The United Nations General Assembly adopted the Convention on International Settlement Agreements Resulting from Mediation (“the Singapore Convention”) on 20 December 2018, which was signed by Turkey on 07 August 2019 in Singapore.
Turkey enacted the Law No. 7282 dated 25 February 2021[1] concerning the approval of the Singapore Convention, which was followed by the Presidential Decree (3866) dated 21 April 2021[2] concerning its ratification.
Finally, with the Presidential Decree (5235) dated 24 February 2022[3], the effective date of the Singapore Convention had been determined as 11 April 2022.
In this regard, the Singapore Convention entered into force on 11 April 2022 in Turkey.
Scope of the Singapore Convention
According to Article 1 of the Singapore Convention, the Convention shall apply to agreements resulting from mediation and concluded in writing by parties to resolve a commercial dispute which, at the time of its conclusion, is international in that:
- At least two parties to the settlement agreement have their places of business in different States, or
- The State in which the parties to the settlement agreement have their places of business is different from either:
- The State in which a substantial part of the obligations under the settlement agreement is performed,
- The State with which the subject matter of the settlement agreement is most closely connected.
If a party has more than one place of business, the relevant place of business is that which has the closest relationship to the dispute resolved by the settlement agreement, having regard to the circumstances known to, or contemplated by, the parties at the time of the conclusion of the settlement agreement; and if a party does not have a place of business, reference is to be made to the party’s habitual residence.
On the other hand, the Singapore Convention shall not apply to the settlement agreements, which are:
- Concluded to resolve a dispute arising from transactions engaged in by one of the parties (a consumer) for personal, family or household purposes,
- Relating to family, inheritance or employment law,
- Approved by a court or concluded in the course of proceedings before a court,
- Enforceable as a judgment in the State of that court, and
- Recorded and are enforceable as an arbitral award.
Under the Singapore Convention, “mediation” means a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons (mediator) lacking the authority to impose a solution upon the parties to the dispute.
Grounds for Refusing to Grant Relief
According to Article 5 of the Singapore Convention, the competent authority of the Party to the Convention where relief is sought for reliance on settlement agreements may refuse to grant relief at the request of the party against whom the relief is sought only if that party furnishes to the competent authority proof that:
- A party to the settlement agreement was under some incapacity,
- The settlement agreement sought to be relied upon is null and void, inoperative or incapable of being performed under the law to which the parties have validly subjected it or, failing any indication thereon, under the law deemed applicable by the competent authority of the Party to the Convention where relief is sought,
- The settlement agreement sought to be relied upon is not binding, or is not final, according to its terms, or has been subsequently modified,
- The obligations in the settlement agreement have been performed, or are not clear or comprehensible,
- Granting relief would be contrary to the terms of the settlement agreement,
- There 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; or
- There was a failure by the mediator to disclose to the parties circumstances that raise justifiable doubts as to the mediator’s impartiality or independence and such failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement.
The competent authority of the Party to the Convention where relief is sought may also refuse to grant relief if it finds that:
- Granting relief would be contrary to the public policy of that Party, or
- The subject matter of the dispute is not capable of settlement by mediation under the law of that Party.
As seen, the grounds for refusing to grant relief under the Singapore Convention are quite similar to the refusal grounds stipulated under the New York Convention dated 10 June 1958 on Recognition and Enforcement of Foreign Arbitral Awards approved by the Law No. 3731 dated 08 May 1991 in Turkey.
Remarks
Consisting of 16 articles in total stipulating several other issues such as the general principles, requirements for reliance on settlement agreements, parallel applications or claims, other laws or treaties and reservations in addition to the aforementioned issues, the Singapore Convention entered into force on 11 April 2022 in Turkey.
The Singapore Convention indicates that the General Assembly is convinced that the adoption of a convention on international settlement agreements resulting from mediation that is acceptable to States with different legal, social and economic systems would complement the existing legal framework on international mediation and contribute to the development of harmonious international economic relations. In this regard, the Singapore Convention is expected to expand the use of mediation in commercial disputes.