As businesses expand and go global, the need for efficient commercial dispute resolution mechanisms has greatly increased. One of the popular dispute resolution mechanisms used by businesses in Singapore is arbitration. An arbitration agreement is a contract between two parties that sets out the terms and conditions of how any future disputes will be resolved by an arbitration tribunal instead of going to court.
The validity of an arbitration agreement in Singapore largely depends on the provisions of the Arbitration Act (Cap. 10) (the “Act”). According to the Act, an arbitration agreement is considered valid when it is in writing, is signed by the parties or is contained in an exchange of letters, telegrams, or other means of communication which provide a record of the agreement. The arbitration agreement can also be found in a separate contract or in a clause within the main contract.
It is important to note that the validity of an arbitration agreement in Singapore can also be affected by certain legal principles. For example, an arbitration agreement may be considered void if it is deemed illegal, immoral or against public policy. Additionally, an arbitration agreement may be rendered unenforceable if it is shown that the parties did not have the necessary capacity to enter into an arbitration agreement at the time of its formation.
Once an arbitration agreement is deemed valid, the parties should then comply with the procedural requirements stipulated in the agreement. This often includes appointing arbitrators, setting out the procedural rules of the arbitration and agreeing on the place of arbitration. The arbitration process is a private, confidential and flexible process, which often results in a quicker and less expensive resolution of disputes than traditional litigation.
In Singapore, there are several reputable arbitration institutions like the Singapore International Arbitration Centre (SIAC) and the Singapore Institute of Arbitrators (SIArb) that provide institutional support and services to parties involved in the arbitration process. These institutions offer a range of services including the appointment of arbitrators, administration of the arbitration process, and facilities for the conduct of hearings.
In conclusion, the validity of an arbitration agreement in Singapore is largely dependent on the provisions of the Arbitration Act. A valid arbitration agreement can provide a confidential, efficient and cost-effective means of dispute resolution for parties involved in commercial disputes. With the support of reputable arbitration institutions, businesses can be assured of a fair and impartial arbitration process that is conducted in accordance with the agreed terms.
