Singapore likes to honour distinguished global personalities visiting the Republic by naming orchids after them. These flowers of resplendent beauty bring joy to the hearts and souls of many nature lovers who stroll the Botanic Gardens, the green lung of this modern urban entity. This lovely slice of historic real estate displays a spectacular variety of precious tropical flora, set in a stunningly beautiful verdant landscape. On Wednesday August 7th, Singapore did something different. It named an orchid after a United Nations Convention. This accord dealt with enforcement of mediation in international commerce reached at the United Nations headquarters in New York eight months ago. That simple act of giving the name of the pact to a floral bud in efflorescence acquired profundity when viewed as symbolising ‘flower-power’ in the world of contemporary diplomatic turmoil.
The gesture by the island state was in reciprocation of the decision by the United Nations to name the Convention itself, finalised last December after three years of gruelling negotiations in New York, after Singapore. This decision was in recognition of the immense contribution of Singaporean diplomats in that multilateral forum to bringing the Convention to fruition. The fact that this key document bear’s the island-Republic’s name, indelibly marks the imprint of the ‘little red dot’ that is Singapore on the international legal cartograph.
Since the dawn of history, the capacity to mete out justice, along with the collection of revenue and maintenance of public order, have been the major tools of State power. Over time litigation for justice became expensive, time-consuming, and arduous. The logical result was the quest for other forms of dispute settlement. Enter arbitration and mediation. There were certain differences between the two. Usually arbitration entailed a ‘binding’ process, and mediation, ‘non-binding’. Arbitration could be conducted by multiple agents, and mediation by a single entity. Arbitration tended to judge the case, while mediation facilitated deliberations and dialogue. Eventually in many cultures which favoured non-confrontational proclivities, mediation began to gain salience. Four elements held provide additional fillip. One, that it was less costly; two, it was seen as being more confidential; three, the process enabled parties to communicate privately; and four, heavy case overloads in conventional judiciary that delayed justice, and since justice delayed was justice denied, the legal system often failed to deliver redress.
The Asian ethos had always traditionally tended to support ‘out -of -court’ settlements. ‘Salishes’ and ‘jirgas’ were instances. But there were always possibilities of miscarriage of justice in such platforms. So, States began to insert certain formalities by legislation into such process. In South Asia, the Indian Arbitration and Conciliation Act of 1996 encouraged arbitrational tribunals to apply the mediation process. In Bangladesh, in 2003, the existing Civil Procedure Code (CPC) was amended to introduce mediation. Further east, in China in 2012 the Civil Code adopted the principle of ‘mediation first’; and in Singapore, the Mediation Act of 2017 was designed to provide ‘certainty’ to the method.
That being said, Asia trailed behind Europe, America and Australia in international commercial mediation. Arbitration was still the preferred option. That was mainly because of the lack in mediation of the factor of ‘enforceability’ that arbitration provided. The frame of reference for that was the New York Convention of 1958 which focused on enforcement of arbitration awards, just as the earlier Hague Convention of the Choice of Courts of 1905 had done for international business-t0-business litigation. So, enforcement was the lacuna in any cross-national mediation that discouraged potential parties. This is what the Convention on Mediation, negotiated at the United Nations under Singapore’s stewardship, sought to fill, and indeed succeeded in doing so.
During the negotiations at the United Nations Commission on International Trade Law (UNCITRAL) the State parties were circumspect, fearing erosion of sovereignty, in one way or another. It was therefore decided that the Convention would apply only if the parties agreed to such application. Article 8 of the document provided for the self-exclusion of States through ‘declarations’ or ‘reservation’. However, enforceability proved a great potential attraction for Multinational Corporations and Small and Medium-sized enterprises. The Convention appeared to be able address the three potential issues that cause most disputes in transnational business; one, unpaid accounts; two, missed deadlines, and three, increased costs from unforeseen changes.
The importance of the Convention will increase in Asia, in step with the burgeoning growth of Asia’s economic role and significance. Apart from other things, the Asian Development Bank has calculated that Asia will require over US 1.7 trillion dollars annually for infrastructural investments. The funds are expected from both the East and the West. China is pumping in huge amounts of funds as a part of its Belt and Road initiative, particularly into Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Malaysia and Indonesia. Regional firms are bound to get involved. The facilitation through enforceable mediation as provided for in the Singapore Convention, will reinforce these interactions. Courts of countries that sign and ratify the Convention -only three ratifications are necessary for it to come into force-would be empowered to rule on enforcement of mediations.
On Wednesday at an event at the Shangri La Hotel in Singapore, 46 countries, mostly represented at Ministerial levels, signed on to the Convention. This is no mean number when compared to the figure of 24 initial signatories of the New York Convention of 1958, which has now risen to 159. Importantly both the United States and China, now locked in what seems to be an intractable trade war, have signed the Singapore Convention. The South Asian countries that have done so are India, Sri Lanka, Maldives and Afghanistan. Those who have not are Pakistan, Bangladesh, Nepal and Bhutan. Professor Tommy Koh, one of Asia’s best-known legal luminaries observed to the author that given Bangladesh’s growing economic significance, and the future possibilities, and indeed need of commercial interactions with cross-frontier firms, signing should merit serious consideration.
It is said we never step into the same river twice. On Wednesday, the 7th of August 2019 at the Shangri La in Singapore, the world appeared to step afresh into a new river of international commerce, one that it is hoped, flow swifter and better than it had done before.