A business can win a dispute and still be disappointed by the outcome. Payment arrives after the opportunity to reinvest it has passed. A valuable relationship has ended. Senior management has spent months on a problem that has little to do with the company’s future.
These consequences deserve attention when a dispute begins. They should influence how it is handled, what the business is prepared to spend and when settlement is explored.
Our view is that mediation belongs in that initial assessment. Leaving it until proceedings have exhausted the parties can mean leaving it until some of the most useful commercial solutions are no longer available.
The cost of waiting
Proposing mediation can feel uncomfortable when a business believes it has been wronged. Directors may worry that it will signal weakness or undermine a position their advisers consider strong.
A strong claim, however, still requires a commercial decision about how to pursue it. The prospects of success matter, but so do the likely time to recovery, the counterparty’s ability to pay and the demands the dispute will place on the business.
There is another consideration that receives less attention: delay can change the deal that is available.
Imagine a manufacturer and an overseas distributor disputing unpaid invoices and defective goods. While they are still doing business, a settlement might combine payment with replacement stock, revised inspection arrangements and agreed terms for future orders. Both parties have something useful to offer.
Six months later, the distributor may have found another supplier. The manufacturer may have appointed a replacement distributor. A settlement may still be possible, but the scope for a commercially valuable agreement has narrowed.
Mediation can create space to explore those possibilities before they disappear. That is a reason to consider it early, while preparing carefully enough to negotiate with confidence.
The people attending need to understand the evidence, have authority to make decisions and know what the business will do if discussions fail. Without that preparation, an early meeting may achieve little.
Make the decision before the dispute makes it for you
For a board or founder, a useful discipline is to ask for a settlement assessment alongside the first substantive assessment of the claim.
That discussion should cover what the business wants to achieve, which outcomes the other party might realistically accept and whether there is enough information to negotiate. If mediation would be premature, the reasons should be clear, together with the developments that would make it worth reconsidering.
The legal framework supports taking that decision seriously. In England and Wales, the Civil Procedure Rules expressly include ordering or encouraging alternative dispute resolution within active case management. Courts can also take account of failure to comply with an ADR order, or unreasonable failure to engage in ADR, when deciding costs. Civil Procedure Rules, Part 1; Part 44.
Some disputes require urgent court protection. Others need a binding determination or further evidence before meaningful negotiations can take place. There may also be good reason to believe that a counterparty is using settlement discussions to buy time.
These are reasons to exercise judgment about timing and safeguards. Where appropriate, mediation can sit alongside preparations for litigation or arbitration, with a defined timetable and a clear understanding of the next step if no agreement is reached.
What the Singapore Convention adds
For international businesses, reaching agreement raises a further question: what happens if the other party does not honour it?
The Singapore Convention on Mediation provides a route to seek direct enforcement of qualifying international commercial mediated settlements in jurisdictions where it applies. This can avoid the need first to obtain a judgment through an ordinary contractual claim on the settlement. UK Ministry of Justice, explanation of the Convention.
That makes the Convention commercially significant. Businesses considering mediation have a potential enforcement route to assess alongside the terms they are negotiating.
The Convention entered into force in September 2020. Its reach continues to develop, including its entry into force for Oman on 10 September 2026. UN treaty register; UN notification concerning Oman.
For businesses operating between the UK and the Middle East, coverage needs particular care. As at 7 October 2026, the UN register records the United Kingdom and Egypt as signatories without ratification. The United Arab Emirates is not listed as a participant. UN treaty register.
However, a settlement does not generally have to originate in another contracting state to benefit from the Convention. A qualifying settlement mediated in London may therefore be enforceable under it in a jurisdiction where it applies, despite the UK not having ratified. UK Ministry of Justice, consultation response, paragraphs 4.60–4.66 and 6.4.
The practical starting point is to establish where the counterparty has assets and what enforcement would involve there.
A settlement should withstand a missed payment
The Convention has limits. It covers written commercial settlements resulting from mediation that meet its internationality requirements. It excludes consumer settlements for personal, family or household purposes, as well as family, inheritance and employment matters. Specified settlements enforceable as court judgments or arbitral awards are also excluded.
An applicant must produce the signed agreement and evidence that it resulted from mediation. Relevant commencement dates and state reservations must be checked. Enforcement may be refused on specified grounds, including invalidity, unclear obligations, public policy and certain serious mediator failings. Convention, Articles 1, 4, 5, 8 and 9.
For the business negotiating a settlement, these rules reinforce the importance of getting the detail right before signature.
If payment will be made in instalments, the agreement needs to address what happens when one is missed. If claims are being released, the timing of that release needs careful consideration. If performance depends on a parent company or another group entity, it matters whether that entity is actually bound.
These points can be difficult to resolve at the end of a long negotiation, when everyone wants to finish. They are easier to address when they have already formed part of the settlement planning.
Advice from the likely enforcement jurisdiction can help identify problems while the terms are still negotiable. Even then, an available legal remedy cannot make an insolvent counterparty able to pay.
Preserve the options that matter
The case for mediation in 2026 is strongest when it is tied to a clear business objective: recovering cash sooner, keeping a project moving, preserving a valuable relationship or agreeing an orderly exit.
The Singapore Convention strengthens that case where it applies. Its value depends on the agreement, the jurisdiction and the practical prospects of recovery.
For business leaders, the immediate step is to bring the settlement discussion forward. Ask for it when the dispute is first assessed, while the business still has choices about the outcome it wants.
If your business is facing a commercial dispute, or reviewing dispute provisions in an international contract, contact Sterling Legal Solutions to discuss where mediation could fit into your commercial strategy.
This article is provided for general information only and does not constitute legal, tax, financial, regulatory, investment or other professional advice. Specific advice should be obtained before relying on any particular course of action.