Ukraine signed the Singapore Convention simplifying enforcement of international settlement agreements resulting from mediation
On 7 August 2019, the United Nations Convention on International Settlement Agreements Resulting from Mediation was signed in Singapore. Ukraine is among the signatory states.
The Convention is intended to allow and facilitate enforcement of the solutions negotiated by the parties in mediating cross-border commercial disputes. It provides implementation of tools for recognizing and enforcing mediation arrangements, which are similar to those envisaged in the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
The Convention will apply to international settlement agreements resulting from mediation in commercial disputes between two companies from different member states. It provides a harmonized framework for recognizing such agreements in the territory of the member state and allows recourse to court for the agreement recognition and enforcement in a foreign jurisdiction.
The Singapore Convention has been designed to facilitate international trade and promote mediation as an alternative and effective method of resolving trade disputes. It guarantees that a settlement reached by parties through mediation becomes binding and enforceable in a foreign jurisdiction in accordance with a simplified procedure.
What are the benefits for businesses?
From now on, if a Ukrainian company and a company from another Party to the Convention settle a dispute through mediation, the enforcement of the relevant settlement agreement in the territory of such other Party will only require legal recourse in accordance with a streamlined procedure for formal vetting and recognition of the settlement agreement and obtaining an enforcement order.
Essentially, the Convention has enhanced mediation with guarantees of enforcement and has become the previously missing piece of the "puzzle" of the uniform and efficient procedure for implementation of agreements resulting from mediation.
Ukraine's participation in signing the Convention signals to foreign investors that the country recognizes and is ready to promote and use alternative dispute resolution, in line with the entire civilized world – the 46 signatory states include the USA and China. In the long term, this will have the effect of creating a more favorable investment climate, cutting the business costs of dispute resolution, and reducing the workload of courts.
The signing of the Convention is a major step in endorsing the recognition of mediation by the global community. It is good to see that Ukraine keeps pace with the world in this process and has joined the Singapore Convention from the onset.
Asters' lawyers who joined the working group of the Ministry of Justice of Ukraine, which will be drafting the Singapore Convention ratification proposals, are Yuna Potomkina (member of the Ukrainian Bar Association and senior associate at Asters) and Natalia Bezkhlibna (member of the National Association of Mediators of Ukraine and associate at Asters). The working group will develop the necessary legislative changes for the ratification and efficient implementation of the Convention in Ukraine.
For further information, please contact Asters' partner Oleksii Reznikov, senior associate Yuna Potomkina or associate Natalia Bezkhlibna.
