Singapore Considers Amendments To Its International Arbitration Act

On June 26, 2019, Singapore's Ministry of Law (the “Ministry”) published a consultation paper seeking comments from the public on six proposals for amendments to Singapore's International Arbitration Act (“IAA”), which governs the conduct of international arbitrations seated in Singapore. We explain below the six amendments put forward by the Ministry on June 26 for public comment.

(1) PROPOSED AMENDMENT 1: Introduction of Default Nomination Procedure for Arbitrators in Multi-Party Arbitrations

At present, section 9A of the IAA sets out a default procedure for the appointment of three arbitrators: each party appoints one co-arbitrator, and the parties appoint the third arbitrator by agreement or, if no agreement is reached in 30 days, the appointing authority appoints the third arbitrator. However, this default procedure applies only to situations involving a single claimant and a single respondent: no provision is made for the possibility of multiple claimants and/or multiple respondents who might not be able to agree among themselves on a single co-arbitrator.

This lacuna in the IAA contrasts with leading institutional rules, which have long stipulated default multi-party nomination procedures. In order to protect the equality of the parties, the current versions of leading institutional rules typically provide that the relevant appointing authority shall select all three arbitrators where one side is unable to agree upon a co-arbitrator between themselves. See, e.g., SIAC Rules (2016), Rule 12.2; HKIAC Rules (2018), Art. 8.2(c); ICC Rules (2017), Art. 12(8); LCIA Rules (2014), Art. 8.1 (except where separate “sides” have been agreed in writing).

The Ministry proposes a new default multi-party nomination procedure in a proposed new section 9B, which prioritizes party autonomy over equality of the parties. If adopted, proposed new section 9B would permit claimants to jointly nominate a co-arbitrator and respondents to jointly nominate another. Where one side cannot agree upon a joint nomination of a co-arbitrator, proposed section 9B would allow the other side to keep its choice of co-arbitrator.

This proposed amendment is to be welcomed as it closes a lacuna in the IAA and should incentivize each side to agree upon a joint nomination and remove the potential for strategic disagreement with the objective of denying the opposing side its choice of a co-arbitrator. The impact of the amendment is, however, likely to be limited: it will...