Working it out
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15 November 2013
The publication of the 2007 Singapore International Arbitration (SIAC) Rules mark a further milestone in the development of institutional arbitration in Singapore. The rules incorporate some key changes to both the procedure and administration of SIAC arbitration that should be noted by lawyers and parties alike. Parties seeking the comfort of institutional arbitration are likely to welcome the changes.
The SIAC 2007 Rules provide a useful and relatively comprehensive framework under which parties can carry out administered arbitration.
The SIAC was established as an institution to administer arbitrations in 1991. The aim of the 2007 Rules, which came into effect on 1 July, was to formalise practices implemented and developed since the publication of the second edition of the rules in 1997. The SIAC’s stated aim is “to bring users improved efficiency and the best practices developed in institutional arbitration for the resolution of international commercial disputes.”
While the 1997 Rules had envisaged the possibility of parties choosing another appointing authority for SIAC-administered arbitrations, this possibility has not been retained in the 2007 Rules, cementing the position of the SIAC as appointing authority for administered arbitrations.
The 2007 Rules incorporate changes to the powers of the Registrar of SIAC (the “Registrar”) and of tribunals. The Rules transfer the actual appointment of arbitrators to SIAC and away from the parties, and also change the rules governing the written stage of arbitrations.
Appointments and fees
Under the old rules, in circumstances where parties had not, or could not, agree on the number of arbitrators, the default provision was for a sole arbitrator. Our Singapore legal correspondents tell us that this mirrored the default position under local law, which (stepping away from the Model law) provides that in international arbitrations, where parties have not agreed on the number of arbitrators, a single arbitrator shall be appointed.
Under the 2007 rules, if parties fail to agree on the number of arbitrators, the Registrar has the power to fix the number of arbitrators he feels appropriate depending on the complexity and quantum of the dispute or other relevant circumstances.
Under the new rules, all arbitral ‘appointments’ made by the parties or by a third party after the terms of the parties’ arbitration agreement, will be treated only as ‘nominations’ and will be subject to confirmation by the Chairman of the SIAC, who will make the actual appointment. Unless SIAC ‘confirms’ a party nominated arbitrator, that arbitrator’s appointment will not be complete.
Under the new rules, the terms of an arbitrator’s appointment are to be settled by the Registrar; arbitrators’ fees are determined in accordance with a prescribed quantum-based fee schedule, although an additional fee may be allowed in exceptional circumstances.
This follows the position adopted by many institutions. But with such strict mechanisms the fee schedule itself is crucial. Why? So that arbitrators from other jurisdictions, who may request higher fees, are not deterred from acting and diminishing the pool of specialised arbitrators willing to act.
New Practice Notes
The SIAC also issued new guidelines for arbitrations it administers and for ad hoc arbitrations where requests are made to the SIAC for the appointment of arbitrators.
Practice Note PN – 02/07 for ad hoc arbitrations states that it “shall apply to all requests made to the SIAC for appointment of arbitrators where the SIAC Rules 2007 do not apply or where parties have not agreed for the matter to be administered by the SIAC.” In other words, the SIAC will, in appointing an arbitrator, also fix the tribunal’s fees (in accordance with the Schedule of Fees in force at the time of commencement of the arbitration) and other terms of appointment.
Under Singapore’s International Arbitration Act, the appointing authority tasked with the default appointment role set out in Article 11 of the UNCITRAL Model Law, is the Chairman of the SIAC.
In that case, even where the parties do not opt for SIAC administration of their arbitration in Singapore, where SIAC appoints the arbitrator(s), the schedule-based approach to fees will apply by default. But there is provision for the Registrar to allow an additional fee to be paid to the arbitrator over that prescribed in the Schedule in exceptional circumstances (as defined).
Timetables, memorandum of issues and awards
Whereas the old rules provided for the tribunal to fix the timetable for proceedings, rule 16 of the 2007 Rules place emphasis on the timetable set out, unless parties otherwise agree or the tribunal otherwise directs.
The new rules also introduce the concept of a Memorandum of Issues into the procedure for SIAC-administered arbitrations. This document will be completed within 45 days of the completion of the submission of written statements. Once signed by the parties and the tribunal, the Memorandum of Issues will define the issues that the tribunal shall determine in its award (although the tribunal has the power to allow parties to make amendments). This appears intended to operate in a similar manner to the terms of reference provided for in Article 18 of the ICC Rules of Arbitration.
Under the 2007 rules, all awards have to be confirmed by the Registrar before they are issued.
The publication of the new rules places SIAC high on the list of tightly regulated arbitration institutions. Parties wishing to entrust their disputes to administration by SIAC will be able to use standard clauses available on SIAC’s website. Other parties who want more autonomy will wish to consider carefully the wording of arbitration agreements they enter into, that nominate Singapore as the seat.
Unless care is taken, then SIAC may become involved in one aspect or another. As well as the growth of SIAC, there are also many ad hoc arbitrations in Singapore, as well as arbitrations involving differing institutions. This diversity is set to continue for the foreseeable future.
John Champion is a partner and Mark Errington a solicitor at the Singapore office of Clyde & Co