On August 7th 2019, Turkey joined the United Nations Convention on International Mediation Settlement Agreements ("Singapore Convention"), which seeks to govern the implementation of international mediation settlement agreements.
The Singapore Convention is identical to the 1956 New York Convention on the Recognition and Compliance of Foreign Arbitral Awards, which governs the compliance and signing of foreign arbitral awards.
By Turkish law, all conflicts arising from private law agreements on issues that can be freely settled are subject to arbitration. Parties must, however, attend mandatory arbitration for commercial disputes over financial claims under the Turkish Commercial Code.
The Singapore Convention applies through mediation to cross-border settlement agreements settling commercial disputes. Taking this into account, settlement agreements concluded after compulsory arbitration before commercial proceedings are within the scope of the Singapore Convention, given that they also satisfy the other requirements stated in the Singapore Convention. Consequently, the ease of implementing arbitration agreements on international commercial conflicts, negotiated as a consequence of mandatory mediation in the Singapore Convention's contracting countries, would make mandatory mediation a practical and effective way to resolve such forms of conflicts.
Scope of the Singapore Convention
The Singapore Convention refers to written cross-border arbitration agreements that resolve commercial disputes by mediation. It does not apply to:
- Concluded in resolving a dispute arising from transactions performed by a customer for personal, family or household purposes;
- concerning marriage, inheritance or employment law; authorized by a court or concluded in proceedings before a court and enforceable as a judgment in that case;
- and registered and enforceable as an arbitration;
Necessary documentation to implement a settlement agreement :
The party seeking the compliance of an international settlement agreement only needs to submit two documents, namely:
- a copy of the signed agreement
- evidence that the agreement resulted from mediation (e.g., the mediator’s signature on the settlement agreement or evidence that the competent authority deems acceptable).
Reasons for failure to implement a settlement agreement :
When a party seeks enforcement of the settlement agreement, the competent authority of the State party to the Singapore Convention may only refuse the application for compliance ex officio if the implementation is contrary to the public policy of that State or if the conflict can not be resolved.
A participant may also rely on a variety of grounds to avoid implementation of a settlement agreement, such as a party's incapacity; a null, invalid, inoperative or incapable settlement agreement; and the mediator's failure to disclose to the parties certain circumstances that pose legitimate questions about the impartiality or autonomy of the mediator.
The Singapore Convention is the first major step in establishing an international legal structure to implement negotiated settlement agreements. The Singapore Convention would increase the acceptance of international arbitration by abolishing the need for a court judgment or arbitral award reporting the results of a negotiation to implement settlement agreements. It will also reduce the need to resort to post-mediation measures, such as court proceedings or arbitration.
While member states of the European Union and Russia are not parties to the Singapore Convention, the Singapore Convention was signed by the US, China, India, Qatar, Israel, and Korea, which are among Turkey's most important trade partners. In this regard, securing enforcement of settlement agreements after mediation in the scope of the Singapore Convention in countries relevant to Turkey's economy shows the significance of the Singapore Convention for Turkey.