The China Question
The international commercial courts marketplace is becoming increasingly crowded, with a rise in the number of commercial courts opening around the world.
While the supply of courts has undoubtedly increased, it is litigants’ demand for and selection of these international commercial courts which ultimately determines their success.
Portland asked Dr Matthew Erie, Associate Professor at The University of Oxford, to hare his thoughts on the emergence of new legal hubs for dispute resolution in Asia, and their relationship to the London Commercial Court.
INTERNATIONAL COMMERCIAL COURTS BETWEEN LONDON AND BEIJING
Brexit-era Britain and globalising China may present a study in contrast with respect to their approaches to participation in regional economic integration. The UK has left the single market of the EU and its trade relationship with the bloc remains uncertain. China has, meanwhile, been building new multilateral platforms such as the Belt and Road Initiative and has emerged as one of the largest capital exporting countries in the world.
Despite these different trajectories, London and Beijing show convergence in the role of legal services and, in particular, international commercial courts. In this regard, the relationship between London and Beijing is characterised both by competition and complementarity.
The bases on which London and Beijing provide services for cross-border dispute resolution differ remarkably. London built its Commercial Court in 1895. Beijing established its China International Commercial Court (CICC) in Shenzhen and Xi’an in London’s Commercial Court benefits from time-tested procedural rules; the procedural framework of the CICC is still nascent. Similarly, the Commercial Court’s bench is deep with judges who have decades of experience with complex financial transactions.
The CICC’s bench is greener but also features some of China’s most accomplished judges as well as an Expert Committee, comprised of Chinese and non-Chinese practitioners, including arbitrators and mediators. It is too early to assess the CICC (as of the time of this writing, it has issued only one judgment and four rulings), but it does signal China’s effort to enter the increasingly competitive field of international commercial dispute resolution.
China is doing so following a wave of dispute resolution centres that are popping up throughout Eurasia, from Qatar to Kuala Lumpur. In a forthcoming article, “The New Legal Hubs: The Emergent Landscape of International Commercial Dispute Resolution,” I analyse a number of these new centres or “one-stop shops” for cross-border disputes, as well as their cross-jurisdictional links, and relationship to the UK which has provided expertise, personnel, and rules. Would-be parties take some of these hubs more seriously than others, with Hong Kong and Singapore leading the pack. China’s competitive advantages are its state support to internationalise its courts; the increasing cross-border business of its enterprises which may opt for China as dispute resolution forum; an industrial policy that prizes experimentation including in constructing legal institutions; and technology.
For example, in the area of lawtech, China has embraced the integration of big data analytics and artificial intelligence into its judicial procedures, outpacing the UK and positioning itself as a model for developing countries. Given the saturation of digital technology in Chinese society, litigants are comfortable with online proceedings and even electronic enforcement, through, for example, Alipay’s suspension of the use of its services. While Chinese courts are not yet fully automated, if algorithms replace humans as judges, it is more likely in China than anywhere else.
The London Commercial Court continues to set the standard for international commercial courts, as evinced by its caseload. The Commercial Court, further, has emerged as a leader of commercial courts through its Standing International Forum of Commercial Courts, comprised of forty-three courts from thirty-two countries, which drafted a Multilateral Memorandum on Enforcement of Commercial Judgments for Money (2019).
China also has championed legal harmonisation. Along with its involvement in such instruments as the UN Convention on International Settlement Agreements Resulting from Mediation (2018) and the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (2019), China has spearheaded its own multilateral network of courts as memorialised in the Shanghai Declaration of the World Enforcement Conference (2019). These growing judicial networks are not mutually exclusive and indeed overlap, while also positioning respective centres as procedural, technological, and doctrinal innovators.
It is too early to say what long-term impacts the COVID-19 pandemic will have on the growing field of international commercial courts. China’s legal institutions face a legitimacy deficit, and its treatment of the pandemic has not bolstered public confidence in its transparency. As for the UK, the long-established hub is best served not when it rests on its legacy as a law supplier but rather through its multilateral engagement and continued involvement with China and other would-be hubs.