If parties would like to commence arbitration at the Singapore International Arbitration Centre (SIAC), the first step is to ensure that there is a valid arbitration agreement in place. The arbitration agreement should clearly specify the disputes subject to arbitration and indicate that SIAC rules will govern the process. Parties should also check for any prerequisites or conditions precedent that may affect the commencement of arbitration.
The claimant must prepare a Notice of Arbitration in accordance with SIAC rules. The document should include key details such as the names and contact information of the parties, a description of the dispute, the legal and factual basis for the claims, and the relief sought.
Once the Notice of Arbitration is finalised, the claimant submits it to SIAC along with the required filing fee. The filing fee is determined based on the amount in dispute and covers the administrative costs associated with the arbitration process. SIAC will then provide an online filing system for the parties.
Next, SIAC will acknowledge the receipt of the Notice of Arbitration and notify the respondent of the arbitration proceedings. The next step is the appointment of arbitrators. Parties can either agree on a sole arbitrator or each appoint one arbitrator, who will then select a presiding arbitrator. In the absence of an agreement, SIAC will appoint the arbitrators.
Once the tribunal is constituted, a preliminary conference is held to discuss procedural matters, including the timetable for the proceedings, exchange of documents, and other relevant issues. The tribunal may also address any preliminary objections raised by the parties.
Following the preliminary conference, the parties will exchange relevant documents and written submissions. Depending on the complexity of the dispute, the tribunal may conduct hearings to allow parties to present their case, examine witnesses, and make oral arguments. The hearings can be conducted either in person, virtually, or a hybrid of both.
And finally, following the conclusion of hearings and the submission of final written arguments, the tribunal will deliberate and render a final award. The award will be in writing and include a detailed explanation of the tribunal’s decision, as well as any costs or damages awarded.
Under the Model law, there are no default rules on how to start arbitral proceedings. Instead, it’s mentioned that unless the parties have agreed otherwise, the arbitration begins when the respondent receives the request for arbitration. This means that the date on which the respondent receives the formal request is considered the starting point for the arbitration process.
If the arbitration is conducted under the rules of an arbitral institution, such as the SIAC, those rules will usually contain provisions that govern the commencement procedure.
The arbitration agreement between the parties plays an important role in determining how the arbitration is to be commenced and how the arbitral tribunal is constituted. The agreement may directly incorporate the rules of an arbitral institution, which would then define the process.
It is crucial for the parties to follow the requirements of the arbitration agreement carefully. Failure to do so could lead to adverse consequences, such as time running against a party for limitation purposes (time-barred from pursuing the claim) or the resulting award being set aside (rendered invalid).
An arbitration clause within a contract may include certain conditions that must be fulfilled before the right to arbitrate arises. For example, it might require the parties to engage in specific procedures, like holding meetings or attempting non-binding mediation with a qualified mediator, in an effort to resolve the dispute before resorting to arbitration.
For example, the case of International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd [2014] 1 SLR 130 involved a multi-tiered dispute resolution clause that required parties to negotiate before resorting to arbitration. The dispute resolution mechanism in Lufthansa provided that parties shall commence arbitration if the disputes cannot be settled by negotiations in accordance with the process stipulated. In particular, it contemplated that a dispute would escalate up the hierarchies of the respective parties with representatives of increasing seniority attempting a resolution.
In determining if the tribunal had jurisdiction over the dispute, it took the view that the requirement for negotiation in the multi-tiered jurisdiction clause was too uncertain to be enforceable and deemed it unnecessary to consider if the negotiation process had been adhered to as a precondition to arbitration.
The Court of Appeal further opined that the choice made by contracting parties on how they wanted to resolve potential differences between them should be respected, and Courts should not be overly concerned with the inability of the law to compel parties to negotiate in good faith in order to reach a mutually acceptable outcome.
Arbitration is meant to resolve disputes between parties. If there is no actual dispute between the claimant and the respondent, then there is no basis for arbitration. It is up to the arbitrator to determine whether a valid dispute exists when the claimant seeks relief that the respondent opposes.
If the respondent remains silent and does not put up any resistance, it could lead to legal complications. The silence of the respondent may be considered equivocal, and the arbitrator may infer that the respondent disputes the relief sought. Therefore, commencing arbitration against a silent respondent is generally permissible.
Under SIAC Rules, the dispute that is the subject of arbitration needs to be clearly identified and defined. The reference to arbitration must be specific to a “particular” dispute. Arbitrators are appointed to decide only the disputes referred to them, so the need for a precise description of the dispute is essential. It is not permissible to give a notice requiring “all and any future disputes under this agreement to be referred to arbitration” as it lacks the necessary specificity.
The request for arbitration must be presented in writing, providing a brief statement describing the nature and circumstances of the dispute. This ensures that the claimant expresses its intention to refer the dispute to arbitration and commence the proceedings immediately.
Regarding the identification of parties to the reference, SIAC Rule 3.1(b) necessitates the provision of names, addresses, phone numbers, etc., of the parties “if known.” However, in practice, parties are often identified generically as “Owners,” “Charterers,” “Buyers,” or “Sellers” based on the language used in the underlying commercial documentation. This generic identification is practical to avoid listing a large number of contracting parties explicitly, which could be burdensome.
On the respondent’s part, under SIAC Rule 4, there is a requirement to respond to the Notice of Arbitration in writing. The response should confirm the parties’ identities and provide a brief description of the nature and circumstances of any counterclaim. This information is vital for the arbitral institution, such as SIAC, to exercise its powers in appointing arbitrators, whether for a sole arbitrator or a three-member tribunal.
Once the request for arbitration is made, and the respondent’s response is received, the next step in the commencement process is the appointment and constitution of the arbitral tribunal. The arbitral tribunal is the panel of arbitrators responsible for hearing the dispute and rendering a final decision.
The first step is to determine which rules govern the constitution of the tribunal. Firstly, the arbitration agreement could specify that the arbitration is to be conducted in accordance with the SIAC rules. Alternatively, the agreement might state that SIAC will only administer the arbitration, and the actual rules for the arbitration will be found elsewhere. It is important to understand the distinction between these possibilities.
Once the rules governing the appointment of the tribunal are identified, the next consideration is the number of arbitrators to be appointed.
Rule 9.1 of the SIAC Rules provides as follows:
“A sole arbitrator shall be appointed in any arbitration under these Rules unless the parties have otherwise agreed; or it appears to the registrar, giving due regard to any proposals by the parties, that the complexity, the quantum involved or other relevant circumstances of the dispute, warrants the appointment of three arbitrators.”
If the arbitration agreement provides that the arbitration is to be conducted in accordance with the SIAC Rules, and also for a sole arbitrator to be appointed, the effect is to take away the registrar’s power to appoint three arbitrators.
For cases where a sole arbitrator is to be appointed, the claimant must propose the sole arbitrator’s name in the Notice of Arbitration. In response to this proposal, the respondent can either comment on the proposed arbitrator or propose a different one. The SIAC Rules require any arbitrator to be appointed by the President of the Court, meaning that if the parties agree on a sole arbitrator, their agreement functions as a nomination, and the President makes the appointment.
If three arbitrators are to be appointed, each party has the responsibility to nominate one arbitrator to the arbitral tribunal. This means there will be three arbitrators in total: one appointed by each party, and a third arbitrator who will be appointed later.
If one party fails to nominate an arbitrator within the agreed timeframe (usually 14 days after receiving the other party’s nomination) or within any other period set by the registrar, the President of the arbitral institution steps in and appoints an arbitrator on behalf of the non-complying party. This ensures that the tribunal is constituted even if one party does not fulfil their responsibility to nominate an arbitrator.
Regarding the appointment of the third arbitrator, who also acts as the presiding arbitrator, there are two possibilities. If the parties have agreed on a specific alternative procedure for appointing this arbitrator, that procedure will be followed. However, if the agreed procedure fails to result in a nomination within the agreed timeframe or the period set by the registrar, the President will appoint the third arbitrator, who will then assume the role of the presiding arbitrator.
The SIAC maintains a panel of arbitrators whose names are published on the SIAC website. All arbitrators appointed in such arbitrations, regardless of whether they were nominated by the parties or not, are required to maintain their independence and impartiality throughout the entire arbitration process. This means they must not have any biases or conflicts of interest that could influence their decision-making.
When appointing an arbitrator under these rules, the President is required to take into account the qualifications required by the parties’ agreement and other relevant factors that could impact the arbitrator’s impartiality and independence. The President must also consider the arbitrator’s availability to handle the case promptly and efficiently, considering the nature of the arbitration.
Furthermore, if an arbitrator is nominated by one of the parties, they have a duty to disclose to the parties and the registrar any circumstances that could give rise to reasonable doubts about their impartiality or independence. This disclosure should be made as soon as reasonably practicable and before their appointment as an arbitrator. Additionally, any arbitrator involved in the case should immediately disclose to all parties, the other arbitrators, and the registrar any circumstances that arise during the arbitration that might raise doubts about their impartiality or independence.
The SIAC Rules contain detailed provisions that specify when and how an arbitrator can be challenged after their appointment. A challenge to an arbitrator can be made if circumstances exist that raise justifiable doubts about the arbitrator’s impartiality, independence, or if the arbitrator lacks any requisite qualification that the parties have agreed upon.
Under Singapore law, justifiable doubts about an arbitrator’s impartiality may arise if there is a reasonable suspicion or apprehension, from the viewpoint of a fair-minded reasonable person with knowledge of the relevant facts, that the arbitrator is biased or has already formed a conclusive opinion about the case before hearing all the evidence.
Justifiable doubts about an arbitrator’s independence are likely to exist if the arbitrator has a personal or business interest in the outcome of the proceedings or has a close relationship with one of the parties or a witness involved in the arbitration.
If a party nominates an arbitrator for a case, they can only challenge that arbitrator’s appointment later on if they discover new reasons or information that raises concerns about the arbitrator’s suitability for the role. In other words, once the arbitrator is appointed by a party, they cannot challenge that appointment based on reasons they were already aware of at the time of the nomination.
The challenge can only be made if new and previously unknown issues come to light after the appointment has been finalised. This rule ensures that parties cannot use information they already had during the nomination process as a basis for later challenging the appointed arbitrator.
If one of the parties involved in the dispute believes that the appointed arbitrator is not suitable or impartial, they must raise their challenge within 15 days of becoming aware of the appointment or any circumstances that give them grounds for challenge. The challenge must be brought before the tribunal, which is the body responsible for overseeing the arbitration process. If the challenge is unsuccessful, the party still has a second chance to appeal by taking the matter to the High Court of Singapore within thirty days of being notified of the rejected challenge. The passage emphasises the importance of adhering to these specific time limits; failure to do so may lead to the party losing the right to challenge the arbitrator, essentially waiving their opportunity to dispute the arbitrator’s appointment. This process ensures that arbitration remains fair and impartial while providing a mechanism for parties to address concerns about the appointed arbitrator’s suitability.
The commencement of arbitration proceedings in Singapore under the SIAC involves initiating the process by serving a Notice of Arbitration to the respondent. Once the arbitration is underway, parties have the opportunity to present their case and evidence before an impartial tribunal, ensuring a fair resolution. It is of utmost importance to follow correct procedures, appoint independent and impartial arbitrators, and ensure transparency in arbitral proceedings. These measures are essential to achieve fair and credible outcomes in the arbitration process.
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Farallon Law Corporation
21 Collyer Quay #01-01
Singapore 049320
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