Singapore International Arbitration Centre (SIAC)’s new Arbitration Rules from 1 August 2016 onwards

Singapore, just like the Netherlands, is one of the most attractive arbitration forums in the world. SIAC continuously improves the arbitration rules to provide parties with the most efficient ways to solve disputes. There are several changes to the Singapore International Arbitration Centre (SIAC) Arbitration Rules. There are two points worth noting.

“Early Dismissal”: Singapore’s innovation

The most significant change of the SIAC 2016 Rules is that of Rule 29. Rule 29 provides a procedure for the parties to apply to the Tribunal for the early dismissal of a claim or defense, based on two reasons: (1) a claim or defense is manifestly without legal merit; or (2) a claim or defense is manifestly outside the jurisdiction of the Tribunal. If the Tribunal decides to proceed with the application, the Tribunal may make an order or award in a summary form, within 60 days.

Under this new procedure, the parties can save a lot of time and money, because claims or defenses that manifestly lack legal merit or fall outside the jurisdiction can be quickly dismissed.

Consolidation of Arbitration Proceedings

SIAC 2016 Rules also provide for new procedures for parties to file a Notice of Arbitration in respect of all arbitration agreements involved or the further consolidation of related arbitrations.

SIAC 2016 Rule 8 lays down a procedure for a party to apply for consolidating the arbitration proceedings under SIAC 2016, provided one of the criteria is fulfilled:

• all parties have agreed to the consolidation; or
• all the claims in the arbitrations are made under the same arbitration agreement; or
• the arbitration agreements are compatible, and: (i) the disputes arise out of the same legal relationship(s); (ii) the disputes arise out of contracts consisting of a principal contract and its ancillary contract(s); or (iii) the disputes arise out of the same transaction or series of transactions.

The consolidation of arbitrations has been a worldwide trend to deal with the complexities of the commercial contracts. The Dutch arbitration act Article 1046 of the Dutch Code of Civil Procedure, has adopted a comparable consolidation procedure, and it has been amended in 2015 to broaden the consolidation possibilities.

Comparing the Singapore system and the Dutch system, there are several interesting differences. Under SIAC 2016 Rule 8, a party can seek to consolidate the arbitrations prior to, or after the constitution of any Tribunal. In other words, even before constitution of the Tribunal, a party already has the possibility of consolidating different agreements. On the contrary, under the Dutch system, the party can apply for consolidation only when there is a pending arbitration proceeding and a corresponding Tribunal has been arranged.

Moreover, under the Singapore system, parties can apply for consolidation of arbitrations pending under the SIAC Rules and the Court will decide to grant the consolidation or not. Being quite different, under the Dutch system since 2015, in addition to the President of the District Court of Amsterdam, a party may request that “a third person”, designated to that end by the parties, order consolidation with other arbitral proceedings pending “within or outside the Netherlands”, unless the parties have agreed otherwise. In this regard, the Dutch system provides an even more liberal approach. Not only the Court, but also a third person can order consolidation. Such third person can also be an arbitration institute. The Dutch system still provides a more liberal system, with regard to the consolidation of arbitration proceedings.

To sum up, the latest version of SIAC Arbitration Rules from 2016, does follow the worldwide development of pursuing the more flexible arbitration rule to save the parties’ time and cost. This trend is reflected in the new Dutch Arbitration Act in 2015. The Singapore system and the Dutch system do have their own liberal aspects. That of Singapore adopts the early dismissal option, which is the first one in the main commercial arbitration forums. The Dutch system also has a quite flexible consolidation procedure for different arbitration proceedings that even allows a third person to order consolidation. The developments both in Singapore and the Netherlands also show that these jurisdictions aim to create a competitive and an attractive forum for international investors.

Shu-Chien Chen LL.M

 

[1] The new Singapore International Arbitration Centre Arbitration Rules in 2016

[2] The Dutch Arbitration Act (in English)