On 3 May 2023, the UK signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, known as the Singapore Convention.
What is the Singapore Convention?
The Singapore Convention is an international treaty created by the United Nations Commission on International Trade Law (UNCITRAL), which provides an international framework for the enforcement of settlement agreements resulting from mediation. The broad context and purpose of the Convention is to promote the use of mediation to resolve international commercial disputes by providing a harmonised and expedited enforcement regime. The Singapore Convention is intended to be complementary to the New York Convention (which provides for the enforcement of arbitral awards) and the Hague Convention on Choice of Court Agreements (which provides for the enforcement of judgments given pursuant to an exclusive jurisdiction clause).
How many countries have signed/ratified the Singapore Convention?
The Singapore Convention was signed by its initial signatories in August 2019. To date, 56 countries have signed the Singapore Convention, and of these, 11 have also ratified.
The GDP of signatories is equivalent to roughly 50% of global GDP and include (signatories only) the United States, China, India, Saudi Arabia, Qatar, Israel, the Republic of Korea, Nigeria, Australia (ratified) Turkey and Singapore. The Convention has not yet been signed by any EU member states.
When does the Singapore Convention come into force?
The Convention came into force on 12 September 2020 and has effect in a Contracting State six months after ratification. The implementation of the Singapore Convention in the UK will require legislation to be passed, including changes to procedural rules. This means, depending on exactly when the UK ratifies the Convention, it is likely to come into force in the UK at some point in 2024.
Settlement agreements are already enforceable under contract law. What difference will the Singapore Convention make?
In order to enforce a settlement agreement that is subject to English law/English courts' jurisdiction, a party may need to issue a claim for breach of contract, obtain a judgment (either following a trial on the merits or, more commonly, an application for summary judgment) and then enforce the judgment. In some cases, a party may be able to obtain relief on an expedited basis within the existing court proceedings, such as where the terms of settlement have been recorded in a court order which can be enforced (e.g. a 'Tomlin Order'). It is the first category of cases where the Singapore Convention will have the most impact.
The Singapore Convention provides that international mediated settlement agreements or iMSAs (i.e. settlement agreements which qualify under the Convention) are directly enforceable by the courts of a contracting state courts akin to an arbitral award under the New York Convention or a domestic judgment. In other words, a party can seek enforcement measures from a court on the basis of the iMSA, without having to bring a claim for breach of contract or litigate the case on the merits. Parties can invoke the Singapore Convention both to enforce an iMSA and as a defence to a claim brought in relation to a matter resolved by an iMSA.
How do I know if my settlement agreement will qualify under the Singapore Convention in the UK?
The exact requirements will depend on the UK's implementation of the Singapore Convention. Broadly, the Singapore Convention applies to settlement agreements "resulting from mediation" relating to commercial matters where at least two parties have their place of business in different contracting states (or the parties have a different place of business to the subject matter of the settlement agreement/substantial part of the obligations to be performed under it). It does not apply to settlement agreements whose terms have been recorded in a court judgment or arbitral award.
The Singapore Convention allows a contracting state to implement the Convention on an 'opt-in' basis and to exclude iMSAs involving state parties. The UK government has decided it will not apply either of these reservations. As a result, in the UK, the Singapore Convention will automatically apply to iMSAs unless parties opt out and will apply to iMSAs involving UK state parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.