Professional Interpretation

Preface: 

International commercial mediation is playing an increasingly important role in both the construction of “Belt and Road” initiated by China and the construction of international rule of law. On August 7, 2019, according to the statistics, 46 countries including China, the US and India officially singed the United Nations Convention on International Settlement Agreements Resulting from Mediation (hereinafter referred to as Singapore Mediation Convention), so that the parties from different countries could conduct the settlement agreements on mediation, including 43 signatory countries along “Belt and Road”. 

According to New York Convention, after mediation is reached outside the court’s proceedings or arbitration, the parties of settlement can usually only implement the settlement by contract. In case of any settlement default, obtaining of the court’s default judgment and the implementation of such default judgment in the jurisdiction may be involved, and during this period, the parties may face the lengthy and costly legal proceedings. 

Singapore Mediation Convention will allow a party implementing the settlement agreement to directly appeal to the court of a party from a contracting county which seeks for enforcement without obtaining the court’s default judgment first, and such court must implement the settlement agreement according to the rules of procedures in such contracting country and the conditions stipulated in Singapore Mediation Convention at that time. 

The international business team of Beijing DOCVIT Law Firm has briefly interpreted the influence and challenges after China joins the convention in terms of the main content of Singapore Mediation Convention, combined with China’s background of “Belt and Road”. 

I. Expand the scope of application of mediation 

Different from New York Convention which emphasizes the arbitration place, Singapore Mediation Convention does not take the location of international mediation procedures as the application standard for the scope of application and can be applied as long as the subjects of the settlement agreements on mediation or the commercial relationship involved in the mediation agreement is of the international character. 

Different from China’s Joining 

The international commercial mediation, as a more flexible and efficient dispute settlement method, provides another choice for the settlement of the disputes between the international commercial objects. In addition, according to the procedures of Singapore Mediation Convention, the settlement and dispute elimination through mediation can both maintain the parties’ long-term relationship of continuing the cooperation and guarantee the executor effectiveness of the settlement agreement. Moreover, after joining Singapore Mediation Convention, for the counter parties, in the circumstance of the same business transaction conditions, the party which can implement the mediation agreement in the convention will incur the relatively low transaction costs, which will increase the transaction possibility frontier under the same conditions. In other words, the transaction opportunities for the enterprises of this country will increase. It will win the positive credit evaluation not only for the enterprises but also for the government. 

II. Simplify the implementation procedures 

Different from New York Convention which recognizes and implements the parallel system, after Singapore Mediation Convention takes effect, when the parties reach a valid settlement agreement under Singapore Mediation Convention, the settlement agreement will have the transnational execution power without obtaining the extraterritorial enforceability by converting the settlement agreement into an arbitration award. However, at the same time, China will face the problem of modifying the domestic laws by laws, and the relevant provisions in the civil procedure laws need to be modified to be consistent with such convention. 

III. Whether it causes the problem of false mediation 

There are some opinions that challenges will be raised to the courts in the enforcement place later, or the difficulty in legal ascertainment and judicial review on the cases enforced in China concerning the maliciously colluded international settlement agreements which occur in the remote countries and even the non-contracting countries will increase as there is no concept of mediation place in Singapore Mediation Convention. 

However, just as the false litigation and false arbitration exist, we cannot be put off easily by a slight risk. Compared with a large number of mediation cases, there is a minority of false mediation. At the same time, China can settle the problems through the targeted improvement of the mediation system, such as referring to the existing third party’s right of objection against the false litigation and criminal punishment. For example, in the process of enforcing the settlement agreement, if a third party finds that the settlement agreement is reached through false medication and damages its benefits, it can put forward the objection against enforcement; For another example, if the parties apply to a court for enforcing the settlement agreement reached through false medication, they may be affirmed to commit a crime of false litigation. 

IV. Whether it increases the judicial burden and occupies the judicial resources 

There are some opinions that Singapore Mediation Convention has brought the great burden to the judicial review of the court in the enforcement place. It may result in the surge in the quantity of cases. In addition, the judges also need to recognize and ascertain the mediator standards, mediation standards and whether the mediation agreements are valid, all of which will raise the higher operation requirements on the specific court in the enforcement place. 

However, at the same time, according to the data of Shanghai Commercial Medication Center, Hong Kong International Medication Center, international renowned medication institution JAMS and Singapore International Medication Center (SIMC), the vast majority of parties will consciously perform the settlement agreement. The commercial medication is a dispute settlement mechanism which assists the parties in reaching the maximum benefit with the guidance of the professional mediators, and the parties’ conscious performance of the settlement agreement is an act in line with their benefits. In addition, medication, as an alternative dispute settlement method, can also reduce the burden of the court in making judgment. 

For the difficulties in the practical operation, indeed, there are the problems, such as lack of legislation for commercial medication, immature commercial medication practice and imperfect supporting mechanism of the convention in China at present; however, if China takes the opportunity of joining Singapore Mediation Convention to continuously improve the commercial medication system, it can be regarded as the progress and improvement of judicature and a better development of diversified dispute settlement mechanism. 

V. Conclusion 

As the first convention in the field of international commercial medication, Singapore Mediation Convention will generate the profound influence on the international dispute settlement and will also provide more powerful guarantee for the construction of the diversified dispute settlement mechanism in the background of “Belt and Road”. In addition, in some countries along Belt and Road, with the lagging judicial environment, changeable investment environment and great influence of the political and economic factors on the investment, the traditional litigation and arbitration cannot adapt to the development demands of “Belt and Road” well. Due to the special role of mediation, we have reasons to believe that within the continuous deepening of Singapore Mediation Convention in the international judicial practice, mediation can assume the increasingly important responsibility for settling the international commercial disputes. 

Annex - List of countries that have joining the convention at present: 

Singapore, Afghanistan, Belarus, Brunei, Burkina Faso, Chile, China, Columbia, Congo, Democratic Republic of the Congo, Eswatini, Fiji, Georgia, Grenada, Haiti, Honduras, India, Iran, Israel, Jamaica, Jordan, Kazakhstan, Laos, Malaysia, Maldives, Mauritius, Montenegro, Nigeria, North Macedonia, Palau, Paraguay, the Philippines, Qatar, Republic of Korea, Samoa, Saudi Arabia, Serbia, Sierra Leone, Sri Lanka, Timor-Leste, Turkey, Uganda, Ukraine, United States of America, Uruguay and Venezuela.