22 June 2020

Singapore Expands Arbitration Options to Include Law of the Sea Disputes

This article was written by Patric McGonigal and Ramon Garcia-Gallardo.

At a virtual ceremony on 11 June 2020, Singapore's Minister for Home Affairs and Law, K Shanmugam SC and the President of the International Tribunal for the Law of the Sea (“ITLOS”), Judge Paik Jin-Hyun signed letters establishing the terms and conditions by which it was agreed that Singapore can now provide facilities to ITLOS whenever it is desirable for ITLOS to exercise its functions in Singapore.  It means that countries engaged in disputes over any dispute related to International Law of the Sea matters may now bring those disputes to ITLOS but have them seated in Singapore.

Established by the United Nations Convention on the Law of the Sea (“the Convention”) in 1982, ITLOS is a specialized international judicial body for the settlement of disputes relating to the law of the sea.  The Convention defines the rights and responsibilities of nations with respect to their use of the world's oceans, establishing guidelines for businesses, the environment, and the management of marine natural resources.  Currently, 167 countries and the European Union are parties to the Convention, with Singapore having itself ratified the Convention on 17 November 1994.

Although ITLOS is seated in Hamburg, Germany, it is expressly permitted to sit and exercise its functions elsewhere whenever it considers this desirable.  Therefore, State parties to a dispute before ITLOS may propose that ITLOS meets at a place convenient to them.  The agreement between Singapore and ITLOS, the first of its kind, means that State parties may now propose Singapore as a convenient jurisdiction in preference to Hamburg.

This is a welcome development because although the agreement is the first of its kind in so far as ITLOS is concerned, it in fact resembles a similar agreement for the provision of facilities for arbitral disputes administered by the Permanent Court of Arbitration (“the PCA”) that was concluded between Singapore and the PCA in 2007 (i.e. a ‘Host Country Agreement’).  Therefore the agreement between Singapore and ITLOS should make recourse to ITLOS more accessible, particularly as the East and South China Seas are home to a number of escalating territorial disputes between China and its neighbours, including Japan, Vietnam, and the Philippines.  Proceedings like these have been transferred in the past to ITLOS and heard by it under the auspices of the PCA in The Hague.  As such, for Asian states, the agreement with Singapore makes a transfer a more attractive proposition as proceedings will be heard closer to home in Asia, but – critically – in a completely neutral venue.

The conclusion of this agreement comes at a time when Singapore continues to enhance its reputation as the leading international dispute resolution hub in Asia through initiatives such as the recent (2017) change in legislation permitting the use of litigation funding in Singapore for international arbitration and related mediation cases as well as the ratification of the Singapore Mediation Convention – a UN Convention which paves the way for the direct enforcement of cross border settlement agreements resulting from mediation (due to come into force on 12 September 2020).  Moreover, parties are increasingly looking to Singapore as a venue for investor-state claims and the Singapore International Arbitration Centre (SIAC) continues to set records in terms of both the number of new cases received each year as well as the total quantum involved (479 and US$8.09 billion respectively in 2019).

Singapore’s ever strengthening reputation and commitment in this regard was reflected by comments made by both the Ministry and ITLOS in a joint press release to announce the new agreement when Minister Shanmugam stated that the agreement “reaffirms Singapore’s commitment to the international rule of law and the peaceful settlement of disputes and is an endorsement of Singapore as a neutral venue for the effective settlement of international disputes.”  Impressed by the range of facilities and flexible mechanisms for settling disputes available in Singapore, the President of ITLOS added that “the current COVID-19 pandemic causes the Tribunal to be more innovative and explore methods utilizing modern technology that would enable it to operate effectively despite wide-ranging restrictive measures taken around the world.”

In short, the agreement is yet a further feather in Singapore’s cap as the leading global center for international dispute resolution in Asia.

For clients of King & Wood Mallesons domiciled in the Asia Pacific region and involved in maritime and shipping activities, the opportunity to have a dispute before ITLOS heard in Singapore is no doubt a welcome development.  King & Wood Mallesons has a strong track record in State to State arbitration in international law of the sea matters. The firm regularly acts in contentious cases before ITLOS and before international arbitration panels, set up under the Convention’s rules and has represented several governments in law of the sea cases which were settled amicably.  KWM has acted, among others, in landmark cases such as in The Camouco, The Monte Confurco and The Juno Trader.  KWM has advised and/or represented the governments (and all ship related interests including owners, charterers, cargo owners and crew) of Canada, Seychelles, Panama, Indonesia, Guinea-Bissau, Malta, The Marshall Islands and Ivory Coast.

 

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