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Singapore – The International Commercial Court: The Best Of Both Worlds?

9 January, 2015

 

Legal News & Analysis – Asia Pacific – Singapore  Dispute Resolution

 

The Singapore International Commercial Court has recently been launched, aiming to combine some of the best features of international arbitration and national court litigation. This article discusses what this development means for commercial parties.


The SICC


Singapore aims to position itself as a leading centre for commercial dispute resolution. There are now three major institutions for international commercial dispute resolution in Singapore: the Singapore International Arbitration Centre (SIAC), the Singapore International Mediation Centre (SIMC) and the Singapore International Commercial Court (SICC). 


The various regulations concerning the SICC came into force on 1 January 2015.1 These regulations are notable for striving to combine in the SICC some of the best features of both international arbitration and national court litigation.


Similarities With Arbitration


Regular users of arbitration will be familiar with many aspects of the SICC. In particular:

 

  • a case cannot be started in the SICC unless there is a written SICC jurisdiction agreement;
  • SICC proceedings may be kept confidential, if a party applies for this;
  • disputes may be heard arising from contracts governed by the law of any country, and parties may be represented in the SICC by lawyers qualified in the relevant governing law (if they are registered with the SICC);
  • the judges that hear an SICC case may be Singaporean or of another nationality, drawn from a panel of 11 International Judges;
  • disclosure of documents is limited to those on which a party relies, followed by requests for production of documents from the other side; and
  • there are various areas of procedure where SICC judges may exercise more discretion than in normal court proceedings, such as in determining the appropriate rules of evidence to be followed.

Keeping The Benefits Of Court Litigation


At the same time, the SICC retains the features of national court litigation that many perceive to be advantages over arbitration, such as:

 

  • third parties can be joined to an SICC case;
  • a party can apply for disclosure of documents before a case has started;
  • orders for disclosure of documents can be made against non-parties;
  • a uniform code of ethics applies to all lawyers appearing in the SICC;
  • a judge in the SICC has broad powers to award costs at the end of a case including ordering, in exceptional cases, that counsel or a non-party must pay costs;
  • SICC judgments can be appealed (unless the parties have agreed in writing to exclude this); and
  • there is a detailed guide to SICC procedure, covering matters such as the conduct of hearings, filing of documents, etc.

Limitations On Party Autonomy


There are two main differences between SICC proceedings and international arbitration. First, the parties’ control over what happens in an SICC case (“party autonomy“) is restricted. So, for example, parties can specify in an SICC jurisdiction agreement that there should be three judges, but the Chief Justice can overrule this and appoint one judge. Also, parties do not have any choice over the judges: the Chief Justice may designate to hear the case any Singapore High Court or Court of Appeal Judge, or any of the panel of International Judges. This is in contrast with arbitration where parties can agree the number of arbitrators and nominate arbitrators.


To the extent there is flexibility offered within the SICC, this is confined by its structure. For example, all of the judges are from common law jurisdictions (apart from three of the International Judges, who are from Japan, France and Austria), and trial hearings will be held in Singapore. It is also likely, in practice, that parties will need to include Singapore-based lawyers on their legal team because of the requirements for registration with the SICC and knowledge of SICC court procedure. In arbitration, parties may nominate arbitrators from any country, specify any location for hearings and instruct any counsel to represent them.


Limitations On Enforcement


The other significant difference between the SICC and international arbitration concerns the enforceability of SICC judgments outside of Singapore. In arbitration, the New York Convention allows enforcement of awards in most countries throughout the world.


An SICC judgment, however, can only be enforced via the network of treaties that Singapore has with other countries, which is more limited than the New York Convention. In the future, a mechanism may be put in place for wider enforcement of SICC judgments, and one possibility is that there may be a general ratification of the Hague Convention on Choice of Court Agreements; however, the Hague Convention has been ratified to date only by Mexico.


This network of treaties also does not provide a uniform standard for enforcement, unlike the New York Convention, nor is there the same history and track record as the process for enforcement of arbitration awards, built up throughout the world over the last fifty years.


Comment


The SICC potentially offers commercial parties a good alternative to international arbitration, being a national court that has adopted many of the qualities that make international arbitration particularly suited to commercial dispute resolution. It is unlikely to supplant arbitration entirely, since it is an inherent part of a particular national court system rather than a truly international commercial court, and the limitations on party autonomy may not suit all. Nonetheless, it may be a useful additional option for commercial parties when choosing which dispute resolution process to incorporate in their contracts.


As a general proposition, however, that is likely to be in the future. For now, the disparity between the enforceability of SICC judgments and arbitration awards is likely to restrict the circumstances in which parties will prefer the SICC to situations where enforcement will take place in Singapore itself, or in a country where parties are confident an SICC judgment will be recognised.


In the short term, it may be users of the Singapore High Court who benefit most from the SICC. International commercial cases may be transferred from the High Court to the SICC if it is “more appropriate”for the SICC to hear these (such transfers do not require an SICC jurisdiction agreement). For example, a case might be transferred to the SICC so that it can be heard by an International Judge who is a leading expert in a particular area.


End Notes:


1 These are available on the SICC website (www.sicc.gov.sg).


2 Order 110, rule 12(4) of the Singapore Rules of Court.

 

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For further information, please contact:

 

Ben Giaretta, Partner, Ashurst
ben.giaretta@ashurst.com

 

Akshay Kishore, Ashurst
akshay.kishore@ashurst.com

 

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