Proposed amendments to International Arbitration Act to strengthen arbitration framework in Singapore: Allen & Gledhill

11 September 2020

On 1 September 2020, the Ministry of Law (“MinLaw”) tabled the International Arbitration (Amendment) Bill (“Bill”) for first reading in Parliament. The Bill proposes amendments to the International Arbitration Act (“IAA”) aimed at enhancing Singapore’s status as an international commercial arbitration hub and strengthening the legal framework for international arbitration. The IAA was last amended in 2012.

Between 26 June 2019 and 21 August 2019, MinLaw conducted a public consultation on four proposals to amend the IAA and received feedback from stakeholders, including businesses, arbitrators, professional bodies, practitioners in both local and offshore law practices, academics and international dispute resolution institutions.

The Bill introduces two of the four proposals put forth for consultation. MinLaw has stated that it will continue to study the two remaining proposals.

The two proposals set out in the Bill are discussed below.

1. Default mode of appointment of arbitrators in multi-party arbitrations

The IAA currently provides for default appointment of a three-member arbitration tribunal in situations where there are two parties to a dispute (i.e., one claimant and one respondent). It does not address situations where there are more than two parties involved in the dispute (“multi-party arbitrations”).

The Bill therefore seeks to introduce a default mode of appointment of arbitrators in multi-party arbitrations where the parties’ agreement does not specify the procedure for such appointments. It sets out the processes and timeframes that should be adopted by claimant(s) and respondent(s) in appointing a three-member arbitration tribunal. MinLaw explains that multi-party arbitrations appear to be a growing trend, especially in arbitrations arising from joint ventures, oil and gas exploration and merger and acquisition disputes.

As multi-party arbitration proceedings can be complex in nature, the introduction of a default mode of appointment of a three-member arbitration tribunal in such situations will reduce delays by introducing timelines and a clear process.

Procedure

The Bill creates a new section which sets out how the appointment procedure will operate. Claimants will be required to jointly appoint an arbitrator and state its choice of appointed arbitrator in the notice of arbitration or request. Similarly, the respondents must jointly appoint an arbitrator and inform the claimants of the appointment within 30 days after the date of receipt of the notice of arbitration or request. The first and second arbitrators must then nominate a third arbitrator within 60 days after the date of receipt of the request for the dispute to be referred to arbitration by the respondent. The third arbitrator will be the presiding arbitrator. Where the first and second arbitrators are unable to agree on the appointment of the third arbitrator within the specified period of time, the appointing authority must, upon the request of any party and having regard to all relevant circumstances, appoint the third arbitrator, who shall be the presiding arbitrator.

If either the claimants or the respondents are unable to appoint their arbitrator within the specified period of time, the appointing authority must, upon the request of any party, appoint all three arbitrators. In doing so, the appointing authority may reappoint or revoke any appointment already made and designate one of the three arbitrators as the presiding arbitrator.

2. Recognise that an arbitral tribunal and the High Court have powers to enforce obligations of confidentiality in an arbitration

The IAA provides that, unless parties otherwise agree, the parties and the arbitral tribunal have a duty of confidentiality under the common law not to disclose confidential information obtained in the course of the proceedings or use them for any purpose other than the dispute.

In recognition of the importance of confidentiality to arbitration, the Bill provides explicit recognition of the powers of the arbitral tribunal and the High Court to enforce obligations of confidentiality, by making orders or giving of directions, where such obligations exist. The Bill does not codify obligations of confidentiality but seeks to strengthen parties’ ability to enforce existing obligations.

Specifically, the Bill provides that an arbitral tribunal has powers to make orders or give directions to any party to an arbitration for enforcing any obligation of confidentiality:

That the parties to an arbitration agreement have agreed to in writing, whether in the arbitration agreement or in any other document;
Under any written law or rule of law (which includes rules under the common law); or
Under the rules of arbitration (including the rules of arbitration of an institution or organisation) agreed to or adopted by the parties.

The High Court will have the same power of making an order in respect of enforcing any obligation of confidentiality as it has for the purpose of and in relation to an action or a matter in the court.

Reference materials

The following materials are available on the Parliament website www.parliament.gov.sg and MinLaw website www.mlaw.gov.sg: