ARBITRATION (FOREIGN AWARDS) BILL

Order for Second Reading read. 6.42 pm

The Second Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Arbitration (Foreign Awards) Bill is to enable Singapore to ratify the New York Convention on the Recognition of Foreign Arbitral Awards concluded on 10th June 1958.

Arbitration, rather than court proceedings, is the favoured means of resolving international commercial disputes. It is therefore important to the international business community that arbitral agreements and awards are recognized and easily enforced in as many countries as possible.

Under our present law there are two ways in which an arbitral award obtained in another country may be enforced in Singapore. The successful party may commence fresh legal proceedings for the purpose, or, where the arbitral award was made in a Commonwealth country to which the Reciprocal Enforcement of Commonwealth Judgments Act (Chapter 24) applies, register the award in the High Court. The first method is cumbersome and the second is available only in respect of awards made in a handful of Commonwealth countries.

On the other hand, the New York Convention provides a more convenient means of enforcing arbitral agreements and awards by simplifying the conditions and procedures governing the recognition of such agreements and awards at the international level. Briefly, the Convention provides for the recognition of arbitration agreements with an international element and the consequent staying of court proceedings concerning disputes which should be arbitrated. Secondly, provision is made for the recognition and enforcement in a contracting state of arbitral awards made in another country without the need to commence fresh legal proceedings. The successful party merely has to produce the duly authenticated original award or a duly certified copy of it. It will then be up to the other party to prove that the enforcement should not be granted.

It is desirable for Singapore to accede to the Convention. To do so will be in keeping with our position as an international commercial and financial centre. It will encourage the development of Singapore as an international commercial arbitration centre and provide a boost to the service sector of our economy. The local business community will also benefit in that an award made in Singapore may be enforced in other countries which are parties to the Convention. As of 1st January 1986, 69 states were members of the New York Convention.

The provisions of the Bill are modelled upon legislation prepared by the Commonwealth Secretariat for giving effect to the Convention. The Bill will not bar persons from enforcing arbitral awards under any other existing laws, and enforcement under the new law will not be less disadvantageous than enforcement under such other existing law.

It is considered desirable that Singapore makes a reservation to the effect that the Convention will apply to "awards made only in the territory of another Contracting State". This is because the principle of universality has not been widely accepted among the member states of the New York Convention and most of them have entered such a reservation upon their accession. Hence, the Arbitration (Foreign Awards) Bill will apply only to arbitral awards made in countries which are parties to the Convention.

Clause 3 of the Bill provides that the new law will be confined only to foreign awards made on or after the commencement of the new law. To permit the enforcement of awards made many years ago and not enforced for one reason or another might cause great trouble and expense to the parties concerned. Foreign awards made before the commencement of the proposed legislation will therefore be governed by the current law on the enforcement of arbitral awards.

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. - [Prof. S. Jayakumar].

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