Singapore: Recent Amendments to the International Arbitration Act

On 9 April 2012, the International Arbitration (Amendment) Bill was passed to amend the International Arbitration Act (IAA) (Chapter 143A of the 2002 Revised Edition) and to make related amendments to the Arbitration Act (Chapter 10 of the 2002 Revised Edition).This Bill is in line with the Singapore Government's efforts in developing Singapore as a hub for international arbitration since the mid-2000s. The amendments seek to improve the efficacy of the arbitration process in Singapore thus further enhancing Singapore's status in the arena of international arbitration.

The definition of an arbitration agreement has been expanded to cover any arbitration agreement that has been concluded orally, by conduct or through other means. ¹ Section 2A (4) IAA now specifically states that an arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct or by other means.

The new Section 2A(6) IAA appears to be all encompassing as compared to the relevant article of its counterpart, the 2006 Amendments to the 1985 UNCITRAL Model Law on International Commercial Arbitration ("Model Law") in that it stipulates that where in any arbitral or legal proceedings, a party asserts the existence of an arbitration agreement in a pleading, statement of case or even in any other document in circumstances in which the assertion calls for a reply and the assertion is not denied, there shall be deemed to be an effective arbitration agreement as between the parties to the proceedings. As the new Section 2A IAA is comprehensive, Parliament has sought it fit to state at Section 2A(9) IAA that Article 7 of the Model Law shall not apply to this section for the avoidance of any doubt.

The new amendments also seeks to recognize emergency arbitrators which are a recent development in the world of international arbitration. ² Singapore has become the first jurisdiction to expressly include an emergency arbitrator under the definition of an arbitral tribunal in its IAA. Under these amendments, the emergency arbitrators are empowered to award the full range of remedies made available to an arbitral tribunal which will be similarly recognized by the Singaporean courts. ³ As emergency arbitrators provide urgent interim relief, Singapore will inevitably be top choice as the seat of arbitration for parties seeking urgent relief.

The other significant change is that now there is an avenue for appeal against the decision of the arbitral tribunal even in the event the arbitral tribunal rules that it has no jurisdiction. ⁴ Previously under the old Section 10 IAA which incorporates Article 16(3) of the Model Law, parties could only appeal against the decision of the arbitral tribunal which has ruled that it has jurisdiction. This section which has been repealed and replaced by the new Section 10 IAA allows the arbitral tribunal to rule on a plea that it has no jurisdiction at any stage of the arbitral proceedings. ⁵ Previously, prior to the amendments, the no jurisdiction plea could only have been raised no later than the submission of the statement of defence. ⁶ Now with these amendments, an appeal against both positive and negative jurisdictional rulings lie to the High Court and to the Court of Appeal with leave of the High Court. ⁷

Section 10(6) of the amended IAA clarifies the consequences of a positive jurisdictional ruling by either the High Court or Court of Appeal on appeal in that the arbitral tribunal shall continue the arbitral proceedings and make an award and if any arbitrator is unable or unwilling to continue with the arbitral proceedings, the mandate of the arbitrator shall terminate and a substitute arbitrator shall be appointed in accordance with Article 15 of the Model Law.

The new Section 10(7) IAA also enables the High Court or the Court of Appeal (as the case may be) to make an award or order for costs of the proceedings when making a ruling or decision that the arbitral tribunal has no jurisdiction ("negative jurisdictional ruling") which was not the case previously. These amendments has adopted the recommendations of the Law Reform Committee of the Singapore Academy of Law in its Report on the Right to Judicial Review of Negative Jurisdictional Rulings (January 2011).

The new amendments such as Section 10(9) IAA specifically stipulates that where an application is made under Article 16(3) of the Model Law or this section, such application shall not operate as a stay of the arbitral proceedings or of execution of any award or order made in the arbitral proceedings unless the High Court orders otherwise; and Section 10(10) states that an appeal to the Court of Appeal from the decision of the High Court with leave shall not operate as a stay of the arbitral proceedings or of execution of any award or order unless otherwise ordered by the High Court or the Court of Appeal.

Section 9 of the Amendment Bill has repealed the old Section 20 IAA on interests and inserted a new Section 20 which enhances the arbitral tribunal's powers to award costs. The arbitral tribunal may award simple or compound interest on the whole or any part of any sum awarded or on any sum paid before the date of the award and even on costs awarded.

In respect of foreign awards, which is dealt with in Part III of IAA, ⁸ the definition of arbitral awards had been expanded to cover any order or direction made by an arbitral tribunal in the course of an arbitration in respect of any matters set out in Section 12(1)(c) to (i) IAA. Therefore an arbitral award would also cover any order or direction made during the giving of evidence by affidavit , the preservation, interim custody or sale of property which forms part of subject matter in dispute, samples to be taken from or any observation or experiment upon any property which forms part of subject matter in dispute, the preservation and interim custody of any evidence for the purposes of proceedings, securing an amount in dispute , ensuring that any award made is not rendered ineffectual by the dissipation of assets by a party including any interim injunction or any other interim measure.

The old Section 14 IAA has been deleted by the amendment bill as it has been rendered redundant with the enactment of Section 13 IAA in 2001. ⁹ Section 6 of the amendment bill seeks to clarify that the High Court or a Judge may order the issuance of a subpoena to testify or to produce documents or to issue an order under Section 38 of the Prisons Act.

Section 19A(1) IAA has been amended to substitute the words "arbitration proceedings" with the words "arbitral proceedings" ¹⁰ to streamline the terminology used in the IAA with that of the Model Law with the exception of the provisions in Part III where the words "arbitration proceedings" is still maintained in line with the terminology used in the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration.

With Singapore hosting the 21st Congress of the International Council for Commercial Arbitration (ICCA) this June 2012, these amendments are timely to confirm Singapore's premier status in the arbitration arena and to show to the world at large Singapore's continued commitment to international arbitration.

Foonotes

¹ Section 3 International Arbitration (Amendment) Bill
² Section 2 International Arbitration (Amendment) Bill
³ Section 12 International Arbitration Act
⁴ Section 4 International Arbitration (Amendment) Bil
⁵ New Section 10(2) International Arbitration Act
⁶ Article 16(2) Model Law
⁷ New Section 10(3) and 10(4) International Arbitration Act
⁸ Section 10 International Arbitration (Amendment) Bill amends Section 27(1) of International Arbitration Act
⁹ Section 7 International Arbitration (Amendment) Bill
¹⁰ Section 8 International Arbitration (Amendment) Bill

This update is provided to you for general information and should not be relied upon as legal advice.