Arbitration & ADR in Singapore

Alternative Dispute Resolution in Singapore

The liberalising of the financial industry in Singapore has led to growth of the ADR sector. Singapore has made great strides in establishing itself as one of the dispute resolution epicentres alongside London and Hong Kong. Having established its reputation for impartiality, integrity, excellent infrastructure and highly qualified professionals, it has become the forum of choice.

Mediation

The Government has actively encouraged prospective litigants to engage in mediation before turning to the courts. Formal or institutionalised mediation was established in the 1990s with the setting up of the Court Mediation Centre, renamed the Primary Dispute Resolution Centre, in the State Courts, the Singapore Mediation Centre (SMC), the Community Mediation Centres and other agencies and tribunals. In other words, mediation is practised in the various sectors of society catering to the diverse ethnic and social backgrounds of Singaporeans, from the grassroots community to government and business. Mediation saves time and money and guarantees confidentiality.

In April 2013, against the backdrop of a significant growth of trade and investment within Asia and the corresponding need for cross-border commercial dispute resolution services, the Honourable the Chief Justice Sundaresh Menon and the Ministry of Law appointed Edwin Glasgow CBE QC and George Lim SC, to co-chair a Working Group to propose plans to develop the international commercial mediation space in Singapore. The Working Group submitted its recommendations in November 2013, which were welcomed by the Ministry of Law. Two key recommendations made by the Working Group were: (a) to establish a professional body to set standards and provide accreditation for mediators; and (b) to establish an international mediation service provider offering a quality panel of international mediators and experts, as well as user-centric innovative products and services. These two recommendations have led to the formation of the Singapore International Mediation Institute (SIMI) and the Singapore International Mediation Centre (SIMC). Both organisations were formally launched on 5 November 2014 and mark a major milestone in Singapore’s development as a regional dispute resolution hub.

Presently, the two pieces of legislation that deal specifically with mediation are the Mediation Act 2017 and the Community Mediation Centres Act. The former provides for the enforceability of mediated settlements by the Singapore Courts and the confidentiality and admissibility of communications made in the course of mediation.

To further establish itself as an international dispute resolution centre, Singapore is a signatory to the United Nations Convention on International Settlement Agreements Resulting from Mediation, which is named after Singapore. Known as the Singapore Convention on Mediation, the Convention provides for the cross-border enforcement of mediated settlement agreements.

As an illustration of the acceptance of mediation as a form of dispute resolution, more than 3,600 matters have been mediated at SMC. The rate of settlement is about 70%, with 90% of them being resolved within one working day. Since its inception, about S$3.3 billion worth of disputes have been mediated at the SMC, the highest quantum being S$209 million.

Arbitration

Like mediation, arbitration is a fairly new concept in the Singapore context, only taking root in the 1990s with the passing of the Arbitration Act and International Arbitration Act after the country acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1986, the cornerstone of Singapore arbitration law. Awards made in Singapore, either in respect of a domestic or international arbitration, are binding and enforceable. In particular, if a counterparty is from a NY Convention country, an award obtained in Singapore against that counterparty is enforceable in the latter's country.

Like mediation, for the past 20 years, arbitration has gained traction as a popular method to resolve disputes, so much so that in 2018, Singapore was named the third most-preferred and widely used seat of arbitration by the International Arbitration Survey (Queen Mary University of London, White & Case, 2018).

Arbitration is well-supported by various institutions, expert arbiters and infrastructure to ensure that the arbitration process is seamless, efficient and professional. The Singapore International Arbitration Centre (SIAC) and the Singapore Chamber of Maritime Arbitration are two local non-institutional organisations that promote arbitration with their own panel of arbitrators and rules. The SIAC also provides training and certification. The SIAC, together with Maxwell Chambers, Asia´s first integrated dispute resolution complex, offer state of the art hearing facilities and comprehensive services to support the conduct of arbitration. In 2018, the SIAC handled 402 new cases with the total sum in dispute for the same year being US$7.06 billion - US$2.38 billion being the highest (SIAC 2018 Annual Report).

To further develop Singapore´s position as a leading international arbitration player, the Singapore International Arbitration Academy was set up at the tail end of 2012 by the Centre for International Law and the Faculty of Law, National University of Singapore, to develop practitioners´ arbitration knowledge and skills.