Speech by Prime Minister Lee Hsien Loong at Opening Ceremony of the 21st Congress of the International Council for Commercial Arbitration (ICCA)

Prof Jan Paulsson
President of the International Council for Commercial Arbitration

Prof Michael Pryles
Chairman of SIAC and Chairman of the Organising Committee

The Honourable Chief Justice Chan Sek Keong

Distinguished Excellencies, judges, guests, ladies and gentlemen

I welcome one and all to ICCA in Singapore. It is timely that you are holding the 21st ICCA Congress here, the last time you were in Asia it was 8 years ago, and this is the first time that this event is held in Southeast Asia.

It is an exciting time for Asia, in an uncertain world. We have here, a young and growing population eager to move forward, make a better tomorrow, change the world. The economies, the resources, the ideas, the drive, offer tremendous potential, notwithstanding the current problems we see in Europe and in the developed economies.

Singapore, in the middle of this region, offers a ring-side seat to this transformation. As you heard Prof Pryles explain, we are an Asian country – multi-religious, multi cultural, reflecting the ethnic composition of our region and yet familiar with Western norms, due to our British colonial history and our membership of the Commonwealth. We use English and have a common law tradition. And we thrived as the crossroads of East and West and we have also thrived because at a strategic location, we have opened ourselves to the world – to trade, investments, talent and ideas.

One reason for our success has been our emphasis on the Rule of Law. Property rights are clearly defined and strictly enforced. Our judiciary is impartial and incorrupt and it deals with cases and issues efficiently, transparently, and effectively. We have been able to build up the scope and the quality of our legal services so that high-quality services have been an enabler for growth and development of the wider economy.

Singapore has always promoted free trade, right from its founding as a modern city in 1819, by Stamford Raffles.  Services, as you know in many jurisdictions, are a complicated matter, but even in services we decided to move and to open ourselves up – a little bit later, in the last few decades, in the 80s and the 90s particularly.

Among the services - accountancy, finance, banking, medical - law is perhaps one of the most sensitive, because it is tied up with administration of justice in the country, and not just an economic service but linked with a political system and a culture, with a whole structure of the society. But nevertheless after studying other jurisdictions, we decided that a closed shop in Singapore was not in our interests.

In particular, the backdrop to this was that in the late 1990s we were liberalising the financial sector, and building Singa¬pore up as a financial hub. The financial institutions (FIs) operating in Singapore but servicing the region would need highly specialised legal services to support them, not always available in Singapore, either with a depth or with that experience which they call for. So if we had insisted that we opened up the financial sector but kept the legal services restricted to local practitioners, law firms, and lawyers, we would have held back the financial industry, and, or more likely,  caused the deals to be done elsewhere. So we started to liberalise the legal services, allowing foreign law firms to undertake selected areas of Singa¬pore commercial law. At that time I was in the Monetary Authority, I was pushing for the liberalisation of financial services, and therefore, the legal services too. Our strategy worked, the financial sector took off, today we are a well established financial centre in Asia. Our law firms and legal services have taken off, and in fact our local law firms have held their own, despite their competition.

The next step beyond this was to recognise legal services as an economic opportunity in its own right, and not just as an enabler for the rest of the economy or for other industries. So the legal services we hope to anchor in Singapore serve the whole region and indeed even beyond Asia, for businesses elsewhere in the world, and certainly not just our five million people in Singapore. Therefore over the last decade we further opened up our legal services, establishing and creating new forms for foreign law firms and foreign lawyers to be able to operate in Singapore, with the Formal Law Alliance and Joint Law Venture (JLV) schemes.

Today, we have a very open legal regime. Foreign law firms are free to practice offshore law. We have a Qualifying Foreign Law Practice (QFLP) and JLV schemes allowing foreign firms to undertake many areas of Singapore commercial law. And we have just announced the second round of applications for QFLP licenses. It is the way the world is going, it is the way the legal services are moving, all over the developed world, and in the advanced countries, and it is the way forward also in Singapore.

Indeed there will be pressure on the local firms, especially the large ones, but taking a broad view of Singapore’s interests, opening up offers enormously more benefits than costs. We have now become a hub for commercial legal services that support investment and trade in Asia. Offshore firms bring international work to Singapore. Our young lawyers have more opportunities to build their careers in Singapore. So when we made the move step by step, and we discussed it with the industry and  the leading firms and practitioners, the senior lawyers from most of the local law firms supported what we were doing, and I think they were right to back the judgement.

One example of how we have grown legal services in the industry is arbitration. It has become the default mode of resolving commercial cross-border disputes today and particularly in emerging Asia, because companies in Asia operate in different legal systems with different practices in many different jurisdictions. Singapore is well-positioned to be the arbitration hub for this industry because of our neutrality. Companies want a neutral venue, not necessarily the host country or where the law is based, which they are arbitrating on. We are well positioned because of our judicial philosophy, because the Singapore Courts support the arbitration process and the finality of arbitration awards, so matters can be settled in months or a year or two, not decades.  We are in a good position because of our openness. You can choose any arbitrator and use any governing law and foreign arbitrators do not need to obtain work permits or pay withholding tax.

We have actively pursued this goal on many fronts, in parallel. We have invested in infrastructure, such as Maxwell Chambers – an integrated international dispute resolution centre with state-of-the-art facilities such as transcription and immediate translation services. We have developed local arbitral institutions, such as the Singapore International Arbitration Centre (SIAC) and the Singapore Chamber for Maritime Arbitration. We have updated our laws – the Singapore’s International Arbitration Act incorporates UN Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration and we are a signatory to the New York Convention so arbitration awards from Singapore are enforceable in over 140 countries.

So, I think I can say that we have achieved a modest international reputation. A survey two years ago by White & Case ranked Singapore, together with Paris and Tokyo, third in the world, after London and Geneva as the most popular seats for arbitration. SIAC itself was ranked as the fourth most popular arbitration institution in world. So we have made progress, but as usual, the more you do, the more you need to do. So we will to work hard to enhance our position as an arbitration hub.

Therefore we are very honoured to host this ICCA Congress here, as the foremost and so far largest ever meeting of leading arbitrators and arbitration counsel from around the world. It endorses the positive developments in international arbitration here over the past five years. And it provides the opportunity for thinkers from developed and emerging nations to exchange perspectives on the future of arbitration.

So I hope in the course of your deliberations, you will learn not only new ideas and make new contacts, but also find out something about what Singapore can offer and consider, in future, Singapore as your arbitration venue for your cases.

Thank you all and I wish you a very fruitful Congress!