We are pleased to congratulate the Singapore International Arbitration Centre (SIAC) on the successful launch of its first overseas office in Mumbai, India.

Singapore has for some time now been a popular arbitration venue for Indian parties. In our earlier post on Indian Arbitration Users and the Singapore Appeal, we pointed out the fact that the SIAC handled more cases involving at least one Indian party in the three years from 2009 to 2011 than in the preceding nine years from 2000 to 2008 combined: 84 cases involving at least one Indian party between 2009 and 2011 vs. a total of 50 cases between 2000 and 2008. Furthermore, India contributed the highest number of new case filings in the SIAC between 2009 to 2011. In 2012, India took second place having contributed only two fewer cases than China.

As the Honourable Senior Minister for State, Indranee Rajah mentioned in her speech at the opening of the SIAC Mumbai office, Singapore and India share close economic, trading and investments ties as well as a unique common legal heritage. Notably,

“8. Indian companies now form the largest foreign corporate contingent in Singapore with more than 5,000 registered Indian companies in Singapore. World-renowned businesses like the Tata Group, leading technologies companies like Infosys and a large number of small and medium enterprise owners have made Singapore their springboard to enter new markets in the rest of Asia. Singapore companies such as Ascendas, First Engineering and YCH Group, have an active presence in India. Ascendas, whose flagship projects include the Singapore Science Park, has more than 10 years of experience in developing and managing industrial facilities in India. First Engineering has established itself as a supplier of ultra-precise plastic moulds and components to consumer electronics and automotive manufacturers in India, whilst YCH Group is now providing third-party logistics services to manufacturers such as Dell in 53 Indian cities.”

There are a few significant differences in the way arbitration is conducted in India as compared to Singapore. For example, ad hoc arbitration is the predominant mode of arbitration in india, whereas institutional arbitration makes up the majority of arbitrations in Singapore. Furthermore, the trend is to appoint retired judges of the Supreme Court or High Court as arbitrators in India. In Ernst & Young’s “Changing Face of Arbitration in India (2011)“, the Indian survey respondents expressed the view that domestic arbitration did not provide cost effective or timely resolutions of disputes.

The views expressed by the Indian Supreme Court in Union Of India v M/S. Singh Builders Syndicate (26 February 2009) are telling and instructive,

“…the cost of arbitration can be high if the Arbitral Tribunal consists of retired Judge/s. … There is no doubt a prevalent opinion that the cost of arbitration becomes very high in many cases where retired Judge/s are Arbitrators. The large number of sittings and charging of very high fees per sitting, with several add-ons, without any ceiling, have many a time resulted in the cost of arbitration approaching or even exceeding the amount involved in the dispute or the amount of the award. When an arbitrator is appointed by a court without indicating fees, either both parties or at least one party is at a disadvantage. Firstly, the parties feel constrained to agree to whatever fees is suggested by the Arbitrator, even if it is high or beyond their capacity. Secondly, if a high fee is claimed by the Arbitrator and one party agrees to pay such fee, the other party, who is unable to afford such fee or reluctant to pay such high fee, is put to an embarrassing position. He will not be in a position to express his reservation or objection to the high fee, owing to an apprehension that refusal by him to agree for the fee suggested by the arbitrator, may prejudice his case or create a bias in favour of the other party who readily agreed to pay the high fee. It is necessary to find an urgent solution for this problem to save arbitration from the arbitration cost. Institutional arbitration has provided a solution as the Arbitrators’ fees is not fixed by the Arbitrators themselves on case to case basis, but is governed by a uniform rate prescribed by the institution under whose aegis the Arbitration is held. Another solution is for the court to fix the fees at the time of appointing the arbitrator, with the consent of parties, if necessary in consultation with the arbitrator concerned. … It is unfortunate that delays, high cost, frequent and sometimes unwarranted judicial interruptions at different stages are seriously hampering the growth of arbitration as an effective dispute resolution process. Delay and high cost are two areas where the Arbitrators by self regulation can bring about marked improvement.”

Just last Friday, Olswang Partners, Jonathan Choo and Andrew Stott, led both panel sessions at the Arbitration India: Technology, Media & Telecommunications Conference in New Delhi which was jointly organised by the SIAC and the Confederation of Indian Industry. The event examined the challenges for the TMT industry and the use of arbitration as a mode of dispute resolution for Indian parties in the TMT sectors.  

We also look forward to the opening of another SIAC overseas office in Seoul, South Korea, as had been announced at the SIAC Annual Appreciation Cocktail Reception 2013.