Speech by Mr Edwin Tong, SC, Senior Minister of State for Law and Health, at the Singapore Mediation Lecture
17 Oct 2019 Posted in [Speeches]
Justice Belinda Ang, Chairperson of the Singapore Mediation Centre (SMC),
Judges of the Supreme Court of Singapore,
Professor Lily Kong, President of Singapore Management University (SMU),
Ladies and gentlemen,
Thank you very much for having me here today, to speak at this year’s Mediation Lecture.
The title of this lecture, “Singapore’s Voyage Across the World Map of Mediation—Past, Present, Future”, will be what I am taking seriously and also literally, today. In keeping with the title, I will focus on what we had done in the past, to look back at what we have done to shed some light as to where we are now; how we see the landscape ahead; and then look at what the key drivers of mediation should be.
The broad theme of what I am going to say will be this: we have had a significant milestone in having the Mediation Convention signed in Singapore, but it would be foolish to rest on those laurels. We need to quickly find the next bound, and pursue the next step forward. We need to look at the drivers of mediation around the world to tell us what we should focus on.
This lecture has been an annual one since 2012. It has been a very useful platform for mediation thought-leadership, to bring the legal community together, to discuss relevant and germane issues that arise in the context of the mediation landscape.
I want to thank, in particular, Justice Belinda Ang, Singapore Mediation Centre (SMC) Chairperson, for inviting me to speak, some months ago. Justice Ang has been an active advocate for the use of mediation to increase access to justice, to expand on the options for mediation to be a way by which parties can continue to preserve relationships and maintain harmony, even as they may come across a dispute.
Under her leadership, SMC has taken great strides, professionalised domestic mediation, and has handled a steadily increasing caseload over the years, contributing richly to the practice of mediation in Singapore.
- 2019, as I mentioned earlier, has been a momentous, historic year for mediation.
- We are very proud to have hosted the historic signing of the Singapore Convention on Mediation (“SCM”) on 7 August.
- Seventy countries attended, which is itself testament to the support that we have received - not just for the practice of mediation, but I would dare say for the support of Singapore as a trusted platform, a trusted legal system, one that people believe in, have confidence in, and are prepared to bring their disputes to resolve in.
- Forty-six countries signed the mediation treaty. When we started the convention, we asked the UN, “How many do we need to make this a convention?” They said three. I said, “Okay, we can do that. Just us, and two others.”
- We made a concerted effort within the government to push this agenda. Every time any office holder travelled to another country, we made it a point to put it on the agenda to remind people not just about the fact that it was a Singapore Convention on Mediation, but that mediation is quickly becoming the way by which businesses would like to see their business disputes resolved. Much of the support that the countries have shown us is a reflection of how their business communities value mediation within their own countries and the value in which they see, in having mediation. That is what led to the overwhelming support that we had for the Mediation Convention.
- Earlier last month, five more countries signed, so we are now at 51. We believe that this is a very encouraging start, given that it has only been nine months since the end of last year when the UN General Assembly passed the resolution to adopt the Convention, and to allow Singapore to host and name the Convention.
- The New York Convention, in a very different time, and different place, and perhaps under different circumstances, first started with 10 signatories when it first opened for signature. Even in this context, the Convention on Mediation has had a rousing start. The comparison is not just a recognition of where we are, but of the importance of mediation in today’s dispute resolution landscape.
- On the UN treaty being named after Singapore, I will say a little more later. Let me share one anecdote with you first, in the context leading up to the signing of the convention.
- In 2017, negotiations in the UN were very intense and we had a team to deal with the negotiations, and to bring the parties together. There was a very harsh North American blizzard that shut down the whole UN headquarters. Delegates who were involved in the negotiations for the purposes of getting the Convention done were all stuck, either in hotels or elsewhere. They just could not access the meeting rooms to the UN HQ. They decided to find an alternative venue (I am told it was a pub in the vicinity!). With the blizzard, once they got in, they could not get out, until they got consensus for the Convention.
- Even in those early days, there was a hallmark of the qualities of a good mediation. You had an unanticipated scenario, and an innovative solution. Good mediators did what was needed to get everyone together to find a solution. So they were locked up until there was consensus. What started in this fashion ultimately ended up with the Convention in the form we see it today. This anecdote tells us a little about what happened, back in 2017 in the UN, but is also a reminder about the confidence that many other countries had in us. That is not something that we should take lightly. It is our value proposition as Singapore, the confidence in our first-class judiciary and Bar, and the entire legal industry ecosystem.
- It has been hard work to get the negotiations done. We now sit right at the point of inflexion, having done it, having put it in motion, and are now embarking on ratification, as we are persuading other countries as well. You also only need three countries to ratify for it to be effective. I think we can achieve that.
- The key is how we now move forward to make sure that we can leverage on the goodwill we have generated, the thought leadership that we have shown in this space, to push ahead with mediation. How do we make sure that mediation will not only become as common as litigation and arbitration, but also effectively help businesses resolve disputes? I look at it from a perspective of the past, what we have done, and the developmental process, the present where we are today in the legal landscape. Most importantly, where the future might take us by looking at the trends, how the legal industry can work together, how the different facets of mediation, the different institutions, the different leaders in mediation, and the communities can all come together.
Past – Our efforts in developing mediation
- Let me start with the past. Mediation is not something new. Mediation might have been a relatively new concept in terms of it being the third of the triumvirate of dispute resolution mechanisms, but it is certainly not a new tool, especially in our Asian context. Migrants from South China used to resolve commercial and non-commercial disputes through negotiations facilitated by their clans. In fact, many of them still do today. They go to a clan elder, one who is respected and able to speak to both parties in a neutral, impartial way, to find common ground, to mediate differences. The Malay communities had their own village heads. Likewise, Indian communities had community leaders called “Panchayats” who played the same role as well. Today, we just call them by a different name – mediators.
- On an institutional level, our efforts to re-introduce mediation as an alternative dispute resolution (ADR) mechanism started in the 1990s. I was a young litigator then, first came out of school, went into practice, and wanted to resolve everything by fighting. That is what we were taught to do in litigation. We went to pre-trial conferences and the Judge just kept asking us, “Have you tried mediation to settle this case?” It was anathema to someone like me, who did not have much experience then. Looking back now, in those days, we started institutionalising mediation in the context of litigation; those were the initial seeds of alternative dispute resolution by mediation, which has grown into what we have today. Mediation does not exist in a vacuum; it exists when there is a dispute. So a contentious litigation was really the natural place to start.
- Mediation was also useful for harmony in society. Singapore is densely populated. We live in a city-state. Neighbours are close to each other. We have a community, a society that is multi-cultural, multi-religious, very diverse. We have different backgrounds. We respect our religions in different ways. There could be ugly flashpoints if we did not have a way by which we could preserve the harmony in our society.
- Going back to the point about institutionalising mediation, in the context of litigation and disputes, one of the early boosts we had was support from the judiciary – mediation was integrated into our domestic dispute resolution system from the early days. It was part of the system, something triggered every time we had a pre-trial conference to resolve disputes. In fact, it became formalised in 1996, where parties were encouraged to resolve matters by negotiation.
- In 1994, court-based mediation by the State Courts, known as court-annexed mediation, started. That gave a tremendous boost to mediation, in the context of dispute resolution and litigation.
- The government played its part and, looking at the landscape in 1996, convened a committee on alternative dispute resolution, looking at the different means by which disputes could be resolved, and how it could be implemented beyond the courts.
- In 1997, the SMC was set up – it has been around for 22 years now. A year after that, the Community Mediation Centre (CMC) started to operate. The CMC started as a grassroots-led initiative where grassroots leaders within communities were called upon from time to time to resolve disputes. CMC gave them a platform, a setting, as well as the training. The early mediators were grassroots leaders. We celebrated the 21st Anniversary of CMC last weekend, and looking at mediators who were groomed through the CMC, they will go far because there is so much value in having community mediators sit amongst us within our community and help resolve those disputes.
- On the other hand, the SMC has grown from strength to strength. It has handled many cases referred by Supreme Court. More than 4,000 cases were referred to SMC, providing high-quality mediation services. SMC achieved a high settlement rate of 70%, and more than 90% of cases were settled within one working day. I think there is a bit of a stretch as to what exactly “one working day” is - it can sometimes go well beyond 6pm.
- There was one mediation case, involving George Lim and myself. We were there from the morning and, because he has so much energy, he outlasted both my opposing counsel and me. We staggered out of the office at 4am in the morning with a signed agreement. We felt that we had really achieved something. Actually, it was just him outlasting us. As a mediator, you need to coax and cajole. You need to find one common ground, in the midst of so much conflict and antagonism. You need staying power, literally.
- This has led to the progressive and very successful early settlement rates of the SMC, which in turn then helps to save court resources. In the 1990s, that was particularly essential where we were looking at making sure that our court system was able to deliver justice, quickly, efficiently. I think the role that SMC played in the context of achieving a first rate legal system in Singapore cannot be underestimated. The SMC also raised awareness of mediation; it is not just about getting into court and having lawyers encouraged to go to SMC, but also going to the community, the business people, explaining what mediation is all about, the value of mediation, and the benefits that it can bring. Not all cases can be mediated. However, those that can would benefit from it. This Singapore Mediation Lecture was one example of how SMC brought awareness to the ground, engaged in the exchange of ideas, and promote mediation and thought leadership behind mediation.
- Beyond domestic mediation, we went on to develop international commercial mediation. SIAC at that time was developing as well into the international centre that it is today. How the transition took place from a domestic arbitration to an international one were lessons that we also took on in the context of mediation. From the late 1990s to early 2000s, there was a rise in cross-border commercial activities and transactions. Parties needed a fair, efficient and transparent way to resolve disputes. Helping business partnerships, supporting trade and commerce and ultimately preserving the harmony and the relationship, is the true value of mediation.
- One of the values I firmly believe in for mediation is the novelty of the solution. If you went and litigated a matter or brought a case for reference to arbitration, you are constrained by certain rules, including rules that govern the kind of remedies you can get. Whereas, in mediation, you can find very innovative solutions. What may be a problem arising from a sale of goods could actually be fixed by buying even more of the goods – that is the kind of solution found in mediation.
- The other value of mediation is in preserving harmony and relationships, which of course is not to be underestimated. Today’s contracts are large go on for a long time, sometimes even beyond the lifespan of a single management team. Goodwill that has been built up over so many years should not be so easily lost over one dispute. That is the thinking behind initiatives such as the Infrastructure Dispute Resolution Protocol, which I will come back to later.
- Let me just give some examples to illustrate these points.
- There was a dispute between a Korean party and an American party. It was a joint venture where the Korean party was the minority shareholder running the business. Parties accused each other of breaching terms of the Shareholders’ Agreement. Parties then decided to go for mediation, at the recommendation of their lawyers, held in Seoul.
- At the mediation, parties were very entrenched in their positions, until the mediator explained that as shareholders, whatever the outcome of this dispute, they would remain as shareholders.
- In the end, the Americans agreed to buy out the shares of the Korean party. To ensure they were able to preserve the harmony, the payment was staggered. One key ask from the Korean side was that after selling out, they wanted to ensure that staff were not let go of, and that they continued to retain a job. It became a term of the mediation that the Americans buying over the Koreans and would retain the staff for a period of time. I think that this was eventually the term that won them over at the very end. In a typical commercial arbitration, you would not be able to impose those terms on another party, but that was what enabled the parties to break the deadlock.
- Another example was of a global technology company sued for IP infringement, the allegation being that the infringer sold stolen copies of products owned by the tech company. The matter was brought before a court and parties agreed to mediate. The matter was settled in an interesting way. The alleged infringer agreed to help the IP owner track down the bigger fish upstream, so that the IP owner could break up even more infringement. It helped to solve the matter between those two parties.
- My point behind all this is that one can find solutions that do not sit within the normal rubric of legal claims or legal principles with mediation.
- Along with the development of SMC and internationalisation, we then set up three complementary entities. They are key institutions that have brought mediation to where it is today. They play a role and will continue to play a role in developing mediation.
- The Singapore International Mediation Centre (SIMC) provides not just good administrative services, but also ensures that the panel of mediators seated would be the best. Rather than be selfish and guarded about having only Singapore mediators, SIMC operated on the principle of quality assurance.
- The Singapore International Mediation Institute (SIMI) was set up around the same time as the professional self-regulatory body to set standards and provide accreditation for mediators, an important part of the ecosystem. Much as we want to ensure more cases and build expertise, [we have] to also ensure that the capability of mediators and the ability to always be ahead of the curve, knowledge-wise, is preserved. SIMI plays that role.
- Finally, Singapore International Dispute Resolution Academy (SIDRA). It drives academically robust thought-leadership research and complements Singapore’s suite of dispute resolution services and training.
- This is the landscape which we have today. We are also fortunate, as Singapore is located at the hub of commerce between the East and the West, leveraging our socio-political position and stability to offer services that perhaps no other country in this part of the world can.
Present – Our Achievement as a Dispute Resolution Hub
- It is in this context that mediation services have also developed.
- A trusted legal system, undergirded by our neutrality and strong commitment to rule of law, and offering different types of dispute resolution services, of which mediation was fast becoming and certainly is now entrenched as one of the key pillars.
- We also had progressive and relevant legislative framework to adapt to needs of businesses. For instance, in 2017, we enacted the Mediation Act to enhance the enforceability of mediated settlement agreements. This meant that, before the mediation convention, for domestic mediation, we already had a framework to ensure that mediated agreements could become enforceable under the Mediation Act. Going forward, one of the enhancements of the Convention on Mediation is to provide the parties, on a cross-border basis, the ability to select mediation as an enforceable mechanism of choice.
- We have also built on the success of Maxwell Chambers, first set up in 2009. Two months ago, we launched the Maxwell Chambers Suites, which provides now three times the size of facilities. More than housing physical locations for hearings and facilities, it also provides a hub for so many world-leading institutions, such as SIAC, the Permanent Court of Arbitration (PCA), the International Chamber of Commerce (ICC), and the American Arbitration Association International Centre for Dispute Resolution (AAA-ICDR). INSOL recently became the newest tenant.
- All of this creates an ecosystem of thought leadership that plays off each other. We bring the best of the world’s organisations here, so that Singapore continues to thrive, not just as a centre for dispute resolution, but also as we progress into the next bound, with people who will help us. And we have made good progress.
- In the 5 years since SIMC was established, they have looked at over 80 cases-to-date. The settlement rate at the end of 2018 was over 80%, significantly above the global settlement rate of 70%. SIMC has expanded its footprint through many international collaborations as well, signing MOUs with foreign dispute resolution institutions in countries including China, India, Japan, and South Korea. Three of these four countries eventually signed the Convention.
- We are also developing new products and services. Prior to the SCM, it was very popular for the “arb-med-arb” protocol to be adopted. If you settle it by mediation, you come back to arbitration to record the settlement as an award. It needed to be done in the days pre-Convention to leverage on the New York Convention for Arbitration, for it to be enforceable.
- Today, with the Singapore Convention on Mediation, we do not need to take a separate route with the New York Convention.
- Another development has been the Singapore Infrastructure Dispute-Management Protocol (SIDP) for infrastructure projects that was introduced last year. It has a number of novel features.
- By all accounts, infrastructure spend is going up in Asia. Money is coming into Asia, in particular Southeast Asia, for investments to build roads, transport services, airports, etc. These infrastructure projects tend to be long-term, of a large scale and high value. We wanted to make sure that these projects would have the best chance of succeeding, even if there might have been disputes arising at some stage in the projects.
- The SIDP takes a proactive dispute resolution approach, to nip any dispute in the bud before it escalates. Hence, even before the dispute has arisen, a dispute board is appointed at the start of a project, so that the personnel involved in the protocol will be familiar with the project, know the people involved in the projects, and will be able to handle any conflicts that may threaten to derail the project.
- The protocol also provides a wider range of methods including mediation, so the SIDP also works at SIMC. We are rendering opinion for making former determination, or neutral evaluation, so it is fairly flexible. The novelty lies in situating a body that helps the parties re-conciliate, even as the dispute arises.
- One upshot of these developments has been that, on the global stage, many of our institutions are being recognised for their thought leadership.
- Our role in UNCITRAL was to bring consensus across so many different legal traditions, legal systems and interests.
- For those of you who were present during the Singapore Convention Week, you would know how proud we were of the whole legal community coming together.
- The whole event was also helmed by so many youth ambassadors who played their part with so much pride.
- However, as I said at the start, all that is now in the past. We now need to find a way to move forward, to bring this to fruition. Let me offer a few suggestions.
Future – Seizing Opportunities Together
Drivers of Growth
- First, we must start by looking at what the key drivers of growth have been and are likely to be, and where these opportunities present themselves, in the sphere of mediation, and in the broader context of dispute resolution. Not just in terms of the subject matter, such as infrastructure projects, and investor-state disputes, but also the geographical location in which mediation can be done, where we can look at expanding beyond the boundaries of Singapore.
- We must ride decisively on these drivers of growth. Investments will flow increasingly into Asia, especially with the renewed initiative on the Belt and Road Initiative (BRI). Today, ASEAN’s GDP alone stands at about $3 trillion, and it grows annually, collectively at ASEAN’s level, at about 5%. If you contrast that to the annual growth rate of GDP around the world, it is at 3.8%. This tells us that the Asian focus is going to be strong in the coming years.
- We must strengthen our mediation network across the region and globally. We cannot be content to just deal with mediation in Singapore. We must also embrace future legal trends and what kind of cases we think mediation might apply to in the future.
- Let me elaborate on this, starting with a survey that was conducted by the Singapore International Dispute Resolution Academy (SIDRA) which gives a useful insight into what we can expect to see.
- It surveyed over 300 corporate and external counsel on the use of dispute resolution mechanisms between 2016 and 2018, in the period before SCM. It showed among other results that arbitration remained the most commonly used dispute resolution mechanism, followed by international commercial litigation. Not surprising, because this is pre-SCM. A key reason was the ability to enforce outcomes. Arbitral awards are enforceable, with a track record of using the New York Convention over time.
- The lack of a mechanism for cross-border enforcement of mediated settlement agreements was a huge limitation. Today, with the SCM, I think we should expect that it would be a different outcome. If enforceability was the inhibitor, with SCM, this will change.
- Why? Because I think we all know, if a business gets into a disagreement, you want it to be mediated. If you have an agreement, you want to know that it can be enforced. Especially if your counter-party comes from a different country. With time, I think that trend will reverse.
- Regarding adoption by countries, we started with 46, and now we are at 51. We are also putting together the necessary legislation to ratify, as are other countries.
- What is also key will be the adoption by corporates and businesses.
- Significant support by countries coming forward to sign the treaty is a surrogate marker for countries’ business interests. If you are sitting in China or India, and you want to do business with the US, you want to make sure that if you have a dispute you can mediate it, and it will be enforceable.
- Second, another driver of the adoption of mediation is economic growth.
- Asia is now the fastest growing region. It is home to 28% of the world’s middle class, which will increase to two-thirds by 2030 and 70% by 2050. Urbanisation rate is at 48%, and will increase to 55% by 2030 and 62% by 2015. Infrastructure demands, especially in ASEAN, is estimated to be about USD$1.7 trillion per year, each year, from 2016 to 2030.
- Between 2017 and 2030, the annual growth rate of legal services in the Asia Pacific is expected to be about 6.6%. That number has to be contrasted with the expected global expansion of legal services, which stands at 3.4%. So, the growth of legal services in Asia Pacific is estimated to be almost double that which you will find around the world. The more business activity there is, the more you expect these services to be on the rise.
- We have the key players driving economic expansion in the region – China and India, two large economies. China is the world’s second largest economy, contributing around 30% of global growth in the past eight years. India is already the third-largest economy in terms of purchasing parity terms, and has a strong momentum of growth.
- We have two other giants in Asia, South Korea and Japan. South Korean and Japanese companies are international. These countries have made significant infrastructure investment in Southeast Asia.
- Taking a step back and looking at the signatories to the SCM, we have the two of the largest economies in the world, three of the four largest economies in Asia, and five out of the 10 countries in ASEAN.
- I read this as a marker of cross-border business activity in those countries, and their interest in using mediation as a way to resolve disputes.
- I would go further to look at regions, such as Central Asia. I visited Uzbekistan and Kazakhstan earlier this year. With Kazakhstan, I am happy to say that they have signed up to the SCM. Uzbekistan attended the convention to show their support.
- I believe that the demand for dispute resolution services in these regions will only grow as economies mature, as more investments flow in, as more infrastructure work takes place.
- Overlaying all of that is what I said earlier, that mediation is a value that is deeply embedded in the Asian way of doing business. This is not only something that we hear first-hand, sometimes anecdotally, in these jurisdictions.
- If you look at the SIDRA survey, of all the reasons for selecting dispute resolution, preservation of business relationships is a top reason for users who chose hybrid dispute resolution mechanisms such as the “arb-med-arb” over standalone arbitration.
- In the region, there will be an influx of investors, economies will grow, infrastructure spending will grow. Along with it, business activity, and along with that, the legal services, and the objective of resolving those disputes will put preservation of relationships between the parties, as top priority. A confluence of all these factors will help us to decide where the next bound in terms of growing mediation should be.
- With this, we look at the different outreach efforts, starting with the BRI. It is a very bold project.
- It spans across more than 60 jurisdictions. It is long term. It is built on infrastructure and substantial investments. It will require a reliable dispute resolution mechanism to ensure that the investors can bring their money inside and put the investments in these projects, and know that it is safe.
- Over time, we have been engaging the Chinese market, Chinese officials, and our counterparts in China to see if we can work together to come up with a common platform to resolve those disagreements.
- I was in Chongqing earlier this week, for the Joint Council for Bilateral Cooperation (JCBC) meeting. The JCBC is the highest level of government-to-government collaboration we have with the Chinese. We put legal and judicial cooperation very high on the agenda.
- Our two respected Chief Justices have an annual roundtable every year. We take turns to host. They have very productive meetings, and reach consensuses of significance.
- Our two ministries are also in very close collaboration. We did a joint dispute resolution conference for the first time in Beijing earlier this year, and it went very well, having collaborated with the China Council for the Promotion of International Trade (CCPIT). For the second instalment, we will be hosting it in Singapore sometime next year.
- This closeness of relationship is something we are building on to give ourselves and our stakeholders a platform from which to build the next steps. Later this year, we will also be signing an MOU between our two law ministries to further deepen that collaboration on many fronts – dispute resolution, legal aid, rule of law issues and so on.
- But one takeaway that I had when I visit our counterparts in China, and we brought several lawyers with us, is that the current dispute resolution mechanism they are subjected to – every time a Western cooperation tries to invest in China – is too Western-centric. It is all based on AAA rules, or ICC rules, and so on. Not that it is bad, but they do not feel that it is customised to what they might need.
- Second, they always tell us there is also room for resolving disputes with mediation. It is actually not fortuitous that the Chinese signed up for the Singapore Convention within the first week. They see value in having mediation as a way by which to preserve long-term relationships. It embodies their own values, and the values whereby they see business being done. Certainly in terms of commercial values, and giving ourselves a platform, it helps.
- We have also been to Japan. When I was in Japan, they told me they set up a mediation centre in a temple. When we were brought in, the first thing they served us was nice tea in a very serene setting.
- It is of a different setting – outside the office – creating conciliatory and peaceful surroundings that we can all learn from, although we do not have these old temples to spare.
- Again, my sense of the market is that they are ready for mediation. I expect them to sign soon. I think it is also the way of doing business in Japan that is very consistent with mediation.
- We were also in India to see whether we could test the market there. SIMC has been very progressive. They went to India, in Bangalore this year, way before it was known that India would sign up to the SCM, and certainly before we knew that we would achieve the three that we needed to get to ratify [the treaty]. SIMC went to Bangalore and they took in 21 specialist mediators, trained them and accredited them as the specialist members of the SIMC. They are now effectively our ambassadors for mediation in India. They are top lawyers, some of them are ex-judges, and they now sing praises of SIMC and bring [mediation] to their own practice. They have inserted SIMC clauses into the ways they draft their agreements as lawyers.
- There is work for us, across the three large countries - three large economies in Asia and Central Asia.
- Beyond the geographical space, as mediation grows and evolves, what else can we do? I say we look at the next beast, which is technology. Technology is something that sometimes lawyers are just too afraid of. I, for one, am not so in-pace with technology. I will confess to the Judges that each time I go to court, I see that there is a screen where the counsel’s desk is. The first thing I do is fold the screen down, and use it as a shelf to put my books and papers. So much for technology!
- It is a quirky story, but one that tells us that we have to be prepared to embrace AI and technology. Many firms are doing it.
- You pit an AI machine against an experienced lawyer, and it shows that the AI is able to vet the document more accurately and more quickly than the lawyers can. There are some things that can be done to be complementary to lawyers – not to replace lawyers, but certainly be helpful.
- Platforms for conduct of online hearings/ mediation; automated negotiations; and analytics for appointment of arbitrators, mediators or counsel would be useful.
- Again, let me go back to some results from the SIDRA survey on technological tools.
- It tells us that the use of technology is relatively young and nascent, and we could do more.
- The survey listed a few examples of technology tools that are used in mediation and asked if users found them useful or never heard of before.
- Approximately one third of users indicated that technology is “useful”, which suggests that the other two-third probably never heard of it. We can learn from this then, leverage on technology and use it to develop the practice.
- A closer look at the respondent profile, which is also interesting, shows that corporate users are more likely to recognise specific technology as useful, compared to lawyers. That reinforces the point that I have made earlier.
- It suggests an opportunity for lawyers to consider a greater use of technology in mediation in meeting and bridging client expectations.
- Another new growth area for mediation is in the context of investor-state disputes. We have studied the numbers of investor-state disputes over the last decade or so. There has been a growing number of investor-state disputes.
- As of 2018, there were 942 known treaty-based investor-state dispute settlement cases. 71 new arbitration proceedings were initiated in 2018 alone.
- This was also validated by the SIDRA survey: almost half of the lawyers who responded had been involved in investor-state or multilateral investment disputes from 2016 to 2018. It reinforces what we think, what we hear on the ground, and what we see anecdotally.
- Arbitration is commonly used in investor-state disputes, again supported by our SIDRA survey.
- However, we see a rising interest in investor-state mediation. That was the surprising find from these results. You would have imagined that two parties, especially two states, would become more entrenched, but the converse is true. Investor-state disputes, with investors being appropriated, look at mediation as something that presents a quick option, cheaper, quicker, option, and preserves long-term relationships. For the investor in the country, there is tremendous value in that.
- We see that mediation is being more frequently incorporated into investment treaties, often as a preliminary step to arbitration. As I said just now, you cannot have mediation exist in a vacuum. It sits together with a more conventional, typical way of resolving disputes.
- The Energy Charter Conference endorsed a Guide on Investment Mediation.
- Many institutions have adopted bespoke rules for investor-state mediation such as the International Bar Association (IBA) and the International Chamber of Commerce (ICC), focusing on the skills and qualifications of investment mediators.
- There is a specialised group of investment mediators now being trained, familiar with this area of the law and understanding the dynamics of parties behind investor-state disputes.
- For example, the International Mediation Institute (IMI) published a set of competency criteria for investor-state mediators.
- All these anecdotes give us an idea of the landscape, and I am highlighting this to you, not so much for you to rush off and develop your own set of criteria, but to let you know that this is where I see the direction moving forward.
- Those of you who are involved in investor-state arbitration work and cross border work, I think there is an avenue for you. Overlay that with what I said earlier about investments coming into Asia, and we have some key drivers that we can lean into.
- I will share some other interesting findings from the survey.
- In terms of selecting a dispute resolution mechanism for investor-state disputes, the top three factors were enforceability, impartiality and political sensitivity.
- Ad-hoc mediation was more frequently used compared to institutional mediation.
- Only 27% of corporate users indicated that they were “very satisfied” or “somewhat satisfied” with the enforcement of outcomes. Bear in mind, this is 2018 - before SCM.
- We think SCM and the mediation community can fill this gap.
- In closing, let me summarise what lies ahead. Given the investments coming into Asia and increasing globalisation, ignoring or marginalising multilateralism will not continue for too long.
- We need to build our capabilities, ensure that SIMI, SIMC, SIDRA all come together, work together. All of these will be undergirded by a progressive legal system that will react to business needs, that will make changes when necessary, and those changes, if needed, will come quickly. You have seen the experience how we have done other pieces of legislation. If we need to move on something, if we need to fill a lacuna, we move quickly.
- Ultimately, what is required for us is to call on all the different players in the mediation community, to come together and work together. That is an important part of this puzzle - that we are not seen as the country that set up SCM, signed it, but then cannot get our act together internally.
- What is important is that we are cohesive, pull in the same direction, and find opportunities in the region, if not in the world.
- It is important to also hear from all of you, as thought leaders in the mediation space, onhow you think we can advance mediation. We should gain consensus, and push on to the next bound in mediation, as a country. It has been a pleasure and honour to have been invited here this evening to speak to you.
- Thank you very much.
Last updated on 16 Apr 2020