26 Jun 2019 to 21 Aug 2019
Proposed amendments to the International Arbitration Act (“IAA”)
Arbitration is a popular means of resolving commercial disputes. One of the reasons for its popularity is that it allows parties to have the autonomy to choose how their dispute should be resolved.
Singapore has over the years become a popular seat of international commercial arbitration. According to the White & Case and Queen Mary University of London’s International Arbitration Survey in 2018, Singapore and the Singapore International Arbitration Centre were ranked as the third most preferred arbitration seat and arbitral institution in the world respectively, and first in Asia. Singapore is committed to continue to serve the needs of parties with commercial disputes and meet the evolving needs of parties and the profession.
Arising from feedback from the profession and the Ministry’s periodic review of our legislative framework for international arbitration, the Ministry is considering various amendments and proposals to enhance our international arbitration regime. The Ministry invites members of the public to provide feedback on the draft IAA Bill (attached at Appendix A to this public consultation paper) as well as other proposals set out in this paper. With regard to the draft Bill, please note that the draft provisions have been framed with a view to giving form to the proposals currently contemplated and will be subject to further changes following the consultation process.
- Summary of the current framework and proposed amendments
(1) Introduce a default mode of appointment of arbitrators in multi-party situations
- Under the current framework, the mode of appointment of arbitrators is set out in section 9A of the IAA and Article 11 of the UNCITRAL Model Law on International Commercial Arbitration (1985) (“Model Law”). This mode of appointment however, applies only to situations where there are two parties to the arbitration agreement. As it is increasingly common to have multi-party arbitrations, Clause 3 of the draft Bill introduces a new section 9B to clarify the mode of appointment of arbitrators in such cases.
- Proposal for consultation: The amendment will provide for the mode of appointment of arbitrators where there are more than two parties to an arbitration agreement. The amendment will clarify that in such situations, the claimants shall jointly nominate an arbitrator and the respondents another. Where the co-claimants (if there is more than one claimant) or co-respondents (if there is more than one respondent) or the parties are unable to agree on a joint nominee, upon request by any party, the appointing authority (viz. the President of the SIAC) shall appoint the respective arbitrator.
(2) Allow parties to, by agreement, request the arbitrator or arbitrators to decide on jurisdiction at the preliminary stage
- Currently, under section 10 of the IAA, the tribunal can decide on jurisdiction either at the stage of the preliminary or final award. To ensure that parties save time and costs, Clause 4 of the Bill contains an amendment to section 10(2) to enable parties to request an early decision on jurisdiction.
- Proposal for consultation: The amendment will clarify that parties can, by mutual agreement, require the tribunal to decide on jurisdictional issues at the preliminary award stage.
(3) Recognize that an arbitral tribunal and the High Court has powers to enforce obligations of confidentiality in an arbitration
- Presently, unless parties otherwise agree, the parties and the arbitral tribunal have a duty of confidentiality under the common law, not to disclose confidential information obtained in the course of the proceedings or use them for any purpose other than the dispute. The rules of many arbitral institutions also provide explicitly for confidentiality, which duty includes confidentiality of the existence of the arbitration.
- Given the centrality of confidentiality to arbitration, Clause 4 of the Bill inserts a new section 12(1)(j) to provide explicit recognition of the powers of the Court and the arbitral tribunal to enforce duties of confidentiality.
- Proposal for consultation: The amendment will explicitly recognise that the arbitral tribunal and the High Court can enforce obligations of confidentiality, whether these obligations exist under the law, or have been expressly agreed by parties.
(4) Allow a party to the arbitral proceedings to appeal to the High Court on a question of law arising out of an award made in the proceedings, provided parties have agreed to opt in to this mechanism.
- Under the current framework, parties may apply to the High Court to set aside an arbitral award on grounds of fraud or corruption in the making of the arbitral award, or a breach of natural justice in connection with the same. There is no basis to apply to the High Court on a question of law arising out of an award made in the proceedings.
- To add to the suite of options available to commercial parties, Clause 6 of the Bill inserts new sections 24A to 24D to provide the option for parties to incorporate a right to appeal to the High Court on a question of law arising out of an award, if they so wish. This will enhance party autonomy and their ability to exercise control as well as designate with greater precision the degree of finality they expect. This will allow parties, who prefer court supervision on matters of law to make a deliberate choice for supervision while preserving the finality of arbitration for parties who prefer not to have appeals.
- Proposal for consultation: The text for the amendment mirrors the rubric for appeals under the Arbitration Act, save that this will only be available on an opt-in basis. Parties will be able to contract in or opt-in to an appeal and the right of appeal will be limited to questions of law. Leave of court is required and parties must file the leave application within a specified time limit.
- Other proposals received
- In addition to the foregoing proposed amendments, the Ministry has also received third party proposals to consider the following changes. The Ministry seeks views on these proposals.
(5) Proposal to allow parties to agree to waive or limit the annulment grounds under the Model Law and IAA
- Presently, parties may apply to the Court to set aside an arbitral award of the arbitral tribunal under Section 24 of the IAA and Article 34(2) of the Model Law. Generally, such an application would be based on grounds of fraud or corruption, breach of natural justice, incapacity, invalidity of agreement, improper notice, inability to present the case, lack or excess of jurisdiction, improper composition of the tribunal or conduct of procedure.
- Views sought: In line with the principle of party autonomy and to avoid situations where the courts at the seat and at the place of enforcement reach conflicting decisions on the same grounds, it has been proposed that in addition to the proposal to allow parties to agree to appeal to the Court on questions of law arising from an award, parties should have the option to limit or waive by agreement, the annulment grounds set forth in Section 24(b) of the IAA and Article 34(2)(a), but may not limit or waive by agreement, the annulment grounds in Section 24(a) and Article 34(2)(b). Such an agreement can only be made after the award has been rendered.
(6) Proposal to provide that the Court shall have power to order costs in certain arbitral proceedings
- The Singapore Academy of Law’s Law Reform Committee has recently concluded a recent study on issues concerning costs in arbitration related court proceedings. The committee has pointed out the Singapore court has no power to make an order in respect of the costs of the arbitral proceedings when a party is successful in its application to set aside a tribunal’s award. This is problematic because the tribunal is generally functus officio in such cases and unable to make any order on costs.
- Views sought: As to whether legislative amendments should be introduced to empower the court to make an order providing for costs of the arbitration following a successful application under section 24 of the IAA or article 34(2) of the Model Law to set aside an award, whether wholly or in part. Similarly, whether a corresponding amendment should be made to the Arbitration Act for domestic arbitrations.
- Invitation for views and feedback
- The Ministry welcomes interested persons to provide their views on the above proposals and any other feedback on how Singapore’s international arbitration framework may be further strengthened to support the needs of commercial users
- If you provide views and feedback, please let us know whether you are willing to be contacted by the Ministry for follow up discussions. Respondents are requested to observe these guidelines:
- Indicate your name and the organization you represent (if applicable) as well as contact details (email address and/or telephone number) to enable us to follow up on your feedback and seek clarification, if necessary.
- State clearly which specific proposals/recommendation you are giving feedback on.
- The consultation period is from 26 June to 21 August 2019. All views and feedback may be sent in electronic form or hard copy form. Please title all comments and feedback “Consultation on IAA Amendments” and send them to the address below:
Ministry of Law
Legal Industry Division
100 High Street
#08-02, The Treasury
Fax: 6332 8842
 Singapore Academy of Law website, “Report on Certain Issues Concerning Costs in Arbitration-Related Court Proceedings” (February 2019) https://www.sal.org.sg/sites/default/files/sites/default/files/PDF%20Files/Law%20Reform/2019-02-Costs-in-Arbitration-Related-Court-Proceedings.pdf (accessed 25 April 2019)
Bill No. /.
Read the first time on .
An Act to amend the International Arbitration Act (Chapter 143A of the 2002 Revised Edition) and to make a related amendment to the Arbitration Act (Chapter 10 of the 2002 Revised Edition).
Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:
Short title and commencement
- This Act is the and comes into operation on a date that the Minister appoints by notification in the Gazette.
Amendment of section 9A
- Section 9A of the principal Act is amended —
- by inserting, immediately after the words “an arbitration with” in subsection (1), the words “2 parties and”;
- by inserting, immediately after the word “arbitrators” in the section heading, the words “in arbitration with 2 parties”.
New section 9B
- The principal Act is amended by inserting, immediately after section 9A, the following section: “Default appointment of arbitrators in arbitration with 3 or more parties
- Despite Article 11(3) of the Model Law, in an arbitration with 3 or more parties and 3 arbitrators —
- the claimant, or all the claimants by agreement if there is more than one claimant, must appoint the first arbitrator;
- the respondent, or all the respondents by agreement if there is more than one respondent, must appoint the second arbitrator; and
- the parties must by agreement appoint the third arbitrator.
- Despite subsection (1)(a), the first arbitrator must be appointed by the appointing authority upon the request of a claimant, where —
- there is more than one claimant; and
- the claimants fail to agree on the appointment of the first arbitrator within 30 days of the receipt of the first request by any claimant to do so.
- Despite subsection (1)(b), the second arbitrator must be appointed by the appointing authority upon the request of a respondent, where —
- there is more than one respondent; and
- the respondents fail to agree on the appointment of the second arbitrator within 30 days of the receipt of the first request by any respondent to do so.
- Despite subsection (1)(c), the third arbitrator must be appointed by the appointing authority upon the request of a party, where the parties fail to agree on the appointment of the third arbitrator within 30 days of the receipt of the first request by any party to do so.”.
Amendment of section 10
- Section 10 of the principal Act is amended by deleting subsection (2) and substituting the following subsection:
“(2) An arbitral tribunal may rule on a plea that it has no jurisdiction —
- as a preliminary question, where the parties have agreed that the plea is to be heard by the arbitral tribunal as a preliminary question; or
- at any stage of the arbitral proceedings, where the parties have not agreed that the plea is to be heard by the arbitral tribunal as a preliminary question.”.
Amendment of section 12
- Section 12 of the principal Act is amended —
- by deleting the word “and” at the end of subsection (1)(h);
- by deleting the full-stop at the end of paragraph (i) of subsection (1) and substituting a semi-colon, and by inserting immediately thereafter the following paragraph:
“(j) enforcing any obligation of confidentiality —
- that the parties to an arbitration agreement have agreed to in writing, whether in the arbitration agreement or in any other document;
- under any written law or rule of law; or
- under the rules of arbitration (including the rules of arbitration of an institution or organisation) agreed to or adopted by the parties.”.
New sections 24A to 24D
- The principal Act is amended by inserting, immediately after section 24, the following sections: “Appeal against award
- This section —
- has effect despite Article 34(1) of the Model Law; and
- applies where all parties to any arbitral proceedings have agreed in writing, whether in the arbitration agreement or in any other document, for this section to apply.
- A party to the arbitral proceedings may appeal to the High Court on a question of law arising out of an award made in the proceedings —
- upon notice to the other parties and to the arbitral tribunal; and
- with the leave of the High Court.
- The right to appeal under this section is subject to the restrictions in section 24B.
- Leave to appeal may be given only if the High Court is satisfied that —
- the determination of the question will substantially affect the rights of one or more of the parties;
- the question is one that the arbitral tribunal was asked to determine;
- on the basis of the findings of fact in the award —
- the decision of the arbitral tribunal on the question is obviously wrong; or
- the question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt; and
- despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the High Court to determine the question.
- An application for leave to appeal under this section must identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted.
- The leave of the High Court is required for any appeal from a decision of the High Court under this section to grant or refuse leave to appeal.
- On an appeal under this section, the High Court may by order —
- confirm the award;
- vary the award;
- remit the award to the arbitral tribunal, in whole or in part, for reconsideration in the light of the High Court’s determination; or
- set aside the award in whole or in part.
- The High Court must not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the arbitral tribunal for reconsideration.
- The decision of the High Court on an appeal under this section is treated as a judgment of the High Court for the purposes of an appeal to the Court of Appeal.
- The High Court may give leave to appeal against its decision in subsection (9) only if the question of law before it is one of general importance, or one that for some other special reason should be considered by the Court of Appeal.
Supplementary provisions to appeal under section 24A
- This section applies to an application or appeal under section 24A.
- An application or appeal may not be brought if the applicant or appellant has not first exhausted —
- any available arbitral process of appeal or review; and
- any available recourse under Article 33 of the Model Law (correction or interpretation of award and additional award).
- An application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process.
- If on an application or appeal it appears to the High Court that the award —
- does not contain the arbitral tribunal’s reasons; or
- does not set out the arbitral tribunal’s reasons in sufficient detail to enable the High Court to properly consider the application or appeal, the High Court may order the arbitral tribunal to state the reasons for its award in sufficient detail for that purpose.
- Where the High Court makes an order under subsection (4), it may make such further order as it thinks fit with respect to any additional costs of the arbitration resulting from its order.
- The High Court may order the applicant or appellant to provide security for the costs of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.
- The power to order security for costs must not be exercised by reason only that the applicant or appellant is —
- an individual ordinarily resident outside Singapore; or
- a corporation or association incorporated or formed under the law of a country outside Singapore or whose central management and control is exercised outside Singapore.
- The High Court may order that any money payable under the award must be brought into the High Court or otherwise secured pending the determination of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.
- The High Court may grant leave to appeal subject to conditions to the same or similar effect as an order under subsection (6) or (8), and this does not affect the general discretion of the High Court to grant leave subject to conditions.
Effect of order of High Court upon appeal against award
- Where the High Court makes an order under section 24A(7) with respect to an award, subsections (2), (3) and (4) apply.
- Where the award is varied by the High Court, the variation has effect as part of the arbitral tribunal’s award.
- Where the award is remitted to the arbitral tribunal, in whole or in part, for reconsideration, the tribunal must make a fresh award in respect of the matters remitted within 3 months of the date of the order for remission or such longer or shorter period as the High Court may direct.
- Where the award is set aside in whole or in part, the High Court may also order that any provision in the arbitration agreement stating that an award is a condition precedent to the bringing of legal proceedings in respect of a matter to which the arbitration agreement applies is of no effect as regards the subject‑matter of the award or the relevant part of the award, as the case may be.
Application for leave of High Court, etc.
- An application for the leave of the High Court to appeal under section 24A(2)(b) or (6) must be made in such manner as may be prescribed in the Rules of Court.
- The High Court must determine an application mentioned in subsection (1) without a hearing unless it appears to the High Court that a hearing is required.
- For the purposes of this section —
- an application mentioned in subsection (1) may be heard and determined by a Judge in Chambers; and
- the Court of Appeal has the like powers and jurisdiction on the hearing of an application under section 24A(2)(b) as the High Court or any Judge in Chambers has on the hearing of such an application.”
Last updated on 26 Jun 2019