On 19 December 2017, the Singapore International Arbitration Centre ('SIAC”) released a proposal on cross-institution cooperation for the consolidation of international arbitral proceedings. The innovative proposal envisages the adoption of a protocol by arbitral institutions that would permit the consolidation of arbitral proceedings subject to different institutional arbitration rules. Gary Born, Chair of the International Arbitration Practice Group and President of the SIAC Court of Arbitration, and Associate Dharshini Prasad worked closely with the SIAC Secretariat to develop the proposal.
Reflecting the increasing complexity of contemporary international business transactions, most institutional arbitration rules today contain provisions on the resolution of complex disputes, including the arbitration rules of SIAC, the International Chamber of Commerce (“ICC”), the London Court of International Arbitration (“LCIA”), the International Center for Dispute Resolution of the American Arbitration Association (“ICDR”), and the Hong Kong International Arbitration Centre (“HKIAC”). A key component of these rules are provisions on the consolidation of arbitral proceedings. By permitting related disputes to be heard together in appropriate circumstances, consolidation allows the more efficient and cost-effective resolution of disputes, while minimizing the risk of inconsistent decisions.
Currently, however, institutional arbitration rules do not permit the consolidation of arbitral proceedings subject to different institutional arbitration rules, even if those disputes otherwise meet the criteria for consolidation. Thus, while an ICC arbitration may be consolidated with another ICC arbitration, it cannot be heard together with a SIAC, HKIAC, LCIA or ICDR proceeding. The lack of a mechanism to consolidate proceedings under different institutional arbitration rules substantially limits the types of international arbitrations that can be consolidated, leading to a proliferation of parallel proceedings. As a result, arbitration does not fully realize its potential as a cost- and time-effective method of international dispute resolution for parties.
Through its proposal for a cross-institution consolidation protocol, SIAC seeks to address this shortcoming in international dispute resolution and provide arbitral institutions with a platform for cross-institution cooperation. The consolidation protocol proposes a two-fold mechanism for institutional cooperation in deciding consolidation applications and administering consolidated proceedings, which arbitral institutions can adopt and incorporate into their institutional arbitration rules. By adopting such institutional rules in their arbitration agreements, parties would in turn give the protocol the same contractual force as other provisions of the institutional rules.
A memorandum that discusses SIAC's proposal for cross-institution consolidation can be accessed here, and the SIAC press release announcing the release of the proposal can be accessed here. Speaking in his capacity as President of the SIAC Court of Arbitration, Mr. Born commented, “We welcome cooperation with other leading arbitral institutions around the world in further enhancing the efficiency and efficacy of the arbitral process. The cross-institution consolidation protocol is an important step in this direction and we look forward to working with our colleagues at other institutions in implementing the proposal.”