Speech by Mr Edwin Tong, Senior Minister of State for Law and Health, at the Launch of the Permanent Court of Arbitration (PCA) Singapore Office

19 Nov 2019 Posted in [Speeches]

His Excellency Hugo Siblesz, Secretary General, Permanent Court of Arbitration

Justice Steven Chong, Judge of Appeal, Supreme Court of Singapore

Justice Pang Khang Chau, Judge, Supreme Court of Singapore

Your Excellencies

Distinguished Guests

Ladies and Gentlemen

Introduction

1. A warm welcome to Maxwell Chambers, and of course, to the Permanent Court of Arbitration (PCA)’s opening this evening.

2. It is a great pleasure to be able to address you and to join you to celebrate this historic occasion.

3. The PCA is an important international dispute resolution centre. It occupies the centrepiece in many of the world’s largest disputes and it offers a peaceable way of resolving disputes in the international arena.

4. I am very happy that you have chosen to launch your office in Singapore, and in this year, on the occasion of your 120th anniversary. There are a couple of milestones that I would like to reflect on, beginning with the launch of the PCA Singapore office.

Official Launch of PCA Singapore Office

5. In Singapore, our relationship with the PCA started many years ago:
a. Just have a look at what happened when countries adopted a trade protectionism approach. Everyone will be familiar with the Great Depression in the 1930s, where countries devalued their own currencies so that exports can be boosted. They also raised their own tariff barriers, hoping to stimulate their own domestic economic activity by reducing imports. These measures can only succeed if other countries do not also respond in the same way. But of course, they did. During that period, global trade shrank by about 65%.

b. We first had recourse to the PCA’s services in 2003 for a land reclamation dispute with Malaysia, and again several years later in 2012, for a development charge dispute on a former Malayan Railway Land. Those have since been resolved.

c. Singapore and PCA signed the Facility Agreement in 2007, to allow PCA to hold its hearings in Singapore on an ad-hoc basis without a staffed office; cases were administered from the PCA’s headquarters in the Hague.

d. We are happy that this was then subsequently elevated to a Host Country Agreement in 2017. Secretary General was present in Singapore for the occasion.

i. At that occasion, in the Secretary-General’s speech, he said,

ii. “the signing of this Host Country Agreement represents a milestone in the long and fruitful relationship between PCA and Singapore” and

iii. It goes on to say that it “opens a new door to expanded cooperation in [our] shared goal of peacefully settling disputes in accordance with the law.

e. Here we are today, celebrating the launch of the new office of PCA.

6. The PCA Singapore Office has achieved very much in the short time since it started operations in 2018.
a. In its very first year of operations alone, it administered 28 PCA proceedings, and concluded 9 PCA hearings in Singapore.

b. In addition, it has, apart from administering cases and hosting the cases, truly embraced and integrated with the dispute resolution landscape. As you know we are within Maxwell Chambers, which is a hub for dispute resolution. I know that many efforts have been made by the PCA to reach out to arbitration practitioners, to stakeholders, to government officials, and indeed, you have participated wholeheartedly in so many international and local events to promote Singapore as a venue for international arbitration, and of course, PCA services throughout the world. For example, the PCA was actively involved in various conferences and events on dispute resolution organised by the NUS Centre for International Law (CIL) and the Singapore International Dispute Resolution Academy (SIDRA). The PCA is also looking to partner our local law schools to provide internships, so that our students from an early age, get to see and experience the work of the PCA, and of course also fellowship opportunities to graduates from the Singapore law schools. These collaborations serve to cement the ties between the PCA and the local stakeholders, and certainly tell us that we can do very much together to better support the dispute resolution needs of states and businesses in the region. The needs of the region, particularly the Asia Pacific region will only grow with time, as we see increasing levels of economic activity in this part of the world. You also see studies that show that the growth of legal services in this part of the world, in Asia, outstrip the rest of the world.

c. Those signs must obviously have been heeded by the PCA. Because you started with an office of around 345 square feet for 1 staff but very quickly doubled that, in fact more than doubled that, to house 6 staff and interns when you moved into the Maxwell Chambers Suites earlier this year. This demonstrates the growth, the potential, and indeed the confidence that PCA has in Singapore. For that I am very, very grateful.

Singapore Convention on Mediation

7. The second milestone I would like to reflect on is:
a. the signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation also known as the “Singapore Convention on Mediation”.

b. Many of you here, were present on that occasion, on the 7th of August at Shangri-La Hotel, witnessing the historic moment. Something that we are very proud of, and will remain very proud of, for many years to come.

8. Why is it historic? Because:
a. It was the first time a multilateral convention under the auspices of the UN is named after Singapore.

b. 70 countries attended the occasion to support the Convention.

c. 46 countries signed the Convention once it opened, on the 7th of August. That includes two of the world’s largest economies – the US and China, and three of the four largest economies in Asia – China, India, South Korea. Japan was present to show support, but felt that they needed a bit of time to look at the terms and what it meant.

9. Since then, 5 more countries have signed the Convention, bringing the total now to 51.

10. This strong show of support of the Convention, in my view, demonstrates:
a. A very strong commitment towards multilateralism and rules-based international order, and

b. also a recognition that mediation as an additional option to resolving disputes, is on the radar of many businesses. Mediation is a viable option to resolving disputes, not only economically, but in a way which is more sustainable in the long term, where the parties’ relationships can be preserved.

c. The need for a system that will enhance cross-border enforceability of mediated settlement agreements and provide certainty and greater assurance of the continuity of businesses, is really the attraction behind the Singapore Convention.
i. We believe that the Singapore Convention provides that missing piece in the international dispute resolution enforcement framework,

ii. the other two being the Hague Convention on Choice of Court Agreements for litigation, and the New York Convention for arbitration.

11. I believe that the Singapore Convention is also relevant to the work of the PCA.
a. The PCA’s functions are not limited only to arbitration, but also include providing support in connection with other forms of peaceful resolution of international disputes, and that includes mediation and conciliation.

b. We all know that there is a growing interest in investor-state mediation.

i. More and more states are turning to mediation for inter-state dispute settlement, and over time, we will see a significant rise in that space.

ii. Investment treaties and trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP), increasingly incorporate mediation clauses. So the TPP has a mediation clause.

12. My Ministry will be organising the second edition of the Singapore Convention Conference. We just recovered from the excesses of the first conference, but now we are looking ahead to plan one in September 2020. We look forward to the PCA’s continued support, and of course, the participation of everyone present in this room.

Grand Opening of Maxwell Chambers Suites

13. Finally, the third milestone is the grand opening of Maxwell Chambers Suites.

14. A bit of the history of Maxwell Chambers. We started it in 2010 – and it was the ‘hardware’ piece to complement our ‘software’ – services. We set up the software by ensuring that the rules were conducive. We made sure that it was party-centric. Party autonomy ruled how arbitrations were decided, but we felt that we also needed, in addition to the software, the hardware – a place where it would be conducive, pleasant, and having nice restaurants always help.
a. So this became the world’s first integrated dispute resolution complex housing both leading international dispute resolution institutions, and also in our view, the best-in-class hearing facilities.

15. We started in 2010, but by 2017, we had run out of space. Hence, we expanded into the adjacent premises, which used to be the Traffic Police Headquarters. We took it over, started refurbishment in 2017, and completed earlier this year. It took us 20 months – quite quick for a building that is rich in history and heritage. There was a brief to the architects to preserve the heritage and the architecture so that the building would look as it was in the past.

16. Today, Maxwell Chambers Suites
a. houses at least 11 international institutions, and 20 dispute chambers and practices across 11 jurisdictions.

b. It has the highest concentration of case management offices within a facility in the world. This includes:

i. The PCA;
ii. The Singapore International Arbitration Centre (SIAC);
iii. The Singapore International Mediation Centre (SIMC);
iv. The International Court of Arbitration of the International Chamber of Commerce (ICC);
v. The World Intellectual Property Organisation Arbitration and Mediation Centre (WIPO); and
vi. The American Arbitration Association (AAA) International Centre for Dispute Resolution.

17. Maxwell Chambers has also added 15 more rooms to the current 22, on Level 2 of the building.
a. With these expansions, we can take in more arbitration cases, more mediation cases and with time, more PCA cases we hope.

Enhancing Singapore’s Position as an Arbitration Hub

18. Finally, we look ahead into the future. As we have developed the hardware and the software and put that together, we feel we need to continuously look at how the world has evolved. Because at the core of what we do, and why we do it, is to ensure that our services always remain business centric and user friendly for businesses.

19. So we continually look at how we can make the environment even more conducive for businesses and to make it pro users.
a. We continually look at the current framework and regime that we have, and see what tweaks we can do to make it even more responsive to business needs.

20. We are currently considering a few proposals, which I will share with you this evening.

21. The first is the conditional fee agreements in certain prescribed areas, which include international arbitration.
a. Conditional fee agreements may be commonplace in many other jurisdictions, but for us it is a relatively novel concept.

b. We have historically been a bit more conservative. We looked very carefully and were very guarded about the possibility of champerty, and we were concerned about the extent to which conditional fee agreements might itself proliferate litigation.

c. We are consulting with our stakeholders, as we often do with new and novel projects to get feedback, get a sense of the market and what the users felt about it. We will be taking incremental steps slowly and looking at it from a very progressive perspective, taking into account what has been done elsewhere, the safeguards that are put in place and how we can contextualize it for our local use.

22. More recently, my Ministry also launched a public consultation to seek views on proposals on the International Arbitration Act. We constantly amend it to keep pace with developments in the public domain and businesses. Some of the areas that we now are considering would be:
a. Whether to provide for the default appointment of arbitrators in multi-party situations; where you have more than two parties, what is the default appointment mechanism in those situations?

b. Second, whether to allow parties, by mutual agreement, to request for arbitrators to decide on jurisdiction at the preliminary award stage;

c. Third, whether to provide an arbitral tribunal and the Courts with powers to support the enforcement obligations of confidentiality in an arbitration; very often, if one side breaches the confidentiality obligations, what happens? What are the powers of the tribunal, and what should the concomitant powers of the court be?

d. Fourth, whether to allow a party to arbitral proceedings to appeal to the High Court on a question of law arising from an award made in the proceedings, provided the parties have, in the arbitration agreement, agreed to opt in to such a mechanism. If you study the common thread that runs through the different proposals, you will see that many of our proposals, if not all, rest on decisions made by the parties. It is opt in to the right to appeal an award, not opt out, and it is with agreement that the arbitrators are cloaked with additional jurisdictional powers. We want to look at it from a perspective of giving parties a choice. We set up the infrastructure but you have the choice on whether to opt in to avail yourself of these options.

23. Currently we are looking at the extensive feedback which we have received from practitioners, stakeholders, institutions and users, and we will reach a landing on each of those points.

24. That is really to give you a flavour of the efforts that we take to keep our framework current and to be also informed by the experience of other jurisdictions. We do not necessarily have to reinvent the wheel each time. We look at the experience of other jurisdictions, other institutions, and we try to borrow the best practices, but contextualising them for our own local domestic use. We see this process as continually evolving, one that is collaborative, working with each of you as the stakeholders, the institutions. We think it is a dynamic process with a lot of to and fro, among the government and stakeholders, including practitioners and institutions. All of you have much to offer as we refine our laws and make them pro-business and focus on the users as being the centrepiece in this whole equation.

Conclusion

25. Finally, let me just once again extend my congratulations to PCA. It is not just the opening of your office here today, but as I mentioned earlier, your 120th anniversary. That is testament to the strength over time, more than a century.

26. We look forward to strengthening and deepening our relationship with PCA, working more closely together with your staff in your Singapore office, supporting the work in Singapore and in the region. There is much that we can do together, not just the government and the PCA, but all the stakeholders within this ecosystem. To continually enhance, refine, reform and really promote Singapore as the choice for international dispute resolution.

27. On that note, I wish you a very pleasant evening ahead, and once again, Secretary-General, congratulations.

Last updated on 19 Nov 2019