The recent implementation of the United Nations Convention on International Settlement Agreements Resulting from Mediation has garnered attention due to its potential impact on the resolution of corporate disputes. The Convention has been introduced as a more effective way to enforce mediated settlements, particularly between businesses in India and other signatories.
About the United Nations Convention on International Settlement Agreements
Adoption of the Convention took place on the 20th December 2018 during the United Nations General Assembly. Following this, it was opened for signature on 7th August 2019 in Singapore. Consequently, it is also referred to as the Singapore Convention on Mediation. This marks it as the first United Nations treaty to receive the name of Singapore.
It’s important to note that Singapore’s collaboration with the UN Commission on International Trade Law, other United Nations member states, and various non-governmental organisations was integral to the development of the Convention. It was approved by India for signing in July 2019. As of the 1st of September, 2020, the Convention has welcomed 53 signatories. This includes heavy-hitters such as China and the USA.
Significance of the Convention
The main purpose of the Convention is to be an instrumental tool in supporting international trade. It achieves this by promoting mediation as an effective and preferable method for resolving trade-related disputes. Additionally, the Convention ensures that settlements arrived at by parties are binding and are enforceable using a straightforward streamlined procedure.
For businesses looking to enforce a mediated settlement agreement across national borders, the Convention allows them to apply directly to the courts of countries that have signed and ratified the treaty. This negates the need to enforce the agreement as a contract in accordance with each country’s domestic processes. This harmonised approach aims to decrease time wastage and legal costs which are paramount considerations in times of uncertainty, such as during pandemics like Covid-19.
On a global scale, the Convention enables businesses to have greater assurance when resolving cross-border disputes through mediation. This is mainly due to its ability to effectively enforce mediated outcomes.
Impact on India
India stands to benefit significantly from the Convention on several fronts. Primarily, it will enhance India’s ease of doing business by facilitating rapid settlements of corporate disputes through mediation. This will also promote increased investor confidence. This move sends a clear message to foreign investors about India’s commitment to following international practices on Alternative Dispute Resolution (ADR).
Conclusion
The implementation of the United Nations Convention on International Settlement Agreements Resulting from Mediation is a significant development in the sphere of international trade and corporate dispute resolution. The Convention’s promise of efficient enforcement of mediated settlements across borders is set to streamline legal processes, cut down time and costs, and boost business activities globally.