The term “seat” differs from “venue” and “place”. The term “seat” is the centre of gravity of an arbitration agreement. Selection of a certain geographical location as the seat of the arbitration means empowering the courts of that jurisdiction to have supervisory jurisdiction over arbitral proceedings. The term “venue” or “place” often means the convenient location selected by the parties to carry out the proceedings.
At least until enforcement, the selection of a foreign seat of arbitration in the case of Indian arbitration is encouraged these days mostly to avoid the delay associated with involvement with the Indian courts. Foreign arbitral institutions have been long used in India and most recently, Singapore has come out to be the first choice of several parties as the seat of arbitration in case of India-related disputes.
Why Singapore?
The supportive government and judiciary are some of the key aspects in making Singapore the preferred seat of arbitration in international arbitration.
To aid the alternative dispute resolution system several institutions like the Singapore International Commercial Court (SICC), the Singapore International Arbitration Centre (SIAC) and the Singapore International Mediation Centre (SIMC) have been established. Singapore’s judiciary has not only supported arbitration since the introduction of the International Arbitration Act 1994 but also the government has also been party to several key conventions promoting arbitration and mediation.
SIAC is at the forefront of developing best practices in international arbitration. It was one of the first arbitral tribunals to introduce the concept of emergency arbitrators and expedited proceedings in 2010. Both procedures have since been incorporated into the rules of many other arbitral bodies. SIAC was also one of the first arbitral bodies to introduce early termination rules and rules for multi-party and multi-contractual disputes (for example, establishing merger and consolidation rules). Such innovative initiatives aim to incorporate the perceived benefits of litigation into arbitration and provide the parties with the best of both worlds.
The Arbitration law of Singapore is governed by Model Law and the New York Convention framework for enforcement and recognition of cross-border arbitral awards. Once an award has been passed by the Singapore arbitration, Singapore courts can only set it aside for limited and exhaustive reasons which is’ lack of due process, violation of natural law, excess of jurisdiction and violation of public policy. They also regularly review their arbitration act to keep it relevant and updated to the needs of the market.
Singapore has also enacted additional laws to encourage parties to arbitrate in Singapore, such as by allowing third-party funding of international arbitrations and certain related litigation. In addition, from 4 May 2022, lawyers will be allowed to enter into Contingent Fee Agreements (CFA) with their clients, so that part or all of the fee is paid only under certain conditions. Lastly, Singapore also benefits from its strategic geographical location which is at the crossroads of many major countries making it the global hub for trade.
Singapore’s ascent as a preferred global seat for arbitration, particularly in the context of India-related disputes, stems from a convergence of factors. The unwavering support from both the government and judiciary, evidenced by the establishment of institutions like the SICC, SIAC, and SIMC, showcases Singapore’s commitment to fostering a conducive environment for dispute resolution. Innovative arbitration practices, adherence to international frameworks, and a robust legal framework for enforcement contribute to Singapore’s reliability.
The jurisdiction’s pro-arbitration stance, strategic geographical location, and continual efforts to adapt to market needs underscore its standing as a leading global hub for arbitration, embodying a comprehensive and forward-looking approach that resonates with parties seeking effective, internationally recognized arbitration proceedings.
_________________________________________________________________________________________________________
This article is written and submitted by Swati Sinha during her course of internship at B&B Associates LLP. Swati is a 5th-year B.A LL.B(Hons.) student from Xavier Law School, St.Xavier’s University, Kolkata
