Keynote Address by Law Minister K Shanmugam at the “International Energy and Infrastructure Arbitration- A Vietnam Perspective” Conference

30 JUL 2010

30 Jul 2010 Posted in Speeches

Member of the Board of Directors, Singapore International Arbitration Centre (SIAC), Cavinder Bull, SC
President of the Pacific International Arbitration Centre, Nguyen Dang Trung,
Officials from Vietnam’s Ministry of Justice,
Distinguished guests,
Ladies and gentlemen,

Introduction

  1. Good morning and thank you for inviting me to this conference.

    State of Global Economy

  2. The global economy is on a recovery path, though the pace of growth is uncertain.

  3. It appears that Asian economies, led by China and India, will lead global growth in 2010, and perhaps next year as well.

    Recognising Opportunities in Vietnam

  4. Vietnam’s economy has grown steadily by between six to nine per cent annually over the past decade. This year, it has continued to recover from the global downturn and may be set for growth of six to seven per cent.

  5. Singapore is a partner in Vietnam’s growth. Singapore companies have invested significantly in Vietnam. For example, the Vietnam-Singapore Industrial Park (VSIP) in particular, has grown to become an icon of Singapore’s economic cooperation and investments in Vietnam since its first project in Binh Duong Province in 1996. The VSIP has since expanded both within Binh Duong Province, as the VSIP II project, as well as to the northern provinces of Bac Ninh and Hai Phong.

    Robust trade and investment volumes

  6. Singapore is the fifth largest investor in Vietnam. Singapore’s key investment areas are in services (ports, logistics and healthcare), manufacturing (food, consumer products and electronic components) and real estate (industrial parks, township and housing developments).

  7. Bilateral trade has grown steadily over the last 10 years. Singapore was Vietnam’s fifth largest trading partner in 2009, while Vietnam was Singapore’s 14th largest trading partner.

    Connectivity Framework Agreement

  8. The Connectivity Framework Agreement, signed in December 2005 and currently in its fifth year, underpins Singapore’s and Vietnam’s bilateral economic cooperation. It provides an overarching framework across six sectors: education and training, finance, investment, information technology and telecommunications, trade and services, and transportation.

  9. The Agreement has successfully facilitated several private sector projects, and has contributed towards approximately US$8.8 billion worth of Singapore’s registered investments into Vietnam from January 2006 to April 2010.

    Singapore’s Value Proposition as the venue of choice for international arbitration

  10. It is against this background that I want to say a few words about the need for a robust arbitration framework, to spur inward investment into Vietnam. And how Singapore can work with Vietnam in this area. Vietnam’s strong growth potential is widely recognised. International investors are keen to do business in Vietnam. But they also need to plan for contingencies, especially if and when disputes were to occur. Increasingly, parties turn to arbitration. Some will be happy to arbitration in the country where the investment takes place – in this case Vietnam. Others might prefer to arbitrate in a third-party neutral venue away from the country of business or investment.

  11. Singapore is well-placed to be this third-party neutral venue, and SIAC is often the international arbitration centre of choice. This may encourage greater investments into Vietnam.

    Advantages of Singapore as an international arbitration venue

  12. Let me highlight some of the key factors that make Singapore a good place for international arbitration in this context.

    1. Neutrality

  13. First and foremost is Singapore’s neutrality. It is a country where businessmen, from Europe or the US or Asia, can go about their business with full confidence of non-interference. It is recognised as a neutral venue.

    1. Legislative Framework

  14. Secondly, the legislative framework is also supportive of arbitration. We have adopted international best practices. The UNCITRAL Model Law was adopted several years ago. Singapore is a signatory to the New York Convention and arbitration awards from Singapore are enforceable in over 140 countries all over the world.

  15. We also keep a close eye on developments in the arbitration industry. When necessary, we move quickly and amend our legislation in a matter of months to keep up with global changes. This is in line with the government philosophy to support arbitration. And with effect from the start of this year, our International Arbitration Act expressly empowers the Singapore Courts to grant interim orders in aid of international arbitration, irrespective of whether Singapore is the place of arbitration.

    1. Judicial Context and Philosophy

  16. The third aspect I would like to emphasize is that the Singapore Courts are extremely supportive in bringing to bear the legislative intent, and have shown consistent emphasis on party autonomy and support of finality of the arbitral award. Designated arbitration judges have been appointed to facilitate the process and to ensure that any curial judicial assistance is provided efficiently and consistently.

  17. Thus, it would be extremely unlikely to find any exceptional circumstance that allows for arbitral awards to be set aside in the Singapore courts.

  18. Indemnity costs awards are also made against those who attempt to derail the arbitration process with unmeritorious court applications, signalling that our Courts will not tolerate such tactics.

  19. Singapore’s Court of Appeal, our highest court, ruled last year and stated emphatically its philosophy: “An unequivocal judicial policy of facilitating and promoting arbitration has firmly taken root in Singapore.” And later in the same judgment: “The role of the court is now to support, and not to displace, the arbitral process.”

    1. Arbitral Institutions

  20. The fourth point that I would make is that any party looking to arbitrate in Singapore can easily engage some of the top arbitral institutions in the world. The American Arbitration Association, the Permanent Court of Arbitration, the ICC’s International Court of Arbitration and the Arbitration and Mediation Centre of the World Intellectual Property Organization have all set up facilities in Singapore. Most recently, in January this year, the International Centre for Settlement of Investment Disputes has also committed to do so.

  21. There is also SIAC. SIAC is strategically placed in the region to offer a neutral service for the dispute resolution of transactions. Forty-five per cent of the new international case references for SIAC in 2009 involved cases where the parties have had no connection with Singapore at all.

  22. SIAC also has a scale of fees for arbitrators and administrative charges based on the sum in dispute. These allow parties to predict their maximum liability for the costs involved in the arbitration, apart from what they would pay for counsel.

  23. The result of these measures is a streamlined dispute resolution process that promises to resolve cases effectively and efficiently, and with predictable and consistent results. On average, a case administered by SIAC can be heard in Singapore and an award issued from the time of notice of arbitration to the issue of the award within about 18 months. Simple cases have been completed in as little as nine months.

  24. The SIAC’s track record also includes issuing awards which have subsequently been enforced in Australia, Hong Kong, Indonesia and China, amongst other New York Convention countries. In China, there are five instances in the last three years in which the courts have enforced SIAC awards.

  25. Last year, a new blue-ribboned SIAC Board was appointed, comprising nine arbitrators and arbitration counsel, several of whom are internationally known. The new Board is chaired by Professor Michael Pryles, who is ranked among the top 20 arbitration specialists in the world and who is a non-Singaporean. There are seven other members of whom six are non-Singaporeans. These appointments to SIAC’s Board bring a new depth of international expertise to SIAC and further boost its reputation as a premier international arbitral institution.

    1. Maxwell Chambers

  26. The fifth point that I would like to share with you, is that in January this year, Maxwell Chambers, which is the world’s first integrated dispute resolution centre was officially opened. Its primary objective is to create as convenient, as conducive and as attractive an environment as is possible to conduct international arbitration hearings in Singapore.

  27. Maxwell Chambers will serve to anchor Singapore’s position as the region’s leading centre for international arbitration. Last July, Maxwell Chambers started taking bookings and since then, it has hosted more than 160 hearings. Its tenants include the list of arbitral institutions I had earlier mentioned, including the AAA, PCA, ICC-ICA, WIPO AMC and ICSID.

    1. Open regime for legal services

  28. We have also adopted a very open regime for the practice of arbitration law. Any party, Vietnamese companies included, who arbitrate in Singapore are free to engage lawyers of any nationality from any country and use any governing law. We also have available a wide array of international expertise in Singapore, as evident from the nearly 100 international law firms 1 . A couple of barristers’ chambers have also set up in Singapore.

    Conclusion

  29. Let me conclude by saying that the International Chamber of Commerce – International Court of Arbitration has, for the past three years, ranked Singapore as the top city in Asia for ICC arbitrations and one of the five most popular venues alongside Paris, London, Geneva and Zurich.

  30. Events such as today’s conference are crucial in bringing about an understanding of what we offer and building up of networks and strengthening partnerships.

  31. PIAC is a young organisation but one that I understand consists of dynamic lawyers committed to making arbitration a dispute resolution mechanism of choice.

  32. There is much scope for PIAC and SIAC to work together to further the development of international arbitration in our region. SIAC, I am sure will be happy to share its experiences with PIAC. And I am confident that this conference is just the start of the collaboration between the two centres. It is in all our interests that arbitration grows, both within Vietnam and, as I mentioned earlier – where it can’t be arbitrated for some reason in Vietnam, in centres around the region. SIAC and PIAC can strengthen their links through more exchanges and initiatives such as an MOU for future cooperation.

  33. I would like to commend SIAC and PIAC, and thank them for putting together today’s programme.

  34. I wish the Conference every success. Thank you.

[1] There are 98 foreign law firms registered with AGC as of Jul 2010.

Last updated on 25 Nov 2012