SCMA: Maritime arbitration is expected to rise in prominence

She also refers to the several bunker disputes they currently handle with regards to quality issues and non-compliance with Mass Flow Meter procedures. Complying with the various regulations for bunker players would help minimise disputes, Mrs Song highlights.

SAFETY4SEA: What are your top priorities in Singapore Chamber of Maritime Arbitration (“SCMA”) agenda for the next 5 years?

Corina Song: In view that the centre of maritime gravity has shifted to the East, the top priorities in the next 5 years for SCMA, which provides a framework of rules for the resolution of shipping and international trade disputes, will be to continue to raise our profile in the Asia-Pacific region. We will intensify our marketing efforts in key markets such as China, India, Indonesia, Malaysia, Thailand, and Vietnam. Various marketing and outreach activities such as local and overseas seminars have been planned with our partners, which include local and international law firms, barristers’ or arbitrators’ chambers, as well as industry associations. Through our series of initiatives, we aim to raise potential users’ awareness of SCMA and at the same time encourage them to adopt our latest SCMA Arbitration Rules (4th Edition) (“Rules”) launched on 1st January 2022.  Our outreach efforts have been hindered during the recent pandemic. However, with the gradual lifting of travel restrictions over the last 12 months, you will find SCMA busy making more in-person visits, and organising more educational as well as networking events in Singapore and beyond our shores in the next 5 years!

S4S: What will be the biggest challenges for the maritime industry from your perspective? How these will affect the industry and how are you preparing to face them?

C.S.: Besides challenges from geopolitical tensions, stagflation, and a possible resurgence of COVID-19, the industry also needs to be equipped to contend with new regulations for decarbonisation. These disruptions and challenges could potentially give rise to disputes. As the maritime sector remains an important pillar of global commerce, maritime arbitration is expected to rise in prominence as a mode of resolving disputes in an increasingly volatile and uncertain environment. Leveraging on Singapore’s position as the top seat of arbitration globally (based on Queen Mary University of London’s international arbitration survey 2021), SCMA is well placed to continue to provide a vital and robust arbitration framework, one that is responsive to the needs of the shipping and international trade industry, for the resolution of shipping and international trade disputes. To better prepare SCMA, we will regularly review our arbitration rules to ensure that they reflect current industry practices and trends, remain user-friendly and relevant. We will also continue to enhance our panel of arbitrators to provide users with a wider choice.  Our diverse panel, with arbitrators from 17 different jurisdictions, comprise legal, commercial and technical subject matter experts well equipped to handle disputes arising from new and emerging industry challenges.

S4S: According to your data/ analytics from disputes and claims of the last five years, have you identified any trends/ key areas that the maritime industry needs to focus on?

C.S.: According to our case statistics, charterparty and bunker disputes form the bulk of SCMA references. Other types of disputes which we encounter include trading/commodity disputes, as well as disputes arising out of the sale and purchase of vessels (MOA). With the current focus on decarbonisation and the introduction of the Energy Efficiency Existing Ship Index (“EEXI”) and Carbon Intensity Indicator (“CII”) regulations, we anticipate that we will in all likelihood see an increase in the number of charter party disputes arising out of these recent regulations. For example, the annual rating of the CII could potentially give rise to disputes between ship owners and charterers.

S4S: What are your suggestions to industry stakeholders to avoid bunker disputes, which is currently a common issue?

C.S.: Many of the bunker disputes that we encounter involve quantity and/or quality disputes, non-compliance with Mass Flow Meter procedures or suspected breach of system integrity (for example, non-calibration). Complying with the various regulations for bunker players would help minimise disputes. However, should disputes still arise, SCMA has a set of specialised rules namely, the Singapore Bunker Claims Procedure (“SBC Terms”).  The SBC Terms were designed to resolve disputes arising out of or in connection with any contract for the sale and/or supply of bunkers. Stakeholders in the bunkering sector are welcome to contact SCMA at [email protected] to find out more about the merits of using the SBC Terms, which include an expedited timeframe for service of pleadings and submissions, and summary proceedings for smaller claims below SGD 100,000.

S4S: What needs to change to raise industry’s profile and attract future talents?

C.S.: At SCMA, we recognise the importance of maintaining quality amongst our panel members and we do this by providing appropriate training.  In 2021, SCMA introduced its Maritime Arbitrator Accreditation Programme (“MAAP”), which is conducted in collaboration with the Singapore Institute of Arbitrators. Consisting of two modules and a written assessment, and conducted by two of SCMA’s experienced and esteemed arbitrators, the programme has so far been well-received by candidates from not only Singapore but also jurisdictions such as Australia, India, Vietnam, and even the United States. The MAAP forms the bedrock of our continuing education programme for our arbitrators, but there are of course many other seminars and courses that we organise or promote in collaboration with many of our partners.  As for attracting young talent, we try to get involved at a much earlier stage – at the tertiary level. We have sponsored and continue to support the Maritime Law Association of Singapore’s annual Maritime Mooting Competition (“MLAS Moot”).  The main objective of the MLAS Moot is to encourage law students, as well as those who are about to embark on a career in law, to study maritime law and/or to embark on a career as a maritime lawyer. Additionally, we also work with the Singapore Maritime Foundation to organise learning journeys for law students from our tertiary institutions such as our recent learning journey to PSA’s busy container terminals and its Innovation Centre which showcases the innovation solutions and plans for future PSA and Singapore’s future container port at Tuas.   We also sponsor the International Maritime Law Arbitration Moot (“IMLAM”), which is a commercial maritime mooting competition organised by the Murdoch University School of Law and open to all law students who have not been admitted to practice.  The Singapore team were champions in 2000, 2001, 2010, 2015, and 2017, and runners up on three other occasions, the most recent being 2022.

S4S: Do you have any new projects/ plans that you would like to share with industry stakeholders?

C.S.: In addition to our recent outreach efforts, it is also timely for SCMA to now resume its first in-person biennial flagship conference in April 2023. This event will be held in conjunction with the Maritime and Port Authority of Singapore’s “Singapore Maritime Week 2023”. The SCMA Conference will serve as a platform for arbitrators, and legal practitioners to congregate and share their experiences and insights on maritime and trade arbitration.  The theme of this year’s annual conference is “Navigating a Disrupted World – Global Perspectives”. We will, at this year’s conference, explore the challenges and opportunities that could arise in a post-Covid world characterised by ongoing geopolitical tensions and war, and the drive towards decarbonisation and digitalisation. Current issues in maritime dispute resolution in key regional jurisdictions – China, India, Indonesia, and Vietnam – will also be discussed. Besides the plenary sessions, there will be opportunities for networking. We look forward to welcoming participants from around the globe.

S4S: What is your key message to industry stakeholders for improving industry’s performance and staying competitive amid these challenging times?

C.S.: Amidst volatility, minimising risk and disruptions are important for businesses to remain competitive. Whilst the tendency is for corporates to spend much time revising and discussing commercial clauses in their contracts, very little time, if at all, is spent considering the dispute resolution clauses in contracts. This leads to many pathological arbitration clauses, some of which make very little sense! Whilst such clauses might be a lawyer’s dream, it is a nightmare for the commercial man.  When a dispute arises, you don’t even know which the appropriate forum is to turn to.  Having clearly worded and defined dispute resolution clauses ensures certainty, which results in faster and more cost-effective resolution of disputes, leading to less business disruption, and impact on commercial relationships. As arbitration is a popular alternative dispute resolution mechanism, we hope that industry stakeholders will consider incorporating SCMA’s model clauses in their next review of their charterparties and other contracts. Besides our main SCMA arbitration clause, we also have an SCMA-BIMCO Law and Arbitration Clause as well as specially designed procedures for the apportionment of liability in collision cases (the SEADOCC procedure), and bunker disputes which was discussed earlier.

The views presented hereabove are only those of the author and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.