Singapore Arbitration Legislation

Annotated

Robert Merkin, Johanna Hjalmarsson

• Publisher: Taylor & Francis
• Year: 2016
• Print ISBN: 9781138801837
• eBook ISBN: 9781317624813
• Edition: 2
• Topic: Law
• Subtopic: Arbitration, Negotiation & Mediation in Law
• Index: Law

The book provides a comprehensive and in depth guide to the regulatory framework in Singapore, the first of its kind for the foremost jurisdiction for international arbitration in the Asia-Pacific geographic zone. It is designed with practitioners in mind and provides terse and specific but detailed and well-informed commentary to each of the sections in the applicable arbitration acts.

The book sets out and annotates the two legislative acts applicable to arbitration in Singapore, as well as the Singapore International Arbitration Centre Rules. It also contains a few international documents including the Uncitral Model Law and the New York Convention.

CHAPTER 1
Background to the Singapore Legislation

Structure of the arbitration system in Singapore¹

Singapore has two parallel arbitral systems. One is for domestic arbitration, the Arbitration Act 2001 (Cap. 37), published in revised form in 2002 (Cap. 10), referred to in this work as AA. The other is for international arbitrations, enshrined in the International Arbitration Act 1994, Act 23 of 1994, referred to in this work as the IAA. Singapore has, since 1986, been a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards 1958, Accordingly, Singapore has a legal system fully equipped to allow it to take its place as a leading forum for hosting international arbitrations.

The IAA was revised in 1995 and amended by the International Arbitration (Amendment) Act 2001 (Cap. 38) and the International Arbitration (Amendment) Act 2002 (Cap. 28),² and then published in revised form in 2002 (Cap. 143A). It was subsequently amended in 2010 to allow the court to grant interim measures in support of arbitration. More significant amendments were introduced by the International Arbitration (Amendment) Act 2012 (No. 12 of 2012), with effect from 1 June 2012, in part the consequence of a Report of the Law Reform Committee of the Singapore Academy of Law published in 2011. The effects of the 2012 amendments are: to extend the power of arbitrators to award interest; to extend the definition of arbitration agreement so as to include oral agreements later recorded in writing; to recognise the use of emergency arbitrators who can act before the tribunal itself has been constituted; and to give a right of appeal against a ruling by arbitrators that they do not have jurisdiction to hear a matter.

Transitional provisions for the 2012 Act are set out in s. 12, as follows:

12.—(1) This Act shall apply to arbitral proceedings commenced on or after the date of commencement of this Act but the parties may in writing agree that this Act shall apply to arbitral proceedings commenced before that date.

(2) Notwithstanding subsection (1), where the arbitral proceedings were commenced before the date of commencement of this Act, the law governing the arbitration agreement and the arbitration shall be the law which would have applied if this Act had not been enacted.

(3) For the purposes of this section, arbitral proceedings are to be taken as having commenced on the date of the receipt by the respondent of a request for the dispute to be referred to arbitration, or where the parties have agreed in writing that any other date is to be taken as the date of commencement of the arbitral proceedings, then on that date.

It was held in AQZ v. ARA³ that s. 12(1) extends the operation of the amending legislation to arbitration agreements entered into before 1 June 2012 if the arbitral proceedings themselves are commended on or after that date.

There is detailed commentary on the adoption of the Model Law in the Law Reform Committee’s Review of Arbitration Laws, August 1993, available online at: www.sal.org.sg/digitallibrary/Lists/Law%20Reform%20Reports/Attachments/1/review_of_arbitration_laws.pdf. There is detailed commentary on the AA in the Attorney-General’s Chambers Review of Arbitration Laws, published in 2001, LRRD No. 3/2001, available online at www.asianlii.org/sg/other/SGLRC/report/R3/3.pdf.⁴ All arbitrations with a seat (referred to as “place” in the legislation) in Singapore are subject to one or other of these regimes.⁵ IAA is governed by the Singapore Rules of Court, Ord. 69A, and AA is governed by the Singapore Rules of Court, Ord. 69.⁶ Singapore, like many other jurisdictions, has adopted the distinction between international and domestic arbitration in order to make itself more attractive as an international arbitral forum. IAA implements into Singapore law the Model Law 1985. As was said in the 1993 Review, para. 8: “If Singapore aims to be an international arbitration centre it must adopt a world view of international arbitration.”⁷

The Model Law was drafted by UNCITRAL, the international trade law committee of the United Nations, as a measure laying down minimum standards for an arbitration regime. The Model Law is a succinct code of arbitration law, designed by its terms for international commercial arbitration but capable of adaptation for a domestic code. The principal features of the Model Law are party autonomy over the arbitration proceedings, the absence of any appeal procedure, the restriction of judicial intervention in the proceedings to default powers, and the free enforceability of the award other than in cases of want of jurisdiction or clear unfairness in the procedure. The IAA both supplements and modifies the Model Law, so it is necessary to read the two measures together: see the Notes to IAA, s. 3. The Model Law was modified in 2006 to provide alternative definitions of “arbitration agreement” and to allow interim measures: although Singapore has not adopted those modifications verbatim, the changes to the IAA by the 2012 Amendment Act to some extent reflect them.

The parties to an international arbitration may contract out of the IAA and the Model Law: see the Notes to IAA, s. 15. Adoption of standard rules ousts the IAA and the Model Law only insofar as the rules are inconsistent with those legislative measures: see the Notes to IAA, s. 15A. Equally, the parties to a domestic arbitration may agree to adopt the IAA and the Model Law.⁸

The two systems

The Model Law, by reason of its non-interventionist approach, was thought not to be fully appropriate to domestic arbitrations which may involve smaller businesses and indeed consumers. The 1993 Review, paras 10–13, thus rejected a uniform system of the type subsequently adopted in England by the Arbitration Act 1996 (AA 1996 (Eng)). There is accordingly separate legislation, AA, which permits intervention by the courts in a number of ways precluded by IAA and the Model Law. There is no legislation in Singapore which protects consumers or small businesses from “unreasonable” contract terms, and partly for that reason AA permits judicial intervention, e.g., by permitting refusal of a stay of judicial proceedings and by allowing an extension of contractual time limits for the commencement of arbitral proceedings. That said, much of the AA is based on the Model Law, and many of the provisions of the latter have been adopted more or less verbatim (albeit with some structural or drafting differences).

An important feature of the AA is that it has also adopted a number of the principles enshrined in the AA 1996 (Eng)⁹ and also the New Zealand Arbitration Act 1996. Those responsible for the drafting of the AA 1996 (Eng) considered at length whether the Model Law was appropriate for adoption in England. The Departmental Advisory Committee on Arbitration Law chaired by Lord Mustill, reporting in 1989, rejected calls for the adoption of the Model Law into English law. Instead the Committee recommended that there should be a new Arbitration Act, incorporating the best features of existing law but redrafted in more user-friendly terms, filling in the many gaps in the legislation which had been resolved, if at all, by case law. The DAC felt that, wherever possible, the new Act should reflect the Model Law, but that wholesale adoption would be detrimental. However, by the time that legislation was finally adopted, following two further important reports by the DAC in 1995 and 1996, latterly under the chairmanship of Saville LJ, the measure had moved English law far closer to the Model Law than had initially been contemplated in 1989, and there are relatively few differences between the two measures.¹⁰

Accordingly, while it is the case that Singapore has two entirely separate arbitral regimes governed by different rules of court, many of the provisions of the two regimes are identical in effect if not always identical in wording. There is a general presumption that the two measures should be construed consistently.¹¹ In this work the provisions of the IAA and the Model Law are set out first, followed by the provisions of the AA.

It may be helpful at this point to highlight the most important differences between the international and domestic codes, as follows:

• (a) The courts may intervene in an international arbitration only where the Model Law or IAA so permits (Model Law, art. 5), whereas the court appears to retain its general residual powers in respect of domestic arbitrations.
• (b) The waiver principle is statutory in the Model Law (art. 4) and is not referred to in the AA, although the common law probably has the same effect.
• (c) The death of a party terminates a domestic arbitration (AA, s. 5) but the effect in an international arbitration is not specified.
• (d) A stay of judicial proceedings is mandatory in an international arbitration (Model Law, art. 8) but discretionary in a domestic arbitration (AA, s. 6).
• (e) The court has power to extend contractual time limits for the commencement of arbitration (AA, s. 10), but there is no equivalent power in respect of international arbitrations.
• (f) The AA makes no reference to the language of the arbitration or the power of the arbitrators to adopt an inquisitorial process, whereas both matters are provided for in respect of international arbitrations (respectively, Model Law, art. 22 and IAA, s. 12(3)).
• (g) In the case of an international arbitration the arbitrators have a range of interlocutory powers, and if for any reason those powers cannot be exercised then the court has a more limited range of fallback powers (IAA, ss 12 and 12A). In the case of a domestic arbitration the arbitrators and the courts have concurrent interlocutory powers, in which case the courts must have regard to what has been done by the arbitrators (AA, s. 31(1)–(3)), although only the courts can secure the amount in dispute, grant a freezing order or grant an interim injunction (AA, s. 31(2)).
• (h) Domestic arbitrators, but not international arbitrators, have the power to issue an award striking out a claim if the applicant has allowed the claim to become stale (AA, s. 29(3)).
• (i) A point of law can be referred to the court for a preliminary ruling under the AA, s. 45, but there is no equivalent provision in the IAA or the Model Law.
• (j) There is no provision for the consolidation of proceedings where an international arbitration is taking place, although the parties may agree on consolidation in the case of two or more domestic arbitrations (AA, s. 26).
• (k) Where there is a time limit for the making of an award, the court may extend that time limit in the case of a domestic arbitration only (AA, s. 36).
• (l) The traditional power of arbitrators to withhold their award by way of security for payment of their fees is retained by the AA, s. 41, but is not replicated for international arbitrations.
• (m) There is provision for an appeal against a domestic award for error of law (AA, s. 49), but an international award cannot be challenged on this basis.

Structure of the present work

In this work the provisions of IAA and the Model Law are set out, followed by the provisions of the AA. All of these measures are annotated, but where the AA repeats what is found in IAA or the Model Law there is in most cases simply a cross-reference. It will be appreciated that, alongside the decisions of the Singaporean courts, the bulk of the annotations consists of decisions of the English courts under AA 1996 (Eng). This is so for three reasons: England is by far the most bountiful source of case law on arbitration legislation, in the past twenty years producing over 1,500 judicial authorities; many of the provisions of the Model Law have been incorporated into the AA 1996 (Eng) so that problems arising under the Model Law have been heavily litigated; and parts of the AA can be traced directly back to the AA 1996 (Eng).

The Rules of the Singapore International Arbitration Centre (SIAC) have been included in this work. Those Rules are regularly adopted in international arbitrations governed by the IAA and there are some important decisions on the relationship between SIAC and the legislation. SIAC was founded in 1991 and has issued its own Arbitration Rules. The most recent version of the SIAC Rules is 2013, effective 1 April 2013.¹² If the seat of the arbitration is Singapore, and the parties adopt SIAC Rules, the IAA will govern the arbitration (r. 32): SIAC’s Domestic Arbitration Rules were abolished in 2007. There is a presumption that the rules in force and applicable at the commencement of arbitration apply to a dispute.¹³ The SIAC Rules 2013 have made significant changes to the structure of the organisation, in particular by establishing a SIAC Court of Arbitration along the lines of the ICC International Court of Arbitration. In addition there is a new power conferred upon the Registrar, by r. 2.5, to extend any of the time limits established under the SIAC Rules.

One particular feature of the 2013 Rules is the introduction, in r. 5, of an expedited procedure under which, prior to the full constitution of the Tribunal, a party may apply to the Registrar for the conduct of the arbitration under the expedited procedure where either: (a) the amount does not exceed S$5,000,000; or (b) the parties so agree; or (c) there is exceptio...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Preface
• Contents
• Table of Cases
• Chapter 1 BACKGROUND TO THE SINGAPORE LEGISLATION
• Chapter 2 INTERNATIONAL ARBITRATION ACT
• Chapter 3 ARBITRATION ACT
• Chapter 4 OTHER LEGISLATION
• Chapter 5 RULES OF COURT
• Chapter 6 RULES OF THE SINGAPORE INTERNATIONAL ARBITRATION CENTRE
• Index