The United Nations Convention on International Settlement Agreements Resulting from Mediation (the "Singapore Convention"), sponsored by the UN (UNCITRAL), was opened for signature at Singapore on 07.08.2019 and has been signed by 46 countries, including Turkey.1

This important convention has been ratified in Turkey on 25.02.2021 and entered into force recently on 10.03.20212. Unlike the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") which developed a uniform framework on the enforceability of arbitration awards globally, the Singapore Convention sets forth harmonized provisions regarding cross-border settlement agreements settling commercial disputes as a result of a mediation (commercial mediation).

Before the convention, there were no uniform way of enforcement agreed between countries, in the event a party did not fulfil its obligations or failed to comply with the settlement agreement concluded under a mediation process.

Indeed, if such settlement agreements were not endorsed by a local courts or arbitral tribunals, the party wishing to enforce had to file a lawsuit in the local court, and then have this decision enforced in the local court of the other party.

As expected, this gap in the enforcement mechanism overshadowed the perceived advantages of mediation, of speed, cost and flexibility and caused it not to be neglected as a truly international alternative dispute resolution method.

With this in mind, the aim of the Singapore Convention, as stated in the preamble, was to reinforce international cooperation in terms of enforceability of settlement agreements arising from commercial mediation and expanding the utilization of mediation as an alternative dispute resolution system on the international stage.3

Thanks to the Convention, signatory States are now under the obligation to enforce settlement agreements, within the scope of the Convention, in line with the provisions stipulated.

As for the scope of the Convention, it applies to agreements arising from mediation and made in writing by parties seeking to resolve a commercial dispute. Disputes based on family, inheritance or labour law do not fall within the scope of the Convention.4

As with the New York Convention, the Singapore Convention forbids state courts that are parties to the Convention to adjudicate on the merits of the settlement agreement brought before them for enforcement, except for the conditions specified in the Convention.

From this perspective the Convention, seeks to form a uniform framework for the world-wide enforcement of settlement agreements resulting from commercial mediation.

Under Turkish law, parties are obliged to apply to mandatory mediation for commercial disputes involving monetary compensations or claims before applying to court.5 In this respect, settlement agreements signed as a result of mandatory mediations before filing commercial cases will also fall under the scope of the Singapore Convention, provided that they also meet the other conditions stated in the Convention.

As a result, although we will need to wait to observe the success and the impact of the Convention on cross-border settlement agreements, it seems that, with the help of the Convention, the possibility of the parties not complying with the settlement agreements will decrease, and the possibility of international commercial mediation should become a serious alternative to court proceedings and arbitration in the future.

Footnotes 

1. See; Singapore Convention on Mediation at https://www.singaporeconvention.org/convention/about-convention/

2. See the relevant Official Gazetta at https://www.resmigazete.gov.tr/eskiler/2021/03/20210311-1.htm

3. See the Preamble of the Convention at https://uncitral.un.org/sites/uncitral.un.org/files/singapore_convention_eng.pdf

4. See the content of the Convention at https://www.singaporeconvention.org/convention/the-convention-text/

5. See article 5 at Turkish Commercial Code at https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=6102&MevzuatTur=1&MevzuatTertip=5

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