Flexibility, efficiency, and cost-effectiveness … The advantages of international arbitration over traditional litigation have been well espoused and are well known to most, if the increasing growth of international arbitration is anything to go by. However, the extent to which these advantages can survive the tactics of disputing parties and be realised in practice has increasingly been called into question. For proponents of international arbitration, this is concerning. The perception that arbitration is less timely, no cheaper and indeed potentially more expensive than commercial litigation is sufficient to render parties reluctant to undertake arbitration.
The Singapore International Arbitration centre (SIAC) has sought to alleviate this concern by introducing progressive new provisions in the sixth edition of the Arbitration Rules of the Singapore Arbitration Centre (SIAC Rules 2016), which came into effect on 1 August 2016.2 The changes introduced under these new provisions will significantly re-inforce the traditional advantages associated with international arbitration, including efficiency and cost effectiveness, particularly in respect of complex disputes involving multiple parties or contracts.
Multiple Contracts and Consolidation (Rule 6 & 8)
In recognition of the increasingly complex nature of international commercial disputes, the SIAC Rules 2016 incorporate a new procedure that provides two routes by which a claimant in a multicontract dispute can commence proceedings:
- Filing a Notice of Arbitration in respect of each contract, whilst concurrently submitting an application for consolidation.
- Filing a single Notice of Arbitration for all the contracts, with the Notice of Arbitration servingas the application for consolidation.
The SIAC Rules 2016 also allow for a party to make an application for consolidation after proceedings have been commenced to either SIAC or the Tribunal.
This rule change will significantly improve the efficiency and cost-effectiveness of arbitrating multi-contract disputes, particularly when compared to the previous position where arbitrations could only be consolidated by consent, creating the risk of additional costs and time, should either party elect to adopt an obstructionist approach.
Early Dismissal of Claims and Defences (Rule 29)
SIAC is the first major commercial arbitration centre to introduce a procedure for the early dismissal of a claim or a defence. The procedure allows parties to apply for the dismissal of a claim or defence where the relevant claim or defence is either:
- Manifestly without legal merit
- Manifestly outside the jurisdiction of the tribunal
This new provision is analogous to seeking summary judgment, and has the potential to provide parties with significant savings of time and costs.
Delocalising the Seat of the Arbitration (Rule 21)
Another significant change introduced under the SIAC Rules 2016 is the removal of the notion of a default seat of arbitration. This change acknowledges the fact that most disputes are of an international character. Instead of Singapore being the default seat under the SIAC Rules 2016, the tribunal will determine the seat once constituted unless the parties have agreed otherwise.
Parties should carefully consider where they elect the seat of arbitration, as it will dictate the procedural laws by which the proceedings are conducted, including the availability of any appeal or review process.
More on Singapore
The SIAC Rules 2016 should be of particular interest to the infrastructure and projects industry in Australia. Singapore is renowned for its strong and sophisticated economy, and has been consistently ranked as one of the best locations globally for Ease of Doing Business.3 Singapore also represents the middle ground between Australia and its key Asian trading partners in Japan, China, and South Korea.
These reasons, combined with the efficiency and cost-effectiveness that the latest SIAC Rules 2016 introduced, makes Singapore a seriously attractive place for the Australian infrastructure and projects industry to refer its disputes to.