On 7 August 2019, Turkey signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention“), which aims to regulate the enforcement of cross-border settlement agreements resulting from mediation. The Singapore Convention is similar to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1956, which regulates the enforcement of foreign arbitral awards and which Turkey also signed.
Under Turkish law, all disputes arising out of private law transactions concerning matters that can be freely disposed of are subject to mediation. However, parties must undergo mandatory mediation for commercial disputes for monetary claims pursuant to the Turkish Commercial Code. The Singapore Convention is applicable to cross-border settlement agreements settling commercial disputes as a result of a mediation. Taking this into consideration, settlement agreements signed following mandatory mediations prior to filing commercial cases are in the scope of the Singapore Convention, provided that they also meet the other conditions specified under the Singapore Convention. Therefore, the ease of enforcing settlement agreements concerning international commercial disputes and signed as a result of a mandatory mediation in the contracting states of the Singapore Convention will make mandatory mediation a functional and effective way to settle these types of disputes.
Scope of the Singapore Convention
The Singapore Convention is applicable to written cross-border settlement agreements that settle commercial disputes as a result of a mediation.
The Singapore Convention does not apply to settlement agreements
- concluded to resolve a dispute arising from transactions engaged in by a consumer for personal, family or household purposes;
- relating to family, inheritance or employment law;
- 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; and
- that have been recorded and are enforceable as an arbitral award.
Necessary documents for the enforcement of a settlement agreement
The party requesting the enforcement of an international settlement agreement only needs to submit two documents to the competent authority, namely:
- a copy of the signed settlement agreement, and
- evidence that the settlement agreement resulted from mediation (e.g., the mediator’s signature on the settlement agreement or evidence that the competent authority deems acceptable).
Grounds for refusal of the enforcement of a settlement agreement
When a party seeks the enforcement of the settlement agreement, the competent authority of the state that is a party to the Singapore Convention may only reject the request for enforcement ex officio if the enforcement would be contrary to that state’s public policy or if the subject matter of the dispute cannot be mediated pursuant to the laws of the state where the party seeks enforcement.
A party may also rely on a number of grounds to prevent the enforcement of a settlement agreement, such as incapacity of a party; a null, void, inoperative or incapable settlement agreement; and the mediator’s failure to disclose to the parties any circumstances that raise justifiable doubts regarding the mediator’s impartiality or independence.
The Singapore Convention is the first major step towards creating an international legal framework for the enforcement of settlement agreements resulting from mediations. The Singapore Convention will increase the popularity of international mediation because it will abolish the need for a court judgment or an arbitral award recording the result of a mediation to enforce settlement agreements. It will also reduce parties’ need to resort to post-mediation steps, such as court proceedings or arbitration.
Although European Union member states and Russia are not parties to the Singapore Convention, the US, China, India, Qatar, Israel, and Korea which are amongst Turkey’s most significant trade partners signed the Singapore Convention. In this regard, securing the enforcement of settlement agreements following mediation in the scope of the Singapore Convention in states that are relevant to Turkey’s economy shows the significance of the Singapore Convention for Turkey.