New Rules Take Effect at the Singapore International Arbitration Centre
The Singapore International Arbitration Centre (SIAC) has updated its procedural rules. The revised rules – known as the “SIAC Rules 2016” – take effect on Aug. 1, 2016. The SIAC Rules 2016 mark the sixth edition of the SIAC’s rules since the institution commenced operations in 1991. The rules were last amended in 2013. The SIAC Rules 2016 will apply to any SIAC arbitration commenced on or after the entry into effect of the new rules, unless the parties agree otherwise.
The SIAC is one of the world’s fastest growing arbitral institutions. While much of the SIAC’s caseload originates in Asia, the number of global cases handled by the institution is growing. The SIAC handled 271 new cases in 2015 – a record for the institution – involving parties from 55 jurisdictions around the world. While Singaporean parties continued to account for the largest number of case participants, the top foreign users hailed from India, China, South Korea, the United States, and Australia.
Rather than a fundamental overhaul, the changes made in the SIAC Rules 2016 reflect an effort to update the rules to account for developments in international arbitral practice and the growing complexity of disputes resolved through international arbitration. Noteworthy changes in the new rules relate to expedited procedures, arbitrations involving multiple contracts, joinder of additional parties, consolidation of cases, the arbitral seat, and early dismissal of claims and defenses. The SIAC Rules 2016 can be viewed in their entirety here.
The SIAC Rules 2016 have made updates to the SIAC’s existing provisions on expedited procedures. The previous version of the rules enabled parties to conduct arbitral proceedings in an expedited manner where: (1) the amount in dispute (including claims, counterclaims, and set-offs) does not exceed S$5 million (approximately US$3.7 million), (2) the parties agree to an expedited procedure, or (3) there is exceptional urgency. These provisions have been maintained, though the amount-in-dispute ceiling has been raised to S$6 million (approximately US$4.4 million).
Another change provides that the rules and procedures set forth in the SIAC Rules 2016 will apply in expedited proceedings even if the arbitration agreement contains contrary terms. The agreement of the parties to arbitration under SIAC’s rules thus acts in effect as an agreement to modify any contrary terms in the underlying arbitration agreement.
Once the expedited procedures are underway, a party may submit an application to the tribunal to cease conducting the arbitration under the expedited procedures. The tribunal may grant the application after giving the other party an opportunity to be heard, having regard to any further information that may subsequently become available, and consulting with the registrar. If the application is granted, the same tribunal will continue to conduct the “un-expedited” arbitration.
Under the previous version of the rules, the parties could agree to forego a hearing under the expedited procedures. The new rules now give the tribunal the discretion, in consultation with the parties, to proceed solely on the basis of documentary evidence or to hold a hearing for witness testimony or any oral argument.
Arbitrations Involving Multiple Contracts
Rule 6 of the SIAC Rules 2016 is a new provision that provides a claimant with two options in situations in which a dispute involves multiple contracts. Under the first option, the claimant may file a notice of arbitration for each arbitration agreement invoked and concurrently submit an application to consolidate the arbitrations (see the section below on the new SIAC provisions relating to consolidation). If a claimant pursues this option, the claimant need only pay a single filing fee at the outset; if the application for consolidation is rejected in whole or in part, the claimant is then required to pay the filing fee for each arbitration that has not been consolidated.
Alternatively, a claimant may file a single notice of arbitration for all of the arbitration agreements invoked. This notice of arbitration must contain a statement identifying each contract and arbitration agreement invoked and a description of how the SIAC provisions on consolidation are satisfied. If the claimant files a single notice of arbitration under these circumstances, the claimant will be deemed to have commenced multiple arbitrations and the notice of arbitration will be deemed to be an application for consolidation. If the tribunal determines that any of the arbitrations will not be consolidated, then the claimant must then file separate notices of arbitrations and pay the filing fee for each such arbitration.
Joinder of Additional Parties
Rule 7 of the SIAC Rules 2016 is a new provision allowing a party or a non-party to an arbitration to make an application to join one or more additional parties to the arbitration if: (1) the additional party is prima facie bound by the arbitration agreement or (2) all parties, including the additional party to be joined, have consented to the joinder of the additional party.
If the application is made prior to the constitution of the tribunal, the application is filed with the registrar, and the Court of Arbitration of SIAC (Court) will decide whether to grant the application in whole or in part, though the Court’s rejection of an application is without prejudice to any party’s or non-party’s right to apply later to the tribunal for joinder. If an application is made after the constitution of a tribunal, the application is filed with the tribunal or, as appropriate, with the registrar, and the tribunal determines whether to grant the application in whole or in part.
In deciding an application for joinder, the Court or the tribunal, as the case may be, must consider the views of all parties, including the additional party to be joined, and have regard to the circumstances of the case. A decision to grant an application for joinder is without prejudice to the tribunal’s power to subsequently decide any jurisdictional questions arising from such a decision.
Consolidation of Cases
Rule 8 of the SIAC Rules 2016 is another new provision that allows a party to make an application to consolidate two or more SIAC arbitrations into a single arbitration if: (1) all parties have agreed to the consolidation, (2) all the claims in the arbitrations are made under the same arbitration agreement, or (3) the arbitration agreements are “compatible” and: (a) the disputes arise out of the same legal relationship(s), (b) the disputes arise out of contracts consisting of a principal contract and its ancillary contract(s), or (c) the disputes arise out of the same transaction or series of transactions. Accordingly, the SIAC Rules 2016 contemplate consolidated arbitrations where the parties may not have provided their consent to consolidation.
If the application is made prior to the constitution of the tribunal, the application is filed with the registrar, and the Court will decide whether to grant the application in whole or in part, though the Court’s rejection of an application is without prejudice to any party’s right to later apply to the tribunal for consolidation. If an application is made after the constitution of a tribunal, the application is filed with the tribunal, and the tribunal determines whether to grant the application in whole or in part.
In deciding an application for consolidation, the Court or the tribunal, as the case may be, must consider the views of all parties and have regard to the circumstances of the case. A decision to grant an application for consolidation is without prejudice to the tribunal’s power to subsequently decide any jurisdictional questions arising from such a decision. Any arbitrations that are not consolidated will continue as separate arbitrations.
Seat of the Arbitration
Under the previous version of the SIAC rules, the default seat of a SIAC arbitration was Singapore, unless the tribunal determined that another seat was more appropriate in light of the circumstances of the case. Under Rule 21.1 of the SIAC Rules 2016, Singapore is no longer the default seat. Where the parties have not chosen a seat, the tribunal is empowered to determine the seat having regard to the circumstances of the case.
However, under Rule 4 of Schedule 1 to the SIAC Rules 2016, which covers proceedings before an emergency arbitrator, Singapore will be the seat of proceedings for emergency interim relief where the parties have not agreed on the seat of arbitration. The designation of Singapore as the seat in such circumstances is without prejudice to the tribunal’s subsequent determination of the seat in the main arbitral proceedings in the case.
In light of these changes, parties with existing arbitration agreements that provide for SIAC arbitration but do not designate an arbitral seat may wish to modify their agreement to expressly designate a seat if circumstances permit.
Early Dismissal of Claims and Defenses
Rule 29 of the SIAC Rules 2016 is a new provision that effectively enables summary judgment proceedings. The rule allows a party to apply to the tribunal for the early dismissal of a claim or defense if: (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 an application for early dismissal is made, the tribunal may allow the application to proceed at the tribunal’s discretion. If the tribunal allows the application to proceed, the tribunal may grant the application in whole or in part after giving the parties the opportunity to be heard. The tribunal’s order or award on the application may be made in summary form but must contain reasons and must be made within 60 days of the filing of the application, unless the registrar extends the time, which may be done only in exceptional circumstances.