On September 12, 2020, the United Nations Convention on International Settlement Agreements Resulting from Mediation ("the Singapore Convention") officially came into force, marking substantial progress in the institutionalization of international commercial mediation, and realizing the integration of three forces – arbitration, mediation and litigation – to promote international commercial dispute resolution. From a macro perspective, institutionalization and regularization are inevitable trends for any dispute resolution mechanism. As one of the first signatories to the Singapore Convention, it is imperative for China to ratify the Convention and establish a corresponding commercial mediation system in order for China to be competitive in the international dispute resolution market. Therefore, to conform to the trends of the times, China should actively participate in and promote the institutionalization of international commercial mediation and help integrate mediation into the "one-stop" diversified international commercial dispute resolution mechanism of the China International Commercial Courts ("CICC").

I. The Singapore Convention and the Institutionalization of International Commercial Mediation

For a long time, the institutionalization of international commercial mediation has been lagging due to the lack of an international convention. This gap has just been filled by the entry into force of the Singapore Convention, which accelerated the institutionalization of international commercial mediation in many respects, and has had an important impact on the practices of international commercial mediation.

First, the Singapore Convention draws on the style and structure of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("the New York Convention") to promote the institutionalization of the international mediation system. Like the New York Convention, the text of the Singapore Convention is concise. Except for the preamble, there are only 16 articles, covering the scope of application, definitions, general principles, requirement for reliance on settlement agreements, grounds for refusing to grant relief, reservations, non-unified legal systems, entry into force, amendment, and denunciations. Focusing on the lack of enforceability of settlement agreements resulting from mediation, the Convention provides standards for the cross-border enforcement of settlement agreements resulting from international commercial mediation and establishes a unified legal framework for invoking and enforcing settlement agreements at a multilateral level.

Second, the Singapore Convention clarifies the definition of international commercial mediation and promotes the systematization of international commercial mediation theories. For a long time, the main disagreement in international commercial mediation theories has been differences in the understanding of "international" and "commercial". Judging from Article 1, the Singapore Convention inherits the long-standing concept of expanding the scope of "international" and "commercial" held by the international community and defines "commercial" by identifying the circumstances that are not "commercial." As a result, the scope of "commercial" defined by the Singapore Convention is wider than that of the New York Convention. When clarifying the concept of "international", the Singapore Convention does not introduce the concept of "the seat of mediation" as the New York Convention did when it set up the concept of "the seat of arbitration." Neither does it set any requirements as to the contracting States. Instead, it only requires the two parties to have their places of business in different States. However, the lack of the concept of the seat of mediation poses specific challenges to the court of the place of enforcement. For instance, which country or region's law shall apply when examining the qualification of the mediator stipulated in Article 2 of the Singapore Convention? In addition, without defining "Contracting States", the scope of application of the Singapore Convention will be greatly expanded, which may result in cases where a commercial party of a non-contracting State seeks enforcement regarding assets and properties in a contracting State by way of a settlement agreement.

Third, the Singapore Convention is conducive to promoting the convergence and coordination of the legal systems of commercial mediation in various States. The Singapore Convention provides for enforcement procedures, but doesn't set up procedures for recognition. Article 3(2) of the Singapore Convention is a modified statement about "recognition", which indeed simplifies the enforcement procedures. Besides, the Convention aggravates the judicial review duties of the court of the place of enforcement. To be specific, Article 4 sets a requirement for reviewing signatures of mediators and the administrative procedures of mediation institutions, and Article 5 provides the grounds for refusing to grant relief, both of which put higher burdens on the court of the place of enforcement. For example, how can a judge find out if the signature of a mediator in a remote jurisdiction is genuine, or accurately handle the proof of foreign law in such a jurisdiction? In addition, according to the Convention, judges are required to identify and ascertain the standards of mediators, the principles of mediation, the validity of the settlement agreement, and whether the foreign laws cannot be enforced. These will affect the formation of domestic laws of the contracting States in terms of specific systems and pose new challenges to the judicial professionals of the States in handling cases.

II. The connection of China's current legal system and the Singapore Convention

Since the promulgation of the Singapore Convention, many Chinese practitioners and scholars have put forward suggestions on the connection of China's legal system to the Convention. This article puts forward the following two points worth discussing.

First, the direct cause of the problems in the connection between China's legal system and the Singapore Convention is the absence of a review and enforcement system in China's mediation norms. The Singapore Convention provides a brand-new solution to settling international commercial disputes, which in turn generates related problems. In particular, China's immature commercial mediation system will be greatly influenced by the Convention, and the most prominent influence will be imposed on the establishment of the review system for foreign-related settlement agreements.

It is undeniable that in the process of international commercial mediation, the mediators or mediation institutions have already shouldered some of the review obligations of the country of enforcement, but this does not mean that the review by the country of enforcement is unnecessary. Specifically, there are two aspects in the review of the "settlement agreements" within the scope of the Singapore Convention. The first aspect is the review of the enforcement of the "settlement agreement" and the second is the application by the parties to refuse the enforcement of the "settlement agreement". Although there are provisions on the enforcement of arbitral awards and the grounds for refusing to grant relief in the New York Convention, relevant provisions in the Singapore Convention do not exactly follow the New York Convention. The New York Convention pays more attention to due process and emphasizes formal review, while the Singapore Convention focuses on the legitimacy of the mediator's conduct and the certainty of the settlement agreement. Does this mean that relevant courts can conduct substantive reviews on the ground of refusing to grant relief?

The proper method of enforcing the settlement agreement is also a thorny issue. Under the Convention, the settlement agreement, upon application by the parties, shall enter into enforcement proceedings. However, enforcement regarding domestic commercial settlement agreements has not yet been fully regulated in China, and the enforcement is not yet compulsory. As a result, when it comes to an international commercial settlement agreement, it is even more difficult to make the right call in order to close the case. These issues should be urgently dealt with in future legislation.

Second, the deep-seated reason for the problems in connecting China's legal system with the Singapore Convention lies in the lack of forceful construction of the commercial mediation system. The biggest obstacle China faces after becoming a signatory to the Singapore Convention is neither the review issues nor the reservations, but the absence of an effective law or a set of rules regarding commercial mediation. Upholding the concept of "harmony is the most valued", Chinese people generally prefer mediation and conciliation, but the development of commercial mediation in China remains slow, still lagging behind international practice.

The reasons behind it are threefold. First, inadequate attention was given to commercial mediation in the early days. Since the turn of the new century, China's judiciary has recognized the benefits of the mediation system. However, they focused on people's mediation, while making insufficient investment in commercial mediation, the more professional kind of mediation, conducted by mediation institutions and arbitral institutions. Chinese commercial mediation developed slowly because the mediation institutions and arbitration institutions were not strong enough. However, in recent years, the Chinese central government has attached great importance to commercial disputes, especially the resolution of international commercial disputes, and the Supreme People's Court has been dedicated to building a "one-stop" dispute resolution mechanism. These developments show that governmental attention and support for commercial mediation have increased dramatically. Meanwhile, the concept that "prioritizing the non-litigation dispute resolution mechanisms" has also played an important role in China's judicial policies.

Second, commercial mediation organizations in China are insufficiently developed. Currently, some international commercial mediation organizations have made great progress in terms of their international reputation and the number of accepted cases. In contrast, although a number of newly founded international dispute resolution institutions across China have arisen in response to the call for the establishment of a diversified dispute resolution mechanism, providing new options for the settlement of foreign-related commercial disputes, their international competitiveness, attractiveness, and credibility need to be further improved. In particular, some international commercial mediation institutions in China do not have a weathered history, and inevitably face problems such as imperfect rule design and inadequate publicity, which result in a low caseload and weak international influence. Overall, there is still a long way to go in the construction of China's international commercial mediation organizations.

Third, China is short of professional talents in the field of international commercial mediation. The qualifications of mediators for international commercial mediation are very different from the people's mediators in China. International commercial mediation requires professional mediators, while most people's mediators in China are working on a part-time basis, selected mainly from college teachers, lawyers, and grassroot administrators of social communities. It is difficult for part-time international commercial mediators to gain trust from the parties, thus hindering the further promotion of commercial mediation organizations. Besides, commercial mediation poses significantly high requirements for mediators. Mediators' own knowledge, temperament, and quality also play a vital role in the mediation process. However, there is no specialized training for mediators nor qualification certification for mediators in China at present. The licensing and accreditation mechanism is a prerequisite for building a credible professional team of international commercial mediators in China.

To sum up, it is imperative for China to better implement the Singapore Convention in order to comply with the institutional development of international commercial mediation, improve China's ability to resolve international commercial disputes, and vigorously strengthen the construction of China's mediation system.

(to be continued....)