The Singapore Mediation Convention took effect on 12 September 2020, with Fiji, Qatar and Singapore being the first three states to ratify it. It is a uniform multilateral framework for international settlement agreements resulting from mediation following cross-border commercial disputes.
The primary aim of the Convention is to ‘facilitate international trade and commerce by enabling disputing parties to easily enforce and invoke settlement agreements across borders’. This aim follows the lack of formal processes for enforcing mediated settlement agreements. Mediated agreements are only enforceable as contracts and for which their enforcement requires the courts’ involvement, with such involvement tantamount to lengthy and costly litigation processes.
As of 15 April 2022, there are 55 signatories to the Convention, including China and India. However, only nine countries have ratified it so far. Heavyweight jurisdictions including Australia, the EU and UK, have yet to ratify the Convention; however, consultation processes are underway for clarity on whether they should accede to the Convention.
The UK published its consultation on the Convention on 2 February 2022, with its closure on 1 April 2022. However, dissenting opinions suggest that although the primary aim of the Convention, as aforementioned, could not be considered regressive of international mediation agreements, it is difficult to glean how the UK not signing or ratifying the Convention adversely impact its mediation processes.
According to the law firm Herbert Smith Freehills, it is unusual for disputing commercial parties to fail to honour agreements reached after mediation. Additionally, it is hard to evidence how ‘the role of mediation in international commercial disputes has been held back to any significant degree by the lack of a global enforcement regime’.
The firm goes on to state that ‘the UK signing the Convention is unlikely to significantly alter the substantive position as to whether any particular mediated settlement agreement…is likely to be enforced…as the UK becoming a Member State would in most cases be limited to a procedural rather than substantive change’.
However, although the UK has ingrained in its jurisdiction the means of enforcing mediated agreements, there is the argument that the UK ratifying the Convention translates into formal recognition of mediation as an enforcement mechanism in solving commercial disputes, and according to the law firm Pinsent Masons, the ratifying of the Convention serves to solidify and enhance the UK’s position as a ‘global hub for dispute resolution’. Furthermore, acceding to the Convention means more expedient, less costly, and less waste of court resources for all parties involved, as enforcement of any negotiated agreements need not tread the litigious route.
The Ministry of Justice states that although mediation is a growing sector in the UK, ‘it is estimated that mediation can save businesses around £4.6 billion per year in management time, relationships, productivity and legal fees’, capital which could be better spent on facilitating the growth of said businesses.
Whilst it is few the number of disputing commercial parties who fail to honour mediated agreements, and which some may feel is a justifiable reason for the UK not acceding to the Convention, it is perhaps less demanding to conclude the UK becoming a Member State is not adverse or detrimental to the growth of mediation for the reasons alluded to previously.
All cross-border, commercial disputing parties will be forced to honour fairly mediated agreements, with less cumbersome mechanisms in place to enforce said agreements. It is not difficult to guess that a complying party would desire the enhanced procedural and substantive protection offered by the Convention.
To add, should there be an agreement to the UK’s ratification of the Convention, and following the Houses’ scrutiny, the substantives of the Convention will be incorporated into UK domestic law under the Private International Law (Implementation of Agreements) Act 2020.
The consultation results will likely be published within 12 weeks after its closure date.
The BBC News shows that some of the financial sanctions imposed against Russia by several western countries include the freezing of assets held abroad by Russia’s Central Bank to halt its use of $630bn (£470bn) worth of foreign currency reserves. The US, in particular, has barred Russia from making debt payments using the $600m it holds in US banks. The UK has also excluded central Russian banks from the UK financial system, preventing Russia and significant Russian companies from raising finance or borrowing money in the UK.
A considerable trade sanction imposed on Russia has been the ban on Russian energy exports. The US has banned all Russian oil and gas imports, and the UK plans to phase out Russian oil imports by the end of 2022. Similarly, the EU, which imports a quarter of its oil and 40% of its gas from Russia, will switch to alternative supplies before 2030.
Following the sanctions on the Central Bank of Russia, the Russian ruble has fallen in value, inflation has risen, and the threat of economic recession is growing. Economists at the Institute of International Finance estimate that Russian GDP will shrink by 15% this year, wiping out a decade and a half of growth. This fall in GDP would be more severe than in 2009 after the financial crisis when Russia’s economy shrank by around 7.8%.
Moreover, the freeze of its foreign currency reserves has prevented Russia from making dollar debt repayments, pushing the country to default on its debts. Furthermore, the rising inflation and the ruble’s drop in value have caused higher costs of importing goods. Therefore, the cost of living in Russia has risen; household staples such as sugar increased by 14%, onions by 13.7%, and toilet paper by 3%.
The Russian-Ukraine crisis also has wide-reaching economic repercussions on the global economy. There are two main ways the Russian sanctions have impacted the global economy: changes in commodity prices and disruption of supply chains for commodities.
One impact on commodity prices has been the price rise of Russian agricultural exports. The US Department of Agriculture shows that Russia and Ukraine’s exports account for about a quarter of the world’s total wheat exports and about a fifth of the world’s corn and other coarse grain exports. Russia and Ukraine account for circa 80% of the world’s total sunflower oil exports. Hence, sanctions and disrupted supplies have led to higher coarse grains prices.
Middle Eastern and North African countries are being particularly affected by the rise in the price of wheat due to the Russia-Ukraine conflict. Countries including Egypt, Iraq, Algeria, Tunisia and Lebanon are heavily reliant on wheat imports from Ukraine. Hence the disruption of global supply and the rising price of wheat has led to concerns about food security in these countries.
Arif Husain, the chief economist at the World Food Program, highlights that before this conflict, countries like Yemen and Lebanon were already ‘a step away from famine’, and are now closer to starvation and economic turmoil. Rising wheat prices have also affected British bakery businesses, including Greggs, which has increased the price of its famous sausage roll.
Furthermore, Russia produces 17% of the world’s natural gas supply and 12% of the world’s oil supply. Following the US ban and UK sanctions on Russian oil and gas, Brent crude oil prices rose to $119 a barrel, the highest since May 2012. UK petrol prices have spiked, with petrol reaching £1.52 a litre for the first time and diesel rising to as high as 115.79p per litre.
At the start of 2022, the EU was paying €190m a day for the natural gas it received from Russia, but by March, this daily figure had risen to €610m. This increase in gas prices means household bills will rise. Due to the heavy reliance on Russian gas, the EU has been undecided on imposing sanctions on Russian oil and gas but has proposed a plan to become independent from Russian energy by 2030.
Clean energy advocates argue that this crisis and the rising price of oil should push Western countries towards ending their dependence on fossil fuels that enrich regimes such as Putin’s.
The crisis in Ukraine is beyond words, resulting in a loss of lives and peace for many in Ukraine. However, the ripple effects of this crisis and the sanctions imposed on Russia by many countries are felt domestically and internationally and will continue to affect the standards of living of many people worldwide for some time, even after the war’s cessation, should it ever cease.
In February 2022, the UK government published the Corporate Transparency and Register Reform White Paper following the government’s proposals for greater transparency in businesses’ finances, the imposition of tauter money laundering measures and the combatting of ever-mutating risks of deception and fraud in companies.
The proposals include:
a) A new requirement is that businesses with a turnover of £600,000 or less (micro-entities) file a profit and loss account, although preparing and filing an accompanying director’s report is not required.
b) An enhancement of the investigative powers of Companies House, for example, in challenging suspicious filings.
c) That new and existing directors, PSCs, and anybody in a company authorised to submit filings must now do so through a verified Companies House account.
d) Smaller companies no longer possess the option to prepare and file abridged accounts. Said companies must prepare and file profit and loss accounts and accompanying director’s reports.
Proprietors and champions of micro-entities indicate that the additional red tape imposed by the proposals will more likely hinder the growth of smaller businesses. For instance, the additional filing requirements require payment of fees, extra time spent on seemingly unnecessary filing requirements, and perhaps an initial lack of workforce to adhere to the new regulations.
As smaller businesses must be supported in their growth, additional pressure, such as the perceived red tape, may be counterproductive to nurturing growth. Depending on the entity’s business structure, the proposed additional requirements may well be a precursor to a business ceasing trade.
However, the additional investigative powers granted to Companies House denotes any submitted filings may be investigated and verified where it is deemed necessary as a means of combatting fraud. This measure is welcomed especially given that currently, all filings are submitted to Companies House in good faith which presents a higher risk of the submission of fraudulent filings.
This measure multilaterally protects the public in general, the members of a company where applicable and any persons thus connected with a company and especially those proprietors of micro-entities, from, for example, the risks of fraud taking place and the incurring of (un)necessary expenses in investigating and possibly correcting the impact of fraud on their businesses.
The removal of the option for smaller companies to file abridged accounts means that smaller companies must now publicly indicate their current net profit. This requirement has been met with some derision, with exponents for the filing of abridged accounts arguing that whilst it is understandable for certain limited companies to make their accounts publicly available, it is also vital that a balance must be sought whereby the requirement for publicly accessible information does not supersede the right for companies to trade without public prejudice. Nonetheless, such transparency is considered a vital tool in combatting money laundering practices thus offering additional protection to a business and anybody who may so have an interest in the company.
Therefore, whilst there are some issues with the proportionality of the applicability of these proposed measures and which may likely be addressed in the future, greater transparency to combat fraud, money laundering practices and consequentially support the greater protection of businesses, the initial inconveniences of the proposed reforms to companies and especially micro-entities, although should not be disregarded, should be considered the lesser of purported evils that must be contended with.