United Nations Convention on International Settlement Agreements Resulting from Mediation
The United Nations General Assembly after adopting the United Nations Convention on International Settlement Agreements Resulting from Mediation on 20th December 2018, authorised that the Convention will open for signature at signing ceremony to be held on 7th August 2019 in Singapore and will be known as the “Singapore Convention on Mediation”. The Convention aims to provide a uniform and efficient framework for the enforcement of international settlement agreements resulting from mediation and for allowing the parties to invoke such agreements, akin to the framework that the Convention on the recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the “New York Convention”) provides for arbitral awards. The Singapore Convention squarely addresses the issue of an efficient and harmonized framework that was missing, for cross-border enforcement of settlement agreements resulting from mediation, which also allays the issue of concern pertaining to the institutional mediation in the country as well. India being a signatory to the Singapore Convention will boost the vision of Centre for Mediation and Conciliation to encourage resolution of disputes through aided dialogue and concluding them swiftly, economically, confidentially and amicably.
Mr. Sumit Banerjee, who is currently the Chief Mentor of the “Centre for Mediation and Conciliation” set up by the Bombay Chamber of Commerce and Industry discusses and answers questions regarding the issues pertaining to execution of the Singapore Convention.
How will it impact Mediation in India?
In 1996, India enacted its new Arbitration Act based on the United Nation Commission on International Trade Law Model Laws on International Commercial Arbitration and the Arbitration Rules of the United Nations Commission on International Trade Law 1976. This was January 1996.
It was said that the Act prior to 1996, had ‘become outdated’ and there was need to have an Act ‘more responsive to contemporary requirements’.
In India, there is no law provided for mediation in the country and provisions for mediation is only provided as provisions in other Acts and statues in the country such as Commercial Courts Act. In a country where Alternative Dispute resolution is slowly and steadily growing the ‘Singapore Convention’ could not have come at a better time to help aid the growth of mediation in India.
However, we foresee the inclusion of a Mediation Act in India which would potentially adopt most principles included in the Singapore Convention as India has received a cabinet nod to be a signatory to the convention.
How will this event facilitate Institutionalization of Mediation Services in India?
An institutional mediation is one in which a specialised institution intervenes and takes on the role of administering the process. Each institution has its own set of rules which provide a framework for the mediation, and its own form of administration to assist in the process.
Often Institutions also provide a set of institutionalized Mediators who are trained to handle disputes in the specific field of the dispute. Institutions carry the burden of providing specialized services and quality mediators to the people seeking for such service. Considering the volume of disputes in India, mediations would allow in catering to commercial disputes to ensure easy and enforceable settlements to ensure businesses focus less on legal troubles and focus more on growing the business.
Many parties arrive at the door of their chosen ADR provider because their contract, about which they are now in dispute, contains a dispute resolution clause containing an agreed dispute process and names a particular institution to administer it. These clauses are well known, for instance the standard ICC multitiered clause requiring the parties to refer the dispute to the ICC mediation rules and if it does not settle, to ICC arbitration. Such clauses are inserted into thousands of contracts all around the world.
Although, the Convention doesn’t specify the roles and regulations for Institutional mediation services, we believe we have been given this opportunity to focus on the growth of this method of dispute resolution to benefit through seminars, education programs and standardized workshops or training programs.
What does the legislature in India have to do beyond the Singapore Convention?
So far in India, The lack of codification has resulted in a lack of uniformity across mediation centres on some of the key aspects of the mediation process. In this context, there is a broad consensus on two points: first, legislation is needed to address certain regulatory aspects of mediation like training standards, enforcement of settlement agreements, et al, and second, such legislation should not over prescribe or compromise the flexibility of the mediation process and autonomy of parties mediating.
Training of Judges – There is a pressing need to train existing and potential judges about the fundamentals of mediation to improve their understanding of the process, and train them for their role in preparing parties for mediation. Chief Justices of all High Courts should enforce a rigorous training framework for all judges in courts within their respective jurisdictions. Furthermore, Chief Justices should also monitor programmes focussing on mediation training.
Training and accreditation of mediators- Legislation should prescribe the minimum training standards for mediators. Apart from training, accreditation of mediators should also be done based on their educational and professional background. Accreditation, while important to help judges choose mediators for parties or for court-connected mediation centres to prepare a panel, need not be made mandatory.
Apart from addressing these issues, Mediation requires a higher degree of code of ethics. It is necessary to enforce a code of ethics and professional standards to be followed by mediators across the board. This code should, inter alia, codify consequences of violation of the said standards by mediators.
Are there any Holistic Concerns Regarding “Enforcement” of Mediated Settlement Agreements?
There are also holistic concerns about the entire idea that an agreement arising from mediation is “enforceable.” Arbitrations result in awards – drafted by tribunals with authority – imposing obligations on the “losing” party that can certainly be enforced by their terms. By contrast, settlements (whether mediated or not) result in agreements, with mutual obligations whose authority derives from the parties’ consent, and often they are incapable on their face of being merely “enforced.”
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 “may reasonably require,” and to do so in a “commercially reasonable” period of time after notice. The counterparty now complains that it did not receive the material when it was needed, and seeks to “enforce” the agreement. What notice was given, by whom and to whom? Was the amount required reasonable? And was the time period “commercially reasonable”?
Any concerns of Mediator attestation to the settlement agreement and evidence that settlement agreement resulted from mediation?
It is the intention of the drafters that this treatment of “enforcement” be granted only as to “agreement resulting from mediation.” 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. Article 4.1(b) sets forth four possible ways that the party seeking enforcement may prove that it is such an agreement. Two of them contemplate that the mediator attests to that fact by signing either the settlement agreement or another document “indicating that the mediation was carried out.”