Keynote Address by Mr Edwin Tong SC, Minister for Culture, Community and Youth, and Second...

Ms Claudia Salomon, President of the ICC International Court of Arbitration

Mr Alexander Fessas, Secretary-General of the ICC International Court of Arbitration

Mr Tejus Chauhan, Director (South Asia) of the ICC International Court of Arbitration

Friends and Colleagues

Our Distinguished Guests

Ladies and Gentlemen

Introduction

1. Good morning to all of you. And to our friends from abroad, a very warm welcome to Singapore.

1. I think I heard Tejus say earlier that we have got a very great turnout today. I warmly welcome all of you to Singapore.

1. I believe that this turnout is also a testament to the camaraderie and the friendship that you have built up around ICC. I was just remarking to Claudia as I was stepping into this ballroom that it is like a reacquaintance of old friends. I think this is something special that you have built up at ICC. Beyond just the professional links, there is also a strong sense of camaraderie and a common sense of purpose in the causes that ICC stands for.

1. I am very happy to be back here again after two years, to speak at the ICC Asia Pacific Conference on International Arbitration, and if my memory serves me correctly, I think we were right here in this very same ballroom.

1. It is of course a little more crowded today. But although the conference, the venue and the familiar faces are the same, I think the world around us is no longer the same, unfortunately. A lot has happened, since we last met in June 2022. And many of these events have directly or indirectly impacted, and still continue to impact, the way in which we look at and perceive international arbitration.

1. So this morning, I thought I would share:

(1) Three global developments that have impacted arbitration, and are likely to continue to do so in the short term;

(2) How Singapore is responding to these developments; and

(3) What are some of the things that we can do, collectively as an international arbitration community, which is the theme of today's conference.

Global Developments Impacting International Arbitration

A. Geopolitical Tensions

1. First, let me speak a little bit about geopolitical tensions and the impact on the region, culminating in my conclusion, which I will make a case for it for, that Asia Pacific remains a very optimistic venue, and one in which we can continue to see the rise of international arbitration.

1. First, the proposition that law follows business - I think that is a very basic proposition. It means that where there are commercial transactions, there will likely be legal work that will follow, and with that, likely to have disputes that will require resolution.

1. These, in turn, depend heavily on the economic and socio-political situation of a particular region. If businesses have confidence in the situation, they will be bullish about investing and expanding. If they have confidence about a jurisdiction - when they invest, and there is a dispute, it will be resolved fairly - that confidence will translate into even more investments. Conversely, if they have little confidence, they will be more cautious - they will invest less, and expand more slowly.

1. Over the last two years, the climate has not been all that rosy.

1. When I last spoke at this conference in 2022, many countries were just emerging from the COVID-19 pandemic. It was just four months after Russia's invasion of Ukraine. The Israel-Hamas war had not yet taken place. The series of US bank failures and bankruptcies had not yet started.

1. All these events collectively, some more than others, have contributed to the increased inflation, deglobalisation, friend-shoring, re-shoring, and somewhat looking introspective, looking inwards, and general business uncertainty, across the world. As a result, economic activities have slowed down. Even though many of these events did not happen in our neck of the woods, APAC was not spared the impact.

1. I put up a chart here, just to look at some of the largest economies in the region:

(1) China saw its foreign investments shrink by a massive 26.1% year-on-year in the first quarter of this year. This is its weakest first quarter since the first wave of COVID-19 infections in 2020.

(2) Japan slipped into a recession at the end of last year and contracted by 1.8% in the first quarter of this year.

(3) India faced a sharp decline in FDI inflows in 2022-2023.

1. These are amongst the three of the largest economies in the world, and in Asia.

1. That said, as I started out at the outset, I remain very optimistic about APAC. Let me share some reasons and give you some sense of what I believe are the barometers of that optimism.

(1) First, in APAC, we have a large and young population. That stands for something in today's context. The United Nations Economic and Social Forum recently reported that there are about 705 million young people aged 15 to 24 across APAC. That is about 60% of the world's youth in APAC. A youthful population means that it becomes a significant driver towards people talent and human capital. And 705 million representing about 60% of the world's youth, that is not a small number.

(2) Second, in APAC, we have a growing middle class. In 2020, Asia's middle class was sized at about 2 billion. By 2030, this number is expected to almost double, to 3.5 billion, and that accounts for two in three of the global middle class. So there is rising affluence and an increasing rate of that rising affluence. If you look at those same indices for Southeast Asia, we have 660 million population, of which 60% are below 35 years old. The GDP today is collectively about US$3.6trillion. In about five to six years' time in 2030, it is expected to grow to US$4.5 trillion and collectively as a unit will become the fourth largest economy in the world. That is not small, and more important than that, the other indicator - its rate of growth - is much faster than many other regions in the world.

(3) Third, increasing urbanisation. According to the UN Habitat, 54% of the global urban population, or more than 2.2 billion people, live in Asia. By 2050, it is expected to grow by 50% - an additional 1.2 billion people. What this means is that it will translate into greater and more infrastructure projects, higher purchasing power of the population, more vibrant, educated and skilled workforce - all of which will benefit the economy. Going back to what I said about law following business, it means there would be more commercialisation, more legal transactions and disputes work for us in this region.

1. In fact, we can already see these trends in the way international arbitration has panned out in terms of choice of seats and venue.

(1) When Queen Mary University of London and White & Case conducted its International Arbitration Survey in 2010, none of the top three most preferred seats was in Asia. But in 2021, just 11 years later, two of the top three seats were in Asia - Singapore and Hong Kong. Same for arbitral institutions. In 2010, none of the top three most preferred arbitral institutions came from Asia. But in 2021, SIAC and HKIAC were ranked among the top three.

(2) In 2010, Singapore did not have any foreign case management offices here. But today, we have the privilege of having the ICC, PCA, ICDR and WIPO AMC - all these major global institutions - managing their cases out of Singapore. They use Singapore as a base to promote their services, and it has yielded good results. As we heard Tejus said earlier, Singapore is ICC's top seat of arbitration in Asia for 13 years running.

1. So, for these reasons, we continue to be very optimistic about Asia.

1. What do we need to do in Singapore? We need to continue to be open and receptive to industry thought leaders coming into Singapore.

(1) Just last week I was in Washington DC and talked to ICSID about the possibility of them also setting up a presence here in Singapore.

1. We want to grow the legal community to support the business transactions, and we think that is important. Of the points that I will come back to is that a jurisdiction like Singapore needs to be a hub that allows parties to come into Singapore, transact in Singapore or from Singapore, or through Singapore.

1. To do that effectively, I think we need to be very much aware and be a hub that acknowledges the cultural nuances and diversities in the way in which business are transacted today. And the way in which businesses are transacted today will be different from in the past. And the way it is done in Asia will also be different in other parts of the world.

1. All of these are nuances that we, as a jurisdiction, if we want to be a hub and continue to play a role in the world, we have to be very mindful of. I will come back to this point in a moment, when I touch on cultural complexities and nuances.

B. Climate Change

1. Let me move on to another topic, which is climate change. Climate change is another issue that looks very different today compared to just two or three years ago.

1. Today, when someone says, 'How's the weather?', it is no longer just a euphemistic or conversation starter. They really mean how is the weather - is it warmer than usual? Is it unusual? Is it cold in spring and hot in winter? So, all of that I think we have all had some experience of one form or another.

1. The COP28 UN Climate Change Conference that took place in Dubai last year was a significant event. It marked the start of the end of the fossil fuel era. More than 100 countries pledged to triple their renewable energy by 2030, and that is just six short years away. All of these will have some impact on the way in which we look at legal transactions, and of course, the impact on dispute resolution cases and services.

1. As we look to phase out fossil fuels, we can expect to see more liability and regulatory issues pan out in arbitrations.

1. The move to renewable energy will also mean that we can expect to see more disputes arising out of licensing, supply chain, and transitional issues. Last year, Wood Mackenzie estimated that the APAC region is expected to invest US$3.3 trillion in power generation over the next decade. India and China, in particular, are expected to have significant opportunities for renewables development for solar and for wind power.

1. In addition to the transformation that we have just outlined, the social impact of climate change will also be very keenly felt.

1. There has already been a marked rise in the number of greenwashing actions being filed across the world. And it is not just the number of actions, the scale is also increasing. For example, in December 2023, Greenpeace Australia filed a greenwashing lawsuit against Woodside Energy, the country's largest oil and gas company. As more greenwashing actions inevitably emerge, companies will also need to manage their responses. It is in this respect, that the confidential nature of arbitration makes it a favourable dispute resolution option for many organisations that may find themselves in a middle of such disputes.

C. Technology and Artificial Intelligence

1. Of course, any discourse on the future of arbitration would be very incomplete without talking about technology.

1. In fact, the way in which we talk about technology today, in about six weeks' time, it will be quite different. That is the rate at which technology is moving today. The way I see it, the impact of technology on arbitration will be twofold - one, on the type of work that we will see come in, and two, on how we will deal with that work.

1. New technology is being developed every day, with AI is becoming more commonplace. ChatGPT, when it was launched, gained rapid popularity. Within just 5 days, there were 1 million users on the ChatGPT platform. Today, that platform has enhanced itself exponentially. As of March 2024, it is estimated that ChatGPT has almost 200 million users worldwide.

1. Since then, AI tools have been developed at phenomenal rates. Today, we can use AI to generate not just text, but images, music, and even videos - many deepfake videos as well. In fact, not for the first time, our former Prime Minister yesterday posted another deepfake video of himself that he found somewhere on the Internet. It is so realistic, so life-like, so real, you almost believe it.

1. AI is also being integrated into our everyday life. It is part of the way in which we work, play, and operate our household. When I last googled the impact of AI, I saw smart mattresses, AI powered oven grills and AI mirrors. I was wondering what AI mirrors were, because the mirror is supposed to tell the truth. Look into the mirror, you are supposed to see yourself. But an AI mirror, if you google it, will allow you to change the look altogether, and allow you to present a very different view of yourself to yourself - and of course, to someone else too.

1. You might laugh and think it is quite funny. But actually, these were amongst the new technologies unveiled at the 2024 Consumer Electronics Show in Las Vegas just a couple of months ago. These are all the showcases and all the advanced technology that we were talking about.

1. But while all of this sounds very impressive, technological advancements have and will continue to result in a wide variety of disputes - whether in data privacy disputes, intellectual property disputes. We, in Singapore, have lots of conversations about the impact of Large Language Models on copyright, on the way in which we will allow the production and the protection of copyright in, for example, artistic productions. We will find more cryptocurrency disputes, and even more post-M&A disputes.

1. So technology will not just change the way we sleep on mattresses or grill our steaks, or the way we look in the mirror. It is also going to change the way in which we practise law. In the last two years, we have seen an increase in both the availability and the use of legal technology tools as well. The types of cases is one thing, but the way we manage the cases is another.

1. We are not about to see robots take over a lawyer's job - not quite yet. But today, tech solutions can be found for a whole variety of legal work processes, including: case management, document and contract management, client management, practice management, legal research, simple drafting, and in some cases, even adjudication and deciding on cases.

(1) I used to do discovery 30 years ago, with all my documents fall on the floor, identifying them, organising them by dates, so that I get a chronological look at the documents, and I manually paginated each and every single page.

(2) I do not know how many in this room remember that but when I tell this to young lawyers today, they think I am from the moon, from a completely different generation. It shows how much we have moved in a couple of decades.

(3) And the rate of change for the next couple of decades will be exponentially quicker and faster - and in some ways, scarier than the last couple of decades.

1. These tools must be used responsibly. We have all heard about cases of lawyers and litigants misusing ChatGPT, or sometimes having AI hallucination where facts and cases were not facts and cases, but pulled out of thin air.

1. The use of AI has really given new meaning to the phrase "garbage in, garbage out". Because the tools we use are trained on the information we give it, we also run the risk of reinforcing our own bias and that comes through very much in the way which we use AI.

1. We will need to put up ethical guidelines and regulations.

(1) In Singapore, we recently updated our Model on AI Governance Framework for Generative AI. We did that at the start of the year, editing a document that has been around for a while. But it will by far not be the last iteration of this document as technology evolves.

(2) In August 2023, the Silicon Valley Arbitration and Mediation Centre published the first edition of their Guidelines on the Use of AI in Arbitration.

(3) In September 2023, by way of example, the Ministry of Justice of New Zealand also released their own guidelines for the use of generative AI in Courts and Tribunals. I am sure this will not be the last word, but its impact, we all agree, will be deep and broad.

Singapore's Response to Developments

1. What then has been Singapore's approach to all these changes? The evolution of AI, climate change, new ways of practising, new ways of developing practice areas and managing legal workflows. We go back to very fundamental basics.

1. I want to take you back to when we first started even thinking about Singapore as a legal services hub back in the late 1980s, early 1990s.

1. A couple of weeks ago, I had the privilege of being on the same fireside chat as Prof Jayakumar at the International Insolvency Institute Conference. It was illuminating to hear him speak about the thinking that he had as one of the first, second generation law ministers - the thinking behind why Singapore needed to open up, and why Singapore needed to become a legal services hub. At the end of the day, the fundamental principles behind what we need to do, even today, remain the same.

(1) We need to ensure that we are a jurisdiction that is founded clearly and unambiguously on the rule of law, on open, strong, transparent governance.

(2) We must build up and we continue to build up a respected judiciary. We have got a first-class judiciary with first rate jurisprudence.

(3) We have a strong command of the English language as our language of communication in business transactions.

(4) We have got a strong, business friendly environment, and we are reactive and responsive, very much so to the business community.

1. Occasions like this, when we have the chance to meet with practitioners from across the world, industry players, industry leaders, we take this as a very serious opportunity to take feedback and to understand, get our sense of what the pulse of the business community is all about, and where this is going. And then we look at our laws regularly to make changes.

(1) To give you an example, my Ministry, the Ministry of Law is perhaps one of the smallest ministries, by budget and by headcount in Singapore, but we are the most active in terms of making changes in Parliament, putting up bills and proposing changes in legislation.

(2) Our Arbitration Act has been enforced for about 30 years. We have seen 11 changes to the Arbitration Act, many of them major ones.

1. So we move very quickly. We understand what the mercantile community needs, and we move very quickly. We have also adopted the approach that we have got to be agnostic to nationality when it comes to strong legal talent. By that, I mean that we have to ensure that the parties have choices of the best in the world for the services they want right here in Singapore.

1. The first foreign firm to open its doors in Singapore obtained approval to set up shop in 1972. That is just 7 years after our independence. In the years that followed, we have established a series of different schemes - the Joint Law Venture (JLV), Formal Law Alliance (FLA) and the Qualifying Foreign Law Practice (QFLP) schemes.

1. All of these serve to bring foreign lawyers into Singapore to practise, sometimes on their own, sometimes in a QFLP, sometimes in alliance with a local firm. They help to serve our local businesses and all the 7,000 MNCs from around the world who have a presence in Singapore. They serve them in different ways.

1. We constantly review our schemes to see where we can improve.

1. In the last few decades, we opened up our legal industry to foreign lawyers to provide more choice of counsel. For example, a couple of years ago, we have allowed foreign lawyers to have rights of audience at the Singapore International Commercial Court (SICC) on large international restructuring cases.

1. Why? Because it is important to acknowledge that for large restructuring cases, you are unlikely to find that they are purely domestic or even purely regional. So you might have a filing in Singapore on a, say, 2(10) or 2(11). In tandem with that you might have a filing in, say, Jakarta or even in the US, in New York or in Richmond or in London.

1. What is important is for the courts to be linked up, and they have a Judicial Insolvency Network (JIN) system to link them up, but also for counsel to be able to directly address the court in Singapore - the SICC - on what is happening in each of these other jurisdictions and the kinds of orders that you might need to prevent arbitrage between the different jurisdictions. So it is important that we look at cases like these and develop incrementally the right approach.

1. When local lawyers say, but why are we opening up to foreign lawyers? Our answer is, well this is not work that would have come into the Singapore courts anyway, had we not opened it up. So overall, there is a much larger pie and it is a win-win for both foreign as well as local lawyers.

1. But I want to emphasise that we do not do this because we want to open up the market per se. It is not about that. It is about giving the parties the choice - the choice of the best trusted professionals to go to for advice and to resolve their disputes. And it is the same in arbitration as we look at changes that we have made in recent times.

1. We made changes to our legislation to provide support for the appointment of emergency arbitrators, a default mode of arbitral appointment in multi-party arbitrations. We have a third-party funding framework that we introduced. We did it initially cautiously, monitored it and then gradually expanded.

1. We have also allowed lawyers to now enter into conditional fee agreements, which we were initially worried about because of champerty and maintenance. But with some safeguards, we have opened it up as well.

1. We have also built up our hardware and infrastructure at Maxwell Chambers. Like Tejus says, come visit ICC at Maxwell Chambers. He made a plug for the chicken rice. I would say that the local dish, char kway teow, is also pretty good. So all that is across the road at Maxwell Market.

1. But I want to make the point that whilst we have been responsive to changes around commercial developments, we have also adopted a very inherently collaborative approach. An essential tenet that underpins our moves has always been to be close and in constant consultation with our stakeholders, like many of you are here.

(1) For example, when we set up the SICC, the government worked closely with the judiciary and the private sector to develop its framework. Within two short years, SICC went from an idea to realisation.

Shaping the International Arbitration Ecosystem

1. That brings me finally to the theme of today's Conference and points that I will close with. How do we look at and reshape the international arbitration ecosystem? I think it needs to be done at three different levels.

1. At the individual level, each of us, whether as counsel or as arbitrator, there needs to be a reaction and a response to the emerging areas, whether it is in AI, or new technologies, or climate change, or the way in which businesses are transacted. As disputes evolve, practitioners will need to understand and perhaps even master emerging technologies, and develop areas of specialisation.

1. Second, there needs to be, at both the individual and institutional level, a deep appreciation of the context in which we operate. I think that is particularly important. I mentioned earlier that I think Asia is going to grow, therefore transactions will grow, disputes will grow. But the way in which we respond and react to a dispute in Asia will also have to be culturally nuanced. By that, I mean we must understand that cultural nuances affecting businesses, the way in which a corporate might look at the long term, and value a long-term relationship and partnership, and how different cultural nuances might impact the perspective of a party on a dispute, or on a relationship, or on a contract, and how it is being performed.

1. All of that has very deep, different cultural nuances that we have to appreciate. I saw in the programme that there is a report that has been commissioned by ICC. I think that it is an excellent report, and I think you will enjoy the report later because it makes the point that we need to be fully appreciative of the audience that we are operating before, and the cultural and business context that we seek to operate in.

1. At the institutional level, I believe that arbitral institutions will need to expand and continue to remain accessible to users, contextualise to the jurisdiction that they operate in. We already see this in the recent updates to the SIAC Rules. But I believe that it is not just the technical framework that institutions will need to keep up with.

(1) Last year, the ICC honoured the Centenary of the ICC Court by unveiling the ICC Centenary Declaration on Dispute Resolution and Prevention, outlining guiding principles to shape dispute resolution for the next century with examples of specific priorities, including ensuring access to justice, improving transparency, adopting sustainability measures, and building on diversity, equity and inclusion.

(2) All of these are excellent principles, which puts people at the very forefront of what we think about when we want to embark on dispute resolution.

(3) I highly commend ICC who has been really, not just publishing this, but also walking the talk. Because in November 2023, the ICC Court began providing free access to dispute resolution content on Brazilian States and State Entities, for example, submissions, procedural orders, and arbitral awards.

1. Finally, besides the individual and institution, I think there also needs to be a national response.

1. I believe that courts will need to be empowered to adopt and maintain a pro-arbitration approach, to be guided by the principle of necessary, but minimal, curial intervention.

1. It is not about staying away from an arbitration. It is really about respecting party autonomy. If the party has chosen arbitration, they have received an award as a result, then full respect and autonomy must be given to that choice.

(1) In one recent case in Singapore, you will find that it is anonymised because of the parties, but you will find a 2023 case CZT. The SICC upheld the protection of confidentiality of deliberations in an arbitration. It is a crucial element of arbitration that is indisputably valued by users. So, when you go back to the greenwashing case that I spoke about, or the new and emerging technology case that I spoke about, the value of arbitration and the protection of confidentiality in the deliberations will be particularly valued.

1. I also believe that the jurisprudence plays an important role in fostering trust, consistency and reliability in the arbitration ecosystem. A strong pro-arbitration jurisprudential framework to uphold party autonomy will be necessary.

1. Governments will also need to be forward-thinking to create hospitable environments for arbitration, to continue to develop globally.

1. Singapore's approach I have outlined, but it may not necessarily be an approach that would fit with other jurisdictions. But for us, we believe in giving parties as much choice as possible, the autonomy to practise, bringing in your foreign counsel, and from the early 2000s, Singapore has not required foreign counsel coming in to practise arbitration, whether in Singapore law or otherwise, to require a licence. We have been very open about developing arbitration in this way.

1. So in the Singapore context, as I mentioned earlier, this translates into maintaining and keeping a very open regime, updating our legal as well as arbitration frameworks regularly, and remaining responsive to global developments.

1. Finally, at the government level as well, multilaterally, I think international cooperation and thought leadership will be essential. Singapore has and will continue to play an active role on international platforms, like UNCITRAL and WIPO. We will do our best, even as a small country, to build multilateral consensus amongst different countries, so that the rule of law can prevail and all of us can progress together on an even keel, on an even platform.

Conclusion

1. I will quickly round up and conclude.

1. I wish you a very pleasant conference. I see this room is filled up and that really is a sign of how important ICC has become in our business transactions, in our practice.

1. But I go back to the first point I made earlier. Beyond building professional connections, learning something about arbitration, I hope that you will also go back with more than just a professional connection, that you build deep social bonds, you build a strong community. Because at the end of the day, it is really about the camaraderie and the fact that you have a community that you share that brings us back each time and allows us to progress ICC.

1. Thank you very much for listening to me.

Last updated on 28 June 2024

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