December, 2021 - SCMA Rules updated

The Singapore Chamber of Maritime Arbitration (“SCMA”) updated its rules on 1^st  December, 2021. The rules will apply to all arbitrations commencing on and after 1^st  January, 2022 and can be found here.

Introduction

The SCMA Rules were amended to ensure that they remain relevant, and to make arbitration proceedings “user-friendly, cost-effective, efficient, and as far as possible, fuss-free”.

We highlight a few key changes below.

Streamlining proceedings

1. Close of proceedings: To provide greater certainty on the length of the arbitral process, unless the parties agree or the tribunal otherwise directs, proceedings shall be deemed to be closed three months from the date of any final written submission or final hearing (Rule 27.1).
    
2. Tribunal’s power to prevent change of counsel: To prevent an abuse of process by parties changing representatives late in arbitration, the tribunal is empowered to withhold any approval to any party’s change of authorised representative if there is a substantial risk that such change might prejudice the conduct of the proceedings or the enforceability of any award (Rule 4.4).

Cost-effective measures

1. Two arbitrators may constitute the tribunal: To reflect current shipping arbitration practice, where parties have agreed that three arbitrators are to be appointed but have not agreed to the procedure for their appointment, unless the parties expressly agree otherwise, the two arbitrators once appointed pursuant to Rule 8.4 shall constitute the tribunal for the time being.  The two arbitrators may appoint a third arbitrator before any substantive hearing or without delay if they cannot agree on any matter relating to the arbitration (Rule 8.4(c)). Where a third arbitrator has not been appointed, or if the third arbitrator’s position becomes vacant, the remaining two arbitrators shall have the power to make decisions, orders and awards (Rule 33.2).
    
2. Oral hearings no longer mandatory: The tribunal has the discretion to decide if a hearing should be held or if the matter is to proceed on documents only. However, a hearing will be held if any party requests one (Rule 25.1).
    
3. Increased monetary threshold for expedited procedure: The Expedited Procedure, with a threshold dispute value of US$300,000, replaces the Small Claims Procedure in the earlier edition of the rules, which had a threshold value of US$150,000 (Rule 44). This procedure is meant to be a quick and cost-effective method to resolve a dispute using a sole arbitrator with no oral hearing unless the tribunal so requires, and the tribunal shall issue the award within 21 days from the date of receipt of all parties’ case statements where no oral hearing is fixed.

Adoption of electronic methods

1. Service by email: Service of any notice or communication by email to the addressee’s designated electronic mailing address is permitted (Rule 3.1(c)).
    
2. Virtual hearings and case management meetings: Case management meetings and hearings may be held in person, by telephone, by video-conference, or in any other manner the tribunal deems appropriate (Rules 17.3 and 25.3).
    
3. Electronic signing of awards: An award may be signed electronically and/or in counterparts (Rule 34.4).

Comments

The updates to the SCMA Rules are welcome as they aim to improve cost efficiency, and to streamline and modernise arbitral proceedings. Parties intending to adopt the SCMA Rules should consider using the model clause to avoid uncertainty as to the applicable law and forum for any dispute.