Srijan Tripathi and Vaibhav Chandra Srivastava are 3rd year B.B.A. L.L.B. (Hons.) students at Maharashtra National Law University, Nagpur.
KEYWORD: Arbitration, SIAC, Coordinated Proceedings, Arbitration Rules.
Introduction
The Singapore International Arbitration Centre (“SIAC”) had published the Draft 7th Edition of the SIAC Rules for public consultation on 22nd August, 2023 which have, after due consideration come into effect from 1st January 2025. This is the first time any changes have been made to the SIAC Rules since 2016.
A particularly noteworthy addition is Rule 17 (“SIAC Rule 17”), which introduces the concept of coordinated proceedings to the SIAC framework. This new rule permits the same arbitral tribunal to preside over two or more arbitration proceedings that share common questions of law or fact. Such a mechanism is especially beneficial in disputes involving complex, multi-party or multi-contract scenarios, as it enhances procedural efficiency and consistency in arbitral outcomes.
While the concept of coordinated proceedings is not entirely novel in institutional arbitration. With International Centre for Settlement of Investment Disputes (“ICSID”) having provisions for similar mechanisms under Rule 46. However, SIAC Rule 17 reflects an effort to address the practical challenges posed by multi-party or multi-contract disputes, particularly in the context of commercial and investment arbitration, where overlapping legal and factual issues often arise.
The Provisions
As per SIAC Rule 17, the proceedings maybe coordinated upon the application of the parties in three ways: (a) proceedings shall be conducted concurrently or sequentially; (b) the parties shall be heard together and any procedural aspect shall be aligned to ensure smooth conduct; and (c) one or more proceedings may be stayed pending the determination in other arbitrations.
SIAC Rule 17 also provides that all the parties to the arbitration shall be given an opportunity to be heard and due regard shall be given to obligations of confidentiality as mentioned under Rule 59 of the SIAC Rules before ordering the coordination.
Unless the parties agree otherwise, the coordinated proceedings continue to be separate, with separate decisions, rulings, orders and awards.
The newly added rule builds upon the existing provisions which deal with multi-contract, multi-party disputes, most notably, the provisions for consolidation (Rule 16) and joinder (Rule 18). The aim is to provide an additional procedural mechanism to streamline the resolution of multiple complex arbitrations, reduce the risk of conflicting outcomes, and avoid duplication of costs due to parallel proceedings.
The Conundrum of Parallel Proceedings
The International Law Association (ILA) defines the term “parallel proceedings” as:
“Proceedings pending before a national court or another arbitral tribunal in which the parties and one or more of the issues are the same or substantially the same as the ones before the arbitral tribunal in the Current Arbitration”.
The issue of parallel proceedings frequently arises in commercial and investment arbitration, when disputes arising from the same or related facts are submitted: (a) There is inefficiency and unnecessary costs, since the same or substantially the same issue is tried multiple times; (b) There is a risk of multiple recovery when remedy for essentially the same damage are sought by multiple claimants; and (c) There is risk of conflicting awards.
The new addition to the SIAC Rules enables the coordination of proceedings as an alternative to consolidation under Rule 16. This development aligns with UNCITRAL’s ongoing efforts to explore potential solutions for addressing dissatisfaction with the current investment dispute resolution framework and offers a structured approach to managing parallel arbitrations more effectively.
Advantages of Coordinated Proceedings
Coordinated proceedings will make the dispute resolution process more streamlined and increase time efficiency by allowing the tribunal to address common legal or factual questions simultaneously. Such proceedings would greatly reduce the financial burden upon all the parties involved as tribunal fees, expert witness fees, and legal representation, and prevent scenarios which may quickly escalate in multi-arbitration. By aligning procedural steps such as evidence evaluation, the parties are saved from multiple rounds of discovery or document production, this allows for distribution of costs across all related arbitrations.
The risk of conflicting awards is also significantly reduced upon coordination. Tribunals in separate arbitrations may reach inconsistent decisions on the same legal or factual issues, leading to uncertainty and potentially undermining the enforceability of the awards. SIAC Rule 17 allows for collaboration among fora ensuring coherence in findings and decisions.
Unlike consolidation, where separate proceedings are merged into one, coordinated proceedings allow parties to retain control over critical aspects of their arbitration, for instance regarding the appointment of arbitrators, while aligning procedures for common issues. By coordination, tribunals can address overlapping issues in a systematic and organized manner ensuring that no key aspect is omitted.
Potential Concerns of Coordinated Proceeding under Rule 17
Coordinated proceedings may prove impractical if they compromise a party’s ability to adequately represent themselves. Without proper preparation, such proceedings can also present significant organizational challenges, particularly during hearings. For instance, in cases where the same fact or expert witness is required to testify in multiple coordinated arbitrations, cross-examination may present logistical and procedural complexities. The tribunal and parties must determine in advance whether specific portions of the testimony will apply solely to one arbitration or to all coordinated cases. To enhance efficiency, parties may opt for the latter. In such a scenario, they must agree on how the testimony is reflected in the hearing transcripts. Portions of the testimony unrelated to a specific arbitration may need to be redacted to protect the integrity of the process.
A critical question also arises: to what extent can coordination be pursued without infringing on the autonomy of individual parties? In cases of disagreement, the tribunal bears the responsibility of balancing procedural efficiency with respect for party autonomy, ensuring that no party is unfairly disadvantaged.
Rule 17.2 requires the tribunal to decide applications under Rule 17.1 while considering confidentiality obligations under Rule 59. However, the coordination process may necessitate the transfer of information across related arbitrations involving different parties, increasing the risk of sensitive data being disclosed to unintended recipients.
Additionally, the enforceability of awards issued in coordinated proceedings may be jeopardized, particularly if one party alleges procedural irregularities or a breach of due process. Tribunals must exercise caution to ensure that coordination measures are implemented transparently and consistently with the procedural rights of all parties.
These risks can be mitigated through the issuance of clear procedural orders, well-defined coordination protocols, and maintaining detailed records of party consent to ensure fairness and transparency throughout the process.
Conclusion
The introduction of coordinated proceedings under SIAC Rule 17 reflects an evolving response to the practical complexities of modern commercial arbitration. By addressing challenges such as parallel proceedings and inconsistent awards, this rule marks a significant procedural advancement in multi-party and multi-contract disputes.
SIAC Rule 17 is poised to influence the drafting of arbitration clauses, encouraging parties to consider provisions for coordination in complex transactions. Its adoption may also position SIAC as a preferred choice for institutional arbitration in cases involving interrelated disputes. Furthermore, the rule sets a precedent that could prompt other arbitral institutions to adopt similar mechanisms, potentially reshaping the landscape of international arbitration by fostering greater efficiency, consistency, and coherence in dispute resolution.