Introduction
Arbitration proceedings have often been touted as an effective and efficient method (compared to litigation proceedings) of resolving disputes. Arbitral institutions (such as the SIAC) have rolled out various initiatives (for e.g., expedited procedure) to ‘speed things up’ to different degrees of successes. In this briefing note, we share our insights on how arbitration proceedings can remain an effective and efficient method of dispute resolution.
The Trend of Prolonged Arbitration Proceedings
Typically, an arbitration proceeding should be concluded in 18-24 months. In recent times, the trend seems to be the upper end of (or even beyond) this range. This is despite the fact that most major arbitral institutions stipulate in their rules that arbitration proceedings are to be conducted in an expeditious manner (for e.g., Rule 19.1 of the SIAC Rules).
Why? One reason may be that arbitrators, unlike judges, do not have a guaranteed tenure. Amongst other things, whether or not an individual is appointed as arbitrator depends on his/her reputation. Arbitrators may be concerned that if they do not grant parties’ requests (i.e., seeking additional time), their awards may be challenged (or worse, set aside), which may damage their reputations as arbitrators. Coupled with recalcitrant parties delaying the arbitration process, this may be why arbitration proceedings are taking longer to conclude.
Reversing the Trend
That said, this trend may soon be reversed (at least for SIAC arbitrations seated in Singapore).
In a recent decision of CYW v CYX [2023] SGHC(I) 10, the Singapore International Commercial Court issued a judgment confirming the powers of arbitral tribunals to ensure arbitration proceedings are conducted in an expeditious manner.
In this case, CYW had commenced the arbitration against CYX. Upon the constitution of the arbitral tribunal, CYW and CYX agreed on a procedural timetable. When it came to:
- filing the Statement of Claim, CYW submitted this but failed to submit English translations of supporting documents (despite repeated reminders to do so);
- disclosing documents, CYW failed to disclose documents that the tribunal had ordered it to disclose; and
- filing the Reply and Defence to Counterclaim, CYW submitted this after four extensions of time but failed to submit supporting witness statements and expert reports (despite repeated reminders to do so).
The tribunal issued several ultimatums that it would proceed with the agreed hearing dates regardless whether CYW submitted the translations, statements or reports. In protest, CYW refused to participate in the hearing. After the hearing, the tribunal issued an award adverse to CYW, who then appealed to the Singapore Courts on the basis of breach of natural justice.
Bathurst IJ determined that there was no breach of natural justice because: (a) the tribunal granted multiple extensions of time despite CYW’s repeated noncompliance with procedural timelines; (b) there was no certainty of when (if ever) the outstanding documents would be submitted; and (c) CYX had a legitimate interest to the timely conclusion of the arbitration.
Takeaways
The CYW v CYX judgment is probably the first instance whereby a Singapore Court has had to decide on the validity of an arbitral award in circumstances where a tribunal refused to grant a party additional time in order to adhere to procedural timelines.
This decision may allay the reputational concerns of arbitrators when faced with requests for additional time. Further, arbitrators who develop a reputation of being strict with timelines may even be popular amongst legal counsels who advocate for an expeditious resolution of disputes. Given that one of the primary concerns of clients is the length of legal proceedings (and its associated cost consequences), this decision is definitely positive news.
Commentary
In any dispute resolution proceeding, we recognise that clients are concerned about: how much; how long; and how likely to succeed. Our arbitration specialists are strong supporters of efficient resolution of disputes. To ensure that we deliver the best value to our clients, we strive to ensure that all matters are resolved in a timely and commercially sensible manner. To find out about how we can help, do reach out to any member of our team.
