Law Bites Special – Dec 2021

LAW BITES SPECIAL – DECEMBER 2021

SINGAPORE CHAMBER OF MARITIME ARBITRATION LAUNCHES THE 4TH EDITION OF ITS RULES

On 1st December, SCMA released the 4th edition of its rules after having conducted public consultations between 16th June to 31st August 2020. These have culminated in changes thatour firm welcomes wholeheartedly, seeing as that they have struck a fine balance between ensuring that the Rules in its entirety would keep with the times, whilst maintaining a measure of certainty for practitioners and clients alike through the streamlining of processes and plugging of opportunities for abuse. Above all, our firm sees that the new Rules demonstrate SCMA’s acumen in anticipating industry-wide needs, and this direction would ultimatelylead to a greater industry adoption of SCMA rules, moving SCMA closer to the goal of becoming the leading Asian arbitration institution for maritime related disputes. A copy of the new rules may be accessed here.

We set out below some key revision highlights:

Time period alterations/ new requirements (new rules 27, 34 and 41)

Rule 27.1 (Closure of Proceedings) (previously rule 32 under the 3rd edition)

Additional provision: in any event, unless the parties agree or the Tribunal otherwise directs, proceedings shall be deemed to be closed after the lapse of 3 months from the date of any final written submission or final hearing. This seeks to streamline the arbitration process and provide greater certainty on the length of the arbitral process

Rule 34.4 (The Award) (previously Rule 36 under the 3rd edition)

Regarding the provision of notice in writing informing the Secretariat of its objection to publication, the time period in conferring such notice has been altered from 60 to 30 days.

Rule 41.2 (Security for Tribunal’s Fees and Expenses) (Previously Rule 13 under the 3rd edition)

The notice requiring the provision of security for the Tribunal’s fees will now be given with 14 days’ notice, an increment from the previous 7 days.

Technological updates (new rules 3.1 to 3.3, 17.3, 25 and 34)

Rules 3.1 to 3.3 (Notice, Calculation of Periods of Time) (previously rule 3 under the 3rd edition)

Now allows for both notice and communication to be conducted electronically.

Rule 17.3 (Case Management Meetings) (previously Rule 35 under the 3rd edition)

A case management meeting may be held in person, by telephone, by video-conference, or in any other manner the Tribunal deems to be appropriate.

Rule 25.3 (Hearings) (previously Rule 28 under the 3rd edition)

Hearings may be held in person, by telephone, by video-conference or in any other manner the Tribunal deems appropriate.

Rule 34.1 (The Award) (previously Rule 36 under the 3rd edition)

Unless any party requires or the Tribunal in its discretion otherwise decides, an Award may now be signed electronically and/or in counterparts and assembled into a single electronic document. Additionally, 3 months after the publication of a final Award, the Tribunal may notify the parties of its intention to dispose of the documents and to close the file, and it will act accordingly unless otherwise requested within 21 days of such notice being given.

Rule 38 (Settlement & Termination of Proceedings) (previously rule 40 under 3rd edition)

Justifiable grounds for objection to an order for termination of proceedings now have to be raised within 30 days after the Tribunal has made its intention known.

Quantum updates (Rule 44)

Rule 44.1 (Expedited Procedure) (previously Rule 46 under the 3rd edition)

In the updated Expedited Procedure, the previous Small Claims Procedure threshold of US $150,000 has been replaced by the new threshold of US$300,000. The expedited procedure is designed to be a quick and cost-effective method to resolve a dispute using a sole arbitrator with issuance of an award within 21 days, if no oral hearing is required.

Added requirement of notifying the Secretariat (Rules 6 and 7)

Rules 6.2 (Notice & Commencement of Arbitration) (previously Rule 4 under the 3rd edition)

At the same time the Notice of Arbitration is delivered to the respondent, there is now the added requirement of sending a copy to the Secretariat electronically, but the Notice of Arbitration shall not be invalidated for late or non-compliance with this rule.

Rule 7.2 (Response to Notice of Arbitration) (previously Rule 5 under the 3rd edition)

Similarly, a copy of the Response shall be sent to the Secretariat, but the Response shall not be invalidated for late or non-compliance with this rule.
The design of these two rules is with the purpose of giving the SCMA Secretariat information about arbitrations that are proceeding under SCMA rules, due to the fact that there are presently a large number of such arbitrations failing to be notified.

General changes (Rules 4 and 40)

Rule 4.1 and 4.4 (Party Representatives) (previously Rule 27 under the 3rd edition)

In addition to representation by a lawyer, an “other agent” will now be permissible as well, and this is intentionally meant to widen the scope of the provision, so as to prevent an abuse of process through the dodging of service

Additionally, any change by a party to its authorised representative(s) after the Tribunal has been constituted shall be subject to the Tribunal’s approval. Approval may only be withheld if the Tribunal is satisfied that there is a substantial risk that such change may prejudice the conduct of the proceedings or the enforceability of any Award. The institution of this rule is meant to prevent an abuse of process by late change of representatives in arbitration to derail proceedings while maintaining a balance for parties to choose their own arbitrators\

Rule 40 (Tribunal’s Fees and Expenses) (previously Rule 12 under the 3rd edition)

Unless an arbitrator and the parties otherwise agree, an arbitrator appointed under these Rules and the parties are deemed to have agreed to the Standard Terms of Appointment. This operates to ensure greater certainty and transparency in the appointment of arbitrators, by having the SCMA Standard Terms of Appointment now apply to all arbitrations by default, unless otherwise agreed.

Conclusion

The SCMA has instituted these changes for the sake of incorporating a greater degree of fairness and efficiency in the conduct of arbitrations. As for changes on the technological front as well as their persistent efforts in the both the conduct of public consultations and the concerted effort in collating and analysing of arbitration data over the years, they undoubtedly demonstrate the SCMA’s drive in keeping up with the times and ensuring that the rules are both relevant and wholly suited to be continually applied. We look forward to seeing these rules put into practice and the users’ feedback on the same.

 

For more details contact:

 

John Sze
Deputy Managing Partner:
E: johnsze@jtjb.com
T: (65) 6324 0232