Editor's Note: The Third Seminar of the International Commercial Expert Committee of the Supreme People's Court and Reappointment Ceremony of the First Group of Expert Members was held successfully on Augest 25, 2022. Over 40 experts from more than 20 countries and regions focused on the theme of the Development, Challenges and Countermeasures of Cross-Border Commercial Disputes during the seminar. Extensive and in-depth discussions were held within the framework of four specific issues. The texts of speeches delivered by the participants would be posted on the CICC's website. 

THE LATEST DEVELOPMENTS AND FRONTIER ISSUES OF THE INTERNATIONAL COMMERCIAL COURT

Bart Magunda Katureebe

Former Chief Justice Emeritus of Uganda Supreme Court (Uganda)

Defining International Commercial Courts 

International Commercial Courts are now a feature in international dispute resolution in private and commercial law. They are called international because they have certain international features that set them aside from national courts. The common features include the composition of the bench – namely the presence of foreign judges; the use of a different set of rules from those applied by ordinary national courts; and sometimes, the use of the English language in a country where it is not the official language[1].

International Commercial Courts adjudicate private disputes and thus play a gap-filling role that neither international (economic) courts and tribunals nor ordinary domestic courts have been in the position to play[2]. They have been established for the specific purpose of adjudicating and attracting international business disputes. 

Today, there are three known categories of International Courts in the world. The first category is those which are attached to special economic zones (SEZ). Under this type, institutions regulating special economic zones create a commercial court to adjudicate commercial disputes arising from that economic zone.[3] Examples of SEZs include the Dubai International Financial Centre (DIFC), the Qatar Financial Centre (QFC), the Abu Dhabi Global Market (ADGM) and the Astana International Financial Centre (AIFC) of Kazakhstan, which have established International Commercial Courts to hear civil and commercial disputes arising from those territories.[4]

The second category is 'Stand-Alone' ICC's which are established within the regular court structure. They are created with separate jurisdiction for the adjudication of cases that are not part of the standard domestic court case load.[5] These courts are specifically designed to accommodate 'international commercial' disputes and thus serve a broader role than that of an SEZ court. This category of ICC's was pioneered by Singapore in 2015 following the establishment of the Singapore International Court (SICC)[6] and later the China International Commercial Court (CICC) of 2018.[7]

According to Georgios Dimitropolous in his paper “International Commercial Courts in the 'Modern Law of Nature' ”, the last category of ICC's includes International Chambers with International Commercial Courts. These are a result of political and constitutional constraints.[8] They are built on the existing court structure of the relevant countries and involve only domestic judges.[9] 

The Factors Influencing the Growth of International Commercial Courts 

▶The strategy of governments around the world to internationalize their domestic legal orders and promote international trade, investment, finance, and dispute resolution.[10] Economic growth is generally perceived as dependent on the performance of judicial systems.[11] 

▶ The willingness of some jurisdictions to establish themselves as global and/or regional dispute resolution hubs in the global competition to attract cases.[12] Thus, with the use of ICC'S, countries appear to be making a credible commitment to future foreign investors that their potential disputes will be adjudicated in a fair and impartial way.[13] 

▶ The expansion in international trade and the perceived inadequacy of the national courts to deal with disputes arising therefrom. The inadequacy of the national courts in dealing with international commercial disputes has been amplified by to W. Lawrence Craig. He emphasizes that national courts, for various reasons, are ill-suited to entertain international disputes as foreign persons or investors may not have confidence in them.[14] 

▶ The absence of an international treaty establishing a genuinely “international” (or supranational) commercial court has also led to the creation of international commercial courts by individual states to fill in the void. Without such a court, countries and regions establish ICCs to facilitate international trade and guarantee commercial justice for foreign and domestic investors.

The Latest Developments in International Commercial Courts 

According to Georgios Dimitropolous, the advent of ICCs signals a new trend in the process of globalization in the adjudication of international disputes.[15] These Courts promote a different type of judicial globalization. They are a phenomenon of a more mature era of bottom up judicial globalization, during which the rules are no longer produced exclusively from international institutions for domestic use.[16] Developments therefore, can be seen in the forms and structures specific ICC's are taking as outlined below; 

a. Composition 

Most ICC's use Common law judges or judges with a knowledge of the common law.[17] Whereas some like the DIFC Courts are composed of a bunch of only foreign common law judges, others like the SICC have a bench comprising of a combination of both domestic and foreign judges.[18] 

Another category of ICC's have a bench comprised of only domestic judges. For example, the CICC.[19] However, instead of foreign judges, the CICC has constituted an “International Commercial Expert Committee” (“ICEC”) consisting mainly of foreign legal experts from other jurisdictions along the “Belt and Road”[20] to provide advice and assist CICC judges in ascertaining the content of foreign laws and preside over mediation.[21] 

b. Jurisdiction 

Most ICCs, especially zonal courts, are no longer restricted to adjudicating cases coming out of their geographical or legal boundaries of the economic zone and have now become fora for the adjudication of all types of civil and commercial disputes between parties that contractually agree to submit to their jurisdiction. A good example is the SICC which requires parties to have agreed to its jurisdiction.[22]

On the other hand, ICCs like the CICC only hears disputes with a connection to China.[23] According to Lance Ang, CICC's jurisdictional ambit stems from a judicial interpretation issued by the Supreme People's Court (SPC) and is hence technically subject to the overarching civil procedural rules under the Chinese Civil Procedure Law under which, in cases where a foreign defendant is involved, the people's court must have a connection with the dispute depending on, inter alia, where the contract was executed or performed, or where the subject matter of the action is located.[24] 

c. Procedure 

Most ICC's are applying and have introduced English as the language of proceedings. However, others like the CICC use the domestic language. For instance, the CICC's procedural rules were drafted in accordance with the Chinese Civil Procedure Law, with the limited concession for evidence to be submitted in English without a Chinese translation where the parties agree.[25] 

d. Law applicable 

The English Common Law has taken center stage in some International Commercial Courts. It is currently establishing itself as a global legal order for trade, investment, and finance based on the sovereign act of individual states and is currently applied in most ICCs. In others like the CICC, the law applicable is the domestic Civil Procedure Law. 

e. Legal Representation 

Because of the international character of most ICCs, parties to proceedings may be represented by foreign lawyers with no substantial connection to the country of the ICC. 

However, other ICCs are still restricting representation to domestic lawyers. For example, in the CICC, parties can only be represented by Chinese law-qualified lawyers, as foreign lawyers do not have a right of audience in Chinese courts. This may be a challenge in the future. 

f. Appeals 

In most cases, decisions of ICC's cannot be appealed. However, this is a challenge various ICCs are trying to address. For example, some have evolved to offer another forum for further determination of disputes. The DIFC Courts, for example, have a two-court tier system with a First Instance court which first determines the matter and a Final Court of Appeal whose orders and judgments are final unless there is a question of a conflict of jurisdiction between onshore Dubai courts and the DIFC.[26] 

Similarly, the SICC also has an avenue for appeals. According to Direction 139 (2) of the SICC Practice Directions, decisions at the first instance are generally appealable to the Singapore Court of Appeal, albeit any appeal is subject to any written agreement between the parties to waive, limit, or vary the right to appeal.[27] 

On the other hand, CICC judgments cannot be appealed from but are subject to possible “retrial” under the Civil Procedure Law.[28]  

g. Purpose for establishment 

Some countries have established ICCs as a strategy to promote economic growth and have accepted that developing a strong international commercial and business court provides a substantial benefit to the national economy.[29] 

h. Partnerships 

An interesting phenomenon has been the establishment of partnerships and collaboration between different commercial courts in a bid to expand their scope. For example, in 2008, the DIFC partnered with the London Court of International Arbitration (LCIA).[30] Likewise, in 2018 the International Chamber of Commerce (ICC) International Court of Arbitration partnered with the ADGM to form the ADGM-ICC, which is the first and only arbitration institution for the administration of arbitration proceedings in the ADGM.[31]  

Contemporary issues affecting the growth of ICCs

▶ The growth and expansion of ICCs have been hampered by the obvious sovereignty concerns and the relative success of international commercial arbitration.[32] 

▶ From a domestic justice perspective, the most prominent point of critique concerns the fear of a two-tiered justice system.[33] 

▶ Furthermore, the proliferation of ICC's and their plethora of advantages has inspired a rush for and competition among states to create ICCA's to reap from the associated benefits. According to Kramer and Sorabji, where there is an increase in jurisdictions seeking to become the 'premium dispute resolution hub', whether regionally or globally, and where the stakes are focused on ultimately improving a country's GDP, competition is inevitable.[34] 

▶ The delivery of justice for international commercial and business disputes is becoming one more aspect of a global service sector, rather than focusing on the delivery of justice as a public good. 

▶ Because of the many players on the international scene, there is clash of legal systems, norms and practices. 

▶ My last thoughts are in relation to the enforcement of judgments made by ICCs. We well know that with International Arbitration, we have the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards through which arbitral awards made by an International Arbitrator or Arbitration Centre can be enforced by a domestic court in any member state. However, it is not clear to me as to what mechanism can be used to enforce judgments by ICCs in countries other than those where the ICCs are located. Presently, we have the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, but this appears so far to have been signed by only six (6) states. 

Conclusion

International Commercial Courts are undoubtedly taking up a dominant role in international dispute resolution. The increasing globalization and international trade are laying fertile ground for their growth. Seeing the numerous economic and access to justice benefits that are associated with them, countries have established ICCs to reap those benefits by designing ICCs suited to secure and serve their justice needs. Be that as it may, their growth is impeded by a number of issues emanating from individual countries' sovereignty and the fear of a two-tier justice system and its effect on the domestic courts, among others. 

Bibliography 

Ang, Lance. “International Commercial Courts and the Interplay Between Realism and Institutionalism: A Look at China and Singapore.” Accessed July 28, 2022. https://harvardilj.org/2020/03/international-commercial-courts-and-the-interplay-between-realism-and-institutionalism-a-look-at-china-and-singapore/. 

Dimitropoulos, Georgios. “International Commercial Courts in the ‘Modern Law of Nature’: Adjudicatory Unilateralism in Special Economic Zones.” Journal of International Economic Law 24, no. 2 (June 18, 2021): 361–79. https://doi.org/10.1093/jiel/jgab017. 

Koster, Harold, and Mark Beer Obe. “The Dubai International Financial Centre (DIFC) Courts: A Specialised Commercial Court in the Middle East.” SSRN Electronic Journal, 2018. https://doi.org/10.2139/ssrn.3237126. 

Kramer, Xandra, and John Sorabji. “International Business Courts in Europe and Beyond: A Global Competition for Justice?” Erasmus Law Review 12, no. 1 (October 2019): 1–9. https://doi.org/10.5553/ELR.000137. 

Tiba, Firew Kebede. “The Emergence of Hybrid International Commercial Courts and the Future of Cross Border Commercial Dispute Resolution in Asia.” SSRN Electronic Journal, 2016. https://doi.org/10.2139/ssrn.2940918. 

Tukulov, Bakhyt. “On the Court and Arbitration at the Astana International Financial Center: A Practical Perspective on What They Can Offer to Kazakhstani Businesses,” August 14, 2018. http://www.gratanet.com/up_files/AIFC%20Article%20Eng%2014%20Aug%202 018.pdf

Footnote

[1] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Dimitropoulos. Pp. 362.

[2] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Pp. 374.

[3] Dimitropoulos. Pp. 362. 

[4] Tukulov, “On the Court and Arbitration at the Astana International Financial Center: A Practical Perspective on What They Can Offer to Kazakhstani Businesses.”

[5] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Pp. 367. 

[6] Ang, “International Commercial Courts and the Interplay Between Realism and Institutionalism.” 

[7] Ang. 

[8] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Pp. 368. 

[9] Dimitropoulos. Pp. 368. 

[10] Dimitropoulos. Pp. 368. 

[11] Kramer and Sorabji, “International Business Courts in Europe and Beyond.” Pp. 4. 

[12] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Pp. 371. 

[13] Dimitropoulos. Pp. 371. 

[14] Tiba, “The Emergence of Hybrid International Commercial Courts and the Future of Cross Border Commercial Dispute Resolution in Asia.” Pp. 35.

[15] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Pp. 372-373. 

[16] Dimitropoulos. Pp. 373-374. 

[17] Dimitropoulos. Pp. 371. 

[18] Ang, “International Commercial Courts and the Interplay Between Realism and Institutionalism.” 

[19] Ang. 

[20] Ang. 

[21] Ang. 

[22] Ibid.

[23] https://cicc.court.gov.cn/html/1/219/193/195/index.html. 

[24] Ang, “International Commercial Courts and the Interplay Between Realism and Institutionalism.” 

[25] Ang. 

[26] Koster and Obe, “The Dubai International Financial Centre (DIFC) Courts.”

[27] Ang, “International Commercial Courts and the Interplay Between Realism and Institutionalism.” 

[28] Ibid. 

[29] Kramer and Sorabji, “International Business Courts in Europe and Beyond.” Pp. 3. 

[30] Dimitropoulos, “International Commercial Courts in the ‘Modern Law of Nature.’” Pp. 369. 

[31] Ibid. 

[32] Tiba, “The Emergence of Hybrid International Commercial Courts and the Future of Cross Border Commercial Dispute Resolution in Asia.” Pp. 37. 

[33] Kramer and Sorabji, “International Business Courts in Europe and Beyond.” Pp. 7. 

[34] Kramer and Sorabji. Pp. 4.

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*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.