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Arbitration analysis: The Singapore International Arbitration Centre (SIAC) is preparing to present the sixth
edition of their Arbitration Rules. Jonathan Choo, partner in Bird & Bird’s international dispute resolution practice, reviews the key changes ahead of their anticipated launch on 1 June 2016.

What are your views on the key changes to the rules?

The key changes that feature in the SIAC Rules 2016 seek to further improve the overall user-experience, particularly in
the areas of efficiency, convenience, cost-effectiveness and certainty.
One change sticks out for being particularly bold and innovative—a world’s first as far as major international commercial
arbitration centres are concerned—Rule 28 of the SIAC Rules 2016 introduces a mechanism for ‘Early Dismissal of
Claims and Defences’. Under this Rule, a party may, no later than 30 days after the constitution of the tribunal, file an
application with the tribunal for the early dismissal of claims or defences on the basis that:

  • the claims or defences are manifestly without legal merit, or
  • the claims or defences are manifestly outside the jurisdiction of the tribunal

The tribunal will issue its award within 60 days of the filing of the application. Interestingly, this change did not feature in the initial draft of the SIAC Rules 2016 that was circulated for public consultation.

The inclusion of this ‘Early Dismissal of Claims and Defences’ mechanism squarely addresses an often cited criticism of arbitration which is that unlike in litigation where summary judgments are available and often relied upon by parties to secure quick resolutions in appropriate cases, there are no similar mechanisms in arbitration under the rules of the major international arbitration centres (albeit now with the exception of the SIAC). The result is that parties in an arbitration are compelled to go through the cost and inconvenience of an entire arbitration process even if a claim or defence is legally unmeritorious. The inclusion of the ‘Early Dismissal of Claims and Defences’ mechanism to respond to claims or defences that are manifestly without legal merit or manifestly outside the jurisdiction of the tribunal will invariably save parties time and costs in the appropriate cases. I imagine that the mechanism will most often be successfully used in straightforward debt or invoice claims.

Other noteworthy changes to the Rules include:

Rule 6 on ‘Multiple Contracts’ and Rule 8 on ‘Consolidation’

Rule 6 is SIAC’s timely response to the user’s need for greater efficiency and cost-effectiveness when dealing with disputes arising out of or in connection with multiple contracts. The claimant may file a Notice of Arbitration in respect of disputes arising out of or in connection with each contract and concurrently submit an application to consolidate the arbitrations pursuant to Rule 8.1—in this scenario, the Registrar may accept payment of a single filing fee for all the arbitrations sought to be consolidated, but this is still subject to the SIAC Court of Arbitration’s determination of the claimant’s application for consolidation. Alternatively, the claimant may file a single Notice of Arbitration in respect of disputes arising out of or in connection with all such contracts—by doing so, the claimant will be deemed to have commenced multiple arbitrations, one in respect of each contract and the Notice of Arbitration shall be deemed to be an application to consolidate all such arbitrations pursuant to Rule 8.1.

Both options provide certainty regarding the date of commencement for the disputes arising out of or in connection with each contract. In practice, I imagine the second option (filing a single Notice of Arbitration in respect of disputes arising out of or in connection with multiple contracts) may prove to be more popular because even if the claimant’s application to consolidate is not granted, the claimant can always still follow up by filing a Notice of Arbitration in respect of each arbitration that has not been consolidated. Rules 6 and 8 promote more efficient adjudication of disputes arising out of or in connection with multiple contracts. They save parties’ time and costs and also reduce the risk of inconsistent decisions and awards concerning disputes arising out of or in connection with multiple contracts.

Rule 7 on ‘Joinder and Intervention’

Rule 7 reflects further progressive thinking and commercial-mindedness on the part of the SIAC by allowing both parties and non-parties to apply for joinder or intervention. The application may be made either prior to the appointment of any arbitrator (in which case the application will be made to the SIAC Court of Arbitration), or after the constitution of the tribunal. If the application for joinder or intervention prior to the appointment of any arbitrator is successful, the joined party may participate in the appointment of the arbitrator(s) according to Rules 9 to 12. Prior to this rule change, a tribunal would only have the power under Rule 24(b) of the SIAC Rules 2013 to grant an application for one or more third parties to be joined in the arbitration, provided that the third parties are themselves parties to the arbitration agreement and have themselves consented in writing to the joinder.

Rule 20 on ‘Seat of the Arbitration’

Rule 20 is a significant change in that it removes any notion of a default seat of arbitration under the SIAC Rules 2016. Instead, failing an agreement by the parties on the seat of the arbitration, it will be for the tribunal to determine the seat of the arbitration. Prior to this change, Rule 18.1 of the SIAC Rules 2013 provided for Singapore as the default seat of arbitration unless the tribunal determines otherwise. Rule 20 effectively delocalises the seat of the arbitration in recognition of the increasingly international nature of the cases that the SIAC administers.

Rule 29, Schedule 1 & Schedule of Fees on ‘Interim and Emergency Interim Relief’

SIAC has managed to make its already quick emergency arbitrator procedure even quicker—the SIAC’s time for appointment of an Emergency Arbitrator used to be within one business day of receipt by the Registrar of an application for emergency interim relief and payment of the administration fees and deposits. The SIAC Rules 2016 now shorten this time to one day, no doubt in recognition of the odd coincidence that most applications for emergency interim relief tend to be received late on a Friday evening. The SIAC Rules 2016 also now provide a time limit for the emergency arbitrator to issue an order or award of interim relief (within 14 days of the emergency Arbitrator’s appointment) and fix the Emergency Arbitrator’s fees at SGD 25,000 in order to ensure that emergency arbitration proceedings remain cost-effective. Overall, these changes reflect the business needs of users of arbitration for certainty, speed and efficiency and they will only serve to make the SIAC’s already popular Emergency Arbitrator procedure even more attractive to users.

Rule 5 on ‘expedited procedure’

The SIAC’s expedited procedure, which requires a final award to be made within six months from the date when the tribunal is constituted, has proved to be popular among users because of the potential savings in time and costs. The SIAC Rules 2016 raise the monetary threshold for the applicability of the expedited procedure by 20% from SGD 5m to SGD 6m. This will allow more cases to benefit from taking advantage of the expedited procedure. A six-month timeline for the making of the final award is attractive in concept. However, the reality in practice is that parties and the tribunal often find it a challenge to stick with an expedited timetable, particularly if a full oral hearing is contemplated. Rule 5 responds to that by now allowing the tribunal to decide if the dispute is to be decided on the basis of documentary evidence only.

Do you foresee any difficulties with the changes?

Rule 28 on ‘Early Dismissal of Claims and Defences’ may cause some commotion, particularly if you are the party on the wrong end of the tribunal’s award granting the early dismissal. I imagine we may see a fair number of challenges to awards granted pursuant to this procedure. There is also a not insignificant risk that parties will seek to rely on the procedure at every opportunity, even if purely for tactical reasons and without any genuine expectation of success. This may in turn inadvertently and unnecessarily contribute to longer and more costly proceedings.

I also think that users who have been familiar with using the SIAC Rules over the years may need to quickly familiarise themselves with Rule 20 and the fact that the SIAC Rules 2016 have done away with making Singapore the default seat of arbitration. It is always good practice to specify the seat of the arbitration in your arbitration agreements. Parties who agree to use the SIAC Rules 2016 and intend to seat their arbitrations in Singapore will now need to specifically provide for this in their arbitration agreements. Otherwise, they risk a situation where a tribunal determines otherwise.

What will the changes do to SIAC’s standing internationally?

The timely and user-friendly changes in the SIAC Rules 2016 further bolster SIAC’s already stellar reputation as a leading international commercial arbitration centre, not just within Asia, but also globally. The SIAC Rules 2016 send a clear message to the international arbitration community that SIAC is keenly aware of (and responsive to) the practical and commercial needs of users for greater efficiency, speed and certainty in the arbitration process. The introduction of the ‘Early Dismissal of Claims and Defences’ mechanism also demonstrates that the SIAC will not shy away from being a leader among other arbitral institutions and will be bold and innovative when it comes to implementing changes to its Rules in an effort to bring greater efficiency and costs-savings to the arbitration process.

Jonathan Choo is a partner in Bird & Bird’s international dispute resolution practice, based in Singapore. His general commercial disputes background covers complex commercial, technology, media and broadcasting, construction, projects and infrastructure, insurance and IP disputes. He has represented MNCs, banks, international contractors, media and broadcasting agencies, telecoms operators and consultants on a variety of disputes, and has also been appointed by the SIAC as an arbitrator on various disputes.

Interviewed by Jane Crinnion.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor

Article originally published on 1 June 2016.