Singapore arbitration law changes removing written contract requirement approved

Amendments to the law (55-page / 237KB PDF) introduced after a "rigorous" public consultation process relax the current requirement that arbitration agreements must be in writing, and allow courts in Singapore to review 'negative jurisdictional rulings' by arbitral tribunals. Tribunals will also now be able to force parties to pay interest on outstanding sums following a ruling.

The latter change in particular would be very effective in "giving more bite to the awards issued by arbitrators", according to international arbitration law expert Joanna Seetoh of Pinsent Masons MPillay, the Singapore joint law venture partner of Pinsent Masons, the law firm behind Out-Law.com.

"The changes will greatly increase the efficiency of Singapore as an arbitration venue, and will make it a more attractive venue for international arbitrations," she added.

Singapore's Government began developing the country as a hub for international arbitration in the mid-2000s according to its Minister for Law, K Shanmugam, and the Singapore International Arbitration Centre (SIAC) heard a total of 188 cases in 2011.

Addressing the Parliament in April, Shanmugam said that the majority of respondents to the consultation had supported an expanded definition of 'arbitration agreement'. Once the changes come into force agreements which are conducted "orally, by conduct or through any other means" will be recognised as arbitration agreements, provided that the content of the agreement is "recorded in any form". This expanded definition better reflected the "commercial reality" of arbitration practice, where agreements are often concluded orally and put into writing later, he said.

The amended law also extends the definition of 'arbitral tribunal' to include cases where an emergency arbitrator is appointed to provide an urgent, temporary solution to the parties before the tribunal itself is constituted. The SIAC was one of the first jurisdictions in the world to introduce emergency arbitration, and the new law will give an emergency arbitrator the same powers as a full tribunal. In addition, any awards made by an emergency arbitrator will be enforceable in the Singapore courts in the same way as awards made by any other arbitral tribunal.

A negative jurisdictional ruling is one where an arbitral tribunal holds that it does not have the jurisdiction to hear a dispute. The amended law will allow parties to appeal such a decision to Singapore's High Court. The Court of Appeal could also potentially rule on the issue if an appeal is allowed. The tribunal and the court will also be able to award costs against any party to the agreement if it rules that the tribunal has no jurisdiction.

Tribunals will also be given "full discretion" to award interest, whether in simple or compound form, on any sums claimed or costs awarded in the arbitration.