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Justice Andre Maniam: Speech delivered at ADR Symposium 2023

A REVIEW OF EMERGING THEMES IN ADR (2023 VERSION)

Keynote Address
Appropriate Dispute Resolution and the Role of the Courts

1 September 2023
Justice Andre Maniam
Supreme Court of Singapore


Senior Parliamentary Secretary for Law and Health, Rahayu Mahzam
Representatives of the International Bar Association, organisers, speakers, delegates
Ladies and gentlemen

Introduction

1. A very good morning to you all, and happy Polling Day!

2. Thank you for the opportunity to share my thoughts on Appropriate Dispute Resolution and the role of the courts.

3. I will address the role of the courts in steering the direction of dispute resolution, including the need to reshape the current framework, conflict prevention, and collaborative and non-adversarial resolution of disputes.

4. I will first discuss the concept of Appropriate Dispute Resolution, before turning to the role of the courts in relation to litigation, arbitration, and ADR (by which I mean, alternative dispute resolution – modes other than litigation and arbitration – modes such as mediation, neutral evaluation, expert determination, and conciliation).

A. Appropriate Dispute Resolution

5. The concept of Appropriate Dispute Resolution is not a new one. Indeed, I suggest that ever since there has been litigation in court, man has known of alternative ways of resolving disputes.

6. To take an example from popular culture, the “Ten Duel Commandments” in the musical Hamilton (about duels with pistols) included:

Number three!
Have your seconds meet face to face
Negotiate a peace
Or negotiate a time and place
This is commonplace, ‘specially ‘tween recruits
Most disputes die and no one shoots.

7. If that did not resolve the dispute, there was still

Number eight!
Your last chance to negotiate
Send in your seconds
See if they can set the record straight.

8. That recognised not one but two opportunities for amicable resolution, before the shooting starts.

9. I also highlight the Queen Mary Arbitration Survey 2021 which had London retaining its place at the top of the list of preferred seats, but for the first time this honour was shared with Singapore – a source of much pride.

10. I draw your attention however to another aspect of the same survey: 31% of survey respondents gave as their preferred method of resolving cross-border disputes, international arbitration (on a stand-alone basis), but 59% said their preferred method would be international arbitration together with ADR (ie, alternative dispute resolution). Thus, 90% of survey respondents said their preferred method of resolving cross-border disputes would include international arbitration, but most of them preferred arbitration together with ADR, rather than stand-alone arbitration.

11. A review of the same survey over the years shows the “arbitration plus ADR” option gaining in popularity, having been chosen by 34% of respondents in 2015, 49% in 2018, and 59% in 2021.

12. To that, I add an observation from the Singapore International Dispute Resolution Academy’s 2022 survey that many parties who pursue mixed-mode or tiered dispute resolution over stand-alone arbitration, are guided by concerns with preserving relationships, cost, and speed.

13. What then is Appropriate Dispute Resolution? It is a concept that recognises that the appropriate mode of resolving a dispute may vary between case to case, and it may even vary between phases or aspects of one case.

14. Adherence to one mode of dispute resolution, on a one-size-fits-all basis, is not appropriate now, and it is certainly not the way of the future.

15. In this regard, besides litigation and arbitration which are adversarial and result in a binding win-lose outcome, there are ADR options: not only mediation (for which Singapore championed the Singapore Convention), but also neutral evaluation, expert determination, and conciliation. There are also recognized ways of combining mediation and arbitration, such as Med-Arb, Arb-Med, and Arb-Med-Arb.

16. What then is the role of the courts in relation to arbitration or ADR? When the parties have chosen a mode chosen other than litigation, there may yet need to be recourse to the courts: to enforce the parties’ agreement regarding the mode they have chosen, to support the process by interim measures, to enforce the outcome reached, and so on.

17. Litigation itself remains an important mode of dispute resolution. In the first place there might be no agreement between the parties pursuant to which they could go to arbitration or ADR. 

18. The Singapore courts have embraced the concept of Appropriate Dispute Resolution. The courts certainly do not regard litigation as the best choice in all instances.

19. For instance, in HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v Toshin Development Singapore Pte Ltd [2012] 4 SLR 738 (“Toshin”) the Singapore Court of Appeal commented (at [68]) that “…the Parties’ dispute is a matter that ought to have been resolved by the application of commercial common sense in good faith through the mediation process, rather than through the adversarial curial process. Regrettably, each of the Parties has, in no small measure, contributed to this unhappy situation that has unnecessarily jeopardised a long-standing commercial relationship.”

20. The court concluded at [72] that “in the light of the questionable conduct of both of the Parties that has in turn stoked sterile litigation, we order that each of the Parties is to bear its own costs”.

B. The Courts and Litigation

21. Singapore has introduced new rules of court, which came into force on 1 April 2022, which are simpler and shorter; they aim to modernize the litigation process, enhancing efficiency and speed of adjudication.

22. Order 3 of the Rules sets out five Ideals which the Rules seek to achieve. The court will seek to achieve those Ideals in all its orders or directions, and all parties have the duty to assist the court and to conduct their cases in a manner which will help to achieve the Ideals. Those Ideals are:

(a) fair access to justice;
(b) expeditious proceedings;
(c) cost-effective work proportionate to – 

(i) the nature and importance of the action;
(ii) the complexity of the claim as well as the difficulty or novelty of the issues and questions it raises; and
(iii) the amount or value of the claim;

(d) efficient use of court resources;
(e) fair and practical results suited to the needs of the parties.

23. Fair, expeditious, cost-effective, efficient, practical, suited to the needs of the parties: these Ideals inform the courts’ attitude towards litigation, and also towards arbitration and ADR.

24. Under the new Rules, the courts play a more active role than was previously the case. As para 5 of the Civil Justice Commission Report 2017 states – “The new Rules seek to let the Court take control right after an action is commenced instead of leaving the parties to determine the pace and intensity of the proceedings”.

25. To that end, case conferences have been introduced into the process (under Order 2 rule 6). A case conference will be fixed after an originating claim or an originating application is issued. The introduction of case conferences is intended to give the court close control over the manner in which the case progresses leading up to the hearing on the merits.  The court is given wide powers to make various directions and orders at the case conference. These include:

(1) dismissing the action if no party attends the case conference or if the claimant is absent (Order 2 rule 6(2));

(2) dismissing the action if the claimant has not served the originating claim or originating action on the defendant, and the court is not satisfied that the claimant has taken reasonable steps to effect service expeditiously; and
(3) if the defendant is absent, giving judgment for the claimant if the claimant proves that the originating claim or originating application has been served on the defendant.

C. The Courts and ADR

26. The court seeks to ensure that parties are aware that there are ADR alternatives to litigation.

27. Order 5 of the Rules is on Amicable Resolution of Cases.

28. Order 5 r 1(1) imposes a duty on parties “to consider amicable resolution of the party’s dispute before the commencement and during the course of any action or appeal.”

29. That is coupled with r 1(2), which requires a party “to make an offer of amicable resolution before commencing the action unless the party has reasonable grounds not to do so.” Correspondingly, under r 1(4) a party “must not reject an offer of amicable resolution unless the party has reasonable grounds to do so.”

30. Rule 3 goes even further – r 3(1) empowers the court to “order the parties to attempt to resolve the dispute by amicable resolution”. And if a party informs the court that the party does not wish to attempt to resolve the dispute amicably, under r 3(3) the court may order the party to submit a sealed document setting out the party’s reasons for such refusal – that sealed document will only be opened after the determination of the merits, and may be referred to on any issue of costs. Under r 3(5), the court may suggest solutions for the amicable resolution of the dispute to the parties at any time as the court thinks fit.

31. Order 21 rule 4 complements the above, by providing that “The Court may disallow or reduce a successful party’s costs or order that party to pay costs, if that party has not discharged that party’s duty to consider amicable resolution of the dispute or to make an offer of amicable resolution in accordance with Order 5.” That goes beyond the traditional cost sanctions for not accepting an offer that was more favourable than the litigated outcome, or for unreasonable conduct of litigation.

32. Order 2 rule 6(6) on case conferences provides that “The Court will consider whether there is scope for the parties to resolve their dispute other than by litigation.”

33. To that end, the court sends out Pre-Case Conference Questionnaires before the first Registrar’s Case Conference. That questionnaire has a section reminding lawyers to apply their minds to Order 5 on amicable resolution of disputes, and to be ready to update the court about that at the first Registrar’s Case Conference.

34. That lawyers must consider amicable dispute resolution is further reinforced by the Supreme Court Practice Directions 2021 (“PDs”) and the Legal Profession (Professional Conduct) Rules 2015.

35. The PDs state that it is the professional duty of advocates and solicitors to advise their clients to consider amicable resolution of disputes as well as to give their clients sufficient information about the different ways in which their disputes may be resolved. The PDs use the abbreviation “ADR” to refer both to amicable resolution of disputes, and also Alternative Dispute Resolution (in Form B5) – indeed, the concepts are seen as synonymous, referring to ways of resolving disputes other than by litigation and arbitration.

36. Appendix D to the PDs provides guidelines for lawyers advising clients about amicable dispute resolution, and specifically, mediation, neutral evaluation, expert determination, and conciliation as alternatives to litigation.

37. The PDs also provide forms for parties who wish to attempt mediation or any other means of amicable dispute resolution to file and serve an ADR Offer, and for the other party to file and serve a Response to ADR Offer. 

38. Rule 17(2)(e) of the Professional Conduct Rules states that a legal practitioner “must in an appropriate case, together with his or her client – (i) evaluate whether any consequence of a matter involving the client justifies the expense of, or the risk involved in, pursuing the matter; and (ii) evaluate the use of alternative dispute resolution processes.

39. A recent local case illustrating the interplay between litigation and ADR (in particular mediation) is Maxx Engineering Works Pte Ltd v PQ Builders Pte Ltd [2023] SGHC 71 (“Maxx v PQ”).

40. In that case, the parties’ contract contained tiered dispute resolution clauses.

(1) there was first an ADR clause which stipulated:

1. “the parties shall endeavor to resolve the dispute through negotiations”;
2. “if negotiations fails, the parties shall refer the dispute for mediation”;
3. “for the avoidance of doubt, prior reference of the dispute to mediation…shall not be a condition precedent for its reference to arbitration…nor shall it affect either party’s rights to refer the dispute to arbitration under [the arbitration clause]”;

(2) there was then an arbitration clause that provided that disputes “not resolved by the parties in accordance with [the ADR clause]…shall [be referred] for arbitration”.

41. One of the parties referred the dispute to arbitration without referring it to mediation. The other party sought an order to compel reference of the dispute to mediation.

42. It was accepted that the parties were not obliged to mediate before commencing arbitration, it being expressly provided that mediation was not a condition precedent to arbitration. From that, the party who had commenced arbitration argued that it did not need to refer the matter to mediation at all, although the ADR clause used the phrase “shall refer” in relation to mediation, just like the arbitration clause used the same phrase “shall refer” in relation to arbitration.

43. The court held that the ADR clause which stipulated that “the parties shall refer the dispute for mediation” created an enforceable legal obligation on the parties to refer their dispute to mediation. The court further held that it would be just and equitable to order specific performance of this obligation, and made an order compelling the party who had started arbitration, to refer the dispute to mediation.

44. The court observed that three circumstances weighed in favour of it being just and equitable to order specific performance:

(1) First, “the mediation process would have provided both parties with the opportunity to resolve the dispute without incurring further legal costs or substantial delay.”

(2) Second, as emphasised by the Court of Appeal in Toshin at [45]: “[t]he choice made by contracting parties, especially when they are commercial entities, on how they want to resolve potential differences between them should be respected”.

(3) Third, the trend towards the promotion of amicable dispute resolution. The Court of Appeal in Toshin noted at [45] that … “negotiate in good faith” agreements do serve a useful commercial purpose in seeking to promote consensus and conciliation in lieu of adversarial dispute resolution. These are values that our legal system should promote.” We now have new Rules of Court with a rule on amicable dispute resolution, and ordering specific performance would be consistent with that trend towards and preference for amicable dispute resolution.

45. Maxx v PQ is significant for the Court’s citing of the trend towards the promotion of ADR (as embodied in Order 5 of the new Rules) as a reason for ordering a party to abide by its agreement to refer disputes for mediation.

D. The Courts and Arbitration
 
46. On 3 May 2023, the court issued a new Arbitration Guide by way of Registrar’s Circular No 1 of 2023, replacing the previous 2018 Guide.

47. Some of the features of the new Guide are:

(1) Summary of reasons: The affidavit in support of the arbitration Originating Application must include a short summary of the applicant’s reasons why grounds in support of the application are established. This focuses the applicant’s attention on the grounds of his application at the time it is made, and helps to avoid the case morphing as it proceeds through the various stages until the final hearing.

(2) Early hearing date: At the first RCC, the directions given may include the fixing of the hearing date – indeed, this will generally be done. Parties are to work with the court in the expeditious disposal of any arbitration OA hearing, and the Court will generally endeavour to fix the hearing for an arbitration OA within 8 to 12 weeks after the date of service of the arbitration OA.

(3) Limits on affidavits and written submissions:

i. There will generally only be one round of affidavits. Any further affidavits will require the permission of the court, which will be granted only in special cases.
ii. Written submissions are not to exceed 35 pages: Order 9, Rule 25(14) of the ROC 2021 and paragraph 105(2) of the Supreme Court Practice Directions 2021 (“SCPD 2021”), except with the permission of the court, which will be granted only in special cases.

48. I touch on two cases involving overlapping court and arbitration proceedings. First, Tomolugen Holdings Ltd v Silica Investors Ltd [2016] 1 SLR 373 where the court reviewed the principles to apply in dealing with such overlapping proceedings. The court stated at [186] that “the court, as the final arbiter, should take the lead in ensuring the efficient and fair resolution of the dispute as a whole.” The court noted that it was aiming to strike a balance between three higher-order concerns: first, a plaintiff’s right to choose whom he wants to sue and where; second, the court’s desire to prevent a plaintiff from circumventing the operation of an arbitration clause; and third, the court’s inherent power to manage its processes to prevent an abuse of process and ensure the efficient and fair resolution of disputes. The balance that is struck must ultimately serve the ends of justice.”

49. Tomolugen was recently followed in Anupam Mittal v Westbridge Ventures II Investment Holdings [2023] 1 SLR 349 (“Mittal v Westbridge”) where the Court of Appeal upheld an anti-suit injunction against proceedings commenced in India, in breach of an arbitration agreement. The court noted at [106] that two of the higher order concerns pulled in opposite directions:

(1) on the one hand, the appellant should be prevented from circumventing his obligation to arbitrate under a binding arbitration agreement;

(2) on the other hand, “the court is always concerned to ensure the fair and efficient resolution of disputes and making the parties undergo an arbitration which may result in an award that cannot be enforced may not conduce to such a resolution here.”

50. Mittal, the appellant, contended that the court should not compel him to arbitrate his disputes with Westbridge, for even if he won that arbitration, the award in his favour would not be enforceable in India.

51. The court, however, considered it too speculative to conclude that it was fruitless to conduct an arbitration just because of the possibility that the award would not be enforceable in India. The court noted that: “The process of the arbitration in itself could be beneficial to the parties in that it will compel them to collect and test their evidence and legal arguments and give them a strong indication of the strength of their respective cases. The determination of the tribunal could give rise to res judicata and estoppel points that would assist the appellant (and the respondent, of course) if after the issue of the final award, court proceedings have to be taken in India or elsewhere to implement (if not directly enforce) the award or the findings of the tribunal”.

52. Mittal v Westbridge is significant for the court’s recognition that the parties might benefit from their chosen mode of dispute resolution, not only from getting an enforceable outcome, but from the process itself. The same observation might be made about Maxx v PQ, for the court might compel parties to refer their dispute to mediation, but the court could not compel the parties to reach a mediated settlement. Both the destination, and the journey, matter.

53. As such, the court will analyse the actual and potential proceedings between the parties, and weigh competing considerations, in seeking to ensure “the efficient and fair resolution of the dispute as a whole” (Tomolugen). To that end, the court may order stays of proceedings or injunctions, to which conditions may be imposed.

E. Conclusion

54. Let me conclude by with some comments on the human element in dispute resolution. Generative AI is the talk of the town. But, by and large, decisions about dispute resolution are still made by humans: clients, lawyers, mediators, arbitrators, judges. (On that note, this keynote address was not drafted by Chat GPT!)

55. As you think about appropriate dispute resolution, be mindful of that human element. For instance: might your advice be influenced by what you are good at, or what your firm specialises in, when something else – or someone else – might be better suited to the circumstances?

56. And, what is it that your client really wants? To vindicate his reputation, to preserve a relationship, monetary compensation, to make a point of principle, etc?

57. Consider what Lord Neuberger said about mediation in his keynote address at the Civil Mediation Conference 2015 at para 11:

“People no doubt have many reasons for litigating without even trying to mediate first. Some people simply want their day in court; some people are so convinced that they will win, that they see no point in mediation; sometimes a party thinks that the other party won’t mediate in good faith; sometimes a party just can’t believe that the case is settleable; sometimes a party thinks that it is a fatal sign of weakness to propose or even agree mediation; and some people still just find the notion of mediation a bit weird. Perhaps the most telling evidence of human nature trumping good sense in this field comes from a 2007 survey, which reported that 47% of respondents involved in commercial litigation admitted that a personal dislike of the other side had been responsible for driving them into costly and lengthy litigation.”

58. There is no shortage of people who personally dislike each other, and so end up in court. Might they be better served if they resolved their disputes in some other way? If so, how might that be achieved?

59. I challenge you to embrace Appropriate Dispute Resolution, and make a difference.

60. I wish you all a fruitful symposium.

61. Thank you.

2023/09/06

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