Mediation, arbitration or litigation: What works when global trade breaks down

Straits Times

a day ago

Supply chain disruptions are creating more commercial disputes, but forward-thinking companies are choosing cooperation over conflict, building new alliances
From escalating trade wars to raging military conflicts, the headlines paint a stark picture of a world increasingly fractured along geopolitical lines. As traditional diplomacy struggles under mounting global tensions, many are left wondering whether collaborative approaches to conflict resolution remain viable in today's rapidly shifting global order.
Yet amid this apparent retreat from multilateral cooperation, one veteran legal practitioner believes that mediation – far from becoming obsolete – offers a critical path forward.
'In today's increasingly polarised and unpredictable global landscape, mediation offers a constructive and non-adversarial path to resolve disputes, foster dialogue, build mutual understanding and encourage creative problem-solving,' says Senior Counsel George Lim, chairman of the Singapore International Mediation Centre (SIMC).
'We've seen this in action during recent crises in Ukraine and Gaza, where mediators – often working quietly behind the scenes – have helped open channels of communication and reduce the risk of further escalation.
'These efforts underscore the quiet power of mediation. It doesn't always dominate the headlines, but it can change outcomes,' says Mr Lim, whose legal career spans over 40 years.
A collaborative option for dispute resolution in Singapore
When geopolitical tensions strain commercial relationships across global supply chains and trade networks, this could result in more commercial disputes – and a growing need for effective, amicable solutions to resolve them.
'Businesses need choices. Depending on the nature of the dispute, their business strategy, values and culture, some may prefer mediation, while others may prefer arbitration or litigation. As a dispute resolution hub, Singapore offers a suite of tools and options – be it mediation, arbitration or litigation – for businesses to resolve their disputes,' says the Ministry of Law's deputy secretary (development) Charlene Chang.
'While 'ADR' typically refers to 'alternative dispute resolution', we prefer to say that 'ADR' represents 'appropriate dispute resolution', where parties work out a dispute resolution strategy that best suits their needs,' she adds.
To support businesses operating across borders, the ministry has been working hard in developing Singapore's international dispute resolution sector. Since its launch in 2014, SIMC has complemented the Singapore International Arbitration Centre and the Singapore International Commercial Court – forming a trio of institutions offering mediation, arbitration and litigation options for parties in international commercial disputes.
To date, SIMC has handled over 500 cases involving parties from 68 jurisdictions, with dispute values exceeding US$26 billion (S$33.3 billion).
Why global businesses are turning to mediation
Mediation has been gaining popularity in the business world, with mediation clauses frequently seen in commercial contracts as a suitable tool for disputes, as observed by Ms Mariana Zhong, a partner of Hui Zhong Law Firm based in Beijing.
Unlike adversarial processes, mediation offers greater room for diplomacy and flexibility where both sides collaborate to achieve win-win solutions outside of the court system. This is particularly valuable in cross-border disputes, where cultural sensitivities and different legal systems are involved. Less confrontation also means less strain on relationships, notes Ms Chang.
A key milestone in the field of mediation was the adoption of the Singapore Convention on Mediation (Singapore Convention) by the United Nations General Assembly in 2018. It provides a legal framework for the recognition and enforcement of cross-border settlement agreements arising from mediation. This means that parties in cross-border disputes can enforce their agreements in countries that are party to the Singapore Convention.
Hosted by then Minister for Culture, Community and Youth and Second Minister for Law Edwin Tong (front row, sixth from left) and then Minister of State for Law and Transport Murali Pillai (front row, eighth from left), the Speakers' Dinner for Singapore Convention Week 2024 was attended by local and international speakers and other participants of the United Nations Commission on International Trade Law Academy.
PHOTO: MINISTRY OF LAW
Mr Lim calls the convention a 'game-changer' in putting mediation on the global agenda. He says: 'A decade ago, mediation was rarely discussed at the governmental level. With the Singapore Convention, internationally mediated settlements are now more enforceable around the world.'
Advocate and arbitrator King's Counsel Ng Jern-Fei of Duxton Hill Chambers concurs, attributing the increasing adoption of the Singapore Convention as one of the key drivers for the continued growth of mediation.
Mediation's less adversarial approach also has a unique draw for commerce. 'In many cases mediated at SIMC, we've helped parties turn old disputes into new deals, and business people love this,' adds Mr Lim.
Shaping the future of dispute resolution
To build trust in the field of international dispute resolution, one way is to foster shared understanding within the legal community. Since 2019, the Singapore Convention Week (SC Week) has served as a key platform for this purpose.
This year's edition, taking place from Aug 25 to 29, will feature a full and diverse programme of conferences, workshops and networking sessions. Legal and business professionals from around the world will join global leaders and fellow experts in shaping the future of dispute resolution.
The event continues to draw more professional organisations with each iteration. 'This year, we are excited to welcome several new partners including, among others, the Japan Ministry of Justice, the Bahrain International Commercial Court, the European Chinese Arbitrators Association, the India International Arbitration Centre, the Korean Commercial Arbitration Board and the Korean Council for International Arbitration, all of whom will add to the diversity of perspectives represented,' says Ms Chang.
Participants at the Breaking with Convention networking event during Singapore Convention Week 2023.
PHOTO: MINISTRY OF LAW
Apart from insightful sessions and expert-led discussions, participants can look forward to the highly anticipated Breaking with Convention networking event, where they can unwind over canapes and drinks with like-minded old and new friends.
For Mr Ng, SC Week is a highlight event on the legal industry's calendar. 'It is not an exaggeration to say that SC Week has grown over the past few years into one of the most significant events in the international commercial disputes arena.'
Giving mediation legal weight across borders
Mediation is a process in which a neutral third party – known as a mediator – facilitates a settlement agreement between disputing parties. However, countries vary in whether, when, as well as how such agreements are enforced.
The Singapore Convention on Mediation (Singapore Convention) addresses this by providing a uniform legal framework that allows these agreements to be enforced or invoked across jurisdictions through a simplified and streamlined procedure.
As of July 2025, the Singapore Convention has 18 parties and 58 signatories, and it is also the first Convention of the United Nations organisation to be named after the city-state.