Opening Address by Ms Indranee Rajah, Senior Minister of State, Ministry of Law & Ministry of Finance, at the Signing of the Host Country Agreement Between Singapore and the Permanent Court of Arbitration

25 JUL 2017

25 Jul 2017 Posted in Speeches

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

Sundaresh Menon, the Chief Justice of Singapore

Lucien Wong, the Attorney-General of Singapore

Distinguished guests, ladies and gentlemen

Introduction

I am delighted to join all of you today at the signing of the Host Country Agreement between Singapore and the Permanent Court of Arbitration (PCA) for the setting up of a PCA office in Singapore.
First, let me extend a very warm welcome to our overseas guests who have travelled from afar to be with us today. I do hope you enjoy your stay in Singapore and find the time to explore our country.
I am also heartened that so many distinguished members of Singapore’s dispute resolution community who have taken the time to honour us with your presence. Your attendance is testament to the significance of today’s event and the deep partnership the Singapore dispute resolution community has with the PCA.
Let me just say a few words about what today’s signing means for Singapore’s relationship with the PCA and our efforts to take dispute resolution to a new level.

Singapore’s relationship with the PCA
Singapore has a longstanding warm relationship with the PCA. This relationship started 24 years ago, in 1993, when Singapore became a Contracting Party to the PCA’s founding Convention, the 1907 Convention for the Pacific Settlement of International disputes.
As a strong proponent of a peaceful and rules-based international legal order, it is no surprise at all that Singapore supports the PCA and what it does in helping to resolve disputes between states, state entities, international organisations and private parties. Singapore has nominated representatives to the PCA’s panel of independent arbitrators, highly distinguished individuals which include Singapore’s Chief Justice Sundaresh Menon, former Chief Justice Chan Sek Keong, Ambassador-at-Large Tommy Koh and Deputy Attorney-General Lionel Yee.
There were also two instances whereby Singapore was itself a “client” of PCA’s dispute resolution services:
1. In 2003, Singapore’s dispute with Malaysia concerning Singapore’s land reclamation activities in the Straits of Johor was submitted for arbitration under the compulsory dispute settlement procedures in the United Nations Convention on the Law of the Sea (UNCLOS). The PCA acted as registry for the arbitral tribunal.
2. In 2012, Singapore and Malaysia agreed to submit the dispute concerning the development charges on former Malayan railway land to final and binding arbitration, again with the PCA acting as registry for the arbitral tribunal.
These two examples underscore Singapore’s belief that disputes, including those between States, can be resolved amicably, in accordance with international law. They also demonstrate our trust and confidence in the role PCA plays in helping to administer a just and amicable resolution.
In 2007, Singapore signed a facility agreement with the PCA in support of its work. The facility agreement allows the PCA to conduct dispute resolution hearings in Singapore on an ad-hoc basis, without the need for the PCA to set up a permanent physical presence in Singapore. This arrangement allowed the PCA the kind of support it needed at a time when the number of PCA cases heard in Singapore was relatively low.
Now, on the 10-year anniversary of the facility agreement, Singapore and the PCA have decided to deepen this partnership, by entering into an agreement for Singapore to host a staffed office of the PCA in Singapore. The signing of the host country agreement signifies a step-up in PCA-Singapore relations, one deeply rooted in a shared belief in the rule of law and a shared commitment to advance this through the provision of quality dispute resolution services.

Taking Dispute Resolution to the Next Level
Singapore is today one of the top five most preferred seats of arbitration in the world, alongside London, Paris, Geneva and Hong Kong. We have done well, but we are certainly not resting on our laurels. We think we can do more and do better, and we believe there is now a window of opportunity for us to take dispute resolution to the next level.
First, the economic centre of gravity of the world is shifting to Asia. As this happens, legal activities will follow. There will be a lag in this shift, because of habits and established practices. But it is inevitable. We will see that Asia’s magnetic pull on businesses has a knock-on effect on legal activities also.
1. Take infrastructure as an example. Asia has an urgent need for additional infrastructure investments totalling US$20 trillion between now and 2030, because of its rapid urbanisation, development, and population growth. Infrastructure projects need financing and project structuring. They also need legal services, including dispute resolution services, to resolve disputes arising from delays and variations which are common.
2. And as we see this shift to Asia, we can see it reflected in the numbers already. Between 2014 and 2019, global legal services are projected to grow at 3.3% a year. But if we look just at the Asia-Pacific region for the same period, the growth rate is much higher at 5.5%, a 2.2 percentage point difference from the global average. This 2.2 percentage point difference is compounded every year, so the gap widens with each passing year. While we will still find opportunities elsewhere in the world, there are just a lot more in Asia. Any major player planning long-term cannot afford to ignore Asia.
Second, Singapore is well poised to serve this growing demand in Asia. We have a trusted legal system that not only delivers high quality jurisprudence, but one that is neutral and stable.
1. This is why businesses who plan long-term choose Singapore as the seat of arbitration in their contracts, even those that have no connection whatsoever with Singapore. This is because they know that if and when disputes arise, be it 5, 10 or 15 years later, Singapore will still be Singapore: trusted, consistent and reliable in its approach, delivering the same high-quality jurisprudence as it does now, if not better.
2. And more businesses will come to appreciate this trust, neutrality and stability that Singapore offers. These qualities will command an even higher premium in an increasingly uncertain world, where the neutrality and stability of well-established legal systems can no longer be taken for granted. What Singapore offers is intrinsically linked to our system of governance. It cannot be created overnight, but also cannot be easily replicated.
Third, Singapore has a government that is focused and determined in helping its dispute resolution sector seize opportunities in Asia. We are fortunate that we are able to work closely with its Courts and the legal profession to do so. It is not a case of every man for themselves, each lawyer, law firm and institution on his own. We give them our full support. In fact, over the last few weeks and over the next few months, I will be visiting all the major law firms as well as speak to the medium and small size firms to talk about plans for the Future Economy and the growth sectors for the legal profession.
Our efforts to support the dispute resolution sector are not ad-hoc, but concerted, coordinated, and sustained over many years.
1. We work together to proactively review legislation to make sure that our laws stay up-to-date, and support businesses. For example, we recently amended legislation to allow third party funding in relation to international commercial arbitration. We also introduced a new legislative framework to strengthen the enforceability of mediated settlements.
2. We build and make long-term investments in institutions to serve the needs of businesses and the dispute resolution community. We now offer a complete suite of dispute resolution services, arbitration through the Singapore International Arbitration Centre (SIAC), mediation through the Singapore International Mediation Centre (SIMC) and litigation, through the Singapore International Commercial Court (SICC). In 2010, we set up Maxwell Chambers, the world’s first integrated dispute resolution complex. We are now making further investments to expand Maxwell Chambers to meet future demand. Just last month, I attended the Ground-breaking ceremony, and I am happy to say that the new building, Maxwell Chambers Suites, is already 65% booked, even before construction begins.
Fourth, Singapore is open and inclusive in our approach. We seek to be a truly international hub from which States and businesses can access a full spectrum of dispute resolution providers and services. For service providers, we seek to be their base in Asia from which they can access and capture its many opportunities. Again just last month, the International Court of Arbitration of the International Chamber of Commerce announced that it will set up a case management office in Singapore. The ICC Court also signed a Memorandum of Understanding with the Singapore Ministry of Law to work together to develop and promote Singapore as a seat and venue for arbitration in Asia through advancing thought leadership, developing manpower talent and arbitration services, and undertaking joint marketing.
The setting up of the PCA office in Singapore, its first staffed office in Asia, will further augment Singapore’s position as an international hub for dispute resolution, particularly in the new area of investment dispute resolution. Many treaties and investment agreements designate the PCA as the appointing authority of arbitrators or charge the PCA with providing registry services or hearing facilities for PCA-administered disputes. With the support of the PCA office in Singapore and Singapore’s world class hearing facilities at the Maxwell Chambers, Singapore will be better placed to host the arbitration proceedings in respect of any dispute arising out of such agreements.
In fact, we are already seeing a growing number of PCA cases held in Singapore. In 2017, at least seven PCA cases have been heard or will be heard in Singapore. This is almost double the number of four that were heard in Singapore in 2015. This growing number is testament to the expertise Singapore already offers. With the setting up of the new office, we hope to be able to better serve the dispute resolution needs of States and businesses in Asia and to meet growing demand in coming years. This will create more opportunities for Singapore lawyers and law firms.

Conclusion
In conclusion, I would say a few words to the many distinguished practitioners who have joined us today.
It is encouraging to note that Singapore-based legal practitioners are in various capacities involved in high-level disputes handled by the PCA. Singapore-based practitioners have acted or are acting as arbitrator in 31 PCA cases, while Singapore-based practitioners currently act as counsel in 9 pending PCA cases. There is certainly room for more to participate. The Ministry of Law is looking into how we can grow work in the area of investment arbitration and we welcome your ideas and suggestions.
Ultimately, the ability of the PCA office here to realise its full potential depends not only on the PCA’s efforts and the Singapore Government’s support, but also on the awareness and willingness of litigants to utilise the services offered by the PCA. We hope you will all share the good news of the opening of the PCA office in Singapore with your clients and business counterparts.
This latest milestone is one of many others to come in Singapore’s continued growth as an international dispute resolution hub. We look forward to partnering with all of you as ambassadors of Singapore’s dispute resolution community.
Thank you all for your continued support.

Last updated on 25 Jul 2017