The Singapore Infrastructure Dispute Management Protocol (the 'SIDP') was launched by the Ministry of Law in October 2018.
Recommended for large infrastructure projects of greater than S$500 million in value, it is a framework which can be incorporated into parties' contracts that provides for a 'standing' Dispute Board (i.e. to be engaged at the start of a project and which will remain in place for its duration).
Dispute Boards have been used as a method of avoiding and resolving disputes in the infrastructure sector for over forty years. They are contractually formed panels of neutral individuals engaged with the primary function of assisting in the swift and cost-effective avoidance (if possible) and resolution of disputes (without the need to resort to more expensive and time-consuming arbitration or litigation).
They first hit the headlines on the Eisenhower Tunnel Project in Colorado in 1975, where a 'Dispute Review Board' which could give non-binding recommendations was considered a resounding success. They became widely used in the US and the concept soon spread internationally.
The Fédération Internationale Des Ingénieurs-Conseils ('FIDIC') famously released versions of its contracts in the 1990s which introduced 'Dispute Adjudication Boards'. FIDIC's approach has since evolved and the latest FIDIC 2nd Edition contracts deploy standing boards in the form of a Dispute Avoidance/Adjudication Board which places a greater emphasis on the board's early dispute avoidance role.
Numerous other international bodies also recommend the use of Dispute Boards and have developed detailed regimes, including the Dispute Resolution Board Foundation ('DRBF'), the International Chamber of Commerce, the Chartered Institute of Arbitrators and the Institution of Civil Engineers.
Do Dispute Boards work?
According to the DRBF, between 1982 and 2017 Dispute Boards have been deployed on at least 2,800 projects worldwide with an aggregate value of approximately US$280 billion. The DRBF's data also shows that over 95% of recommendations/decisions by Dispute Boards have not been challenged in arbitration or litigation, potentially delivering substantial time and cost savings.
However, while they can and have worked successfully, there is a debate as to whether Dispute Boards actually deliver more often than they flop. The Japan International Cooperation Agency, for example, has reported from a survey of large-scale projects in 31 countries between 2012 and 2017 that standing Dispute Boards were only actually established on 15% of the projects where the contracts provided for such boards.
Critics often highlight the high cost involved in funding a Dispute Board, particularly 'standing' dispute boards whose members must be paid for their time in keeping up with progress and making regular site visits (in addition to fees incurred in resolving disputes). Such costs may be reduced where parties opt for an 'ad-hoc' Dispute Board, which is appointed only when a dispute arises, but these have their own disadvantages. Amongst other things an ad-hoc Dispute Board will not perform any proactive dispute avoidance role.
Does the SIDP offer anything new?
Inspired by the FIDIC and other Dispute Board regimes which precede it the SIDP introduces some features which are "novel", according to the Ministry of Law. Indranee Rajah SC, Second Minister for Finance and Education, also commented that it has "expanded the original Dispute Board idea and turned it into a comprehensive dispute management tool."
These comments slightly over-egg the pudding as the SIDP's main features are present in the same or similar forms in other Dispute Board regimes. However, the following aspects are significant:
• The SIDP provides for a 'standing' Dispute Board, appointed at the start of a project and remaining in place for its duration, which takes an active approach to helping the parties avoid disputes and to resolve them when they arise. As part of this process the Dispute Board is required to hold meetings and site visits. This is consistent with most other Dispute Board regimes.
• The Dispute Board will have wide powers to order the production of relevant documents, to take measures to protect confidential information and to appoint one or more experts, with the agreement of the parties. This is also consistent with other Dispute Board regimes.
• Parties can choose from non-binding opinions, binding determinations (which are binding unless a party objects, in which case they may refer the dispute for final resolution by arbitration or litigation) and mediation, to help resolve their disputes. If the parties cannot agree on the method of resolution, the Dispute Board decides. While it would be open to parties under other Dispute Board regimes to request that the board mediates a dispute, the express reference to mediation in the SIDP does distinguish it from other regimes and may encourage parties and boards to consider mediation.
• Although not mentioned in the SIDP itself, SIDP Dispute Boards will be supported by an institutional framework in Singapore. The parties will be able access support from the Singapore International Mediation Centre or the Singapore Mediation Centre, including in connection with the appointment of Dispute Board members from those centres' panels (which will include legal, engineering and QS experts).
Will the SIDP catch on?
The use of Dispute Boards is already common on infrastructure projects in the region, including given the popularity of the FIDIC contract forms. On the other hand, it is not at all common on domestic infrastructure projects in Singapore.
One reason for this, which has also been proposed as a reason for Dispute Boards not being commonplace in England and Wales, is that the well established statutory adjudication regimes and mediation institutions in these jurisdictions already offer effective forms of alternative dispute resolution which are quicker and cheaper than arbitration or litigation (and arguably cheaper than standing Dispute Boards).
However, the SIDP nevertheless offers a compelling alternative on very large infrastructure projects in Singapore and the region, and one of its biggest selling points may be that none of the other leading institutions which provide and support Dispute Board regimes are headquartered in Asia.
If parties are looking for a comprehensive Dispute Board process with support from an established institution based in Asia which has a panel of Dispute Board members who understand and have relevant expertise in the region, then the SIDP is likely to be at the top of the list.
Rakesh Nelson - MPillay; Sean Hardy - Pinsent Masons MPillay