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International court to hear arbitration-related cases in Singapore

Alison Ross

09 January 2018

International court to hear arbitration-related cases in Singapore

Singapore's supreme court building, which hosts the SICC (Credit: istock.com/romanbabakin)

Singapore has today passed a bill allowing parties to submit cases under its international arbitration act to the Singapore International Commercial Court for consideration by a bench of judges from all over the world – but only Singapore qualified lawyers will be able to argue them. 

Chief Justice Sundaresh Menon disclosed the existence of the bill to amend Singapore's Supreme Court of Judicature Act in a speech to mark the opening of the legal year in Singapore yesterday. ‎It had its second reading in parliament today and is understood to have been passed this evening. 

The key part of the bill (No. 47/2017) requires the insertion into the act‎ of these words: "the Singapore International Commercial Court (being a division of the High Court) has jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear and that satisfy such conditions as the Rules of Court may prescribe." 

The SICC was formed three years ago as a division of the Singapore High Court to be a neutral venue for international commercial litigation for parties with little or no connection to Singapore who need strong rule of law, experienced and respected judges and access to high quality legal and professional services.  

So far, it has heard 17 international cases transferred from the Singapore High Court, including cases governed by foreign law – but not cases under the Singapore International Arbitration Act (IAA).

‎Speaking to GAR, Divyesh Menon of Mayer Brown in Singapore explains that the amendment to the law means that applications to stay court proceedings and to enforce or set aside arbitral awards, along with other arbitration-related litigation, can be heard by the SICC as well as by the Singapore High Court. 

"The‎ potential benefit to parties lies in having a  renowned and diverse, including judges that are versed in the governing law of the underlying dispute, international bench hear and determine such arbitration-related court applications," Menon says. A total of 12 judges were appointed to the court when it was formed in 2015, of whom 11 are still serving. They hail from a mix of civil and common law jurisdictions, including Australia, Canada, continental Europe, England and Wales, Hong Kong and Japan. 

The court also just added four new judges, including the former president of the UK Supreme Court Lord Neuberger; the former judge in charge of the English Commercial Court Sir Jeremy Cooke (who first conceived the idea of the SICC with Sundaresh Menon), the former chief justice of the High Court of Australia Robert French and the former chief justice of Canada Beverley McLachlin

For Danish national Jawad Ahmad and Singaporean Paul Tan, who are private law clerk to judge and arbitator Charles N Brower and partner at Rajah & Tann, respectively, the SICC has the potential to become the "go to" court for arbitration-related litigation in Singapore. Two years ago, they predicted today's development in Kluwer Arbitration Blog, observing that "thus far murmurs of concern have focused on the extent to which the SICC will 'eat into' Singapore's bustling international arbitration market [...] The SICC's value [however] may lie in it exercising curial review of arbitration-related court actions."

Ahmad and Tan went on to argue that the SICC would be a particularly apt choice as curial court if the action raised foreign law or evidential law issues, as the involvement of a judge qualified in that area of law would give the judgment "legitimacy and credibility".

The SICC could also depart from Singapore rules of evidence even in the absence of party agreement, they noted – for example choosing not to admit new evidence in a de novo jurisdictional review of a Singapore-seated investment arbitration, as the High Court did in its criticised 2015 judgment in Lao v Sanum Investments.

"As a broader point flowing from the above, the SICC is of an international character and would promote the notion of arbitration as a 'delocalised' form of dispute resolution", free of any "parochialism," they explained.

But they said it would make sense to continue to submit actions that did not require the SICC's "unique features" to the Singapore High Court, for instance a challenge to an award on the basis that procedural due process was not respected which did not trigger foreign law or evidential issues.

Addressing parliament today, Singapore's senior minister of state for law and finance Indranee Rajah said the SICC has served parties from Australia, Hong Kong, India, Indonesia, Is‎rael and Japan in high-value cases over construction, investment, banking, finance and shipbuilding – with two parties availing themselves of an option to use foreign lawyers and others engaging Singapore counsel. 

The law states that foreign lawyers can be used if they are registered with the SICC, which entails a fairly simple application process, and if the case is "offshore" – meaning it has no substantial connection to Singapore.

"The SICC has received positive reviews for the quality and speed of its judgments," Rajah said, noting GAR's description of the court's first judgment in a dispute arising from Indonesian coal production worth over US$800 million as a "masterclass" in how to deal with rules of interpretation, public policy and the implication of terms. 

Most judgments have been issued within a month to three months of the court's last hearing, she said. 

Rajah continued that "since the SICC was set up as a division of the High Court, it has always been the intention that parties should be able to appear before the SICC for an IAA-related matter" – or that such cases could be transferred from the High Court.

Parties in these arbitrations will benefit from the "added option‎ of having their applications heard by SICC judges whose expertise covers a range of civil and common law jurisdictions", she said. "These are jurists of the highest calibre... Many of them are also very experienced in arbitration law." 

Rajah added that the development will "increase Singapore's attractiveness as a seat of arbitration, primarily because the widely acknowledged high quality of the bench hearing arbitration related matters will now be further enhanced by the inclusion of the international judges who sit on the SICC." 

However, the minister clarified that it is still the case that only Singapore-qualified lawyers in Singapore law practices may appear in IAA and IAA-related matters, whether in the SICC or ordinary High Court.

"There will be no change to this status quo", she told parliament. "The IAA is part of Singapore law, with features that are tailored for the Singapore arbitration landscape, and there is a developed body of local jurisprudence based on our courts' interpretation and application of the IAA provisions, which Singapore lawyers are well versed in."

"Hence parties which have arbitration-related matters heard in the SICC must be represented by Singapore-qualified lawyers. Foreign lawyers, who may be registered to represent parties in an 'offshore case' as defined in the rules of court, will not be able to appear before the SICC in respect of IAA matters. This will be so notwithstanding that the foreign lawyers had represented the parties in the original arbitration. The rules of court will be amended accordingly to clarify that an 'offshore case' does not include matters under the IAA."

Divyesh Menon tells GAR there was some expectation that the confirmation of the SICC's jurisdiction to include arbitration matters would be accompanied by a green light for foreign lawyers registered with the court to appear as advocates in IAA-related litigation before the court. "Segments of the Singapore legal profession have called for such a move, which would allow parties to retain their international counsel from the arbitration in any ensuing litigation in Singapore with the potential for substantial cost-savings as a result," he says.

However the amendments to the rules of court that Rajah announced make it clear that IAA cases are not "offshore cases" and that only Singapore-qualified lawyers may appear.

"The only exception to this remains where a QC or equivalent is granted ad hoc admission [to the Singapore bar] under the exceptional circumstances provided for in section 15 of Singapore's Legal Profession Act," Menon explains. In recent times, this has happened on only three occasions in arbitration-related cases, when Toby Landau QC and David Joseph QC (both English barristers based at Essex Court Chambers in London) were allowed to appear in the Astro/ Lippo case; when Samuel Wordsworth QC (a third English barrister at the same chambers) was allowed to appear in the Lesotho/ van Zyl case and when Harish Salve SA and Gopal Subramanium SA (both Indian senior counsel) were allowed to appear in the Diachil Sankyo/ Ranbanxy case.

For Menon, a more "flexible" approach would be preferable, permitting registered foreign lawyers to appear in IAA cases before the SICC where the case has no substantial connection to Singapore other than it being the seat of arbitration, and where the issues in the application involve questions of foreign law (in particular, applications on jurisdiction).

"It is to be hoped that, as with several other SICC-related developments, these provisions will be incrementally refined and liberalised in the time to come," he says.

His colleague Yu Jin Tay, partner at Mayer Brown in Singapore, agrees, saying, "Although this development is not liberalising for foreign lawyers, it gives parties more choice. Of course, the idea longer term is that there might be a chance for liberalisation, perhaps without the need for legislation."

Rajah's comments in parliament today may offer hope in this regard: "The SICC's early successes place Singapore in a good position to continue to serve as a leading centre for the resolution of international commercial disputes," she said. "We will continuously refine and develop this offering to meet the needs of parties to such disputes. The amendments in the bill are part of this ongoing endeavour."

Chief Justice Sundresh Menon also offered hope in his speech to launch the start of the legal year. To meet challenges that lie ahead including the internationalisation of legal practice, the disruption of technology and increased concern over professional standards "we must embrace new ways of doing things," he said.

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