Key Changes: 4th Edition of the Singapore Chamber of Maritime Arbitration Rules

The Singapore Chamber of Maritime Arbitration (SCMA) has recently published the 4th Edition of the SCMA Arbitration Rules (the Rules). This will apply to all SCMA arbitrations commenced on or after 1 January 2022, unless otherwise agreed.

The Rules have been streamlined and updated to reflect modern maritime arbitration practice. The key changes to the Rules are: -

Accommodating remote hearings and adopting electronic methods

• Video-conference hearings and case management conferences (Rules 17.3 and 25.3) – The Rules now expressly allow the Tribunal to direct that hearings and case management conferences be conducted by video-conference (in addition to the Tribunal being able to direct that they be conducted through traditional in person or telephone formats).

• Methods of service (Rule 3.1) – The Rules now expressly provide that any notice or communication will be deemed effectively served and received if sent to the addressee’s designated electronic mailing address, and delivered with proof of delivery or proof of receipt. There is no longer a need for physical delivery of notices or communications, though the option remains if desired.

• Electronic signatures (Rule 34.4) – Tribunals no longer need to meet in person to sign any award or effect corrections and they may sign awards electronically and/or that the awards be signed in counterparts. However, in recognition that some jurisdictions may still require wet signatures for enforceability of an award, any party may request, or the Tribunal in its discretion may decide, that wet signatures be used instead.

​Promoting speed as well as cost and procedural efficiency for users

• Number of arbitrators (Rules 8.4(c), 8.4(d) and 33.2) – two arbitrators may now proceed with the conduct of an arbitration and a third arbitrator does not need to be appointed unless there is an substantive hearing or lack of agreement between the two arbitrators. Where a third arbitrator has not been appointed, and a substantive hearing is not required, the two arbitrators have the power to make decisions, orders and Awards.

• Deemed closure of proceedings (Rule 27.1) – the Rules now provide that unless the parties agree or the Tribunal directs otherwise, the arbitration proceedings will be deemed closed three months from the date of any final written submissionsor final hearing.

• Deadline for awards (Rule 34.1) – Tribunals must now make the final award within three months from the close of proceedings. In accordance with the preceding amendment, it means that an award should be issued within six months from the date of any final written submission or final hearing.

• Oral hearings (Rule 25.1) –oral hearings are no longer mandatory. The Tribunal has the power to decide if a hearing should be held or if the arbitration proceed on documents only. However, a hearing must be held if any party requests one.

• Change in representation subject to Tribunal's approval (Rule 4.4) – any change by a party of its authorised representatives after constitution of the Tribunal will now be subject to the Tribunal's approval. The Tribunal may only withhold its approval if it is satisfied that there is substantial risk that such change may prejudice the conduct of the proceedings or the enforceability of any award. The amendment is aimed at preventing abuse through late changes in party representation which have the aim of delaying or disrupting the arbitration proceedings.

• Increased information sharing (Rule 6) – Notices of Arbitration must now include a description of the nature of the claim, and where possible, an indication of the amount of the claim.

• Increase in claim limit for Expedited Procedure (Rule 44.1) – the Expedited Procedure now applies to any dispute where the aggregate amount of the claim and counterclaim (if any) is no more than US$300,000 (excluding interests and costs). This replaces the Small Claims Procedure under the current SCMA rules, which provides for a limit of US$150,000. The Expedited Procedure is intended to be a quick and cost-effective method to resolve a dispute using a sole arbitrator, which requires statement of case to be served within 14 days rather than 30 days. Where no oral hearing is required, an Award must be issued within 21 days from date of receipt of the parties’ case statements.

• SCMA Standard Terms of Appointment (Rule 40) – to ensure greater certainty and transparency in the appointment of arbitrators, the newly introduced SCMA Standard Terms of Appointment now applies to all SCMA arbitrations by default, unless otherwise agreed.

Comment

The 4^th Edition of the SCMA Rules represent a welcome update which users are likely to find practical and useful. The Rules helpfully adapt to the changes in working practice by encouraging virtual-conference hearings and email service of documents.

Furthermore, the latest amendments to the SCMA rules allow for more streamlined arbitration proceedings. By allowing arbitration proceedings to progress with two arbitrators (except where there is a substantive hearing or disagreement between the arbitrators), SCMA arbitrations will more closely follow the process adopted in LMAA arbitrations. This will have the effect of increasing the efficiency and speed, as well as lowering the cost of SCMA arbitration.

Overall, the changes are likely to increase the attractiveness of SCMA arbitration as a dispute resolution mechanism for maritime and trade disputes, particularly in Asia.

Ik Wei Chong (Partner / Managing Director, Asia) is a Board Member of the SCMA and Nicholas Lum (Partner, Shanghai and Singapore) is a member of the SCMA Procedure Committee and Promotion Committee. Both of them were actively involved in the drafting and formulation of the new SCMA Arbitration Rules.

A copy of the 4^th Edition of the SCMA Rules may be found here.