The new Singapore International Commercial Court (SICC) was officially launched on 5 January 2015. The SICC is intended to be the Asian centre for resolving international commercial disputes, in particular, international banking and financial disputes.
Whilst Singapore has for some time enjoyed success as the leading regional centre for international arbitration, financial institutions have traditionally been resistant to arbitration, preferring litigation as their chosen method of dispute resolution. Accordingly, the SICC may be attractive to financial institutions as a new forum for international banking and financial disputes. Even though the SICC typically enjoys jurisdiction via a contractual jurisdiction clause, the Singapore High Court may on its own motion order a transfer of a case to the SICC where “it is more appropriate for the case to be heard in the Court”.
The Singapore High Court has seen several high profile international banking and financial disputes in recent years. These include suits brought by Filipino, Taiwanese and Chinese investors against different international banks and a suit brought by a Singapore public-listed infrastructure company against a Middle Eastern-based bank arising out of credit facilities for a construction project in Libya.
The number of cross-border disputes involving financial institutions is only set to increase as the Singapore government continues to actively promote Singapore as a major Asian financial centre. Singapore is home to over 700 financial institutions offering a myriad of products and services across various asset classes. This includes over 200 banks, a growing number of which have also chosen to base their operational headquarters in Singapore to service their regional group activities. Singapore is the third largest foreign exchange centre globally and the largest foreign exchange centre in Asia Pacific. Singapore is also ranked the largest over the counter (OTC) interest rate derivatives centre in Asia Pacific excluding Japan by turnover. Assets under management in Singapore rose by 30% from S$1.8 trillion in 2013 to over S$2.3 trillion in 2014.
Given this trend, the Singapore High Court may face increasingly technical and complex international banking and financial disputes. Should such disputes be filed before the Singapore High Court in the future, it is plausible that the High Court may transfer the dispute to the SICC.