Arbitration
...eement in the way that the arbitration will be stayed until security is provided. Mustill LJ's approach is a way of dealing with the potential conflict between the parties' intention as expressed in the arbitration agreement and the powers of the national courts. Against the involvement of the national court stands the ideal of 'transnationalism' and the idea that national courts shall not interfere in the practice of international arbitration and on the other side is the plain fact, that a national court may be the only court that has powers to rescue the arbitration. The question is where to draw the line. As mentioned by Mustill LJ total consistency - 'transnationalism' - cannot be expected . Each domestic court will have its own traditions for the relationship between arbitration proceedings and the courts, but the general approach is, that the domestic court in exceptional cases will support the arbitration, but that the national court in general should be "strict" in using it powers. In other words the national courts should use a "qualified discretion" taking into account the parties intention, the connection to England and all the circumstances of the case; and only in exceptional cases should the order be given. Curial law for international arbitrations with seat in Singapore In international arbitrations with seat in Singapore, the national courts and the arbitrators role are regulated in the International Arbitration Act (Chapter 143A) , which adopt the UNCITRAL Model Law and include further amendments and modifications to the Model Law in Part II. In s. 15 of the IAA it is today clearly stated, that if the parties have chosen to follow any rules of arbitration e.g. the ICC-rules as in the Ken-Ren case, this will not by itself exclude the application of the IAA . Further clarification of the understanding of s. 15 has been made in October 2002, after the comments made by the High Court in the Dermajaya case . In the Dermajaya case the question was also, as in the Ken-Ren case, related to security for costs. The parties had here chosen the UNCITRAL arbitration Rules, which were silent on whether an arbitrator has power to order security for costs. The judge held that the arbitrator, based on the IAA, s. 12 (1), had the power to order security for costs. However, the judge went on to say that since the UNCITRAL rules and the IAA were incompatible, only the IAA could apply. This created concern for, among other, international law firms, questioning the principle of party autonomy and right to choose institutional arbitrations rules when seat in Singapore. The amendment in October 2002 makes it clear that this is not the intention. Party autonomy in international arbitrations should be upheld, and the rules should be read together. Division of powers between the courts and the arbitration tribunals in international arbitrations The question is how the Singapore courts exercise the powers given in the curial law. In accordance with the provisions in the IAA the courts can intervene at different stages in the arbitration process - like before, during or after - and have either a supportive , supervisory or decisive role . A good example of a provision which aim to promote the arbitration institution is s. 6 in the IAA, which makes it clear that the court has a mandatory duty to stay proceedings and refer the parties to arbitration, unless it is clear that the arbitration agreement is either "null and void, inoperative or incapable of being performed". While s. 6 describes the courts mandatory duty to stay the proceedings, s. 6 (2) gives the courts the powers to impose terms with a stay order "upon such terms and conditions as it may think fit". This discretionary power is not found in Article 8 of the UNITRAL Model Law. Locknie Hsu has in an article from 2000 described the courts use of s. 6 (2) . In two cases, both from 1998, the judge Lai J. used the powers in s. 6 (2) to order the defendant to furnish a security, in what seems to be based on an "absolute discretion", and in the second judgment it was made even against an individual who was not a party mentioned in the court proceedings . Also in the Xanadu case it was stated that the power under s. 6 (2) could be used when it appears "reasonable or required by the ties of justice" . XXXXXXXXXXXX The wide powers to the courts in s. 6 (2) have raised concerns. The exercise of the additional power in s. 6 (2) makes it necessary for the judge to go into the merits of the case and can at the same time makes it difficult or impossible to maintain the stay condition, if the defendant is unable to raise the security. This does not seem to fit well to Article 8, which intention is to uphold the parties' decision of solving disputes via arbitration. In the Sundwind case the courts power under IAA s. 7 was discussed. The question was whether an order for security could be given, when the parties had not applied to stay the proceedings. The court found that this power was not available, but it at the same time stated that "if there was an application and an order to stay the proceedings pending arbitration, the court could order security…..as that would be wholly reasonable in the circumstances". The case do not given an guidance to how the court would use its discretion and if there in the term "reasonable in the circumstances" was a consideration of the facts in the case in view of the approach taken by Mustill LJ. The courts power to order security for costs, other than in relation to stays, can be found in s. 12 (6), which provides that the High Court or a judge thereof has the same powers in relations to arbitrations for making order in s. 12 (1) as it has for actions or matters in court . Interesting enough, this section has not been referred to in resent Singaporean cases. In Bilia A.B. V. Te Pte Ltd & Others, the court ordered security of costs with reference to section 388(1) of the Companies Act, and not s. 12 (6). OTHER CASES THAT SHOWS THE OPPOSITE??????????????? For courts???????? If not, indication that the courts forgot the specific nature of arbitrations and just follows the general powers in co. act and order 23……………….. According to the article by Locknie Hsu , the High Court in the Bilia case was prepared to follow the view of Goff LJ in the Bank Mellat case, in which he drew a distinction between "international arbitrations", where the court should decline an order for security for costs unless there are special circumstances and "general commercial arbitrations", which has a close connection to the English jurisdiction. In the Bilia case the judge found that the case fell within the category of "general commercial arbitrations", and security for costs could therefore be ordered without any requirements for exceptional circumstances. What is the role of the courts in Singapore law today? Based on the above it seems like there are still several open questions related to how the Singapore courts will apply the powers given within IAA in the area of international arbitrations. And no new cases seem to deal with the questions related to security for costs. ???????? As mentioned above the latest amendments of section 15 has clarified that the curial law is either the IAA or the AA and that the parties reference to e.g. the ICC rules, will not exclude the application of the IAA. Furthermore the IAA and a provision of rules of arbitrations shall be read together and shall not be read as inconsistent merely because one or the other is silent on a matter regulated in the other. This is one example on an area, where it has been important to show that "[the parties] choice of arbitration rules will be fully...