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YSIAC Club Event

22 May 2019
YSIAC Club event: What are the challenges to the growth of arbitration in Singapore in the upcoming decade?
By Lee Chia Ming, Senior Associate, Dentons Rodyk & Davidson LLP

It was only fitting that the YSIAC marked its first YSIAC Club event of 2019 by tackling the question on the minds of many members of the arbitration community: What are the challenges to the growth of arbitration in Singapore in the upcoming decade?

The event kicked off with a warm welcome from Benson Lim (Member of the YSIAC Committee; Senior Associate, Hogan Lovells Lee & Lee). In line with the purpose of a YSIAC Club event, the moderator and panellists were all younger members of the arbitration community. True to form, panel moderator Adriana Uson (Member of the YSIAC Committee; Associate, Norton Rose Fulbright) kept things lively and youthful by asking each panellist to describe how they would introduce themselves on Twitter, leading to much laughter and amusement all round.

Adriana swiftly moved on to outline Singapore’s position as the 3rd most popular seat of arbitration and the country’s key strengths. She began the discussion proper by asking panellists how much further Singapore could improve and their thoughts on the future of arbitration in Singapore.

Taking up the invitation, panellist Matthew Brown (Senior Associate, Clifford Chance Asia) spoke on the increasingly diverse options in Singapore, although he cautioned that Singapore ought not to take its privileged status for granted. Matthew highlighted the International Commercial Court in Singapore as an example of Singapore’s status as an international dispute resolution hub and how this was part of a worldwide trend. Other instances across the world abound: the Paris International Commercial Court which permits experienced English commercial judges to apply English law, specialist courts such as the Frankfurt specialist financial chamber, and the XiAn International Commercial Court set up in view of BRI projects.

Matthew also assessed what the SICC meant as an alternative option to SIAC arbitration. While the SICC helped to grow the pie for Singapore, it would to some extent compete with SIAC since both deal with international judges and foreign laws. As court decisions are public, there might be a perception that the SICC would apply the law more rigorously than an arbitral tribunal. Nevertheless, arbitration also retains strong advantages, such as the ease of enforceability of awards in other countries under the New York Convention, the right to party-appointed arbitrators, and perceived neutrality of the tribunal.

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Left to Right: Matthew Brown, Roger Milburn, Pauline Low, Kevin Elbert, Benson Lim and Adriana Uson

Members of the audience

Kevin Elbert (Associate, TSMP Law Corporation) expanded on how the suite of dispute resolution options in Singapore—namely SIAC, SICC, and SIMC—were particularly useful in the context of IPTMT practice, where relief in domestic courts could be limited. He also mentioned possible future changes to the International Arbitration Act that would permit a party to appeal to the Singapore Courts on a point of law, following the approach of jurisdictions such as Hong Kong. As a true blue IP-TMT lawyer, Kevin highlighted that at the end of the day how Singapore decides to take itself forward would depend on “what USP it is trying to sell” to its end users.

Chiming in on this note, Pauline Low (Associate Counsel, SIAC) pointed out that arbitration no longer stands alone nowadays. Rather, hybrid dispute resolution mechanisms are being seen with increasing frequency, particularly in the context of BRI disputes. Pauline also noted that the Arb-Med-Arb procedure in arbitration had an advantage over mediation, primarily because the former meant that a standing tribunal would be ready to decide the dispute if no settlement could be reached.

The next topic of extensive discussion related to a notorious feature of arbitration: high costs. All the speakers recognised that expanding costs are a real bugbear for arbitration users. Often, costs are exacerbated due to the tendency of arbitrators to err on the side of permissiveness so as to safeguard against an award being set aside.

In this context, Roger Milburn (Investment Manager, Litigation Capital Management) shed light on the third party funding scene in Singapore arbitrations. Roger explained that while third party funding is theoretically available to any Singapore-seated arbitration, in reality funders typically have a strict screening process—Litigation Capital Management themselves only take on about 4-5% of potential cases globally! The funder’s main concern is retaining its investment. However, it is also a concern whether, even if the client ultimately prevails in arbitration, the funders would recover very little after funders’ costs and lawyers’ costs are paid out. On this note, Pauline helpfully brought attention to the SIAC 2017 Practice Note which permits the Tribunal to take into account any third-party funding arrangements in apportioning the costs of the arbitration.

The panel then moved on to engage with audience questions, such as whether trade wars are good for arbitration (short answer: on balance the cynical lawyer would say yes to more disputes!) and how Singapore plans to become a seat beyond the region. In this regard, the panellists were unequivocal about Singapore’s competitive strengths as a seat. These include its neutrality, integrity, and the responsive and fast-paced amendment of legislation that brings Singapore in line with international best practices for arbitration. Examples of this adaptability include third party funding, early dismissal of claims, and expedited arbitration procedures. While other countries beyond the region might pose competition, Singapore’s robust court system and nimble legislation would be difficult to replicate.

Following the intellectual download, we all adjourned for much anticipated refreshments and a time of networking. It was a natural and wonderful end to a refreshing evening (no pun intended) during which we heard perspectives shared from younger members of the international arbitration community and had much-needed lateral discussions. It was particularly helpful that the points canvassed looked not only to challenges posed by other countries to Singapore in the future of arbitration, but also fleshed out the interplay of SIAC arbitration with other modes of dispute resolution in international courts (including our very own SICC), mediation, and hybrid dispute resolution mechanisms.

It will certainly be interesting to look back, in a decade’s time, on the evening’s discussions and predictions!

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