General understanding of the Arbitration: Civil court lawsuits and trials are the traditional method for resolving disputes. However, concerns about court congestion and delays, rising litigation costs, and the negative psychological and emotional impact of litigation have increased the use of alternative dispute resolution (ADR) techniques such as mediation, arbitration etc. Arbitration is one of the more frequently used ADR processes. However, any person or legal entity which is to choose arbitration for dispute resolution, the understanding of arbitration is important to know and aware the procedure to follow.

Arbitration is the formal alternative to litigation resettlement. In this process, the disputing parties present their case to a neutral third party or arbitrator, who renders a decision. Arbitration is generally considered a more efficient process than court because it is quicker, less expensive, and provides greater flexibility of process and procedure. The parties often select the arbitrator and exercise control over certain aspects of the arbitration procedure. Arbitrators typically have more expertise in the specific subject matter of the dispute than do judges. They may also have greater flexibility in decision-making.

Typically, a party initiates the arbitration process by sending the other party a written demand for arbitration. The demand generally describes the parties, the dispute, and the type of relief sought. The opposing party usually responds in writing, indicating whether they believe the dispute is arbitrable. If the dispute is arbitrable, the parties then select an arbitrator or panel of arbitrators.

In most jurisdictions, the format for arbitration is similar to a trial. The parties make opening and closing arguments, present testimony and witnesses, and offer documents. The evidentiary rules, however, are not applicable and the discovery and cross-examination opportunities are limited.

The well-known regional arbitrations are Hong Kong International Arbitration Center (HKIAC), the Singapore International Arbitration Centre (SIAC), London Court of International Arbitration (LCIA) and the International Chamber of Commerce (ICC) etc.

The brief introduction and model clauses to use of highly ranked arbitrations including ICC, SIAC and HKIAC follows. The introduction of Mongolian International and National Arbitration and current legislation of arbitration is briefly summarized.

Dispute resolution by the International Chamber of Commerce (ICC)

ICC International Court of Arbitration is the world's leading arbitral institution. Since 1923, ICC has been helping to resolve difficulties in international commercial and business disputes to support trade and investment.

ICC performs an essential role by providing individuals, businesses and governments alike with a variety of customizable services for every stage of their dispute.

Although ICC is called a court in name, they do not make formal judgments on disputed matters. Instead, they exercise judicial supervision of arbitration proceedings. Their responsibilities include:

  • confirming, appointing and replacing arbitrators, as well as deciding on any challenges made against them;
  • monitoring the arbitral process to make certain that it is performed properly and with the required speed and efficiency necessary;
  • scrutinizing and approving all arbitral awards to reinforce quality and enforceability;
  • setting, managing and — if necessary — adjusting fees and advances; and
  • overseeing emergency proceedings before the start of the arbitration.

Standard ICC Arbitration Clause

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

Parties are free to adapt the clause to their particular circumstances. For instance, they may wish to stipulate the number of arbitrators given that the ICC Arbitration Rules contain a presumption in favour of a sole arbitrator. Also, it may be desirable for them to stipulate the place and language of the arbitration and the law applicable to the merits. The ICC Arbitration Rules do not limit the parties' free choice of the place and language of the arbitration or the law governing the contract.

When adapting the clause, care must be taken to avoid any risk of ambiguity. Unclear wording in the clause will cause uncertainty and delay and can hinder or even compromise the dispute resolution process.

Parties should also take account of any factors that may affect the enforceability of the clause under applicable law. These include any mandatory requirements that may exist at the place of arbitration and the expected place or places of enforcement.

ICC Arbitration without Emergency Arbitrator

If the parties wish to exclude any recourse to the Emergency Arbitrator Provisions, they must expressly opt out by adding the following wording to the clause above:

The Emergency Arbitrator Provisions shall not apply.

Expedited Arbitration

The ICC Arbitration Rules provide for use of an expedited procedure in lower-value cases. If parties wish to exclude the application of the Expedited Procedure Provisions, they must expressly opt out by adding the following wording to the clause above:

The Expedited Procedure Provisions shall not apply.

Parties wishing to avail themselves of the expedited procedure in higher-value cases should expressly opt in by adding the following wording to the clause above:

The parties agree, pursuant to Article 30(2)(b) of the Rules of Arbitration of the International Chamber of Commerce, that the Expedited Procedure Rules shall apply irrespective of the amount in dispute.

If parties wish the ceiling for the application of the Expedited Procedure Rules to be higher than that specified in those Rules, the following wording should be added to the clause above:

The parties agree, pursuant to Article 30(2)(b) of the Rules of Arbitration of the International Chamber of Commerce, that the Expedited Procedure Rules shall apply, provided the amount in dispute does not exceed US$ [specify amount] at the time of the communication referred to in Article 1(3) of the Expedited Procedure Rules.

Multi-tiered Clauses

ICC Arbitration may be used as the forum for final determination of a dispute following an attempt at settlement by other means such as mediation. Parties wishing to include in their contracts a tiered dispute resolution clause combining ICC Arbitration with ICC Mediation should refer to the standard clauses relating to the ICC Mediation Rules.

Other combinations of services are also possible. For instance, arbitration may be used as a fallback to expertise or dispute boards. Also, parties who resort to ICC Arbitration may wish to provide for recourse to the ICC International Centre for ADR for the proposal of an expert if an expert opinion is required in the course of the arbitration.

Other recommendations

The parties may also wish to stipulate in the arbitration clause:

  • the law governing the contract;
  • the number of arbitrators;
  • the place of arbitration; and/or
  • the language of the arbitration.

The standard clause can be modified in order to take account of the requirements of national laws and any other special requirements that the parties may have. In particular, parties should always check for any mandatory arbitration. For example, it is prudent for parties wishing to have an ICC Arbitration in Mainland China or in Russia to include in their arbitration clause an explicit reference to the ICC International Court of Arbitration.

The following language is suggested for this purpose:

"All disputes arising out of or in connection with the present contract shall be submitted to the International Court of Arbitration of the International Chamber of Commerce and shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules."

Make special arrangements where the contract or transaction involves more than two parties.

English and French are the Court's official working languages of ICC. However, they can administer cases in any language and communicate in all major languages, including Arabic, Chinese, German, Italian, Portuguese, Russian and Spanish.

Dispute resolution by the Singapore International Arbitration Centre (SIAC)

Since commencing operations in 1991 as an independent, not-for-profit organization, SIAC has established a track record for providing best in class arbitration services to the global business community. SIAC arbitration awards have been enforced in many jurisdictions including Australia, China, Hong Kong SAR, India, Indonesia, Jordan, Thailand, UK, USA and Vietnam, amongst other New York Convention signatories. SIAC is a global arbitral institution providing cost-competitive and efficient case management services to parties from all over the world.

In May 2018, the prestigious Queen Mary University of London and White & Case International Arbitration Survey (QMUL Survey) ranked SIAC as the 3rd most preferred arbitral institution in the world, making SIAC the most preferred arbitral institution based in Asia.

What Singapore Has to Offer on ADR:

  • An independent neutral third-country venue consistently ranked 7th for the least corrupt public sector in the world in the Corruption Perceptions Index 2016. Singapore is also consistently ranked no. 1 for the least corrupt public sector in Asia in the Corruption Perceptions Index.
  • A strong multicultural society, with excellent legal and technological expertise as well as language fluency.
  • A central location in Southeast Asia with 6,600 scheduled flights a week to 320 cities.
  • An open economy and business environment that is host to over 7,000 multinational firms.
  • The UNCITRAL Model Law is the cornerstone of Singapore's legislation on international commercial arbitration which is regularly updated to incorporate internationally accepted codes and rules for arbitration.
  • A party to the 1958 New York Convention (on enforcement of arbitration awards). Singapore arbitration awards are enforceable in over 150 countries worldwide.
  • A strong tradition of the rule of law, supported by a highly skilled judiciary that receives top rankings in international surveys.
  • The courts offer maximum judicial support of arbitration and minimum intervention granting parties full and consistent support in the conduct of international arbitration.
  • Parties have a freedom of choice of counsel in arbitration proceedings regardless of geographical origin.
  • There is no restriction on foreign law firms engaging in and advising on arbitration in Singapore.
  • Non–residents do not require work permits to carry out arbitration services in Singapore.
  • There are excellent facilities and services to support the conduct of arbitration at Maxwell Chambers, Asia's first fully-integrated dispute resolution complex with state-of-the-art hearing facilities.
  • Lower costs than in almost any other major center of arbitration.
  • Third party funding allowed in the field of international arbitration and related proceedings.

SIAC Model Clause

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration administered by the Singapore International Arbitration Centre ("SIAC") in accordance with the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules") for the time being in force, which rules are deemed to be incorporated by reference in this clause. The seat of the arbitration shall be [Singapore]. The Tribunal shall consist of _________________arbitrator(s). The language of the arbitration shall be ________________. This contract is governed by the laws of _________________.

UNCITRAL Model Clause

For parties adopting the UNCITRAL Arbitration Rules, we recommend that they adopt the following: Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in Singapore in accordance with the UNCITRAL Arbitration Rules for the time being in force. The arbitration shall be administered by Singapore International Arbitration Centre ("SIAC") in accordance with its Practice Note on UNCITRAL cases. The appointing authority shall be the President or Vice-President of SIAC Court of Arbitration. The number of arbitrators shall be _________________. (Should be odd number of 1 or 3) The language to be used in the arbitral proceedings shall be ________________.

Expedited procedure model clause

In drawing up international contracts, we recommend that parties include the following arbitration clause:

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration administered by the Singapore International Arbitration Centre ("SIAC") in accordance with the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules") for the time being in force, which rules are deemed to be incorporated by reference in this clause.

The parties agree that any arbitration commenced pursuant to this clause shall be conducted in accordance with the Expedited Procedure set out in Rule 5.2 of the SIAC Rules.

The seat of the arbitration shall be [Singapore]. The Tribunal shall consist of one arbitrator.

The language of the arbitration shall be ________________.

Parties who have an arbitration agreement may wish to refer their dispute to mediation, either before they commence arbitration or in the course of the arbitration.

"Arb-Med-Arb" is a process whereby a dispute is first referred to arbitration before mediation is attempted. If parties are able to settle their dispute through mediation, their mediated settlement may be recorded by the Tribunal in the form of a consent award. The consent award is generally accepted as an arbitral award, and, subject to any local legislation and/or requirements, is generally enforceable in more than 150 countries under the New York Convention. If parties are unable to settle their dispute through mediation, they may continue with the arbitration proceedings.

Under the SIAC-SIMC(Singaporean International Mediation Center) Arb-Med-Arb Protocol, the arbitrator(s) and the mediator(s) will be separately and independently appointed by SIAC and SIMC respectively, under the applicable arbitration rules and mediation rules of each institution. Unless the parties otherwise agree, the arbitrator(s) and the mediator(s) will generally be different persons.

Singapore Arb-Med-Arb Model Clause

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration administered by the Singapore International Arbitration Centre ("SIAC") in accordance with the Arbitration Rules of the Singapore International Arbitration Centre ("SIAC Rules") for the time being in force, which rules are deemed to be incorporated by reference in this clause.

The seat of the arbitration shall be [Singapore].

The Tribunal shall consist of _________________ arbitrator(s).

The language of the arbitration shall be ________________.

The parties further agree that following the commencement of arbitration, they will attempt in good faith to resolve the Dispute through mediation at the Singapore International Mediation Centre ("SIMC"), in accordance with the SIAC-SIMC Arb-Med-Arb Protocol for the time being in force. Any settlement reached in the course of the mediation shall be referred to the arbitral tribunal appointed by SIAC and may be made a consent award on agreed terms.

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