Changes proposed to ensure S'pore remains attractive for int'l arbitrations
The law ministry has proposed changes to ensure that Singapore remains an attractive venue and maintains a first-class framework for international arbitrations, following positive feedback from industry stakeholders.
SINGAPORE: The law ministry has proposed changes to ensure that Singapore remains an attractive venue and maintains a first-class framework for international arbitrations, following positive feedback from industry stakeholders.
One set of changes relates to the International Arbitration Act (IAA); another revolves around a Foreign Limitation Periods Act (FLPA).
The Ministry of Law (MinLaw) put forward the proposed changes during the first reading of the Bills in Parliament on Thursday.
It followed public consultation on a draft International Arbitration (Amendment) Bill (IA(A) Bill) in October 2011 to expand the scope of arbitral tribunals' jurisdiction and powers.
MinLaw also conducted a public consultation on a draft Foreign Limitation Periods Bill (FLP Bill), seeking to enact a Foreign Limitation Periods Act (FLPA) to clarify the applicable rules of limitation for both arbitral and court proceedings.
It said the feedback from industry stakeholders, including arbitrators, practitioners in law firms, academics and the Singapore International Arbitration Centre (SIAC), was mostly in favour of the changes.
It fine-tuned the provisions in the final versions of the Bills, taking into consideration the views and comments received.
On the International Arbitration (Amendment), or IA(A) Bill 2012, MinLaw proposed several changes,it wants to relax the current requirement that arbitration agreements be in writing.
The IAA currently only recognises arbitration agreements that are made in writing.
MinLaw received feedback that this requirement does not accord squarely with commercial reality, as arbitration agreements are often concluded orally, and put into writing later.
So it wants to extend the IAA's application to arbitration agreements concluded by any means, as long as their content is recorded in any form.
A second proposal is to allow Singapore courts to review rulings by arbitral tribunals that these tribunals do not have jurisdiction to hear the dispute (negative jurisdictional rulings).
The IAA currently does not permit a Singapore court to review negative jurisdictional rulings made by arbitral tribunals or rulings by the tribunals that it has no jurisdiction to hear the dispute.
In contrast, however, Singapore courts are able to review positive jurisdictional rulings made by arbitral tribunals, or rulings by tribunals that they have jurisdiction to hear the dispute.
MinLaw said this inconsistent treatment of negative and positive jurisdictional rulings has been criticised by practitioners and academics.
The IA(A) Bill seeks to rectify this, by allowing parties to have recourse to Singapore courts for positive and negative jurisdictional rulings.
The third change revolves around the scope of arbitral tribunals' powers to award interest in arbitral proceedings.
Singapore's IAA currently does not clearly define the scope of arbitral tribunals' powers to award interest.
The Bill proposed changes to clarify the scope of these powers, such as granting simple or compound interest on monies claimed in arbitrations and orders to pay legal costs.
The fourth proposed amendment called for legislative support for the appointment of "emergency arbitrators" before the arbitral tribunal hearing the dispute is properly constituted.
MinLaw said parties to a dispute may require urgent relief, even before the arbitral tribunal over the dispute is constituted.
The Bill proposed amending the definitions of an "arbitral tribunal" and an "arbitral award" to clarify the status of orders made by such "emergency arbitrators".
It wants to accord emergency arbitrators with the same legal status and powers as that of any other arbitral tribunal and ensure that orders made by such emergency arbitrators are enforceable under Singapore IAA regime.
As for the Foreign Limitation Periods Bill 2012, MinLaw proposed a new Foreign Limitation Periods Act (FLPA).
It aims to clarify the issue of which country's limitation laws apply to disputes that are litigated in Singapore, but which are governed another jurisdiction.
MinLaw said the provisions make it clear that the applicable limitation period will be the rules of the law that govern the dispute.