Pharmaceutical and medical device manufacturers are increasingly finding themselves resolving disputes through international arbitration. After London, Singapore is now arguably the second most important arbitration center in the world, meaning the Singapore International Arbitration Centre's (SIAC) new arbitration rules, which were due to come into effect on June 1, 2016, but will now come into effect shortly, should be of particular interest to global life sciences companies.
Here are some of the changes companies arbitrating through SIAC will see under the new rules:
- Improvements to expedited procedure. SIAC offers an expedited procedure that allows parties to significantly cut down on the arbitration timeframe under certain circumstances. Under a new amendment to the SAIC rules, the maximum total value in dispute that can seek to utilize the expedited procedure is now SGD6 million (approximately US $4.35 million as of today's exchange rates).
- Multi-contract disputes. Multi-contract disputes are increasingly common in international arbitration and they have at times proved difficult to manage efficiently. Through new amendments, SIAC is now letting claimants either (1) file a notice of arbitration for each contract and at the same time submit an application for consolidation of the arbitrations, or (2) file a single notice of arbitration for all the contracts, in which case it will be deemed to have commenced multiple arbitrations, albeit the notice of arbitration will be considered to be an application to consolidate all of those arbitrations.
- Joinder/intervention. Multi-contract and multi-party disputes are common in international arbitration. The SIAC Rules 2016 now enable both parties and non-parties to apply for either joinder or intervention. In addition, such application can be made either prior to the appointment of any arbitrator or following the constitution of the Tribunal.
- Reasoning in relation to arbitrator challenges. SIAC has supplemented its existing procedure for challenging arbitrators, and now the Court of Arbitration of SIAC will provide reasoned decisions on challenges brought against arbitrators. The administrative fees for bringing an arbitrator challenge are now fixed at SGD8,000.
- Seat of the arbitration. The seat of an arbitration determines the procedural law which applies to the conduct of the arbitration and, normally, any appeal process in the courts of the jurisdiction in question. Under the SIAC Rules 2016, Singapore will no longer be the default seat of the arbitration. The Tribunal will now have the power to determine the seat of the arbitration, unless it has already been agreed upon by the parties.
- Reimbursement for deposits paid as a result of another party's default. The SIAC Rules 2016 now give the Tribunal the power to make an order or award that gives reimbursement of unpaid deposits towards the costs of the arbitration where one party has had to pay the other's share of the deposits. (This situation occurs often in arbitrations when the respondent refuses and/or fails to pay its share of the costs of the arbitration.)
- Early dismissal of claim(s) and defense(s). Under the SIAC Rules 2016, there will be a procedure akin to a summary judgment and/or strike-out application. Parties can now apply for a dismissal of a claim(s) or defense(s) within 30 days of the constitution of the Tribunal. The Tribunal will issue its decision on the application for dismissal within 60 days of the filing of the application.
- Improvements in the efficiency of the Emergency Arbitration procedure. The SIAC Rules 2016 now provide that an Emergency Arbitrator will be appointed within just one day of receipt by the Registrar of the application for emergency interim relief, and the requisite fees and deposits. In addition, the award of interim relief must now be delivered within 14 days of the appointment of the Emergency Arbitrator.
For more in-depth information on this subject, please read our Client Alert, "New Singapore International Arbitration Centre ("SIAC") Arbitration Rules 2016."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.