SINGAPORE'S ACTIONS TO PROMOTE ARBITRATION

Singapore's recent efforts to promote arbitration include:In Singapore, there are two legal systems that regulate arbitration. The Arbitration Act (revised 2002) or the International Act (IAA) will apply in situations where the (seat) of arbitration is Singapore. The Arbitration Act, which replaced the previous Arbitration Act in Toto on March 1, 2002, governs all domestic arbitrations in Singapore. In the case of international arbitration agreements, the relevant legislation is the International Arbitration Act (IAA), which applies to both domestic and international arbitrations where the parties have agreed to apply Section II of the IAA and the Model Law.

Arbitration is considered international under the IAA if: By the time the arbitration agreement was concluded, at least one of the parties had a place of business in a state other than Singapore; or the agreed place of arbitration is situated outside the state where the parties had their place of business.

Singapore being a recent entrant to the sphere of International Arbitration has already seen its fair share of controversial cases in spite of the Judiciary being very stringent. The judicial intervention has been very limited and clear. Below are some of the cases that affected Arbitration in Singapore:

VV and Another v VW [2008] SGHC: This is most likely the first case in Singapore to deal with a party's application to set aside a costs award under the new IAA. In this case, VV and another party entered into a contract with VW for a design project in VW's country, where disputes arose between the parties, and the parties referred the dispute to arbitration under an arbitration clause, where VV claimed a sum of US $927,000 in response to which VW raised two defenses and ten counterclaims totaling US$20 million, which the arbitrator dismissed. The suit was dismissed by the High Court, which stated that because the parties had decided to resolve their disagreements through private litigation, regardless of how unfair the judgement is, it would not be against public policy, and any mistake on the part of the arbitrator would be a factual error that could not be investigated by the courts.

Insigma Technology Co Ltd v Alstom Technology Ltd [2008] SGHC:This case concerns the authority of one agency to perform proceedings under the laws of another, as well as its validity. The following are the facts of the case: Sigma Technology Co Ltd and Alstom Technology Ltd signed an agreement in which the parties agreed to resolve disputes by consultations before referring to arbitration before the SIAC in compliance with ICC law. Following that, disagreements emerged between the parties, and after unsuccessful negotiations, Alstom referred the matter to arbitration at the International Chamber of Commerce, to which in sigma objected, despite the agreement clearly naming SIAC as the institution to administer the arbitration.

In sigma brought an action in the High Court to overturn the tribunal's ruling, which was rejected by the court. However, the court noted that "in theory, there is no issue with one organization conducting arbitration proceedings in place of another set of rules selected by the parties." The High Court also clarified that the supervising authority and the procedural rules to be followed do not have to be the same, and that the two should work together if there is no significant difference.