Keynote Address by Guest of Honour Senior Minister of State for Law and Finance Ms Indranee Rajah at the 3rd ICC Asia Conference on International Arbitration

28 JUN 2017

28 Jun 2017 Posted in Speeches

Mr John Danilovich Secretary-General, International Chamber of Commerce

Mr Alexis Mourre President, International Court of Arbitration of the International Chamber of Commerce

Distinguished guests

Introduction

I am delighted to join all of you here today at the 3^rd ICC Asia Conference on International Arbitration.
Let me begin by first extending my warmest congratulations to ICC for being the first business organisation to be granted observer status at the United Nations General Assembly. This is a remarkable achievement. I am confident that ICC, as an observer at the UNGA, will bring about more robust policy-making processes for global business.
Later, the ICC Court and the Ministry of Law will sign a Memorandum of Understanding (MOU). Under this MOU, the ICC Court and the Government of Singapore will work together to do the following:
1. Set up an ICC Court case management office in Singapore to serve the arbitration needs of businesses in Asia; and
2. Develop and promote Singapore as a seat and venue for arbitration in Asia through advancing thought leadership, developing manpower talent and arbitration services, and undertaking joint marketing.
I would like to take this opportunity to say a few words about the MOU, and what it means for Singapore and for the international arbitration community.

Why Asia?
John started his address just now, talking about the major political and economic uncertainty facing the world today. What he said obviously resonated very much.
This year, we expect global growth to pick up, but only slightly. There remain tremendous uncertainties and downside risks in the global economy. The pro-trade consensus, which has served us well for many decades, lifted millions out of poverty, and brought peace and prosperity, is fracturing. Governments struggle to stay open and to manage the politics. As a politician myself, who has to stand for re-election every few years, I can tell you: it’s not easy.
In this uncertain environment, the world is looking for growth. Asia is where growth in the next decade will be: Northeast Asia, which includes China, Japan and Korea; South Asia, which includes India; and Southeast Asia which boasts 600 million people and a US$2.4 trillion GDP. Population growth, rapid urbanisation and development will sustain economic activities. While the pace of growth may vary from country to country, Asian countries remain predominantly pro-trade. Asian governments and people still believe that trade and economic integration, not isolation, will deliver a better life for all.
An effect of this is that we will see the economic centre of gravity of the world shifting to Asia, and at a quickening pace. Today, the Asia-Pacific region already accounts for 40% of global GDP. Within the next 20 years, it will account for more than 50% of global GDP.
As the economic centre of gravity shifts to Asia, so too will the centre of gravity for legal activities, because legal work follows economic activities. There will be a lag in this shift, because there are habits and established practices. Nonetheless, we will see Asia’s magnetic pull on business having a similar knock-on effect for legal activities.
1. Take infrastructure as an example. Asia's rapid urbanisation, development and population growth creates an urgent need: US$20 trillion of additional infrastructure investments from now till 2030. These infrastructure projects need financing and project structuring. They will also need legal services to bring the projects into being. The nature of infrastructure projects is such that delays and variations are common. Demand for infrastructure in Asia will translate to demand for dispute resolution services.
2. And we see this from the numbers already. Between 2014 and 2019, legal services are projected to grow at 3.3% a year globally. Over the same period, legal services in the Asia-Pacific region is expected to grow at 5.5% annually. What this means is that while we can continue to do good work around the globe, there are simply more opportunities in the Asia-Pacific region. And because the 2.2%-point difference in growth rate is compounded each year, this gap is widening very quickly.
If Asia, why Singapore?
It is therefore unsurprising that more and more multi-national corporations are setting up shop in Asia. This has been happening for some time, but we are now seeing professional service providers, including financial institutions, audit and accounting firms, law firms, and international dispute resolution institutions like the ICC following these multinational corporations.
In Singapore, we seek to be an Asian base for these companies. Today, we are already home to 4,200 regional HQs, and we aspire also to be the hub for dispute resolution service providers, even as they follow businesses into Asia. We will do so in a number of ways.
First, we are strategically located in the heart of Asia and we offer excellent connectivity. I am reminded of this when a few years ago, I saw the American TV series “Amazing Race”. Singapore was featured many times in the series, not because Singapore was the pit-stop for the race, but because contestants found it most convenient to transit through Singapore when they were travelling to and from Asia or within it. And we continue to invest, to make sure that it is easy for you to fly out and fly in. Just last week, Changi Airport opened its new Terminal 4. We are now building a new Terminal 5 to meet future demand in air traffic.
Second, we are pro-business and an open economy. In 2017, the World Bank ranked Singapore as the 2nd easiest place to do business in the world. The 2016 Business Environment Risk Intelligence Report rated Singapore the No. 1 investment destination in Asia. Trade amounts to more than three times our GDP. We have the most extensive and comprehensive network of trade agreements in Asia. I say all these, not to blow Singapore’s trumpet, because I think you know all these and need no convincing, but to reaffirm Singapore’s commitment to business and to open markets, amidst rising anti-globalisation tendencies. So John, we stand shoulder to shoulder on this.
Third, we have a trusted legal system that delivers high quality jurisprudence and is neutral and stable. Today, Singapore is one of the top five seats of arbitration in the world, alongside London, Paris, Geneva and Hong Kong. We are ICC’s No. 1 seat of arbitration in Asia. In 2016, there were 26 ICC cases seated in Singapore. Of these 26 cases, 24 did not involve any Singaporean party. Businesses who plan long-term choose Singapore as the seat of arbitration in their contracts, even though they have no connection whatsoever with Singapore. They know that if and when disputes arise, be it 5, 10 or 15 years later, Singapore will be Singapore: trusted, consistent and reliable in its approach, delivering the same high-quality jurisprudence as it does now, if not better. And more businesses will come to appreciate the trust, neutrality and stability that Singapore offers, as they command an even higher premium in an increasingly uncertain world. What we offer is intrinsically linked to our system of governance. It cannot be created overnight and is not easily replicated.
Fourth, the Singapore Government is focused and determined in our pursuit of developing the dispute resolution sector. Our efforts are concerted and sustained over many years. We engage practitioners and other stakeholders to ensure that our ecosystem is responsive to the needs of commercial parties.
We proactively review legislation to make sure they stay up-to-date and support businesses. For example, we recently amended legislation to allow third party funding in relation to international commercial arbitration as Alexis noted earlier. This offers businesses an additional financing and risk management tool, where businesses can finance valid claims which they might not have otherwise pursued due to financial constraints. This adds to our arbitration regime that is completely open and our pro-arbitration judiciary that reliably upholds parties’ agreement to arbitrate.
We also invest in institutions to serve the needs of businesses and the dispute resolution community. Maxwell Chambers is one good example. In 2010, the Ministry of Law set up Maxwell Chambers, the world’s first integrated dispute resolution complex. It houses custom-designed hearing facilities, as well as top dispute resolution institutions and arbitration chambers.
With growing demand for dispute resolution services in Asia, we are seeing strong demand for space at Maxwell Chambers. The Ministry of Law is now refurbishing the building next to the current premises to expand Maxwell Chambers. Last week, I attended the Groundbreaking ceremony, and I am happy to say that the new building, Maxwell Chambers Suites, is already 65% booked, even before construction begins.

ICC Case Management Office
On this note, I would like to warmly welcome the ICC Court as the first international arbitral institution to set up a physical case management team and office in Singapore. The case management office will start operating in the first quarter of 2018, and will take up around 2,000 square feet at the new Maxwell Chambers Suites.
For the ICC Court, this is a vote of confidence in Asia and in Singapore. For Singapore, it says to the international dispute resolution community that Singapore is open and inclusive, and can be your base in Asia from which you access and capture its many opportunities.
And for both parties, it is an expression of a long-lasting partnership, one deeply rooted in shared values and shared objectives. Just now, Alexis listed the values that matter to ICC: openness, transparency, multilateralism, belief in rule of law, belief in international law; and for the Court: access to justice, due process, party equality and incorruptibility. When Alexis said all these about the ICC, it resonates very much with what Singapore stands for and believes in.
Singapore looks forward to working with ICC to continue to live up to these values we both share, and to demonstrate in practical ways how they will deliver benefit for all.
Thank you and I hope you have a good conference.

Last updated on 28 Jun 2017