SINGAPORE CONVENTION
Singapore Convention-United Nations Convention on International Settlement Agreements Resulting from Mediation-(“Convention”),; is an agreement which opened to signature to assist the parties to settle commercial disputes amicably. Turkey ratified abovementioned Convention by enacting a ratification act by the Turkish Grand National Assembly on March 11, 2021 and the Presidential Decree of April 22, 2021, and Convention has entered into force as of October 22, 2021.
Arbitration is an alternative dispute resolution method in international commercial disputes. However, when we compare mediation and arbitration in terms of applicability, for the enforcement of arbitration decisions, the decision must be recognized by the applicable country. At this stage, Convention was signed to expand and facilitate mediation as an alternative solution in international commercial disputes. Namely; the settlement agreement signed by the parties does not need to be recognized by the state. Signature of Convention by the state where the agreement shall apply is sufficient. Thus, Convention helps states to save resources in the administration of justice and provides a solution that is acceptable and applicable to states which have different legal, social and economic structures, too.
According to the Singapore Convention Article 1, requirements for a settlement agreement to be considered as international are as follows:
- “At least two parties of 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.”
Although Convention is naturally international, it is not applicable to following settlement agreements:
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Has been made for the resolution of disputes regarding the transactions made by the consumer for personal, family or household purposes;
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Related to family, inheritance or employment law,
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Approved by a court or made during court proceedings, Executed as a court decision on the seat of the court,
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Settlement agreements that are recorded and fulfilled as arbitral awards.
There is written form requirement to the settlement agreement for the Convention to be applicable. For electronically made settlement agreements, the written form requirement is fulfilled if the content is accessible.
If an international commercial dispute has been resolved by a settlement agreement as a result of mediation, but a dispute has arisen due to the claim of one of the parties, the settlement agreement is accepted as a legal basis under Convention to prove that the dispute has already been resolved. Namely, in a lawsuit filed as a result of such dispute, the settlement agreement should be considered as an evidence. To accept the settlement agreement as a basis, the document must have the signatures of the parties and the mediator. The signature can also be put electronically.
Therefore; due to its easy, fast and economical applicability, it is thought that Convention, mediation will find more application areas as an alternative dispute resolution method in international commercial disputes, and at the same time, this will contribute the signatory states to be seen as safe and attractive for investments and investors.