International Mediation in Asia, 2023-2024: From Japan to Sri Lanka

Sri Lanka became the 14th state party to the United Nations Convention on International Settlement Agreements Resulting from Mediation (‘the Singapore Convention’/ ‘Convention’) on 28 February 2024. Its ratification of the Convention is the first in 2024 and stands out as a significant development in the international mediation landscape for reasons which will be elaborated below. It comes soon after a series of advancements in 2023, where Uruguay, Japan, and Nigeria all ratified the Convention.

Table: Countries which ratified the Singapore Convention on Mediation in 2023 till early 2024

Concurrently, India enacted the Mediation Act, 2023 (‘The Indian Act’), a long-awaited legislative measure aimed at promoting and facilitating mediation within its jurisdiction. Collectively, these developments signify a positive trajectory for the use of mediation in resolving international disputes and facilitating cross-border cooperation, as the international community continues to recognize its efficacy in promoting peaceful and amicable conflict resolution on a global scale.

This article summarises key developments in the international mediation landscape in Asia since 2023.

Japan

As the third largest national economy in the world, Japan is the biggest so far to have ratified the Convention.[2] In preparation for this, and unlike the dozen or so other signatory countries which signed the Convention first and ratified subsequently, Japan was not an original signatory and chose instead to first enact the Act for Implementation of United Nations Convention on International Settlement Agreements Resulting from Mediation（Act No. 16 of 2023) (hereinafter ‘the Japan Act’) in April 2023. It thereafter ratified the Singapore Convention by submitting an instrument of accession on 1 October 2023.  In a recent commentary, Singapore International Mediation Centre (SIMC)’s Japan Representative, Ms. Yuko Nitta, who is Partner at Utsunomiya Chuo Attorneys at Law, highlights that Japan has availed itself to the Convention’s opt-in provision contained in Article 8 (1) (b):

“Article 8. Reservations

A Party to the Convention may declare that:
…

(b) It shall apply this Convention only to the extent that the parties to the settlement agreement have agreed to the application of the Convention.”

Having incorporated this provision in Section 3 of the Japan Act, the Singapore Convention does not automatically take effect in Japan. Instead, it will only take effect when the parties to the agreement, specifically agree to its utilization. Ms Nitta points out that many contracting parties to the Convention, including Singapore, do not make this reservation. For companies from these Contracting Parties to waive the Convention's application, they typically must expressly opt-out of the Convention by way of a clause in their settlement agreement. If such a clause exists in the settlement agreement, it may form a valid ground for refusal to enforce a settlement agreement in terms of Article 5 (1) (d) of the Convention.

Ms Nitta explains that incorporating the opt-in provision is in fact, a positive inclusion for Japanese parties. She believes that this would avoid an imbalance in situations where a Japanese party enters into a settlement agreement with a party from a country that has not ratified the Singapore Convention. With the opt-in provision, Japanese parties can choose to apply the Convention only when their counterparty’s country is also party to the Convention, ensuring that the Japanese party can also guarantee enforcement. She suggests that this was a prudent inclusion within the Japan Act given that currently, only a small number of countries have ratified the Convention.

India

Just before Japan ratified the Singapore Convention in October 2023, India saw the enactment of the Mediation Act, 2023 (“the Indian Mediation Act”). While it is noted that India has not yet ratified the Singapore Convention, nor is the Indian Mediation Act intended to enable ratification to take place, its enactment has been a positive step, not just for domestic mediations, but also for some categories of international mediations. Section 2 (iii) on application of the Act and section 3 (g), which defines ‘international mediation’ are extracted below:

 

“Section 2. This Act shall apply where mediation is conducted in India, and—

…

(iii) there is an international mediation; or”

…”

 

“(g) "international mediation" means mediation undertaken under this Act and relates to a commercial dispute arising out of a legal relationship, contractual or otherwise, under any law for the time being in force in India, and where at least one of the parties, is—

(i) an individual who is a national of, or habitually resides in, any country other than India; or

(ii) a body corporate including a Limited Liability Partnership of any nature, with its place of business outside India; or

(iii) an association or body of individuals whose place of business is outside India; or

(iv) the Government of a foreign country;”

 

While the Indian Mediation Act covers such international mediations where “at least one party is” a foreign person / entity, it nonetheless grounds the mediation in India. It does so in two ways: first, by virtue of section 2, which provides that the Act would apply “where mediation is conducted in India”. Secondly, in the definition of ‘international mediation’, the Act stipulates its application when the mediation is undertaken under the Act and arises from a commercial relationship “under any law for the time being in force in India.” However, section 13 of the Act then provides some respite from the seemingly onerous obligation to conduct the mediation in India by providing:

 

“13. Every mediation under this Act shall be undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction to decide the subject matter of dispute:

Provided that on the mutual consent of the parties, mediation may be conducted at any place outside the territorial jurisdiction of the court or tribunal, or by way of online mediation.

Explanation.—For the removal of doubts, it is clarified that where the parties agree to conduct the mediation at any place outside the territorial jurisdiction or online, for the purpose of enforcement, challenge and registration of the mediated settlement agreement, the same shall be deemed to have been undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction.”

 

The proviso to section 13 carves an important exception to the first territorial requirement discussed above, as it allows mediations to be conducted online or outside the jurisdiction of the competent court or tribunal. However, the subject matter of the Mediation remains grounded in “the territorial jurisdiction of the court or tribunal of competent jurisdiction”. This may in fact be helpful insofar as a competent court or tribunal can exercise overarching control over mediation proceedings and help formalise them. This would make settlement agreements easily enforceable within India. For further analysis of the background and scope of the Mediation Act, 2023, see SIMC’s more extensive article here.

With India being one of the first signatories to the Singapore Convention, its ratification of the Convention is awaited. At the time of enactment in August 2023 during the Parliamentary session of the Lok Sabha, or lower house, India’s Law and Justice Minister Arjun Ram Meghwal spoke about the Singapore Convention and suggested that India would ratify the convention in due course. In any case, the enactment of the Mediation Act, 2023 is an encouraging development. Already, Indian parties are the second highest users of mediation services offered by SIMC. With Japan’s recent ratification, coupled with Indian users’ increasing confidence in oversees mediation proceedings, it would not be too bold to predict India’s ratification of the Convention in the near future.

Sri Lanka

The Singapore Convention will enter into force in Sri Lanka on 28 August 2024. Prior to submitting its instrument of ratification, Sri Lanka enacted the Recognition and Enforcement of International Settlement Agreements Resulting From Mediation Act (‘Sri Lanka Act’), which was published in the gazette on 16 October 2023. Shedding light on how Sri Lanka stands to benefit from the ratification, Ms Dhara Wijayatilake, Director and Secretary-General of the International ADR Centre and Attorney-at-law in Sri Lanka, said that “adopting a universally accepted uniform framework for enforcement of mediated international settlement agreements creates in Sri Lanka a conducive environment that will make the country an attractive investment destination,” in response to questions from SIMC.

Given that Sri Lanka’s ratification comes soon after Japan’s, one difference is worth noting. Unlike Japan, Sri Lanka has not currently made any reservations to the Convention. However, Section 2 of the Sri Lanka Act, clarifies that Sri Lanka may, in future, make reservations. Commenting on this inclusion, Ms Wijayatilake explained that “Section 2(2) provides that in the event that Sri Lanka does declare a reservation, then the Act will apply only subject to that reservation. This is important since reservations can be declared at any time even after ratification.”

Ms Wijayatilake added that ratifying the Singapore Convention could make significant contributions to Sri Lanka's economic development by attracting investments as the move signals a promising shift in dispute resolution, especially given the delays and costs associated with litigation and arbitration. However, the key challenge at this stage, she suggests, lies in establishing a robust ecosystem for delivering and maintaining quality mediation services, and in building awareness about the efficiency of mediation amongst stakeholders. Ms Wijayatilake’s detailed analysis of Sri Lanka’s motivations in signing the convention and what lies ahead for the nation may be accessed here.

Conclusion

The advancements in international mediation witnessed in Asia throughout 2023 and early 2024 represent more than just isolated legal and legislative actions; they signify a fundamental shift towards a culture of cooperation, dialogue, and resolution. By ratifying the Singapore Convention and enacting complementary domestic legislations, countries like Japan and Sri Lanka are not only embracing mediation as a viable means of dispute resolution but are also actively positioning themselves as hubs for cross-border collaboration and investment.

About the writer

Meghna Jandu is an LL.M. candidate at the National University of Singapore, with a specialisation in international arbitration and dispute resolution. As an intern with the Singapore International Mediation Centre, she has contributed to varied initiatives in the organisation. Meghna previously worked as a Judicial Clerk at the High Court of Delhi, India. Prior to her engagement as Judicial Clerk, she worked as litigation counsel in a New-Delhi based law firm, focusing on civil and commercial disputes. Meghna's professional pursuits are directed towards developing a comprehensive expertise in appropriate dispute resolution, encompassing arbitration, mediation, and litigation.