In the past, using mediation to settle disputes between companies in different countries was not always practical. Many businesses relied on lawsuits or arbitration instead.
Today, more companies are choosing cooperative ways to solve problems. The introduction of the Singapore Convention on Mediation has helped make that possible. If your New York organization is doing business with an international company, it can be a valuable part of your dispute resolution strategy.
The enforceability gap of the past
Before the Convention, an international mediation settlement was usually treated like a normal contract. If one side refused to follow the agreement, the other side had to file a new lawsuit for breach of contract. That could mean going to a foreign court with unfamiliar laws and procedures, which often caused long delays and extra costs.
Arbitration had a big advantage because of the New York Convention, which made it easier to enforce arbitration awards in many countries. Since mediation did not have a similar international enforcement system for a long time, arbitration often seemed like the safer option for cross-border disputes.
How the Singapore Convention changes the game
At its core, the Singapore Convention makes mediated settlement agreements easier to enforce across borders. If one party does not follow the settlement, the other party can go to a court in a country that has signed the Convention and ask the court to enforce the agreement.
The Convention also creates a more consistent legal process, so businesses do not have to fight the same issue in multiple courts. For global companies, this can be a major advantage.
Strategic benefits for global businesses
Mediation is often faster and less expensive than arbitration or litigation, which can reduce costs like travel, translation and complicated legal steps. It also gives both sides more control because they work together to create a solution instead of having one imposed by a judge or arbitrator.
Mediation can also protect business relationships because it is less aggressive than going to court. It is usually private as well, which can help companies protect their reputations and keep sensitive information confidential.
Protecting the future of your business
In light of the Singapore Convention, you may want to review your contract terms for international dispute resolution and consider adding mediation clauses. Seeking legal guidance can help you ensure those provisions are written clearly and work as intended.