The New Frontier: Singapore launches the Singapore International Commercial Court offering a new forum for dispute resolution in Singapore

At the Opening of Legal Year 2015 on 5 January, the Singapore International Commercial Court ("SICC") was officially launched by the Chief Justice of Singapore, Mr Sundaresh Menon. The SICC had been two years in the making since it was first mooted at the Opening of Legal Year 2013,[1] and is intended to grow Singapore's legal services sector as well as promote the use of Singapore law. The launch of the SICC is latest in the drive to promote Singapore as an international centre for dispute resolution, which started with the promotion of the Singapore International Arbitration Centre more than a decade ago, and more recently, the opening of the Singapore International Mediation Centre in November 2014 (covered in our arbitration blog here).

The SICC is intended to take on high-value, complex, cross border commercial cases. It will be a division of the Singapore High Court but will have, in addition to the existing panel of High Court judges, international jurists appointed to hear cases before the SICC.

The jurisdiction of the SICC

Paving the way for the SICC, amendments to the Constitution of the Republic of Singapore,[2] the Supreme Court Judicature Act ("SCJA"),[3] and the Legal Profession Act ("LPA"),[4] were passed in late-2014, followed by a number of subsidiary legislation and regulations. The amendments to the SCJA introduced a new Part III on the SICC into the SCJA, which confers jurisdiction on the SICC to try an action or a claim that is:

1. international and commercial in nature;
2. one that the High Court may hear and try in its original civil jurisdiction; and
3. satisfies other conditions as may be prescribed by the Singapore Rules of Court.[5]

With respect to the last requirement, the Rules of Court (Amendment No. 6) Rules 2014, published on 26 December 2014, contain a new Order 110 on the SICC. In particular, Order 110 Rule 1 clarifies the meaning of "international" and "commercial".

A claim is considered to be commercial if it arises from any relationship that is commercial in nature. The definition includes a non-exhaustive list of relationships that are considered to be commercial, such as concession agreements, joint ventures, consulting, engineering or licensing, as well as construction works, investment, financing, banking or insurance relationship.[6] A claim will be considered "international" if:

1. the parties have agreed by written agreement to submit their claim to the SICC and the parties have their place of business in different states;
2. none of the parties to the claim have their place of business in Singapore;
3. a substantial part of the obligation of the commercial relationship between the parties is to be performed outside any state in which any of the parties have their place of business;
4. the place with which the subject matter of the dispute is most closely connected is outside any state in which any of the parties have their place of business, or
5. the parties to the claim have agreed expressly that the subject-matter of the claim relates to more than one state.[7]

Significantly, a claim may end up being heard before the SICC even in the absence of the parties' express submission to the SICC's jurisdiction, as the High Court can transfer cases to the SICC of its own motion.[8] What this means is that parties to international commercial transactions that satisfy any of the conditions (ii) to (v) above, and that have submitted to the jurisdiction of the Singapore courts, may see their claim being referred to the SICC by the High Court. In practice, such transfer will be effected by way of a notice from the High Court to parties informing that the matter has been transferred to the SICC, and giving the parties the opportunity to show cause within a specified time as to why the matter ought to remain with the High Court. It is understood that several such notices have already been issued in pending cases.

Those who do not wish to wait for such a referral to take place, and would like a claim to be heard by the SICC, may obtain what is known as a "pre-action certificate" which if granted certifies as conclusive that the claim in question is international and commercial in nature (and, where applicable, is an "offshore case", which characterisation affects the choice of counsel, discussed further below).

Features of the SICC  

Constitution

Every claim to be tried by the SICC shall be heard by a single judge or three judges. One of the distinguishing features of the SICC is that its composition of judges will include not only the judges of the High Court (of which the SICC is a division) but also foreign jurists. Foreign jurists, who in the opinion of the Chief Justice possess the necessary qualifications, experience and standing may be appointed an international judge the President of Singapore (upon the advice of the Prime Minister and the Chief Justice).

The first cohort of international judges have been appointed for a period of three years with effect from 5 January 2015, and hail from both civil and common law jurisdictions.  These are:

• The Honourable Ms Carolyn Berger (United States of America)
• The Honourable Justice Patricia Bergin (Australia)
• The Honourable Mr Roger Giles (Australia)
• The Honourable Dr Irmgard Griss (Austria)
• The Honourable Justice Dominique T. Hascher (France)
• The Honourable Mr Dyson Heydon AC QC (Australia)
• The Honourable Sir Vivian Ramsey (United Kingdom)
• Mr Anselmo Reyes (Hong Kong)
• The Right Honourable Sir Bernard Rix (United Kingdom)
• Professor Yasuhei Taniguchi (Japan)
• Mr Simon Thorley QC (United Kingdom)

It is therefore now possible therefore for a matter before the SICC which is governed by, for example, French law, to be argued by French qualified lawyers (subject to certain conditions, discussed below), before a court of three judges, one of whom is a French-qualified international judge. This feature takes a leaf out of the practice of international arbitration where parties can appoint an arbitrator with specific legal qualifications to determine a dispute.

Full or partial foreign representation

Another groundbreaking feature of the SICC is the ability of parties to appoint and be represented by a foreign counsel of its choice upon the fulfillment of certain conditions.

Any foreign lawyer (i.e. a lawyer who is not called to the bar in Singapore) who is qualified (and certified by the relevant authority in the jurisdiction in which he/she is qualified) to practise law in any part of the world, provided that he/she has at least five years' experience in advocacy and is sufficiently proficient in the English language to conduct proceedings may apply for registration. The foreign counsel must also give an undertaking in the affidavit accompanying the application for registration to comply with the Code of Ethics issued pursuant to the amended LPA. The detail of the registration requirements is fully set out in the Legal Profession (Foreign Representation in Singapore International Commercial Court) Rules 2014 ("SICC Foreign Representation Rules") and the Singapore International Court Practice Directions ("SICC PD").

A party may be represented by a registered foreign counsel without any involvement of local Singapore counsel if the matter in question is considered to be an "offshore case". An "offshore case" is defined in the amended Rules of Court as a case which has no substantial connection to Singapore either because (i) Singapore law is not the law applicable to the dispute and the subject matter of the dispute is not regulated by or otherwise subject to Singapore law, or (ii) the only connection between the dispute and Singapore are the parties' choice of Singapore as the law applicable to the dispute and the parties' submission to the SICC's jurisdiction ("Singapore Law-only Connection"). The SICC PD provides examples as to the type of cases which may be classified as an offshore case.

Where a case is not considered an offshore case, a registered foreign counsel may only represent the party in question in respect of aspects of foreign law on which the said counsel is qualified to advise. This form of restricted registration is regulated by the new Part IVB of the LPA read with the SICC Foreign Representation Rules and the SICC PD. In this case, it is expected that local counsel will have primary conduct of the matter as if it were a matter before the High Court, with assistance from the registered foreign counsel as co-counsel and not as expert on foreign law.

This new legislation is groundbreaking insofar as it enables, for the first time, foreign counsel to represent clients before the Singapore courts. In practice however, the occasions on which parties may appoint foreign counsel on the basis of the 'Singapore Law-only Connection" may be few and far between, given Singapore's significance as an international commercial hub. Many multi-national corporations set up their headquarters in Singapore and/or use the Singapore banking and financial system. To mitigate this, the SICC PD has clarified that the fact that funds connected to the dispute or incorporation in Singapore (or the existence of Singapore shareholders) will not in and of itself amount to a substantial connection between the dispute and Singapore. This must be correct as the choice of Singapore law by parties for their transaction is more often than not tied to some other nexus to Singapore (even if insignificant or insubstantial). Without the clarification in the SICC PD, those cases may immediately be disqualified from being an offshore case under this limb.

Domestic rules of evidence do not apply

Along with the ability to pick a foreign counsel, the amended SCJA also permit parties to submit on foreign law (through registered foreign counsel qualified to submit on that law) rather than to prove such law through expert evidence as traditionally required under the domestic rules of evidence.[9]

In addition, the SICC is not bound by the domestic rules of evidence at all and may apply other rules of evidence whether they are found in a foreign law or otherwise, if the parties make an application for it. The amended Rules of Court makes it clear that the reference to rules of evidence includes any rule relating to legal professional privilege and the taking of evidence.[10]

Observations

Singapore has, in its usual fashion, moved very efficiently in issuing the necessary rules and regulations to support the immediate operation of the SICC. Nevertheless, there remain some gaps which no doubt will be dealt with either through practice or amendments to the existing subsidiary legislation.

One particular gap relates to the ability of an advocate and solicitor (i.e. a Singapore qualified lawyer) who is not practicing in a Singapore law practice to represent a party before the SICC. Under the current framework, such individuals are precluded from doing so, under any circumstances, by virtue of the exclusion to the permitted areas of legal practice under the Legal Profession (International Services) Rules 2008. That advocate and solicitor also does not appear to be able to fall under the registration regime in the amended LPA and SCJA, since the regime is limited to "foreign lawyers" - defined as individuals who are duly authorised or registered to practise law in a state or territory other than Singapore. If correct, this has the peculiar effect of putting those advocates and solicitors in a worse position than foreign lawyers – even in respect of offshore cases governed by Singapore law – for no reason other than the fact that they are not practising in a Singapore law practice.

Another perceived "gap" is the fact that there is nothing in the legislation or regulations that deal with lawyers assisting a registered foreign counsel who is representing a party before the SICC. A registered foreign counsel will presumably be assisted by a team of lawyers, some of whom may not qualify for registration themselves and/or are otherwise generally not permitted to undertake litigation in Singapore.  Questions arises as to the regulation of these assisting lawyers, who will also presumably not be entitled to appear on record or argue before the SICC).

These issues do not arise in the practice of arbitration in Singapore because the LPA contains a general exception that disapplies the prohibition against carrying out acts that are in the exclusive domain of advocates and solicitors (i.e. Singapore qualified lawyers) to foreign counsel representing parties in arbitration proceedings in Singapore.[11] This makes it possible for any foreign lawyer, whether registered to practise with a foreign law practice in Singapore or otherwise, to represent a party in arbitrations in Singapore.

As it presently stands, the SICC may also face challenges in promoting its use. One primary reason is the enduring popularity of arbitration and the ease of cross-border enforcement that arbitration provides.  In contrast, an SICC judgment, being a judgment of the Singapore court, may not be as easily enforced abroad in the absence of a litigation equivalent to the New York Convention, which allows arbitral awards issued in a "Convention State" to be enforced as a matter of course (and subject to limited exceptions only) in any of the other 152 or so Convention States. The Singapore Government is reportedly studying Singapore's possible accession to the Hague Convention on the Choice of Court Agreements and there have also been discussions about reciprocal enforcement possibilities within the ASEAN framework, but the Hague Convention is not yet in force, and there has been little indication thus far that Singapore would be prepared to enter into reciprocal arrangements for the mutual enforcement of ASEAN judgments.

Nonetheless the SICC fulfills a very important function insofar as it widens the offering available in the Singapore courts to those who cannot or choose not to, for whatever reasons, refer their disputes to arbitration. It provides these users with some of the attractive features available in arbitration, such as flexibility on the rules of evidence, wider choices of counsel for the right circumstances, and specialist expertise in foreign law amongst the judges hearing the dispute.

The SICC will also be instrumental in increasing the profile of Singapore as a dispute resolution center. To do so, it is expected that Singapore's courts will be proactive in referring suitable cases to the SICC to promote the SICC. This will increase the profile and decision-making expertise of the SICC, which in turn will further enhance the reputation of Singapore as a dispute resolution centre and can only be helpful for the continued growth of other forms of dispute resolution such as arbitration and mediation.  As the SICC develops, it will also build a body of jurisprudence which will in turn contribute to the internationalisation of Singapore law and Singapore legal services.

For more information, please contact Alastair Henderson (Partner), Gitta Satryani (Senior Associate), Emmanuel Chua (Associate), or any of your usual Herbert Smith Freehills contacts.

[1]        Opening of the Legal Year 2013, Response by Chief Justice Sundaresh Menon, 4 January 2013 (http://www.sal.org.sg/Lists/Speeches/Attachments/112/CJ%20OLY%20Welcome%20Reference.pdf).

[2]        Act No. 39 of 2014.

[3]        Act No. 42 of 2014.

[4]        Act No. 40 of 2014.

[5]        Part III, Section 18D.

[6]        Order 110, Rule 1(2).

[7]        Order 110, Rule 1(2).

[8]        Part III, Section 18J.

[9]        Part III, Section 18L.

[10]       Order 110, Rule 23.

[11]       Section 35 of the LPA.