International Commercial Disputes and Singapore’s advance in 2023
The three main Singaporean institutions dedicated to the resolution of international commercial disputes have released in January 2023 two initiatives aiming at making Singapore more attractive. That includes the centre for arbitration Singapore International Commercial Court (SIAC), the centre for mediation Singapore International Mediation Centre (SMIC) and the dedicated court of the judiciary Singapore International Commercial Court (SICC).
Interesting to note is the pivotal role of SICC, an institution which parallels the Chambre Commerciale Internationale de la Cour d’Appel de Paris, both in arbitration and (more recently) in mediation matters.
This is major step towards a new, hybrid model for the resolution of international commercial disputes, presenting to the parties an alternative to the most traditional avenues of the Courts, arbitration and mediation.
As a sign of that new frontier, Singapore has suggested to interpret the well-known acronym ADR no longer as “Alternative Resolution” but instead as “Appropriée Dispute Resolution”.
This is beyond a semantic adjustment, it means to convey the message that ADR should consist of a range of options for the parties to choose from in consideration of their individualities, their industry and the very content of the dispute.
Newsletter No. 12 - A new hybrid model for resolving international commercial disputes
Hybrid dispute resolution models are not new to South-East Asia
As early as 2014, the Singapore International Arbitration Centre SIAC and the Singapore International Mediation Centre SIMC have established a joint protocol by the name of “Arb-Med-Arb” whereby in the event where a dispute submitted to arbitration is resolved through the course of the proceedings through mediation, the settlement can be recorded as consent award and as such is enforceable in many jurisdictions under the New York Convention.
In Malaysia, the “Mediation Rules 2018” provide for a Med-Arb mechanism whereby parties may first seek to resolve their dispute through mediation; if unsuccessful, the proceedings shall continue by way of arbitration, resulting in an award enforceable under the New York Convention.
The breakthrough of January 2023: the addition of a third pillar, the judiciary
SICC and SIMC have agreed on a protocol LML allowing the parties to request the suspension of an on-going proceedings before the SICC and its conversion into mediation for the whole or for part of the dispute.
The mediation takes place under the supervision of SICC, which can register the settlement as “order of court” and meanwhile, issue interim or supplementary orders including the appointment of an expert, the interpretation of a point of law or of a piece of evidence, the freezing of an asset, the protection of evidence, the discovery of document….etc.
That Protocol establishes a new type of mediation , which combines the flexibility of mediation with the rigours of Court supervision.
It relies on some of the fundamentals of arbitration , with the main difference that the solution at the end of the proceedings is not binding.
Nonetheless, many of the advantages of mediation remain: confidentiality, speed of resolution and openness to creative solutions. This being in addition to lower costs than in arbitration, albeit possibly higher than in a traditional mediation.
Likewise, the preservation of the business relationship will be somewhere between arbitration and traditional mediation. There is a need for the parties to agree on resorting to the LML Protocol, which suggests a minimum of cooperation between them, and it is their discretion to accept or reject the terms of the mediated settlement.
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The content above is purely for informational purposes, relating to a selected overview of legislative, regulatory and case law developments in the relevant geographical area, which is not and does not claim to be exhaustive.
It does not constitute legal advice in relation to any particular case and should not be regarded as such. A more detailed doctrinal study on any of the topics mentioned may be requested.
Philippe Girard-Foley is a Registered Foreign Lawyer accredited by the Supreme Court of Singapore before the Singapore International Commercial Court – Certificate of Full Registration under Section 36P Legal Profession Act (Chapter 61).