Editor’s Note: The Fourth Seminar of the International Commercial Expert Committee of the Supreme People’s Court and Reappointment (New appointment) Ceremony of Expert Members was held successfully on September 25, 2024. Over 40 experts from more than 20 countries and regions focused on the theme of the “Collaborative Dialogue, Diverse Integration, Peaceful Development” during the seminar. Extensive and in-depth discussions were held within the framework of four specific issues. The texts of speeches delivered by the members of expert committee and distinguished guests during the discussion session on Topic Three Cross-border judicial cooperation in commercial courts: international agreements and judicial practice would be posted on the CICC’s website.

Cross-border judicial cooperation in commercial courts: international agreements and judicial practice

Hamid Sharif

First Managing Director of Asian Infrastructure Investment Bank’s Complaints resolution, Evaluation and Integrity Unit

Former Country Director for the PRC at the Asian Development Bank

Ladies and Gentlemen,

We find ourselves in a time of extraordinary interconnectedness, where global supply chains, cross-border investments, and the swift movement of capital form the lifeblood of the world economy. The COVID-19 pandemic laid bare our reliance on these intricate systems, reminding us that even the most advanced economies are not immune to the vulnerabilities inherent in global commerce. The seamless operation of these networks hinges on the efficient enforcement of legal rights across jurisdictions. Yet, without robust cross-border judicial cooperation—particularly among commercial courts—these legal rights remain aspirational at best.

In the past few decades, we’ve seen remarkable strides in the development of international agreements designed to facilitate judicial cooperation across borders. Instruments such as the Hague Convention on the Taking of Evidence Abroad, the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents, and the Hague Convention on the Recognition and Enforcement of Foreign Judgment and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, among others, have laid a sturdy foundation. These agreements have created a framework of predictability and certainty, which is indispensable for businesses that operate on a global scale. However, the path to such cooperation is fraught with challenges, and much work remains to be done, particularly in the context of developing nations.

The Challenges of Judicial Cooperation: A Deeper Dive

Judicial cooperation on an international scale is not merely a legal challenge—it is a test of our ability to bridge disparate legal traditions and reconcile divergent national interests. The negotiation of these conventions often stretches over decades, as illustrated by the protracted discussions surrounding the Hague Convention on the Recognition and Enforcement of Foreign Judgments. Here, we must consider four primary challenges:

1. Complex Legal Issues: The diversity of legal systems, particularly the distinctions between common law and civil law traditions, presents a formidable challenge. For instance, Article 5 of the Hague Judgments Convention attempts to straddle these traditions by offering a hybrid approach to the recognition and enforcement of foreign judgments. Yet, this delicate balance is not easily achieved. Common law’s broad interpretation of public policy, encompassing principles of justice, morality, and good conscience, contrasts sharply with the civil law’s more restrictive view. This tension is palpable in the convention’s effort to allow flexibility while preventing misuse—a task that demands both nuance and vigilance.

2. Diverging Interests: The economic interests of states vary widely based on their stage of development and their participation in global trade. Developing nations, in particular, may be wary of ceding control over the recognition and enforcement of foreign judgments, viewing such actions as intrusions on their sovereignty. Conversely, more developed economies may resist opening their borders to foreign judgments that could disrupt domestic markets. The task of negotiating international agreements thus becomes one of balancing these competing interests—a process that is as much about diplomacy as it is about law.

3. Institutional Challenges: The institutions tasked with facilitating these negotiations often operate under constraints of consensus-based decision-making. This method, while inclusive, is inherently time-consuming. Additionally, institutional capacity is a limiting factor, especially for organizations and countries with finite resources. Developing countries, in particular, may struggle to keep pace with the demands of international negotiations, further complicating the process.

4. The Global Political and Economic Landscape: The broader context of global events—be it can profoundly impact the pace and direction of judicial cooperation. These can vary from economic downturns, political shifts, and changing alliances. More recently the world has witnessed the weaponization of economic sanctions and a retreat from globalization and free trade which can undermine judicial cooperation. Often these factors will be beyond the control of negotiators, yet they play a decisive role in shaping the outcomes of international agreements for judicial cooperation.

Lessons for China, Pakistan, and the Developing World

In regions like ours, judicial cooperation remains in its infancy. The Asia-Pacific region, for example, has relatively few signatories to key international conventions on judicial cooperation. Yet, the need for such cooperation is undeniable. As cross-border trade and investment grow, so too will the demand for mechanisms to take evidence abroad, serve judicial documents, and recognize and enforce foreign judgments.

For nations like China and Pakistan, the challenge is to build a framework that balances the need for judicial cooperation with the protection of national interests. This requires not only participating in existing international conventions but also considering the creation of new, region-specific mechanisms. The process will be slow, and it will require patience and persistence. But the rewards—greater legal certainty, enhanced investment, and stronger economic ties—are well worth the effort.

The Belt and Road Initiative and the Imperative for Judicial Cooperation

Let us turn our attention to the Belt and Road Initiative (BRI), a project of unparalleled ambition that holds immense potential for transforming the economic landscape of the participating countries. For the BRI to realize its full potential, it is imperative that we expedite the development of dispute resolution mechanisms and related judicial cooperation among BRI countries. The Supreme People’s Court of China has already demonstrated leadership in this area, but much more needs to be done.

A rule-based system of judicial cooperation will provide the certainty and predictability that businesses require to invest and operate across borders. In particular, the Chinese judiciary must extend its leadership by reaching out to the judiciaries of developing countries, offering both expertise and capacity-building support. Chinese aid agencies, too, should recognize the importance of investing in the soft infrastructure of legal and judicial capacity.

The experience of institutions like the World Bank has shown that the benefits of physical infrastructure are only fully realized when accompanied by robust legal frameworks. The BRI countries should not wait decades to learn this lesson. By integrating judicial cooperation into the BRI agenda, we can ensure that this monumental project achieves not only economic success but also fosters a more just and stable international legal order.

In conclusion, the task before us is both daunting and essential. The legal community must continue to strive for greater cooperation, learning from the successes and challenges of others while remaining steadfast in our commitment to fairness, justice, and the rule of law. With the right approach, we can build a future where cross-border commercial transactions are not only possible but thrive under a framework of predictable and equitable legal cooperation.

Thank you.

*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.