UN Convention on International Settlement Agreements Resulting from Mediation.
UN Convention on International Settlement Agreements Resulting from Mediation
On August 7, 2019, in Singapore, Ukraine signed and joined the UN Convention on International Settlement Agreements Resulting from Mediation.
The Convention is intended to facilitate the fulfillment of any agreement settled resulting from international commercial disputes’ mediation. It helps to implement the tools of recognition and enforcement of decisions made in mediation, like those provided by the New York Convention on Recognition and Fulfillment of Foreign Arbitrary Resolutions, 1958.
It shall also be applied to international agreements settled via the mediation of commercial disputes between two companies from different member states of the Convention. The document forms standard frameworks for such agreements to be recognized on the territories of the member states and makes it possible to go to the court for acknowledgment of an agreement and accomplishment thereof in another jurisdiction.
The UN Convention, signed in Singapore is meant to be an instrument to facilitate international trade and promote mediation as an alternative and efficient way to solve trade disputes. This is to guarantee that an agreement reached by mediation shall be binding and enforceable in a foreign jurisdiction via a simple procedure.
To claim underperformance of an agreement settled resulting from mediation, such dispute, and the agreement itself shall meet certain criteria, stated by the Convention, namely:
- A dispute shall be international. At least two parties of a contract shall run business in different countries, or a state of origin of the parties thereof shall differ from the one, in which a reasonable share of commitments has been fulfilled, or which is closely connected to a contract’s subject.
- A dispute shall relate to the sphere of business. Convention rules are not applied to the settlement of the agreements resulting from mediation on consumer disputes, i.e. a party whereof is an individual (a consumer). Besides, they are not applied to family, heritage and labor disputes.
- A dispute settled by mediation shall be in writing. Electronic communication meets this requirement also, as mailing makes it possible to understand the essence of negotiations of the parties.
- A mediator shall confirm the mediation procedure, for instance by signing a contract or issuing a respective written confirmation.
What are the advantages of the Convention for Ukrainian business?
It simplifies a procedure for formal inspection and acknowledgment of a decision, receiving a court order to be accomplished (if a partner entity is from a Convention member state), and guarantees fulfillment thereof as a tool of an efficient and unified procedure for agreements, being settled resulting from mediation.
How could the Singapore Convention affect Ukrainian laws?
By signing the Convention, Ukraine not only creates some opportunities but also throws down a list of challenges to its government. For instance, it is necessary to clarify the essence of mediation because according to provisions of the Convention only agreements settled by the results of the process mentioned above could be enforced.
We also have to appoint a body in Ukraine to accept the agreements settled by mediation, its power, and extent of influence in the sphere.
We need to have qualified personnel, aware of the rules and principles of mediation, to keep the balance between the state impact on a mediation process and the demand of business for a fast, convenient, and good faith dispute settlement.
Having analyzed the foreign experience of mediation procedures, we could declare that nowadays it is a widely recognized and necessary method for dispute resolution throughout the world. Thanks to the international support, the sphere of application thereof is constantly growing, and we wish it tighten up securely in Ukraine.