Between August and November 2023, SIAC ran a two-month public consultation on the Draft 7th Edition of the SIAC Rules (“Draft Rules”).[1] As Sana Mahmud explains, the new SIAC Rules are currently in the process of finalisation and, once in force, will contain important changes which SIAC hopes will enhance user experience and raise the bar on efficiency, expedition and cost-effectiveness in SIAC administered arbitrations.[2]
The Draft Rules contain significant changes to the 6th Edition of the SIAC Rules that have been in force since 2016 (“2016 Rules”). We review some of the key changes and new provisions below which will apply to any arbitrations under the SIAC Rules commenced on or after the date on which the new rules come into force.
Key Changes
Streamlined Procedure
The Draft Rules introduce a new “Streamlined Procedure” in Draft Rule 13, in addition to the existing Expedited Procedure.
At the time of filing the Notice or Response, or at any time prior to the appointment of the tribunal, a party can apply to the Registrar to have the arbitration conducted under the Streamlined Procedure, in circumstances where:
- the parties have agreed to the application of the Streamlined Procedure;
- the amount in dispute does not exceed the equivalent amount of S$1 million at the time of the application; or
- the circumstances of the case warrant the application of the Streamlined Procedure.
An arbitration subject to the Streamlined Procedure will be decided by a sole arbitrator on a documents only basis, without factual or expert witness evidence or a document production process. Consequently, the Draft Rules introduce an ambitious three-month timeframe from the date of the constitution of the tribunal to the issue of the award. There is also a cost benefit with this approach, as SIAC offers a significant 50% saving on the maximum amounts of SIAC’s administrative fees calculated in accordance with the Schedule of Fees.
Expedited Procedure
Perhaps as the result of the introduction of the new Streamlined Procedure for smaller claims, Draft Rule 14.1(b) increases the threshold for the existing Expedited Procedure from S$6 million to S$10 million. This change is likely to increase the number of disputes settled through the shorter and more cost-efficient Expedited Procedure.
The Draft Rules also introduces changes designed to make the Expediated Procedure more efficient, including an express power for the tribunal to limit document production, written submissions and witness evidence.
It should be noted that both the Expedited Procedure and the Streamlined Procedure can be applied to higher-value disputes where the circumstances of the case warrant the application of the Streamlined or the Expedited Procedure; for example, where the dispute in question is relatively straightforward.
The time limit for rendering an award under the Expedited Procedure remains six months.
Emergency Arbitration
The Draft Rules allow a party to apply for the appointment of an Emergency Arbitrator before filing the Notice of Arbitration. This is a change to the 2016 SIAC Rules, which only allowed a party to apply for the appointment along with, or after, the filing of the Notice of Arbitration.
To prevent abuse of process, the Draft Rules specifies that the party making the application must file a Notice of Arbitration within five days of the application.
In addition to the above, other timeframes have also been shortened, including:
- A party has 24 hours in which to challenge an Emergency Arbitrator.[3] Under the 2016 SIAC Rules, this is two days.
- The Emergency Arbitrator must establish a schedule for consideration of the application within 24 hours.[4] Under the 2016 SIAC Rules, this is two days.
- The emergency arbitrator must issue an order or award within 10 days from appointment.[5] Under the 2016 SIAC Rules, this is 14 days.
These changes are designed to streamline the existing Emergency Arbitration process.
Consolidation
Pursuant to Draft Rule 16.1(c), arbitrations can now be consolidated where arbitration agreements are compatible and “a common question of law or fact arises out of or in connection with all the arbitrations”. This is a new provision.
The Draft Rules also allow for the consolidation of arbitrations even if they are under different rules (such as UNCITRAL or earlier SIAC rules).
Coordinated Proceedings
Draft Rule 17 is a new provision which allows coordinated proceedings where the same tribunal is appointed in two or more arbitrations in which a common question of law or facts arises. Pursuant to Draft Rule 17.1, the Tribunal may determine that:
- the coordinated arbitrations shall be conducted concurrently or sequentially;
- the coordinated arbitrations shall be heard together and any procedural aspects shall be aligned; or
- any of the coordinated arbitrations shall be suspended pending a determination in any of the other coordinated arbitrations.
Draft Rule 17.2 makes clear that “[u]nless otherwise agreed by the parties, the coordinated arbitrations shall remain separate proceedings and the Tribunal shall issue separate decisions, rulings, orders, or awards in each arbitration”.
The primary purpose of this provision appears to be to avoid conflicting findings on issues commons to coordinated arbitrations without the need for consolidation.
Early Dismissal
The 2016 Rules already contain an early dismissal procedure pursuant to which unmeritorious claims can be dismissed in the early stages of the arbitration process.
Draft Rule 47.4 shortens the timeframe in which the tribunal must make a decision for early dismissal from within 60 days in the 2016 Rules to 45 days.
Preliminary Determination
Draft Rule 46 is a new provision which allows a party to apply to the tribunal for a preliminary determination of an issue on a preliminary basis. Whilst parties are free to make such applications under the 2016 Rules, the Draft Rules go one step further and codify the process, encouraging parties to consider making an appropriate application where there is a fundamental issue which warrants such an approach.
In recent experience, SIAC tribunals can be reluctant to provide preliminary determination. This reluctance, perhaps, arises out of cautious approach because of a perceived risk of rendering an unenforceable award through a lack of due process. This codification may go some way to allaying such fears, and encouraging tribunals to make preliminary determinations which lead to a more efficient and expeditious resolution of the dispute.
Conclusion
According to the SIAC Annual Report 2023,[6] in 2023, SIAC received:
- 94 requests for the Expedited Procedure, of which 41 were accepted.
- 11 applications to appoint an Emergency Arbitrator, all of which were accepted.
- Nine applications for Early Dismissal, three of which were allowed to proceed, four of which were not allowed to proceed, one application was pending under Rule 29.3 of SIAC Rules 2016. One application was withdrawn. Of the three applications that were allowed to proceed, one application was granted, one application was rejected and one was withdrawn.
Once the new rules are in force, it will be interesting to see if the number of applications for the procedures above increase, and whether there is significant take up of the new Streamlined Procedure, contributing to SIAC’s stated aim of creating a more efficient arbitration process.
[1] Draft-7-Edition-of-the-SIAC-Rules-Consultation-Draft.pdf
[2] Registrars-Report-Public-Consultation-on-the-Draft-7th-Edition-of-the-SIAC-Rules.pdf
[3] Draft Rules Schedule 1, paragraph 9
[4] Draft Rules Schedule 1, paragraph 14
[5] Draft Rules Schedule 1, paragraph 17
[6] SIAC Annual Report 2023, page 42: https://siac.org.sg/wp-content/uploads/2024/04/SIAC_AR2023.pdf