The Hague Court of Arbitration for Aviation (CAA) signed a memorandum of understanding with the Singapore International Mediation Centre (SIMC) on Wednesday to provide the first specialized mediation framework for the aviation industry in Asia.
The agreement paves the way for an aviation-specific mediation option in Asia and beyond. Currently, aviation businesses in the region seeking such an option must turn to Europe for mediation.
Mediation offers a facilitated negotiation through a professionally trained mediator to help parties reach an agreement over a dispute. This process differs from commercial arbitration and litigation which can be more adversarial and take much longer to resolve.
SIMC CEO Chuan Wee Meng called mediation a more flexible and cost-effective alternative dispute resolution that can ward off the need for arbitration or litigation. About 90 percent of mediations administered by SIMC take only a day, and the settlement rate averages more than 70 percent. Many are multimillion-dollar settlements, Meng said, adding that its largest settlement resolved involved a $4 billion dispute.
“In a fast-moving, mission-critical industry like aviation, the speedy resolution of disputes is absolutely essential,” he said.
Taking place before guests and dignitaries at the Singapore Airshow, industry representatives from the Singapore Economic Development Board and the Association of Aerospace Industries for Singapore witnessed the signing.
Paul Ng, co-chair of The Hague CAA’s mediation standing committee and head of aviation at the law firm of Rajah & Tann, noted the challenges the industry has faced because of the Covid pandemic but also the importance it plays in global economies. “An efficient method for dispute resolution between industry players is key to help the industry back to growth and success,” Ng said.
He called SIMC a “natural choice” to partner on mediation, noting Singapore is a leading international commercial alternative dispute resolution hub for the region.