The fintech GC in 2030

Finance, International Comparative Guides | 27 November 2019

10 years ago the fintech landscape was barely embryonic. The iPhone had only just been invented. The first ever bitcoin had just been traded. Regulations had just started to refer to such things as “electronic transmission of documents” pre-empting the rise of online and mobile financial services. Crowdfunding and robo-advice were in their very first stages. Of course the use of innovative technologies in financial services is nothing new (credit cards, ATMs, electronic stock trading, not to mention the stuff in the backend like mainframes, data centres and risk management tools). But with the explosion of technological capability, consumer sentiment and a regulatory push for more competition after the financial crisis of 2008, the sheer scale and speed of adoption and innovation was and continues to be breathtaking.

This created the perfect breeding ground for a new type of company: the fintech – and so came with it a new breed of lawyer: the fintech General Counsel (GC). I’m fortunate enough to have worked alongside many of them and the many fantastic external counsel that have repurposed their corporate, commercial and regulatory capabilities to be able to serve this unique sector. So as we enter 2020 and we look ahead to 2030: What will the fintech GC look like in ten years’ time?

Challenges and themes

At the heart of the role of the GC is the provision of legal advice to an employer (namely, the company and board) whilst upholding and complying with professional obligations. This includes upholding the rule of law and the proper administration of justice, acting with integrity, and acting in the best interests of the client -as set out in the Solictor Regulation Authority’s (SRA) Principles from the Legal Services Act 2007. Working in fast-paced, high-tech organisations that are themselves heavily regulated places means in-house lawyers in these environments face a unique set of challenges.

 A true business partner

In larger and more mature organisations the role of the Legal function is generally well understood and there are clear frameworks for employees to know when they need to engage with Legal and what they will get in return. In small, nimble start-ups that is less true. It is usually the case that the first lawyer must establish the credibility and process of what an in-house lawyer is there to do. They can’t sit in an ivory tower waiting for people to come to them with well-formed requests for legal advice and nor can they simply reply with an opinion and an assessment of risk. They must get their hands dirty – getting in front of the business and being part of the decision-making process: A true business partner.

As an organisation grows and new business units are created, the demand for a replicable model increases within those business units. However this creates the risk of a lack of consistency, control and oversight across the business GCs must wrangle with how they can set up their in-house lawyers in an agile way that responds to the reality of their organisations, but also follows the SRA Principle to ‘ carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles​’. This will come into sharp focus for fintech GCs as fintechs grow and evolve over the next few years into large companies.

`A common concern for in-house lawyers is that their organisations can be mistrustful of their lawyers, seeing them as deal-blockers rather than deal-makers, or cost centres, rather than part of the profit making enterprise.`​ (Moorhead et al. 2016).

Clearly being established in the business as a business partner can help alleviate some of this concern; through sheer proximity to the decision makers and the business and a mindset of “business person first, lawyer second”. However, it does raise a challenge as to how to maintain the role of independent gate-keeper when a lawyer is so embedded in that particular business. Additionally, it is important to note that in most fintechs lawyers receive not insignificant stock options plans. There is a nagging question mark over the extent to which incentives such as these influence the independence of an in-house legal department. Perhaps as fintechs grow we will mirror the way in-house legal departments operate and move to a more centralised model; or a combination of the two with the central department setting risk appetite and policy within which the business unit lawyers must operate. Alternatively we could see remuneration rules apply differently to in-house lawyers (as they do for risk, compliance and audit professionals in financial services).

Regulation and Financial Services

Nearly all fintechs in the UK will be regulated in some way by the Financial Conduct Authority (FCA). This has a couple of significant impacts on GCs and in-house lawyers.

Firstly, the regulatory environment and principles-based regulation. Navigating the laws that apply to the services provided to customers and businesses must be read in light of ‘regulatory expectations’ which in turn must be gleaned from sometimes quite unlikely sources such as speeches made by regulators, guidance documents, letters to CEOs, and conversations with compliance officers. Building up this patchwork to ensure that advice complies with the letter of the law and regulatory expectations can be very difficult. In-house lawyers must become highly skilled at building networks within policy, compliance, external regulatory consultants and the regulators themselves to create solutions that work for their organisation.

Over the last few years in-house lawyers have had to quickly get up to speed to this new paradigm, overlaying well understood consumer protection legal advice with a deeper level of customer and business analysis under the framework of ‘Treating Customers Fairly’ and Conduct Risk. This will only continue and we may see over the next few years a fundamental shift in the legal relationship between fintech and customer following the FCA’s Duty of Care proposal . Although this has gone to the bottom of the pile in terms of the FCA’s priorities for now it would appear the genie is out of the bottle and a Private Members’ Bill is currently passing through the House of Lords.

The second major impact is the impact of Senior Management and Certified Staff Regime (SM&CR). Introduced for banks in 2016 and now applying to all of financial services with the tagline ‘SM&CR is a catalyst for change – an opportunity to establish healthy cultures and effective governance in firms by encouraging greater individual accountability and setting a new standard of personal conduct.’ ​This creates some interesting dynamics as it relates to in-house lawyers working in organisations under SM&CR, as they are already subject to the SRA regulations governing their standard of personal conduct.

A variation of this dynamic was heard in a recent consultation CP19/4 the outcome of which was summarised in PS19/20 that decided that GCs should not​ ​come under the SMF regime and stated that ‘including the Head of Legal in the Certification Regime and applying our Conduct Rules delivers most of the benefits of including these individuals within the SMR without compromising the law of legal privilege.’ ​In particular the impact of SC4 (which only applies to SMFs) ​on the law of legal privilege was of particular concern: ‘You must disclose appropriately any information of which the FCA or PRA would reasonably expect notice​’.

Although that debate focussed on the impact of bringing in-house lawyers within SMF I believe that in-house lawyers will have to grow accustomed to living within the Certification Regime and the Conduct Rules (even aside from the higher standards of SMF). Although delivered in a different context, the Law Society’s response to UCL’s review of Legal Services Regulations notes that ‘t​​he Clementi Review rightly highlighted the importance of an independent legal profession. A key indicator of an independent legal profession is the degree to which regulation of the legal profession is free from government control. The independence of legal professionals from the state is crucial to underpin an effective legal system and is a critical factor for the international reputation and success of English and Welsh legal professionals and their clients. The profession must be, and must be seen to be, unfettered in its ability to uphold the law. Only if this is the case can solicitors represent the interests of individuals and businesses fully, particularly in the many areas where individuals’ interests can conflict with those of the state.’  

Although these tones may sound somewhat dramatic, the dynamic of being subject to two sets of conduct rules is almost certainly going to have some impact on how in-house lawyers advise and set up their functions. I can see external counsel playing a bigger role in helping in-house lawyers navigate this dynamic and using external advice legal advice more to demonstrate proper oversight and consideration of relevant risks. This will come into even sharper focus since the revised Solicitors Regulation Authority (the “SRA”) Standards and Regulations were published on the 25 November 2019 that pay particular focus on the question of conflicts and duty to the court in the context of in-house lawyers.

Rise of technology and alternative legal services in in-house legal delivery 

The stratification of legal services based on complexity or importance of matter is nothing new. But with the advent of alternative legal business models, process outsourcers and technology, the GC of 2030 will need to be as operationally savvy in how to manage legal delivery at an appropriate price point (with the end consumer in mind) as they are with a plethora of supply chain options at their disposal. Managing this landscape has resulted in the rise of legal operations as a discipline and the rise of legal design and legal engineering as variants of this concept. GCs need to be able to navigate this skillfully to deliver on the ‘more for less’ demands on legal departments.

Modern matter management, contract management, discovery, horizon scanning, risk assessment and chatbot technology has promised in-house lawyers the ability to extricate themselves from the day-to-day and spend their time advising strategically on the business – but the reality is that ongoing maintenance of these tools can be a full time job. Buying off the shelf SaaS products can help with much of the heavy lifting but usually requires significant configuration to make it fit for purpose within an organisation. Building in-house is the holy grail but in high-growth fintech start-ups software developers always have more urgent things to work on than products to make in-house lawyers’ lives easier!

This market will develop over the next few years and I think we will see some truly transformational products that can deliver timely insights to in-house lawyers and can move work that is lower down the value chain to a technological solution. But I don’t think we’ll move away from the classic model of speaking with your in-house lawyer face-to-face or over email to get a bespoke answer to a particular query any time soon. Not only does the business tend to prefer it, in-house lawyers usually do too: the ability to solve someone’s problems in front of you, the ability to practice​ law and not just deliver​ ​legal services is still, in my view, at the heart of why  lawyers become lawyers and I can’t see that disappearing.

One trend in high growth fintech companies – and it relates to the point above on business partnering – is to use highly collaborative communication tools to communicate internally. Google Drive, Slack, Notion and DropBox all create unbelievably fast and dynamic work environments where questions can be asked and answers given in real-time. This is incredibly powerful and allows advice to be given in the context where it is required and with incredible speed.

However, it creates two key issues: (1) the ability to integrate with the way external counsel work and their tools. Often in-house legal teams will have to spend time converting documents or copying and pasting legal advice from emails. It is slow and inefficient and the margin for error and loss of legal privilege is incredibly high. And (2) these tools do not easily allow for auditability – external legal advice is with reference to many layers of hyper-linked documentation which often changes after the advice is given. For these tools to continue to be fit for purpose over the next few years in a highly regulated environment they will have to design easy ways for key moments to be snapshotted and exported to a secure environment for auditability. The board portal sector has already made great strides in this direction but their tools are less weildy than those used by most technology businesses.

The ethical landscape

A number of other macro-trends over the last few years have started to impact how in-house lawyers and the legal profession at large conduct themselves in advising companies and individuals in the modern world. The Companies Act 2006 made some subtle but key changes to director’s duties and included the following as part of a non-exhaustive list of matters to which directors should have regard: ‘the impact of the companys operations on the community and the environment’.  

This, amongst other things such as the growing rise of principles-based regulation around ethics and customer outcomes in financial services and data protection; the ethical introspection of the role of lawyers in silencing victims in the ‘me too’ movement and how that impacts workplace culture; the rise of specific regulations requiring financial services firms to consider the impact of climate change in their planning; means that in-house lawyers must elevate their consciousness to consider the three-hundred and sixty degree impact of their advice and the actions their clients take as a result. This intersection of law, finance and technology provides a unique opportunity for in-house lawyers to carry the torch for a new breed of ethics and advice that will, with courage, nudge us towards a kinder, gentler and more inclusive and sustainable future. As lawyers we should not underestimate our role here and we should lean into it, more. Much more.


As we look ahead to 2030 we will see a generation of fintech GCs who have technology and efficiency built into their operations from day one. They will have found innovative ways to be agile and will work how the business wants to work but with clear boundaries and audited processes around what they are there to do. They will be understood and supported by a mature governance framework in the organisation, partly driven by the regulatory environment in which they work. They will provide multifaceted advice and will draw in all stakeholders from customers, employees and the environment to provide a rounded view for their organisation’s long term success. I think most of all it will be a complex, fantastic and incredibly rewarding role.

Fintech’s growth as a sector grew out of a reaction to the financial crisis and a desire to do things better that would enable customers get a better deal from the complex and archaic world of financial services. I think the legal leaders who have been part of this will be at the vanguard of doing something similar in legal and ethical ​ services over the next decade.​

BREXIT – Expected impact on the shipping industry from a Cyprus perspective

International Comparative Guides | 18 November 2019

The UK has long been one of the leading shipping hubs, this role having been enhanced by its European Union membership and involvement with and contribution to the operations of EU institutions, as well as being the largest and most influential common law country to have joined the EU. This role changed, however, once the UK submitted, on 29 March 2017, the notification of its intention to withdraw from the Union pursuant to Article 50 of the Treaty on European Union (the “Brexit”). This means that once the Brexit process is completed (the “Withdrawal Date”) [1], all European Union primary and secondary law will cease to apply to the UK, save for the agreed or residual legislation. Further, the UK will then become a ‘third country’[2] in accordance with EU rules and regulations.

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Blockchain and the GDPR: reconcilable differences?

International Comparative Guides | 04 November 2019

This article is an abridged version of the full paper “March of the blocks: GDPR and the blockchain”, published jointly by Slaughter and May and Cravath, Swaine and Moore LLP in February 2019, as commissioned by the Center for Global Enterprise. A version of this article was first published in Privacy Laws & Business UK Report (Issue 102, March 2019).


Blockchain technology has advanced significantly over the past decade, and now provides a real alternative to traditional database solutions. However, the General Data Protection Regulation (GDPR) presents substantial compliance hurdles to the ongoing development of blockchain solutions that involve storing (and transacting with) personal data. Some commentators have gone so far as to call blockchain fundamentally incompatible with the GDPR. However, with some collaborative, proactive and innovative thinking by lawmakers and technology providers alike (and some much needed, up-to-date guidance from European regulators) blockchain solutions that respect the fundamental principles of data protection and privacy are, in our view, achievable.

A background to blockchain

Simply put, a blockchain is a series of blocks of data, linked together by a cryptographic hash to form a chain. Cryptographic hashing, which is one of the cornerstones of blockchain technology, works by using an algorithm to turn each block of data into a random, fixed-length, output (known as a “hash”). Each block of data includes a hash of the chain’s previous block. Because the previous block in the chain itself includes a hash of the block before that one (and so on all the way back to the first block), the blocks form a continuous, unbroken chain of reliable data. This means that multiple parties can hold separate copies of the same blockchain and can easily verify that a particular copy of the chain has not been modified or is different from any other copy. It is for this reason that blockchain technology is being applied to an increasing number of solutions for recording, processing and sharing information in a decentralised and easily accessible and auditable way.

One of the most widely acclaimed features of a blockchain is that the information stored on it is immutable; the data of any block in the chain cannot be modified without changing the hash of every block that follows it. This is because the hash stored in each block of the chain effectively acts as a “fingerprint” of the previous block. A hashing algorithm can then be passed over the previous block in the chain to confirm that it generates the correct hash. If the previous block is changed in any way, the algorithm will of course not generate the correct hash, and the chain will break.

Interestingly, as businesses have developed progressively more innovative blockchain-based solutions to an increasingly broad range of data-related problems, governments, regulators and organisations have become more active in creating meaningful support for blockchain’s huge potential. That said, there still remains significant concern about the application of the GDPR to blockchain technology, and about the difficulty of achieving a GDPR-compliant blockchain solution.

Blockchain vs GDPR

Some of the most revolutionary features of blockchain technology, notably the generally immutable nature of data on a blockchain discussed above, do not sit neatly with the key principles and obligations of the GDPR. The most obvious difficulties stem from the GDPR’s obligations to uphold data subjects’ rights to the erasure and rectification of their personal data, which are difficult to reconcile with a technology whose most valuable properties are the decentralised and immutable nature of the information it contains.

However, while some applications of blockchain technology (such as most public, permissionless blockchains, theoretically accessible to anyone in the world) will almost certainly end up not being compliant with the GDPR, GDPR-compliant solutions should not be viewed as being intrinsically unachievable.

Some possible solutions?

With some up-to-date and pragmatic guidance from data protection regulators, a blockchain solution that respects the fundamental principles of data protection and privacy could be achievable, particularly if the following four guiding principles are followed.

I. Use a private, permissioned blockchain.

While the most common vision of blockchain is of a fully public, permissionless network, there are a wide variety of blockchain solutions, many of which are in fact private and require permission to join. The principal point of a public, permissionless network is that any person in any location can become a participant in that blockchain, without registration or restriction, simply by installing the relevant software and downloading a full copy of the blockchain.

Generally, all participants on a public, permissionless blockchain can see all the data on that blockchain. Because anyone can join a public, permissionless blockchain, it is difficult to ensure that all participants will agree to (and comply with) governance rules around the protection of personal data.

By contrast, to interact with a private, permissioned blockchain network, participants must first obtain authorisation. Private, permissioned blockchain networks employ various processes to approve new participants and part of this process can be to ensure all new participants subscribe to a set of rules or terms and conditions that govern their participation in the network.

For these reasons, compliance with the GDPR requires use of a private, permissioned blockchain.

II. Avoid storing personal data on the blockchain.

The most obvious way to avoid GDPR compliance issues is, predictably, to avoid storing any personal data on the blockchain. Indeed, one crucial aspect of distributed ledger technology (i.e. that data should be decentralised and stored by participants rather than in a central repository) is particularly at odds with the GDPR’s principles of data minimisation, storage limitation, and purpose limitation. The ideal means to resolve this dilemma is to avoid it altogether.

While keeping a blockchain completely free of personal data will be difficult to achieve, this should not prevent efforts being made to keep personal data off-chain (as far as it is possible to do so). This may be done, for example, by storing a cryptographic hash of the personal data on-chain, with the underlying raw data being kept off-chain.

However, given the expanded definition of personal data under the GDPR, it is also important to consider the data environment within which the personal information sits, rather than focusing only on information that is clearly, on its face, personal data. After all, personal data under the GDPR also includes information relating to an indirectly identifiable individual, and this means that information which on its own may not be personal data can quickly become personal data when brought together with other information to build a profile of an identifiable individual.

Finally, while a blockchain solution may be designed to avoid storing personal data, there are a number of scenarios where personal data may nevertheless be added to the ledger. However, the development of blockchain middleware applications (software that sits on top of one or more underlying blockchain networks, enabling the application of those blockchain networks to particular use cases) could be used to prevent personal data being added to the network in the first place (by avoiding, for example, any free-form data or indeed any data fields for names and contact details). These applications could also employ more advanced techniques to recognise and remove personal data from information submitted to the blockchain network. AI or machine learning-based tools can, for example, be employed to recognise and blur faces in images (or anonymise other personal data) before it is submitted to the network.

III.        Implement a detailed governance framework.

Given: (a) the need to ensure that personal data is adequately protected; (b) the requirements under the GDPR to establish contractual relationships governing the processing of personal data between parties; (c) the legal obligations on data controllers to provide individuals with privacy notices and a means to uphold their personal data rights; and (d) the use of contractual mechanisms to enable the export of personal data across international borders, a GDPR-compliant commercial blockchain solution will require a detailed governance framework that is contractually binding on all participants and clearly sets out each party’s rights and responsibilities.

The contractual governance framework can be built in such a manner that the GDPR responsibilities of network participants around the provisions of privacy notices, the upholding of data subjects’ rights, the response to subject access requests, the restriction of international transfers, and the proper administration of relationships between controllers and processors can all be appropriately addressed.

IV. Employ innovative solutions to data protection problems.

As discussed above, the immutable nature of blockchain data is the one element of the technology which clashes most obviously with the GDPR, especially the right to erasure and the right to rectification. However, through reliance on innovative solutions such as the use of advanced irreversible encryption (as a means of deletion), or the use of supplementary corrective statements (as a means of rectifying inaccuracies) there are solutions that enable compliance with the spirit and the policy of data protection legislation, if not yet fully the word.

For example, in relation to the right to erasure, while it is technologically difficult (and expensive) to delete historical blocks of data on a blockchain (“pruning”) or delete and rebuild a blockchain (“forking”), it may be possible to delete personal data stored on the blockchain by irreversibly encrypting the data. Under this approach, the encrypted data would remain permanently on the blockchain, but the personal data it contains would be “deleted” from the blockchain by deleting all keys that enable decryption of that data.

However, the Article 29 Data Protection Working Party (now the European Data Protection Board) previously classified encryption and hashing as pseudonymisation techniques which produce data that is not necessarily anonymised, though the guidance has not been formally endorsed by the EDPB for the purposes of the GDPR.[1] The Working Party’s view seems to have been reached in part on the basis that data produced by pseudonymisation allows an individual data subject to be singled out and linked across different data sets. Indeed, the opinion left open the question of whether a combination of such techniques, with the help of innovative solutions, could produce data that is rendered anonymous in such a manner that the data subject is no longer identifiable. One pseudonymisation technique mentioned by the Working Party included producing a cryptographic hash and then deleting the key used to generate that hash. The opinion did note that employing this technique would make it “computationally hard for an attacker to decrypt or replay the function, as it would imply testing every possible key, given that the key is not available”, but it remains unclear whether personal data that is irreversibly encrypted or hashed and keyless can be considered to be anonymised for the purposes of the GDPR.

It is for this reason that it is of utmost importance for the European Data Protection Board and national data protection authorities to produce up-to-date, pragmatic and innovative guidance on the interplay between blockchain and the GDPR, especially in relation to innovative solutions to deletion and rectification.

A call for up-to-date regulatory guidance

It is clear that not all of the blockchain challenges posed by the GDPR and other privacy regimes can currently be completely bridged. However, the gap left by those challenges is in fact relatively small, and the fundamental freedoms forming the policy behind such privacy laws can be maintained and protected in particular blockchain environments with the help of an active and pragmatic approach by lawmakers and regulators alike.

Greater engagement by, and co-operation between, regulators, lawmakers and blockchain technology developers is now a necessity. The current legal and regulatory obstacles could then be overcome in a manner that facilitates the continued growth and exploitation of blockchain as a technology of great potential.

There is a risk that, if steps are not taken by regulators and lawmakers to bridge the gap between data protection law and blockchain technology, there will be a slowing in (or even end to) advancements in blockchain solutions. Such an outcome would ultimately be detrimental to technological developments having the capacity to deliver substantial benefits to the world as a whole.

[1] Article 29 Data Protection Working Party, opinion 05/2014 on Anonymisation Techniques (adopted on 10 April 2014), available at:

Hot Topics – Singapore

Dispute Resolution | 31 October 2019


Singapore has, in recent years, been playing a prominent role in international arbitration and has matured to be a leading arbitration hub in Asia and in the world. As a reputable seat for both commercial and investment treaty arbitrations, Singapore was ranked in 2018 as the most preferred seat in international arbitration in Asia and the third most preferred seat worldwide just after London and Paris.[1] The legal developments in Singapore relating to international arbitration therefore assume great significance, and would be of particular interest to the arbitral community.

A particular space to watch is the jurisprudence from the Singapore courts concerning investment treaty arbitrations. The first investment treaty arbitration case that came before the Singapore courts is Sanum Investments Ltd v Government of the Lao People’s Democratic Republic[2] (“Sanum”) where the courts grappled with the application of the moving treaty frontiers rule in state succession and the interpretation of fork-in-the-road clauses. The next occasion for the Singapore courts to hear an investment treaty case was in Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Limited[3] (“Lesotho”) where difficult and novel issues of public international law, treaty interpretation and international investment law arose in the context of the shuttering of a specially constituted tribunal known as the South African Development Community (“SADC Tribunal”), which was established to hear disputes concerning breaches of the SADC treaty. What is of note is that the underlying investments and disputes in Sanum and Lesotho had no connection with Singapore, other than Singapore being chosen as the seat of arbitration. A third setting aside application in the context of an investor-state arbitration is on the horizon, as evident from the recent dismissal of an application by a Queen’s Counsel for ad-hoc admission to defend the setting aside application of an investor-state award; the setting aside application has also been transferred to be heard by the Singapore International Commercial Court (“SICC”).[4]

In addition, the Singapore courts often deal with challenges to an arbitral tribunal’s jurisdiction under s 10(3) of the International Arbitration Act (“IAA”) and Art 16(3) of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) where the tribunal has ruled on a preliminary plea that it has (or does not have) jurisdiction. This has generated a number of interesting decisions, including that of the Singapore Court of Appeal in Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd[5] (“Rakna”) where the Court had to answer the question as to whether a non-participating party to an arbitration could lose its right to raise jurisdictional challenges in setting aside proceedings before the seat court if it has failed to earlier avail itself of the recourse under s 10(3) of the IAA and Art 16(3) of the Model Law. In BNA v BNB and another[6] (“BNA”), the Singapore Court of Appeal disagreed with the Singapore High Court’s interpretation of an arbitration clause, and found that the parties had chosen Shanghai instead of Singapore as the seat of arbitration, which therefore meant that the jurisdictional issues were for the People’s Republic of China (“PRC”) court, as the seat court, to decide.

Apart from case law developments, another topic which has generated a lot of interest and discussion pertains to the proposed amendments to the IAA to further improve the arbitration regime in Singapore. The ongoing review of the arbitration legislation demonstrates how Singapore, as a preferred arbitral seat, is not content to rest on its laurels, and is constantly looking to improve itself so as to maintain its attractiveness as an arbitral seat.


  • Investment treaty arbitrations – Sanum and Lesotho

A number of investment treaty arbitrations which have no connection to Singapore other than being seated in Singapore, have come before the Singapore courts, and the Singapore courts have had the opportunity to tackle complex, novel and interesting issues of public international law, treaty interpretation and international investment law.

Sanum concerned an application under s 10(3)(a) of the IAA against a positive jurisdictional ruling of the tribunal, in favour of the Macanese investor, in an arbitration brought against the Government of Laos, under the PRC-Laos bilateral investment treaty (“PRC-Laos BIT”). While the High Court set aside the positive jurisdictional ruling of the tribunal, the 5-judge Court of Appeal, who appointed 2 amicus curiae, adopted a de novo approach[7], and decided to reverse the decision of the High Court and uphold the jurisdiction of the tribunal.

The key question before the Court of Appeal is whether the PRC-Laos BIT applied to Macau SAR by reason of the moving treaty frontiers rule, and whether any of its exceptions applied, namely “whether a different intention appears from the treaty or is otherwise established”. The Court of Appeal did not find that the treaty text displaced the presumption, and neither did the other evidence, including the 1987 PRC-Portugal Joint Declaration and the 1999 Note from PRC to the UN Secretary-General. Interestingly, after the tribunal’s positive jurisdictional ruling, Laos had produced before the Singapore courts Notes Verbales exchanged in 2014 between the Laotian Ministry of Foreign Affairs and the PRC Embassy in Vientiane which stated that the PRC-Laos BIT was not applicable to Macau SAR. Adopting the “critical date doctrine” under international law i.e. evidence generated after the dispute has arisen cannot be used by the disputing party to improve its position, the Court of Appeal found that Notes Verbales should not be accorded any weight, as they contradicted the pre-critical date doctrine position, and also did not amount to a subsequent agreement or practice, as that would amount to a retroactive amendment of the PRC-Laos BIT. This aspect of the decision has been cited with approval by international tribunals sitting in investor-treaty arbitrations, in particular those concerning disputes arising out of the annexation of Crimea by Russia.

In interpreting the fork-in-the-road clause in Art 8(3) of the PRC-Laos BIT which provides for “a dispute involving the amount of compensation for expropriation” to be submitted to international arbitration[8], the Court of Appeal in Sanum adopted a broad interpretation, and found that the clause was wide enough to cover an expropriation dispute, as issues of quantum and liability for expropriation were incapable of segregation.

Lesotho, on the other hand, concerned an application by the Kingdom of Lesotho to set aside a partial final award on jurisdiction and liability rendered by a tribunal seated in Singapore under the auspices of the Permanent Court of Arbitration (“PCA”) in favour of the South African investors. The investors had been granted prospecting and mining leases in Lesotho, which were subsequently expropriated by the implementation of various measures in Lesotho. This led to proceedings commenced against Lesotho for wrongful expropriation before the SADC Tribunal, which was shuttered while the proceedings were pending, as a result of resolutions passed by SADC States, without there being an alternative forum provided to hear these pending proceedings.[9] The investors thus commenced the PCA arbitration against Lesotho arguing breaches of various obligations under the SADC treaty and its associated protocols, by Lesotho participating in the shuttering of the SADC Tribunal without providing an alternative forum to hear the pending proceedings. The PCA tribunal found that it had jurisdiction to hear and determine the claim, that Lesotho had breached its obligations under the SADC treaty and its associated protocols, and directed the parties to constitute a new tribunal to hear the investors’ expropriation claim. The Singapore High Court and Court of Appeal set aside the award under Art 34(2)(a)(iii) of the Model Law, on the basis that the SADC tribunal did not have jurisdiction to hear and determine the claim, albeit on slightly different analysis and reasoning.

Similar to Sanum, the 5-judge Court of Appeal appointed two amicus curiae, and elucidated on various important principles in public international law and international investment law, some of which are highlighted below.

First, the Court of Appeal held that an “investment” can consist both of the primary right to exploit the investment and the secondary right to seek remedies to vindicate the primary right.[10] In connection with this, the Court of Appeal ventured to observe that the rights associated with an investment need not even be in existence at the time the original investment was made, endorsing a dynamic view of investment treaties.[11]

Second, the Court of Appeal was of the view that to qualify as an “investment”, there was a need to satisfy the requirement of a “territorial nexus” i.e. for the investment to be made or located within the territory of the host States. In the context of a bundle of rights, those rights must exist and be enforceable under the domestic laws of the host State because, in the Court of Appeal’s view, “it is generally not sufficient for a right to exist only extraterritorially or on the international law plane unless that right is within the State’s sole control or the State has expressly undertaken to guarantee that specific right”.[12] Consequently, the investors’ right to bring a claim before the SADC Tribunal was not a protected investment, as it existed on the international law plane and its assurance was dependent on the consent of SADC member states, and not Lesotho alone.[13]

Third, on an issue of temporal jurisdiction, the Court of Appeal embarked on an analysis of the SADC treaty and its associated protocols to come to the conclusion that they did not create an independent basis of jurisdiction over investment disputes.[14] This potentially has implications for the interpretation of the SADC treaty and its associated protocols in other proceedings involving these instruments.

The Singapore courts have demonstrated in Sanum and Lesotho that they are ready to confront complex, difficult and varied issues of public international law, treaty interpretation and international investment law, and lead the way in the jurisprudence in this field, which would only further cement its position as an arbitral seat for investment arbitrations. As mentioned, a third investor-state case is on the horizon for the Singapore courts, this time, before the SICC.[15]


  • Rakna – choice of remedies

In Rakna, arbitration proceedings under the Rules of the Singapore International Arbitration Centre (“SIAC”) were commenced by Avant Garde Maritime Services (Pte) Ltd (“AGMS”), a Sri Lanka-incorporated company providing maritime security services, against Rakna Arakshaka Lanka Ltd (“RALL”), a Sri Lanka-incorporated company specialising in providing security and risk management services, for breach of various agreements. The arbitral tribunal ruled on its jurisdiction in a preliminary ruling, but no challenge under s 10(3) of the IAA and Art 16(3) of the Model Law was filed by RALL. [16] Although RALL had also written to the SIAC seeking multiple extensions of time to respond to the Notice of Arbitration,[17] RALL neither participated in the arbitral proceedings nor submitted any post-hearing written submissions or submissions on costs.[18] After the arbitral tribunal issued a final award in favour of AGMS,[19] RALL instituted proceedings in the Singapore High Court to set aside the award on, amongst other things, jurisdictional grounds[20]. The High Court held that RALL’s failure to challenge the tribunal’s preliminary ruling on jurisdiction within 30 days amounted to an abuse of process, and prevented RALL from subsequently applying to set aside the award on jurisdictional grounds, due to the preclusive effect of s 10(3) of the IAA and Art 16(3) of the Model Law.

On appeal, the Court of Appeal disagreed with the High Court, and found that the preclusive effect did not extend to a respondent who failed in its jurisdictional objection and then does not participate in the arbitral proceedings and has not contributed to any wastage of costs, or the incurring of any additional costs that could have been prevented by a timely application under s 10(3) of the IAA and Art 16(3) of the Model Law.[21] As the Court of Appeal found that RALL did not participate in the arbitration proceedings, RALL was entitled to avail itself of all the remedies, including raising the jurisdictional objections at the setting aside stage.[22] The Court of Appeal eventually decided to set aside the final award pursuant to Art 34(2)(a)(iii) of the Model Law because it contained a “decision on matters beyond the scope of the submission to arbitration”.[23] The Court of Appeal observed that as there was an agreement which had effected a settlement and resolved the dispute between the parties, there was no longer a dispute for the tribunal to deal with and the tribunal had no jurisdiction to conduct the arbitral proceedings.

While this decision represents an important pronouncement on the preclusive effect of a failure to resort to the early mechanism under Art 16(3) of the Model Law (or its equivalent) to ventilate jurisdictional objections, questions remain as to the precise contours of when a respondent can be said to justifiably not to participate in the arbitration proceedings, and to be still entitled to raise the jurisdictional objections when it comes to setting aside of the award, and whether this same reasoning applies to resisting enforcement of the award. One would certainly have in mind the decision of the Singapore Court of Appeal in PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal[24] where the Court of Appeal distinguished between the “active remedy” of setting aside the award and “passive remedy” of resisting enforcement of the award, and rejected the submission that Art 16(3) was a mandatory route that must be followed. The fact that a party had not raised a timely challenge to the preliminary award on jurisdiction did not therefore prevent it from subsequently exercising its passive remedy to challenge the enforcement, and it was also found on the facts that the party in question did not waive its right to challenge the jurisdiction despite participating in the proceedings, as the party had always maintained its jurisdictional objections in the arbitral proceedings.

In this context, of note are also two SICC decisions, namely that of Roger Giles IJ in BXY and others v BXX and others[25], which decided that the 30-day time limit in s 10(3) of the IAA and Art 16(3) of the Model was absolute, and that the Court has no inherent power to extend that time, similar to the finding of Reyes IJ in BXS v BXT[26] that the three-month time limit in Art 34 of the Model Law was absolute.



  • BNAdetermining the proper law of an arbitration agreement

In BNA, an application was brought by the plaintiff under s 10(3) of the IAA challenging a preliminary positive jurisdictional ruling of the tribunal in an arbitration administered by the SIAC. The arbitration agreement in question formed a part of the underlying contract, which was governed by the laws of the PRC. The arbitration clause provided that “the disputes shall be finally submitted to the Singapore International Arbitration Centre (SIAC) for arbitration in Shanghai, which will be conducted in accordance with its Arbitration Rules”.[27]

Before the High Court, the plaintiff contended that the tribunal lacked jurisdiction as the arbitration clause was invalid under PRC law. Under PRC law, foreign arbitral institutions are prohibited from administering arbitrations of domestic disputes and PRC-seated arbitrations.

In determining the validity of the arbitration clause, the High Court had to first consider the proper law of the arbitration agreement, and endorsed the three-stage inquiry laid down by the English Court of Appeal in Sulamérica[28]. While PRC law was the governing law of the underlying contract, there was no express choice of law for the arbitration agreement. As to the implied choice of law, the High Court noted that as the arbitration agreement would be invalid under PRC law, that may indicate the parties’ contrary intention to apply that law, and the High Court thus undertook an analysis as to whether the law of the sear of the arbitration would instead apply.

The High Court concluded that Singapore was the seat of arbitration notwithstanding the reference to “Shanghai” in the arbitration clause. This was due to the parties’ express choice of SIAC Rules 2013 for the conduct of the arbitration, by which the parties had clearly manifested their intention to have Singapore as the seat[29], as r 18.1 of the SIAC Rules 2013 provided that in the absence of an agreement to the contrary, the seat of any arbitration under the SIAC Rules 2013 would be Singapore.[30] In construing the arbitration clause, the High Court had rejected both the “effective interpretation” principle and the “validation principle”[31], preferring instead to adopt general principles of construction of contracts. Following from this, the High Court found that the proper law of the arbitration agreement was the law of the seat, which was Singapore law[32], and that the arbitration agreement thus had its closest and most real connection with Singapore.[33] As the arbitration agreement was valid under Singapore law, the High Court upheld the jurisdiction of the tribunal.

The High Court decision was reversed by the Singapore Court of Appeal. While written grounds have not yet been issued, it was reported that the Court of Appeal, in its oral grounds, has “quashed a ruling that affirmed a SIAC tribunal’s jurisdiction to hear a case under a clause providing for ‘arbitration in Shanghai’ – concluding that the Chinese city was clearly intended as the seat for the dispute”.[34] It was reported that Sundaresh Menon CJ had opined that the High Court was wrong in concluding that Shanghai was not the seat and simply the venue for the hearing; thus, any questions related to the jurisdiction of the tribunal was for the PRC court, and not the Singapore courts.[35] It remains to be seen when the written grounds of decision are issued, as to whether the Court of Appeal disagreed with the other analysis and reasoning of the High Court.


  • Proposed amendments to the IAA

Apart from case law developments, another topic which has generated a lot of interest and discussion pertains to the proposed amendments to the IAA to further improve the arbitration regime in Singapore.

In a public consultation initiated by the Singapore Ministry of Law from 26 June 2019 to 21 August 2019[36], the Ministry proposed certain amendments to the IAA, namely:

  • the introduction of a default mode of appointment of arbitrators in multi-party situations;
  • allowing parties to, by agreement, request the arbitrator or arbitrators to decide on jurisdiction at the preliminary stage;
  • a provision recognising that an arbitral tribunal and the High Court have powers to enforce obligations of confidentiality in an arbitration;
  • allowing a party to the arbitral proceedings to appeal to the High Court on a question of law arising out of an award made in the proceedings, provided parties have agreed to opt in to this mechanism;

Of particular significance is the proposal to allow a party to appeal to the High Court on a question of law arising out of an arbitral award, provided that parties have agreed to opt in to this mechanism. As pointed out by Sundaresh Menon CJ, this proposed amendment has many considerable advantages, including promoting efficiency in the arbitral process,[37] accountability of arbitrators and enhancing “the legitimacy of the arbitral regime as a whole”.[38] It would further stimulate and lead to the development of a cohesive body of arbitral case law[39]; reduce ambiguity, which in turn “enhances certainty, lowers the costs of doing business, and reduces the risk of similar disputes occurring”.[40] Having “judicial recourse to correct obvious errors of law would in fact strengthen users’ confidence in arbitration”.[41] As seeking judicial recourse on a point of law is available only if the parties have agreed in writing to opt-in to this mechanism, this proposed amendment strikes a balance between party autonomy and promoting efficiency and certainty in arbitration.

Drawing from the experience of s 69 in the UK Arbitration Act, this proposed amendment envisages that a party may appeal on a question of law arising out of an award only upon notice to the other parties and the arbitral tribunal and with the leave of the High Court. Leave to appeal may be granted only if the High Court is satisfied that: “(a) the determination of the question will substantially affect the rights of one or more of the parties; (b) the question is one that the arbitral tribunal was asked to determine; (c) on the basis of the findings of fact in the award – the decision of the arbitral tribunal is obviously wrong; or the question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt; and (d) despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the High Court to determine the question”.[42] It is evident that judicial recourse on a point of law is available only in certain limited circumstances, and this proposed amendment has the necessary safeguards to deter parties from pursuing unnecessary litigation, thereby undermining the finality of arbitral awards.

It remains to be seen whether the High Court would be given the power to go a step further, in a situation where the parties do not appeal on a particular question of law, and the High Court decides, of its own motion, to intervene where there is a manifest error in law in the arbitral award. It appears that the general sentiment is that this may be going one step too far.

The ongoing review of the arbitration legislation demonstrates how Singapore, as a preferred arbitral seat, is not content to rest on its laurels, and is constantly looking to improve itself so as to maintain its attractiveness as an arbitral seat.


The expanding jurisprudence in international commercial and investment arbitration from the Singapore courts is certainly not going to slow down, especially with Singapore’s growing popularity as an arbitral seat. Of late, these decisions are also being generated from the SICC, which include an international panel of judges, with both common law and civil law background, and this would no doubt add an international dimension to the jurisprudence, which will continue to contribute significantly to the development of international arbitration globally.

* Alvin Yeo is a Senior Counsel, Chairman, Partner and Koh Swee Yen is a Partner at WongPartnership LLP, Singapore. The authors are grateful to their colleagues Alexander Kamsany Lee, Brunda Karanam and Donny Trinh Ba Duong for the considerable assistance given in respect of the research and preparation of this chapter.

[1] SIAC, ‘SIAC is Most Preferred Arbitral Institution in Asia and 3rd in the World’, 10 May 2018, available at <> (accessed 29 October 2019).

[2] [2016] 5 SLR 536.

[3] [2019] 1 SLR 263.

[4] Re Matthew Gearing QC [2019] SGHC 249 at [5]; The SICC is a division of the Singapore High Court, and part of the Supreme Court of Singapore, designed to deal with transnational commercial disputes. The SICC panel of judges comprise the Singapore High Court judges as well as an international panel of judges, with common law and civil law background. See Singapore International Commercial Court, ‘Judges’, available at  <> (accessed 29 October 2019).

[5] [2019] 2 SLR 131.

[6] [2019] SGHC 142.

[7] Sanum at [40]–[41].

[8] See Sanum at [150]–[152].

[9] Lesotho at [26].

[10] Lesotho at [120], [124].

[11] Lesotho at [128].

[12] Lesotho at [137].

[13] Lesotho at [112]–[113]; [138]–[139]; [163].

[14] Lesotho at [146], [151], [153]–[156].

[15] Supra note 4.

[16] Rakna at [32].

[17] Rakna at [11]–[15].

[18] Rakna at [27].

[19] Rakna at [28].

[20] Rakna at [30]–[32].

[21] Rakna at [77].

[22] Rakna at [75]–[77].

[23] Rakna at [84].

[24] [2014] 1 SLR 372 at [68], [125]–[132].

[25] [2019] 4 SLR 413 at [89].

[26] [2019] 4 SLR 390 at [41].

[27] BNA at [3].

[28] Sulamérica Cia Nacional de Seguros SA and others v Enesa Engenharia SA and others [2013] 1 WLR 102, endorsed in earlier decisions of the Singapore courts in BCY v BCZ [2017] 3 SLR 357 and BMO v BMP [2017] SGHC 127.

[29] BNA at [109].

[30] BNA at [104].

[31] BNA at [45], [48], [51], [53], [62]

[32] BNA at [111].

[33] BNA at [119].

[34] Tom Jones, ‘No Singapore seat for Chinese dispute, rules appeal court’, Global Arbitration Review 22 October 2019, available at (accessed 29 October 2019) (“GAR Report”).

[35] GAR Report.

[36] Ministry of Law, ‘Consultation Paper – Proposed amendments to the International Arbitration Act (“IAA”)’, available at  (accessed 29 October 2019).

[37] The Honourable Chief Justice Sundaresh Menon, The Singapore Chamber of Maritime Arbitration ‘10th Anniversary Keynote Address – The Race to Relevance’ 4 October 2019, available at–keynote-address-delivered-at-the-singapore-chamber-of-maritime-arbitration-10th-anniversary (accessed 29 October 2019) (“Keynote Address”).

[38] Keynote Address at [26].

[39] Keynote Address at [18]–[22].

[40] Keynote Address at [22].

[41] Keynote Address at [23].

[42] Appendix A, Ministry of Law, ‘Consultation Paper – Proposed amendments to the International Arbitration Act (“IAA”)’, available at  (accessed 21 October 2019).

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