arbitration briefing - singapore 28th aug 2013

Arbitration Briefing - Singapore 28th Aug 2013

Lee Wai Pong Executive Director

FCIArb, FSIArb , FICS, Master Mariner

Maritime Knowledge Shipping Session 25


DISPUTE RESOLUTION ALTERNATIVES

Informal

Mix of law and relationship

Least Confrontational

Less Time & Expense

Outcome – May not have one

Enforcement – Problems overseas

Court Proceedings

Negotiations

Mediation

Arbitration


Mediator lacks power

Less Confrontational

Outcome – May not be one

Enforcement – Problems overseas if contract breached

Court Proceedings

Negotiations

Mediation

Arbitration



Formal proceedings but not as strict as Court Proceedings

Arbitrator (has powers)

More Confrontational

More Time & Expense

Outcome – Award or dismissal

Enforcement - Best option in international cases

Court Proceedings

Negotiations

Mediation

Arbitration



Little Privacy

Very Formal & Confrontational

Judge has wide coercive powers and no party autonomy in his appointment

Rules of Discovery Apply Strictly compared to ADR

Time Consuming & Expensive

Outcome – Judgment / dismissal

Enforcement – Problems outside of home country

Exceptions – EU, Commonwealth, etc..

Court Proceedings

Negotiations

Mediation

Arbitration



Historical development SCMA Model Clauses :

Application and usage in contracts

SCMA’s Role in arbitration landscape

Singapore as a seat of arbitration

Virtual Tour of Maxwell Chambers

Case Studies

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1985 – Worst recession since independence in 1965

1986 – Economic Committee - review & restructure New Economy

Headed by young Minister at MTI His brief - No Sacred Cows Trade & Services sector identified

as key driver for new economy Alternative Dispute Resolution

(ADR) identified as building block

BRIEF HISTORY OF ARBITRATION IN SPORE

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Considerable work potential for Singapore to tap

International shipping and related (commodities) activities

Singapore’s legal framework and laws structured to support international arbitration

Aligned with international arbitration practices

ARBITRATION IDENTIFIED AS KEY FORM OF ADR

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International Arbitration Act (Cap 143A) or IAA

IAA provides legislative framework for Singapore’s international arbitration regime

Based on UNCITRAL Model Law (ML) of 1985

ML reflects established practices worldwide on key aspects of international arbitration

Most arbitrations fall under under IAA

Lex Arbitri

SINGAPORE’S ARBITRATION REGIME

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Under IAA - NO provision for appeal

England is notable exception – appeal sometimes allowed for errors of law

Parallel Regime - Singapore has a separate Arbitration Act (AA) – for conduct of domestic arbitration

AA has some modifications which allows for some level of appeal

Good or bad?

SINGAPORE’S ARBITRATION REGIME

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Why use arbitration?? A Reminder Party autonomy – on law, seat, tribunal, counsel & procedure Nature of proceedings – P&C Ease of Enforcement NY Convention 1958 - UN Convention for Recognition and

Enforcement of Foreign Arbitral Awards April 2013 - 146 of the 193 UN Member States have adopted

NY Convention - Most successful treaty in private international law

Claimants benefit from court orders for enforcement – defaulters face sanctions backed by state

Best of both worlds result Awards - Final and Binding (IAA) Closure - No Right of Appeal (IAA)

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Model Clause for Maritime Usage

Recommended short form for negotiations

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Full Model Clause

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Not a Model Clause

Arbitration Act 1996 (of England) - 1996

CHAPTER 23

Old version. Current version is 2010

Substantive Law - Preferable to use

a named country’s law, eg English

or Singapore

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SCMA Model Clause & SCMA Model BIMCO Clause

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SCMA BIMCO Model Clause

- BIMCO adopts Singapore as default seat of arbitration alongside London and New York

- If Singapore is selected as a seat by parties in BIMCO forms

- SCMA BIMCO Model Clause and SCMA Rules will become applicable

- Choice of English / Singapore Law as governing law

- Close to 70% of all global maritime contracts concluded using BIMCO forms

14th Nov 2012

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1. Singapore signed NY 1958 Convention in 1986

2. SIAC formed in 1991 3. SCMA formed in 2004 to

serve maritime community 4. Reconstituted in May 2009 5. Company limited by

guarantee 6. Shareholders : MPA & SMF 7. Located in Maxwell

Chambers

Creation of SCMA

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1. Promote Maritime Arbitration in Singapore holistically

Roles of SCMA

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1. Originally patterned after SIAC model of Administered Arbitration

2. Poor reception from maritime stakeholders

3. Accustomed to un-administered model - No Scale Fees & Award Scrutiny

4. Since May 2009, changed to Un-administered model comparable to LMAA

SCMA’s Role - Providing the Model

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Membership 1. 160 + Corporate &

Individual 2. Member Types - Local

and Overseas 3. Reflects wide diversity

of stakeholders from legal and maritime communities

SCMA’s Role - Cementing the foundation

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Membership Types – Arbitrators – Lawyers – Ship Owners – Ship Managers / Brokers – Ship Charterers /

Operators – Shipyards & Repairers – Cargo Interests – P&I Clubs


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Building up a Strong Panel of Arbitrators 1. 60 2. Demonstrated Expertise

& Experience in Maritime Cases

3. Local and Overseas members

4. Rising numbers of LMAA Arbitrators applying

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Rules 1. Recognized & Well Accepted by

Community 2. 3rd Edition due end 2013 3. Chinese & Korean version available

now 4. Dynamic and responsive to shipping

practices 5. Format is Simple & Uncluttered 6. Comparison with LMAA available 7. SEDOCCS

SCMA’s Role - Providing the Rules

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Cases 1. 16 since Jan 2013 2. 20 in 2012 & 16 in 2011 3. Total 72 since May 2009 4. Enquiries: On the rise 5. Types: Diversification from

shipping into Commodities, Oil&Gas

6. Internationality: 50% Non-resident claimants / respondents

SCMA’s Role - Building up the Caseload

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SCMA’s Role – Reaching out to stakeholders

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2. Capitalize on our recognized & established advantages

Purpose of SCMA

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Gateway to Asia / Strategic centre for maritime business

Rare cluster providing rich vein of resources & expertise to tap into for arbitral process

Maritime ecosystem hosts > 5,000 companies

- Employs > 170,000 people - Contributes about 7% to GDP - Home >100 major international shipping groups - Diverse Activities cover 1. Ship Owning, chartering and broking 2. Ship Financing (eg banks, trusts) & Insurance 3. Hosting of international maritime organizations - Baltic

Exchange, BIMCO, Intertanko & ASF

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Singapore as a Seat of Arbitration

Government proactive with fiscal, legislative, judicial & infrastructural initiatives to support arbitration

No restriction for foreign arbitrators/counsel to practise – Ali Baba clause abolished

Visas not an issue for many nationalities

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http://www.google.com/url?sa=i&rct=j&q=visas&source=images&cd=&cad=rja&docid=EjYPqclE80EmmM&tbnid=NHgUTWxwzSOAZM:&ved=0CAUQjRw&url=http://picassotravel.com/index.php?id%3D52&ei=kXQUUpaDKs2UrgeN04CoCw&bvm=bv.50952593,d.bmk&psig=AFQjCNHdGgrw1g-Yw9CPB9LHmdOQzvR80Q&ust=1377158625547742


Singapore as a Seat of Arbitration

No work permits needed & withholding tax abolished for arbitrators

Written and spoken English widely used

Any exotic tourist attractions??

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https://www.google.com.sg/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=vI6GXHNivwn3uM&tbnid=leEGNKGqRzt0RM:&ved=0CAUQjRw&url=https://www.facebook.com/TheSingaporePandas&ei=U8XcUcfwJojtrQfRm4DIDg&bvm=bv.48705608,d.bmk&psig=AFQjCNHWJW52ay1QqGbJ8PwgPcJ4Pi5EKg&ust=1373509289743326

http://www.google.com/url?sa=i&rct=j&q=marina+bay+sands&source=images&cd=&cad=rja&docid=OuMulyQ1FygmaM&tbnid=CdK-1KTxKNA6JM:&ved=0CAUQjRw&url=http://www.tripadvisor.com/Hotel_Review-g294265-d1770798-Reviews-Marina_Bay_Sands-Singapore.html&ei=7bIIUrz6D4jJrAe3_4GYBg&bvm=bv.50500085,d.dGI&psig=AFQjCNHMAuelg5g_GzivQCwTFPr3zVq6WQ&ust=1376388201757597

http://www.google.com.sg/url?sa=i&rct=j&q=work+permits&source=images&cd=&cad=rja&docid=VVnjLJOaarxOUM&tbnid=ODoFtJSQNv2e4M:&ved=0CAUQjRw&url=http://www.costaricantimes.com/the-costa-rica-work-permit-scam/12249&ei=JvsIUu7tE8nDrAfuhoCQCA&bvm=bv.50500085,d.bmk&psig=AFQjCNEJ__WmCTob6J52MKxpQwrLjqmICw&ust=1376406687931796


Singapore as a Seat of Arbitration Consistent Regional Leader in Asia - 2010

Queen Mary (London-based) International Arbitration Survey & 2007 ICC (Paris-based) Report

Spore law is rooted in English law. Both laws are readily accepted here

Civil Law also acceptable

Wide choice : Administered or Un-administered Arbitration

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Where it all happens

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Dedicated and full facilities for hearings

14 custom-designed hearing rooms 12 preparation rooms Translation services Audio recording Video conferencing 24/7 Availability

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http://www.google.com/url?sa=i&rct=j&q=the+end&source=images&cd=&docid=fa3RHY8yOH0a_M&tbnid=IOaoVUKha4igmM:&ved=0CAUQjRw&url=http://blogs.lynn.edu/herethereandeverywhere/2012/05/07/the-final-page-of-the-first-chapter-a-captivating-farewell/not-the-end-4/&ei=obMHUvFtx_etB-vOgJgO&bvm=bv.50500085,d.bmk&psig=AFQjCNHqmJM3siVzjamfGEtC19KIHwJOhA&ust=1376322761041321


Case Study 1 Company A in Thailand owes Company B in

Singapore US$ 1 mio for unpaid charter hire Company A sues Company B US$5 mio in

Thailand for consequential damages caused by Company B’s ship during Time Charter

How should Company B react, taking into account various kinds of Dispute Resolution agreements that might or might not have been agreed?

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Case Study 2 Owner A concludes sale of 2nd hand geared

supramax bulker to Buyer B to service a CoA requiring ship’s gear.

Norwegian Sale Form ‘93 and on As-Is-Where Is basis

All 5 Crane bearings become faulty 1 month after delivery and vessel needs to go to drydock for 2 weeks to repair

For Buyer B – any recourse? Dalmare SpA v Union Maritime Ltd and Anr (The “Union Power”) – QBD

(Com Ct) (Flaux J) – 13 December 2012

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arbitration briefing - singapore 28th aug 2013

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