INTRODUCTION

The Singapore International Arbitration Centre (SIAC) was established in the year 1991 for the purpose of facilitating institutional arbitration. It provides administrative and technical assistance in conducting international and domestic arbitration proceedings which are conducted under its own rules and also based on United Nations Commission on International Trade Law (UNCITRAL) arbitration rules. SIAC is mainly based in Singapore at Maxwell Chambers and the awards laid down by it are enforceable in many jurisdictions namely Australia, Thailand, Indonesia, UK, USA, Hong Kong SAR, India, Vietnam, Jordon, China1 and many other signatories of the New York Convention2. Singapore is the Asian hub and world leader for International Arbitration and has become the first choice amongst international businesses when they want to have their commercial disputes resolved3.

DISPUTE RESOLUTION AT SIAC

All sorts of dispute resolution processes are hosted in Singapore, covering wide range of subject matter of suits. These processes are administered and facilitated by International Chamber of Commerce. Situated in the heart of South-East Asia, there has been a substantial increase in the total number of suits being referred to arbitration with its seat in Singapore due to various reasons such as:

  1. Many foreign companies have their headquarters in Singapore and there has been an increase in establishment of branches or subsidiaries of foreign banks, public and private, in the city.
  2. Geographical location which strengthens its connectivity with its neighbouring countries like Indonesia, Malaysia and Thailand.
  3. Modern day infrastructure to cater every need and advance communication facilities.
  4. Utmost support of its Courts striving to uphold arbitration agreements, enforcing foreign awards and expressing a public policy that the decision of contracting parties to arbitrate their dispute should be upheld and given effect.4

Having a comprehensive legal infrastructure that supports and at the same time intensively promotes arbitration along with a robust and efficient legal system; judiciary that is supportive of arbitration as a dispute resolution mechanism are the main reasons why Singapore is the most preferred seat of arbitration in the world. The other factors that contribute towards the emergence of Singapore as a leading center for international commercial arbitration include the Arbitration Procedure wherein the post-dispute agreement that has to mandatorily be in writing can be fulfilled in one step i.e. submitting it to the registrar of SIAC5. SIAC's fee structure is also very simple wherein the parties submitting their dispute to the abovementioned institution only have to pay the administrative fee for using administrative assistance. Arbitrators' fees is determined based on the quantum of suit and the institution does not apply hourly rate6.

RISE OF INTERNATIONAL ARBITRATION IN SINGAPORE

Just twenty years ago, the concept of international arbitration did not exist at all in Singapore but today it has become a globally recognized hub for the same. SIAC has attained global recognition as 80% of the cases it has administered are all international cases. Singapore has one of the fastest growing economies with an estimated GDP per capita of USD 55, 252.40 approximately7. This development owes its due credit to the firm governance and the efficiencies led by it8. Singaporean government practices state-capitalism which has a competent economic management and has the ability to deliver sustained economic growth.

The government of Singapore has worked hard to maintain Singapore as the hub of business and international trade and is now bearing the fruits of its work. With the kind of commitment and efforts put in by the Singaporean government to maintain its economic growth, it is not surprising that the country has marketed itself well as an arbitration-friendly nation. The economy of Singapore has grown and has been effectuated by the resources it receives in the form of fees of the arbitrators and the administrative fees that the Arbitration Institutions, mainly SIAC, receive from the parties who register their disputes here. While seeking to attract arbitration, Singapore as a state also ends up attracting international business and international trade which in return is more beneficial for the economy9. It is a settled fact that to ensure economic growth in this modern era of globalization of commerce it is essential to develop and promote a strong system for public international law and a dispute resolution mechanism that resolves disputes relating to it. This ideology has been substantiated by the former President of Iran-United States Tribunal and is quoted below:

"Arbitration accompanied the growth of International Commerce. It saw its role as offering the tools best suited to international business to resolve disputes whenever they arose. The major institutions majorly see their role in facilitating the growth of international business by offering the necessary tools to resolve the disputes arising in international business10."

The abovementioned texts seeks to convey that growth of international dispute resolution mechanism is complementary to the growth of international business in the state/country. Thereby, having a strong legal system and judiciary that supports alternative dispute resolution mechanism and not just judicial settlement, is beneficial for the growth of the economy. It is exactly the strategy that Singaporean Government has adopted and become one of the richest countries in the world all due to firm governance that supports arbitration leading to a strong well-built economy. Singapore achieved this is by first developing its legal structure that is arbitration friendly state in order to attract contracts that will mention their seat of arbitration as Singapore11. Further, being a signatory to the New York Convention has helped Singapore to enforce international and foreign arbitral awards with much ease. After attaining domestic expertise in the field of arbitration, it sought to promote international commercial arbitration and drafted the International Arbitration Act12 to regulate international arbitration in Singapore. It has also been advantageous that the government has taken steps to ensure that there is minimal intervention from the country's Courts in the process of arbitration. This feature of minimal intervention is what SIAC boasts about on its webpage in order to attract disputants to choose their seat of arbitration as Singapore13.

CONCLUSION

Singapore is one of the world's most prosperous nation with a non-existent arbitration background twenty-five years ago to becoming the world's leader in the field of International Arbitration14. The efficiency of its legal system and structure is because of the transparency and generosity of its government that provides sound funding to facilitate every field that will lead to development of its economy15. Singapore has very strategically used its regulatory framework to turn itself into world leader in international arbitration and at the same time make it a hub for international trade and business. Along with this, Singapore has also permitted Third Party Funding - a concept in international arbitration, by introducing a legal framework that will regulate it. These regulations can be interpreted in the Amended Civil Law Act and The Civil Law (Third-Party Funding) Regulations 201716. Singapore's success in international arbitration is the outcome of the strength of its legal system and the support of the government in ensuring a policy of non-intervention that has led to increase in economic efficiencies.

Footnotes

1. www.siac.org.sg

2. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York 1958

3. www.siac.org.sg/64-why-siac/150-facts-figures

4. www.siac.org.sg

5. Supra note 5

6. Ibid

7. Tan Cheng-Han, Dan W Puchniak, & Umakanth Varottil, "State-Owned Enterprises in Singapore: Historical Insights into a Potential Model for Reform" (2015) 28:2 Colum J Asian Law 61 at 65.

8. Ibid

9. Edward Leahy & Carlos Bianchi, "The Changing Face of International Arbitration" (2000) 17:4 J Int'l Arb 19 at 58.

10. Robert Briner, "Globalization and the Future of Courts of Arbitration" (2000) 2:1 Eur J L Reform 439 at 444.

11. Joshua Karton, The Culture of International Arbitration and the Evolution of Contract Law (Oxford: Oxford University Press, 2013) at 63.

12. SIAC, "What Singapore Has to Offer", supra note 29; International Arbitration Act (Cap 143A, 2002 Rev Ed Sing).

13. Singapore International Arbitration Centre, "What Singapore Has to Offer" (4 January 2018), online: archived at [SIAC, "What Singapore Has to Offer"].

14. Queen Mary University of London and White & Case, '2018 International Arbitration Survey: The Evolution of International Arbitration', 9-10, https://www.whitecase.com/sites/whitecase/files/files/download/publications/qmul-international-arbitration-survey-2018-18.pdf .

15. Elizabeth MacArthur, Regulatory Competition and the Growth of International Arbitration in Singapore, Appeal Vol. 23 Pg 165

16. Indranee Rajah SC (Senior Minister of State for Law), Second Reading of the Civil Law (Amendment) Bill (10 January 2017) https://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00010624-WA¤t

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