INTERVIEW: Mr Lionel Leo and
Mr Chou Sean Yu
Ahead of The Legal 500’s Commercial Arbitration Summit: Singapore, The Legal 500 & GC magazine talks to partners in WongPartnership’s disputes team, Mr Lionel Leo and Mr Chou Sean Yu, who explain how their firm is adapting to clients' changing needs in handling international disputes.
G C I N T E R V I E W
Left: Mr Lionel Leo; Right: Mr Chou Sean Yu
What do you find best about Singaporean law in handling commercial disputes? What’s the worst part of Singaporean law when it comes to commercial disputes? In general, what factors are necessary for a strong seat of arbitration?
Chou Sean Yu: Singapore law is rooted in both the common law and in statute, and which were inherited from English law. Singapore law has since dynamically evolved through its clear and robust application by the Singapore courts. There is now substantive jurisprudence on many areas of substantive principles of commercial law.
Lionel Leo: One area which Singapore law may be at a disadvantage compared to other jurisdictions is that conditional and contingency fee agreements are not permitted in respect of litigation in the Singapore courts or for lawyers based in Singapore participating in arbitration. As certain clients may only be willing to engage lawyers on the basis of such agreements, this does place Singaporean firms at a disadvantage in relation to potential matters from such clients.
Chou Sean Yu:The most important factor is probably a clean and independent judiciary, and followed closely by the courts of the jurisdiction taking a supportive stance towards international arbitration. Singapore scores highly on both counts. It is widely seen as a neutral venue whose judges are both knowledgeable about international arbitration and possess a high level of integrity. On the latter, the courts strive to uphold arbitration agreements and enforce awards, with the grounds for setting aside awards or resisting enforcement being very limited.
Are you seeing a rise in Singapore-based arbitration (including from India and Middle East-based clients)? How is your firm positioning itself to capture this work?
Chou Sean Yu: Yes, as is evident from the steady increase in caseload at the Singapore International Arbitration Centre (“SIAC”), we have seen an increase in Singapore-based arbitration work. Some notable cases for clients from India and the Middle East include acting as Singapore counsel to the Government of India in an investor-state arbitration under the UK-India Bilateral Investment Treaty commenced by Vedanta Resources plc for a GBP 2.2 billion claim and acting for a multinational in an international arbitration under the ICC Rules in respect of disputes arising from the design, construction, operation and maintenance of the Middle East's first fully integrated state-of-the-art Solid Waste Management Facility valued at over QAR 3.9 billion.
Apart from the increase in work from India and the Middle-East, we have also seen increased work from other countries in the region, particularly, China and Indonesia. In order to capture this increased work, we have increased our presence outside Singapore in the Asia-Pacific region. Apart from having specialized international practises (including ASEAN, China, India and the Middle-East), the firm has offices regionally in China, the Middle-East and Myanmar. As part of our 25th anniversary, the firm also launched WPG, a regional law network, which comprises WongPartnership and its member firms Al Aidarous Advocates and Legal Consultants (Middle East), Foong & Partners (Malaysia), Makes & Partners (Indonesia) and Zambrano Gruba Caganda & Advincula (Philippines). Through WPG, our firm is able to provide seamless service to clients across various jurisdictions in the region.
What is the biggest issue facing international arbitration right now? How is this (or any other changes to international arbitration) shaping your practice?
Lionel Leo: The biggest challenge for international arbitration is probably that it has grown to be too time-consuming and costly. Whereas international arbitration was initially perceived as having the advantage of time efficiency and cost savings, there is a growing consensus that international arbitration is more often longer and costlier than court proceedings, especially in a jurisdiction such as Singapore where the courts have a reputation for efficiency.
Chou Sean Yu: In Singapore, the establishment of the Singapore International Commercial Court (“SICC”) provides an avenue for dispute resolution that has much of the benefits of international arbitration but that is likely to be faster and cheaper. The one advantage that international arbitration continues to possess, however, is the enforceability of arbitral awards internationally through the New York Convention. Nevertheless, some headway has been made in this regard for the enforceability of Singapore court judgments, including those by the SICC, through Singapore having ratified the Hague Convention on Choice of Court Agreement.
We have shaped our practice to take into account many clients’ concerns with the time and costs of arbitration by actively managing cases we take on and to use our experience to successfully advocate for procedural timetables that push the matter towards a conclusion within a reasonable time frame. Our philosophy is also not to litigate at all cost as we see our role as assisting our clients to reach an acceptable resolution of their dispute. To this end, where negotiations or mediation are possible, we encourage and assist our clients to try to reach an amicable resolution to their dispute, which often leads to savings of time and costs for both parties.
If you could make one change to international arbitration what would it be?
Lionel Leo: Closely related to the issue of international arbitration being too time-consuming and expensive, one change to international arbitration that we would like to see is the increased availability of summary procedures as well as an increased willingness on the part of arbitrators to resort to summary determination where appropriate. Another approach that could help reduce the time and expense of arbitration is the availability of fast-track procedures and time limits being imposed for the rendering of awards.
How would you improve diversity in international arbitration? Do you feel Asia-Pacific-based centres such as SIAC have the necessary diversity of arbitrators to respond to clients’ demands?
Chou Sean Yu: Certainly Asia-Pacific-based centres such as the SIAC have the necessary diversity of arbitrators to respond to the demands of clients who choose to arbitrate under the auspices of the SIAC. With a panel of more than 100 arbitrators from more than 25 jurisdictions, from both common law and civil law jurisdictions, our experience has been that our clients have been more than satisfied with the choice of arbitrators available. In particular, there is an abundance of arbitrators from countries where many of parties who more regularly arbitrate their disputes in Singapore come from, including China, India, the United States, the United Kingdom and Australia. Nevertheless, with Singapore’s growing status as an international arbitration hub, we expect that there will be an increase in work from parties hailing from other countries, and perhaps more can still be done to include arbitrators from some of these jurisdictions, most notably from countries from Eastern Europe, South American and Africa. Not only is there a diverse range of nationalities of arbitrators, on the gender front, there are a number of very prominent lady arbitrators in active practice in the Asia-Pacific.
What is the most common reason clients engage you in arbitration proceedings? Where do you think your firm/practice adds value vs rivals?
Chou Sean Yu: We believe that we are the firm of choice for our clients as we combine both recognized expertise in international arbitration, and an understanding of Asian culture and perspectives. For Singapore seated arbitrations, we also benefit from our lawyers, including our four Senior Counsel, having extensive experience before the Singapore Courts, which becomes invaluable especially if the matters require intervention by the supervisory court. We have also developed particular expertise in various more specialized forms of international arbitration ahead of some of our rivals. For example, our firm has been leading the way for Singaporean firms in investor state arbitration, having acted for the Independent State of Papua New Guinea in successfully defeating an investor-state arbitration on jurisdictional grounds, and we currently act in court proceedings relating to an ongoing investment treaty arbitration against the Kingdom of Lesotho. We have also consistently been ranked highly amongst Singaporean firms in various legal publications including Legal 500 and Chambers, most recently moving up the ranks for our International Arbitration practice in Chambers Asia Pacific 2019. We are also the only Singapore law firm who has been sole counsel on record in an ICSID arbitration.
Are clients becoming more demanding when it comes to pre-estimation of arbitration costs?
Lionel Leo: Yes although clients usually appreciate that for complex international disputes, it is difficult to predict the costs of arbitration, especially at an early stage. There is clearly an expectation that counsel should be cost-efficient and cost-effective.