Companies looking to grow and expand their operations should necessarily consider investing in Singapore if they wish to penetrate the Asian market. The island-city-country hybrid has consistently been regarded by the World Bank as one of the easiest countries in the world to conduct business in. It has become a prime destination for plenty of corporate organizations.
There are countless reasons doing business in Singapore is considered to be a good idea. For the most part, the country serves as a focal point for Asian trade. It promises to offer extensive knowledge of various markets within the region. Additionally, Singapore is also caught in the middle of the Straits of Malacca—one of the busiest shipping lanes in the world—making the flow of goods and capital extremely free.
Prevalent Commercial Disputes
Just as with any business venture, however, companies should necessarily understand that there will be risks and challenges involved. Even more so, when entering into such a strong foreign market. Particularly, commercial disputes are sure to abound. It should go without saying that businesses that find themselves in legal trouble need to have the appropriate legal counsel.
Finding a suitable legal practice that houses knowledgeable personalities, especially within the context of the country’s business landscape, is a definite must. Fortunately, Singapore is also home to well-known advocates and arbitrators, such as Toby Landau, who are renowned for their commercial dispute resolutions.
Regardless, companies should be aware of the common types of disputes they may come across in Singapore. More importantly, they should also take into consideration how the current global pandemic has affected the nature with which these legal matters are claimed.
Claims of Force Majeure
The health crisis has significantly disrupted commercial contracts and the ability of employees to accomplish their tasks. Travel bans, remote working arrangements, and localized lockdowns have made it difficult for some professionals to fulfill their obligations as stated in their contracts.
This is precisely the reason why force majeure claims have come in abundance over the past year, in an effort for a given party to avoid or reduce its contractual obligations. Certain clauses under various force majeure claims do, in fact, include a pandemic as a qualifying circumstance. However, the indirect effects of the pandemic, such as government-mandated lockdowns, are questionable.
In this regard, both companies and professionals should know that reliance on legal doctrines and current laws will often suffice as the basis to suspend, revise or excuse further performance under a contract.
Long-term Supply Disagreements
It’s important to note that long-term supply contracts are also fairly common, especially with regard to commodities in Asia. These contracts are usually accompanied by mechanisms that will require the parties to set periodical meetings to discuss and renegotiate specific elements of the agreement.
Within the context of the global pandemic, this has proven to be quite demanding to achieve. Additionally, substantial market disruptions brought about by the crisis have also made it difficult for separate parties to come to an agreement during the periodic sit-downs. In this light, debates have arisen surrounding the viability of referring to legal processes like arbitration to settle these disagreements.
The prices of commodities are among the most sensitive provisions in these long-term supply contracts. In effect, price reviews have been the most common cause for this type of dispute to ensue. Given the agitated commodity markets, expect similar legal problems to be emphasized in the coming months.
Changes in Resolution
Alongside the understanding of prevalent commercial disputes in Singapore, companies should also be well-informed regarding the nature of how these disputes are being resolved. Particularly in relation to the current global pandemic.
Over the past year, there has been an observed increase in the appeal of companies to amicably resolve commercial disputes in an effort to significantly reduce costs. Avenues for this type of resolution will usually include negotiations, conciliation, and mediation which are considered to be non-adversarial.
In terms of mediation, this will often be settled within the local court. Likewise, they will also handle to enforcement of the agreements that might stem from the mediation. On the other hand, more complex and substantial commercial disputes of foreign companies will typically be resolved through international arbitration.
Moreover, it should be expected that virtual hearings will become more common as a means to resolve these commercial disputes. This is all the more relevant when it comes to adhering to the governmental restrictions that have been imposed.
Ultimately, companies should note that certain commercial disputes have become more prominent primarily because of the outbreak of the global pandemic. Hence, businesses looking to invest in Singapore should necessarily come prepared to handle these legal matters should they arise.