When the world has been devastated by a pandemic, this UN initiative has been timely and befitting
The United Nations Convention on International Settlement Agreements Resulting from Mediation, 2018 (Singapore Convention on Mediation) came into force on September 12, 2020 upon the required third ratification of the treaty. The convention amends the 2002 UN model law on international commercial conciliation.
At a time when the world is jolted by the devastating pandemic caused by the Covid-19 virus and its inevitable aftermath, including the proliferation in international commercial disputes, the UN initiative has been seen as a timely and befitting step. The convention, providing an alternative to the traditional adjudicatory processes of litigation and arbitration, creates a synchronized and integrated avenue for international settlement of commercial disputes through mediation.
Globally, in recent years, sophisticated mediation cultures and supportive institutional frameworks have been developed in many advanced legal systems, particularly those with common law traditions, such as the US, Canada, the UK, and Australia. Even in jurisdictions practising the continental civil law, particularly those in the European community, countries have adopted the EU Mediation Directive (2008) on certain aspects of civil and commercial matters, later further expanded through the EU directive on online dispute resolution in 2013, both designed to promote amicable settlement of disputes using mediation.
The 2012 German legislation requiring a statement on the willingness of parties in all civil matters to resort to a mediated settlement by what is termed as a “conciliation judge” is an instance of the European regional trends promoting mediation.
Amongst the Asian countries, the 2003 amendment of the Civil Procedure Code (CPC) in Bangladesh, the Arbitration and Conciliation Act, 1996 in India, the 2012 Civil Code adopting the principle of “mediation first” in China, or the Mediation Act 2017 in Singapore, are all but some of the instances of adopting and promoting the spirits of out-of-court settlement of disputes, ADR/ODR to be precise.
Also, sensing the market demand and the ongoing trends, the International Chamber of Commerce and the International Centre for Dispute Resolution have opened regional offices in Asia to capture their share of these disputes.
In fact, Bangladesh, by virtue of the subsequent amendments of the CPC in 2006 and 2012, became one of the few jurisdictions in the world that has made attempts at resolving all civil matters before the court through mediation a mandatory step before proceeding with the regular judicial processes.
However, despite the global trends in placing prioritized emphasis on mediation in the dispute settlement mechanisms, including in the formal judicial processes, the concept has not been fully developed or found recognition in the legal frameworks of many other countries, such as Italy, Russia, Ukraine, Turkey, Brazil, etc.
These differences in differing mediation cultures lead to an uncertainty with regard to the application and enforcement of international commercial settlement reached through mediation.
Unlike international arbitration regime, until the adoption of the 2018 UN Convention, there was no global normative framework that provided a common platform for regulatory agreements between states in this regard.
Apart from their differences in scope and modalities, a significant aspect for preferences by investors, enterprises, and entrepreneurs to arbitration over mediation lies in the enforcement provisions of their respective outcomes.
By virtue of the new convention, states ratifying the treaty recognize the determinative traits of international settlement of commercial disputes resulting from mediation.
In other words, the primary effect of ratifying the convention would be to entrust international settlement from mediations with the same status as international arbitral awards (or a judgment of the court) in terms of enforcing the settlement in a member country.
These notions of certainty, predictability, and legal sanctity of international settlement agreements from mediations have been seen as ones that promise great potentials in attracting FDIs, multinational corporations, SMEs, and increased cross-border trade and businesses for the state parties.
It may be noted that amongst the 53 signatory states to date, the two global giants in the so-called trade war -- the US and China -- have both signed the convention. In fact, the convention has had the highest number of first-day signatories of a UN trade convention (46 signatures on the opening day).
However, in South Asia, Bangladesh is one of the four countries that hasn’t yet signed the instrument (along with Pakistan, Bhutan, and Nepal).
While there is a broad consensus on the importance and benefits of becoming a party to the Singapore Convention in Bangladesh, it is also of essence that appropriate legal and institutional measures are taken to create a conducive regulatory framework as well as equipping the courts to deal with issues relating to international mediated settlements under the convention.
Accordingly, while government agencies concerned should prioritize signing the convention, appropriate legislative provisions should be made to the effect that parties to the settlement in question may submit a petition to the High Court (whether applying its original or appellate jurisdiction) for recording the agreement between the parties as an order of the court for the purposes of enforcing the settlement in Bangladesh, or invoking the agreement in any court proceedings in Bangladesh involving a dispute concerning the settlement.
In the stated context, authorities concerned should look at similar legislative initiatives undertaken by other countries in the region, such as the Singapore Convention on Mediation Act, 2020, adopted by Singapore, or the on-going processes in India in enacting an Indian Mediation Act to give effect to disputes settled through mediation under the convention.
In addition, the accompanying model law of the Singapore Convention provides a legal framework that would serve as useful guideline in this process.
Dr Md Parvez Sattar is a former access to justice, governance, and human rights expert within the UN system, and is currently employed as a faculty at the Department of Law, Independent University, Bangladesh. E-Mail: [email protected]