The Draft 7th Edition of the SIAC Rules – overview of progressive reforms and key changes

Proposed Key Changes

Simplification of Processes & Increasing Collaboration

Measures are being introduced to ease case administration and simplify the process of commencing an arbitration. It is no longer mandatory to include a copy of the contract and arbitration agreement in the Notice of Arbitration (NOA) (Draft Rules 6.3 (d) and (e)).

The Draft Rules also aim to increase collaboration between parties in constituting the Tribunal. Parties are only required to comment on the number of arbitrators and procedure for the constitution of the Tribunal (Draft Rules 6.3 (g)), doing away with the current requirement under the 6^th Edition Rules to nominate the arbitrator at the outset. The President of the SIAC Court may also use a list procedure to appoint a sole arbitrator or a presiding arbitrator in certain situations (Draft Rule 19.8). Parties should consider these provisions in their strategy for arbitrator appointments.

New Streamlined Procedure, Changes to the Expedited Procedure and Emergency Arbitration Process

The proportionality principle is reflected in the new Streamlined Procedure for claims up to SGD 1 million, or where the circumstances warrant (Draft Rule 13.1). Draft Schedule 2 provides that parties may agree to have their claims determined by a sole arbitrator based on written submissions and documentary evidence only, without the entitlement to request for document production, or to file any fact or expert witness evidence. The final award must be issued within three months from the date of the constitution of the Tribunal, and will state the reasons on which it is based in summary form unless the parties agree otherwise. The Tribunal’s fees and SIAC’s costs are not to exceed 50% of the maximum amounts provided under the SIAC’s Schedule of Fees unless determined otherwise by the Registrar.

The Expedited Procedure is now expanded to include claims of up to SGD 10 million (Draft Rule 14.1(b)) (an increase from SGD 6 million under the 6^th Edition Rules) and where “the circumstances of the case warrant (it)” (Draft Rule 14.1(c)), which is wider than the alternative ground of “exceptional emergency” under the 6^th Edition Rules.

The commencement and procedures of an Emergency Arbitration (EA) are streamlined. An EA application may now be filed prior to the filing of an NOA. Any challenge to the appointment of an Emergency Arbitrator must now be made within 24 hours from the date of receipt of the notice of appointment or from the date the circumstances became known or should have reasonably been known to that party (instead of within two days under the 6^th Edition Rules). The Emergency Arbitrator must establish a schedule for the application within 24 hours of their appointment (instead of within two days under the 6^th Edition Rules) and must make an order or award within ten days from the date of his/her appointment (instead of 14 days under the 6^th Edition Rules) unless the Registrar extends the time.

Streamlining of existing consolidation and joinder provisions

The scope of when multi-contract and multi-party disputes may be heard by the same Tribunal is expanded. It is now possible to consolidate two or more pending cases “under SIAC's administration”, as well as cases where “the arbitration agreements are compatible and (…) a common question of law or fact arises out of or in connection with all the arbitrations”.

Greater Powers for Tribunal to Manage Proceedings

Tribunals are provided with greater powers to ensure fair and proportionate proceedings (relative to the cost and conduct of the proceedings). This includes providing the Tribunal with the power to determine issues preliminarily within 45 days where parties agree the determination will expedite resolution and the power to terminate arbitration or issue sanctions and awards in case of non-participation or non-compliance by a party.

Safeguarding the Composition of The Tribunal

The Draft Rules now address situations where parties engage in “sharp practices” by exploiting procedural rules for strategic advantage. These practices include deliberate attempts to stymie or disrupt proceedings and range from deliberate failures to comply with Tribunal’s orders, failure to pay arbitral deposits, changing legal representation, or challenging the arbitrator. Tribunals will have the power to refuse proposed changes to party representatives, after considering the parties' views to “safeguard the composition of the Tribunal”. (Draft Rule 10.5). While representation changes may be legitimate, this refusal power will allow Tribunals to consider such changes and safeguard against engineered conflicts of interest regarding Tribunal members.

However, refusal of a proposed change of party representative could risk rendering an award unenforceable if a party was unable to present properly its case.  Article V(1)(b) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) provides that a court may refuse to recognise or enforce an award if the party the award is invoked against successfully proves that it was unable to present its case.

Nonetheless, the threshold appears to be high. Courts have interpreted Article V(1)(b) to mean that parties must have an opportunity to be heard at a “meaningful time and in a meaningful manner”  1  Iran Aircraft Indus. v. Avco Corp., Courts of Appeals, Second Circuit, United States of America, 24 November 1992, 92-7217, 980 F.2d 141, 146; Karaha Bodas Co. (Cayman Islands) v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Indonesia), Court of Appeals, Fifth Circuit, United States of America, 23 March 2004, 02-20042, 03-20602. and that Article V(1)(b) “concerns the impossibility rather than the difficulty of presenting one’s case.”  2 De Maio Giuseppe e Fratelli snc v. Interskins Ltd., Court of Cassation, Italy, 21 January 2000, 671, XXVII Y.B. Com. Arb. 492 (2002).

In the ICSID Case No ARB/05/24 Hrvatska Elektroprivreda d.d. v. Republic of Slovenia, the Tribunal held that the late participation of Respondent’s counsel who was from the same set of Chambers as the President of the Tribunal was “inappropriate and improper” and prohibited further participation of the proposed counsel in the case. The Tribunal held that under the ICSID Convention and as “a judicial formation governed by public international law”, it had “an inherent power to take measures to preserve the integrity of its proceedings”. However, as private commercial international arbitrations do not have the same protection under public international law and international conventions, these Draft Rules provide the Tribunal with the express power to maintain the integrity of its composition.

Proceeding with Less than Three Arbitrators

In the event of death, incapacity, resignation, withdrawal, or removal of an arbitrator in a three-member Tribunal during the course of the arbitration, the SIAC Court or the President may now determine that it is more appropriate to proceed with the arbitration without appointing a substitute arbitrator, after considering the views of the parties and the remaining arbitrators (Draft Rule 30.3). Article V(1)(d) of the New York Convention provides for challenges to awards on the ground that the “composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties…”. The provision of this power to the SIAC Court and the President under the Draft Rules means that parties would have agreed to proceed without a substitute arbitrator.

Updated Digital Practices

Provisions are introduced for modernised digital practices to provide greater flexibility, convenience, and cost savings for parties.

The SIAC Gateway is a centralised online case filing platform onto which all communications and documents are uploaded from the commencement of the arbitration. Hearings can be conducted in-person, hybrid or through video/teleconference (Draft Rule 39.2). Additionally, Tribunals are also required to discuss information security measures with parties to protect electronically shared data, reflecting the increased use of remote technologies in international arbitration (Draft Rule 61).

Other New Provisions

Other new provisions reflect and respond to developments in the practice of international arbitration, including (i) disclosing any third-party funding relationship in the NOA (Draft Rule 38); (ii) adopting environmentally sustainable procedures for the arbitration (Draft Rule 32.4(b)); and (iii) requiring the President is to consider principles of diversity and inclusion when appointing an arbitrator (Draft Rule 19.5). The Draft Rules also expressly provide that where the parties are of different nationalities, the sole or presiding arbitrator must be of a different nationality than the parties (unless otherwise agreed or it is appropriate not to be) (Draft Rule 19.7).

Conclusion

The Draft Rules refine existing arbitral processes and provide new measures that respond to the evolving needs of arbitration users at a time when international arbitration practice and specialised dispute areas continue to develop.