A total of 46 countries, including China, the United States, India and the Republic of Korea, inked the convention at a signing ceremony and conference organized by the United Nations Commission on International Trade Law (UNCITRAL) and the Singapore Ministry of Law.

Li Chenggang, assistant minister of commerce, signed the convention on behalf of the Chinese government.

Also known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, the treaty applies to settlements resulting from mediation of international commercial disputes, enabling enforcement in the courts of the signatory countries.

"This will help advance international trade, commerce and investment," said Singapore Prime Minister Lee Hsien Loong at the opening ceremony.

Lengthy commercial disputes can severely disrupt business operations, damage reputations, pull down share prices and make it harder for companies to raise capital, Lee said, adding that a robust framework to manage such conflicts can prevent disputes escalating unnecessarily or causing unintended consequences.

Today, for cross-border disputes, many businesses rely either on arbitration, enforced via the New York Convention, or on litigation.

Citing the convention as "the missing third piece in the international dispute resolution enforcement framework," Lee noted that businesses will benefit from greater flexibility, efficiency and lower costs, while states can enhance access to justice by facilitating enforcement of mediated agreements.

The Singapore Convention is also a powerful statement in support of multilateralism, according to Lee. "Multilateralism is under pressure, but the solution is to improve it, not to abandon it," he said.

Stephen Mathias,the United Nations (U.N.) assistant secretary general for legal affairs, in his address, pointed out this was the first treaty on mediation, bridging legal systems and reflecting a worldwide consensus beyond cultural differences.

By promoting settlement of disputes driven by party autonomy, the convention establishes mediation as a credible and effective path for commercial parties to not only resolve commercial disputes, but also preserve their long-term relationships, he said.

It contributed to the mitigation of unnecessary costs and risks and would help build confidence in the ability to engage in cross-border trade, creating fertile ground for sustainable investment and innovation, the U.N. official added.

Finalized at the 51 Commission session of UNCITRAL in June last year and adopted by the United Nations General Assembly in December, the convention will come into force after it is ratified by at least three countries.