The Monthly Newsletter

October 2020 | Vol . 6

The "Singapore Convention” On Mediation

Mediation is an “alternative dispute resolution method” that is becoming widespread day by day. It is an out-of-court method that allows the parties to the dispute, including those with an element of foreignness, to resolve their dispute quickly and precisely by applying to an impartial and expert 3rd person. The parties may resort to mediation on disputes on which they can freely dispose of.

According to the letter of the law (verba legis), mediation is mainly voluntary. As the parties participate in the mediation process with their free will and equal rights, it is possible for the parties to apply for mediation before or during the trial. However, mediation has been made compulsory before filing a lawsuit for some disputes. In this context, these disputes will be tried to be resolved through mediation at first and if this attempt is inconclusive, it will be possible to file a lawsuit. For this reason, compulsory mediation is a cause of action for these disputes. If a dispute subject to mandatory mediation is filed directly with the court, the case will be rejected according to the procedural law.

Fundamental principles of mediation are set in the Second Section of the Mediation Law in Legal Disputes; as voluntariness, equality, confidentiality and inability to use statements and documents. In accordance with these principles, the information and documents obtained by the mediator and other records will be kept confidential and others participating in the interviews will also comply with this confidentiality. Regarding the dispute; the parties, mediators and third parties shall not be able to give testimony or submit the documents about any of the parties' request or will to participate in mediation, the opinions and proposals, suggestions, statements, the acceptance of any fact or claim, in a civil or arbitration proceeding. Even if it is presented as evidence contrary to this, the judgment cannot based on it and the exception of this matter will only be the existence of an mandatory legal provision or the execution of the agreement resulting from the mediation activity.

The final draft of the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention) (Hereinafter referred to as “Convention”) was approved by the United Nations Commission On International Trade Law (UNCITRAL) on June 26, 2018, in order to gain international recognition and enforceability of the settlement agreements resulting from the mediation method and to expand their use and adopted by the United Nations General Assembly on 20 December 2018. Convention consisting of 16 articles, was signed by 46 States, including Turkey, on August 7, 2019.

Since the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention of 1958) was taken as an example for the Sinapore Convention; based the concepts of recognition and enforcement in the New York Convention, it is stipulated that settlement agreements should be given enforceability and conclusive evidence quality. Pursuant to Article 1 titled "Application Area", for the recognition of these qualifications of settlement agreements resulting from mediation activities, the agreement should be made in written form, aiming to settle a commercial dispute, should have an international aspect at the time of conclusion and should not to be among the issues specified as out of scope in the Convention. Accordingly, in order to mention the existence of the condition of having an international aspect, at least two of the parties should have their workplaces in different States or the State where the parties' workplaces are, must differ from the State in which a significant part of the settlement agreement is fulfilled or it must differ from the State most relevant to the subject of the settlement agreement.

Settlement agreements that are; arising from a consumer's actions for personal, family or household purposes, concerning family, inheritance or employment law, approved by a court or made during a trial in a court and enforceable as a court order in the State where that court is located, determined and enforceable as an arbitration decision, are excluded from the scope of the Convention.

In order for the execution of the settlement agreement to be requested, a document proving that the settlement agreement signed by the parties and the related settlement agreement that has been signed, must be submitted to the competent authority in this matter. As nowadays electronic communication is of paramount importance, how the condition of the settlement agreement being signed by the

parties and the mediator will be considered fulfilled if the mediation activity is carried out electronically, is also regulated in the Convention. However, if the settlement agreement is not in the official language of the State where execution is requested, the agreement will have to be translated into the official language of the State concerned. According to the Convention, the competent authority can request further documents to verify that the requirements for enforceability are met. It is stipulated in the Convention that the State from which execution is requested should evaluate the request immediately.

In Article 5 of the Convention, the reasons for rejection of the demand for the execution of the settlement agreement are listed numerus clausus. While some of the reasons for refusal are counted as reasons to be examined ex officio by the competent authority, some are the reasons to be examined upon the objection and proof of the party against whom enforceability is requested.

In the event that granting the right of enforceability is against the public order of that state or the dispute is related to an issue that cannot be resolved through mediation according to the laws of that state, the competent authority may reject the enforceability request by ex officio examination.

In the event that granting the right of enforceability is against the public order of that state or the dispute is related to an issue that cannot be resolved through mediation according to the laws of that state, the competent authority may reject the enforceability request by ex officio examination.

In the event of incompetence of one of the parties, the settlement agreement bein invalid, dysfunctional or impracticable according to the applicable law agreed by the parties, or if there is no such law, according to Article 4, the law assumed to be applied by the competent authority of the State where the enforceability request was made, the settlement agreement not being binding and final, amendment of the settlement agreement, fulfillment of the obligations stipulated in the settlement agreement, obligations stated in the settlement agreement not being clear or understandable, the execution of the settlement being against the terms of the settlement agreement, violation of the rules regarding the mediator or mediation by the mediator and the settlement agreement wouldn’t be signed by the parties if the violation didn’t occur, existence of a matter that may raise doubts about the mediator's impartiality or independence which has not been disclosed to the parties and this deficiency has a substantial effect on the will of one of the parties to conclude the settlement agreement, the competent authority may reject the enforceability request upon the objection and proof of the party that has been requested enforceability against.

In Article 3 of the Convention, it is regulated that the contracting states will execute the settlement agreement in accordance with their own procedural rules in accordance with the conditions specified in the Convention. In this context, it is aimed to ensure the faster and more effective implementation of the Convention by leaving the procedural issues regarding the execution of the settlement agreements to the  domestic laws of the states. Thus, The Mediation Law in Legal Disputes that enables to obtain enforceability annotation for the settlement agreements that Turkey has put into force in 2012, will have an important impact on the Convention to be easily included in Turkish Law.

Consequently, the Convention has had very important results in the settlement of international commercial disputes through mediation. It will ensure that the mediation method, which is a fast and flexible dispute resolution method, will frequently be preferred due to the international enforceability provided by the Convention, in case the settlement agreement is not fulfilled.

Sezin ERGÜNER