SIAC – Introduction of Practice Note on the Appointment of Administrative Secretaries

Background

There is a growing trend for arbitral tribunals to enlist the services of administrative secretaries to provide support, particularly in large and complex arbitrations, sometime involving several parties. When used effectively, administrative secretaries enhance the efficiency of the proceedings and also help to save costs for the parties. In 2012, ICC issued a Note on the Appointment, Duties and Remuneration of Administrative Secretaries and JAMS issued Guidelines for Use of Clerks and Tribunal Secretaries in Arbitrations. The SIAC’s recently published Practice Note on the Appointment of Administrative Secretaries (effective on 2 February 2015) further recognises this growing trend and seeks to provide some practical guidance on issues concerning the appointment of administrative secretaries; the role that they play; and remuneration for their services.

Appointment

The SIAC Practice Note provides that Arbitral tribunals may, with the consent of all parties, appoint administrative secretaries in appropriate cases. There is no formal process for such appointment except that administrative secretaries must execute a declaration of independence, impartiality and confidentiality prior to the appointment. This helps to ensure fairness in the conduct of proceedings and protect any confidentiality ascribed to the arbitration process. The SIAC Practice Note doesn’t provide any further guidance regarding the appointment. By way of comparison, the ICC Note (i) explicitly states that the arbitral tribunal must make clear to the parties that they may object to the proposal; and (ii) imposes an additional obligation on the arbitral tribunal to submit the proposed administrative secretary’s CV to the parties. Under the JAMS Guidelines, clerks or secretaries are required to complete a separate conflicts disclosure form. The JAMS Guidelines also require arbitrators to explicitly disclose their intentions to use a clerk or secretary as early as practicable in their initial disclosure to the parties on issues such as the fee agreement, engagement letter and scheduling order.

Duties

The SIAC Practice Note states that administrative secretaries may be appointed to assist arbitral tribunals in “administrative matters”. This no doubt implies that duties or tasks performed by administrative secretaries must be limited to administrative work and separate from any decision-making role which can only be performed by arbitral tribunals. The SIAC Practice Note, however, does not provide any specific guidance on what these ‘administrative’ duties or tasks might include, perhaps preferring to give arbitral tribunals the flexibility to exercise their common sense in this regard. In contrast, the ICC Note is more prescriptive in specifying the duties of administrative secretaries in greater detail and providing examples of tasks that they may perform. Likewise, the JAMS Guidelines require an arbitrator to disclose the type of tasks assigned to a clerk or a secretary. Both the ICC Note and JAMS Guidelines sensibly state that administrative secretaries must not engage in deliberations or decision making.

Fees

The SIAC Practice Note provides specific guidance on the fees for administrative secretaries. Unlike the ICC Note and the JAMS Guidelines, the SIAC Practice Note specifies that if the amount in dispute is under SGD 15 million, the parties are not to bear any fees for the use of an administrative secretary except for any reasonable expenses incurred. If the amount in dispute is SGD 15 million or above, both the administrative secretary’s fees and reasonable expenses are to be borne by the parties at an hourly rate that should be capped at SGD 250.

Moving Forward

The issuance of the SIAC Practice Note is useful and also timely given the growing trend for arbitral tribunals to enlist the help of administrative secretaries. Moving Forward, we foresee that parties will benefit from having a better understanding and appreciation of (i) the fees that they can expect to pay for the use of such services; and (ii) the potential costs savings in using administrative secretaries rather than arbitral tribunals to perform the more administrative tasks in an arbitration.

The author is grateful for the assistance provided by Daniel Jung, Associate, Olswang Asia LLP in drafting this post.

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Swedish Court of Appeal upholds pathological hybrid arbitration clause

We previously addressed the problematic issue of pathological arbitrations clauses and discussed the cases of HKL Group Co Ltd v Rizq International Holdings Pte Ltd[2013] SGHCR 5 (see Case Update: Singapore High Court gives effect to pathological arbitration clause) as well as HKL Group Co Ltd v Rizq International Holdings Pte Ltd[2013] SGHCR 8 (“HKL v Rizq International (No. 2)“) (see HKL v Rizq International: Pathological Arbitration Clause Case Update).

One of the issues that arose for determination in HKL v Rizq International (No. 2) was whether an arbitration using the ICC Rules could be administered by an institution other than the ICC International Court of Arbitration. Famously, in  Insigma Technology Co Ltd v Alstom Technology Ltd [2009] 3 SLR(R) 936, the Singapore Court of Appeal upheld a pathological hybrid arbitration clause which had provided that,

“Any and all such disputes shall be finally resolved by arbitration before the Singapore International Arbitration Centre in accordance with the Rules of Arbitration of the International Chamber of Commerce then in effect and the proceedings shall take place in Singapore and the official language shall be English …”

The Court of Appeal in that case had taken cognizance of the fact that the SIAC was able and willing, for that particular case, to conduct a hybrid arbitration, applying the ICC rules.

However, following the Insigma case, the ICC amended the ICC Rules (effective 1 January 2012) in an attempt to prevent a re-occurrence of any such hybrid arbitration. This was achieved through inserting the underlined words into Article 1(2) of the ICC Rules which, with effect from 1 January 2012, provides as follows:

“The Court does not itself resolve disputes. It administers the resolution of disputes by arbitral tribunals, in accordance with the Rules of Arbitration of the ICC (the “Rules”). The Court is the only body authorized to administer arbitrations under the Rules, including the scrutiny and approval of awards rendered in accordance with the Rules. It draws up its own internal rules, which are set forth in Appendix II (the “Internal Rules”)”.

Recently, the Swedish Court of Appeal upheld a clause providing for arbitration administered by the Chamber of Commerce and Industry, Stockholm, Sweden  (“SCC“) but using the ICC Rules. The Swedish court thus dismissed the Russian Federation’s challenge to the award which had been issued by the tribunal constituted by the SCC.

Continue reading

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SLW Commentary – Arbitration in 2014: Looking Ahead to 2015

Our brand new article on Arbitration in 2014: Looking Ahead to 2015 has been published on Singapore Law Watch.

The SLW commentary looks at the following significant 2014 Singapore court cases involving arbitration that either dealt with novel points of law, or were otherwise noteworthy in that they differ from the equivalent English position:

  1. R1 v Lonstroff [2014] SGHC 69 – power of the Singapore court to grant
    permanent anti-suit injunctions in aid of arbitration. See our detailed analysis of the case here. Our examination of the Singapore Court of Appeal decision is at Case Update: Court of Appeal grants permanent anti-suit injunction in R1 v Lonstroff.
  2. Silica Investors v Tomolugen Holdings [2014] SGHC 101 – limited arbitrability
    of intra-corporate disputes. Our detailed analysis of the case can be found here.
  3. FirstLink v GT Payment [2014] SGHCR 12 – Seat of Arbitration and Implied
    Choice of Governing Law of Arbitration Agreement. Our detailed look at the case is available here.
  4. PT Central Investindo v Franciscus Wongso [2014] SGHC 190 – court will
    determine challenge to arbitrator even when final award has been rendered. Our examination of the case is available here.

Our article also considers likely trends in 2015 regarding the practice of international arbitration which are worth watching out for:

  1. The growth of the Singapore International Commercial Court (SICC).
  2. The regulation of external or alternative funding of international arbitration in
    Singapore.
  3. Passing of the Myanmar (International) Arbitration Bill.
    See our Singapore Law Gazette article Myanmar Draft Arbitration Bill to Further Bolster Foreign Investor Confidence for further background.

This follows our Singapore Law Gazette article Arbitration in Singapore 2013: A Year in Review published last year which looks back at significant Singapore Court decisions of 2013 involving arbitration.

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Case Update: Court of Appeal grants permanent anti-suit injunction in R1 v Lonstroff

In an earlier post regarding the case of RI International Pte Ltd v Lonstroff AG[2014] SGHC 69, we wrote about how the Singapore High Court confirmed (albeit in obiter) that the Singapore courts have the power to grant a permanent anti-suit injunction in aid of international arbitration proceedings seated in Singapore. The High Court also expressed a tentative view that such powers would extend to foreign arbitration proceedings as well (see Case Update: Power of the Singapore Court to grant permanent anti-suit injunction in aid of arbitration proceedings).

However, on the facts of the case, the High Court held that there was in fact no arbitration agreement between the parties and that Lonstroff AG (“Lonstroff”) was therefore entitled to commence proceedings in the Swiss Court.

The Singapore Court of Appeal in R1 International Pte Ltd v Lonstroff AG, [2014] SGCA 56 has reversed the decision of the High Court. The Court of Appeal held that “a set of terms containing an agreement to arbitrate in Singapore, which is found in a detailed contract note that was sent by the Appellant [R1] to the Respondent [Lonstroff] shortly after the deal had apparently been agreed, was incorporated as part of the contract between the parties” (see paragraph [3]).

The Court of Appeal noted that “the arguments in the appeal did not focus on the power of the court to grant an anti-suit injunction to support the arbitration”. Nonetheless, the Court of Appeal did grant R1 the anti-suit injunction it had sought on the basis that there was a valid and binding arbitration agreement between the parties (see paragraph [77]).

Background and decision of the High Court Continue reading

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Singapore High Court rejects attempt to set aside an award for breach of an alleged agreed arbitral procedure

The Singapore High Court recently delivered another pro-arbitration, pro-enforcement decision in Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd, [2014] SGHC 220 (“Triulzi v Xinyi”).

The plaintiff’s i.e. Triulzi Cesare SRL (“Triulzi”) decision to challenge an adverse ICC award arose chiefly out of a dispute as to whether “witness statements” include expert reports/opinions and whether the parties had agreed not to file expert reports.

Triulzi argued that the Tribunal’s conduct during the arbitral proceedings gave rise to “a number of serious breaches…which had caused it prejudice”. The Singapore High Court summarised the alleged breaches as follows (see paragraph [17]):

“…(a) on the basis of Art 34(2)(a)(iv) of the Model Law in that the Tribunal’s decision to admit Xinyi’s expert witness statement was in breach of the parties’ agreed arbitral procedure (“Issue 1”);

(b) on the basis of Art 34(2)(a)(ii) of the Model Law and s 24(b) of the IAA in that Triulzi was, inter alia, not afforded a reasonable opportunity to be heard in respect of expert evidence (“Issue 2”); and

(c) on the basis of Art 34(2)(b)(ii) of the Model Law in that the decision of the Tribunal not to apply the United Nations Convention on the International Sale of Goods (“the CISG”) as the applicable law of the three contracts does not accord with the public policy of Singapore (“Issue 3”).”

The High Court considered that “the nub of the complaints for Issues 1 and 2 [were] the same in that they [were] challenges to the procedural orders or directions made in the course of the arbitral proceedings rather than a challenge to the making of the Award” (see paragraph [19]). The High Court also considered that Issue 1, and in particular, whether there was an agreement to dispense with expert evidence, was a threshold issue (see paragraph [70]).

This post will therefore focus on the challenge under Article 34(2)(a)(iv) of the Model Law given the novelty of this issue before the Singapore courts.

Background to ICC arbitration and Triulzi’s complaint Continue reading

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Singapore Law Gazette – Myanmar Draft Arbitration Bill to Further Bolster Foreign Investor Confidence

We are pleased to announce that the Singapore Law Gazette has just published an article that we recently wrote for them. The article Myanmar Draft Arbitration Bill to Further Bolster Foreign Investor Confidence is now available online.

The Myanmar Draft Arbitration Bill is an important next step in the liberalisation of the Myanmar economy and following its accession to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. The article explores some of the details of the Draft Arbitration Bill including certain novel features not found in the UNCITRAL Model Law.

We look forward to the Bill being enacted and the future developments on this front.

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Challenge to Arbitrator for Apparent Bias – What happens if the final award is rendered before the court determines challenge?

The recent Singapore High Court decision of PT Central Investindo v Franciscus Wongso and others and another matter, [2014] SGHC 190 involved a rare challenge to an arbitrator for apparent bias. The case also addressed a novel legal issue: what would happen when a party seeks to disqualify and remove a sole arbitrator, but that sole arbitrator then renders her/his final award before the courts determine the removal application? Continue reading

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SIAC-CII Bangalore Conference 2014

The SIAC, in conjunction with the Confederation of Indian Industry (CII) will be jointly conducting a conference on Protecting Business Interests through International Arbitration in an Evolving Indian Economy on Friday, 26th September 2014 in Bangalore, India. The conference will be held at Vivanta, By Taj in Bangalore, India from 9:30am to 6:00pm.

The conference will examine the challenges for businesses in an evolving Indian economy and arbitration as a mode of dispute resolution for Indian parties in various sectors. The detailed programme can be found here.

Olswang Partner, Jonathan Choo, will be presenting together with Vyapak Desai (Partner, Nishith Desai Associates) on “Does International Arbitration Work For The Technology Sector?” – a topic which will be of particular relevance to businesses in the thriving technology sector within Bangalore.

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Time limited obligations to engage in “friendly discussions” before proceeding to arbitration may be binding

[We are grateful for the following guest post from Charlotte Bamford, a Trainee Solicitor currently sitting in the Commercial Litigation Group of our London office.]

In Emirates Trading Agency LLC v Prime Mineral Exports Private Limited [2014] EWHC 2104 (Comm), the Commercial court considered whether a contractual clause requiring the parties to “first seek to resolve the dispute or claim by friendly discussion” before proceeding to arbitration was enforceable, and – if it was – whether it would constitute a condition precedent to issuing arbitration proceedings.  In a departure from the existing stance demonstrated by the courts, Teare J’s judgment proclaims that such an obligation is indeed both enforceable and likely to constitute a condition precedent.

The clause in question reads as follows: Continue reading

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Case Update: Unavailability of a particular source may operate to frustrate contracts

[Thanks to Daniel Jung, Associate, Olswang Asia LLP for a summary of the case and the first draft of this post]

We previously discussed  the case of Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd, [2013] SGHC 127 (see our previous post: “The Interpretation of Force Majeure Clauses and Frustration in Singapore”) in which the Singapore High Court examined the issues of frustration and the interpretation of force majeure clauses in relation to the so-called “Sand Ban” which affected the construction contract between parties (the “Supply Agreements”).

On the facts of that case, the High Court found that the plaintiff appellant, Alliance, had not been rendered incapable of performing its obligations under the Supply Agreements at the material time and furthermore, nothing had occurred that radically altered the obligations undertaken by Alliance under the Supply Agreements. The High Court, therefore, held that the Supply Agreements were not frustrated by the Sand Ban and, therefore, Alliance should not be discharged from its contractual obligation to supply concrete to Sato by way of the doctrine of frustration. Alliance appealed.

In Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd, [2014] SGCA 35, the Singapore Court of Appeal reversed the decision of the High Court.  The main issues in the appeal were whether Alliance was discharged from its contractual obligation to supply concrete to Sato by way of the doctrine of frustration and whether Alliance was in breach of the relevant contracts.

This post will only focus on the Court of Appeal’s holding on frustration. Continue reading

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