德尊（新加坡）律师事务所律师开明德：关于RCEP法律与国际商事调解 | 论坛集锦

议题二

RCEP金融与法律服务发展

Managing Disputes under the Regional Comprehensive Economic Partnership (RCEP):

An ASEAN and Singapore Perspective

[Introduction: ASEAN as a new window of opportunity]

1. Greetings to all from Singapore. My name is Cavinder Bull. I am the Chief Executive Officer of Drew & Napier, a Singapore law firm which practises in the ASEAN region.  I practise dispute resolution and have particular expertise in international arbitration.  

2. It is my privilege to have been invited to speak about managing cross-border disputes under the Regional Comprehensive Economic Partnership, or RCEP for short. The ASEAN region comprises a myriad of business and regulatory environments, and is often considered to be a complicated region for foreign businesses and investors to navigate. The introduction of RCEP provides foreign businesses with greater transparency and stability to the region’s trade policy landscape, and this would certainly generate many new opportunities for businesses in the Asia-Pacific region. Against this backdrop, I am optimistic that Chinese businesses entering the ASEAN region can expect even more transactions with its ASEAN counterparts. At the same time, it is pertinent for Chinese businesses to be wary of the legal risks associated with cross-border dealings, and to have a broad understanding of the dispute resolution processes available under the RCEP regime.

[Dispute resolution in cross-border trade and investment in the ASEAN region]

3. When conducting business in the ASEAN region, Chinese companies may sometimes find themselves in disputes with two types of parties: first, the regulatory authorities in the ASEAN host state; and second, their ASEAN-based counterparties to the transaction.

4. With respect to the host state’s regulatory authorities, there may be instances where Chinese investors might need to challenge certain regulatory actions taken against them for alleged breaches of certain regulations, such as legislative restrictions on foreign ownership of assets and investments, as well as employment and environmental regulations. In such a situation, a foreign investor should take note of two things.

5. First, the RCEP currently only provides for a state-to-state dispute settlement mechanism, and does not contain any investor-state dispute settlement (or ISDS) mechanism that enables an investor to initiate legal action directly against a host state. In other words, under RCEP’s current dispute resolution mechanism, the foreign investor can only raise its claim to its home state, who can then decide whether to bring a claim against the host state.   Foreign investors need to be mindful that the success of bringing a claim under the RCEP’s state-to-state mechanism is heavily reliant on the home state’s willingness to intercede and escalate the investor’s claim to the inter-state level. Accordingly, RCEP’s dispute settlement mechanism might not be a viable option if, due to certain political, economic and diplomatic reasons, investors find themselves unable to convince their home states to bring a claim on their behalf.

6. Second, despite the current absence of ISDS provisions in the RCEP, Chinese investors in the ASEAN region can still avail themselves of the ISDS mechanisms in existing free trade agreements and investment agreements between the People’s Republic of China and ASEAN countries in order to bring their claims directly against an ASEAN host state. For example, Chinese investors may rely on the ISDS mechanism in the existing ASEAN-China Free Trade Agreement to submit an investment dispute with an ASEAN host state to one of several avenues, including the courts of the disputing party. Arbitration under a variety of arbitration rules is another option.

7. Next, vis-à-vis their contracting counter-parties, Chinese companies should manage their legal risks early in the contract-drafting stage. In my view, it would be beneficial for companies to seek professional legal advice at the contract-drafting stage, and care should be taken when crafting dispute resolution clauses. A well-drafted dispute resolution clause provides contracting parties with clear procedures for resolving disputes, including matters relating to the forum of dispute resolution; and if arbitration is preferred, the clause would set out the seat of arbitration, the applicable arbitration rules, the appointment of the tribunal, and the choice of language for the proceedings. A well-drafted dispute resolution clause may also have the added effect of saving significant time and costs for parties when resolving their disputes, as less time is wasted arguing over procedural issues which are costly, but do not address the substance of parties’ dispute.

8. Unfortunately, in our experience, many of our Asia-based clients tend to shy away from lengthy discussions on dispute resolution during the contract drafting process. This may be partly due to the fact that parties are less wary about the possibility of a dispute early on in the transaction. This may also be attributable to the values of harmony and conflict-avoidance which are deeply ingrained in Asian culture. For the same reason, we have also noticed that there is a rising trend among our Asia-based clients to implement a ‘tiered’ dispute resolution clause in their contracts. Such clauses typically require parties to engage in ‘good faith’ settlement discussions or mediation before parties can refer the dispute to arbitration or litigation. Such dispute resolution clauses would be ideal for Asian parties that prefer to have an early opportunity to resolve their dispute amicably through mediation.

[Mediation in international trade dispute – a Singapore experience]

9. Finally, with the recent introduction of the Singapore Convention on Mediation which allows for easier cross-border recognition and enforcement of settlement agreements reached by mediation, I expect more parties to start considering mediation as their first port of call for settlement of their cross-border commercial disputes.

10. Singapore is well placed to be a hub for international business dispute settlement in the Asia-Pacific region for a number of reasons. We are politically stable and independent, and our rule of law is held in high regard. Further, we have an established legal infrastructure which has consistently put us as one of the top five most preferred and widely used seats of arbitration in the world. The Singapore International Arbitration Centre (SIAC) also ranks as the second-most preferred arbitral institution internationally. Singapore’s unique strengths in arbitration and mediation can also be seen from our constant innovation in our dispute resolution offerings, such as the arbitration-mediation-arbitration (AMA) protocol offered jointly by the SIAC and Singapore International Mediation Centre (SIMC). 

[Conclusion: A collaborative future for ASEAN-China relations]

11. The member countries of RCEP account for almost a third of the world’s GDP, making RCEP the world’s largest trading bloc in economic size. The expected surge in cross-border business within the Asia-Pacific region would most certainly bring about tremendous prosperity to both RCEP member countries and investors alike. Amidst such optimism however, foreign investors investing and conducting business in RCEP member countries must not forget to tread the legal, regulatory and contractual landscape of the host states with caution and proper advice.