The Report of the Law Reform Committee of the Singapore Academy of Law (the Report) considers the arguments for and against extending the right to judicial review, as well as the growing consensus in favour of such an amendment. The Report concludes that there is a strong case for changing the existing Singaporean law.

The IAA adopts almost all of the UNCITRAL Model Law on International Commercial Arbitration (Model Law) without modification. Accordingly, arbitral tribunals are granted the power to rule on their own jurisdiction to determine a dispute under the IAA by way of Article 16(1) of the Model Law.

Judicial intervention in arbitral proceedings is precluded unless permitted under the IAA. One circumstance in which judicial intervention is permitted is under Article 16(1), where an arbitral tribunal rules that it has jurisdiction. In such circumstances, Articles 16(3), 34(2)(a)(iii) and 34(2)(a)(iv) of the Model Law grant a right to judicial review.

However, in their unamended form, Articles 16 and 34 grant no such right in circumstances where an arbitral tribunal rules that it has no jurisdiction. For example, judicial review under Article 16(3) is limited to circumstances where an arbitral tribunal "rules as a preliminary question that it has jurisdiction". Accordingly, there is no right to judicial review where an arbitral tribunal rules that it lacks jurisdiction. The Singapore Court of Appeal agreed that this was the current position in PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR 597.

Similarly, Article 34(2)(a) limits the right to judicial review to circumstances where an arbitral award has been made, but may be set aside on the grounds that the arbitral tribunal lacks jurisdiction.

The decision to exclude the right to judicial review of negative jurisdictional rulings was a deliberate one on the part of UNCITRAL, as it was thought inappropriate to compel a tribunal to continue with an arbitration once it had ruled that it lacked jurisdiction. However, the Report argues that there is a strong case for enabling judicial review.

The Report puts forward five grounds for permitting the judicial review of negative jurisdictional rulings:

The Report comes in light of and makes reference to growing support within the arbitration industry for a change in the law. Those listed as supporting reform include:

Amongst those cited as questioning the need to change the law is the Singapore Institute of Arbitrators (SIArb). One concern raised by SIArb is the risk that an arbitral award passed by a tribunal that has previously ruled it has no jurisdiction, may be challenged on jurisdictional grounds under Article V(1) of the New York Convention when enforcement is sought abroad. However, the Report seeks to argue this is a risk for the appellant to consider when appealing a negative ruling, given its knowledge of the laws of the jurisdictions in which it may seek to enforce an award. The Report also states that it is impossible to cater for every approach to enforcement and, therefore, implies that one should not try.

Another potential stumbling block to reform considered by the Report is whether a negative ruling could be considered an "award" under the IAA. If it were, the Report states that opening such rulings to judicial review would "run against the grain of the Model Law". The Report ultimately rejects this argument on the grounds that any "award" must be binding on the parties. However, a negative ruling demonstrates that the arbitral tribunal lacks the power to make a binding decision. Accordingly, the argument that a negative ruling constitutes an "award" is described as "fallacious". The Report supports this conclusion by citing Lord Hope in Premium Nafta Products Limited and others v Fili Shipping Company Limited and others [2007] UKHL 40, in which he said that "if there was no contract to go to arbitration at all an arbitrator's award can have no validity".

The Report notes that the IAA does not directly amend the Model Law. Instead, it attaches the Model Law at Schedule 1 and modifies or complements it in the text of the Act. Accordingly, the Report proposes that section 10 of the IAA be amended so that it states that, notwithstanding Article 16(3) of the Model Law, if the arbitral tribunal rules that it has no jurisdiction at any stage of the proceedings, any party may request that a High Court decides the matter.

The Report also recommends that section 10 should clarify how the arbitration should proceed in the event a negative ruling is reversed by the court. In particular, it proposes that section 10 state that, in such circumstances, the arbitral tribunal shall proceed with the arbitration. In the event any arbitrator is unable or unwilling to proceed, his mandate shall be terminated and Article 15 of the Model Law shall apply. The Report addresses the ICC's concern that Article 15 would not apply in an ICC arbitration on the ground that section 15(A) of the IAA provides a mechanism for resolving conflicts between the applicable Rules of Arbitration and the IAA.

The Report proposes two further amendments to the IAA in order to address the issue of costs in proceedings where the arbitral tribunal's jurisdiction is challenged.

The first proposal is to grant the arbitral tribunal the power to make an order for costs in the event it rules that it has no jurisdiction. The reason for granting such a statutory power is outlined above, as by ruling that it has no jurisdiction, the tribunal also rules that it lacks the power to make any binding order, including one for costs. Without any statutory power, the tribunal is unable to render a claimant who has unsuccessfully commenced arbitration liable for the respondent's wasted costs.

The second proposal is to grant the court the power to make an order for costs in the event it reverses a positive jurisdictional ruling by the arbitral tribunal. This is on the grounds that the law, as it currently stands in Singapore, currently grants the court the power to make an order for costs in respect of proceedings before it, but not those incurred in arbitral proceedings. Accordingly, the Report proposes that the IAA grant the court the power to make an order for costs against the unsuccessful party in a judicial review of a positive jurisdictional ruling.

The Law Reform Committee's Report demonstrates a growing sense in the arbitration industry that the IAA's failure to provide for the judicial review of negative jurisdictional rulings represents a gap in the law. The Report cites various jurisdictions that allow the judicial review of negative rulings and asserts that, on this particular issue at least, Singapore should exercise greater flexibility in its application of the Model Law.

Amending the IAA to permit judicial review of negative rulings is not without risks, as the Report does not completely rule out the possibility that some jurisdictions may not recognise an arbitral award made after the reversal of a negative jurisdictional ruling. However, the Report concludes that such factors do not tip the balance against enabling judicial review. The Singaporean government has not yet commented on the Report's conclusion.