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Presentation of Prof. Mochtar Kusuma-Atmadja : Arbitration in the 1990s: Developments in East Asia : Arbitration in the Southeast Asian Region

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Singapore

The Singapore International Arbitration Centre (SIAC) began operations in July 1991. It was set up as an arbitral institution with the primary purpose of:

1. providing facilities for international and domestic commercial arbitration and conciliation;

2. promoting arbitration and conciliation as alternatives to litigation for the settlement of commercial disputes; and

3. developing a pool of experts in the law and practice of international arbitration and conciliation.

The number of cases settled by arbitration and the amounts involved in the period since 1991 are as follows: in 1991, 2 cases have been decided by SIAC with a total value of S$29.6 million; in 1992, 12 cases were settled with a total value of S$171 million; in 1993, 20 cases were settled with a total value of S$218 million; in 1994, 34 cases were settled with a total value of S$400 million; and in 1995, 51 cases were settled with a total value of S$154 million.

Before the establishment of the SIAC, almost all arbitrations in Singapore were ad hoc arbitrations with no institutional support. Lawyers involved in those arbitrations would conduct them like they would conduct proceedings in the courts for which they were primarily trained. With the setting up of the SIAC, this pattern of ad hoc arbitration had to be changed, so also the mindset of lawyers with regard to how arbitrations are to be conducted.

One of the first tasks of the SIAC was thus to come out with institutional rules for arbitration. That task was made easier by the excellent work done by the UNCITRAL, the London Court of International Arbitration and the American Arbitration Association in the form of their various arbitration rules. The SIAC Rules 1991 were drawn up to be consistent with accepted international arbitration practice as well as to keep in view the existing arbitration law in Singapore.

The initial reaction of many professionals (particularly lawyers) to the setting up of the SIAC was one of skepticism. Many articles and speeches were made deriding the decision of the Singapore High Court in Turner (East Asia) Pte Ltd v Builders Federal (Hong Kong) Ltd & Another in which the court disallowed a firm of U.S. attorneys from representing a party to a pending arbitration in Singapore. In 1992, the Legal Profession Amendment Act was passed by Parliament and the amendment came into force on 27 March 1992. This effectively allows foreign lawyers to appear in all arbitrations in Singapore with the proviso that in cases where Singapore law is involved, the foreign lawyer must appear with a practicing Singapore lawyer.

After setting up the SIAC, the Singapore Arbitration Act (which was first enacted in 1953 following the English 1950 Act) may no longer be suitable for the conduct of international arbitrations which the SIAC and Singapore hope to attract. In November 1991, a Working Committee was appointed and it was charged with the tasks of examining the existing Singapore laws relating to commercial arbitration in the light of developments in international commercial arbitration and to make recommendations for the reform of the law and the related rules of court.

The Working Committee became a Sub-Committee of the Law Reform Committee of the Singapore Academy of Law. The task was made easier because several countries had by then also undertaken similar exercises namely, England, Scotland, Australia, Hong Kong and New Zealand.

The recommendations proposed by the Sub-Committee were accepted by the Singapore Government and the International Arbitration Act 1994 (IAA) was enacted in October 1994. The IAA came into force on 27 January 1995 which adopted all of the recommendations with minor changes.

The IAA adopts the UNCITRAL Model Law on International Commercial Arbitration as "having the force of law" in Singapore. Parties in domestic arbitrations may "opt-in" to the IAA regime. Similarly, parties to an international arbitration who wish to retain a higher degree of judicial control may "opt-out" of the IAA.

In designating the SIAC as the appointing authority for arbitrators and for taxation of costs, parties to an international arbitration in Singapore have yet another assurance that they would not be unnecessarily forced into the courts. Certain procedural difficulties, such as service of judicial process overseas and relating to applications made to the courts for appointing arbitrators, would also be overcome with applications now being made to the SIAC.

The IAA permits a conciliator to also act as an arbitrator in the event of the conciliation failing to achieve any settlement only if the agreement specifically provides so. Similarly, an arbitrator could act as a conciliator in the dispute in which he is the arbitrator only if all the parties consent and "for so long as no party has withdrawn his consent in writing". The approach taken in the IAA gives full liberty to the parties to a dispute to decide whether an arbitrator could act as a conciliator and vice versa.

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