Speech by Law Minister K Shanmugam at the inaugural Singapore International Arbitration Forum
21 Jan 2010 Posted in Speeches
The Honourable the Chief Justice, Mr Chan Sek Keong,
Attorney-General, Professor Walter Woon,
Judges of Appeal, Justice Chao Hick Tin, Justice Andrew Phang and Justice V K Rajah,
Senior District Judge, Mr Tan Siong Thye,
Chairman, Singapore International Arbitration Centre, Mr Michael Pryles,
Chairman, Maxwell Chambers, Mr Chelva Rajah,
Ladies and gentlemen,
Good morning. Thank you for inviting me to this inaugural Singapore International Arbitration Forum. We have great pleasure in welcoming the distinguished speakers and delegates from the international arbitration community, including those from abroad, who have made a special effort to be here today. I understand more than 300 of you have joined us here in a strong show of support.
I would also like to commend Maxwell Chambers and the Singapore International Arbitration Centre, co-organisers of this event, and the supporting organisations for working together in arranging this conference.
The Importance of International Arbitration
- International arbitration has experienced remarkable growth in recent years. Throughout the developed and developing world, there is increased acceptance of arbitration. Many of the major international arbitral institutions have reported significant increases in the number of cases handled by them. Much of this growth has taken place in Asia, prompting international arbitral institutions to plan for increased levels of activity in the region.
Singapore – A Regional Legal Services Hub
- Our efforts to grow the arbitration sector here in Singapore have been made in the context of a growing legal services sector.
- Singapore is the commercial focal point in South-east Asia, a region with a population of more than half a billion people. It lies between two emerging economic giants, China and India, each with more than a billion people and booming, large, economies.
- Many serious people believe that this new decade will, finally, begin to realise the immense potential of Asia. In Singapore, we seek to be the gateway to Asia, as a key global legal and financial centre and regional hub for businesses.
- International law firms have taken note of these developments and have found Singapore an attractive location to build their bases. Since 2006, the number of foreign law firms in Singapore has more than doubled to almost 100 law firms today. Law firms already in Singapore continued to expand their offices here, with some bringing in specialist partners to their Singapore offices and starting new practice areas here, including arbitration, energy and aviation. The value-add (VA) of our legal services sector grew eight per cent year-on-year in 2008.
- Measures in place to enhance the growth of the legal services sector have helped. In 2008, six Qualifying Foreign Law Practice (QFLP) licences were issued, which allow foreign firms to practise Singapore law. Four of these six firms are ranked amongst the top 10 in the world in terms of revenue. The Joint Law Venture (JLV) scheme was enhanced to allow all existing and new JLVs – partnerships between foreign and local law firms – to similarly practise Singapore law. A new JLV in 2009 saw, for the first time, a Chinese law firm as the joint venture partner. Foreign law firms are now allowed to practise Singapore law wherever arbitration is contemplated.
- But we know that it takes more, and we have concentrated on building the essentials for developing Singapore as an important arbitration centre. Let me highlight some of them.
Singapore’s Arbitration Eco-System
- Modern and Sophisticated Legislation
- First, the legislative framework here is strongly supportive of arbitration and adopts international best practices. The Model Law was adopted into our International Arbitration Act several years ago. Singapore is a signatory to the New York Convention and arbitration awards from Singapore are enforceable in over 140 countries across the world.
- Last year, we amended our International Arbitration Act after extensive consultations with key industry experts, to bring in some of the latest developments in the field.
- We have also adopted an open regime for the practice of arbitration law. Parties who arbitrate in Singapore are free to engage lawyers of any nationality and use any governing law, not just Singapore-qualified lawyers or Singapore law. Income earned by foreign arbitrators is exempted from tax, and there is a tax incentive scheme for arbitration work for law firms.
- Judicial Philosophy
- Secondly, the Singapore Courts are very supportive in bringing to bear our legislative intent, and have shown consistent emphasis on party autonomy and support of the finality of the arbitral award. Recent cases in Singapore’s Courts demonstrate that it would be extremely unlikely to find any exceptional circumstance that allows for arbitral awards to be set aside. In fact, based on reported cases from the Singapore Courts, all applications to enforce awards have been granted, and only one award (and that is from a domestic arbitration) in Singapore has been successfully appealed against.
- The Court of Appeal, in Tjong Very Sumito vs Antig Investments Pte Ltd stated quite emphatically the philosophy last year: “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.”
- Singapore International Arbitration Centre (SIAC)
- In the past decade, the SIAC has grown from strength to strength. Back in 2000, it handled 58 cases. By 2009, the SIAC had almost tripled this number to handle 160 cases. These comprise 132 cases administered by SIAC and 28 cases where SIAC appointed the arbitrators. These statistics relate purely to arbitration cases and do not include cases involving domain name disputes and mediation. It also does not include cases where only SIAC’s facilities were used for dispute resolution. It is difficult to compare with different centres in Asia because of different yardsticks used – for example, some include domain name disputes and cases where only their facilities were used. But, I think it is fair to say that SIAC has in the last few years emerged as a leading centre, if not the leading centre in Asia administering international arbitrations.
- The SIAC constantly reviews its Rules and processes to reflect progressive commercial arbitration practices.
- It also regularly supplements its Rules with comprehensive Practice Notes. These notes clarify obscurities, promote transparency, and strengthen the parties’ and their arbitrators’ confidence and certainty in the arbitration process.
- Last year, we saw the appointment of a new blue-ribboned SIAC Board comprising nine leading arbitrators and arbitration counsel. The new Board is chaired by Professor Michael Pryles. Mr Sundaresh Menon, widely regarded as one of Singapore’s and Asia’s foremost lawyers in commercial litigation and arbitration, serves as Deputy Chairman. 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 will further boost its reputation as a premier international institution.
- Maxwell Chambers
- Maxwell Chambers, to be officially opened tonight, will serve to position Singapore as the region’s leading centre for international arbitration. Since last August, it has already hosted more than 60 hearings. It is the world’s first integrated dispute resolution centre and houses state-of-the-art facilities. Its tenants include the Permanent Court of Arbitration, the American Arbitration Association, the International Court of Arbitration of the International Chamber of Commerce and the Arbitration and Mediation Centre of the World Intellectual Property Organization. This evening, the International Centre for the Settlement of Investment Disputes will also be signing an agreement to set up an office in Maxwell Chambers.
- Maxwell Chambers’ primary objective is to create as convenient, as conducive and as attractive an environment as it is possible to conduct arbitration hearings in Singapore. With the support of lawyers and arbitrators here this morning, we hope to realise this objective sooner rather than later.
- Singapore has seen considerable growth as a venue of choice for international arbitration. A 2008 report by the International Chamber of Commerce - International Court of Arbitration (ICC-ICA) ranked Singapore the top city in Asia for ICC arbitrations and one of the five most popular venues alongside Paris, London, Geneva and Zurich. Significantly, the number of ICC-ICA cases heard in Singapore nearly doubled from 17 in 2007 to 31 in 2008. A study of the profile of cases administered by SIAC is instructive. In 2009, 114 out of 160 (or more than 70 per cent) of the cases were international cases. The same picture is seen at Maxwell Chambers. Thus far, more than half of their cases involved foreign parties and are truly international arbitration cases.
- We will remain focused and constantly re-examine our legal regime to ensure that we remain arbitration friendly. The presence in Singapore of so many eminent arbitration thinkers and practitioners for this conference, for example, helps to catalyse this process, and we are privileged that you are here. It is through open discussion and creative exchange that the arbitration sector can continue to upgrade and improve.
- Thank you and I wish you a fruitful conference ahead.
Last updated on 26 Nov 2012