On August 7, 2019, 46 countries signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (hereinafter referred to as the “ Singapore Convention”) in Singapore. The Singapore Convention is aimed at facilitating settlement agreements resulting from mediation which at the time of conclusion, is international.
Settlement Agreements Prior to the Convention
In Ghana, the Alternative Dispute Resolution Act, 2010 (Act 798) provides that where the parties to mediation agrees that a settlement agreement is binding, it would have the same effect as if it was an arbitral award. This means that it is final and binding on the parties and in case of default, the settlement agreement could be enforced as an arbitral award.
Thus, a person seeking to enforce a settlement agreement could seek leave from the High Court of Ghana to enforce the settlement agreement as if it was a Court judgement. Though this provision in Act 798 has been deemed to be progressive, it only makes enforcement and execution of settlement agreements easy only when the parties are all located in Ghana and the assets to be executed are also located in Ghana. Enforcement is however not as straightforward where the settlement agreement is international. The parties could have submitted to the jurisdiction of the Courts in Ghana, however, once judgement is obtained, it has to be enforced in another jurisdiction where the assets of the party against whom enforcement is sought is located. These processes are cumbersome and discourages parties from agreeing to mediation at all.
Settlement Agreements after 7th August 2019
If the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) enabled the enforcement of foreign arbitral awards within the jurisdiction of member states, then the Singapore Convention has come to save the hurdles of enforcing international settlement agreements resulting from mediation.
The Singapore Convention provides a uniform and efficient mechanism for parties to enforce international settlement agreements resulting from mediation. Without this mechanism, a party wanting to enforce the terms of international settlement agreement must bring an action for breach of contract and then seek to have the subsequent judgment enforced, potentially in a different jurisdiction where the assets under execution would have to be executed. The subsequent paragraphs answers questions outlining the basic features of the Singapore Convention and its impact on international settlement agreements in Ghana.
The Scope of the Singapore Convention
The Singapore Convention applies to international settlement agreements concluded in writing resulting from mediation to resolve a commercial dispute. “International” according to the Singapore Convention means:
- at least two parties to the settlement agreement have their place of business in different states; or
- the state in which the parties to the settlement agreement have their places of business is different from either:
- the state in which a substantial part of the obligations under the settlement agreement is performed: or
- the state where the subject matter of the settlement agreement is most closely connected.
In the circumstance where a party has more than one place of business, the relevant place of business for the purpose of enforcing the international settlement agreement would be that which has the closest relationship to the dispute resolved by the international settlement agreement. In the case of a party who does not have a place of business, reference would be made to that party’s habitual residence.
The Singapore Convention only applies to international settlement agreements concluded after the effective date of the convention.
Limitations on the Scope of Application of the Singapore Convention.
From the preceding paragraph, the Singapore Convention will only apply where the settlement agreement is:
- is in writing:
- results from mediation;
- is an agreement between two or more parties who have their place of business in different states; and
- the place of business of each of the parties to the agreement is in a state that has acceded to or ratified the convention.
The Singapore Convention does not however apply to:
- settlement agreements concluded to resolve disputes arising from transactions engaged by any of the parties for personal, family or household purposes;
- settlement agreements relating to family, inheritance or employment law;
- settlement agreements approved by a Court or concluded in the course of proceedings before a Court;
- settlement agreements that are enforceable as a judgement in the state of that Court; and
- settlement agreements that have been recorded and are enforceable as an arbitral award.
Comprehensive Enforcement Procedure under the Singapore Convention
A party seeking to enforce an international settlement agreement under the Singapore Convention is to provide to the competent authority:
- the settlement agreement signed by the parties;
- evidence that the settlement agreement resulted from mediation. Such evidence includes the mediator’s signature on the settlement agreement; a document signed by the mediator indicating that the mediation was carried out; an attestation by the institution that administered the mediation. Where none of these are available, a party may present any other evidence acceptable to the competent authority.
The competent authority may request for a translation of the settlement agreement where the agreement is not in the official language of the party to the Singapore Convention where relief is being sought.
Grounds for Refusal for Grant of Relief by the Competent Authority.
The competent authority where relief is sought may refuse to grant relief under limited circumstances at the request of the party against whom the relief is sought if the party proves any of the following:
- a party to the settlement agreement was under some incapacity; or
- the settlement agreement sought to be relied upon
- is null and void;
- inoperative or incapable of being performed under the law to which the parties have validly subjected it or under the law deemed applicable by the competent authority of the party to the Singapore Convention where relief is sought;
- is not binding or is not final, according to its terms;
- has been subsequently modified;
- the obligations in the settlement agreement have been performed or are not clear or comprehensible;
- granting relief would be contrary to the terms of the settlement agreement;
- serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement;
- failure by the mediator to disclose to the party’s circumstances that raise justifiable doubts as to the mediator’s impartiality or independence and such failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement;
- granting relief would be contrary to the public policy of that party;
- the subject matter of the dispute is not capable of settlement by mediation under the law of that party.
Prospective Effects of the Singapore Convention for International Settlement Agreements with a Ghanaian Party
The Singapore Convention allows for direct enforcement of international settlement agreements in the state of a party to the convention. Should Ghana ratify the Singapore Convention, it will allow a Ghanaian party seeking enforcement of an international settlement agreement to apply directly to the Courts of the state of the party against whom enforcement is being sought (provided that State has also ratified the Convention). Execution may also be sought where the enforcement process is successful. This will avoid the multiplicity of proceedings and facilitate the execution of the international settlement agreement.
Helen Amponsah Asare Esq.