Chairman, SingaporeLaw Committee, Singapore Academy of Law, the Honourable Judge of Appeal  V K Rajah

Singapore’s High Commissioner to India, Mr Calvin Eu

President, Indian Merchants’ Chamber, Mr Nayan Patel

Chairman, IMC Court of Arbitration & Conciliation Committee, Mr D.M. Popat

Chairman, Singapore Indian Chamber of Commerce and Industry, Mr M. Rajaram

Distinguished Guests

Ladies and Gentlemen

1 Let me congratulate the Singapore Academy of Law for organising this event to promote Singapore as a centre for dispute resolution.  I am very happy to be here to support this initiative, which marks the beginning of yet another avenue to broaden and deepen the collaboration between India and Singapore.

2 The ties between India and Singapore have ancient and deep roots.  They date back to the era of Indianised states in South-East Asia in the 14th century, when Singapore was a port of call in the well-plied trade routes between India and East Asia.  Later, under British rule, Singapore was governed out of Calcutta until 1867.

3 These long-standing ties are being reinvented in the new environment of the 21st century and a rapidly transforming Asia-Pacific.  Singapore is India’s leading economic partner in South-East Asia, and in many respects its gateway to East Asia.  The India-Singapore Comprehensive Economic Cooperation Agreement (“CECA”), signed in 2005 by our two Prime Ministers, was a major step to expand our ties and help both India and Singapore to make the most of the opportunities of a global era.

4 Since CECA came into force in August 2005, bilateral trade has in fact grown 70%, to S$19.9B in 2006.  Singapore was also the third largest foreign direct investor in India last year.  (Mauritius, which was the largest, is a booking centre for many investors, including several from Singapore.)  There are now over 2,500 Indian companies operating in Singapore, and the number is growing as Indian companies try to capture opportunities in East Asia and beyond.

Financial market collaboration
5 But we have considerable untapped potential for collaboration between Indian and Singapore - potential for win-win engagements between our companies and people.  We have strengths that can be  built upon for mutual benefit.  A good example of this complementarity is in the financial markets.

6 Singapore has over the last 40 years evolved into a leading international financial centre.  There are a number of factors behind this - our trusted framework of laws and regulations; our pro-business environment including an efficient and highly networked communications infrastructure; and our openness to talent and enterprise from all over the world.  Singapore’s connectivity  -  our human, funds and IT connectivity -  makes it a natural partner for India’s financial markets and in capital raising by Indian companies.

7 Singapore’s financial markets can serve as an additional bridge between India’s huge domestic investment needs and the global pool of funds searching out for good prospects.  In particular, in the areas of infrastructure, transportation and property, India seeks substantial investment over the medium term.

8 Singapore is able to play an organic role in meeting these needs.  We are the leading home for global fund managers in Asia, with total assets under management exceeding S$720 billion.  And these investors are increasingly looking towards structured finance products – an area where Singapore is a leader.

9 Specifically, Singapore is the largest Real Estate Investment Trust (REIT) market in Asia outside Japan, with 15 trusts and a combined market capitalisation of S$26 billion.  (The last three listed property trusts consisted entirely of overseas assets from Australia, China and Indonesia respectively.  This is a growing market.  More of such foreign property trusts, including Indian assets, are in the pipeline.  Singapore has also developed innovative markets in infrastructure and shipping financing.  There are three infrastructure funds and two shipping trusts with nearly S$7 billion in market capitalisation.  And more are in the making.  These unique structured finance investments for property, infrastructure and transportation assets are able to bring new sources of overseas investments into India.

10 Over the long term, India intends to develop Mumbai into an international financial centre.  The recently released report by the Indian High Powered Expert Committee has outlined a clear roadmap to build capabilities to achieve this goal over the next 20 years.

11 I am sure Mumbai will eventually emerge as a major player in international finance over time, leveraging on India’s large pool of talent, its rule of law, and India’s huge domestic financial needs as seen in the growth of its securities markets.  Will Singapore and Mumbai grow at the expense of each other?  I believe not, just as I believe that both Hong Kong and an internationalising Shanghai will play major roles in financial markets.  Singapore and Mumbai will complement each other and feed off each other in a fast growing Asian financial landscape.  They will complement each other as India and Asia’s economies grow, as global investors look for opportunities in Asia in the full span of asset classes from bonds and equity to real estate and commodities, and as domestic investors increasingly look to diversify their assets internationally for a better profile of risks and returns.

12 Financial institutions will use Singapore and Mumbai to target their different geographies.  And the ties between Mumbai and Singapore will surely be enhanced as the trade, investment and the flow of ideas between India and East Asia grows.  A recent development  -  the Singapore Exchange’s strategic collaboration with, and equity investment in the Bombay Stock Exchange – illustrates the shape of things to come.

13 The intertwining of our financial centres will go together with that in many other services, including legal services.  One example is in fact the area of cross-border business dispute resolution, which will grow considerably in importance in coming years.

14 In June 2006, an Indian arbitration centre, the Construction Industry Arbitration Association (“CIAA”), was established through the collaboration of the Construction Industry Development Council, a body established by the Planning Commission of the Government of India, and the Singapore International Arbitration Centre.

15 CIAA’s importance was reflected in its formal inauguration by His Excellency the President of India, Dr. A.P.J. Abdul Kalam on 15 November 2006.  About 155 senior Indian arbitrators from the construction industry and legal fraternity are accredited to the panel of arbitrators of CIAA.

16 Under the Arbitration Rules of CIAA, India will be the seat of arbitration for domestic arbitrations, i.e, arbitrations will take place in India where all the disputants are Indian parties.  For international arbitrations, which are disputes involving at least one non-Indian party, Singapore will be the seat of arbitration.

17 Today’s initiative by the Singapore Academy of Law to promote Singapore as a centre for dispute resolution in cases involving Indian corporations and non-Indian parties is therefore in harmony with the spirit of the partnership that led to the establishment of CIAA.  Further, the use of Singapore law as the governing law, when parties require a neutral law or an alternative to Indian law, will be a natural extension of the use of Singapore as the seat of arbitration.

18 I fully support this initiative, which will provide Indian businesses access to dispute resolution in Singapore and the further option of using Singapore law to govern their transactions where parties cannot agree on Indian law.  It will further strengthen economic ties between India and Singapore.

19 I am pleased to announce that a number of leading Indian corporations have already expressed their support for the initiative.  In a while, they will be signing a Statement of Endorsement to support the use of Singapore as a dispute-resolution venue outside India when such a venue is desired, and to support the use of Singapore law when an alternative law to Indian law is required.

20 It leaves me to conclude my speech with my best wishes for all the bonds of mutual trust and benefit that will spring forth.  May the longstanding partnership between India and Singapore be brought to greater heights, and the ties of our business and legal communities be brought even closer.  Thank you.