With the release on April 1st of a new and improved governance structure along with a revised edition of its rules, the Singapore International Arbitration Centre (SIAC) further flexed its muscles on the Asian arbitration stage.
Having enjoyed a peak in its economic growth of nearly 15% in 2010 and averaging nearly 5% since 2008, Singapore has become an attractive destination for foreign investment, finance and trade. During this period its arbitration seat has also taken full advantage of the boisterous economic conditions.
Singapore’s growth has been built on a legal and political system currently ranked 5th in the World for neutrality by the international Corruption Perception Index. To put that rank into perspective, Australia is ranked 8th and Hong Kong 12th. China does not even make the top 50, sitting in 75th place.
January 2013 saw SIAC celebrate its 21st anniversary having handled a record 235 arbitration cases in during 2012. The opening of the Maxwell Chambers in early 2010, the world's first integrated dispute resolution complex housing state of the art arbitration hearing facilities, has further enhanced SIAC’s reputation as an attractive arbitration venue. Indeed other international business centres are looking to follow suit - this year will likely see the launch of an international arbitration centre in New York following pressure from its legal industry to keep pace with the rest of the World.
The decision of the High Court of Australia this year in the TCL Air Conditioner case saw the Australian Courts officially acknowledge the enforceability of a SIAC arbitration clause.
TCL argued that the International Arbitration Act 1974 (Cth), which gives ‘the force of law in Australia’ to the UNICITRAL Model Law on International Commercial Arbitration, was unconstitutional as it undermined the institutional integrity of the Federal Court by preventing it from refusing to enforce an arbitral award on the ground of error of law. The High Court rejected TCL’s arguments and re-enforced its commitment to respecting the decision of contracting parties to determine that disputes arising from an agreement would be resolved through arbitration.
Whilst the outcome is perhaps unsurprising - both Australia and Singapore are signatories to the New York Convention - the decision has been heralded as an important vote of confidence in SIAC from the Australian legal system and will no doubt further improve SIAC's standing as a dispute resolution venue in the eyes of Australian corporations trading within Asia.
At the start of April 2013 SIAC adopted a new governance structure in which it introduced a Court of Arbitration to administer cases and oversee arbitral appointments, a function previously performed by the SIAC Board. SIAC also published new rules which promoted enhanced flexibility and enforceability. SIAC’s newly formed Court of Arbitration now has powers that its predecessor did not: Registrars of the Court may now extend or shorten time limits and also determine that there has been ‘substantial compliance’ with respect to the requirements of a valid Notice of Arbitration. The Tribunal now has increased powers to order that property or items are to be made available by the parties for inspection and may now include the costs of the arbitration within its awards. Many of these mirror similar powers enjoyed by the Australian Courts to prevent technicalities (or diffcult parties) from derailing the progress of a dispute.
Parties to a SIAC arbitration have also been given more freedom in their choice of legal representation within the arbitral process and the Court now has the authority to publish its decisions, so long as the names of the parties and any identifying information has been removed.
The rules relating to the integrity and enforcement of the Court‘s decisions have also been enhanced. A Registrar can now determine whether an initial challenge to the jurisdiction of SIAC should be referred to the Court for a determination as to whether it is ‘prima facie’ satisfied that a valid arbitration agreement under the Rules has been agreed between the parties. A new rule also establishes that the decisions of the President, Court and Registrars are conclusive and binding upon the parties (without the need for reasons to be provided) with the parties having waived any right of appeal or review of those decisions to any State court or other judicial authority.
The new rules provide both greater flexibility for the Court as well as increased certainty for parties seeking to obtain and enforce SIAC arbitral awards. These changes can only improve SIAC’s standing in the international arbitration market and bring increased numbers of international disputes to its shores.
The international legal community will no doubt continue to keep a close eye on this particular Asian Tiger’s dispute resolution ambitions.
This article was first published in the Business Times (Singapore) on 8 May 2013.