Speech by Minister for Culture, Community and Youth & Second Minister for Law Edwin Tong SC at Singapore Institute of Arbitrators' 40th Anniversary Dinner
30 November 2022 Posted in [Speeches]
Mr Tay Yu-Jin, President of the Singapore Institute of Arbitrators (SIArb)
Council Members, Committee Members and Members of SIArb
Friends, Colleagues, Distinguished Guests,
Ladies and Gentlemen
- A very good evening to all of you. I am very honoured to be back here again and to join all of you in this massive occasion of the SIArb’s 40th anniversary today. Although if you look at the SIArb logo here, you may wonder why we are 40th this year when SIArb was founded in 1981. To be clear, this year is actually the 41st year. But because of COVID-19 restrictions, we were not able to celebrate the occasion in a fitting manner. So this year, we celebrate both the 40th and the 41st anniversaries of SIArb. Congratulations to all of you!
- It is not an overstatement at all, to say that SIArb is a pioneer of Singapore’s arbitration history. Starting in 1981, 41 years ago, that was the year that I sat for my PSLE exams. It either shows how old SIArb is, or perhaps, how young I am.
- This is of course some years ago, and if you just trace the history of Singapore’s arbitration landscape, 1981 was before we even enacted the International Investment Disputes Act in 1985, which was a precursor to the International Arbitration Act that we see today. 1981 was before we acceded to the New York Convention in 1986, before we set up the Singapore International Arbitration Centre (SIAC) in 1991, and the Singapore Chamber of Maritime Arbitration (SCMA) in 2004, and certainly also before Maxwell Chambers was set up as the world’s first integrated dispute resolution complex to provide purpose-built hearing facilities for alternative dispute resolution (ADR) in 2010. Of course, as you all know, during the pandemic, we expanded and now we have also additional premises which tripled Maxwell Chambers’ original space.
- 1981 was also the year before we liberalised arbitration in Singapore. And those of you who are history buffs will know that in 1992, we allowed foreign lawyers to participate in Singapore-seated arbitration proceedings, but with an important qualifier – you had to have Singaporean co-counsel with you. In 2004, we removed this qualifier and we thereafter had the ability for all foreign lawyers to appear by themselves without Singaporean counsel in arbitration proceedings. Largely as a result of all of these moves, Singapore has grown rapidly as an international arbitration hub. It is now ranked as the most preferred seat of arbitration in the world alongside London, the traditional legal powerhouse. SIAC is also now ranked as the second most preferred arbitral institution in the world and the top arbitral institution in the Asia Pacific.
- SIArb has been with us throughout all these key moments and grew in tandem with the development of arbitration in Singapore. SIArb started with 25 founder members back in 1981. Today, it boasts more than a thousand members from diverse backgrounds from more than 40 countries. Arbitrators come from all walks – architects, accountants, doctors, engineers, lawyers, ex judges, surveyors, shipbrokers, and many more. The 1,000 members that we see today, is a 40-fold increase in over 40 years.
- Over the years, SIArb has played an instrumental role in supporting the development and the growth of the entire arbitration ecosystem in Singapore, and become established as one of the key pillars in the growth of arbitration in Singapore.
- SIArb’s roles include:
a) First, development of human capital, which is really important, because as we know, in Singapore, our most valuable resource is our people talent. In the context of this evening, those would be our arbitrators. For those of you who are arbitration counsel, you will know, how important a good arbitrator is and what a world of difference it makes. Arbitrators have a wealth of experience and also domain knowledge expertise. You do not have to explain the basics of the industry, or how the process works, because these arbitrators are very knowledgeable. In fact, they are experienced experts in these fields. They also know how to read between the lines, if necessary, they know how to deal with counsel’s tricks, when it comes to delay tactics, and manage the dynamics and get the hearing back on stream.
Over the years, SIArb has also trained many who are seeking to be arbitrators - equipping them with the necessary skills and expertise, including in specific industry sectors like maritime and construction. In my view, those are two areas which have significantly propelled Singapore’s growth over the years. SIArb has also updated arbitrators, and is training arbitrators on happenings around the world so that they keep pace with the evolving landscape, and put in extra effort to groom the next generation of arbitrators through this mentorship scheme.
In fact, SIArb is one of the professional arbitration institutes recognised by the SIAC for empanelment on its panel of arbitrators. This itself demonstrates the high-quality training and accreditation that SIArb provides.
b) Second, SIArb has been helping to enhance our arbitration ecosystem and regime. Another of Singapore’s value proposition is our ability to react quickly, move quickly, respond quickly to the latest developments in the industry, and also best practices.
In the formative years of SIAC, successive generations of SIArb presidents were actively involved, including in the working committee set up by the then-AG and of course the first chairman of SIAC, Senior Counsel Tan Boon Teik. SIArb has always been proactive and forthright in providing feedback from the ground on various matters, such as our institutions, how our legislation can come together to support arbitration better, and our products and services. There were many occasions. Just take the International Arbitration Act for example. Since its commencement in 1995, we have amended that piece of legislation 11 times, five of which were major amendments. This has helped us enhance our offering as a top-class arbitration hub, and also honed our system, improving it in response to user needs. Fundamentally, that is the most important aspect of our system. It must be a system that responds to and caters to users’ needs. This allows us to stay ahead of our competition.
c) Third, SIArb has been instrumental in profiling Singapore, as a preferred arbitration forum. SIArb has built strong global alliances and linkages with various industry associations and other professional bodies locally and also overseas. This complements very strongly the promotion efforts by the Ministry of Law, SIAC, SCMA, and also other agencies. In fact, I just got back from Delhi last evening. I met with Delhi lawyers, in-house counsel, business executives, and also many government officials and civil servants from India. I was there together with SIAC, the Singapore International Mediation Centre (SIMC) and Maxwell Chambers to share about and promote Singapore’s dispute resolution offerings.
I came back with a strong appreciation of the fact that we have a very strong branding overseas and that is in no small part due to the efforts of SIArb and its outreach globally with other institutions and other organisations. These steps and many more have helped Singapore establish an arbitration hub that we all benefit from, which serves our users and our clients. It ensures there is a strong ecosystem that promotes fair, transparent and open dispute resolution services.
- At this juncture, I would like to express my deep appreciation to all past and present Presidents, Council Members, Committee Members, and also the Secretariat. I commend your achievements over the last 40, or maybe 41 years. The journey that you have undertaken must not have been easy, having pre-dated institutions like SIAC and our very important pieces of legislation. This is especially since this organisation has predominantly been run by many volunteers who need not have done this work, but have been doing it, not for themselves, but for the benefit of SIArb and for the broader arbitration ecosystem in Singapore. They have unselfishly put in time, effort, resources, oftentimes of their own, to do all that I have just articulated and much more. Rallying the arbitration community together, bringing people together, trying to bring value to fellow Singaporeans and indeed to Singapore. So, thank you very much to all past and present members who have served SIArb in various capacities. Thank you for your passion, the dedication, commitment, and also your creativity. I hope more will continue to step forward to serve at SIArb.
- Moving forward to the next 40 years, I think we all know that it will be as challenging, if not more so. We can already see some signs that will impact Singapore’s opportunities in the short- to mid-term. For example, the pressures to reduce time and cost of arbitration. This, of course, we all know is a perennial concern, which will now be exacerbated due to the high inflationary environment that we see. We also see competition from other jurisdictions, perhaps the non-traditional jurisdictions. A number of countries have declared their ambition to be also an arbitration hub like us. They include Bahrain, China, India, Japan, Saudi Arabia, and South Korea. We can and we should expect a lot more concerted effort by the governments of these countries and their industry working together to give us quite a formidable run for our money.
- Many from these jurisdictions have come to visit Singapore, and they want to learn from us. Why? First, to emulate what we have done. But certainly secondly, to try to outstrip what we have done and overtake us. So, we will have our work cut out for us and we will have to work very hard to stay ahead. We also see competition from other ADR mechanisms, such as mediation and international commercial courts, not just in Singapore, but elsewhere in the world as well. We see an increasing number of mediation centres and international commercial courts being set up in the region, vying for the same piece of work, vying for the same disputes that we might otherwise see in arbitration. And of course, their goal is to get more cases.
- There will also be the demands of keeping up with the new emerging areas of disputes. Today, we see a lot more new, novel, and also more complex areas such as in technology, cryptocurrencies, AI, and sustainability.
- The challenges for SIArb are therefore:
a) First, how do we ensure that arbitration remains attractive and remains the go-to port of call?
b) How do we ensure that arbitration law and procedure is kept in lockstep with business development? that, to me, is important. There is no point in having an arbitration when it is out of sync with commercial reality, and with recent developments.
c) Third, how to train and improve the skill and expertise of arbitrators and those involved in arbitration in these new and emerging areas.
d) And finally, how do we grow the pie overall? How do we ensure that there are new novel opportunities for the members of SIArb?
- These, I am sure, are questions that the SIArb leadership have been thinking about, grappling with, and I am sure that it will eventually come to terms with.
- For myself, I am fairly optimistic about the opportunities for arbitration in Singapore. Let me share some reasons why. First, cross-border trade and investments are only increasing in this part of the world, I am sure you have read about how this is the Decade of Asia and so on. If you look at the raw statistics, it will explain why.
- Asia now accounts for more than a third of foreign direct investment (FDI) inflows and outflows, and the world’s imports and exports. So, the business activity here is strong and rapidly growing. This growth is not just in traditional sectors and industries, but also in new and emerging areas. For instance, Asia is a leader in areas such as technology, cryptocurrency, and AI. Between June 2020 and June 2021, in the throes of the COVID-19 pandemic, Asian markets accounted for 43% of the world’s global cryptocurrency activity. AI is also expected to grow in Asia by four or five times within the next five years. It tracks faster than any other region in the world over the next four or five years. Of course, as we all know, where there is business activity, with opportunity, new emerging economies, new markets, there will be disputes.
- Whilst other ADR methods, for example mediation and conciliation, are growing in popularity, overall, the pie, meaning the number of disputes in total, will also be growing. So, the demand for dispute resolution and along with that, arbitration is expected to continue in this trajectory. Our value proposition in Singapore and the Singapore ecosystem remains strong. Singapore is one of the few places in the world which offers a trusted, neutral forum for arbitration. You can have the assurance that we have a supportive government who is in favour of arbitration and doing what we can to ensure that our arbitration laws or infrastructure and our practices remain up to date, remain in sync with the recent development.
- We also have a first-class judiciary, which understands that we do not interfere lightly in private contracts, arbitrations, and most importantly, party autonomy. We have a business-friendly arbitration regime. We have a strong infrastructure with SIArb, SCMA, SIAC, to name a few, and we do have a deep talent pool, both local and foreign, from the common law as well as the civil law jurisdictions, and with a different range and spectrum of specialisation.
- All of this, I think bodes for a bright a few years ahead, but we do have to work hard, and we cannot rest on our laurels. Over the last few days I was in Delhi, people come and say, “We like Singapore. We like SIAC. We will come and bring our arbitrations to Singapore. We like the regime there. We like the curial intervention and support.” But I always say to those that made these comments to me that we cannot for a moment assume that this will carry on and we cannot for a moment therefore rest on these laurels.
- Therefore, as we look ahead, I think we have to be prepared to think of what we need to do for the next bound, to change ahead of the tide. Responding to change is never easy, and perhaps it is harder to change, when you think that you are at the top or near the top of these achievements. There is always an inertia not to rock the boat or keep to the same trusted formula and trusted ways of doing things. But I believe that change is best done when it is not entirely needed. So for Singapore to continue to be the international arbitration hub that it is today, we need everyone in the entire Singapore arbitration ecosystem, including SIArb, SIAC, SCMA, to up their game and punch well above our weight, to be innovative, to be adventurous and to be proactive.
- I believe that that SIArb has done an excellent job thus far. Besides continuing on the good work that you have done, and the strong legacy that you have built, we can consider a few steps. First, for SIArb to continue to be a pathfinder for emerging markets. We see a few – there is a lot of headroom in ASEAN, because a lot of FDIs go into many ASEAN countries for infrastructure development, and with it, the potential for disputes.
- One of the first priority for countries looking to develop arbitration is to develop their own local talent. This is an area which SIArb is very well positioned to assist them in, and in the process, profile our own arbitrators and build goodwill in these countries towards Singapore. This will enable us to amplify our resources. There is no need for all our institutions to promote themselves in the same market individually and in some ways, we are reaching out to a similar audience and can always cross-market, cross-sell and leverage one another.
- Second, to proactively get a sense of development on the ground. I mentioned more than once in this speech, that it is important for us in government to understand the pulse on the ground, get our ears to the ground, how mercantile law has developed over the years. It has changed a lot.
- Today, you see a lot more e-commerce transactions, e-markets, which never before existed. The volume is now growing and will only grow in the future. All of you as practitioners have a very deep intimate knowledge of these developments on the ground. You carry with you first-hand contact with fellow arbitrators, arbitration counsel, service providers, their clients, those in the service industry. Are there new rules that you would like to see? New pieces of legislation that you think we can put forward? New processes and new procedures that will help you capture more market share, or be a game changer in the industry? Are there new tools or new standards of arbitration services? Or perhaps even the quality of the food that we serve at Maxwell Chambers?
- All of these things help us to improve and from where I sit, now looking at policy, it is important for us to build the whole package for clients to want to come to Singapore, for arbitrators to want to come to Singapore, and choose Singapore as a seat.
- Feedback to us in government is critical, and we rely a lot on all of you at SIArb to give us that sense. I will give you one example. Recently, we made changes to legislation to deal with CFAs or conditional fee agreements. We heard feedback from many users about how CFAs would be useful because many of the competing counsel from around the world come forward with key proposals that include conditional fee arrangements. For a while, because Singapore was a lot more conservative in our outlook, because of champerty, we were more conservative, more reticent and more reluctant, but we heard the views. We took soundings and we charted a path together to allow us to safely introduce conditional fee agreements. We consulted stakeholders, we introduced some safeguards. Eventually, in January this year, we passed a Bill that allows for conditional fee agreements to be put forward. This provision commenced about six months ago in May, and now counsel can put that forward as one of several items in the armoury to bring work into Singapore.
- This is an example of how a proactive approach partnering with the government and different stakeholders can be a lot more effective than taking the reactive approach in responding to public consultations. We move forward on this, I believe, for the better good of the entire arbitration ecosystem in Singapore.
- In this vein, the government, will try to see how we can continue to institutionalise, have more regular feedback, more dialogue sessions, both formal and informal, to get a dipstick on the industry and understand where we are going and how we, the government, can set up the infrastructure, help you in your work, and promote arbitrate in Singapore.
- I just leave you with a wish, that as we look at charting the next 40 or 41 years of SIArb, that we continue in this vein of working together. I know SIArb has your own leadership and own priorities, but we should see this as a broad ecosystem of Singapore’s arbitration. Together, there is so much more work we can do, to bring work to Singapore, to expand the pie, to grow the ecosystem and to really make it more productive, whether you are on the side of government, or arbitrators, senior counsel, and indeed, even clients.
- So once again, congratulations on your 40th anniversary, and 41st as well. Have a pleasant evening ahead. I think one of the values or benefits of being able to do the dinner this evening as opposed to last year is that we can now mill around and chit chat with one another without a mask. Beyond just building thought leadership and exchanging know-how, one of the most important things in our arbitration fraternity is that of camaraderie. To be able to socialise, to meet one another, to have coffee or a drink, all of that builds bonds in that fraternity. I for one, having come from practice not so long ago, see this as a real value. So enjoy all of that, have a great evening, and thank you very much for listening to me.
Last updated on 30 November 2022