This article traces recent developments in Singapore in support of both international and domestic alternative dispute resolution (“ADR”). The benefits of ADR (for example, less monetary cost, less strain on disputing parties’ relationships and/or faster resolution of the dispute) over traditional litigation have been much canvassed and debated and will not be dealt with in detail in this article. The author generally agrees with findings that ADR tends to result in a better experience for all parties involved as compared to the results of litigation.
The Current State of Alternative Dispute Resolution in Singapore
Singapore’s commitment to ADR can be seen in the numerous developments in ADR in recent years.
The 2010 International Arbitration Survey named Singapore as the regional leader in Asia for seat of arbitration.2 Following from the 2010 International Arbitration Survey, Asian Legal Businesspublished an article stating that “Few in the arbitration field can fail to be impressed by Singapore’s recent meteoric rise in the world of alternative dispute resolution…”3 Evident from the many ADR-related events which occurred in Singapore in 2012, Singapore’s meteor in the world of ADR has not ceased rising.
Arbitration has long been a well-known form of ADR. However, other kinds of formal ADR such as mediation and neutral evaluation are becoming increasingly viable, especially for smaller claims. The successful implementation of various ADR initiatives in the Subordinate Courts recently resulted in the Subordinate Courts’ introduction of a “presumption of ADR” for all claims within its ambit.4
This article traces the recent developments in Singapore in support of both international and domestic ADR. It also highlights the amendments to the International Arbitration Act (Cap 143A) (“IAA”) and the various ADR recommended by the Subordinate Courts Practice Directions Amendment No 2 of 2012.
Amendments to the IAA
Singapore continues to enhance and refine its position as the leading centre for arbitration in Asia. Correspondingly, amendments which came into effect on 1 June 2012 were made to the IAA and Arbitration Act (Cap 10).
The main amendments to the IAA were the broadening of the definition of an agreement to arbitrate, granting of full discretion to the arbitral tribunal to award interest, empowering the Singapore High Court to review negative jurisdictional rulings by an arbitral tribunal, including emergency arbitrators into the definition of an arbitral tribunal and providing for the Singapore Courts’ enforcement of interim measures made by an arbitral tribunal in Singapore or abroad.5 The Arbitration Act (Cap 10) was amended to bring it into conformity with the amended provisions of the IAA.
The broadening of the definition of an agreement to arbitrate and granting of full discretion to the arbitral tribunal to award interest are uncontroversial and consistent with international arbitral practice and international commercial reality.
The amendment to empower the Singapore High Court to review negative jurisdictional rulings by an arbitral tribunal reveals the pragmatism with which Singapore approaches the arbitral process. This departure from the New York Convention and the UNCITRAL Model Law6 is not surprising given Singapore’s commitment to being a leader in international arbitration. Further, the Singapore Academy of Law’s Law Reform Committee has observed that there is a “discernible lack of international consensus” as to the right to judicial review of negative jurisdictional rulings and that numerous countries which are frequently seats for international commercial arbitration expressly provide for judicial review of negative jurisdictional rulings or establish the same through case law.7
The recognition of emergency arbitrators as arbitral tribunals and the provision for the Singapore Courts’ enforcement of interim measures made by an arbitral tribunal in Singapore or abroad further demonstrate Singapore’s maturity and leadership in international arbitration. The Singapore International Arbitration Centre (“SIAC”) was one of the first arbitral institutions to provide for emergency arbitrators and interim relief to parties before the arbitral tribunal is constituted.8 Additionally, Singapore is one of the first to expressly legislate support for emergency arbitrators and the enforcement of interim measures. It remains to be seen if other countries will follow suit.
21st International Council for Commercial Arbitration Congress
In his second reading speech on the International Arbitration (Amendment) Bill on 9 April 2012, Minister for Foreign Affairs and Minister for Law K Shanmugam highlighted that Singapore was due to host the 21st International Council for Commercial Arbitration (“ICCA”) Congress in June 2012. He emphasised that the passage of the International Arbitration (Amendment) Bill would signal to the international arbitration community Singapore’s continued commitment to provide full legislative support to international arbitration.9
The 21st ICCA Congress was held from 10 June 2012 to 13 June 2012 at the Marina Bay Sands Convention and Exhibition Centre. This was the first time that an ICCA Congress was held in Asia since 2004.10 Over 900 lawyers, Judges, government officials and other allied professionals from more than 58 countries attended the 21st ICCA Congress. Singapore Prime Minister Lee Hsien Loong gave a speech at its opening ceremony, and a dinner for the ICCA Council was hosted by the President of Singapore at the Istana.
It is noteworthy that some of the world’s leading arbitration experts in attendance at the 21st ICCA Congress postulated that Singapore is poised to become a centre for international investment arbitration.11 International investment arbitration in Singapore is governed by the Arbitration (International Investment Disputes) Act (Cap 11) which was revised on 31 March 2012.12
Despite a seemingly overwhelming focus on international arbitration, Singapore also hosted an inaugural ADR Conference which was held from 4 October 2012 to
5 October 2012. The ADR Conference was collectively organised by the Supreme Court of Singapore, the Subordinate Courts of Singapore, the Law Society of Singapore (“Law Society”), the Singapore Academy of Law, the Singapore Mediation Centre (“SMC”) and the Community Mediation Centre of the Singapore Ministry of Law. It focused primarily on mediation and conciliation rather than arbitration and was held to promote awareness of the ADR processes and provide a forum for local and international ADR leaders to share their practices and formulate policies for the future. The keynote address was given by then-Chief Justice of Singapore Chan Sek Keong who emphasised the importance of networks of ADR within the community and the judiciary and encouraged the use of ADR even before a dispute enters the Court system.13
Initiatives by the Subordinate Courts of Singapore
The Subordinate Courts of Singapore has been innovative in its promotion of the benefits of ADR to both disputants and the judiciary.
Non-Injury motor accident claims
In 2002, a pre-action protocol for non-injury motor accident (“NIMA”) claims was implemented. Such claims have to proceed through the Court Dispute Resolution (“CDR”) process at the Primary Dispute Resolution Centre (“PDRC”). At the PDRC, a Judge will provide a neutral evaluation of the case to enable parties to understand the strengths and weaknesses of their case and negotiate a settlement based on the same.14
The FIDReC-NIMA scheme was introduced in 2008 where NIMA claims less than $1,000 would undergo either mediation or adjudication at the Financial Industry Dispute Resolution Centre (“FIDReC”).15 From 1 September 2011, the limit of claims falling within the FIDReC-NIMA scheme was increased to $3,000.16
Medical negligence claims
In light of the success of the pre-action protocol for NIMA claims, the Subordinate Courts introduced a pre-action protocol for medical negligence cases sometime in 2006.17 Prior to commencing legal action, potential claimants are encouraged to discuss their concerns with the allegedly negligent hospital or practitioner. In the event a medical negligence claim is filed, parties will be directed to go for CDR at the PDRC to discuss and facilitate settlement of the claim.18
Personal injury claims
In May 2011, the Subordinate Courts introduced a pre-action protocol for personal injury claims. Parties are directed to go for neutral evaluation at the PDRC to facilitate discussion and settlement of their claims.19 To further facilitate negotiation and settlement of disputes for personal injury claims where general damages amount to less than $20,000 before the apportionment of liability and excluding interest, the Single Joint Expert (“SJE”) scheme for the appointment of an SJE in such claims was introduced on 22 August 2012 and took effect on 22 November 2012.20
Presumption of ADR for Civil Matters in the Subordinate Courts
Following from the success of the above ADR schemes, the Subordinate Courts implemented a “presumption of ADR” for civil matters in the Subordinate Courts which took effect on 28 May 2012. Cases filed in the Subordinate Courts are automatically referred for the most appropriate mode of ADR unless any or all of the parties opt out of ADR. Relevant amendments were also made to the pre-action protocols for NIMA, medical negligence and personal injury claims to ensure that the schemes would be in alignment with the guidelines for a “presumption of ADR”.21
The available modes of ADR prescribed by the Subordinate Courts are mediation at the PDRC or SMC, neutral evaluation at the PDRC or arbitration under the Law Society’s Arbitration Scheme (“LSAS”).
Mediation involves a neutral third party facilitating discussion between the disputing parties to enable them to come to an agreement in settlement of their dispute. This agreement does not necessarily determine the parties’ legal rights but rather focuses on finding a solution which addresses each party’s concerns. The neutral third party in a mediation held at the PDRC would either be a Judge or an associate mediator who has been accredited by the Subordinate Courts of Singapore and SMC.22 Parties can alternatively opt for private mediation service providers at SMC.23 It should be noted that much as the focus of mediation differs from that of litigation, the role of a lawyer in mediation also differs.24
In contrast with mediation, neutral evaluation results in a non-binding determination of the disputing parties’ legal rights. A case undergoing neutral evaluation at the PDRC will be heard before a Judge who will give a non-binding evaluation of the strengths and weaknesses of the case. Parties would then be better able to assess their position and consider a negotiated settlement.25
Another mode of ADR specifically prescribed by the Subordinate Courts Practice Direction Amendment No 2 of 2012 is arbitration under the LSAS. In contrast with the other modes of ADR prescribed by the Subordinate Courts, arbitration under the LSAS results in a binding determination of the disputing parties’ legal rights. The neutral third party who determines the disputing parties’ legal rights in arbitration conducted under the LSAS is a private adjudicator instead of a Judge.
Introduced in 2007, arbitration under the LSAS is applicable to all kinds of civil disputes and is governed by the Law Society Arbitration Rules 2011 ("Arbitration Rules").26 The LSAS is an efficient and cost-effective form of ADR, especially for less complex claims.27
The LSAS would be of particular interest and benefit to disputing parties whose value of the claim and counterclaim in total (“Sum in Dispute”) is not more than $60,000. This is because under the LSAS, any Sum in Dispute not more than $60,000 would be referred to “documents only” arbitration28 unless the arbitrator, in exceptional circumstances, deems a substantive hearing is necessary for the resolution of the dispute.29 In “documents only” arbitration, the arbitrator will decide the dispute solely based on the documents submitted to him. Such documents would include pleadings (fixed timelines for the submission of pleadings are prescribed in rr 14-18 of the Arbitration Rules) and any other documents which the arbitrator may direct or require.30 The arbitrator also has to publish an award no later than 90 days from the commencement of such “documents only” arbitration (subject to any adjustments by the arbitrator).31 A “documents only” arbitration allows for quick resolution of parties’ dispute as there is no need for preparation for a substantive hearing and results in reduced arbitrator’s fees and minimal administrative costs.
Where an arbitration conducted under the LSAS requires a substantive hearing, the Arbitration Rules provides for the substantive hearing to be completed no later than 90 days from the commencement of the arbitration32 and the arbitrator to publish an award no later than 120 days from the commencement of the arbitration (subject to any adjustments by the arbitrator).33 These rules minimise the risk of escalating cost of the arbitration arising from a protracted hearing.
Another noteworthy feature is that the Law Society prescribes a scale of arbitrator’s fees in relation to the quantum of the claim in an LSAS arbitration.34 An arbitrator who determines a Sum in Dispute not more than $60,000 is only entitled to charge fees up to 10 per cent of the total Sum in Dispute, subject to a minimum of $2,000.35 Where the Sum in Dispute exceeds $60,000, the arbitrator’s fees are limited to a fixed rate per day (depending on the quantum of the claim) as follows:36
1.For a Sum in Dispute between $60,000 and $100,000, the arbitrator may levy a fee of up to $2,000 per day;
2.For a Sum in Dispute between $100,000 and $200,000, the arbitrator may levy a fee of up to $2,400 per day;
3.For a Sum in Dispute between $200,000 and $300,000, the arbitrator may levy a fee of up to $2,800 per day;
4.For a Sum in Dispute between $300,000 and $500,000, the arbitrator may levy a fee of up to $3,400 per day; and
5.For a Sum in Dispute exceeding $500,000, the arbitrator may levy a fee of up to $4,000 per day.
The range of daily rates above is, however, subject to additional fees which the arbitrator may levy in the event the arbitrator is required to spend time beyond eight hours per hearing day or on work done outside the substantive hearing.37
The Arbitration Rules provides that the arbitrator retains the discretion to order the proportion of cost to be borne by each party for a Sum in Dispute more than $60,000. For a Sum in Dispute not more than $60,000, the arbitrator retains the same discretion but is only allowed to award costs up to $20,000. Where the Sum in Dispute is between $40,000 to $60,000, the arbitrator may only award costs between $7,000 to $20,000. Where the Sum in Dispute is between $20,000 to $40,000, the arbitrator may only award costs between $6,000 to $14,000. Where the Sum in Dispute is not more than $20,000, the arbitrator may only award costs up to $7,000.38
Another feature of LSAS arbitration is the pilot pro bonoarbitration scheme which the Law Society introduced in conjunction with the Subordinate Courts’ introduction of the “presumption of ADR”. The pilot pro bonoarbitration scheme took effect on 12 April 2012 and applies to any dispute of up to $20,000 referred to arbitration under the LSAS. Such arbitration would be conducted on a “documents-only” basis in accordance with the Arbitration Rules.39
The key feature of the pilot pro bonoarbitration scheme is that the sole arbitrator waives his/her fees for the matter.40 Accordingly, disputing parties whose dispute is valued at not more than $20,000 can refer their dispute to the pilot pro bonoarbitration scheme and not incur any cost in the arbitration except for their legal fees and any administrative charges payable to the Law Society.41 A list of arbitrators involved in the pilot pro bonoarbitration scheme is available on the Law Society website.42
Balance between “presumption of ADR” and the voluntary and consensual nature of ADR
Whilst the Subordinate Courts signals its pragmatism and commitment to ADR through its promotion of modes of ADR which would benefit disputants by minimising the effects of litigation, it recognises that a balance has to be struck between its promotion of ADR and the voluntary and consensual nature of ADR.43 Consequently, the Subordinate Courts Practice Directions provides for parties to opt out of ADR and proceed with their claims in the traditional manner in Court.
Yet, allowing parties to easily opt out of ADR would undermine the Subordinate Courts’ pro-active support of ADR. To counter the possibility of parties’ easy circumvention of the presumption of ADR, the Subordinate Courts Practice Direction Amendment No 2 of 2012 expressly refers to O 59 r 5(1)(c) of the Rules of Court which states that “the Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account the parties’ conduct in relation to any attempt at resolving the cause or matter by mediation or any other means of dispute resolution”.44
Such comprehensive implementation and encouragement of ADR for different claims within the Subordinate Courts compels disputing parties to consider their case realistically and review the various alternatives other than the traditional route of litigation to resolve their dispute.
The amendments to the IAA and the implementation of a “presumption of ADR” in the Subordinate Courts represent further evolution of the state of ADR in Singapore. Such forward-looking changes serve to cement Singapore’s leadership in ADR and herald a “new age” of dispute resolution in Singapore. We look forward to further developments in ADR in Singapore, particularly in the areas of international investment arbitration and civil matters filed in the High Court of Singapore.
► Deborah Chua
E-mail: [email protected]
1 See for example, Lord Woolf’s Interim Report on Access to Justice (1995).
2 School of International Arbitration, Queen Mary, University of London, 2010 International Arbitration Survey: Choices in International Arbitration, sponsored by White & Case, pp 17- 20.
3 “Singapore v Hong Kong: The Arbitration Battle Intensifies” (December 2011) Asian Legal Business1.
4 Joyce Low & Dorcas Quek, “Introducing A ‘Presumption of ADR’ For Civil Matters In The Subordinate Courts”, Singapore Law Gazette, May 2012.
5 International Arbitration (Amendment) Act 2012, (No 12 of 2012), Republic of Singapore Government Gazette Acts Supplement, June 1.
6 The IAA was formerly based generally on both the New York Convention and the UNCITRAL Model Law.
7 Vangat Ramayah, Chan Leng Sun, SC, and Abraham Vergis, Report of the Law Reform Committee on Right to Jurisdictional Review of Negative Jurisdictional Rulings Singapore Academy of Law, January 2011), pp 5 and 6, para 12(d).
8 Other arbitral institutions are the International Chamber of Commerce, the International Institute for Conflict Prevention and Resolution, the Stockholm Chamber of Commerce, the Australian Centre for International Commercial Arbitration and the Netherlands Arbitration Institute.
9 Second Reading Speech by Minister for Law, K Shanmugam, on the International Arbitration (Amendment) Bill, 9 April 2012, available at http://app2.mlaw.gov.sg/News/tabid/204/Default.aspx?ItemId=645.
11 “Singapore A Centre For International Investment Arbitration?”, Channel News Asia, 10 June 2012, available at http://ww.channelnewsasia.com/stories/singaporelocalnews/view/1206766/1/.html.
12 Arbitration (International Investment Disputes) Act (Cap 11).
13 ADR Conference, Keynote Address of the Honourable the Chief Justice Chan Sek Keong, 4 October 2012, available at http://app.supremecourt.gov.sg/data/doc/ManageHighlights/3427/CJKeynote%20Address%20at%20ADR%20Conference.pdf.
14 Paragraph 25B of the Subordinate Courts Practice Directions.
15 Subordinate Courts Practice Direction Amendment No 1 of 2008.
16 Subordinate Courts Practice Direction Amendment No 4 of 2011.
17 Subordinate Courts Practice Direction Amendment No 3 of 2006.
18 Paragraph 25D of the Subordinate Courts Practice Directions.
19 See para 25C of the Subordinate Courts Practice Directions and Practice Direction Amendment No 2 of 2011.
20 Subordinate Courts Practice Direction Amendment No 4 of 2012.
21 Subordinate Courts Practice Direction Amendment No 2 of 2012.
22 Paragraph 25F(7) of the Subordinate Courts Practice Directions.
23 More information on the premier mediation scheme jointly launched by the Subordinate Courts and SMC is available at http://www.mediation.com.sg/pdf/Premier%20Mediation%20Scheme.pdf.
24 More information on mediation advocacy for civil disputes in the Subordinate Courts can be found in the article by Dorcas Quek & Kenneth Choo, “Mediation Advocacy for Civil Disputes in the Subordinate Courts: Perspectives from the Bench”, Singapore Law Gazette, September 2012.
25 Paragraph 25G of the Subordinate Courts Practice Directions; Dorcas Quek & Seah Chi-Ling, “Finding the Appropriate Mode of Dispute Resolution: Introducing Neutral Evaluation in the Subordinate Courts”, Singapore Law Gazette, November 2011.
26 A copy of the Arbitration Rules is available at http://www.lawsociety.org.sg/forMembers/ResourceCentre/ArbitrationScheme/LawSocArbitrationRules.aspx.
27 More information on LSAS is available at http://www.lawsociety.org.sg/forMembers/ResourceCentre/ArbitrationScheme.aspx.
28 Rule 3 of Arbitration Rules.
29 Rule 20 of Arbitration Rules.
30 Rule 19 of Arbitration Rules.
31 Rule 31 of Arbitration Rules.
32 Rule 24 of Arbitration Rules.
33 Rule 32 of Arbitration Rules .
34 A copy of the LSAS Scale Fees is available at http://www.lawsociety.org.sg/forMembers/ResourceCentre/ArbitrationScheme/LSASScaleFees.aspx.
35 Rule 1 of the LSAS Scale Fees.
36 Rule 2 of the LSAS Scale Fees.
37 The arbitrator is entitled to levy an hourly rate which is the relevant fixed rate per day divided by 8. See r 2.2 of the LSAS Scale Fees.
38 Rule 34 of Arbitration Rules.
39 See http://www.lawsociety.org.sg/forMembers/ResourceCentre/ArbitrationScheme/PilotProBonoArbitrationScheme.aspx.
40 More information on the pilot pro bonoarbitration scheme is available at http://www.lawsociety.org.sg/forMembers/ResourceCentre/ArbitrationScheme/PilotProBonoArbitrationScheme.aspx.
41 More information on the administrative charges of the Law Society is available at http://www.lawsociety.org.sg/Portals/0/ResourceCentre/ArbitrationScheme/pdf/Provision_of_Facilities_for_LSAS_Administrative_Charges_080728_D3.pdf.
42 See http://www.lawsociety.org.sg/forMembers/ResourceCentre/ArbitrationScheme/PilotProBonoArbitrationScheme.aspx.
43 Detailed discussions of the tension between “coercion into mediation” and “coercion within mediation” can be found in the following articles:
Dorcas Quek, “Mandatory Mediation: an Oxymoron? Examining the Feasibility of Implementing a Court-Mandated Mediation Program” (2010) Vol II No 2 Cardozo J Con Res469 at 490 -492, 508 -509; and.es:-2011)
Timothy Hedeen, “Coercion and Self-Determination in Court-Connected Mediation: All Mediations are Voluntary but Some are More Voluntary than Others”, (2005) 26 Jus Sys J273.
44 Paragraph 18(6) of the Subordinate Courts Practice Directions Amendment No 2 of 2012.