Legal Opinion – Arbitration in Singapore
Parties to major construction contracts these days almost invariably choose arbitration as their dispute resolution process. It is open to them to choose where the arbitration is to be ‘seated’. The traditional choices of New York, London, Paris and Geneva are now being joined by Singapore on the parties ‘wishlist’ of places to arbitrate. Shourav Lahiri, a partner in the international law firm Pinsent Masons LLP, recently met Mohan R Pillay, the managing partner of MPillay, a Singapore firm specialising in litigation and arbitration to talk about the attractiveness of Singapore as a place of arbitration.
Mohan, what makes Singapore attractive as a place to arbitrate?
Well, Singapore is rightly perceived by many international companies as a neutral and arbitration friendly location. It comes with all of the conveniences of first-rate travel connectivity, excellent support facilities, and a transparent Court system that supports and encourages efficient commercial arbitration. So perhaps it is not surprising that the Asia Pacific Arbitration Review 2009 ranked Singapore as the top South/East Asian venue for ICC arbitrations (180 arbitrations
since 1992), ahead of China (80 arbitrations since 1992) and Hong Kong (64 arbitrations since 1992).
If you ask me, there are probably seven reasons why Singapore gets the nod.
1. Singapore’s well earned reputation for a government and judiciary with high standards of efficiency, integrity and transparency, combined with its
strong tradition of the rule of law;
2. Singapore’s International Arbitration Act is based on the UNCITRAL Model Law, which most foreign parties, counsel and arbitrators are familiar with.
Indeed India’s own 1996 Arbitration & Conciliation Act is based on this very same UNCITRAL Model Law ;
3. Singapore’s courts are ‘pro-arbitration’ – they provide maximum judicial support for arbitration where helpful, while keeping unnecessary judicial
intervention in international arbitrations to a minimum;
4. The level of infrastructure and support that parties can expect from Singapore’s arbitration institution (the Singapore International Arbitration Centre);
5. The highly qualified and experienced pool of arbitrators, counsel and experts available in Singapore; and
6. Singapore’s relatively low cost compared to other major centres of arbitration in Europe and the US.
7. For India in particular, I would also add the convenience of Singapore’s close proximity to India as an important factor. Flight times of five hours from New Delhi to Singapore for example can make a substantial difference to busy Indian corporates.
Can arbitration awards obtained in Singapore be enforced elsewhere?
You are right to raise it as this is one of the main considerations in choosing an arbitral venue. Singapore is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and therefore an arbitration award issued in Singapore is generally enforceable (subject to certain limited defences) in most other countries, apart from in the small number of countries who have not adopted the Convention.
Readers of Construction Week India may want to know if their choice of Indian legal counsel can represent them in arbitration in Singapore
Yes they can. A party to a Singapore arbitration has the free choice of legal representation. There is of course a good pool of highly trained Singapore arbitration lawyers, for reasons I shall mention in a moment, we very often work as a team with foreign counsel from the home jurisdiction of the client, in managing the arbitrations.
Certain considerations should be kept in mind, however, in deciding on legal representation. If the contract is subject to a law other than Indian law, it would be prudent to have some involvement in the representation from lawyers from the country whose law governs the contract. Even where Indian law is the governing law of the contract, the procedural law governing an arbitration in Singapore will be Singapore law (that is the same in any jurisdiction one chooses) and therefore parties should at least have access to Singapore counsel ‘in their back pocket’. In addition to guidance on Singapore procedural law, such support is absolutely critical in case it becomes necessary to make (or for that matter resist the opposing party’s) applications to the Singapore court before or during arbitration.
Mohan, what is your view about the quality of arbitrators available in Singapore for arbitrations? Surely, Singapore based arbitrators would be most cost-effective for parties choosing to arbitrate in Singapore?
In my experience of having conducted arbitrations internationally, arbitrators from Singapore compare with the best. The Asia Pacific Arbitration Review 2009 reported that amongst ICC arbitrators appointed from South and East Asia, Singapore arbitrators have consistently featured as being the most confirmed or appointed by the ICC Court (nearly half of the 53 ICC arbitrators from South and East Asia in 2007 were Singaporean). This provides some indication of the quality of local Singapore arbitrators available.
However, as with the choice of counsel, parties to Singapore arbitrations are not confined to appointing Singapore arbitrators. They can opt for any arbitrator they consider most suited to preside over their dispute, subject to the usual considerations of expertise and independence. If, however, parties cannot agree on who to appoint as sole arbitrator or chairman of a three member tribunal, they can look to the SIAC to assist with the appointment. The SIAC has a panel of internationally respected arbitrators and experts from legal and other industries.
Finally, Mohan, any ‘war stories’ of Indian companies arbitrating in Singapore? What do they find the experience like?
Of course reasons of client confidentiality preclude identification of any particular company. I can however quite safely say that the feedback I have received has been very positive – the key areas have been the speed and efficiency of the whole process. In Singapore, arbitrators generally recognise that they need to take responsibility to manage the arbitration process as efficiently as possible. So they tend to provide directions and hearing dates as early as is possible, to move the process along.
My own recent experience as Arbitrator in a dispute between an Indian and Singapore party over iron ore shipments to China is perhaps a helpful illustration. The whole process was concluded in about 15 months. In that time I heard and decided applications for security as well as issued an Interim Award. The parties then sought to negotiate a settlement, but when this began to unduly prolong the arbitration timelines, without any real sign of real progress, I issued directions fixing dates for the final hearing on the merits. The parties eventually settled the dispute before the final hearing took place.
MPillay is ranked as one of the top Singapore law firms in arbitration & dispute resolution. MPillay works in association with Pinsent Masons LLP in Singapore. Mohan Pillay can be reached at firstname.lastname@example.org. The interviewer can be reached at email@example.com