Editor's Note: The Second Seminar of the International Commercial Expert Committee of the Supreme People's Court and Appointment of New Members of the International Commercial Expert Committee was held successfully on December 8, 2020. The theme of this seminar is the Latest Developments of International Commercial Dispute Resolution Mechanism and the Research on Relevant Issues on International Law. The participants, on site or virtually, had discussions on the two topics, the Development of International Commercial Dispute Resolution Mechanism: New Situation and New Challenges and the Research and Application of International Law Related Issues in the Post-Pandemic Era, respectively. The texts of speeches delivered by the participants would be posted on the CICC's website.
Current Issues in International Commercial Dispute Resolution
former Judge of the High Court of Justice, Sir William Blair
Honourable Chief Justice Zhou Qiang, Justices, Members of the International Commercial Expert Committee, colleagues,
It is a pleasure and an honour to participate in this seminar this afternoon.
I spoke at the first Seminar of the International Commercial Expert Committee on 26 August 2018.
Since then, the China International Commercial Court (CICC) has begun operations and is already achieving respect for the quality of its judges and for its decisions.
International legal cooperation has an added importance in these challenging times.
China has been a full and important participant in the work of the Standing International Forum of Commercial Courts (SIFoCC), which now includes the courts of 41 jurisdictions.
The Forum has produced a number of memoranda one of which relates to the recognition and enforcement of money judgments of foreign courts.
This is the subject of a forthcoming new edition of a Multilateral Memorandum compiled from the contributions of the Forum’s members.
The Multilateral Memorandum, although not a binding instrument, should be a means of rationalising the mutual recognition of foreign judgments, by (for example) encouraging the concept of "presumed reciprocity" which was developed in the Nanning Statement approved at the 2nd China-ASEAN Justice Forum in 2017.
I am pleased to say that Judge Xi Xiangyang is a member of a working party tasked with writing a commentary on the new Memorandum.
Dr Michael Hwang SC will consider this subject further in his remarks shortly.
The current interruption of commerce and finance globally has produced many disputes which have some common features.
One such feature is force majeure, where a party claims to be relieved of liability to perform a contract because the pandemic could not reasonably have been foreseen when the contract was concluded.
Other disputes have involved material adverse change clauses, sometimes known as hardship clauses, which permit a party to exit from a transaction on the occurrence of a fundamental change of circumstances.
Doctrines such as frustration and impossibility apply in both the civil law and in the common law under various different names, but the basic idea is the same.
Supervening illegality is a distinct doctrine – it could apply, for example, if a party was required under national law to switch production from manufactured goods to medical supplies.
To take some examples, over the past few months the courts in London have considered a test case relating to the scope of business interruption insurance, and the courts in Paris have considered force majeure in the context of the supply of nuclear energy.
There are three points that seem to come out of the international jurisprudence.
The first is that, so far as international commercial contracts are concerned, the legal analysis will depend upon the terms of the individual contract, and the facts of the case.
The second is that it is for the party raising these defences to prove its case, including questions of causation.
The third is that, if possible, parties should be encouraged to conciliate, particularly if they have an ongoing commercial relationship. The 2020 SPC Guiding Opinion encourages renegotiation in case of performance difficulties caused by the outbreak or by measures implemented to contain it.
There are a number of advantages of this approach – it helps avoid the interruption of one contract disrupting the whole supply chain. It also helps reduce backlog in the courts, which in some countries has become an issue in recent months.
We have adopted something similar in Guidelines published in September 2020 by the British Institute of International and Comparative Law.
Current conditions have given a great boost to the holding of hearings remotely on various different platforms – so far as major commercial disputes are concerned, this appears to be a global phenomenon.
Protocols were rapidly introduced and approved by the courts.
Very similar considerations apply to international arbitration.
After nearly 9 months, it is possible to draw some conclusions. An advantage of the virtual format is the avoidance of the need to travel, particularly for hearings which do not include extensive oral witness evidence.
In the London Commercial Court and the Qatar International Court, for example, for short hearings in commercial cases where physical attendance is unnecessary, it is quite likely virtual hearings will be the preferred choice, even after current conditions improve.
Where witness evidence is part of a virtual hearing, it is important to ensure that the witness is comfortable in this environment, and that their evidence is given without covert assistance.
Potential problems include unstable Wi-Fi connections, protection from cyber-security threats, different time zones, the lack of personal interaction that can come from a remote format, and a disparity of technological resources among the parties – it is also necessary to ensure that parties without access to proper legal representation are not disadvantaged.
However, these problems are increasingly seen as manageable in commercial cases both in court and in arbitration.
The already increasing use of technology internationally – something which the Supreme People’s Court has invested in during recent years – seems to be assured.
Used appropriately, these developments can help in the fair and just resolution of commercial disputes according to the law, and thereby make an important contribution to the resumption of full commercial relations.
Thank you for listening to me this afternoon.
*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.