Making a passionate case for arbitration

PHOTO: Making a passionate case for arbitration

SINGAPORE - The word arbitration does not have a ring of adventure to it but leading lawyer Andre Yeap relishes the challenges it throws his way.

Those challenges can mean venturing into the catacombs of obscure Japanese law or going to bat for a firm ensnared in a legal mess in the Philippines.

And invariably, there are hundreds of millions of dollars at stake. Winning at this level of the game means huge payouts.

Mr Yeap, 51, who was called to the Bar in 1987, recently took over the helm of the international arbitration practice at Rajah and Tann, one of the largest law firms here.

Singapore, with its robust legal system, is becoming a leading regional centre for arbitration. That means Mr Yeap, who is senior partner at the firm and also oversees the commercial litigation practice, will be right at the front line of this fast-growing business. Made Senior Counsel in 2003, Mr Yeap, who is married with three daughters, has handled many international arbitration cases.

Although arbitration can generally be more expensive than going to court, there are many cases that have seen better results through it.

They can be more interesting as well. Mr Yeap, 51, recalls one case where he acted for an engineer who was being sued over the reconstruction cost of a cement silo used for bulk storage.

"We hunted down a South African expert who was considered one of the top three silo engineers in the world. He gave us a crash course on how to design a silo, how to place the reinforcement steel bars," he recalls. "If you're not dealing with a case like this and unless you're in that very specialised industry, you'd never get to meet people like that."

He also cites a "classic example of why you don't go to a court" but opt for arbitration instead.

His client was an Indian steel conglomerate that bought a steel plant in the Philippines, on the condition that the plant title be free of certain tax liens - the legal right to sell a debtor's collateralised property. The tax amnesty agreement was revoked resulting in back taxes of more than US$80 million (S$101 million), raising the question of who would foot the bill.

Mr Yeap says: "One of the issues was, who caused the revocation of the tax amnesty agreement. Our clients went to the Philippine courts to get an injunction on the basis that we were going to start arbitration and the injunction was needed to maintain the status quo. If not, we'd be paying without getting the title." The Philippine courts did not grant the injunction but the Singapore courts did, and a partial award, valued at about US$700 million, has been obtained. Mr Yeap notes: "Imagine if this was dealt with by only the Philippine courts. To put it bluntly, the clients would have died."

Mr Yeap's busy schedule reflects Singapore's rise as a leading arbitration hub over the years: there were 235 cases dealt with last year, up from 58 in 2000.

The Singapore International Arbitration Centre, set up in 1991, is housed in Maxwell Chambers, with special hearing, break-out and meeting rooms.

Mr Yeap has handled arbitration cases since the late 1980s, and in the old days, he says, there was no designated place for arbitration hearings, so lawyers and clients often had to meet in hotel rooms.

Another case involved a regional distributor of commercial vehicles who claimed a major Japanese vehicle manufacturer wrongfully terminated an assembly and distribution franchise. Mr Yeap's team had to pore over stacks of material to find a similar case.

"I kept saying, I'd bet my bottom dollar there's a case out there that says I'm correct where Japanese law is concerned," he says. "Our Japanese law advisers hunted but couldn't find the case, so I got my guys to do it and we found a case in an obscure legal textbook on good faith obligations under the civil law regime, by a European author."

Damages claimed exceeded US$300 million and a settlement was reached.

He said: "If we went to a court in Japan and you're taking on one of the giant conglomerates there, where the Japanese are not litigious, would we have got the same result? Maybe not." The moral of the story, he added, is that "when dealing with someone influential in another country or jurisdiction, best to take it out of the courts of that jurisdiction".

When it comes to arbitration, what gets the blood coursing through his veins are the intricacies of different law systems. He thoroughly enjoyed fishing for "that strange Japanese arbitration case", and found it interesting to study how the steel plant case worked under Philippine law.

Part of the fun is working with local legal eagles, who see the law in a more practical context, and pushing for an argument.

Mr Yeap, who has the civil codes of various countries stacked in his office, adds: "It's a great relief against boredom. My wife tells me I've the attention span of a fly - I need things to keep changing to stay interested in it."

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