Arbitration and Mediation PDF

ARBITRATION.................................................................................. 6 A – Applicable laws......................................................................................... 6 1 – Legislative framework..................................................................................................... 6 2 – Relationship between applicable laws............................................................................ 6 Arbitral Rules vs Lex Arbitri................................................................................................ 7 3 – Arbitration rules.............................................................................................................. 7 4 – Seat of Arbitration........................................................................................................... 7 5 – Governing law.................................................................................................................. 8 6 – Law governing the arbitration agreement..................................................................... 8 7 – Party’s capacity................................................................................................................ 9 B – Arbitration Agreement.......................................................................... 10 1. Definition......................................................................................................................... 10 1.1 Written Requirement............................................................................................... 10 1.2 Incorporation by reference.......................................................................................... 10 2. Parties to the arbitration agreement.............................................................................. 10 2.1 non-signatories............................................................................................................ 10 2.2 Joinder......................................................................................................................... 11 2.3 Consolidation............................................................................................................... 11 3. Subject matter arbitrability............................................................................................ 12 4. Pathological arbitration clauses..................................................................................... 12 4.1 Naming......................................................................................................................... 13 4.2 Institution A, with Institution B’s rules........................................................................ 14 5. Drafting Arbitration clauses........................................................................................... 14 6. Stay of court proceedings................................................................................................ 15 C – Jurisdiction of arbitral tribunal............................................................ 18 Competence-Competence.................................................................................................... 19 Separability........................................................................................................................... 19 Process of objecting jurisdiction......................................................................................... 19 Timing of objection............................................................................................................ 19 Rule on jurisdiction............................................................................................................ 20 Appealing tribunal’s decision............................................................................................ 20 Determination of Preliminary point of law........................................................................ 21 D – Constitution, Conduct, and Interim Measures.................................... 23 4. Constitution of tribunal................................................................................................... 23 4.1 Constitution of tribunal................................................................................................ 23 4.2 Challenging Arbitrators............................................................................................... 24 4.3 Arb-med (arbitrator acting as a conciliator)............................................................... 30 5. Conduct of Proceedings................................................................................................... 31 5.1 Freedom to agree on the procedure............................................................................ 31 5.2 Core procedural rights and duties............................................................................... 31 5.3 Default of a party (or non-participation).................................................................... 32 5.4 Obtaining Evidence...................................................................................................... 32 5.5 Confidentiality............................................................................................................. 33 5.6 Parties’ representation................................................................................................ 33 5.7 Termination of proceedings......................................................................................... 33 5.8 Typical procedural steps in a typical arbitration........................................................ 34 6. Interim Measures............................................................................................................. 37 6.1 Tribunal ordered interim measures............................................................................. 37 6.2 Court ordered interim measures.................................................................................. 39 6.3 Enforcement of Interim Measures................................................................................ 41 6.4 Anti-suit injunctions..................................................................................................... 41 E – Awards..................................................................................................... 43 1. Types of Remedies........................................................................................................... 43 1.1 Power to award remedies............................................................................................ 43 2. Costs.................................................................................................................................. 43 3. Definition of an Award.................................................................................................... 43 4. Types of awards............................................................................................................... 44 5. Content and Form............................................................................................................ 45 5.1 Content......................................................................................................................... 45 5.2 Scrutiny and Time limits for rendering awards........................................................... 45 5.3 Dissenting judgments................................................................................................... 46 6. Correction and Interpretation of Awards..................................................................... 46 6.1 Correction.................................................................................................................... 46 6.2 Interpretation............................................................................................................... 46 6.3 Additional award......................................................................................................... 46 6.4 Extension of Time......................................................................................................... 47 F – Setting aside............................................................................................. 48 1. Finality of Awards........................................................................................................... 48 2. Setting aside vs Resisting enforcement.......................................................................... 48 3. How to set aside?.............................................................................................................. 49 3.1 Grounds for setting aside............................................................................................. 49 3.2 Step 1 – Identify the grounds....................................................................................... 49 Step 2 – Is the setting aside application made in time?..................................................... 50 Step 3 – Court exercises discretion NOT to set aside the award....................................... 50 Step 4 – Consequences of challenging an award.............................................................. 50 3.3 Setting aside of foreign awards................................................................................... 50 G – Enforcement of awards.......................................................................... 53 1. Enforcement at the seat of arbitration........................................................................... 53 2. Enforcing foreign awards in NYC countries................................................................. 53 2.1 Application of NYC...................................................................................................... 53 2.2 Reservations................................................................................................................. 54 2.3 Obligation to recognise and enforce awards............................................................... 54 2.4 Procedure for Enforcement......................................................................................... 54 2.5 Bilateral and multilateral enforcement agreements.................................................... 55 3. Grounds for refusal of enforcement............................................................................... 55 3.1 Violation of due process / Breach of natural justice (Art V(1)(b)).............................. 56 3.2 Irregularity in procedure or composition of tribunal (Art V(1)(d))............................ 58 3.3 Award which has already been set aside..................................................................... 58 3.4 Public Policy (Art V(2)(b)).......................................................................................... 59 4. Adjournment of enforcement proceedings (while pending setting aside).................. 60 MEDIATION..................................................................................... 62 1 – Introduction to Mediation...................................................................... 62 1.1 What is Mediation?........................................................................................................ 62 1.2 Mediation and Other dispute resolution mechanisms................................................ 62 1.3 Mediation Institutions................................................................................................... 62 1.4 Roles of Advocate in Mediation.................................................................................... 63 1.5 Benefits of Mediation..................................................................................................... 63 1.6 Disadvantages of Mediation.......................................................................................... 63 1.7 Facilitative vs Evaluative Mediation............................................................................ 64 2 – Mediation Institutions............................................................................. 64 3 – Legal Framework.................................................................................... 65 3.1 Legal Source................................................................................................................... 65 3.2 Basis of Mediation.......................................................................................................... 65 3.2.1 By Agreement............................................................................................................ 65 Multi-tier Dispute Resolution Clauses/Agreements...................................................... 65 3.2.2 Statute or Sub-Legislation........................................................................................ 65 3.2.3 By Court’s / Authorised Body’s Directions.............................................................. 65 3.3 Mediation Act................................................................................................................. 66 Stay of Court proceedings (in favour of mediation) – section 8........................................ 66 Confidentiality – Section 9................................................................................................. 66 Without prejudice privilege............................................................................................... 66 Waiver............................................................................................................................ 66 4 – Settlement Agreement and Consent Order.......................................... 67 4.1 Mediation Settlement Agreement................................................................................. 67 Drafting.............................................................................................................................. 67 Normal Contractual Principles......................................................................................... 67 4.2 Consent Orders.............................................................................................................. 67 Requirements under MA.................................................................................................... 68 Grounds of Refusal............................................................................................................ 68 Exemptions to the Mediation Act....................................................................................... 69 4.3 Mediated Settlement Agreement in Family Law........................................................ 69 Section 12 MA not applicable............................................................................................ 70 4.4 Enforcement of Settlement Agreement........................................................................ 70 5 – Conduct of Lawyers: Ethics and Legal Concerns................................ 70 5.1 Rule 5 – Competence in Advising Client..................................................................... 70 5.2 Rule 6 – Confidentiality................................................................................................. 70 5.3 Rule 7: Courtesy and Fairness...................................................................................... 72 5.4 Rule 8A: Duty to be respectful, courteous and to act in good faith.......................... 72 5.5 Rule 5/17: Duty to advance and act in client’s best interests..................................... 72 5.6 Rule 17: Duty to evaluate the use of ADR processes.................................................. 72 5.7 Rule 22: Avoid Conflict of Interest.............................................................................. 72 5.8 SCPD 35B: Duty to advise on Mediation..................................................................... 72 5.9 Rule 15A PCR: Family Proceedings............................................................................ 72 6 – Conduct of Parties and Costs Consequences........................................ 72 6.1 Whether party has unreasonably refused ADR.......................................................... 72 7 – The 7 Elements of Effective Negotiations............................................. 73 8 – Roles and Duties of Advocate During Mediation................................. 73 ARBITRATION A – Applicable laws The applicable laws include: Arbitration rules Law of the seat (lex arbitri); curial law Law governing the substance of the dispute; governing law Law governing the arbitration agreement; goes toward validity of the agreement 1 – Legislative framework There are 2 statutes which are relevant: International Arbitration Act – where the arbitration agreement is international Arbitration Act – for domestic arbitrations Application of IAA. Where the parties are undergoing an international arbitration, or where the parties agree that it applies (s 5(1) IAA). Factors for an international arbitration. An arbitration is classified as international where: One of the parties has its place of business in any state other than in Singapore – s 5(2)(a) The place of arbitration, determined pursuant to the arbitration agreement, is outside the state in which the parties have their business – s 5(2)(b)(i) The place where a substantial part of the obligations of the commercial relationship is to be performed is situated outside the state in which the parties have their places of business – s 5(2)(b)(ii) The place where the subject-matter is most closely connected is situated outside the state in which the parties have their places of business – s 5(2)(b)(iii) The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country – s 5(2)(c) Adoption of the Model Law. The IAA enacts the Model Law, but contains additions and modifications. It must be noted that some new amendments to the Model Law have not yet been enacted under the IAA. Applies to ‘commercial’ matters. The term commercial is to be given a wide interpretation, so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. 2 – Relationship between applicable laws Requirement of a valid arbitration agreement. This represents the parties’ consent to arbitrate. Parties can also choose between adhoc or institutional arbitrations. Institutional. Parties choosing a specific institution will tend to adopt the Arbitration rules of said institution. Institutions are helpful in that they have model arbitration agreements. Adhoc. Parties tend to choose UNCITRAL Rules. Generally cheaper and faster, but lacks the ‘convenient’ elements of an institution. Choice of seat. As part of their choice, parties will also decide on the seat of arbitration. The seat is significant because it dictates the procedural law governing the conduct of the arbitration – lex arbitri. Singapore – IAA or AA London – English Arbitration Act Hong Kong – HK Arbitration Ordinance Arbitral Rules vs Lex Arbitri Choice of arbitral rules does not oust application of Model Law. See s 15(2) IAA, overruling John Holland. The arbitral rules will apply, to the extent that they are not inconsistent with the mandatory provisions of the IAA (Insigma Tech, s 15A(1) IAA). Mandatory provisions. ML does not classify which provisions are mandatory. However, some provisions can be said to be non-mandatory, where they use the phrase ‘unless otherwise agreed by the parties’ Determining inconsistency. An arbitral rule is not inconsistent with the ML where: (s 15A IAA) It provides for a matter on which the ML is silent It is silent on issues already covered by the ML It covers issues which the ML covers, but which the ML allow the parties to make their own arrangements by agreement, but which applies in the absence of such agreement 3 – Arbitration rules Parties may agree on a set of rules, institutional (ICC/SIAC) or adhoc (UNCITRAL). Parties are also free to formulate their own. Which version. The presumption is that the rules which are in force at the date of commencement of the arbitration proceedings will apply, and not those which were applicable on the date of contractual formation (Black and Veatch Singapore). 4 – Seat of Arbitration Failure to choose. Where the parties fail to specify a seat, the arbitral rules may dictate how the seat is to be determined. Some rules may specify a default seat in the absence of choice, or by conferring the tribunal with the authority to decide on the seat. No change, unless agreed. A seat cannot be changed unless the parties themselves agree to it. Seat is not venue. PT Garuda v Birgen Air New York Convention. One of the biggest benefits of arbitration is the ability to enforce the arbitral award at countries which are signatories to the NYC. Thus, it is crucial that parties choose a seat which adopted the NYC. NYC is recognised in Singapore’s IAA; Reciprocal enforcement. SG made a reservation under the NYC whereby it will apply the NYC only to awards made in another signatory state of the NYC. Quality of the judiciary. Parties must be cognizant that in the event of potential issues in the arbitral proceedings, parties will be consulting the courts in the seat jurisdiction. As such, the level of judicial interference and control must be considered, along with the quality of the court system. Issues like challenging jurisdiction, applying for stays and issues pertaining setting aside, are all dependent on the character of the seat’s judiciary. Neutral. Preferably neutral, but usually dependent on the parties. 5 – Governing law Parties are free to choose the rules of law applicable to the substance of the dispute (Art 28(1) ML). There are no restrictions, and parties can decide on any law regardless of whether such laws bare any connection to the parties or the dispute (Quarella SpA). No choice made. Without any indication as to the applicable governing law, the tribunal shall apply the law determined by the conflict of laws rules which it considers appropriate – i.e. Tribunal must decide on (i) conflict of laws rule to apply, before (ii) applying those rules to decide the appropriate governing law. Some commonly used conflict of laws rules include the conflict of laws rules of (i) the seat of arbitration; (ii) the place where the award is likely to be enforced; (iii) the jurisdiction that would have been competent but for the arbitration place; (iv) the place of contractual performance; (v) the jurisdiction with some element common to the parties; (vi) general principles of private international law; or (v) the law with the closest connection to the dispute, etc. Clash. While the ML requires the tribunal to first decide on a conflicts rule, the same is not the case under the SIAC Rules. R 31 empowers the tribunal to apply the law or rules of law which it deems appropriate, without mandating a conflict of laws methodology. o Inconsistency. It appears that the practical solution is to choose a conflict of law rule anyway. 6 – Law governing the arbitration agreement Purpose. Formation. The law determines whether the arbitration agreement has been formed validly, such that it is efficient in conferring authority and jurisdiction onto the arbitrator (Dallal v Bank Mellat). Scope. The law also determines whether the substance of the dispute lies within the scope of the arbitration agreement, and whatever qualifications that follow, as well as the constitution of the tribunal. These issues may arise prior to the commencement of the arbitration, like when one party seeks a stay of proceedings. It could also arise during a setting aside or when resisting enforcement, as grounds to challenge the entire arbitral proceedings. New. Previous arbitration agreements have not expressed a law. No choice made. Rebuttable presumption – governing law. The position is that there is a rebuttable presumption that parties have impliedly chosen the governing law of the main contract to also govern the arbitration agreement, given that it forms as part of the actual contract itself. Closest connection test. Absent any express or implied governing law, then the law with the closest and most real connection with the arbitration agreement will be applied. o Law of the seat. In general, the law with the closest and most real connection tends to be the law of the seat. 7 – Party’s capacity A party must have the capacity to enter into the arbitration agreement. This is dependent on the law of the party’s nationality – lex personam. Issues of incapacity may be raised before or during arbitration and may be submitted as a ground to set aside the award (Art 34(2)(a)(i) MAL), or to resist enforcement of an award (Art V(1)(a) NYC; Art 36(1)(a)(i) MAL; S 31(2)(a) IAA). A party’s legal capacity to contract is generally governed by the law of the party’s nationality (i.e. lex personam), even if a different law applies to the merits of the parties’ dispute. For a company, that will be the law of the place of incorporation or business. Alternatively, whether a party has validly entered into a contract may be determined by the law governing the contract B – Arbitration Agreement 1. Definition A clause, or a separate agreement. An arbitration agreement may be in the form of an arbitral clause within a contract, or as a separate agreement altogether (Art 7(1) ML, s 2A(2) IAA). 1.1 Written Requirement Must be in writing. An arbitration agreement must be in writing (Art 7(2) ML, s 2A(3) IAA). Written – recorded in any form, electronic suffices. An arbitration agreement is in writing if its content is recorded in any other form, whether or not the AA or contract has been concluded orally, by conduct or by other means (s 2A(4) IAA). It is satisfied by an electronic communication if the information is contained therein and is accessible so as to be usable for subsequent reference (s 2A(5) IAA). Where an AA is mentioned in pleadings, and is not denied in reply – deemed to be written. Where the assertion of an AA is made in a pleading, and the assertion calls for a reply, but is not denied but the opposing party, it would be deemed an effective arbitration notwithstanding its failure to strictly comply with the writing requirement (s 2A(6) IAA). 1.2 Incorporation by reference General principles. Incorporation by reference refers to a situation where parties have not included an arbitration agreement in their own contract, but included a reference to another document which contains the arbitration agreement. Common situations include the use of standard forms, or the incorporation of standard forms into a contract. Such reference constitutes incorporation, where it purports to incorporate the AA. The reference will serve to incorporate an arbitration agreement if it makes that clause part of the contract (s 2A (7) IAA, Art 7(2) ML). The relevant test is whether parties had intended to incorporate the AA (International Research), and this is a question of construction. Specific words of incorporation may express such an intention (Concordia), and express reference to such a clause is not necessary. Where the reference to another document is clearly to adopt all the terms of the document referred to, then incorporation includes the arbitration clause (Mancon v Heng). 2. Parties to the arbitration agreement 2.1 Non-signatories Doctrines to bind non-signatories. In general, an arbitration agreement can bind only those who have consented to it. However, there are various legal doctrines that may bind non-signatories to the AA, some of which are controversial in various jurisdictions. Implied consent – was the objective intention of the 3P to be bound. Under the doctrine of implied consent, negotiation or performance of obligations of a contract by a non-signatory can bind it to the agreement, including the arbitration cl. The relevant inquiry is whether the parties’ objective intention was for the non-signatory to be a party to the agreement and its arbitration clause. Agency – authority of the agent. A 3P can be bound to an arbitration agreement by agency principles – an agent who signs an agreement acting on behalf oof a principal binds the principal to the agreement. Relevant concepts under the law of agency include actual authority (express or implied), apparent authority and ratification. Assignment – where the contract is assigned. An assignment refers to the transfer of property or rights to another party. Where a contract containing an arbitration agreement is assigned, the 3P will ordinarily not have signed the contract or arbitration agreement per se, but nevertheless remains bound. Group of companies – SG law doubtful. Under certain limited conditions, the AA, although signed only by one or some of the companies of a group, is extended to apply to non-signatory companies of the same group (Dow Chemical). However, SG courts have express doubts over the applicability of such a doctrine under SG law (Manuchar Steel). Estoppel – by conduct (narrow). Under the doctrine of estoppel, a party is ‘barred by considerations of good faith and equity from acting inconsistently with its own statements or conduct’. A party is prevented from denying representations arising out of words or deeds on which another party has relied to its detriment. If C is a party to the AA, estopped from saying B (who is in exact same position as C) is not party. o The doctrine applies to prevent A from arguing that B, who is a party to the arbitration agreement, must commence a separate arbitration for B’s claims against A, in circumstances where (i) there is an ongoing arbitration commenced by C against A on the same facts as B’s claims, and (ii) on a proper interpretation of the relevant contract B is a party to the arbitration agreement (Jiang Haiying). Wider estoppel – not yet approved. The SG Courts have considered a wider approach of applying equitable estoppel to 3Ps endorsed in certain US Cases, but a conclusive position has not been taken (Parmod Kumar). 2.2 Joinder What? – where existing party seeks to add new 3rd party to proceeding and have that 3rd party bound by the outcome. ML, NYC and most AA silent on joinders. Institutional rules also silent. o Although the ML, the NYC, and most arbitration agreements are silent on the question of joinder, it is addressed in most institutional rules, which give arbitral tribunals the power to consider whether there is at least prima facie consent by 3P to be bound by the arbitration agreement. 2.3 Consolidation What? – fusing 2 arbitration proceedings into 1. Consolidation involves the fusion of two or more separate and independently existing arbitrations into one. ML, NYC silent, but provided for in most institutional rules. 3. Subject matter arbitrability What. It refers to whether the subject matter of a dispute is capable of determination by arbitration Effect. Where a dispute is held to be not arbitrable, an award on the dispute can be set aside (Art 34(2)(b)(i) ML), or the courts may refuse enforcement of the award (Art V(2)(a) NYC, s31(4)(a) IAA). See below grounds for setting aside or resisting enforcement. Singapore – public policy. For arbitrations seated in Singapore, any dispute which the parties have agreed to submit to arbitration under an arbitration agreement is arbitrable, unless it is contrary to public policy to do so (objective arbitrability) (s 11(1) IAA). Public policy includes foreign public policy. If it is not arbitrable under foreign law, the same applies in SG. Where arbitrable under governing law, but not arbitrable under Singapore law where Singapore is law of the seat, not allowed. “Public policy” in s11 IAA includes foreign public policy. Law governing Arbitration Agreement – pre-award stage. In determining the arbitrability of a dispute at the pre-award stage, the arbitrability of a dispute is determined by the law that governs the arbitration agreement. o If it is a foreign governing law and that law provides that the subject matter of the dispute cannot be arbitrated, the Singapore court will not allow the arbitration to proceed pursuant to s 11. o Second, where a dispute may be arbitrable under the law of the arbitration agreement but Singapore law as the law of the seat considers that dispute to be non- arbitrable, the arbitration would not be able to proceed. Subjective arbitrability. Subjective arbitrability concerns whether parties have agreed to arbitrate certain specific claims or issues. This involves interpreting the arbitration agreement, including phrases such as “in connection with” or “arising out of” the contract. In SG, AAs are construed widely such that all manner of clarims relating to contract (whether based on tort or contract, whether common law or statutory) should be regarded as falling within the AA’s scope unless there was a good reason to conclude otherwise (Larsen Oil). Objective arbitrability. This concerns matters which the law permits for parties to resolve by arbitration. A dispute is not arbitrable if it is contrary to public policy (s 11(1) IAA). While no specific subjects are non-arbitrable by way of statute in Singapore, it is generally accepted that issues which may have public interest elements may not be arbitrable; e.g.. citizenship, legitimacy of marriage, grants of statutory licences, validity of registration of trademarks or patents, copyrights, winding up of companies (Aloe Vera). 4. Pathological arbitration clauses What? An ambiguous Arbitration Agreement which contains defects that disrupt arbitration. A pathological clause is an ambiguous or unclear arbitration agreement which contains defects liable to disrupt the smooth progress of the arbitration. Invalidate AA, unless cured. A pathological clause will invalidate the AA if the defect is not curable. Generally, tribunals or courts rely on the principle of effective interpretation to salvage the AA by restoring the true intention of the parties. However, the defect may not be curable where it is “impossible to infer an intention which is sufficiently coherent and effective to enable the arbitration to function” (Insigma). Mere description as ‘pathological’ does not automatically invalidate the AA. A clause that is labelled as ‘pathological’ (merely as a description) does not automatically invalidate the clause. Rather, the substance of the clause will be considered (Insigma). Examples of pathological clauses. Incorrect naming of the arbitral institution, or naming a non-existent institution. Empowering one institution to administer arbitration using another institution’s rules Referring to an arbitral institution by its location rather than by name Failing to indicate clearly that the award will be final and binding Identifying a specific arbitrator who has died and thus, unable to act Drafting terms that are inherently contradictory to other terms in the arbitration agreement. 4.1 Naming The court will determine the parties’ true intention. Where the arbitral institution is incorrectly named, or a reference is made to a non-existent institution, the court may consider whether the dominant purpose of the agreement was to settle disputes via arbitration. If this is satisfied, the court may opt to direct arbitration before such tribunal as it determines to be the most appropriate in the circumstances (by interpreting and identifying the parties’ intentions) (Lucky Goldstar). Reference to non-existent institution does not render AA invalid. In Re Shanghai, the SGHC interpreted the arbitration clause which selected a non-existent institution (‘China International Arbitration Center’) as an arbitration agreement referring the dispute to an existing arbitration institution. The court was satisfied that this incorrect reference did not render the arbitration agreement invalid, regardless of whether the parties intended a different institution, or if it was impossible to identify the specific institution they wanted. The court construed the AA as an agreement to CIETAC arbitration. Bare arbitration clauses – no reference to place or methods of appointment. In KVC Rice, the AA provided for “… arbitration as per Singapore Contract Rule” and “… arbitration as per Indian Contract Rules”. The SGHC held that the enforcement of such bare arbitration clauses would give rise to practical difficulties over how the tribunal would be appointed. o Nevertheless, the court upheld the arbitration clauses by finding that the statutory appointing authority in the SG IAA, namely the President of the SIAC, has the power under Art 11(3) ML to appoint a tribunal even in cases where the place of arbitration is unclear or not yet determined. o s 8(2) IAA; Appointing Authority. (2) The president of the Court of Arbitration of the Singapore International Arbitration Centre is to be taken to have been specified as the authority competent to perform the functions under Article 11(3) and (4) of the Model Law. 4.2 Institution A, with Institution B’s rules General – depends on whether Institution A is able to administer arbitrations with other institution’s rules. Generally, there is no issue in providing for hybrid arbitration where one institution administers another institution’s rules. However, the administering institutions must be able to arrange for organs to carry out functions similar to those performed by the other arbitration institution (Insigma). Unclear whether applicable in other jurisdictions. It is good practice to avoid using hybrid arbitration clauses. Even if the clause may be upheld in SG, any consequent award that is to be enforced somewhere else may run into issues. Art V – grounds for resisting enforcement SIAC able to administer arbitration using ICC rules. In Insigma, the court held that the arbitration could proceed. SIAC had indicated in a letter to the tribunal the various bodies and officers within its institution that were capable of performing the roles of the functionaries described under the ICC rules. HKL Group v Rizq. In this case, the AA provided for an arbitration by the ‘Arbitration Committee of Singapore’ under the rules of ‘The International Chamber of Commerce’. While there is no such entity, the SGHC held that the AA remained valid. However, the court imposed a condition that parties obtain the agreement of an arbitral institution in Singapore to conduct the hybrid arbitration applying the ICC rules. NB: ICC Rules provide that the ICC is the only body that is authorised to administer arbitrations. It appears that the court did not place any weight on this point. 5. Drafting Arbitration clauses Try to stick to model clauses. Typically, parties should stick to the model clauses promulgated by the different arbitral institutions. If free drafting, essential elements include: Certainty regarding the identity of the parties. Certainty that the parties have agreed to submit their disputes exclusively to arbitration. Certainty as to the subject matter or scope of arbitrable disputes. Certainty of the seat of arbitration. Certainty as to the arbitral institution administering the arbitration, if any. Certainty as to number of arbitrators—avoid having a panel of two arbitrators. Stipulate the language of proceedings. Stipulate the governing law of the arbitration agreement. Stipulate to what extent parties agree to go for expedited arbitration (which is a feature available under certain institutional rules). Obligation to arbitrate must be clear. AA should provide that all disputes shall or will be referred to arbitration. Avoid ‘optional’ arbitration clauses. The drafting of optional arbitration clauses should be avoided. “may” arbitrate – unclear. If an arbitration agreement provides that a dispute “may” be referred to arbitration, whether there is a clear obligation to arbitrate is arguable. Some jurisdictions have equated the term “may” to “shall’’ such that arbitration clauses which state that parties “may refer to arbitration” have been interpreted to mean that parties are obliged to do so (China State Construction). “can” arbitrate – HK courts. In Guangdong Agriculture, the HK High Court upheld a clause stating that all disputes SHALL be settled by amicable negotiations, and where no settlement can be reach, the case CAN then be submitted to arbitration. It found construed as a whole, the parties agreed to settle any dispute by arbitration. 6. Stay of court proceedings Party can apply to stay if dispute goes to court instead of arbitration. Where a party to the arbitration agreement initiates proceedings in court in breach of the AA, the other party may apply to the court to stay proceedings and refer the parties to arbitration (Art II (3) NYC, Art 8(1) ML, s 6(1) IAA). Application must be done before submission of first statement. The stay application must be made no later than the submission of the first statement on the substance of the dispute (Art 8(1) ML). This may be done at any time after the appearance and before delivering any pleading or taking any other step in the proceeding (s 6(1) IAA). Pending stay application, arbitration can proceed. When an application to stay proceedings is made in court, the arbitral proceedings may nonetheless continue (or commence), and an award can be made (Art 8(2) ML).. Mandatory stay – international arbitration. Under the IAA, the court shall stay the proceedings unless it finds that the AA is: (Art II(3) NYC, Art 8(1) ML, s 6(2) IAA) Null and void; Inoperative; or Incapable of being performed. Domestic Arbitration (sg AA). A court can refuse stay if: (s 6(2) AA, CSY v CSZ) Sufficient reason. Sufficient reason not to refer to arbitration, or Unwilling. the applicant is unwilling to conduct arbitration. {Not mandatory} In a domestic arbitration, the court retains discretion to refuse a stay application. It may do so where there is sufficient reason why the matter should not be referred to arbitration, or if the applicant seeking a stay was not ready and willing to do all thing necessary for the proper conduct of the arbitration. To establish ‘sufficient reason’, the court looks at a range of factors. “Sufficient reason” captures a broad range of factors (Fasi Paul Frank). The factors will be weighed against the fact that the parties had voluntarily bound themselves to arbitrate, and ought to be held to their agreement (Sim Chay Koon). Factors include: (a) the existence of related actions and disputes, some of which are governed by an arbitration agreement and others which are not; (b) the overlap between the issues in dispute such that there is a real prospect of inconsistent findings; (c) the likely shape of the process for the resolution of the entire dispute; (d) the likelihood of injustice in having the same witnesses deal with the same factual issues before two different fora; (e) the likelihood of disrepute to the administration of justice ensuing from the fact that overlapping issues may be differently determined in different actions; (f) the relative prejudice to the parties; and (g) the possibility of an abuse of process. No dispute between parties, or no binding AA. Some courts may refuse to grant a stay if, on a balance of probabilities, there is no dispute or valid and binding arbitration agreement between the parties. Prima facie review of AA/dispute. In Singapore, the courts will only conduct a prima facie examination of whether they exist. A mere denial of liability or of the quantum claimed, even in circumstances where no defence exists, will be sufficient to find a dispute for the purpose of s 6 IAA (or Art 8 MAL) (Dalian Hualiang). However, no dispute will exist if there has been a clear and unequivocal admission of liability and quantum. Attaching conditions. The court can order a stay of proceedings under such terms and conditions that it thinks fit (s 6(2) IAA). The court can impose any interim or supplementary orders as it thinks fit (s 6(3) IAA). Nonetheless, despite an unfettered discretion, the court will generally be slow to interfere in the arbitration process (The Duden). Prima facie, and not Balance of Probabilities. When considering a stay, the court must remain cognizant that it should not consider the merits of the case. As such, the court will only engage in a prima facie review on whether the arbitral tribunal ought to have jurisdiction; this is ultimately an issue that is for the Tribunal to decide. Tomolugen test. Ultimately, the court will grant a stay where the applicant shows, on a prima facie basis, that: (by applying the law of the arbitration agreement) o There is a valid Arbitration Agreement between the parties; o The dispute in the court proceedings falls within the scope of the AA; o The AA is not § Null and void § Inoperative § Incapable of being performed. Refusal of stay only in the clearest of circumstances. The court will only reach a definitive ruling to refuse a stay where it is clear that the dispute falls outside the terms of the arbitration or that a party is not truly a party to the AA., or that the application is out of time (Dalian Hualiang). Facts unclear. Where it is arguable that the dispute falls within the terms of the AA, or that a party is privy to the AA, a stay should be granted so that the matters can be properly dealt with by the Tribunal (Dalian Hualiang). Supervisory jurisdiction. Ultimately, the court still retains supervisory jurisdiction over the issues dealt with by the arbitral tribunal. Appealing tribunal’s jurisdictional ruling. An appeal under s 10(3) IAA is still possible should an aggrieved party want to challenge a tribunal’s ruling on jurisdiction. o Time bar. However, note that: § Bifurcation. This provision only applies in relation to bifurcated proceedings, where the tribunal decides on jurisdiction as a preliminary question. § Time bar. The aggrieved party must apply for appeal within 30 days after having notice of the tribunal’s ruling. It is advisable for a party to do so immediately upon the tribunal’s decision. § Cannot rely again during setting aside. This is because the court has expressed sentiments that a failure to make a quick application to challenge jurisdiction may prevent the party from setting aside the award by relying on the same grounds at a later stage (PT First Media). Even if he fails to do so, (subject to any waiver) it bears noting that the award debtor always retains its rights to resist enforcement on these grounds (PT First Media). Setting aside of award. The aggrieved party may alternatively set aside the award (Art 34 ML, s 24 IAA). o Bifurcated proceedings. However, in relation to jurisdiction, if the proceedings have been bifurcated, and the aggrieved party fails to raise jurisdictional appeal under s 10(3), it is likely that the court will not aid him for failing to use an active remedy. It has been held in obiter that if the aggrieved party does not make an application under s 10(3) IAA, that party loses the right to make a setting aside challenge on any eventual award subsequently on the same jurisdictional objection (PT First Media). Even if he fails to do so, (subject to any waiver) it bears noting that the award debtor always retains its rights to resist enforcement on these grounds (PT First Media). Appealing Court’s decision. (s 10(3) IAA). An appeal from the decision of the SGHC can be made to the SGCA only with the leave of the appellate court (s 10(4) IAA). There is no appeal if the appellate court refuses to grant leave to appeal (s 10(5) IAA). When reviewing tribunal’s jurisdictional ruling, Court can consider issue afresh unhindered by tribunal’s decision – de novo. Whenever a court at the seat of arbitration reviews an arbitral tribunal’s decision on jurisdiction (whether under s 10(3) IAA or at the setting aside stage), the court is not bound by the tribunal’s decision. The court’s jurisdiction to decide the jurisdiction of an arbitral tribunal is an original jurisdiction and not an appellate one (s 16(3) MAL, Insigma). Evidence. To what extent can parties adduce further evidence before the Courts when seeking curial review of a tribunal’s decision on jurisdiction? There is no definitive guidance from the Singapore courts yet, with AQZ v ARA suggesting a less restrictive approach, compared to Laos v Sanum SGHC 15 applying a stricter approach. Refusal of enforcement. C – Jurisdiction of arbitral tribunal The tribunal’s jurisdiction is derived from the agreement to arbitrate. It represents the parties’ consent. However, such consent can be challenged, and objections to a tribunal’s jurisdiction can be absolute (no capacity at all) or partial (issues fall outside the scope of the clause). Challenging jurisdiction. There are a number of ways for a party to challenge the jurisdiction of the tribunal. (a) Raising direct jurisdictional objections. Parties can challenge jurisdiction as part of the actual proceedings of the arbitration. This means that the party raises such objection to the tribunal, who has the competence to decide on their own jurisdiction. o A tribunal’s decision on its jurisdiction can be reviewed. § Bifurcated proceedings. Under s 10(3) IAA, a party can apply to the court to review the tribunal’s decision. It is advisable for a party to do so immediately upon the tribunal’s decision. This is because the court has expressed sentiments that a failure to make a quick application to challenge jurisdiction may prevent the party from setting aside the award by relying on the same grounds at a later stage (PT First Media). Even if he fails to do so, it bears noting that the party may still resist enforcement on these grounds (PT First Media). § Non-bifurcated; i.e. the issue of jurisdiction is merged with the merits of the case, and a single award is given. In this scenario, the objecting party can look to set aside the award by relying on Art 34 ML read with s 24 of the IAA. The option to resist enforcement is also viable. (b) Refusing to participate in the arbitration. Generally, the arbitrators will make judgment in favour of the other side. Then, the objecting party can (i) set it aside or (ii) resist enforcement. However, he runs the risk that if his application (to either set aside or resist enforcement) fails, the award is binding. Prof argues that the client would be on the backfoot fighting against an award that has already been given. o Boycotting the arbitration when Tribunal decides it has jurisdiction. This is similar, and also risky. However, one key difference is that the party participated half-way and the abandoned the proceedings because the jurisdictional ruling was not in their favour. o Prof argues that the boycotting party must be treated differently. While cases like Rakna and PT First Media appears to suggest that their rights are not affected (i.e. identical to a non-participating party), this should not be the case. A clear right of appeal under s 10(3) IAA is available, and they should be treated the same as parties who failed to use an ‘active remedy’ (see above). Setting aside should thus be unavailable. (c) Bifurcating the proceedings. This is more of a suggestion – should the objecting party disagree on jurisdiction; it is advisable for the parties to request a bifurcation. In this way, the jurisdictional challenge can be brought to the courts first prior to any merits being decided. o See above on specific issues in relation to “Jurisdictional Challenges” in a bifurcated vs non-bifurcated arbitration. (d) Commencing litigation. The objecting party may opt to ignore the arbitration agreement entirely and commence litigation. However, it is likely that the other party will then apply for a stay. The other party may then accept the court’s jurisdiction (possibly because it enters a defence) and this amounts to a waiver of the arbitration agreement. Competence-Competence Competence-competence. A tribunal bears the power to rule on its own jurisdiction (Art 16 ML). Note, that if the arbitration agreement is invalid, then it follows that the tribunal does not have jurisdiction. Separability Separability. Although part of the main contract, an arbitration agreement is treated as separate and independent of the terms of the other contract (Art 16). As such, its validity does not depend on the validity of the other terms. Invalid. Accordingly, a tribunal may hold that the contract is invalid, but, retain its jurisdiction to decide on such matters given the separate nature of the arbitration agreement – the source of the tribunal’s jurisdiction (Ferris v Plaister). o For the arbitration agreement to be rendered invalid, the law that specifically applies to it will be considered. Process of objecting jurisdiction Timing of objection The objecting party must challenge jurisdiction no later than the submission of the statement of defence (Art 16(2) ML). It does not matter that the party had appointed any of the arbitrators. Failure. The objecting party shall be deemed to have waive his right to object (Art 4). Where a party has knowledge of the circumstances and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or within the time limit provided, he shall be deemed to have waived his right to object Obtaining interim relief. However, a party who seeks temporary injunctive relief or interim measures does not waive the arbitration agreement (Art 9 ML). Non-signatories. If participate in arbitration and never object to jurisdiction – waive right to challenge. Where a non-signatory participates in the arbitration and fails to object to a tribunal’s jurisdiction within the time limit specified, its silence may amount to entering into an arbitration agreement (Art 7(2) MAL; s 2A(6) IAA). There shall be deemed to be an effective arbitration agreement where a party asserts the existence of an arbitration agreement in a pleading and the assertion is not denied. Rule on jurisdiction 2 types – (i) preliminary question, (ii) award on the merits. The arbitral tribunal may rule on a jurisdictional objection either as a preliminary question (thus bifurcating the proceedings) or in an award on the merits (Art 16(3) MAL; s 10(3) IAA). Advantage of deciding separately – can be long and expensive to argue merits then later find actually no jurisdiction. The advantage of deciding jurisdiction separately from the merits is that it potentially avoids long and costly proceeding on the merits when it is uncertain whether the arbitral tribunal possesses jurisdiction. Appealing tribunal’s decision Immediate review under Art 16(3). If the tribunal rules on jurisdiction as a preliminary question (i.e. bifurcated), then any party may apply to the court at the seat within 30 days to appeal (s 10(3) IAA). Pending the court’s determination, the tribunal may continue with the proceedings and even make an award. SG IAA. The IAA is slightly different, in that the party’s application for the SGHC’s determination can be appealed to the SGCA (s 10(3), (4) IAA). Original jurisdiction. The curial court bears origin jurisdiction, and this is implied from the wording of Art 16(3) ML which provides for the court to ‘decide the matter’ (Insigma Tech). The court is at liberty to consider the material before it, unfettered by any principle limiting its fact-finding abilities (AQZ v ARA 2 SLR 972 at ). Setting aside/enforcement. A preliminary jurisdictional determination is not liable to be set aside, because it is not an award. However, an award on the merits may be set aside. But award on merits can be set aside on ground tribunal lack jurisdiction. However, an award on the merits may be set aside (or resisted when enforced) on the ground that the tribunal lacked jurisdiction (Art 34(2) MAL; Art V NYC). See above. Bifurcated vs non-bifurcated. Negative jurisdictional decisions – court cannot second guess. ML does not provide for recourse against a tribunal’s decision that it lacks jurisdiction – the court is not to second guess such a determination. Further, because it is not an arbitral award, there is no grounds for setting aside as well (PT Asurani). When reviewing tribunal’s jurisdictional ruling, Court can consider issue afresh unhindered by tribunal’s decision. Whenever a court at the seat of arbitration reviews an arbitral tribunal’s decision on jurisdiction (whether under s 10(3) IAA or at the setting aside stage), the court is not bound by the tribunal’s decision. The court’s jurisdiction to decide the jurisdiction of an arbitral tribunal is an original jurisdiction and not an appellate one (s 16(3) MAL, Insigma). NOTE: SG IAA CHANGES THIS POSITION. IAA slightly modifies the MAL’s mechanism of curial review under Art 16(3). In Singapore, if the tribunal makes a ruling on jurisdiction as a preliminary issue, then regardless of whether the arbitral tribunal makes a positive or negative jurisdictional ruling, any party may, within 30 days after receiving notice of that ruling, apply to the SGHC to decide the matter (s 10(3) IAA). An appeal from the decision of the SGHC can be made to the SGCA only with the leave of the SGHC (s 10(4) IAA). There is no appeal if the SGHC refuses to grant leave to appeal (s 10(5) IAA). Scope of review by the court. Whenever a court at the seat of arbitration (typically called the curial court) reviews an arbitral tribunal’s decision on jurisdiction (whether under s 10(3) IAA or at the setting aside stage), the court decides the issue de novo and it is not bound by the tribunal’s decision. The court’s jurisdiction to decide the jurisdiction of an arbitral tribunal is an original jurisdiction and not an appellate one. This is implied from the wording of Art 16(3) MAL which provides for the court to “decide the matter” (Insigma Technology v Alstom Technology SGHC 134 at ; PT First Media v Astro Nusantara SGCA 57). The court is at liberty to consider the material before it, unfettered by any principle limiting its fact-finding abilities (AQZ v ARA 2 SLR 972 at ). Evidence. To what extent can parties adduce further evidence before the Courts when seeking curial review of a tribunal’s decision on jurisdiction? There is no definitive guidance from the Singapore courts yet, with AQZ v ARA suggesting a less restrictive approach, compared to Laos v Sanum SGHC 15 applying a stricter approach. Determination of Preliminary point of law Only for domestic arbitration. Parties may apply to court to determine a point of law. Determination of preliminary point of law Parties can apply to court to determine a point of law while pending proceedings. Parties need either (i) agreement between them or (ii) permission of the tribunal, where there is savings in cost and no delay. 45.— (1) Unless otherwise agreed by the parties, the Court may, on the application of a party to the arbitral proceedings who has given notice to the other parties, determine any question of law arising in the course of the proceedings which the Court is satisfied substantially affects the rights of one or more of the parties (2) The Court is not to consider an application under this section unless — (a) it is made with the agreement of all parties to the proceedings; or (b) it is made with the permission of the arbitral tribunal and the Court is satisfied that — i. the determination of the question is likely to produce substantial savings in costs; and ii. the application is made without delay. (3) The application must identify the question of law to be determined and, except where made with the agreement of all parties to the proceedings, must state the grounds on which it is said that the question should be decided by the Court. (4) Unless otherwise agreed by the parties, the arbitral tribunal may continue the arbitral proceedings and make an award while an application to the Court under this section is pending. (5) Except with the permission of the appellate court, no appeal shall lie from a decision of the Court on whether the conditions in subsection (2) are met. (6) The decision of the Court on a question of law is a judgment of the Court for the purposes of an appeal to the appellate court. (7) The appellate court may give permission to appeal against the decision of the Court in subsection (6) only if the question of law before it is one of general importance, or is one which for some other special reason should be considered by the appellate court. Appeal against award Aggrieved party can go to court to appeal decision on a question of law. Parties must agree, or must get court permission (see requirements). 49.— (1) A party to arbitral proceedings may (upon notice to the other parties and to the arbitral tribunal) appeal to the Court on a question of law arising out of an award made in the proceedings. [12/2012] (2) Despite subsection (1), the parties may agree to exclude the jurisdiction of the Court under this section and an agreement to dispense with reasons for the arbitral tribunal’s award is to be treated as an agreement to exclude the jurisdiction of the Court under this section. (3) An appeal must not be brought under this section except — (a) with the agreement of all the other parties to the proceedings; or (b) with the permission of the Court. (4) The right to appeal under this section is subject to the restrictions in section 50. (5) Permission to appeal is to be given only if the Court is satisfied that — (a) the determination of the question will substantially affect the rights of one or more of the parties; (b) the question is one which the arbitral tribunal was asked to determine; (c) on the basis of the findings of fact in the award — i. the decision of the arbitral tribunal on the question is obviously wrong; or ii. the question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt; and (d) despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the Court to determine the question. (6) An application for permission to appeal under this section must identify the question of law to be determined and state the grounds on which it is alleged that permission to appeal should be granted. (7) The permission of the appellate court is required for any appeal from a decision of the Court under this section to grant or refuse permission to appeal. (8) On an appeal under this section, the Court may by order — (a) confirm the award; (b) vary the award; (c) remit the award to the arbitral tribunal, in whole or in part, for reconsideration in the light of the Court’s determination; or (d) set aside the award in whole or in part. (9) The Court is not to exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the arbitral tribunal for reconsideration. (10) The decision of the Court on an appeal under this section is to be treated as a judgment of the Court for the purposes of an appeal to the appellate court. (11) The appellate court may give permission to appeal against the decision of the Court in subsection (10) only if the question of law before it is one of general importance, or one which for some other special reason should be considered by the appellate court. D – Constitution, Conduct, and Interim Measures 4. Constitution of tribunal 4.1 Constitution of tribunal 4.1.1 Number of Arbitrators Parties free to determine number of arbitrators. Parties are free to determine the number of arbitrators (Art 10(1) MAL). If the number of arbitrators is not determined by the parties: - Default 3 The default number is three (Art 10(2) MAL) - Single arbitrator for IAA Notwithstanding Art 10(2) MAL, there shall be a single arbitrator (ss9 IAA). 4.1.2 Procedure of Appointment Free to agree on procedure, usually provided by institutional rules. Parties are free to agree on a procedure of appointing the arbitrator(s) (Art 11(2) MAL). This is a matter usually addressed by institutional rules. If no agreement. Failing such agreement: In an arbitration with 3 arbitrators: o Each party shall appoint one arbitrator, and the parties shall by agreement appoint the third arbitrator (s 9A(1) IAA). If the parties fail to agree on the appointment of the third arbitrator within 30 days of the receipt of the request to do so, the appointment shall be made by the appointing authority (s 9A(2) IAA). In an arbitration with a sole arbitrator: o If the parties are unable to agree on the arbitrator, he shall be appointed by the relevant authority specified in Art 6 (Art 11(3)(b) MAL) Appointing authority: In Singapore, the High Court is the competent court while the President of the SIAC Court has been designated as the authority competent to perform the functions under Art 11(3) and (4) of the MAL (s 8(1), (2) IAA). 4.2 Challenging Arbitrators Steps: Step 1: What is the ground for challenge? (see directly below) ➔ Test of ‘reasonable suspicion ➔ Look at the IBA Guidelines on Conflicts of Interest in International Arbitration Step 2: What is the challenge procedure under the institutional rules or lex arbitri (see 4.2.4)? 4.2.1 Grounds for Challenge An arbitrator has an ongoing duty to disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence (Art 12(1) MAL). An arbitrator may be challenged if circumstance exist that give rise to “justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties” (Art 12(2) MAL). However, a party may challenge an arbitrator nominated by him only for reasons of which he becomes aware after the appointment was made (Art 12(2) MAL). 4.2.2 Test for impartiality and independence In Singapore, the applicable test is one of “reasonable suspicion”. The concern is not whether there is a real likelihood or possibility of bias, but simply whether a reasonable man without any inside knowledge might conclude that there was an appearance of it (Re Shankar Alan SGHC 194 at , ). A ground which may give rise to impartiality are instances where an arbitrator has private contact with one party or appears to have some personal correspondence from that party. While that there is no absolute rule against an arbitrator corresponding directly with the parties, this should only be done in very exceptional circumstances (Turner (East Asia) v Builders Federal (Hong Kong) SGHC 47 at ). Test for Art 12(2) Model Law is an objective one, and the court is to find circumstances that exist which give rise to justifiable doubts. Once such doubts have been found, the applicant need not prove the existence of actual bias (PT Central Investindo v Francisus Wongso and ors and anor matter SGHC 190). Actual bias is one of the three forms of bias considered by the Singapore courts – (i) actual bias, (ii) imputed bias, or (iii) apparent bias. Findings of an actual bias will obviously disqualify a person from sitting in judgment. The second form of bias is imputed bias which arises where a judge or arbitrator may be said to be acting in his own cause (nemo judex in sua causa) and this happens if he has, for instance, a pecuniary or proprietary interest in the case. In such a case, disqualification is certain without the need to investigate whether there is a likelihood or even suspicion of bias. The third form of bias is apparent bias, with the test to be applied being the “reasonable suspicion test”, i.e. whether a reasonable and fair- minded person with knowledge of all relevant facts would entertain a reasonable suspicion that the circumstances leading to the arbitral award might result in the arbitral proceedings being affected by apparent bias if the arbitrator was not removed (PT Central Investindo, at ). In BYL and ors v BYN SGHC(I) 6 (“BYL v BYN”), the Singapore Court analogised the test to be applied in order to determine apparent bias in arbitrators to that applied in court proceedings, namely a test of reasonable suspicion. This involves an assessment of whether there are circumstances which would give rise to a reasonable suspicion or apprehension in a fair-minded reasonable person with knowledge of the relevant facts that the tribunal may be biased and that a fair hearing may not be possible as a result. The test applies to applications to remove an arbitrator for bias under Art 13(3) of the Model Law and applications to set aside an arbitral award for apparent bias under section 24(b) of the IAA and Art 34(2) of the Model Law (BYL v BYN, at ). The reasonable suspicion test is applied objectively. The hypothetical reasonable observer is presumed to be a lay-person who is (1) informed of the relevant facts and able to consider them in their proper context, (2) not wholly uninformed and uninstructed about the law in general or the issues to be determined in the proceedings, (3) aware of the traditions of integrity and impartiality that persons who exercise adjudicative functions generally have to uphold, and (4) fair-minded in the sense of being neither complacent nor unduly sensitive or suspicious. A reasonable suspicion or apprehension arises when the hypothetical reasonable observer would think, from the relevant circumstances, that bias is possible. The belief should not be fanciful and must be capable of articulation by reference to the available evidence. A standard of possibility (as opposed to probability) is adopted to ensure that from the public perspective the administration of justice is beyond reproach (BYL v BYN, at ). 4.2.3 IBA Guidelines on Conflicts of Interest in 2014 While they are (typically) not binding and do not have the force of law, the IBA Guidelines on Conflicts of Interest in International Arbitration (2014) are widely referred to by parties, arbitrators, and courts. The IBA Guidelines contain certain “coloured lists” as follows. Non-waivable red list includes situations deriving from the overriding principle that no person can be his or her own judge. Acceptance of such a situation cannot cure the conflict. 1.1 The arbitrator is a legal representative or employee of an entity that is a party in the arbitration 1.2 The arbitrator is a manager, director or member of the supervisory board, or has a controlling influence on one of the parties or an entity that has a direct economic interest in the award to be rendered in the arbitration 1.3 The arbitrator has a significant financial or personal interest in one of the parties, or the outcome of the case. 1.4 The arbitrator or his or her firm regularly advises the party, or an affiliate of the party, and the arbitrator or his or her firm derives significant financial income therefrom. Waivable red list covers situations that are serious but not as severe. These situations are considered waivable, but only if and when the parties, being aware of the conflict-of- interest situation, expressly state their willingness to have such a person act as arbitrator. Relationship of arbitrator to the dispute. o 2.1.1. Where the arbitrator has given legal advice or provided an expert opinion, on the dispute to a party or an affiliate. o 2.1.2. Arbitrator had a prior involvement in the dispute. Arbitrator’s direct or indirect interest in the dispute o 2.2.1 The arbitrator holds shares, either directly or indirectly, in one of the parties, or an affiliate of one of the parties, this party or an affiliate being privately held. o 2.2.2 A close family member of the arbitrator has a significant financial interest in the outcome of the dispute. Arbitrator’s relationship with the parties or counsel. o 2.3.1 The arbitrator currently represents or advises one of the parties, or an affiliate of one of the parties. o 2.3.3 The arbitrator is a lawyer in the same law firm as the counsel to one of the parties. o 2.3.6 The arbitrator’s law firm currently has a significant commercial relationship with one of the parties, or an affiliate of one of the parties. o 2.3.9. A close family member of the arbitrator has a significant financial or personal interest in one of the parties, or an affiliate of one of the parties. Orange list: The arbitrator has a duty to disclose in such situations. The parties are deemed to have accepted the arbitrator, if, after disclosure, no timely objection is made Previous services for one of the parties or other involvement in the case o 3.1.1 The arbitrator, has, within the past 3 years, served as counsel for one of the parties, or an affiliate of one of the parties, or has previously advised or been consulted by the party… but the arbitrator and the party… have no ongoing relationship. o 3.1.2 The arbitrator has, within the past 3 years, served as a counsel against one of the parties… Current services for one of the parties o 3.2.1 The arbitrator’s law firm is currently rendering services to one of the parties, or to an affiliate of one of the parties, without creating a significant commercial relationship for the law firm and without the involvement of the arbitrator. Relationship between an arbitrator and another arbitrator or counsel o 3.3.1 The arbitrator and another arbitrator are lawyers in the same law firm. o 3.3.2 The arbitrator and another arbitrator, or the counsel for one of the parties, are members of the same barristers’ chambers. o 3.3.3 The arbitrator was, within the past 3 years, a partner of, or otherwise affiliated with another arbitrator or any counsel in the arbitration. o 3.3.5 A close family member of the arbitrator is a partner or employee of the law firm representing one of the parties, but is not assisting with the dispute. o 3.3.6 A close personal friendship exists between an arbitrator and a counsel of a party. o 3.37 Enmity exists between an arbitrator and counsel appearing in the arbitration. Other circumstances o 3.5.1 The arbitrator holds shares, either directly or indirectly, that by reason of number or denomination constitute a material holding in one of the parties. o 3.5.2 the arbitrator has publicly advocated a position on the case, whether in a published paper, or speech, or otherwise. Green list: a non-exhaustive list of specific situations where no appearance and no actual conflict of interest exists from an objective point of view. The arbitrator has no duty to disclose situations falling within the green list. Previously expressed legal opinions. o 4.1.1 The arbitrator has previously expressed a legal opinion concerning an issue that also arises in the arbitration (but the opinion is not focused on the case). Current services for one of the parties. o 4.2.1 A firm, in association or in alliance with the arbitrator’s law firm, but that does not share significant fees or other revenues with the arbitrator’s law firm, renders services to one of the parties. Contacts with another arbitrator, or with counsel for one of the parties. o 4.3.1 The arbitrator has a relationship with another arbitrator, or with the counsel for one of the parties, through membership in the same professional association, or social or charitable organisation, or through a social media network. o 4.3.2 The arbitrator and counsel for one of the parties have previously served together as arbitrators. o 4.3.3 Arbitrator teaches in the same faculty or school as another arbitrator, etc. o 4.3.4 arbitrator participated in seminars or working parties of a professional organisation with another arbitrator or counsel to the parties. Contacts between the arbitrator and one of the parties. o 4.4.1 The arbitrator has had an initial contact with a party, or their counsel prior to appointment, if the contact is limited to the arbitrator’s availability and qualifications to serve, or to the names of possible candidates for a chairperson, and did not address the merits or procedural aspects of the dispute, other than to provide the arbitrator with a basic understanding of the case. o 4.4.2 The arbitrator holds an insignificant amount of shares in one of the parties, or an affiliate of one of the parties, which is publicly listed. o 4.4.4 The arbitrator has a relationship with one of the parties or its affiliates through a social media network. 4.2.4 Challenges Procedure 3 possible scenarios once a challenge is filed: Arbitrator does not resign and opposing party contests the challenge. In this case, a decision on the merits of the challenge will have to be taken. Opposing party agrees to the challenge. The arbitrator’s mandate ordinarily terminates, although an arbitrator may purport to remain on the panel despite all parties agreeing to remove him. Arbitrator resigns. However, tendering a resignation after being challenged should not be seen as an admission that the challenge was justified. This is an area that is addressed in most institutional rules. The MAL which applies where parties have not agreed to any relevant rules provides as follows: Parties are free to agree on a procedure for challenging an arbitrator (Art 13(1) MAL). If there is no agreement, a party who intends to challenge an arbitrator shall submit a written statement of reasons for challenge to the arbitral tribunal within 15 days after becoming aware of the circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality or independence. Unless the challenged arbitrator withdraws or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge (Art 13(2) MAL). If the challenge is unsuccessful, the challenging party may, within 30 days, request the court to decide on the challenge, which decision shall be subject to no appeal. While such a request is pending, the tribunal may continue proceedings and make an award (Art 13(3) MAL). 4.2.5 Failure or impossible to act If an arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay, his mandate terminates if he withdraws from office or if parties agree on the termination (Art 14(1) MAL). Otherwise, any party can request the court to decide on the termination of the mandate, which decision shall be subject to no appeal (Art 14(1) MAL). Withdrawal by the arbitrator or agreement by the parties to terminate the arbitration does not imply acceptance of the validity of any ground for removal (Art14 (2) MAL). The mechanism in Art 14 MAL is different from Art 13 MAL (which deals with challenges as to independence and impartiality) because it provides a direct recourse to the court and is not time limited. Where the mandate of an arbitrator terminates or because of his withdrawal from office, a substitute arbitrator is appointed according to the rules that were applicable to the appointment of the arbitrator being replaced (Art 15 MAL). 4.2.6 Setting aside or resisting enforcement of award on ground that arbitrator was not impartial A party may attempt to set aside an award on the grounds that the arbitrator was not independent under Art 34(2)(a)(iv) MAL [composition of arbitral tribunal or arbitral procedure not in accordance with agreement of parties] or under s 24(b) IAA [breach of rules of natural justice where rights of party prejudiced]. An application for setting aside may not be made after 3 months of receiving the award (Art 34(3) MAL). However, if the party fails to challenge the arbitrator’s lack of impartiality or independence without undue delay after becoming aware of the circumstances, he may be deemed to have waived his right to challenge the arbitrator (Art 4 MAL). Enforcement of the award in Singapore may be resisted on the similar grounds, i.e. that composition of the arbitral tribunal or arbitral procedure was not in accordance with agreement of parties (Art V(1)(d) NYC; s 31(2)(e) IAA). 4.2.7 Immunity of arbitrators and instruments An arbitrator is not liable for negligence in respect of anything done or omitted to be done in the capacity of arbitration, and or any mistake in law, fact, or procedure made in the course of arbitral proceedings or in the making of an arbitral award (s 25 IAA). Most international arbitration rules also contain an exclusion of liability provision to protect arbitrators and arbitral institutions from civil liability. 4.3 Arb-med (arbitrator acting as a conciliator) Arb-med is a dispute resolution process which combines arbitration and mediation. The mediation, if it occurs, takes place with the parties’ consent at an appropriate stage during the arbitration proceedings. The dispute is first referred to arbitration before mediation is attempted. If parties are able to settle their dispute through mediation, their mediated settlement may be recorded as a consent award. The consent award is generally accepted as an arbitral award, and, subject to any local legislation and/or requirements, is generally enforceable in over 170 countries under the New York Convention. If parties are unable to settle their dispute through mediation, they may continue with the arbitration proceedings. In Singapore, where all parties to an arbitral proceeding consent in writing, an arbitrator may act as a conciliator (s 17(1) IAA). In this case, the parties will be taken to have waived their right to challenge the arbitrator solely on the ground that he had acted previously as a conciliator (s 17(4) IAA). Whilst an arbitrator double-hatting as a mediator is common in certain jurisdictions such as China, issues of impartiality may arise if the arbitrator is also asked to be a mediator. For this reason, the SIAC-SIMC Arb-Med-Arb protocol uses a separate arbitrator and mediator. Parties keen to use the SIAC-SIMC Arb-Med-Arb protocol can insert the appropriate model clause into their contracts. What happens if a party does not adhere to the med-arb clause and refuses to engage in any pre-arbitration mediation? Does that entitle the innocent party to commence a court action instead? In Heartronics Corporation v EPI Life Pte Ltd SGHCR 17, the Singapore High Court refused to grant a stay of court proceedings in favour of arbitration because, in its view, the first defendant had committed a repudiatory breach of the arbitration agreement by conveying that it had no interest in performing its obligation under the relevant med-arb clause to participate in mediation. The first defendant delayed matters, failed to pay the relevant fees for mediation, and alleged that it had cashflow issues which were not substantiated. Under those circumstances, the court held that the first defendant’s repudiatory breach was accepted by the plaintiff, thereby rendering the med-arb clause inoperative. This can be contrasted with Maxx Engineering v PQ Builders Pte Ltd SGHC 71, where clause 54 provided that, in the event of a dispute, the parties “shall endeavour to resolve the dispute through negotiations” and “[i]f negotiations fail, the parties shall refer the dispute for mediation at the [SMC] in accordance with the Mediation Rules for the time being in force”. Clause 55 of the contract provided that if the dispute was not resolved by the parties in accordance with clause 54, the parties shall refer the dispute for arbitration. The High Court held that, by its plain wording, clause 54 imposed a legal obligation on the parties to refer their dispute to mediation, if negotiations failed. The High Court also found that it was just and equitable to grant an order specific performance sought by the applicant compelling the parties to refer the dispute to mediation, because o (a) damages were not an adequate remedy if specific performance was not ordered, o (b) the respondent would not suffer substantial hardship from the order, o (c) an order for specific performance would not be futile as there was no evidence that mediation would be futile and o (d) the order for specific performance would not be impractical as there was no serious difficulty in determining whether the respondent had taken specific and concrete steps to refer the dispute to mediation. 5. Conduct of Proceedings 5.1 Freedom to agree on the procedure Parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings (Art 19(1) MAL), for instance by agreeing to certain institutional rules. Failing such agreement, the arbitral tribunal has the power to conduct the arbitration in such manner as it considers appropriate, including the power to determine the admissibility, relevance, materiality and weight of any evidence (Art 19(2) MAL). It is important to note that domestic evidence statutes and laws are not binding on the tribunal, unless parties agree. 5.2 Core procedural rights and duties A fundamental right is that all parties shall be treated with equality and be given a full opportunity of presenting his case (Art 18 MAL). Parties can request for an oral hearing to take place (Art 24(1) MAL). Parties are to be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal (Art 24(2) MAL). All statements, documents or information supplied to the arbitral tribunal by one party shall be communicated to the other party (Art 24(3) MAL). 5.3 Default of a party (or non-participation) 5.3.1 Claimant fails to communicate statement of claim If, without showing sufficient cause, the claimant fails to communicate his statement of claim, the arbitral tribunal shall terminate the proceedings (Art 25(a) MAL). 5.3.2 Respondent fails to communicate statement of defence If, without showing sufficient cause, the respondent fails to communicate his statement of defence, the arbitral tribunal shall continue the proceedings without treating such failure as an admission of the claimant’s allegations (Art 25(b) MAL). 5.3.3 Any party fails to appear at a hearing or to produce documentary evidence If any party, without showing sufficient cause, fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the award on the evidence before it (Art 25(c) MAL). 5.4 Obtaining Evidence 5.4.1 Documentary evidence An arbitral tribunal seated in Singapore has the power to make orders or give directions to any party for the discovery of documents (s 12(1)(b) IAA). Court assistance may be sought in document production (Art 27 MAL). In Singapore, any party to an arbitration may take out a subpoena to produce documents, which may be issued by the SGHC (s 13(1), (2) IAA). 5.4.2 Witness Evidence A witness who refuses to give evidence may be compelled to do by the courts in Singapore (s 13(2) IAA). In ALC v ALF SGHC 231, the Singapore High Court confirmed that under s 30 of the AA, subpoenas may be issued to compel the attendance of a witness before an arbitral tribunal. However, in that case, the Singapore High Court set aside the subpoena on the basis that the party seeking the subpoena ought to have sought directions from the tribunal on the calling of the relevant witness prior to making any court application. This was because the terms of Procedural Order No. 1 in the arbitration reserved the decision as to what legal steps a party should take in the event it wishes to adduce evidence from a person who will not appear voluntarily at its request to the arbitrator; and second, that party should write first to the arbitrator, enclosing the grounds on which they seek such a witness’s testimony and explain its relevance to the substantive case. 5.5 Confidentiality This is an issue that is typically covered in institutional rules. In India v Deutsche Telekom SGCA(I) 4, the SGCA described the “conventionally private nature of arbitration proceedings”. In Singapore, ss 22 and 23 of the IAA provide, among other things, that court proceedings relating to arbitration are to be heard in private by default. In India v Deutsche Telekom SGCA(I) 4, it was recognised that the purpose of ss 22 and 23 is to protect the confidentiality of the arbitration itself and the interest in keeping any enforcement proceedings confidential under the IAA is essentially a derivative interest designed ultimately to protect the confidentiality of the underlying arbitration. However, when the confidentiality of the arbitration has been lost, the principle of open justice would weigh strongly in favour of lifting the cloak of privacy that has been provided for in the IAA. Earlier, in AAY v AAZ 1 SLR 1093, the Singapore High Court opined (at ) that “as a principle of arbitration law at least in Singapore and England, the obligation of confidentiality in arbitration will apply as a default to arbitrations where the parties have not specified expressly the private and/or confidential nature of the arbitration”. In that case, the High Court held (at ) that “confidentiality is a lesser interest than the public interest of having criminal wrongdoing revealed to the relevant authorities for their investigation” and accordingly “disclosure to the appropriate authorities where there is reasonable suspicion of criminal conduct is thus an exception to the obligation of confidentiality”. 5.6 Parties’ representation In Singapore, there are no restrictions on the ability of foreign lawyers to act for clients in arbitrations seated in Singapore (s 32 read subject to s 35 Legal Profession Act). This extends to: any arbitrator acting in arbitration proceedings, (b) a person representing any party in arbitration proceedings, or (c) the giving of advice, preparation of documents in relation to arbitration proceedings (s 35(1) LPA). 5.7 Termination of proceedings Arbitral proceedings are terminated by the final award (Art 32(1) MAL). The arbitral tribunal shall issue an order for termination of the arbitral proceedings when: (a) the claimant withdraws his claim, unless the respondents object and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute; (b) the parties agree on the termination of the proceedings; (c) the arbitral tribunal finds that continuation of the proceedings has for any other reason become unnecessary or impossible (Art 32(2) MAL). However, after termination, the mandate of the tribunal may revive if there is a request by a party to correct or interpret the award under Art 33 MAL or if a court hearing a setting aside application determines that the arbitral tribunal shall resume arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the grounds for setting aside under Art 34(4) MAL (Art 32(3) MAL). 5.8 Typical procedural steps in a typical arbitration Using the SIAC Rules as an example: 1. Notice of arbitration: To be in writing, and filed with the registrar (see Rule 2, 3 SIAC). A notice of arbitration may include the statement of claim (Rule 3.2 SIAC). 2. Response to notice of arbitration: Respondent shall send claimant a response within 14 days of receipt of the notice of arbitration (see Rule 4 SIAC). Response may include the statement of defence and statement of counterclaim (Rule 4.2 SIAC). 3. Deposit of fees for the institution: The claimant and respondent shall each pay 50% of the advance on costs of arbitration (Rule 30.2 SIAC). If a party fails to make advances or deposits, the Registrar may direct the tribunal to suspend work (Rule 30.5 SIAC). Parties are jointly and severally liable for the costs of arbitration. Any party is free to pay the whole of the advances or deposits should the other party fail to pay its share (Rule 30.6 SIAC). 4. Expedited procedure: Prior to the full constitution of the tribunal, a party may apply to the registrar in writing for the arbitral proceedings to be conducted in accordance with the expedited procedure if any of the following criteria is satisfied: (a) amount in dispute does not exceed S$5m; (b) parties so agree; or (c) case is of exceptional urgency (Rule 5.1 SIAC). 5. Appointment of arbitrators: Number of arbitrations: see Rule 6 SIAC. Appointing sole arbitrator: see Rule 7 SIAC. Appointing 3 arbitrators: see Rule 8 SIAC. Multiparty appointment of arbitrators: see Rule 9 SIAC. Qualifications of arbitrators: see Rule 10 SIAC. Challenge of arbitrators: see Rule 11 SIAC. Notice of challenge: see Rule 12 SIAC. Decisions on challenge: see Rule 13 SIAC. Replacement of arbitrator: see Rule 14 SIAC. Repetition of hearings in event of replacement of arbitrator: see Rule 15 SIAC. 6. Preliminary meeting between arbitral tribunal and parties: As soon as practicable after appointment of all arbitrators, the tribunal shall conduct a preliminary meeting with the parties, in person or by any other means, to discuss the procedures that will be most appropriate and efficient for the case (Rule 16.3 SIAC). 7. Exchange of written submissions: Unless already submitted, the Claimant shall, within a period of time determined by the tribunal, send to the respondent and the tribunal a statement of claim stating the facts, legal grounds, and relief claimed (see Rule 17.2 SIAC). Unless already submitted, the Respondent shall, within a period of time determined by the tribunal, send to the Claimant a statement of defence setting out its full defence to the statement of claim. The statement of defence shall also state any counter claim (see Rule 17.3 SIAC). If a counterclaim is made, the claimant shall, within a period of time to be determined by the tribunal, send to the respondent a statement of defence to the counterclaim (see Rule 17.4 SIAC). 8. Jurisdiction of tribunal: The tribunal has the power to rule on its own jurisdiction, including any objections with respect to the existence, termination or validity of the arb

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