Singapore consults on 'more flexible' international arbitration reforms

Out-Law News | 27 Jun 2019 | 12:47 pm | 2 min. read

Singapore's Ministry of Law (MinLaw) has begun a consultation on proposed amendments to the International Arbitration Act (IAA), aimed at giving parties more flexibility to tailor the process to their requirements.

Proposed reforms include default provisions for appointing arbitrators in multi-party disputes, confidentiality provisions and giving parties the ability to opt in to extended rights to appeal an arbitral award to the High Court.

MinLaw said that its proposals "take into account the experience of other jurisdictions", as well as feedback from the profession.

Singapore has become an increasingly popular seat for international commercial arbitration. Singapore and the Singapore International Arbitration Centre were ranked as the third most preferred arbitration seat and arbitral institution in the world respectively in 2018, and the first in Asia, according to research cited by MinLaw in its consultation paper.

"The Singaporean Ministry of Law has again demonstrated its spryness in reforming the republic's international commercial arbitration framework in a user-friendly manner," said international arbitration expert Nicholas Brown of Pinsent Masons, the law firm behind Out-Law.com.

"The ministry's four proposals and its recognitions of the two third party proposals all address vital aspects of a customised arbitral experience, weighing interests of certainty, quality and confidentiality, and squarely addressing a lacunae in worldwide award-annulment procedure. The provision of a two-month consultation period isn't overly brisk, nor is it unduly indulgent in view of the interests that are touched by the provisions of the draft bill and the third-party proposals," he said.

Brown Nicholas

Nicholas Brown

Partner

The Singaporean Ministry of Law has again demonstrated its spryness in reforming the republic's international commercial arbitration framework in a user-friendly manner.

Arbitrators in international disputes in Singapore are currently appointed in line with the provisions set out in section 9A of the IAA and Article 11 of the UNCITRAL Model Law on International Commercial Arbitration. However, these provisions only apply where there are two parties to the arbitration agreement. MinLaw is proposing to amend the IAA to introduce a default mode of appointment in multi-party disputes, which are becoming increasingly common.

MinLaw has also proposed amendments to the IAA to allow parties to request an early decision on jurisdiction, allowing them to save time and costs. Currently, the tribunal can decide on jurisdiction either at preliminary or final award stage. A further amendment would explicitly recognise the powers of both the arbitral tribunal and the High Court to enforce obligations of confidentiality, whether these obligations exist under the law or have been expressly agreed by the parties.

The proposed amendments would also allow parties to opt in to the ability to appeal a question of law arising out of an arbitral award. Permission from the court would be required, and appeals would have to be filed within a specified time limit. Currently, the IAA only permits parties to apply to the High Court to set aside an award on grounds of fraud or corruption in the making of the award, or a breach of natural justice in connection with the award.

"This will enhance party autonomy and their ability to exercise control as well as designate with greater precision the degree of finality they expect," MinLaw said in its consultation. "This will allow parties who prefer court supervision on matters of law to make a deliberate choice for supervision while preserving the finality of arbitration for parties who prefer not to have appeals."

The consultation also contains two additional proposals, based on third party feedback. MinLaw has proposed to give parties the ability to agree to waive or limit the grounds for annulment of the award set out in the IAA and the UNCITRAL Model Law; and to give the courts the power to order costs in certain arbitral proceedings.

The consultation closes on 21 August 2019.