ARTICLE 2: DEFINITIONS
1. For the purposes of article 1, paragraph 1:
(a) If a party has more than one place of business, the relevant place of business is that which has the closest relationship to the dispute resolved by the settlement agreement, having regard to the circumstances known to, or contemplated by, the parties at the time of the conclusion of the settlement agreement;
(b) If a party does not have a place of business, reference is to be made to the party’s habitual residence.
Find the introduction and context of this blog series on the Singapore Convention here.
Click here for the complete annotation in Portuguese (Anuário – Ano 3).
Maria Carlota Beno Jardim
1.Framework of the article; 2. Absence of jurisdiction – comparison with the New York Convention; 3. Concept of “place of business”; 4. Internationality in relation to the subjects; 5. Concept of time; 6. Concept of “substantial part of the obligations”; 7. Concept of “closest relationship”; 8. Concept of “habitual residence”.
1. The Singapore Convention determines its scope of application through the use of indeterminate concepts which, in current international commercial disputes, could raise some doubts. It is an instrument of Public International Law and, as a general rule, its application is not restricted by legal requirements of national nature (imposed by the competent authority), but it may be in the exceptional cases foreseen in Article 5, paragraph 2 a) and b) of the Convention.
Although this is the rule, and as these are indeterminate concepts, it is important to underline that their treatment may, in practice, vary according to the legislation of the State where the enforcement of the mediation agreement takes place. This happens because, in their definition, the enforcer of the Law (in this case, of the Singapore Convention) would, eventually, rely on his national experience. In other words, the interpretation could be carried out on the basis of a freedom of judicial enquiry, in accordance with the fundamental principles of each State, which are difficult to depart from. Nevertheless, as far as possible, the concepts in the conventions should be interpreted in an autonomous manner, which means that an interpretation should be sought which allows the convention to be applied in the most uniform way possible. In our view, and being so, the enforcer of the Law, in the enforcement of the mediation agreement, should abstain from the rules in force in its legal system, ensuring a conformity with those which are the international interpretations, guarantors of an application of the assumptions of the Singapore Convention.
The Singapore Convention determines, as a basic requirement with regard to its scope, the international nature of the dispute. This is due, essentially, to the fact that there is an increasing globalisation of markets, originating commercial exchanges between private and collective subjects of different nationalities. Mediation, as a means of alternative dispute resolution, has become an answer to conflicts arising from these relationships, allowing them to be resolved impartially, quickly and effectively.
2. In its drafting, several discussions arose as to the determination of the “international” concept . The Working Group was faced with two different approaches: to follow the narrower concept used in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, i.e. the term “foreign”, or to go for a broader, simpler and clearer concept, namely that of “place of business”.
According to the New York Convention, the international character of the dispute is defined in relation to the location of the rendering of the arbitration award: it must be issued in a State other than the one where its enforcement is requested, which implies, a priori, the identification of a jurisdiction. However, the Singapore Convention has moved away from this definition, as mediation has shown a rapid adaptation to new technological means, such as Zoom, Skype or e-mail (even more after the COVID-19 pandemic), which makes the identification of a country where the mediation agreement has been concluded very difficult or practically impossible.
3. For these reasons, the flexibility required by transactional markets and the advantages for the parties in being able to choose the rules to be applied, the concept of “place of business” has been chosen, which makes the State in which the agreement is concluded irrelevant.
This concept has been interpreted and complemented by the texts of the United Nations Commission on International Trade Law, which elucidates it as the place where the commercial activity is developed, requiring a certain duration, stability and autonomy . Nevertheless, the Singapore Convention defines what it understands by “commercial establishment”, namely in Article 2, paragraph 1 a.
4. It is important, in our view, to underline that paragraph a) of the article under analysis refers to “at least two of the parties”, which leads us to conclude that if a mediation involves two or more subjects, the fundamental requirement is that at least two of them have places of business in different countries.
5. The article states that internationality is to be measured “at the time of the conclusion” of the mediation agreement. This has a decisive impact, in particular because of the elasticity of international markets and transactions, as a company will be able to move its place of business easily from one State to another. To ensure the application of the Singapore Convention, it is necessary to consider only the moment of conclusion of the agreement, since it may happen that mediation does not have an international character at its beginning, but acquires it at its conclusion, or vice-versa. In this sense, it will be important to underline the particularity of commercial relations, which are born and cease quite easily, adapting to the needs of the parties. Thus, the moment at which the parties concluded the agreement should be considered in detail, because this is what will be relevant for the application (or not) of the Convention.
6. However, it may happen that the parties have their places of business in the same State and, even so, the mediation agreement assumes an international character, as follows from Article 1(1)(b). In such cases, point (i) refers to the concept of “a substantial part of the obligations” to ascertain internationality.
For its interpretation, one should not take as determinant the literal element of the rule, since it seems to follow a quantitative criterion – the place where most of the obligations are effectively fulfilled (numerically speaking).
On the contrary, the concrete situation must be analysed in a qualitative way, especially the parties to the agreement, their relationship, and the nature of the obligations. This necessarily involves a case-by-case assessment of the mediation agreement. The content of the obligatory matters and the place where they will be fulfilled (those that are considered more important) must be considered, since they may be different from the subject of the dispute.
7. Article 2 of the Singapore Convention has as its ratio the explanation of the normative content referred to in the previous rule.
Article 2(1)(a) states that where a party has more than one place of business, the relevant place of business is to be understood as being the place having the closest relationship to the dispute resolved by the agreement. In turn, in order to define that ‘closest relationship’, regard must be had to the circumstances known or contemplated by the parties at the time of the conclusion of the settlement agreement.
It has been understood, in this context, that it must be interpreted according to a functional criterion. Account must therefore be taken of all the factual elements – objective and subjective – in relation to the dispute. This aspect is very important, since the reference to the “closest connection” made in the previous article, namely in paragraph 1 b) ii, refers to the agreement.
Therefore, its interpretation will vary: if we are talking about the situation in which the parties have their place of business in the same State, the internationality is assessed taking into account the obligatory content of the agreement that they stipulate, insofar as it will be made in a different State (article 1). A different situation is that listed in the article under comment, which refers to the circumstance that one party has more than one place of business and, therefore, to determine the internationality, we will have to choose the one that is relevant in relation to the dispute. These are different but complementary situations, since in the same mediation it may be necessary to apply both criteria.
8. Regarding paragraph 1(b) of the article under comment, it is important to specify the importance of the indeterminate concept of “habitual residence”. The concrete life of the subject will be analysed in the discussion, ensuring that the evidence is brought to the case that indicates where he lives, works and where he develops his life.
The use of this concept is questionable. The Singapore Convention only covers disputes of a commercial nature, which will normally restrict its scope to disputes between legal persons, expressly excluding consumer relations involving natural persons. However, in this day and age, it will be difficult to find that one of the parties to the mediation agreement being enforced does not have a place of business, representing the legal person. Nevertheless, this concept will find its relevance when this does not happen.
 Timothy Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements”, Pepperdine Dispute Resolution Law Journal, volume 19, no. 1, 2019, pp. 21 and 22.
 In line with the provisions of Article 31 of the Vienna Convention on the Law of Treaties, signed on 23 May 1969.
 Natalie Y. Morris-Sharma, “Constructing the Convention on Mediation: The Chairperson’s Perspective”, Singapore Academy of Law Journal, SAcLJ 487, 2019, p. 498.
 Eunice Chua, “The Singapore Convention in Mediation – A Brighter Future for Asian Dispute Resolution”, Asian Journal of International Law, 2019, p. 196.
 Ahdieh Alipour Herisi, “Aftermath of the Singapore Convention: A Comparative Analysis between the Singapore Convention and the New York Convention”, American Journal of Mediation, volume II, 2018, p. 6.
 Carlos Esplugues Mota, “La Convención de Singapur de 2018 sobre mediación y la creación de un título deslocalizado dotado de fuerza ejecutiva: una apuesta novedosa, y un mal relato”, Revista Española de Derecho Internacional (REDI), volume 72/1, 2020, pp. 53-80, p. 5.
 Nadja Marie Alexander and Shouyu Chong, “Singapore Convention Series: Why Is There No ‘Seat’ of Mediation?”, in Kluwer Mediation Blog, 2019, p. 3.
 Ignacio Jorge Tasende Iturvide, “Reflections on the New United Nations Convention on International Agreements Resulting from Mediation”, Revista de Derecho De La Universidad De Montevideo, no. 37, 2020, p. 76.
 Ignacio Jorge Tasende Iturvide,, “Reflections on the New United Nations Convention on International Agreements Resulting from Mediation”, 2020, p. 76.
 Ignacio Iturvide and Jorge Tasende, “Reflections on the New UN Convention on International Agreements Resulting from Mediation”, 2020, p. 78.
 Eunice Chua, “The Singapore Convention in Mediation – A Brighter Future for Asian Dispute Resolution”, 2019, p. 196.
 Eunice Chua, “The Singapore Convention in Mediation – A Brighter Future for Asian Dispute Resolution”, 2019, pp. 196 and 197.
 Ignacio Jorge Tasende Iturvide, “Reflections on the New United Nations Convention on International Agreements Resulting from Mediation”, 2020, p. 82.