A win-win option for all

THIS WEEK'S TOPIC: What is the biggest consideration for a business when seeking to resolve a commercial dispute? How will the new Singapore Convention on Mediation affect the decision?

Yeoh Oon Jin Executive Chairman PwC Singapore

Disputes are generally viewed as distractions for businesses who prefer their management to concentrate on expansion and growth. Thus, when a business is faced with a commercial dispute, the aim is usually to quickly resolve the matter with minimal time, resources and reputational damage. While court litigation and arbitration offer binding and enforceable solutions, such processes are usually adversarial and enable only one side to win the case. Where parties are willing to mediate and negotiate terms of settlement, it is more likely that they will be able to achieve a win-win solution as the Singapore Convention on Mediation offers them greater certainty of enforcing such agreement in all signatory countries.

Lynette Chew Director CMS Holborn Asia

Put simply, businesses do not want disputes to detract from their business operations. Ideally, these would be fairly resolved in a timely and cost-efficient manner. Disputes occur against the backdrop of working business relationships in which parties have already invested considerable effort. Understandably, businesses are keen to limit the fallout from disagreements. Mediation, being consensual, is party-driven and allows the flexibility to put creative solutions on the table, and arrive at mutually acceptable outcomes. Businesses will consider that they have greater certainty of enforcing cross-border mediated settlement agreements in countries that are party to the Singapore Convention on Mediation.

Philip Jeyaretnam Global Vice Chair & ASEAN CEO Dentons Rodyk

When faced with a commercial dispute, a business should start with thinking about desired outcomes - recovering money, keeping its reputation intact or preserving the relationship. The mix of desired outcomes will influence next steps. Mediation, as opposed to litigation or arbitration, is best for goodwill, and the possibility of working together in future. The Singapore Convention is helpful when choosing mediation because it enables mediated agreements to be readily enforced across borders (in signatory countries).

Yu-En Ong Head of Singapore Norton Rose Fulbright (Asia) LLP

The successful use of mediation to resolve international commercial disputes is one of the big success stories of the last 20 years. In international commercial disputes, the most important considerations are time, cost and enforcement. With this in mind, the Singapore Convention on Mediation is a great and welcome initiative and certainly elevates Singapore's stature as a dispute resolution hub, but is not an immediate game changer. The Singapore Convention on Mediation, when ratified and implemented by enough countries, promises to smoothen the process of enforcing an international mediated settlement agreement across international boundaries. While it has already been signed by 46 countries, including the United States, India and China, ratification is likely to still take some years.

John Bittleston Founder and Chair Terrific Mentors International Pte Ltd

While commercial disputes are often about money, they can involve ''face'' as well. Businesses in these situations want to ensure that the company:

The new Singapore Convention on Mediation will encourage dispute resolution by mediation, which has proved to be less fractious than court battles, much less costly and generally leaves both parties less hostile. Singapore is ideally situated in both legal and commercial terms to be a mediation centre, because we have an envious record of keeping our cool.

Victor Mills Chief Executive Singapore International Chamber of Commerce

Most businesses would prefer to keep disputes out of the public eye and to settle them out of court for reputational and cost reasons. Alternative dispute resolution options like mediation and arbitration are real advantages to businesses. This is precisely why Singapore facilitates them as practical alternatives to litigation. The Singapore Convention on Mediation removes the concern about cross-border recognition of mediated disputes.

It solves another real business problem and, at the same time, reinforces Singapore's position as a respected hub for dispute resolution. Singapore offers businesses the full range of options for dispute resolution: mediation, arbitration and litigation.

Joyce Fong Associate Reed Smith

The key considerations of a business tend to vary depending on the dispute and parties involved. That said, they typically involve a cocktail of preserving confidentiality, maintaining commercial relationships, maximising time and cost efficiencies and ensuring that the resolution achieved does, in fact, finally achieve an effective outcome, for example, by resulting in actual collection of money.

Since the cross-border enforcement of mediated settlement agreements under the Singapore Convention on Mediation is intended to confer such agreements with equivalent gravitas as arbitral awards and certain court judgments, businesses will be incentivised to consider mediation more seriously and at an early stage, before even commencing court proceedings or arbitrations.

The enhanced enforceability of mediated settlement agreements is also likely to lead to more commercially driven (as opposed to legally determined) outcomes.

Bazul Ashhab Managing Partner Oon & Bazul LLP

The pronouncement of a victor in a bruising battle is necessary to dictate future conduct. An adversarial process which is effective in determining who is the offending party can damage relationships permanently.

Mediation is an alternative to avoid the animosity in dispute but was viewed as ineffective in the past. The Singapore Convention on Mediation provides teeth to a resolution brought about by mediation as it allows for the cross-border enforcement of mediated settlement agreements between commercial parties. Given that the concept of mediation is already a part of the Asian DNA, the Singapore Convention on Mediation is a game changer for Singapore in its continued development as a dispute resolution hub in Asia.

Jason Hammond Chief Executive Officer QBE Asia

Commercial disputes erode trust that has often been painstakingly built over time. The mediation process works well in helping maintain this hard-earned trust in these situations, as it seeks out a mutually agreed resolution rather than one determined and enforced by the courts. The Singapore Convention on Mediation legitimises the mediation process further, ensuring that resolutions derived are legally enforced in jurisdictions that have ratified the treaty. This can only benefit businesses and our stakeholders as our operations become increasingly borderless. As more countries come on board, I feel that mediation will soon become the go-to for commercial disputes, preserving trust and, importantly, collaboration within the global business environment.

S Suressh Partner, Litigation and Dispute Management Eversheds Harry Elias

No two cases or commercial disputes are alike, so it is impractical to generalise them. The principal factors that parties consider when resolving commercial disputes via mediation are as follows: (i) opportunity for greater personal involvement in the case; (ii) the cost savings of mediation over more traditional alternatives; (iii) mediation's ability to better preserve relationships as it seeks to develop solutions based on mutual interests; (iv) the confidentiality of the mediation process; and (v) the mediator's neutrality and ability to work out a solution that considers the needs and interests of all parties.

The Singapore Convention on Mediation serves two functions: it provides a framework for mediation to be recognised as a valid and serious form of dispute resolution (rather than a casual agreement); and it provides for a simpler mechanism for the enforcement of settlement agreements rather than forcing parties to sue on it.

Sujith Sivaram Managing Director ESCO Pte Ltd

Net economic gain is the key consideration in trying to resolve commercial disputes. Mediation proceedings help to enlighten both parties on their rights and credibility of their arguments and help to moderate expectations of both parties and promote settlement through negotiation. The Singapore Convention on Mediation adds assurance to parties and renders more confidence in realising the economic gains, thus making it the preferred option for parties seeking dispute resolution.

Mario Singh CEO Fullerton Markets

The biggest consideration for all businesses and companies when seeking dispute resolution is cost. Various costs like finances, time and lost opportunities will all be incurred. As an example, prior to a commercial dispute resolution, steps that need to be taken include reviewing of contracts, clarifying areas of disagreements and assessing the claims or losses from each affected party.

Prior to the establishment of the Singapore Convention on Mediation, mediated settlement agreements couldn't be enforced across country borders. With the new Singapore Convention on Mediation being signed by 46 countries, the above costs can be drastically reduced. This is because it allows for settlement agreements arising from mediation to be enforced internationally.

Dileep Nair Independent Director Thakral Corporation Limited

While commercial disputes are inevitable, businesses are keen to settle them as soon as possible and get on with their work. Spending the least money as well as time and energy (both of which translate into cost) on settling them is uppermost for a business, given its focus on the bottom line. Recourse to mediation offers this benefit, and more. Besides lower cost, mediation allows predictability of outcome as well as preservation of ongoing business relationships. The Singapore Convention on Mediation will establish the legitimacy, credibility and enforceability of mediation just as the New York Convention on Arbitral Awards has done for arbitration. This should spur businesses to think of mediation first before going to court, making mediation a mainstream (rather than an alternative) process. Indeed, it is fitting that the mediation treaty has been signed in Singapore since Asia has a strong tradition in using mediation as a ''harmonious'' way of settling disputes.

Chia Ngiang Hong President Real Estate Developers' Association of Singapore (REDAS)

A reasonable level of certainty to enforce the desired settlement outcome is very important. Alternative dispute resolution (ADR) mechanisms are less formal and often considered as cost-effective solutions to expedite resolutions of disagreements or disputes in business. They also take on a less adversarial approach, which reduces the risks and costs of damaging relationships and tarnishing reputations, and generally require less time and money, making them worthwhile options to consider.

In mediation, disputing parties come to a resolution on their own with the help of a neutral third party but the settlement agreement reached is voluntary and non-binding, causing concern over its enforceability, especially across borders. This concern is alleviated with the recent UN-sanctioned Singapore Convention on Mediation, which will enable the expedited enforcement of mediated settlement agreements amongst the signatory countries. This should encourage more businesses to consider mediation in their dispute settlement strategy.

Sarah Thomas Partner Morrison & Foerster

Businesses find commercial disputes an unhelpful distraction from their operations, so their primary objective is to resolve and move on from disputes as quickly as possible. To do that, businesses demand final comprehensive resolution of their disputes with no ends untied, so to speak. Other important considerations for businesses are:

Time and cost efficiency: Disputes must be resolved efficiently in a timely and relatively inexpensive manner; and

Confidentiality: Businesses prefer that information about their disputes remain confidential.

The New Singapore Convention on Mediation has the potential to significantly increase the popularity of mediation cross-border disputes. At present, only arbitral awards (and, in some instances, court judgments) are readily enforceable across borders. If given effect in domestic legislation and ratified, the Singapore Convention will potentially offer businesses an additional means of obtaining a globally enforceable resolution of their disputes: through the conclusion of a mediated settlement agreement. Because litigation and/or arbitration between parties may be split across different fora (eg different courts and tribunals), settlement offers businesses the advantage of achieving a comprehensive resolution of all disputes through a single mediation, the outcome of which is memorialised in a single settlement agreement. This is likely to be very attractive to businesses.

That said, the success of any resolution reached through a mediated settlement agreement will depend on the quality of the agreement itself and the approach of the enforcement court. The drafting of the Convention leaves room for dispute at the time of the enforcement as to the propriety of the underlying mediation procedure and the proper interpretation of the settlement agreement. It remains to be seen as a practical matter whether parties with the assistance of a mediator will be able to draft and agree upon settlement agreements with terms having the necessary clarity and detail to be directly and specifically enforced by a court. When procedure and interpretation are disputed, there will be an adverse impact on not only the finality of the process, but on other core benefits of mediation such as time and cost efficiency. However, if the Convention is carefully implemented into domestic legislation and national enforcement courts enforce mediated settlement agreements under the Convention in good faith and a rational way, the Singapore Convention has the potential to make mediated settlement a powerful tool in the dispute resolution toolkit.

Mark Billington Regional Director, Greater China and South-East Asia ICAEW

Businesses involved in a commercial dispute are looking for a cost-and time-effective resolution that is reasonable for all parties involved. These conditions are usually a challenge to fulfil for cross-border commercial disputes, as they are often fraught with inconsistencies and differences in how laws across jurisdictions are being interpreted and enforced.

The Singapore Convention on Mediation presents an alternative approach to resolving disputes that is recognised internationally, and can be enforced. At a reasonable and transparent cost, businesses can now leverage the Convention to achieve fair outcomes and arrangements that are beneficial to them. This will ultimately increase the efficiency and effectiveness of cross-border business transactions, improve business confidence and boost international trade, commerce and investment.

Helen Ng Chief Executive Officer Lock+Store

Businesses are increasingly turning to mediators to resolve commercial conflict without incurring hefty legal bills. The neutrality of the mediator is a key consideration for disputing parties. Another important consideration is the enforceability of settlement agreements. The new Singapore Convention on Mediation is timely as more companies are expanding overseas amid market saturation. The treaty removes the uncertainty of entering into cross-border agreements.

Free trade can only flourish if companies' interests are protected by a robust international legal framework that also covers dispute resolution.

Maren Schweizer Director Schweizer World Pte Ltd

Get to know your business partners first by taking the time to get the relationship right, understand expectations and outline these in written agreements. With rising cross-border transactions in Asia, a common legal framework is increasingly important.

Mediation with the Singapore Convention on Mediation is our preferred way to address deal and dispute management before, during or after deals.

Overall it's more beneficial for parties to focus on growing the business as opposed to being stuck in litigation with an outcome for one party, a damaged reputation that makes carrying on business hardly possible. The Singapore Convention on Mediation further increases the attractiveness of the Republic, already well known for its stable political climate, ease of doing business, as well as robust legal and commercial infrastructure.

Henry Tan Group CEO Nexia TS Group

When businesses seek to resolve disputes, it is usually because they find that amiable discussions have broken down and either one or both parties feel they have no choice but to turn to a third party to resolve the problem. Businesses are also aware that it will be an expensive exercise with the outcome uncertain. There are essentially three considerations: 1) Satisfactory resolution; 2) Cost; 3) Control over outcome.

The mediation process allows these three considerations to be met. Both parties mediate to get a satisfactory resolution, it is usually less expensive then litigation in court, and the outcome can be determined by both parties as it is a negotiated result. I feel the Singapore Convention on Mediation will create great opportunities for businesses to settle disputes with these considerations taken care of, and it will also offer the legal and accounting professions in Singapore great business opportunities.

Lim Soon Hock Managing Director PLAN-B ICAG

Enforcement of a settlement is the biggest consideration for a business when seeking to resolve a commercial dispute, especially when it involves parties across borders. It is a bigger concern as compared to litigation and international arbitration, because in mediation, the disputants are empowered to decide on the settlement, facilitated by a mediator, outside the courts. For local disputes, the Mediation Act provides for enforcement through an application to court to stay proceedings. The Singapore Convention on Mediation extends this further beyond our borders.

That the convention is named after Singapore - the third by the UN after The Hague (on Child Abduction ) and New York ( for International Arbitration) - adds extra weight to the enforcement of Alternative Dispute Resolutions, underpinned by Singapore's trusted brand equity of an established and reputable legal system.

The convention will promote Singapore as a mediation centre, in addition to the existing international arbitration. It will encourage more companies to settle their commercial disputes here through mediation - a comparatively cheaper and faster alternative dispute resolution - while upholding confidentiality, knowing full well that outcomes can be enforced.

Zaheer Merchant Regional Director (Singapore & Europe) QI Group of Companies

Businesses engaged in contentious commercial disputes all face the same considerations. In no order of merit these are jurisdiction and applicable law provisions; litigation fees and costs, travel and miscellaneous expenses; operational downtime and economic loss depending on the number of personnel involved either as witnesses or experts; resources of the opposing party; confidentiality or the lack thereof (particularly if proprietary or other trade information is involved or is the subject matter); delays and inconvenience; and significant enforcement issues even upon success. The impact of a contentious dispute is generally time consuming and unconstructive. Hence parties often mediate and embody settlement terms in a mediated settlement (MS).

The new Singapore Convention on Mediation is a brilliant convergence of such settlement since it blends key elements of what are the real practical necessities in an MS (mainly enforcement and recovery) into one convention with, critically, 46 countries signatory to it. With education and rollout, it will ensure greater cross-border mediation (including in Singapore and thereby providing direct benefit), and an increased willingness to mediate since there is a real solution now in the convention regardless of jurisdiction or venue.

Not since the New York Convention is a legislation as useful as this, assuming an MS is in place and opt-in provisions complied with. No longer will ''to sue or not to sue'' be rhetoric once this convention takes effect.

Seamus Phan Chief Content and Technology Officer McGallen & Bolden

One of the problems with litigation, arbitration or mediation is the balance of power. In traditional law suits, might may triumph (against the ideal of David versus Goliath), simply because the mighty side will have more (sometimes infinitely more) resources, to badger a small opponent into submission. Mediation suffers the same challenge - the outcome hinges on whether both parties truly seek fairness, or simply to win at the expense of the other side.

Although signed by many countries internationally, the new Singapore Convention on Mediation will face this challenge as well. Will ''might'' sit calmly with the meek and seek an amicable solution that benefit both parties as much as possible? Time will tell.

Annie Yap CEO AYP Group

The biggest consideration for any business definitely will be cost and it would wish to be on the winning side. For parties that wish to resolve a commercial dispute quickly and be directly involved in negotiating their own settlement, mediation is the preferred choice as it is cost-saving and conducted in private. In today's challenging business climate, it is perhaps inevitable that issues will arise - for instance, when the other party is unable to deliver the work. However, with this new Singapore Convention on Mediation, businesses that want to minimise damage to their reputation or financial prospects in a dispute can turn to mediation and leverage on this new international treaty that ensures enforceability in signatory countries.

David Leong Managing Director PeopleWorldwide Consulting Pte Ltd

Whether it's litigation, arbitration or mediation, the real teeth in the enforcements to close the disputes between parties. With this new treaty, Singapore's enforcement teeth in mediation is sharpened. With the high volume of international trades and commerce today, disputes inevitably arise. With the Singapore Convention on Mediation, the cost of dispute settlement is minimised, which is good for international and cross-border issues. Singapore can be a dispute resolution hub only because of its strong trust stature and transparent legal infrastructure. This will posture Singapore as the last mile in the deal-making transaction chain to help reduce the heat in trade friction.

Johnson Chng Managing Partner (Asia) QVARTZ

While cost is certainly a big consideration for businesses seeking dispute settlement, speed is an equally (if not more) important factor as each stage of the dispute settlement process will take away management's attention on its core business. Thus the faster the dispute gets settled, the less distraction for management and customers too. Singapore needs to demonstrate its ability to enable a speedy and just settlement; having the right expertise, or access to them when needed to help with the mediation process, will be key to our success to become a mediation hub for the region.