Speech by Permanent Secretary Mr Pang Kin Keong at the SIAC Conference in Beijing

29 Jun 2011 Posted in Speeches

Ladies and gentlemen, good morning.

1. I am pleased to have the opportunity to address you at this inaugural SIAC conference in Beijing.

2. I understand that the SIAC – together with the Shanghai Bar Association – organised a similar event in Shanghai last year and that was well-received. I hope that today’s conference will be equally useful.

3. You have ahead of you a line-up of highly regarded legal professionals, each speaking from a wealth of experience and expertise on the topic of International Arbitration in Outbound Investment Disputes. But before that, I would like to take a few minutes to share some general perspectives with you.

   Singapore-China Relations

4. China-Singapore relations have been described as “having a late start, rapid acceleration, deep cooperation and bright future prospects” ( 起步晚， 进展快，合作深，前景好 ). In the two decades since diplomatic ties were formally established, our countries have enjoyed a strong, substantive relationship, anchored by high-level visits, people-to-people exchanges and economic links.

5. The latter, in particular, is an essential pillar in our relationship. The China-Singapore Free Trade Agreement, concluded in October 2008, is China’s first comprehensive bilateral FTA with an Asian country, and bilateral trade has increased from US$3.7b in 1990 to US$77.5b last year. Chinese companies make up almost 10% of the 38,000 MNCs in Singapore.

6. As the bilateral relationship matures, both sides are moving beyond the traditional parameters of economic cooperation and seeking new spheres of collaboration. One such sphere is the legal services and international arbitration sector. There have been visits by officials and Ministers of our two countries dealing with legal and judiciary matters in recent years, and China and Singapore have signed a Treaty on Judicial Assistance in Civil and Commercial Matters and a MOU on Legal Co-operation. We should see what more we can do together.

   Growth of the Singapore Legal Sector

7. The last few years have seen a sharp growth in the legal services sector in Singapore.

8. Today, Singapore hosts about a thousand foreign lawyers and more than a hundred foreign law firms. Their numbers have more than doubled in recent years, since Singapore liberalised its legal services market.

9. Eight of the world’s top ten law firms by revenue have set up offices in Singapore, where they have a wide range of practices - finance, banking, insurance, M&A, capital markets, investment management, amongst others. They serve clients and businesses not just in Singapore but in Southeast and South Asia, using Singapore as their regional HQ.

10. The foreign firms and foreign lawyers complement more than 800 Singapore firms and over 3,800 local lawyers, a good number of which have regional presence including in China.

11. As a result, the available legal expertise in Singapore to handle complex international commercial and corporate transactions has grown significantly, particularly in the energy, maritime and financial services sectors. They support Singapore’s ongoing efforts to be a key global and Asian hub for business.

12. Indeed, in the past five years or so, Singapore has seen the legal sector’s value-add to the economy grow by over 50 per cent. In 2009, when the economy shrank by two per cent, the legal sector still grew in real terms by 4.3 per cent. There remains considerable potential for continued growth in this sector.

13. The international profile of Singapore law and of Singapore as a centre for dispute resolution has also grown. Sections of the legal and business communities of China and India, amongst others in Asia, have increasingly endorsed the use of Singapore law as the governing law of contracts, as well as promoted Singapore as a dispute-resolution venue, when a neutral venue and neutral law are needed. When two companies are not able to use their country of operation or business as the venue of dispute for various reasons, Singapore is seen as the next best, neutral alternative.

    An Increasingly Liberalised Legal Services Sector

14. To establish a deep and wide base of legal services expertise, Singapore has been opening up its legal services sector to foreign participation. There is established commercial and political recognition in Singapore that a strong legal services sector is an economic engine in itself, and a key enabler for many other sectors of the Singapore economy.

15. As part of the process of measured liberalisation, Singapore gave out six Qualifying Foreign Law Practice (QFLP) licenses to selected foreign law firms in 2009. These QFLP licenses allow the foreign firms to practise Singapore law in certain permitted areas, in particular in commercial and corporate law. Of the six QFLP firms, four are ranked among the top 10 in the world by revenue.

16. The Government is considering awarding a few more QFLP licences to selected foreign firms next year.

17. In addition, Singapore also recently enhanced its Joint Law Venture (JLV) scheme to allow joint ventures between foreign firms and Singapore firms to similarly practise permitted areas of Singapore law.

18. And from next year, foreign lawyers who pass a Foreign Practitioner Examination will be allowed to practise the same permitted areas of Singapore law.

    Arbitrating in Singapore

19. In the wider context of Singapore’s liberalisation of the legal sector, the Singapore Government has invested special focus and resources in developing Singapore as a venue for international arbitration.

    Open Regime for Arbitration Services

20. Singapore has adopted a completely open regime for the practice of arbitration. Anyone doing arbitration in Singapore has the freedom to engage lawyers of any nationality and to use any governing law. In addition to being able to choose from the wide range of international arbitration experts based in Singapore, parties engaging in arbitration can also opt to bring in their preferred legal expertise. Non–residents do not require any special work permits to carry out arbitration work in Singapore. This means that it is hassle-free for Chinese law firms, for instance, to represent their clients in arbitral hearings in Singapore.

21. In fact, I am told that the Singapore International Arbitration Centre has had a number of cases where Chinese law firms have represented their Chinese clients in arbitration hearings in Singapore, and cases where the arbitrations were conducted in Chinese.

    Supportive Legislative Framework

22. Singapore has developed a legislative framework that is supportive of arbitration and continues to incorporate international best practices.

23. Singapore has as the cornerstone of its legislation on international commercial arbitration, the UNCITRAL Model Law. This is consistently updated to incorporate internationally accepted codes and rules for arbitration. Singapore is also a signatory to the New York Convention. Arbitration awards from Singapore can be enforced in more than 140 countries.

    Supportive Judiciary

24. The Singapore judiciary has also been very supportive of arbitration. It has consistently emphasised party autonomy and supported the finality of arbitral awards. The highest court in the land, the Court of Appeal, has declared that “the role of the court is to support, and not to displace, the arbitral process.”

25. Based on reported cases from Singapore Courts, all applications to enforce awards have been granted, with the exception of one domestic award.

26. And indemnity costs awards are made against those who “attempt to derail the arbitration process with unmeritorious court applications”. The Singapore Courts have little tolerance for such tactics.

    Integrated Dispute Resolution Centre

27. The opening of Singapore’s Maxwell Chambers in 2009 has greatly facilitated the conduct of international arbitration in Singapore. Maxwell Chambers is the world’s first integrated dispute resolution centre whose mission is to “provide one-stop, best of class facilities and services for the conduct of Alternative Dispute Resolution (ADR) activities in Singapore”.

28. Maxwell has state-of-the-art facilities, immediate translation services, transcription services and a courtroom-like atmosphere, for the conduct of arbitration hearings.

29. Last year, the Global Arbitration Review shortlisted the opening of Maxwell Chambers as one of the “Best Developments” in the arbitration industry.

    World Class Arbitral Institutions, Firms and Facilities

30. As a result of the comprehensive arbitration eco-system put in place in Singapore, top international arbitral institutions have opened up facilities there, for instance, the American Arbitration Association (AAA), the Permanent Court of Arbitration (PCA), the ICC’s International Court of Arbitration (ICA), the Arbitration and Mediation Centre (AMC) of the World Intellectual Property Organization and the International Centre for the Settlement of Investment Disputes (ICSID).

31. Top arbitration law firms have also set up offices in Singapore, including more than 10 of the Global Arbitration Review’s top 30 arbitration groups, and renowned arbitration outfits such as 20 Essex Street, Essex Court Chambers, and Bankside Chambers. I am told that the arbitration practices of these outfits and local and foreign law firms in Singapore have been growing significantly.

    Singapore Arbitration Institutions

32. Singapore arbitration institutions have also been doing well. The Singapore International Arbitration Centre has administered over 1200 cases, of which 80% are international cases. In 2010, the SIAC handled 198 new cases – double the number of new cases it handled in 2008.

33. The SIAC’s dispute resolution process is streamlined and efficient. An average case administered by SIAC can be completed within 18 months; straightforward cases have been completed in as few as nine months.

34. SIAC’s awards have been enforced in Australia, Hong Kong, Indonesia and China, to name a few. In China, there have been at least five instances since 2007 in which the courts have enforced SIAC awards. SIAC awards are also recognised in India.

35. SIAC was shortlisted by the Global Arbitration Review as one of the top arbitral Institutions of 2010. SIAC also ranked fourth in terms of choice of arbitral institution in a 2010 White and Case survey, after the International Chamber of Commerce, the London Court of International Arbitration and the American Arbitration Association/International Centre for Dispute Resolution.

36. As for the Singapore Chamber of Maritime Arbitration (SCMA), it was established in 2004, in recognition of the fact that Asian interests control an increasingly large percentage of global tonnage and cargo. Originally coming under SIAC, it is now a wholly separate entity, operating under its own management and a revised set of rules.

37. SCMA aims to provide a framework for maritime arbitration in Singapore that is responsive to the needs of the maritime community.

    Conclusion

38. Let me conclude and leave you with another finding of the 2010 White & Case survey I mentioned earlier. The survey found that after London and Geneva, Singapore was the next most popular arbitration venue, alongside Tokyo and Paris. The survey noted that Singapore has emerged as “regional leader in Asia”, and listed positive factors such as its “track record in enforcing agreements to arbitrate and enforcing arbitral awards, as well as neutrality and impartiality”. The Singapore Government intends to keep the arbitration regime in Singapore completely open, and will continue to invest resources and efforts to make Singapore the best venue possible for international arbitration.

39. In this regard, Singapore has certain competencies and advantages that can be beneficial to China: as Chinese companies increasingly do business with foreign entities, and as they expand regionally and internationally, they are likely to need a forum to resolve disputes. Where they are not able to do it in China for various reasons, Singapore provides an alternative, neutral option.

40. I wish you a fruitful conference. Thank you.

Last updated on 17 Jan 2013