A very good morning to everyone.
It is an honour to be speaking to all of you today, and I would like to thank the Institute of South Asian Studies for giving me the opportunity to do so.
I believe you have had some interesting and engaging discussions on topics that are very relevant to the regional businesses and communities, such as Infrastructure Investment in India and Regional Integration.
Today’s plenary topic on Law and Business is just as pertinent. I would like to spend the next few minutes first talking about our operating context, and second, the approach that Singapore has taken to develop our laws, frameworks, and services to support businesses and their transactions in the region.
Our Operating Context – Continued Growth of South Asia Economy
In the face of turbulent international markets and the slowdown of the global economy, South Asia continues to enjoy strong economic prospects.
- According to a World Bank report published in April this year,
- South Asia was the fastest growing region in the world in 2015; and
- growth in this region is forecasted to accelerate from 7.1 percent in 2016 to 7.3 percent in 2017.
- These statistics are perhaps not surprising – this region has in place many of the demand conditions to spur economic development:
- The infrastructure gap in South Asia is estimated to require trillions of US dollars to bridge; and
- The collective middle class in Southeast Asia and India alone is expected to more than double, growing from about 400 million in 2012 to reach nearly 1 billion by 2020.
Dispute Resolution – Supporting Economic Development
However, as the number and complexity of commercial transactions and deals increase, the number and complexity of commercial disputes will inevitably grow.
Businesses which find themselves embroiled in such disputes will need resolution mechanisms. These mechanisms must be fast, effective, suited to their business needs, and result in enforceable outcomes.
- As such, the role of adequate dispute resolution mechanisms in supporting continued economic development is an important one. Singapore has progressively put in place an ecosystem for a comprehensive suite of international commercial dispute resolution services - comprising :
- litigation; and
Dispute Resolution – International Commercial Arbitration in Singapore
For some time now, arbitration has been a popular choice of dispute resolution system for the international business community. It offers a neutral forum with flexibility, confidentiality, and international enforceability under the New York Convention.
Singapore ranks among the world’s top seats for arbitration, alongside London, Paris, Geneva, and Hong Kong. For the last five years, we have consistently been the number one seat for ICC arbitration in Asia.
Our flagship arbitration institution – the Singapore International Arbitration Centre, or SIAC, also ranks in the top five preferred arbitration institutions in the world. In 2015, SIAC handled a record number of 271 new cases, more than 80% of which are international in nature.
- Our success as an arbitration centre has been fuelled by the growing demand for dispute resolution services in the region, and is supported by a series of comprehensive and focused efforts we have taken to develop the sector.
- First, we have a complete open regime for international commercial arbitration. Parties engaging in arbitration in Singapore have the freedom to engage lawyers of any nationality to arbitrate on contracts under any governing law.
- Second, we are a signatory to the New York Convention. As such, awards issued here are enforceable in over 150 Convention countries.
- Third, our International Arbitration Act is modelled after the UNCITRAL Model Law, and we have also continuously reviewed and revised our legislation, to ensure that it is on par with the best international practices. For instance, Singapore was one of the first jurisdictions to provide clear legislative support for the appointment of an emergency arbitrator.
- Traditionally, parties could only apply to the courts under UNCITRAL Model Law, which gives courts the power to order interim relief in support of arbitration proceedings.
- The Emergency Arbitrator procedure was introduced as an alternative method of obtaining emergency interim relief. It allows for a hearing and decision on a party’s urgent application for interim relief before the arbitral tribunal is constituted.
- The Emergency Arbitrator procedure is now widely used and offered by top arbitration institutions including the SIAC, the ICC, and the ICDR.
- Fourth, our Courts are pro-arbitration. They have consistently supported and adopted the principle of the finality of arbitral awards with minimal intervention, except within the very clearly defined, internationally accepted rubric.
- Fifth, we set up Maxwell Chambers, the world’s first integrated dispute resolution complex.
- It houses state-of-the-art hearing facilities and a full suite of support services, including video conferencing, long term document storage and a private space lounge space for arbitrators.
- Today, it is also a sought after venue for many international dispute resolution institutions around the world. In fact, to meet the rising demand for space, Maxwell Chambers will soon be expanding to triple its current size. Service offerings to users and tenants will also be upgraded.
Dispute Resolution – International Commercial Litigation in Singapore
We recognise the importance of providing solutions tailored to address the unique circumstances of each individual dispute. Thus, building on the success of SIAC and Singapore as a seat for arbitration, we developed additional service offerings in the form of international commercial litigation and mediation.
- In 2015, the Singapore International Commercial Court, or SICC, was set up to hear international commercial disputes which need not have any connection to Singapore. The SICC combines the advantages of a court with flexible features usually associated with arbitration. In general, litigation at the SICC will allow for
- right of appeal unless parties agree otherwise;
- joinder of third parties, which is especially important for multi-party cross-border disputes;
- cases will be heard by judge(s) drawn from a panel of eminent local and international judges, from both civil and common law jurisdictions. The Judges are appointed in each case by the Chief Justice of Singapore;
- clients can be represented by foreign lawyers where the case has no substantial connection to Singapore or where matters of foreign law are involved;
- flexibility in choosing the rules of evidence and less extensive discovery; and
- the option of confidentiality subject to meeting certain requirements.
- Judgments under the SICC are enforceable by registration in countries listed under
- The Reciprocal Enforcement of Commonwealth Judgments Act – RECJA; and
- The Reciprocal Enforcement of Foreign Judgments Act – REFJA.
Singapore has ratified the Hague Convention of Choice of Court Agreements, which will make SICC judgments enforceable in the EU and Mexico. The Haque Convention will come into force for us on 1 October this year.
For common law jurisdictions not covered by RECJA and REFJA, SICC judgments may be enforced as judgment debt. For non-common law jurisdiction, enforceability will depend on the principle of reciprocity and the rules of that jurisdiction.
To date, SICC has received 7 cases. We expect this number to grow as the region becomes more familiar with its use and benefits. For instance, Pakistan is already considering enabling the referral of trade-related commercial disputes to the SICC under their draft Trade Dispute Resolution Act.
Dispute Resolution – International Commercial Mediation in Singapore
Mediation as an important complement to arbitration and litigation.
In a world that is becoming more interconnected, businesses will want forms of dispute resolution mechanisms that can help them preserve long-term business relationships.
- Mediation can be that tool.
- Successful mediation allows parties to mutually arrive at win-win situations, incorporating a mix of legal and non-legal solutions suited to their different interests, in an efficient and cost-effective manner.
- It is also confidential, and can be used in conjunction with either litigation or arbitration.
- We set up the Singapore International Mediation Centre to serve this purpose.
- The SIMC features an international panel of more than 65 mediators from 14 jurisdictions, who are able to mediate in 14 languages. All of them are certified by the Singapore International Mediation Institute, the professional body for mediation in Singapore.
- Mediation at SIMC also comes with the unique benefit of enforceability if parties choose to adopt the Arb-Med-Arb protocol a unique dispute resolution protocol jointly administered by SIAC and SIMC.
- Under the Arb-Med-Arb Protocol, parties would file a Notice of Arbitration and Response to Notice of Arbitration with SIAC, and have an arbitrator appointed.
- The arbitral tribunal would then order a stay of proceedings to allow for a mediation to take place under SIMC.
- If the mediation results in a full settlement, parties may apply to the tribunal to reflect the settlement in the form of a consent award. This will allow the parties to take advantage of the enforcement provision of the New York Convention.
- If the mediation does not result in a full settlement, the parties may proceed with the arbitration of the dispute or the unresolved issues at the SIAC.
- The Arb-Med-Arb Protocol allows the parties to leverage mediation to arrive at a quick and effective resolution, yet ensure that the outcome of the mediated settlement is enforceable as an award under the New York Convention.
- We will also be putting in place a Mediation Act to provide a conducive legislative environment for mediation to thrive.
- Public consultation on the Bill completed earlier this year.
- We are currently finalising the Bill which will include a provision to strengthen the enforceability of mediated outcomes.
- With this new provision, parties will by agreement, be able to apply to the court to have a mediated settlement agreement recorded as a court order, subject to certain conditions.
Our full suite of dispute resolution services, coupled with our reputation as a trusted venue with good governance, low corruption and strong rule of law, makes Singapore a very attractive place for dispute resolution.
And we won’t stop here. In this era of rapid development and unpredictable change, the needs of the business community will constantly evolve, and our services cannot remain static. We are therefore always looking to enhance our services and offerings to meet the needs of businesses.
One such area is debt restructuring. As the global economy continues to face uncertain headwinds, intensified by difficult-to-predict events such as the recent Brexit, businesses will come under increasing pressure. Some will eventually encounter financial difficulties, and find the need to restructure their debts in order to survive.
Recognising that there is potential in this area, the Committee to Strengthen Singapore as an International Centre for Debt Restructuring prepared and submitted its report to the Ministry of Law in April this year.
- The recommendations put forth by the Committee include
- enhancing our legal framework to complete restructurings quickly and cost-effectively and with a high certainty in outcome;
- increasing availability of rescue financing; and
- strengthening insolvency professionals.
All these will help ensure that Singapore is well positioned to meet the needs in this region. The government will be issuing its formal response to these recommendations very soon.
The continued developments in South Asia bring change, but also opportunities for all of us. As a major business and services hub, Singapore will continue to adopt a future-oriented mind set, in developing strategies to help businesses navigate and operate effectively in the region.
- On this note, I wish you all an engaging session, and an enjoyable stay in Singapore. Thank you.