The Pyrrhic Victory of the SIAC Restructuring and Insolvency Arbitration Protocol: Efficiency Won, Enforcement Lost?

The Singapore International Arbitration Centre (“SIAC”) recently unveiled the pioneering SIAC Restructuring and Insolvency Arbitration Protocol (“Protocol”), thereby introducing the first ever framework for efficiently arbitrating debt restructuring and insolvency (“R&I”) disputes. Having achieved the status of a global arbitration hub, SIAC is now positioning itself as a leading forum for R&I dispute resolution.

This ambitious move, however, raises pressing concerns in relation to enforceability, arbitrability, and public policy barriers. This is because R&I disputes traditionally bear the character of public rights, as they impact the collective interests of all creditors involved, not merely the disputing parties. R&I disputes are also often centralized, as a judicial/quasi-judicial authority coordinates the asset distribution to ensure fairness amongst creditors.

Instead of resolving R&I disputes in national courts where decisions will be enforceable, parties may now attempt to resolve more R&I disputes through arbitration. In this context, the Protocol runs the risk of giving uninformed parties false hope that the resulting arbitral award will definitely be enforceable. We hence believe that enforcement will be “lost”. With this in mind, we explore in this post, primarily through an Indian lens, the question: to what extent can R&I disputes truly be arbitrated under this Protocol?

Scope of Arbitrable Disputes and Waiver Under the Protocol

According to Paragraph 1, the Protocol applies to:

“…any dispute that parties have agreed to submit to arbitration…where the dispute:

(a)   arises out of or in connection with any matters pertaining to a law relating to restructuring, adjustment of debt, or insolvency;

(b)   arises out of, in connection with, or in anticipation of, any insolvency proceedings, including on the recommendation of a court or an insolvency officeholder; or

(c)   does not arise in anticipation of or in relation to any insolvency proceedings.”

Further, the Guidance Note, stipulates at Paragraphs 3 and 4 that:

“3. The Protocol is intended to provide for arbitrations arising from an agreement among parties in the context of any restructuring or insolvency situation...the Protocol is also available for use in situations of restructuring of debt of solvent entities and persons.”

“4. The Protocol is also intended for use in connection with or in anticipation of any insolvency proceedings which mean and include any judicial or administrative proceeding…” (emphasis added)

Hence, the Protocol casts a wide net, permitting the parties to consent to arbitrating almost every dispute relating to or potentially concerning R&I.

Paragraph 30 of the Protocol goes further, requiring parties to “not raise, and insofar as such waiver can be validly made, expressly waive, any objection to the arbitrability of any dispute, claim, or controversy…”. Additionally, Paragraph 18 of the Guidance Note also states that “…tribunals should discuss and consider…any objection as to the scope of arbitrable issues or any argument that the dispute…is otherwise not arbitrable. Tribunals should deal with such objections with reference to the applicable law and taking into account paragraph 30 of the Protocol” (emphasis added).

Thus, the waiver on arbitrability, though seemingly resolute, is constrained by the qualifier “validly made,” acknowledging the need of acceptance ultimately by the enforcement courts. The Guidance Note further reinforces this restraint via the safeguard of the “applicable law,” thereby preventing the waiver from rendering inherently non-arbitrable matters arbitrable.

The Protocol acknowledges that insolvency and arbitration co-exist like oil and water, because while arbitration rests on bilateral rights, party autonomy, and consent, the underlying essence of insolvency is the adjudication of collective rights (i.e., rights of all creditors and other stakeholders) in accordance with a statutory mandate, which cannot be waived through private agreement.

Indian and Singaporean Law: An Unromantic Wedlock of Insolvency and Arbitration

The Indian courts have consistently drawn a firm line that disputes ‘in personam’ are arbitrable, while those ‘in rem’ are not. The Supreme Court of India in Indus Biotech (P) Ltd. v Kotak India Venture (Offshore) Fund (2021), relying upon the test of arbitrability laid down in Vidya Drolia v Durga Trading Corporation (2020), clarified at the pre-admission stage that insolvency petitions under the Insolvency and Bankruptcy Code, 2016 retain an in personam character. However, post-admission, once the Corporate Insolvency Resolution Process commences, the process transforms into a collective one: third-party rights crystallise, creditor claims are collated, and the proceedings acquire an erga omnes effect.

An earlier post snapshots how Indian courts prioritize insolvency proceedings, serving collective interests of creditors over arbitral disputes between a creditor and debtor. The Delhi High Court's decision in Indian Oil Corporation Ltd. v Arcelor Mittal Nippon Steel India Ltd. (2023) exemplifies this principle. Therein the court declined to refer claims to arbitration, as they stood extinguished under a duly approved insolvency resolution plan, rendering them non-arbitrable. Earlier posts here and here also provide broader global perspectives on similar challenges.

So, how do we reconcile bilateral rights under an arbitration clause with collective rights under Indian insolvency law? The answer may be generalized in two ways:

1. Pre-admission disputes (before a court formally admits an insolvency petition and triggers the collective process) that include debt recovery, guarantee enforcement, shareholder conflicts, security enforcement, restructuring negotiations, director liability claims, and inter-creditor disagreements, being in personam remain arbitrable; and

2. Post-admission disputes such as creditor ranking, avoidance actions, scheme/plan approval, liquidation/dissolution, are irredeemably in rem and thus, non-arbitrable. In this situation, limited exceptions ought to exist for disputes that are peripheral to the insolvency process and do not disrupt the collective process or creditor hierarchy, such as where the debtor itself is the claimant or has a counterclaim; or third-party disputes not implicating creditor rights and assets of the debtor.

The challenge lies in drawing this line in practice. What may appear at first to be a private, bilateral dispute can quickly take on a collective character once insolvency is triggered. Suppose a secured creditor initiates arbitration under the Protocol against a debtor claiming unpaid credit-line. Midway, another secured creditor triggers insolvency proceedings and the insolvency court imposes a moratorium, injuncting all ongoing proceedings against the debtor. While the unpaid credit-line remains an in personam R&I dispute between the creditor and debtor, the determination of the order in which secured creditors are paid under the collective process based on the priority of their charges, constitutes an in rem issue. In such circumstances, it can be presumed that an Indian court may injunct the said arbitration and absorb the secured creditor’s claim within the collective process on the grounds of non-arbitrability.

The ‘arbitrability’ dilemma is hardly confined to India; similar tensions exist in Singapore. The Singapore Court of Appeal (“SGCA”) in Larsen Oil and Gas Pte Ltd v Petroprod Ltd. (2011) has categorically held that disputes arising from the statutory operation of insolvency law are non-arbitrable, even if contractually included within an arbitration agreement. Nevertheless, disputes stemming from a company’s pre-insolvency rights and obligations do not involve public policy considerations and can be arbitrated. The claims not affecting the pool of assets available to creditors during the liquidation of the company pass this muster.

The SGCA reaffirmed this position in AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) (2020), and outlined a three-step test for prioritizing arbitration over winding-up petitions: (a) existence of a prima facie valid arbitration agreement; (b) a dispute prima facie covered by the arbitration agreement; and (c) absence of abuse of process by the debtor. Subsequently, the SGCA in Sapura Fabrication Sdn Bhd v GAS (2025) rejected the notion of a mandatory carve-out to enforce an arbitration agreement during ongoing insolvency proceedings, and balanced the interests of each party in the case with the creditors’ collective interests. Earlier posts here and here provide pertinent analysis in this context.

The Enforcement Dilemma

Fragility of the Protocol lies at the enforcement stage. Pursuant to Article V(2) of the New York Convention and Article 36 of the UNCITRAL Model Law, enforcement of awards may be refused on the grounds of non-arbitrability and public policy. This is the case for most jurisdictions, including Singapore and India. Even though parties waive their objections to arbitrability through the Protocol, the award still remains vulnerable to the enforcement court’s decision on non-arbitrability and public policy. The award stands exposed to the same vulnerability even if a party seeks its setting-aside as contemplated under Article 34 of the UNCITRAL Model Law, rendering the award unenforceable by virtue of Article V(1)(e) of the New York Convention.

Courts in India and Singapore, while interpreting ‘public policy’, have consistently held that awards violating larger public good or a state’s fundamental law or policy cannot be enforced. The Protocol’s waiver mechanism risks being perceived as creating a legal fiction—private consent used to bypass principles embedded in national regimes, thereby being considered contrary to public policy. Further, an arbitral award that purports to circumvent collective insolvency proceedings, may fall foul of the core policy of insolvency laws which aims to protect all creditors and the wider public interest and can thus be rendered unenforceable.

Way Forward

While the Protocol is a welcome innovation, it operates on contested terrain. Its promise of efficiency is real, but so are the risks of unenforceable awards and jurisdictional conflict. Without refinement, it risks replicating the fate of Anupam Mittal v Westbridge Ventures II Investment Holdings (2023). As discussed in this post, the SGCA upheld the arbitrability of an oppression-mismanagement (”O&M”) dispute and injuncted the appellant from approaching Indian insolvency courts in view of an arbitration agreement. The Bombay High Court, however, refused to enforce this injunction holding that O&M disputes are non-arbitrable under Indian law and hence, any award born out of such arbitration, would be rendered unenforceable. Later, the subsequent arbitration commenced in Singapore was itself injuncted by the Indian insolvency court.

The path forward lies in refinement, not abandonment. One promising reform could be an ‘optional pre-admission carve-out clause’, which rather than relying on the waiver contemplated under Paragraph 30 of the Protocol, would enable the parties to restrict their arbitration only to ‘pre-admission disputes’. Thus, parties who foresee seeking enforcement of the award in countries like India where post-admission R&I disputes are non-arbitrable, could vary the Protocol to opt-in to such a clause, whereby only R&I disputes at the pre-admission stage are arbitrated.

The views expressed in this article are the authors’ personal views and do not reflect the views of the organizations they are associated with.