New SCMA rules: reflecting the new world of arbitration


290Jhe Singapore Chamber of Maritime Arbitration (SCMA) provides a framework for maritime and international commercial arbitrations.
Singapore-based SCMA arbitration is the default choice for dispute resolution under the Singapore Standard Code of Practice for Bunkering and the Singapore Vessel Sales Form.

It is also listed as one of the Default Choices in BIMCO Arbitration Clause and Law 2020 and NYPE Time Charter 2015 and therefore a popular choice for maritime arbitrations.

The SCMA recently launched the 4th Edition of its Rules, which will govern any SCMA arbitration commenced on or after January 1, 2022.

What changed?
The new rules change the procedure throughout the arbitration process, starting with the service of documents.

Under Rule 3.1, any notice or communication sent by email with proof of delivery or receipt is deemed to have been actually given and received. Service in person, by courier or by post is still permitted but is no longer required.

Rule 44 introduces an expedited procedure for claims/counterclaims whose value does not exceed USD 300,000.

This replaces the Small Claims Procedure, which had a lower claim/counterclaim value of $150,000. The accelerated procedure aims, when no hearing is required, for the sole arbitrator to render his award within 21 days.

Appointment of arbitrators
In terms of the procedure for appointing arbitrators, it is no longer necessary to appoint a third arbitrator for the arbitration to continue.

Instead, SCMA arbitrations can now progress after the appointment of two arbitrators until the two arbitrators fail to agree on a matter relating to the arbitration, or until just before the hearing oral evidence, when a third arbitrator must be appointed (rule 8.4) .

Consequently, the appointment of a third arbitrator is no longer necessary if the case proceeds on documents only and the court agrees on the award.

In addition, the SCMA has introduced the Standard SCMA Appointment Conditions. Under Rule 40.2, an arbitrator is appointed in accordance with the Rules and the parties are deemed to have accepted those terms, unless expressly agreed otherwise.
The Terms address independence and impartiality, arbitrator fees and expenses, and guarantee of arbitrator fees.
The new rules also provide in Article 4.4 that once the tribunal is constituted, it is no longer possible for a party to change legal representatives without the approval of the tribunal.

Oral hearings
When it comes to determining the dispute, the default position under the new rules in Rule 25.1 is that arbitration will be determined on documents only. If the parties require an oral hearing, they must request it, otherwise the court may decide that there should be an oral hearing.

If there is to be an oral hearing, it is now clear that this, as well as the case management conference, can take place virtually (see rules 17.2 and 25.3).

This was not clear under the previous rules, which made no reference to hearings held by videoconference or telephone, nor expressly gave the court discretion to conduct the hearing “in any other manner that the Court deems appropriate. “.
Despite this shift, hearings have increasingly been held virtually, particularly over the past two years, and in October 2020, the SCMA issued Model Instructions for Virtual Hearings and accompanying guidelines.

This clarification, like many changes made to the 4th edition, is consistent with those recently made to other arbitration rules such as the London Maritime Arbitrators Association (LMAA), London Court of International Arbitration (LCIA) and the ICC. International Court of Arbitration.

They also reflect the wishes of the parties. In the ‘2021 International Arbitration Survey: Adapting Arbitration to a Changing World’, one of the top reasons cited for choosing an arbitration seat was ‘administrative/logistical support for virtual hearings’ with 79% of respondents indicating that they would prefer to move forward with a virtual hearing over the 16% who would postpone until they can hold one in person.1

Fiona Cain, Attorney, Haynes and Boone, LLP

Closing of the debates
Under the old rules, it was up to the court to decide when to declare the proceedings closed. This created uncertainty and sometimes delayed the delivery of prizes.

An amendment made to the 4th edition provides, in Article 27.1, that the procedure is now deemed to be closed 3 months from the date of the final written submissions or the final hearing. It remains up to the parties to agree or the court to order otherwise, but this change will provide greater certainty as to the closing date for the majority of SCMA arbitrations.

Sign the price
Finally, when it comes to making the award, it is now open to the court to sign the award electronically and/or in counterpart (see rule 34.4).

Again, this is a change that has been welcomed in many arbitrations during the pandemic as it eases logistical issues and allows the award to be rendered more efficiently.

The rules recognize that an electronically signed award can cause enforceability issues in some jurisdictions, so a party can always request handwritten signatures.

Overall, these new rules recognize the changes the arbitration world has had to make over the past two years to allow arbitrations to proceed despite travel restrictions and the reunion of people in many jurisdictions, including Singapore.
The SCMA said when announcing the new rules that they would ensure that SCMA arbitrations remain relevant and attractive to parties while enhancing profitability for parties.

Time will tell if this is indeed the case and if SCMA arbitrations remain a popular choice for maritime disputes.

1. International Arbitration Survey 2021: Adapting Arbitration to a Changing World – https://arbitration.qmul.ac.uk/research/2021-international-arbitration-survey/
Source: By: Fiona Cain, Attorney, Haynes and Boone, LLP

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