On 1 December 2021, the Singapore Chamber of Maritime Arbitration (SCMA), Singapore’s bespoke maritime arbitration body, launched the fourth edition of its arbitration rules. These new rules will apply to an arbitration commenced on or after 1 January 2022.
The latest rules have been streamlined and updated to reflect modern maritime arbitration practice in Asia. The most notable changes are (in no particular order):
Oral hearings are no longer mandatory.
This change removes one of the most consistent criticisms of SCMA arbitrations: the mandatory hearing requirement, which added costs, time, and was viewed as a delinquent respondent’s dream.
The discretion to hold a hearing now lies with the tribunal, save that a hearing must be held if any party requests one.
To reflect common maritime arbitration practice, the rules now allow two arbitrators to proceed without appointing the third arbitrator. The third only has to be appointed just before an oral evidential hearing or, without delay, if the two appointed arbitrators cannot agree on any matter relating to the arbitration (new rules 8.4(c) and (d)).
Subject to the above, the revised rules also allow for two arbitrators to conduct an arbitration through to its conclusion without the appointment of a third arbitrator (new rule 33.2).
Arbitration is commenced by the claimant serving a notice of arbitration on the respondent. Under the third edition of the SCMA rules, any notice including a notification, communication, or proposal was deemed to have been received only if it was physically delivered to the addressee, or if it was delivered at his habitual residence, place of business, or mailing address.
The new rules have been updated to provide for service of documents by e-mail, and notice is deemed to have been effectively served and received if it is delivered with proof of delivery (new rules 3.1 to 3.3).
Arbitration awards may now also be signed electronically (new rule 34.4).
Provision is also made that hearings and case management conferences, if held, may be conducted virtually such as by telephone, video-conference, or any other manner the tribunal deems appropriate (new rule 17.3).
Party autonomy in choice of representatives is a fairly fundamental principle.
However, dogmatically sticking to this principle allows the possibility for changes of representatives at crucial times of the arbitration process, sometimes with serious knock-on consequences (perhaps intentionally, as a tactic). The rules now empower a tribunal to prevent an abuse of process in this way by withholding approval of a change of counsel. Under new rule 4.4 approval can be denied where there is a substantial risk that the conduct of proceedings or the enforceability of any award may be prejudiced. This is hopefully a deterrent to nasty tactics being employed.
It will be interesting to see how this new rule works in practice.
To ensure greater certainty and transparency in the appointment of arbitrators, the SCMA Standard Terms of Appointment now apply to all arbitrations by default, unless agreed otherwise.
An Expedited Procedure with a threshold of US$300,000 has been introduced, replacing the Small Claims Procedure with a threshold of US$150,000 in the third edition of the SCMA rules.
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.
An official time limit for the closure of proceedings has now been inserted. Proceedings will be deemed to be closed three months from the date of any final written submissions or final hearing.
This streamlines the arbitration process and means the award should be published within three months after the close of proceedings (rule 34.1).
In order to keep the rules as user-friendly as possible, the new revisions also include general structural updates such as renumbering, the inclusion of chronological sections, and updating language to take into account gender neutrality.
The SCMA has been keen to find ways to improve its framework for the benefit of parties in disputes. Updating the rules has aimed at doing just that. Time will tell if they achieve their aim.
The revisions were formulated and drafted by key members of the SCMA Procedure Committee, one of whom was Steffen Pedersen, partner in the marine, trade and energy practice of Penningtons Manches Cooper.
A copy of the new rules can be accessed here.