In August of 2019, Qatar became one of the first signatories to the UN Convention on International Settlement Agreements Resulting from Mediation, or otherwise known as the Singapore Convention on Mediation.
The Instrument of Accession to the Convention was signed by His Excellency Dr. Issa bin Saad Al Jafali Al Nuaimi, Minister of Justice and Minister of State for the Council of Ministers Affairs.
The importance of the Singapore Convention for those investing in Qatar or engaging in business with Qatar based counterparts is that it provides enforceability for settlement agreements that have been achieved through mediation.
Qatar’s signing of the Singapore Convention is a major development for expedient dispute resolution processes in Qatar. Parties will now able to enforce settlements agreements that are a result of mediation as if they were an arbitral award.
Generally, the enforcement of settlement agreement is akin to the enforcement of contractual obligations – requiring the non-defaulting party to proceed with standard court processes in case parties do not comply with the terms of the settlement agreement.
As the New York Convention has significantly benefited arbitral proceedings and investment protection in the State of Qatar, so will the Convention provide a larger level of confidence for parties to resolve their issues amicably without the need to resort to substantial court procedures.
Outside the parameters of the State of Qatar, this will also assist parties in enforcing against assets located in other States that are signatory to the Convention. However, the Convention can also be used as a defense mechanism if a dispute arises in a signatory State, but the matter has already been resolved via a mediation under the Convention, the respective settlement agreement can be presented to challenge the jurisdiction of the court overseeing the dispute.
The Convention was adopted on 20 December 2018 and was open for signature on 7 August 2019 in Singapore, and thereafter, at the United Nations headquarters in New York. The Convention is aimed at facilitating litigation procedures and providing alternative means of resolving disputes quickly.
The Convention applies to international settlement agreements resulting from mediation. It sets up a seamless system for the privilege to summon settlement understandings just as for their implementation.
“A uniform and efficient framework for international settlement agreements resulting from mediation”
The Convention defines a settlement agreement as being “in writing” if its content is recorded in any form. The requirement that a settlement agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference.
“Mediation” is defined as a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons lacking the authority to impose a solution upon the parties to the dispute.
Signatories (as of August 2019): Afghanistan, Belarus, Benin, Brunei, Chile, China, Colombia, Congo, Democratic Republic of Congo, Eswatini, Fiji, Georgia, Grenada, Haiti, Honduras, India, Iran, Israel, Jamaica, Jordan, Kazakhstan, Laos, Malaysia, Maldives, Mauritius, Montenegro, Nigeria, North Macedonia, Palau, Paraguay, Philippines, Qatar, Republic of Korea, Samoa, Saudi Arabia, Serbia, Sierra Leone, Singapore, Sri Lanka, Timor-Leste, Turkey, Uganda, Ukraine, USA, Uruguay, Venezuela.
When is the Convention applicable?
The Convention applies to an agreement resulting from mediation and concluded in writing by parties to resolve a commercial dispute (“settlement agreement”) which, at the time of its conclusion, is international in that:
- At least two parties to the settlement agreement have their places of business in different States; or
- The State in which the parties to the settlement agreement have their places of business is different from either:
- The State in which a substantial part of the obligations under the settlement agreement is performed; or
- The State with which the subject matter of the settlement agreement is most closely connected.
The Convention does not apply to settlement agreements:
- Concluded to resolve a dispute arising from transactions engaged in by one of the parties (a consumer) for personal, family or household purposes;
- Relating to family, inheritance or employment law.
The Convention does not apply to:
- Settlement agreements:
- That have been approved by a court or concluded in the course of proceedings before a court; and
- That are enforceable as a judgment in the State of that court;
- Settlement agreements that have been recorded and are enforceable as an arbitral award.
If an application or a claim relating to a settlement agreement has been made to a court, an arbitral tribunal or any other competent authority which may affect the relief being sought, the competent authority of the Party to the Convention where such relief is sought may, if it considers it proper, adjourn the decision and may also, on the request of a party, order the other party to give suitable security.