Singapore International Arbitration Centre Rules 2016: Towards Greater Efficiency in International Commercial Arbitration

by Reed Smith
Contact

Reed Smith

The latest edition of the SIAC Arbitration Rules came into effect on 1 August 2016 and SIAC’s Annual Report published in March 2017 provides an update on how the new rules have been utilised. This client alert examines the key amendments introduced by these rules and their use so far.

An efficient international commercial arbitration is one where each party is given a reasonable opportunity to put its case and an enforceable award is issued as soon as possible at the lowest possible cost. However, international commercial arbitration generally faces increasing criticism globally due to perceived unnecessary delays and wasted costs.

In an attempt to address these concerns, key international arbitral institutions have amended, or are in the process of amending, their arbitration rules to introduce or refine the tools available to tribunals and parties seeking to improve the effectiveness and efficiency of arbitration.

The Singapore International Arbitration Centre (SIAC) is at the forefront of this initiative. The sixth edition of the Arbitration Rules of the SIAC1 (SIAC Rules 2016) came into effect on 1 August 2016. Further, SIAC’s 2016 Annual Report2 was published on 10 March 2017 and gives an update on how the SIAC Rules 2016 have been utilised. The key amendments made by the SIAC Rules 2016 and their use so far are examined below.

Early Dismissal of Claims and Defences (Rule 29)

The SIAC Rules 2016 introduce an early dismissal procedure similar to a summary judgment and/or strike-out application before the courts. Pursuant to Rule 29, a party may apply to the relevant tribunal for the early dismissal of a claim or defence on the basis that the claim or defence is manifestly without legal merit or manifestly outside the jurisdiction of the tribunal and the tribunal must make its decision within 60 days.

Although the early dismissal procedure is not novel to court litigation, the SIAC is the first major international arbitral institution to introduce this procedure. The early dismissal procedure is a welcome innovation as it has the potential to enable significant savings in time and cost by deterring parties from mounting speculative claims or baseless defences. However, it does seem more likely that respondents will make use of this procedure since claimants may have concerns about whether an award obtained through the early dismissal procedure will face issues upon enforcement.

SIAC’s 2016 Annual Report suggests that the early dismissal procedure had not been utilised as of 31 December 2016. We anticipate that the procedure will only be utilised sparingly because of the high burden of showing that a claim or defence is manifestly without merit or manifestly outside the jurisdiction of the tribunal, but on the occasions it is used, significant time and cost savings will surely result.

Multiple Contracts and Consolidation (Rule 6 and Rule 8)

Rules 6 and 8 of the SIAC Rules 2016 align the SIAC Rules with the rules of other major international arbitral institutions.

Pursuant to Rule 6 a claimant may either (a) file a notice of arbitration in respect of each arbitration agreement invoked and concurrently submit an application for consolidation, or (b) file a single notice of arbitration in respect of all the arbitration agreements invoked. Pursuant to Rule 8, the SIAC Court of Arbitration has the power to consolidate multiple arbitrations without the consent of all parties, provided certain criteria are satisfied. If an application for consolidation is made after constitution of the tribunal, the tribunal shall decide whether to grant an application for consolidation.

This is again a step in the right direction as it potentially prevents uncooperative parties (typically the respondents) from forcing related disputes to be progressed through multiple arbitrations, each adding further time and costs. From a more practical point of view, the consolidation of arbitrations could be a welcome relief to claimants bringing related claims in situations where they might otherwise have to pay advances on the costs of multiple arbitrations to the SIAC on behalf of themselves and the respondents.

According to SIAC’s 2016 Annual Report, 20 applications for consolidation involving 52 cases were made between August and December 2016, of which 6 were granted. Clearly this new rule is being applied regularly.

Joinder (Rule 7)

Rule 7 of the SIAC Rules 2016 expands tribunals’ powers on joinder by allowing a party or non-party to apply for an additional party to be joined to an arbitration. While these powers seek to mirror those held by courts, a key distinction is that a party cannot be joined in a SIAC arbitration without its consent, as demonstrated in an arbitration agreement. This is, of course, intrinsically linked to the fundamental principle that arbitration relies on the agreement of the participants to the process.

According to SIAC’s 2016 Annual Report, between August and December 2016, one application for joinder was made, but not granted.

Improved Expedited Procedure (Rule 5)

The expedited procedure was first introduced into the SIAC Rules in 2010 and has developed into one of the SIAC’s most popular mechanisms for disposing of arbitrations efficiently. According to the SIAC’s 2016 Annual Report, the SIAC received 70 requests for the expedited procedure in 2016 alone, of which 28 were accepted.

The SIAC Rules 2016 extend the accessibility of the expedited procedure by increasing the monetary threshold from S$5 million to S$6 million with the effect that more arbitrations will qualify for this procedure. Further, where an arbitration proceeds under the expedited procedure, the tribunal has the discretion to decide if the dispute should be decided on the basis of documentary evidence only, without requiring the consent of all parties.

The expedited procedure was also recently introduced by the International Chamber of Commerce (ICC) in Article 30 of its revised Arbitration Rules3, which are applicable from 1 March 2017. The ICC Arbitration Rules however go a step further than the SIAC Rules 2016 and stipulate that the expedited procedure shall automatically apply to arbitrations if the amount in dispute does not exceed US$2 million unless the parties have opted out, provided that the arbitration agreement in question was concluded after 1 March 2017.

Conclusion

The SIAC Rules 2016 provide a robust set of tools which, if used properly, go a long way towards ensuring that SIAC arbitrations progress in an efficient and cost-effective manner. The onus is now on parties and tribunals to take advantage of these tools and it is clear from the statistics published by the SIAC that, on the whole, they are indeed doing so.


  1. siac.org.sg
  2. siac.org.sg
  3. iccwbo.org

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reed Smith | Attorney Advertising

Written by:

Reed Smith
Contact
more
less

Reed Smith on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.