Singapore Convention on mediation in Bangladesh: A call of the time

Disputes, which often form part of our everyday lives, can take various forms - disagreement, breach, incompatibility - and can lead to lengthy court procedures. 

This has been the usual practice, and has contributed to a long backlog of cases in the courts of Bangladesh. According to the latest available figures, around 3.7 million cases are pending in all the courts, including the Supreme Court of Bangladesh.  

For decades, litigation has been considered the most effective course of action in resolving disputes.

Questions have been raised about sticking to this outdated method to resolve disputes whereas the world is moving on with other more efficient, organised and inexpensive ways of settling disputes mostly outside courts. 

The call for adopting or resorting to these alternate methods of dispute resolution (ADR) has never been stronger in these challenging times when the world is facing seemingly a never-ending unprecedented pandemic.

The era of online dispute resolution has made considerable advancement in these testing times and those involved in the legal sectors have now progressed to become digital dispute management specialists. 

Our courts have gone virtual and are handling urgent matters quite efficiently. However, long-standing pending cases filed before the pandemic have seen little progress. 

In order to try and resolve these waves of complexity where many new cases are expected to be filed in the coming times, our legal system  requires more active engagement of ADR methods which includes- negotiation, mediation, conciliation, adjudication, arbitration etc.  

Effective ADR also includes Bangladesh participating in the international treaties, conventions and practices. 

The New York Convention 1958 helped to lift the status of international commercial arbitration as the most operative method of ADR with unqualified global acceptance. 

This has enabled an award/decision pronounced by an arbitral tribunal in one member state to be recognised and enforceable in any other member state. 

So far over 168 states have ratified this convention which has made it one of the most popular treaties of the modern times. 

However, despite its popularity, arbitration has received harsh criticism due to increased costs and delays caused by the fact that the courts of the country of the seat, as well as those of the place of enforcement, must be involved in order to secure the benefits of the award.

Thus, mediation has grown in popularity and acceptance in many leading jurisdictions. 

Dr Khaled H Chowdhury. Illustration: TBS

Encouraged by the success of the New York Convention, the Singapore Convention on Mediation was adopted by consensus at the United Nation General Assembly on 20th December 2018 and was later enforced in 2019 with the aim of filling the void in mediation in international commercial disputes. 

This new international treaty provides for the cross-border enforcement of mediated settlement agreements, giving businesses greater certainty and assurance, facilitating international trade and commerce. 

The purpose of the Singapore Convention is to make the outcome of mediation binding, just as the New York Convention made arbitration binding. 

This is because mediation is a voluntary, confidential, and non-binding process where a neutral mediator will help the parties in reaching a settlement that is satisfactory to all the concerned parties.  

Unlike litigation, here the mediators do not decide and/or impose the outcome; they only facilitate the parties to reach mutually agreeable settlements. 

Thus, it is a procedure which is absolutely controlled by the parties, the outcome of which is also made with the agreement of the parties.

Barrister Ayesha Fariha. Illustration: TBS

As of today, the Singapore Convention has 53 signatories, including the United States, China, and India. However, six states have deposited their respective instruments of ratification or approval so far. 

Through this Convention, businesses, especially where foreign investors are involved, can rely on mediation as a dispute resolution option for their cross-border transactions, with greater certainty and assurance that their mediated outcomes would be enforceable. 

The conciliatory nature of mediation also helps to preserve commercial relationships between the parties. Also, in our neighbouring country India, the Law Commission recommended, in its 129th Report, that it should be made obligatory for the courts to refer disputes to mediation for settlement. 

This was referred to in the landmark case of Afcons Infra Ltd v M/S Cherian Varkey Constructions (2010). In this case, the Supreme Court of India further held that all cases relating to trade, commerce and contracts, consumer disputes, patent related disputes and even tortious liability should normally be mediated. 

In the case of B.S. Krishnamurthy v B.S. Nagaraj (2013), the Indian Supreme Court has directed the Family Courts to strive to settle matrimonial disputes via mediation and also to introduce parties to mediation centres with consent of the parties, specially matters that concern maintenance and child custody. 

Ever since this direction, 60% of such cases have been settled via mediation resulting in less pressure on the courts. This shows that the prospect of mediation need not be confined to settlement of commercial disputes only.

Due to the fact that Bangladesh is a rising economy, its effort to fight back the pandemic has been globally acclaimed. 

Therefore, one can be hopeful of more international involvement with increasing foreign investment, joint venture and other collaborative arrangements in Bangladesh. 

In the current situation, urging Bangladesh to sign and ratify a mediation agreement is undoubtedly the best choice.

Section 89A of Code of Civil Procedure 1908, as amended, has already provided for mediation to be compulsory in every civil dispute. 

Respective provisions of the Money Loan Court Act 2003, Labour Act 2006 and Arbitration Act 2001 also provided scope for mediation to be used for settlement of disputes. 

Unfortunately, due to lack of awareness, misconceptions and lack of enthusiasm of different stakeholders involved in disputes, mediation is yet to make much progress. 

Laws and rules on mediation are sporadically defined and applied in Bangladesh. There is no such 'Single Code' on mediation to make the process more definitive. 

This makes it even more crucial for Bangladesh to adopt the Singapore Convention in order to establish itself on the global map as a strong supporter of mediation culture.

Hopefully, this will also improve our standing in the table of 'Doing Business' and 'Enforcement of Contracts' assessed by the World Bank. 

Dr Khaled H Chowdhury is an Advocate, Appellate Division at Supreme Court of Bangladesh, Head of Laws at London College of Legal Studies (South), Head of Chambers at Dr. Khaled H. Chowdhury & Associates, Dispute Management Specialists and an Accredited Civil/Commercial Mediator of ADR ODR International Limited. 

Barrister Ayesha Fariha is a Lecturer at London College of Legal Studies (South), an Associate at Dr. Khaled H. Chowdhury & Associates, Dispute Management Specialists and an Accredited Civil/Commercial Mediator of ADR ODR International Limited.