On 5 May 2020, Saudi Arabia ratified the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the "Singapore Convention on Mediation", which will enter into force in Saudi Arabia on 5 November 2020.
Saudi Arabia’s Ratification of the Convention
On 5 May 2020, Saudi Arabia ratified the United Nations Convention on International Settlement Agreements Resulting from Mediation, which will enter into force in Saudi Arabia on 5 November 2020. The Convention provides an effective mechanism for the enforcement of international settlement agreements resulting from mediation. As a result of Saudi Arabia’s ratification of the Convention, international settlement agreements falling under the Convention and involving assets located in Saudi Arabia may be enforced directly by the courts of Saudi Arabia.
The Convention applies to international settlement agreement resulting from mediation. It establishes a harmonized framework to invoke cross-border settlement agreements and to enforce them, thereby bringing more certainty and stability to mediation procedures between international parties.
The Convention was adopted on 20 December 2018 and opened for signature on 7 August 2019. To date, 52 states have signed the Convention and it will enter into force on 12 September 2020.
When a state ratifies the Convention, the Convention shall enter into force in such a state six months after its ratification or accession to the Convention.
Key Features of the Convention
Pursuant to Article 1 (“Scope of Application”), the Convention applies to international agreements resulting from mediation and concluded in writing by parties to resolve a commercial dispute.
Article 1 also lists the exclusions from the scope of the Convention. Specifically, the Convention excludes settlement agreements concluded by a consumer for personal, family or household purposes, or relating to family, inheritance or employment law, as well as settlement agreements that are enforceable as judgments or as arbitral awards.
Article 3 (“General Principles”) considers the key obligations of the Parties to the Convention with respect to both enforcement of settlement agreements and the right of a disputing party to invoke a settlement agreement covered by the Convention. It essentially provides that a state that is a party to the Convention shall enforce international settlement agreements in accordance with its rules of procedure and under the conditions laid down in the Convention.
Pursuant to Article 4 (“Requirements for reliance on settlement agreements”), a party relying on a settlement agreement must supply to the competent authority the settlement agreement signed by the parties and evidence that the settlement agreement resulted from mediation.
In Article 5 (“Grounds for refusing to grant relief”), the Convention sets out grounds upon which a court may refuse to grant relief at the request of the disputing party against whom it is invoked. These grounds include: (i) the incapacity of a party; (ii) nullity of the settlement agreement, its lack of binding and final character or its subsequent modification; (iii) the obligations in the settlement agreement have been performed or are unclear; (iv) the requested relief would be contrary to the settlement agreement; (v) breach by the mediator of standards applicable to the mediator or the mediation; (vi) failure by the mediator to disclose circumstances raising justifiable doubts as to the mediator’s impartiality or independence.
Article 5 includes two additional grounds upon which the court may, on its own motion, refuse to grant relief. Those grounds relate to public policy and the fact that the subject matter of the dispute cannot be settled by mediation.
The COVID-19 Emergency Mediation Program by the Saudi Center for Commercial Arbitration (SCCA)
In line with the rationale behind Saudi Arabia’s ratification of the Convention and in response to COVID-19, the SCCA has recently launched the COVID-19 Emergency Mediation Program, which allows parties to a mediated settlement to convert their settlement agreement into an enforceable bond that can be directly enforced through the enforcement courts in Saudi Arabia.
The Program is based on the SCCA mediation rules and is available for both domestic and international parties. In response to the pandemic, the SCCA has also reduced its mediation fees and has prepared its staff and facilities to complete the mediation and settlement processes on a virtual basis.
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