International Arbitration 2019 Comparisons

Last Updated August 19, 2019

Law and Practice

Authors



Rajah & Tann Singapore LLP has the only standalone arbitration practice in Singapore, with close to 30 dedicated members who are involved solely in arbitration matters. The firm has over 150 lawyers in its dispute department in Singapore who are also regularly involved in arbitration matters, comprising practice groups such as commercial litigation, IP, insolvency & restructuring, international arbitration and shipping. As part of the largest Asian-headquartered legal network, it works with arbitration specialists across the Rajah & Tann Asia network to seamlessly support multi-jurisdictional arbitration matters in the region, including China, Lao PDR, Vietnam, Thailand, Malaysia, Indonesia, Philippines, Cambodia and Myanmar. Members of the team have been retained as arbitrators, advisers and/or counsel on arbitrations conducted under the auspices of the world’s leading arbitration institutions, including the Permanent Court of Arbitration, the International Court of Arbitration of the ICC, the LCIA, the American Arbitration Association, the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre (SIAC), the China International Economic and Trade Arbitration Commission, and the Asian International Arbitration Centre (formerly known as the Kuala Lumpur Regional Centre for Arbitration).

Singapore is an established seat for international arbitrations. In particular, it has become the seat of choice for investors across Asia looking for a neutral forum and independent arbitral tribunal in light of the rapid pace at which the region has embraced international commercial arbitration. International commercial arbitration has become the preferred method of resolving disputes across a wide spectrum of industries, particularly where the transactions have a cross-border element or involve parties from more than one jurisdiction. Singapore has also increasingly become the seat of choice for investor-state disputes for investors in the region. This has been aided by the increasing number of investor-state arbitration-related decisions by the Singapore courts. The detailed and carefully reasoned decisions by the Singapore courts have lent credence to the viability of Singapore as the seat of choice for investors and states alike.

The stellar growth of international arbitration in Singapore is expected to continue apace with increasing economic activity in Asia and beyond. The introduction in 2017 of third-party funding for international arbitrations is expected to make international arbitration even more attractive as a method of dispute resolution. The establishment of the ICC's case management office in Singapore in 2018 is likely to further this trend. The Singapore International Commercial Court (SICC) has also recently released its first arbitration-related judgment, following amendments made to the Supreme Court of Judicature Act in 2018 that allow the SICC to hear applications under the International Arbitration Act (Cap 143A) that satisfy the SICC jurisdictional requirements.

The Singapore Ministry of Law has also recently launched a public consultation to seek feedback on proposed amendments to the International Arbitration Act. Possible changes include amendments to the International Arbitration Act to:

  • provide for default appointment of arbitrators in multiparty situations;
  • allow parties to, by mutual agreement, request the arbitrator(s) to decide on jurisdiction at the preliminary award stage;
  • provide an arbitral tribunal and the courts with powers to support the enforcement obligations of confidentiality in an arbitration; and
  • allow a party to arbitral proceedings to appeal to the High Court on a question of law arising out of an award made in the proceedings, provided parties have agreed to opt in to this mechanism.

International arbitration is prevalent across a wide spectrum of industries in Singapore. SIAC’s Annual Report for 2018 has identified the trade sector as having the largest proportion (27%) of the number of cases that it has handled. That said, Singapore continues to attract high-value project and infrastructure disputes in a wide range of sectors, including the energy and resources space. The growth of investor-state disputes for investors in the region has also been noted.

Singapore is home to many arbitral institutions, such as the Permanent Court of Arbitration, the ICC, the Singapore Chamber of Maritime Arbitration and the Singapore International Arbitration Centre (SIAC), which are commonly used for international arbitrations. SIAC is generally the most popular arbitral institution in Singapore. Having opened a case management office in Singapore in April 2018, the ICC has experienced an increase in registered cases in Singapore, from 23 participating parties in 2017 to 34 parties in 2018.

The International Arbitration Act (IAA) governs international arbitration in Singapore. According to Section 5(2), IAA, an arbitration is ‘international’ if:

  • at least one of the parties has its place of business outside Singapore at the time of conclusion of the arbitration agreement;
  • the agreed place of arbitration is situated outside the state in which the parties have their place of business;
  • any place where a substantial part of the obligations of the commercial relationship is to be performed or the place to which the subject matter of the dispute is most closely connected is situated outside the state in which the parties have their place of business; or
  • the parties have expressly agreed that the subject matter of the arbitration relates to more than one country.

The IAA essentially enacts (and incorporates as its First Schedule) the 1985 UNCITRAL Model Law, albeit with the exception of Chapter VIII and a number of statutory modifications. Any departures from the Model Law are listed in Part II, IAA. The primary legislative intent behind the IAA was to implement the Model Law (Singapore Parliamentary Reports 31 October 1994, vol 63, col 626).

Various elements of the 2006 UNCITRAL Model Law have also since been incorporated into the IAA. Section 3, IAA states that "the Model Law, with the exception of Chapter VIII thereof, shall have force of law in Singapore."

On 9 January 2018, the Supreme Court of Judicature (Amendment) Bill was passed in Parliament. Amongst others, an amendment was made to Section 18D of the Supreme Court of Judicature Act to allow the SICC to hear court proceedings related to international commercial arbitrations under the IAA, in so far as the Order 69A rules of the Rules of Court are satisfied. This includes applications for interim relief and the setting aside and enforcement of awards.

The SICC is a division of the Singapore High Court and part of the Supreme Court designed to deal with transnational commercial disputes. Order 69A sets out the relevant procedural rules for international arbitration-related court applications, whilst Section 18D of the Supreme Court of Judicature Act delineates the jurisdiction of the SICC.

Section 18D of the Supreme Court of Judicature Act has since been amended to include Section 18D(2), which provides that “the Singapore International Commercial Court (being a division of the High Court) has jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear and that satisfy such conditions as the Rules of Court may prescribe.”

The SICC released its first arbitration-related judgment in June 2019.

An arbitration agreement must be in writing. However, even if it is concluded orally, by conduct or any other means, it is still considered to be in writing (and, therefore, valid) if its contents are recorded in any form (Section 2A, IAA).

Apart from the requirements of Singapore law, the governing law of the agreement (if any) containing the arbitration clause may also affect this question. It is common for parties to include in their arbitration agreements their express choice of law governing the arbitration agreement. However, where parties do not do so, the Singapore High Court in BCY v BCZ [2016] SGHC 249 has held that where the arbitration agreement is a clause forming part of a main contract, it is reasonable to assume that the contracting parties intend for the same system of law to govern both the arbitration agreement and the main contract. In a recent Singapore High Court decision in BNA v BNB [2019] SGHC 142, the Court affirmed BCY and also affirmed the principle that determining the proper law of an arbitration agreement is to be approached in the same way as determining the proper law of a substantive contract between two parties, and that the three-stage inquiry should apply, namely: (i) Have the parties expressly chosen the proper law of their arbitration agreement? (ii) Have the parties impliedly chosen the proper law of their arbitration agreement? (iii) With what system of law does their arbitration agreement have its closed and most real connection? However, the Court cautioned that this three-stage inquiry operates against the context of general principles of contract law that apply when construing any contract.

Only disputes that, if resolved by arbitration, are contrary to public policy may not be referred to arbitration (Section 11, IAA and Section 48(1)(b), AA). As such, custody disputes, grant of statutory licences, validity of registration of trade marks or patents and some anti-competition matters (such as matters regulated under Singapore’s Competition Act) may not be arbitrated. Likewise, claims of unfair preference in respect of insolvent companies are not arbitrable as these claims affect the substantive rights of other creditors (Larsen Oil and Gas Limited v Petroprod Ltd [2011] 3 SLR 414).

The general approach on arbitrability in Singapore is set out by the Singapore Court of Appeal in Tomolugen Holdings v Silica Investors Ltd [2015] SGCA 57: the arbitrability of a dispute would be presumed as long as it falls within the scope of an arbitration clause, subject to that presumption being rebutted if it could be shown that Parliament intended to exclude a particular type of dispute from being arbitrated or if permitting the arbitration of a type of dispute would be contrary to public policy. Such non-arbitrable matters include claims arising upon insolvency or the liquidation of an insolvent company because they impinge on third-party rights. The Court of Appeal, however, noted that disputes involving Section 216 of the Companies Act (Chapter 50) (which relate to unfair prejudice or oppression claims of minority shareholders) do not, generally, engage public policy considerations as they are essentially contractual in nature. This approach was followed in the recent decision in L Capital Jones Ltd v Maniach Pte Ltd [2017] 1 SLR 312.

The Singapore High Court in Piallo GmbH v Yafiro International Pte Ltd [2014] 1 SLR 1028 has also held that actions on bills of exchange (eg, claims on dishonoured cheques) are arbitrable if the reason for the cheques being dishonoured arose from a dispute falling within the scope of the arbitration agreement.

The Singapore courts take a robust approach as regards the enforcement of arbitration agreements and will grant relief to parties seeking to enforce an arbitration agreement. Such reliefs include granting a stay of court proceedings, or anti-suit injunctions in support of arbitration agreements.

The Singapore High Court in Hilton International Manage (Maldives) Pvt Ltd v Sun Travel & Tours Pvt Ltd (Hilton) [2017] SGHC 56 took the view that a positive agreement to arbitrate implies at least two negative obligations: not to commence court proceedings stemming from an agreement to resolve any disputes by reference to arbitration and not to set aside or otherwise attack an arbitral award in jurisdictions other than the seat of the arbitration. While the Court of Appeal (Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019] SGCA 10) partially allowed the appeal against the High Court judgment, the Court of Appeal agreed with the High Court’s view that foreign proceedings brought in breach of arbitration agreements amounted to vexatious and oppressive conduct on the part of the defendant.

Further, it was held by the High Court in BLY v BLZ and another [2017] SGHC 59 that a ‘special circumstances’ test is preferred in determining whether discretion should be exercised to stay an arbitration pending a jurisdiction challenge. The court held that ‘special circumstances’ would not include costs incurred in potentially useless arbitration proceedings and any potential detriment stemming from an award that may be passed pending determination of a curial review. This illustrates the Singapore courts’ commitment to minimal judicial intervention and demonstrates the high threshold for staying arbitral proceedings.

In BNA v BNB [2019] SGHC 142, the Singapore High Court held that the doctrine of separability would be broad enough to uphold an arbitration agreement “even when the substantive agreement into which it is integrated is valid but an operation of the substantive agreement could operate to nullify the parties’ manifest intention to arbitrate their disputes” (at [77]). The High Court therefore appeared to take the view that the doctrine of separability could be applied to save an arbitration agreement even where the defect was the arbitration agreement itself (as opposed to the substantive contract).

Even if a contract is avoided, rescinded or terminated, an arbitration agreement contained in that contract will continue to be enforceable under the doctrine of separability (Article 16 Model Law, First Schedule, IAA and Section 21, AA).

There are no statutory restrictions on who may act as an arbitrator. The IAA and AA both provide that no person shall be precluded by reason of his or her nationality from acting as an arbitrator unless otherwise agreed by the parties (Article 11(1), Model Law, First Schedule, IAA and Section 13(1), AA). However, it is not uncommon for parties to state specific requirements, such as a certain expertise or set of qualifications, for their intended arbitrator.

However, parties to the arbitration must select an arbitrator who is independent of them. The arbitrator has the obligation to disclose any circumstance that gives rise to justifiable doubts as to his or her impartiality and independence. This obligation continues throughout the duration of the arbitration (Article 12, Model Law, First Schedule, IAA and Section 14(1), AA).

In the event that parties are unable to agree on an arbitrator, the IAA provides for the default appointment of a single arbitrator (Section 9, IAA) by the President of the Court of SIAC as appointing authority (Section 8(2), IAA read with Article 11(3) and (4), Model Law). Likewise, for a three-man tribunal, each party may appoint one arbitrator and if parties are unable to agree on the third arbitrator, the third arbitrator shall be appointed by the President of the Court of SIAC (Section 9A(2), IAA).

The court cannot intervene in the selection of arbitrators, unless there are justifiable doubts as to the arbitrator’s impartiality or independence, or the arbitrator does not possess the qualifications agreed to by the arbitrators.

Article 12, Model Law, First Schedule, IAA provides that an arbitrator can be challenged where there are justifiable doubts as to the arbitrator’s impartiality or independence, or the arbitrator does not possess the qualifications agreed to by the parties. In the absence of any challenge procedure agreed by the parties, the procedure set out in Articles 13(2) and (3), Model Law apply.

An arbitrator may also be replaced on his or her death or resignation, where the arbitrator is physically or mentally incapable of conducting the proceedings or where the arbitrator has failed to properly conduct the arbitration with reasonable despatch or in making the award, or where substantial injustice has been or will be caused to a party. Under Article 14, Model Law, First Schedule, IAA, where the arbitrator is unable to conduct proceedings or where the arbitrator has failed to act without undue delay, either party may apply to the Singapore High Court for his or her removal in the absence of voluntary resignation by the arbitrator or any agreement by the parties to terminate his or her mandate.

In international arbitrations in Singapore, frequent reference is made by counsel and arbitrators to the IBA Guidelines on Conflicts of Interest in International Arbitration even though these guidelines are not strictly binding.

The Singapore High Court in PT Central Investindo v Franciscus Wongso and others and another matter [2014] SGHC 190 held that bias can take three forms: actual bias, imputed bias or apparent bias, which would lead to disqualification of the arbitrator(s). The court held, first, that ‘actual bias’ would obviously disqualify a person from sitting in judgment. Second, that ‘imputed bias’ arises where an arbitrator may be said to be acting in his or her own cause (nemo judex in sua causa) and this may involve a situation where he or she has, for instance, a pecuniary or proprietary interest in the case. Here, disqualification is "certain without the need to investigate whether there is likelihood or even suspicion of bias". Third, that the test for ‘apparent bias’, which was what the aggrieved party in that case accused the sole arbitrator of, is whether a "reasonable and fair-minded person with knowledge of all the relevant facts would entertain a reasonable suspicion" that a fair hearing for the applicant was not possible.

See 3.2 Arbitrability.

The arbitral tribunal has the power to determine its own jurisdiction based on the Kompetenz-Kompetenz principle. This is encapsulated in Article 16, Model Law, First Schedule, IAA.

If a party is dissatisfied with the tribunal’s jurisdictional ruling (whether finding that it has jurisdiction or that it does not), it may appeal to the Singapore High Court.

See 5.4 Timing of Challenge for elaboration.

A plea that the arbitral tribunal does not have jurisdiction must be raised not later than the submission of the statement of defence. The arbitral tribunal may, however, admit a later plea if it considers the delay justified (Article 16(2), Model Law, First Schedule, IAA and Section 21(4), AA). In Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Private) Limited [2019] SGCA 33, the Singapore Court of Appeal held that it is not necessary for a party to file a formal objection or plea in the legal sense of the term to engage Article 16(3) of the Model Law as there is nothing in Article 16 that prohibits the tribunal from considering its jurisdiction on its own motion. The Court also held that Article 16(3), Model Law and Section 10, IAA do not preclude a non-participant in an arbitration who has informally objected to the tribunal’s jurisdiction from applying to set aside the award under Article 34(2)(a)(iii), Model Law on the grounds of lack of jurisdiction.

Parties may then bring a challenge on the jurisdiction of the arbitral tribunal within 30 days of receiving the tribunal’s ruling before the Singapore High Court (Section 10, IAA; Article 16(3), Model Law). Preliminary rulings on jurisdiction can only be challenged under Article 16(3), Model Law if their contents do not include the merits of the case. In AQZ v ARA [2015] 2 SLR 972, the Singapore High Court held that relief under Article 16(3), Model Law was not available if the tribunal’s ruling dealt in some way with the merits of the case, even if the ruling was predominantly on jurisdiction. Instead, the aggrieved party’s proper recourse would be to challenge the ruling under the relevant limbs of Article 34(2), Model Law. This decision was subsequently followed by the Singapore High Court in Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and others [2017] SGHC 195.

A party who is thereafter dissatisfied with the decision of the High Court on a challenge brought under Section 10, IAA and Article 16(3), Model Law may then appeal to the Court of Appeal, provided that leave to do so is obtained from the High Court (Section 10(4), IAA; Section 21A(1), AA). The appeal will not operate as a stay of the arbitral proceedings unless the High Court or the Court of Appeal orders otherwise.

If the court subsequently decides upon an appeal from the tribunal’s decision that the tribunal does have jurisdiction, the tribunal will continue the arbitral proceedings and make an award. If, however, the tribunal is unable or unwilling to do so, its mandate will be terminated and a new tribunal will be appointed (Section 10(6)(b), IAA).

The practical difference between an application made pursuant to Article 16 of the Model Law and an application made pursuant to Article 34 of the Model Law is that the former deals specifically with arbitral rulings or awards that deal solely with decisions on jurisdiction. The supervisory court can review the tribunal’s decision on a de novo basis. However, the moment an award deals with the merits of the dispute (even if it does so marginally), a party can only rely on the limited grounds within Article 34 of the Model Law to set aside the award. Where such applications are concerned, the supervisory court will not engage with the correctness of the arbitral tribunal’s decision and the challenge will only be considered strictly against the threshold set out in Article 34 of the Model Law.

The court will review an arbitral tribunal’s decision de novo. This was affirmed by the Singapore Court of Appeal in PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV [2014] 1 SLR 372 and subsequently affirmed by the same Court in Sanum Investments Ltd v Government of the Lao People’s Democratic Republic [2016] SGCA 57. In Sanum, the Court held that a de novo review entails that there is no basis for deference to be accorded to the tribunal’s findings. However, the Court endorsed the view that a de novo review does not mean that all that has transpired before the arbitrator should be disregarded, but that the court is at liberty to consider, unfettered by any principle limiting its fact-finding abilities, the material before it. This was subsequently affirmed by the Singapore Court of Appeal in AKN v ALC [2015] 3 SLR 488 at [112], and the Singapore High Court in Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and others [2017] SGHC 195.

The Singapore courts take a robust approach. A stay of judicial proceedings is mandatory in an international arbitration (Section 6, IAA and Article 8, Model Law) but discretionary in a domestic arbitration (Section 6, AA). However, even in an application for a stay under Section 6, AA, the burden is on the party who wishes to proceed in court to "show sufficient reason why the matter should not be referred to arbitration." Assuming the applicant is ready and willing to arbitrate, the court will only refuse a stay in exceptional cases because of Singapore’s strong policy in favour of arbitration (see Maybank Kim Eng Securities Pte Ltd v Lim Keng Yong and another [2016] 3 SLR 431).

However, an application to the court for pre-action disclosure will not be stayed pursuant to Section 6, IAA, because it would be premature (Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd [2010] 1 SLR 25).

An arbitral tribunal cannot assume jurisdiction over non-parties to an arbitration agreement and non-signatories to the contract containing the arbitration agreement, subject to the exceptions below:

  • Section 9, Singapore’s Contracts (Right of Third Parties) Act allows third parties to rely on an arbitration clause or agreement to enforce a term in a contract if the contract expressly provides that they may enforce that term in their own right or if that term purports to confer a benefit on them;
  • the legal assignee of a contract may also, upon giving notice of assignment to the other party, be entitled to the rights of a party under the arbitration agreement;
  • a principal, whether disclosed or undisclosed, of a party who acted as an agent in the agreement has rights as a party to the arbitration agreement; and
  • the legal representatives of the estate of a deceased, and trustees in bankruptcy, are also entitled to that party’s rights under the arbitration agreement. An insurer claiming through a subrogated action is also bound by the terms of an arbitration clause by which the insured was bound.

There does not appear to be a distinction made between foreign and domestic parties.

One such interim measure that an arbitral tribunal may order under Section 12, IAA is for a claimant to provide security for costs (Section 12(1)(a), IAA), although the power to do so may be restricted by Section 12(4), which provides that an order cannot be made only by reason of the fact that the claimant is an individual residing outside Singapore or a corporation incorporated or controlled outside Singapore. Similar provisions are found in the AA (Section 28(2), AA). Arbitral tribunals commonly grant preliminary or interim relief in the form of prohibitory injunctions and freezing injunctions to preserve assets.

The Singapore courts have the power to grant many of the types of relief available to the tribunal under the IAA and AA, whether before or after arbitration proceedings have commenced. However, the court’s power in respect of international arbitrations is curtailed to the extent that parties should apply to the court only if the arbitral tribunal has not been constituted or otherwise unable to act or grant the relief sought (Section 12A(6), IAA). It is also now clear that the court’s power to assist international arbitrations does not extend to the grant of security for costs or the discovery of documents. In this regard, the Singapore High Court has confirmed that it had no power to grant an order for the discovery of documents prior to the commencement of the arbitration (Equinox Offshore Accommodation Ltd v Richshore Marine Supplies Pte Ltd [2010] SGHC 122).

See 6.2 Role of Courts.

In the absence of parties’ prior agreement, neither the IAA nor the AA provides for a default mechanism for determining the place of arbitration or the language of the arbitral proceedings. The procedural rules agreed to by the parties, however, often provide for such matters. In the absence of any other mechanism, the arbitral tribunal ultimately has the discretion to determine such matters.

Nevertheless, the IAA, which adopts the procedure set forth in the Model Law, provides that arbitration proceedings are commenced when a request to refer a dispute to arbitration is received by the respondent (Article 21, Model Law). The AA also contains similar provisions.

Further, procedural rules usually specify what the request for arbitration (or notice of arbitration) should contain. For example, the SIAC Rules require the claimant to file a notice of arbitration with the SIAC Registrar (rule 3.1, SIAC Rules). The notice of arbitration should comprise:

  • a demand that the dispute be referred to arbitration;
  • the names, addresses, telephone numbers, facsimile numbers and email addresses, if known, of the parties to the arbitration and their representatives, if any;
  • a reference to the arbitration agreement invoked and a copy of the arbitration agreement;
  • a reference to the contract or other instrument (eg, investment treaty) out of or in relation to which the dispute arises and, where possible, a copy of the contract or other instrument;
  • a brief statement describing the nature and circumstances of the dispute, specifying the relief claimed and, where possible, an initial quantification of the claim amount;
  • a statement of any matters that the parties have previously agreed as to the conduct of the arbitration or with respect to which the claimant wishes to make a proposal;
  • a proposal for the number of arbitrators if not specified in the arbitration agreement;
  • unless otherwise agreed by the parties, the nomination of an arbitrator if the arbitration agreement provides for three arbitrators, or a proposal for a sole arbitrator if the arbitration agreement provides for a sole arbitrator;
  • any comment as to the applicable rules of law;
  • any comment as to the language of the arbitration; and
  • payment of the requisite filing fee.

The claimant must also, at the same time, send a copy of the notice of arbitration to the respondent and it must notify the SIAC Registrar that it has done so, specifying the mode of service employed and the date of service (rule 3.4, SIAC Rules).

Although Article 24(1), Model Law provides that an arbitral tribunal has the discretion to decide whether to hold oral hearings, the SIAC Rules provide that the tribunal must, unless the parties have agreed on a documents-only arbitration, hold a hearing for the presentation of evidence or the oral submissions, or both, on the merits of the dispute, including, without limitation, any issue as to jurisdiction (rule 24.1, SIAC Rules).

The AA and IAA do not set forth a specific list of mandatory procedural provisions from which parties may not contractually deviate.

Arbitrators have wide powers. For instance, they have the power to order a claimant to provide security for costs (see 6.1 Types of Relief).

There is also no prohibition on dissenting opinions in either the IAA or AA. Hence, tribunal members who do not agree with the majority view in an award may issue dissenting opinions.

On the other hand, while neither the IAA nor AA prescribes a time limit within which an award should be rendered, a tribunal should conduct the arbitration without undue delay (Article 14, Model Law). A similar provision can be found in the AA (Section 16). Notwithstanding, there does not appear to be any Singapore case law defining what would amount to ‘undue delay’. In Coal & Oil LLC v GHCL [2015] 3 SLR 154, the Singapore High Court found that a 19-month delay in the release of the award did not violate any rule of natural justice.

There are no restrictions on parties appointing foreign law firms or lawyers who are not qualified in Singapore as their legal representatives in arbitration.

The tribunal is not bound to apply the Singapore rules of civil procedure. The tribunal has the power to order the discovery (disclosure) of documents and interrogatories, and the giving of evidence by affidavit from witnesses (Section 12, IAA; Section 28(2), AA). Both the AA and IAA provide that the arbitral tribunal has wide discretion to conduct the arbitration in such manner as it considers appropriate (Article 19(2), Model Law, First Schedule, IAA and Section 23(2), AA). The IBA Rules on the Taking of Evidence in International Arbitration are frequently referred to.

In practice, evidence is frequently given in the form of witness statements (sometimes made on oath, depending on the procedure agreed by the parties) that are subsequently orally verified at the evidentiary hearing, followed by cross-examination and re-examination. Cross-examination is usually not limited to the scope of the witness statements, although the tribunal may exercise some control in preventing cross-examination from straying beyond the issues identified by the parties. Re-examination is permitted, but it is usually limited to matters raised in cross-examination. Re-cross-examination is uncommon and does not usually occur. The tribunal may also adopt an inquisitorial process (Section 12(3), IAA). Where expert witnesses are concerned, witness conferencing (concurrent evidence or hot-tubbing) is becoming increasingly popular as an alternative to the traditional examination, cross-examination and re-examination approach stated above.

In a Singapore-seated arbitration, the tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence (Article 19, Model Law, First Schedule, IAA, Section 23(3), AA). The SIAC Rules further provide that the tribunal is "not required to apply the rules of evidence of any applicable law" (rule 19.2, SIAC).

The court has the power to issue subpoenas to witnesses within the jurisdiction to testify or produce documents at arbitral proceedings (Section 30, AA and Section 13, IAA).

There is a difference between parties and non-parties: curial assistance is required for the latter because arbitrators derive their jurisdiction only from the agreement of parties.

Neither the AA nor the IAA imposes a statutory duty of confidentiality on the parties or the arbitral tribunal. Singapore courts have, however, ruled that there is an implied duty on the parties and the arbitrator not to disclose confidential information obtained in arbitration proceedings or use them for any purpose other than the dispute in which they are obtained (Myanmar Yaung Chi Oo Co Limited v Win Nu [2013] 2 SLR 547 at [15] and International Coal Pte Ltd v Kristle Trading Ltd & Anor [2009] 1 SLR (R) 945 at [82]). In that regard, a party may apply to the Singapore High Court to seal court documents in court proceedings in order to preserve the confidentiality of a related arbitration (Section 22, IAA).

However, the implied duty of confidentiality is not absolute. The extent to which confidentiality applies depends on the specific facts of the case. For instance, confidentiality may be lifted by the express or implied consent of the parties, where leave of court is obtained, where disclosure is reasonably necessary for the protection of a party’s legitimate interests, where disclosure is in the interest of justice or where the public interest so requires (AAY v AAZ [2011] 1 SLR 1093 at [64]).

The AA and IAA prescribe that the award must fulfil the following requirements (Article 31, Model Law, First Schedule, IAA and Section 38, AA):

  • it must be made in writing and signed by the arbitrators (in the case of two or more arbitrators, by all the arbitrators or the majority of the arbitrators provided that the reason for any omitted signature of any arbitrator is stated);
  • it must state the reasons for the award, unless the parties have agreed that no reasons are to be given or the award is one on agreed terms;
  • it must state the date of the award and the place of arbitration; and
  • a copy of the award shall be delivered to each party to the proceeding.

Section 12(5), IAA provides that an arbitral tribunal may award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings in that court. Further, the tribunal has the power to award interest. Similar provisions are found in Sections 34 and 35, AA.

Furthermore, a domestic arbitral tribunal may not make orders for securing the amount in dispute, for the preservation, for interim custody or sale of the subject matter, or to prevent the dissipation of assets.

Unless the parties have agreed otherwise, a Singapore-seated arbitral tribunal has a wide and general discretion to allocate and apportion costs in its award. The general rule is that ‘costs follow the event’. This rule means that the losing party will be ordered to bear the legal costs and arbitration costs incurred by the successful party, in full or in part. Notwithstanding, a tribunal need not take Singapore civil procedure principles on the allocation of costs into account (see VV v VW [2008] 2 SLR 929). The SIAC Rules provide that most forms of costs are recoverable, including fees and expenses of the tribunal and the SIAC’s administration, as well as legal and expert fees and expenses (rules 35-37, SIAC Rules).

A Singapore-seated tribunal may also award simple or compound interest on the whole or any part of sums awarded or costs awarded under an award for any period ending not later than the date of payment (Sections 12(5), 20, IAA). A sum directed to be paid under an award shall, unless the award otherwise directs, carry interest from the date of the award until date of payment and at the same rate as a judgment debt (Section 20(3), IAA). The default rate for judgment debts in Singapore is at present 5.33% per annum (Supreme Court Practice Directions, Part IX, para 77).

An award may be appealed or challenged through making an application to the Singapore High Court to set aside the award. The grounds for setting aside are found in Article 34, Model Law, supplemented by two additional grounds set out in Section 24, IAA and Section 48, AA.

Article 34, Model Law provides that the award may be set aside on the following grounds:

  • a party to the arbitration agreement was under some incapacity;
  • the arbitration agreement was not valid;
  • the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present his case;
  • the award dealt with a dispute not falling within the terms of the arbitration agreement;
  • the tribunal was improperly constituted or the arbitral procedure was not in accordance with the parties’ agreement;
  • the subject matter of the arbitration was not capable of settlement by arbitration; or
  • the award was contrary to public policy.

Under Section 24, IAA and Section 48, AA there are two further grounds for setting aside an award: (i) the making of the award was induced or affected by fraud or corruption, or (ii) a breach of natural justice occurred in connection with the making of the award by which the rights of a party were prejudiced.

Under the AA, as distinct from the IAA, unless parties have agreed otherwise, a party may appeal against an award on a question of law arising out of an award (Section 49, AA). It should be noted that if the parties agree for any reason to dispense with the tribunal giving reasons for the award, that agreement would include a waiver of the right to appeal against the award on a question of law (Section 49(2), AA).

An award will not be set aside for breach of an agreed procedure if the non-observance is derived from the applicant’s own doing, or if the challenge to the award is against the arbitral tribunal’s procedural orders or directions that fall within the exclusive domain of the arbitral tribunal (see Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2014] SGHC 220).

In Coal & Oil LLC v GHCL [2015] 3 SLR 154, the Singapore High Court held that in order for an award to be set aside under Article 34(2)(a)(iv), Model Law – ie, that the procedure was not in accordance with the agreement of the parties – the procedural breach cannot be of an arid, technical or trifling nature; rather, it had to be a material breach of procedure serious enough that it justified the exercise of the court’s discretion to set aside the award. This would often, although not invariably, require proof of actual prejudice.

Even an award that has been remitted back to the tribunal by the Court is not immune. In JVL Agro Industries Ltd v Agritrade International Pte Ltd [2016] 4 SLR 769, the High Court set aside an award after remitting the matter to the arbitral tribunal. While the award had initially been remitted to the arbitral tribunal to allow the tribunal an opportunity to cure the breach of natural justice, the arbitral tribunal sought to justify its original position instead. The breach was not remedied. As such, the High Court proceeded to set aside the award.

The challenge/appeal is made in the first instance to the Singapore High Court as a setting aside application. This must be made within three months of the date of receipt of the award and the SICC has recently held that the Court has no power to extend the strict three-month time limit (BXS v BXT [2019] SGHC (I) 10). If the application fails, a party may pursue an appeal to the Singapore Court of Appeal.

Article 34, Model Law, First Schedule, IAA sets out limited grounds for challenging an arbitral decision (see 11.1 Grounds for Appeal). Further, Article 5, Model Law, First Schedule, IAA provides that where these grounds are not satisfied, no court may intervene in arbitral proceedings under the IAA. In other words, Article 5, Model Law provides that the only grounds on which an award may be set aside are those set out in Article 34, Model Law. This was applied in PT Central Investindo v Franciscus Wongso and others and another matter [2014] SGHC 190, where the Singapore High Court had to consider the issue of whether a successful application to remove an arbitrator that was filed prior to the issuance of the final award would result in the final award, which was subsequently issued, being set aside. There, the Court (with reference to Article 5, Model Law) held that a successful application to remove an arbitrator in itself does not automatically render an award a nullity, although a challenge to an arbitrator’s impartiality or independence is a ground for setting aside under Article 34(2)(a)(iv) and Article 34(2)(b)(ii), Model Law.

Judicial review of the merits of a case is not permitted under the IAA (see 11.1 Grounds for Appeal). In TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] SGHC 186, the Singapore High Court held that parties “must not be encouraged to dress up and massage their unhappiness with the substantive outcome into an established ground for challenging an award.”

Singapore is a signatory to the New York Convention, which is enacted in full in Schedule 2, IAA. The Convention has been in force since 19 November 1986, with the reservation that the Convention will only be applied to the recognition and enforcement of awards made in the territory of another contracting state.

Singapore is also a party to the International Convention for the Settlement of Investment Disputes between States and Nationals of other States (the ICSID Convention). The Arbitration (International Investment Disputes) Act was enacted to provide for the recognition and enforcement of arbitral awards under the ICSID Convention.

Enforcement is made by application to the Singapore High Court (Section 19, IAA).

The Singapore courts have developed a pro-arbitration reputation and generally favour the enforcement of awards, unless there are solid grounds upon which enforcement should be refused. In that regard, the Singapore Court of Appeal has, in at least two cases, allowed a party’s challenge to a tribunal’s finding that it had jurisdiction and also allowed a party’s application to resist enforcement of multiple awards (see International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another [2014] 1 SLR 130 and PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal [2014] 1 SLR 372).

The Singapore High Court in Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd [2014] 4 SLR 832 held that it would not grant enforcement of arbitral awards against a non-party to the arbitration agreement.

The Singapore Court of Appeal has upheld the enforceability of an interim award in PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation [2015] 4 SLR 364.

The Singapore courts, however, are unlikely to recognise the enforcement of foreign awards that have been set aside at the place of arbitration. The Singapore Court of Appeal in PT First Media TBK held in obiter that “the contemplated erga omnes effect of a successful application to set aside an award would generally lead to the conclusion that there is simply no award to enforce”, otherwise such an application would have little discernible purpose. Further, the Court of Appeal emphasised that it is open to a party to challenge an award (on the basis of a jurisdictional challenge) within the prescribed period after issuance of the award, or at the time of the enforcement of the award. As such, a party who elects not to challenge the tribunal’s preliminary ruling on its jurisdiction would not be precluded from relying on its right to resist recognition and enforcement of the award on the grounds set out in Article 36 of the Model Law (see [132] of PT First Media TBK).

The courts intervene with arbitral awards in a very limited way, with their grounds for intervention narrowly circumscribed (see 11.1 Grounds for Appeal). Hence, in relation to the IAA, the Court of Appeal in AKN v ALC [2015] SGCA 18 stated that courts must resist the temptation to engage with the legal merits of an award. This is based on the foundational principle in arbitration that parties choose their adjudicators: just as the parties enjoy many of the benefits of their autonomy, they must also accept the consequences of the choices they have made.

The approach the courts takes as to enforcement is mechanistic, consisting of two stages. The first stage requires the production of a valid arbitral award made by reference to an arbitration agreement and the second stage entails a consideration of the validity of the agreement (Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd and another [2006] SGHC 78 at [41]-[45]).

Singapore does not have a regime for class-action proceedings in general.

There are no applicable ethical codes or professional standards set in stone in Singapore arbitral legislation, although institutions such as the SIAC have a Code of Ethics for Arbitrators. However, there have been discussions about Singapore taking the lead to forge an ethical code for arbitration practice.

Third-party funding in international arbitration is regulated by Section 5B of the Civil Law Act (Cap 43).

Read together with the subsidiary legislation, Civil Law (Third-Party Funding) Regulations 2017, Singapore only allows third-party funding in international arbitration proceedings, as well as court and mediation proceedings that arise from or out of or are in any way connected with international arbitration proceedings. This extends to application for stays as well as proceedings related to enforcement of an award under the IAA.

Regulation 4 of the Civil Law (Third-Party Funding) Regulations 2017 also provides that in order to be a qualifying “Third-Party Funder” under Section 5B of the Civil Law Act, the funder must carry on the principal business of funding of costs of dispute resolution proceedings in Singapore and have a paid-up share capital of not less than SGD5 million or equivalent amount in foreign currency, or the equivalent amount in foreign currency in managed assets.

Amendments were also made to the Legal Profession Act and Professional Conduct Rules to impose a requirement on Singapore legal practitioners to disclose existence of third-party funding (although Singapore legal practitioners are not prohibited from referring third-party funders to their clients).

Singapore arbitral legislation does not provide for consolidation procedures. This is subject to the applicable institutional rules. For example, Rule 8 of the SIAC Rules 2016 provides for a detailed consolidation application procedure, whether before the arbitral tribunal has been constituted or after. The general requirements are: (i) all parties have agreed to consolidation; (ii) all claims in the arbitration have been made under the same arbitration agreement; or (iii) the arbitration agreements are compatible and the disputes arise out of the same legal relationships, the disputes arise out of contracts consisting of a principal contract and ancillary contracts or the disputes arise out of the same transaction or series of transactions. In December 2017, the SIAC had also issued a proposal on cross-institution consolidation protocol to consider the possibility of consolidating arbitrations subject to different arbitration rules. 

See 5.7 Third Parties.

Rajah & Tann Singapore LLP

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andre.yeap@rajahtann.com www.rajahtannasia.com
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Law and Practice in Singapore

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Rajah & Tann Singapore LLP has the only standalone arbitration practice in Singapore, with close to 30 dedicated members who are involved solely in arbitration matters. The firm has over 150 lawyers in its dispute department in Singapore who are also regularly involved in arbitration matters, comprising practice groups such as commercial litigation, IP, insolvency & restructuring, international arbitration and shipping. As part of the largest Asian-headquartered legal network, it works with arbitration specialists across the Rajah & Tann Asia network to seamlessly support multi-jurisdictional arbitration matters in the region, including China, Lao PDR, Vietnam, Thailand, Malaysia, Indonesia, Philippines, Cambodia and Myanmar. Members of the team have been retained as arbitrators, advisers and/or counsel on arbitrations conducted under the auspices of the world’s leading arbitration institutions, including the Permanent Court of Arbitration, the International Court of Arbitration of the ICC, the LCIA, the American Arbitration Association, the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre (SIAC), the China International Economic and Trade Arbitration Commission, and the Asian International Arbitration Centre (formerly known as the Kuala Lumpur Regional Centre for Arbitration).