Singapore looks to dethrone Hong Kong

Singapore has experienced a meteoric rise the last years in the arbitration field. If this continues Singapore may dethrone Hong Kong as the arbitration heavyweight in Asia. 

Arbitration and Singapore - 10 years ago

In 1991 the Singapore International Arbitration Centre (SIAC) was established. About 10 years later, Singapore was still developing its reputation as an Asian centre of arbitration. Seeing an opportunity, at this time the SIAC transitioned from primarily providing facilities for arbitration to administrating arbitrations.

Fast-forward five years and momentum was gathering. A high level committee was formed to review the legal services industry in Singapore and various significant concrete recommendations were made.

The government followed through by enacting changes, including freedom for foreign lawyers and arbitrators to practice arbitration in Singapore.

Furthermore, the power of the courts to grant interim measures in support of foreign arbitrations were clarified and Singapore also introduced a framework for authenticating arbitration awards. The icing on the cake was the unveiling of plans for an integrated state-of-the-art arbitration facility.

In 2007 Maxwell Chambers was established with a promise to provide the “world’s first integrated dispute resolution complex”.

This firmly positioned Singapore as South East Asia’s leading centre for dispute resolution. The next question was, could Singapore match the traditional powerhouse of Hong Kong?

The situation today – Singapore catching up on Hong Kong

In 2007 the Hong Kong International Arbitration Centre (HKIAC) handled 448 disputes while SIAC handled just 86.

After the establishment of Maxwell Chambers and the implementation of the legislative changes to attract leading foreign arbitrators and law firms to work out of Singapore, Singapore’s attractiveness as an arbitral seat experienced an amazing rise.

Between 2008 and 2010, the number of disputes handled by SIAC doubled. Since then an international arbitration survey stated that “Singapore clearly emerges as the most popular Asian arbitral seat”.

Today there can be no doubt that Singapore is quickly catching up on Hong Kong. Singapore now appears to be attracting more genuine international cases, independent of local party involvement.

And while Hong Kong still has more arbitration disputes than Singapore, the SIAC figures are increasing while the HKIAC figures have been decreasing.

It also appears as if Singapore is being perceived as more neutral, independent, and free from external influence than other regional centres.

Singapore is the venue of choice for many Asian parties, especially from China and India. Chinese parties like to pick Singapore as an arbitration venue when contracting with their Western counterparts.

As for India, the number of cases involving at least one Indian party has gone up by some 200 percent in the last few years.

Last summer Singapore successfully hosted the 21st International Council for Commercial Arbitration Congress (ICCA). That drew further attention to Singapore as the arbitration heavyweight in Asia.

As it looks now, Singapore is already in pole position to develop into the leading centre for Asian dispute resolution.

The implications of this are far reaching—attracting leading service providers and companies to a stable business environment where they can trust the regulators to be consistent and even-handed.

In difficult economic times, having a highly reputable dispute resolution system is an important part of successfully running an international business. This bodes very well for Singapore’s reputation as South East Asia’s business hub of choice.