7 February, 2019
A report by the Asian Development Bank suggests that Asia will need more than US$1.7 trillion (S$2.3 trillion) of infrastructure annually from 2016 to 2030[1]. Since infrastructure projects are complex and can involve litigation, Singapore has introduced the Singapore Infrastructure Dispute-Management Protocol.
The protocol was launched on 23 October 2018 by the Ministry of Law and is a set of contract terms and conditions that provide for the appointment of a dispute board in an infrastructure project. The incorporation of the protocol has to be mutually agreed to by parties, often by an inclusion of an appropriately worded clause. The principle that underpins the protocol is that parties in an infrastructure project should refer any difference to a quasiadjudicatory body as early as possible, who will proactively help to prevent them from escalating into disputes, thereby minimizing risks and costs.
The protocol recommends that the dispute board should only be appointed for a project that exceeds S$500 million and should comprise one to three expert professional members. The dispute board can be selected by agreement of the parties at the start of the project, or failing that, the dispute board may be appointed by an authorized appointing board: either the Singapore International Mediation Centre or the Singapore Mediation Centre. Unlike other similar existing protocols, the members of the dispute board are expected to hold regular meetings and carry out site visits (a minimum of three over a span of 12 months) to keep abreast of the overall progress of the project and to anticipate differences that may arise. The dispute board is supported by an authorized appointing board who will maintain a panel of professionals who may be engaged on the dispute board and provide general administrative support.
In the event that a difference does arise, either party to the protocol is entitled to seek recourse by referring it to the dispute board. In the referral, the referring party is entitled to ask the dispute board to mediate the difference, provide an opinion or render a determination. Alternatively, the dispute board can decide on the preferred dispute resolution method. The process of mediation is self-explanatory. The key difference between an opinion and a determination is that the former is neither final nor conclusive and as such is subject to the final determination by the court or an arbitral tribunal. The latter is binding on parties and unless objected to by the aggrieved party within 28 days of the date of the determination, has to be complied with immediately. In both cases, however, either party is at liberty to serve a notice of dissatisfaction, which will automatically render both an opinion and a determination nugatory. In the event of noncompliance with a mediation settlement agreement, opinion or determination, a party is entitled to obtain a relevant enforcement order.
While it remains to be seen if the protocol is a success, there is no denying that Singapore has a diverse system of dispute resolution mechanisms to cater to the different demands and needs of users. The protocol will also be a critical plank in Singapore’s efforts to establish itself as an infrastructure hub of Asia.
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For further information, please contact:
Satinder Pal Singh, Duane Morris & Selvam LLP
spsingh@selvam.com.sg
Notes
[1]Asian Development Bank. Meeting Asia’s Infrastructure Needs. Mandaluyong City, Philippines: Asian Development Bank, 2017.
