Speech by Second Minister for Law Edwin Tong SC at Appropriate Dispute Resolution: The Singapore Way
12 January 2023 Posted in [Speeches]
Justice Philip Jeyaretnam, President of the Singapore International Commercial Court (SICC)
Ms Gloria Lim, CEO of the Singapore International Arbitration Centre (SIAC)
Mr Chuan Wee Meng, CEO of the Singapore International Mediation Centre (SIMC)
Friends and Colleagues
Ladies and Gentlemen
- Good afternoon.
- It is great to be here, to support three of our key dispute resolution institutions – SICC, SIAC, and SIMC. What we regard as the triumvirate of dispute resolution institutions.
The “International Dispute Resolution” Trilogy
- As the saying goes, “good things come in threes” – from fairytales, such as the Three Little Pigs, Goldilocks and the Three Bears, and Aladdin’s three wishes, to blockbusters, such as The Lord of the Rings, Back to the Future, and The Godfather.
- But that is not the reason why we have three dispute resolution institutions. We have three, because we were focused on what commercial parties wanted, whether it is mediation and arbitration or international commercial court.
- As the title of today’s event suggests, to us, ADR does not stand for “alternative dispute resolution”, but rather, “appropriate dispute resolution”, which I felt was a lot more appropriate, to borrow the phrase – what is the most appropriate dispute resolution mechanism for a particular case may not always be the same, even for the same party, and perhaps even in the context of a similar case. There may be many considerations involved, such as the counterparty, the nature of the bargain, the particular circumstances of the client involved in the dispute.
- Therefore, what we strive to offer is really to have a selection of tools in a toolbox – able, ready and willing to meet and deal with situations. We may not be able to have all the tools, but we can have the most essential tools that will resolve majority of disputes, either on its own, or in combination.
Mixed Mode (Hybrid) Dispute Resolution and Launch of Litigation-Mediation-Litigation Protocol
- In dispute resolution, mixed mode or hybrid mechanisms have become more prevalent. A survey conducted by the Singapore International Dispute Resolution Academy (SIDRA) in 2022 found that preservation of business relationship, cost, speed, and flexibility were key factors why parties chose hybrid mechanisms over standalone mechanisms. This is obviously influenced by what has happened over the last two and a half years with COVID-19. But nonetheless, I think these are all measures that we should assume will stay in the post COVID-19 environment, and those choices must influence and tell us how we would like to shape the three institutions’ offerings.
- SIAC and SIMC introduced the arb-med-arb protocol in 2014, at the time when SIMC was set up. As most of you would know, in arb-med-arb, a dispute is first referred to arbitration, and then mediation is attempted. If you are able to find a concluded mediated settlement agreement, that mediated settlement agreement may be recorded as a consent award, which is then enforceable in 171 contracting states under the New York Convention.
- We had to do that previously, because that was before the time of the Singapore Convention on Mediation (SCM). Of course, the SCM is now in place. However, it is still at a relatively nascent stage, in terms of the number of countries that have signed up, and hence, will take some time for the states to ratify and put their domestic legislation to support it.
- So it is in this context that I am very glad that SICC and SIMC have come up with a litigation-mediation-litigation protocol, adding yet another important tool in the toolbox. Similar to the arbitration-mediation-arbitration protocol, parties commence proceedings at the SICC, which are then stayed for mediation in the appropriate cases. If the dispute is subsequently resolved by mediation, then the mediated settlement agreement may be recorded as an Order of Court.
Launch of SICC Model Jurisdiction Clause for International Arbitration Matters
- Another product, which we are launching today, is the SICC model jurisdiction clause for international arbitration matters. It provides for any court proceedings in Singapore commenced under the International Arbitration Act (IAA) 1994 in relation to the arbitration, to be commenced before the SICC, and to be heard and adjudicated by the SICC.
- This really came as a result of feedback from the ground – from both local and foreign practitioners – who are of the view that the ability to designate SICC as the supervisory court for IAA matters, would be appropriate in some cases. It gives options to parties.
- SICC bench consists of, not just local judges, but a whole deep bench strength of international judges from both common law and civil law jurisdictions from around the world. They have rich experience in different fields. They have deep expertise, particularly in different foreign laws and other matters, and those come in very useful when hearing matters related to cross-border cases with foreign law elements.
- The ability of the SICC to provide that curial support for arbitration matters, particularly high-value, cross-border international arbitration matters, will be quite invaluable. So this model clause, in my view, will significantly advance the ability of parties to harness and use the mechanism well.
- Indeed, the judicial support and recognition of international arbitration is one of the reasons why Singapore is attractive as an arbitration hub today.
- Arbitration is chosen by parties, and is a product of a party choice. There is no question that our courts are pro-party autonomy, and therefore pro-arbitration, where parties have validly and properly chosen arbitration as the appropriate mechanism for resolving the dispute. The courts in Singapore constantly and reliably uphold parties’ agreement to arbitrate, and offer maximum judicial support, with minimal intervention in international arbitration proceedings.
- Based on my own experience when I was in practice, when you try coming to court to set aside an arbitral award without basis, without merit, so you can buy some time, I think you know what will happen to you, not just in terms of adverse court orders, but also broader implications. I think that is an important principle to keep close to.
- With the additional judicial support from SICC, this can only enhance our value proposition.
- In the spirit of what I said at the start, “all good things come in threes”, I thought I would end by sharing three key takeaways, partly from today’s launch, but also partly in the spirit that we are taking this session at the start of a brand new year. I think whilst we look ahead with a lot of confidence, I would also say, have a look back as well to make sure the problems that we had for the past two and a half years or so, do not visit upon us again. In that spirit, let me just share three quick thoughts with you.
The first - I believe we can all benefit tremendously from more ground-up initiatives.
a) As I said at the outset, the whole construct and philosophy behind almost every piece of legislation that we look at, particularly those like the International Arbitration Act (IAA), or those that deal with industry, is aimed at ensuring that parties’ commercial needs are met. We look at that very carefully and somewhat jealously as well.
b) Our regime, frameworks, policies, incentives and initiatives are really geared towards the end user. What does the end user want, what can Singapore as a dispute resolution hub, offer the end user in Singapore?
c) We therefore take a practical, rather than a theoretical, approach. I mentioned earlier that the choice of SICC as a supervising court came from feedback. It was from sessions not dissimilar to this, where people tell us, “Why not designate SICC because of the depth of experience, and the range of expertise in foreign law matters?” And so we did that, after studying it.
d) The two new products we are launching today are very good examples of this. We know that they would be very useful and helpful, because they did come as feedback from actual users operating on the frontline.
e) So, if you have further feedback, suggestions or ideas in your practice as you deal with clients overseas, as you engage in matters overseas, and experience overseas jurisdictions and legal systems, take back to us what you think might work for us. Share your experience with us. Tell us what your clients think of our system. Tell us what your clients think of other systems and whether we could bring, as best practices, features into our own system. That is the constantly evolving process between users like you, front end, the bench, who looks at cases when they come before them, and ourselves in Government, as we deal with policy, frameworks, initiatives and incentives to promote arbitration, mediation as well as international commercial court in Singapore.
Second, I would say, we can achieve much more, if we achieve it as a collective group, as Team Singapore. When I say Team Singapore, it also includes all the lawyers from overseas jurisdictions who operate in Singapore. All of us are part of the same jurisdiction, trying to make this jurisdiction work, and trying to bring work into this jurisdiction.
a) I would say it is not just the three institutions today – SICC, SIMC and SIAC, but also the broader legal ecosystem, including the Singapore Chamber of Maritime Arbitration (SCMA), Singapore International Mediation Institute (SIMI), SIDRA, Singapore Institute of Arbitrators (SIArb), and Maxwell Chambers, and others. All coming together, to make it a Team Singapore dispute resolution offering.
b) I would say collectively they have already punched above their weight, and made their mark both regionally and internationally. I think there is deep respect and deep regard for many of our institutions. On the trips that I have made recently to Delhi and Hong Kong in the past couple of months, I would say there is deep respect and deep regard for what we have achieved.
c) But at the same time, I would say, never rest on these laurels. Because things move very quickly, and we have got to respond equally quickly to market forces and market changes. That, in part, was why I raised the first point with you - to come and give us your views, feedback and suggestions on a timely basis.
d) This is a small country, a small community. Our resources are too limited to be trying to do the same things all the time – understanding the needs of the same markets from different perspectives, albeit, but the same markets; getting feedback from the same users; or marketing our services to the same people. So instead, why not harness and turn our small size, our ‘smallness’ into a strength, which I feel we can do?
e) It is precisely because we are small and in Singapore, the added advantage of being small is that we are tight-knit – the bench, the bar, the Government and academia. We can work together productively. Why not share our experiences and feedback; cross-sell and cross-market even each other – there is no reason why SICC and SIMC should not do so, because after all, it is lit-med-lit, or in the case of SIAC, arb-med-arb. There is a lot of synergy in what each of us do, collectively. If we bring that together and harness it, we can collectively be greater than the sum of its parts.
f) In fact, it is precisely what I said in Hong Kong too. We are both a jurisdiction of choice when it comes to dispute resolution, financial centres, and we have similarities in many ways. Therefore, the competition is obvious. But at the same time, the point I made to practitioners as well as government officials in Hong Kong, is that there is at once a synergy in what we do. If they succeed, we succeed, and vice versa. They are a gateway into Greater China, and we are a gateway into Southeast Asia. There is a lot of synergy between what we can do as friendly competitors, and we can collaborate to complement and benefit one another, leveraging and relying on our respective strengths. That same principle holds true in this room, within Singapore, amongst our own institutions, the bar, the bench and the Government.
Third, my final point is that we have over the years, and I think we have been fortunate to have over the years, a very strong foundation.
a) We built a strong basis and have had good fundamentals. You think back to the years where we started SIAC - it was just kept to domestic counsel, and we then broadened it. If you take SIAC, look at the composition of the board, or arbitrators on the panel - they are not the best of Singapore, they are the best of the world. We do that consciously because we are agnostic to where you come from, as long as you are the best. That principle has to apply. We cannot be parochial about things, we have got to be outward looking.
b) I believe that Singapore already as a very strong foundation. I do not just mean the hardware, which is non-negotiable – governance, strong rule of law, business friendly laws, a vibrant business hub, and so on. We built that, and we should maintain that. We have our software as well – our people, I mentioned our close knit fraternity.
c) But the ability to move fast, once we decide on something, gives us a competitive advantage. Take the SICC as an example. It was first mooted at the Opening of the Legal Year in January 2013. Almost within months, it went into overdrive – a committee was set up, comprising the Ministry, judges, in-house counsel, academia, the Bar and so on, who came together to study the framework, give ideas and input. By November 2013, just barely a few months after the committee was set up, the recommendations and the report were ready. We did a public consultation, the framework was then finalised, and SICC started operations by January 2015.
d) It is this kind of courage and conviction, and this kind of unity, and ability to move when we have decided collectively that we want to move, we need to move, and we know where to move to, that gives us an advantage. I think we should continue to build on that foundation. So, I hope we will be able to take advantage of and build on the very solid base we have today, to look at something even better.
- On the part of the government, we remain committed to safeguarding that strong foundation - our strong adherence to rule of law and governance and so on. We also remain committed to continually enhancing the regime, looking at it from the angle of not just government and policy, but being out there, dealing with you, hearing from you, receiving feedback from each of you who deal with your clients in different jurisdictions, to ensure that we continue to evolve, enhance, and make ready a system that users will see value in, and want to be here and using Singapore, whichever is the mechanism of choice.
- With that, let me end here. Thank you very much for listening to me, inviting me here to share some thoughts in this session. I look forward to Judge’s keynote address as well. Excuse me that I will have to leave after that session for another function. I think as the year opens up, there is a real pent-up demand for functions and events. So please excuse me, and thank you very much.
Last updated on 12 January 2023