Asia’s First Specialized Alternative Dispute Resolution Mechanism for Mediation in the Aviation Industry Set to Take Off

Singapore, 21 February 2024 – Two alternative dispute resolution institutions – one seated in Europe, and the other in Asia – have come together to collaborate on Asia’s first specialized mediation framework for the aviation industry. At the Singapore Airshow today, The Hague Court of Arbitration for Aviation (The Hague CAA) and the Singapore International Mediation Centre (SIMC) inked a memorandum of understanding to promote the adoption and facilitation of mediation in aviation-related disputes in Asia. 

“The aviation industry is a crucial arterial of global commerce.  In the past few years, the industry in Asia has faced unprecedented challenges because of the pandemic.  An efficient method for dispute resolution between industry players is key to help the industry back to growth and success.  The Hague CAA was formed to offer specialized arbitration and mediation services fine-tuned to the distinctive dynamics and needs of the sector.  Singapore is a leading international commercial alternative dispute resolution hub for the region and globally.  We are especially delighted to partner with SIMC, the leading Singapore institution specializing in cross-border dispute resolution, our natural choice as a key partner when it comes to mediation for our sector in Asia.” said Paul Ng, Co-Chair of The Hague CAA’s Mediation Standing Committee and head of Aviation at leading regional law firm, Rajah & Tann.  

Mediation is a facilitated negotiation under the guidance of a professionally trained mediator, who helps parties arrive at an outcome that they can both agree on. This process differs from widely used forms of dispute resolution like court litigation or commercial arbitration, which are adversarial in nature and require judges or arbitrators to determine the outcome based on strict legal principles and the evidence presented to them. 

“We are delighted to partner with The Hague CAA which specializes in addressing disputes within the aviation sector and is committed to advancing the use of mediation within it. In a fast-moving, mission-critical industry like aviation, the speedy resolution of disputes is absolutely essential. Mediation is a fast, flexible and cost-effective mode of alternative dispute resolution that can be used before and during litigation or arbitration to complement one’s dispute resolution strategy. Ninety per cent mediations administered by SIMC take only one day and enjoy a settlement rate of over 70 per cent. This translates into potential time and cost savings for commercial parties in a dispute,” said Chuan Wee Meng, SIMC’s CEO.  

The signing took place before 120 guests at the Singapore Pavilion at the Singapore Airshow and was witnessed by industry representatives from the Economic Development Board and Association of Aerospace Industries (Singapore). 

“With one of Asia’s largest and most diverse aviation ecosystems, Singapore is a key node in the global aerospace value chain and has over 130 aerospace players located here. This specialised mediation framework for the aviation industry provides parties here with an alternative means to resolve industry-specific disputes. It is a welcome development that builds on Singapore’s position as an international legal services and dispute resolution hub,” said Celia Sia, Senior Vice President and Head, Hub Strategy, EDB. 

“The aviation and aerospace ecosystem is highly interconnected, and parties commonly enter into multiple or long-term commercial arrangements, as we’ve seen here at the Singapore Airshow. By embracing mediation as the first option for disputes, aviation and aerospace organisations can find win-win solutions, safeguarding valuable commercial relationships for the long run,” said Mr. Sia Kheng Yok, Chief Executive, Association of Aerospace Industries (Singapore).  

In the MOU, which was signed today, Hague CAA and SIMC also agreed to promote the incorporation of suitable model dispute resolution clauses in Asia’s aviation industry and collaborate on joint events and training opportunities.