With nearly 400 people from around the world tuning in to a live webcast on June 10, Wednesday night (or day if you are in the US), one panellist echoed current sentiments—that “interest in mediation is a global phenomenon.”
SIMC Chairman Mr. George Lim SC, together with a distinguished panel – Ms. Natalie Morris-Sharma, Deputy Senior State Counsel, Singapore Attorney-General’s Chambers and Chair of UNCITRAL Working Group II; Ms. Frauke Nitschke, Senior Legal Counsel, ICSID; Dr. Judith Knieper, Legal Officer, UNCITRAL; and Mr. Gary Born, President, SIAC Court of Arbitration—covered the key features of the Singapore Convention on Mediation, its implications for mediated settlement agreements, and what it would mean in the context of international investment disputes.
We thank Mr. Diogo Pereira, Partner at De Almeida Pereira, for moderating the session.
You can access the full recording and all presentations here. In the meantime, here are some key takeaways from the session:
Singapore Convention on Mediation – Its relevance for investor-state disputes
Ms. Morris-Sharma gave an overview of the Singapore Convention on Mediation – its history, key purpose and reasons behind its development.
In short, the Convention enables disputing parties to enforce mediated settlement agreements. It applies to international commercial settlement agreements concluded by parties through mediation, and this includes cross-border commercial contracts between investor and state.
She said, “The Singapore Convention offers an additional option (for businesses seeking to resolve their disputes) among the different forms of dispute resolution, and added certainty in the effect of that choice.” While 52 countries have signed and four have ratified the Convention, she stressed that “the mechanism will be strengthened when more countries sign on and ratify.”
Increasing interest in mediation for investor-state disputes
At the UNCITRAL Working Group III on investor-state dispute settlements (ISDS) meeting earlier this year, Dr. Knieper shared that there was a common consensus among states to strengthen mediation for investor-state disputes. Countries were keen to find ways to include mediation in investor-state disputes, as they recognised that mediation’s benefits—time- and cost-efficiencies, party autonomy and preservation of relationships—would be in the interest of the state.
She emphasized the preservation of relationships as a key concern as states were keen to attract—and continue to retain—private investment in the long run. If a settlement could not be reached, the mediation session would at least have clarified positions, reducing the number of issues to be tackled down the road. To this end, the WG III is also working on guidance notes on the language for clauses in contracts.
Global institutions are responding to this rising demand
Ms. Nitschke concurred on the importance of strengthening the use of mediation in investor-state disputes. In fact, the emphasis on mediation has grown in recent years. For instance, the EU-Vietnam Free Trade Agreement and EU – Singapore Free Trade Agreement have references to mediation in these treaties, and more recently, the 2016 Guide on Investment Mediation was adopted by 57 ICSID Member States at the Energy Charter Conference.
With reference to the Singapore Convention, Ms. Nitschke recognized that the multilateral effort on such a uniform and efficient framework was also intended for settlements in investor-state disputes.
She added that ICSID started exploring Mediation Rules in 2018, which may be used as a standalone or combined with other dispute resolution processes. The Rules were intended to complement ICSID’s other dispute settlement mechanisms, allowing for flexibility and cost efficiencies during the process. The Rules would also integrate the formal requirements of the Singapore Convention.
What does this mean for arbitrators, litigators and counsel?
Before the Singapore Convention came into being, mediation was often used together with litigation and arbitration. Mr Lim shared that such hybrid processes were not new and in fact, its adoption had seen growth over the years, according to one study. For instance, SIMC and SIAC have been offering an arb-med-arb service where parties can opt for mediation during arbitral proceedings. If a settlement was reached during mediation, the agreement can be converted into an arbitral award, enforced in 160 countries under the New York Convention.
Mr Lim reflected that the Singapore Convention has had an impact on countries all around the world, driving the interest in mediation. In India for example, Chief Justice S A Bobde has called for “compulsory pre-litigation mediation”.
With mediation here to stay, Mr Lim stressed that the demands of the future lawyer have evolved; it is no longer sufficient to be a good litigator or a good arbitrator. On what makes a good mediator, he said that one would need to have “three Ps”. That is, People skills (ie: managing people, relationships, emotions); Process skills (ie: bringing people through the mediation process); and Problem-solving skills (ie: designing a dispute resolution process that would resolve a client’s issues). After all, businesses want their problems solved and do not want to expend unnecessary resources on long-drawn battles in court, he concluded.
Responding to a question on why parties should attempt mediation, Mr Lim said, “Try mediation, if not for the other party, do it for yourself. What have you got to lose? If (the mediation) is unsuccessful, at least issues have been crystalised. There is value in dialogue. It is better to talk it out than fight it in court.”