SIAC Recommends SICC as Supervisory Court for Singapore Arbitrations

On January 12, 2023, the Singapore International Commercial Court (“SICC”) launched a model clause (“SICC Model Jurisdiction Clause”) to assist parties that wish to designate the SICC as the court having supervisory jurisdiction over their international arbitrations. In tandem, to encourage parties to make this choice in agreements for Singapore-seated arbitrations, the Singapore International Arbitration Centre (“SIAC”) modified its popular Model Arbitration Clause to recommend inclusion of the SICC Model Jurisdiction Clause in arbitration agreements. The SIAC’s recommendation of the SICC Model Jurisdiction Clause shows strong support for the supervisory jurisdiction of the SICC and is likely to lead to an increase in the SICC’s caseload in the future.

Introduction to the Singapore International Commercial Court

The SICC was established on January 5, 2015, as a division of the Singapore High Court dedicated to the adjudication of international commercial disputes. The SICC markets itself as being a neutral forum for the resolution of international commercial disputes. Both local and international judges experienced in commercial disputes sit on the SICC, and non-Singaporean lawyers may represent parties in “offshore cases,” i.e., cases in which: (a) Singapore law is not the law applicable to the dispute; or (b) the only connections between the dispute and Singapore are the parties’ choice of Singapore law as the law applicable to the dispute and the parties’ submission to the jurisdiction of the Court. Building on the success of the SIAC, the SICC was intended to position Singapore as a premium forum for court-based commercial dispute resolution both within and beyond Asia.

Generally speaking, the SICC has jurisdiction to hear an action if:

• the claim in the action is of an international and commercial nature;
• the parties to the action have submitted to the SICC’s jurisdiction under a written jurisdiction agreement; and
• the parties to the action do not seek any relief in the form of, or connected with, a prerogative order (i.e., a type of administrative law relief).

An action is international in nature if:

• any of the following places is situated in a State other than Singapore:
• the place of business of at least one party to the action;
• the place where a substantial part of the obligations of the commercial relationship between the parties is to be performed; or
• the place with which the subject matter of the action is most closely connected; or

• all parties named in the case when it was first filed have expressly agreed that the subject matter of the action relates to more than one State.

An action is commercial in nature if:

• the subject matter of the action arises from a relationship of a commercial nature, whether contractual or not;
• the action relates to an in personam intellectual property dispute; or
• all parties named in the case when it was first filed have expressly agreed that the subject matter of the action is commercial in nature.

In addition to cases in which the parties have submitted to the SICC’s jurisdiction in writing, the General Division of the High Court is empowered to transfer cases to the SICC, provided: (a) that the General Division considers that the action is of an international and commercial nature and would be more appropriately heard by the SICC; and (b) that the parties are not seeking relief in the form of a prerogative order.

Judgments of the SICC are subject to appeal to the Singapore Court of Appeal, unless parties agree otherwise, and are not enforceable as arbitral awards under the New York Convention.

SIAC Recommends the SICC Model Jurisdiction Clause

In 2018, the Singapore Parliament passed the Supreme Court of Judicature (Amendment) Act 2018, which clarified that the SICC has jurisdiction to hear proceedings relating to international commercial arbitration. As a result of referrals of cases from the General Division of the Singapore High Court, the SICC has heard an increasing number of arbitration-related matters. This looks likely to increase with the launch of the SICC Model Jurisdiction Clause and the SIAC’s modification of its popular Model Arbitration Clause to recommend that parties designate the SICC as the supervisory court for Singapore-seated international arbitrations. While the incorporation of the SICC Model Jurisdiction Clause into arbitration agreements remains voluntary, SIAC arbitration is popular and the SIAC Model Arbitration Clause is widely-used by parties who opt for SIAC arbitration. Therefore, the recommendation of the SICC Model Jurisdiction Clause in the SIAC Model Arbitration Clause is likely to cause an increase in the SICC’s caseload in the future.

The SICC has several features that make it potentially a more attractive supervisory court for international arbitration as compared to the General Division of the Singapore High Court:

1. The SICC has a diverse and international bench, which is likely to be perceived as having greater neutrality. A not insignificant portion of Singapore-seated arbitrations involve a Singaporean party. For example, a total of 411 Singaporean parties appeared in the 469 new cases that the SIAC received in 2021. In those circumstances, international counterparties may understandably prefer to litigate arbitration-related disputes in the SICC rather than in the General Division of the Singapore High Court.
2. Judges sitting on the SICC are eminent international and local judges, many of whom possess specialist expertise ranging from construction to intellectual property, securities, and bankruptcy. The SICC is therefore well-positioned to hear arbitration-related proceedings that require subject matter expertise.
3. The SICC offers great procedural flexibility. The SICC has its own standalone set of procedural rules (the “SICC Rules”) that differ from Singapore’s Rules of Court (“ROC”). The SICC Rules incorporate international best practices from international commercial litigation as well as international arbitration, which may be more familiar to international parties. The SICC Rules, for example, are flexible in allowing for claims and counterclaims to be determined by: (i) the pleadings adjudication track, the procedure laid down in the ROC for disputes that involve substantial disputes of facts; (ii) the statements adjudication track, the procedure laid down in the ROC for disputes that are unlikely to involve any substantial dispute of facts; or (iii) the memorials adjudication track, which is often used in arbitrations. The SICC Rules do not provide as a default for a general discovery process in which parties must exchange documents that (i) they will be relying on; or (ii) a party knows or ought reasonably to know are adverse to its case. Instead, parties are initially only required to produce documents that they intend to rely on and may serve a request to produce specific categories of documents on any person.
4. The SICC has to date established a strong track record in determining applications quickly.  
5. The prospects for meaningful recovery of legal costs are better in the SICC. The Singapore Court of Appeal recently confirmed in Senda International Capital Ltd v Kiri Industries Ltd [2022] SGCA(I) 10 that successful parties in SICC proceedings are to be awarded reasonable costs by reference to what the successful parties have actually incurred (see also O. 22, r. 3(1) of the SICC Rules 2021). This is a more favorable standard than that applied in proceedings in the General Division of the Singapore High Court, in which the court attempts to assess what ought to have been incurred and typically awards costs by reference to Appendix G of the Rules of Court 2021, which sets out a relatively modest scale of costs for different types of proceedings without regard to the fees actually incurred by the parties. This often results in very low recoveries of legal costs by successful litigants.

Given these features, the SIAC’s modification of its Model Arbitration Clause to recommend the SICC Model Jurisdiction Clause is a welcome development and shows strong support for the growth of the SICC. Given the influence that model clauses have on the drafting of arbitration agreements, we expect to see a noticeable increase in the SICC’s international arbitration-related caseload in the future.