Articles

Principle, Policy and Diplomacy in International Relations.
(Lecture to Singapore Institute of Arbitrators, 6 September 2022)

Prime Minister Lee Hsien Loong devoted much of his Chinese language National Day Rally Speech this year to the geopolitical challenges facing Singapore. He warned Singaporeans to “actively guard against hostile foreign influence operations, regardless of where they originate” in order to safeguard Singapore’s sovereignty and independence.

Since my retirement, I have spent much time writing and talking about this serious challenge. It is not a new challenge. In 2017, we expelled a Chinese academic with both PRC and US citizenship employed by the Lee Kuan Yew School of Public Policy for acting as an agent of influence of a foreign power. We did not name the foreign power but the academic in question is now happily living and working in China not America. In the late 1980s, we expelled an American diplomat for interfering in our domestic politics. There were other influence operations that had been exposed in the 1960s and 1970s.

Competition among major powers is an inherent characteristic of an international system of sovereign states. But after the end of the Cold War and the collapse of the Soviet Union, competition was muted by the overwhelming dominance of the US and for a period -- between circa 1989 when the Berlin Wall came down, and circa 2008 when the global financial crisis led many to become disillusioned with American-led globalization -- seemed to have faded away.

But this was a historically short and anomalous period. For most of the 20th century, international order was fiercely contested; major power competition for influence was the norm. We have now returned to a more historically normal period of contested order with the main contest now being between the US and China, with Russia as the junior partner on China’s side. For all its violence and danger, Ukraine is a secondary issue. At least in our region, misinformation on the war in Ukraine is largely an instrument of US-China competition.

Major power competition is not just a matter of diplomatic and military maneuvering. It is also a struggle for the minds of the public – to affect policies by shaping public opinion. The US, Russia and China, among others, conduct influence operations. But it was the battle with the Chinese Communist Party (CCP) supported United Front in the 1950s and early 1960s that most profoundly shaped Singapore’s political history.

The United Front is a specific influence tactic and was hard enough to deal with back then. But what was at stake then was starkly clear. However, during the 20 years or so when great power competition seemed to have faded away, instincts honed during that struggle grew flabby. We became less alert because countering influence operations seemed irrelevant to dealing with a China that embraced market reforms and opening up.

China has indeed profoundly changed in many ways. But while class struggle no longer motivates Chinese policy, China is still a communist system and the CCP is still a Leninist style vanguard-party. The United Front is the characteristic instrument of the vanguard-party. Mao Zedong called it the CCP’s “magic weapon” a term that Xi Jinping has borrowed. In 2018, Xi placed overseas Chinese affairs, hitherto a state function, under the CCP’s United Front work department.

Unlike during the earlier period of major power competition, social media which blurs the distinction between information and opinion, does not distinguish between informed and uninformed opinion, or between opinion of any kind and entertainment, has now given the influence apparatus of all countries a powerful new tool. It is extremely difficult to deal with social media because its reach is faster, wider, and more insidious.

By coincidence, the same morning as the rally – 21 August – the Sunday Times had published a short piece of mine in which I had argued that the consequence of foreign influence operations was to confuse Singaporeans about our fundamental national interests.

The Prime Minister had made clear that our position on Russia’s aggression against Ukraine was not about taking sides with the US or against Russia, but acting in our own interests. There could not have been a more explicit statement of Singapore’s interests than that by the Foreign Minister in Parliament on 28 February, only four days after the invasion. There could not have been a more egregious violation of the principles on which our interests were based than a massive cross-border invasion by a big country of a smaller country whose very right to exist as an independent and sovereign state was denied by the big country.

And yet the misrepresentation of our position as a ‘taking sides’ stubbornly persists, seemingly impervious to facts. I do not think this is by accident.

A few months ago, an international financial institution asked me to speak to a group of their top clients about Ukraine. One of the audience insisted – loudly and at inordinate length -- that Singapore had made a mistake ‘siding’ with Ukraine because Russia was winning. At that time, the Russian offensive to capture Kyiv had already failed and Russian forces had withdrawn to the Donbass. This was an educated and successful man but he refused to listen to facts that contradicted his beliefs. It was as if he was living on another planet. That was not the only instance of denial of fact I have experienced. Sadly, that gentleman was far from atypical.

The majority of Singaporeans support the government’s position on Ukraine. But there is, I think, a not insignificant minority that is at least ambivalent.

In March 2022, a private polling company found that while 69% of Singaporeans surveyed held Russia responsible for the war, a total of 26% either did not know or held the EU, the US, or NATO responsible. Similarly, while 60% supported sanctions against Russia, 39% either did not know, had no opinion, or opposed sanctions. If there is ambivalence about such a straight-forward issue as the invasion of one country by another, I am sure that there will be much more ambivalence about the complexities and nuances of US-China competition.

I think the problem goes well beyond lack of understanding of particular issues or inaccurate or misleading information about particular issues. Accurate information is of course very important. Prime Minister Lee had asked Singaporeans to be vigilant about information received through social media, to check facts and not accept everything as truth. That is very necessary. But more fundamentally, I believe it is lack of understanding of the nature of international relations in general that causes Singaporeans to be susceptible to misleading or inaccurate information or to deny facts that do not fit their preconceptions.

Most people in any country take only a sporadic and casual interest in international affairs. There is no reason for them to do otherwise. They have their own lives to live. So when events force themselves onto the public’s attention as Ukraine has done, there is a tendency among the general public to subconsciously fit them into familiar but simplistic mental frameworks. If the facts do not fit into such tidy frameworks, too bad for the facts.

Casual observers of international relations often look at them almost as we would a sporting event, which is one kind of subconscious framework. They cheer one side or another as if nothing more is at stake than a clear-cut outcome – win, lose or draw. But the outcomes of international issues are seldom so satisfyingly neat. More often than not, they are messy compromises. Few international problems can be definitively resolved, only managed; the management of one problem or issue spawns other issues or problems that in turn also need management in a complex process in which diplomacy and the implementation of foreign policy must be continually adjusted according to the contingencies of circumstances.

For the general public, the result of this confused and confusing process is often denial or cynicism in which the idea of the national interest becomes at least blurred if not entirely lost. Yet in an era of renewed major power competition, it is vitally important that foreign policy rest on a foundation of public support and the best defense against foreign influence operations is an informed public.

This lecture hopes to make a very modest contribution to public understanding by analyzing the interplay between principles, policy and diplomacy and by so doing, clarifying the nature of international relations in all its manifold complexities and contradictions. I do not know whether I will succeed, but nothing is ever gained without venture and I am grateful to the Institute of Arbitrators for having given me the opportunity to try.

Every sovereign state is a member of the United Nations (UN) and in theory relations between them are subject to the principles, purposes, and procedures of the UN Charter. But the reality is that Charter principles are often only secondary considerations, and in any case will be emphasized or downplayed according to the exigencies of circumstances. They are often evoked only as aspirations.

Principles do not naturally prioritize themselves or order themselves into neat hierarchies. The thread that runs through the work of Isaiah Berlin – a 20th century British political philosopher that deserves to be more widely read – is that there is not one Supreme Good but many Goods each desirable in itself, but not necessarily capable of simultaneous realization. Similarly, the UN Charter contains a host of principles, each with their own validity, but not necessarily reconcilable or applicable in any particular situation.

Choice is therefore unavoidable, all the more so since principles and values are in different contexts both ends in themselves and means to other ends. This includes the principle that stands at the heart of international relations: sovereignty.

Why do countries value sovereignty? It is to exercise the agency to choose in order to navigate the maze of international relations in accordance with their own interests. The national interest is the central organizing concept in international relations. It is the basis on which states make their choices. That is why the public’s lack of clarity or confusion about our national interests can be so damaging.

The national interest is not a difficult concept to grasp in broad terms. But a broad understanding of the idea begs crucial questions. Once we get past generalities like ‘survival’ or ‘prosperity’ and their like, which prescribe nothing particularly useful for making specific policies, how do we determine what do we need to do to ‘survive’ or ‘prosper’ in situations which are constantly evolving? What are the principles or values by which we can derive the ultimate guiding interest by which we navigate an uncertain world?

There is a rather silly academic debate about the relative importance of values and interests in international relations. It is silly because values are interests. This is true of every country even those whose values we do not share. We should not make the mistake of believing that only what we find attractive or useful are the only valid values. Values that we may find abhorrent are valid values to those that hold them or find them useful. Universality is a myth.

Claiming that what we find convenient to believe is universal is common in the West, but is not a peculiarly western mistake. Xi Jinping’s China makes a parallel mistake when he asserts that ‘all Chinese’ should support his China Dream.

This is universality with Chinese characteristics. When Xi says ‘all Chinese’ he exploits the ambiguity of the several meanings of the term ‘Chinese’ in the Chinese language to claim the loyalty of the race or nation defined ethnically not territorially for his China Dream. In effect, he is claiming that ‘all Chinese’ should understand their interests in terms of China’s interests, at least on issues that are of importance to China.

Overseas Chinese in Southeast Asia and elsewhere, Taiwan, or even many in Hong Kong which is already incorporated into the People’s Republic, would not all agree. But in its appeal to ethnic sentimentality, it must be admitted that the ethno-nationalist narrative of China’s humiliation, rejuvination and finally attaining the China Dream, is not without resonance in overseas Chinese communities, including in Singapore, particularly to those with only a casual interest in international affairs. But this is not a ‘dream’ that is relevant to Singapore’s most fundamental interests.

On 16th and 17th December 1965, only a few months after we had independence thrust upon us, our first foreign minister, Mr. S. Rajaratnam, spoke in parliament setting out Singapore’s foreign policy. The speech deserves to be better remembered. Every subsequent speech by Singapore foreign ministers is an elaboration of or commentary on this seminal speech. After discussing several aspects of Singapore’s national interests, Mr. Rajaratnam concluded, “our ultimate goal is the preservation of the essential values on which our society is founded.”

The ‘essential values’ Mr. Rajaratnam referred to was the idea of Singapore as a multiracial society based on meritocracy. This was the reason why we could not remain within a Malaysia organized on entirely different lines. This essential value is the fundamental criterion on which we base our choices. It is our core national interest.

Singapore is not a perfect multiracial meritocracy – there is no perfection to be found this side of heaven – but it is an idea that we take very seriously and this idea distinguishes us from others in the Indo-Pacific. Every other country organizes itself or aspires to organize itself on the basis of formal or informal ethnic or religious hierarchy and often both. Hierarchy is too often asserted or defended by force.

Multiracial meritocracy makes us unique. We take the principle of sovereignty seriously in order to preserve this unique ‘essential value’ of multiracial meritocracy and protect the choice we made in 1965 when staying in Malaysia proved unsustainable because of our commitment to this value. This value is the foundation of our social cohesion and all that flows from it that keeps us successful and thus relevant. Relevance not something small city-states can take for granted.

Our uniqueness in this respect does not necessarily endear us to our closest neighbours who organize their own societies on diametrically opposed lines. When we do better, as we must, this is taken as an implicit criticism of their systems. Ultimately, when problems arise with our neighbours, it is less about what we do and more about what we are. But we cannot compromise on this even if it means occasional frictions with our neighbours.

Standing firm does not just apply to our immediate neighbours. Despite close relations with the US, we expelled the American diplomat because in interfering in our domestic affairs, he was trying to introduce American values that he thought desirable into our political system. Only Singaporeans should decide what our values should be.

The assertion that ‘all Chinese’ should support the China Dream is a far more direct, indeed existential, attack on multiracial meritocracy. It is an explicitly ethnic appeal to the majority of our population to extrapolate a demographic fact into the re-characterization of Singapore as a ‘Chinese country’. Other more narrowly targeted extra-territorial appeals to our minorities, to religious values, or to secular attitudes such as LGBT rights, do not pose quite the same danger because they do not attack the fundamental organizing principle of our society. Their appeal is limited and it is improbable that they can change the entire character of our society.

That Singapore conducts a principled foreign policy based on support for world governed by rules and law as being in the interest of small states generally and the best way to protect our values, are core axioms of our approach to international relations. We take them very seriously and consistently explain our foreign policy in these terms. Still, axioms are only just that – axioms. They are simplifications of complex realities; true but with qualifications left unstated. If we do not make the qualifications explicit, it is because the exigencies of diplomacy often does not make it convenient to be too explicit about them.

A pensioner like me has no such constraints. The most important unstated qualification is the uncomfortable truth that double standards are inherent in international relations. The lack of a natural hierarchy of principles, the fact that principles can be both ends and means, and that there are many principles and not every principle can be reconciled with every other principle, makes impossible for any country with an active foreign policy to apply any principle, even one as fundamental as sovereignty, with perfect consistency.

The only way to be perfectly consistent in an imperfect world is never to do anything. Being passive carries its own risks; indeed for small countries, perhaps even greater risks. If you are going to do nothing it should be by deliberate choice and not because you allow yourself overwhelmed or intimidated by events or bigger countries.

Singapore is widely acknowledged internationally to have an excellent record in the UN. Generations of Singapore diplomats from pioneers like Tommy Koh and former foreign minister S. Jayakumar, down the years to the present incumbent, Burhan Gafoor, who probably wasn’t even born when these veterans first served at the UN, have played active roles in, and made important contributions to, the UN. Still, in a 1994 interview with Malaysian Business, General Tan Sri Hashim ‘Freddie’ Mohammed Ali, former chief of the Malaysian Armed Forces, claimed that then Prime Minister Lee Kuan Yew had told him “if PAS comes to power … and tries to meddle with the water in Johor Bahru, I’ll move my troops in. I will not wait for the Security Council to solve this little problem.” Was the General’s recollection accurate? Water from Johor was certainly a matter of life and death.

Singapore took a strong and principled position on the Russian invasion of Ukraine. Almost forty years earlier, we voted in the UN against the almost farcical American invasion of tiny Grenada because the principle involved was deadly serious. For a decade during the 1980s, we played an active role in ASEAN to oppose the Vietnamese invasion and occupation of the country then known as Democratic Kampuchea in defense of the same principle.

But in 2003, Singapore joined the Multilateral Force-Iraq and sent servicemen, ships and aircraft to the Persian Gulf in support of the invasion that toppled Saddam Hussein and dismantled his regime. Singapore justified our participation with reference to UN Security Council resolutions requiring Iraq to give up weapons of mass destruction. This was true but a little disingenuous. The Security Council had not explicitly authorized the use of force against Iraq. In the event, it turned out that Saddam Hussein was only pretending to have such weapons. This was somewhat embarrassing, but entirely beside the point as far as Singapore was concerned. Whether or not Iraq had weapons of mass destruction was never the main consideration for us.

It is very difficult to recapture the mood two decades ago after the 9/11 terrorist attacks for those that did not experience it. But I remember vividly that I had just returned home and was watching my children sleep when the MFA duty officer called to ask me to turn on CNN. I even remember the name of the officer on duty that evening. I turned on the television just in time to see the second jet fly into the World Trade Centre in New York. I rushed back to MFA. In the shock of the moment, nobody had remembered to activate crisis procedures. But every foreign service officer who was needed returned to MFA that night without being told. All of us understood that something fundamental had changed.

The US is a vitally important partner for Singapore. We have a close relationship with the US. But we are not an American ally and do not want to be an American ally. We do not expect the US to defend us. We only expect the US to sell us the advanced weapons a small country needs to deter larger countries and protect our sovereignty, and to maintain the overall regional balance of power within which our deterrence operates. The US is a key element of every balance everywhere, and in our region is an irreplaceable element.

So soon after 9/11, the US was not going to indulge us in any too-clever-by-half attempt to finesse our position or to be overly punctilious about Security Council procedures. After the most serious attack on American soil since Pearl Harbor, the Americans were taking careful note of who stood with them and who did not. Had we not stepped up, something essential would have changed in the relationship and not for the better.

Two years after the invasion of Iraq, we concluded a Strategic Framework Agreement for a Closer Cooperation Partnership in Defense and Security with the US. It has a clumsy title but is nevertheless a very important agreement for us. In short, our participation in the Iraq operation was based on a realpolitik calculation of interests in which Iraqi sovereignty was subordinated to the contingencies of the times.

Principles prescribe broad strategic directions. Foreign policy is the adaptation of principles to changing circumstances in order to further some interest. A policy is not just something to be hung on the wall and admired as a trophy of your own cleverness: it has to serve some purpose. If you are unable to, or do not intend to, implement it, what you have is not so much a policy as a posture or a policy of posturing.

There may well be good reasons to strike postures. For most countries that is in effect what happens most of the time when they vote in the UN on non-binding General Assembly resolutions, most of which are on subjects on which they have little substantive interest or knowledge and little if any capability or even intention to act. A General Assembly vote is not inconsequential but at best it is only a statement of position.

During the translation of principle to policy, it is often necessary to choose between irreconcilable principles, or accept that no matter how important a principle may be, it may have to be compromised or even sacrificed entirely. All countries confront this fact of international life.

For example, China is neuralgic about the principle of sovereignty and its collorary principles, non-interference in the internal affairs of other states and respect for their territorial integrity. The reason for this can be summarized in three words: Taiwan, Xinjiang and Tibet. Chinese diplomats lose no opportunity to take countries to task for their alleged violations of these principles.

Recently, the new Chinese ambassador to Singapore told someone I know that she was disappointed that while Singapore condemned Russia for violating Ukraine’s sovereignty, we did not do the same for Nancy Pelosi’s violation of China’s sovereignty by her recent visit to Taiwan. China, the ambassador reportedly said, would judge Singapore’s ‘friendship’ by our consistency.

There can be no greater violation of sovereignty than the invasion of one country by another. But China has even refused to call the war in Ukraine a war. In the UN, China did not vote in favor of the resolution condemning Russia’s invasion of Ukraine and instead abstained. Abstaining was understandable given China’s interests. But by insisting that Singapore should be consistent while ignoring China’s own inconsistency, the good ambassador was clearly operating in cahoots with our old friend, the Double Standard.

When she accused Singapore of inconstancy, I don’t think the Chinese ambassador was primarily interested in defending the principle of sovereignty, even with regard to an issue as fundamental to China as Taiwan. She was more interested in using the principle to sow doubt about Singapore’s positions on Ukraine and Taiwan in the expectation that the person who told me about the conversation would spread what she said more widely, and I don’t think she only spoke to one person. I don’t blame her for trying. In her place, I would have done the same. But we shouldn’t be naïve about what she was really up to.

Some of you may think that I am arguing for moral relativism. That is incorrect. I do not think that moral relativism is a desirable ethical standard for an individual or a country. Explicit in the stress I have laid on what Mr. Rajaratnam called our essential values, is the idea that we ought to hold some values as absolute. In drawing attention to the inevitable inconsistency with which even fundamental principles are implemented, I am not making a normative argument, only a purely empirical observation that like its cousin, the double standard, moral relativism is inherent in the nature of international relations.

States are sovereign equals in theory but not in practice. The possibility of Russia being held accountable for Ukraine, China for Xinjiang, or the US for Iraq, in the same way that, for example, Serbs have been tried for crimes committed during the Balkan wars of the 1990s or Africans for genocide in Rwanda, is just about zero. We may deplore this but our disapproval will not make any difference. The reality of inequality is even formally acknowledged by the UN Charter in the privilege of the veto given to the Permanent Members of the Security Council.

There is no need to be apologetic about the reality of moral relativism and double standards in diplomacy. It is entirely possible to be both a good diplomat and a good human being. I know many. But if you are an ethical perfectionist, it may be better for your own peace of mind to find a different job. There are many definitions of diplomacy and diplomats, some are very witty but few are complementary.

One of the better known definitions is that of Sir Henry Wotton, a 17th century English diplomat who while on a mission to a town in Germany, famously expressed the view that “an ambassador is an honest man who is sent to lie abroad for the good of his country.” What is less well known is that Sir Henry meant it as a joke, but the King he served, James I, heard about it and was not amused by the apparent cynicism of his ambassador and never employed him again.

I don’t claim that diplomats never lie. That would itself be a lie. But good diplomats stick to the strict truth as far as possible because the most valuable coin of diplomacy is credibility. A diplomat who acquires a reputation for being unscrupulous is going to be ineffective. This is particularly true for diplomats representing small countries. Whatever you may think of the policies that Sergey Lavrov or Wang Yi defend – and having worked with both, I admire their technical skills as diplomats even if I don’t think much of their countries’ policies – even bad policies of big countries have to be taken seriously. So whether you like it or not, you have to deal with their representatives. Not so for small countries.

Without principles, policy risks losing direction and drifting. Yet when principle is evoked, it is sometimes difficult to decide whether it is really the basis on which policy was made, or an aspiration, or only a justification of policy; all the more so because few who think of themselves as ‘statesmen’ – a grandiose term that betrays a lot about those who think of themselves in this way – can resist wrapping the mantle of moral rectitude around even the most banal of their actions. I don’t want to exaggerate the difficulties, only point out that they exist and the exercise of choice is again needed, even if it is only the choice of whom to trust.

How to recognize the reality of moral relativism in international relations without devaluing all values and how to make compromises without losing credibility? Or to approach the issue from another perspective, how to prevent the inevitable inconsistencies of policy and diplomacy from instilling a sterile cynicism in the general public in which any action by any country is as good as any other action by any other country and the idea that some actions by other countries are not in our own interests is lost. Cynicism is the close neighbour of gullibility. If you believe in nothing you can be made to believe in anything.

The answer, I think, does not lie in denying the inconsistencies. That would be counter-productive because sooner or later, they become evident even to the casual observer if only because someone – your enemies -- will draw attention to them. The answer lies in frankly acknowledging that inconsistencies will occur but getting the public to better understand that we have to take the world as it is and the nature of international relations is such that foreign policy and diplomacy cannot be justified by any ethically perfect criterion – a noble but impossible standard – but only by action and its effects on our own interests.

However ‘principled’ a policy claims to be -- our own policy or any other country’s policy -- we should not judge it on the basis of an ethic that condemns all compromises of principles however deplorable per se such compromises may be. Rather, one should adopt a utilitarian ethic which weighs any diplomatic action regardless of whether it entails a compromise of principle or, conversely, standing firm on principle, in terms of its effect on our interests that the action was intended to achieve.

The purpose of policy is action. Even a policy of deliberate non-action is an action of sorts. Did the action achieve the goal? Was the action chosen the best that circumstances permitted? Could the same end have been achieved at less cost to the integrity of the principle? Could it have been achieved in a different way? Was the intended goal achievable by any means in the first place?

All these questions must be asked and answered with full understanding and acceptance of another uncomfortable truth. However morally unsatisfactory this may seem in the abstract, there is an important practical difference between private morality and public morality.

This was the central insight of Machiavelli which has drawn misplaced condemnation for centuries. The condemnation is misplaced because Machiavelli’s argument is not for immorality or even amorality, but simply that in this vale of tears we call the world, you cannot do good only by being good. In international relations, virtue is seldom its own reward and often has to be helped along the way to its just reward.

For a leader or diplomat representing his or her country’s interest, the difference between private morality and public morality is not just a reality that has to be reluctantly accepted, but something of a moral imperative in its own right. An individual who suffers for his or her own beliefs can be admired. But if an individual representing a country’s interests, sacrifices those interests and makes the country suffer for his or her own beliefs, then he or she is being selfishly self-indulgent if not criminally negligent.

Of course, it is much easier for me, a pensioner, to talk about the necessity of policy based on a public utilitarian ethic than it is for those still in practice to formulate and implement such policies, particularly in crisis situations when decisions have to be made on the fly, with imperfect or misleading information, against pressures of time, and when even clarity about goals can be elusive because different actors even if apparently working in concert on the same issue, do not necessarily have the same goals. This is particularly true in multilateral settings. ASEAN’s approach to Myanmar can serve as an illustration of both what is possible and what can go wrong in such circumstances.

ASEAN was confronted with a crisis on 1st February 2021 when the Tatmadaw – the Burmese military – staged a coup against the civilian government of Aung San Suu Kyi. Trouble had been brewing for some time and the factors that led to the coup were complex. We should not assume that the victim is always guiltless and Aung San Suu Kyi herself must share considerable responsibility for the crisis. Still, a coup was clearly a violation of the ASEAN Charter and ASEAN obviously needed to take some action. But was it really obvious?

What had ASEAN done eight years earlier when the Thai military seized power from a civilian government? The answer is nothing of any consequence. That the Thai King subsequently endorsed the coup leader after the coup seems to me a very tenuous argument for the legitimacy of the military’s action. Did a constitutional monarch really have the authority to retroactively wash away political sins? We are far from the days when the mere laying of Royal hands was believed to cure a variety of ills.

If ASEAN took no effective action against the Thai coup in 2014, why was ASEAN – or at least the handful of foreign ministers who were more than usually passionate about the Myanmar coup -- pressing for action in 2021? What had changed in the intervening years? Was it just different personalities? Had some ASEAN foreign ministers been suddenly struck by the Holy Spirit of Constitutionalism? Or perhaps it was simply a case of Myanmar being less important to ASEAN than Thailand and so a heroic gesture could be made at relatively little cost?

Some of ASEAN’s partners, particularly those from the West, certainly expected ASEAN to act. But compared to the pressures ASEAN had endured for 24 years from 1988 when the Tatmadaw brutally suppressed demonstrations and killed thousands, to 2012 when Aung San Suu Kyi was freed from house arrest and regulations eased to allow her to travel and successfully contest by-elections, the western pressures after the 2021 coup were mild; to my mind, barely noticeable.

The global geopolitical situation had significantly changed and the US and EU now had more urgent concerns than Myanmar. If they were asking ASEAN to act, I suspect that it was more to give themselves an alibi so they could get away with doing the minimum. Letting ASEAN take the lead is not always an expression of ASEAN centrality.

In the event, for whatever reason, ASEAN did act against Myanmar and did so quite swiftly. It would be tedious for me to recount every twist and turn of developments after February 2021. Suffice to say that it was fortunate that the ASEAN Chair was held then by Dato Erywan Yusof, Brunei’s Second Foreign Minister. Dato Erywan is an experienced ASEAN hand who had come up through the ranks and knew ASEAN’s workings in a way that many of his counterpart foreign ministers did not. After a series of consultations, he succeeded in convening a special summit of leaders on 24 April in Jakarta. This is light-speed in ASEAN time

The Summit agreed on 5 points to deal with the Myanmar coup:

• Immediate cessation of violence and all parties to exercise restraint;

• Constructive dialogue among all parties concerned shall commerce to seek a peaceful solution in the interests of the people;

• A special Envoy of the ASEAN Chair shall facilitate mediation of the dialogue process, with the assistance of the Secretary-General of ASEAN;

• ASEAN shall provide humanitarian assistance through the AHA Centre; and

• The Special Envoy and delegation shall visit Myanmar to meet with all parties concerned.

Up to this point, ASEAN did very well. Given the differences of interests among its members, it was a near miracle to have achieved consensus. But to anyone with minimal familiarity with Myanmar, at least three of the five points were clearly only aspirational. If the Tatmadaw was an organization willing to exercise restraint, foreswear violence, engage in dialogue with its political opponents, or allow an external party to mediate its relations with its political opponents, it would not have staged a coup in the first place.

The coup leader, Senior General Min Aung Hliang, attended the summit and had raised no objections to the 5 points. But Myanmar has been under military rule for most of its independent history. The odds that he would really comply, were always very long. It was nevertheless important for ASEAN to have established a baseline of principles of acceptable conduct for one its members. As I had earlier mentioned, it is sometimes legitimate to adopt a policy of posturing. It at least showed ASEAN doing something and thus preserved the appearance of ASEAN centrality.

But it was a mistake for ASEAN to have gone further to suspend the State Administration Council (SAC), which is what the military regime calls itself, from participation in ASEAN meetings. ASEAN insisted that until the SAC complied with the 5 points, Myanmar could only be represented by a ‘non-political representative’. The idea of a ‘non-political representative’ is a contradiction in terms because even if Myanmar had been represented by an office-boy, that could not have happened without the SAC’s approval and the office-boy would thus have been ‘political’.

Suspension was a step too far. ASEAN has neither effective carrots nor effective sticks to influence the Tatmadaw’s behaviour. It can only try to influence the Tatmadaw by talking to it. It was never going to be easy to change the Tatmadaw’s behaviour. But by refusing to engage the real power in Myanmar until the SAC fulfilled conditions that it never realistically could be expected to fulfil, the prospect of influence is now practically non-existent. Why should the SAC listen to an ASEAN that has shunned it?

In essence, ASEAN got on a high moral horse with no effective plan for getting off it, and thus ceded the initiative to the Tatmadaw, marginalizing itself. What happens next in Myanmar almost entirely depends on the Tatmadaw. What centrality does ASEAN now have on Myanmar? ASEAN – or at least a handful of foreign ministers -- compounded the mistake by criticizing Prime Minister Hun Sen’s bilateral visit to Myanmar while Cambodia was Chair of ASEAN. This shut down a potential way out of the impasse.

ASEAN’s policy on Myanmar is a salutary lesson in the perils of diplomacy getting swept away by emotion or rigid adherence to principle. From 1988 to the early 2000s, ASEAN criticised the West for adopting an inflexible ideological approach and refusing to engage the military regime of the time. ASEAN has now adopted that same failed western policy.

I do not have time to discuss the reasons for this, but Iet me point out that while Myanmar is perhaps in itself not of great geopolitical significance – a humanitarian tragedy is not always geopolitically consequential -- if the lack of clinical realism that has contaminated ASEAN’s Myanmar policy continues and becomes entrenched – and the decision to admit Timor Leste as a new member is perhaps a symptom of this -- this could have significant adverse implications for ASEAN’s ability to deal with the far more crucial issue of US-China strategic competition. More than any other issue, dealing with US-China competition requires hard-headed realism and clinical calculation of interests.

US China competition is now a structural feature of international relations that is not going away. It is, however, not a ‘new Cold War’ as the intellectually lazy have labeled it. That trope fundamentally misrepresents the nature of US-China competition which is far more complex than US-Soviet rivalry ever was, does not present unambiguous choices, is unlikely to end in any clear dénouement, and hence requires far greater agility and pragmatism to successfully navigate if the countries of Southeast Asia are to preserve the agency to determine their own futures.

ASEAN does not claim to take a common position on every issue. Still, the approach it has adopted on Myanmar may lead to a serious split within ASEAN. The two member states that share a border with Myanmar – Thailand and Laos – cannot afford to merely strike postures indefinitely. Geography gives them concrete concerns that those members that played the leading role in shaping ASEAN policy on Myanmar – Indonesia, Malaysia and Singapore – do not have. The concerns of these three countries may be serious, but they are abstract. Posturing is largely costless to these three countries; not so for Thailand and Laos.

Sooner or later Thailand and Laos will go – must go – their own way to secure their interests. In all probability, when they do so, they will be followed by Vietnam and Cambodia, neither of whom is enthusiastic about ASEAN’s approach towards Myanmar, even though so far they have gone along with it. This potential split between mainland and maritime ASEAN members over Myanmar could catalyze other incipient fault-lines with profound consequences for Southeast Asia.

Let me wind up by elaborating on four sentences that encapsulate what I have been trying to convey. They are:

• Contradictions and therefore choices are inescapable in international relations;

• Choice requires the exercise of pragmatic judgement;

• Judgement requires the exercise of agency; and

• The exercise of agency requires the acceptance of risk.

For Singapore, the crucial choices, judgements and risks are essentially domestic political challenges not foreign policy challenges. If we can deal with the domestic challenges, we can manage the complications of our external environment.

Speaking in the Singapore Legislative Assembly on 5th March 1957, Lee Kuan Yew said: “In the context of the second half of the 20th century Southeast Asia, island nations are a political joke.” He made the statement during a debate on the Constitutional Talks in London and his conviction that merger with Malaya was the only practical way forward. Of course, as we now all know, merger did not work out.

What made contemporary Singapore can be understood only if the elder Mr. Lee’s 1957 statement is read alongside other statements by him and other first-generation leaders. Speaking to Dennis Bloodworth, a British journalist who settled in Singapore, about the PAP’s struggles against the CCP supported United Front, Mr. Lee said “Some mug had to do it”. Dr. Goh Keng Swee echoed the sentiment: “It was an act of reckless folly … We were five foolish young men and we walked right into it.”

The 1957 statement was deterministic in tone; the subsequent statements quoted by Dennis Bloodworth stressed agency and choice, cloaked in self-deprecating irony. The range of foreign policy options, indeed the range of options in any policy domain, for a small city-state are never broad. But small countries are also never entirely without agency.

Exercise of agency is the real point of the self-deprecating statements by Lee Kuan Yew and Goh Keng Swee quoted by Dennis Bloodworth. As the elder Mr. Lee, again quoted by Bloodworth, explained: “We wanted the British out … we believed nationalism to be a more potent force than communism, we pressed on regardless of the horrendous risks.”

The same spirit with which they faced the communist United Front, infused the way our first generation leaders faced the very bleak prospect that confronted Singapore after Separation. Our circumstances then were far more dire and complicated than anything we face today.

Our first-generation leaders were practitioners not theoreticians. But they were widely read and must have known of Thucydides’ too often quoted dictum: The strong do what they can and the weak suffer what they must. As practitioners, they must, however, have regarded it as at best only partially true. If after 1965 they ‘suffered what they must’, Singapore as we know it today would not exist.

After having had independence thrust upon us for the sake of the ‘essential values’ that Mr. Rajaratnam spoke about, they had to make those values work in the most daunting of circumstances. And rather than meekly suffer what the Malaysian leadership of those days thought they must suffer, make it work they did by convincing Singaporeans that it could work. That is political leadership.

Thucydides represents crude realism. Our first-generation leaders were realists, but not crude realists. They understood that crude realism is sometimes not very realistic. Of course, any exercise of agency entails risk. But realism does not mean only avoiding danger. Sometimes the biggest risk is to try and avoid all risks. We should not be paralyzed by the possibility of risk. Fatalism is fatal to small states.

Acceptance of risk is not recklessness. The exercise of agency therefore requires judgement which is composed of the rejection of fatalism coupled with a grasp of complexity and an appreciation of what is realistically achievable in any particular situation, guided by a deep understanding our interests. The kind of situation ASEAN has gotten itself into in Myanmar is an unacceptable risk because we lost sight of what is core and what is peripheral to our interests.

Myanmar was an unforced error. But the essential purpose of influence operations is to instill a sense of powerlessness that erodes the will to exercise agency in defense of our own interests. If we allow ourselves to be bribed or persuaded into believing that History is moving in a particular direction – whether its arc is tending towards ‘Democracy’ as defined by the West or whether ‘The East is Rising, the West Declining – why resist? Better to hitch our wagon to History’s locomotive.

Neither idea is entirely without some basis; both are gross simplifications that distort complex realities. History has no particular direction that is not set by the inter-play of human volitions. Educating voters at the grassroots in the complexities of that dynamic and keeping their faith in our own ability to determine the direction of our own history, is the crucial political task.

Bilahari Kausikan
Chairman, Middle East Institute, National University of Singapore

Bilahari Kausikan is currently Chairman of the Middle East Institute, an autonomous institute of the National University of Singapore. He has spent his entire career in the Ministry of Foreign Affairs. During his 37 years in the Ministry, he served in a variety of appointments at home and abroad, including as Ambassador to the Russian Federation, Permanent Representative to the UN in New York, and as the Permanent Secretary to the Ministry. Raffles Institution, the University of Singapore and Columbia University in New York all attempted to educate him. 

 By Dinesh Dhillion - Allen & Gledhill LLP

Following the successful release of the 2nd edition of ‘Law, Practice and Procedure of Arbitration’ written from the perspective of Malaysian law, Datuk Professor Sundra Rajoo has authored another invaluable treatise in his latest work ‘Law, Practice and Procedure of Arbitration in India’, a welcome and valuable resource providing a detailed insight into India’s developments and contributions to international arbitration. This book provides a holistic guide on both the practical and procedural aspects of arbitration. The book expounds not only on arbitration in India but also draws comparisons of the Indian position with global international arbitration practice, which both the Indian and global community would be able to harness. Datuk Professor Sundra Rajoo brings to this exposition on Indian arbitration law his vast knowledge and experience as an arbitrator (including his stint as the former President of the Chartered Institute of Arbitrators and founding president of the Asian Institute of Alternative Dispute Resolution), his expertise in the construction and architecture sectors, as well as his academic knowledge gained from his professional degrees in Architecture and Town Planning.

Divided into 12 divisions and further sub-divided into 51 chapters, the work is designed for practitioners to efficiently navigate to the desired sections of the book for quick reference and at the same time provide deep academic insight for scholars as well. The book juxtaposes the Indian Arbitration Act with the rules of other major arbitral institutions in India and around the world, as well as the New York Convention. The book starts off with a useful introduction to arbitration, its mechanisms and its process in a manner appropriate for novices, serving as a one-stop guide. The contribution is also valuable for seasoned practitioners and users generally at any stage of the arbitration process, as the author identifies common pitfalls that should be avoided in the practice of arbitration.

It is insightful that Professor Rajoo begins the book by shedding light on the fact that dispute resolution methods akin to arbitration are not new in India, and that such traditions go back many centuries, even before the colonial era. It traces the history of arbitration in India, highlighting that it is a jurisdiction that has been a pioneer in resolving disputes by alternative means and not just by way of litigation in the Court. Such illustration of the historical context allows readers to appreciate the Indian culture and outlook from early days to resolve disputes by way of alternative dispute mechanisms. With this background, the author then delves into the present-day arbitration case law and discusses leading Indian precedents and latest developments in the sphere, including the amendments brought about by the Arbitration and Conciliation (Amendment) Act 2020. Professor Rajoo helpfully compares the Indian position with the development of case law in other jurisdictions.

It is significant that Professor Rajoo has included insightful analysis of very current Supreme Court of India decisions, such as that of PASL Wind Solutions Private Limited v GE Power Conversion India Private Limited (2021) SCC OnLine SC 331. In this case, the Supreme Court of India held that there is no bar under Indian law to permit Indian parties and Indian subsidiaries of foreign companies to use foreign-seated arbitration to resolve disputes and / or foreign substantive law to govern the contract between them. The Supreme Court of India held that Section 28(1)(a) of the Arbitration Act only applied in relation to Indian-seated arbitrations between Indian parties. Professor Rajoo highlights potential policy concerns that arises from this decision, where Indians may attempt to use such an avenue to evade Indian law. He discusses the potential applicability of the public policy exception under the Arbitration Act. Professor Rajoo also discusses whether Section 28(1)(a) of the Arbitration Act should be amended to allow parties to a domestic arbitration to also have the autonomy to agree on a substantive law other than Indian law, to encourage Indian parties to use arbitrations with India as the seat of arbitration but allow the flexibility to apply other rules of substantive law to facilitate their undertakings and contracts.

In-house counsels and parties in the inception stages of drafting their contracts would find the first 2 divisions of the book (Chapter 3 Defining an Arbitration, Chapter 5 Privacy, Confidentiality and Transparency in Arbitration, Chapter 6 Types of Arbitrations, Chapter 7 Arbitration Agreements, Chapter 10 Who May Refer Matters to Arbitration, Chapter 11 Scope of Arbitration Agreement) illuminating, in particular Chapter 4 which Professor Rajoo has devoted to express his views on the relevance of arbitration in resolving disputes, which also captures the impact of the COVID-19 pandemic on arbitration as a dispute resolution mechanism. Of pertinent mention is that Professor Rajoo has dedicated a substantial portion of commentary in division 6 of the book on the topics of Appointment (Chapter 20) and Composition of the Arbitral Tribunal (Chapter 21), Removal of Arbitrator (Chapter 23) and Remuneration (Chapter 24).

Professor Rajoo has also given emphasis to how the role of the court intertwines with the arbitral process – from the commencement of arbitration, with the possibility of staying concurrent proceedings in Courts (Chapter 14), injunctions restraining arbitration proceedings (Chapter 17), to ousting the court’s jurisdiction (Chapter 18) and finally the court’s supervisory role in challenges to arbitral awards and enforcement (Divisions 10 and 11). Finally, Professor Rajoo has also covered Conflict of Laws (Chapter 50) and Investment Arbitration (Chapter 51), which would be crucial topics for multinational projects.

All in all, Professor Rajoo, has through his excellent exposition in the form of ‘Law, Practice and Procedure of Arbitration in India’ contributed to detailing and showcasing Indian jurisprudence on arbitration, which has much to offer in the sphere, with recent landmark judgments of the Supreme Court of India promulgating the development of jurisprudence on arbitration and buttressing its pro-arbitration stance. The book is an essential and invaluable resource on India’s developments and contributions to the international arbitration jurisprudence and practice.

By Chan Yong Neng - Pinsent Masons MPillay; Connor Clark & Horace Ng - Pinsent Masons

Introduction

1. In the biblical tale of the Judgement of Solomon, King Solomon ruled between two women both claiming to be the mother of a child. Solomon identified the true mother by proposing that the baby be cut in two, with each woman receiving a half. One woman was content with the proposal, while the other pleaded that the child be given to her rival. With this strategy, he was able to distinguish the mother as the woman who prioritised the life of the child over her own maternal instincts. In How Arbitration Works (Elkouri and Elkouri, 1960), the authors described Solomon as an arbitrator, and further remarked that the procedure utilised by the King resembled that used by arbitrators at the time of publication. Fortunately, the cut-throat arbitration style of the 1960s described by Elkouri and Elkouri is not commonplace in this age. Indeed, the availability of modern technology would have presented Solomon with alternatives in delivering justice.
2. Technology now has a central and indispensable role in fair, effective and efficient conduct of arbitrations, and has seen recent and dramatic increase in use following the COVID-19 pandemic.
3. In February this year, the ICC’s Arbitration and ADR Commission (the “Commission”) launched the report, “Leveraging Technology for Fair, Effective and Efficient International Arbitration Proceedings” (the “Report”). Although the Report was meant to be an update of the Commission’s 2017 report on Information Technology in International Arbitration (the “2017 Report”), what was produced is ultimately an entirely new resource. The Report offers pragmatic and practical guidance for arbitrators and practitioners on utilising technology effectively without compromising fairness or efficiency.
4. This article briefly (i) summarises the key points made in the Report; (ii) compares the Report with similar resources available (including the 2017 Report); and (iii) considers potential drawbacks of the availability of technology use in international arbitration, before concluding.

I. The Report

5. The Report was produced by an appointed group of experts, with its conclusions and recommendations being informed by survey responses from over 500 international arbitration community members on their views of use of technology tools and solutions. Appendix A to the Report provides an overview of those survey results, including some noteworthy findings that illustrate the increased use and approval of technology tools in international arbitration:
   1. 93% of respondents agreed that technology has improved the efficiency and cost-effectiveness of the arbitration process.
   2. 71% of respondents agreed that, post pandemic, they would be using online case management platforms / virtual data rooms for exchange of all or most communications and submissions.
   3. 74% of respondents agreed that, post-pandemic, they would be using hard copy documents less often.
   4. 88% of respondents agreed that, post pandemic, it should be the norm to conduct case management and other procedural conferences as virtual meetings.
   5. The technology solutions that  respondents would use ‘more often’ included videoconferences, online case management platforms, cloud filing sharing sites and hyperlinked submissions or e-briefs.

6. The key thrust from the Report is that arbitration participants should consider early how technology will be used in an individual case and it aims to provide guidance on how parties and tribunals can integrate technology in a way that will maximise savings of time and cost, with due regard for fundamental principles of fairness and equality. The Report comprises six Sections, with its recommendations detailed in Sections 3 to 6.
7. Section 3 of the Report focuses on effective case management when integrating technology in arbitration. It recommends that parties seek to agree specific IT solutions to an arbitration after a dispute arises, rather than mandating specific IT solutions within the arbitration agreement (that could be outdated by the time a dispute arises). However, the Report also recommends that, despite parties being able to agree to use IT at any stage of proceedings, they should bear in mind that once written submissions have been exchanged, agreeing on large-scale use of IT may be less efficient and cost effective, perhaps requiring parties to redo some elements of work. 
8. The authority and responsibility of the tribunal for the efficiency and the integrity of proceedings is emphasised, with the Report also providing examples of the way a tribunal may utilise its broad powers to manage the use of IT, subject to the fairness and equal treatment of the parties. In anticipation of the possibility that technical issues arise during the arbitration, the Report also makes the practical recommendation for each party to designate technical support persons who may be contacted in case of technical difficulty, and in lieu of contacting the full distribution list of case participants.
9. Section 4 of the Report canvasses a wide range of practical issues related to the electronic exchange of communications and notifications in an arbitration procedure. It highlights that regard must be given to the service requirements, including requirements as to mode and proof of service, under the applicable arbitration rules and mandatory laws. The Report explores various possible modes of electronic service, including use of email, file share transfers, physical data carriers (flash drives, hard disks etc) and online case management platforms (even briefly noting that in some jurisdictions, courts have confirmed that notifications in court proceedings have been validly issued via Facebook Messenger or WhatsApp). When using online case management platforms, the Report recommends putting in place protocols to regulate control and access to the documents, protecting data integrity, as well as standardising the types of data to be uploaded and how they are to be organised or named.
10. Section 5 of the Report identifies other uses of technology that the parties and tribunals may wish to consider, such as e-briefs and machine learning artificial intelligence. It suggests that tribunals may wish to undertake a rough cost-benefit analysis before ordering the presentation of e-briefs, given the costs involved in their preparation. If specialised hardware or software is required for an arbitration, the Report highlights that users should consider hardware interoperability, software compatibility, whether the tool is properly licensed and whether tribunal members and the parties have adequate technical ability and resources to properly utilise the tool.
11. Section 6 of the Report flags practical considerations and potential pitfalls related to the use of technology to facilitate evidentiary hearings, with special attention paid to the organisation of both virtual and hybrid hearings. For tribunals considering whether to order virtual hearings, the Report recommends consideration of amongst others, any potential violation to any parties’ due process rights, including the right to present one’s case, and technological limitations or time zone issues that may arise from participation from different locations and countries.
12. Overall, the Report concludes that there is no one-size-fits-all when it comes to technology, recognising also that available technology services change rapidly with technological advancements. The Report thus seeks to provide ‘starting points’ for potential technology users when investigating the technology marketplace.

II. Comparisons 

13. The Report has been prepared in view of the changes brought about by the COVID-19 pandemic and serves as an update to the report published in March 2017 by the same task force titled ‘Information Technology in International Arbitration’.
14. While the use of IT in international arbitration was already becoming widely adopted in 2017, its use was not the foregone conclusion it is today since the onset of COVID-19. The updated style of the Report, which methodically addresses aspects and issues of IT now familiar to most practitioners, reflects the Commission’s aim at providing detailed guidance on the use of IT considering its necessity and prevalence in the modern day. This contrasts with the frequently-asked-questions style of the 2017 Report, which was ostensibly intended instead to provide a framework for practitioners considering the use of IT in arbitration proceedings.
15. Furthermore, compared to the 2017 Report which lamented a lack of reliable information and hard data regarding the frequency and sophistication of IT use in international arbitration, the Report has been prepared with the benefit of a survey of 500 members of the arbitration community, the results of which are reflected in the breadth and extent of detail of different types of IT canvassed in the Report.
16. For example, greater attention has been focused on topical aspects of IT such as virtual hearings and cybersecurity, the former now a mainstay in arbitral proceedings and the latter a prevailing concern in the industry. The Appendices to the Report include a checklist for practitioners as well as sample procedural orders in relation to virtual hearings, encompassing details such as camera set-up for witnesses and break-out room functionality. Sample language has also been included in Appendix B in relation to data protection and information security with reference to the ICC Data Privacy Notice for ICC Dispute Resolution Proceedings and the ICCA-NYC Bar- CPR Cybersecurity Protocol for International Arbitration.
17. The Report complements other recent publications by various organisations regarding IT in international arbitration. Examples include:
    1. The CIArb Framework Guideline on the Use of Technology in International Arbitration issued in December 2021, which outlines general principles and a high-level summary of similar issues discussed in the ICC Report including best practices relating to cybersecurity;
    2. The IBA’s Technology Resources for Arbitration Practitioners, first published in March 2019, which offers a list of providers of common IT solutions such as case management platforms, technology assisted document review software, and translation tools; and
    3. The Protocol for Online Case Management in International Arbitration produced by the Working Group on LegalTech Adoption in International Arbitration in November 2020, which provides a deeper dive into the usage and functionalities of online case management platforms.

III. Potential drawbacks to the availability of technology in international arbitration 

Technological playing field

18. It would appear that the pandemic was a panacea for the legal fraternity’s notorious inertia and caution towards adopting new technologies. By way of example, only 2% of respondents surveyed in the Report were in the practice of utilising online case management platforms or virtual data rooms for all exchange of communications and submissions pre-pandemic, but 71% said, post-pandemic, they would utilise them more often. Section 2 of the Report also underscores that basic technological competence is now expected of arbitrators and counsel, and 51% of respondents consider it an important consideration when selecting an arbitrator. The Report also countenances the possibility that arbitrators may require more than just basic technological literacy to accommodate parties’ expected technology needs, so much as needing to undergo training to understand the software and tools employed by parties during arbitration.
19. In a time where the use of IT has become imperative, and possibly unavoidable, it is important for practitioners to stay abreast of when and how to effectively utilise IT solutions. The need to ‘upskill’ and adapt means a potentially uneven playing field, favouring able and competent users. There are also costs associated with technology tools, resulting in greater and wider access to the parties with deeper pockets. Such access brings tangible advantages. For example, having access to and effectively implementing technology assisted review software can afford a party a massive time and cost advantage in respect of discovery, in contrast to another party that is confined to the laborious traditional manual document review. Indeed, survey respondents to the Report were close to evenly split on whether they believe technology has levelled the playing field between parties.
20. The Report notes that technological challenges or disadvantages may be particularly pronounced in emerging markets, and aims to help level the playing filed by increasing awareness of and access to information on technology tools and practices.
21. The authors suggest that the tribunal will also have an important role in mitigating an uneven technological playing field, by staying conscious to potential imbalances between the parties that would result from adoption of technology and taking reasonable steps to contain the imbalances. For example, if a party is domiciled in a country with limited internet access and known slow access speeds, a tribunal should consider whether use of virtual hearings would still be appropriate for fair conduct of the proceedings. 

Effectiveness and fair conduct of virtual hearings

22. While participants in the Report’s survey expressed a largely positive attitude towards the use of IT in arbitrations, they were noticeably more divided on the utilisation of virtual hearings. Despite 88% supporting virtual case management and procedural conferences as the norm, 56% did not think there should be a presumption (whether physical or virtual) in respect of evidentiary hearings.
23. 32% of respondents believed virtual hearings were overall less effective than physical hearings, 49% considered that cross-examination and ensuring integrity of testimony were less effective virtually, and over 40% also believed interaction with counsel, hot-tubbing and settlement opportunities were less effective when hearings were virtual. The results also suggested that technical difficulties experienced during virtual hearings may have caused prejudice to a party’s presentation of their case.
24. Although several judicial rulings in various courts around the world have dismissed due process concerns in the context of virtual hearings in international arbitrations,^[1] a recent Canadian litigation case has shown that apprehensions over the integrity of witness evidence via videoconference are not wholly unfounded.^[2]
25. Where virtual hearings are implemented, it is important for parties to put in place protocols for the conduct of such hearings (as well as the use of IT during the hearings). Appendix D to the Report provides a suggested template procedural order for conduct of evidentiary hearings via videoconference. To prevent witness tampering, it is also common for witnesses to be disallowed from using virtual backgrounds and for a witness to conduct a virtual ‘room tour’ before testifying or to maintain a second camera angle.

Conclusion

26. Although the brutal means utilised in the Judgement of Solomon are now a distant memory in the history of arbitration, the industry should not be complacent in utilising newly available technology tools that go to the very heart of an effective, efficient, and just arbitral process.
27. The survey results that informed the Report are clear – the international arbitration community is increasingly engaging with the use of technology to enhance the arbitration process. The Report provides practical advice on how this may continue. It is therefore imperative for arbitrators and practitioners to make provision for appropriate use of technology tools through the necessary procedural orders. As a starting point, Appendix B of the Report provides sample procedural language relating to general use of technology tools, and Appendix D provides a template procedural order for conduct of evidential hearing via videoconference.

^[1]See e.g. Austrian Supreme Court Case No. 18 ONc 3/20s (The Austrian Supreme Court found that the arbitral tribunal’s decision to hold a remote hearing did not violate the parties’ right to be heart and treated fairly. The Court rejected the Respondents’ arguments on the issues of: holding a remote hearing against the objection of a party; disadvantages due to differing time zones; and fear of witness tampering in videoconferencing); and Sino Dragon Trading Ltd v Noble Resources International Pte Ltd [2016] FCA 1131 (The Federal Court of Australia rejected an application to set aside an arbitral award on the basis of unequal treatment and procedural unfairness due to technical difficulties in videoconferencing.)

^[2]Kaushal v. Vasudeva et al. (2021 ONSC 440) (The witness' wife and son were communicating and gesturing to him off-camera during his testimony over Zoom. The Ontario Superior Court of Justice struck out the evidence and held that this was misconduct and an abuse of the court’s process.) 

By  Albert Monichino QC *

I INTRODUCTION

1. In Rinehart v Hancock Pty Ltd (‘Hancock’)ⁱ Australia’s apex court, the High Court of Australia, recently considered the proper approach to the interpretation of arbitration agreements. Whilst the ‘liberal presumptive approach’ articulated by Lord Hoffmann in Fiona Trust ⁱⁱ is followed in the UK and Singapore ⁱⁱⁱ, this approach has received a cooler reception in Australia. Indeed, Australian intermediate appellate courts have adopted contrary positions regarding whether Fiona Trust  should be applied. These conflicting positions were at centre stage in Hancock  with the New South Wales Court of Appeal (‘NSWCA’) and the Full Court of the Federal Court of Australia (‘FCAFC’) applying divergent approaches to the interpretation of the same arbitration clause. Thus, it was hoped that the High Court would clarify whether Fiona Trust  should be followed in Australia but, ultimately, the Court left the question unresolved.

II FACTS

2. Hancock  involved a long-running family dispute between, on one side, Mrs Gina Rinehart and certain companies in the Hancock Group,^iv and, on the other, two of her children, Bianca Rinehart and John Hancock^v (‘the Siblings’). ^vi The dispute, which attracted extensive media coverage in Australia, was described by the FCAFC as ‘one between a mother and her children, about the destruction of a family relationship under the crushing weight of wealth’.^vii

3. The facts of Hancock  are complex. For present purposes it is sufficient to say that:

1. In 1992, Mrs Rinehart was the trustee of the HMH Trust and HFMF Trust of which her children (including the Siblings) were the sole beneficiaries.
2. The main assets of each trust were certain companies within the Hancock Group, including HFMF and HRL, which owned valuable mining tenements.
3. In the mid-1990’s, HFMF and HRL (which Mrs Rinehart had no financial interest in) transferred three mining tenements to HPPL, a Hancock Group company that Mrs Rinehart held a majority interest in.
4. These tenements were subsequently transferred to other companies in the Hancock Group in which Mrs Rinehart had a major financial interest but in which the Siblings had no financial interest (‘Third-Party Companies’).
5. Mrs Rinehart was a director of all of the relevant companies.

4. In 2006, the Siblings, Mrs Rinehart and certain Hancock Group companies (including HPPL, HFMF and HRL) entered into the Hope Downs Deed. The Deed was intended ‘to quell ongoing disputes as to title concerning mining tenements’.^viii The Deed required the Siblings to give releases of claims and undertakings not to sue Mrs Rinehart or the Hancock Group Companies that were party to the deed (which did not include the Third-Party Companies).

5. Clause 20 of the Hope Downs Deed also provided for alternative dispute resolution, including arbitration, and was drafted in relatively narrow terms. It provided:

6. In 2014, after nearly a decade of litigation in the New South Wales courts on distinct claims involving the Hope Downs Deed, the Siblings initiated separate litigation in the Federal Court of Australia against their mother and, inter alia, HPPL.^x

7. The Siblings sought relief for breach of trust and removal of Mrs Rinehart as an officer of the Hancock Group companies and as trustee of the respective trusts. They also sought declarations that the Hope Downs Deed (and various associated deeds), and the arbitration agreements contained within them, were void.

8. Mrs Rinehart and HPPL applied under s 8(1) of the CAA  for an order that the proceeding be stayed and that the parties be referred to arbitration, pursuant to the arbitration agreements contained in the several deeds. They argued that the matters before the Federal Court fell within the scope of the arbitration agreements and that the releases and bars to future action contained in the several deeds provided a complete defence to the Siblings’ claims. The Third-Party Companies also sought a stay of the Federal Court proceedings on the grounds that they were deemed parties to the arbitration agreement because they were claiming ‘through or under’ HPPL.

9. The Siblings resisted the stay application on the grounds that the deeds were void (and therefore incapable of referring the parties to arbitration pursuant to s 8(1) of the CAA  because they had been procured through wrongful conduct by Mrs Rinehart and HPPL (‘Validity Claims’).^xi In contrast, the Respondents countered that the Validity Claims fell within the scope of the several arbitration agreements.

10. The operation of the arbitration agreement contained in the Hope Downs Deed (and associated deeds) was the central question in dispute.^xii

III EARLIER PROCEEDINGS

11. Shortly before proceedings were initiated in the Federal Court, the New South Wales Court of Appeal (‘NSWCA’) handed down its judgment in the related proceedings brought by the Siblings. The interpretation of cl 20 of the Hope Downs Deed was central to those proceedings. In sum, the NSWCA rejected the liberal presumptive approach to interpreting arbitration agreements as laid down by the House of Lords in Fiona Trust.^xiii  In that case, Lord Hoffmann famously observed that the fine semantic distinctions drawn in the old cases between relational phrases like ‘under’, ‘in connection with’, arising out of’ and the like ‘reflect[ed] no credit upon English commercial law’.^xiv Instead, ‘the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal’.^xv

12. In contrast, the majority of the NSWCA (Bathurst CJ, Young JA agreeing) held that arbitration clauses should be interpreted by the same rules of construction that apply to other contractual clauses. Applying the traditional Australian approach to the construction of commercial contracts, the Court found that a dispute as to the validity of the deed was not a dispute ‘under this deed’ and therefore was not a dispute that the parties had agreed to refer to arbitration.^xvi This was because, in the majority’s view, a dispute ‘under the deed’ involved a dispute about something ‘controlled by the deed’ (which necessarily assumed the deed’s validity).^xvii

13. However, in the Federal Court proceedings, the FCAFC held that the proper approach to the interpretation of arbitration agreements was the ‘liberal presumptive approach’ as articulated by Lord Hoffmann in Fiona Trust. Applying that approach, it held that the Validity Claims were disputes that fell within the scope of the reference to arbitration in the several deeds.

14. The FCFCA thus disagreed with the NSWCA, to the point that it considered that the conclusion of the NSWCA was plainly wrong. Australian courts are required to follow earlier decisions of intermediate appellate courts, unless the earlier decision is considered to be ‘plainly wrong ’.^xviii Accordingly, it was a very serious matter for the FCAFC to depart from the earlier decision of the NSWCA, particularly as both cases concerned the interpretation of the very same arbitration clause.

IV PROCEEDINGS BEFORE THE HIGH COURT

15. The Siblings appealed to the High Court from the FCAFC. The primary issue was whether the Validity Claims fell within the scope of the relevant arbitration agreements. This required consideration of the proper approach to the construction of arbitration agreements.

16. Despite the diametrically opposed positions taken by the NSWCA and FCAFC regarding the proper approach to interpretation of arbitration agreements, and indeed the interpretation of the identical clause, the High Court found it unnecessary to consider whether Fiona Trust  is good law in Australia. According to the majority, Kiefel CJ, Gageler, Nettle and Gordon JJ, the appeals could be resolved by application of orthodox principles of contract interpretation, without reference to Fiona Trust.^xix Thus, the majority declined to grapple with the important question of whether the liberal presumptive approach is applicable in Australia.

17. Instead, the High Court held that the orthodox approach required consideration of the context and purpose of the deed. Here, the majority embraced the FCAFC’s observation that ‘[c]ontext will almost always tell one more about the objectively intended reach of [prepositional] phrases than textual comparison of words of a general relational character ’.^xx

18. In light of the proper approach to contractual interpretation, ^xxithe majority held that: ‘[i]t could not have been understood by the parties to these Deeds that any challenge to the efficacy of the Deeds was to be determined in the public spotlight ’.^xxii In other words, the purpose and the context of the several deeds — in particular, the overwhelming desire to quell any future disputes by confidential dispute resolution — demanded an expansive interpretation of the phrase ‘dispute under this deed ’.

19. Accordingly, disputes as to the validity of the several deeds (as well as substantive disputes) were held to fall within the scope of the reference to arbitration, and the appeal from the FCAFC was dismissed.

20. In a separate, concurring judgment (on this issue), Edelman J held that consideration of context was a vital element of interpretation but did not consider it necessary to determine what weight to place on the presumption that parties to an arbitration agreement wish to minimise fragmentation of their disputes.^xxiii Thus, his Honour appears to have recognised that the considerations in Fiona Trust  were valid.

V COMMENT

21. It is disappointing that the High Court of Australia did not tackle the important policy question of whether Fiona Trust , and the presumptive liberal approach to the interpretation of arbitration agreements, is good law in Australia. Nor did the majority endorse the narrow interpretative approach employed by the NSWCA. As a result, the conflict of views between two Australian intermediate appellate courts remains unresolved.

22. There are strong reasons for supporting a generous approach towards the interpretation of the scope of arbitration clauses. Such an approach has been followed among leading commercial jurisdictions, including Singapore^xxiv and Hong Kong^xxv. It is also strongly supported by leading academic commentators, such as Gary Born.^xxvi Moreover, such an approach has the salutary benefit of facilitating arbitration.

* LLM (Cambridge), Chartered Arbitrator, Barrister and Mediator, Immediate Past President of the Australian Branch of the Chartered Institute of Arbitrators. The author gratefully acknowledges the valuable assistance of Alan de Rochefort-Reynolds, MIR (Melb), JD (Melb) in the preparation of this article.

[i] [2019] HCA 13.

[ii] Premium Nafta Products Limited v Fili Shipping Company Limited [2007] 4 All ER 951.

[iii] See, eg, Larsen Oil & Gas Pte Ltd v Petroprod Ltd [2011] 3 SLR 414.

[iv] The Hancock Group included signatories to the Hope Downs Deed, namely HPPL, HML, HFMF, HRL and HMHTI, as well as related third-party companies which were not parties to the Hope Downs Deed (referred to below as ‘Third Party Companies).

[v] Mr Hancock changed his name by deed poll.

[vi] Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442, [134].

[vii] Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442, [134].

[viii] Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442, [77].

[ix] Emphasis added.

[x] Rinehart v Rinehart (No 3) (2016) 257 FCR 310.

[xi] Rinehart v Rinehart (No 3) (2016) 257 FCR 310, [14] – [18] (Gleeson J).

[xii] A second, and subsidiary question (which is not discussed here) involved the ability of the Third-Party Companies to claim ‘through or under’ parties to the agreement pursuant to s 2(1) of the Commercial Arbitration Act 2010 (NSW) (‘CAA’). That section is equivalent to s 7(4) of the Australian International Arbitration Act 1974 (Cth) and s 6(5) of the Singapore International Arbitration Act (CAP 143A).

[xiii] [2007] 4 All ER 951.

[xiv] Premium Nafta Products Limited v Fili Shipping Company Limited [2007] 4 All ER 951, [12] (Lord Hoffman).

[xv] Premium Nafta Products Limited v Fili Shipping Company Limited [2007] 4 All ER 951, [13] (Lord Hoffman).

[xvi] Rinehart v Welker (2012) 95 NSWLR 221, [121].

[xvii] Rinehart v Welker (2012) 95 NSWLR 221, [125].

[xviii] Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, [135].

[xix] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13, [18].

[xx] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13, [26] quoting Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442, [193].

[xxi] Referring to Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, [35] (French CJ, Hayne, Crennan and Kiefel JJ).

[xxii] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13, [44].

[xxiii] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13, [83].

[xxiv] Larsen Oil & Gas Pte Ltd v Petroprod Ltd [2011] 3 SLR 414, [19]. 

[xxv] Klöckner Pentaplast GmbH v Advance Technology [2011] HKEC 941, [17].

[xxvi] Gary B Born, International Commercial Arbitration (Kluwer, 2^nd ed, 2014) 1319.