Singapore – International Arbitration (Amendment) Bill Introduced in Parliament
An International Arbitration (Amendment) Bill (the “Arbitration Bill”), as well as a Foreign Limitation Periods Bill (the “Limitation Bill”), were passed by the Singapore Parliament on 10 April 2012. This followed a round of public consultation on the Arbitration Bill by the Ministry of Law from 21 October 2011. The recent amendments ensure that Singapore remains an attractive place for arbitrating international disputes.
International Arbitration Act
Key amendments are:
- Widening of definition of arbitration agreement in writing – currently, arbitration agreements must be in writing. The Arbitration Bill widens the definition of writing to cover arbitration agreements recorded in any form (this would cover audio recordings according to the Ministry of Law), whether or not the arbitration agreement was concluded beforehand orally, by conduct or by other means. This is based on the 2006 amendments to the UNCITRAL Model Law. Hong Kong’s section 19 of its Arbitration Ordinance (Cap. 609) is similar.
- Providing for courts’ power to review tribunals’ decisions refusing jurisdiction – currently, the Singapore courts may only review an arbitral tribunal’s ruling on jurisdiction if such ruling is positive, namely, if the tribunal finds that it does have jurisdiction. The Arbitration Bill also gives the courts the power to review negative rulings on jurisdiction. This is a rare departure from the UNCITRAL Model Law. Hong Kong, on the other hand, follows the Model Law and its Arbitration Ordinance expressly provides that negative jurisdictional rulings are not subject to appeal. Nevertheless the following countries allow review of negative jurisdictional rulings: Belgium, England, France, India, Italy, New Zealand, Sweden and Switzerland.1
- Clarifying power to award interest – arbitral tribunals’ powers to award interest are clarified by the Arbitration Bill, which provides for express powers to award simple or compound interest at appropriate rates and with appropriate rests on sums and costs awarded. This is based on section 79 of the Hong Kong Arbitration Ordinance.
- Facilitating emergency arbitrator procedure – the Arbitration Bill facilitates arbitration rules providing for the appointment of an emergency arbitrator pending formal constitution of the arbitral tribunal where parties require urgent relief such as an interim injunction. An example of such rules is found in the 4th edition of the Rules of the Singapore International Arbitration Centre effective 1 July 2010. The Arbitration Bill amends the definitions of “arbitral tribunal” and “arbitral award” to ensure that emergency arbitrators appointed pursuant to arbitration rules agreed or adopted by the parties have the same status and powers as formally constituted tribunals and their orders are equally enforceable. There are no equivalent provisions in the Hong Kong Arbitration Ordinance.
The Limitation Bill clarifies that in actions or proceedings in Singapore, where the substantive law governing the dispute is a foreign law, this would also govern the limitation period applicable, not Singapore law. Currently, at common law, there is uncertainty as to whether the limitation period is to be determined by the governing or substantive law of the dispute or the law of the forum if the issue is to be characterised as a procedural issue.
The Limitation Bill provides for exceptions including where the application of the relevant foreign law would conflict with public policy including causing undue hardship to a party or potential party to the relevant proceedings.
People’s Republic of China – New CIETAC Arbitration Rules
The China International Economic and Trade Arbitration Commission (CIETAC) has amended and refined its Arbitration Rules and the new arbitration rules will come into effect on 1 May 2012. Please see article above for a discussion on the amendments.
Hong Kong – Consultation on Amending HKIAC Administered Arbitration Rules
The Hong Kong International Arbitration Centre (HKIAC) recently issued a Consultation Paper setting out areas in which it was considering making revisions to its Administered Arbitration Rules (the “HKIAC Rules”), which first came into force on 1 September 2008. Views from users were invited to be provided by 28 February 2012, after which the HKIAC will hold a series of further consultations before making a final decision on the form and timing of any amendment to the HKIAC Rules.
The HKIAC is not contemplating a wholesale revision of the HKIAC Rules. However, certain modifications are considered to be useful, in particular, in light of 3 years’ experience in usage of the HKIAC Rules.
Some of the areas in which revisions are being considered include:
- Application of the HKIAC Rules – the current Article 1.1(b) of the HKIAC Rules provides that the same shall govern arbitrations where an agreement to arbitrate provides for arbitration "administered by the HKIAC" or words to the same effect. The HKIAC is seeking views as to whether this is sufficiently clear.
- Representation of parties – the current Article 5.8 of the HKIAC Rules provides that parties may be represented or assisted by persons of their choice. The HKIAC is seeking views as to whether the distinction between representation and assistance is helpful and whether provisions should be added requiring parties to produce proof of their designated representatives and allowing arbitral tribunals to exclude representatives whose conduct threatens to disrupt the fair and expeditious conduct of arbitration.
- Independence of arbitrators – the current Article 11.3 of the HKIAC Rules simply provides that arbitrators must disclose without delay any circumstance likely to give rise to justifiable doubts as to their impartiality or independence. The HKIAC is seeking views as to whether arbitrators should be required to sign a document to this effect.
- Arbitral procedure – the current Article 14 of the HKIAC Rules contains provisions regarding procedures for the conduct of an arbitration and specifically, Article 14.1 provides that an arbitral tribunal must adopt suitable procedures in order to avoid unnecessary delay or expense provided such procedures ensure equal treatment of the parties and affords each party a reasonable opportunity to be heard and to present its case. The HKIAC is seeking views as to whether they should add further provisions with more emphasis on time and cost effectiveness and efficiency.
- Joinder – the current Article 14.6 of the HKIAC Rules provides that an arbitral tribunal may join a third party to the proceedings upon the application of a party and provided that such third party has consented to the joinder in writing. The HKIAC is seeking views as to whether wider powers to join parties and also to consolidate proceedings should be provided for.
- Plea that arbitral tribunal does not have jurisdiction – the current Article 20.3 of the HKIAC Rules provides that a plea of no jurisdiction must be raised in the Answer to the Notice of Arbitration if possible but in any event no later than in the Statement of Defence. The HKIAC is seeking views as to whether it should be clarified and thus expressly provided that if a plea of no jurisdiction is not made by the Statement of Defence, such a plea is treated as irrevocably waived.
- Discovery – the current Article 23.3 of the HKIAC Rules provides that at any time during the arbitral proceedings, the tribunal may require a party to produce documents or other evidence. The HKIAC is seeking views as to whether this is sufficient and whether more detailed provisions should be laid out.
- Interim measures – the current Article 24 of the HKIAC Rules provides simply that an arbitral tribunal may order any interim measure it deems necessary or appropriate. The HKIAC is seeking views as to whether this should be brought in line with sections 36 and 37 of the Arbitration Ordinance (Cap. 609), which provides for more detailed guidance on the ordering of interim measures. The HKIAC is also seeking views as to whether express provision should be made in the HKIAC Rules for the ordering of security for costs, which is contained in any event in section 56(1)(a) of the Arbitration Ordinance. In addition, the HKIAC is seeking views as to whether an emergency arbitrator procedure (available under the 2012 ICC Arbitration Rules and given legislative effect in Singapore) should be introduced to allow a party to apply to the HKIAC for appointment of an emergency arbitrator to consider applications for interim relief.
- Expedited procedure – the current Article 38 of the HKIAC Rules provides for an expedited procedure (essentially documentary evidence only unless otherwise decided by arbitral tribunal) where the amount in dispute does not exceed US$250,000. The HKIAC is seeking views as to whether this threshold amount should be increased.
India – People’s Republic of China (PRC), Hong Kong and Macau Awards Now Enforceable in India
On 19 March 2012, the Government of India declared the PRC, including Hong Kong and Macau, to be a territory to which the New York Convention applies and to be notified in the official Gazette of India.
What this means is that the Indian courts will now recognise and enforce arbitral awards made in the PRC, Hong Kong and Macau.
The PRC and India have long been signatories to the New York Convention. However, the Indian Arbitration and Conciliation Act requires a country to be notified in the official Gazette of India before the Indian courts can recognise and enforce awards made in such a country. In fact, of the 146 New York Convention countries, only about 46 have been notified in the official Gazette of India. Singapore has, until the recent notification, been enjoying an advantage over Hong Kong in that arbitral awards in Singapore has long been enforceable in India.
This is a step welcomed by the arbitral community in the PRC, Hong Kong and Macau.