Chief Justice Sundaresh Menon: Keynote Address at the 25th Annual International Bar Association Arbitration Day on 23 February 2024

25TH ANNUAL INTERNATIONAL BAR ASSOCIATION
ARBITRATION DAY

Arbitration and the Transnational System of Commercial Justice:
Charting the Path Forward

Friday, 23 February 2024

The Honourable the Chief Justice Sundaresh Menon ⁽¹⁾
Supreme Court of Singapore

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I. Introduction

1                 Good afternoon. Let me begin by extending a warm welcome to all of you, especially those of you who have travelled far to join us in Singapore. It is a pleasure to see you. The arbitration community is a relatively small one where many of us know and interact with each other in a variety of capacities, and so it is a particular pleasure for me to have the chance to speak to you this afternoon. And I am delighted to address you at this special anniversary of the IBA Arbitration Day. Much has changed in the international commercial dispute resolution landscape over the last few decades, and the 25th iteration of this conference affords us a timely opportunity not only to reflect on how far arbitration has come, but also – and perhaps more importantly – to envision the new directions in which it might go.

2                 I have spoken elsewhere⁽²⁾ about what I refer to as the transnational system of commercial justice (or “TSCJ”). It is perhaps easier to envision this as a virtual system that has evolved organically over the last several decades to provide a legal framework for the resolution of international commercial disputes. To meet the needs of international commerce, that framework must offer a suite of robust dispute resolution options that can operate individually or in tandem to ensure the efficient, effective and holistic resolution of international commercial disputes.⁽³⁾ And, make no mistake, arbitration has emerged as the key player in the substantive resolution of such disputes. Indeed, in a 2021 survey, 90% of respondents indicated that international arbitration – either on its own, or together with other modes of dispute resolution – was their preferred method of resolving cross-border disputes.⁽⁴⁾

3                 My principal message today can be summarised as follows. The place of arbitration in the broader landscape of international commercial dispute resolution has been strengthened, and I think is now secure, by reason of the efforts of the institutions of the TSCJ, and in particular the courts. But arbitration now confronts several of the significant challenges that have already emerged in other modes of dispute resolution within the TSCJ. I suggest that the ability of the arbitration community, working with other players in the TSCJ, to effectively address these challenges will determine the path forward for arbitration.

II. The place of arbitration in the TSCJ

4                 Let me first outline how the place of arbitration has been strengthened and secured by the legal institutions of the TSCJ. These institutions range from dispute resolution bodies, such as commercial courts and arbitral and mediation institutions, to international organisations such as UNCITRAL and UNIDROIT that promulgate instruments of international commercial law. These institutions of the TSCJ develop and apply the laws and principles that, together, form a coherent system for managing and resolving international disputes. Such a system is especially important because international commercial disputes will almost always engage at least two sets of substantive and procedural rules, and the interaction between these two sets of rules can give rise to unique and difficult legal issues.⁽⁵⁾

5                 Part of the TSCJ comprises instruments like the New York Convention⁽⁶⁾ and the UNCITRAL Model Law on International Commercial Arbitration.⁽⁷⁾ But these instruments do not exist in a vacuum. They need to be brought to life by being interpreted and applied in a broadly consistent way across borders. In the absence of any centralised governing body within the TSCJ, the courts have served as its superintendents: they develop, interpret and apply its rules, and facilitate the orderly resolution of disputes that may span several jurisdictions and even several dispute resolution mechanisms.⁽⁸⁾ By taking a systemic approach when confronted with such issues, courts in key commercial nodes have secured arbitration’s pre-eminent place within the TSCJ in at least four ways:

1. first, by allocating jurisdiction appropriately between arbitral tribunals and other institutions;
2. second, by facilitating the enforcement of arbitral awards and preventing the relitigation of issues;
3. third, by setting sensible standards for the conduct of arbitration; and
4. fourth, by reinforcing rule of law norms within arbitration.

 

A.         Allocation of jurisdiction

6                 Let me touch on each of these, beginning with the allocation of jurisdiction. While the kompetenz-kompetenz doctrine provides that it is for the arbitral tribunal to determine matters of its own jurisdiction, a court hearing an application to stay court proceedings in favour of arbitration must take some view on the existence and scope of the arbitration agreement in question. The balance that is struck between the court and the tribunal is reflected in the standard of review that the courts will apply when deciding whether to grant a stay, because it is satisfied that there is reason to direct the parties to arbitration. The Singapore Court of Appeal in the Tomolugen case, for example, adopted a relatively low standard of review that requires a litigant to establish only a prima facie case that there is a valid and operable arbitration clause, and that the dispute that is before the court does appear to fall within the scope of that clause.⁽⁹⁾ This, in our view, was more consistent with preserving the tribunal’s kompetenz-kompetenz,⁽¹⁰⁾ and in turn it contributes to safeguarding the legitimate space of arbitration within the TSCJ.

B.         Enforcement of awards and prevention of relitigation

7                 Next, the courts have facilitated the enforcement of arbitral awards by developing doctrines to prevent the relitigation of disputes over the validity of awards. These doctrines supplement the regime under the New York Convention for the recognition and enforcement of awards. In particular, the courts in some jurisdictions have applied the doctrine of transnational issue estoppel in determining the approach that an enforcement court, for instance, should take to a prior decision of the seat court on the validity of an arbitral award.

8                 Our Court of Appeal recently considered this issue in the case of India v Deutsche Telekom.⁽¹¹⁾ Let me briefly outline the facts. In an arbitration commenced in Switzerland by Deutsche Telekom against India, the tribunal had found that India was liable for breaching its obligations under a bilateral investment treaty. India applied to the seat court in Switzerland to set aside the tribunal’s award, primarily on the basis that the tribunal lacked jurisdiction over the dispute, but this was unsuccessful. Subsequently, Deutsche Telekom was granted leave to enforce the tribunal’s final award in Singapore. India then applied to set aside that leave order and to resist enforcement, on essentially the same grounds that had been raised unsuccessfully before the seat court.

9                 The Court of Appeal upheld the lower court’s decision to dismiss India’s application.⁽¹²⁾ We held that the doctrine of transnational issue estoppel should be applied by a Singapore enforcement court, subject to considerations of domestic public policy, when determining whether preclusive effect should be accorded to a seat court’s decision on the validity of an arbitral award.⁽¹³⁾ On the facts, we found that the requirements of this doctrine were satisfied, and this precluded India from relitigating the same grounds for resisting enforcement in the Singapore proceedings.⁽¹⁴⁾ In applying the doctrine of transnational issue estoppel in this context, we also observed that this appropriately respected the parties’ choice of the arbitral seat as the jurisdiction and system of law that would regulate most matters concerning the arbitration.⁽¹⁵⁾

10                 Decisions like this help to safeguard the place of arbitration within the TSCJ by promoting the finality of decisions on the validity of awards. This is especially important to ensure that a claimant that has succeeded before both the tribunal and the seat court is not kept out of the fruits of its victory. Without doctrines like transnational issue estoppel to guard against the relitigation of disputes, there is a real risk that the same award might be enforced in one jurisdiction but set aside in another,⁽¹⁶⁾ leading to uncertainty and unfairness that can undermine the value proposition of arbitration as the pre-eminent mode of international commercial dispute resolution.

C.         Standards for the conduct of arbitration

11                 Third, the courts have set sensible standards for the conduct of arbitration, especially in relation to due process challenges. Supervisory courts play an important role in protecting the parties from genuine breaches of natural justice, and this helps to secure confidence in arbitration as a dispute resolution process.⁽¹⁷⁾ But for some years now, concerns have been raised regarding the converse problem of due process paranoia among tribunals, which is said to have arisen as a result of parties invoking due process arguments cynically to undermine the finality of awards.⁽¹⁸⁾ The courts can help curb this trend by developing and applying clear and sensible standards for assessing due process challenges, which would deter parties from employing such tactics and empower tribunals to act decisively and robustly in managing the cases before them. Thus, in the case of Jaguar Energy, our Court of Appeal held that a court assessing due process challenges should consider what a reasonable and fair-minded tribunal might have done in the circumstances, having regard to all the facts and considerations that were made known to it, and further that the court should accord a margin of deference to the tribunal in procedural matters. We suggested that such standards preserve the proper limits of the tribunal’s discretion and prevent due process from being abused to undermine the integrity and effectiveness of arbitration.⁽¹⁹⁾

D.         Reinforcement of rule of law norms

12                 I turn to the fourth way in which the courts have strengthened arbitration’s place in the TSCJ, and that is by reinforcing rule of law norms. Arbitration, as part of a transnational system of commercial justice, should uphold and advance the rule of law, and should not be permitted to be used in ways that would subvert the rule of law.

13                 The courts have, in the context of arbitration, taken a strong stance against bribery and corruption, because these are inimical to the rule of law. For example, in the case of Lao Holdings, the Singapore International Commercial Court held in obiter that arbitrators had a public duty, which could not be precluded by the parties’ agreement, to proactively examine and consider evidence of possible corruption. This included illegal conduct, bribery and fraud.⁽²⁰⁾ More recently, the problem of bribery and corruption tainting arbitration proceedings came to the fore in the case of Nigeria v Process & Industrial Developments Limited, where arbitral awards had been issued in favour of a company that was found to have knowingly provided false evidence and to have bribed a civil servant in Nigeria. The English High Court held that the awards had been procured by fraud and were contrary to public policy, and noted that it was important that Nigeria had been able successfully to challenge the awards in order to maintain the rule of law and protect the integrity of arbitration as a process.⁽²¹⁾ By taking a robust approach to the ills of bribery and corruption, courts and tribunals can play their respective parts in strengthening the broader rules-based international legal order, and the legitimacy of arbitration within that order.

III. The next frontier: the challenges that lie ahead

14                 I have thus far outlined how the place of arbitration has been strengthened and secured by the institutions of the TSCJ. But I want to spend some time looking ahead, because arbitration also confronts several of the systemic challenges that have already emerged in, and begun to affect, other modes of dispute resolution. I suggest that there are at least three significant challenges that will need to be addressed as we map the future of arbitration within the broader TSCJ:

1. complexification;
2. access to justice; and
3. climate change,

which is what I will turn to in the time that remains.

A.         Complexification

15                 Let me begin with complexification. By this, I mean the problem of disputes becoming so technically and evidentially complex that they threaten to exceed the ability of human adjudicators to comprehend the material, much less process it effectively and efficiently.⁽²²⁾ This is a reality in arbitration just as it is in litigation, especially in fields like construction. In a 2019 survey conducted by the Queen Mary University of London, the top two defining features of international construction arbitration identified by respondents were factual and technical complexity, and the large amounts of evidence involved.⁽²³⁾ More generally, it has been observed that parties have imported what is referred to as “American-style discovery”, including voluminous document exchange, into what was traditionally envisaged as a streamlined process of presenting the evidence followed by swift decision-making.⁽²⁴⁾ This increase in complexity is partly attributable to technological advances, which have given rise to the “information explosion” that we are all living in, and that at the same time has generated difficult technical and legal questions.⁽²⁵⁾ But it is also a result of the increasingly complex nature of commercial disputes: a larger proportion of disputes involve more than two parties and multiple contracts, and more disputes involve intellectual property rights or issues that arise out of regulated industries, such as oil and gas or telecommunications.⁽²⁶⁾

16                 Complexification poses two particular threats to arbitration. First, it will make arbitration even more expensive and protracted,⁽²⁷⁾ thus threatening its practical appeal as a mode of commercial dispute resolution. And second, it may take a toll on the quality of arbitral decision-making,⁽²⁸⁾ and thus its legitimacy.

17                 How can we deal with complexification? Beyond mechanisms that improve the efficiency of existing arbitral processes, this seems to me to call for a more fundamental reimagining of our approach to resolving complex disputes. Instead of requiring a painstaking determination of every contested issue, justice may be better served by the efficient and economical resolution of the dispute in a manner that is good enough, even if not perfect or exhaustive.⁽²⁹⁾ With this in mind, I float two ideas that could be considered.

18                 The first is collaboration between arbitration and other dispute resolution mechanisms. Dispute boards have shown that they can help to avoid⁽³⁰⁾ and contain incipient disputes before they snowball to unmanageable proportions, and they have been especially useful in construction projects.⁽³¹⁾ Mediation is another valuable option, especially where the parties wish to preserve their commercial relationship, because mediation focuses on their shared interests instead of being fixated on the determination of their legal rights.⁽³²⁾ Composite or tiered models that facilitate the movement of disputes between arbitration and other dispute resolution mechanisms⁽³³⁾ can help the parties achieve the best of both worlds, for instance by providing for arbitration proceedings to be stayed while the dispute is referred to mediation, and for any settlement agreement to subsequently be recorded in a consent award issued by the tribunal. Such collaboration between different dispute resolution mechanisms would harness the advantages of each mechanism to pre-empt and help manage complex disputes, and this would also support the smooth operation of the TSCJ as a unified system of international commercial dispute resolution.⁽³⁴⁾

19                 The more controversial idea is the possible use of artificial intelligence (or “AI”). Technological advances such as generative AI present us with many opportunities. Such AI tools afford us the potential to manage and process voluminous documents and information in a fraction of the time it would have taken humans, resulting in considerable time and cost savings. For instance, it might already be possible to use AI to flag documents that corroborate or contradict a witness’s evidence, or to highlight inconsistencies in the testimony of a witness.⁽³⁵⁾ AI could also provide tremendous assistance with sourcing, synthesising and summarising the relevant legal and factual material, allowing lawyers and tribunals to focus their energies on applying that information to the case at hand. An example of such tools is Jus-AI, which draws from Jus Mundi’s global legal database to identify and summarise relevant arbitral awards and national judgments.⁽³⁶⁾ Also of interest is the report last year that an AI assistant created by the Guangzhou Arbitration Commission had resolved its first case. At the end of the hearing, it analysed the data and said it would send an opinion to the tribunal in 5 minutes!⁽³⁷⁾ As the President of the ICC International Court of Arbitration, Claudia Salomon, has observed, it is not science fiction to imagine that parties in the not-too-distant future will be able to choose an AI-generated award, or a hybrid award that is AI-generated but human-reviewed, instead of an award completely drafted by humans.⁽³⁸⁾

20                 Of course, the use of AI in arbitration comes with its share of challenges that will need to be addressed. I mention just two.

1. The first relates to confidentiality. In a 2023 survey conducted by Bryan Cave Leighton Paisner, nearly 90% of respondents were concerned about breaches of confidentiality arising from the use of AI in arbitration.⁽³⁹⁾ Parties who choose arbitration because of the confidentiality it offers are unlikely to agree to their information being uploaded onto third-party AI platforms. This limits the volume of the datasets on which AI tools for arbitration can be trained, and may in turn affect the quality of the output generated by these tools.⁽⁴⁰⁾
2. The second challenge is securing confidence in the ability of tribunals to manage the use of AI in arbitration. The 2023 Bryan Cave Leighton Paisner survey also found that nearly 80% of respondents lacked confidence in the technical capability of arbitrators to give suitable directions on the use of AI tools.⁽⁴¹⁾ This may exacerbate concerns over confidentiality, data privacy, and the risks of AI generating fictitious responses or being used to falsify or tamper with evidence,⁽⁴²⁾ which in turn could diminish the effectiveness and integrity of AI tools in arbitration.

21                 These are valid concerns, and I suggest that they call for the development of clear and robust guidelines to regulate the use of AI in arbitration.⁽⁴³⁾Arbitration rules and institutions currently provide little guidance with respect to AI.⁽⁴⁴⁾ But the landscape is changing. For instance, last August, the Silicon Valley Arbitration and Mediation Center released a set of draft guidelines on the use of AI in arbitration, which cover issues like confidentiality; disclosure of the use of AI tools; the parties’ duties of competence and diligence in using AI; and the non-delegation of arbitrators’ decision-making responsibilities to AI.⁽⁴⁵⁾ In time, guidelines like these may help to provide effective and trusted frameworks that will build confidence in the potential of AI to assist with delivering quality justice in arbitration, and transform the way we deal with complex disputes.

 

B.         Access to justice

22                 The second systemic challenge that arbitration faces is securing access to justice. Arbitration is very expensive. Costs awards can rise to tens of millions in larger arbitrations; and even in smaller arbitrations where the amount in dispute is less than a few million dollars, costs can run into the millions.⁽⁴⁶⁾ To many commercial parties, these numbers are startling. It is therefore unsurprising that cost is often identified as one of the most unsatisfactory features of international arbitration.⁽⁴⁷⁾

23                 This is a particular concern for small- and medium-sized enterprises and mid-sized companies, which represent around 90% of all firms globally.⁽⁴⁸⁾ From a practical perspective, engaging in costly arbitration is likely to be a real struggle for medium-sized enterprises, and a near impossibility for their smaller cousins.⁽⁴⁹⁾ This suggests that there is a significant “justice gap”, where cost constraints prevent commercial parties with meritorious claims from pursuing those claims and obtaining meaningful redress through arbitration.⁽⁵⁰⁾

24                 Another area of concern is the mandatory application of arbitral processes to consumer and employee disputes, which often involve relatively small-value claims and marked inequalities in bargaining power and resources. Mandatory arbitration clauses often also contain class action and group arbitration waivers or exclusions, which deprive consumers and employees of mechanisms that could otherwise have facilitated their accessing justice.⁽⁵¹⁾ If such clauses are upheld – as they have been by the Supreme Court of the United States,⁽⁵²⁾ for example – this would require prospective claimants to pursue individual arbitrations to vindicate their rights. But given that the costs this would involve are likely to be prohibitive for ordinary individuals, mandating that these disputes undergo arbitration – at least in its current form – is likely to effectively exclude any meaningful recourse and frustrate the vindication of consumer and employee rights. The practical ramifications of this are immense. Of the Fortune 100 companies in the US in 2018, 78 used arbitration agreements with class action waivers in connection with consumer transactions.⁽⁵³⁾ And in the employment context, a 2017 survey found that over half of private sector non-union employees in the US were subject to mandatory employment arbitration procedures. This meant that over 60 million American workers had no access to the courts to protect their employment rights and had to seek recourse through arbitration, assuming this was viable at all.⁽⁵⁴⁾

25                 While the justice gap may be especially acute in the context of consumer and employee disputes in the US, these examples illustrate the broader point that many commercial parties and individuals may not be able to access justice through arbitration simply because they cannot afford the cost of arbitrating in the traditional way. This is an area where urgent collaboration is needed to devise sensible solutions that can enhance access to justice in arbitration, and I suggest that we should consider developing alternative models of arbitration with simpler procedural regimes, which are cheaper and more effective for resolving smaller-value disputes.⁽⁵⁵⁾ This will necessitate a careful consideration of what costs need to be incurred, and what costs are being incurred merely because they have become commonplace.⁽⁵⁶⁾ The largest proportion of the costs of international arbitration are party costs, including lawyers’ fees and expenses, and expenses related to witness and expert evidence.⁽⁵⁷⁾ In the light of this reality, the International Chamber of Commerce has called for “special emphasis” to be placed on lowering the costs associated with the parties’ presentation of their cases, noting that such costs are often caused by “unnecessarily long and complicated proceedings with unfocused requests for disclosure of documents and unnecessary witness and expert evidence”.⁽⁵⁸⁾

26                 Some inspiration might be drawn from the simplified process that we in Singapore developed for proceedings in our Magistrate’s and District Courts, which deal with cases of a lower monetary value. The simplified process was born out of the recognition that parties cannot reasonably be expected to litigate small-value claims using the same procedures and rules as are designed for multi-million-dollar suits. Instead, the applicable procedures should be designed to ensure proportionality and accessibility. Accordingly, the simplified process provides for the upfront production of all relevant documents together with the pleadings; places limits on interlocutory applications; and imposes time limits on the presentation of oral evidence.⁽⁵⁹⁾ The parties are also prompted to consider resolving part or all of their dispute through negotiation, mediation, conciliation or neutral evaluation at various points before the matter gets to trial.⁽⁶⁰⁾ We could perhaps explore similar features for smaller-value arbitrations, such as limiting document production;⁽⁶¹⁾ limiting or even dispensing with oral evidence for some witnesses;⁽⁶²⁾ imposing page limits on submissions and awards;⁽⁶³⁾ and creating opportunities for negotiation and mediation. Remote hearings and paper hearings, in place of in-person and oral hearings, should also be explored, especially when dealing with procedural issues.⁽⁶⁴⁾

27                 There is no one-size-fits-all model, even for small claims. The key point is that the parties and tribunal in each case should apply their minds to how the procedural flexibility that arbitration offers can best be utilised to facilitate the proportionate and efficient resolution of the dispute at hand. Arbitral institutions, as “gatekeepers” of the arbitral process and the presumptive thought leaders in this field,⁽⁶⁵⁾ should also proactively explore procedural innovations to make arbitral processes cheaper and easier to navigate for less sophisticated and less well-resourced users. This may be challenging work, but if arbitration is to provide an effective system of dispute resolution that meets the needs of its users, then – just as in domestic court systems – access to justice should be a priority as we chart the future of arbitration.

C.         Climate change

28                 I turn to the third systemic challenge: climate change, which poses a grave existential threat to humanity and the world as we know it. Dispute resolution institutions within the TSCJ have already been, and will increasingly be, confronted with disputes that relate directly or indirectly to climate change, and norms will need to be established to manage and resolve these kinds of disputes. Arbitral tribunals can play an important part by developing and articulating the environmental obligations owed by various actors, and by setting down the limits of permissible commercial activity.⁽⁶⁶⁾

29                 For instance, in Burlington v Ecuador, Ecuador brought a counterclaim against a corporation that had invested in oil production facilities there, for soil and groundwater pollution around those facilities. The tribunal allowed Ecuador’s counterclaim and ordered the corporation to pay damages in excess of US$39 million for breaching Ecuadorian environmental laws.⁽⁶⁷⁾ And in Aven v Costa Rica, the tribunal held that an investor could in principle be liable for breaching international legal obligations relating to environmental protection.⁽⁶⁸⁾ These are just some examples, and the broader point is that courts and tribunals should keep abreast of how other adjudicative bodies are shaping remedial responses to the climate crisis.

30                 I suggest that arbitral institutions should also develop procedures and expertise tailored to the resolution of climate change-related disputes.⁽⁶⁹⁾ For example, they could maintain specialised lists of arbitrators with environmental expertise and expert witnesses in relevant scientific or technical fields.⁽⁷⁰⁾ Having regard to the time-sensitivity of climate change-related disputes, tribunals could also adopt case management techniques to facilitate their prompt resolution – such as identifying scientific or technical issues that can be resolved by agreement, or decided solely based on documents instead of oral evidence or legal submissions.⁽⁷¹⁾ Further, having regard to the shared interests we all have in a sustainable future, there is much to be said in favour of incorporating mediation as part of an integated dispute resolution model in this field.

31                 There is also a question of whether and if so how the traditional model of private arbitration should be adapted for climate change-related disputes, given that these often have public interest implications extending far beyond the case at hand.⁽⁷²⁾ There has been growing recognition of the potential value of transparency in investor-State dispute settlement,⁽⁷³⁾ and there may also be increasing pressure for transparency in commercial arbitrations involving public interest issues.⁽⁷⁴⁾ Whether and how arbitration’s guarantees of confidentiality and privacy should be modified in this context are questions that will warrant further consideration as tribunals come to face more and more of these types of disputes.

IV. Conclusion

32                 This survey of the landscape suggests that the path ahead is not straightforward, and it will need to be thoughtfully navigated so that we do not get lost in the weeds. But there is cause for optimism. With arbitration’s place in the TSCJ now strengthened and secured, arbitration practitioners and institutions can and should turn their attention to preparing themselves for the challenges that will come and that are here; and in this, they can draw from the experiences of other institutions within the TSCJ to chart a viable path forward. This will not be an easy task; but the pool of talent in this community assures us that we will be able to generate ideas that will stand arbitration in good stead for the next 25 years and beyond.

33                 Thank you very much.

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^{(1)       I am deeply grateful to my law clerk, Arjit Pandey, and my colleagues, Assistant Registrars Tan Ee Kuan, Wee Yen Jean and Bryan Ching, for all their assistance in the research for and preparation of this address.
(2)       See, for example, Sundaresh Menon CJ, “The Law of Commerce in the 21st Century: Transnational Commercial Justice Amidst the Wax and Wane of Globalisation”, lecture hosted by the University of Western Australia Law School and the Supreme Court of Western Australia (27 July 2022) at paras 17 and 45; and Sundaresh Menon CJ, “The Transnational System of Commercial Justice and the Place of International Commercial Courts”, lecture in Bahrain (9 May 2023) (“Bahrain Lecture”) at para 2.
(3)       See Sundaresh Menon CJ, “Dispute Resolution at the Intersection of Domestic and Transnational Justice Systems: The Case for International Commercial Courts”, keynote address at the 7th International Bar Association Asia Pacific Regional Forum Biennial Conference (23 February 2023) ("IBA Address”) at para 3.
(4)       See Queen Mary University of London, School of International Arbitration and White & Case, “2021 International Arbitration Survey: Adapting Arbitration to a Changing World” (2021) (“2021 International Arbitration Survey”) at p 5: 31% of respondents preferred arbitration as a standalone method of resolving cross-border disputes, while 59% of respondents expressed a preference for arbitration to be used in conjunction with alternative dispute resolution (here defined to include adjudication, dispute boards, expert determination, mediation and negotiation, but to exclude litigation and arbitration), as opposed to 49% in 2018 and only 34% in 2015.
(5)       See Sundaresh Menon CJ, “Transnational Commercial Law and the Development of the Modern-Day Lex Mercatoria”, lecture to the National Judges College in Beijing (29 November 2023) (“NJC Lecture”) at para 6.
(6)       United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958).
(7)       United Nations Commission on International Trade Law, Model Law on International Commercial Arbitration (1985).
(8)       See the Bahrain Lecture at paras 2 and 29.
(9)       See Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 (“Tomolugen”) at [25]–[29], [63], [65] and [67]–[68]. This can be contrasted with the “full merits” approach that had been applied in England, under which the court undertakes an actual determination of the existence and scope of the arbitration agreement when it hears a stay application, and may thus pronounce with finality on an arbitral tribunal’s jurisdiction in the first instance: see Tomolugen at [30].
(10)       See Tomolugen at [50]–[56] and [65].
(11)       The Republic of India v Deutsche Telekom AG [2023] SGCA(I) 10 (“Deutsche Telekom”).
(12)       See Deutsche Telekom at [180].
(13)       See Deutsche Telekom at [4], [96] and [193].
(14)       See Deutsche Telekom at [174]–[178].
(15)       See Deutsche Telekom at [98]–[99] and Jonathan Hugh Mance, “Arbitration – a Law unto itself?”, 30th Annual Lecture organised by The School of International Arbitration and Freshfields Bruckhaus Deringer (4 November 2015) at p 22.
(16)       See, for example, PT Putrabali Adyamulia v Société Est Epices [2003] 2 Lloyd’s Rep 700 (England) and PT Putrabali Adyamulia (Indonesia) v. Rena Holding, et al (2007) 32 ICCA Yearbook Commercial Arbitration 299 (Court of Cassation of France, 29 June 2007); and Kabab-Ji SAL v Kout Food Group [2022] 2 All ER 911 (England) and Kout Food Group v Kabab-Ji SAL (2022) 47 ICCA Yearbook Commercial Arbitration 603 (Court of Cassation of France, 28 September 2022) (France).
(17)       For example, in Sai Wan Shipping Ltd v Landmark Line Co Ltd [2022] 4 SLR 1302, the General Division of the High Court set aside an arbitral award in a “truly exceptional” case where there had been a series of clear breaches of natural justice: see Justice Judith Prakash, “The Critical Role of the Courts in Arbitral Disputes: Conceptualising the Partnership between the Courts and Arbitration”, plenary address at the Singapore International Arbitration Centre Symposium 2023 (28 August 2023) at paras 27–29.
(18)       See, for example, Lucy F Reed, “Ab(use) of Due Process: Sword vs Shield” (2017) 33 Arbitration International 361 at 364 and 374–376.
(19)       See China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another [2020] 1 SLR 695 at [3]–[4], [104(c)] and [104(d)].
(20)       See Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter [2021] 5 SLR 228 at [152]–[154]; upheld on appeal by the Court of Appeal in Lao Holdings NV and another v Government of the Lao People’s Democratic Republic [2023] 1 SLR 55.
(21)       See The Federal Republic of Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638 (Comm) at [493]–[497], [574]–[575] and [595].
(22)       See, for example, Sundaresh Menon CJ, “The Complexification of Disputes in the Digital Age”, Goff Lecture 2021 (9 November 2021) (“Complexification of Disputes”).
(23)       See Queen Mary University of London, School of International Arbitration and Pinsent Masons, “International Arbitration Survey – Driving Efficiency in International Construction Disputes” (November 2019) (“2019 International Arbitration Survey”) at p 10: 73% identified factual and technical complexity as a factor that distinguished international construction arbitration from other forms of international arbitration, and 66% identified the large amounts of evidence involved as such a factor.
(24)       See Deborah R Hensler and Damira Khatam, “Re-inventing Arbitration: How Expanding the Scope of Arbitration is Re-shaping its Form and Blurring the Line Between Private and Public Adjudication” (2018) 18 Nevada Law Journal 381 (“Hensler & Khatam”) at pp 384–385.
(25)       See Complexification of Disputes at paras 11 and 16–22.
(26)       See Hensler & Khatam at p 408.
(27)       See Sundaresh Menon CJ, “International Mediation and the Role of the Courts”, speech to the Indonesian Judiciary (7 November 2023) (“International Mediation and the Role of the Courts”) at paras 23 and 25. See also: Queen Mary University of London, School of International Arbitration and White & Case, “2018 International Arbitration Survey: The Evolution of International Arbitration” (2018) (“2018 International Arbitration Survey”) at pp 7–8 (67% of respondents identified “cost” as the worst characteristic of international arbitration, while 34% identified “lack of speed” as the worst characteristic); and Singapore International Dispute Resolution Academy, Singapore Management University, “SIDRA International Dispute Resolution Survey: 2022 Final Report” (“SIDRA Survey”) at pp 7–8 (only 30% of respondents were satisfied with the cost of arbitration, and only 41% with its speed).
(28)       See Complexification of Disputes at paras 5(b) and 27–34.
(29)       See Complexification of Disputes at paras 5(b) and 41–52 and 55.
(30)       See the Dispute Resolution Board Foundation’s analysis of its database, which indicates that 85% to 98% of recommendations and/or decisions made by dispute boards that were recorded in its database have not gone on to further arbitration or litigation: https://www.drb.org/db-faqs.
(31)       See the 2021 International Arbitration Survey at p 6 and Sundaresh Menon CJ, “Constructing Collaboration: Remoulding the Resolution of Construction Disputes”, keynote address at the 9th Annual Conference of the International Academy of Construction Lawyers (14 April 2023) (“IACL Address”) at para 7.
(32)       See International Mediation and the Role of the Courts at paras 26–27.
(33)       Such as the “Arb-Med-Arb” mechanism administered by the Singapore International Arbitration Centre and the Singapore International Mediation Centre: see https://siac.org.sg/the-singapore-arb-med-arb-clause.
(34)       See the IACL Address at para 22.
(35)       See Charlie Morgan and Rebecca Reed, “Dispute Resolution in the Era of Big Data and AI”, Herbert Smith Freehills (18 September 2019): https://www.herbertsmithfreehills.com/insights/2019-09/dispute-resolution-in-the-era-of-big-data-and-ai.
(36)       See Daily Jus, “Jus Mundi Introduces Jus-AI: A Game-Changing GPT-Powered AI Solution for the Arbitration Community” (29 June 2023): https://dailyjus.com/news/2023/06/jus-mundi-introduces-jus-ai-a-game-changing-gpt-powered-ai-solution-for-the-arbitration-community. See also Lucia Bizikova, Philip Hancock, Dan Jewell and Ilan Sherr, DLA Piper, “IA Meets AI – Rise of the Machines”, Daily Jus (2 October 2023): https://dailyjus.com/legal-tech/2023/10/ia-meets-ai-rise-of-the-machines ("IA Meets AI”).
(37)       See Qiu Quanlin, “AI arbitration used for dispute in Guangzhou”, China Daily (1 September 2023): https://www.chinadaily.com.cn/a/202309/01/WS64f13406a310d2dce4bb34ad.html.
(38)       See Claudia Salomon, “The New Frontier: AI in Arbitral Decision Making”, Legaltech News (28 September 2023): https://www.law.com/legaltechnews/2023/09/28/the-new-frontier-ai-in-arbitral-decision-making/.
(39)       See Bryan Cave Leighton Paisner, International Arbitration Group, “Annual Arbitration Survey 2023: The Rise of Machine Learning” (November 2023) (“2023 BCLP Survey”) at p 15: 87.5% of respondents were very concerned or somewhat concerned about breach of confidentiality.
(40)       See, for example, IA Meets AI, and Magdalena Łągiewska, “New Technologies in International Arbitration: A Game-Changer in Dispute Resolution?” (2023) International Journal for the Semiotics of Law at p 10.
(41)       See the 2023 BCLP Survey at p 23: 79% of all respondents rated their confidence in the technical capability of arbitrators to give directions concerning the use of AI tools in arbitration at 5 or below (on a scale of 10), and 73% of arbitrator respondents rated their confidence in their own technical abilities at 5 or below (on a scale of 10).
(42)       See the 2023 BCLP Survey at p 15: 88% of respondents were very concerned or somewhat concerned about cybersecurity; 88% of respondents indicated that they were very concerned or somewhat concerned about AI hallucination (the risk of AI generating fictitious responses), and 86% of respondents were very concerned or somewhat concerned about deepfakes (the use of AI tools to falsify or tamper with evidence).
(43)       See the 2023 BCLP Survey at p 27: 63% of respondents were in favour of the regulation of the use of AI tools in arbitration. See also FTI Consulting, “The Power of AI: Navigating the Paradigm Shift in Dispute Resolution Services” (16 November 2023): https://www.fticonsulting.com/insights/reports/power-ai-navigating-paradigm-shift-dispute-resolution-services at p 5.
(44)       See Martin Magal, Alexander Calthrop and Katrina Limond, “Artificial intelligence in arbitration: Evidentiary issues and prospects”, Allen & Overy (12 January 2024): https://www.allenovery.com/en-gb/global/news-and-insights/publications/artificial-intelligence-in-arbitration-evidentiary-issues-and-prospects.
(45)       See Silicon Valley Arbitration and Mediation Center, “Guidelines on the Use of Artificial Intelligence in Arbitration” (draft as of 31 August 2023): https://svamc.org/svamc-draft-guidelines-released-for-public-consultation/.
(46)       See Joseph R Profaizer, Igor V Timofeyev and Adam J Weiss (Paul Hastings LLP), “Costs”, Global Arbitration Review, The Guide to Damages in International Arbitration (5th ed) (19 December 2022): https://globalarbitrationreview.com/guide/the-guide-damages-in-international-arbitration/5th-edition/article/costs and Phillip Landolt (Landolt & Koch), “Controlling Costs in International Arbitration”, Bloomberg Law: Practical Guidance (October 2023): https://www.bloomberglaw.com/external/document/XABGU4JK000000/litigation-professional-perspective-controlling-costs-in-interna.
(47)       See the 2018 International Arbitration Survey at pp 7–8 (67% of respondents identified “cost” as the worst characteristic of international arbitration) and the SIDRA Survey at pp 7–8 (only 30% of respondents were satisfied with the cost of arbitration).
(48)       See World Economic Forum (in collaboration with the National University of Singapore), “Future Readiness of SMEs and Mid-Sized Companies: A Year On”, Insight Report (2 December 2022) (“WEF Report”) at p 6: https://www.weforum.org/publications/future-readiness-of-smes-and-mid-sized-companies-a-year-on/.
(49)       With an annual revenue of below $5 million: see the WEF Report at p 6.
(50)       See, more generally, World Justice Project, Measuring the Justice Gap: A People-Centered Assessment of Unmet Justice Needs Around the World (2019): https://worldjusticeproject.org/our-work/research-and-data/access-justice/measuring-justice-gap, which estimated that 5.1 billion people around the world (approximately two-thirds of the world’s population) had “unmet justice needs”, mainly because they faced obstacles to obtaining just remedies for their everyday civil, administrative, or criminal justice problems, or because they lacked the legal tools that would allow them to protect their assets and access the opportunities and services that the law offers.
(51)       See Sundaresh Menon CJ, “Gateway to Justice: The Centrality of Procedure in the Pursuit of Justice”, 36th Annual Lecture of the School of International Arbitration in Dispute Resolution (30 November 2021) (“Gateway to Justice”) at paras 10 and 28.
(52)       See, for example: AT&T Mobility LLC v Concepcion 562 US 333 (2011) at 339, 340–341, 343 and 352; American Express Co. et Al. v Italian Colors Restaurant et al. 570 US 228 (2013) at 233, 236 and 239; and Epic Systems Corporation v Lewis 138 S. Ct. 1612 (2018).
This may be contrasted with the approach taken in England. For example, in Payward Inc v Chechetkin [2023] EWHC 1780 (Comm) (“Payward”), the English High Court refused to enforce an arbitral award that a cryptocurrency exchange operator had obtained against an individual trader on that exchange, on the ground that doing so would be contrary to the public policy that consumer rights issues should be dealt with by the English courts under domestic consumer rights legislation rather than any foreign law: see Payward at [124]–[126]. In Payward, the parties’ arbitration clause had required disputes to be resolved in arbitration in California; and in holding that this clause was unfair, the court noted that the practical necessity for the trader to have engaged US attorneys would have been “both expensive and inconvenient”: see Payward at [132] and [144]. See also David Lewis KC, Twenty Essex, “Is the Consumer Always Right? When International Arbitration Meets Consumer Protection” (September 2023).
(53)       See Imre Stephen Szalai, “The Prevalence of Consumer Arbitration Agreements by America’s Top Companies” (2019) 52 UC Davis Law Review Online 233 at 238.
(54)       See Alexander J S Colvin, “The growing use of mandatory arbitration: Access to the courts is now barred for more than 60 million American workers”, Economic Policy Institute (6 April 2018) at 5–6 and 11: https://www.epi.org/publication/the-growing-use-of-mandatory-arbitration-access-to-the-courts-is-now-barred-for-more-than-60-million-american-workers/.
(55)       See Gateway to Justice at paras 28–29.
(56)       See James Allsop, “Commercial and Investor-State Arbitration: The Importance of Recognising their Differences” [2018] Federal Judicial Scholarship 3 at paras 38 and 52–53, referring to such costs as “process-driven costs”.
(57)       See International Chamber of Commerce, Commission on Arbitration and ADR, Report on “Decisions on Costs in International Arbitration” (2015) at p 3: party costs (including lawyers’ fees and expenses, expenses related to witness and expert evidence, and other costs incurred by the parties for the arbitration) make up 83% (on average) of the overall costs of the proceedings. In contrast, arbitrators’ fees account for only 15% (on average) of the overall costs.
(58)       See International Chamber of Commerce, Commission on Arbitration and ADR, Report on “Controlling Time and Costs in Arbitration” (2nd ed, 2018) (“2018 ICC Report”) at p 6.
(59)       See the Rules of Court 2021, Order 65. See also Sundaresh Menon CJ, “Procedure, Practice and the Pursuit of Justice”, keynote address at the Litigation Conference 2022 at paras 11–12.
(60)       See the State Courts Practice Directions 2021, paras 36(4)–36(6) (which provides that parties should file a “Court ADR Form” on Court alternative dispute resolution ("Court ADR”) options before the first Case Conference; that solicitors should take all necessary instructions from their clients to achieve an amicable resolution of the matter; and that the Court may manage the case by encouraging parties to negotiate and/or undergo the appropriate Court ADR modality, as well as by facilitating the use of such Court ADR modalities).
(61)       See the 2021 International Arbitration Survey at p 13: 27% of respondents selected “document production” as a procedural option they would be willing to forgo if this would make their arbitration cheaper or faster. Many interviewees emphasised that that document production could be a very costly and time-consuming process, and the time and cost involved were often disproportionate to the benefits that a party might hope to derive from this exercise. See also the 2018 ICC Report at p 12, para 52 (suggesting that the time and costs associated with requests for production of documents could be reduced by agreeing upon one or more of several options, such as: limiting the number of requests; limiting requests to the production of documents that are relevant and material to the outcome of the case; and presenting requests in the form of a Redfern Schedule).
(62)       See the 2018 ICC Report at p 14, para 77 (suggesting that parties’ counsel confer before the hearing on whether all witnesses need to give oral evidence); para 78 (suggesting that written witness statements might substitute for direct examination of witnesses at a hearing); and para 80 (suggesting that the time for cross-examination of witnesses by each party might be limited).
(63)       See the 2021 International Arbitration Survey at p 13: 61% of respondents selected “unlimited length of written submissions” as a procedural option they would be willing to forgo if this would make their arbitration cheaper or faster, and some interviewees suggested that page limits should also be set for arbitral awards, particularly in the context of investor-state disputes. 24% of respondents indicated a willingness to relinquish “more than one round of written submissions”.
(64)       See the 2021 International Arbitration Survey at p 13: 38% of respondents selected “oral hearings on procedural issues” as a procedural option they would be willing to forgo if this would make their arbitration cheaper or faster, while 25% selected “in-person hearings”. See also the 2018 ICC Report at p 10, para 31 (suggesting that case management conferences might be held by way of telephone or video-conferencing, without the need for a physical meeting) and p 14, para 71 (suggesting the use of telephone and video-conferencing for procedural hearings in particular).
(65)       See Sundaresh Menon CJ, “The Special Role and Responsibility of Arbitral Institutions in Charting the Future of International Arbitration”, keynote address at the Singapore International Arbitration Centre Congress 2018 (17 May 2018) at paras 2, 9, 12 and 21.
(66)       See the NJC Lecture at paras 29–30.
(67)       See Burlington Resources Inc v Republic of Ecuador, ICSID Case No ARB/08/5, Decision on Counterclaims (7 February 2017) at [52], [889], [1075(i)] and [1099].
(68)       See David Aven v The Republic of Costa Rica, Case No UNCT/15/3, Final Award (18 September 2018) at [738] and [742].
(69)       See International Bar Association, Climate Change Justice and Human Rights Task Force Report, “Achieving Justice and Human Rights in an Era of Climate Disruption” (July 2014) at p 14.
(70)       See, for example, the Permanent Court of Arbitration’s Optional Rules for Arbitration of Disputes Relating to the Environment and/or Natural Resources (2001), Arts 8(3) and 27(5).
(71)       See International Chamber of Commerce, Commission on Arbitration and ADR, “Resolving Climate Change Related Disputes through Arbitration and ADR” (2019) (“2019 ICC Report”) at paras 5.34–5.35.
(72)       See, for example, the 2019 ICC Report at para 5.66 and United Nations General Assembly, Report of the Special Rapporteur on the Issue of Human Rights Obligations Relating to the Enjoyment of a Safe, Clean, Healthy and Sustainable Environment, David R Boyd, “Paying Polluters: The Catastrophic Consequences of Investor-State Dispute Settlement for Climate and Environment Action and Human Rights” (13 July 2023) at paras 22–23.
(73)       See, for example, the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, and the International Centre for Settlement of Investment Disputes (ICSID) Arbitration Rules (1 July 2022), Chapter X: “Publication, Access to Proceedings and Non-Disputing Party Submissions” (which includes rules on matters such as the publication of decisions, awards and documents filed in the proceedings and the observation of hearings by third parties).
(74)       See the 2019 ICC Report at paras 5.67–5.69.}