ARBITRATION (AMENDMENT) BILL

Order for Second Reading read. 3.09 p.m.

The Minister for Home Affairs (Mr Chua Sian Chin): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Our Arbitration Act (Chapter 16) was enacted in 1953 and based upon the United Kingdom Arbitration Act, 1950. In 1979 the United Kingdom Act was amended to implement a number of law reforms recommended in the Report on "Arbitration" by the Commercial Court Committee.

The Bill before this House seeks to introduce the recent changes made in the United Kingdom to assist our commercial community resolve their disputes more speedily.

Clause 2 amends section 8 which deals with the power of the High Court to appoint an arbitrator or umpire in various circumstances. At present, the High Court has no power to make the appointment if the arbitration agreement provides that it shall be made by a stranger (e.g. the President of a professional body) and he fails or refuses to make the appointment. Clause 2 seeks to amend section 8 to fill this gap.

Clause 3 repeals and re-enacts section 10 to provide that in any case where there is a reference to three arbitrators, the award of any two of them shall be binding. At present, where an arbitration agreement provides that the reference should be to three arbitrators, one to be appointed by each of the parties and the third by the arbitrators, section 10 of the Arbitration Act converts the third arbitrator into an umpire. As such, he has no jurisdiction unless and until the other two arbitrators disagree. This is unfair to those people who favour three-arbitrator agreements.

Clause 4 repeals and re-enacts section 28 to provide a new procedure for judicial review of arbitration awards. The present procedure by way of "case stated" will be replaced by a limited right of appeal to the High Court on points of law. The present procedure is capable of being used by undeserving parties for the purpose of delaying the evil day when they are to meet their liabilities. The clause also empowers the High Court to order an arbitrator or umpire to state the reasons for his award in sufficient detail.

Clause 5 enacts new sections 28A, B, C and D. The new section 28A gives the High Court jurisdiction to determine preliminary points of law arising in the course of references to arbitration. Such a measure will produce substantial savings in costs to the parties.

The new section 28B provides for the right to make agreements excluding the jurisdiction of the High Court to review an arbitration award.

The new section 28C provides that in the case of arbitrations not involving foreign nationals or companies (i.e. domestic arbitrations), the right of appeal to the High Court can only be excluded after the arbitration has begun. This is to prevent a party who is in a weak bargaining position (e.g. a consumer or small trader) from being bullied into agreeing in advance to forgo the limited right of appeal to the High Court. It is felt that foreign nationals or corporations who choose Singapore as the venue for the settlement of their disputes by arbitration should be permitted to exclude the jurisdiction of the courts so that the decisions of the arbitrators will be final and conclusive, enabling such disputes to be resolved at an early date.

The new section 28D empowers the High Court to authorise an arbitrator or umpire to proceed with the arbitration where a party fails to comply with an order given by the arbitrator or umpire. This is to discourage parties to a reference from disobeying the orders of an arbitrator.

Clause 6 repeals and re-enacts a new paragraph 2 of the First Schedule to the Arbitration Act, to provide that an umpire need not be appointed immediately unless the arbitrators cannot agree among themselves.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Chua Sian Chin].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clause I -

The Chairman: The citation year will be altered from "1979" to "1980".

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 4 inclusive ordered to stand part of the Bill.

Clause 5 -

The Chairman: The citation year in page 6, line 6, has also to be altered from "1979" to "1980". This will be done.

Clause 5 ordered to stand part of the Bill.

Clause 6 ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.