Singapore International Commercial Court: Positioning Singapore as Asia's legal capital

It builds on a strong brand and should aim to spread use of its law.
By Zaid Hamzah, Published The Straits Times, 16 Jan 2015

THE launch last week of the Singapore International Commercial Court (SICC) positions Singapore decisively as a leading city where international commercial disputes can be heard in a court of law.

London and New York, both leading global financial centres, have traditionally been the two leading locations for international commercial dispute resolutions.

English law and New York state law, in turn, have traditionally been the preferred neutral choice of governing law for the international business community, even when the business transactions are done in Asia. 

The law follows financial and business flows. With Asia outperforming the global economy and attracting a higher share of international capital as well as trade, the legal services sector in the Asia-Pacific region will grow significantly, as Law Minister K. Shanmugam observed recently. He added that cities in Asia - Singapore, Hong Kong and others - are in a position to service large, growing economies such as India and China.

With the recent launch of the SICC, Singapore courts will provide the necessary institutional framework for disputants to resolve their disputes where the mediation option has been exhausted or where arbitration is not an available or preferred option. 

This is where Singapore, as a trusted neutral centre with an established tradition of judicial integrity and efficiency, can fill a natural gap in Asia.

What does the establishment of the SICC mean for the Singapore economy?

First, it can boost the legal industry in Singapore. As the past experience in promoting Singapore as an arbitration centre has shown, more international arbitration in Singapore means more Singapore lawyers being engaged to provide legal support services. More complicated commercial disputes brought before an international court in Singapore will require sophisticated legal services. This will enhance the professional development of the legal industry.

Second, it strengthens Singapore's brand as a premier dispute resolution hub in Asia. The setting up of a court complements Singapore's ongoing effort to provide mediation and arbitration services, not just for Asean but also for Asia.

Third, the setting up of the SICC will eventually help boost the Singapore economy, especially with Singapore emerging as an increasingly sophisticated service economy.

In recent years, the legal industry in Singapore has been growing faster than Singapore's economic growth. According to Mr Shanmugam, the growth rate of legal services compounded over the past six years is about 7 per cent per year, compared with GDP growth of about 5.4 per cent per year.

According to the minister, the value of legal services has grown between 2008 and 2013 by 71.5 per cent, and the nominal value-add of the sector has grown by 40 per cent in the same five-year period. Singapore has seen the legal profession grow in the last five years, not just due to the banking and financial services sector, but as a whole.

Regionalising Singapore law

THE choice of forum is separate from the substantive law governing commercial transactions.

International businesses have traditionally preferred to adopt English law or New York state law because of their historically trusted legal traditions and predictable commercial practices. 

There is a compelling case to promote the Singapore law strategy, which if successful, will further advance Singapore's standing as a regional or international legal hub.

As Chief Justice Sundaresh Menon said at the launch of the SICC, the establishment of the SICC might expand the scope for internationalising Singapore law. This, in my view, is a good and necessary move to further bolster the development of Singapore legal jurisprudence to support business growth in Asia and beyond.

Now that the SICC is set up, what's next?

In my view, the next challenge will be to design a preventative regime and create a legal eco-system that focuses on prevention of disputes.

To quote Sun Tze, the ancient military strategist, "to win without fighting is best". Litigation costs money and if disputes can be prevented, all the better.

The existing international forums for mediation, arbitration and litigation in the court system are meant to resolve disputes after they have taken place. With Singapore pushing ahead in the area of analytics, it might be useful to explore how we can leverage technology in the area of legal analytics to prevent disputes from arising. So instead of settling disputes after they have arisen, we process "big data" in the litigation and dispute resolution space to gain insights on the source of disputes and understand the picture better to enable us to take proactive measures to prevent disputes from arising. In the United States, there are already companies and legal practices moving into this new space. As the Singapore economy transforms to become more innovation-driven and knowledge-based, the legal profession and the judicial service will have to address increasingly issues of legal and judicial innovation to push the boundaries further and move up the legal value chain.

The design and development of a preventative regime will require a new paradigm shift in the way we look at the sources of conflict and how we should proactively manage such dispute-related risks from emerging. There is a real opportunity to develop a unique Singapore methodology and development model to manage disputes in the international arena by leveraging our trusted brand, legal and judicial talents and technology.

The writer is a technology and intellectual property lawyer, author and associate law lecturer at RMIT University.

Singapore law ready to influence development of law elsewhere
By Goh Yihan And Paul Tan, Published The Straits Times, 16 Jan 2015

CHANGE is here. If this was not evident from the speech of Chief Justice Sundaresh Menon at his welcome ceremony three years ago, it is now.

In three short years, Singapore is leading Asia - possibly the world - in the provision of not only legal services but also intellectual capital and resources. The speed of these developments should not be surprising. As Attorney-General V.K. Rajah observed at the Opening of the Legal Year this month, Singapore's law and legal system has come a long way in a short time. The story of the Singapore legal system thus far can be told in three phases: consolidation (1965-1990), refinement (1990s-2000s) and internationalisation (today).

Consolidation

THE Singapore legal system underwent a process of consolidation shortly after Independence. There were serious challenges in setting up a truly Singapore legal system so soon after the British departed. Perhaps the most important was infusing the fledgling legal system with the rule of law.

Looking back, the consolidation years guaranteed the Singapore legal system its legitimacy, laying the foundation for future refinements.

Refinement

THE most significant development in the refinement period was the establishment of an autochthonous legal system and jurisprudence.

Institutionally, Singapore rejected the automatic reception of English law by passing the Application of English Law Act in 1993 and abolishing all appeals to the Privy Council in 1994.

Our empirical research undertaken for a forthcoming monograph on the development of Singapore law has shown multiple-fold citation of our own judgments during this period. This suggested a conscious effort to develop our own jurisprudence.

One example is the development of an effective criminal justice system on its own terms. Singapore has not shied away from divorcing itself from unsuitable models elsewhere by, for example, abolishing the jury system in 1969.

Singapore's criminal justice system has also of late moved from a model of deterrence and punishment to individualised sentencing and rehabilitation.

Part of the refinement to the Singapore legal system focused on transforming Singapore into a legal services hub. The centrepiece of this effort was the gradual liberalisation of the legal market, including the eventual abolition of any restrictions on the ability of foreign lawyers to appear in international arbitrations conducted in Singapore. These measures paved the way for the next chapter of the Singapore legal system.

Internationalisation

THE next leap will very much be one of the internationalisation of our laws and legal infrastructure. Plans announced by CJ Menon left no doubt that Singapore will be the "premier destination" in Asia for legal services and dispute resolution.

As Asia is expected to triple its gross domestic product to US$34 trillion (S$45 trillion) between 2010 and 2020, the number of complex cross-border commercial disputes will increase.

Singapore's advantages of neutrality, a strong judiciary and a supportive legislative framework will cement its role as a centre for arbitration. In fact, the Singapore International Arbitration Centre handled a record 259 new cases involving multinational businesses in 2013. Singapore is now entrenched among the top five arbitration centres worldwide, together with London, Paris, Geneva and New York.

Two institutions set up this year give businesses more options for seeking an appropriate and neutral forum for dispute resolution.

The Singapore International Commercial Court creates a court-based dispute resolution forum. The Singapore International Mediation Centre uses qualified mediators, allowing disputants to avoid the more costly arbitration or court processes. The two institutions build on, and indeed enhance, the strong international reputation of the Singapore judiciary and its pool of international jurists.

These developments come at a time when the development of Singapore law has started to exhibit an increasingly internationalist outlook.

Our study reveals that our judgments today tend to consider a wider diversity of foreign judgments. In 2013, Singapore courts considered over 1,500 foreign cases, five times as many foreign cases compared with 20 years ago.

This dovetails with existing efforts within Singapore to try and harmonise business laws in Asia, in hopes of making this a regional and international endeavour.

It is crucial that the courts are adept at analysing issues through a comparative lens, while retaining a strong corpus of law that is both uniquely suited to local circumstances and useful as a point of comparison for foreign jurisdictions.

Indeed, more Singapore courts' judgments are also being considered elsewhere. A recent example is the adoption by an English court of a Singapore judgment endorsing the enforceability of agreements to negotiate in good faith. These developments show that Singapore law is ready to influence the development of law elsewhere.

Goh Yihan is an associate professor at Singapore Management University Law School and Paul Tan is a partner of Rajah & Tann Singapore LLP.

Singapore International Commercial Court

* $1.1b dispute is first case heard
Successful resolution of spat between Aussie and Indonesian firms could draw more cases
By K.C. Vijayan, Senior Law Correspondent, The Straits Times, 21 Nov 2015

The Republic's first international commercial court case is under way and has made history with two distinguished international judges sitting with a presiding local judge to hear a US$800 million (S$1.1 billion) dispute.

The significance of the first Singapore International Commercial Court (SICC) case, which started on Monday, was not lost on the presiding Justice Quentin Loh, who said: "This court signifies not only the aspirations of Singapore to establish itself as a dispute-resolution hub, but it also reflects the needs of international trade and commerce for different fora, for different kinds of dispute-resolution methodologies to resolve the many different types of disputes that can and unfortunately do arise from time to time."

Industry sources said the case will be keenly watched as its success could draw more parties to Singapore to settle cross-border commercial disputes.

In this case, BCBC Singapore, a wholly owned subsidiary of Australian company Binderless Coal Briquetting Company, is seeking damages from Indonesian company Bayan Resources TBK. The claims and counterclaims arise mainly from alleged breaches of a joint-venture pact for the application of a patented technology to produce and sell upgraded coal from East Kalimantan in Indonesian Borneo.

The spat also relates to joint-venture company Kaltim Supacoal, incorporated in Indonesia, whose shares are held by both parties.

The joint-venture deed is governed by Singapore law and the heads of damages include a claim of about US$750 million and a counterclaim of about US$59 million.

The newly minted SICC - first mooted by Chief Justice Sundaresh Menon two years ago - was set up to hear cross-border disputes and is part of Singapore's plan to become Asia's dispute-resolution hub and grow its legal services industry.

A team of Rajah & Tann lawyers, led by Senior Counsel Francis Xa-vier, is representing BCBC Singapore while Senior Counsel Davinder Singh is helming a Drew & Napier team in defending Bayan and making a counterclaim.

Justice Loh, who is hearing the case with international judges Vivian Ramsey from England and Anselmo Reyes from Hong Kong, lauded SC Xavier and SC Singh and their teams for their "brisk and business-like" approach "reflecting the best traditions of the Bar".

"They concentrated on the issues that really matter" and "cooperated to avoid unnecessary, time-consuming and costly skirmishes over interlocutory matters", added Justice Loh on the court's behalf.

The case has spawned satellite litigation in the Australian courts involving a landmark tussle on whether Bayan's shares in Perth-based company Kangaroo Resources should be frozen pending the outcome of the Singapore hearing.

The case, which wound its way through several tiers of the Australian system, was settled last month by a seven-judge panel of Australia's highest court.

The apex court ruled it had the powers to freeze Bayan's shares despite proceedings having yet to be concluded in an overseas jurisdiction - that is, Singapore.