The Singapore International Arbitration Centre (SIAC) published the 4th edition of its Rules, which became effective on 1 July 2010 (see Legal update, New SIAC arbitration rules: key changes).

The main changes from the previous rules include:

For a detailed overview of arbitrating under the new SIAC Rules, please see Practice note, SIAC arbitration: a step-by-step guide.

In a decision dated 22 April 2010, the Singapore High Court held that it has no power to grant discovery prior to the commencement of arbitration (see Legal update, Court has no power to order pre-arbitration discovery). In this case the court held that the word "proceedings" in Order 24, Rule 6(1) meant only court proceedings and did not extend to arbitration proceedings. The court therefore decided that it did not have the power to order discovery prior to the institution of arbitral proceedings.

Order 92, Rule 4 of the Singapore Rules of Court provides that nothing in the Rules limits the court's inherent powers to make any order necessary to prevent injustice or an abuse of process. The court held that a real "need" had to be established for Order 92, Rule 4 to apply and that in this case there was no such need because there are specific legislative provisions set out in the International Arbitration Act (IAA) in relation to the court's power to make orders regarding the conduct of arbitration. Recent amendments to the IAA made it such that the court no longer had the power to grant discovery in aid of arbitration. In practice, if parties think they may wish to make an application for discovery pre-arbitration, they would be well advised specifically to include a clause to this effect in their arbitration agreement. Otherwise they will be faced with the option of starting the arbitration based on the information they have, and making an early request for document discovery to the tribunal.

In AJT v AJU [2010] SGHC 201, the Singapore High Court set aside an arbitral award made by a SIAC tribunal on the basis that upholding the award would have involved enforcing an illegal agreement. Accordingly, the award was contrary to public policy (see Legal update, Singapore High Court sets aside SIAC award as contrary to public policy). In this case the parties had entered into a settlement agreement which required them to take steps to withdraw and discontinue all claims, and any other form of legal action. However, the plaintiff refused to terminate the relevant arbitral proceedings and challenged the validity of the settlement agreement on the basis of duress, undue influence and illegality. The arbitral tribunal concluded that the settlement agreement was not illegal and the plaintiff then applied to have the award set aside as contrary to public policy under Article 34(2)(b)(ii) of the UNCITRAL Model Law (which is set out in the First Schedule of the Singapore International Arbitration Act).

The court held that the award should be set aside under the Model Law. The court noted that in relation to Article 34(2)(b)(ii) it must be shown that there was an error in the award such that enforcement would "shock the conscience", be "clearly injurious to the public good" or would "contravene fundamental notions and principles of justice".

The court found that the parties had, in the settlement agreement, clearly intended to compound a non-compoundable offence (that is, an offence in relation to which the parties cannot terminate the proceedings once a complaint has been made to the relevant authorities). Accordingly, the settlement agreement was illegal.

The case usefully defines the limited circumstances in which an arbitral award will be set aside by the Singapore courts on public policy grounds related to alleged unlawful agreements. It also serves as a reminder that parties should exercise caution before involving criminal or regulatory authorities in civil disputes. In many cases, the parties will not be able to control the activities of those authorities, even after the dispute has come to an end, with unintended consequences.

Total number of cases: There has been a steady increase in the number of cases handled by SIAC over the past few years, and this trend seems likely to continue, especially with Asia's and Singapore's expanding economies and influence.

Last year SIAC handled 198 cases. This is a 24% increase on 2009 in which SIAC handled 160 cases and a 100% increase on 2008 in which SIAC handled 99 cases.

Trade/Commercial sector: SIAC has seen a dramatic rise in the number of trade/commercial disputes which it handles. Last year SIAC handled 105 cases in this sector, up from 53 cases in 2009 (a 98% increase). It remains to be seen whether or not this increase will continue into 2011, but it seems likely that disputes in this sector will continue to make up the largest proportion of SIAC disputes given the current turmoil in the commodity markets.

Nationalities of parties: Singapore is still the nationality which makes up the largest proportion of parties involved in SIAC cases, with India being the second largest. However, last year SIAC only saw a 8% increase in cases involving a party from Singapore (107 cases up from 99 in 2009), whereas Indian parties showed a 46% increase for the same time period (35 cases up from 24 in 2009).

The remaining top five nationalities also showed much larger percentage increases than Singapore: Hong Kong with a 156% increase (23 cases up from 9 in 2009); Indonesia with a 83% increase (22 cases up from 12 in 2009); and Vietnam with a 150% increase (15 up from 6 in 2009).

Requests for expedited procedure: Of the 88 SIAC cases administered since the new 2010 SIAC Rules came into force earlier last year, 20 involved requests for the new expedited procedure. Most of these requests were made pursuant to Rule 5.1(a) of the 2010 Rules, meaning they had a value of less than SGD5,000,000.

As the expedited procedure becomes more well-known and more established, more parties will most likely look to take advantage of it in 2011.