Editor's Note: The Second Seminar of the International Commercial Expert Committee of the Supreme People's Court and Appointment of New Members of the International Commercial Expert Committee was held successfully on December 8, 2020. The theme of this seminar is the Latest Developments of International Commercial Dispute Resolution Mechanism and the Research on Relevant Issues on International Law. The participants, on site or virtually, had discussions on the two topics, the Development of International Commercial Dispute Resolution Mechanism: New Situation and New Challenges and the Research and Application of International Law Related Issues in the Post-Pandemic Era, respectively. The texts of speeches delivered by the participants would be posted on the CICC's website. 

Enforceability of Judgments in a Foreign Court and Implementation of the Singapore Mediation Convention

Michael Hwang S.C.

Good afternoon Everyone. I am going to make some brief remarks about certain characteristics of international commercial courts and the Singapore Convention on Mediation. 

My first question is ‘what is the role of international commercial courts, compared with international commercial arbitration, as a mean of dispute resolution’? The short answer is that international commercial courts can exist side by side happily with international commercial arbitration institutions. Each institution could fulfill certain needs of potential disputants, while other disputants may pay greater attention to certain perceived advantages of other institutions. This is best illustrated by London, where the English Commercial Court is the most popular court in the world for international commercial disputes, while the LCIA is among of the top five arbitration institutions in the world. 

My next question is ‘how to enforce judgments from international commercial courts in other countries’?

My first point is that these judgments can be enforceable by treaty. So this depends on how many bilateral and multilateral treaties the country of that international commercial court has with other countries. It can also be enforceable in common law countries by virtue of the common law rule that all foreign judgments for a specific sum of money made by a superior court of a foreign country will be recognized regardless of reciprocity. Subject to compliance with a few basic rules, which are relatively easy to comply with, this means that, in practice, all money judgments of any international commercial court will be enforced in all common law countries and territories, regardless of treaty, and regardless of reciprocity. So there are over 50 common law countries, including the United States of America (as well as important common law territories, like Hong Kong), which will enforce the judgments of any foreign court without any treaties or arrangements for reciprocity between the foreign court and the enforcing court. 

The next point is that, if a country has acceded to (or signed and ratified) The Hague Convention on Choice of Courts Agreements, then its court judgments will be enforceable in all other countries which have signed this Convention. The United States was among the first countries to sign the Convention, but has not yet ratified it. However, this may not make no difference in practice, because the USA applies the common law rule of recognition of foreign judgments. In practice, the most important signatory to this Convention is the European Union, which is made up of 27 countries. This is why Singapore and China have signed this Convention (although China has not yet ratified it), because it will make their own court judgments enforceable in all the countries in the EU, plus of course all the common law countries as well as the important country of Mexico, making a total of over 80 countries and territories, including many of the major commercial centers of the world. 

I now want to move to another topic, which is the concept of the Memorandum of Guidance. This is a concept invented by the Dubai International Financial Centre (“DIFC”) Courts in Dubai while I was the Chief Justice of these Courts. That concept has shown its usefulness, although it is a non-binding memorandum which we called a ‘Memorandum of Guidance’ (MoG) as it does not imply any obligation taken on by the signing parties (as opposed to a “Memorandum of Understanding”, which does imply some obligation to do some something).  The MoG is made directly between the courts of two countries which states, in simple terms, the legal position in each country on the recognition and enforcement of the judgments of the court of the other country. We used these MoGs to prove to the world that the judgments from the DIFC Courts could be enforced in a significant number of other important commercial courts (and up to the time of my departure, we had signed 11 such MOGs with other courts).  This is a technique which is especially useful when signed with a civil law country which does not automatically recognize and enforce judgments of a foreign court without either a treaty between the two countries or reciprocity (as I have previously explained). Such MoGs have the effect of educating the international business community and its legal advisers about the legal status of each country's court judgments, and helps to promote international trade and investment by virtue of this extra knowledge and certainty. The usefulness of this device has been recognized by the Standing International Forum of Commercial Courts, which we commonly call SiFoCC. This concept has been explained to you in the speech made by Sir William Blair earlier this afternoon. SiFoCC is currently undertaking a major project to finalize a joint memorandum to be signed by all the courts of SiFoCC, including China, describing the general law in each of its member courts relating to recognition and enforcement of the judgments of other countries’ courts. The first edition has already been prepared and can be accessed on the internet at https://sifocc.org/app/uploads/2019/11/Multilateral-Memorandum-on-Enforcement-Nov-2019.pdf.The second (and a more final version) will be issued in the near future. This will certainly be a major step forward in encouraging each country which is represented in SiFoCC to carefully study the legal position of recognition and enforcement of foreign judgments in its own country, compared with the rest of the world. Hopefully, this comparison will persuade several countries to revise their respective laws to try and achieve a wider general recognition and enforcement of foreign judgments in their country. 

The last topic I want to talk about is mediation. Most of the legal and commercial world is familiar with the United Nations Convention known as the Singapore Convention on Mediation, which was first signed on 7 August 2019, and came into force a few months ago. Up to now, 53 countries (including Singapore and China) have signed the Convention. 

When the Convention was first signed, I had some personal doubts as to how meaningful this Convention would be for common law countries. This is because, under the common law, a mediation which results in a settlement agreement being reached and signed by all parties to that agreement will be enforceable as a normal contract in any common law country. Further, most common law countries have a system of Summary Judgment, where it is not necessary for a case to wait for months or years to be heard in Court. If the defence advanced by the party sued raises no serious arguments as to the liability of the party sued, in such a case, the Claimant can ask for a quick judgment without a full trial and without the need for oral evidence. In countries like Singapore, Summary Judgment can be obtained within 3 months or less. I therefore had some doubts as to what the Singapore Convention could add to this existing procedural efficiency in getting a quick judgment to enforce a mediated settlement. 

However, Singapore has now introduced, as part of its domestic legislation, the Singapore Convention on Mediation Act 2020, which carries out Singapore’s obligation under the Convention for each signing state under the Convention to introduce local rules and procedures to allow enforcement of international settlement agreements in its local courts (see Articles 3 and 4 of the Convention). This provides for a procedure which should be faster than a normal Summary Judgment procedure. The expedited procedure works in the following way. 

First, the party (“the Applicant”) claiming that there is an International Settlement Agreement (which is defined in Article 1 of the Convention) can apply to a Court without serving its application on the other party (“the Settlement Debtor”) to the International Settlement Agreement (“the Settlement Agreement”), per Rule 6 of the Supreme Court of Judicature (Singapore Convention on Mediation) Rules 2020. The Applicant will provide evidence of the International Settlement Agreement (Section 6(1) of the Singapore Convention on Mediation Act) and ask the Court to record that Settlement Agreement as an Order of Court (Section 4(1)(a) of the Singapore Convention on Mediation Act).  

Second, after the Court has satisfied itself that the papers are proper, and has granted such an Order, the Order of Court must then be served on the Settlement Debtor (Rule 6(2) of the Supreme Court of Judicature (Singapore Convention on Mediation) Rules 2020). If the Settlement Debtor wishes to contest its liability under the Settlement Agreement, it must then apply to the High Court to set aside that order within 6 weeks after it has received the Order of Court (Rule 7(1) of the Supreme Court of Judicature (Singapore Convention on Mediation) Rules 2020). That application to set aside must state the grounds why the Settlement Agreement should not be enforced, and must also provide all documents and other evidence in support of the reasons for denying the Applicant's right to enforce the Settlement Agreement (Rule 7(2) of the Supreme Court of Judicature (Singapore Convention on Mediation) Rules 2020). 

Third, that application will then be heard by the High Court in Singapore, which should grant priority in hearing the application, because the Singapore Convention requires each signing state to deal with enforcement applications expeditiously (Article 4(5)). So there will be no automatic right of hearing available to the Settlement Debtor, unless the Settlement Debtor asks for it. 

As yet, there is no recorded case of an application to the High Court of Singapore under these new se rules, but at least (on paper) it will be a faster process for obtaining a Court judgment than the traditional route of enforcement by filing a claim in Court, and then applying for Summary Judgment to enforce the Settlement Agreement, which will then require a hearing. Hopefully, this will lead the way as an example for other countries which have adopted the Singapore Convention to pass similar legislation. 

May I end by expressing my thanks to the Chinese International Commercial Court for appointing me to the International Expert Committee of the Supreme People’s Court. I look forward to contributing to the work of this Court. 

Thank you. 

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*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.