{"id":2019,"date":"2018-10-09T12:52:14","date_gmt":"2018-10-09T16:52:14","guid":{"rendered":"http:\/\/www.businessconflictmanagement.com\/blog\/?p=2019"},"modified":"2023-08-13T14:50:23","modified_gmt":"2023-08-13T18:50:23","slug":"concerns-on-the-new-singapore-convention","status":"publish","type":"post","link":"http:\/\/www.businessconflictmanagement.com\/blog\/2018\/10\/concerns-on-the-new-singapore-convention\/","title":{"rendered":"Concerns on the New Singapore Convention"},"content":{"rendered":"

The United Nations Commission on International Trade Law (UNCITRAL) has announced agreement on a \u201cUnited Nations Agreement on International Settlement Agreements Resulting from Mediation<\/a>.\u201d\u00a0 Informally named the \u201cSingapore Convention,\u201d the instrument has been hailed as a long-sought mechanism to give cross-border disputants the confidence that, if they engage in mediation of international commercial disputes, any resulting agreement will be enforceable by its terms. \u00a0The rationale stated in the Preamble to the Convention is \u201cthat the establishment of a framework for international settlement agreements resulting from mediation that is acceptable to States with different legal, social and economic systems would contribute to the development of harmonious economic relations.\u201d<\/p>\n

\"Image<\/p>\n

A review of the provisions of the proposed Convention reveals, however, many aspects that are inconsistent with fundamental attributes of commercial mediation as practiced in Western jurisdictions, including the United States and the United Kingdom.\u00a0 Moreover, the Convention\u2019s clear reliance on the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) exposes fundamental confusion in the distinction between enforcing a commercial contract and enforcing an arbitral award.<\/p>\n

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  1. Concerns of Mediator Attestation to the Settlement Agreement<\/em><\/li>\n<\/ol>\n

    It is the intention of the drafters that this treatment of \u201cenforcement\u201d be granted only as to \u201cagreement[s] resulting from mediation.\u201d\u00a0 The question then arises how to verify that an agreement presented to the court of a country that is a party to the Convention is one that resulted from mediation.\u00a0 Article 4.1(b) sets forth four possible ways that the party seeking enforcement may prove that it is such an agreement.\u00a0 Two of them contemplate that the mediator attest to that fact by signing either the settlement agreement or another document \u201cindicating that the mediation was carried out.\u201d<\/p>\n

    Many mediators conscientiously refuse to sign a settlement agreement.\u00a0 Most American mediators follow the practice that, consistent with their mediation agreements providing that they not be subpoenaed as a witness, they neither draft nor execute any written memorial that may be interpreted as witnessing its execution or \u2013 even worse \u2013 including them as a party to the rights and obligations set forth therein.<\/p>\n

    Additionally, many mediators decline to comment on whether a mediation took place, and among what parties, in the exercise of their obligation of confidentiality.\u00a0 My own mediation agreement, by which parties engage my services, provides in part: \u201cThe Mediator will maintain in strict confidence all information arising out of or in connection with this mediation regardless of the form that information might take.\u201d\u00a0 I understand this to embrace the fact that a particular party engaged in a mediation with another particular party on a particular date concerning a particular issue.\u00a0 Although I sometimes may refer to a mediation’s having taken place (for example, in the course of my teaching or training), I never reveal the names of the parties and often disguise the information by, for example, changing the date, gender, or substantive issue involved.\u00a0 (See Standard V(A)(3) of the Model Standards of Conduct for Mediators<\/a> (2005)).\u00a0 To my knowledge, this is common practice in both the UK and the United States.\u00a0 To not only permit but, in some cases, to require a mediator to reveal that information is inconsistent with both contractual and statutory provisions that are broadly recognized.<\/p>\n

    2.\u00a0Concerns of Refusal to Enforce Grounded on Mediator Conduct<\/em><\/p>\n

    Article 5 sets forth grounds upon which a court in a subscribing State may refuse to enforce a settlement agreement arising from mediation.\u00a0 Article 5.1(e) provides that an authority may refuse to grant the relief sought against a party to an agreement if that party furnishes proof that \u201c[t]here was a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement.\u201d<\/p>\n

    This provision can be interpreted as a map for counsel to relieve its client of its obligations under a settlement agreement, by focusing on the conduct of the mediator.\u00a0 Even the most superficial review of the body of case law in the United States arising from FAA Section 10(a)(3) \u2013 authorizing the vacatur of arbitral awards for arbitral \u201cmisbehavior\u201d, frequently arbitral failure to provide timely and sufficient disclosure \u2013 leads one to shudder at the mini-trials from which this provision is likely to arise.\u00a0 What standards are applicable to this mediator and this mediation?\u00a0 What conduct of the mediator constituted violation of those standards?\u00a0 What witness to the alleged conduct is competent to testify as to the alleged violation?\u00a0 Shall the mediator be called to explain why the contested conduct does not constitute a violation of the applicable standards?<\/p>\n

    And what of the deeply entrenched principles \u2013 subsisting (in my jurisdiction of New Jersey) in statute, court rule and private contract — that no party will subpoena the mediator to testify in any proceeding; that mediation communications are confidential; and that such communications are also privileged and may not be introduced in any proceeding?\u00a0 Shall we have contested motion practice on whether proffered evidence of mediator misbehavior shall be admitted before the trier of fact in an action to deny \u201cenforcement\u201d of the settlement agreement?<\/p>\n

    3.\u00a0 Holistic Concerns Regarding \u201cEnforcement\u201d of Mediated Settlement Agreements Generally <\/em><\/p>\n

    There is also the more holistic concern about the entire idea that an agreement arising from mediation is \u201cenforceable.\u201d\u00a0 Arbitrations result in awards \u2013 drafted by tribunals with authority \u2013 imposing obligations on the \u201closing\u201d party that can certainly be enforced by their terms.\u00a0 By contrast, settlements (whether mediated or not) result in agreements, with mutual obligations whose authority derives from the parties\u2019 consent, and often they are incapable on their face of being merely \u201cenforced.\u201d<\/p>\n

    Take, for example, a cross-border mediated settlement in which one party agrees to supply the counterparty with such quantity of material as the counterparty \u201cmay reasonably require,\u201d and to do so in a \u201ccommercially reasonable\u201d period of time after notice.\u00a0\u00a0 The counterparty now complains that it did not receive the material when it was needed, and seeks to \u201cenforce\u201d the agreement.\u00a0\u00a0 What notice was given, by whom and to whom?\u00a0 Was the amount required reasonable?\u00a0 And was the time period \u201ccommercially reasonable\u201d?<\/p>\n

    Or, as another example, by way of compromise in the course of a mediation, a party agrees to supply a store with chocolate cake at a lower price, and also to supply cakes that are \u201cethically sourced.\u201d\u00a0 It turns out that, unknown to anyone, the ingredients of the cakes were not ethically sourced and the store seeks to \u201cenforce\u201d the mediated settlement agreement, by holding the defrauded supplier strictly liable for its \u201cbreach\u201d of the settlement agreement.\u00a0 Under commercial practices, the Convention on the International Sale of Goods, or other standards, is the supplier in breach?\u00a0 And is it a fundamental breach?\u00a0 And does the agreement support lost profits?\u00a0 Exemplary damages?<\/p>\n

    In both these cases, an arbitration tribunal may interpret the contract, resulting in an award that is enforceable by means of the New York Convention.\u00a0 But may a court \u201cenforce\u201d the settlement agreement on its terms by means of the Singapore Convention?<\/p>\n","protected":false},"excerpt":{"rendered":"

    New Mediation Enforcement Protocol Prompts Concerns<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40,13,14],"tags":[8,25,39,15],"class_list":["post-2019","post","type-post","status-publish","format-standard","hentry","category-courts","category-international","category-mediation","tag-adr","tag-adr-institutions","tag-courts","tag-mediation"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/2019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/comments?post=2019"}],"version-history":[{"count":5,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/2019\/revisions"}],"predecessor-version":[{"id":2133,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/2019\/revisions\/2133"}],"wp:attachment":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/media?parent=2019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/categories?post=2019"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/tags?post=2019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}