7 June 2012
The amendments to Singapore's International Arbitration Act and Arbitration Act (the latter dealing with the domestic arbitration regime in Singapore ("together, the Amendment Acts"), which were passed in early April 2012, came into effect on 1 June 2012.
The changes to the Arbitration Acts deal with 4 principal issues which are briefly summarised below:
1) Requirement that arbitration agreements are in writing
The Amendment Acts extend the definition of "arbitration agreement in writing" to provide that an arbitration agreement can be recorded in any form, whether concluded orally, by conduct or any other means. The requirement that an arbitration agreement is in writing is satisfied if it is recorded by an electronic communication as long as the information is accessible so as to be usable for subsequent reference.
Accordingly, a reference in a contract to any document containing an arbitration clause can constitute an arbitration agreement in writing if the document is incorporated by reference into the contract and also by the exchange of emails.
This amendment addresses the difficulties which often arise in practice in parties concluding contracts by the exchange of documents in both electronic and other forms and where the Parties fail to prepare a single contract document recording all provisions of the various agreements reached.
2) Appeals on rulings on jurisdiction
Previously, the Singapore Courts were only in a position to review an arbitral tribunal's ruling on jurisdiction where a positive ruling was made, i.e. where a tribunal decided that it did have jurisdiction to hear the dispute.
As a result of the amendments made, the Singapore Courts have now been given the power to review negative decisions reached, where a tribunal considers that it does not have jurisdiction to hear a dispute.
It should be noted that the Court's power can be exercised at the time that proceedings are commenced or at any stage thereafter.
The Amendment Acts also provide that in making a ruling or decision that an arbitral tribunal does not have jurisdiction to hear a dispute, the arbitral tribunal or the Court may make an award or order of costs of the proceedings (including in the arbitral proceedings) against any party. This amendment deals with the uncertainty which previously existed as to whether an arbitral tribunal, in making a negative decision on jurisdiction, had the power to issue an award on costs.
3) Emergency arbitrators
Changes have been made by the Amendment Acts which are consistent with the amendments made in 2010 to the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules") which introduced provisions for the appointment of emergency arbitrators before a permanent tribunal is constituted and by which emergency arbitrators were given the power to issue awards and grant interim measures.
Following the changes to the SIAC Rules, uncertainty existed as to the enforceability of an emergency arbitrator’s order and whether such orders amounted to the issue of an award by an "arbitral tribunal".
By amending the definitions of "arbitral tribunal" and "arbitral award", the Amendment Acts now provide that an award of an emergency arbitrator has the same status as an award of an arbitral tribunal appointed in the usual way, ensuring that their orders are enforceable.
Previously, the powers of an arbitral tribunal to award interest on sums referred to in an arbitral award and on costs were unclear. The Amendment Acts now provide a tribunal with clear power to award simple and compound interest on principal amounts claimed and on sums awarded as costs.
The amendments introduced by the Amendment Acts provide another example of how the Singapore Government is prepared to refine its arbitration legislation to ensure that Singapore's arbitration regime can operate efficiently and to address the uncertainties and practical difficulties that can often arise during the conduct of arbitration proceedings. Singapore has gained increasing prominence as one of the world’s leading international arbitration forums and the amendments introduced by the Amendment Acts will assist in maintaining Singapore’s position as a premier venue for the resolution of disputes in South Asia.
For inquiries related to this Legal Update, please contact Kevin Owen or your usual contacts with our firm.