Publications

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2007 was an exciting year for arbitration in Singapore. The city state achieved several milestones in further establishing itself as an international arbitration centre.

These included, in chronological order:

• the release of the Singapore International Arbitration Centre’s Arbitration Rules, third edition;
• the introduction of the Law Society Arbitration Scheme;
• the announcement of the Singapore government’s agreement with the Permanent Court of Arbitration to set up a regional facility in Singapore;
• the hosting of the Meeting of the ICC’s Commission on Arbitration and the International Bar Association Conference;
• the opening of the International Centre for Dispute Resolution in Singapore; and
• the announcement of liberalisation for foreign law firms practising in Singapore to conduct international arbitration work.

These recent developments, complemented by legislation that encourages international arbitration and an established policy of minimum judicial intervention, were introduced against the backdrop of several interesting decisions in the Singapore High Court and Court of Appeal.

Most Interesting Decision of the Year

Perhaps the most interesting decision of the year handed down by the Singapore High Court came in Government of the Republic of Philippines v Philippine International Air Terminals Co, Inc [2007] 1 SLR 278. This was described as a classic challenge to the jurisdiction of a tribunal made by way of an application to set aside a partial award.

The facts of the case were as follows.

In 1997 and 1998, the government of the Republic of the Philippines awarded several concession contracts to Philippine International Air Terminals Co, Inc (PIATCO)that would grant it the right to build and operate an airport terminal. PIATCO duly commenced construction and declared that the terminal was ready for handover in November 2002. However, in January 2003, the Philippine government applied for (and, in May 2003, secured) an order from the Philippine Supreme Court declaring the concession contracts null and void. At the same time, PIATCO commenced an ICC arbitration.

Who Had Jurisdiction?

At the outset of the arbitration, the Philippine government maintained that the tribunal had no jurisdiction to adjudicate any dispute between the parties. Thus, the tribunal’s first task was to determine jurisdiction. At the preliminary meeting, it was agreed that the tribunal must first determine the law governing the arbitration agreement and the arbitration proceedings before the parties could make their submissions on the jurisdiction of the tribunal and the validity of the arbitration agreement.

Partial Award in 2004 Decided that Singapore Governed Proceedings

In October 2004, the tribunal rendered a partial award deciding that Singapore law governed both the arbitration agreement and, by reason of the choice of Singapore as a neutral venue, the arbitration proceedings.

The Philippine government then applied to the Singapore High Court to set aside the partial award. That application was dismissed. In its judgment, the High Court held that it was necessary for the tribunal to consider whether the arbitration agreement survived any alleged nullity before it could then address the two substantive issues which it had been asked to determine: the law governing the arbitration agreement and arbitration proceedings.

The Philippine government was not denied any opportunity in the arbitration to put its case on the issue of severability such that there was no breach of natural justice that impugned the tribunal’s decision that the arbitration agreement was severable and, consequently, governed by Singapore law. The High Court then rejected the Philippine government’s submission that, in breach of the rules of natural justice, it was not afforded an opportunity to address the neutrality of Singapore as the seat of the arbitration when considering the governing law of the arbitration procedure. It held that this submission was tantamount to an appeal on the merits of the tribunal’s decision that Singapore law governed the procedure and that such an appeal did not fall within the High Court’s jurisdiction.

In any event, the court observed that the tribunal had taken an objective approach in construing the arbitration agreement and was entitled then to address the governing law of the arbitration agreement and procedure.

The message from Singapore to the international arbitration community is clear. Singapore offers a world-class arbitration venue which, through the SIAC 2007 Rules and the approach of the Singapore courts, provides sensible procedural rules against the backdrop of a sound arbitration legislation and an established policy of minimal curial intervention that accord with international arbitration best practice standards.