The proposed draft new rules of the Singapore International Arbitration Centre (SIAC) are a comprehensive rewrite and restructure of the existing 6th edition of the SIAC Rules dated 1 April 2016 (SIAC Rules 2016), making the rules more logical and coherent. The proposed rules include some welcome developments, such as proposals to streamline the procedure for small disputes and increase the powers of the Registrar and President.
On 22 August 2023, the Singapore International Arbitration Centre (SIAC) announced its Public Consultation on the Draft 7th Edition of the SIAC Rules (Draft Rules). The Draft Rules can be accessed on SIAC’s website. Given the rewrite and restructure, there is no redline comparison with the SIAC Rules 2016. The consultation period is open until 21 November 2023.
The spirit of the SIAC Rules, which is given new emphasis in the Draft Rules, is to ensure:
- the fairness of the proceedings;
- the expeditious and cost-effective conduct of the arbitration, proportionate to the complexity of the claim and the amount in dispute; and
- the enforceability of any award.
In this article, we comment on the key features of the Draft Rules.
Key features
The Draft Rules introduce substantial revisions to the SIAC Rules 2016 including:
- Introduction of Streamlined Procedure for claims of under S$1 million;
- Preliminary determination application procedure;
- Disclosure of third-party funding arrangements;
- New powers for the Registrar and President; and
- Updates to the Emergency Arbitration process
1. Introduction of Streamlined Procedure for claims of under S$1 million (Rule 13 and Schedule 2)
All arbitral institutions administer smaller claims for which the standard arbitration procedure is not efficient nor cost effective.
The SIAC introduced its Expedited Procedure in 2010 as a “fast-track” procedure for the resolution of suitable disputes. While the SIAC does not publish how many smaller claims are filed each year, there have been 802 applications for the Expedited Procedure from 2010 until the end of 2022 which provides an indication of the number of smaller claims and popularity of expediting their resolution.
In a major revision, the SIAC is now proposing to streamline procedures even further for smaller claims, through the introduction of the Streamlined Procedure which is set out at Rule 13 and Schedule 2 to the Draft Rules. The Streamlined Procedure will be an even faster procedure which caters for small-value disputes that require greater cost-effectiveness and expediency.
An arbitration may be conducted in accordance with the Streamlined Procedure where:
- the parties have agreed to the application of the Streamlined Procedure;
- the amount in dispute does not exceed the equivalent amount of S$1,000,000 at the time of the application; or
- the circumstances of the case warrant the application of the Streamlined Procedure.
Like the Expedited Procedure, the Streamlined Procedure mandates that the case shall be determined by a sole arbitrator. However, unlike the Expedited Procedure which can be run as a compressed version of a standard SIAC arbitration, the Streamlined Procedure sets out shorter timeframes and mandatory procedural rules for the conduct of the arbitration. Further, the Streamlined Procedure offers lower fees for SIAC and the Tribunal, which shall not exceed 50% of the maximum amounts calculated in accordance with the SIAC Schedule of Fees, unless the Registrar determines otherwise.
Given the demand for swift resolution, the Draft Rules also raise the monetary threshold for the Expedited Procedure to S$10,000,000 (from S$6,000,000) and provide the President with the discretion to grant an application for the Expedited Procedure to apply when the circumstances of the case warrant it even if the monetary threshold is exceeded (this amendment is similar to that proposed for the Streamlined Procedure).
We summarise below the key differences between the Streamlined Procedure and Expedited Procedure under the Draft Rules:
| Monetary threshold | Tribunal | Hearing | Document Production | Witness Evidence | Timeframe for Final Award | |
| Streamlined Procedure | S$1,000,000 | Sole arbitrator | Arbitration shall be decided on written submissions and documents only. | Parties not entitled to request for document production. | No party is entitled to file any fact or witness evidence. | 3 months from the constitution of the Tribunal (can be extended by the Registrar) |
| Expedited Procedure | S$10,000,000 | Sole arbitrator unless the President determines otherwise | The arbitration shall be decided on written submissions and documents only unless any party requests a hearing or the Tribunal decides that a hearing would be appropriate. | The Tribunal may decide not to allow requests for document production. | The Tribunal may limit the number, length and scope of written submissions and written witness evidence. | 6 months from the constitution of the Tribunal (can be extended by the Registrar) |
The Streamlined Procedure is a welcome innovation that provides a more efficient and cost-effective option for low value less-complex disputes. It could also be used for disputes which only concern a discrete legal point. Given the limitations of the timeframe, it will not be suitable for those disputes that require witness evidence to determine factual or quantum issues.
2. Preliminary Determination (Rule 46)
The current SIAC Rules 2016 allow a Tribunal to bifurcate proceedings (Rule 19.4) and make separate awards on different issues at different times (Rule 32.5). Given these powers, parties do make applications for the determination of preliminary issues under the current SIAC Rules 2016.
The Draft Rules introduce a set procedure for parties to apply to the Tribunal for a preliminary determination of any issue that arises for determination in the arbitration. This proposed procedure contrasts with the flexible ad hoc approach currently taken by parties and Tribunals. It follows the introduction in the SIAC Rules 2016 of a procedure for the early dismissal of a claim or defence that was manifestly without legal merit or manifestly outside the jurisdiction of the Tribunal (Rule 29 in SIAC Rules 2016 and Rule 47 in the Draft Rules).
First the proposed procedure in Rule 46 sets out the criteria by which the Tribunal should allow an application for preliminary determination to proceed, namely that:
- the parties agree that the Tribunal may determine such an issue on a preliminary basis;
- the applicant is able to demonstrate that the determination is likely to contribute to a savings of time and costs and a more efficient and expeditious resolution of the dispute; or
- the circumstances of the case warrant the preliminary determination.
Second, the proposed rule requires that the application state the facts and legal basis supporting the application.
Third, the proposed rule sets a timeframe for the Tribunal to determine the application, after deciding whether it should proceed and giving the parties the opportunity to be heard, of 45 days from the date of filing of the application. The Registrar is allowed to the extend the timeframe. This is a quite a short timeframe that would not usually allow for the exchange of detailed evidence and indicates that any such application should be on a discrete legal or factual point. This same 45-day timeframe is specified also in draft Rule 47 on Early Dismissal of Claims and Defences – shorter than the existing 60-day timeframe in Rule 29 of SIAC Rules 2016 for the same application.
Fourth, the proposed rule provides that the Tribunal is required to provide reasons for its determination within 45 days which may be in a summary form and can take the form of a decision, ruling, order or award. The draft Rule 47 on Early Dismissal of Claims and Defences adopts this language also which expands the options available to the Tribunal from that in the current Rule 29 (which specifies that a Tribunal will make an order or Award).
This is a novel rule; most of the leading arbitration rules do not prescribe a procedure for the preliminary determination of issues. The exceptions are the International Centre for Dispute Resolution Rules 2021 (ICDR Rules) issued by the international division of the American Arbitration Association and the Arbitration Rules of the SCC Arbitration Institute 2023 (SCC Rules). Article 23 of the ICDR Rules specifies a procedure for the early disposition of issues, which procedure has a different test for whether such an application should be heard. The SCC Rules include a summary procedure in Article 29 that covers preliminary determination as well as the early dismissal of claims and defences. Notably neither of these arbitration rules specify a timeframe for the Tribunal’s consideration of such an application.
This draft Rule 46 gives the Tribunal and the parties guidance on when it is appropriate for a Tribunal to make a preliminary determination. Preliminary determination of issues may lead to time and cost savings by streamlining the issues in dispute between the parties and as such should be encouraged where appropriate. It can though result in delay if the preliminary determination does not narrow the issues sufficiently. The timeframe of 45 days would suggest that in the SIAC’s view preliminary determination is only appropriate for straightforward issues.
Given the similar procedure and timeframe, in our view if Rule 46 Preliminary Determination is adopted it will be used for determinative issues in preference to Rule 47 Early Dismissal of Claims and Defences. Rule 47 requires that the Tribunal determine that any claim or defence is manifestly without merit or manifestly outside the jurisdiction, which is a high threshold whereas no special legal test is specified in Rule 46.
3. Disclosure of Third-party funding arrangements (Rule 38)
The Draft Rules include a standalone Rule 38 Third-Party Funding which sets out provisions governing the disclosure of third-party funding.
Third party funding for arbitration has only been allowed in Singapore since 2017, after the introduction of the SIAC Rules 2016. Consequently, the SIAC issued a Practice Note to Arbitrators on 31 March 2017 which ensures that prospective arbitrators disclose any relationships with third party funders prior to appointment and that a Tribunal has the power to make enquiries as to funding relationships.
In a welcome development given the growing prevalence of third-party funding in the Asia Pacific region, the Draft Rules go further than the Practice Note by putting a positive duty of disclosure on the parties (consistent with other rules such as the 2018 HKIAC Administered Arbitration Rules and 2021 ACICA Arbitration Rules). The Draft Rules require that parties disclose the existence of any third-party funding relationship and identity of any funder in:
- the Notice of Arbitration;
- the Response to the Notice of Arbitration;
- applications for consolidation, joinder and to appoint an emergency arbitrator; and
- immediately upon concluding a third-party funding relationship.
Rule 38 also allows the Tribunal to order the disclosure of details of the third-party funder’s interest in the outcome of the proceeding and whether the third-party funder has committed to undertake adverse costs liability.
4. New powers for the Registrar and President of the SIAC Court
One of the interesting features of the Draft Rules are the new powers for the Registrar and President of the SIAC Court.
Given the increasing number of procedural applications set out in Section III of the Draft Rules that can be made by the parties and determined by the President and/or the SIAC Court prior to the constitution of the Tribunal (for appointment of an emergency arbitrator, expedition, consolidation and joinder), proposed Rule 3.4 allows the Registrar to determine the acceptance and ordering of any procedural application. Rule 11 gives the Registrar the new power, prior to the constitution of the Tribunal, to direct the parties to attend an administrative conference to discuss and make directions for any procedural applications.
The Draft Rules expand the powers of the President on the appointment of arbitrators. The SIAC Rules 2016 provide that the appointment of any arbitrator nominated by the parties or by a third person is in the discretion of the President. The Draft Rules go further and explicitly state that the President can refuse to appoint any arbitrator nominated by the parties or third person.
The Draft Rules also specify what the President should consider when appointing an arbitrator, including a new requirement to bear in mind the principles of diversity and inclusion. Reflecting provisions in the arbitral rules issued by the ICC and LCIA, the Draft Rules specify that the President should appoint a sole arbitrator or presiding arbitrator of a different nationality to the parties where the parties are of different nationalities unless appropriate otherwise.
In another new feature the Draft Rules include a list procedure that the President can use when making an appointment of a sole arbitrator, presiding arbitrator or the Tribunal in a multi-party arbitration. Further, the Draft Rules allow the President to “take any necessary measure to constitute an independent and impartial Tribunal” if, under an appointment procedure agreed by the parties, there is the risk of unequal treatment that may affect the enforceability of the award.
The Draft Rules include a provision in Rule 32.8 which allows the President to intervene in the arbitral procedure by directing the parties and the Tribunal to attend an administrative conference to identify and discuss the procedures that will be most appropriate and efficient for the case (the current SIAC Rules 2016 only allow the President to request that the parties and Tribunal convene a meeting). This appears to be a safeguard measure to allow the President to prevent an arbitration going wrong.
5. Updates to Emergency Arbitration process allowing for pre-arbitration applications to be made (Schedule 1 Emergency Arbitrator Procedure)
The Draft Rules revise the SIAC’s Emergency Arbitration Procedure set out in Schedule 1. This schedule is comprehensively drafted and covers the application process, the appointment of an emergency arbitrator, the challenge of an emergency arbitrator, the conduct of the emergency arbitration proceedings and the order or award to be issued by an emergency arbitrator.
There are two significant changes.
First, the revised schedule allows an application for emergency relief to be filed prior to the filing of the Notice of Arbitration. Under the existing rules, such an application can only be filed concurrently or following the Notice of Arbitration. If the application is made prior to filing of the Notice of Arbitration, the party then has 5 days to file the Notice of Arbitration or else the application shall be considered as withdrawn.
Second, the timeframes have been shortened from those in the existing SIAC Rules 2016. Any challenge to the appointment of the Emergency Arbitrator has to be made within 24 hours of appointment (shortened from 2 days). The Emergency Arbitrator needs to establish a schedule for the procedure within 24 hours (also shortened from 2 days). Most notably the Emergency Arbitrator now needs to make any order or award within 10 days from appointment, compared to 14 days in the current rules.
There have been 141 Emergency Arbitrator applications from 2010, when the procedure was introduced, to the end of 2022. Shortening the timeframes and allowing for the application to be made prior to the filing of the Notice of Arbitration, increases the utility of the procedure where truly urgent interim relief is required.
Other new features of the Draft Rules include provisions on the appointment of a Tribunal Secretary, the encouragement of Tribunals to liaise with parties on settlement and environmentally sustainable procedures, new powers for the suspension and termination of the arbitration and the introduction of an electronic case management system called SIAC Gateway. SIAC Gateway has the potential to assist Tribunals and the SIAC better manage the slew of electronic documents filed by parties.
Conclusion
The proposed Draft Rules are more comprehensive and prescriptive than the existing SIAC Rules 2016. While there is a reduction in procedural flexibility in some instances, such as for the preliminary determination of issues, they offer Tribunals and parties greater clarity over how an arbitration should be conducted. The reorganization brings together related rules in a logical manner making it easier for less-experienced parties, counsel and Tribunals, for example the proposed new Rule 44 on non-participation and non-compliance makes it clearer what the Tribunal can do in the event of a party defaulting (these aspects are currently addressed in Rules 24.3, 20.8, 20.9 and 27(l)).
The proposed introduction of the Streamlined Procedure is a commendable attempt to provide an efficient and more cost-effective solution to small cross border disputes.
The Draft Rules show the benefit of the long experience of the SIAC. The Draft Rules address procedural issues that have arisen in the past, seek to prevent issues from arising in the future by giving parties and Tribunals greater guidance, while also giving the President the means to intervene if required.
