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  • Given the ongoing impact of the COVID-19 pandemic on supply chains and business liquidity, contract breaches are likely to occur.
  • The Singapore Convention can provide Australians conducting international business with the opportunity to engage in amicable commercial discussions, and hold counterparties to account for agreed outcomes. It also provides a potentially cheaper, faster and more flexible alternative to international arbitration or litigation.
  • Choice of mediator is vital to an enforceable agreement.

The United Nations Convention on International Settlement Agreements Resulting from Mediation (the ‘Singapore Convention) came into force on 12 September 2020. At the time of writing, there are 53 participant States, among them China and the United States. Australia is not yet a party, however given the Convention does not operate on the basis of reciprocity between States, it is still relevant to Australian businesses engaging in international trade and commerce with other participant States or in other participant States.

International dispute resolution

Previously arbitration was the only alternative dispute resolution (‘ADR’) method that could be easily enforced internationally. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (‘New York Convention’), allows parties to easily enforce their arbitral award in jurisdictions which are contracting States.

The Singapore Convention now provides another tool to assist international dispute resolution. It recognises the value of mediation as a method of amicably settling disputes (therefore helping preserve the relationship) arising in the context of international commercial relations. It has arisen in response to the increasing use of mediation in international commercial practice as an alternative to litigation (Singapore Convention, Preamble). Parties who resolve international disputes through mediation can have their award recognised and enforced in any State that is a signatory to the Convention. This provides an established framework by which mediated settlement agreements can be recognised and enforced around the globe. Together with that framework comes certainty of outcome, a cost-effective method of dispute resolution, ease of recognition and enforcement.

Benefits for Australian businesses

The Singapore Convention provides Australians conducting international business with the opportunity to engage in amicable commercial discussions and, critically, to hold participants to account for agreed outcomes. In the present economic climate, breaches of contract are likely as a result of the COVID-19 pandemic and the ongoing effect on supply chains and business liquidity. The Singapore Convention will allow parties to resolve those disputes amicably, provide a flexible ADR process during unpredictable times and, importantly, to preserve relationships into the future.

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