In the last of four briefings coinciding with the launch of the Singapore International Mediation Centre (SIMC) on 5 November 2014, Ben Giaretta and Katherine McMenamin consider what the SIMC can offer to commercial parties.
Background to the SIMC
The SIMC originated in a 2013 report written for the Singapore Ministry of Law, which recommended the expansion of mediation in Singapore. The Working Group that prepared the report recognised that the growth of trade and investment in Asia has “significantly enhanced the need for dispute resolution services, especially for cross-border commercial disputes“. It recommended that Singapore develop an “entire suite of dispute resolution services” i.e. court litigation, international arbitration and mediation in international commercial contracts.
At the same time, there have been growing concerns among users of international arbitration about increasing time and costs, and a desire to improve the efficiency of international dispute resolution. Encouragement of mediation is one way to meet these concerns; we explained the benefits of mediation in our first briefing in this series.
This combination of a need for more dispute resolution services in Asia and a desire to promote efficient processes has led to the creation of the SIMC.
Part of the Singapore offering
As we explained in an earlier briefing, Singapore has developed a number of dispute resolution institutions. These include the Singapore High Court, the Singapore International Arbitration Centre (SIAC) and the Singapore Mediation Centre (SMC). A Singapore International Commercial Court (SICC) is also planned.
The SIMC fits into this by offering mediation of commercial disputes which may have no link to Singapore other than using the SIMC. In contrast, the SMC mainly deals with disputes in Singapore.
The SIMC will work closely with the SIAC, in particular, to promote mediation within international arbitration. Although these are separate organisations, their offices are adjacent to each other in Maxwell Chambers in Singapore, and the CEO of the SIAC has been appointed as the first CEO of the SIMC. There is also a new SIAC–SIMC arb–med–arb protocol linking the two institutions, as explained below.
Architecture for mediation
While the official launch is taking place in November 2014, the SIMC was established earlier in the year and considerable work has already been done to develop a suitable framework for SIMC mediation. In particular:
- a Secretariat has been appointed;
- mediation rules have been issued;
- a fee structure has been developed;
- a panel of over 60 leading mediators from throughout the world has been created; and
- model mediation clauses have been published on the SIMC website (simc.com.sg).
There are two significant innovations here: (i) the CVs of mediators describe each mediator’s approach to mediation; and (ii) the model clauses propose a new method of combining mediation with arbitration.
Know what you’re getting
Mediators can approach their role in different ways. Broadly speaking, there are two main avenues. A “facilitative” approach focuses on relationships and concentrates on the parties generating a solution to their dispute themselves. In contrast, an “evaluative” approach focuses on the rights and wrongs in the dispute. An “evaluative” mediator is usually a lawyer, who brings their knowledge and experience to bear to help parties assess where they are and the costs and benefits of proceeding with litigation or arbitration.
Different disputes require different approaches. However, the difficulty can be that parties may not know which method an individual mediator prefers.
The SIMC is trying to improve on this. The CVs of each of the mediators on the SIMC panel (available on the SIMC website) contain details of each mediator’s preferred approach. Parties may then make an informed choice as to the appropriate mediator.
This system is not perfect. It depends on individuals recording their methods accurately in a short CV. Also, the SIMC panel consists of highly experienced mediators who are accustomed to using a range of techniques, both facilitative and evaluative. Any “pen sketch” may be too limited, therefore. Nonetheless, this extra information should help parties in most cases to find a suitable mediator for their dispute.
The Singapore arb-med-arb clause
Secondly, in addition to a model mediation clause, the SIMC offers a new model dispute resolution clause for contracts. The SIMC “arb–med–arb” clause allows a party to start an arbitration; then proceed to a mediation after the tribunal is appointed; then take the settlement back to the tribunal for an award. This is designed to deliver an enforceable arbitration award at the end of a mediation, rather than an agreement, which may need a further process such as arbitration to be started before a settlement can be enforced.
“Arb-med-arb” should not be confused with “med–arb”, under which the same person acts as mediator, then, if there is no settlement, as arbitrator. “Arb–med–arb” involves different people being appointed as mediators and arbitrators, and by different institutions.
The clause links SIMC mediation and SIAC arbitration: it refers to the “SIAC–SIMC Arb–Med–Arb Protocol for the time being in force“. The intention is for the SIAC and SIMC to work together to keep time and cost spent on the arbitration to a minimum before a settlement is (hopefully) achieved through mediation.
This is a novel idea that will bind arbitration and mediation closer together. Parties that incorporate this clause into their contracts will have the benefit of both processes. It also avoids the situation arising in which a party proceeds straight to arbitration without complying with a mediation clause, thereby bringing the jurisdiction of the tribunal into doubt. Here, the mediation will follow an order of the tribunal.
The key question, however, remains: when is the optimum time for a mediation to begin in the context of a particular dispute? We discussed this in our third briefing. It is possible the “arb-med-arb” clause will force parties to mediate too early. Alternatively, it may result in parties bringing parts of an arbitration into the mediation, such as disclosure of documents.
The next stage in the development of mediation in Singapore is the creation of the Singapore International Mediation Institute (SIMI), providing mediation training and accreditation. The SIMI and the SIMC are being launched on the same day. A Mediation Act is also being prepared, to give a statutory framework to mediation in Singapore. Beyond this, the SIMC will hopefully implement in due course the other Working Group proposals, such as a “post-merger facilitation” and online dispute resolution.
- Use the SIMC as a resource for mediation in Asia. Its panel of mediators includes some of the most renowned mediators in the world.
- Consider using the arb–med–arb clause in contracts, to benefit from both processes.
- Prepare properly, as we explained in our second briefing, so you can get the most out of mediation.
By Ben Giaretta (Partner, Singapore, Asia Head of International Arbitration, Ashurst) and Katherine McMenamin (Associate, Singapore, Ashurst)