Introduction to the Singapore International Commercial Court
It is evident that the SIAC is acutely conscious of the challenges that parties face in submitting their disputes to arbitration, and it will constantly examine how it might address those challenges in order that Singapore might continue to be an arbitral seat of choice in the region and the world. The SIAC has already ensured that cost-competitive administrative and technological support, translation services, and state-of-the-art conference facilities are readily and easily available. The statistics suggest that these measures have met with some success: in the space of 10 years, the number of arbitrations administered by the SIAC increased from 64 in 2003 to 259 in 2013.
The effort to promote Singapore as an arbitration centre does not begin and end with the SIAC. The courts have an important role to pay as well, as I highly doubt we could be an attractive arbitral seat if the substantive arbitration law promulgated by our courts were not sound. In this regard, the Singapore High Court has a specialist arbitration list staffed by judges with ample experience in the field. I would also point out that our apex court has, in recent jurisprudence, reiterated its commitment to the promotion of arbitration by emphasising the policy of minimal curial intervention in arbitration proceedings. In its latest decision in the field, AKN and another v ALC and others and other appeals  3 SLR 488, the Court of Appeal addressed itself to the trend of an increasing number of challenges to arbitral awards on the ground of breaches of natural justice. The Court noted that, through the ingenuity of counsel, what were essentially appeals on the legal merits of an arbitral award could readily be disguised and presented as challenges based on procedural failures. In that vein, the Court distinguished an arbitrator’s absolute failure even to consider an argument, which could amount to a breach of natural justice, from a decision to reject the argument, which would not give rise to issues of natural justice however erroneous might have been the decision to reject that argument.
To round off this brief discussion on the efforts Singapore is taking to maintain and improve its standing as an arbitral seat, I would add that our judges are mindful of arbitration jurisprudence in other jurisdictions and do what they can to strive for convergence. In that connection, we have sought to participate in collaboration across judiciaries. There are periodic dialogues that take place among the commercial judges of Hong Kong, New South Wales and Singapore, and it is hoped that commercial judges from Shanghai and Mumbai will also attend the next edition of this event due to be held next year. The ASEAN judiciaries have also set up a joint platform for training and development, and it is anticipated that arbitration training will be conducted in Singapore sometime next year. I believe that the outward-looking attitude of our courts, and our readiness to work with other judiciaries to promote legal convergence in the area of arbitration, will enable our substantive law to develop in a way that makes Singapore an even more conducive place for international arbitration.
Meanwhile, mediation is fast shedding its tag as the ineffectual cousin of litigation and arbitration, and is gaining recognition as a valuable and cost-effective method of commercial dispute resolution in its own right. It is especially appropriate where parties to a dispute have a wish to maintain a long-term business relationship for their mutual benefit. The statistics reflect a commendable success rate: the UK Centre for Effective Dispute Resolution reported last year that, of the Â£9 billion worth of commercial claims mediated from May 2013 to May 2014, just over 75% of cases reached settlement on the day of mediation and another 11% saw settlement shortly after. It was further estimated that, in 2014 alone, mediation would save a whopping Â£2.4 billion in management time, relationships, productivity and legal fees.
I mentioned earlier that trade and commerce in Asia is expected to grow significantly in the second half of our current decade. This may mean potential for mediation to assume a yet more prominent role in this region, because the cultures and mindsets of the Asian market are arguably such as would embrace a less adversarial mode of resolving disputes than litigation and arbitration. Against this backdrop, the Singapore International Mediation Centre (“SIMC”) was set up in November last year.
The SIMC is the first organisation in Asia focused on offering international commercial mediation services. It aims to deliver quality international mediation services in cross-border commercial disputes under the auspices of its own mediation rules. Its panel of mediators comprises more than 65 experienced mediators from Asia, the Americas, Europe and Australasia, and it also has an international panel of more than 65 technical experts from various industry sectors. These experts will be able to assist the mediator in complex commercial disputes involving technical questions. The SIMC also offers logistical and administrative support throughout the mediation process.
Under the SIMC’s rules, there is substantial scope for case management so that a given mediation may proceed in the most efficient way possible. For instance, the SIMC may arrange pre-mediation conferences to discuss the manner in which the mediation will be conducted, including setting relevant timelines. Such pre-mediation conferences may take place by electronic means in order to save time.
A unique feature of the SIMC is the “Arb-Med-Arb” protocol that it offers in conjunction with the SIAC. While most multi-tiered dispute resolution clauses provide for “Med-Arb” procedures under which parties proceed to arbitration if and when mediation fails, under “Arb-Med-Arb” parties commence arbitration before mediation is attempted. This protocol was specifically designed for international businesses that would value finality and enforceability: because arbitration is commenced first, in the event that the mediation is successful, the settlement may be recorded as a consent award which then becomes enforceable under the New York Convention. In the event that mediation fails, the parties simply continue with the arbitration. In short, “Arb-Med-Arb” allows a seamless transition between arbitration services offered by the SIAC and mediation services offered by the SIMC.
With the SICC, the SIAC and the SIMC in place, I believe that Singapore offers a full suite of dispute resolution options to fit any given transnational commercial dispute. Harmonisation of substantive business law
Finally, I return to the point I made earlier that it is desirable to harmonise as far as possible substantive commercial law across disparate legal systems. To address the issues arising out of such an endeavour of harmonisation, Singapore will be hosting in January next year an international conference titled “Doing Business Across Asia: Legal Convergence in an Asian Century”. One highlight of this conference will be the launch of the Asian Business Law Institute (“ABLI”), which is an institution dedicated to moving substantive business law, legal policy and practice in Asia towards convergence. Allow me to elaborate on this.
The ABLI will commission research on specific areas of legal convergence identified through consultations with a wide range of stakeholders: businesses, legal practitioners and in-house counsel, academia, the judiciary, governments, and local, regional and international institutions. This will be research with tangible output, as the research projects should be designed to culminate in concrete policy recommendations and legal tools that would be practically applicable, suited and usable for the Asian context. In doing so, the ABLI will draw on techniques used by other international, regional and national organisations involved in promoting the harmonisation of laws such as the American Law Institute, the European Law Institute and UNCITRAL.
A unique feature of the ABLI will be its role in providing a forum for businesses in the region to, interact with and articulate their commercial perspectives and needs to the legal community. It is hoped that this interaction between businessmen and lawyers will allow for greater practical application and adoption of ABLI’s work, and thus set it apart from the conventional approach of other organisations and university-led initiatives. Indeed, we intend to establish an advisory council that includes business representatives who can provide guidance for the work of the Institute.
Ultimately, the ABLI will undertake sustained outreach efforts among its diverse stakeholders to promote legal convergence in Asia. Its outreach strategy includes a number of components including the establishment of partnerships with other international institutions such as the American and European Law Institutes, the International Bar Association, and the International Institute for the Unification of Private Law, also known as UNIDROIT. It will also explore government-to-government platforms to promote its work to regional policy-makers.
The ABLI will also host a major international conference on the convergence of Asian business laws once every two years, and the event in January next year is the inaugural edition. The conference has already attracted notable speakers and panellists, including the Honourable Chief Justice Robert French, the Honourable Chief Justice Geoffrey Ma of Hong Kong, Mr Michael Traynor, President Emeritus of the American Law Institute, and Mr Henri de Castries, Chairman and CEO of the AXA Group.
The work of the ABLI will be steered by a governing council which will include a number of senior judges, jurists and lawyers from several jurisdictions including Australia, China, Hong Kong, India and Singapore. I believe that the work the ABLI will do will prove highly valuable in the conduct of transnational business in Asia. It is especially important, in my view, that all stakeholders should be engaged and brought into the discussion, because they are all instrumental in their own way in the push towards legal convergence in the region. The ABLI recognises this, and I am confident that it will result in proposals and recommendations that are not only legally sound but are also commercially sensible and practically applicable by governments, courts, commercial lawyers and most importantly by parties.
In a speech I recently delivered in Mumbai, I highlighted two challenges facing the transnational trading community, which will have profound significance for our legal system. The first is the exponential growth of international trade that has given rise to a corresponding increase in the volume of disputes. The second is the fact that these disputes have also grown in complexity, requiring a greater degree of technical sophistication; and with the great surge in transnational dealing, also an appreciation of cross border legal issues. These challenges in some respects pull against the widespread desire for the dispensation of justice that is swift, practical, and cost-effective. This makes it essential for us to innovate and evolve our legal frameworks for dispute resolution so as to enable us to better meet these needs.
I hope I have given you a good understanding of what the SICC is, what it does, and what it hopes to achieve. It is early days yet for the institution, and so it is too soon to assess its contributions to the resolution of transnational commercial disputes. But thus far in its debut year, the SICC has had transferred to it two cases which were started in the High Court, and these cases are moving along through the various pre-trial stages. It is not at all a bad start.
In addition, I hope I have also given you a broader understanding of the full range of international commercial dispute resolution options in Singapore, which includes arbitration and mediation.
There was a time when ADR was an acronym that stood only for Alternative Dispute Resolution. This seems to confine the understanding of dispute resolution methods such as arbitration and mediation within the perspective of a negative definition: they are alternatives in the sense that they are not the usual or preferred methods. In the context of a legal framework that seeks to serve the transnational trading environment of this century, it is obvious that this is a woefully inadequate and misplaced perspective.
We in Singapore seek to meet the need for a vibrant and robust centre that can serve the wider region in which we are situated by providing a rich tool kit of different dispute resolution methods. In this environment, ADR could be modernised and brought up to date to stand for Appropriate Dispute Resolution. Under this conceptualisation, arbitration, litigation and mediation are not competing in a flat and mono-dimensional zero-sum game. Rather they each seek to enhance their strengths and attractions so that the users they seek to serve have the advantage of finding the appropriate tool that best serves their needs.