Its convenient location, judicial support and transparent system make it attractive to firms

A YEAR on from the dramatic collapse of Lehman Brothers, many companies have treaded through the times of uncertainty and are now assessing the effects of the economic downturn on their businesses.

This has led to an increase in appetite to bring or contest commercial disputes, a mood that has displaced a collective hesitancy to expend resources on existing or prospective litigation and arbitration. As a consequence, Singapore is witnessing an increase in the volume of international arbitrations that shows no sign of abating.

Singapore enjoys a reputation for being one of the leading centres for international arbitration in South-east Asia. In a region where doubts continue to linger about whether the local courts can be relied on for swift and transparent enforcement of contractual rights, Singapore stands as a beacon due in no small part to its long-standing reputation and association with transparent business processes and international best practices. It is therefore of no surprise that many international companies seek to resolve their disputes within the region by way of arbitration in Singapore. From the perspective of regional players, Singapore, both as a place of doing business and as an economic partner in the region, is sufficiently familiar to them so that they are comfortable with resolving their disputes in the Singapore.

Enforceability of awards

International arbitration in Singapore is therefore attractive to both multinational companies and regional companies because of the transparency of the Singapore system as well as the promise of near global enforceability of arbitration awards.

Separately, Singapore’s location as an air-route hub makes it a convenient destination for anyone in Asia or further afield. The country’s investment into infrastructure to support the MICE (meetings, incentives, conventions and exhibitions) tourism segment has also provided it with a vibrant hospitality industry well-suited to the needs of parties, their lawyers and experts and, not least, visiting arbitrators who could find themselves in Singapore for a few days, weeks or even months.

In addition to location and infrastructure, the Singapore government has been proactive with fiscal, legislative and infrastructure initiatives to support arbitration. The government engages the arbitration community on an ongoing basis and amendments to the International Arbitration Act are made constantly to improve the process of international arbitration, demonstrating a commitment to the development of the country’s legislative framework to suit the needs of the international business community.

Commitment from the legislature is coupled by positive judicial support and respect for the arbitral process. The Singapore courts have evolved views on arbitration consistent with other leading centres of arbitration. The courts will uphold parties’ intentions to arbitrate where that intention may be poorly expressed or even where, as in a recent case, the parties provided in apparent self-contradiction for arbitration ‘before’ the Singapore International Arbitration Centre (SIAC) ‘in accordance with’ the Rules of Arbitration of the International Chamber of Commerce (ICC). The High Court upheld the parties’ intention to arbitrate and found that this hybrid clause provided for the SIAC to administer an arbitration governed by the ICC Rules, notwithstanding fundamental differences between how the two institutions administer arbitrations.

The courts have also recognised the autonomy of parties and refrained from intervening in the decisions of arbitral tribunals save in exceptional circumstances. This non-interventionist approach has led to relatively few cases where the decision of an arbitral tribunal, which is intended to be final, binding and not subject to an appeal, has been overturned in the courts. While this highlights the importance of ensuring that arbitration proceedings are well-prepared and properly argued by experienced practitioners, it also provides commercial certainty to parties who wish to avoid the protracted and enervating quagmire into which litigation sometimes descends.

State-of-the-art facilities

Most recently, Maxwell Chambers, a dedicated centre for international dispute resolution on Maxwell Road, has been launched to provide state-of-the-art facilities for arbitration hearings as well as house offices for some of the most established international alternative dispute resolution bodies. These include the International Centre for Dispute Resolution (ICDR), the World Intellectual Property Organization (WIPO), the Permanent Court of Arbitration (PCA), the ICC as well as the SIAC.

WIPO and Singapore have also inked a memorandum of understanding to establish an international WIPO Mediation and Arbitration Scheme for Film Related Disputes. The scheme, which will be developed by the WIPO Center in collaboration with Singapore’s Media Development Authority, a statutory board that regulates the country’s media sector, is a further example of Singapore’s push to create tailored alternative dispute resolution schemes for industry-specific problems.

The embracing of such internationally recognised dispute resolution bodies and practitioners appears to reflect a broader vision for Singapore as a hub for international dispute resolution. Regardless of how a dispute comes to be brought to Singapore for resolution, whether it be an international arbitration arising out of a regional contract or a cross-border intellectual property dispute, parties can expect to receive the appropriate assistance and support expected of a truly international dispute resolution venue.

Against the backdrop of what has been achieved to date, Singapore’s stature as an international arbitration hub is only likely to grow. As parties become more conscious of and insistent on their legal rights in the current economic climate, and as the world’s gaze continues to focus on Asia in search of signs of economic stability and recovery, the continued adherence to the principles set out above will make more parties realise that, in order to do business in Asia, it is to their advantage to adopt Singapore as the place to resolve any disputes they may have.

Tan Chuan Thye is Principal, Baker & McKenzie.Wong & Leow and Timothy Cooke is an Associate, Baker & McKenzie.Wong & Leow

Source : Business Times – 28 Oct 2009