Supreme Court of Judicature (Amendment) Bill

Mdm Speaker, I rise to support the Bill. I will deal with the provisions establishing the Singapore International Commercial Court (SICC). Before that, I declare my interests as a lawyer practising in cross-border disputes.

The Bill represents a bold move towards cementing Singapore's position as a leading destination for international dispute resolution. The growth of cross-border investment and trade, particularly in Asia, heralds a corresponding increase in demand for first-rate, efficient and dependable dispute resolution mechanisms. That is the value proposition, the brand, Singapore is able to offer in Asia. More than a few Asian clients have told me that they regard the Singapore system as one which will give a fair, just and reasonably expedient outcome. And so if two or more parties from different Asian countries enter into a deal, they will likely want their disputes to be settled in a neutral environment, and with the assurance that the outcome will be determined on the merits of the case and on the merits alone. And we have seen the results of that confidence in Singapore. Singapore is today regarded as the leader in Asia for arbitration, and the number of new cases handled by the Singapore International Arbitration Centre (SIAC) is increasing steadily. And this, as the Minister said in the last Bill, did not happen by luck or accident.

But not all disputes can be arbitrated, and there remains an opportunity to provide a platform for international parties to resolve their differences in a court setting. The establishment of the SICC is a bold and creative move to fill that gap. With our well-developed legal infrastructure and reputable judiciary, and also our willingness to allow experienced judges and practitioners from elsewhere to participate, the SICC represents a new way of thinking about international dispute resolution.

I would like to deal with several aspects of the Bill.

First, a large number of details concerning the SICC will be prescribed by subsidiary legislation, that is, they will be issued without scrutiny and debate in this House. This is no doubt understandable and warranted for technical details and procedural matters. For example, rules governing how questions of foreign law will be determined and rules governing court procedures and practices in the SICC are suitably dealt with by rules. However, I question why important and fundamental aspects of the SICC should not come directly under Parliament's purview.

One such aspect is the SICC's jurisdiction. This is governed by the proposed section18D, which sets out three conditions that must be fulfilled for the SICC to have jurisdiction over a dispute. First, the action must be international and commercial in nature. Second, the action

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must be one that the High Court may hear and try in its original civil jurisdiction. And then we come to the third condition, which states that the action must satisfy "such other conditions as the Rules of Court may prescribe". Given that these three conditions must be fulfilled together in order for the SICC to have jurisdiction over the action, the conditions prescribed by the Rules of Court are pivotal.

Further, the new section 80(2A)(b) allows rules to be made to prescribe what constitutes "an action of an international and commercial nature". This should be contrasted with section 5(2) of the International Arbitration Act (Cap 134A) which specifically defines what an international arbitration is.

What this means is that Parliament has no direct control over a matter as fundamental as the SICC's jurisdiction. I would like to ask the Minister why this cannot be prescribed in the Act. And what are the definitions and conditions that will be prescribed by the Rules of Court that cannot be set out in the Bill? Section 18D can be contrasted with sections 15-22 of the SCJA, which sets out the jurisdiction of the Singapore High Court in a straightforward fashion. I understand the purpose is to allow flexibility. But there should be a balance between certainty and flexibility, particularly on fundamental issues like jurisdiction.

My second point concerns the pre-action certificate. This is governed by section 18E of the Bill. According to this provision, parties intending to bring an action in the SICC may apply for a pre-action certificate to state that the intended action is international and commercial in nature for the purposes of the jurisdiction of the SICC and that such matters as the Rules of Court prescribe had been satisfied. I understand the rationale is to ensure that only the proper cases are brought before the SICC. My concern is that it adds an extra layer to the process of making a claim to the SICC, and will have implications on time and costs, therefore making the SICC less attractive. The method prescribed by the Act is for parties to file an original summons – I know it is supposed to be heard on expedited basis, but could there have been a simpler way to get the pre-action certificate issued. And could the Minister elaborate on how this application will be expedited?

Third, I would like to comment on section 18J, which provides for the transfer of cases from the SICC to the High Court and vice versa. Again, the details governing such transfers will be set out in the Rules of Court. Nonetheless, cases properly brought before the High Court, may, without the consent of the parties, be transferred to the SICC. Such transfers may affect costs because the SICC fees may differ from High Court fees. Such transfers may also have an impact on certainty as the SICC Rules and practice directions will now govern the proceedings. Further, foreign rules of evidence may apply to the proceedings and foreign representation may be allowed. These factors may not have been contemplated by the parties when they first brought the dispute to the High Court. Therefore, I would like to

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clarify the circumstances in which a transfer may be made.

My fourth point has to do with representation by foreign lawyers in the SICC. This is provided for by section 18M of the Bill. The provision states that a party to a case in the SICC may, in accordance with the Rules of Court, be represented by a foreign lawyer who has been registered under Part IVB of the Legal Profession Act. This implies that there are two pre-requisites for foreign representation: first, the Rules of Court must permit it; and secondly, the lawyer must be duly registered. Again, I would like to seek clarification from the Minister regarding the Rules. What are the conditions that must be satisfied before a party can be represented by a registered foreign lawyer? For example, will foreign representation be restricted to cases governed by foreign law?

My final point has to do with our goals for the SICC and this is a broader point. There is no doubt that there is great interest internationally in the SICC. I have lost count of the number of times foreign lawyers visiting Singapore have asked my colleagues and me about it. The simple question is this: how will we define its success? Does the Ministry have benchmarks it expects the SICC to meet, whether in terms of the number of cases, the value of disputes, the growth of the legal sector or even the direct or indirect revenues it generates for Singapore and Singapore businesses? In short, do we have a list of KPIs which we hope the SICC will meet?

I thank Mr Hri Kumar for supporting the Bill. I will address the questions that he raised or at least try to address them. Mr Kumar's first concern is that a number of details and issues concerning the SICC will be set out under subsidiary legislation, for example, those relating to SICC's jurisdiction.

Section 18D provides three requirements to be satisfied before the SICC will have jurisdiction to hear any action. As Mr Kumar noted, the three requirements are cumulative. So, for SICC to have jurisdiction, it must first be an action that can be heard by the High Court under its original civil jurisdiction. Second, there is the additional requirement to show that the action is international and commercial. So, that circumscribes the nature of the cases. The Rules of Court cannot enlarge the jurisdiction of the SICC. It can refine it, it can define it, but it cannot enlarge what is set out in legislation.

Ultimately, Parliament, of course, has direct control over the ambit of SICC's jurisdiction. For example, if necessary, we can enact further laws. At this stage, we have not sought to

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define it with too much precision, because the objective is to attract international and commercial cases to Singapore and we took the approach that flexibility is key and that is best achieved through putting it under the Rules of Court. The Rules Committee is chaired by the Chief Justice and includes the Attorney-General, Judges and Members of the Bar.

I will come back to the type of cases the SICC will hear, but let me first deal with the pre-action certificate question governed by section 18E of the Bill. This is an optional step for parties to take. It is not required, it is not essential, but sometimes parties do not want to start and then face an objection that the case is not appropriate. So, if you wanted to have a higher level of certainty, you will go and apply for the certificate. And because the SICC is new and untested, parties would be very uncertain as to whether it will or will not have jurisdiction, or how it will resolve threshold issues. They may not even be sure if their dispute is international or commercial in nature, which are jurisdictional requirements. So, we thought that it would be advantageous for parties to be able to apply for such a certificate in advance of the actual proceedings commencing. We considered other options, a number of options, and we spent a lot of time thinking about this. But in the end, we thought that allowing this pre-action certificate is the easiest and it will be certified by the Court.

The third point that Mr Kumar made relates to the Court's power to order a transfer of cases from the High Court to the SICC and vice versa. The rationale is to allow the cases to be heard in the Court which is more appropriate, rather than again trying to set it in stone upfront, and the Rules of Court again are expected to set out the detailed procedure for such transfers. Section 18J(3) contemplates the Court making consequential orders to address the procedural and other issues that Mr Kumar raises.

On the adoption of foreign rules of evidence and foreign representation, these are optional. Unless the parties make the necessary application, the status quo will prevail, which means the Singapore rules of evidence apply and parties will continue to be represented by local counsel. So, when can parties be represented by foreign lawyers in the SICC? We envisage a system of registration. They will have to register under the Legal Profession Act to appear in the SICC. There will be two types of registration – either a full registration or a restricted registration. I will deal with the requirements for registration in the Legal Profession (Amendment) Bill. Basically, in essence, foreign lawyers will only be allowed to appear in cases defined in the Rules of Court. These could be cases which are governed by foreign laws or have no connection to Singapore, or Singapore law cases but with an element involving foreign law, and you want a foreign lawyer to come and argue that specific foreign law part. So, subject to that, for Singapore cases, it is not envisaged that they will come and argue.

If you look at the report of the SICC Committee, there can be situations where a case involves Singapore law but has no substantial connection to Singapore. Foreign parties, with

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disputes arising overseas, but Singapore law has been chosen for some reason. In such situations, foreign counsel may be permitted to appear, but the objective is a very different one. It is to persuade parties to choose Singapore law as a choice of law, which will be beneficial for our legal industry.

Finally, on the question of how the success of the SICC will be defined, I think the data is important, like the number of cases filed and disposed, the values of the claims, which is very much the way we look at arbitration. Everyone knows it is a success now. I think it is not going to be possible to precisely track the direct and indirect economic benefits. But we have to define "success" at two levels: one, the number of cases and the type of claims that have come through; and, second, also, the intangible, which is how it positions us as a legal hub, as a place to go to in all of Asia. So, if you sit anywhere in the world and you think of a dispute resolution in the Courts, in a neutral forum, would you think of Singapore? That is what we want to try and achieve. To some extent, we are the only jurisdiction in Asia now that can even think of it. It is not going to be easy. It is not going to be achieved any time soon, but we have to try. And this is an attempt.

*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 K Shanmugam].*

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