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One of the key changes introduced in the 4th edition of the Singapore International Arbitration Centre Rules (2010 SIAC Rules) was Rule 5, relating to the Expedited Procedure. 

At the recent Singapore International Arbitration Forum 2011 (SIAF 2011)¹, conference delegates had the opportunity to consider how Rule 5 has impacted the arbitration landscape in Singapore since its introduction a year ago.  The discussion resulted in an exploration of the issues concerning the introduction of Rule 5.

Expedited procedure

Rule 5 provides for three situations in which a party may apply to the SIAC for the arbitral proceedings to be conducted in accordance with the Expedited Procedure under the 2010 SIAC Rules.  These are:

• when the aggregate amount in dispute does not exceed the equivalent amount of S$5 million (approximately US$4 million based on current exchange rates): Rule 5.1(a)
• when the parties agree to adopt the Expedited Procedure: Rule 5.1(b), and
• in cases of exceptional urgency: Rule 5.1(c)

The chairman of the SIAC will then decide whether it is appropriate to adopt the Expedited Procedure.

The Expedited Procedure still requires the Tribunal to hold a hearing for the examination of all factual and expert witnesses as well as for any argument (unless the parties agree to a documents only arbitration)². However, the Expedited Procedure truncates the arbitration process by:

• allowing the registrar of the SIAC to shorten time limits under the Rules³ 
• referring the case to a sole arbitrator unless otherwise determined by the chairman⁴ 
• providing that the award shall be made within six months from the date when the Tribunal is constituted (the registrar of the SIAC may extend this deadline due to exceptional circumstances)⁵, and 
• allowing the Tribunal to state the reasons upon which the award is based in summary form, unless the parties have agreed that no reasons are to be given⁶

Statistics

As of 10 May 2011, the SIAC had received 28 applications for the Expedited Procedure⁷. Of the 28 applications, 15 were accepted, 5 were rejected and 8 were either terminated, settled or still pending.

Twenty-five of the 28 applications relied on Rule 5.1(a), i.e. the aggregate amount in dispute does not exceed the equivalent amount of S$5 million.  Of these, 14 applications were accepted, 4 were rejected and 7 were either terminated, settled or are still pending.

Two applications relied on Rule 5.1(b), i.e. agreement between the parties to adopt the Expedited Procedure.  One was accepted and the other still pending.

The only application which relied on "exceptional urgency" pursuant to Rule 5.1(c) was rejected by the chairman of the SIAC.

Comments

The overwhelming majority of the applications for the Expedited Procedure were brought under Rule 5.1(a). This is not surprising because it is usually the smaller disputes which benefit the most from the time and costs savings associated with the Expedited Procedure. However, since the S$5 million threshold in Rule 5.1(a) includes the aggregate of the claim, counterclaim and any setoff defence, it would be easy for a creative respondent who is intent on protracting the proceedings to circumvent the Rule by pleading a sufficiently large counterclaim and/or setoff defence.

If parties have already agreed to adopt the Expedited Procedure, then it may not even be necessary for parties to apply for it. Therefore, it could even be argued that Rule 5.1(b) is unnecessary. In practice, parties already have the freedom to agree the procedure and timelines in the arbitration (subject of course to the availability of the Tribunal and witnesses). The reality is that parties in a dispute will seldom agree on anything, so that applications for the Expedited Procedure under Rule 5.1(b) will be rare – in fact, it is more likely that respondents will want to delay proceedings at every opportunity. 

The SIAC's inclusion of the "exceptional urgency" scenario in Rule 5.1(c) broadens the scope of the type of disputes which qualify for the Expedited Procedure. Unfortunately, "exceptional urgency" is not defined in the Rules, and arbitration users would therefore benefit from an explanation or guidelines as to what constitutes "exceptional urgency". Otherwise, the temptation is for parties who apply for the Expedited Procedure under other grounds to also automatically include a reference to Rule 5.1(c) without understanding whether their scenario qualifies as "exceptional urgency". The inclusion of an explanation or guidelines as to what constitutes "exceptional urgency" would also assist the chairman of the SIAC when determining an application for the Expedited Procedure.

The time-saving measures built into the Expedited Procedure are sensible. In particular, the default deadline for the making of the award (six months from the date when the Tribunal is constituted, unless the registrar extends this date due to exceptional circumstances)⁸ helps to limit the overall timeframe for the arbitration. The Expedited Procedure appears to work in practice, and conference delegates at the SIAF 2011 were informed by one of the speakers⁹ that, as of 1 June 2011, one Expedited Procedure case had gone to a final award which was issued within 8 months of the filing of the application for the Expedited Procedure and within 6 months of the appointment of the Tribunal.

Conclusion

Although these are still early days as far as the implementation of the Expedited Procedure in SIAC arbitrations is concerned, things have begun promisingly. However, as with virtually all new initiatives, there are some teething issues which still need to be resolved.  These may be considered in the fifth edition of the SIAC Rules.

For more information about the SIAC Rules, please contact Justyn Jagger.

^{1    The Singapore International Arbitration Forum was held on 1 June 2011 at Capella Singapore on Sentosa Island. The event was jointly organised by the SIAC and Maxwell Chambers and attended by arbitration practitioners from around the world.}

^{2    See Rule 5.2(c).}

^{3    See Rule 5.2(a).}

^{4    See Rule 5.2(b).}

^{5    See Rule 5.2(d).}

^{6    See Rule 5.2(e).}

^{7    Eight of these applications were between the same parties in connected matters.}

^{8    Rule 5.2(c).}

^{9    John Savage, Partner, King & Spalding LLP, during his presentation "The New SIAC Rules: Case Studies on Expedited Proceedings".}