30 IN CONVERSATION WITH MICHAEL HWANG
INTERNATIONAL ARBITRATION 1/3LY
S APNA It’s interesting how counsel and arbitrators bring their own training and litigation backgroundwith them to the arbitration table. For example, those trained in English litigation often seek to persuade tribunals to issue interim costs orders upon thedeterminationof interimapplications, but rarelysucceed. MI CHAEL Can I tell youwhy such orders are rarely issued? There are two reasons at least: one is philosophical and the other is practical. The practical reason is that most arbitrators are not ex-litigators, particularly if they come from civil law countries. They really have no understanding of how the systemof costs works in some jurisdictions. When counsel put forward their interlocutory applications at the end of a hearing, many arbitrators simply do not feel comfortable with plucking numbers out of the air and issuing interimcosts orders. The philosophical reservations that some tribunals have is that, in dealing with applications for interimcosts orders based on the principle that costs follow the event, there is a risk that the argument becomes heated and the tribunal makes an order whichmakes one party feel greatly aggrieved. This could lead to a palpable change of atmosphere in the relationship between counsel and the tribunal, which is not healthy. In a court situation, usually different judges will hear the case at different stages and they don’t have any proprietary feeling about the case, so theywill hear each application on its ownmerits without having to suffer future unhealthy tensions between unhappy counsel and the Tribunal.
MI CHAEL It’s all part of the Singapore Government’s long termpolicy tomake Singapore the legal hub of the region. The concept of “the region” is slowly expanding beyond ASEAN to include India andmore broadly South Asia – it may even extend into North-East Asia to a certain extent. I suppose the concept behind SICC is an ideawaiting to happen and Singapore is as well-positioned as any other jurisdiction tomake it happen. I don’t know of any other national court which has been solely designed to be an international court. For example, Hong Kong brings in overseas judges fromgreat common law jurisdictions, which is not somuch an attempt to internationalise the court systembut more away of developing their own law. Similarly, when compared to Singapore, the DIFC courts operate amore national court system, albeit whilst remaining aware of their largely international clientele. In comparison, if a case is classified as international in the Singapore Courts, it is subject to a different set of rules with international judges who will give the samemix of legal expertise which is usually found in international arbitration tribunals. It is unique in that way. S APNA For it to get a big caseload I presume they are going to need cases inwhich parties opt in for dispute resolution by the Court? Themain concern that has been raised by practitioners and users is: if arbitration awards are enforceable in over 150 countries around the world under the New York convention, how is the Court going tomake itself attractive to prospective users given themore limited enforceability of its judgments?What measures should be taken to ensure it is a success? MI CHAEL If you compare the SICCwith the DIFC Courts, the DIFC Courts are essentially national. A couple of years ago the law changed to allow the DIFC Courts to assume jurisdiction onanopt-inbasis. TheDIFCCourtshave topersuade external (i.e. those situated outside the DIFC) users to buy-in to resolving their disputes in the DIFC and so opt for our jurisdiction. Hence, they face the sameproblems that all arbitration institutions face. SIAC took 20 years to reach its current level of caseload. It’s going to be slow for the DIFC Courts, and it’s also going to be slow for the SICC, but the SICC is different from the DIFC Courts. There are two sources of cases coming into the SICC: one is the ‘opt-in’ cases, and that jurisdiction operates in the same way as in the DIFC Courts. The second source is cases being transferred from the existing domestic court system to the SICC in circumstances where the Chief Justice considers that the case is international, commercial and offshore. So there will
be an initial streamof cases into the SICCwhich should help to build its profile and people will then see how it works in practice and, hopefully, this will assist the Court tomarket itself and the “opt-in” aspects of its jurisdiction. So in a sense the SICC is not really doing anything newbecause this feature already exist in the rules if both parties elect to give the Singapore Courts jurisdiction. The question of transferring cases out of the regular divisions of the Singapore High Court into SICC is simply a refinement of what is already there, in that international cases can already be heard in the High Court if they fulfil certain statutory requirements. Following the transfer to or filing of a case in the SICC, the Chief Justice will then decide whether or not the case should be tried in a different way because of its international elements. In this instance, there will bemore international participation in the trying of cases, both in terms of the bench and the counsel that are allowed to appear. SEC UR ING IN T ERN AT I ON A L ENF ORCEMEN T OF S I C C JUDGEMEN T S MI CHAEL On the issue of how the SICCwill fare when compared to the New York Convention, there are already existingmeasures that allowSingapore judgements to be recognised elsewhere without treaties. There is of course the common lawaction on the enforcement of a foreign judgment, which is not based on reciprocity; it is based on the so-called foreign court having jurisdiction over the defendant under the law of the enforcing court. That includes all common law countries, including the US. In fact, most of the important financial and commercial centres are covered by this doctrine alone. There is the potential for the SICC to become significantlymore important if the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (Hague Convention) were to get a large number of sign-ups, whichmay allow for international enforcement of judgments. If, for example, the EUwere to sign up and ratify, the addition of twenty-seven EU countries would give impetus for evenmore countries to sign-up. Hopefully there would be some countries from the Asia Pacific regionwhichmight sign up. If a bandwagon can be created, it would create a newprospect for mutual enforcement of court judgments.
S ING A P ORE A S A REG I ON A L L EG A L HUB : E S TA BL I SHING
T HE S ING A P ORE IN T ERN AT I ON A L C OMMERC I A L C OUR T
S APNA Youmay recall that recently SIAC held a congress in Singapore where themain topic of discussionwas the establishment of the Singapore International Commercial Court (SICC). There has beenmuch comparison to the courts in the DIFC. Having practised in Dubai myself, and knowing that the legal landscape is very different to that of Singapore, I was expecting the drivers of the two projects to be very different. What do you think about the establishment of the SICC?
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