SICC: Meaning of a Claim of an International & Commercial Nature, & What Constitutes a Written Jurisdiction Agreement

Singapore High Court

The recently established Singapore International Commercial Court, which adjudicates claims of an international and commercial nature (in relation to which the parties have submitted to the Singapore International Commercial Court’s jurisdiction under a written jurisdiction agreement), is meant to further boost Singapore’s value as a “prime destination for international commercial dispute resolution”. This article explores the meaning of claims which are of an “international” and “commercial” nature, as well as what constitutes a “written jurisdiction agreement”.

What are Claims of an International Nature?

It should first be noted that the definitions of “international”, “commercial” and “agreement in writing” would follow the same definitions applicable in international arbitration, with suitable modifications (see [21(b)] of the Report of the Singapore International Commercial Court Committee (November 2013)).

Under the new Order 110, rule 7 of the Rules of Court, the first key requirement to establish the Singapore International Commercial Court’s jurisdiction to hear and try an action is that the claims between the parties are “of an international and commercial nature”.

Order 110, rule 1(2)(a) of the Rules of Court provides 4 alternative situations where a claim is “international in nature”:

  • The parties to the claim have, by a written jurisdiction agreement, agreed to submit the claim for resolution by the Singapore International Commercial Court and, at the same time the agreement was concluded, the parties have their places of business in different States;
  • None of the parties to the claim have their places of business in Singapore;
  • One of the following places is situated outside any State in which any of the parties have their places of business: (A) any place where a substantial part of the obligations of the commercial relationship between the parties is to be performed; (B) the place with which the subject-matter of the dispute is most closely connected; or
  • The parties to the claim have expressly agreed that the subject-matter of the claim relates to more than one State.

The Singapore International Commercial Court must not decline to assume jurisdiction solely because the dispute is connected to a jurisdiction other than Singapore, if there is a written jurisdiction agreement between the parties (see Order 110, rule 8(2) of the Rules of Court). In other words, forum non conveniens arguments would ordinarily be dismissed having regard to the parties’ mutual agreement to submit to the Singapore International Commercial Court.

The new general rule that forum non conveniens arguments will ordinarily be dismissed, would have the happy effect of attracting to Singapore (and allowing to be heard here) cases of an international and commercial nature, when previously the Singapore Court may have had to decline to exercise jurisdiction and stay local proceedings in favour of a foreign jurisdiction. That being said, as the Singapore International Commercial Court gains popularity and acceptance as an international forum for dispute resolution, and parties increasingly enter into written jurisdiction agreements, the High Court’s caseload of cases of such nature may potentially decrease in favour of the Singapore International Commercial Court hearing such cases (especially cases where notwithstanding the “international” nature of such claims, the proceedings would not have been stayed due to other connecting factors to Singapore such as Singapore governing law, the location of witnesses in Singapore, etc).

What are Claims of a Commercial Nature?

Order 110, rule 1(2)(b) of the Rules of Court provides a non-exhaustive definition of a claim which is “commercial in nature”, which are claims where the subject-matter arises from a relationship of a commercial nature, whether contractual or not, including (but not limited to) any of the following transactions:

  • Any trade transaction for the supply or exchange of goods or services;
  • A distribution agreement;
  • Commercial representation or agency;
  • Factoring or leasing;
  • Construction works;
  • Consulting, engineering or licensing;
  • Investment, financing, banking or insurance;
  • An exploitation agreement or a concession;
  • A joint venture or any other form of industrial or business co-operation;
  • A merger of companies or an acquisition of one or more companies;
  • The carriage of goods or passengers by air, sea, rail or road.

Cases which would clearly not be of a commercial nature would include matrimonial disputes (see [28] of the Report of the Singapore International Commercial Court Committee (November 2013)). See also the First Schedule of the International Arbitration Act (Cap. 143A) for a similarly wide definition of “commercial” matters (citing the UNCITRAL Model Law on International Commercial Arbitration).

What is a Written Jurisdiction Agreement?

The second key requirement to establishing the Singapore International Commercial Court’s jurisdiction to hear and try an action is that the parties have “submitted to the Court’s jurisdiction under a written jurisdiction agreement”.

A written jurisdiction agreement would, of course, include clear and express contractual terms providing for such submission. However, Order 110, rule 1(2)(e) provides that a jurisdiction agreement is written “if its contents are recorded in any form (whether or not the agreement has been concluded orally, by conduct or by other means), including an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference”. It should be noted that this definition is similar to the definition of an arbitration agreement under Section 2A of the International Arbitration Act (Cap. 143A).

This is a fairly wide definition which would include agreements concluded orally, by one’s conduct, or other means, as long as such agreement is recorded in any form and is accessible so as to be usable for subsequent reference. On a plain reading, such recordings may potentially include electronic communications such as faxes, emails or even phone or WhatsApp messages.

Such a wide definition of a written jurisdiction agreement would allow willing and able parties to bring their claims before the Singapore International Commercial Court for adjudication, without the need to actually sign any written jurisdiction agreements. This is commercially sensible and convenient given that not all commercial transactions are governed by written contracts, and even if they were so governed, such contracts may not specifically provide for the choice of forum for dispute resolution. It is likely that parties involved in international and commercial matters may now come to an oral agreement (or even by conduct) to submit their claims to the Singapore International Commercial Court, and to follow up with a simple email to confirm such agreement, without the need to sign a new or revised agreement.

That being said, it may envisaged that such a wide definition may potentially lead to preliminary and perhaps time-consuming issues being raised by unwilling or backtracking parties disputing the jurisdiction of the Singapore International Commercial Court, on the basis that the recording of the written jurisdiction agreement did not represent parties’ agreement, especially if the agreement was concluded orally or by conduct, and/or recorded in a form other than in a signed agreement. To avoid such issues, and to ensure clarity on the choice of forum for dispute resolution, it may be best to ensure that any written jurisdiction agreement (whether contained in the original contract or otherwise) should be signed by both parties.

Conclusion

Quite clearly, the similarity of the definitions of “international”, “commercial” and “agreement in writing” between the rules governing the Singapore International Commercial Court and that in international arbitration shows the complementariness of the Singapore International Commercial Court to arbitration in Singapore. This is best summed up in the following paragraph from the website of the Singapore International Commercial Court:

“The SICC serves as a companion rather than a competitor to arbitration as it seeks to provide parties in transnational business with one more option among a suite of viable alternatives to resolve transnational commercial disputes. It enhances Singapore’s share of the global legal services pie without compromising Singapore’s success as a seat of international arbitration as well as the international recognition and acclaim enjoyed by the Singapore International Arbitration Centre (SIAC).” [Emphasis added]

Together with the Singapore International Mediation Centre and the Singapore International Arbitration Centre, the establishment of the Singapore International Commercial Court strongly places Singapore in a strategic position to be a “prime destination for international commercial dispute resolution” in the years (or decades or more) to come.”

 

The usual disclaimer: All opinions expressed on www.singaporelitigationlawyer.com are entirely my own. Importantly, my opinions do not constitute legal advice and you should definitely formally engage a lawyer to confirm, vary or refute my views.

To Sue or Not to SueDemystifying Litigation in Singapore@www.singaporelitigationlawyer.com © Dominic Chan, a Singapore litigation lawyer. All rights reserved.

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