Parliament: Amendments passed to make Singapore more attractive for international arbitration

The amendments to the Act explicitly spell out powers for the High Court and arbitral tribunals to enforce confidentiality obligations between parties.
The amendments to the Act explicitly spell out powers for the High Court and arbitral tribunals to enforce confidentiality obligations between parties.ST PHOTO: KUA CHEE SIONG

SINGAPORE - Changes to the International Arbitration Act were passed on Monday (Oct 5) to enhance the arbitration process and hold parties to their confidentiality obligations.

The amendments to the Act outline a new default process for arbitrators to be appointed in disputes involving more than two parties.

They also explicitly spell out powers for the High Court and arbitral tribunals to enforce confidentiality obligations between parties.

In a speech on Monday, Second Minister for Law Edwin Tong said these changes help strengthen Singapore's international arbitration framework, and will ensure that the country remains an attractive venue for such arbitration.

For example, the new default process for arbitrators to be appointed in multi-party disputes would "reduce potential delay in the conduct of arbitration proceedings", such as when parties do not agree on the joint nomination of arbitrators or on third-party arbitrators, said Mr Tong.

With the amendment, any party can ask the appointing authority to appoint arbitrators. This would effectively work around the problem of parties who seek to delay or frustrate an arbitration by failing to appoint one or by not taking part at all, said Mr Tong.

Such a procedure is already outlined for disputes involving only two parties.

Meanwhile, recognising the powers of the arbitral tribunal and the High Court to enforce confidentiality obligations underscores the importance of confidentiality in arbitration, he added.

The High Court and arbitral tribunal will be able to make orders or give directions to enforce the confidentiality obligations that parties and the arbitral tribunal already have a duty to fulfil.

Several MPs welcomed these amendments, including Mr Patrick Tay (Pioneer), who noted that the potential for disputes is rife now, as contractual obligations are being restructured, suspended or terminated as a result of the "unprecedented impact of Covid-19 on global economies".

Mr Vikram Nair (Sembawang GRC), also noted that the move to empower the High Court and arbitral tribunal is an important development, as it allows them to act swiftly in protecting confidential information.

 
 

He added that the court can also take action if a tribunal is unable to do so, such as when it has yet to be appointed but a leak of confidential information is imminent.

However, Mr Nair, Mr Louis Ng (Nee Soon GRC) and Mr Zhulkarnain Abdul Rahim (Chua Chu Kang GRC) also asked that the Law Ministry implement other proposals that had been put forward in a public consultation paper.

The two amendments that were passed are among four main proposals on which the Law Ministry has been consulting various stakeholders since last year.

The other two include a proposal that allows parties in arbitral proceedings to appeal to the High Court on a question of law arising from the arbitral award and a proposal to allow parties to agree to waive or limit the annulment grounds.

Mr Zhulkarnain said there has been an increase in cross-border disputes since the outbreak of the Covid-19 pandemic and the subsequent economic fallout, and that Singapore continues to face stiff competition to attract these disputing parties.

"I would urge the Ministry of Law to consider expediting the tabling of the other proposals in the consultation paper, as this will be key to cementing Singapore's status as the preferred seat for arbitration disputes," he said.

 
 

In response, Mr Tong said these proposals are still being studied.

"As I've flagged, this is a process that is ongoing, and we are always taking into account what users want to see, developments in the law, and of course international conventions and practices as well.

"We will continue to make Singapore an attractive scene for arbitration disputes."