Disputes - Geopolitical Risk
The Landscape of Arbitrators in Germany - The Institutional Perspective
Disputes - Geopolitical Risk
This is the fifth article in Clyde & Co’s latest international arbitration series covering the topic of the landscape of arbitrators across various international jurisdictions. In this piece, Leon Alexander (Partner) and Hannah Chua (Legal Director) from our Singapore office provide the legal perspective from Singapore.
Singapore, being an arbitration hub and one of the top five preferred seats for arbitration in the world (alongside London, Paris, Geneva and Hong Kong), is no stranger to the appointment of both local and foreign arbitrators, be it on or off institutional panels.
In this article, we will provide an overview of the landscape of arbitrators in Singapore and the applicable rules relating to their appointment.
Unlike most jurisdictions, Singapore has two pieces of legislation which provide for the conduct of arbitration, namely the Arbitration Act 2001 (“AA”) which applies to domestic arbitrations, and the International Arbitration Act 1994 (“IAA”) which applies to international arbitrations. Generally, an arbitration is “international” if certain requirements are met, e.g. at least one of the parties to the arbitration agreement has its place of business outside of Singapore.
Under the IAA, the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) has the force of law in Singapore (subject to a few modifications specified in the IAA).
Insofar as the appointment of an arbitrator is concerned, the applicable rules in domestic and international arbitrations are largely similar.
2.1. Default appointment rules
One of the key steps in the initial stages of any arbitration proceedings is the appointment of the arbitrator(s). In line with the doctrine of party autonomy, parties are free to determine both the number of arbitrators and the process for appointing arbitrators in both domestic and international arbitrations.
If parties fail to specify the number of arbitrators, the default position under both the AA and the IAA is for there to be a sole arbitrator.
The AA and IAA also set out the default process for appointment of arbitrators if the same has not been agreed by the parties. For instance, if there is an arbitration with 2 parties and 3 arbitrators, the AA and IAA both provide for each party to appoint one arbitrator and the third arbitrator is to be appointed by the parties’ agreement, failing which either party may request the appointing authority to appoint the third arbitrator. As of the time of this article, the appointing authority is the president of the Court of Arbitration of the Singapore International Arbitration Centre.
2.2. Statutory restrictions
It goes without saying that a good arbitrator should possess the required qualifications and experience and instil confidence in the parties that their dispute will be dealt with in a fair and impartial manner. However, neither the AA nor the IAA contains any specific requirements that an arbitrator must meet in order to be appointed, presumably in an effort to be as non-prescriptive as possible so as to allow parties greater freedom to contract.
However, an arbitrator may be challenged if (a) there are circumstances giving rise to justifiable doubts as to his or her impartiality or independence; or (b) he or she does not possess the qualifications agreed to by the parties .
2.3. Disclosure obligations
Where any person is approached in connection with his or her possible appointment as an arbitrator, that person must disclose any circumstance likely to give rise to justifiable doubts as to his or her impartiality or independence. Further, an arbitrator must, from the time of his or her appointment and throughout the arbitral proceedings, disclose without delay any such circumstance to the parties (unless they have already been so informed by him or her).
With a sizeable legal industry which not only possesses its own homegrown legal practitioners but also attracts renowned foreign lawyers, there is no shortage of qualified arbitrators in Singapore.
Local arbitrators come from a myriad of backgrounds, including former Judges (some of whom are appellate Judges), Senior Counsels (the Singapore equivalent of the UK’s King’s Counsels), practicing lawyers, in-house lawyers and trade specialists.
International arbitrators with similar backgrounds come to Singapore from all over the world, including Australia, China, India, Japan, Malaysia, the US and the UK. There is almost no barrier to the appointment of foreign arbitrators not residing in Singapore subject to the terms of the relevant arbitration agreement.
It follows that, regardless of the language skills or subject matter expertise required, a party will not be short of suitable options when selecting an arbitrator.
In relation to diversity and inclusion, women remain fairly under-represented on the panels of the arbitral institution panels, making up about 10-15% of such panels only. That said, there is a concerted effort to improve diversity. For instance, the SIAC reported that 46.2% of the 145 arbitrators appointed by the SIAC in 2022 were women, an increase from 35.8% in 2021.
Gender aside, Singapore’s former attorney general VK Rajah Senior Counsel also recently promoted the inclusion of Asian arbitration practitioners.
There are currently two main arbitration centres in Singapore, namely the Singapore International Arbitration Centre (“SIAC”) and the Singapore Chamber of Maritime Arbitration (“SCMA”). Each has its own set of rules and we discuss them in further detail below.
4.1 Singapore International Arbitration Centre (SIAC)
The SIAC’s directory currently boasts more than 100 arbitrators in the areas of Energy, Engineering, Procurement and Construction. These arbitrators come from more than 25 jurisdictions, including Australia, Canada, China, France, Germany, India, Japan, Korea, Pakistan, the UAE, the US and the UK.
This is not to say that it is easy to be admitted to the SIAC’s panel. Admission is by invitation by the SIAC Court of Arbitration as advised by its Executive Committee, or upon an application to the SIAC. To apply, a candidate needs to demonstrate “an appropriate level of expertise and experience in international arbitration and be of good standing and character”. Further, the applicant must have the following qualifications or experience at a minimum:
Given the fairly stringent requirements, only experienced arbitration practitioners will qualify.
Like the AA and the IAA, the default position under the SIAC Rules is for the tribunal to comprise a sole arbitrator unless parties have otherwise agreed.
The default process for appointment of arbitrators under the SIAC Rules is also similar to the position under the AA and IAA, save that the SIAC Rules only allow parties to nominate the arbitrators. Any arbitrator(s) nominated by the parties are subject to formal appointment by the President of SIAC’s Court of Arbitration at their discretion. More often than not, and particularly in a three-member tribunal, an arbitrator nominated by a party will be appointed unless such appointment is challenged by the other party with sufficient grounds.
4.2 Singapore Chamber of Maritime Arbitration (SCMA)
The SCMA covers all practice areas related to maritime, including bunkering, cargo loss/damage, ship collisions, charterparties, trade and commodities (including oil and gas), marine insurance, salvage, shipbuilding, ship finance and ship sale. It is therefore not surprising that it also has an impressive panel comprising more than 100 eminent maritime practitioners from all over the world, including Australia, China, India, Japan, Korea, Sweden, the UK and the US.
In terms of admission requirements, the SCMA’s Board of Directors have discretion to admit an applicant to the SCMA Panel upon recommendations made by the Procedure Committee. However, each candidate needs to fulfil the below requirements:
Unlike the statutory regime and the SIAC Rules, the SCMA Rules provide for the tribunal to comprise 3 arbitrators as a default unless otherwise agreed by the parties.
Where the procedure for appointment has not been agreed by the parties, the SCMA Rules also contain the default appointment procedure. For instance, where 3 arbitrators are to be appointed, each party shall appoint one arbitrator and the two arbitrators once appointed shall constitute the Tribunal for the time being, and may at any time thereafter (but before any substantive hearing) appoint a third arbitrator.
If any party fails to appoint its arbitrator in accordance with the SCMA Rules, or if the parties fail to agree on an appointment as required, the Chairperson of the SCMA is empowered to make the necessary appointment.
It is safe to say that the rules and procedures relating to the appointment of arbitrators in Singapore are already well established. The volume of cases also attracts experienced and well-regarded arbitrators to set up practice in Singapore. As a result, commercial parties have confidence Singapore’s arbitration system and Singapore is now one of the most popular arbitration venues not just in Asia, but in the world.
This series will continue next week with the perspective from England & Wales.