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The New SIAC Rules

 


Singapore has a comprehensive, modern and progressive legal framework to support international arbitration that is on par with that of the world’s leading arbitration centers writes Ajay Thomas

The rise of Singapore as an international trading and business centre in South East Asia, coupled with the paradigm shift towards arbitration as the most preferred mode for settlement of international commercial disputes, saw the SIAC being set up in 1991 to meet the demands of the international business community for a neutral, efficient and reliable dispute resolution institution in Asia.

The SIAC administers arbitrations under a set of well defined rules called the SIAC Rules. The first edition of the rules was published in 1991 and later revised in 1997. In 2007, with a view to formalising the practices and experiences learnt from over a decade in administering arbitrations, the SIAC after a year long consultation process introduced the third edition of its Rules. The new rules took effect from 1 July 2007 and signify the evolution of the SIAC Rules from its ad hoc origins to a truly institutionalised set of Rules. A few of the more significant changes introduced by the new rules are detailed below.

Appointment of Arbitrators

Parties in a SIAC arbitration are free to agree on their arbitrators. However, to ensure the prospective arbitrator’s impartiality and secure his independence from the parties, Rules 5.2 and 5.3 clarifies that the nomination of a candidate by the parties for appointment as Arbitrators will only be treated as an agreement to nominate and the nomination shall be subject to confirmation by the Chairman of SIAC. The rationale behind this is that in an institutional arbitration, the arbitrators appointed must agree to abide by the institutional Rules and its code of conduct and practices. If the arbitrator is not agreeable to do so, there is a real risk that the progress of the arbitration will be affected.

Memorandum of Issues

One of the most significant changes introduced by the new Rules is the introduction of the Memorandum of Issues (“MOI”) to the pre-hearing stage of the proceedings. This concept is introduced in Rule 17 and requires the Tribunal, within 45 days following the completion of the written statements, to draw up a Memorandum of Issues in consultation with the parties. The MOI serves the purpose of defining the issues to be determined by the Tribunal and also enumerates the remedies sought by the parties. This feature, which draws its inspiration from the “List of Issues” in Court proceedings and the “Terms of Reference” under the ICC Rules, ensures that the issues agreed by the Tribunal and the parties are dealt with in the award published by the Tribunal.

Ad valorem Fees for Arbitrators

The basis for the calculation the Arbitrator’s Fees has been changed under the 2007 Rules. The previous method of calculating the Arbitrator’s fees on the basis of hourly rates has been replaced with a structure that sets the fees on the basis of the sum in dispute read with a published schedule of fees. In today’s cost conscious commercial world, this change goes a long way in ensuring greater transparency and certainty as regards arbitrators’ fees.

Increased institutional control over the arbitration proceedings

Under the 2007 Rules, with a view to facilitating greater institutional control over the administration of the arbitration and to keep a check on its progress, the Registrar is now vested with additional powers. These include extending time for the following steps required of the Tribunal: completion of the MOI (Rule 17.2), submission of draft awards to the SIAC (Rule 27.1) and correction of awards (Rule 28.4). However, the most notable addition to the powers of the Registrar is the power to fix the seat of arbitration, which power was vested with the Tribunal under the 1997 Rules.

Practice Notes

In an effort to ensure transparency and certainty in the practical aspects in the administration of Arbitrations at the SIAC, the 2007 Rules formalise SIAC’s existing practice of using practice notes, which supplement, regulate and implement the Rules. The use of Practice Notes is now expressly provided for in Rule 35.4. A copy of the SIAC Rules 2007 and the new Schedule of Fees are available on the SIAC website (www.siac.org.sg).
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AJAY THOMAS is an Assistant Counsel with the Singapore International Arbitration Centre.

 
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