The Singapore Parliament has recently passed the latest amendments to the Singapore International Arbitration Act (“IAA”), with a view to improving the procedure in complex matters and ensuring the confidentiality of proceedings. The two main features of the amendments are:
a) introducing a default procedure for the appointment of three arbitrators when there are three or more parties in an arbitration; and
b) providing additional powers of the arbitral tribunal and the Singapore High Court to enforce any confidentiality obligations of the parties.
Why this is important
As contractual relationships increasingly become more complex, arbitrations with more than two parties (e.g., arbitrations where there are two or more claimants suing jointly, or two or more respondents being jointly sued, or both) have become the norm. Having multiple claimants or multiple respondents increases the chances that they would not be able to agree on a procedure for the appointment of arbitrators or in the arbitrator to be nominated. This could then potentially lead to delay in the very beginning of the proceedings. The amended IAA has thus addressed this gap, to ensure that arbitration proceedings remain alive to the modern commercial landscape.
The confidentiality of international arbitration proceedings, on the other hand, is one that is already provided for under common law. Parties generally have a duty not to disclose confidential information obtained in the course of the arbitration. The amended IAA provides arbitral tribunals and the Singapore High Court with greater confidence to impose penalties for breaches of confidentiality by the parties. As virtual hearings have increased in the past year due to the pandemic, this emphasis in the tribunal’s power to enforce confidentiality becomes even more relevant.
Brief Background
Previously, on June 2019, the Singapore Ministry of Law (“MinLaw”) released the proposed amendments to the IAA for public consultation. There were four major areas of change:
a) a default mode of appointment of arbitrators in multi-party situations;
b) powers of an arbitral tribunal and the High Court to enforce confidentiality obligations;
c) allowing parties to, by agreement, request the arbitrator to decide on jurisdiction at the preliminary stage; and
d) allowing a party to the arbitral proceedings to appeal to the High Court on a question of law arising out of an award made in the proceedings, provided parties have agreed to opt in to this mechanism.
On 1 September 2020, the Singapore Ministry of Law introduced the International Arbitration (Amendment) Bill that dealt with the first two of the above four items. These amendments were passed in October 2020.
Default Procedure for the Appointment of Three Arbitrators in Multi-Party Arbitrations
A multi-party arbitration is one wherein there are three or more parties (i.e., two or more claimants, two or more respondents, or both). Previously, there was no provision under the IAA for a default procedure to appoint three arbitrators in a multi-party arbitration, in the event that the parties have not agreed on this procedure beforehand. Instead, there was only a default procedure in the situation where there was a single claimant and a single respondent.
Under the amended IAA, the default mode of appointment of three arbitrators in a multi-party arbitration is as follows:
a) The claimant, or all the claimants by agreement if more than one, must:
i. jointly appoint an arbitrator on or before the date of sending of the Request for the dispute to be referred to arbitration (“Request”), and
ii. inform the respondent(s) of the appointment on the same date that the Request is sent to the latter.
In practical effect, the claimant(s) must state in its Request or notice of arbitration its nominated co-arbitrator.
b) The respondent(s) must, by agreement if there is more than one respondent:
i. jointly appoint an arbitrator, and
ii. inform the claimant(s) of the appointment within 30 days after the date of receipt of the Request by the respondent, or by the last respondent to receive the Request if there is more than one respondent.
c) The first and second arbitrators must by agreement nominate the third arbitrator, who is the presiding arbitrator, within 60 days after the date of receipt of the Request by the respondent, or by the last respondent to receive the Request if there is more than one respondent.
d) If either side fails to appoint an arbitrator or fails to inform the other side of such appointment, upon the request of any party, the appointing authority must appoint all three arbitrators. The appointing authority may reappoint or revoke any appointment already made, and designate one of the three arbitrators as the presiding arbitrator.
e) Where the first and second arbitrators are unable to agree on the appointment of the third arbitrator within 60-day timeline in (c) above, the appointing authority must, upon request of any party, appoint the third arbitrator, who shall be the presiding arbitrator.
Confidentiality of Arbitration Proceedings
While arbitration proceedings are generally considered to be confidential, the IAA previously did not contain any express provision imposing a duty of confidentiality or empowering the tribunal or the courts to enforce such obligations. That being said, the rules of a number of arbitral institutions expressly impose the obligation of confidentiality on the parties. For example, under the SIAC Rules, unless otherwise agreed, the parties and arbitrators shall at all times treat all matters relating to the proceedings and the Award as confidential.
Under the amended IAA, the Tribunal and the High Court are given additional powers to enforce the obligation of confidentiality:
a) that the parties to an arbitration agreement have agreed to in writing, whether in the arbitration agreement or in any other document;
b) under any written law or rule of law; or
c) under the rules of arbitration (including the rules of arbitration of an institution or organisation) agreed to or adopted by the parties.
The Harry Elias Partnership International Arbitration Group
Harry Elias Partnership regularly provides advice on complex international commercial disputes. We have extensive experience in advising and successfully representing multinational entities in commercial arbitration. As a full-service Singapore law firm, we have full rights of audience before all tiers of Singapore Courts. We are therefore well placed to advise and support our clients in any arbitration-related court applications before the Singapore Courts.
For further information, please contact:
Francis Goh
Head, International Arbitration
Partner | Harry Elias Partnership LLP
francisgoh@harryelias.com | +65 6361 9835
Janice Lee
Foreign Legal Associate | Harry Elias Partnership LLP
janicelee@harryelias.com | +65 6361 9821