By MICHELLE LEE - Associate, Baker & McKenzie.Wong & Leow
The sixth and latest edition of the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules 2016") came into effect on 1 August 2016. It is the product of an extensive public consultation process in multiple forums across Asia, Europe, and North America.1 It takes into account recent developments in the international arbitration space and is aimed at meeting the needs of its users such as businesses, financial institutions and governments.2 The SIAC Rules 2016 introduce both groundbreaking innovations and enhancements to provide its users with greater time and cost efficiencies. This article covers the significant changes introduced in the SIAC Rules 2016.
1. Early Dismissal of Claims and Defences (Rule 29)
The SIAC is the first of its kind to introduce a procedure for early dismissal of claims and defences. As in litigation practice, it is intended to offer parties an avenue to seek the dismissal of a claim or a defence that is manifestly without legal merit, or manifestly outside the jurisdiction of the Tribunal.3
The language adopted in this new rule suggests that it was derived from institutional rules for investor-state arbitrations, as it is similar to Rule 41(5) of the International Centre For Settlement Of Investment Disputes ("ICSID") Convention Arbitration Rules, which provides a party with a right to file an objection on the basis that a claim is "manifestly without legal merit". Evidently, the SIAC Rules 2016 go further, by allowing an early dismissal objection to also be brought against defenses, and allowing objections to also be brought on the basis of the Tribunal's manifest lack of jurisdiction.
If the application for early dismissal is allowed to proceed, the Tribunal has to make an order or award on the application, with reasons (which may be in summary form), within 60 days of the date of filing of the application, unless the Registrar of the Court of Arbitration of SIAC ("SIAC Court") ("Registrar") extends such time in exceptional circumstances.4
2. Consolidation (Rule 6 and 8)
The SIAC Rules 2016 introduce a streamlined procedure for the commencement of arbitration for disputes arising out of or in connection with multiple contracts and arbitration agreements. Under Rule 6, the claimant may choose one of the following procedures:
- Normal procedure: file multiple Notices of Arbitration, one for each arbitration agreement, and concurrently submit an application for consolidation; or
- Streamlined procedure: file a single Notice of Arbitration for all the relevant arbitration agreements, in which case the claimant would be deemed to have commenced multiple arbitrations, one for each arbitration agreement, and the Notice of Arbitration itself would be deemed to be an application for consolidation.
Gary Born (President of the SIAC Court) et al, who played a part in drafting the SIAC Rules 2016, explained that the streamlined procedure presents a key advantage for users because the deemed commencement of multiple arbitrations ensures that the rights of the parties are preserved in relation to limitation periods.5 This is because should an application for consolidation be rejected in whole or in part, a claimant would have to re-file a Notice of Arbitration in respect of the arbitrations that were not consolidated and such filing may subsequently be out of time.6
After the commencement of arbitration proceedings, a party may apply for consolidation either to the SIAC Court if the application is made prior to the constitution of the Tribunal, or the Tribunal itself if the application is made after the Tribunal has been constituted.
Where the application for consolidation is made prior to the constitution of the Tribunal, any one of the following criteria must be satisfied for consolidation by the SIAC Court:7
- all parties have agreed to the consolidation;
- all the claims in the arbitrations are made under the same arbitration agreement; or
- the arbitration agreements are compatible, and:
i. the disputes arise out of the same legal relationship(s);
ii. the disputes arise out of contracts consisting of a principal contract and its ancillary contract(s); or
iii. the disputes arise out of the same transaction or series of transactions.
The same criteria apply for consolidation by the Tribunal, with an additional requirement for criterion (b), i.e. that either the same Tribunal has been constituted in each of the arbitrations to be consolidated, or that no Tribunal has been constituted in the other arbitration(s).8
3. Joinder (Rule 7)
Under the previous edition of the SIAC Rules, only existing parties to the arbitration could apply for the joinder of non-parties. The SIAC Rules 2016 now allow both parties and non-parties to apply for joinder and the application may be made either to the SIAC Court if the application is made prior to the constitution of the Tribunal, or the Tribunal itself if the application is made after the Tribunal has been constituted.
The criterion for joinder has also been expanded in the SIAC Rules 2016. Under the previous edition, the party to be joined must be a party to the arbitration agreement9, whereas under the SIAC Rules 2016, the party to be joined only needs to be "prima facie bound by the arbitration agreement". 10 This clearly extends the availability of joinder but the SIAC Rules 2016 make it clear that any decision of the SIAC Court or the Tribunal to grant the joinder application would not prejudice the Tribunal's power to subsequently decide any question as to its jurisdiction arising from such decision.11
Further, the SIAC Court's decision to reject an application for joinder would not prejudice any party's or non-party's right to subsequently apply to the Tribunal for joinder after it has been constituted.12
4. Procedural Enhancements - Increased Time and Cost Efficiencies
The SIAC Rules 2016 include procedural enhancements to the Emergency Arbitrator provisions and the Expedited Procedure. These procedural enhancements are expected to provide greater time and cost efficiencies to its users.
- Emergency Arbitrator (Rule 30, Schedule 1 & Schedule of Fees)
The President of the SIAC Court is now required under the SIAC Rules 2016 to seek to appoint an Emergency Arbitrator within one calendar day of receipt of the application for emergency interim relief 13, as compared to one business day under the previous edition of the SIAC Rules 14. The fact that most other major arbitral institutions currently provide for a 2-day timeframe shows that the SIAC is keen to provide its users with as much time savings as practicable. Having said that, it should be noted that the timeframe for challenges to the appointment of the Emergency Arbitrator has been extended from one business day to two calendar days.15
Further, while the previous edition of the SIAC Rules was silent on the timeframe for the Emergency Arbitrator to issue its interim order or Award, the SIAC Rules 2016 now prescribe that the Emergency Arbitrator must make his or her interim order or Award within 14 days from the date of appointment, unless the Registrar extends the time under exceptional circumstances.16In order to provide its users with certainty on costs, the SIAC Rules 2016 now provide that the fees of the Emergency Arbitrator are fixed at S$25,000 regardless of the quantum of the claim, unless determined otherwise by the Registrar.
As a side note, according to statistics from the SIAC, as of 21 October 2016, the SIAC received a total number of 51 applications for emergency interim relief for the period between 1 July 2010 and 21 October 2016. This is significant when compared to the experiences of other arbitral institutions such as the Hong Kong International Arbitration Center, which has only received 6 cases to-date. One of the main reasons for this disparity is that the SIAC Rules provide for the retrospective application of its Emergency Arbitrator provisions to arbitration agreements entered into before those provisions were implemented, whereas other arbitral institutional rules require the arbitration agreement to have been entered into after the emergency arbitrator provisions were included in those rules.17
- Expedited Procedure (Rule 5)
The Expedited Procedure provides time and cost-savings to parties with relatively smaller disputes. In order to allow more parties to benefit from this, the SIAC Rules 2016 raised the monetary threshold from S$5M to S$6M.
Further, possibly in response to the challenge brought before the Singapore High Court in AQZ v ARA [2015] SLR 972, where the award debtor challenged an SIAC award on the ground that the parties had expressly agreed to arbitration before three arbitrators, and that therefore the conduct of the expedited arbitration before a sole arbitrator was not in accordance with the parties' agreement18, the SIAC Rules 2016 now make it unequivocally clear that in the event of any conflict between the terms of the arbitration agreement and the provisions under the Expedited Procedure, the latter would apply.19
These groundbreaking innovations and procedural enhancements in the SIAC Rules 2016 are expected to not only provide users with greater savings in time and costs, but also provide greater certainty and user-friendly mechanisms to the arbitral process. It would not be surprising to see other arbitral institutions looking to these new Rules and enhancing the competition amongst the institutions.
1 SIAC, Public Consultation on Draft SIAC Arbitration Rules, 18 January 2016,
http://www.siac.org.sg/images/stories/press_release/Public%20consultation%20on%20draft%20SIAC%20Arbitration%20Rules_18%20January%202016.pdf;
SIAC, SIAC Announces the Official Release of the SIAC Rules 2016, 30 June 2016,
http://www.siac.org.sg/images/stories/press_release/SIAC%20Announces%20the%20Official%20Release%20of%20the%20SIAC%20Rules%20%202016_30June2016.pdf
2 SIAC, Public Consultation on Draft SIAC Arbitration Rules, 18 January 2016,
http://www.siac.org.sg/images/stories/press_release/Public%20consultation%20on%20draft%20SIAC%20Arbitration%20Rules_18%20January%202016.pdf
3 SIAC Rules 2016, Rule 29.1.
4 SIAC Rules 2016, Rule 29.4.
5 Gary Born et al, 2016 SIAC Rules, 29 July 2016.
6 Gary Born et al, 2016 SIAC Rules, 29 July 2016.
7 SIAC Rules 2016, Rule 8.1.
8 SIAC Rules 2016, Rule 8.7(b).
9 SIAC Rules 2013, Rule 24.1(b).
10 SIAC Rules 2016, Rule 7.1.
11 SIAC Rules 2016, Rule 7.4, 7.10.
12 SIAC Rules 2016, Rule 7.4.
13 SIAC Rules 2016, Schedule 1, para 3.
14 SIAC Rules 2013, Schedule 1, para 2.
15 SIAC Rules 2013, Schedule 1, para 3; SIAC Rules 2016, Schedule 1, para 5.
16 SIAC Rules 2016, Schedule 1, para 9.
17 Michael Dunmore, The Use of Emergency Arbitration Provisions, 10 September 2015, <http://globalarbitrationnews.com/use-emergency-arbitration-provisions/>.
18 AQZ v ARA [2015] SLR 972 at [132], where the court ultimately rejected the award debtor's argument and held that a commercially sensible approach to interpreting the parties' arbitration agreement would be to recognize that the President of the SIAC Court does have the discretion to appoint a sole arbitrator pursuant to the SIAC Rules.
19 SIAC Rules 2016, Rule 5.3.