SICC Launches Litigation-Mediation-Litigation Protocol in Collaboration with SIMC

In order to promote the amicable resolution of international commercial disputes, the Singapore International Commercial Court (SICC) has released a Litigation-Mediation-Litigation Protocol (the “LML Protocol”), setting out a procedure for parties to refer disputes commenced or to be commenced in the SICC to the Singapore International Mediation Centre (SIMC) for mediation. The SICC also introduced an LML Model Clause, which parties can insert into their agreements to opt into the LML Protocol.

The LML Protocol

The SICC is a division of the Singapore High Court dedicated to the adjudication of international commercial disputes. The SICC Rules 2021 require parties to consider alternative dispute resolution. Order 9, rule 3(c) of the SICC Rules 2021 provides that “[p]rior to a case management conference, the parties must consider the possibility of alternative dispute resolution, and be prepared to inform the Court of the suitability of the case for alternative dispute resolution.”

The SICC developed and released the LML Protocol in collaboration with the SIMC. The LML Protocol sets out a voluntary opt-in mediation procedure for disputes commenced or to be commenced in the SICC. The procedure provides for referral of disputes to the SIMC for mediation and for the continuation or termination of proceedings in the SICC upon conclusion of the mediation.  For the LML Protocol to apply, parties must affirmatively agree to resolve their dispute in accordance with the LML Protocol. This can be done by incorporating the LML Model Clause into commercial agreements at the time of contracting, or by a separate agreement to adopt the LML Protocol at any other time, such as after a dispute has arisen. 

When parties commence proceedings in the SICC and there is an agreement to refer the dispute for mediation in accordance with the LML Protocol, one of the parties must notify the SICC of this agreement and provide the SICC with a copy of the parties’ dispute resolution agreement within a prescribed time. If a party objects to having the dispute referred to mediation, that party will still have the opportunity to object to the referral notwithstanding any prior agreement to refer a dispute for mediation in accordance with the LML Protocol. The objecting party must provide concise reasons for objecting and the SICC may, without an oral hearing, determine the objection and give directions related to the referral.

Upon a party’s commencement of mediation at the SIMC, the LML Protocol provides that the SICC may stay SICC proceedings for up to eight weeks of its own volition, subject to any extension for good reasons.

If the mediation is successful, the LML Protocol provides that parties may choose to have the settlement terms recorded as an order of court to augment the settlement agreement’s enforceability. Generally speaking, settlement agreements reached through mediation are enforceable in certain jurisdictions by virtue of the Singapore Convention on Mediation (the “Singapore Convention”), which allows commercial parties involved in transnational disputes to apply directly to the courts of the ratifying countries to enforce settlement agreements resulting from mediation. The practical effect of the Singapore Convention, however, is presently limited: only 10 countries have so far ratified the convention. The LML Protocol bolsters the enforceability of settlement agreements by affording parties the additional option of recording the settlement terms as an order of court. Once a settlement agreement is registered as an order of court, enforcement actions can be taken directly against the defaulting party in Singapore or in other jurisdictions that recognize and enforce Singapore judgments, such as Hong Kong and India.

If the mediation is unsuccessful, parties may seek directions from the SICC on the conduct of the proceedings going forward at the next case management conference.

Commentary

The SICC’s launch of the LML Protocol is a welcome development. The Protocol sets up a framework for mediation to play out in tandem with SICC litigation and makes it clear to parties how long they have for mediation, and how the SICC proceedings can be stayed and restarted. That said, mandating meditation pre-contractually poses a risk. Parties typically head to court as a last resort after prior negotiations fail. Injecting an additional stage of mediation shortly after commencement of litigation can be unhelpful and prone to abuse. Foisting mediation on an involuntary party appears unlikely to lead to a successful settlement.

On the other hand, mediation is the most productive when both parties at the table are willing to mediate and is likely most helpful after litigation has progressed. At that point, parties tend to have a clearer picture of each other’s positions, the available dispute resolution options, and relevant cost implications. Opting into the LML Protocol on such an informed basis seems most likely to produce a successful settlement.