On 9 January 2017, the Mediation Bill 2016 ("the Bill") underwent a second reading in Parliament.
The Bill seeks to support mediation as a dispute resolution mechanism, by providing certainty and clarity to the mediation process. It aims to integrate the mediation process into Singapore's litigation procedural framework and to encourage mediation as a bona fide dispute resolution mechanism in its own right.
The Bill incorporates key recommendations of the International Commercial Mediation Group ("ICMWG") set up in 2013 by the Ministry of Law and existing provisions from the UNCITRAL Model Law on International Commercial Mediation.
The Bill was one of multiple moves made by Singapore in its efforts to establish its brand name as a trusted location for high quality cross-border dispute resolution services.
The key provisions of the bill are as follows:-
Scope of the Bill
The Bill applies to Court-directed mediations pursuant to a direction from the Court of Appeal, High Court, State Court and the Family Justice Court in Singapore. The Bill also applies to any mediation conducted wholly or partly in Singapore, or internationally, where the agreement to mediate provides that Singapore Law or the Bill (if passed into law) shall apply.
Enforceability of Settlement Agreements
The Bill seeks to strengthen the enforceability to mediated settlement agreements by allowing parties to apply to court to have the said settlement agreement be recorded as a Court Order.
In the event that a party to the dispute reneges on the mediated settlement agreement, the innocent party would no longer be required to initiate proceedings, and prove the existence of a contract and a breach of its terms.
The finality of a Court Order provides certainty of outcome which would attract commercial parties to consider mediation as means of dispute resolution.
Stay of Court Proceedings
Under the current rules, a party to a dispute before the Courts who wishes to attempt mediation (or other forms of alternative dispute resolution ("ADR")) may file an Offer to ADR. If the other party is willing to undergo mediation, the Court may provide a direction for the staying of proceedings.
While the Court's power to do so is currently based on its inherent jurisdiction under the Rules of Court, the Bill provides parties to the dispute with a specific statutory basis to apply to Court to stay any on-going Court proceedings in relation to the same dispute.
The Bill also provides the Court with express powers to stay proceedings subject to terms and conditions that would preserve the rights of parties, as it deems fit. This assures parties that their legal position in any court proceeding can be preserved pending the outcome of mediation.
Restrictions on Disclosure and Admissibility
Common law privilege, equitable remedies for breach of confidence and contractual undertaking (if any) protect the confidentiality of the mediation process. However these rules are subject to interpretation, and in practice, parties may not be clear on how such protections may apply to their individual circumstances.
The Bill seeks to codify the existing rules, making clear that subject to narrow circumstances set out in the Bill, communications made in mediation cannot be admitted in Court or arbitral proceedings as evidence.
Admissibility of Foreign-Qualified Counsel & Mediators/ Exceptions under the Legal Profession Act
The Bill will see amendments to the Legal Professions Act which will mirror the exceptions currently applicable in relation arbitration proceedings. This will provide parties with the flexibility to choose a foreign mediator and/or foreign qualified counsel. By doing so, the Bill seeks to encourage international parties to use Singapore as a venue for mediation.
The Bill follows a spate of measures such as the establishment of the Singapore International Mediation Centre and the Singapore International Mediation Institute in 2014 to develop the commercial mediation space in Singapore.
The steps taken seek to entrench Singapore's global brand name as a trusted location for high-quality cross-border dispute resolution, where parties have at their disposal a full suite of services that best meet their particular needs.
This article is part of the Asia-Pacific Dispute Resolution update for April 2017. View the next article here.
This article is produced by our Singapore office, Bird & Bird ATMD LLP, and does not constitute legal advice. It is intended to provide general information only. Please contact our lawyers if you have any specific queries.