With the Singapore International Arbitration Centre (SIAC) as a popular destination for Indian parties to resolve their disputes, may affect Indian entities’ choice for resolution. Nishith Desai Associates’ Ashish Kabra, head of the Singapore office and Kamran Mohammad, Delhi-based leader, explain the impact.
Q1. What are the key changes introduced? What difference would these bring?
Some of the key changes revolve around the new electronic case management system, emergency arbitration, third-party funding, etc. The following features have been introduced:
(1) The SIAC gateway enables electronic filing, secure document management, real-time case tracking, and integrated payments, providing a centralised document management platform. This is likely to promote speed, transparency and cost effectiveness in case progression.
(2) Ex-parte orders in emergency arbitration are now allowed where an emergency arbitrator can grant immediate relief, such as asset freezes or injunctions, without prior notice to the opposing party. This is particularly useful in urgent scenarios where giving notice could undermine the effectiveness of the relief sought. This change reduces the need for court intervention in urgent matters, making the arbitration process more self-contained and efficient.
(3) Third-party funding framework has been introduced. Parties must now disclose any third-party funding agreements, and tribunals are empowered to order additional disclosures, assess the funder’s interest in the proceedings and consider funding agreements when apportioning costs.
Other key changes include a streamlined procedure for low-value disputes capping the fees and a three-month deadline, preliminary determination procedures, and a co-ordinated proceedings mechanism for multiple matters with common issues, etc. These changes collectively aim to make arbitration more efficient, transparent, and adaptable to modern challenges, ultimately benefitting both practitioners and users of the system.
Q2. Many matters before the SIAC come from Indian entities. What should these entities be mindful of about the changes?
Indian entities should be mindful of features like the availability of ex-parte relief in emergency arbitrations, preliminary determination procedure and co-ordinated proceedings mechanisms for connected disputes.
For Indian entities involved in smaller disputes, streamlined procedures offer a faster and more affordable alternative to traditional arbitration, reducing both time and costs significantly.
Streamlined procedures for lower-value disputes are cost-effective and efficient, eliminating time-consuming steps like document production, witness evidence and hearings, unless deemed necessary by the tribunal. There are upper limit caps of three months for awards and 50% for administrative fees.
It is now hoped that this will allay some of the longstanding concerns that arbitration is not well suited for lower value claims.
Q3. What effect do the new rules have on ongoing contracts that decidedly mention the SIAC as the mode of dispute resolution?
The rules apply to all arbitrations commencing on or after 1 January 2025, unless the parties agree otherwise. Where the specification of which SIAC rules has not been agreed on by the parties, it will be assumed that they have agreed to the new rules for their arbitration. Hence, for ongoing contracts the application of the new rules is almost automatic if the arbitration commences after 1 January 2025, unless the parties have agreed otherwise. This ensures that parties benefit from the latest procedural enhancements and efficiencies. Where the parties have chosen an older version of the rules, they would have to agree on the application of new rules to benefit from them.
Q4. How will these new rules change the way arbitration is practised in Singapore and abroad?
The new rules provide more tools to practitioners improving flexibility and efficiency. While some features introduced are novel and specific to the SIAC, others align with existing provisions in the rules of other leading arbitration institutions, although with certain differences. For example, the streamlined procedure for smaller claims, and the express preliminary determination procedure are distinctive features of the SIAC. The new rules align with best practices around the world, making them more efficient, transparent and adaptable to the needs of modern commercial disputes.
