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August 27, 2019

Arbitration in Singapore Recent Developments


- Sarjit Singh Gill, SC, Senior Partner [ Shook Lin & Bok - Singapore ]
- Jamal Siddique, Senior Associate [ Shook Lin & Bok - Singapore ]

Sarjit-Singh-Gill-SC-&-Jamal-Siddique

In recent years, Singapore has been strengthening its position as a regional hub for dispute resolution. An important branch in this development is arbitration at the Singapore International Arbitration Centre (SIAC).

The SIAC was set up in 1991, some 28 years ago. During this time, the SIAC Rules have undergone 5 revisions, ensuring that the arbitration procedure in Singapore remained up to date, and able to meet the changing needs of parties. The sixth iteration of the SIAC Rules, the SIAC Rules 2016, has introduced further innovations.

In addition, the legislature and the judiciary have, respectively, taken steps to develop the law with a view towards assisting parties to arbitration in Singapore. This has been achieved primarily through the International Arbitration Act in Singapore, which, in line with the UN Model Law, takes an arbitration-friendly position.

SIAC Rules 2016 – New Innovations

The SIAC Rules 2016 introduced a number of innovative developments, which have had a significant impact on arbitration in Singapore.

One of the key developments is the introduction of a procedure for the early dismissal of claims and defenses, in Rule 29. Like in litigation practice, this is intended to offer an avenue for parties to seek summary dismissal of a claim or defense that is without legal merit, or outside the jurisdiction of the Tribunal. SIAC is the first international arbitration institution to have introduced such a procedure.

Traditionally, a key concern that parties, and in particular, financial institutions, have had in relation to arbitration has been the lack of a summary procedure. This is especially so in straightforward debt recovery matters. Parties have long bemoaned the need to proceed for a full evidentiary hearing for straightforward debt recovery claims, which can be decided on the basis of documents alone, in a summary fashion.

This new innovation in the SIAC Rules, the first of its kind globally, addresses this concern. Rule 29 provides that a party may, no later than 30 days after the constitution of the Arbitral Tribunal, file an application for the early dismissal of claims or defenses on the basis that (i) the claims or defenses are manifestly without legal merit; or (ii) the claims or defenses are manifestly outside the jurisdiction of the Tribunal. The use of the term “manifestly” in the Rules ensures that the summary procedure is only available in clear cases, like summary judgment or striking out in litigation practice.

The SIAC Rules 2016 have also introduced a procedure for consolidation of disputes, in Rules 6 and 8. This change reflects the recognition that commercial disputes administered through the SIAC are getting increasingly complex. The previous position was that arbitration proceedings could only be consolidated by consent. Therefore, where one party refused consent to consolidate proceedings, even if proceedings were suitable for consolidation, parties risked having to expend additional time and costs in conducting multiple arbitrations.

The 2016 Rules provide for two routes by which a claimant in a multi-contract dispute can commence arbitration proceedings. The claimant could file one Notice of Arbitration for each contract, and submit an application for consolidation. Alternatively, a claimant may file a single Notice of Arbitration for all the contracts in question, pursuant to which the claimant is deemed to have commenced multiple arbitrations, with the joint Notice of Arbitration operating as an application for consolidation.

Rule 7 of the 2016 Rules provides that a party to arbitration may apply for joinder of parties, and for a non-party to apply to intervene in the arbitration. Previously, joinder was only available where the additional party was itself a party to the arbitration agreement, and had consented, in writing, to the joinder.

The 2016 Rules also contain refinements to the Emergency Arbitrator procedure, further highlighting the SIAC’s awareness of commercial needs. Rule 30 of the 2016 Rules provides that an Emergency Arbitrator can now be appointed within one calendar day. This is in contrast to the position under the previous rules, where the appointment would be within one business day. In addition, the Emergency Arbitrator is required to issue an interim order or Award within 14 days of his appointment.

SICC

Recent Developments in Court Practice and Recent Decisions

Recent developments in Court practice, and decisions of the Courts in Singapore, have complemented the commercial minded approach that the 2016 Rules have spurred.

In January 2018, Singapore’s Parliament passed amendments to the Supreme Court of Judicature Act providing that the Singapore International Commercial Court (SICC) has jurisdiction to hear “proceedings relating to international commercial arbitration.”

The SICC was established in 2015. It is a division of the Singapore High Court, and is designated to hear high value international commercial disputes, and appropriate cases transferred from the High Court. The SICC has flexible procedural rules, which are particularly beneficial where international commercial disputes relate to foreign law or rules of evidence. In addition, the SICC has a strong bench, comprising of local as well as foreign judges.

The Parliament’s clarification on the issue of SICC’s jurisdiction in relation to matters pertaining to arbitration extends the procedural flexibility and other benefits of the SICC to such matters.

In Sanum Investments Limited v ST Group Co, Ltd [2018] SGHC 141, the High Court upheld enforcement against award-debtors despite existence of certain procedural irregularities. The Tribunal had erroneously held that Singapore was the seat of the arbitration, instead of Macau – which the High Court held was the actual seat of the arbitration. In addition, a 3-member tribunal had erroneously been constituted, instead of a 1-member tribunal.

The High Court held that, where a party had not shown prejudice arising out of procedural irregularities, the court had a residual discretion to allow enforcement of an award. This decision, once again, underlines the commercial minded, and common sense approach the Singapore courts take. This decision makes clear that a mere procedural irregularity, which does not cause prejudice, will not be reason to decline enforcement of an award. This is in accordance with the principle that procedural rules ought to be the handmaid, and not the mistress of justice.

Conclusion

We believe that the innovations introduced by SIAC Rules 2016 and the recent developments in court cases pertaining to arbitration by the courts in Singapore will greatly contribute to keeping Singapore ahead of the curve and at the forefront of developments in international arbitration.

Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.



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