Arbitration gains ground in Singapore

Cases on rise from six recorded in 2009 to 46 last year

The Singapore Chamber of Maritime Arbitration (SCMA) plans to venture into other areas closely connected to the shipping industry

Dispute resolution under the SCMA is done on an informal basis, so it is difficult to judge the success of its attempts to gain a large slice of the global maritime caseload.

The problem is that arbitration under the SCMA is unadministered and the parties involved have no obligation to report to the chamber.

“It is hard for them to track the numbers. It is more of a marketing machinery that creates awareness,” said Singaporean maritime law stalwart Jude Benny of Joseph Tan Jude Benny.

Getting more feedback is something that SCMA executive director Dennis Chan would like.

“We need feedback and reporting. The data allows us to tweak the rules and develop different products that meet the industry’s needs,” he said.

Even though the data that SCMA does have may not give the full picture in terms of volume, it provides insight into how arbitration is gaining traction in Singapore.

The number of arbitrations has been rising steadily since 2009, when a mere six were recorded. Last year, the number reached 46, with 57% involving bunker claims. Charterparty disputes made up 35% and the rest were a mix of sale-and-purchase (S&P), shipyard and shipmanagement disputes.

“We expect a robust 2017. There has been a significant uptick in the number of cases since the fourth quarter of last year. We have already registered 17 cases during the first quarter of this year,” Chan said.

He credits this continued growth to the efforts of his predecessors during the early days of the organisation’s relaunch seven years ago.

“We are reaping the benefits of the work done before. The disputes being arbitrated today are a result of clauses that were inserted into contracts two, three, four years ago,” he said.

Benny concurs. “The SCMA needed a certain gestation period for clauses to come in,” he said.

John Simpson, managing partner of Ince & Co’s Singapore office, says a growing number of contracts have the SCMA written into them.

“That is the first step. What SCMA really needs is a big arbitration hearing to get it noticed,” he said.

The SCMA is funded by the Maritime & Port Authority of Singapore and the Singapore Maritime Foundation as part of their effort to build the country into a major maritime dispute-resolution centre.