Speech By SMS Murali Pillai SC at Gala Dinner of the 23rd International Congress of Maritime Arbitrators (ICMA XXIII)

Realities of War, Role of Law

Mr Chao Hick Tin SC, Chairman, Singapore Chamber of Maritime Arbitration,

Mr Clive Aston, Chairman, International Congress of Maritime Arbitrators Steering Committee,

Mrs Suphanee Aston,

Justice Judith Prakash, Senior Judge, Supreme Court of Singapore 

Mr Jaya Prakash,

Distinguished guests,

Ladies and gentlemen,

1.           Good evening. We meet in tumultuous times, a time of war and conflict, of guns, missiles, drones and destruction. Every death diminishes us. But we meet also at a time of courage and common cause, of allies and coalitions. Every death must give us fresh resolve to build a world, more just and fair. 

2.           This resolve will not be realised in empty pronouncements and fair intentions, but must instead find footing in law, process and political will.

3.           The International Congress of Maritime Arbitrators returns to Singapore, 19 years after we last hosted it in 2007. In these two decades we have seen how, when united in our common humanity, we are strong enough to overcome the insurmountable – climate change and natural disasters, the Covid-19 pandemic and its cataclysmic effects on our economy.

4.           We can, we must, once again today, in the face of conflict and war, find hope in our shared history of peace and prosperity, and remember that there is a way to resolve differences not with raw power or force but with legitimate process and negotiation; and to achieve fairness and justice with law and moral reasoning.

5.           ICMA’s work resonates with me. By way of background, before joining Government on a full-time basis, I had a fairly long legal practice. I had the opportunity to act as arbitrator and counsel on commercial matters but not shipping work though.

6.           These were important at a time of peace and prosperity. They are even more vitally so at a time of war and dispute. I will focus on what developments in the maritime industry mean for the legal and arbitration sector.

Evolving external environment

7.           We have entered an era of raw power and heightened contestation. We are seeing factions along the lines of national interest, instead of mutual and global benefit.

8.           The fate of the maritime industry is closely tied to global developments. This is clearly underscored by the ongoing Iran war and the attacks on merchant vessels along the Strait of Hormuz imperilling the safety and wellbeing of the seafarers onboard. Global shipping and trade have been disrupted, with lasting repercussions on the global economy. Amidst disruptions to production facilities and export routes, major oil producers, refineries and suppliers have declared force majeure on contracts.

9.           What is the impact of the current war in Iran? First, the nature of disputes. Charterparty disputes as well as commercial sales and cargo disputes are all expected to increase.

10.        We are already seeing the shape of some of these in the increase in advisory work provided by law firms to shipping clients – disputes in connection with ship service disruptions and diversions, and exercise of liberties to discharge and liability for extra freight and detention; cargo insurance coverage and war risks; and sale contracts where sellers are unable to fulfil their contractual obligations. For a number of these cases, it is likely that claims may arise, and arbitration proceedings are likely to commence in the coming months.

11.        Separate from the impact of war, the maritime industry itself is undergoing a profound transformation with new technologies. The adoption of alternative fuels such as green methanol and ammonia to decarbonise, as well as emerging digital technologies like blockchain, create new avenues for operational efficiency and innovation. These developments come with new risks – safety risks from alternative fuels, cybersecurity risks with digitalisation.

12.        Geopolitical tensions & conflicts, trade disputes, particularly those arising from tariffs and supply chain disruptions add to the uncertainty and fragility of the maritime landscape. The risk of contractual disputes over delays, liabilities and obligations has grown.

Maritime law as constant

13.        Against these changes, maritime law is a critical constant that provides the market with certainty, neutrality and enforceability. Shared rules across borders, anchored in international law, keep ships moving.

14.        There is therefore, an increasingly important role for maritime arbitration in offering a neutral, specialised and efficient way to resolve disputes with speed and legitimacy. 

Singapore as neutral and honest convener

15.        Singapore is committed and well-positioned to support maritime law and arbitration. As Asia’s share of global maritime trade expands and countries look to the region to diversify supply chains, we offer ourselves as a key forum for shipping-related disputes.

16.        Our neutrality, trusted legal framework and proximity to the growing Asian market enable institutions such as the Singapore Chamber of Maritime Arbitration (SCMA) to play a constructive bridging role, particularly in times of heightened trade friction.

17.        Ladies and gentlemen, at this point, I wish to pay tribute to the Founding Chairman of SCMA, the late Mr Goh Joon Seng, and the current chair Mr Chao Hick Tin, both former Justices of the Supreme Court of Singapore.

a.           SCMA was reconstituted as an independent entity in 2009 with MPA and SMF as its founding members, to better meet the industry’s needs. Its non-administered arbitration model, premised on SCMA Rules, provides flexible, tailored dispute resolution with greater party control over procedures and lower costs.

b.           Mr Goh assumed the position as SCMA’s Chairman in the same year and held that position for the next 10 years. Mr Goh’s dedication built Singapore into the international maritime and dispute resolution hub it is today – he led a strategic review of SCMA which prioritized outreach and promotional efforts to key geographical markets, and worked closely with MPA to advance Singapore’s interests in the global maritime landscape.

c.           Mr Chao Hick Tin succeeded Mr Goh in 2019. Under his stewardship, SCMA has undertaken several new initiatives including a refreshed international engagement strategy and in emerging areas such as alternative fuels and cyber-security.

d.           As a litigation lawyer in private practice, I have had the opportunity to appear before both of them in the course of my work.

e.           Their command and respect for the rule of law is grounded in deep scholarship as well as practical wisdom.

f.            I am therefore privileged to be able to pay tribute to them tonight, in particular Mr Chao Hick Tin, who is here with us.

18.        In the current geopolitical risk profile, SCMA is also well-positioned.  For parties that are looking to a speedy resolution and have already indicated the use of SCMA Rules in their contracts, SCMA has an Expedited Procedure that applies to claims where the aggregate amount in dispute is US$300,000 or less, making the process cost and time efficient for smaller claims.

19.        For the future, SCMA must remain open to exploring more such measures relating to SCMA Rules.

Networks, people, ideas in maritime arbitration

20.        Our maritime ecosystem creates strong synergies, informing dispute resolution in emerging areas. For example, as part of our efforts to advance the adoption of alternative fuels as a bunkering hub, we are developing “Green Clauses” and technical panels on alternative fuels. Two other emerging areas include:

a.           Cyber and data forensics - There are already reports of rising instances of cyberattacks on ships. Data forensics may thus increasingly be called upon to support the investigation and resolution of related disputes.

b.           Autonomous and AI-enabled vessels - As remote and autonomous operations expand, the legal framework for liability will need to be studied in detail. The allocation of responsibility between shipowners, operators, technology providers and insurers will be one of the defining areas of maritime law, and disputes are likely to arise if there is no clear delineation of liabilities and responsibilities.

21.        Singapore, and particularly SCMA, welcomes collaborations in identifying and analysing such emerging areas so that the global community of arbitrators can be better prepared. We welcome all interested partners to reach out to Bernice and the SCMA Secretariat team.

22.        We are growing Singapore maritime arbitration, as an active member of the international maritime community, but also because of our enduring and existential commitment to the rule of law.

23.        First, we are intensifying engagements with multipliers, arbitrators, and members in regional markets. SCMA’s outreach to key geographical markets including China, India, Indonesia and Thailand is gaining traction. Just last year, these markets account for almost a third of total case references under the SCMA pledge – a formal commitment to consider the use of SCMA rules.

24.        Second, we are investing in thought leadership, such as in emerging risks. In 2024, SCMA convened three working groups to study the impact of ammonia, methanol, and cybersecurity on legal clauses and obligations. The workgroups are hard at work.

a.           I am happy to share that the SCMA methanol working group has completed a standard contract for methanol bunkering. I look forward to its formal launch.   

25.        Third, we continue to invest in our people, equipping them with the skills to meet the industry’s evolving needs. Skilled arbitrators form the backbone of the sector and we are providing opportunities and support throughout their careers.

a.           These range from programmes to facilitate entry into the sector, such as the National University of Singapore’s Graduate Diploma in Maritime Law and Arbitration, Master of Laws in Maritime Law (LLM), and SCMA’s Maritime Arbitrator Accreditation Programme, to programmes for skilled professionals such as the Singapore Academy of Law’s Specialist Accreditation Scheme.

b.           These programmes cultivate a pipeline of future talent.

Maritime arbitration – the power of legal reasoning

26.        In ending, I once again welcome the International Congress of Maritime Arbitrators back to Singapore. I had earlier referenced our “existential commitment" to the rule of law – this is not hyperbole - for a small and diverse country like ours, a belief in the power of law in arbitration and dispute resolution is part of our everyday life.

27.        I remember this each time I walk along South Bridge Road in Singapore – a short walk which I commend to our foreign guests - South Bridge Road in Chinatown which has the Chulia Mosque, the Sri Mariamman Temple and the Buddha Tooth Relic Temple within steps of each other. Races - Chinese, Malay, Indians. Faiths - Buddhists, Muslims and Hindus.

28.        We are a country of diversity, but not differences, of contestation, but not conflict, of different languages but spoken with one accent.

29.        It was not always so. In the 1960s, Singapore was a place of deadly race riots where Chinese and Malays fought each other. Even today, there remains disputes of race, language and religion. The peace you see around you today is hard won, through tough laws, tougher enforcement on the part of public agencies, unceasing restraint on the part of the public, and a constant balancing of interests and mediation. We need the law not because Singaporeans all agree, but because we do not.

30.        Singaporeans, more than most in the world, know that even on a small island, interests do not always coincide, that a vain hope in the desire for peace is not enough, that we must all be bound to the rule of law so as to build a world just and fair. 

31.        Writ large, this is the grand endeavour for which we are gathered today. To build networks, train people and inspire new ideas, we must strengthen collaboration, renew our commitment to arbitration, and collective confidence in the global maritime system.

32.        Like lighthouses shining safe passage, maritime law and arbitration must continue to be the guiding light to steer the world through the current fog of war.

33.        I congratulate ICMA and SCMA on their success in organising this congress. I wish you fair winds and following seas. Thank you.