Insolvency and arbitration traditionally do not mix well, as they embody somewhat contrasting legal policies. Arbitration entails the decentralisation of private dispute resolution, while the insolvency regime embodies the public centralisation of disputes.
In the modern era, however, insolvency and arbitration have increasingly overlapped. In its April 2016 Report, the Committee to Strengthen Singapore as an International Centre for Debt Restructuring noted that:
“…as insolvencies and restructurings have become more complex and more costly, there is a growing trend of employing [alternative dispute resolution] processes, separately or in combination with the main court proceedings, as a tool to help save costs and time in the resolution of large and complex restructuring proceedings …”
Between 13 December 2024 to 17 January 2025, the Singapore International Arbitration Centre (“SIAC“) held a public consultation on the draft SIAC Insolvency Arbitration Protocol (“Protocol“). The Protocol sets out a procedure for arbitration at SIAC for the resolution of disputes arising in relation to (or in anticipation of) any insolvency proceedings. It can also apply in the context of insolvency, notwithstanding whether such dispute arises in anticipation of, or in relation to, any insolvency proceedings.
Essentially, the Protocol adapts the SIAC Rules “for the time being in force” with relevant modifications to make it suitable for use in the insolvency context, with an emphasis on time-efficiency. The Protocol forms part of Singapore’s push towards becoming an international debt restructuring hub.
In this Update, we consider the applicability of the draft Protocol and review its key differences from the current SIAC Rules.
For more information, click here to read the full Legal Update.
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