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Companies involved in cross-border trade are often faced with two important questions: 

  • Where and how to settle commercial disputes? 
  • How to receive payment in case of a successful resolution of international commercial disputes? 

To help them successfully tackle these problems, two international conventions have been adopted – the Singapore Mediation Convention & Hague Judgements Convention. Both of them are based on the NYC that is used for enforcing arbitral awards.

Execution of Foreign Courts’ Judgements

Resolving international commercial disputes involves two options: filing a claim in national courts or filing a lawsuit in a court where a counterparty is based. Decisions of national courts are enforceable:

  • in jurisdictions that have signed reciprocal enforcement agreements;
  • under the law of the legislation of countries where enforcement is requested.

Unlike enforcing international arbitral awards, this procedure is much simpler because it provides parties with a much wider selection of enforcement options provided for in the NYC.

Judgments Convention

Pursuant to the Judgements Convention, decisions rendered by courts of countries which are signatories to the Judgements Convention must be mutually recognized & enforced. Defined as “any judgment on merits rendered by a court,” such decisions include both monetary & non-monetary awards. 

Recognizing & enforcing judgements is possible if a jurisdictional link is proved to exist between an individual seeking enforcement & a country or court where a decision has been made.

Non-Recognition of Judgements

Foreign judgments aren’t recognized only if corresponding provisions are included in the Convention:

  • No proper notification was sent to the defendant;
  • Notification was sent but it was inconsistent with basic principles of laws of a particular state
  • An award was enforced in violation of a particular state’s public policy;
  • Court proceedings in a country where a decision was rendered violated an agreement on court selection;
  • A decision isn’t consistent with decisions rendered by courts in other countries or in a selected country;

Mediation

Settling commercial disputes by mediation presents a viable alternative to litigation. What makes it more advantageous is that it can be completed in one or several days, which allows the parties to save time & money that would otherwise be spent on lengthy litigation or arbitration.

The role of the mediator is not to determine the outcome of the case, but to facilitate the achievement of a mutually acceptable solution. However, when it comes to resolving cross-border commercial disputes, parties frequently resort to arbitration. And the reason for that is quite simple: if an agreement is violated, an injured party can file a lawsuit for violation of contractual obligations.

That entails lengthy & costly litigation which (as far as cross-border disputes are concerned) frequently takes place in a foreign jurisdiction. That’s precisely why mediation is a less attractive option when it comes to resolving international disputes. 

SCM

Meant to facilitate enforcement of awards by mediation, the SCM requires courts to recognize mediated settlements in a fashion identical to enforcement of arbitral awards pursuant to NYC. Under the SCM, parties intending to enforce an amicable settlement must provide an international mediation agreement & evidence that such an agreement was concluded due to mediation & in a signatory state’s court. 

Courts are then required to ensure enforcement of settlement terms pursuant to provisions contained in the SCM & domestic procedural rules.

When it comes to limitations, the SCM isn’t applicable to mediation agreements signed during litigation or arbitration, including those of them that are to be enforced as judicial or arbitral awards. The document isn’t applicable to mediation agreements concerning inheritance, family & labor legislation, either.

Conclusion

Should you need more information on the subject of the article or require advice on pre-trial settlement of an international dispute, please do not hesitate to contact IQ Decision UK. You can also request for our assistance if you’re interested in peaceful resolution of a commercial dispute.