Author: Lawyer Zhang Jingxinyue, PRC-qualified Lawyer | Singapore Registered Foreign Lawyer
Note: International arbitration is becoming increasingly important in resolving commercial disputes between China, Singapore, and the rest of the world, and Singapore's position as a major international arbitration centre has become increasingly prominent. The previous article from China Singapore Legal News introduced the advantages and limitations of Singapore's international arbitration regime and explained to readers why cross-border disputes primarily choose Singapore as the seat of arbitration.
As a port city internationally known for manufacturing and services, Singapore's diversity and complexity in international arbitration is also reflected in the variety of its arbitration institutions. This article intends to introduce the main arbitration institutions in Singapore and compare their scope of arbitration and fee structures.
01 Scope and Structure of Singapore International Arbitration Institutions
For "international arbitration", Section 5(2) of Singapore's International Arbitration Act provides the following circumstances:
- At the time of signing the arbitration agreement, at least one party's place of business is in a country other than Singapore;
- The seat of arbitration is in a country other than the country where a party's place of business is located; or the place of performance of the principal obligations under the commercial relationship or the place with the closest connection to the subject matter of the dispute is in a country other than the country where a party's place of business is located;
- The parties expressly agree that the subject matter of the arbitration agreement relates to more than one country.
Singapore's International Arbitration Act provides that, unless contrary to public policy, any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be resolved by arbitration. Nevertheless, judicial practice indicates that matters such as bankruptcy, liquidation, citizenship, marriage, and patents are considered non-arbitrable on public policy grounds.
Where a party so requests and the court considers it appropriate, the court has the power to stay the setting-aside proceedings. Therefore, if a party needs to apply to set aside an arbitral award, the party must, within 30 days after receiving the award, request the arbitral tribunal to correct or interpret the award.
2. Structure of Arbitration Institutions
Singapore's arbitration legislative framework distinguishes domestic arbitration from international arbitration through its Arbitration Act and International Arbitration Act. For international arbitration, the institutions in Singapore responsible for handling international arbitration include:
- Singapore International Arbitration Centre (SIAC)
- International Court of Arbitration of the International Chamber of Commerce (ICC)
- Singapore Chamber of Maritime Arbitration (SCOMA)
- Beihai Asia International Arbitration Centre (BAIAC), etc.
02 Introduction and Fee Models of Singapore International Arbitration Institutions
1. Singapore International Arbitration Centre (SIAC)
1. Overview
The main institution for international arbitration in Singapore is the Singapore International Arbitration Centre (SIAC), established in 1991. It is an independent, non-profit organisation primarily responsible for handling international arbitration cases. Since its establishment, SIAC has been welcomed by users from many parts of the world, particularly from many Asian regions including China. In recent years, SIAC has continued to rise in terms of case numbers, amounts in dispute, and its influence in the international arbitration community. SIAC maintains an international panel of more than 500 experienced arbitrators from over 40 jurisdictions and appoints arbitrators based on their expertise, experience, and track record.
Since 2015, SIAC has received an average of 390 new arbitration cases each year, reaching a record high of 479 new cases in 2019. In 2020, SIAC received 1,080 new cases, exceeding for the first time the number of new cases received by the International Chamber of Commerce ("ICC") (946 cases), and also exceeding the number of new cases received by the Hong Kong International Arbitration Centre ("HKIAC") (318 cases).
As SIAC continues to expand overseas, with representative offices in the United States, India, South Korea, and China, and as the ASEAN economy continues to become an important destination for foreign investment, Singapore's status as a preferred international dispute resolution institution is increasingly enhanced, and this trend is expected to continue.
(SIAC case numbers have continued to rise in recent years)
2. Fee Model
The following standards are provided only as a reference for calculating arbitration fees corresponding to a quantified amount in dispute. If the amount in dispute is unclear or the parties have a special agreement on arbitration procedures, the arbitration fees shall be determined by the filing office at the time the arbitration is filed. (The current SGD to RMB exchange rate is approximately 1:5.)
1. Case Filing Fee
SIAC charges a case filing fee of SGD 2,140 (including 7% GST) for Singapore parties and SGD 2,000 for overseas parties. This fee is non-refundable.
2. Arbitration Institution Administrative Fee (including 7% GST)
For an amount in dispute not exceeding SGD 50,000, an administrative fee of SGD 3,800 is charged; for the portion exceeding SGD 50,000 but not exceeding SGD 100 million, a progressive excess fee rate is applied based on the different excess amounts; for an amount exceeding SGD 100 million, an administrative fee of SGD 95,000 is charged.
3. Arbitrator's Fees (excluding 7% GST)
For an amount in dispute not exceeding SGD 50,000, SGD 6,250 is charged; for the portion exceeding SGD 50,000 but not exceeding SGD 500 million, a progressive excess fee rate is applied according to the different scales; for the portion exceeding SGD 500 million, fees are charged proportionally, subject to a maximum of SGD 2 million.
4. Emergency Interim Relief Fees (including 7% GST)
If emergency arbitration becomes necessary, SIAC charges an emergency arbitration application administrative fee of SGD 5,350 for Singapore parties and SGD 5,000 for overseas parties. The emergency arbitrator's fee is SGD 25,000, and the deposit for the emergency arbitrator's fee is SGD 30,000. This fee is non-refundable.
5. Fees for Challenging an Arbitrator (non-refundable)
If a challenge to an arbitrator is made, SIAC charges an arbitrator challenge administrative fee of SGD 8,560 (including 7% GST) for Singapore parties and SGD 8,000 for overseas parties. This fee is non-refundable.
6. Arbitration-Mediation-Arbitration Fees (AMA Fees)
AMA (Arbitration-Mediation-Arbitration), or Arb-Med-Arb, is a hybrid dispute resolution mechanism combining arbitration and mediation procedures. Specifically, it refers to a process in which the claimant has commenced arbitration, the respondent has submitted its response, the arbitral tribunal has been constituted, the arbitration proceedings are then stayed, and the parties attempt to resolve the dispute through mediation. The AMA fee for Singapore parties is SGD 3,140, of which SGD 2,140 is collected by the arbitration centre (including 7% GST) and SGD 1,000 by the mediation centre. The AMA fee for overseas parties is SGD 3,000, of which SGD 2,000 is collected by the arbitration centre and SGD 1,000 by the mediation centre.
7. Appointment Fee (non-refundable)
If a request to appoint an arbitrator is made in an ad hoc case, the fee shall be paid by the party requesting the appointment. The fee is paid based on the number of arbitrators appointed at the time the appointment request is made.
8. Assessment Fee
At the end of the arbitration, or after an award is made on a particular issue during the arbitration, the arbitrator will usually order one party to pay the legal costs, or part of the legal costs, incurred by the other party. If the arbitrator does not do so and the parties cannot agree on the amount, an assessment of the amount of legal costs may be required. The assessment fee is paid by the party requiring the assessment based on the amount of the costs claimed. The assessment fee also adopts a progressive excess rate system, ranging from SGD 5,000 to SGD 25,000 depending on the amount in dispute.
3. Procedure
According to a study on actual case costs and duration submitted by the Singapore International Arbitration Centre, the average duration of a SIAC arbitration is approximately 13.8 months. At the same time, if the amount in dispute does not exceed the equivalent of SGD 6 million, the parties have agreed to apply the expedited procedure, or exceptional urgency exists, a party may also submit a written application to SIAC for arbitration under the expedited procedure, in which case the arbitration shall be completed within six months.
Generally, a SIAC arbitration proceeds through the following stages:
- The claimant submits a Notice of Arbitration to the Registrar appointed by SIAC and sends a copy to the respondent;
- The date on which the Registrar receives the complete Notice of Arbitration is deemed to be the date on which the arbitration proceedings commence, and SIAC sends notice to the parties;
- After receiving the Notice of Arbitration, the respondent submits a response to the Registrar;
- The number of arbitrators is determined and the arbitrator(s) are appointed; the parties may apply for the appointment of arbitrator(s);
- The arbitral tribunal is constituted. Unless the parties have agreed to a documents-only hearing or the rules provide otherwise, the tribunal shall hold an oral hearing;
- After consulting the parties, the tribunal shall declare the proceedings closed as soon as possible and notify the parties and the Registrar;
- Before making an award, the tribunal shall submit the draft award to the Registrar; unless the draft award is approved, the tribunal shall not make any award;
- The tribunal shall issue the award in writing.
Website: https://siac.org.sg
SIAC Fee Calculator: https://www.siac.org.sg/component/siaccalculator/?Itemid=448
2. International Court of Arbitration of the International Chamber of Commerce (ICC)
1. Overview
In the field of international commercial arbitration, the International Court of Arbitration of the International Chamber of Commerce (ICC) is the most influential arbitration institution. It was established in 1923, is part of the International Chamber of Commerce, and has a representative office in Singapore. It is an international chamber of commerce with more than 60 national members. The establishment of its arbitration court also continues its purpose of promoting and safeguarding international commercial activities, providing individuals, enterprises, and governments with diversified and personalised dispute resolution services.
Unlike a court, although it is called an "arbitration court", the ICC itself does not issue awards. Awards are made by 184 national committee members and arbitration experts from 110 jurisdictions, while the Court assists and supervises the progress of the arbitration proceedings. The Court's role is to ensure the correct application of the ICC Arbitration Rules and to assist parties and arbitral tribunals in overcoming procedural obstacles. This role is carried out by the Court's Secretariat, which consists of more than 80 lawyers and administrative staff.
2. Fee Model
The ICC Arbitration Rules in force since 2017 provide that arbitration costs include the ICC administrative fees and arbitrator's fees determined by the Court in accordance with the fee schedule applicable at the commencement of the arbitration based on the total amount in dispute, as well as the fees of experts appointed by the arbitral tribunal, the actual expenses of the arbitrators, and the reasonable legal and other expenses incurred by the parties for the arbitration.
Depending on the amount in dispute and the parties' intentions, the arbitration proceedings may be conducted under either an expedited procedure or a standard procedure: Where the amount in dispute is less than USD 2,000,000 or the parties unanimously agree, the expedited arbitration procedure may apply, with a sole arbitrator appointed by the parties or by the Court, and the time limit for the award is six months. If the amount in dispute is greater than USD 2,000,000 and the parties have not agreed to apply the expedited procedure, the standard procedure shall apply, with either a sole arbitrator or a three-member tribunal as agreed by the parties.
Regarding Singapore's legislation on international arbitration, its International Arbitration Act provides a legal framework governing all international arbitrations seated in Singapore. However, the International Arbitration Act does not contain specific provisions on the allocation of legal costs; it only contains specific provisions on interest, security for costs, and the bearing of taxes and fees. If there is a conflict between the ICC Rules and specific provisions of the International Arbitration Act, the latter prevails, because the former is a set of arbitration rules and the latter is an arbitration statute.
In particular, the ICC Rules emphasise that the conduct of the parties during the arbitration must be taken into account. Under the ICC Rules, the arbitral tribunal has the power to determine the allocation of the parties' costs in the award. The arbitration costs that a party may claim include the reasonable legal and other expenses incurred by that party in the arbitration. In other words, if a party fails to cooperate in the arbitration, then even if that party ultimately wins, its claim for legal fees may not be fully supported by the tribunal under the ICC Rules.
Website: https://iccwbo.org/
3. Singapore Chamber of Maritime Arbitration (SCOMA)
1. Overview
Singapore arbitration has long been promoting the use of Singapore arbitration in the shipbuilding industry in East Asia. Its mission is to encourage industry players to arbitrate maritime disputes in Singapore, while enhancing expertise in maritime arbitration and promoting the maritime arbitration profession locally.
The Singapore Chamber of Maritime Arbitration (SCOMA) was established in 2004. After its restructuring in 2009, it has become more independent, and its advantages over London in terms of cost, convenience, and efficiency have become more prominent. In 2012, the Baltic and International Maritime Council (BIMCO) listed Singapore as one of the three formal arbitration venues in its standard dispute resolution clauses, making Singapore undisputedly an international maritime arbitration centre on a par with London and New York.
Today, the world's key maritime judicial centres have formed a tripartite pattern, with London and New York as the traditional Western centres and Singapore as the emerging Eastern centre, and this pattern is also facing new fluctuations. The rise of Singapore has not only impacted Western ports but also created an agglomeration effect within Asia. Future changes in this landscape will depend on the further development of each jurisdiction.
2. Fee Model
The total costs for arbitrating a case at the Singapore Chamber of Maritime Arbitration range from USD 750,000 to USD 1,000,000 for bringing the arbitration, while the costs of a counterclaim are estimated at USD 45,250 to USD 56,250. There is also a separate expedited resolution route for small claims disputes.
Under the Singapore Chamber of Maritime Arbitration Rules (4th Edition), where the total amount in dispute does not exceed USD 200,000, the fee of any arbitrator hearing the dispute under the expedited procedure is capped at USD 10,000. If the total amount in dispute does not exceed USD 300,000, the fee of any arbitrator shall be USD 10,000 plus 5% of the amount of the claim exceeding USD 200,000. The parties shall be jointly and severally liable for all fees and expenses incurred by the tribunal in performing its duties when appointed under these Rules. The Court may, at its discretion, require each member to make interim payments of his or her fees and expenses at appropriate intervals. Any such request for payment shall be made to the parties and notified to all other members of the tribunal.
Because maritime disputes generally involve relatively large amounts, the Court is entitled to reasonable security for arbitration costs. If the Court exercises its right to require security, it shall inform the parties of the estimated total cost of the arbitration, or the estimated costs up to the current stage, and require security for its costs. If a party fails to provide security within a reasonable time specified, it must provide security within 14 days after receiving notice from the Court that security has not been provided, failing which the tribunal may suspend the arbitration or cancel any previously fixed hearing dates.
4. Beihai Asia International Arbitration Centre (BAIAC)
1. Overview
The Beihai Asia International Arbitration Centre (BAIAC, also known as Beihai Asian Arbitration) was established in Singapore by the Beihai Arbitration Commission, whose headquarters are located in Beihai, Guangxi, China. BAIAC is the first international arbitration centre established in Singapore by a Chinese arbitration institution.
Since its registration and establishment in 2003, the Beihai Arbitration Commission has set up hearing centres (circuit tribunals) in 29 cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Tianjin, Hangzhou, Chengdu, Kunming, Xi'an, Lanzhou, Yinchuan, Xining, Urumqi, Dalian, Zhengzhou, Haikou, Foshan, and Dongguan, providing parties with convenient local hearings and establishing a complete domestic arbitration service system. In 2018, the Beihai Arbitration Commission accepted 58,869 cases; in 2019, Beihai Arbitration accepted 88,415 cases, ranking second nationwide; in 2020, it accepted 59,696 cases, ranking first nationwide.
2. Features
1. Targeted at small and medium-value disputes, with simple and accessible arbitration
BAIAC was not established to compete with the many existing international arbitration centres. Its goal is to meet unmet needs and to contribute to the continued development and innovation of the international arbitration and dispute resolution industry. Its arbitration rules contain detailed provisions on both small claims procedures and expedited procedures. It is committed to addressing the demand of disputing parties, including Chinese parties, for low-cost, high-quality international arbitration services, responding to the needs of small and medium-value dispute cases, and reducing arbitration costs. At the same time, for cases that cannot be handled early, control over arbitration costs will also prompt the expediting of subsequent procedures.
BAIAC promises that arbitration and mediation under its auspices are simple and easy to understand; its arbitration rules are an improvement based on the UNCITRAL Arbitration Rules. Focusing on the intrinsic needs of disputing parties and arbitration practitioners, BAIAC adopts the most efficient and direct arbitration process, charges low fees, and provides high-quality services.
2. Adapting to the trend of diversification in arbitration, based in Asia with a global outlook
Respecting and achieving gender diversity, geographic diversity, historical diversity, and diversity of general rules are the guiding principles of BAIAC. As an international dispute resolution centre, Singapore can provide reliable resolution avenues for various disputes arising from the Belt and Road Initiative, Asian trade cooperation, and international investment between China and ASEAN countries. Today, Guangxi, as China's gateway to ASEAN and supported by the newly established Guangxi Free Trade Zone, is expected to play a stronger bridging role in enhancing commercial cooperation between China and ASEAN. Building on its existing status as an international arbitration and mediation centre, Singapore as a "city-state" will play an even more critical role in supporting dispute resolution in the region and around the world.
BAIAC also commits to promoting the application of digital technology and artificial intelligence in international arbitration and mediation. BAIAC believes that innovation is always a potential solution for reducing arbitration costs and improving arbitration efficiency.
3. Fee Model
1. Case Filing Fee
BAIAC charges parties a case filing fee of SGD 850 (non-refundable).
2. Arbitration Institution Administrative Fee
For an amount in dispute not exceeding SGD 50,000, an administrative fee of SGD 1,000 is charged (compared with SGD 3,800 at SIAC); for the portion exceeding SGD 50,000 but not exceeding SGD 100 million, a progressive excess fee rate is applied based on the different excess amounts; for an amount exceeding SGD 100 million, an administrative fee of SGD 45,000 is charged (compared with SGD 95,000 at SIAC).
3. Arbitrator's Fees (excluding 7% GST)
For an amount in dispute not exceeding SGD 50,000, SGD 2,500 is charged (compared with SGD 6,250 at SIAC); for the portion exceeding SGD 50,000 but not exceeding SGD 500 million, a progressive excess fee rate is applied according to the different scales; for the portion exceeding SGD 500 million, fees are charged proportionally, subject to a maximum of SGD 750,000 (compared with SGD 2 million at SIAC).
4. Emergency Interim Relief Fees (including 7% GST)
If emergency arbitration becomes necessary, SIAC charges an emergency arbitration application administrative fee of SGD 5,350 for Singapore parties and SGD 5,000 for overseas parties. The emergency arbitrator's fee is SGD 25,000, and the deposit for the emergency arbitrator's fee is SGD 30,000. This fee is non-refundable.
5. Appointment Fee
If a request to appoint an arbitrator is made in an ad hoc case, the fee shall be paid by the party requesting the appointment. The fee is paid based on the number of arbitrators appointed at the time the appointment request is made. The fee for appointing one arbitrator is SGD 1,500, two arbitrators SGD 2,000, and three arbitrators SGD 2,500.
4. Contact Details
Website: www.baiac.org
Email: shirlene.tan@baiac.org
Conclusion
Singapore has long been known for the integrity and efficiency of its arbitration and judicial institutions. But Singapore's international arbitration system has not stopped there. It continues to update and improve its rules as times develop, enhancing the transparency and accessibility of international arbitration and building its international influence. As the Asia-Pacific regional economy receives further attention, Singapore's expertise in financial services, trade, maritime matters, and its professional legal talent from around the world will attract an increasing number of international dispute resolutions to be seated here.
- For more information on arbitration and dispute resolution in Singapore, please contact the professional consultants of China Singapore Legal News.
Authors | Zhang Jingxinyue, Yu Tianlong
This article is for general information only and does not constitute formal legal advice.
This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.