In my previous column, I explained about international mediation as a means of resolving international disputes between companies, based on my position as the Japanese representative of the Singapore International Mediation Center(hereinafter referred to as ”SIMC”).
　Since then, there has been a major update on international mediation.
　On October 1, 2023, Japan deposited with the Secretary-General of the United Nations a letter of subscription to the United Nations Convention on International Settlement Agreements through Mediation (Singapore Convention on Mediation), becoming the 12th country to become a party to the Convention. The Convention will enter into force in Japan on April 1, 2024.
The Singapore Convention on Mediation has more than 50 signatories, including the U.S. and the U.K., but the number of signatories is still not necessarily large(As of January 16, 2024, the date of this column's writing, the Parties are Belarus, Ecuador, Fiji, Georgia, Honduras, Japan, Kazakhstan, Nigeria, Qatar, Saudi Arabia, Singapore, Turkey, Uruguay), so the signing of the Convention by Japan was welcomed with open arms by SIMC and the international mediation community, partly because Japan is the largest economy among the current signatories.

　The Singapore Convention on Mediation, signed in Singapore on August 7, 2019 and entered into force on September 12, 2020, aims to establish a common framework for settlement agreements reached through international mediation, including the granting of enforceability.
　Prior to the establishment of the Convention, international mediation had no means of enforcing a settlement agreement reached between the parties if one party did not voluntarily fulfill the agreement. In response to this problem, the Singapore Convention on Mediation established common international rules that allow for enforcement in the contracting states if certain requirements are met. For example, if a dispute between a company from Country A and a company from Country B, both of which are parties to the Singapore Convention on Mediation, were to reach a settlement agreement through international mediation at SIMC, if Company A does not voluntarily perform the settlement agreement, Company B can seek enforcement of the settlement agreement in Country A.
　When a settlement agreement is reached in international mediation, the parties usually enter into the agreement with the intention of performing the agreement, so there may not be that many scenarios in which the parties have to forcefully realize the settlement agreement that has been reached. However, it is not impossible for a party to gradually neglect to make the installment payments agreed to in international mediation, or to become dissatisfied with the content of the agreement after it has been reached, etc. In such cases, the Singapore Convention on Mediation can be effective and provide reassurance to the parties. In fact, SIMC has seen a significant increase in the number of mediation cases since the Singapore Conciliation Convention on Mediation came into effect.

　One important point regarding Japan's conclusion of the Singapore Convention on Mediation is that Japan made an opt-in reservation. An opt-in reservation means that the Convention applies only when the parties to a settlement agreement agree to the application of the Singapore Convention on Mediation (Article 8.1(b) of the Singapore Convention on Mediation).In other words, even after the effective date of the Singapore Convention on Mediation in Japan, the Convention will not automatically apply to and be enforced in all international mediations involving Japanese companies, but only when the parties agree to its application. Therefore, a Japanese company may choose not to enter into an opt-in agreement if its counterparty is not a party to the Convention, in order to avoid an imbalance whereby the counterparty can enforce the settlement agreement in Japan while the company cannot enforce the agreement in the counterparty's country.
　On the other hand, many Contracting Parties, including Singapore, do not make this opt-in reservation, and if companies from these Contracting Parties wish to exclude the application of the Convention, they must explicitly exclude (opt-out) the application of the Singapore Convention on Mediation in the language of their settlement agreement (Article 5.1(d) of the Convention).
　We believe that the fact that Japan, unlike other countries, has chosen to adopt a framework under which the Convention does not apply to Japanese companies unless they opt-in was a more prudent decision based on the assumption that there would be more than a certain number of situations in which Japanese companies would want to exclude the application of the Convention, given the fact that not many countries are yet parties to the Convention. We believe that this was a more prudent decision. Japanese companies or attorneys representing them are required to correctly understand the framework established in this way and correctly judge whether or not opting in is in the interest of the company or the client in the case in question.

　In conjunction with the conclusion of the Singapore Convention on Mediation, Japan has also enacted a new law, the Act on the Implementation of the United Nations Convention on International Settlement Agreements through Mediation, to implement the Convention in Japan. The Act will enter into force on April 1, 2024, the effective date of the Singapore Convention on Mediation in Japan.
　The Act provides that a Japanese court may decide to permit enforcement of an international settlement agreement that satisfies the following requirements: (1) the head office of the parties or their parent company is outside Japan, (2) the parties' domiciles or business offices are in different countries from each other, or (3) the parties' domiciles or business offices and the place of performance of obligations under the settlement agreement are in different countries.In other words, a party who wishes to enforce such an international settlement agreement in Japan must file a petition with the court seeking an execution order, with the obligor as the respondent (Article 5.1 of said Act), and the court must issue an execution order unless there are grounds for dismissal provided for in said Act (Article 5.11, 5.12 of said Act).The grounds for dismissal are limited, for example, that the content of the obligation under the international settlement agreement cannot be specified (Article 5.12(3) of the Act) or that the entire obligation under the international settlement agreement has been extinguished due to performance or other reasons (Article 5.12(4) of the Act).
　The Act also provides that, consistent with the opt-in reservation to the Singapore Convention on Mediation, the Act shall apply to cases where the parties to an international settlement agreement have agreed that civil enforcement may be carried out in accordance with the Convention or laws and regulations relating to the implementation of the Convention (Article 3 of the Act).
　In addition, the Act also provides that, if the court finds it appropriate, it may omit the submission of a Japanese translation of the settlement agreement, etc. (Article 5, Paragraph 4 of the said Act). Although it is a general rule to submit a Japanese translation when submitting a foreign language document to a Japanese court, it is assumed that most settlement agreements in international mediation will be prepared in English or other foreign languages, so this provision lightens the burden on the parties by taking this practical matter into consideration.