International Commercial Courts: Next frontier or latest trend?
Singapore International Commercial Court Symposium 2021 (online)
The title to this session posits a dichotomy, but there may be more to say about inspiration, organic growth and public purpose than frontier or trend.
The notion of “frontier” connotes expansion and territorial reach: the dealing with the Marchlands or territories where there is no or little law. I do not think that to be an apt metaphor for insight.
The description “trend” connotes fashion and change of behaviour or direction based on flow and perhaps a touch of caprice devoid of organic force or drive. Again such metaphor is not apt for necessary or appropriate insight here.
Avowedly internationally focused commercial courts or judicial chambers have emerged since 2004: Dubai (2004), Qatar (2009), Abu Dhabi (2015), Singapore (2015), Astana (2018), Frankfurt (2018), Paris (2018), China (2018) and the Netherlands (2019).[1]They have sought to challenge the great sovereign commercial courts dealing with international litigation, especially the London Commercial Court.
The inspiration for their rise can be readily understood. By the turn of the 21st century after nearly half a century of the effects of the New York Convention on arbitral enforcement and the astonishing development of interconnected global commerce, a huge worldwide demand had grown for dispute resolution which was fair, just, practical and enforceable. International commercial arbitration, both institutional and ad hoc, grew enormously to meet these commercial needs. Several great arbitral centres developed, to add to the long influence of cities such as London, Paris and New York.
In many respects, the distinguishing features of arbitration cater most satisfactorily to the needs of international commerce: the contractually sourced and shaped focus of the tribunal; its chosen skill; and the ability to agree on procedure, including privacy, and on governing law to remove the risk of state sovereign actors.
This burgeoning worldwide demand for an international system of justice (for that is what it is) involved the exponential growth of its own profession and lucrative professional activity.
The activity of dispute resolution has been matched by the development of international commercial law: model laws, principles, conventions, directions and instruments on contract law[2], electronic commerce[3], international sale of goods[4], agency and distribution[5], international credit transfers and bank payment undertakings[6], international secured transactions[7], cross-border insolvency[8], securities settlement and collateral[9], conflict of laws[10], international civil procedure[11], and international commercial arbitration[12].
Thus the late 20th and early 21st centuries were an era of active development of international legal principles in a fertile environment of active global commerce, in a prevailing framework of freedom of international trade.
To put the matter thus hints at the geopolitical features which underpin the subject.
Out of this environment, which included not only the attractions of international commercial arbitration, but some of its perceived disadvantages: sometimes over-elaborate, over-lawyered, slow and costly hearings[13], grew the idea of sovereign but internationally focused and organised courts.
There had been thought and discussion of internationally structured courts established by trading countries jointly, but the model of sovereign establishment, with an international mandate, focus and organisation has taken hold.
There was a concern in Singapore, a place where arbitration has flourished, that the SICC might undercut the arbitral work of the city. But such concerns were misplaced. There may be a degree of competition between arbitral and curial institutions, but the complementarity of the two is far more important. Some disputes and some parties will be apt for, or favour, a public sovereign, but avowedly internationally structured, tribunal of skill, rather than an arbitral process. The capacity to populate an international chamber or court with expertise from all parts of the world as part of a domestic commercial court of excellence provides not only the opportunity for primary (and appellate) commercial decision-making of the highest quality, but also arbitral supervision of exceptional quality.
So the inspiration for these courts is sovereign: the attempt by different jurisdictions to participate in the “commerce” of international dispute resolution; but its success will be organic: in meeting the growing needs of commerce.
The hybrid of sovereignty and internationality in primary decision-making, appellate review, and arbitral supervision will bring forth, I am sure, procedural innovation, cross-fertilisation of procedural approaches, the development of harmonising principles and the growth of a lex mercatoria through convergence.
One of the great American justices of the Supreme Court (Robert Jackson) speaking in 1953 for a Supreme Court of remarkable quality said the following about international maritime law. He used words that inspire and lift the eyes. We should not lose sight of the need for and importance of these ideals in world trade and the need for the rule of law in promoting the peaceful co-existence of competing legitimate self-interests. Justice Jackson described international maritime law as follows (he could now be speaking of the developing international commercial law) [14]:
… courts of this and other commercial nations have generally deferred to a non-national or international maritime law of impressive maturity and universality. It has the force of law not from extraterritorial reach of national laws, nor from abdication of its sovereign powers by any nation, but from acceptance by common consent of civilized communities of rules designed to foster amicable and workable commercial relations.
International or maritime law in such matters as this does not seek uniformity and does not purport to restrict any nation from making and altering its laws to govern its own shipping and territory. However, it aims at stability and order through usages which considerations of comity, reciprocity and long-range interest have developed to define the domain which each nation will claim as its own.
These are not rosy dreams. They are, and have been, the reality of maritime law and commerce for millennia. They provide the underlying inspiration for international commercial law principles and international commercial law. International commercial courts drawing their members from around the world are apt to administer chosen law or international commercial law in a fashion that reflects this internationality.
International commercial courts will take their place in moulding and developing an international system of justice in partnership with arbitral institutions, ad hoc arbitration and national sovereign commercial courts. I do not think they are a fashion or trend or new territory or frontier, but a strong and forceful part of the healthy organic growth of the international system of the rule of law in commerce.
*Chief Justice of the Federal Court of Australia. Speech delivered at the first session of the Singapore International Commercial Court Symposium 2021: Trends & Developments in International Commercial Litigation, held on 10 March 2021 via virtual platform.
[1] The Dubai International Financial Centre Courts; Qatar International Court and Dispute Resolution Centre; Abu Dhabi Global Market Courts; Singapore International Commercial Court; Astana International Financial Centre Court; Chamber for International Commercial Disputes (Landgericht Frankfurt am Main); International Commercial Chamber of the Paris Court of Appeal; China International Commercial Court; Netherlands Commercial Court.
[2] As to international private law, see generally Goode, R et al Transnational Commercial Law: International Instruments and Commentary (Oxford 2004). The UNIDROIT Principles of International Commercial Contracts 2004, produced by a group of international scholars and practitioners under the direction of Prof Joachim Bonell (Part I of which was published in 1994); the Principles of European Contract Law completed in 2003 prepared by scholars from all member states of the European Community.
[3] UNCITRAL Model Laws on Electronic Commerce (1996) and on Electronic Signatures (2001); EC Directives on Electronic Commerce (2000) and on Electronic Signatures (1999); CMI Rules for Electronic Bills of Lading 1990; the Bolero (an acronym from Bill of Lading Registration Organisation) bill of lading prepared through the co-operation of the Through Transport Mutual Insurance Association (the TT Club) and the Society for Worldwide Inter Bank Financial Telecommunications (SWIFT) which operates through a joint venture company; and the ICC rules as to electronic presentation of documents.
[4] The United Nations Convention on Contracts for the International Sale of Goods done at Vienna 11 April 1980 (“CISG”) which superseded the Uniform Law on the Formation of Contracts for the International Sale of Goods, 1964 and the Uniform Law on the International Sale of Goods, 1964; and the ICC Official Rules for the Interpretation of Trade Terms (Incoterms 2000), replacing earlier versions.
[5] The First Company Directive (EEC) (1968); the EEC Directive on Commercial Agents (1986); the UNIDROIT Convention on Agency in the International Sale of Goods done at Geneva 17 February 1983; and the UNIDROIT Model Franchise Disclosure Law (2002).
[6] UNCITRAL Model Law on International Credit Transfers (1992); ICC Uniform Customs and Practice for Documentary Credits (1993) (UCP 500) and electronic supplement (EUCP); ICC Uniform Rules for Demand Guarantees (1992); International Standby Practices (ISP 98) by the Institute of International Banking Law & Practice Inc; UN Convention on Independent Guarantees and Stand-by Letters of Credit done at New York 11 December 1995; ICC Uniform Rules for Contract Bonds (1993).
[7] The European Bank for Reconstruction and Development (ERBD) Model Law on Secured Transactions (1994); the Model Inter-American Law on Secured Transactions (2002); the various maritime conventions dealing with security: on Maritime Liens and Mortgages (1926 and 1993) and on Arrest (1952 and 1999); the Convention on the Unification of Certain Rules Relating to the Precautionary Attachment of Aircraft done at Rome on 29 May 1933; the Convention on the International Recognition of rights in Aircraft done at Geneva on 19 June 1948; the UNIDROIT Convention on International Financial Leasing done at Ottawa 28 May 1988; the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment and Protocol done at Cape Town on 16 November 2001; the UNIDROIT Convention on International Factoring done at Ottawa 28 May 1988; the UN Convention on the Assignment of Receivables in International Trade done at New York 12 December 2001.
[8] The UNCITRAL Model Law on Cross-Border Insolvency (1997); the European Union Convention on Insolvency Proceedings; and the EC Council Regulation NO 1346/2000 on Insolvency Proceedings.
[9] The EC Settlement Finality Directive (1998), 98/26/EC; and the EC Directive on Financial Collateral Arrangements (2002), 2002/47/EC.
[10] The Convention on the Law Applicable to Agency done at the Hague on 14 March 1978; The Convention on the Law Applicable to Contracts for the International Sale of goods done at the Hague on 22 December 1986; the Convention on the Law Applicable to Contractual Obligations done at Rome on 19 June 1980; the Inter-American Convention on the Law Applicable to International Contracts done at Mexico on 17 March 1994; and the Convention on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary done at the Hague in 2002.
[11] The European Convention on State Immunity done at Basle on 16 July 1972; European Community Council Regulation No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters; a MERCOSUR Convention and Protocol on jurisdiction in civil and commercial matters; the Buenos Aires Protocol to the Treaty of Asuncion signed on 26 March 1991, on International Jurisdiction in Contractual Matters done at Buenos Aires on 5 August 1944; the Convention on the Service Abroad of Judicial or Extra-judicial documents in Civil or Commercial Matters done at the Hague on 15 November 1965; the European Community Council Regulation No 1348/2000 of 29 May 2000 on the service in the Member States of Judicial and Extrajudicial Documents in Civil or Commercial Matters; the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters done at the Hague on 18 November 1970; European Community Council Regulation No 1206/2001 of 28 May 2001 on Cooperation of Courts of Member States in the Taking of Evidence in Civil or Commercial Matters; and the American Law Institute and UNIDROIT jointly developed Principles of Transnational Civil Procedure.
[12] The Convention on the Recognition and Enforcement of Foreign Arbitral Award adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its 24th meeting (the New York Convention); the Inter-American Convention on International Commercial Arbitration done at Panama City on 30 January 1975; the UNCITRAL Model Law on International Commercial Arbitration (1985); the UNCITRAL Arbitration Rules (1976); the ICC Rules of Arbitration (1998); and the London Court of International Arbitration Rules.
[13] Toby Landau QC, “The Day Before Tomorrow: Future Developments in International Arbitration” for the 2009 International Arbitration Clayton Utz Lecture.
[14]Lauritzen v Larsen 345 US 571 at 571-572 (1953).
