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Singapore Convention enforcement

In this 9/12 the United Nations Convention on International Settlement Agreements Resulting from Mediation, known as the Singapore Mediation Convention, came into force. This is a remarkable day for the international scenario of dispute resolution.

Article 14 of the Convention provides that it would enter into force six months after three of its signatories had ratified it into their domestic law, what happened in the 12 March this year, when Qatar became the third state to ratify the Convention.

The goal of UNCITRAL Working Group dedicated to the draft of the Convention was to create an international regime for the enforcement of mediation settlements that would contribute to increase the use of mediation as a conflict resolution method in international trade. With the Singapore Convention the role of mediation is strengthened and the reached agreements enforcements will be simplified.

The Singapore Convention applies to commercial cross border mediation. An important issue to pay attention at is the fact that Singapore Convention is not based in reciprocity between member states, as its “sister” New York Convention.

And what does it mean? It means that a member state shall enforce mediated settlement agreements even if it comes from a non member state. For example, if an international mediation was located in Brazil (a non signatories) it might be enforced in Saudi Arabia (a member state).

On the other hand, under the Convention, the states may adopt a reservation provision, which allows them to declare that they will apply it only to the extent that the parties to the relevant settlement agreement have agreed that the Convention will apply.

Thus, international mediation players from all nationalities should from now bear in mind that Singapore Convention matters.

Contract renegotiation methods during COVID-19 pandemic

Since the coronavirus outbreak turned into a pandemic with global impacts, many companies turned their attention to the economic changes caused by several measures to contain the virus spread. In this regard, travel bans and orders for citizens to be quarantined, e.g., could affect great part of the obligations assumed in the contracts those companies are party to.

Several disruptions may still impair and cause breach of contract if the party (or parties) affected by the pandemic does not have a legal reason to refuse to perform its obligations, such as pay the price or deliver the goods in the date fixed by the contract. It can occur in many types of contracts, although it is commonly related to the ones whose subject is the sale of goods.

The internationally known principle of “pacta sunt servanda” admits some exceptionalities that allows a party to release itself from perform its obligation without being carried in liability. The force majeure clause is a great example of legal reason settled in a contract when it becomes difficult, onerous or even impossible to be performed by a party. Many discussions about considering COVID-19 pandemic as a force majeure event arises in both common law and civil law countries according to the examination of each contract’s content.

Pursuant to article 79 of the UN Convention on Contracts for the International Sale of Goods (Vienna Convention), a party may not be liable if its failure was due to an event out of its control. The same convention enforces in article 59 that the buyer “must pay the price on the date fixed by or determinable from the contract”. Regardless whether the contract may contain possibilities for finding a solution when the payment (or the obligation discharge) cannot occur in the fixed date, serious disagreements can be triggered.

Nevertheless, this scenario can be even worst if the business negotiation becomes a litigation, or even arbitration, issue. Besides expending money and time, the parties may miss the chance to set the best alternatives for their interests due to an event, again, out of their control. That is why recalling mediation as dispute resolution method in such case of unpredictable circumstances is important. By preserving either relationship or business from unnecessary discussion, the parties are free to set their strategic choice for preserving contract as well.

Thus, the Singapore Convention on Mediation enhances the paramount benefits of mediation to resolve commercial disputes. Such convention itself describes mediation as way to “reach an amicable settlement of their dispute with the assistance of a third person or persons (“the mediator”) lacking the authority to impose a solution […]”. And maybe that is the great advantage of using business mediation: the parties can solve the issue together, by setting an amicable deal. The imposition of a solution without the participation of the parties could affect not just the current negotiation, but the future ones too.

The focus needs to be in solutions based on the preservation of both negotiation and relationship behind this while situations such as COVID-19 pandemic occurs. Hence, it is time to mediate, not to disagree.

Singapore: the International Convention on Mediation

The signing ceremony for the United Nations Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention on Mediation”) was held on 7 August 2019 in Singapore.

There is a great expectancy by the players involved in internacional commercial disputes concerning what really wait from this point in the mediation international scenario.

It is true that the Covention is a milestone. An international convention is very likely to bring us various benefits, and contribute with the development of mediation as an adequade method of dispute resolution in the international arena. Many users are expecting the same positive effects that New York Convention has brought to arbitration.

The text of the Convention gives a wide interpretation of the term Mediation and sets grounds under which the recognition and enforcement of the agreement could be denied by State courts.

It seems there will be no more escuses not to consider Mediation as an option for the ones who are involved in actual ou potential conflicts.

Singapura is giving us the example, by leading an International Mediation Competition during the week of the Singapore Convention signature, and, thus, putting together many of the young generation representatives, that will be soon dealing with international dispute resolution.

Does Arbitration fit Agribusiness?

The flexibility and duration of the proceedings are commonly appointed as advantages of arbitration as a dispute resolution method. However, as it is also known, not every dispute has in arbitration its best arena. That said, and noticing the little use of arbitration in conflicts related to the agribusiness, the question title of this article is posed.

It is important to stress that agribusiness involves much more than what is done on the farms. The whole chain of the agribusiness (term coined in 1957 by Goldberg and Davis) includes agrichemical, breeding, crop production, distribution, farm machinery, processing, seed supply, marketing and retail sales, not to mention the international commodities trade.

Analysing the diversity of legal and commercial relationships that can come from this complex chain, it turns clear that many of them fill the arbitrability condition. Besides this, specially nowadays, very specific knowledge is needed in order to resolve the issues arising from this field. For instance, contract farming has peculiarities that are not found in other type of contracts. It is enough to remember that UNIDROIT has already elaborated a document concerning this subject. Even diverse financial operations were created to fit this market, in which is not rare that the “currency’ is the farm production itself. All this meaning that there is a wide range of possibilities for the arbitration, and other ADRs methods, to be adopted in agribusiness, as an alternative to the State courts.

Furthermore, the agricultural production development is seasonal, what means that the duration and costs of the proceedings must be very well administrated. In conclusion, I would say that not only arbitration fits agribusiness, but also agribusiness needs arbitration, in order to reach better results in terms of dispute resolution.