The law numbered 7282 on the approval of the ratification of the United Nations Convention on International Settlement Agreements Resulting from Mediation which was prepared by the United Nations International Trade Law Commission (UNCITRAL) ("Singapore Convention" or "Convention") was published in the Official Gazette on 11 March 2021. In addition, the Convention was ratified by the Presidential Decision No. 3866 as published in the Official Gazette on April 22, 2021. The Convention will enter into force six months after the date of deposit of the instrument of ratification, acceptance, approval, or accession to the United Nations, and the Convention will apply to settlement agreements concluded after the date the Convention enters into force.
The Singapore Convention aims to cover settlement agreements that have been executed as a result of mediation procedures for the settlement of international commercial disputes by the competent authorities of the parties to the Convention. If one of the parties does not comply with its obligations within the scope of the settlement agreement, enforcement of the settlement agreement may be requested from the competent authority of the country where the assets of the party that is incompliant with the agreement are located. If the concerned assets are in Turkey, enforcement of the settlement agreement will be executed by the competent Turkish courts and executive offices.
The scope of the Singapore Convention includes settlement agreements that are i) concluded as a result of the mediation process, ii) written, iii) on commercial disputes, and iv) international.
The following settlement agreements are out of the scope of the Convention:
• settlement agreements resolving disputes arising from transactions that have been engaged in by one of the parties for personal, familial, or household purposes;
• settlement agreements that are resolving disputes on family, consumer, inheritance, and employment law; and
• settlement agreements that have been approved by the court or executed during the court trial, executed as a court decision, or recorded as an arbitral award are out of the scope of the Convention.
Although the Singapore Convention leaves the enforcement procedures of settlement agreements at the contracting parties’ discretion, similar to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), it has determined the grounds for refusal of enforcement. If the limited grounds for refusal of enforcement exist, the enforcement of settlement agreements will not be possible.
In addition to the enforceability of settlement agreements, another benefit of the Singapore Convention is when a dispute arises from a party’s subsequent claim on an issue that has already been resolved by the settlement agreement, the settlement agreement can be invoked before the competent authorities of the relevant contracting state.
The easy enforcement opportunity of arbitral awards rendered as a result of arbitration proceedings in many countries in accordance with the New York Convention will now apply to the Singapore Convention. The Singapore Convention will enable mediation procedures to be a more preferred dispute resolution mechanism. The Singapore Convention, which has been signed by 53 countries, is expected to expand the trade volume with the increasing preferences for mediation.