Gladiators of dispute resolution: the battle for jurisdiction

Sarah Murray
Stevens & Bolton, Guildford
sarah.murray@stevens-bolton.com

Disputes and their resolution represent big business. It is therefore understandable that, in the evolving landscape of cross-border litigation, the different options and mechanisms for resolving them have become increasingly diverse and competitive. Alternative dispute resolution (ADR), encompassing mediation, international arbitration and any method for resolving disputes outside a courtroom, is an industry by itself. It is against this backdrop that we have seen a ‘new’ concept – the international commercial courts (ICCs). ICCs claim to be viable alternatives to established domestic courts and international arbitration. But do they live up to their promises? Below, we take a closer look at the nature of these courts and why, in our view, the courts of established jurisdictions, such as England & Wales, won’t be so easily displaced.

What is an ICC? In summary, they are:

• institutions established domestically (rather than through international collaboration), usually operating within the legal framework of their respective countries and subject to national laws and regulations;
• branded and marketed as distinct from other domestic courts with the aim of attracting cross-border commercial disputes by offering specialised judicial services; and
• able to deal with domestic disputes in appropriate cases.

The key difference between an ICC and other courts is its branding and stated purpose. For example, while courts such as the London Commercial Court (LCC) may practically fulfil the same function (with many disputes having a cross-border element) they are not specifically marketed as international courts.

Over the past twenty years there has been an increase in the number of jurisdictions establishing ICCs. The Dubai International Financial Centre Courts and the Qatar International Financial Centre Courts were established in 2004 and 2009 respectively, and are designed to support their respective jurisdictions’ financial centres. Other ICCs are established in particular regions, such as the Singapore International Commercial Court, China’s two international commercial courts, and the Astana International Financial Centre Court. In Europe ICCs are established in the Netherlands and France.

Alongside the rise of ICCs, commercial mediation and international arbitration have continued to evolve as key dispute resolution mechanisms. Mediation offers a collaborative approach where a neutral third party facilitates negotiations between disputing parties to reach a mutually acceptable solution. It is valued for its confidentiality, cost-effectiveness, and ability to preserve business relationships. International arbitration, on the other hand, provides a binding resolution through an arbitrator or a panel of arbitrators. It is essentially privately funded litigation, offering a structured yet slightly more flexible process. Arbitration is particularly favoured for its ease of enforceability when compared with court judgments.

Against this backdrop, what factors should parties seek to consider when faced with a choice between international arbitration, an ICC and a domestic court? The answer, as always, is that ‘it depends’.

The differences between litigating in different domestic courts can be vast. Depending on the jurisdiction, litigation in domestic courts can be expensive, lengthy and unpredictable, with question marks over the enforceability of a judgment once you finally receive it. In some jurisdictions, domestic courts may also lack the legal and commercial expertise to handle complex commercial cases.

Where the quality of domestic courts is high, parties may need to look no further. For example, the LCC is in the ‘premier league’ when it comes to domestic courts. The UK legal services market is one of the largest in the world, with significant contributions to the economy through exports of legal services. The English legal system is respected globally for its stability, quality and the independence of its judiciary, and England and Wales has long been recognised as the leading jurisdiction for dispute resolution. English law is often chosen as the governing law in international transactions due to its predictability and fairness, with some ICCs choosing to base their systems around the common law and, in particular, English law as a result.

Features of the LCC that appeal to international litigants are its robust legal framework, the expertise of its judges, its ability to handle complex and high-value disputes, and its specialist Financial List that deals with cases relating to the financial markets and of market significance. It deals with cases quickly and efficiently, and due to the UK’s extensive network of reciprocal enforcement agreements, judgments are widely recognised and enforceable in numerous jurisdictions. This will improve further from 1 July 2025, when the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019 (otherwise known as ‘Hague 2019’) comes into force in the UK, extending the scope of enforcement and recognition of judgments between the UK and other international contracting states.[1]

The courts in England and Wales also champion ADR, encouraging the use of mediation and arbitration as effective tools in resolving complex commercial disputes. The 2024 case of DKH Retail Limited, C-Retail Limited, Supergroup Internet Limited, Superdry Plc v City Football Group Limited[2] (heard in the Chancery Division) was the first reported instance of a compulsory mediation order being made. The landmark decision of the Supreme Court in UniCredit Bank GmbH v RusChemAlliance LLC[3] demonstrated that where the seat or governing law of an arbitration agreement is English law, the English courts will enforce it and support the parties in upholding it.’

Despite these clear advantages, litigating in England can be expensive and there are instances where English law and jurisdiction might not be acceptable or appropriate for one or more counterparties. Arbitration practitioners would say that the answer is to submit disputes to international arbitration (and then fiercely debate seat, institution and applicable law). Yet despite the oft-cited advantages of arbitration (for example, flexibility, enforceability and confidentiality) it also has drawbacks. The quality and consistency of decisions is perceived as variable which, coupled with limited appeal rights, can be off putting for some parties. 

Advocates for ICCs would say that they can bridge the gap between litigation in domestic courts and alternative forms of dispute resolution such as international arbitration. They claim to do this by offering a hybrid model, combining the procedural rigour and expertise of national courts with the flexibility and efficiency of arbitration, all at a lower cost. If this is right ICCs would seem to be a natural answer but, as always, the details are important.

In attempting to create this hybrid model, ICCs in fact often draw on procedural and institutional elements of jurisdictions such as England and Wales. For example, some ICCs (eg, in Singapore, Abu Dabi and Dubai) allow foreign judges to hear disputes alongside domestic judges. The foreign judges often tend to be retired judges from England and other common law jurisdictions. Some ICCs also apply procedural rules that are largely modelled on the procedural rules of England and Wales (eg, in Kazakhstan).[4]

ICCs are therefore not homogenous – there are vast differences between them. Before choosing one to litigate in, parties would be well advised to understand what these are and what that will mean in various circumstances. ICCs will usually be limited by their own domestic jurisdiction; until they become better established, there may be question marks over the enforceability of their judgments in some jurisdictions. Their relative novelty means that they will have limited case law to draw on, providing fewer precedents and less predictability in outcomes for parties. Parties should also consider whether interim remedies are likely to be relevant to them, and if so, which interim remedies are available in ICCs and how easy such interim remedies would be to enforce in other jurisdictions.

Conclusion

The competition between national legal systems, ICCs, ADR and international arbitration reflects the dynamic nature of global dispute resolution. While ICCs offer a promising alternative, their domestic jurisdictional limitations highlight the importance of understanding and considering all available dispute resolution mechanisms. Ultimately, the choice should be guided by the specific needs of the parties and the context of the dispute, ensuring that the selected forum provides the most effective and efficient resolution on a case-by-case basis.