25 August 2016

Taking it to the next level - the SIAC Rules 2016

This article was written by Chau Ee Lee and Constance Zhao.

SIAC Rules 2016

The Singapore International Arbitration Centre (SIAC) has been in recent years regarded as a leading international arbitral institution.

In its laudable efforts to continue to remain at the forefront of international arbitration practice, the SIAC has just released its sixth edition of the Arbitration Rules of the SIAC (SIAC Rules 2016) that came into effect from 1 August 2016.

In essence, the SIAC Rules 2016 recognises the growing complexity and international nature of disputes and by introducing a number of new provisions as well as enhancements to existing procedures, it aims to deliver a comprehensive regime for users so that arbitrations can be conducted in an efficient, flexible and cost-effective manner.

Some key features

There are several features of the SIAC Rules which merit special attention:

(a) Multiple Contracts, Consolidation and Joinder of Additional Parties

The SIAC Rules 2016 sets out the criteria and procedures governing the consolidation of multiple arbitrations and the joinder of additional parties. Such guidance is important in international commercial disputes, which often involve multiple parties or multiple contracts. 

The Court of Arbitration of SIAC will decide consolidation and joinder applications prior to the constitution of the arbitral tribunal, while the arbitral tribunal will decide such applications after its constitution. 

The claimant may now file a Notice of Arbitration (NOA) in respect of each arbitration agreement invoked and concurrently submit an application to consolidate, or file a single NOA in respect of all the arbitration agreements invoked. In the latter scenario, the claimant shall be deemed to have commenced multiple arbitrations and the NOA shall be deemed to be an application to consolidate all such arbitrations. 

Both parties and non-parties are now able to apply (either prior to or after the constitution of the arbitral tribunal) for joinder of a party to an arbitration. Previously, under the SIAC Rules 2013, only existing parties to the arbitration could apply for the joinder of non-parties. 

(b) Expedited Procedure

The Expedited Procedure is a ‘fast-track’ arbitration procedure which is intended to speed up the arbitral proceedings – the final award is to be made within 6 months from the date of constitution of the arbitral tribunal.

A party may apply for the arbitral proceedings to be conducted in accordance with the Expedited Procedure where the amount in dispute is within the monetary ‘ceiling’ of S$6 million (previously S$5 million under the SIAC Rules 2013), the parties so agree, or in cases of exceptional urgency. This increase in the monetary ‘ceiling’ allows more cases to make use of this mechanism.

Further, under the SIAC Rules 2016, the arbitral tribunal may, in consultation with the parties, determine whether a case under the Expedited Procedure is to be decided on the basis of documentary evidence only.

The arbitral tribunal is also empowered to, upon application by a party, order that the arbitral proceedings no longer be conducted in accordance with the Expedited Procedure. Such flexibility is important in cases where circumstances have changed such that the dispute is no longer suitable for ‘fast-track’ arbitration.

(c) Emergency Arbitration

In some cases, parties may require urgent relief for the purpose of protecting their rights pending the final determination of the dispute in arbitration. The SIAC Rules address this need in the form of its ‘emergency arbitrator’ provisions, which allow such relief to be applied for as early as the filing of the Notice of Arbitration.

Importantly, the SIAC Rules 2016 tightens the timelines for the process, requiring (among other things) that an emergency arbitrator be appointed within 1 day of the Registrar’s receipt of such an application and payment of the required fees (rather than 1 business day in the SIAC Rules 2013) and the emergency arbitrator make his interim order or award within 14 days from the date of his appointment.

(d) Early Dismissal of Claims and Defences

The new provisions under the SIAC Rules 2016 empowering the arbitral tribunal to dismiss claims or defences which are “manifestly without legal merit” or “manifestly outside the jurisdiction of the Tribunal” are aimed at allowing clearly unmeritorious claims to be quickly disposed of.

The arbitral tribunal shall make an order or award within 60 days of filing of the application for the early dismissal of a claim or defence, unless, in exceptional circumstances, the Registrar extends the time.

This appears to be one of the first attempts (if not the first) by a major arbitral institution to implement arbitral procedures which are similar to the summary judgment and the striking out procedures in the litigation process. While potentially time-saving and cost-saving, it remains to be seen how such procedures will be applied in practice and whether such awards will withstand scrutiny in national courts.

(e) Delocalising the Seat of the Arbitration

Under the SIAC Rules 2016, the default seat of arbitration will no longer be Singapore. The seat will instead be determined by the arbitral tribunal having regard to all the circumstances of the case, unless parties have otherwise agreed. This change is significant and reflects the increasingly international nature of SIAC cases.

Given that the seat of arbitration determines the procedural laws governing an arbitration, including any appeal or review process by the courts with supervisory jurisdiction, parties may wish to make clear their choice of seat in their arbitration agreements as Singapore will no longer be the default seat under the SIAC Rules 2016.

If you would like to discuss with us the implications of the SIAC Rules 2016 for your business, please feel free to contact us. The KWM Singapore Dispute Resolution Group is part of one of the largest dedicated Dispute Resolution and International Arbitration teams globally, offering our clients local market knowledge and world class execution capability. For more information about our Group, please check below.

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