Brazil signs Singapore Convention on international mediation

​On June 4, 2021, Brazil signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (known as the Singapore Convention on Mediation). Effective as of September 12, 2020, the Singapore Convention on Mediation aims to facilitate enforcement of written agreements stemming from international trade dispute mediation proceedings. The convention has already been signed by countries such as the United States, China, India, and South Korea.

The Singapore Convention on Mediation opens up new possibilities for applying mediation, serving to make it more internationally recognized, certain and enforceable. It follows the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which helped to make arbitration an effective way of resolving international disputes in economic relations after World War II.

According to the Singapore Convention, mediation is defined as a process where parties attempt to reach an amicable settlement with the assistance of a third person – the mediator. This person, however, lacks the authority to impose a solution.

The Singapore Convention on Mediation applies to all written agreements resulting from mediation proceedings for resolving international commercial disputes. The convention defines international disputes as those:

• involving at least two parties based in different countries;
• involving parties whose places of business are different from the country where a substantial part of the agreement is fulfilled or enforced;
• involving parties whose places of business are different from the country that the subject of the transaction agreement primarily concerns.

As per Article 1 of the convention, countries that ratify the Singapore Convention on Mediation are bound to comply with agreements resulting from mediation, according to their own procedural rules.

Enforcing agreements made via mediation in Brazil

In Brazil, mediation is already regulated by Law No. 13,140/2015 (the Mediation Law), which provides that agreements arising from out-of-court mediation procedures are conclusive and enforceable, establishing immediate rights and obligations. If the Brazilian Congress ratifies the Singapore Convention on Mediation, the enforcement of such agreements in Brazil will also apply to those concerning international commercial disputes. This is because Brazil’s Civil Procedure Code provides that an enforceable legal instrument from a foreign country does not require prior judicial ratification to be enforced.

Article 4 of the Singapore Convention on Mediation provides that the parties must present the executed agreement with evidence that it was agreed upon via mediation for it to be enforceable. This could include the mediator’s signature on the agreement, a document signed by the mediator indicating the mediation was concluded, a certificate issued by the institution hosting the mediation process or any other evidence that the authority of competent jurisdiction considers necessary.

Furthermore, Article 5 also provides that local courts may refuse to enforce the agreement if:

• One of the parties is considered incompetent by the law;
• The agreement is non-binding, void, or unenforceable;
• The mediator violated applicable mediation standards during the mediation process;
• The agreement has already been fulfilled or modified;
• Granting the request to enforce the agreement runs contrary to public policy;
• The dispute could not have been resolved through mediation.

The guarantee that mediation agreements can be executed provides the parties that choose to submit their disputes to this process with greater legal certainty, though historically, most requests have been fulfilled regardless. In the economic sphere, this guarantee gives mediating parties and foreign investors the confidence to opt for a faster, less costly and less bureaucratic conflict resolution method.

As a signatory of the New York Convention and with well-established case law favoring the adoption of the arbitration process, Brazil is already considered an ‘arbitration friendly’ country. By signing the Singapore Convention on Mediation, Brazil is now moving towards becoming a global reference in yet another important conflict resolution method.

For further information about this subject, please contact Mattos Filho’s Litigation and Arbitration practice area.