10 May 2016

In Conversation With Chau Ee, Lee In Singapore - Embracing International Arbitration

With Chau Ee Lee’s recent arrival, our nascent Singapore office has added another string to its bow – the birth of its Dispute Resolution / International Arbitration / Construction & Engineering practice.

Chau Ee also brings with him a unique ‘cradle to grave’ project life-cycle construction and engineering practice which allows our Singapore office to immediately possess the knowledge, experience and expertise of not only international arbitration capabilities but also those of a transactional and advisory nature relating to large-scale complex energy and infrastructure projects throughout the UK, the Middle East and Asia.

Welcome to King & Wood Mallesons, Chau Ee. Why don’t you start off by talking about your career?

I started out as a dispute resolution lawyer based in Singapore about 20 years ago. 

Since qualification, my practice progressively veered towards an international platform culminating in my move to the international arbitration group of a major US law firm based in its Singapore office. 

I subsequently continued my practice in London and Dubai for a decade before returning to Singapore in 2014.

With an international practice coupled with a primary focus on international arbitration, is there any particular industry or sector that you focus on?

Predominantly, I act for clients in the resolution of construction and engineering disputes through litigation, adjudication (statutory and ad-hoc), arbitration (domestic and international) and alternative forms of dispute resolution (including conciliation, mediation, expert determination and dispute adjudication board).

The primary industry sector I serve is construction and engineering, which the marine sector services industry (which includes offshore oil platforms and petrochemicals), is a part of.

My specific focus is on the construction and engineering, projects, energy, natural resources and infrastructure sectors. I typically advise clients on legal, contractual, technical and operational elements of the life-cycle of a construction project from conception to inception and construction through completion, maintenance and beyond – a ‘cradle to grave’ approach.

Let’s talk a bit about Singapore and why you think it is now the preferred neutral forum in Asia for dispute resolution.

In recent years, Singapore has increasingly been widely considered as the preferred neutral forum for resolving disputes in Asia, if not the world.

Much like Dubai in the Middle East, Singapore is a regional and financial hub in Asia that serves as a gateway between the East and the West.

As many will know, Singapore is today the regional headquarters of many multinational corporations.

One can see that there are quite a number of advantages when one compares Singapore with some of its Asian counterparts. First, it has a highly regarded legal system led by a best-of-class judiciary.

Second, it has a well-developed arbitration leg­islative framework with an outstanding arbitration infrastructure. After all, with Maxwell Chambers it now houses the world's first integrated dispute resolution complex providing both state-of-the-art hearing facilities and top international alternative dispute resolution institutions, including the Singapore International Arbitration Centre (the “SIAC”).

Unsurprisingly then, more cases than ever are being arbitrated in Singapore with the SIAC Rules as the applicable rules  of arbitration, although the parties are non-Singapore parties and the subject-matter is not Singapore-specific in any way.

Moving on to the arbitration legislation in Singapore - have there been any recent major changes?

It is noteworthy that through the years Singapore has often been pro-active in making appropriate changes to its arbitration legislation having specific regard to the ever-changing nature of the practice of international arbitration.

As it turns out, there have not been any significant changes to its International Arbitration Act (CAP 143A) in the past year, with the last legislative amendment made in 2012.

What is the approach of the Singapore courts as regards international arbitration – does is adopt a pro-arbitration stance?

It is now widely regarded by the international arbitration community that the courts of Singapore have continued its well-regarded work in developing a strong jurisprudence of arbitration case law.

By way of example, the courts in Singapore, as a general rule, actively enforce arbitra­tion agreements when satisfied that there is a valid arbitration agreement in place.

Indeed, the Singapore Courts will actively try to incorporate arbitration clauses into contracts. A recent case in the Court of Appeal (Singapore’s apex court) held that an arbitration clause (stipulating that arbitration must be held in Singapore) was to be incorporated into the contract despite the parties’ intention to subject the transaction to further negotiations (see R1 International Pte Ltd v Lonstroff AG [2015] 1 SLR 521).

In that case, the apex court granted an anti-suit injunction predicated on its finding that the agreement in question to arbitrate in Singapore was validly incorporated. 

Such developments have important implications for parties who conclude ‘in-principle agreements’ – a term often used to indicate that the parties have already agreed on key terms whilst acknowledging that further work is to be done before the agreement takes its final form.

An agreement that is labelled ‘in-principle’ may nevertheless be binding on the parties if the court finds that the parties’ objective intentions as gleaned from their correspondence and conduct in light of the relevant background support such an interpretation.

Moving forward, it is important that parties use clear language to document their intentions if they have no wish to be bound by agreements that have not been thoroughly negotiated, or where they have not completely agreed on all the terms, especially arbitration clauses.

Let’s talk about construction arbitrations in Singapore – are we seeing more of these?

Through the years, the local construction industry has witnessed an increasing number of arbitration cases. In recent years, it has become more common for   international construction disputes to be arbitrated in Singapore.

That said, arbitration in Singapore remains rather broadly spread across a number of industries such as shipping, telecommunications and information technology.

The Singapore International Arbitration Centre has recently launched in Shanghai. Are there more developments to come?

Yes, the SIAC has launched in Shanghai recently in January this year – stealing another march on its rivals - its third overseas office, following launches in Mumbai and Seoul in 2013.

The SIAC’s stated objective is to promote its world-class international arbitration services to Chinese users by working with mainland Chinese arbitration commissions to promote the development of international arbitration and global best practices, among other things.

In another development, this time to do with the SIAC’s Rules of arbitration, the SIAC will publish its 2016 version later this year, after a period of public consultation.

There has been some discussion in the international arbitration community about the Singapore International Commercial Court – how did it come about and is it not in direct competition with arbitration as a means of resolving disputes?

Building on the success of its arbitration sector, in early 2015 the Singapore International Commercial Court (the “SICC”) was officially launched in Singapore.

The SICC’s aim is to serve as a companion rather than a competitor to arbitration by giving international parties another option to resolve commercial disputes.

Has investment arbitration in Singapore been in the news much?

Of late, investment arbitration has been gaining much traction in Asia and therefore Singapore.

With Singapore’s standing as the legal hub of Asia, investment arbitration in Singapore has taken on a more visible presence not least among arbitration practitioners in this region but also the parties likely to be involved in an investment arbitration.

The SIAC is also due to publish its first set of arbitration rules on investment arbitration, the SIAC Investment Arbitration Rules, later this year after a period of public consultation.

As for relevant Singapore case law, in what marked the first time where a Singapore court reviewed an investment arbitral tribunal’s jurisdiction, the High Court provided guidance on the appli­cable principles in relation to the jurisdiction of a tribunal of an investment treaty arbitration (see the High Court’s decision in Government of the Lao Peo­ple’s Democratic Republic v Sanum Investments Ltd [2015] SGHC15).

Will Singapore become the preferred forum for resolving investment disputes?

I see no reason why Singapore cannot become the preferred forum for resolving investment arbitrations. After all, it has already had a head start - the very reasons Singapore is getting the kudos for being the preferred place for international parties to resolve their commercial disputes are the very same ones that will work in Singapore’s favour when parties consider the forum for investment arbitrations.

In addition, what I see as a compelling selling point for Singapore is its convenient geographic location and how it is generally viewed as culturally and economically comfortable for people from all over the world by reason of its multicultural society.

Neutrality is a key factor for an international arbitration, and more so in an investment arbitration. In this regard, Singapore provides a unique platform on all fronts to ensure neutrality is paramount.

Being a signatory to the New York Convention, which guarantees enforceability of awards rendered in investor-state disputes under the UNCITRAL Rules, or any other rules, in over 145 countries, also works favourably for Singapore.

I mentioned Maxwell Chambers earlier. It is a party to a Memorandum of Understanding with the International Centre for Settlement of Investment Disputes for the conduct of hearings in Singapore in investor-state disputes. At last count, hearings in three disputes have already taken place here in Singapore as well as a number of ad-hoc investor-state disputes seated in Singapore.

Insofar as enforcement against sovereign states is concerned, Singapore has a restrictive immunity policy that allows arbitral agreements to be enforced against sovereign states where they relate to commercial and contractual matters and not purely sovereign ones. Similarly, awards may be enforced against assets of a state used for commercial purposes and not sovereign or diplomatic purposes.

Accordingly, Singapore’s enforcement policy as regards sovereign states does not pose an overwhelmingly insurmountable challenge to parties seeking enforcement of arbitration agreements and awards against sovereign States.

From an arbitral institution standpoint, the SIAC prides itself on having a multi-national Secretariat familiar with investment arbitration. What this means is that it is more than capable of administering the entire investment arbitral process, from appointing arbitrators, determining costs and facilitating logistics.

Thank you for your time.

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