Asia's vibrant economies are driving a substantial amount of commodity trading and, with that, substantial shipping activity. Asia's share of global Gross Domestic Product (GDP) is said to be over 45% and likely to exceed 50% by 2030. Asia continues to build cities, maintaining its already substantial importation of raw materials and commodities. These cities, in turn, generate an export trade from the manufacture of goods and also generate an increasing import trade from rising business and consumer expenditure, all of which is carried mostly by ship. These commercial and shipping transactions have, as their by-product, disputes that need to be resolved in a meaningful and efficient way, giving rise to a demand for arbitration services and for a selection of arbitral venues appropriate to the transaction or dispute.
London has attracted and continues to attract a large number of maritime law disputes not least because of the trust reposed by the maritime and commercial community in English commercial law and English arbitral processes. English awards, on the whole, offer extensive reasoning that the maritime and insurance community find useful in business and forward planning. The most recognisable arbitral organisation in maritime arbitration is the London Maritime Arbitrators Association (LMAA).
In recent years, Singapore has become a popular choice to seat international commercial arbitrations. Singapore sits geographically at the centre of Asia and is close to China and India, two of the dominant players in Asian and global trade. It operates in English and is known for its transparency, efficiency and adherence to the rule of law. In a recent study of international arbitration centre, Singapore and London were ranked jointly as the most favoured seats of arbitration around the world. Singapore's dedication to the rule of law and its open-architecture system of arbitration (allowing non-Singapore qualified practitioners and arbitrators to arbitrate in Singapore with little to no restriction) provides the commercial certainty and predictability that the trading world desires. The fact that many practitioners and arbitrators are based in Singapore and Asia also promotes the sense that they understand cultural differences between parties to a transaction, whether it is a difference between parties from different parts of Asia (a Continent of about 30% of the Earth's land area, comprising about 50 countries and a population of about 4.7 billion) or differences between parties further apart geographically.
All businesses wish their cases in arbitration to be understood. Sometimes an inability on the part of counsel or the arbitral tribunal to appreciate cultural norms in a certain part of the world might make the eventual award in arbitration feel like counsel and the tribunal have not truly appreciated the facts and how the parties have dealt with one another. What Singapore endeavours to offer continually, I believe, is a place of arbitration that parties, wherever they are based in the world, trust and where they feel comfortable arbitrating.
Singapore's regular appearance at the top of the world's maritime centre also promotes its attractiveness as an arbitral centre where there exists a full maritime ecosystem and the technology to handle complex maritime disputes. The most recognisable arbitral organisation in this respect is the Singapore Chamber of Maritime Arbitration (SCMA) whose processes are similar to those that take place in London maritime arbitration. SCMA has made good progress over the last decade in attracting maritime arbitrations both regionally and internationally in a whole range of maritime disputes ranging from charterparty and cargo disputes to commodity and commercial disputes, to disputes arising from shipbuilding, ship conversion and offshore construction. Future trends in commercial and maritime disputes will involve traditional commercial and shipping issues, but they will also contain questions of decarbonisation, Environmental, Social and Governance (ESG) -compliance, new forms of "ships" and transportation and the use of technology and artificial intelligence (AI) in commerce and shipping. Arbitration centre may in future be defined by their ability to handle such disputes and to grow with the changes that the world is already experiencing at a rapid rate.
This article first appeared in the Xinhua-Baltic International Shipping Centre Development Index Report 2023, which announced that Singapore retained its lead as the world's top maritime centre for the tenth consecutive year. It is reproduced with the kind permission of the publishers of the report.
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