Chartered Institute of Arbitrators Centenary London Conference Principles

The Chartered Institute of Arbitrators (CIArb) has plenty to be proud of – with over 13,000 members in more than 120 countries, CIArb has established itself as a leading global institution that supports the promotion, facilitiation and development of all forms of private dispute resolution. Its current Patron is none other than The Honourable the Chief Justice Sundaresh Menon, Chief Justice of Singapore.

CIArb celebrates its centenary year in 2015. To mark the occasion, conferences and events have been lined up around the world with a focus on looking ahead. The CIArb Singapore Centenary Conference, entitled “The Age of Innovation: Addressing The Perils & Promises of Arbitration”, will be held at the Marina Bay Sands on 3rd & 4th September. Find out more about the Conference here and register soon because seats are limited.

At the London Centenary Conference that was held from 1 – 3 July, CIArb launched and debated draft Principles which distil 10 key characteristics that are necessary for an effective, efficient and “safe” seat for conducting international commercial arbitration. The Principles relate to:

  1. Law
  2. Judiciary
  3. Legal Expertise
  4. Education
  5. Right of Representation
  6. Accessibility and Safety
  7. Facilities
  8. Ethics
  9. Enforceability
  10. Immunity

CIArb recognises that the Principles touch on potentially complex issues and hopes to further refine and define these principles in time. In many ways, what CIArb has done will help States, professional bodies and other arbitration stakeholders to focus on the most important issues that need to be addressed in order for international arbitration to flourish in any particular jurisdiction. In the ASEAN region, this of course has particular relevance for States such as Myanmar that are still in the early stages of developing what many would hope to be a reliable and investor friendly international arbitration framework (see our previous post on Myanmar’s Draft Arbitration Bill).

In a previous post, I offered a few reasons why Singapore has managed to establish itself as a preferred venue for international arbitration, not just within Asia, but globally. The CIArb Centenary London Conference Principles provide a very useful reference or yardstick against which Singapore’s success as a seat for international arbitration can be mapped.

Interestingly, in his Patron’s Address at the London Centenary Conference, The Honourable the Chief Justice Sundaresh Menon, Chief Justice of Singapore shared very candidly about how the international arbitration landscape in Singapore had steadily developed over the years. I hope to share some thoughts on this subject in a subsequent post.

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The rise and rise of Singapore: Singapore as a preferred venue for international arbitration

Could Singapore become the most popular destination for international arbitration? LexisPSL’s Stephanie Boyer recently interviewed me to get my thoughts on the subject. The full interview with LexisPSL can be found here.

With a revised International Arbitration Act and a modern, well-respected arbitral institution, is Singapore en route to being the most popular arbitral centre?

Singapore has already developed a strong reputation within the international business community as a preferred venue for international arbitration, not just within Asia, but globally. The sensible revisions to the International Arbitration Act over the years and the high quality of the Singapore International Arbitration Centre (SIAC) have certainly contributed to Singapore’s success in this regard, but there are also several other factors which must not be overlooked. For example, many parties that conduct business internationally value Singapore as a neutral venue that is free of corruption. They have confidence in the level of professional service and efficiency within Singapore, particularly within the legal industry. The fact that many of the world’s largest banks and multinational corporations (MNCs) have their regional headquarters or a significant presence in Singapore gives them further reason to want to seat their arbitrations in Singapore.

What message do recent appointments to Singapore give, such as Judith Gill QC’s move?

We’ve seen this trend developing over the years. There has been a marked increase in the number of high-quality arbitration practitioners who ply their trade in Singapore across a sizeable number of international and local firms. All of this has contributed to:

  • businesses having better access to talented arbitrators and arbitration counsel based in Singapore
  • Singapore further enhancing its position as an international arbitration hub
  • an increasingly competitive environment in which arbitration practitioners in Singapore are learning to operate–more and more businesses will start to look at how arbitration practitioners differentiate themselves through their areas of focus and the quality of their work

What limitations does Singapore have as an arbitral centre?

Businesses tend to think regionally when selecting a venue for arbitration. For example, European parties involved in a project based entirely within Europe would usually prefer to hear arbitration disputes in Paris or Geneva. To that extent, Singapore may not necessarily attract such disputes and, you could say, that this acts as a limitation of sorts. Having said that, each year the SIAC still manages to attract a significant number of disputes involving parties, projects or matters that have no connection with Singapore. In 2013, almost 50% of new cases filed at the SIAC fell within this category. This shows just how much regard businesses have for the SIAC and Singapore as an arbitral venue.

Furthermore, the recent trend is for businesses in Asia and South-East Asia to feature in both inbound and outbound investments across a variety of commercial sectors. This has contributed to the growing number of arbitrations seated in Singapore–and the trend looks set to continue.

How does the court’s attitude impact on Singapore as an arbitral centre?

In order for arbitration to be successful in any jurisdiction and for parties to rely on it as a speedy and cost-effective form of dispute resolution, it is crucial that arbitration practitioners and arbitrators maintain high-quality standards. Parties must also have confidence that the judiciary is fully supportive of arbitration. Singapore is fortunate to have a strong and arbitration-savvy judiciary that has developed a reputation and track record for being non-interventionist when it comes to the arbitration process. At the same time, parties have confidence that valid arbitral awards will be enforced. The court’s attitude to arbitration has been critical in allowing arbitration to thrive in Singapore.

How do you see this trend developing?

I think that over the next few years, Singapore will continue to grow its reputation not just as an arbitral centre, but also as a global dispute resolution hub. The recently launched Singapore International Commercial Court (SICC) will attract high-value international commercial disputes. When considered together with the Singapore International Mediation Center (SIMC) and the SIAC, the collective offering sends a very strong signal to the international business community that Singapore is serious about enhancing its already stellar reputation as a hub of dispute resolution. In practical terms, for international businesses, the SICC gives them yet another Singapore-branded dispute resolution option to consider. I think that in time, the likes of the SICC and the SIMC will ultimately grow the pie for dispute resolution practitioners in Singapore.

Moving forward, I expect that in line with the growing trend for international technology and media businesses to target the immense market potential within the ASEAN region and in India, we will soon start to see more disputes from the technology and media sectors being determined through arbitration in Singapore.

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Singapore Law Gazette – Arbitration in 2014: Looking Ahead to 2015

Our article on Arbitration in 2014: Looking Ahead to 2015 has also been published in the March 2015 edition of the Singapore Law Gazette.

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. The Singapore court declined to follow what it deemed to be the broad approach to arbitrability by the English court in Fulham Football Club (1987) Ltd v Richards and another [2011] EWCA Civ 855; [2012] Ch 333. 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. The Singapore High Court disagreed with the English position and held that where parties had expressly provided for the governing law of the underlying agreement (eg England and Wales), but had chosen a different seat for the arbitration (eg Singapore), the Singapore courts would not infer or assume that parties intended for the law of the underlying contract to take precedence over that of the law of the seat of the arbitration. Our detailed look at the case is available here.
  4. PT Central Investindo v Franciscus Wongso [2014] SGHC 190 – the Singapore court will determine a challenge to arbitrator for bias even when the 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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NUS-SMU Public Lecture Series on International Investment Law and Dispute Resolution: 1 & 15 April 2015

For our readers who are based in Singapore, or who may be visiting in the month of April, you might want to attend these upcoming lectures given the increasing interest in the area of International Investment Treaty arbitration.

The inaugural NUS-SMU Public Lecture Series on International Investment Law and Dispute Resolution takes place on the 1st and 15th of April 2015, 6.30pm to 8pm, at Seminar Room 4-4, Level 4, Block B, NUS Bukit Timah Campus, 469 Bukit Timah Road, Singapore 259756.

Hosted by the Centre for International Law, the first instalment on 1 April 2015 will see Toby Landau QC and Sam Wordsworth QC, both barristers at Essex Court Chambers, address the topic “ISDS: (Mis)understanding State Consent”.

The second instalment on 15 April 2015 will feature J Christopher Thomas QC, Senior Principal Research Fellow at the Centre for International Law, on the topic “Modern Investment Treaty-Making Practice: Restatement, Elaboration and Transparency”.

Admission is free-of-charge, but as seats are limited and registration is on a first-come, first-served basis, you will need to quickly reserve your seat by emailing cil.events@nus.edu.sg

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Arbitration under SIAC Expedited Procedure not contrary to arbitration clause providing for 3 Arbitrators

In the recent case of AQZ v ARA, [2015] SGHC 49, the Singapore High Court had to consider a challenge to an SIAC award which was rendered pursuant to the SIAC’s expedited procedure under the SIAC Rules 2010. The High Court upheld the award rendered by the sole arbitrator even though the parties had expressly provided that all disputes were to be resolved by a panel of three (3) arbitrators.

Introduction to the SIAC Expedited Procedure

One of the oft-stated benefits to arbitration is that its proceedings can be quicker than domestic court proceedings. In 2010, the Singapore International Arbitration Centre (“SIAC“) introduced an expedited procedure to its arbitration rules. Using the expedited procedure allows, parties can expect to receive their arbitral award within six months of the appointment of the tribunal.  Continue reading

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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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