Arbitration in Singapore has been developing in line with Singapore becoming a financial and legal hub and one of the major centres for international arbitration in Asia and in the world. Arbitration is governed by two separate legal regimes. Domestic arbitration is governed by Arbitration Act (Cap. 10) 2002 (“Arbitration Act”), while international arbitration is governed by the Arbitration Act (Cap. 143A) (“International Arbitration Act”) 2002.
Both the Arbitration Act and the International Arbitration Act are based on the UNCITRAL Model Law on International Commercial Arbitration 1985. The International Arbitration Act enacts and incorporates the UNCITRAL 1985 Model Law as the First Schedule, giving it the force of law in Singapore. The International Arbitration Act applies to both international and non-international arbitrations whenever the parties have agreed in writing that Part II of International Arbitration Act and Model Law shall apply. Pursuant to Section 5(2) of International Arbitration Act, an arbitration is considered international if:
“Section 5(2)[…]
(a) at least one of the parties to an arbitration agreement, at the time of the conclusion of the agreement, has its place of business in any State other than Singapore; or
(b) one of the following places is situated outside the State in which the parties have their places of business:
(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;
(ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or
(c) the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country.”
Furthermore, Section 5(3) defines what is to be considered as a place of business, as the place of the closest relationship to the arbitration:
“Section 5(3)[…]
For the purposes of subsection (2) —
(a) if a party has more than one place of business, the place of business shall be that which has the closest relationship to the arbitration agreement;
(b) if a party does not have a place of business, a reference to his place of business shall be construed as a reference to his habitual residence.”
The main difference between the two legal regimes is the level of court intervention – in international arbitrations court intervention is rather limited and the court does not have any power to grant an application unless this is explicitly provided by law. Recourse against the award is also limited. To the contrary, in domestic arbitrations, pursuant to Section 49 of Arbitration Act, a party may appeal an award “on a question of law arising out of an award made in the proceedings“. Furthermore, pursuant to Section 45 of the Arbitration Act, the Parties may also apply for a court determination of any question of law which arises in the course of arbitration which substantially affects the rights of the parties.
Regarding the place and language of the arbitration, neither the International Arbitration Act nor the Arbitration Act provide for a default mechanism for determining the place or the language of the arbitration. Ultimately, it is the arbitral tribunal who has discretion to determine these procedural issues.
Concerning the arbitrability of disputes, subject-matter arbitrability is not specifically dealt with in the Arbitration Act. In general, any dispute is arbitrable unless arbitration of such a dispute is contrary to the public policy of Singapore or not capable of being settled by arbitration. Non-arbitrable disputes are generally ones with public interest elements, which include for example citizenship, legitimacy of marriage, trade union disputes, patents, winding up of the companies, etc. Regarding international arbitration, the International Arbitration Act only provides that the subject matter must arise from “a relationship of a commercial nature“, however, what is “commercial” is not defined even though the footnote to Article 1 of the Model Law can be used as guidance. Which disputes are considered as non-arbitrable has also been developed by the jurisprudence of the courts. For example, the Singapore Court of Appeal held that claims involving an insolvent company are not arbitrable when the substantive rights of creditors are affected (See Larsen Oil and Gas Limited v Petroprod Ltd [2011] 3 SLR 414).
Parties are further free to choose ad hoc or institutional arbitration. The main local arbitration institution is the Singapore International Arbitration Center (SIAC), which is one of the leading international arbitration institutions in Asia and in the world. The SIAC administers arbitrations under its own set of rules, the newest version being the SIAC Rules 2016. The SIAC also administers arbitration under the UNCITRAL Rules of Arbitration and, in exceptional circumstances, under rules of other institutions.
Regarding the enforcement of arbitral awards, both for domestic and foreign awards, applications are always made to the High Court and must be filed within 6 months as of the date of the issuance of the award. Concerning the enforcement of foreign arbitral awards, as Singapore is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (the“New York Convention”) since 21 August 1986, the procedure set out in the New York Convention applies. However, it should be noted that Singapore made the reciprocity reservation set out in Art I(3) of the New York Convention, which is also set out in Part III of the International Arbitration Act.
Concerning the setting aside of arbitral awards, pursuant to Section 48 of the Arbitration Act and Articles 34(1) and (2) of the Model Law, the party applying for a set aside of the award would have to prove that:
“(a) if the party who applies to the Court to set aside the award proves to the satisfaction of the Court that
(i) a party to the arbitration agreement was under some incapacity;
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it, or failing any indication thereon, under the laws of Singapore;
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings or was otherwise unable to present his case;
(iv) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, except that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside;
(v) the composition of the arbitral tribunal or the arbitral procedure is not in accordance with the agreement of the parties, unless such agreement is contrary to any provisions of this Act from which the parties cannot derogate, or, in the absence of such agreement, is contrary to the provisions of this Act;
(vi) the making of the award was induced or affected by fraud or corruption;
(vii) a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced; or
(b) if the Court finds that
(i) the subject-matter of the dispute is not capable of settlement by arbitration under this Act; or
(ii) the award is contrary to public policy.”
Finally, since November 1968, Singapore is a party to the International Convention for the Settlement of Investment Disputes between States and Nationals of Other States, Washington 1965 (the “ICSID Convention”). Singapore is also a party to a number of Free Trade Agreements (“FTA’s“) and other comprehensive economic cooperation agreements with a number of its major trading partners, such as China, India, Korea and Japan. Singapore is also a member of ASEAN and the ASEAN Free Trade Agreement, with its own dispute settlement mechanism. To date, there are no investment arbitrations known involving Singapore as a disputing party. However, Singapore has served as a hearing venue for several ICSID arbitrations and other investment treaty disputes.
