Speech by Mr Edwin Tong, Minister for Community, Culture and Youth and Second Minister for Law at the SIMC Singapore Specialist Mediators Empanelment Ceremony
10 Dec 2020 Posted in [Speeches]
Chairman of the Singapore International Mediation Centre (SIMC)
Chairman of the Singapore International Mediation Institute (SIMI)
Friends and colleagues
- I normally start my speeches by saying I am ‘happy to be here’, and I mean it. This evening, I mean it even more because it’s so fantastic to be here in person. I am very happy to be here at the SIMC Singapore Specialist Mediators Empanelment Ceremony today, and to see so many familiar faces.
- This is the first fully physical event that I have attended in a long time, so thank you very much for having me here.
COVID-19 and Role of Mediation
- As you know, COVID-19 came upon us rather unexpectedly. We had our last Empanelment Ceremony in January 2020, just before COVID-19 hit us. None of us could have seen it coming. It has impacted our public health, and also the global economy.
- In Singapore, our GDP is expected to contract by about 6 to 6.5 per cent this year. If you look at our history, this is significant. We did not contract this much in the 1997 Asian Financial Crisis or in the 2008 Global Financial Crisis. But this year, we expect to contract by 6 to 6.5% across all sectors, and that is after we have had a fairly good third and fourth quarter this year, after the circuit-breaker ended. It tells you the scale of the economic struggles that we will have next year.
- Many retailers have hit the deck, including Robinsons, Topshop, Esprit, DFS, Prima Tower Revolving Restaurant, KidZania, just to name a few. To help businesses weather the storm, we have had to move very fast. We had a physical circuit breaker to deal with the pandemic, and a legal circuit breaker the day before on 6 April 2020 where we introduced in Parliament four different Bills. Internally, we call it COVID-1, 2, 3 and 4, and my MinLaw colleagues will kill me if we get to COVID-19!
- COVID-1 was when we came up with immediate, hold-the-fort measures, just to put a moratorium in place, because it’s against the country’s interest to have everyone rush to court to deal with default. So COVID-1 was to hold the line, give a moratorium and allow people some breathing space.
- COVID-2 was the Rental Relief Framework, to deal with rental, which we regard as a significant part of a business’s costs, the other one being employees.
- COVID-3 is the Simplified Insolvency Programme. We wanted to ensure that those businesses were able to pivot out of the business, can get into liquidation pain-free, easily, and do not have the struggle of being made bankrupt, making it much harder to come back into the business cycle even after the pandemic is behind us. We also want, through COVID-3, to encourage restructuring. So for businesses who can find white knights, amalgamations as solutions, we make it easy and pain-free to do as well, out of court. We are working with the Law Society to provide legal advice for many of these businesses. I am very encouraged and indeed heartened that many people have come forward to offer their services, pro bono. The number of people who have asked to sit on our panels, to be assessors have not stopped. We have been almost overwhelmed by the support.
- COVID-4 was just passed in Parliament a few weeks ago. It is a bit more interventionist, and somewhat more novel. It is something that we thought about long and hard, because it is something that we never frequently do as a common law, rule of law country – to intervene in a contract, a contract that was signed in pre-COVID days, with very different assumptions on things like cost structures, operating assumptions, and footfall, in a very different paradigm, different environment. We had to decide that we would intervene on a very narrow, limited basis. We have just announced the conditions of the intervention, which was very narrow to begin with, but nonetheless felt that it would be useful for a party who is stuck in a contract where you are facing significant losses and looking at seeing out two or three more years of contract based on pre-pandemic cost assumptions, to be able to renegotiate the contract. That is the purpose and thrust of COVID-4, which we call the Re-Align Framework.
- In these contexts, we have deliberately inserted mediation, because we see mediation as the way in which we can do things quickly, fast, and most importantly, especially in these times, to preserve the long-earned, hard-earned relationship that matters the most for businesses. I think that is the true value of mediation, that you can resolve a business dispute, and at the same time, retain the value of the relationship, which is paramount in these times.
SIMC’s Efforts to Support Businesses
- On SIMC’s part, they have also moved fast to support businesses. They have moved to conduct mediation online, just like everything else – the courts have moved online, we have all moved online. It is the most efficient way of getting things done across borders when we can’t travel. SIMC has provided end-to-end support to ensure that any challenges in mediation can be overcome. They also have personnel on-hand, online, at all times, to resolve any technical difficulties that there might be. Sometimes, these are things that really get you down when you can’t connect, you can’t hear, can’t see, and so on. Detailed briefings are given to the mediators on how to use the video-conferencing platforms, and you’d be surprised, some people really cannot navigate this. It really allows parties and mediators to take their minds off the technology and focus on the issue at hand, which is to understand the issue between the parties, what is the dispute, and what is the best solution, or out-of-the-box solution, to find that common ground.
Supporting and Recognising Businesses with a Heart
- One of the online mediation cases that SIMC administered was a multi-jurisdictional energy dispute involving participants from five different countries across two continents. The case had nothing to do with Singapore, which is in line with SIMC’s mission as the Singapore International Mediation Centre, but parties chose to mediate with SIMC because of its expertise in managing such complex cross-border disputes. The fact that SIMC is relatively young, but yet has a profile, and deep bench experience and expertise, says a lot. SIMC coordinated the participation of mediators, parties and counsel over five days across different time zones, and administered the entire process online from start to end. The parties gave very positive feedback to SIMC. One of the mediators in fact shared that the case management support that was given pre-mediation helped to focus parties on the mediation outcome.
- SIMC also introduced the SIMC COVID-19 Protocol on 18 May 2020, when we were still in the middle of the circuit-breaker. That itself shows you how progressive SIMC is. The protocol provides businesses with an expedited, economical and effective route to resolve international commercial disputes that arose during the COVID-19 pandemic. In consultation with its stakeholders, SIMC also created a set of procedures to complement the SIMC COVID-19 Protocol, offering lower-cost, fixed fee mediation, done online. In addition, SIMC partnered with the Japan International Mediation Centre (JIMC), and launched the JIMC-SIMC COVID-19 Protocol last month. Under this Protocol, SIMC and JIMC each nominate a mediator, and businesses can resolve their disputes promptly and efficiently through online mediation.
- These efforts, I’m happy to say, are bearing fruit. It is testament to the efforts of SIMC Chairman George and his team, and the progressiveness and foresight that he has. SIMC has reached a record number of 43 cases so far this year, surpassing previous years even before the year is up. I hope you can continue to do that even in a post-pandemic situation, and I am quite confident that you will. Of the cases that have been mediated, partly because of the circumstances this year, close to half had an online element. Even in a post-pandemic world, this online or hybrid aspect will be with us. We’ll have to embrace it, it’s going to be the new normal. The stronger we embrace this, the more likely we are going to be prepared for a post-pandemic normal.
- With the Singapore Convention on Mediation (SCM) having entered into force on 12 September, we are expected to give a further boost to international commercial mediation. The SCM provides a lot more effective means for mediated settlements to be enforced, because Convention parties now have a framework to enforce the negotiated and agreed terms of mediation, without having to worry about whether one party defaults, or otherwise what you have to do for enforcements. That greater assurance itself is the key benefit of the SCM. On my part, every time I see a foreign dignitary, I tell them to consider the merits of mediation, and consider where this is going. It is slowly gaining traction. Today, we’ve had 53 countries sign up and 6 of these countries have ratified, and we are encouraging more to come on board. The more we can gather this critical mass, the more effective it will be, because there will be more countries our business people would be confident enough to deal with in their cross-border transactions.
Government’s Efforts to Support Businesses
- On our side, the Government will continue to support efforts to grow this space. It is one of the three key pillars of dispute resolution, together with litigation and arbitration. Mediation being the slightly newer kid on the block, we want to give it a bigger push.
- We will continue to encourage countries to sign and ratify the SCM. One project which we have been working on and are now accelerating is online dispute resolution (ODR). As the stats have shown us, and as the last few months have shown us, it is really catching on. MinLaw is in talks with some of the Singapore dispute resolution institutions, including SIMC, to see how we can make the process seamless for dispute resolution. You can pivot from litigation, to arbitration or to mediation. This takes a leaf out of the arb-med-arb protocol. This is still a work in progress, but it will give practitioners and their clients alike a lot more flexibility, a lot more convenience and also access to our ADR (alternative dispute resolution) mechanisms.
What Specialist Mediators Can Do
- All of you, as specialist mediators, what can you do? I think that you can turn this crisis into an opportunity, especially during these times when there’s a lot more economic uncertainty.
- COVID-1 has recently come to a sunset – we’ve had it for six months. COVID-4, which is our newest tool, will be valid for six weeks because we don’t want a greater period of uncertainty for contracts to be re-negotiated. When we end the JSS (Jobs Support Scheme), when we look at easing off on the SIRS (Self-Employed Person Income Relief Scheme), we can’t keep this Government support going on indefinitely, continuing to support zombie companies – at some stage, it will come to an end. This is when there will be a lot more economic uncertainty, a lot more businesses will come to many of you to resolve their disputes, and mediation is a significantly viable option today. Parties looking for efficient, cost-effective options, especially ones which will preserve their business relationships, will see mediation as a serious option. With cross-border transactions still very much on the cards, encouraging more countries to ratify the SCM would be something we would do.
- We will support all of you in this work. We work closely with George and the team, as well as the Singapore Mediation Centre, to see what more we can do to enhance the infrastructure. The Government works very closely with our stakeholders. If there is one country in the world where the Bench, the Bar, academics, and Government come together, I think it is this country. If we hear feedback from you on the ground, through your interactions, through your discussions with clients and overseas parties, that we need to make changes, you can be sure that if we are satisfied that changes need to be made, they will be done very quickly. So, come to us with your feedback, because that has been very important as we measure and calibrate what kind of changes we need to make.
- Finally, let me congratulate all of you. It’s a new normal for all of you to be in class, and in masks, and having to pay attention and come and graduate today. But this is a big step. I encourage you to go back to your firms and tell your colleagues that this is a worthwhile course, and that we want to grow this space. We will continue to make mediation a mainstay of dispute resolution.
- Thank you very much, thank you for inviting me here and thank you for having this event!
Last updated on 10 Dec 2020