Knowledge Highlights 23 December 2021
On 1 December 2021, the Singapore Chamber of Maritime Arbitration (“SCMA”) announced the launch of the fourth edition of the SCMA Arbitration Rules (“SCMA Rules”). The new edition will apply to all arbitrations commencing on or after 1 January 2022.
The SCMA Rules apply to an arbitration agreement where parties have so agreed and shall govern the arbitration save that, if any of the Rules conflict with any law of the seat of the arbitration from which the parties cannot derogate, then such applicable law shall prevail.
The SCMA Board and committees have provided guidance and drafting on the formulation of the new SCMA Rules. Several Allen & Gledhill Partners are members of the SCMA Board and committees. Corina Song is Vice Chair of the Board, Kenny Yap is a Procedure Committee member, and Ankit Goyal is a Promotion Committee member.
This article provides an overview of the key revisions made to the SCMA Rules.
1. Adapting technology
In recognition that business is increasingly conducted by electronic and digital means, the SCMA Rules have been amended to allow for service of documents by email, the electronic signing of arbitration awards (“award”), and conducting hearings and case management conferences virtually.
2. Arbitral tribunal composition
The SCMA Rules codify maritime arbitration practice by allowing an arbitration to proceed with two party-appointed arbitrators, with the third being appointed only if necessary. New Rule 8.4(c) permits the two party-appointed arbitrators to constitute the arbitral tribunal (“tribunal”) and gives them the discretion to appoint a third arbitrator before any substantive hearing or without delay if the two arbitrators cannot agree on any matter relating to the arbitration. Where a third arbitrator has not been appointed, and a substantive hearing is not required, the two arbitrators have the power to make decisions, orders and awards.
3. Oral hearings not mandatory
Oral hearings will no longer be mandatory, with the SCMA Rules providing that the tribunal will have the discretion to decide if an oral hearing is required or if the arbitration can proceed on a documents-only basis. However, a hearing will still be held if a party so requests.
4. Power to prevent change of counsel
Rule 4.4 of the SCMA Rules provides that any change of a party’s authorised representative after constitution of the tribunal will be subject to the tribunal’s approval. The tribunal will be able to refuse to give such approval where there is a substantial risk that such a change might prejudice the conduct of the proceedings or the enforceability of any award.
5. Closure of proceedings
The SCMA Rules provide that arbitration proceedings shall be deemed to be closed three months from the date of any final written submissions or final hearing, and the award should be drafted three months after the close of proceedings. Currently, the tribunal has the discretion to decide “at an appropriate stage” to declare the closure of proceedings. This amendment will provide greater certainty to parties.
6. Expedited Procedure with new claim value limit
The Expedited Procedure (“Procedure”) in the SCMA Rules will replace the current Small Claims Procedure. The Procedure applies to any dispute where the aggregate amount of the claim and counterclaim (if any) is no more than US$300,000 (excluding interests and costs). The Small Claims Procedure provides for a limit of US$150,000. The Procedure provides for the appointment of a sole arbitrator and for a speedier mechanism to resolve the dispute. The case statement is to be served within 14 days rather than 30 days and, where no oral hearing is required, the award must be issued within 21 days from the date of receipt of the parties’ case statements.
7. Standard Terms of Appointment
The SCMA Rules provide that the SCMA Standard Terms of Appointment will apply to all arbitrations by default, unless parties agree otherwise. The Standard Terms of Appointment include provisions on independence and impartiality of arbitrators, arbitrator fees, and the exclusion of liability.