POSTED 9 Sep 2019 - 11:46

What is the biggest consideration for a business when seeking to resolve a commercial dispute?

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How will the new Singapore Convention on Mediation affect the decision?

Top Response

Yu-En Ong, Head of Singapore, Norton Rose Fulbright (Asia) LLP

The successful use of mediation to resolve international commercial disputes is one of the big success stories of the last 20 years. In international commercial disputes, the most important considerations are time, cost and enforcement. With this in mind, the Singapore Convention on Mediation is...


Helen Ng, Chief Executive Officer, Lock+Store
9 Sep 2019 - 11:54

Businesses are increasingly turning to mediators to resolve commercial conflict without incurring hefty legal bills. The neutrality of the mediator is a key consideration for disputing parties. Another important consideration is the enforceability of settlement agreements. The new Singapore Convention on Mediation is timely as more companies are expanding overseas amid market saturation. The treaty removes the uncertainty of entering into cross-border agreements.

Free trade can only flourish if companies' interests are protected by a robust international legal framework that also covers dispute resolution.

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Mark Billington, Regional Director, Greater China and South-East Asia, ICAEW
9 Sep 2019 - 11:53

Businesses involved in a commercial dispute are looking for a cost-and time-effective resolution that is reasonable for all parties involved. These conditions are usually a challenge to fulfil for cross-border commercial disputes, as they are often fraught with inconsistencies and differences in how laws across jurisdictions are being interpreted and enforced.

The Singapore Convention on Mediation presents an alternative approach to resolving disputes that is recognised internationally, and can be enforced. At a reasonable and transparent cost, businesses can now leverage the Convention to achieve fair outcomes and arrangements that are beneficial to them. This will ultimately increase the efficiency and effectiveness of cross-border business transactions, improve business confidence and boost international trade, commerce and investment.

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Sarah Thomas, Partner, Morrison & Foerster
9 Sep 2019 - 11:53

Businesses find commercial disputes an unhelpful distraction from their operations, so their primary objective is to resolve and move on from disputes as quickly as possible. To do that, businesses demand final comprehensive resolution of their disputes with no ends untied, so to speak. Other important considerations for businesses are:

Time and cost efficiency: Disputes must be resolved efficiently in a timely and relatively inexpensive manner; and

Confidentiality: Businesses prefer that information about their disputes remain confidential.

The New Singapore Convention on Mediation has the potential to significantly increase the popularity of mediation cross-border disputes. At present, only arbitral awards (and, in some instances, court judgments) are readily enforceable across borders. If given effect in domestic legislation and ratified, the Singapore Convention will potentially offer businesses an additional means of obtaining a globally enforceable resolution of their disputes: through the conclusion of a mediated settlement agreement. Because litigation and/or arbitration between parties may be split across different fora (eg different courts and tribunals), settlement offers businesses the advantage of achieving a comprehensive resolution of all disputes through a single mediation, the outcome of which is memorialised in a single settlement agreement. This is likely to be very attractive to businesses.

That said, the success of any resolution reached through a mediated settlement agreement will depend on the quality of the agreement itself and the approach of the enforcement court. The drafting of the Convention leaves room for dispute at the time of the enforcement as to the propriety of the underlying mediation procedure and the proper interpretation of the settlement agreement. It remains to be seen as a practical matter whether parties with the assistance of a mediator will be able to draft and agree upon settlement agreements with terms having the necessary clarity and detail to be directly and specifically enforced by a court. When procedure and interpretation are disputed, there will be an adverse impact on not only the finality of the process, but on other core benefits of mediation such as time and cost efficiency. However, if the Convention is carefully implemented into domestic legislation and national enforcement courts enforce mediated settlement agreements under the Convention in good faith and a rational way, the Singapore Convention has the potential to make mediated settlement a powerful tool in the dispute resolution toolkit.

Chia Ngiang Hong, President, Real Estate Developers' Association of Singapore (REDAS)
9 Sep 2019 - 11:52

A reasonable level of certainty to enforce the desired settlement outcome is very important. Alternative dispute resolution (ADR) mechanisms are less formal and often considered as cost-effective solutions to expedite resolutions of disagreements or disputes in business. They also take on a less adversarial approach, which reduces the risks and costs of damaging relationships and tarnishing reputations, and generally require less time and money, making them worthwhile options to consider.

In mediation, disputing parties come to a resolution on their own with the help of a neutral third party but the settlement agreement reached is voluntary and non-binding, causing concern over its enforceability, especially across borders. This concern is alleviated with the recent UN-sanctioned Singapore Convention on Mediation, which will enable the expedited enforcement of mediated settlement agreements amongst the signatory countries. This should encourage more businesses to consider mediation in their dispute settlement strategy.

Dileep Nair, Independent Director, Thakral Corporation Limited
9 Sep 2019 - 11:52

While commercial disputes are inevitable, businesses are keen to settle them as soon as possible and get on with their work. Spending the least money as well as time and energy (both of which translate into cost) on settling them is uppermost for a business, given its focus on the bottom line. Recourse to mediation offers this benefit, and more. Besides lower cost, mediation allows predictability of outcome as well as preservation of ongoing business relationships. The Singapore Convention on Mediation will establish the legitimacy, credibility and enforceability of mediation just as the New York Convention on Arbitral Awards has done for arbitration. This should spur businesses to think of mediation first before going to court, making mediation a mainstream (rather than an alternative) process. Indeed, it is fitting that the mediation treaty has been signed in Singapore since Asia has a strong tradition in using mediation as a ''harmonious'' way of settling disputes.

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Mario Singh, CEO, Fullerton Markets
9 Sep 2019 - 11:51

The biggest consideration for all businesses and companies when seeking dispute resolution is cost. Various costs like finances, time and lost opportunities will all be incurred. As an example, prior to a commercial dispute resolution, steps that need to be taken include reviewing of contracts, clarifying areas of disagreements and assessing the claims or losses from each affected party.

Prior to the establishment of the Singapore Convention on Mediation, mediated settlement agreements couldn't be enforced across country borders. With the new Singapore Convention on Mediation being signed by 46 countries, the above costs can be drastically reduced. This is because it allows for settlement agreements arising from mediation to be enforced internationally.

Sujith Sivaram, Managing Director, ESCO Pte Ltd
9 Sep 2019 - 11:51

Net economic gain is the key consideration in trying to resolve commercial disputes. Mediation proceedings help to enlighten both parties on their rights and credibility of their arguments and help to moderate expectations of both parties and promote settlement through negotiation. The Singapore Convention on Mediation adds assurance to parties and renders more confidence in realising the economic gains, thus making it the preferred option for parties seeking dispute resolution.

S Suressh, Partner, Litigation and Dispute Management, Eversheds Harry Elias
9 Sep 2019 - 11:50

No two cases or commercial disputes are alike, so it is impractical to generalise them. The principal factors that parties consider when resolving commercial disputes via mediation are as follows: (i) opportunity for greater personal involvement in the case; (ii) the cost savings of mediation over more traditional alternatives; (iii) mediation's ability to better preserve relationships as it seeks to develop solutions based on mutual interests; (iv) the confidentiality of the mediation process; and (v) the mediator's neutrality and ability to work out a solution that considers the needs and interests of all parties.

The Singapore Convention on Mediation serves two functions: it provides a framework for mediation to be recognised as a valid and serious form of dispute resolution (rather than a casual agreement); and it provides for a simpler mechanism for the enforcement of settlement agreements rather than forcing parties to sue on it.

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