Singapore has once again confirmed its status as Asia’s leading dispute resolution hub.
The ICC 2015 Report
The International Court of Arbitration of the International Chamber of Commerce (“ICC“) announced strong growth in Asia in 2015, with Singapore retaining her ranking as the number one seat of ICC Arbitration in Asia.
- Singapore has been consistently ranked as the number one seat of ICC arbitration in Asia for the last 5 years.
- Singapore has been ranked in the top 5 most preferred seats of ICC Arbitration in the world for the last 10 years.
- In 2015, Singapore was the 4th most preferred seat globally for ICC Arbitration, with more than 6% of new ICC cases last year naming Singapore as the seat of arbitration.
- An increase in the number of foreign parties choosing Singapore as a seat for arbitration.
- In over 71% of Singapore-seated arbitrations filed in 2015, one or more of the parties was not Singaporean.
- In almost 50% of these cases, a non-Singapore arbitrator was appointed.
- The ICC recorded the second-highest number of new cases in its 93-year history.
- 801 cases were filed in 2015.
- The average monetary value of disputes submitted to the ICC in 2015 rose to US$84 million, with the largest dispute valued at over US$1 billion. The aggregate value of all disputes pending before the Court at the end of 2015 stood at US$286 million.
The Seat of Arbitration – Why is it important?
The choice of the seat is important for the following reasons:
- The seat determines the law of the arbitration procedure and the courts of the seat have supervisory jurisdiction over the arbitral proceedings (including the right to intervene in the proceedings).
- The law of the seat governs key issues such as how an award may be challenged, and whether an arbitrator has jurisdiction to hear a particular case.
- Parties usually go to the courts of the seat to seek interim relief.
- “Arbitration-friendly” seats tend to give parties a high degree of procedural autonomy, thereby facilitating the smooth progress of the arbitral process.
Points to note:
- Identification of the seat is one of the most important features of an arbitration clause.
- The seat of the arbitration can differ from the venue of the arbitration [i.e. location where the hearings may take place].
- When choosing a seat, it is important to consider:
- The effect of the local law of the seat on the conduct of the arbitration and the enforceability of the ultimate award; and
- Whether the local courts are “arbitration-friendly” [for e.g. in less arbitration-friendly countries, the courts can have wider powers / discretion to control the arbitration process and tend to be more interventionist].
The ICC and SIAC statistics for 2015 reaffirm Singapore as the forum of choice for dispute resolution in Asia, with the Financial Times (FT) recently pronouncing that “Singapore is becoming a world leader in arbitration“.
As the FT noted, Singapore has a growing menu of options for sorting out disputes without litigation. Apart from ICC Arbitration, parties seeking to adjudicate their disputes in Singapore are spoiled for choice. Depending on their preferred choice of dispute resolution mechanism, parties can now elect to have their cases heard at the Singapore International Arbitration Centre (SIAC), the Singapore International Mediation Centre (SIMC), and the newly established Singapore International Commercial Court (SICC). Each of these institutions boasts a well-respected panel of arbitrators, mediators and judges of international calibre, from which parties can choose.
In the 2015 International Arbitration Survey: Improvements and Innovations in International Arbitration, Singapore was named as the most improved arbitral seat. The survey is a positive endorsement of Singapore’s formal legal infrastructure, as it is based on factors such as: the neutrality and impartiality of the legal system; the national arbitration law; and its track record for enforcing agreements to arbitrate and arbitral awards.
The survey respondents also voted the SIAC as the second most improved arbitral institution, a testament to the quality of its administration and its reputation and recognition by the international community for its “internationalism“.