MinLaw seeks feedback on international arbitration regime and International Arbitration Act 1994: Allen & Gledhill

4 April 2025

On 21 March 2025, the Ministry of Law (“MinLaw”) launched a public consultation to seek feedback on Singapore’s international arbitration regime and the International Arbitration Act 1994 (“IAA”). The consultation closes on 2 May 2025.

Background

As part of MinLaw’s continual review to ensure that Singapore remains attractive as an arbitration forum, MinLaw commissioned the Singapore International Dispute Resolution Academy (“SIDRA”) to conduct a study on the international arbitration regime in Singapore and the IAA. SIDRA has since published a report of its study. In addition, MinLaw has engaged various stakeholders, including practitioners and dispute resolution institutions.

Scope of consultation

To assist MinLaw in assessing SIDRA’s study and the feedback received from various stakeholders, the consultation invites views from the public on SIDRA’s report, with a focus on the following eight issues:

Issue 1 - Whether to confer on the court power to make cost orders for arbitral proceedings following successful setting aside of award: MinLaw seeks views on whether legislative amendments should be introduced to give Singapore courts the discretion to (i) make an order in respect of costs of the arbitration proceedings following a successful set-aside application, and/or (ii) remit the issue of costs to the arbitral tribunal as an exceptional remedy when all of the parties to the award agree to the remission and it is in the interest of justice to do so.

Issue 2 - Whether separate cost principles should be applied in respect of unsuccessful setting aside applications: MinLaw seeks views on (i) whether there is anecdotal or empirical evidence of applicants using setting aside applications to drag out the resolution of a matter and/or the enforcement of an arbitral award, and (ii) whether there is a need to adopt separate cost principles for unsuccessful setting aside applications to disincentivise frivolous and unmeritorious setting aside applications, and if so, whether this should be on an indemnity basis or a different framework.

Currently, the default position on costs in proceedings before the High Court and Court of Appeal is for party and party costs to be awarded to a successful litigant on a standard basis, and that there are no separate cost principles applicable to unsuccessful setting aside applications in Singapore. The consultation paper notes that while this position is consistent with the UK, Australia, Canada, and Malaysia, the Hong Kong courts grant indemnity costs as a default unless special circumstances can be shown.

Issue 3 - Whether to introduce a leave requirement for appeals to Court of Appeal arising from a High Court decision in a setting aside application: MinLaw seeks views on how the time taken for setting aside applications to be disposed of by the Singapore courts compares with the experience in other jurisdictions.

MinLaw also seeks views on whether the IAA should be amended to require parties to obtain permission to appeal against a decision of the High Court on both setting aside and resisting enforcement applications (whether successful or otherwise) to prevent frivolous, unmeritorious, or vexatious appeals. MinLaw also seeks views on whether the application for such permission should be heard by the High Court or the Court of Appeal, and whether any such application should be decided without hearing as a default, unless the court determines otherwise.

The consultation paper notes that currently, Singapore’s position differs from the UK and Hong Kong, where permission from the court of first instance is required for any appeal from a decision of that court.

Issue 4 - Whether the time limit to file a setting aside application should be reduced: MinLaw seeks views on whether the IAA should be amended to (i) shorten the three-month time limit for the filing of setting aside applications, and/or (ii) give the courts the discretion to extend the time limit to file an application under section 24(1) of the IAA, where the award may be tainted by fraud or corruption.

The consultation paper notes that the Singapore courts have held that the current three-month time limit is absolute and cannot be extended, even in cases involving fraud or corruption or applications made under section 24 of the IAA. For jurisdictions that have adopted shorter time limits, the courts are generally provided some form of discretion to extend the time limit.

Issue 5 - Whether a right of appeal on questions of law is desirable: MinLaw seeks views on whether the IAA should be amended to introduce a right of appeal on points of law, on an opt-in basis, and if so, whether (i) an appeal on “points of law” should be restricted to Singapore law, or whether it should include foreign or international law, (ii) to clarify that the right of appeal is not waived merely by operation of institutional rules (such as the Singapore International Arbitration Centre or International Chamber of Commerce rules), which may include automatic waiver provisions, (iii) to expressly require appeals to be decided on the basis of the findings of fact in the award, (iv) to make provisions for the costs of the court and arbitral proceedings, and (v) to provide that applications for permission to further appeal from the High Court shall be determined by the appellate court.

The consultation paper notes that in jurisdictions where appeals from arbitral awards on points of law are permitted, the threshold required for leave to appeal is generally high and explains that providing an opt-in right of appeal on points of law in the IAA could potentially add to the suite of options available to commercial parties, and enhance party autonomy and flexibility.

Issue 6 - How to ascertain the governing law of the arbitration agreement: Currently, the Singapore courts adopt a three-stage framework to determine the governing law of an arbitration agreement (“Singapore Common Law Approach”). In contrast, the new UK Arbitration Act 2025 departs from the previously similar position in English law, providing instead that the law of the seat will govern the arbitration agreement unless expressly agreed otherwise.

MinLaw seeks views on whether, in ascertaining the governing law of the arbitration agreement, Singapore should (i) retain the Singapore Common Law Approach, (ii) enact a statutory choice of law approach in the IAA, or (iii) adopt the English position under the UK Arbitration Act 2025.

In the event that a statutory choice of law approach in the IAA is implemented, MinLaw seeks views on whether Singapore should do so based on the following principles to provide greater certainty and predictability for commercial parties who wish to arbitrate their disputes or enforce their awards in Singapore:

The law which the parties have subjected their arbitration agreement to, shall be the law that parties expressly designate as applicable to the arbitration agreement.
In the absence of an express designation, the law which the parties have subjected their arbitration agreement to, shall be the law that the parties expressly designate as applicable to any contract which contains that arbitration agreement.
If no law has been expressly designated by the parties as applicable to any contract which contains that arbitration agreement, the law applicable to the arbitration agreement shall be the law of the seat of arbitration.

Issue 7 - Whether the review of the tribunal’s jurisdiction should be conducted by way of an appeal or a rehearing: MinLaw seeks views on whether the court’s review of a tribunal’s jurisdiction should continue to be conducted by way of a de novo

The consultation paper notes that under the UK Arbitration Act 2025, the English position has been changed from permitting a de novo review, to only allowing a limited review. Under the new English position, where an objection has been made to the tribunal that it lacks jurisdiction and the tribunal has already ruled on its jurisdiction, in any subsequent challenge by a party who had participated in the arbitration proceedings, the court will not hear any new grounds of objection or any new evidence, unless it could not with reasonable diligence have been put before the tribunal, and evidence will not be reheard, save in the interests of justice.

Issue 8 - Whether the summary disposal powers of arbitral tribunals should be set out in the IAA: MinLaw seeks views on whether the IAA should be amended to expressly provide that unless otherwise agreed by parties, the arbitral tribunal has the power to summarily dispose of any issue, claim, or defence (or part thereof) in dispute by way of an award.

The consultation paper explains that currently, the IAA does not expressly let out the summary disposal powers of arbitral tribunals, notwithstanding that the arbitration rules of the major institutions provide for it in some form. In the UK, the UK Arbitration Act 2025 includes a provision to expressly confer a power on arbitrators to make an award on a summary basis, on an application by a party, if the tribunal considers that the party has no real prospect of succeeding on that issue or in the defence of the issue. This power is not mandatory, and parties can agree to opt out.

Reference materials

The following materials are available on the MinLaw website www.mlaw.gov.sg and SIDRA website sidra.smu.edu.sg: