India needs an integrated approach to be a global arbitration hub: Jimmy Yim

Neutrality, accessibility, convenience, judicial support, a good pool of arbitrators and arbitration counsel. Together, they will lead to regional, if not global, acceptance of an international arbitration hub.

Singapore has now become the number one arbitration centre in the Asia Pacific. And in the world, I think we're number three, after London and Paris. These centres were established in the 19^th – early 20^th century for shipping insurance and commodities contracts. The Singapore International Arbitration Centre (SIAC) was only established in 1991; its success in a short space over three decades has a lot to do with the government’s determination to make Singapore an international arbitration hub. The government streamlined various processes to promote and support arbitration. For example, they eased entry for arbitrators and foreign counsel, simplified and lowered tax for income of international professionals involved and provided institutional support, which made it convenient for arbitration in Singapore. The Singapore judiciary played a significant role as the seat court and adopted a minimal curial intervention approach.

I remember there was a time in the early 2000s when arbitration hearings were held physically within the Singapore Supreme Court. The government was advised that it would be better to have an arbitration-friendly complex with modern facilities.

The government then created Maxwell Chambers, a wholly dedicated centre for arbitration, in 2010. I still remember prior to the launch in 2010, a note went around asking for views. They proposed to charge about $2,000 to $3,000 a day for the use of rooms. I thought that seemed expensive, because when we did it in the hotels and in the court complex, it was cheaper.

But over time, they were proven right as parties were prepared to fork out such monies as they were happy with the facilities and support technology which Maxwell Chambers provided, such as breakout rooms for the parties to go into a huddle in-between the hearings. At one point, Maxwell Chambers became so popular that it became difficult to book rooms on short notice. The government soon embarked on expansion plans for Maxwell Chambers. Now, there are nearby amenities such as good hotels, restaurants and easy access to public transportation.

The government and SIAC maintain constant vigilance to ensure that the Singapore ecosystem promotes the arbitration objectives of providing speedy, efficient, just and fair resolution of disputes. They do not hesitate to make the necessary amendments to the Act and the Rules to meet user expectations.

Secondly, as the seat court of the arbitration is usually the first port of call in a challenge of an arbitral award, judges assigned to hear these cases are arbitration jurists who are familiar with and can develop the correct legal principles in arbitration. A recent innovation is to have such challenges heard before the Singapore International Commercial Court (SICC), which typically comprises at least one international judge. This process contributes to the trust and confidence in Singapore as an international arbitration centre.

India is very important in the SIAC and the Singapore arbitration ecosystem. Last year, there were 625 new cases files at the SIAC, and Indian companies constitute the third highest users in Singapore seated arbitrations.

It is interesting to note that when SIAC was incepted in 1991, there were no more than 10 cases per year for many years. It took about 20 years before it gained serious traction. The phenomenal growth is an international statement of their confidence and trust in Singapore as an international arbitration centre. Apart from the SIAC and the ICC,  various other arbitration institutes have offices there such as the Arbitration and Mediation Centre of the World Intellectual Property Organisation (WIPO), the International Centre for Dispute Resolution (ICDR) which is the international division of the American Arbitration Association (AAA), the International Court of Arbitration of the International Chamber of Commerce (ICC), the Permanent Court of Arbitration (PCA) and the Asia Pacific International Arbitration Chamber (APIAC).

In order for the system to maintain trust and integrity, arbitrators must be unquestionably impartial, possess deep experience in commercial matters and wise in judgment. Under the UNCITRAL Model Law and New York Convention 1958, the grounds of challenge to an international arbitral award are narrow and limited. The common areas of appeal from a court judgment for errors of fact or law are not available in a challenge against an arbitral award. Losing parties at times feel that the Tribunal got it wrong on the facts or misapplied the applicable law. Since they cannot appeal, they try to shoe-horn arguments into a 'breach of natural justice' ground. Recognising this, the Ministry of Law has recently been seeking feedback from users on whether the parties should be given an opportunity to opt-in for a right to appeal. This opt-in is consistent with the principle of party autonomy, a cornerstone of arbitration. It will not slow down the arbitral process, since the losing party would have challenged it anyway, but on a meritless ground of breach of natural justice.

There are two possible scenarios here – (i) whether foreign parties with no connection to India would nominate India as the seat and (ii) whether Indian parties can persuade the counter-party to agree for India as the seat of arbitration.

For a start, India should turn towards institutional arbitration and engage centres like the Mumbai International Arbitration Centre and the Indian International Arbitration Centre. Ad hoc arbitration without institutional support raises a distinct set of problems.

Next, India must promote a pool of renown local and international arbitrators and local international arbitration counsel. For the visitors, they should be given easy access to perform their professional work in India. Another important point is the need for leaders in Indian industry and enterprises to be more aware of the issues and complexities of dispute resolution and arbitration, particularly when drafting the dispute resolution agreement during the time of contracting. Here, I salute the efforts of Sanjeev Gemawat, CV Raghu and others in founding the General Counsels’ Association of India (GCAI), as a national organisation of all in-house counsel in India. Through organisations like the GCAI, there will be significant improved sophistication on issues of dispute resolution and arbitration.

As the seat court, the judges must adopt a policy of minimal curial intervention and show their competence in arbitration jurisprudence. The recent successful completion of the 3^rd Delhi Arbitration Weekend (DAW), which was greatly supported by the judiciary, is an instance where the international arbitration community can witness the strong support shown by the judiciary towards arbitration. Needless to say, Indian judges must not hesitate to decide against Indian corporations and Indian Public Sector Undertakings (PSUs) in hearings when warranted in order to demonstrate complete neutrality, another keystone of international arbitration.

The Indian Parliament must also support the arbitration ecosystem by speedily amending legislation whenever the occasion arises, and in my view, there will certainly be such occasions.

I must admit I have had varied experience with Indian arbitrators who usually are retired judges of the Supreme Court of India. Some have shown great skill and knowledge in arbitration while others have shown a propensity to unduly favour the Indian party appearing against me. I was told that they might be perceiving that as the party-appointed arbitrator, it is their role and duty to articulate the cause of the party appointing them.  This is not unusual in the arbitration ecosystem around the world, as some arbitrators wish for re-appointment, which in my view robs them of the need for complete impartiality.

In my view, a good international arbitrator must obviously be impartial, fair and learned in the law. On top of that, he must have a degree of sensitivity towards cultural differences as parties come from different jurisdictions and cultural backgrounds. Deep commercial experience is another important attribute.

It is unusual for the Court to name the arbitrator involved in a setting aside application. It is the Court’s seal of disagreement.

I venture to suggest that as Singapore has expended so much effort and made such significant advancements towards creating a world class arbitration ecosystem, the awards in question have raised a number of disturbing concerns which, if left unchecked, might erode the hard-earned trust in the Singapore arbitration system. But I must emphasise that this was a rare situation.

International firms are keen to enter the Indian market. India possesses a highly developed legal market with many accomplished and excellent lawyers. As global law firms seek opportunities for expansion, their presence will likely diversify and invigorate the profession. The Bar Council of India should not fear this. Many Asian countries which have opened to foreign practices have continued to thrive.

India holds great importance for Drew & Napier and our Drew Network Asia, which covers the entire ASEAN region. We intend to maintain an even strong engagement moving forward. We frequently collaborate with prominent Indian lawyers and Senior Advocates. While opening an office in India is not currently under consideration, we expect to work more closely with Indian legal professionals. For instance, I recently finished an SIAC arbitration case, in which the venue was changed to New Delhi for the convenience of both parties as they were both Indian entities. Sudipto Sarkar SA represented the opposing side. This matter involved so many lawyers (even before counting the clients) that we had to change to a bigger conference room to accommodate everyone on day two of the hearing!

South Asia and Southeast Asia are perhaps the world’s fastest growing regions. These business communities will thus continue to grow and develop with increased sophistication. As they progress, arbitration will be the choice of dispute resolution and may be utilised more commonly. Additionally, there is potential for mediation to become more widely adopted during dispute resolution, representing another possible area for growth.

The growth area for arbitration will be in technology, infrastructure, energy and climate change related issues.