Amendments to Singapore's International Arbitration Act to Enhance Statutory Regime

This article is produced by CMS Holborn Asia, a Formal Law Alliance between CMS Singapore and Holborn Law LLC.

In September 2020, Singapore’s Ministry of Law (“MinLaw”) proposed the International Arbitration (Amendment) Bill (the “Bill”) to introduce two new features to the International Arbitration Act (Cap. 143A) (“IAA”).

The Bill was passed on 5 October 2020 and the amendments came into force on 1 December 2020.

We look at the two new features in detail and provide our takeaways on their likely impact on the international arbitration regime in Singapore.

Default process for appointment of arbitrators in multi-party proceedings

The first amendment to the IAA provides for a default mode of appointment of arbitrators in multi-party arbitrations. It sets out the processes and timeframes that should be adopted when appointing a three-member tribunal. To apply this provision, the agreement of parties must not specify any appointment procedure in a situation where there are more than two parties to a dispute.

Before the introduction of the Bill, the IAA only addressed the process for default appointment of a three-member arbitral tribunal in situations where there are two disputing parties. It did not address situations where there are more than two parties involved in a dispute.

The new section 9B of the IAA sets out how the default appointment procedure will operate:

• The claimants will be required to jointly appoint an arbitrator and state their choice in the request for the dispute to be referred to arbitration, or the Notice of Arbitration (“NOA”).
• The respondents must jointly appoint an arbitrator and inform the claimants of the appointment within 30 days from the date of receipt of the request for dispute to be referred to arbitration, or NOA.
• The 1st and 2nd arbitrators must then nominate a 3rd arbitrator within 60 days from date of receipt of the request for dispute to be referred to arbitration by the last respondent. The 3rd arbitrator shall be the presiding arbitrator.
• Where the 1st and 2nd arbitrators are unable to agree on the appointment of the 3rd arbitrator within the specified period of time, the appointing authority must, upon the request of any party and having regard to all relevant circumstances, appoint the 3rd arbitrator.
• If either the claimants or the respondents are unable to appoint their arbitrator within the specified period, the appointing authority must, upon the request of any party, appoint all three arbitrators. In doing so the appointing authority may re-appoint or revoke any appointment already made and designate one of the three arbitrators as the presiding arbitrator.

The new amendment brings Singapore’s IAA in line with the current procedures set out in the rules of the world’s leading arbitral institutions, such as the Singapore International Arbitration Centre (SIAC), the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) and the Hong Kong International Arbitration Centre (HKIAC).

All of the above institutional rules provide, in some form or other, for the appointing authority to have the power to select all three arbitrators in a three-member tribunal where the parties fail to select a co-arbitrator among themselves.

The introduction of this new statutory regime for the default appointment of a three-member tribunal in multi-party arbitrations reduces delays and inefficiencies in the conduct of arbitral proceedings.

High Court’s and tribunal’s power to enforce confidentiality obligations

At present, parties and tribunals have a duty of confidentiality at common law not to disclose confidential information obtained in the course of proceedings or to use them for any purpose other than the dispute.

The second amendment explicitly recognises the powers of the arbitral tribunal and the High Court to enforce obligations of confidentiality, by making orders or giving directions where such obligations exist. The amendment’s focus is not on codifying such obligations of confidentiality, but to strengthen the parties’ ability to enforce these obligations.

In particular, sections 12(1)(j) and 12A(2) of the IAA empower both the arbitral tribunal and the High Court to make orders for enforcing confidentiality obligations when:

1. The parties to the arbitration agreement have agreed to the same in writing, whether in the arbitration agreement or any other document;
2. Under any written law or rule of law; or
3. Under the rules of arbitration (of an arbitral institution or otherwise) agreed or adopted by the parties.

Takeaways

The amendments to the IAA bring Singapore’s legislative framework in line with important innovations in the global international commercial arbitration regime.

The provision for the default appointment of arbitrators in multi-party arbitrations increases the efficiency of the arbitral process for Singapore seated arbitrations. This addresses an important lacuna in the IAA in a scenario that is increasingly more common in disputes involving international commercial contracts.

The confidentiality amendment strengthens Singapore’s commitment to party confidentiality in arbitral proceedings by statutorily recognising the powers of the High Court and arbitral tribunal to enforce obligations of confidentiality.

Both changes are welcome developments that will cement Singapore’s reputation as a global dispute resolution hub of choice for savvy users.