Why is Dispute Resolution on the Rise in Singapore?
As we observed throughout 2022, the use of mediation and arbitration as alternatives to litigation has seen a worldwide surge in popularity. Singapore is no exception to the trend, and as a nation finds itself well-placed to accommodate many organisations’ dispute resolution needs.
Maxwell Chambers chief executive Ban Jiun Ean expands on the reasons behind Singapore’s explosive ADR growth in this feature.
What makes Singapore especially attractive as a destination for ADR?
There are many reasons why parties find Singapore attractive for international ADR work. Here, there is a deep respect for the rule of law, a stable geopolitical climate, a safe business environment and strong transportation links, while being geographically and culturally part of the fastest and largest growing market in the world – located within a six-hour flight of more than half the world’s population.
Other factors that parties have considered in choosing Singapore are the presence of many regional HQs of global MNCs, the deep and varied pool of legal talent available and the ease of doing business. Even factors such as the ease of movement and suitable cuisine for people from all parts of the world have tipped the scales in favour of a decision to arbitrate in Singapore. When parties think of arbitrating in Singapore, it is because of a combination of many factors that encompass the physical environment, the legal and judicial support system, and the presence of good counsel and related services.
In your view, why are hearing centres still relevant to disputes today?
For the simple reason that the kind of experience we can provide remains difficult to reproduce elsewhere, even for large companies or law firms. At best, there may be state-of-the-art audio visual equipment and IT capabilities in a conference room or two, but the full suite of offerings in a dedicated hearing centre will likely be missing. This includes soundproof breakout rooms with refreshments and automated locking systems to allow 24-hour access to only authorised individuals, mobile storage within hearing rooms to accommodate document-heavy proceedings, dedicated staff and IT support, privacy and confidentiality, bespoke room layouts to allow ancillary services like transcription and interpretation to operate effectively throughout hearings, and so on.
Proximity to hotels and good transport links are also part of the equation, as well as the availability of good food and coffee. Also, an interesting draw of dedicated centres is the possibility of meeting other arbitrators and arbitration counsel having hearings in the same location – always a pleasant experience for members of a far-flung global community.
During your time practising in the sector, how have you seen ADR usage grow more prominent in Singapore and in Asia more widely?
The growth has been steady and multifaceted over the years, in some ways exceeding even Asia’s greater economic growth trajectory. Firstly, there has been the increasing maturity of the ADR industry, with both lawyers and clients alike becoming more experienced and sophisticated in using non-court processes for dispute resolution, and companies using ADR clauses by default in more of their contracts and standard forms. This has led to the steady growth of the use of mediation and arbitration as opposed to litigation.
There are many reasons why parties find Singapore attractive for international ADR work.
A second driver has been the shifting of ADR work from outside Asia back into Asia, as the number and quality of Asian neutrals continues to grow and parties become more familiar and comfortable with using a neutral not from the traditional powerhouse jurisdictions. The movement of some of these neutrals from more traditional seats has also contributed to this, with a lot of top ADR practitioners relocating their practice to Asia as a response to the increasing work they have been receiving from the region.
Finally, governments in Asia have also become much more supportive of ADR processes, in no small part due to years of efforts from bodies like UNCITRAL and the many large international arbitral institutions around the world. The Singapore Convention coming into force recently has also helped move the needle in terms of creating awareness among governments about the usefulness of ADR processes in helping to grease the wheels of their economies. As a result of all this, the ADR scene in Asia today, particularly in Singapore, is especially vibrant and deep, with an even brighter future on the horizon.
How has government support contributed to these developments?
Without government support, a lot of this growth might possibly have come anyway, but almost certainly at a much slower pace. Government support, whether from the Singapore government or others, has been instrumental in driving change at many levels, whether by passing arbitration and mediation-friendly laws, by helping the courts understand ADR better, by creating specialist bodies like the Singapore International Commercial Court which provide deep support to the ADR processes, or by resourcing various efforts and initiatives that have driven awareness and growth.
Government support has also made large-scale events possible, in terms of making access to a country straightforward and fuss-free, by lending weight in the form of high-profile government officials attending and speaking, and by reaching out to their counterparts in other countries to raise awareness of the event in their respective jurisdictions. The Singapore Convention is a high-profile example of what government support can achieve, where the years of contribution by various bodies from around the world resulted in a groundbreaking international treaty that strengthens the international dispute resolution framework.
Without government support, a lot of this growth might possibly have come anyway, but almost certainly at a much slower pace.
To use a generic example, what might two companies involved in an IP dispute stand to gain by bringing their dispute to a Singapore hearing centre rather than the courts?
In this example, one major advantage is the ability to shape the nature of the outcome using a negotiated settlement that can cover disputes ranging across multiple jurisdictions. For example, a dispute over a trademark infringement may involve products sold in several countries by both companies. Even if a favourable court judgment is obtained by one side, the effect of enforcing it in each of the many markets concerned will require starting (and for the other side, defending against) legal actions in each of those jurisdictions, potentially relitigating the issue in some places.
A successful settlement agreement, however, can be structured to cover all these markets and jurisdictions simultaneously, saving cost and time and ultimately leading to a better outcome for both sides. There is also, of course, the established advantage of arbitration or mediation where brand damage from the dispute can be reduced as proceedings and even terms of the settlement or award can be kept confidential, whereas court proceedings are public, as are court judgments.
Another advantage is the ability for disputing parties to select an IP specialist to be their neutral, whether as mediator or as arbitrator, which is extremely helpful in complex IP cases. These are just a few of many advantages of using ADR rather than the courts.
How do you expect to see this development continue in 2023 and beyond?
It will undoubtedly continue along this trajectory of growth as we see a new generation of lawyers and general counsel begin to increasingly embrace ADR as the approach of choice for dispute resolution. The newfound confidence and maturity of Asian-based dispute resolution institutions contributes in no small part to this, leading to parties increasingly putting their disputes in the hands of local or regional bodies. We expect that the foreseeable future of ADR in Asia will remain bright.
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Ban Jiun Ean is the Chief Executive of Maxwell Chambers and has spearheaded its development, helming the company between 2010 and 2016 before leaving to pursue other projects, including authoring several novels and overseeing the development of an arts centre. Since his return to Maxwell Chambers, he has worked to strengthen the firm whether in Singapore or on the world stage.
Maxwell Chambers is a dispute resolution centre centrally located in Singapore. Its purpose-built hearing rooms are equipped with best-in-class hearing facilities and state-of-the-art supporting technology. It also houses arbitral institutions, service providers and legal practitioners under the same roof in Maxwell Chambers Suites. Maxwell strives to be a one-stop shop for clients’ dispute resolution needs.