THREE KEY FEATURES IN THE 2025 SIAC RULES FAVOURABLE TO THE INSURANCE INDUSTRY
Introduction
Litigation and arbitration are two methods of resolving disputes. But they differ significantly in their processes, formality and outcomes.
Litigation is a formal process where disputes are resolved in a court of law. It is highly formalized with strict rules. For example, litigation in Singapore proceeds in accordance with the Singapore Rules of Court. The decision is made by a judge and is legally binding. Appeals are possible under certain conditions. Court proceedings and outcomes are generally publicly available.
Arbitration is a private dispute resolution process where an impartial third party appointed by parties serves as the arbitrator or tribunal and makes a binding decision. Parties agree to submit their dispute to arbitration often by way of an arbitration agreement contained in a contract. Arbitration is generally less formal than litigation with more flexibility in procedures. Arbitration may be administered by an arbitral tribunal (e.g. SIAC, HKIAC, AIAC) in accordance with their institutional rules (e.g. SIAC Rules). An arbitrator’s decision is binding and cannot be appealed except in very limited circumstances. Arbitration stands to be more expensive than litigation as the arbitrator’s fees and the arbitral tribunal’s fees need to be factored. However, the arbitration proceedings are private and confidential and their results are not public record.
It is common for insurance policies to require disputes to be decided by arbitration.
In this article, we explore three key features contained in the latest edition of the arbitration rules released by the Singapore International Arbitration Centre that are favourable to the insurance industry.
The 2025 SIAC Rules
On 1 January 2025, the 2025 SIAC Rules were introduced.
The 2025 SIAC Rules apply to all SIAC arbitrations unless parties agree to proceed in accordance with earlier editions of the SIAC Rules or the rules of some other arbitral institution.
1. New Streamlined Procedure (applicable to disputes under SGD 1 million)
Rule 13 of the 2025 SIAC Rules provides for a new default streamlined procedure governing disputes of up to SGD 1 million. Under the previous rules, disputes up to SGD 6 million would, upon application or by agreement, proceed in accordance with the SIAC Expedited Procedure (See below).
Under the New Streamlined Procedure, the dispute will be determined by a sole arbitrator. The sole arbitrator must be nominated within three days and the award issued within three months from the arbitrator’s appointment. Additionally, the cost of the arbitrations is capped at 50% of SIAC’s existing schedule of fees. The New Streamlined Procedure operates on a default basis if the value of the dispute is less than SGD 1 million. Parties who object to the operation of the streamlined procedure must apply to the President of the SIAC Court explaining why the streamlined procedure is not suitable. Overall, the New Streamlined Procedure presents a quicker and cheaper option over the SIAC Expedited Procedure.
Relevance: Default position offers a quick and efficient resolution of disputes with lower administration costs proportional to the value of the dispute at hand. This feature is a welcomed addition that seeks to limit cost to a level proportionate to the value of the dispute.
2. Expedited Procedure (applies to disputes more than SGD 1 million and up to SGD 10 million)
The Expedited Procedure regime was introduced in the 6th edition of the SIAC Rules to promote swifter resolution of lower value disputes of up to SGD 6 million. With the New Streamlined in place, the Expedited Procedure has been elevated to govern disputes of more than SGD 1 million but less than SGD 10 million. Previously, disputes exceeding SGD 6 million would proceed on standard timelines issued by the tribunal (typically 12 to 18 months from the commencement of the arbitration to issuance of the final award).
Some of the cost-savings features including the appointment of a sole arbitration notwithstanding that the arbitration agreement may provide for a multi member tribunal, the option for a document-only hearing as well as a summarized final award in point form. Additionally, the Expedited Procedure imposes timelines that require the final award to be rendered within six months from the date of constitution of the tribunal.
Relevance: The new Expedited Procedure offers a quicker and more economical dispute resolution solution to resolve disputes up to SGD 10 million. Previously, disputes more than SGD 6 million had to proceed in accordance with standard timelines (12 to 18 months to final award). We can expect a greater proportion of insurance disputes between SGD 6 and 10 million to fall under the new Expedited Procedure regime and be resolved more expeditiously.
3. Preliminary Determination
Pursuant to rule 46 of the 2025 SIAC Rules, a party may request the Tribunal to make a final and binding determination of any issue on a preliminary basis where (i) parties agree; (ii) the determination of the issue in a preliminary basis is likely to contribute to savings of time and costs and a more efficient and expeditious resolution of the dispute; or (iii) the circumstances of the case warrant the determination of the issue on a preliminary basis.
If such application for preliminary determination is accepted, the tribunal must render its decision within 90 days from the date of the filing of the application.
Relevance: The option to apply to the tribunal for preliminary determination of issues will benefit the efficient resolution / settlement of insurance disputes, specifically, those that hinge on the determination of a single issue. For example, disputes on issues of policy liability or coverage where quantum is not in dispute. It is anticipated that parties would be in a position to resolve claims amicably once that issue has been determined by the tribunal.
Stephen Cheong
Sharpe & Jagger LLC