23 July, 2016
INTRODUCTION
The Singapore International Arbitration Centre (“SIAC”) has released the 6th edition of its rules (“SIAC Rules 2016”) which shall come into force on 1 August 2016. The SIAC Rules 2016 apply to arbitrations commenced on or after 1 August 2016.
The SIAC has established its position as a leading institution, with 271 cases filed from 55 jurisdictions in 2015. The new rules introduce bold measures and bring together best practices which will render SIAC arbitrations even more efficient, cost effective, and user-friendly.
The SIAC has become the first major commercial arbitration centre to introduce such a procedure.
NOTABLE FEATURES OF THE SIAC RULES 2016
A. Early Dismissal of Claim or and Defence (Rule 29)
Perhaps the most notable feature of the SIAC Rules 2016 is the provision for early dismissal of claims. The SIAC has become the first major commercial arbitration centre to introduce such a procedure.
Under Rule 29.1 of the SIAC Rules 2016, a party may file for the early dismissal of a claim or defence within 30 days of the constitution of the arbitral tribunal (“Tribunal”), and under Rule 28.3,
the Tribunal shall issue its order or award within 60 days of the filing of the application.
The early dismissal provision addresses the common complaint that unmeritorious or frivolous claims are pursued all the way through to the Final Award, resulting in a significant waste of time and costs. Arbitrators are often reluctant to dismiss claims at an early stage for fear of challenges brought on the basis of an infringement of the right to be heard or pre-judging an issue. With Rule 29.1, SIAC Tribunals are now expressly empowered to dismiss claims or defences which are without legal merit or outside the Tribunal’s jurisdiction.
B. Delocalising the Seat of the Arbitration (Rule 21)
Another significant change is Rule 21 which provides that Singapore will no longer be the default seat of arbitration under the SIAC Rules 2016.
Parties may agree on the seat of the arbitration. However, failing such agreement, the seat of the arbitration shall be determined by the Tribunal, having regard to all the circumstances of the case.
This is a key point which contracting parties should be aware of, especially if it is the intention of parties for the seat of the arbitration to be Singapore or a particular other jurisdiction. The seat of the arbitration determines the procedural law which applies to the arbitration and it is the courts at the seat that exercise supervisory jurisdiction over the arbitration.
C. Expanding and Refining the Expedited Procedure (Rule 5)
In order to allow more cases to make use of the Expedited Procedure, which is one of SIAC’s most popular procedures for saving time and costs, the monetary threshold for the applicability of the Expedited Procedure has been raised from S$5,000,000 to S$6,000,000 under Rule 5 of the SIAC Rules 2016.
Further, under Rule 5.2c, the Tribunal may, in consultation with the parties, determine whether a case conducted under the Expedited Procedure is to be decided on the basis of documentary evidence only. This will save the time and expense incurred.
Rule 5.3 also makes clear that in the event of any conflict between the terms of the arbitration agreement and the provisions under the Expedited Procedure, the latter would apply.
D. Multiple Contracts and Consolidation (Rule 6 & 8)
Multi-contract disputes are becoming increasingly commonplace. In recognition of this, the SIAC has introduced a streamlined process for disputes involving multiple contracts.
Under Rule 6.1, the Claimant may now:
(a) file multiple Notices of Arbitration, one for each contract, and concurrently submit an application for consolidation; or
(b) file a single Notice of Arbitration for all such contracts. Both options provide certainty on the date of commencement for multi-
contract disputes.
If a single Notice of Arbitration is filed for all contracts, the Claimant shall be deemed to have commenced multiple arbitrations, one in respect of each contract and the Notice of Arbitration shall be deemed to be an application to consolidate all such arbitrations.
Rule 8 also introduces a process for consolidation whereby a party may apply to the Court of Arbitration of SIAC for the consolidation of multiple arbitrations before or after the constitution of any Tribunal.
E. Joinder (Rule 7)
Rule 7 allows both parties and non-parties to apply for joinder.
The joinder is premised on two alternative criteria:
(a) the party to be joined is prima facie bound by the arbitration agreement, or
(b) all parties, including the party to be joined, have consented to the joinder.
This is a key point which contracting parties should be aware of.
A joinder application may be made before or after to the constitution of the Tribunal.
If a successful application is made under Rule 7 prior to the appointment of any arbitrator, the joined party may participate in the process of appointing the arbitrator(s).
F. Arbitrator Challenges (Rule 16.4 & Schedule of Fees)
Rule 16.4 now reflects SIAC’s practice that the SIAC Court of Arbitration will issue reasoned decisions on all challenges to arbitrators. To provide certainty for users and to save time, the administrative fees payable for arbitrator challenges are now fixed at S$8,560 (includes 7% GST) for Singapore Parties and S$8,000 for overseas parties.
G. Remedy Against Non-Paying Party (Rule 27)
Rule 27g expressly provides that the Tribunal has the power to issue an order or award for the reimbursement of unpaid deposits towards the costs of the arbitration where a party to the arbitration has paid another party’s share of the deposits.
H. Enhancing the Emergency Arbitration Proceedings (Rule 30, Schedule 1 & Schedule of Fees)
Finally, to further increase the speed of emergency arbitration proceedings, Rule 29 read with Schedule 1 shortens the time for
the appointment of an Emergency Arbitrator to within one day of receipt by the Registrar of an application for emergency interim relief and payment of the fees and deposits. Previously, the appointment was within one business day.
Schedule 1 of the SIAC Rules 2016 also provides that the order or award of interim relief must be issued within a maximum of 14 days from the appointment of the Emergency Arbitrator.
In order to ensure that emergency arbitration proceedings are cost-effective for cases of any quantum, the fees of an Emergency Arbitrator are now fixed at S$25,000 and the deposits towards the Emergency Arbitrator’s fees and expenses is fixed at $30,000 in the Schedule of Fees.
COMMENTS
The 2016 Rules Revision recognises the realities and complexities of commercial disputes. With bold features such as the early dismissal provision, the SIAC is further establishing its position as a leader amongst arbitral institutions.
