The Year Ahead – Competition: Governments Are Increasingly Aware Of The Competition For International Disputes Work.

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Asia Pacific Legal Updates

 

6 February, 2019

 

The Year Ahead – Competition: Governments Are Increasingly Aware Of The Competition For International Disputes Work.

 

Governments around the world are becoming increasingly aware of the competition that exists for international disputes work, between and amongst national courts and arbitral institutions. Whilst some courts, such as in England and the US, have long dealt in international cases, other jurisdictions are seeking to win a greater share.

 

In 2006, Dubai opened specialist English-language courts in the DIFC, followed in 2009 by the Qatar International Court, in 2015 by the Singapore International Commercial Court, and in 2016 by the Abu Dhabi Global Market Court.

 

A wave of initiatives followed in 2018, with Frankfurt launching a specialist Chamber for international commercial disputes, Paris launching a specialist Chamber within its Court of Appeal (building on an existing international trade chamber), and Kazakhstan launching an international court in Astana.

 

There is a challenge and we shouldn’t be complacent.

Mr Justice Popplewell, former head of the English Commercial Court, discussing new international courts – November 2018

 

In the same year, China opened two new international commercial courts, in Xian and Shenzhen, focusing on “belt and road” project disputes. The courts have a more limited international nature, requiring Chinese language proceedings, Chinese judges, and Chinese procedural law.

 

Preparations continue for the Netherlands Commercial Court, and a successful parliamentary vote took place in December 2018.

 

The Belgian government intends to launch the Brussels International Business Court by January 2020.

 

A Success Story?

 

The current caseload of these courts is mixed. Dubai now sees several hundred cases per year, but a number of the newer courts have yet to see their first case, or are operating with very small caseloads. This is perhaps inevitable given that parties’ contractual choices may take time to work their way through to disputes.

 

But we have seen other obstacles in some cases. Parties to international contracts may be reluctant to agree on the application of local substantive law, which may have unusual or unpredictable features, or simply be less familiar to the parties.

 

There may also be concerns over the cross-border enforceability of any resulting award, or over the neutrality of the judges. These new courts may help the business community by adding pressure to governments to make necessary reforms, or to sign up to reciprocal enforcement treaties.

 

The Shadow of Arbitration

 

Of course, commercial courts compete not only among themselves, but with arbitral institutions. And here they chase a moving target, as new arbitration centres open on a regular basis. In 2018, new centres opened in locations including Delhi, Abu Dhabi, Sao Paulo, Vancouver and Astana, and more initiatives are expected in 2019.

 

Pressure for Reform

 

In addition to new courts launching, greater competition is driving existing institutions to improve their offering. In January 2019, the business courts in England and Wales will commence a two year pilot of a new regime aimed at reducing the cost and volume of discovery. In Singapore a consultation is underway on procedural reforms to improve flexibility and simplify applications.

 

Other jurisdictions planning or considering improvements to their court procedures in 2019 include Vietnam, Russia, and Colombia. Jurisdictions seeking to make improvements to their arbitration law include Thailand, Sweden and Canada.

 

In the last few years, the major arbitration institutions have undertaken a wave of reforms to their rules in order to improve procedural efficiency. In 2018, reforms were made in Hong Kong (HKIAC), Taiwan (CAA), Vienna (VIAC) and Germany (DIS), and more are expected in 2019, including Venezuela (CACC).

 

The International Centre for Settlement of Investment Disputes has also proposed far-reaching reform of its rules, covering electronic filing, expedited proceedings, and shortened timelines for the rendering of awards. Consultation on the new rules closed in December 2018. A vote on the amendments is expected in 2019 or 2020.

 

New International Commercial Courts

 

Location  Year Established 
Dubai 2006
Qatar 2009
Singapore 2015
Abu Dhabi 2016
Frankfurt 2018
Paris 2018
Kazakhstan 2018
Xian and Shenzhen 2018
Amsterdam Planned for 2019
Brussels Planned for 2019
 

Competition is generally a force for good, and the development of new dispute resolution venues and more efficient procedures will ultimately benefit end users. The impact of these changes may come slowly. But there is recognition that contracting parties have a choice when they draft a jurisdiction clause, which established litigation and arbitration centres cannot take for granted.

 

A version of this post originally appeared in the 2019 edition of Baker McKenzie’s “The Year Ahead”, a publication looking at key developments in global litigation and arbitration for the coming year.

 

Baker McKenzie

 

For further information, please contact:

 

Benjamin Roe, Baker & McKenzie 

benjamin.roe@bakermckenzie.com