Second Reading Speech by Minister for Law, K Shanmugam, on the Constitution of the Republic of Singapore Bill

04 NOV 2014

4 Nov 2014 Posted in Parliamentary speeches and responses

Madam Speaker,

  1. I beg to move, ‘That the Bill be now read a second time’.
  1. Introduction
  1. The Constitution of the Republic of Singapore (Amendment) Bill 2014 (“the Constitution Bill”) seeks to amend the Constitution in five aspects:-
    1. First, to create two new judicial appointments, namely, International Judges and Senior Judges;
    2. Second, to introduce a gratuity plan for future holders of judicial and statutory appointments in place of pensions;
    3. Third, to create the office of the Deputy Attorney-General (“DAG”);
    4. Fourth, to amend the composition of the Presidential Council for Minority Rights; and
    5. Fifth, to reflect the change of name to “GIC Pte. Ltd.”.
  1. Madam Speaker, before I discuss the amendments, I would like to point out that some of the amendments in the Constitution Bill are related to subsequent items in the Order Paper, as follows:
    1. First, the appointment of International Judges is one part of the legislative amendments introduced to establish the Singapore International Commercial Court (“SICC”).
      1. Other SICC-related amendments are found in the Supreme Court of Judicature (Amendment) Bill 2014 and the Legal Profession (Amendment) Bill 2014.
    2. Second, the introduction of a gratuity plan to replace pensions is related to the amendments in the Judges’ Remuneration (Amendment) Bill 2014.
    3. Third, the creation of the office of the DAG is related to the amendments in the Statutes (Miscellaneous Amendments – Deputy Attorney-General) Bill 2014.
  1. I will deal with each of the amendments in turn.
  1. Appointment of International Judges and Senior Judges
  1. Madam Speaker, I will begin with the appointment of International Judges.
  1. Rationale and Objectives of the SICC
  1. Our vision is to become the leading dispute resolution hub in the region.
  1. There are significant opportunities arising from the increase in the number of cross-border transactions and disputes in Asia.
  1. This increase is a result of the tremendous growth in the volume of trade, business, investment and finance in Asia in recent years.
    1. Trade
      1. A study by the Asian Development Bank suggests that Asia could account for half of the world’s GDP, trade and investment by 2050.
      2. Last year, the ASEAN economies achieved a combined annual growth rate of 5%, compared to the estimated global growth rate of less than 3%.
      3. ASEAN is also working towards the ASEAN Economic Community to integrate and transform ASEAN into a single regional market with freer flows of goods, services, investment, skilled labour and capital.
    2. Foreign Direct Investments (FDIs).
      1. Second, FDI into Indonesia, Malaysia, the Philippines, Singapore and Thailand, known as the ASEAN 5, grew by 7% from US$120 billion in 2012 to US$128.4 billion in 2013.
      2. FDI inflows to Asia have grown by nearly 30% since 2009, reaching US$400 billion as of 2012. This accounts for 30% of the global FDI flows.
    3. Infrastructure spending.
      1. In Southeast Asia, nearly US$1 trillion of infrastructure investment will be required until 2020, the next 6 years.
      2. Likewise, India’s infrastructure sector potential is estimated to require US$1 trillion in funding from 2012 to 2017, in the next 3 yrs.
  1. With these opportunities and growth in the region, the number and complexity of cross-border disputes will probably increase exponentially.
    1. The need for reliable dispute resolution services will increase.
    2. This is a need that we are well-placed to meet.
  1. There are three parts to our strategy to become one of the world’s leading dispute resolution hubs:
    1. First, international arbitration.
      1. For a few years now, we have focused on developing our international arbitration services.
      2. Our efforts have yielded excellent results. Singapore is now the third most preferred arbitration seat in the world.
      3. The Singapore International Arbitration Centre (“SIAC”) is the fourth most preferred arbitral institution worldwide. This did not happen by chance.
    2. Second, international commercial mediation:
      1. My Ministry has welcomed the recommendations of the International Commercial Mediation Working Group to develop Singapore into a centre for international commercial mediation.
      2. Two new mediation institutions, the Singapore International Mediation Centre and the Singapore International Mediation Institute, will be set up.
      3. We are also looking at introducing a legislative framework for mediation.
  1. The SICC represents the third part of our strategy that will enable us to provide a full suite of dispute resolution services.
  1. In May 2013, a Committee co-chaired by then Judge of Appeal V K Rajah and Senior Minister of State for Law and Education Ms Indranee Rajah was appointed to study the viability of developing a framework for the establishment of the SICC.
    1. It comprised international and local members to provide a wide range of expertise and views.
  1. The Committee submitted its report to my Ministry at the end of last year.
    1. We conducted a public consultation on the report, and
    2. The feedback received was generally supportive of the initiative.
    3. We also conducted a subsequent public consultation on the Bills to put in place the legislative framework for establishing the SICC.
    4. The feedback received was taken into consideration in finalising the Bills. So there were 2 consultations, one before the draft Bill, and one after.
  1. The SICC – A Court for International Commercial Disputes
  1. The SICC will be an international court with specialist jurists hearing international commercial disputes.
  1. We want the SICC to hear disputes governed by foreign law as well.
  1. The SICC will complement existing arbitration services and broaden the suite of dispute resolution options that are available to regional as well as international parties.
  1. It will attract parties who would not otherwise have come to Singapore to have their disputes resolved here.
  1. The key objectives are :
    1. to grow the legal sector by bringing offshore work into Singapore; and
    2. that will in turn give our lawyers and law firms more opportunities to tap into Asia’s growth.

That process has taken place in the arbitration scene so that even when disputes have little or no connection to Singapore, Singapore lawyers were involved once the dispute was heard in Singapore.

  1. Potential for Success
  1. How will the SICC seek to achieve these objectives?
    1. Singapore: We have a strong reputation for good governance, low corruption, efficiency, rule of law and a trusted legal system. The brand name for Singapore is outstanding.
  2. Our neutrality is also an important factor which will help.
    1. Our judiciary is highly regarded as being efficient, competent and honest. It is consistently ranked highly in international surveys.
    2. Singapore Legal Sector: Our lawyers and law firms have developed a good reputation for providing high quality legal services.
      1. We have the “Asian advantage” in that we understand Asian context and culture. This advantage is important as arbitration users have indicated that a personal connection to the city in which the arbitration is held is one of the main reasons for selecting the venue.
      2. 37 of the top 100 law firms in the world are present in Singapore. This further helps in what we have to offer - in terms of legal services.
  1. Parties involved in cross-border disputes rely on the courts in London or New York, if they do not want to arbitrate and wish to have their disputes heard in a neutral court.
  1. There is presently no equivalent default court in Asia. Our intention is to become that default court. No other country provides this option. We want to be the first, and we want to succeed.
  1. The SICC will be positioned – as that Court to leverage on our strengths to become the neutral forum of choice for court-based litigation in this part of the world.
  1. Opportunities from the Establishment of the SICC
  1. The SICC will provide an excellent, new platform for Singapore law firms and lawyers to gain international exposure and experience.
    1. They will have more opportunities to work on high value, complex cross-border disputes.
  1. If we are able to successfully develop our international litigation and mediation spheres, while maintaining our status as an arbitration hub, we will become the key centre for legal work in Asia.
  1. The legal sector will be a direct beneficiary.
  1. Framework of the SICC
  1. The SICC will be established as a division of the High Court.
  1. This will enable its judgments to be enforceable as judgments of the Supreme Court of Singapore.
  1. The SICC will hear international commercial disputes, including those governed by foreign law, where the parties have agreed to use the SICC, or where the case is transferred from the High Court.
  1. Proceedings will generally take place in open court, but parties will have the option to apply for the proceedings to be heard confidentially.
  1. Proceedings before the SICC will be heard before a single Judge, or 3 Judges.
  1. Foreign lawyers will have to register to appear before the SICC and appeals from the SICC in certain situations to be prescribed in the Rules of Court.
    1. This will be covered in greater detail when I speak on the Legal Profession (Amendment) Bill.
  1. Local commercial cases will be primarily handled by local lawyers.
  1. Decisions of the SICC may be appealed to the Court of Appeal, although parties will be allowed to contractually exclude or limit this right of appeal.
  1. Consistent with the international character of the SICC, parties may apply to exclude the application of Singapore’s laws of evidence.
    1. Instead, as with arbitration, the Court may allow parties to choose to apply alternative rules of evidence, which they may be more familiar with.
    2. This will help to make the SICC a more attractive option to foreign parties where the cases or disputes have little or no connection to Singapore.
  1. Appointment of International Judges
  1. I will now turn to the appointment of International Judges under the Constitution Bill.
  1. These will be persons who, in the opinion of the Chief Justice, have the necessary qualifications, experience and professional standing to be such a Judge 1.
  1. The International Judges on the SICC’s panel will therefore comprise eminent foreign jurists who will be able to hear disputes governed by foreign law.
    1. They will complement our Supreme Court Judges in hearing disputes at the SICC.
    2. The high quality of the Bench will be a major point for foreign parties.
  1. The International Judges will be appointed by the President, if he, acting in his discretion, concurs with the advice of the Prime Minister 2.
  1. An International Judge will be required to take the Oath of Office for International Judges before taking office.
    1. This is similar to the oath taken by other Judges, but it excludes a requirement to defend the Constitution 3.
  1. An International Judge may be appointed for a specified period of time, or to hear and determine a specific case 4.
    1. The Supreme Court of Judicature (Amendment) Bill 2014 provides that an International Judge may only sit in the SICC, and in appeals from the SICC.
    2. Where an International Judge is appointed for a specified period of time, the Chief Justice may, from time to time require the International Judge to hear and determine any specific case or such classes of cases which the Chief Justice may specify.
  1. Some of the Constitutional protections that are available to Judges of the Supreme Court will be extended to cover International Judges:
    1. An International Judge may resign, but may not be removed from office except in accordance with the procedure for removal set out in the Constitution.
    2. An International Judge’s conduct may not be discussed in Parliament except on a substantive motion of which notice has been given by not less than one-quarter of the total number of the Members of Parliament.
  1. Conclusion on the SICC
  1. The SICC will be the first court of its kind in Asia that caters to foreign parties and foreign laws.
  1. It will bring immense benefits to our legal community.
  1. And we hope to leverage on the success of our arbitration sector, and position the SICC as a complementary option that will enhance our ability to become the dispute resolution hub of Asia.
  1. Appointment of Senior Judges
  1. Madam Speaker, I will now touch on the appointment of Senior Judges.
  1. These will be persons who were formerly Judges of the Supreme Court 5.
  1. The objective of introducing the appointment of Senior Judges is:
    1. to allow the Supreme Court to tap into the experience of the retired Judges.
  1. The process of appointing a Senior Judge is identical to that of an International Judge 6.
    1. The protections they enjoy are identical.
  1. Likewise, a Senior Judge may be appointed for a specified period of time, or to hear and determine a specific case 7.
    1. Where a Senior Judge is appointed for a specified period, he may hear and determine any specific case, or such classes of cases as the Chief Justice may specify.
    2. However, there is no provision for Parliament to limit the classes of cases that a Senior Judge may hear.
  1. A Senior Judge may sit in the High Court, the SICC, or if the Chief Justice so requires, in the Court of Appeal.
  1. A Senior Judge will be required to take the same oath as that for the Judges and Judicial Commissioners of the Supreme Court.
  1. We consulted the President on the appointment of International Judges and Senior Judges. The President is supportive of these amendments.
  1. Introduction of a Gratuity Plan for Future Judicial and Statutory Appointment Holders In Place of Pensions
  1. Madam Speaker, I will now move on to the second set of amendments.
  1. These amendments introduce a gratuity plan which will replace the pensions for:
    1. future judicial appointment holders
      1. namely, the Chief Justice, Judges of Appeal and Judges of the High Court; and
    2. future statutory appointment holders
      1. namely, the Attorney-General, Auditor-General and the Chairman of the Public Service Commission.
  1. These amendments arise from the Public Service Division’s comprehensive review of the salary framework of judicial and statutory appointment holders last year.
  1. Deputy Prime Minister Teo Chee Hean had informed the House then, that amongst other changes, the pensions of these future judicial and statutory appointment holders will be replaced by a gratuity plan.
  1. Future judicial and statutory appointment holders who receive the plan will not be eligible for any pension benefits, including post-retirement medical benefits.
  1. The Bill confers on the President the power to, on the advice of the Cabinet, make regulations to prescribe a gratuity plan for the statutory appointment holders.
  1. Similar powers will be conferred on the President to make regulations for the judicial appointment holders. This is provided for in item 4 on the Order Paper, the Judges’ Remuneration (Amendment) Bill 2014.
  1. The regulations will set out how the gratuity will be computed, and the terms and conditions for payment.
  1. They will also provide a death gratuity to the dependants or estate of these judicial and statutory appointment holders, should these appointment holders die in service.
  1. The provision of a death gratuity is a service benefit that is accorded to existing judicial and statutory appointment holders and all other public servants, should they die in service.
  1. The gratuities payable under the plan will be paid from the Consolidated Fund.
  1. This plan will apply only to future appointment holders. Current appointment holders will not be affected by this change.
  1. Overall, this set of amendments will make future appointment holders non-pensionable, like most public officers.
  1. Creating the Office of a Deputy Attorney-General
  1. Madam Speaker, I will now turn to the third set of amendments, to create the office of the Deputy Attorney-General (DAG).
  1. The Attorney-General (AG) performs numerous functions and bears numerous responsibilities.
  1. This office carries critical Constitutional responsibilities, namely:
    1. acting as the Government’s legal adviser 8; and
    2. acting as the Public Prosecutor 9.
  1. In addition, the AG:
    1. is responsible for drafting Singapore’s laws; and
    2. acts as Singapore’s representative, both in actions by or against the Government and in the international arena.
  1. The past few years have seen the volume and complexity of the work handled by the Attorney-General’s Chambers (AGC) grow enormously.
  1. AGC estimates that the public sector’s demand for legal advisory services from AGC has grown by more than a third between 2008 and last year.
  1. The effect of globalisation on enforcement and on policy development and implementation has introduced additional work and a new level of complexity.
  1. There has been a fourfold increase in requests for attendance in international negotiations and dispute resolution, and a threefold increase in mutual legal assistance requests.
  1. It is hence timely to introduce the office of the DAG, to assist the AG in the discharge of his functions and responsibilities.
  1. The DAG will discharge such duties of the AG, as the AG may assign 10.
  1. This may include assisting the AG to have oversight of the day-to-day administration of criminal justice.
  1. The DAG will be a constitutional appointment, and there may be one or more DAGs.
  1. A DAG will be accorded the status of a High Court Judge and conferred the same security of tenure as that of the Attorney-General 11.
  1. The remuneration and allowances of the DAG will be charged to the Consolidated Fund 12.
  1. Creating the office of the DAG will enable AGC to have and retain, at its apex, individuals of the same standing and ability as our Judges.
  1. The creation of the office of the DAG will also require consequential amendments to various Acts to include mention of the DAG alongside the Solicitor-General.
  1. These are found in the Statutes (Miscellaneous Amendments – Deputy Attorney-General) Bill, which I will take the House through later.
  1. Amending the Composition of the Presidential Council for Minority Rights
  1. The next set of amendment deals with the composition of the Presidential Council for Minority Rights (“PCMR”).
  1. The PCMR’s main functions are to:
    1. draw attention to any legislation that contains differentiating measures; and
    2. consider and report on matters affecting persons of any racial or religious community in Singapore as may be referred to it by Parliament or the Government.
  1. Presently, the PCMR comprises:-
    1. a Chairman appointed for a period of 3 years; and
    2. not more than 10 permanent members appointed for life; and
    3. not more than 10 other members appointed for a period of 3 years.
  1. The composition of the PCMR will be amended:
    1. to remove the limit on the number of non-permanent members; and
    2. to retain the cap of 10 permanent members and the aggregate cap of 20 members apart from the Chairman.
  1. The amendment ensures that the PCMR will continue to be representative of the major races and religious groups in Singapore.
  1. We consulted the President on the amendment to the composition of the PCMR and the President is supportive of this amendment.
  1. Renaming the Government of Singapore Investment Corporation Pte. Ltd.
  1. Madam Speaker, the last set of amendment is to Article 142(4) of the Fifth Schedule of the Constitution.
  1. This is to reflect the change of name of the “Government of Singapore Investment Corporation Pte. Ltd.” to “GIC Pte. Ltd.”.
  1. Conclusion
  1. Madam Speaker, I beg to move.

Factsheet on the Constitution of the Republic of Singapore Bill(0.11MB)

[1] Clause 8, New Art 95(4)(c)
[2] Clause 8, New Art 95(4)(c)
[3] Clause 16(b)
[4] Clause 8, Art 95(5)
[5] Clause 8, Art 95(4)(a)
[6] Clause 8, Art 95(4)(a)
[7] Clause 8, New Art 95(5)
[8] Art 35(7) of the Constitution
[9] Art 35(8) of the Constitution
[10] Clause 5, New Art 35A(4)
[11] Clause 5, Art 35A(6)
[12] Clause 5, Art 35A(11)

Last updated on 04 Nov 2014