The presentation discusses in depth the recent proposal of the Singapore International Arbitration Centre on cross-institutional consolidation of arbitral proceedings. It also discusses how the international arbitration has reacted in the first week since the proposal was published.

1. SIAC Proposal on Cross-
Institutional Consolidation of
Arbitral Proceedings
Badrinath Srinivasan, LL.M., A.I.I.I., M.C.I. Arb.
http://in.linkedin.com/pub/badrinath-srinivasan/13/604/916
www.practicalacademic.blogspot.in
http://ssrn.com/author=665603

2. The Problem
 Complex transaction between a foreign
investor and a corporation in the host
country
 Nature of Transaction: Foreign investor
wants to directly invest in the latter
Corporation
 Transaction consists of many agreements
 Agreements include, say, Shareholders
Agreement (SHA) and Technology
Licensing Agreement (TLA)

3. The Problem (2)
 Shareholders Agreement (SHA) provides for
arbitration under the ICC Rules
 Technology Licensing Agreement (TLA)
negotiated subsequently provides for
arbitration SIAC Rules
 After transaction fructifies, disputes arise
between parties under both the SHA and the
TLA.
 Foreign investor wants arbitration under the
ICC Rules but host corporation wants it under
SIAC rules.
 Existing institutional rules do not deal with
consolidation such cases

4. The Problem (3): Issues
 Will arbitration be under the SIAC or the
ICC Rules?
 Who decides the issue when parties
disagree?
 What happens if the tribunal under the ICC
Rules comes up with a finding inconsistent
with the tribunal under the SIAC Rules?
 Parties will have to expend thousands, if not
millions, of dollars in deciding these
questions, possibly in various jurisdictions.

5. The Compatibility Requirement
 Existing rules contemplate consolidation
if the arbitration agreements are
compatible.
 Art. 19.1(b)&(c) CIETAC Rules 2015,
 Art. 10(c) ICC Rules 2017, Art. 8.1(c)
AAA-ICDR Rules 2014, Art. 28.1(c)
HKIAC Rules 2013, Art. 22.1(x) LCIA
Rules 2014, Art. 15.1(iii) SCC Rules,
2017, Art. 8.1(c) SIAC Rules 2016
 If the agreements are not compatible
(say, ICC & SIAC Rules), no
consolidation is possible

6. Possible Solutions
 Many jurisdictions adopt different
methods
 Method 1: go by the clauses and risk
increased costs and inconsistent
decisions.
 Method 2: Refer disputes to arbitration
under the main agreement, especially
through the courts of the seat (see, for
instance, Chloro Controls India Pvt. Ltd.
Vs. Severn Trent Water Purification Inc.
(2012: Supreme Court of India)

7. SIAC’s Proposal
 Singapore International Arbitration
Centre’s proposal (December 2017):
Institutional Cooperation.
 SIAC’s Proposal on Cross-Institution
Consolidation Protocol contemplates
understanding between arbitral
institutions for consolidation.
 Such understanding is either on case-
to-case basis or on pre-determined
criteria.

8. Two Solutions
 Two possible solutions proposed by
SIAC
 Solution 1: Creation of a standalone
mechanism to address consolidation
applications
 Solution 2: Objective criteria in
Institutional Rules

9. Solution 1: Standalone
Mechanism
 Adoption of Consolidation Protocol with
the below features
 Joint Committee of the Arbitral
Institutions would decide consolidation
applications
 Protocol should provide for timing of
consolidation applications, rules
regarding appointment of the Joint
Committee, and criteria for determining
the application for consolidation

10. Solution 1: Standalone
Mechanism (2)
 Specific joint committee to be
appointed for each consolidation
application
 Preferable for arbitral tribunal not to
have any role in the application
 Separate fee for decision by the Joint
Committee is to be borne by the
parties
 Decision to partially consolidation in
such cases may not be fruitful.

11. Solution 1: Standalone
Mechanism (3)
 Requirement for reasoned decisions
by the Committee is to be balanced
against delay and costs for providing
reasons by both institutions.

12. Solution 2: Unilateral Decision by
an Institution
 Arbitral institutions could adopt a
single Consolidation Protocol (CP)
 CP would authorise one institution to
decide on the arbitration
 Decision would be based on objective
criteria as contained in the CP

13. Solution 2: Unilateral Decision by
an Institution: Merits & Demerits
 Merits of Solution 2
◦ Simple
◦ Easy to administer
◦ Less costs and delay
 Problems
◦ Substantial discretion on a single
institution
◦ Lack of possible consensus between
arbitral institutions

14. Proceedings Post-Consolidation
 Once there is a decision to
consolidate, the arbitration can either
be administered jointly by both
institutions.
 Alternative is for institutions to agree
on objective criteria based on which
one institution will administer the
arbitration

15. Proceedings Post-Consolidation
(2)
 Joint administration has its advantages
◦ Increased case load to institutions
◦ Increased value of disputes administered
◦ Possible expansion of geographical spread of
disputes
 Joint administration is also disadvantageous
◦ Requires new rules on joint administration- too
arduous
◦ Extensive cooperation will increase costs and
delay the proceedings
 Administration by one institution is more
attractive

16. Criteria for determination of the
institution
 Number of proceedings
◦ If number of proceedings to be
consolidated is odd, the institution that is
referred to more times than the other. e.g.,
two agreements provide for ICC and one
SIAC, the arbitration is to be administered
by ICC Rules
◦ If the number is even, other criteria such
as timing of the invocation can be looked
at.

17. Other Criteria
 Value of the disputes
 Time of commencement of arbitrations
 Subject-matter of the dispute
 Nationality and domicile of the parties.

18. Preliminary Assessment of the
SIAC Proposal
 Market seems to call it a bold, innovative
move.
 Another example of erosion to party
autonomy in international arbitration?
 One more ground for challenging the
arbitral award?
 Possibility of different jurisdictions
viewing the consolidation decision
differently?
 May lead to “institution shopping” by the
parties

19. Preliminary Assessment of the
SIAC Proposal (2)
 Apprehension on whether the
proposal is administratively workable?
 Consolidation applications could be
filed as a strategy to delay, increase
costs in obtaining the award

20. Further Readings
 Angela Bilbow, SIAC proposes ‘ground-breaking’
consolidation protocol, CDR-News (21.12.2017)
 Herbert Smith Freehills, SIAC Issues Proposal for
Consolidation of Arbitral Proceedings Between
Institutions (22.12.2017)