SIAC 2016 Rules: The key changes

On 1 July 2016, the Singapore International Arbitration Centre (“SIAC“) published the latest revised set of SIAC Rules (“SIAC 2016 Rules“), which will come into effect on 1 August 2016. The SIAC 2016 Rules are available here.

The SIAC’s draft revised rules were released for public comment on 18 January 2016. In a previous blog post, we highlighted some of the key proposed changes relating to Multiple Contracts and Consolidation, Joinder of Additional Parties and the enhanced Emergency Arbitration Proceedings, which have since been finalised.

An Overview of the Key Changes

A. Consolidation of multi-contract disputes (Rules 6 and 8):

Rule 6 [Multiple Contracts]

  • At the time of arbitration proceedings, the claimant can choose to either:
    • File a Notice of Arbitration in respect of each arbitration agreement invoked and concurrently submit an application for consolidation of the arbitrations under Rule 8.1; or
    • File a single Notice of Arbitration in respect of all the arbitration agreements invoked, including:
      • A statement identifying each contract and arbitration invoked; and
      • A description of how the applicable criteria under Rule 8.1 are satisfied.

Note: By filing a single Notice of Arbitration, the claimant is deemed to have:

  • commenced multiple arbitrations (one for each arbitration agreement invoked); and
  • applied to consolidate all such arbitrations under Rule 8.1.

Rule 8 [Consolidation]

  • Complements Rule 6.
  • Prior to the constitution of the Tribunal, a party may apply for two or more pending arbitrations to be consolidated into a single arbitration, subject to any of the following criteria being satisfied:
    • The parties’ consent;
    • The claims are made under the same arbitration agreement; or
    • The compatibility of the arbitration agreements and the disputes arise out of:
      • the same legal relationship(s); or
      • contracts consisting of a principal contract and its ancillary contract(s); or
      • the disputes arise out of the same transaction or series of transactions.
  • After the constitution of the Tribunal, a party may apply to consolidate two or more pending arbitrations into a single arbitration. The same criteria as above applies with some additions:
    • The same Tribunal should have been constituted in each of the arbitrations; or
    • There is no Tribunal constituted in the other arbitration(s).

Who does a party apply to?

  • The Court of Arbitration of SIAC (“SIAC Court“) [if application is made before the Tribunal is constituted]; or
  • The Tribunal [after the Tribunal has been constituted].

Why is this significant?

  • Previous SIAC Rules were silent on the administration of multi-contract disputes.
  • SIAC 2016 Rules provide a streamlined process for managing disputes arising out of or in connection with multiple contracts/arbitration agreement.

B. Joinder of Additional Parties (Rule 7):

  • Parties and non-parties may apply to be joined in a pending arbitration.
  • Joinder application may be made before or after the Tribunal is constituted.
  • Criteria to be considered:
    • The additional party to be joined is prima facie (i.e. on the face of it) bound by the arbitration agreement; or
    • All parties (including the additional party) consent to the joinder.

Why is this significant?

  • Previous rules (SIAC 2013 Rules) only allowed a third party to be joined to the arbitration if the third party:
    • was a party to the arbitration agreement; and
    • provided written consent to be joined.

C. Early dismissal of Claims and Defences (Rule 29):

  • A claim or a defence may be dismissed early if it is “manifestly”:
    • without legal merit; or
    • outside the jurisdiction of the Tribunal.
  • Application is to be made to the Tribunal.
  • The Tribunal has the discretion whether to allow it.
  • If the Tribunal allows an application for early dismissal to proceed, it must issue an order or Award:
    • with reasons (which may be in summary form); and
    • within 60 days of filing of the application [unless (in exceptional circumstances) the Registrar extends the time].

Why is this significant?

  • While early dismissal proceedings are common in court litigation, SIAC is the first major commercial arbitration centre to introduce such a procedure.

D. Seat of the Arbitration delocalised (Rule 21):

  • If the parties have not / are unable to agree on the seat of the arbitration, the Tribunal shall determine the seat having regard to all the circumstances of the case.

Why is this significant?

  • Previously, if the parties have not or were unable to agree on the seat, the seat was (by default) Singapore [unless the Tribunal determined otherwise].
  • Parties who do not expressly state the seat of arbitration in their arbitration clauses should take note of this change.

[As covered in a previous post, the seat of the arbitration is important for a number of reasons, for instance the seat determines the procedural law and the courts which have supervisory jurisdiction over the arbitral proceedings.]

E. Remedy against a Non-Paying Party (Rule 27):

  • The Tribunal has the power to issue an order or award for the reimbursement of unpaid deposits towards the costs of the arbitration.

Why is this significant?

  • The previous rules (SIAC 2013 Rules) merely allowed the Tribunal to issue an award for unpaid costs of the arbitration.
  • The new rule addresses a significant practical issue for parties (usually the Claimants) who need to pay the required deposits towards the costs of the arbitration when a counterparty fails or refuses to pay its share.

F. Expedited Procedure (Rule 5):

  • The amount in dispute (i.e. the aggregate of the claim, counterclaim and any defence of set-off) for the expedited procedure to be invoked has been increased from S$5,000,000 to S$6,000,000.
  • The Tribunal now has the discretion to determine whether an Expedited Procedure case can be decided on the basis of documentary evidence only as long as this is done in consultation with the parties.

Why is this significant?

  • Previously, the parties’ agreement was required for an Expedited Procedure case to be decided based only on documentary evidence (i.e. without a hearing).
  • The increase of the monetary threshold will enable more cases to benefit from the expedited procedure.
  • The Tribunal’s expanded discretion on dispensation of a hearing may increase the efficiency and speed at which a decision is made.

G. Emergency Arbitration Proceedings (Rule 30; Schedule 1; and Schedule of Fees):

  • New timeline for appointment of Emergency Arbitrator: Within 1 day (instead of 1 business day) of receipt of application for emergency interim relief and payment of administration fee and deposits.
  • New time limit for issuance of interim award / award: Within 14 days from the date of Emergency Arbitrator’s appointment [unless, in exceptional circumstances, the Registrar extends time].
  • Fixed fees: S$ 25,000 (unless the Registrar determines otherwise).

Why is this significant?

  • Faster relief.
  • Certainty on fees.

H. Challenge of Arbitrators (Rules 14 to 16; and Schedule of Fees):

  • A fixed “challenge fee” of S$8,000 (or S$8,560 for Singapore parties) is set; and
  • A reasoned decision of the SIAC Court will be issued.

Previously, there was:

  • no fee payable for submitting a notice of challenge; and
  • no requirement for the SIAC Court to provide reasons for its decision.

Why is this significant?

  • In our view, the requirement to pay a “challenge fee” may discourage frivolous or unmeritorious applications designed to delay the proceedings.
  • Greater clarity for the parties on the reasoning behind any decision by the SIAC Court on such challenges.

Conclusion

With the launch of the 6th edition of its rules (the last version being only 3 years ago), the SIAC has once again showcased its proactive and robust approach to refreshing, reviewing and streamlining its procedures to meet the commercial demands of its users.

With thanks to Lakshanthi Fernando.

About Eric Lai

Associate, CMS Holborn Asia
This entry was posted in Arbitration, SIAC, Singapore. Bookmark the permalink.

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