ARB 1 - Applicable Laws in Arbitration

Applicable Laws in Arbitration

• Arbitration rules govern the procedures of the arbitration process
• The law of the seat of arbitration (lex arbitri) governs the procedural aspects of the arbitration
• The law governing the substance of the dispute deals with the issues at hand
• The law governing the arbitration agreement dictates the agreement itself
• The law applicable to non-contractual claims covers non-contractual situations
• The law governing a party's legal capacity to contract outlines the ability of a party to enter into a contract

Legislative Framework in Singapore

• Domestic arbitrations in Singapore are governed by the Arbitration Act
• International arbitrations are governed by the International Arbitration Act
• An arbitration is considered international if:
  • At least one party has its place of business outside Singapore
  • The place of arbitration is outside the state of a party's business
  • A substantial part of the commercial relationship is performed outside a party's business's state
  • The subject matter of the dispute is closely connected to a state outside Singapore
• The parties can explicitly state that the International Arbitration Act will apply
• The UNCITRAL Model Law on International Commercial Arbitration (Model Law) has the force of law in Singapore (except Chapter VIII)

Relationship Between Applicable Laws

• Arbitration agreements require valid agreement between parties for a tribunal to have jurisdiction
• Parties choose between ad hoc or institutional arbitration for the administration of the arbitration
• Institutional arbitration delegates the administration to a designated institution or organization (SIAC, ICC, HKIAC, LCIA, etc)
• Institutions publish pre-drafted arbitration agreements called model clauses to be included in a contract.
• Ad hoc arbitration does not involve any institution
• Arbitration rules often specify the seat of the arbitration (e.g., Singapore) which determines procedural law (lex arbitri)

Relationship Between Applicable Laws (continued)

• The choice of seat has significant implications for the procedural law overseeing the proceedings - Singapore's Arbitration Act (AA) or the International Arbitration Act (IAA) for domestic and international arbitrations, respectively - The English Arbitration Act, if the seat is London - Hong Kong Arbitration Ordinance, if the seat is Hong Kong
• A party or parties opting for institutional arbitration, where the rules of that institution govern, may or may not override the lex arbitri provisions

Relationship Between Applicable Laws (continued)

• Provisions in arbitration agreements adopting arbitral institution rules aren't sufficient to exclude the Model Law.
• Singapore law adheres to Model Law provisions unless there's a mandatory Model Law provision in conflict
• Parties can choose the law that governs their arbitration agreement
• A party's contractual capacity is usually governed by their nationality

Arbitration Agreement

• An arbitration agreement might appear as a clause within a contract, or as a separate agreement
• Arbitration agreements must be in writing; electronic forms are valid as long as the information is accessible
• There is a general consensus that an arbitration agreement needs to be stated expressly; although there are exceptions.

Parties to the Arbitration Agreement

• Arbitration agreements typically bind only those who've consented to it.
• Several legal doctrines may still bind non-signatory parties (e.g., implied consent, agency principles, group of companies' doctrine and estoppel), though the legal treatment of these is controversial, especially in Singapore.

Subject Matter Arbitrability

• Concerns whether a dispute's subject matter is suitable for arbitration
• In Singapore, any dispute agreed for arbitration is arbitrable unless it violates public policy.

Pathological Arbitration Clauses

• Unclear or ambiguous clauses possibly causing disruptions in the arbitration process
• Defects often include incorrect institution names, institution's location usage, unclear finality, etc.
• Effective interpretation is applied to correct defects to accurately reflect parties' intent

Drafting Arbitration Clauses - Considerations

• Clearly identify parties
• Stipulate that disputes are subject solely to arbitration
• Detail the scope of arbitrable issues
• Specify the arbitration seat
• If applicable, determine arbitration institution/rules
• Detail the number of arbitrators (avoiding panels of two)
• Stipulate the language of proceedings
• Specify the governing law of the arbitration agreement

Stay of Court Proceedings

• A party may seek to stop court proceedings started in breach of an arbitration agreement.
• Applications to stop court proceedings must be filed before the first statement on the substance of the dispute is submitted.
• The court retains some discretion to refuse a stay in domestic arbitrations if sufficient cause exists
• The court should consider other factors, including disputes' nature and potential overlap with other issues, along with the likelihood of injustice or prejudice.

Prima Facie Considerations

• Courts' evaluation of arbitration agreements' existence, scope, and validity varies based on whether the contesting party disputes an arbitration agreement's existence itself or merely its implications.
• The court's decision concerning jurisdiction is seen as a preliminary decision, not a final one, and thus reviewable.

Scope of Court Review of a Tribunal's Jurisdictional Decisions

• The court at the seat of arbitration reviews the tribunal's jurisdictional decisions de novo (from the beginning; not based on the previous tribunal decision)

This quiz explores the key laws and frameworks governing arbitration in Singapore, including both domestic and international arbitration laws. Understand the concepts of lex arbitri, the arbitration agreement, and the various legal capacities regarding non-contractual claims. Test your knowledge on the procedural and substantive aspects of arbitration.