'Embrace innovation' in arbitration

CJ Menon urges lawyers and arbitrators to work together to rein in costs, control time

Arbitration may have become the top choice for companies to settle international disputes, but the impression is that it is getting more expensive and time consuming.

This needs to be addressed, said Chief Justice Sundaresh Menon in highlighting how arbitration was envisioned to be cheaper and quicker than taking cases to court.

He urged lawyers and arbitrators to work together to cut down on unnecessary paperwork, agree on the case's key issues and even limit the time witnesses are given to testify to prevent proceedings from "spiralling out of their control".

He was speaking on Thursday at the start of a two-day event at Marina Bay Sands marking the 100th anniversary of the Chartered Institute of Arbitrators, which has over 13,000 members from more than 120 countries and of which he is the patron. About 250 lawyers and arbitrators attended the event.

He noted that arbitration is "so much in vogue today".

Figures from the Singapore International Arbitration Centre show its cases quadrupled within a decade to 259 in 2013.

But the Chief Justice also referred to a 2006 survey by the School of International Arbitration at Queen Mary University of London showing that 88 per cent of respondents did not think arbitration saved them money compared to court proceedings. "The second most commonly expressed concern was that it was taking longer to complete an arbitration." The same concerns were repeated in a 2013 survey, he pointed out.

"Perhaps the change (in attitudes towards dispute resolution) has been brought about by the fact that disputes between commercial parties now often involve staggering amounts of money," he said, adding that this turned arbitration " into total warfare".

Another factor is the limited scope of appeal for arbitration awards, which leads to lawyers covering every single issue in the case.

He urged lawyers to "embrace innovation". For instance, a tribunal can meet before a hearing to discuss and consolidate issues.

"The early identification of key issues would also limit unnecessary document production," he said.

Another suggestion he highlighted is for the tribunal to penalise a party's "dilatory or unreasonable behaviour", and take that into account when allocating costs.

Some of these ways to cut time and cost are included in a new set of publicly available arbitration guidelines which the Chief Justice announced during his speech.

Senior Counsel Francis Xavier, who chairs the Singapore branch of the Chartered Institute of Arbitrators, said the community has to resolve the problem of arbitration being seen as expensive.

A version of this article appeared in the print edition of The Straits Times on September 05, 2015, with the headline ''Embrace innovation' in arbitration'. Print Edition | Subscribe