Amidst the growing incidents of cross border trade disputes and the resultant chaos and bit to the global economy, and agreement was signed by the members of the United Nations on Wednesday called the Singapore Convention on Mediation which aims at intervening to mediate and easily settle cross-border commercial disputes as well as help in the normalization of trade relationships between nations and regions.

46 U.N. members, including the United States and China signed on Wednesday in Singapore the U.N. Convention on International Settlement Agreements Resulting from Mediation which is the official title of the agreement. U.N. conventions are often named after the country or city where they are signed.

The primary aim of the agreement is to create and develop a framework that would be acceptable and applicable globally which would offer  a greater sense of confidence to businesses and trade about the settlement of dispute at the international level through mediation instead of the parties taking recourse in courts which typically takes up a very long time to get resolved as well as incurs a hefty cost.

“This will help advance international trade, commerce and investment,” said Singapore’s Prime Minister Lee Hsien Loong at the signing ceremony. “Today, a group of states have come together to recommit ourselves to multilateralism and to declare that we remain open for business.”

In jurisdictions like the United States and the United Kingdom, commercial disputes are already being settled through mediation. However there is no globally acceptable framework. The signing members are hopeful that after the agreement at the convention, there would be an improvement in the credibility of mediation as a solution o trade disputes.

“Uncertainty surrounding the enforcement of settlement agreements had been the main obstacle of the greater use of mediation,” said UN Legal Affairs Assistant Secretary-General, Stephen Mathias. “The convention sets the standards for enforcing and invoking settlement agreements, the requirements for reliance on settlement agreements and the grounds for refusing to grant relief.”

For the small city state of Singapore, the naming of the convention is very important. This city state that has a population of more than 130 foreign law firms and it is vying to be an international legal hub as the number of commercial cross-border disputes rise.

(Adapted form Reuters.com)

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