SIAC's New Insolvency Arbitration Protocol
On 13 December 2024, the SIAC opened a public consultation into its new SIAC Insolvency Arbitration Protocol (the “Protocol”). The Protocol is designed to provide a set of truncated procedural rules for the resolution of disputes “arising out of or in connection with, or in anticipation of, any insolvency proceedings”. Insolvency proceedings are defined widely in the Protocol and include judicial, administrative and debt restructuring proceedings where the affairs of a person or entity are subject to, or will be subject to, control or supervision by a court. The Protocol states that awards generally have to be rendered within 6 months from the date of constitution of the tribunal and sets the default seat of the arbitration as Singapore and Singapore Law as the default governing law although this can be changed by the parties. The Protocol also anticipates the creation of a specialist panel of arbitrators with expertise in insolvency related disputes, the SIAC Specialist Insolvency Disputes Panel. Given that insolvency practitioners are generally officers of the Court and have reporting duties to creditors and their supervising Court, the Protocol also allows the parties to request the tribunal to amend the default confidentiality provisions surrounding an arbitration to allow parties to inter alia disclose part or all of any award.
This Protocol is a positive development given the increasing globalisation of business and consequently of cross-border insolvencies; it provides an alternative forum for the determination of insolvency disputes which will be particularly attractive in cases which involve foreign debtors. That said parties still need to be aware that not all jurisdictions accept the arbitrability of insolvency disputes and some jurisdictions draw a distinction between private remedial claims which they recognise as arbitrable, and avoidance claims pursued in insolvency proceedings which are non-arbitrable[1]. The public consultation closes on 17 January 2025.
[1] Article V(2)(a) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) provides that the recognition and enforcement of an arbitral award may be refused if “the subject matter of the difference is not capable of settlement by arbitration under the law of that country”.
