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Three practically useful procedures in the Singapore International Arbitration Centre’s (“SIAC”) Investment Arbitration Rules

The first edition of the SIAC’s Investment Arbitration Rules (“SIAC IA Rules”, or the “Rules”) came into effect on 1 January 2017. In developing these Rules, the SIAC consulted the SIAC Global Users Council (a corps of users of international commercial and/or investment arbitration, and industry practitioners) and the public. This practitioner and industry input has contributed to the creation of an innovative and practical set of rules, which build on existing features of investment arbitration and go beyond in seeking to address current gaps in investment arbitration procedure. Three features of the Rules which could be useful in practice are highlighted in this blogpost.

Emergency arbitrator proceedings

The SIAC IA Rules allow any party to apply for emergency relief,[1] which is interim relief before the tribunal is constituted. The Court of Arbitration of SIAC would seek to appoint the emergency arbitrator within one day of receipt by the SIAC Registrar of the application for emergency relief; and the emergency arbitrator should issue his decision within 14 days of his appointment.[2] This means that a party seeking emergency relief could receive assistance in little more than two weeks from the date of application.

Apart from the SIAC IA Rules, the International Chamber of Commerce (ICC) and Stockholm Chamber of Commerce (“SCC”) rules also allow for emergency relief.[3] SCC emergency relief has been granted to enjoin a State from collecting disputed taxes on natural gas production;[4] and to stay a State’s enforcement of a domestic regulation that would expropriate the claimant’s shares in its investment.[5]

The above examples illustrate the usefulness of emergency procedures in practice, especially given the time-sensitive circumstances under which the need for interim relief commonly arises. Parties may be able to use the emergency relief procedure to prevent the publication of sensitive information, to preserve important evidence, or freeze funds and/or assets.

Early dismissal procedure

A party may apply to the tribunal for the early dismissal of a claim or defense if this is manifestly: (i) without legal merit; (ii) outside the tribunal’s jurisdiction; or (iii) inadmissible.[6] Thus, a manifestly unsupportable claim or defense can be dismissed without proceeding to the evidential stage of the dispute. This is akin to the common law processes of striking out or summary judgment, and helps to save time and costs.

The SIAC IA Rules are not the first to incorporate such a procedure. The ICSID Rules (Rule 41(5)) were the first to do so,[7] although they are limited to the early dismissal of a claim only. The SIAC IA Rules are unique in providing that both claims and defenses may be the subject of early dismissal.

A claimant in seeking early dismissal of a defense would probably only be able to rely on the first ground viz that the defense is without legal merit. If a claim is within the tribunal’s jurisdiction and it is admissible, it would probably not be possible to argue that a defense to this claim is outside jurisdiction and/or inadmissible. This procedure could be very useful where the defense is plainly unsound as a matter of law.

Additionally, this procedure also allows a claimant to apply to strike out a State’s counterclaim[8] if this is without merit. This is helpful if an unmeritorious counterclaim is deployed as a means to delay the arbitral proceedings.

In practice however, it remains to be seen if a tribunal would be willing to summarily dismiss a respondent State’s defense and render an award for a claimant (and damages against the State) without having heard the evidence. The early dismissal procedure understandably looks only to the legal merit of the defense. Tribunals may also wish to examine the factual merits of a State’s defense before deciding if it ought to be dismissed.

Third party submissions

The SIAC IA Rules allow third parties to the dispute to make written submissions to the tribunal. A third party who is also party to the treaty under which the arbitration was commenced (termed a “Non-Disputing Contracting Party”) has the right to make submissions on questions of treaty interpretation directly relevant to the dispute. Submissions by third parties (whether treaty party or not) on all other matters within the scope of the dispute may be allowed in the tribunal’s discretion. The tribunal may also invite both the above types of submissions after considering the views of the parties and having regard to the circumstances of the case.[9]

This is akin to the amicus curiae procedure provided for in the ICSID rules, and which allow ICSID tribunals to admit submissions which would assist the tribunal with a perspective, particular knowledge or insight that is different from that of the disputing parties. [10] In the Micula case,[11] for example, the European Commission made amicus submissions to the ICSID tribunal in support of the Romanian State, on issues of European competition law.

Where the SIAC IA Rules go beyond the ICSID rules however, is in conferring on Non-Disputing Contracting Parties the right, independent of the tribunal’s discretion, to submit on the interpretation of that treaty.

This procedure introduces another strategic tool to the parties’ presentation of their cases. Parties could apply to the tribunal for the admission of amicus submissions from appropriate and authoritative institutions such as regulatory or intra-governmental bodies, or a suitable Non-Disputing Contracting Party. Such amicus submissions could assist the tribunal in viewing the issues in a different and useful light.

Conclusion

The procedures provided by the SIAC IA Rules highlighted above apply at different stages of the dispute – the emergency relief procedure applies before the tribunal is constituted; the early dismissal procedure before the evidential stage; and the third party submission procedure could apply at any stage of the arbitration proceedings. If deployed tactically and strategically, these procedures have the potential to be of advantage to the arbitrating parties.

By Amy Seow

[1] Subject to the requirement that the parties expressly consent to the use of the emergency procedure, SIAC IA Rules Art 27.

[2] SIAC IA Rules Schedule 1, Arts 3, 9.

[3] ICC Rules Art 29, SCC Rules Appendix II.

[4] JKX Oil & Gas plc, Poltava Gas B.V. and Poltava Petroleum Company JV v Ukraine (SCC) (2015).

[5] TSIKinvest LLC v. The Republic of Moldova, SCC Emergency Arbitration No. EA(2014/053).

[6] SIAC IA Rules Art 26.1.

[7] The SCC rules (Art 39) also provide for summary disposal of “one or more issues of fact or law”.

[8] Art 4.1.b SIAC IA Rules expressly provides that a State may submit a counterclaim.

[9] SIAC IA Rules Art 29.

[10] ICSID Rule 37(2).

[11] Ioan Micula, Viorel Micula, S.C. European Food S.A., S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20.