18 May 2018 Posted in Speeches
Mr Davinder Singh, S.C.
Chairman of SIAC
Ms Lim Seok Hui
CEO of SIAC
Distinguished Judges, distinguished ladies and gentlemen
This is the 3rd edition of SIAC’s flagship Congress. It is a timely forum.
SIAC continues to break caseload records, with a historical high of 452 last year.
- Just one week ago, the 2018 International Arbitration Survey results were released. Singapore and SIAC have moved up the ranks again:
- SIAC is now the 3rd most preferred arbitral institution in the world; and
- Singapore is now 3rd most preferred seat of arbitration globally.
- This also means that SIAC and Singapore are now the most preferred institution and seat in Asia.
- This is excellent news. Obviously we are very pleased. Congratulations, SIAC!
- Since you have been discussing the future of international arbitration, let me to consider two questions.
- What role can SIAC and Singapore play in the economy of the future? And
- Will arbitration remain the most preferred mode of resolving disputes?
- The Future of Growth is in Asia
- You would have heard this morning that Asia is driving global growth.
- Asia’s rise has been steady and rapid, in spite of uncertainties and downsides in the global trading environment.
- Asia is expected to grow at over 6.0% this year, more than double the expected growths of other regions in the world.
- As Asia expands, we will see:
- Local companies going global;
- International companies coming to meet the needs of growing markets in Asia;
- Growing cross-border commercial activity, which will lead to potential cross-border disputes, and an increase in demand for dispute resolution services.
- The ‘Asia effect’ is already evident in arbitration.
- The Global Arbitration Review estimated that between 2012 and 2016, there was a 37% increase in cases administered by 11 arbitral institutions worldwide.
- But caseloads of institutions outside Asia grew by 13%, whereas caseloads of institutions in Asia grew by more than 75%!
- This effect will be multiplied by ambitious plans such as Belt and Road Initiative, which will greatly enhance economic cooperation and interdependence within Asia, and between Asia and the rest of the world.
- All this augurs well for Singapore.
- As an international commercial hub strategically situated in Asia, we have long been connecting Asia with the rest of the world, and connecting the rest of the world with Asia.
- Let me touch on how we can play a role in unlocking Asia’s potential, and capture opportunities in this part of the world.
- I will speak about two areas: infrastructure and dispute resolution.
- Meeting Asia’s Infrastructure Needs
- Asia is hungry for infrastructure.
- Its economies are growing, urbanising, and its people are becoming wealthier.
- The UN projects that by 2030, 24 of the world’s 41 megacities will be in Asia.
- These cities, and the rest of Asia, will need infrastructure and urban solutions – over USD 1.7 trillion of it per year, from 2016 to 2030.
- But the region’s infrastructure needs remain unmet.
- Singapore is in a unique position to bridge this infrastructure gap.
- We are developing ourselves as an infrastructure hub for Asia, to connect supply and demand, where infrastructure-related expertise, financing, and support can come together.
- We have built up our own expertise in infrastructure, arising from our own experience in urbanisation. This technical knowledge can be put to good use to serve the region’s needs.
- As an international financial centre, we are a one-stop shop for all the infrastructure financing and project structuring needs for the region.
- The World Bank’s first Infrastructure and Urban Development Hub is situated in Singapore,
co-locating the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). They provide a critical source of project structuring knowledge and financing.
- Through the Hub, regional governments can access the Global Infrastructure Facility (GIF), which facilitates the preparation and structuring of complex infrastructure public-private partnerships. Singapore is a founding funding partner of GIF.
- Our strong position in world capital markets makes us an ideal place to raise financing and mobilise investments.
- Our banks have a deep understanding of Asia’s infrastructure investment needs, and a track record of financing projects.
And of course, we also have strong professional services to support infrastructure work.
- Our largest accounting firms – PwC, Deloitte, Ernst & Young and KPMG – provide project advisory services to the region, including in financial optimisation, model development and stress testing.
As an international legal services hub, we are also able to provide strong advice on infrastructure work.
- Our 5 largest Singapore Law Practices – Allen & Gledhill, Dentons Rodyk & Davidson, Drew & Napier, Rajah & Tann and WongPartnership – are the largest in Southeast Asia, with strong regional practices.
- Top international law firms here, such as Latham & Watkins and Allen & Overy, to name just a few, have active infrastructure practices.
- As you can see, we are a convenor for players who are instrumental in getting infrastructure projects off the ground.
- Now, we are taking this one step further with the establishment of Infrastructure Asia, which I understand Minister Heng Swee Keat spoke about this morning.
- Infrastructure Asia is set up by Enterprise Singapore (ESG) and the Monetary Authority of Singapore (MAS) – MAS, because of the financial aspects of infrastructure, and ESG, because its mission is to help Singapore businesses internationalise. The Infrastructure Asia office is meant to take advantage of the collective capabilities of the public and private sectors, and catalyse projects to meet Asia’s infrastructure needs. What exactly will it do?
- It will connect local and international stakeholders across the value chain. In other words, it is meant to be a platform to connect supply and demand. It will deepen our understanding of the pipeline of projects in the region – because we need to have visibility of these projects in order to realise them – and facilitate investments in these projects.
It will also create platforms for discussions between asset owners, financiers, multilaterals and governments. An example is the Asia-Singapore Infrastructure Roundtable that will take place later this year, which you are all very welcome to attend.
- We hope that by bringing together developers, investors, multilaterals, and legal, accounting and financial services providers, we will be able to support infrastructure development in the region.
- Infrastructure Projects will generate demand for dispute resolution
- Singapore’s gearing up to be the infrastructure hub for Asia means greater opportunities for infrastructure-related dispute resolution, especially arbitration.
- Infrastructure dispute resolution is high-value as infrastructure projects tend to be complex, capital-intensive, and long-term.
- However, the opportunities are not limited to infrastructure disputes.
- Infrastructure is itself an enabler of commerce: more ports, airports, roads and railways will mean more trade and commercial transactions. This will inevitably result in more commercial disputes.
- Singapore has the right ecosystem to cater to this growing demand for dispute resolution.
- We are a jurisdiction known for trust, neutrality and rule of law. This makes us a natural venue for dispute resolution.
- Top international institutions that handle infrastructure disputes, including investment disputes, have set up offices or conduct arbitrations in Singapore. These include :
- the International Centre for Settlement of Investment Disputes (ICSID)
- the International Court of Arbitration of the International Chamber of Commerce (ICC-ICA); and
- the Permanent Court of Arbitration (PCA).
SIAC is also particularly well positioned to handle infrastructure-related disputes. Its panel includes arbitrators with expertise in fields such as energy, engineering and finance.
- If, for any reason, parties prefer other modes of dispute resolution, we have, as you know, the Singapore International Commercial Court (SICC) and the Singapore International Mediation Centre (SIMC), which offer international litigation and international mediation.
We set up SIMC in 2014 to offer high-quality mediation services. Recognising that mediation is complementary to arbitration, we also introduced the Arb-Med-Arb Protocol, which has been very well received by parties.
- We are also participating in discussions on a multilateral convention on the enforcement of settlement agreements resulting from mediation.
- The convention will provide for settlement agreements to be enforced internationally. It would be to mediation what the New York Convention is to arbitration. This will provide businesses with certainty that mediation can be relied upon to resolve disputes.
In 2015, we established the Singapore International Commercial Court (SICC) for parties with cross- border disputes who, for whatever reason, need or prefer litigation and a court-based process.
- Litigation is also developing its own instruments for the international enforcement of court judgments. Singapore is involved in these discussions, and is a party to The Hague Choice of Courts Convention, which has gathered pace.
Parties who resolve their infrastructure disputes in Singapore can also tap on a readily available pool of professional service providers.
- International consultancies like Navigant and FTI, which provide dispute advisory and expert testimony services, have set up offices in Singapore. If a dispute arises over a construction delay, such firms can help parties map out the sequence of events involved, and analyse the factors and impact at each stage.
- We have also taken a holistic approach to building up our own physical infrastructure for dispute resolution.
- Just as we are bringing infrastructure players together in Singapore, we have already been bringing together institutions, clients, arbitrators, counsel and ancillary services for some years now, at Maxwell Chambers – our purpose-built arbitration facility.
- We are expanding Maxwell Chambers to triple its size, in order to meet the growing demand for dispute resolution facilities in Singapore.
- Maxwell Chambers continues to redefine what it means to be a world-class hearing centre. Last month, it launched the “Smart Maxwell” initiative, which leverages technology to enhance convenience, comfort and security for users.
- Singapore has built up a comprehensive ecosystem which we are continually adjusting and refining to cater to the varied demands of users, so that we can serve as a gateway for all your dispute resolution needs.
- The Golden Age of Arbitration?
- Now, let me ask whether or not we are in a Golden Age of arbitration.
- It would seem like arbitration stands to gain the most from the opportunities I outlined earlier, and that we are now indeed in a Golden Age of arbitration.
- This is evinced by the growth in the number of arbitral institutions, and top international institutions expanding their presence across the world.
- The New York Convention provides arbitral awards with wide enforceability. The Convention has 159 parties today and is acknowledged to be one of the most successful treaties in private international law.
- 97% of respondents in the survey I cited earlier chose international arbitration as their preferred method of dispute resolution.
- In Greek mythology, however, the Golden Age referred to the first of five Ages of Man. While it was an age of perfection, each successive stage was a decline from the preceding one. I guess the thinking was that you can’t top perfection!
- But the lesson to draw from this, however, is that it is precisely when things are going well that you must be the most careful, to avoid the pitfalls of complacency, or being blinded to legitimate concerns. Hence, the industry would do well to examine where it can do better.
- There have been concerns about some features of arbitration.
- 67% of survey respondents highlighted cost as the worst feature of arbitration. This is despite arbitration being touted as a cost-efficient method of resolving disputes.
- Some have taken issue with the lack of the right of appeal, despite finality being one of the hallmarks of arbitration.
- Others cite speed, among others, as limiting factors.
- Arbitration needs to acknowledge and address these concerns to remain relevant.
- On our part, Singapore has taken a pro-active approach in responding to issues. We have focused on asking what commercial users need, and creating a conducive environment for their disputes to be resolved.
- In arbitration, we have remained open and inclusive to international institutions, to offer more options for users.
- We continually review our laws to ensure they remain arbitration-friendly.
- Last year, we introduced a legislative framework for third-party funding, to provide arbitration users with an additional financing tool. This was in response to feedback that there was demand for such funding in international arbitration cases.
- The Government’s role has really been to create the framework and structures that are conducive for arbitration and dispute resolution. But we also need strong institutions who can take advantage of this, and change with times to stay ahead of the pack.
- SIAC has demonstrated responsiveness and a commitment to meeting clients’ needs:
- It was the first institution in Asia to introduce an Emergency Arbitrator mechanism, to plug a gap when users needed emergency relief before the constitution of a Tribunal.
- It also introduced an expedited procedure to cut time and costs for relatively small or exceptionally urgent disputes.
- It launched dedicated Investment Arbitration Rules last year which take into account the special features of such arbitral proceedings.
- It is also the first to propose a cross-institution consolidation protocol that could potentially generate time and cost savings for users, while expanding the reach of leading arbitral institutions.
- Remaining at the cutting edge of arbitration will allow SIAC to cement its position as a thought leader, and play a role in shaping the future of international arbitration.
- There are synergies between what the Government and institutions can do. The SIAC and the Government have a strong collaborative approach. That is the reason why Singapore and SIAC are today the world’s 3rd most preferred seat and institution respectively. It is the result of this collaboration. However to take arbitration further, we want to partner with all the stakeholders in international arbitration, such as yourselves – those of you who are here today. We hope to work with you to do even better.
- Last week, our President – the President of the Republic of Singapore – delivered the President’s Address. She set out the priorities of the next phase of the Singapore story – the agenda for Singapore 4.0, if you would.
- Dispute resolution and arbitration will be an important part of this next phase, because it is linked to Singapore’s development as a vibrant global node in the heart of Asia. You are all therefore part of this exciting transformation.
- We want to work together with you. Your feedback is important to us, because you come from jurisdictions around the world, and you are in a position to tell us what works for you and your clients. We want to synthesise all these ideas, and work together with you to make Singapore a leading arbitral hub.
- And if we can work together to make sure arbitration can respond nimbly and effectively, then we can buck the forecast of Greek mythology, and do better than a Golden Age – perhaps a Platinum or even a Rhodium Age!
- Thank you.
Queen Mary University of London and White & Case, 2018 International Arbitration Survey: The Evolution of International Arbitration, May 2018.
Asian Development Bank, Asian Development Outlook 2018, April 2018.
United Nations, “The World’s Cities in 2016”. The UN defines megacities as urban areas with populations of at least 10 million.
Asian Development Bank, “Asia’s Next Infrastructure Boom”, September 2017.
Together with the World Bank Group and four other countries.
 China, the EU States (save Denmark) and Mexico have also ratified The Hague Choice of Courts Convention.
 Either on a standalone basis (48%) or in conjunction with alternative dispute resolution methods such as mediation (49%). Queen Mary University of London and White & Case, 2018 International Arbitration Survey: The Evolution of International Arbitration, May 2018.
Last updated on 23 May 2018