International Arbitration 2022 Comparisons

Singapore is an established seat for international arbitrations. In particular, it has become the seat of choice for investors across Asia looking for a neutral forum and independent arbitral tribunal in light of the speed with which the region has embraced international commercial arbitration. Singapore tied for first place with London as the top seat of arbitration in the world in the 2021 international arbitration survey by Queen Mary University of London and White & Case.

International commercial arbitration has become the preferred method of resolving disputes across a wide spectrum of industries, particularly where the transactions have a cross-border element or involve parties from more than one jurisdiction. Singapore has also increasingly become the seat of choice for investor-state disputes for investors in the region. This has been aided by the increasing number of investor-state arbitration-related decisions by the Singapore courts. The detailed and carefully reasoned decisions by the Singapore courts lend credence to the viability of Singapore as the seat of choice for investors and states alike.

Consistent with Singapore’s reputation as a leading venue for dispute resolution, various dispute resolution institutions in Singapore showed their ability to adapt immediately to the difficulties associated with the COVID-19 pandemic, which peaked in 2020–2021.

Within three days of the Singaporean government’s announcement that it would be imposing enhanced measures to control the spread of COVID-19 in Singapore (including the closure of most workplaces with effect from 7 April 2020), the Singapore International Arbitration Centre (SIAC) issued a press release to assure users that it would remain fully operational with all staff available. The SIAC also issued a case-management update to inform users of procedures that had been moved online.

The Singapore International Mediation Centre (SIMC) launched an SIMC COVID-19 Protocol. Key features of the protocol include reduced fees and the conducting of mediation online.

Maxwell Chambers, a prominent hearing venue in Singapore, was also quick to adapt to the conducting of hybrid and virtual hearing solutions so that users could conduct hearings with safe distancing measures in place and reduce the need for travel for international parties.

Although travel restrictions have since largely lifted, the SIAC and the SIMC continue to readily offer both virtual and hybrid facilities.

Singapore is an international arbitration hub and sees disputes being resolved across a wide spectrum of industries, including treaty cases. The SIAC’s Annual Report for 2021 identified the trade sector as having the largest proportion (30%) of the number of cases it has handled. The trade sector involves sale and purchase of goods. Singapore continues to attract high-value project and infrastructure disputes in a wide range of sectors, including the energy and resources space.

Singapore is home to many arbitral institutions, such as the Permanent Court of Arbitration, the ICC, the Singapore Chamber of Maritime Arbitration and the SIAC. The SIAC, established in 1991, is generally the preferred institute among many Asian-based users. The ICC management office was established in 2018 and has seen a steady flow of administered cases during the past four years.

Applications and disputes relating to international arbitrations are heard by the General Division of the High Court or the Singapore International Commercial Court (SICC). These applications include:

• a party’s appeal against the tribunal’s ruling of jurisdiction;
• enforcement of orders or directions made by an arbitral tribunal as court orders;
• an application for a court-ordered interim measure;
• an application for subpoena to testify or produce documents;
• enforcement of awards; and
• the setting-aside of awards.

An application for a stay of proceedings to enforce an arbitration agreement may be heard by the General Division of the High Court, District Court, Magistrates’ Court or any other court in which proceedings are instituted, per Section 6 of the International Arbitration Act (IAA) (Chapter 143A).

The IAA governs international arbitration in Singapore. According to Section 5(2) of the IAA, an arbitration is “international” if:

• at least one of the parties has its place of business outside Singapore at the time of conclusion of the arbitration agreement;
• the agreed place of arbitration is situated outside the state in which the parties have their place of business;
• the place where a substantial part of the commercial relationship’s obligations are to be performed – or the place to which the subject matter of the dispute is most closely connected – is situated outside the state in which the parties have their place of business; or
• the parties have expressly agreed that the subject matter of the arbitration relates to more than one country.

The IAA essentially enacts (and incorporates as its First Schedule) the 1985 UNCITRAL Model Law (the “Model Law”), except for Chapter VIII and a few statutory modifications. Departures from the Model Law are listed in Part II of the IAA. The primary legislative intent behind the IAA was to implement the Model Law (Singapore Parliamentary Reports 31 October 1994).

Various elements of the 2006 UNCITRAL Model Law have also since been incorporated into the IAA. Section 3 of the IAA states that "the Model Law, with the exception of Chapter VIII thereof, shall have force of law in Singapore".

A comprehensive set of amendments to Singapore civil procedure had taken effect as of April 2022, pursuant to the Courts (Civil and Criminal Justice) Reform Act 2021. These amendments:

• simplify the names of court documents and minimise legalese; and
• aim to provide for more efficacious litigation by generally shortening timelines and streamlining procedures.

Two aspects of these changes bear noting, as they affect court-related arbitration matters.

First, court proceedings relating to arbitration matters under the IAA are presumptively private. The previous Section 22 of the IAA states: “Proceedings under this Act in any court are, on the application of any party to the proceedings, to be heard otherwise than in open court.” The amendments do not only replace the phrase “otherwise than in open court” with the more succinct “in private”, they also provide for this privacy as a starting point (unless the court orders otherwise). The new Section 22 provides as follows:

• subject to Subsection (2), proceedings under this Act in any court are to be heard in private.
• proceedings under this Act in any court are to be heard in open court if the court, on its own motion or upon the application of any person (including a person who is not a party to the proceedings), so orders.

Second, the amount of time a party has to serve court papers (eg, for setting aside an arbitral award) has been significantly reduced.

Prior to these amendments, the typical originating process when applying to set aside an award was known an originating summons and was valid for service out of jurisdiction for one year.

Under Singapore’s new civil procedure, the originating summons is now called an originating application and – crucially – the period of validity has been shortened to three months. There is an additional obligation on the claimant to take reasonable steps to serve the papers on the respondent “as soon as possible and, in any event, within 28 days after the originating application is issued”.

An arbitration agreement must be in writing. However, even if it is concluded orally – by conduct or any other means – it is still considered to be in writing (and, therefore, valid) if its contents are recorded in any form (Section 2A of the IAA).

The only disputes that may not be referred to arbitration are those that will be contrary to public policy if resolved by arbitration, as per Section 11 of the IAA and Section 48(1)(b) of the Arbitration Act (AA). As such, custody disputes, the granting of statutory licences, the validity of registration of trade marks or patents and some anti-competition matters (such as matters regulated under Singapore’s Competition Act) may not be arbitrated. Likewise, claims of unfair preference in respect of insolvent companies are not arbitrable, as these claims affect the substantive rights of other creditors (Larsen Oil and Gas Limited v Petroprod Ltd (2011) 3 SLR 414).

The general approach on arbitrability in Singapore is set out by the Singapore Court of Appeal in Tomolugen Holdings v Silica Investors Ltd (2015) SGCA 57. The arbitrability of a dispute is presumed as long as it falls within the scope of an arbitration clause. However, this presumption may be rebutted if it can be shown that Parliament intended to exclude a particular type of dispute from being arbitrated or if permitting arbitration would be contrary to public policy.

Such non-arbitrable matters include certain claims arising upon insolvency (for instance, claims made pursuant to the avoidance provisions in the Bankruptcy Act or the Companies Act) or the liquidation of an insolvent company. In such matters, rights of third parties may be involved, and there is further a need to avoid different findings by different adjudicators. Both concerns suggest that the court (not arbitration) is the most suited forum.

The court of appeal, however, noted that disputes involving Section 216 of the Companies Act (Chapter 50) – ie, those that relate to unfair prejudice or the oppression claims of minority shareholders – do not generally engage public policy considerations, as they are essentially contractual in nature. This approach was followed in the recent decision in L Capital Jones Ltd v Maniach Pte Ltd (2017) 1 SLR 312.

The Singapore High Court in Piallo GmbH v Yafriro International Pte Ltd (2014) 1 SLR 1028 proceeded on the basis that actions on bills of exchange (eg, claims on dishonoured cheques) are arbitrable if the cheques were dishonoured as a result of a dispute falling within the scope of the arbitration agreement.

The Singapore High Court in BCY v BCZ (2016) SGHC 249 has held that, where the arbitration agreement is a clause forming part of a main contract, it is reasonable to assume that the contracting parties intend for the same system of law to govern both the arbitration agreement and the main contract.

In BNA v BNB (2019) SGCA 84 (BNA CA), the Singapore Court of Appeal affirmed both BCY and the principle that the proper law of an arbitration agreement is determined in the same way as determining the proper law of a substantive contract between two parties – and that a three-stage enquiry should apply, namely:

• have the parties expressly chosen the proper law of their arbitration agreement?
• have the parties impliedly chosen the proper law of their arbitration agreement?
• with what system of law does their arbitration agreement have its closest and most real connection?

The third and final stage only applies where there is no express or implied choice of the law that governs the arbitration agreement.

In BNA CA, the court of appeal overturned the decision of the Singapore High Court, holding that “arbitration in Shanghai” meant – on a plain reading – that the parties chose Shanghai to be the seat of arbitration and not merely as the venue of arbitration.

The Singapore courts take a robust approach to enforcing arbitration agreements and will grant relief to parties seeking to enforce an arbitration agreement. Such reliefs include granting a stay of court proceedings or anti-suit injunctions in support of arbitration agreements.

In Hilton International Manage (Maldives) Pvt Ltd v Sun Travel & Tours Pvt Ltd (Hilton) (2017) SGHC 56, the Singapore High Court found that a positive agreement to arbitrate implies at least two negative obligations:

• not to commence court proceedings stemming from an agreement to resolve any disputes by reference to arbitration; and
• not to set aside or otherwise attack an arbitral award in jurisdictions other than the seat of the arbitration.

Although the court of appeal partially allowed the appeal against the High Court judgment in Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd (2019) SGCA 10, it agreed with the High Court’s view that foreign proceedings brought in breach of arbitration agreements amounted to vexatious and oppressive conduct on the part of the defendant. The court of appeal held that it would suffice to show a breach of such an agreement for an anti-suit relief to be granted unless there are strong reasons not to grant such a relief.

In CCH and others and another matter (2020) SGHC 143, the High Court agreed with Hilton CA and held that that the defendants’ breach of the arbitration agreement justified an anti-suit injunction and there were no strong reasons not to grant an anti-suit injunction. The High Court ordered that the defendants discontinue the foreign proceedings they had commenced.

Special Circumstances Test

Furthermore, it was held by the High Court in BLY v BLZ and another (2017) SGHC 59 that a "special circumstances" test is preferred when determining whether discretion should be exercised to stay an arbitration pending curial review of a tribunal’s ruling on jurisdiction. The court held that "special circumstances" would not include costs incurred in potentially useless arbitration proceedings and any potential detriment stemming from an award that may be passed pending determination of a curial review. This illustrates the Singapore courts’ commitment to minimal judicial intervention and demonstrates the high threshold for staying arbitration proceedings.

Doctrine of Separability

In BNA v BNB (2019) SGHC 142, the High Court noted that the doctrine of separability “is not an end in itself but simply a means to the ultimate end of giving effect to the parties’ manifest intention to arbitrate their disputes”. The court explained that “… the doctrine achieves its objective through the fiction of treating an integrated arbitration agreement as though it were a free-standing arbitration agreement”.

The High Court in BNA further noted that the doctrine of separability would be broad enough to warrant upholding an arbitration agreement “even when the substantive agreement into which it is integrated is valid but an operation of the substantive agreement could operate to nullify the parties’ manifest intention to arbitrate their disputes”. The High Court therefore appeared to take the view that the doctrine of separability could be applied to save an arbitration agreement even where the defect was the arbitration agreement itself (as opposed to the substantive contract).

Although this decision was overturned on appeal, as noted above, the High Court’s findings on separability were not disturbed by the court of appeal.

Case management stay

Even where parties to court proceedings are not privy to an arbitration agreement, the court may grant a case management stay as long as there is a pending arbitration that overlaps with the court proceeding.

CJY v CJZ (2021) SGHC 69 is a case in point. There, the High Court upheld the lower court’s decision to grant a case management stay of court proceedings. The High Court found a stay would provide for an efficient and fair resolution of the dispute as a whole, based on the following:

• there were overlapping parties (the plaintiff was also the claimant in the arbitration, but none of the defendants were parties to the arbitration);
• there was overlapping subject matter; and
• the arbitration had been underway for more than three years.

Additionally, even though the defendants were not parties to the arbitration, the court noted it might not be open to them to challenge any adverse finding on issues common across the stayed High Court matter and the arbitration.

Even if a contract is avoided, rescinded or terminated, an arbitration agreement contained in that contract will not itself be rendered void under the doctrine of separability (Article 16 of the Model Law, First Schedule of the IAA and Section 21 of the AA).

There are no statutory restrictions on who may act as an arbitrator. The IAA and AA both provide that no person shall be precluded from acting as an arbitrator by reason of their nationality, unless otherwise agreed by the parties (Article 11(1) of the Model Law, First Schedule of the IAA and Section 13(1) of the AA).

At the same time, parties to the arbitration must select an arbitrator who is independent of them. The arbitrator has the obligation to disclose any circumstance that gives rise to justifiable doubts about their impartiality and independence. This obligation continues throughout the duration of the arbitration (Article 12 of the Model Law, First Schedule of the IAA and Section 14(1) of the AA).

In international arbitrations in Singapore, frequent reference is made by counsel and arbitrators to the International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration even though these guidelines are not strictly binding.

If parties are unable to agree on an arbitrator, the IAA provides for the default appointment of a single arbitrator (Section 9 of the IAA) by the President of the Court of Arbitration at the SIAC (Section 8(2) of the IAA read with Articles 11(3) and (4) of the Model Law).

Likewise, for a three-person tribunal, each party may appoint one arbitrator and if parties are unable to agree on the third arbitrator, the third arbitrator shall be appointed by the president of the court of the SIAC (Section 9A(2) of the IAA).

Two subsections were introduced into the IAA on 1 December 2020, namely Sections 9B and 12(1)(j).

In the absence of an agreed appointment procedure, Section 9B provides for a default method and timelines for the appointment of three-member arbitral tribunal in an arbitration of more than two parties. The default method is as follows:

• all claimants are to appoint an arbitrator jointly;
• all respondents are to appoint an arbitrator jointly; and
• the two party-appointed arbitrators are to appoint the third presiding arbitrator jointly. 

If the default method fails, powers are vested in the appointing authority (ie, the President of the Court of Arbitration of the SIAC or any other person appointed by the Chief Justice) to appoint all members of the tribunal. Prior to the inclusion of Section 9B, the IAA only provided for a process for the default appointment of a three-member arbitral tribunal in a two-party arbitration.

The amended Section 12(1)(j) confers a Singapore-seated arbitral tribunal with the power to make orders and issue directions to enforce confidentiality obligations arising from:

• an agreement between the parties;
• any written law or rule of law; or
• the arbitration rules agreed or adopted by the parties.

Such orders and directions are, by leave of the General Division of the Singapore High Court, enforceable in the same manner as though they were orders made by a court. The addition of Section 12(1)(j) expressly preserves and protects the confidential nature of arbitral proceedings. The amendment will provide parties with the confidence and ability to react to any breach of confidentiality obligations.

The court cannot intervene in the selection of arbitrators, unless there are justifiable doubts as to the arbitrator’s impartiality or independence, or the arbitrator does not possess the qualifications agreed to by the parties.

Article 12 of the Model Law, First Schedule of the IAA provides that an arbitrator can be challenged where there are justifiable doubts about the arbitrator’s impartiality or independence, or if the arbitrator does not possess the qualifications agreed to by the parties. In the absence of any challenge procedure agreed to by the parties, the procedure set out in Article 13(2–3) of the Model Law apply.

An arbitrator may also be replaced in the following circumstances:

• upon their death or resignation;
• where the arbitrator is physically or mentally incapable of conducting the proceedings;
• where the arbitrator has failed to conduct the arbitration properly or make the award with reasonable despatch; or
• where substantial injustice has been or will be caused to a party.

Where the arbitrator is unable to conduct proceedings or where the arbitrator has failed to act without undue delay, either party may apply to the Singapore High Court under Article 14 of the Model Law, First Schedule of the IAA for the arbitrator's removal, in the absence of voluntary resignation by the arbitrator or any agreement by the parties to terminate the arbitrator's mandate.

The Singapore High Court in PT Central Investindo v Franciscus Wongso (2014) SGHC 190 held that bias can take three forms, each of which would lead to disqualification of the arbitrator.

• Actual bias – the court noted that "actual bias" would obviously disqualify a person from sitting in judgment.
• Imputed bias – this arises where an arbitrator may be said to be acting for their own cause (nemo judex in sua causa) (eg, they have a pecuniary or proprietary interest in the case) and disqualification is certain “without the need to investigate whether there is likelihood or even suspicion of bias".
• Apparent bias – the test for "apparent bias" is whether a "reasonable and fair-minded person with knowledge of all the relevant facts would entertain a reasonable suspicion" that a fair hearing for the applicant was not possible.

The aggrieved party in the above-mentioned case accused the sole arbitrator of apparent bias.

See 3.2 Arbitrability.

The arbitral tribunal has the power to determine its own jurisdiction based on the Kompetenz-Kompetenz (competence-competence) principle. This is encapsulated in Article 16 of the Model Law, First Schedule of the IAA.

If a party is dissatisfied with the tribunal’s jurisdictional ruling (whether finding that it has jurisdiction or that it does not), it may appeal to the Singapore High Court.

A recent example of a successful challenge is York International Pte Ltd v Voltas Ltd (2022) SGHC 153, where the High Court found a tribunal that had already issued an award in 2014 was functus officio and had no jurisdiction to issue a further award, contrary to the tribunal’s decision in 2021. The High Court reversed the tribunal’s 2021 decision and declared the tribunal had no jurisdiction to make any further award in the matter.

See 5.4 Timing of Challenge for further elaboration.

A plea that the arbitral tribunal does not have jurisdiction must be raised no later than the submission of the statement of defence. The arbitral tribunal may, however, admit a later plea if it considers the delay justified (Article 16(2) of the Model Law, First Schedule of the IAA and Section 21(4) of the AA).

In Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Limited (2019) SGCA 33, the Singapore Court of Appeal held that it is not necessary for a party to file a formal objection or plea in the legal sense of the term to engage Article 16(3) of the Model Law, as there is nothing in Article 16 that prohibits the tribunal from considering its jurisdiction on its own motion. The court also held that Article 16(3) of the Model Law and Section 10 of the IAA do not preclude a non-participant in an arbitration who has informally objected to the tribunal’s jurisdiction from applying to set aside the award under Article 34(2)(a)(iii) of the Model Law on the grounds of lack of jurisdiction.

Parties may then challenge the jurisdiction of the arbitral tribunal before the Singapore High Court within 30 days of receiving the tribunal’s ruling (Section 10 of the IAA, Article 16(3) of the Model Law). Preliminary rulings on jurisdiction can only be challenged under Article 16(3) of the Model Law if their contents do not include the merits of the case. In AQZ v ARA (2015) 2 SLR 972, the Singapore High Court held that relief under Article 16(3) of the Model Law was not available if the tribunal’s ruling dealt in some way with the merits of the case, even if the ruling was predominantly on jurisdiction. Instead, the aggrieved party’s proper recourse would be to challenge the ruling under the relevant limbs of Article 34(2) of the Model Law. This decision was subsequently followed by the Singapore High Court in Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and others (2017) SGHC 195.

A party who is thereafter dissatisfied with the decision of the High Court on a challenge brought under Section 10 of the IAA and Article 16(3) of the Model Law may then appeal to the court of appeal, provided that leave to do so is obtained from the High Court (Section 10(4) of the IAA, Section 21A(1) of the AA). The appeal will not operate as a stay of the arbitration proceedings unless the High Court or the court of appeal orders otherwise.

If the court subsequently decides upon an appeal against the tribunal’s decision that the tribunal does have jurisdiction, the tribunal will continue the arbitration proceedings and make an award. If, however, the tribunal is unable or unwilling to do so, its mandate will be terminated and a new tribunal will be appointed (Section 10(6)(b) of the IAA).

Articles 16 and 34 of the Model Law

The practical difference between an application made pursuant to Article 16 of the Model Law and an application made pursuant to Article 34 of the Model Law is that the former deals specifically with arbitral rulings or awards that deal solely with decisions on jurisdiction. The supervisory court can review the tribunal’s decision on a de novo basis. Where such applications are concerned, the supervisory court will not engage with the correctness of the arbitral tribunal’s decision and the challenge will only be considered strictly against the threshold set out in Article 34 of the Model Law.

The court will review an arbitral tribunal’s decision on jurisdiction de novo. This approach was affirmed by the Singapore Court of Appeal in PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV (2014) 1 SLR 372, and subsequently affirmed by the same court in Sanum Investments Ltd v Government of the Lao People’s Democratic Republic (2016) SGCA 57.

In Sanum, the court held that a de novo review entails that there is no basis for deference to be accorded to the tribunal’s findings. However, the court endorsed the view that a de novo review does not mean that all that has transpired before the arbitrator should be disregarded – but, rather, that the court is at liberty to consider, unfettered by any principle limiting its fact-finding abilities, the material before it. A similar view was taken by the Singapore Court of Appeal in AKN v ALC (2015) 3 SLR 488 (112) and the Singapore High Court in Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and others (2017) SGHC 195.

The Singapore courts take a robust approach to addressing breaches of arbitration agreements. The foremost route is to stay any court proceedings commenced in breach. A stay is mandatory in an international arbitration (Section 6 of the IAA and Article 8 of the Model Law) but discretionary in a domestic arbitration (Section 6 of the AA).

That said, even in an application for a stay under Section 6 of the AA, the burden is on the party that wishes to proceed in court to "show sufficient reason why the matter should not be referred to arbitration". Assuming the applicant is ready and willing to arbitrate, the court will only refuse a stay in exceptional cases because of Singapore’s strong policy in favour of arbitration (see Maybank Kim Eng Securities Pte Ltd v Lim Keng Yong and another (2016) 3 SLR 431).

When considering whether such exceptional circumstances feature, the court will take the following into account (see the recent court of appeal decision in CSY v CSZ (2022) SGCA 43):

• the existence of related actions and disputes, some of which are governed by an arbitration agreement and others that are not;
• the overlap between the issues in dispute to the extent that there is a real prospect of inconsistent findings;
• the likely shape of the process for the resolution of the entire dispute;
• the likelihood of injustice in having the same witnesses deal with the same factual issues before two different fora;
• the likelihood of disrepute to the administration of justice ensuing from the fact that overlapping issues may be differently determined in different actions;
• the relative prejudice to the parties; and
• the possibility of an abuse of process.

An application to the court for pre-action discovery and interrogatories will generally not be stayed, pursuant to Section 6 of the IAA. This is because such a stay application would be premature – the earliest point in time at which a stay application can be made is when a substantive claim has already crystallised.

One such example is Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd (2010) 1 SLR 25, which concerned an application for pre-action discovery and interrogatories to assist Acclaim to assess “the possibility of launching action against the parties that may have conspired against acclaim” and to determine the identity of certain parties who were involved in the alleged conspiracy.

An arbitral tribunal cannot assume jurisdiction over non-parties to an arbitration agreement and non-signatories to the contract containing the arbitration agreement, subject to the following exceptions.

• Section 9 of Singapore’s Contracts (Right of Third Parties) Act allows third parties to rely on an arbitration clause or agreement to enforce a term in a contract if the contract expressly provides that they may enforce that term in their own right or if that term purports to confer a benefit on them.
• The legal assignee of a contract may also, upon giving notice of assignment to the other party, be entitled to the rights of a party under the arbitration agreement.
• A principal, whether disclosed or undisclosed, of a party that acted as an agent in the agreement has rights as a party to the arbitration agreement.
• The legal representatives of the estate of a deceased, and trustees in bankruptcy, are also entitled to that party’s rights under the arbitration agreement.
• An insurer claiming through a subrogated action is also bound by the terms of an arbitration clause by which the insured was bound.

No distinction appears to be made between foreign and domestic parties.

One interim measure that an arbitral tribunal may order under Section 12 of the IAA is for a claimant to provide security for costs (Section 12(1)(a) of the IAA). However, the power to do so may be restricted by Section 12(4), which provides that an order cannot be made only by reason of the fact that the claimant is an individual residing outside Singapore or a corporation incorporated or controlled outside Singapore. Similar provisions are found in Section 28(2) of the AA. Arbitral tribunals commonly grant preliminary or interim relief in the form of prohibitory injunctions and freezing injunctions to preserve assets that are the subject matter of the dispute.

The Singapore courts have the power to grant many of the types of relief available to the tribunal under the IAA and AA, whether before or after arbitration proceedings have commenced.

The court’s power with respect to international arbitrations is curtailed to the extent that parties should apply to the court only if the arbitral tribunal has not been constituted or is otherwise unable to act or grant the relief sought (Section 12A(6) of the IAA). And there is reason to suggest the Singapore High Court has no power to grant an order for the discovery of documents prior to the commencement of an arbitration – ie, pre-arbitral discovery (see and Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd (2010) 1 SLR 25).

The court in Equinox Offshore Accommodation Ltd v Richshore Marine Supplies Pte Ltd (2010) SGHC 122 explained the difference between pre-action discovery (which the court has the power to grant) and pre-arbitral discovery (which the court does not):

“Where one party to a contract with an arbitration clause believes that may have a cause of action against the other contracting party but [this] falls outside the scope of the arbitration clause, and he brings an application to try and determine whether it is viable to commence that cause of action in court, it would be an application for pre-action discovery. This is in contrast to a case where the party applying to court for discovery does so with the intention of ascertaining whether it would have a viable cause of action to pursue in arbitration. This latter scenario involves an application for pre-arbitral discovery.”

Equinox concerned the latter scenario and this was why the court dismissed the application, primarily for want of power.

The Singapore courts uphold the principle of minimum curial intervention in respect of arbitration-related applications. This was emphasised by the Singapore Court of Appeal in Republic of India v Vedanta Resources plc (2021) SGCA 50. There, the Singapore Court of Appeal had to consider whether a party to an arbitration can apply to the supervisory court (by way of an application for declaratory relief) to reconsider a question of law that had already been decided by the arbitral tribunal.

The arbitral tribunal had made procedural orders finding that an implied obligation of confidentiality applied in every arbitration governed by Singapore procedural law, subject to exceptions. When the appellant subsequently applied to the arbitral tribunal to disclose certain documents, the application was rejected by the arbitral tribunal.

The appellant thereafter applied to the Singapore High Court seeking a declaration that the documents disclosed are not confidential or private, arguing that no obligation of confidentiality was attached or should be attached to investment treaty arbitrations under Singapore law as the law of the seat.

At first instance, the Singapore High Court disagreed with the respondent’s objection that the application amounted to an abuse of process and a collateral attack on the arbitral tribunal’s procedural orders. However, the Singapore High Court declined to exercise discretion to grant the declarations sought by the appellant.

The Singapore Court of Appeal dismissed the appeal. First, the appellant had no legitimate claim to invoke the jurisdiction of the supervisory court on the basis that the procedural orders related to the law of the seat. Further, even if the arbitral tribunal had erred in finding that confidentiality applied to Singapore-seated investment treaty arbitrations, this would amount to an error of law, which is insufficient to justify curial intervention.

The court found that the application was an abuse of process because it was, in essence, a back-door appeal against the arbitral tribunal’s procedural orders to dismiss the appellant’s disclosure applications and/or an attempt to re-litigate questions that had already been considered and determined by the arbitral tribunal.

See 6.2 Role of Courts.

In the absence of parties’ prior agreement, neither the IAA nor the AA provide for a default mechanism to determine the place of arbitration or the language of the arbitration proceedings. The procedural rules agreed to by the parties, however, often provide for such matters. The SIAC Rules, for instance, provide (at Rule 21) that, in the absence of an agreement by the parties, “the seat of the arbitration shall be determined by the tribunal, having regard to all the circumstances of the case”. Where there is no other mechanism, the arbitral tribunal ultimately has the discretion to determine such matters.

The IAA, which adopts the procedure set forth in the Model Law, nevertheless provides that arbitration proceedings are commenced when a request to refer a dispute to arbitration is received by the respondent (Article 21 of the Model Law). The AA contains similar provisions.

Further, procedural rules usually specify what the request for arbitration (or notice of arbitration) should contain – for example, the SIAC Rules require the claimant to file a notice of arbitration with the SIAC Registrar (Rule 3.1 of the SIAC Rules). The notice of arbitration should comprise:

• a demand that the dispute be referred to arbitration;
• the names, addresses, telephone numbers, facsimile numbers and email addresses (if known) of the parties to the arbitration and their representatives (if any);
• a reference to the arbitration agreement invoked and a copy of the arbitration agreement;
• a reference to the contract or other instrument (eg, investment treaty) from which the dispute arises and, where possible, a copy of the contract or other instrument;
• a brief statement describing the nature and circumstances of the dispute, specifying the relief claimed and, where possible, an initial quantification of the claim amount;
• a statement of any matters that the parties have previously agreed as to the conduct of the arbitration or about which the claimant wishes to make a proposal;
• a proposal for the number of arbitrators, if not specified in the arbitration agreement;
• unless otherwise agreed by the parties, the nomination of an arbitrator if the arbitration agreement provides for three arbitrators, or a proposal for a sole arbitrator if the arbitration agreement provides for a sole arbitrator;

• any comment as to the applicable rules of law;
• any comment as to the language of the arbitration; and
• payment of the requisite filing fee.

The claimant must also, at the same time, send a copy of the notice of arbitration to the respondent and it must notify the SIAC Registrar that it has done so, specifying the mode of service employed and the date of service (Rule 3.4 of the SIAC Rules).

Article 24(1) of the Model Law provides that an arbitral tribunal has the discretion to decide whether to hold oral hearings. Unless the parties have agreed on a documents-only arbitration, the SIAC Rules provide that the tribunal must hold a hearing for the presentation of evidence or oral submissions (or both) on the merits of the dispute, including – without limitation – any issue as to jurisdiction (Rule 24.1 of the SIAC Rules).

The AA and IAA do not have a specific list of mandatory procedural provisions from which parties may not contractually deviate.

Arbitrators have wide powers, including the power to order a claimant to provide security for costs (see 6.1 Types of Relief).

There is also no prohibition on dissenting opinions in either the IAA or AA. Hence, tribunal members who do not agree with the majority view in an award may issue dissenting opinions.

However, although neither the IAA nor the AA prescribes a time limit within which an award should be rendered, a tribunal should conduct the arbitration without undue delay (Article 14 of the Model Law). A similar provision can be found in the AA (Section 16). Nevertheless, there does not appear to be any Singapore case law defining what would amount to "undue delay". In Coal & Oil LLC v GHCL (2015) 3 SLR 154, the Singapore High Court found that a 19-month delay in the release of the award did not violate any rule of natural justice.

There are no restrictions on parties appointing foreign law firms or lawyers who are not qualified in Singapore as their legal representatives in arbitration.

The tribunal is not bound to apply the Singapore rules of civil procedure. The tribunal has the power to order the discovery (disclosure) of documents and interrogatories, and the giving of evidence by affidavit from witnesses (Section 12, IAA; Section 28(2), AA). Both the AA and IAA provide that the arbitral tribunal has wide discretion to conduct the arbitration in any manner that it considers appropriate, per Article 19(2) of the Model Law, First Schedule of the IAA and Section 23(2) of the AA. The IBA Rules on the Taking of Evidence in International Arbitration are frequently referred to.

In practice, evidence is frequently given in the form of witness statements (sometimes made on oath, depending on the procedure agreed by the parties) that are subsequently orally verified at the evidentiary hearing, followed by cross-examination and re-examination. Cross-examination is usually not limited to the scope of the witness statements – although the tribunal may exercise some control in preventing cross-examination from straying beyond the issues identified by the parties. Re-examination is permitted, but it is usually limited to matters raised in cross-examination. Re-cross-examination is uncommon and does not usually occur. The tribunal may also adopt an inquisitorial process (Section 12(3) of the IAA).

Where expert witnesses are concerned, witness-conferencing (also known as concurrent evidence or "hot-tubbing") is becoming increasingly popular as an alternative to the traditional examination, cross-examination and re-examination approach previously described.

In a Singapore-seated arbitration, the tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence (Article 19 of the Model Law, First Schedule of the IAA, Section 23(3) of the AA). The SIAC Rules further provide that the tribunal is "not required to apply the rules of evidence of any applicable law" (Rule 19.2 of the SIAC).

However, parties must be mindful of the limits imposed on the admission of evidence for arbitration-related proceedings before the courts in Singapore. In BNA CA, the respondent had earlier attempted to admit new evidence in the form of pre-contractual negotiations before the High Court (in BNA HC). The respondent argued that the parol evidence rule should be displaced because Section 2(1) of the Evidence Act provides that the Act “shall apply to all judicial proceedings in or before any court, but not to affidavits presented to any court or office nor to proceedings before an arbitrator”

However, the court of appeal refused to admit the new evidence, as the proceedings in BNA HC was not a “proceeding before the arbitrator” and admission of the new evidence would contravene the parol evidence rule under Section 94 of the Evidence Act (Chapter 97). Further, the court of appeal found that both the High Court and the court of appeal are bound by the parol evidence rule.

The court has the power to issue subpoenas to witnesses within the jurisdiction to testify or produce documents at arbitration proceedings (Section 30 of the AA and Section 13 of the IAA).

The difference between parties and non-parties is that curial assistance is required for the latter because arbitrators derive their jurisdiction only from the agreement of parties.

The AA or the IAA does not statutorily impose any obligations of confidentiality. Singapore courts have, however, ruled that there is an implied duty on the parties and the arbitrator not to disclose confidential information obtained in arbitration proceedings or to use them for any purpose other than the dispute in which they are obtained (Myanma Yaung Chi Oo Co Limited v Win Nu (2003) 2 SLR(R) 547 and International Coal Pte Ltd v Kristle Trading Ltd & Another (2009) 1 SLR (R) 945). A party may apply to the Singapore High Court to seal court documents in court proceedings in order to preserve the confidentiality of a related arbitration (Section 22 of the IAA).

However, the implied duty of confidentiality is not absolute. The extent to which confidentiality applies depends on the specific facts of the case. As per AAY v AAZ (2011) 1 SLR 1093 and CJY v CJZ and others (2021) 5 SLR 569, confidentiality may be lifted where:

• leave of court is obtained;
• disclosure is reasonably necessary for the protection of a party’s legitimate interests;
• disclosure is in the interest of justice or where the public interest so requires; or
• by the express or implied consent of the parties.

The IAA has since been amended to make it clear that arbitration-related court proceedings are presumptively private (see 2.2 Changes to National Law).

The AA and IAA prescribe that the award must fulfil the following requirements (Article 31 of the Model Law, First Schedule of the IAA and Section 38 of the AA).

• It must be made in writing and signed by the arbitrators. In the case of two or more arbitrators, it must be signed by all the arbitrators or the majority, provided that the reason for omitting any signature is stated.
• It must state the reasons for the award, unless the parties have agreed that no reasons are to be given or the award is won on agreed terms.
• It must state the date of the award and the place of arbitration.
• A copy of the award shall be delivered to each party to the proceeding.

Section 12(5) of the IAA provides that an arbitral tribunal may award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings in that court. Furthermore, the tribunal has the power to award interest. Similar provisions are found in Sections 34 and 35 of the AA.

However, a domestic arbitral tribunal may not make orders for securing the amount in dispute, for the preservation, for interim custody or sale of the subject matter, or to prevent the dissipation of assets.

Unless the parties have agreed otherwise, a Singapore-seated arbitral tribunal has wide and general discretion to allocate and apportion costs in its award. The general rule is that "costs follow the event". This rule means that the losing party will be ordered to bear the legal costs and arbitration costs incurred by the successful party, in full or in part.

Notwithstanding this, a tribunal need not take Singapore civil procedure principles on the allocation of costs into account (see VV v VW (2008) 2 SLR(R) 929). The SIAC Rules provide that most forms of costs are recoverable, including the fees and expenses of the tribunal and the SIAC’s administration, as well as legal and expert fees and expenses (Rules 35–37 of the SIAC Rules).

A Singapore-seated tribunal may also award simple or compound interest on the whole or any part of sums or costs awarded under an award for any period ending not later than the date of payment (Sections 12(5) and 20 of the IAA). A sum directed to be paid under an award shall, unless the award otherwise directs, carry interest from the date of the award until the date of payment and at the same rate as a judgment debt (Section 20(3) of the IAA). The default rate for judgment debts in Singapore is at present 5.33% per annum (Supreme Court Practice Directions 2021, paragraph 109, Rules of Court 2021, Order 17 Rule 5).

An award may be appealed or challenged through making an application to the Singapore High Court to set aside the award. It bears noting, as a starting point, that successful applications are exceedingly rare. As the court of appeal noted in CAJ and another v CAI and another appeal (2022) 1 SLR 505, approximately only 20% of applications to set aside awards have been allowed in the past 20 years.

The grounds for setting aside are found in Article 34, Model Law, supplemented by two additional grounds set out in Section 24, IAA and Section 48, AA.

Grounds for Setting Aside

Article 34, Model Law provides that the award may be set aside on the following grounds:

• a party to the arbitration agreement was under some incapacity;
• the arbitration agreement was not valid;
• the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings, or was otherwise unable to present their case;
• the award dealt with a dispute that did not fall within the terms of the arbitration agreement;
• the tribunal was improperly constituted or the arbitral procedure was not in accordance with the parties’ agreement;
• the subject matter of the arbitration meant that it could not be settled by arbitration; or
• the award was contrary to public policy.

Under Section 24, IAA and Section 48, AA there are two further grounds for setting aside an award:

• the making of the award was induced or affected by fraud or corruption; or
• a breach of natural justice occurred in connection with making the award, by which the rights of a party were prejudiced.

Under the AA, as distinct from the IAA, a party may appeal against an award on a question of law arising from the award unless the parties have agreed otherwise (Section 49 of the AA). It should be noted that if the parties agree for any reason to dispense with the tribunal giving reasons for the award, such an agreement would include a waiver of the right to appeal against the award on a question of law (Section 49(2) of the AA).

Procedural Breach

An award will not be set aside for breach of an agreed procedure if the non-observance derives from the applicant’s own doing, or if the challenge to the award is against the arbitral tribunal’s procedural orders or directions that fall within the exclusive domain of the arbitral tribunal (see Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd (2014) SGHC 220).

In Coal & Oil LLC v GHCL (2015) 3 SLR 154, the Singapore High Court held that in order for an award to be set aside under Article 34(2)(a)(iv) of the Model Law – ie, that the procedure was not in accordance with the agreement of the parties – there must have been a material breach of procedure serious enough to justify the exercise of the court’s discretion to set aside the award. This would often, although not invariably, require proof of actual prejudice.

Even an award that has been remitted to the tribunal by the court is not immune from subsequently being set aside. In JVL Agro Industries Ltd v Agritrade International Pte Ltd (2016) 4 SLR 769, the High Court did precisely this. The court initially found basis for setting aside the award but then decided to remit the matter to the arbitral tribunal to allow the tribunal an opportunity to cure the breach of natural justice. The arbitral tribunal sought to justify its original position instead. The breach was not remedied. As such, the High Court proceeded to set aside the award.

Timeframe

The challenge/appeal is made in the first instance to the Singapore High Court as a setting-aside application. This must be made within three months of receiving the award, and the Singapore courts have held that the court has no power to extend the strict three-month time limit (BXS v BXT (2019) SGHC (I) 10 and BRS v BRQ (2021) 1 SLR 390). If the application fails, a party may pursue an appeal in the Singapore Court of Appeal.

The Bloomberry series of cases are instructive. In Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another (2021) 3 SLR 725, the plaintiffs sought to overcome the time limit in Article 34(3) of the Model Law by arguing that it should be extended in cases of fraud – particularly if the fraud is only discovered after the time limit expires.

The Singapore High Court reviewed the drafting history of Article 34(3) of the Model Law and found that, although there was a proposal for a separate regime with a different time period for setting aside applications brought on grounds of fraud or corruption, this was ultimately rejected. Hence the Singapore High Court held that the time limit in Article 34(3) of the Model Law was an absolute one and the same time limit equally applied to applications brought under sections 24(a) and 24(b) of the IAA. 

On appeal, in Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another (2021) 1 SLR 1045, the Singapore Court of Appeal considered the potential “absurdity” that a party affected by fraud would be time-barred. This potential absurdity, the court found, was beside the point. The prospect of such an absurdity did not warrant reopening the time limit or reconsidering the strict approach discussed above. Rather, the time-barred party in that scenario could explore other avenues, such as resisting enforcement of the award on the basis of fraud.

Article 34 of the Model Law, First Schedule of the IAA sets out limited grounds for challenging an arbitral decision (see 11.1 Grounds for Appeal). Furthermore, Article 5 of the Model Law, First Schedule of the IAA provides that, where these grounds are not satisfied, no court may intervene in arbitration proceedings under the IAA.

In other words, Article 5 of the Model Law provides that the only grounds on which an award may be set aside are those set out in Article 34 of the Model Law. This was applied in PT Central Investindo v Franciscus Wongso and others and another matter (2014) SGHC 190, where the Singapore High Court had to consider whether a successful application to remove an arbitrator that was filed prior to the subsequent issuance of the final award would result in it being set aside.

The court (with reference to Article 5 of the Model Law) held that a successful application to remove an arbitrator does not in itself automatically render an award a nullity. However, a challenge to an arbitrator’s impartiality or independence is a ground for setting aside under Article 34(2)(a)(iv) and Article 34(2)(b)(ii) of the Model Law.

Parties have the right to appeal against an award on questions of law if it is a domestic arbitration governed by the AA. Pursuant to Section 49 of the AA, parties must choose to opt out of the right to appeal on questions of law.

The Ministry of Law announced a public consultation on proposed amendments to the IAA in 2019, which included the possibility of allowing parties to agree that there should be a right to appeal to the High Court on questions of law.

To this end, the Singapore Academy of Law (Law Reform Committee) released a report in February 2020, with the key recommendation that the IAA should be amended to include an optional right of appeal against international arbitration awards on questions of law. Including this as an opt-in right in the IAA would clearly signal that the basis of the right to appeal is party autonomy and choice. However, to date, no such amendment has been introduced in the IAA.

Judicial review of the merits of a case is not permitted under the IAA (see 11.1 Grounds for Appeal). In TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd (2013) SGHC 186, the Singapore High Court held that parties “must not be encouraged to dress up and massage their unhappiness with the substantive outcome into an established ground for challenging an award”.

Singapore is a signatory to the New York Convention, which is enacted in full in Schedule 2 of the IAA. The convention has been in force since 19 November 1986, with the reservation that the convention will only be applied to the recognition and enforcement of awards made in the territory of another contracting state.

Singapore is also a party to the ICSID Convention. The Arbitration (International Investment Disputes) Act was enacted to provide for the recognition and enforcement of arbitral awards under the ICSID Convention.

Enforcement is made by application to the Singapore High Court (Section 19 of the IAA).

The Singapore courts have developed a pro-arbitration reputation and generally favour the enforcement of awards, unless there are clear grounds upon which enforcement should be refused. The Singapore Court of Appeal has in at least two cases allowed a party’s challenge to a tribunal’s finding that it had jurisdiction and also allowed a party’s application to resist enforcement of multiple awards. For further details, see International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another (2014) 1 SLR 130 and PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal (2014) 1 SLR 372.

Three further cases that illustrate the pro-arbitration (and, correspondingly, pro-enforcement) approach taken by the Courts are worth noting.

The Singapore High Court in Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd (2014) 4 SLR 832 held that it would not grant enforcement of arbitral awards against a non-party to the arbitration agreement.

In National Oilwell Varco Norway AS v Keppel FELS Ltd (2022) SGCA 24, the Singapore Court of Appeal reiterated the mechanistic approach to enforcement. The court upheld the enforcement of an award even though there was a difference in name between the claimant on the award (which no longer existed) and the party seeking to enforce the award (which assumed all the claimant’s assets, rights, obligations and liabilities resulting from two mergers as part of a corporate restructuring exercise).

The court of appeal found the party seeking to enforce the award (ie, the appellant before it) was – for all intents and purposes – the same legal entity as the claimant in the arbitration. As such, the case was “a situation of a true misnomer” (at (6)), which the court did not allow to impede enforcement of the award.

The Singapore Court of Appeal has upheld the enforceability of an interim award in PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation (2015) 4 SLR 364.

If an award is subject to ongoing set-aside proceedings at the seat, a party could request that the Singapore court both adjourns enforcement of the award and orders the other party to give suitable security, per Article VI of the New York Convention.

Foreign Awards That Have Been Set Aside

The Singapore courts, however, are unlikely to recognise the enforcement of foreign awards that have been set aside at the place of arbitration. The Singapore Court of Appeal in PT First Media TBK held in obiter that “the contemplated erga omnes effect of a successful application to set aside an award would generally lead to the conclusion that there is simply no award to enforce”, otherwise such an application would have little discernible purpose.

Furthermore, the court of appeal emphasised that it is open to a party challenging an award (on the basis of jurisdiction) within the prescribed period after it is issued, or at the time the award is enforced. As such, a party that elects not to challenge the tribunal’s preliminary ruling on its jurisdiction would not be precluded from relying on its right to resist recognition and enforcement of the award on the grounds set out in Article 36 of the Model Law (see (132) of PT First Media TBK).

The courts intervene with arbitral awards in a very limited way, as their grounds for intervention are narrowly circumscribed (see 11.1 Grounds for Appeal).

Hence, in relation to the IAA, the court of appeal in AKN v ALC (2015) SGCA 18 stated that courts must resist the temptation to engage with the legal merits of an award. This is based on the foundational principle in arbitration that parties choose their adjudicators. Just as the parties enjoy many of the benefits of their autonomy, they must also accept the consequences of the choices they have made.

The approach the courts take to enforcement is mechanistic, consisting of two stages. The first stage requires the production of a valid arbitral award made by reference to an arbitration agreement, and the second stage entails consideration of the validity of the agreement (Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd and another (2006) SGHC 78 at (41–45)).

Singapore does not have a regime for class action proceedings in general.

There are no applicable ethical codes or professional standards set in stone in Singapore arbitration legislation, although institutions such as the SIAC have a code of ethics for arbitrators. However, there have been discussions about Singapore taking the lead to forge an ethical code for arbitration practice.

Third-party funding in international arbitration is regulated by Section 5B of the Civil Law Act (Chapter 43).

Read alongside the subsidiary legislation, Civil Law (Third-Party Funding) Regulations 2017, Singapore only allows third-party funding in international arbitration proceedings – or court and mediation proceedings that arise from (or are in any way connected with) international arbitration proceedings. This extends to applications for stays as well as proceedings related to enforcement of an award under the IAA.

Regulation 4 of the Civil Law (Third-Party Funding) Regulations 2017 also states that in order to qualify as a “third-party funder” under Section 5B of the Civil Law Act, the funder’s principal business must be funding the costs of dispute resolution proceedings in Singapore. The funder must also have a paid-up share capital of not less than SGD5 million (or the equivalent amount in foreign currency or managed assets).

Amendments were also made to the Legal Profession Act and Professional Conduct Rules that require Singapore legal practitioners to disclose the existence of third-party funding. However, Singapore legal practitioners are not prohibited from referring third-party funders to their clients.

Singapore arbitration legislation does not provide for consolidation procedures. This is subject to the applicable institutional rules. Rule 8 of the SIAC Rules 2016, for example, provides for a detailed consolidation application procedure, whether before the arbitral tribunal has been constituted or after.

The general requirements are:

• all parties have agreed to consolidation;
• all claims in the arbitration have been made under the same arbitration agreement; or
• the arbitration agreements are compatible and the disputes arise out of:
1. the same legal relationships;
2. contracts consisting of a principal contract and ancillary contracts, or
3. the same transaction or series of transactions.

In December 2017, the SIAC also issued a proposal on cross-institution consolidation protocol to consider the possibility of consolidating arbitrations subject to different arbitration rules.

In October 2018, the SIAC entered into a Memorandum of Understanding (MOU) with the China International Economic and Trade Arbitration Commission (CIETAC). Under the MOU, the SIAC and the CIETAC will set up a joint working group to discuss the cross-institution consolidation protocol.

See 5.7 Third Parties.