Mrs. Lim Hwee Hua, Minister of State, Finance and Transport, distinguished guests, ladies and gentlemen. A very good morning to all of you.
On behalf of the Singapore Maritime Foundation (SMF), and the Singapore International Arbitration Chamber (SIAC), let me bid a warm welcome to all of you, to this gathering, to mark the launch of the Singapore Chamber of Maritime Arbitration (SCMA).
In particular, I would like to record my sincere thanks and appreciation, to the Honorable Minister of State, for taking the time to join us, and recognizing the significance of this launch today of SCMA, to both the maritime and legal communities in Singapore. Thank you very much indeed.
By way of background, it might be worthy of note that it was not so long ago that we gathered to mark the launching of the SMF, in March this year. At the first meeting of the board of directors, we identified maritime arbitration and ship financing, as areas that we would give particular attention to. I was asked by the Chairman, Mr. S. S. Teo, if I would chair a working group to undertake the task of developing maritime arbitration in Singapore. I readily agreed, as it brought together my two interests: the law, and the world of shipping.
Soon after, at the Asia Pacific Maritime Exhibition, also in March this year, I informed the Minister for Transport, Mr. Yeo Cheow Tong, that we had a roadmap for the future of maritime arbitration in Singapore, and that the SMF would lead the way to launch a dedicated maritime arbitration body. Then, in a fleeting moment of insanity, I went on to promise that it would be launched before the end of the year !
The fact that we are gathered here in November, is therefore significant, and a tribute to the industry, co-operation and hard work, of the team that worked tirelessly to make this a reality - with one month to spare!
This would therefore be an appropriate juncture for me record my thanks to the SIAC, under the Chairmanship of Mr. Goh Joon Seng, and it's CEO, AP Lawrence Boo. The SIAC rendered full and unqualified support to our initiatives, and we are very confident that under the stewardship of AP Boo, the new Chairman of SCMA, an exciting chapter awaits to be written in maritime arbitration.
The launch of SCMA has been characterized by the inclusive manner in which the stakeholders came together enthusiastically, and recognized the necessity to create a vehicle to carry our hitherto tentative flirtation with maritime arbitration, to the next level. Today would have been a very empty event, holding little promise for the future, without the support and endorsement of these stakeholders, namely, the Singapore Maritime Arbitrators Association (SMAA), the Maritime Lawyers Association of Singapore (MLAS), the Singapore Institute of Chartered Arbitrators (SIARB), and the National University of Singapore. The latter two organizations undertaking the task of training new entrants into the world of arbitration, thus completing a holistic approach to the entire structure for maritime arbitration, going forward. The need for training and constant upgrading cannot be overstated, and the working group recognized the need to build this component firmly into the arbitration playing field.
The desire of the SMF to focus attention on maritime arbitration, is driven by a number of key facts, which I are pleased to share with you today.
The international shipping industry is responsible for the carriage of 90% of world trade. The United Nations Conference on Trade and Development (UNCTAD) estimates that the operation of merchant ships contributes about US $380 billion in freight rates alone, within the global economy. There is no doubt that shipping is the lynchpin of the global economy. There are around 50,000 merchant ships trading internationally, carrying approximately 5.5 thousand million tonnes over a distance of 4.6 million miles annually, giving roughly 23 thousand billion tonne-miles of total trade.
Now, what I can conclusively tell you, is that there is no way that that amount of trading can take place, without disputes arising.
It is only logical that Singapore, as a key hub port and financial center, with a strong maritime tradition, should find and claim its natural place in the dispute resolution process, of world shipping.
Currently, London is the undisputed leader in the provision of maritime legal services. English law is applied to shipping disputes far more widely than the law of any other country. The London Maritime Arbitrators Association (LMAA) received 2030 appointments in the year 2002. That is approximately 170 appointments every month. This figure is significantly lower that the number of appointments made in the year 1990, which was 3373. A drop of more than 1300 appointments annually. One major reason for this drop, is the proliferation and development of arbitration centers in other parts of the world, including of course Asian countries such as Hong Kong and Singapore.
There is a common misunderstanding among many, which I should perhaps correct,that somehow Singapore arbitration means that the dispute must be resolved in accordance with Singapore law, hence causing concern to those unfamiliar with our laws. This is of course not true. Singapore arbitration merely refers to the seat or place of administration of the arbitration. The applicable law can be that which was chosen by the parties at the time they concluded their contract. SCMA therefore hopes to facilitate and encourage parties to choose Singapore for their arbitrations, by exhibiting a professional and efficient structure, with an international panel of highly qualified arbitrators, with diverse expertise and background.
In a SWOT Analysis done on London's maritime legal services sector, in the Report " The Future of London's Maritime Services Cluster: A Call for Action" by Fisher Associates, the Report said , and I quote:
" The principal weakness of the sector is overwhelmingly seen as cost. These costs include solicitors' and barristers' fees as well as the general costs associated with a London location"
In promoting SCMA, we feel that Singapore has much to offer, apart from the very manageable legal costs, which I can personally attest to!
Consistency, integrity and impartiality, together with access to complimentary services, such as banking, communications and insurance, have all been cited as strengths, in the SWOT analysis of London. These values and attributes that could equally have been used to describe Singapore. As such I have every confidence that SCMA will grow from strength to strength, with the strong support of the maritime community. In this respect I am grateful for the pledges of support for SCMA, that have come from 6 of Singapore's major shipping industry players, which you will hear more about shortly.
On that note it only leaves me to thank my hardworking crew at the SMF Secretariat, led by Trudy Leung, and Sabiha Shiraz from SIAC, who all worked tirelessly behind the scene, dotting the "i"s and crossing the "t"s, to make this day possible.
It has been my honor and privilege to lead the Working Group on maritime arbitration.. Thank you, and I hope you have a pleasant lunch.
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