Arbitration – requirement for dispute!

1. We recently attended the SCMA Jakarta Conference 2025 held on 16^th July 2025. As usual, SCMA conducted a very nice conference with speakers speaking on various developments. It was nice to come across one of the slides of Sue Ann Gan of Norton Rose Fulbright who spoke on Trends in Ship Finance, and which listed 19 reasons due to which there is interest in financial arbitration growing. We submit that these reasons are common for other shipping and maritime disputes. Two of the reasons listed in the slide were Difficulty of Enforcing Court Judgements and Ease of Enforcing Award under the New York Convention.
2. Arbitration clauses are creatures of contract in that parties agree in their contract to arbitrate issues which include disputes and differences. Crucially, the model clauses used in LMAAⁱ, SCMAⁱⁱ, SMAⁱⁱⁱ and HKMAG^iv all provide for the requirement of a dispute for the arbitration clause to kick in. In the event, there is no dispute, say for a money claim and which has been acknowledged and accepted in full by the respondent, then obviously, there is nothing to arbitrate given that contractually, parties agreed only to arbitrate disputes. In this regard, the Singapore Court had to grapple with similar issues in Crystal Moveon Technologies Pte Ltd v Moveon Technologies Pte Ltd (which is an appeal against a AR’s decision) on whether to grant a stay to the respondent for the matter to be arbitrated when there was no “dispute” at hand.
3. The Singapore International Arbitration Act (“IAA”)^v defines an Arbitration Agreement in S 2A (1) as “… “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not”. Additionally, the wordings of Article 7 of the Model Law and which is a part of the IAA has similar wordings. Accordingly, it suggests that for the application of the IAA, there is a requirement of a dispute such that even if the words of the arbitration clause is tinkered with, this may not bite sufficiently to allow for the undisputed claims to be arbitrated.
4. With respect to enforcement under the New York Convention, there is no similar provision defining an arbitration agreement such that the bite of the word “dispute” should not apply. Article II.I of the New York Convention provides for all or any differences instead of the word dispute and therefore it does appear to us that non disputed claims would not be barred from enforcement if there is a difference and which could include the time of payment.
5. In some circumstances, it would actually be tactically better for the defendant to unequivocally admit its liability so that the matter cannot be arbitrated and which would mean that the claimants do not have the benefit of the faster processes available in arbitration together with the potential for easy enforcement (court awards of another jurisdiction may only be enforced if there is a treaty between the countries or there is a practice in law to enforce such judgements^v).
6. If there is an intention for arbitration to also be the process for non-disputed claims, the relevant legislation such as the IAA^vi including the model law would have to be amended. Till such time, arbitration can only be considered as the chosen dispute resolution method to deal only with disputes. Accordingly, if the defendant has unequivocally admitted its liability but refuses to make payment, the claimants must consider initiation of legal action to pursue recovery, and which should be at the jurisdiction which will have the best bite (which in most cases would be the jurisdiction where the defendant is sited) together with its warts and all. We believe that this is ultimately a KYC issue^vii and which parties should always consider together with their chosen dispute resolution method.

[i] This Contract shall be governed by and construed in accordance with English law and any dispute.
[ii] Any and all disputes arising out of or in connection with this contract, including any question …
[iii] Should any dispute arise out of this contract …
[iv] … and any dispute arising out of or in connection …
[v] See Singapore Comparative Guide 2023  on Enforcement of Judgements in Civil and Commercial Matters published by Wong Partnership LLP.
[vi] There are similar wordings in the English Arbitration Act 1996 such that a dispute is required.
[vii] See Pt 5 of our earlier article, Logistics Contract – Arbitration.