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Tuesday, 22 May 2012
An era of new opportunities
Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed
Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed
By Hri Kumar Nair SC 17 May 2012
Two things are undeniable: Asia will be the engine of worldwide economic growth for some time and Singapore, if it plays its cards right, will have an important role in this. And Singapore has thus far been doing the right things. The evidence is clear. Businesses, like people, vote with their feet. More foreign companies and banks are opening offices here, more MNCs have chosen to site their regional headquarters here, and more talent is coming to work or explore opportunities.
The experience in the legal sector is no different. This cannot be better illustrated than the explosion of international arbitration work in Singapore, and its growing recognition as the leading international arbitration hub in Asia. In the 2010 White & Case International Arbitration Survey, Singapore was lauded as “the most popular Asian seat”. It ranked third on the list of most preferred seats by companies, tying with Paris and Tokyo, and behind only traditional powerhouses, London and Geneva. Singapore’s standing in international arbitration is most clearly reflected in the number of new cases handled by the Singapore International Arbitration Centre (SIAC). Last year, SIAC saw a significant spike in its caseload, receiving 188 new cases involving parties from over 40 jurisdictions. The total sum in dispute for cases filed in 2011 amounted to $1.32 billion.
These results are stellar, but unsurprising. They are not the result of accident or chance. The arbitration market stands on the shoulders of Singapore’s reputation as an important and conducive venue for commercial activity in Asia. We are a multilingual society, located between the two emerging economic giants, India and China. We are known for our political and social stability, efficiency and cutting-edge facilities. The competence and integrity of our judiciary is second to none. Our laws and political alliances make us a safe and neutral venue for the adjudication of cross-border disputes. Ultimately, our brand is that parties, regardless of origin, can be confident that their disputes will be tried fairly and efficiently in Singapore.
Singapore’s legal regime and institutional framework are also consciously geared towards making us a more arbitration-friendly country. The Singapore Courts constantly demonstrate their support of the international arbitration process, adopting a policy of minimal judicial intervention and a strong emphasis on party autonomy. SIAC is a top-notch arbitral institution which is rapidly gaining a strong foothold. Maxwell Chambers, Singapore’s world-class centre for international arbitration, boasts state-of-the-art facilities and houses arbitration bigwigs such as the International Chamber of Commerce.
More importantly, we are not standing still. The International Arbitration Act (IAA) has been continuously reviewed and revised to meet the needs of the international arbitration process, reflecting Singapore’s growing sophistication as an arbitral jurisdiction.
As more MNCs invest in Singapore, and there is a need to cross legislative and regulatory hurdles across various jurisdictions, Singapore’s latest move has been to further liberalise the legal sector. There are now more than 110 foreign law practices in Singapore. Structures have been put in place to allow foreign firms to form Joint Law Ventures and Formal Law Alliances with Singapore firms to enter into certain areas of local practice. In 2008, six foreign firms were granted licences under the Qualifying Foreign Law Practices (QFLP) scheme to similarly practise Singapore law. The Singapore government has recently announced its intent to award more QFLP licences by next year. The law has also been amended to allow foreign lawyers to be more easily called to the Singapore Bar, and for foreign firms and individuals to acquire an interest in local law firms.
Such liberalisation of the legal sector expands the available pool of legal expertise in Singapore to handle complex international disputes. The presence of foreign firms in Singapore, and their ability to practise Singapore law, would undoubtedly attract more international investors to choose Singapore as the place to do business, and the preferred venue to arbitrate disputes.
The message is clear - Asia is where the work is, and Singapore is the place to be. The legal industry needs to be well-equipped, responsive and quick to adapt. Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed.
Some are sceptical about these changes, and whether Singapore law firms, and Singapore lawyers, benefit from them. They unquestionably do. More than 50 per cent of the arbitrator appointments by the SIAC were Singaporean. More significantly, the quality, complexity and value of cases handled in Singapore have increased, thereby giving Singapore law firms the opportunity to be involved in more challenging work. Singapore lawyers, particularly the younger ones, have opportunities to work with and learn from leading arbitration practitioners from around the world, and develop and hone their own skills. That in turn will make Singapore lawyers more sought after to engage in arbitration work overseas. Far from being a threat, the growth of international arbitration work has provided a boost to the local legal sector, and to the development and retention of local talent. That has certainly been Drew & Napier’s experience.
Consider the alternative of doing nothing. In a globalised world with increasing cross-border transactions, parties will continue to turn to efficient, neutral venues to resolve disputes. Not encouraging arbitration in Singapore will not translate to more court work for local firms. It only encourages parties to go elsewhere to resolve matters. Countries which embrace arbitration will build up their reputations and continue to be the venue of choice, and others will always be trying to play catch up. These are the realities we have to accept. Singapore has made tremendous strides to close the distance with the traditional arbitration venues. We are now deservedly the premier venue for Asia, but others are doing their best to close the gap on us. We cannot afford to let up now.
The real challenge for local firms is to construct a model which will enable them to seize these new opportunities. Whether this is best done by expanding, forming alliances, merging or being assimilated by a foreign or larger firm is a difficult question, but one that must be confronted. The lack of such activity amongst local firms suggests that they are still finding their feet in the new environment, and there is uncertainty about how to more forward. It is, however, unlikely that they can adopt a wait and see approach much longer.
2 comments:
An era of new opportunities
Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed
By Hri Kumar Nair SC
17 May 2012
Two things are undeniable: Asia will be the engine of worldwide economic growth for some time and Singapore, if it plays its cards right, will have an important role in this. And Singapore has thus far been doing the right things. The evidence is clear. Businesses, like people, vote with their feet. More foreign companies and banks are opening offices here, more MNCs have chosen to site their regional headquarters here, and more talent is coming to work or explore opportunities.
The experience in the legal sector is no different. This cannot be better illustrated than the explosion of international arbitration work in Singapore, and its growing recognition as the leading international arbitration hub in Asia. In the 2010 White & Case International Arbitration Survey, Singapore was lauded as “the most popular Asian seat”. It ranked third on the list of most preferred seats by companies, tying with Paris and Tokyo, and behind only traditional powerhouses, London and Geneva. Singapore’s standing in international arbitration is most clearly reflected in the number of new cases handled by the Singapore International Arbitration Centre (SIAC). Last year, SIAC saw a significant spike in its caseload, receiving 188 new cases involving parties from over 40 jurisdictions. The total sum in dispute for cases filed in 2011 amounted to $1.32 billion.
These results are stellar, but unsurprising. They are not the result of accident or chance. The arbitration market stands on the shoulders of Singapore’s reputation as an important and conducive venue for commercial activity in Asia. We are a multilingual society, located between the two emerging economic giants, India and China. We are known for our political and social stability, efficiency and cutting-edge facilities. The competence and integrity of our judiciary is second to none. Our laws and political alliances make us a safe and neutral venue for the adjudication of cross-border disputes. Ultimately, our brand is that parties, regardless of origin, can be confident that their disputes will be tried fairly and efficiently in Singapore.
Singapore’s legal regime and institutional framework are also consciously geared towards making us a more arbitration-friendly country. The Singapore Courts constantly demonstrate their support of the international arbitration process, adopting a policy of minimal judicial intervention and a strong emphasis on party autonomy. SIAC is a top-notch arbitral institution which is rapidly gaining a strong foothold. Maxwell Chambers, Singapore’s world-class centre for international arbitration, boasts state-of-the-art facilities and houses arbitration bigwigs such as the International Chamber of Commerce.
More importantly, we are not standing still. The International Arbitration Act (IAA) has been continuously reviewed and revised to meet the needs of the international arbitration process, reflecting Singapore’s growing sophistication as an arbitral jurisdiction.
Liberalisation
As more MNCs invest in Singapore, and there is a need to cross legislative and regulatory hurdles across various jurisdictions, Singapore’s latest move has been to further liberalise the legal sector. There are now more than 110 foreign law practices in Singapore. Structures have been put in place to allow foreign firms to form Joint Law Ventures and Formal Law Alliances with Singapore firms to enter into certain areas of local practice. In 2008, six foreign firms were granted licences under the Qualifying Foreign Law Practices (QFLP) scheme to similarly practise Singapore law. The Singapore government has recently announced its intent to award more QFLP licences by next year. The law has also been amended to allow foreign lawyers to be more easily called to the Singapore Bar, and for foreign firms and individuals to acquire an interest in local law firms.
Such liberalisation of the legal sector expands the available pool of legal expertise in Singapore to handle complex international disputes. The presence of foreign firms in Singapore, and their ability to practise Singapore law, would undoubtedly attract more international investors to choose Singapore as the place to do business, and the preferred venue to arbitrate disputes.
The message is clear - Asia is where the work is, and Singapore is the place to be. The legal industry needs to be well-equipped, responsive and quick to adapt. Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed.
Some are sceptical about these changes, and whether Singapore law firms, and Singapore lawyers, benefit from them. They unquestionably do. More than 50 per cent of the arbitrator appointments by the SIAC were Singaporean. More significantly, the quality, complexity and value of cases handled in Singapore have increased, thereby giving Singapore law firms the opportunity to be involved in more challenging work. Singapore lawyers, particularly the younger ones, have opportunities to work with and learn from leading arbitration practitioners from around the world, and develop and hone their own skills. That in turn will make Singapore lawyers more sought after to engage in arbitration work overseas. Far from being a threat, the growth of international arbitration work has provided a boost to the local legal sector, and to the development and retention of local talent. That has certainly been Drew & Napier’s experience.
Consider the alternative of doing nothing. In a globalised world with increasing cross-border transactions, parties will continue to turn to efficient, neutral venues to resolve disputes. Not encouraging arbitration in Singapore will not translate to more court work for local firms. It only encourages parties to go elsewhere to resolve matters. Countries which embrace arbitration will build up their reputations and continue to be the venue of choice, and others will always be trying to play catch up. These are the realities we have to accept. Singapore has made tremendous strides to close the distance with the traditional arbitration venues. We are now deservedly the premier venue for Asia, but others are doing their best to close the gap on us. We cannot afford to let up now.
The real challenge for local firms is to construct a model which will enable them to seize these new opportunities. Whether this is best done by expanding, forming alliances, merging or being assimilated by a foreign or larger firm is a difficult question, but one that must be confronted. The lack of such activity amongst local firms suggests that they are still finding their feet in the new environment, and there is uncertainty about how to more forward. It is, however, unlikely that they can adopt a wait and see approach much longer.
Hri Kumar Nair SC is Director, Drew & Napier LLC
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