China-Singapore mediation initiative - what's in it for businesses?

Law suits can prove to be the worst means to settle a legal dispute. Court rooms have produced decisions unsatisfactory to all parties. Mediation on the other hand preserves a relationship, nudges feuding parties towards a middle ground and acquire a peaceful resolution. This is especially crucial when corporations do business across international borders.

Economic activity between Singapore and China looks set to heat up as an array of initiatives take shape. The Belt and Road Initiative (BRI) will drive commerce even further. When this happens, legal demands will rise.

In good time, part of these initiatives concluded with China last week includes co-operation between the Singapore International Mediation Centre and the Mediation Centre of the China Council for the Promotion of International Trade. Both organisations signed a Memorandum of Understanding to work together to help businesses resolve disputes that may arise under the BRI.

For business people all this translates into commercial certainty and confidence.

Asia is a fragmented continent. Here, hundreds of different languages are spoken. A myriad of cultures and legal systems form the background of commercial activity. In some countries, poorly developed legal systems hinder justice. All this create hurdles for business transactions and makes it hard for many companies to flourish.

“Very often disputes are based on compromise and not on legal principles”, said Steve Ngo, a dispute resolution professional. “Mediation plays an important role in facilitating resolution in a manner favourable to all parties.”

All this will change with enhanced mediation frameworks and what better place to take your disputes than to a neutral third-country such as Singapore? Our own legal system had developed in such a way that we become a choice destination for mediation.

“We have a matured legal system, we are well grounded in the rule of law and we are politically stable.” Singapore, with all its resources and infrastructure, is able to host these activities at the Maxwell Chambers or, if they wish to take it elsewhere, we are also in a position to provide the the rules of mediation to parties. “

“This is not a new occurrence”, reminded Ngo. “Singapore had always been at the forefront of arbitration and mediation. Our system of justice is completely reliable and the outside world has come to respect us for this.”

Parties coming to Singapore to resolve their disputes can essentially enjoy the flexibility and versatility. For instance, mediation acts as early intervention to prevent disputes from spiralling out of control. Attempts to resolve disputes without resorting to legal proceedings may not always succeed especially when sentiments rule rather than clear heads. However, when mediation fails, all is not lost because the parties can then turn to arbitration, where we can quite confidently say that we have world class arbitration services in Singapore.

As the economic centre of gravity shifts to Asia, legal activities will follow. Singapore is indeed looking set to become Asia’s version of The Hague.