What Is Arbitration? Resolving Disputes in Singapore

For many businesses in Singapore, litigation is no longer the default way to resolve a serious commercial dispute. Arbitration offers a private, binding alternative — one that lets parties choose their own decision-maker, keep the details of the dispute confidential, and walk away with an outcome that’s enforceable well beyond Singapore’s borders.

Singapore has built its reputation as one of the world’s leading arbitration seats, home to the Singapore International Arbitration Centre (SIAC) and backed by a court system known for minimal interference in arbitral proceedings.

Whether you’re dealing with a breach of contract, a construction dispute, or a cross-border commercial disagreement, understanding how arbitration works in Singapore, and when it’s the right choice — is essential before you sign your next contract or file your next claim. This guide covers what arbitration is, how the process works, what it costs, and the laws that govern it in Singapore.

What is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR) where  a dispute between two or more parties agree  is decided by a neutral third party, known as an arbitrator or a panel of arbitrators appointed pursuant to the agreement of the disputing parties. This agreement between the disputing parties to resolve their dispute is referred to as arbitration agreement.  

Unlike litigation, which involves courts and judges, arbitration is a private and flexible process that allows parties to tailor proceedings to their needs. It is widely used for commercial disputes, especially when confidentiality, speed, and expert decision-making are required.

In Singapore, arbitration is an increasingly popular method for both businesses and individuals to resolve their dispute alongside mediation and litigation.

What Kind of Disputes Can Be Managed with Arbitration?

Arbitration is suitable for various types of disputes, including domestic and international commercial conflicts. It is commonly used for:

• Commercial contract disputes – Breach of contract, payment issues, and service agreements.
• Construction disputes – Delays, defective works, and contract interpretation issues.
• Financial and banking disputes – Loan defaults, investment agreements, and cross-border financial transactions.
• Technology and intellectual property disputes – Software licensing, patent disputes, and trade secrets.
• Oil, gas, and energy disputes – Joint venture disagreements, exploration and distribution conflicts.
• International disputes – Arbitration is frequently chosen for cross-border business conflicts where parties come from different legal jurisdictions, as it provides a neutral and enforceable resolution method.

What is “not” Arbitration?

Arbitration, although commonly misunderstood, is not a form of informal negotiation between individuals and businesses. Additionally, arbitration is not mediation.

When parties agree to arbitrate any dispute and submit the dispute to the arbitrator/panel of arbitrators, the arbitrator has to power, similar to a judge, to decide matters that is binding upon the parties. The award (or the decision given) by the Arbitrator has the same effect as a court’s decision, meaning it is enforceable.

Arbitration cannot be a solution for every dispute. Not every dispute can be arbitrated. Usually commercial disputes, contractual disputes can be arbitrated but issues relating to criminal matters simply cannot be arbitrated.

Arbitration cannot be forced on parties. Arbitration can only take place if parties have consented to it.

Also Read: Misrepresentation in Singapore: Your Rights and Next Steps

Key Features of Arbitration

• Confidentiality – Arbitration proceedings and outcomes remain private, unlike litigation.
• Neutrality – International arbitration allows parties to resolve disputes in a neutral forum.
• Flexibility – Parties have control over procedural rules and arbitrator selection.
• Finality – Arbitral awards are legally binding with limited grounds for appeal.
• Enforceability – Awards are enforceable in over 160 countries under the New York Convention.

SIAC Arbitration in Singapore

Most institutional arbitrations in Singapore are administered by the Singapore International Arbitration Centre (SIAC), one of the world’s most-used arbitral institutions — SIAC handled 886 new case filings in 2025, with the large majority being international disputes drawn from over 79 jurisdictions.

Parties who choose SIAC operate under the SIAC Rules (7th edition, in force since 1 January 2025), which place greater emphasis on encouraging mediation alongside arbitration. SIAC also offers an Expedited Procedure for straightforward disputes, targeting an award within six months.

If your contract already names SIAC as your arbitral institution, our arbitration lawyers can guide you through the SIAC-specific process from filing to award.

Advantages & Disadvantages of Arbitration

Advantages	Disadvantages
Confidentiality – Unlike litigation, arbitration keeps disputes private.	Costs – Arbitration can be expensive, especially with multiple arbitrators.
Faster resolution – Avoids court backlog and lengthy proceedings.	Limited appeal rights – Arbitration awards are difficult to challenge.
Expert arbitrators – Parties can choose arbitrators with industry-specific expertise.	Lack of precedent – Unlike litigation, arbitration decisions do not create binding legal precedents.
Flexibility – Parties can customize the procedure and timeline.	Enforcement challenges – Some jurisdictions may not fully comply with enforcement mechanisms.
Cross-border enforceability – Awards are enforceable in multiple jurisdictions.	Potential imbalance – If arbitration clauses favor one party, it may lead to unfair outcomes.

Arbitration Process in Singapore

Arbitration in Singapore is a well-structured alternative dispute resolution method, commonly chosen for its efficiency, confidentiality, and enforceability. The arbitration process generally follows a clear sequence of steps, as outlined below:

1. Agreement to Arbitrate – Parties agree to arbitration through a contractual clause or a separate agreement.
2. Commencement of Arbitration – The claimant submits a notice of arbitration.
3. Appointment of Arbitrators – Arbitrators are chosen based on expertise and neutrality.
4. Preliminary Proceedings – Timelines, procedural rules, and case management are set.
5. Exchange of Pleadings & Evidence – Parties submit written claims, defenses, and supporting documents.
6. Hearing & Deliberation – Arguments are presented, and witnesses may be cross-examined.
7. Issuance of the Award – The arbitral tribunal renders a legally binding decision.

Laws Relevant to Arbitration

Singapore’s arbitration framework is governed by the following laws:

• Arbitration Act 2001 – Governs domestic arbitration proceedings.
• International Arbitration Act 1994 – Regulates international arbitration, incorporating the UNCITRAL Model Law.
• Arbitration (International Investment Disputes) Act 1968 – Implements Singapore’s obligations under the ICSID Convention, governing the enforcement of international investment treaty awards involving foreign states.

How Much Does Arbitration Usually Cost?

The cost of arbitration depends on factors such as case complexity, the number of arbitrators, and hearing duration:

• Simple disputes – SGD 30,000 to SGD 100,000.
• Complex commercial disputes – Can exceed SGD 500,000.
• Institutional fees – Costs vary depending on arbitration institutions such as SIAC.

Who Pays the Cost of Arbitration?

Firstly, arbitration is a consensual process. This means that the parties can decide whether each party want to bear their own cost or if the “losing” party should bear all the cost.

Importantly, there are different types of cost associated in an arbitration

• If the arbitration is administered by an arbitral institution such as ICC, SIAC, LCIA, then the parties have to pay the administrative fees to such institution;
• The fees of arbitrator/arbitrators
• Legal fees paid by the parties to their lawyers
• In case there are experts required, the fees of experts
• Logistical costs associated with the hearing

Cost allocation follows Section 21 of the International Arbitration Act

Who Can Be Appointed as an Arbitrator?

Arbitrators can be professionals with legal, industry, or subject-matter expertise. The selection process is determined by the arbitration agreement or institutional rules, such as those of SIAC.

This means that either the parties can agree and choose one arbitrator, or an arbitration tribunal may be formed according to the applicable rules to oversee the appointment and conduct of the proceedings.

Is the Decision by Arbitration (the Arbitrator?) Final? Can It Be Overturned?

Arbitration decisions, known as arbitral awards, are generally final and binding on the parties. Unlike court judgments, , arbitration awards can be challenged on “limited grounds”.

In Singapore, under the International Arbitration Act and the Arbitration Act, an arbitration award can only be set aside under specific circumstances, such as:

• Instances of fraud, corruption, or undue influence in the arbitration process.
• Situations where the arbitrator exceeded their jurisdiction or the award conflicts with public policy.
• Cases involving serious procedural irregularity affecting the fairness of the proceedings.

However, these challenges are rare and difficult to succeed, making arbitration a reliable and conclusive dispute resolution method. The finality of arbitration is one of its main advantages, as it prevents drawn-out legal battles commonly seen in litigation.

Why Choose Arbitration for Business Disputes?

As dispute resolution experts, we strongly recommend arbitration for businesses seeking efficient, enforceable, and confidential resolutions. Compared to litigation, arbitration offers:

• Confidentiality for sensitive commercial matters – Court filings are public; arbitration keeps the dispute, evidence, and outcome private, protecting your business reputation and trade secrets.
• An arbitrator with relevant industry expertise – You can select an arbitrator who understands your industry, rather than leaving a complex commercial or technical dispute to a generalist judge.
• A binding, enforceable outcome – The final award carries the same legal force as a court judgment and is enforceable in more than 170 countries under the New York Convention.
• Faster resolution than litigation – Without a court backlog to contend with, most SIAC-administered arbitrations conclude well within 12 to 18 months.
• Control over procedure and timeline – Parties can agree on the rules, language, seat, and schedule that best suit the dispute, rather than following a fixed court process.

For businesses operating internationally, arbitration is an ideal mechanism to protect commercial interests while maintaining confidentiality and neutrality.

Also Read: Litigation vs Arbitration: What’s Better for Resolving Disputes?

Speak With RBN Chambers About Your Arbitration Matter

Choosing the right dispute resolution path, and drafting an arbitration clause that actually protects your position, makes a real difference once a dispute arises.

Ramesh Bharani Nagaratnam and the team at RBN Chambers regularly advise Singapore businesses on arbitration strategy, from reviewing existing contracts to representing clients through SIAC and ad hoc proceedings.

If you’re facing a commercial dispute or want to strengthen your contracts before one arises, contact RBN Chambers to discuss your options.

Frequently Asked Questions