New amendments to Singapore’s International Arbitration Act

A bill has been tabled in the Singapore parliament introducing amendments to the International Arbitration Act (IAA).  According to the Singapore Ministry of Law, the amendments are aimed at enhancing Singapore’s status as an international commercial arbitration hub, and strengthening the state’s legal framework for international arbitration.

In 2019, the Singapore government held public consultations in respect of four proposed amendments to the IAA. The Ministry of Law received input from business, arbitrators, professional bodies, academic and practitioners.  Two of those amendments, which seek to introduce a default mode for appointment of arbitrators in multi-party disputes and strengthen powers to enforce confidentiality obligations, are now officially introduced as the first proposed amendments to the IAA since 2012.

Key features of the amendments

1. Default mode of appointment of arbitrators

The first proposed amendment creates a default mode of appointment of arbitrators in multi-party arbitrations where the parties’ agreement does not specify the procedure that would apply.  While currently the IAA addresses the process for default appointment of a three-member arbitration tribunal where there are two parties to a dispute, the amendment sets out the process for multi-party arbitrations.

Specifically, the amendment provides the process and timeframe that should be adopted by parties appointing a three-member arbitration tribunal in a detailed Annex.  The aim here being to reduce the delays associated with the appointment process, particularly where there are multiple parties and agreement is more challenging.

2. Power to enforce obligations of confidentiality

Confidentiality is of utmost importance to commercial parties in arbitration.  This amendment recognises the role of confidentiality in the process and provides explicit recognition of the powers of the tribunal and High Court to enforce obligations of confidentiality by giving directions or making orders.

Under the common law, parties and the arbitral tribunal have a duty not to disclose confidential information obtained in the course of the proceedings or use them for any purpose other than the dispute.  The proposed amendment strengthens the parties’ ability to enforce these existing obligations.  Given the inevitable increase of virtual hearings, questions of confidentiality have become even more prevalent as online hearings become the norm and arbitral tribunals lose an element of physical oversight.

Further amendments

Two further amendments are still being considered by the Ministry of Law, which would introduce the following changes to the IAA:

(i) parties can by mutual agreement require the tribunal to decide on jurisdictional issues in a preliminary award; and

(ii) an opt-in mechanism to allow parties to appeal to the Singapore High Court on a question of law arising out of an award.

Comment

Singapore is the world’s third most preferred arbitration seat, and SIAC the third most preferred arbitration institution.[1]  These proposed amendments, and the two that may potentially follow (which we will report on when they are introduced), reaffirm Singapore’s dedication to enhancing efficiency in the arbitration process and respect for party autonomy.