SINGAPORE: The new international treaty on mediation named after Singapore is “crucial” now, given that the rules-based international order which has underpinned global peace and stability is “coming under pressure”, Deputy Prime Minister Heng Swee Keat said on Wednesday (Aug 7).
Speaking at the Singapore Convention gala dinner for delegates, Mr Heng said that beyond strengthening international dispute resolution, the Singapore Convention on Mediation bears testament to the continued commitment by countries to a rules-based international order.
READ: A 'powerful statement' for multilateralism, says PM Lee as 46 countries ink Singapore Convention on Mediation
He reiterated Prime Minister Lee Hsien Loong’s sentiment that the new treaty is a “powerful statement in support of multilateralism”. Forty-six countries, including the United States and China, signed the treaty on Wednesday.
“All states benefit from an international world order that is based on the rule of law. It allows for predictability and the management of relations and issues based on agreed principles,” said Mr Heng, who is also Singapore’s Finance Minister.
“This, in turn, assures countries big and small that their interests will be taken into account.”
He said the new treaty was the outcome of three years of “hard work and perseverance” by all parties involved, such as the United Nations Commission on International Trade Law (UNCITRAL) Working Group II. It also shows Singapore’s efforts to better serve the needs of companies in the region when they have differences in their business dealings.
Mr Heng noted that businesses traditionally rely on litigation and arbitration when differences arise, and that these mechanisms appeal because there is certainty that judgments and arbitral awards can be enforced internationally.
That said, mediation has risen in prominence in recent years, he added.
“Mediation is cheaper and faster. It preserves harmony and business relationships, which is in line with many cultures, particularly in Asia,” Mr Heng said, adding that it gives firms an extra option for dealing with cross-border disputes.
Citing infrastructure projects as an example, the Deputy Prime Minister said there is a big demand for such projects around the world but that these are inherently complex. They span many years, multiple parties and over various jurisdictions, and the stakes are high because of the large sums involved and wide-ranging economic and socio-political impact, he elaborated.
“Beyond structuring these projects well at the onset, it is equally important to have good dispute resolution mechanisms that can resolve issues when they arise across the lifetime of the projects,” Mr Heng said.
“Mediation is therefore a good option for such disputes, because it focuses on solving the problem rather than on deciding who is right. It seeks to resolve the problem in a way that will preserve relationships and allow the project to go on,” he added.
He acknowledged that mediation’s effectiveness is limited if parties are not assured the agreement will be enforced.
This is why the Singapore Convention on Mediation is critical to the adoption of international commercial mediation as a dispute resolution option as it will make it easier for businesses to enforce settlement agreements with cross-border counterparts, the minister said.
This is not the first time Mr Heng has highlighted the challenges of infrastructure projects.
At the World Economic Forum (WEF) in Davos this January, he said that Singapore is getting its lawyers to work with the World Bank to develop standardised contracts for these long-term infrastructure projects.