Singapore Convention and mediation in Thailand

Post Views: 299

For cross – border commercial disputes, the parties found that the litigation is inappropriate to resolve the disputes for various reasons, such as cost, delay, inability to handle the technicalities of cross border disputes, the difference between the legal systems and national court system and etc.[1]

Because of the aforesaid reasons, the legal practitioners have turned to settle the cross border disputes by using arbitration, which seems to overcome the flaws that are found in litigation, as well as offering several advantages such as confidentiality and privacy, ability of parties to select arbitrators. You can see from the statistics that have been shown up in Queen’s Mary 2018 International Arbitration survey : The evolution of international arbitration that 97% of respondents expressed that international arbitration is their preferred method of resolving cross – border disputes.[2]

However, international commercial entities have been recently experiencing some drawbacks with arbitration, such as increasing of costs, lack of speed and also lack of effective sanctions during the arbitral process. At present, the legal practitioners are turning to another process of alternative dispute resolution which is mediation.

Mediation keeps increasing its popularity continuously because it can effectively resolve the cross border disputes while saving time and expenses. Mediation also reduces the instances where a dispute leads to termination of commercial relationships and facilitating the administration of international transactions by commercial parties.

However, there are some difficulties that parties face in ensuring that the other party complies with their mediated agreement. As the mediated agreement are binding the parties contractually and therefore, not directly enforceable. In the event that the settle agreement has been successfully made, and a party does not comply with its obligations, the other party must enforce the terms of the mediated agreement through the dispute resolution procedure in the agreement (either by arbitration or litigation).

The lack of an efficient and harmonized framework for cross – border enforcement of mediated agreement are the obstacles to the use of mediation.

Therefore in June 2018 the commission of UNCITRAL’s working group II on dispute settlement finalized the United Nations Convention on International Settlement agreements resulting from agreement and adopted the UNCITRAL Model law on international commercial mediation and International settlement agreement resulting from mediation 2018. This aforementioned model law has been amended from the model law on international commercial conciliation 2002.

On 20 December 2018, the United Nations General Assembly adopted the convention, authorized the signing ceremony of the convention to be held in Singapore and authorized the nomenclature of the “Singapore Convention on Mediation”

On 7 August 2019, the signing ceremony and conference was held in Singapore and 46 countries have signed the Convention on that day., seven other countries signed onto the Convention at the UN headquarters in New York, so the total number of signatories to the Convention is 53 countries.

On 12 September 2020, the Convention has been coming into force after being ratified by six countries.

For Thailand, We have not signed the convention yet. It is under the consideration of the relevant organizations.

Key features of the convention

The Convention set up the effective legal framework for cross border commercial mediated settlement agreements. The contracting parties might file a request to the enforce the mediated agreement, this mechanism is quite similar to New York Convention on the recognition and enforcement of foreign arbitral awards 1958.

Like the New York Convention, there are limited grounds under the Singapore Convention on which the competent authority of a state party may refuse to grant relief requested by a party to a mediated agreement[3]. For instance, the incapacity of a party to the mediated agreement, such agreement is null, void, inoperative or incapable of being performed under the applicable law, granting relief would be contrary to public policy, the subject matter of the dispute is not capable of settlement by mediation under the law where the relief is sought.

On the other hand, it can be said that the Singapore Convention is a positive development for mediation of cross border disputes, and it enables easier enforcement of international mediated agreement.

Mediation act in Thailand

In 2019, the first mediation act of Thailand has been enacted. This Act aims to place uniform systems and standards of procedures for mediating the civil disputes involving not large amount of claims and a certain type of criminal dispute.

For civil disputes, it stipulates in the Act that when a party of the settlement agreement fails to perform its duties, the other party may file a request to the competent court for the enforcement of the settlement agreement. In this event, the competent court shall issue an order to enforce the settlement agreement unless it appears to the court that there are some grounds to refuse to enforce the settlement agreement. From this point, it can be said that the grounds of refusal are very limited. This uniform framework is really similar to the framework in Singapore convention.

However, there are considerable issues such as this act governs only the mediation which are conducted by the state agency only, this act shall not apply to the civil disputes of which the amount of claim exceed 5 million baht etc.

If the mediation are not governed by this act, the party of the settlement agreement would have to commence an action against the party in breach, either through litigation or arbitration, to enforce the settlement agreement. This process would result in unnecessary costs and wasted time for innocent party.

Med-Arb in THAC rules

If the mediation is administered by THAC and under THAC mediation rules, in the event that the settlement agreement can be successfully made and the contracting parties intend to make such agreement become more enforceable and has a same status as the arbitral ward.

The parties can apply the request to the registrar, then the registrar will appoint a sole arbitrator (the persons who perform as the mediators of the case can not be appointed as the arbitrator). The arbitrator will review whether the mediated agreement is null, void, or incapable of being performed or not. If those circumstances are not appeared to the arbitrator, he/she will render the arbitral award. This award is generally accepted and able to enforce in approximately 160 countries under the New York Convention.

The expenses in this med – arb mechanism under THAC rules are less costly than the expenses in the normal arbitration proceeding.

[1] Thomas Gaultier, “Cross-Border Mediation : A new Solution for International Commercial Dispute Settlement”NYSBA International Law practicum, no.26 (Spring 2013) : 38-39.
[2]http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey—The-Evolution-of-International-Arbitration-(2).PDF)
[3] Article 5 of Singapore Convention

For further information, please contact THAC!

Singapore Convention and mediation in Thailand