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Singapore's new mediation centre and court will cater for growing demand for dispute resolution services in Asia


The forthcoming Singapore International Mediation Centre (SIMC) and Singapore International Commercial Court (SICC) will improve the range of dispute resolution venues available to the international business community, legal experts have said. 

The two institutions will meet the growing demand for neutral venues in which to launch cross-border transaction dispute processes which are transparent and efficient, the experts said.

Mohan Pillay, joint head of Pinsent Masons MPillay, the Singapore joint law venture partner of Pinsent Masons, the law firm behind Out-Law.com is the immediate past president of the Singapore Institute of Arbitrators. He said: "In today’s global market, it’s vital that businesses have efficient and reliable avenues to resolve their disputes in a neutral venue. For cross border transactions, the neutrality and transparency of the process can be critical.  So the establishment of the Singapore International Commercial Court and Singapore International Mediation Centre will be welcomed by the international business community.”

Jon Howes, also joint head of Pinsent Masons MPillay, said: “The government and legal community are working together to push through these developments with great speed. I see this as a very positive step which will continue to improve the choice and quality of dispute resolution options available in Singapore.”

The legal experts made the comments following the recent Singapore International Arbitration Centre Congress.

The congress was chaired by Edwin Glasgow QC who will be the founding chairman of the SIMC which is due to open in November.  The SIMC deputy chairman will be George Lim.

Singapore minister for law K.Shanmugam was guest of honour at the congress and due to deliver a key-note address, but fielded a question and answer session instead, according to lawyers who attended the congress.

In his planned speech, which was distributed afterwards, Shanmugam said that the SICC and SIMC, together with the existing Singapore International Arbitration Centre (SIAC) will provide "a complete suite of dispute resolution offerings to parties, especially those with cross-border disputes".  

According to the minister, in 2013, SIAC achieved a new record of 259 new cases filed. This follows a steady increase in cases over the last five years, he said. In addition, SIAC also established its first overseas office in Mumbai last year,

Shanmugam said: "The SICC would appeal to those who, for example, have non-arbitrable disputes and who would like the availability of an appeal. The SIMC will provide international commercial mediation services as an important complement to arbitration and litigation. Successful mediation can allow parties to mutually arrive at a mix of legal and non-legal solutions suited to their different interests."

Shanmugam said that Singapore is now the third most preferred seat of arbitration worldwide having developed its "arbitration ecosystem" in recent years and that SIAC is the fourth most preferred arbitral institution in the world.

"The success of the arbitration sector in Singapore is due to several factors," said Shanmugam. "First, Singapore has built a strong legal framework and arbitration-friendly policies and regulation. We have a completely open regime for international commercial arbitration, such that parties engaging in arbitration in Singapore have the freedom to engage lawyers of any nationality and to use any governing law."

"Our Courts have been supportive of arbitration," Shanmugam said. "The courts have consistently supported the finality of awards from arbitrations and there has been minimal intervention by the courts except within an internationally accepted rubric."

Singapore's status as a signatory to the New York Convention and the fact that the country's International Arbitration Act is compliant with the United Nations Commission on International Trade Law model law, has also played a part in Singapore's success as an arbitration centre, Shanmugam said. Its situation as a major aviation hub in Southeast Asia also allows Asia's major economic powers to have their disputes heard in a "convenient and neutral location".

In addition, Shanmugam said, SIAC is a "first-rate" arbitration centre. "Its international board has been instrumental in establishing SIAC in the international scene alongside players like the London Court of International Arbitration (LCIA) and International Chamber of Commerce (ICC). The SIAC caseload is today comparable to that of LCIA."

Shanmugam said that economic development in the region offers "tremendous potential for growth" in arbitration.

He pointed out that the combined Association of Southeast Asian Nations (ASEAN) economies last year achieved annual growth of 5%, compared to global economic growth estimated at less than 3%.

Shanmugam attributed this growth to increased foreign direct investment in Asia which he said has grown by nearly 30% since 2009, totalling US$400 billion in 2012. He pointed to a study by the Asian Development Bank which suggests that by 2050 Asia could account for half of global gross domestic product, trade and investment.

The minister also said that infrastructure spending in the region is expected to increase.

"In Southeast Asia alone, nearly US$1 trillion of infrastructure investment will be needed through 2020," said Shanmugam. "India also presents a significant infrastructure business opportunity. India’s infrastructure sector potential is estimated to require US$ 1tn in funding from 2012 to 2017."

Trade agreements which are currently under negotiation are also likely to lead to an increase in economic growth and the demand for arbitration services in the area, said the minister. These include the talks to create the ASEAN Economic Community (AEC) and the Trans-Pacific Partnership (TPP) which involves 12 countries including Singapore, the US, Australia and Japan.

"All these factors will contribute to the growth in arbitration," said Shanmugam. "The rise in cross-border investment and trade transactions will invariably result in the prevalence of complex cross-border disputes, and parties will demand access to timely and cost-efficient dispute resolution services such as arbitration."

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