Singapore Convention on Mediation: Government Response to Consultation

(Limited Text - Ministerial Extracts only)

Thursday 2nd March 2023 Written Statements

[The Parliamentary Under-Secretary of State for Justice (Mike Freer)]

My noble Friend the Parliamentary Under Secretary of State for Justice (Lord Christopher Bellamy KC), has made the following statement:

Today I am publishing the Government response to the consultation on the United Nations Convention on international settlement agreements resulting from mediation (New York, 2018) (the “Singapore Convention on Mediation").

In an increasingly globalised world, it is important that businesses have the confidence to trade across borders in the knowledge that private international law rules are in place to determine which country’s courts will hear a dispute raising cross-border issues (jurisdiction), which country’s law will apply (applicable law) and whether a judgment obtained in one country will be recognised and enforced in another (recognition and enforcement). These rules also establish procedures for cooperation in areas such as the taking of evidence, the service of legal documents and co-operation between competent authorities.

The Singapore convention on mediation (“the Convention") is a private international law agreement which provides a framework to allow for the recognition and enforcement of international commercial settlement agreements reached via mediation. It enables a party which has mediated their dispute to enforce the resulting cross-border mediated agreement in any country that is party to the convention without needing to commence an action for breach of contract.

The convention has garnered international support and recognition since it opened for signature in August 2019, with 55 countries having already signed it, including a number of the UK’s key trading partners and 18 of the UK’s fellow Commonwealth nations. The convention has been ratified by 10 countries to date, namely Fiji, Qatar, Saudi Arabia, Belarus, Ecuador, Honduras, Turkey, Georgia, Kazakhstan, and Singapore.

With this global reach, the convention presents opportunities for the UK to strengthen its relationships with our existing international partners and to establish new relationships. It will also reaffirm the UK’s intention to build upon its long history of leadership in international law-making fora such as the United Nations and the Hague Conference on private international law.

Mediation as a dispute resolution process is integral to the UK justice system. It can provide a cost-effective method of resolving disputes whilst also aiming to preserve important and potentially long-standing business relationships. It is estimated that commercial mediation can save businesses around £5.9 billion per year in management time, damaged relationships, lost productivity, and legal fees. In February 2023, the value of UK mediated cases each year was estimated at approximately £20 billion.

The convention provides a uniform framework for the effective recognition and enforcement of international mediated settlement agreements resulting from commercial disputes. Its non-reciprocal nature means that the settlement agreements that UK courts may be asked to enforce, as a party to the convention, do not need to have been concluded in the jurisdiction of another state party. Parties to international mediated settlement agreements will therefore be able to have their settlement agreements recognised and enforced in the UK under the convention rules, regardless of the jurisdiction in which they were reached. This wide application of the convention will reinforce and potentially increase the UK’s attractiveness as a respected jurisdiction for international dispute resolution.

The Government launched a public consultation in February 2022 to seek the views of the UK’s flourishing legal sector and mediation community on whether the UK should become a party to the convention. The majority of the responses were in favour of the UK joining the convention. In practical terms, many respondents noted that joining the convention will mean that where it might be necessary to enforce a mediated agreement, having a direct route for enforcement would be preferable to the current practice of having to enforce by way of a breach of contract or following a court order. Respondents also generally agreed that becoming party would signal the UK’s commitment to mediation, further enhance the UK’s status as an attractive international dispute resolution hub, promote the UK legal sector and increase the credibility of UK-based mediators.

For these reasons, the Government has concluded that it is the right time for the UK to become a party to the convention to provide for recognition and enforcement of international commercial mediation settlement agreements throughout the UK. This decision will be a clear signal to our international partners that the UK is committed to maintaining and strengthening its position as a centre for dispute resolution and to promote the UK’s flourishing legal and mediation sectors.

The UK will sign the convention as soon as possible, as an important signal of our intentions to remain a world leader in this area and as a clear indication of the UK's commitment to mediation. We will work to ratify at a later date once all necessary implementing legislation is in place and after the convention has been laid before Parliament under the terms of the Constitutional Reform and Governance Act 2010.

I invite you to consider the Government response to the consultation, available at https://www.gov.uk/government/consultations/the-singapore-convention-on-mediation.

[HCWS592]