Turkey ratified the Singapore Convention on Mediation

On 25 February 2021, Turkey Parliament ratified the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the “Singapore Convention on Mediation”. When the world has been devastated by a pandemic, this Turkey initiative has been timely and befitting.

Turkey’s Ratification of the Convention

On 25 February 2021, Turkish Parliament ratified the United Nations Convention on International Settlement Agreements Resulting from Mediation. The Convention provides an effective mechanism for the enforcement of international settlement agreements resulting from mediation. As a result of Turkey’s ratification of the Convention, international settlement agreements falling under the Convention and involving assets located in Turkey may be enforced directly by the courts of Turkey. 

The Singapore Mediation Convention was published in the Official Gazette dated March 11, 2021.

The Convention

The convention, providing an alternative to the traditional adjudicatory processes of litigation and arbitration, creates a synchronized and integrated avenue for international settlement of commercial and civil disputes through mediation.

The Convention applies to international settlement agreement resulting from mediation. It establishes a harmonized framework to invoke cross-border settlement agreements and to enforce them, thereby bringing more certainty and stability to mediation procedures between international parties. 

The Singapore Convention was adopted on 20 December 2018 by Resolution 73/198 during the seventy-third session of the General Assembly of the United Nations. On 7 August 2019, Singapore hosted the signing ceremony where 46 countries signed what would be commonly known as the Singapore Convention. 46 countries, including the world’s two largest economies, the United States and China, and three of the four largest economies in Asia, China, India and South Korea, signed the Singapore Convention on the day it opened for signature, while another 24 countries attended the signing ceremony to show their support for the Singapore Convention. The Convention has entered into force on 12 September 2020.

When a state ratifies the Convention, the Convention shall enter into force in such a state six months after its ratification or accession to the Convention.

Key Features of the Convention

Pursuant to Article 1 (“Scope of Application”), the Convention applies to international agreements resulting from mediation and concluded in writing by parties to resolve a commercial dispute.

Article 1 also lists the exclusions from the scope of the Convention. Specifically, the Convention excludes settlement agreements concluded by a consumer for personal, family or household purposes, or relating to family, inheritance or employment law, as well as settlement agreements that are enforceable as judgments or as arbitral awards.

Article 3 (“General Principles”) considers the key obligations of the Parties to the Convention with respect to both enforcement of settlement agreements and the right of a disputing party to invoke a settlement agreement covered by the Convention.  It essentially provides that a state that is a party to the Convention shall enforce international settlement agreements in accordance with its rules of procedure and under the conditions laid down in the Convention.

Pursuant to Article 4 (“Requirements for reliance on settlement agreements”), a party relying on a settlement agreement must supply to the competent authority the settlement agreement signed by the parties and evidence that the settlement agreement resulted from mediation.

In Article 5 (“Grounds for refusing to grant relief”), the Convention sets out grounds upon which a court may refuse to grant relief at the request of the disputing party against whom it is invoked.

These grounds include: (i) the incapacity of a party; (ii) nullity of the settlement agreement, its lack of binding and final character or its subsequent modification; (iii) the obligations in the settlement agreement have been performed or are unclear; (iv) the requested relief would be contrary to the settlement agreement; (v) breach by the mediator of standards applicable to the mediator or the mediation; (vi) failure by the mediator to disclose circumstances raising justifiable doubts as to the mediator’s impartiality or independence.

Article 5 includes two additional grounds upon which the court may, on its own motion, refuse to grant relief. Those grounds relate to public policy and the fact that the subject matter of the dispute cannot be settled by mediation.

Promoting amicable settlement globally

Globally, in recent years, sophisticated mediation cultures and supportive institutional frameworks have been developed in many advanced legal systems, particularly those with common law traditions, such as the US, Canada, the UK, and Australia. Even in jurisdictions practising the continental civil law, particularly those in the European community, countries have adopted the EU Mediation Directive (2008) on certain aspects of civil and commercial matters, later further expanded through the EU directive on online dispute resolution in 2013, both designed to promote amicable settlement of disputes using mediation. 

The 2012 German legislation requiring a statement on the willingness of parties in all civil matters to resort to a mediated settlement by what is termed as a “conciliation judge” is an instance of the European regional trends promoting mediation. 

Amongst the Asian countries, the 2003 amendment of the Civil Procedure Code (CPC) in Bangladesh, the Arbitration and Conciliation Act, 1996 in India, the 2012 Civil Code adopting the principle of “mediation first” in China, or the Mediation Act 2017 in Singapore, are all but some of the instances of adopting and promoting the spirits of out-of-court settlement of disputes, ADR/ODR to be precise. 

Current and future turmoil

The ratification’s timing is significant. The global economy, which was already in choppy waters, is now wracked by the COVID-19 pandemic. On the horizon, the business community also has to grapple with the burgeoning realities of climate change coupled with a political landscape where inequalities of opportunity are generating historic social shifts. Against this background of current and future turmoil, an international instrument which bolsters an effective form of alternative dispute resolution is to be welcomed.

The COVID-19 pandemic has stress-tested not only the detailed economic bargain underpinning most commercial agreements, typically manifested in the risk/reward allocation and the assignment of particular rights, obligations and responsibilities to the various parties, but it has also laid bare where the parties’ wider interests may not be fully aligned.

Primary effects of ratification

The primary effect of ratifying the convention would be to entrust international settlement from mediations with the same status as international arbitral awards (or a judgment of the court) in terms of enforcing the settlement in Turkey.

These notions of certainty, predictability, and legal sanctity of international settlement agreements from mediations have been seen as ones that promise great potentials in attracting FDIs, multinational corporations, SMEs, and increased cross-border trade and businesses for Turkey.