Singapore defies Mayan apocalypse

The announcement on 16 November 2012 that BIMCO had decided to add Singapore as a third option to its standard jurisdiction clause was a big deal.

It was feted by many as signifying a recognition that Asia, as an economic juggernaut, is growing more and more as a preferred dispute resolution region.

The choice of Singapore (above its main rival in the region – Hong Kong) is also significant recognition of the great marketing work that the Singapore government and maritime organisations have been doing to raise Singapore’s profile as a trusted dispute resolution centre for the international maritime sector.

However, whilst the signs are certainly good for Singapore—and this is an important milestone—the amendment BIMCO has made is just the beginning.

As with any marketing campaign, the true test is whether this success will lead to more customers coming through the door. The competition is tough, and there will be strong competition from the traditional power houses of New York and London, as well as the “fourth” bespoke option of the BIMCO form—a totally different option, like, say, Hong Kong.

The initial signs appear to be very good for Singapore, as one would expect Asian-based companies, if they have a choice (and increasingly their negotiation position is improving), to choose a local forum. The real advantage for Singapore is that this choice should be easier for counterparties to accept when it is so obviously endorsed by BIMCO.

Attracting customers through the door is only the first step. Once they come, they must like what they see. The real test is whether having come here once, they come back the next time.

To achieve this, Singapore will need to prove to the world that it has what it takes to deliver quick, impartial, and accessible justice - at competitive prices. This is no small challenge, but all signs suggest that optimism here is not misplaced. Singapore does have what it takes.

The rules of the Singapore Chamber of Maritime Arbitration (SCMA), which is the institution that assisted BIMCO to draft the new standard clause (and will therefore likely be the entity that the BIMCO form will refer to), has become more streamlined and more user-friendly—in line with the LMAA Rules in London.

The Singapore courts are efficient, and thus provide firm back-up to the arbitration process, allowing attachment of assets and vessels as required.

More importantly, as it is arbitration, parties have a free choice of local lawyers or their preferred home lawyers to run their cases as they please. And, as so many international insurers and law firms are already present in Singapore, it seems likely that parties will not hesitate to come here on that score.

All in all, this is good news for Singapore. So, unless the Mayans were right and the apocalypse is shortly approaching, the future is bright for the Lion City as a maritime arbitration hub!