Singapore builds its dispute resolution capabilities

July 22 2014
Holman Fenwick Willan LLP

Recent developments in Singapore demonstrate its intention to position itself as a leading dispute resolution centre in Asia.

Singapore is already widely recognised as a centre for arbitration. It is the third most popular arbitral seat internationally and SIAC is the fourth most popular arbitral institution. Singapore is a signatory to the New York Convention and SIAC awards have been enforced by courts in Australia, China, Hong Kong, India, Indonesia, the UK, USA and Vietnam amongst other countries. SIAC also established its first overseas office  in Mumbai  last year.

The Singapore courts have contributed to SIAC’s success by being supportive of arbitration, upholding the finality of awards and keeping intervention to a minimum.

Now Singapore is turning its attention to other forms of dispute resolution.

The Singapore government has announced the creation of two new dispute resolution centres, the Singapore International Commercial Court (SICC) and Singapore International Mediation Centre (SIMC). The aim is to meet what it sees as a growing demand for dispute resolution in the region.

In his keynote address to the SIAC Congress in June, the Singapore Minister for Law, K. Shanmugam, explained the government’s thinking in more detail.

The combined Association of Southeast Asian Nations (ASEAN) economies achieved annual growth of 5% last year, compared to global economic growth estimated at less than 3%. ASEAN is working towards establishing the Asian Economic Community, AEC, which would provide a single market for goods, services and labour in the region. It is also negotiating the Trans Pacific Partnership, a multilateral trade agreement which involves 12 countries including Singapore, the US, Australia and Japan.

As Asia’s economy continues to grow, there will be a commensurate demand for neutral venues in which to launch complex, cross-border transactional disputes which are conducted transparently, efficiently and fairly. Singapore is positioning itself to meet that demand by offering arbitration, mediation (which is more popular in the region than in other parts of the world) and litigation in one location.

Shanmugam commented, “The SICC would appeal to those who, for example, have non-arbitrable disputes and who would like the availability of an appeal. The SIMC will provide international commercial mediation services as an important complement to arbitration and litigation. Successful mediation can allow parties to mutually arrive at a mix of legal and non-legal solutions suited to their different interests.

The intention is to provide what Shanmugan described as a “complete suite of dispute resolution offerings.

The hope is that the opening of the Singapore International Mediation Centre (SIMC) later this year and the forthcoming Singapore International Commercial Court (SICC) will attract greater levels of international legal work to Singapore and bring benefits to its legal system, legal practitioners and the wider community.

A committee has been set up to develop the SICC as a division of Singapore’s High Court, with its judgments enforced as those of the High Court. This will require amendments to Singapore’s constitution. The SICC will handle cases involving any substantive law, and foreign counsel can be registered with the court and appear depending on the law of the dispute. The bench will be staffed with “borrowed judges from different jurisdictions again sitting depending on the law of the substantive dispute. It is meant to be an international commercial court situated in Singapore and separate from the existing Singapore High Court.

The Singapore Ministry for Law is working with the Singapore Business Federation, Singapore Academyof Law and SIAC to establish the SIMC, which it is planned to open later this year.

It will be interesting to see whether establishing the SIMC and the SICC will extend Singapore’s success in arbitration into commercial mediation and court-based commercial litigation for international cases.