• On 1 May 2001 the Singapore International Arbitration Centre introduced new procedural rules for domestic arbitration. SIAC’s existing rules had been designed primarily for international arbitration. Differences include a mandatory timetable for exchange of statements of case that will apply even before the arbitrators themselves have been appointed. Later in the arbitration, a new procedure permits applications for a summary award where there is no valid defence to all or part of the claim. The objective of these and other changes is to enable domestic disputes to start and then to proceed more quickly and at less cost than under the international procedure.
  • In late 2000, the Inland Revenue Authority of Singapore (IRAS) advised that fees paid to international arbitrators sitting in Singapore should be subject to the tax liabilities applicable to income earned in Singapore by non-residents. Henceforth, the SIAC and other bodies paying fees to arbitrators for work in Singapore are required to deduct and account to IRAS for tax at appropriate rates (24.5% in Year of Assessment 2002). Relief under double taxation treaties is not commonly available in these cases. Actual and anecdotal evidence suggest that the imposition of this tax charge is influencing some tribunals to try to move arbitrations out of Singapore. These consequences are viewed with concern by the arbitration community in Singapore.

    • Several Asian countries have out-of-date or inconvenient arbitration laws that could benefit from revision. However, in most cases the reform proposals are still some way from final approval:

  • Malaysia’s current arbitration laws date from 1952. The Government has invited the Malaysian Bar Council to draft new legislation. It is expected that the new laws will mainly follow the Model Law whilst preserving a separate regime for domestic cases. However, there is presently no indication as to when such a law may be submitted to Parliament or passed into law.
  • Japan’s arbitration laws date back to 1890. Two academic groups are currently attempting to draft news laws. However, neither is likely to complete its work for some time and, even when they do, it is unclear whether the Government would support the proposals. Given the Government’s other legislative priorities, new arbitration laws are not expected for several years.
  • Thailand has prepared a new draft arbitration law based substantially on the Model Law. This draft is presently under consideration in the House of Representatives, after which it will be sent to the Senate for further review. It is unlikely that the new Act will receive final approval for some time to come.
  • Laos and Thailand are to set up a sub-committee to oversee the arbitration of disputes in business and investment sectors. It is anticipated that this sub-committee to oversee the arbitration of disputes in business and investment sectors. It is anticipated that this sub-committee would set out measures to help solve bilateral disputes and encourage the parties to reach a compromise. The proposed sub-committee is to be discussed during the Tenth Joint Commission held in August and co-chaired by the Foreign Ministers of each country.
  • Singapore is considering changes to its domestic arbitration laws to bring them closer to the Model Law regime applicable to international cases. Legislation to replace the Arbitration Act 1953 has already been prepared in draft and should be submitted for parliamentary review in due course.
  • Asian arbitration centres reported mixed trends in annual growth for year 2000 caseloads. Upwards trends were reported by the HKIAC (Hong Kong), which received 298 new international cases in 2000 compared to 257 in 1999 and 240 in 1998, and by the KLRCA (Kuala Lumpur) which registered 10 new international cases (8 in 1999 and in 1998). Internationally, 541 new requests for arbitration were filed with the ICC, up from 529 in 1999 and 466 in 1998. Countering this trend, the SIAC (Singapore) received 52 new international cases in 2000 as against 67 in both 1999 and 1998, and CIETAC (China) received 543 new international cases in 2000.

"© Herbert Smith 2002

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