Singapore Welcomes Foreign Judges as HK Lawyers Fret

Bloomberg News

Singapore's move to allow foreign judges to hear commercial cases may boost its standing against regional rival Hong Kong where concerns have mounted that its judicial independence is being undermined by China.

Judges from other jurisdictions will be able to hear cross-border disputes at the Singapore International Commercial Court, according to proposed changes tabled in Parliament yesterday. Singapore, which earlier allowed foreign lawyers to advise clients on its corporate laws, will also let them appear in the new court.

Singapore, 13 spots behind Hong Kong's fourth place for judicial independence in a World Economic Forum report last year, has seen contributions from legal services expand 46 percent to S$1.9 billion ($1.5 billion) in 2012 from 2007. That's double the pace of the Chinese city in the same time. Lawyers in Hong Kong marched in silent protest in June against a policy paper from China which asked judges to be patriotic, stoking concerns over its independence from Beijing.

'Singapore, which had a reputation for being conservative and somewhat closed, having laws which many outside the country viewed as oppressive, is changing,' said Peter Goldsmith, Chair of European and Asian Litigation at Debevoise & Plimpton LLP and a former U.K. attorney general. 'It demonstrates Singapore's maturity.'

While the commercial court will 'absolutely' boost Singapore's reputation, those with a negative perception of the country's judiciary aren't going to change their minds, according to Law Minister K. Shanmugam, whose previous clients as a lawyer included government leaders who successfully sued opposition politicians for libel.

Fair Game

Prime Minister Lee Hsien Loong in May sued a blogger for defamation. Another blogger faces possible contempt of court action by the attorney general's office for scandalizing the judiciary.

'In Singapore, a public figure is expected to have integrity, and if an allegation is made against him, then he is expected to either resign or clear his name,' Shanmugam said in an interview in May.

Singapore pushed ahead with its legal services reform despite concerns from some that it might lead to foreign law firms dominating the market as they do in Hong Kong.

'Even that limited opening up was, of course, not a popular move and there are good arguments both ways,' said Shanmugam, who was appointed law minister in 2008. 'I wasn't one of those who thought that it was logical to do that opening up. Nevertheless, by the time I became minister, it was government policy which I then put into motion.'

Winning Support

Six foreign law firms were given licenses to practice Singapore corporate law in 2008 and tax incentives were offered to boost arbitration. In 2012, admission rules for experienced foreign trial lawyers were relaxed. A year later, four more firms won licenses for domestic corporate law.

'Singapore is like a very, very well run board of directors of a leading corporate,' said Martin Rogers, a Hong Kong-based litigation partner of Davis Polk & Wardwell LLP. They're 'strong at communicating with, and winning support from shareholders and able to do the right thing, even if a vocal minority aren't happy,' he said.

Election Vetting

While international law firms have also been expanding in Hong Kong including moving lawyers there to advise Chinese and other clients on foreign disputes, China's June policy statement about the former British colony has raised concern that its separate legal system is being threatened.

Hong Kong's legal services sector accounted for HK$12.6 billion ($1.6 billion) of the economy in 2012, compared with HK$10.5 billion in 2007.

China's decision that candidates for the city's chief executive in elections in 2017 must be vetted by a committee have triggered protests that are still continuing, including a candlelit vigil Oct. 3 in front of Hong Kong's High Court by a group of lawyers led by lawmaker Dennis Kwok.

'I have complete confidence in the rule of law of Hong Kong,' Kwok said. 'The legal profession are united and committed to defend and safeguard it.'

Hong Kong's 'sad developments' mean Singapore is the only truly independent and neutral, first-class venue for dispute resolution in Asia, according to Michael Pryles, president of the Singapore International Arbitration Centre's court of arbitration. He's also an international advisory board member at the Hong Kong International Arbitration Centre.

'It is convenient to see any slide in Hong Kong's reputation as a natural gain for Singapore but I don't think the co-relation is always so straightforward,' said Yu-Jin Tay, global co-chair of international arbitration at DLA Piper. 'Both cities are complementary.'

To contact the reporter on this story: Andrea Tan in Singapore at atan17@bloomberg.net

To contact the editors responsible for this story: Douglas Wong at dwong19@bloomberg.net Linus Chua