RECENT DEVELOPMENTS IN ARBITRATION & DISPUTE RESOLUTION IN SINGAPORE

(adapted from a paper presented by Mr George Tan in Tokyo, in October 1995 at the 2nd Plenary Meeting of TG15 of the C.I.B.)

GENERAL BACKGROUND
The methods of dispute resolution in the construction industry in Singapore have gone through a number of stages over the years. Around 10 to 15 years ago, traditional mediation through the assistance of various Chinese clan and trade associations was the norm. However, along with advanced methods and technology, participants in construction activities have gradually adopted more adversarial methods of dispute resolution. Currently in Singapore, the preferred or, perhaps, the mode of construction dispute resolution adopted by default, is arbitration. In the absence of an appropriate arbitration clause, it is likely that parties will gravitate to litigation. The position, however, is not completely bleak. Parties involved in arbitration or litigation are beginning to balk at the escalating costs. There have been a lot of grievances aired in the local press about legal costs and recommendations have been made to the public to consider alternative forms of dispute resolution.

Recent developments in dispute resolution in Singapore of significance are as follows:

  Court-assisted mediation
  The passing of the International Arbitration Act
  The establishment of the Singapore International Arbitration Centre

COURT ASSISTED MEDIATION
The Singapore courts have initiated a mediation scheme by encouraging parties to settle their dispute amicably before trial. This was first introduced in the Subordinate Courts by Practice Directions No. 2 of 1994. The mediation process starts by the calling of a settlement conference by the notification by the registrar. This will take place within 7 days after the conclusion of the hearing of the summons for directions. The solicitors for the parties are expected to submit their Opening Statement not later than 2 clear days before the Settlement Conference. The parties and their solicitors must personally attend the Conference. They are expected to be thoroughly prepared to discuss their respective cases. Where there are expert witnesses, they are also expected to personally attend such conferences.

All settlement conferences are conducted on a without prejudice basis and communication arising out of the conferences will be treated in strict confidence. If an amicable resolution is not possible, the district judge or magistrate will arrange for the action to proceed to trial before another judge or magistrate.

INTERNATIONAL ARBITRATION ACT
This Act was passed by Parliament on 31 Oct 1994. It provides for the adoption of UNCITRAL Model Law on International Commercial Arbitration for Singapore and the repeal of the Arbitration (Foreign Awards) Act. It is meant to provide Singapore with an up-to-date legal infrastructure for the conduct of international arbitration. The Act was designed to be acceptable to lawyers from both the common law and civil law systems.

The adoption of the Model Law is meant to facilitate the resolution of disputes with parties unfamiliar with English law. eg.China, Indonesia, Vietnam. The Model Law should be more accessible to non-English speaking parties as it is available in six official languages of the UN including Arabic, Chinese, French, Russian and Spanish. The Model Law has also gained widespread international acceptance. Eg. Australia, Bermuda, Bulgaria, Canada, Cyprus, Egypt, Finland, Hong Kong, Mexico, Nigeria, and certain states of the US among others.

By the adoption of the Model Law, the procedural framework for the conduct of international commercial arbitration is established. The Act provides the framework for the regulation of the composition and jurisdiction of the arbitral tribunal. International parties get full liberty to choose laws and arbitrators to resolve their disputes with minimal judicial intervention from domestic courts.

The UNCITRAL Model Law will be applicable on an "opt-out" basis, i.e. will unless parties expressly exclude it. The principal purpose is to give the Model Law the force of law in Singapore. This is embodied in Part II of the Act. The Model Law adopted by the Act is however modified to a certain extent. Changes are made to improve and clarify the law by ensuring minimal court intervention while at the same time providing for court support during arbitral proceedings. Reference may be made to the travaux preparatoires leading to the preparation of the Model Law.

The parties are governed by Part II of the Act only if:

(a) there is an express agreement that Part II of the Act or the Model Law shall apply to their arbitration, or

(b) the arbitration between the parties is international as defined in the Act; eg. where at least one of the parties to the arbitration agreement has its place of business in any state other than Singapore, or where the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

Any arbitration that does not fall within any of the categories will continue to be governed by the Arbitration Act. If there exists between the parties an international arbitration agreement and legal proceedings are commenced in any Singapore court, the court is obliged to stay the proceedings as they have no discretion in the matter. The exception is where the court is satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed.

The Act tries to ensure that the arbitral tribunal constituted under the Act has all the powers necessary to carry out its functions, with the court only playing a supervisory role. The provisions are designed to minimise resort to the court during the interlocutory stages of an arbitration. The arbitral tribunal therefore has power to make orders for security for costs, discovery and interrogatories, the giving of evidence by affidavit etc.

The Act tries to ensure the finality of the arbitral awards. Therefore, there is no right of appeal against an award made in an international arbitration. An arbitral award can, however, be set aside by the High Court, but only if certain grounds are established, like fraud or corruption, invalidity of the arbitration agreement, breach of rules of natural justice, etc.The arbitral tribunal has power to adopt if it thinks fit inquisitorial processes unless the parties have agreed otherwise. Under Chapter IV of the Model Law, the arbitral tribunal empowered to rule over its own jurisdiction including any objections to the existence or validity of the arbitration agreement.

To facilitate arbitration, the Act also provides for:

  conciliation proceedings prior to actual arbitration
  immunity of arbitrators from negligence and mistakes
  invoking the assistance of courts in enforcing interim orders and directions
  taxation of arbitration costs by Registrar of SIAC
  allowing arbitrator to adopt "inquisitorial processes" in the civil law tradition

Part III has re-enacted substantially unchanged the Arbitration (Foreign Awards) Act. This is in line with the Act’s aim to consolidate and centralise all the provisions on international arbitrations in a single Act for easy retrieval. It allows arbitral awards to be enforced internationally i.e in any country who is part of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.

In April 1994, the Singapore High Court enforced an arbitral award made by CIETAC (China International Economic Trade Arbitration Commission) against Kin Yuen Trading Pte Ltd, a Singapore company. Since 1986, Singapore courts have enforced foreign arbitral awards under the UN Convention for the Recognition and Enforcement of Foreign Arbitral Awards 1958. To date no foreign award has been refused enforcement in Singapore.

THE SINGAPORE INTERNATIONAL ARBITRATION CENTRE
URL:http://www.sg/infomap/busns/siac/siac.html

The Singapore International Arbitration Centre is a non-profit organisation that was incorporated as a public company in March 1990. It actually commenced operations on 1st July 1991. Its stated aims are:

  provide facilities for international and domestic commercial arbitration and conciliation.
  promote arbitration and conciliation as alternatives to litigation for the settlement of disputes.
  develop a pool of arbitrators and experts in the law and practice of international arbitration and conciliation.

The Centre issued a set of rules known as the SIAC Rules which are based on the UNCITRAL and the Rules of the London Court of International Arbitration with some modifications.