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Arbitration Legislation and International Arbitration Institutions in Singapore

Release time：2024-01-03 16:27:17

Introduction

The judiciary of Singapore, renowned for its fairness, integrity, transparency, and lack of corruption, welcomes foreign lawyers to engage in arbitration activities. As a signatory to the “New York Convention”, Singapore boasts a high rate of enforcing arbitral awards, providing a solid foundation for parties to choose Singapore as their seat of arbitration. According to an international law firm named White & Case and Queen Mary University of London, Singapore's position in the international commercial arbitration system has been steadily rising, particularly noted in the "2021 International Arbitration Survey," where Singapore and London were jointly recognized as the most preferred seat of arbitration. 1

I. Arbitration Legislation in Singapore

Singapore's arbitration legal framework is distinctive, employing a dual-track legislative approach. Domestic arbitration is under the jurisdiction of the Arbitration Act, while international arbitration is governed by the International Arbitration Act which enacted in 1994 and underwent partial amendments in 2001, 2010, and 2012, referencing provisions of the UNCITRAL Model Law on International Commercial Arbitration ("Model Law"). Article 5 of the International Arbitration Act extensively outlines the scope of its applicability.2

Article 5

(1) This Part and the Model Law do not apply to an arbitration which is not an international arbitration unless the parties agree in writing that this Part or the Model Law is to apply to that arbitration.

(2) Despite Article 1(3) of the Model Law, an arbitration is international if —

(a) at least one of the parties to an arbitration agreement, at the time of the conclusion of the agreement, has its place of business in any State other than Singapore;

(b) one of the following places is situated outside the State in which the parties have their places of business:

(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;

(ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or

(c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

Compared to domestic arbitration, Singapore courts exhibit stronger support for international arbitration. Parties may expressly agree by written to apply the International Arbitration Act, even if they do not meet the "international" criteria specified in Article 5(2). Singapore courts also favor arbitration dispute resolution, recognizing arbitration agreements' validity whenever parties manifest an intention to arbitrate. Importantly, the International Arbitration Act stipulates that parties can only seek to set aside an arbitral award through court application and are precluded from appealing arbitral awards.

II. Key International Arbitration Institutions in Singapore

Singapore boasts the world's first comprehensive dispute resolution center, Maxwell Chambers, offering a range of solutions. Equipped with multiple state-of-the-art hearing rooms, Maxwell Chambers is surrounded by well-established support facilities. This ensures that users participating in offline hearings have a superior experience while also allowing users the option to choose remote hearings according to their preferences. Numerous international dispute resolution institutions and local organizations in Singapore have already established their presence at Maxwell Chambers. Currently, Singapore is home to key institutions responsible for handling international arbitration, including:

(i) Singapore International Arbitration Centre (SIAC)

Established as an independent nonprofit organization in 1991, SIAC is a global arbitration institution known for its efficient, cost-effective, and flexible rules that integrate aspects of both civil law and common law. SIAC's secretariat, with an international team of lawyers from 13 jurisdictions, manages cases in multiple languages. SIAC's roster of nearly 700 arbitrators, with diverse international experience, spans various fields such as energy, engineering, procurement, and construction.

In the "2021 International Arbitration Survey," SIAC ranked second among the world's top five preferred arbitration institutions and emerged as the most popular institution in the Asia-Pacific region. SIAC, with its 2022 annual report revealing 357 cases, 88% of which involved "international" elements, handled disputes amounting to USD 56.1 billion.3 To enhance its global influence, SIAC has established offices in the United States, China, India, South Korea, and Japan.

(ii) International Court of Arbitration of the International Chamber of Commerce (ICC)

Founded in 1923 and headquartered in Paris, the ICC International Court of Arbitration comprises a committee of 177 legal professionals from 120 countries and regions. Its secretariat, with over 100 lawyers and administrative staff, operates globally, including branches in Hong Kong, New York, São Paulo, Singapore, and Abu Dhabi. With a total of 28,000 registered cases, ICC is the world's most influential arbitration institution, managing a significant portion of cross-border and regional disputes.

In 2022, the ICC International Court of Arbitration handled cases where 25% of the parties were from the Asia-Pacific region.4 Recognizing the importance of the Asia-Pacific market, ICC established case management offices in Hong Kong in 2008 and Singapore in 2018.

(iii) Singapore Chamber of Maritime Arbitration (SCMA)

Initially managed by SIAC, SCMA, established in November 2004, was restructured as an independent arbitration institution in May 2009, focusing on resolving maritime and international trade disputes. SCMA offers a neutral, economical, and flexible framework for fair and prompt dispute resolution in the maritime and international trade sectors.

SCMA's features include:

(1) Flexibility, that is, the parties can manage the arbitration procedure by themselves, and the secretariat provides various services according to the requirements of the parties.

(2) Professionalism, that is, the roster of arbitrators consists of arbitrators with professional legal, technical and industrial skills.

(3) Sound and unique rules, that is, SCMA has a set of sound arbitration rules that have stood the test of shipping, trade and arbitration circles. Special procedures are set up for disputes over fuel claims, ship collisions and other small-sum cases, and arbitration-mediation-arbitration procedures are available for the parties to choose from.

(4) Low cost, that is, SCMA will neither charge any mandatory deposit nor stipulate the mandatory fees for arbitrators. Any fees paid to the arbitrator shall be agreed by both parties to the dispute and the arbitrator.

(5) Pan-members, that is, members of SCMA come from enterprises and individuals in shipping, trade and arbitration, and they provide guidance and feedback according to the needs of the industry.

(6) Ease, that is, SCMA is the default dispute resolution method in Singapore Ship Sale Contract and Singapore Standard Code of Fuel Operation. The parties are free to choose any applicable law.

(7) Enforceability, that is, Singapore is a signatory to the 1958 New York Convention.

(iv) American Arbitration Association International Centre for Dispute Resolution (AAA-ICDR)

Established in 1926, the American Arbitration Association (AAA) is a private, permanent arbitration institution based in New York. The AAA-ICDR, its international division, is responsible for managing all international affairs of AAA and providing dispute resolution services for enterprises involved in cross-border transactions. It began operations in Singapore in 2007 and established the Asia Case Management Center (“Asia CMC”) in 2019, handling cases from China, India, and Japan. The AAA-ICDR provides dispute resolution services in multiple languages, including Chinese, Korean, Hindi, and Tamil. In 2022, AAA-ICDR received a total of 755 cases, mainly from the technology, finance, and entertainment industries.

(v) Asia Pacific International Arbitration Chamber (APIAC) 5

APIAC is an arbitration institution jointly initiated by arbitration experts from Mainland China, Hong Kong S.A.R., Macau S.A.R., Singapore, Malaysia, Indonesia, the United States, and other Pacific Rim countries and regions, and approved by the Ministry of Law, Singapore. APIAC has established its presence in Maxwell Chambers, the Singapore government's dispute resolution center, and set up the APIAC Hong Kong Arbitration Center in Hong Kong, the APIAC Southwest Service Center (Sichuan), the APIAC Southwest Service Center (Chongqing) and the APIAC-Legal Service Center for Global Taiwan-invested Enterprises Integrated with RCEP Affairs in the Southwest region of China. Currently developing branch offices in Indonesia and Malaysia, APIAC focuses on providing international arbitration legal services, aligning with the "Belt and Road" initiative and China-ASEAN cooperation. Leveraging Singapore's existing status as an international arbitration and mediation center, APIAC plays a key role in supporting dispute resolution in the region and even globally.

Conclusion

The above international arbitration institutions in Singapore have crafted unique arbitration rules and standardized processes, demonstrating mature management systems. The Singapore government consistently supports the development of arbitration systems, reforming and refining international arbitration laws to foster a favorable international arbitration landscape. Singapore is actively positioning itself as a global hub for dispute resolution, ensuring its status as the preferred arbitration destination for international parties.

References:

1.      Singapore United Morning Post. "Survey: First time Singapore is selected as the most popular globally, tied with London"https://www.zaobao.com.sg/news/singapore/story20210508-1145112.

2.      Singapore Status Online. International Arbitration Act 1994 (2020 revised version) https://sso.agc.gov.sg/Act/IAA1994.

3.      Singapore International Arbitration Centre. Annual Report 2022 https://siac.org.sg/wp-content/uploads/2023/04/SIAC_AR2022_Final-For-Upload.pdf.

4.      International Chamber of Commerce. "ICC reaches arbitration milestone with case 28,000" https://iccwbo.org/news-publications/news/icc-reaches-arbitration-milestone-with-case-28000/ .

5.      Asia Pacific International Arbitration Chamber (APIAC) Official Website http://apiac.sg.

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