The UAE and Singapore Mediation Convention

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Table of Contents

Introduction
Mediation and the Singapore Convention
The UAE and the Singapore Convention
The Reasons to Sign the Singapore Mediation Convention
Conclusion
References

Introduction

Mediation has long been considered one of the most efficient ways to resolve a conflict between two parties. An impartial third party with successful experience in mitigating crises in various types of relations can offer various techniques and communication tools to enhance the negotiation process. In many cases, a third party may play a crucial role in improving an existing dialogue’s overall quality. Moreover, there is a large body of evidence that mediation is capable of opening a dialogue in the first place when other ways to address the issue have already proven to have little or no effect on conflict resolution.

Mediation and the Singapore Convention

Increasing the empathy levels of both parties to the conflict can be the most challenging part of any negotiation. Therefore, it is of major importance to promote such an approach that allows for understanding the full picture of the conflict. One of the crucial benefits of applying mediation to settle a conflict is the opportunity for the third party to realize the rationale of both sides and provide a proper interpretation of it (Montineri 2018). Therefore, each conflicting party can develop a different perspective on the arguments used by the other side. Moreover, each party is more likely to agree to concessions when they are promoted by an impartial third party, not it’s opponent.

There are numerous economic, legal, diplomatic, and commercial disputes that arise each year. Given the growing complexity of international law, the international community is desperate to find the most efficient options when it comes to overcoming misunderstandings in a certain sphere. It is not surprising that mediation has become an extremely important means of settling conflicts between states in the last decades (Hioureas 2019). Nowadays, nations have to be able to settle any conflict in a timely manner, as the inability to resolve an issue in due course may result in the loss of billions of dollars if the dispute is purely commercial, let alone a full-scale armed conflict if serious political issues are the disputed matters.

Mediation has become one of the most practical options for solving commercial issues. Sometimes nations that show large trade volumes can have completely different political, legal, and economic systems. Therefore, mediation is the most reasonable option that can be equally perceived as objectively fair by both sides (Schnabel 2019). Nevertheless, until recently, some countries did not have a full-scale framework that could properly settle disputes with the help of mediation. The lack of experience in the sphere turns out to be a major obstacle for some countries to join dozens of nations that have signed the Singapore Convention since 2019.

Prior to the Singapore Convention, the major issue with mediation as a means of settling a variety of international disputes used to center around the lack of international legislation. Senties (2018) claims that settlement agreements could not be properly enforced and, thus, could not grant relief at the request of a party. The Singapore Convention, from the outstart, was designed to provide a universally accepted framework that would be glorious in its simplicity.

The countries that signed the Singapore Convention finally have the chance to perceive international settlement agreements resulting from mediation as an integral part of international law (United Nations Commission On International Trade Law 2018). Moreover, the international community undertakes to guarantee the proper enforcement of any agreement for what it is. Therefore, neither party has to notarize or formalize agreements in any other way to be able to seek relief.

The concept of reconciliation has always been an essential part of Arabic culture. Moreover, various types of mitigating a conflict that resemble mediation have been widely used in the UAE recently. Therefore, the government has passed a series of laws that seek to broaden the variety of conciliation agreements used in the country. Different emirates have worked hard to promote the creation of dedicated institutions (The Supreme Legislation Committee in the Emirate of Dubai 2021). They are expected to assist in mitigating the causes of various disputes and propose the best type of settlement agreement.

The UAE and the Singapore Convention

The UAE government realizes the importance of applying mediation not only to issues that arise between domestic companies but also to various international commercial issues. The UAE plays a crucial part in the global economy, providing access to affordable and high-quality fuel, transport services, financial services, high-end manufactured goods, etc. The economy of the UAE is in a rapid transformation process, during which the oil industry will become even less important compared to other sectors.

Commodity market regulations have a long industry of settling issues successfully. Nevertheless, the changing structure of a country’s economy implies paying more attention to the relegations of other sectors. Disputes connected to the financial sector and electronics exports are vividly more complex. Therefore, the UAE is determined to develop legislation acts that will provide an opportunity for domestic businesses to use all the benefits of settling agreements by mediation alongside their foreign partners.

Lately, the UAE has been successful in implementing various techniques to encourage the use of mediation as a preferable tool to resolve various issues that do not necessarily need to proceed further to courts. Therefore, the entire legal system can be optimized to allow the courts to spend more time and effort on cases where a conflict cannot be settled by mediation. The Centre for Amicable Settlement of Disputes was established pursuant to Law No. (16) of 2009 has become a cornerstone of the successful development of various types of settlements in the UAE. Law No. (6) of 2021 On Mediation for the Settlement of Civil and Commercial Disputes establishes a sophisticated framework that encourages the use of mediation in the UAE.

Moreover, Law No. (6) represents a product of enormous efforts and resources that were allocated in order to stipulate every single issue that may occur concerning the obligations of mediators. There has been a great demand for enacting such a framework, as various parties were sometimes reluctant to utilize other jurisdictions since they are constantly becoming costlier and more time-consuming. Thus, mediation rapidly came from a point where its use was seriously limited to a widely used and convenient means of problem resolution.

Law No. (6) of 2021 On Mediation for the Settlement of Civil and Commercial Disputes not only promotes the use of mediation and provides the enforcement of settlements through the Court process but also encourages the appointment of judges from a List of Mediators. These mediators are expected to provide impartial, fair judgment, assist in the negotiation process, and offer a high-quality solution, as all the mediators on the list are registered and preapproved with the special administrative institution (The UAE Government 2021). Nevertheless, the Law does not hinder the ability of the parties to appoint a Mediator (Special Mediator) independently. In this case, they must stipulate such an option and name the mediator in their Mediation Agreement.

The Law provides a complete description of all the cases that lead to termination of mediation. Termination occurs if either party reduces to continue working on mediation or if the parties and the mediator come to a conclusion prior to resolution. When parties reach a Settlement Agreement, termination of mediation takes place as well. One of the most important steps forward in the development of an efficient framework for the wide use of mediation is the lack of necessity to file a case with the Court. Thus, parties are not expected to be involved in proceedings, which becomes a crucial advantage of resolving a conflict via mediation.

What is more, the parties’ only significant expenditure when utilizing mediation to settle an agreement is the fee they have to pay the mediator. Most mediators do not have a fixed rate, and it stays negotiable. Moreover, the Law stipulates that the amount of the final fee cannot exceed 5% of the value of the dispute. Thus, when opting for mediation, both parties realize the total amount they will have to spend on the mitigation of a conflict. Such an option has proven to be more practical, as the traditional Court proceedings may become a long and expensive process that is also hard to leave.

The Reasons to Sign the Singapore Mediation Convention

The fact that the US and China were among the first countries to ratify the Singapore Convention points to its importance in resolving even the most complex world trade issues. The two largest economies in the world have been involved in an unprecedented trade war involving tariffs and barriers rarely used in the 21^st century. Amidst such a crisis, both states came to the conclusion that they needed a properly functioning mechanism that could guarantee the enforcement of settlement agreements resulting from mediation. The presence of the US and China on the list of countries that signed the Convention gives it extra weight and signals to others that the mechanisms stipulated in the Convention are to become global standards.

Numerous countries that had already had substantial legislation covering various settlement agreements, including those reached via mediation, did not hesitate to the Convention in 2019. These states seek to provide their domestic businesses with a globally recognized efficient tool to overcome commercial disputes. Although the UAE could not boast of efficient legislation concerning the enforcement of mediation agreements in 2018, the country has managed to develop rapidly in this direction. Numerous business people are looking forward to being protected by a properly functioning and universally recognized mechanism.

Currently, it is not possible for a party to any contract to enforce a Settlement Agreement, as the UAE still lacks legislation that can assist in doing so. The fact that the UAE has not signed the Singapore Convention prevents its courts from processing Settlement Agreements, as they cannot use the equivalents of some major globally acknowledged legal terms concerning mediation and conciliation. Therefore, the country’s officials should consider standardizing the existing acts and passing new laws that can introduce uniform equivalents to legal frameworks used worldwide. It is the most efficient way to address modern issues concerning Settlement Agreements. Moreover, it will eventually allow the country to sign the Singapore Convention which will prove to be extremely beneficial for domestic businesses and foreign trade partners.

The UAE identified the issue and recognized the seriousness of all the negative influence it used to have in a timely manner. Thus, passing Federal Law No. 6 of 2021 On Mediation for the Settlement of Civil and Commercial Disputes became the first major step to overcome the unfair disparities and proving to businesses worldwide that the UAE undertakes to guarantee all enforcement aspects stipulated in any Settlement Agreement.

Conclusion

Although the Singapore Convention can offer numerous economic benefits to the countries that have signed it, it still has serious drawbacks. For instance, it concentrates solely on mediation and does not cover the negotiated settlement agreements that are still responsible for the numerous cases featuring the harmonization of international economic relationships. Therefore, the UAE has an opportunity to realize the whole set of benefits that the Singapore Convention can provide. The country can enjoy the chance to examine the brightest cases featuring large business partners seeking relief.

At the same time, the Singapore Convention has undoubtedly influenced the country’s attitude to mediation as a means of settling an agreement. Several laws seek to establish a framework for the organization of the mediation process, and, more importantly, the enforcement of settlement agreements will be beneficial for enhancing the business atmosphere. Even if there is no urgent need for the UAE to join the Singapore Convention, it is still important to realize all the landslide changes in the attitude to the promotion of internationally acceptable means to reinforce settlement agreements. Most of the difficulties connected to the enforcement of settlement agreements in the UAE are centered around the lack of uniform legislation concerning mediation.

Since 2019 the UAE has managed to pass extremely beneficial laws to address the issue. Moreover, the country officially encourages the establishment of new mediation Centers in the UAE and the licensing of foreign Centers. Such policy will undoubtedly promote the creation of uniform standards that can be applied to international settlement agreements. Furthermore, it will accelerate the processes that may lead to signing the Singapore Mediation Convention, enhancing the UAE’s business atmosphere and image.

References

Hioureas, C. G. (2019). The Singapore Convention on international settlement agreements resulting from mediation: a new way forward. Berkeley Journal of International Law, vol. 37, p. 215.

Montineri, C. (2018). The United Nations Commissions on International Trade Law (UNCITRAL) and the significance of the Singapore Convention on Mediation. Cardozo Journal of Conflict Resolution, vol. 20, p. 1023.

Schnabel, T. (2019). The Singapore Convention on Mediation: a framework for the cross-border recognition and enforcement of mediated settlements. Pepperdine Dispute Resolution Law Journal, vol. 19, p. 1.

Senties, H. F. (2018). Grounds to refuse the enforcement of settlement agreements under the Singapore Convention on Mediation: purpose, scope, and their importance for the success of the Convention. Cardozo Journal of Conflict Resolution, vol. 20, p. 1235.

The Supreme Legislation Committee in the Emirate of Dubai. (2021). Law No. 18 of 2021 Regulating Conciliation in the Emirate of Dubai. [Online]. Web.

The UAE Government. (2021). Federal Law No. 6 of 2021 On Mediation for the Settlement of Civil and Commercial Disputes. [Online]. Web.

United Nations Commission On International Trade Law. (2018). Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation. [Online]. Web.

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