Tine Abraham
Trilegal, New Delhi
tine.abraham@trilegal.com

Shourya Bari
Trilegal, New Delhi
shourya.bari@trilegal.com

Meghana Senthil Kumar
Trilegal, New Delhi
meghana.kumar@trilegal.com

Introduction

International Commercial Courts (ICCs) have emerged as strong contenders to courts and arbitration proceedings in the global dispute resolution regime. Set up in countries such as the United Kingdom, United Arab Emirates (UAE), China and Singapore, ICCs have been designed to address the shortages of domestic courts and arbitration procedures alike. They promise judicial expertise, party autonomy, expediency and efficiency to attract cross-border commercial disputes, even if the dispute has no territorial nexus with the adjudicating ICC. Although ICCs lure litigants with specialised features that combine the benefits of courts and arbitration proceedings, it is widely acknowledged that they raise concerns regarding forum shopping – where litigants can select a jurisdiction that benefits them procedurally and/or substantively.^[1]

This article will attempt to reconcile criticisms against ICCs with their practical benefits in an increasingly denationalised dispute resolution regime by:

• setting out the broad procedural frameworks of a few prominent ICCs; and
• weaving concerns posed by such frameworks with potential ways forward.

Overall, this article will critically evaluate concerns surrounding ICCs and map them against practical solutions that will help them become impartial and effective arbiters of commercial disputes.

Procedural frameworks of certain ICCs: advantages and disadvantages^[2]

Multiple jurisdictions worldwide have set up ICCs with different yet broadly overlapping procedural frameworks. ICCs like the China International Commercial Court (CICC) follow a comparatively strict framework for jurisdiction (similar to that of Chinese civil courts) and can only exercise jurisdiction when the dispute has an actual connection to China.

In contrast, there are forums like the Dubai International Financial Centre Courts (DIFCC) and Singapore International Commercial Court (SICC), which allow foreign litigants to opt into their jurisdiction by way of contractual arrangement even if the cause of action does not arise within their respective jurisdictions. In fact, these courts are procedurally structured towards attracting foreign litigants. For instance:

• DIFCC uses common law principles of adjudication although the United Arab Emirates is a civil law country. Further, in DIFCC, any arguments of foreign law will be treated as law and not fact, where parties may append expert opinions to supplement their submissions.
• DIFCC and SICC appoint specialist foreign judges towards expanding their range of expertise and foster impartiality and neutrality.
• In the SICC, parties may opt out of the Singaporean rules of evidence and appoint foreign lawyers to argue on issues of foreign law.

Considering the above, practitioners across the globe find ICCs to be convenient forums that apply international best practices to enable a smooth dispute resolution.  

Legal uncertainties posed by ICCs^[3]

While ICCs offer efficiency and expertise to sophisticated litigants, the concerns surrounding ICCs, which practitioners regularly highlight, must be addressed. These concerns include:

• Significant relaxation of procedural requirements aimed at attracting a wider pool of litigants. While litigants and practitioners generally welcome relaxed procedural standards, it is not desirable that procedural standards of the court system, especially evidentiary standards, are relaxed to such an extent that the legitimacy of ICCs is undermined.
• The misapplication of unfamiliar laws by foreign judges, which may lead to unsound judicial outcomes.
• Undermining the traditional role of national courts, as they lose their natural jurisdiction over disputes to ICCs. While international arbitrations also oust the jurisdiction of national courts, the difference is that in an arbitration, the disputes are adjudicated by a private tribunal, not by an alternative state-run court system. Further, given that ICCs are generally expensive, usually litigants with greater financial resources are able to refer their disputes to ICCs, enabling forum shopping.

Ensuring enforcement: charting a balanced path for ICCs

Considering the concerns set out above, especially with respect to the legitimacy of ICCs and their decisions, the overarching concern remains the enforceability of ICCs’ decisions. Therefore, unless there is a reasonable certainty of enforcing decisions rendered by ICCs, litigants will always be cautious about subjecting their disputes to the jurisdiction of ICCs given the severity of commercial and financial risks that underlie a complex commercial dispute of international character.

As such, in our view, the following considerations are critical towards developing a robust dispute resolution mechanism through ICCs:

• Introduction of baseline thresholds as a pre-condition for ICCs to exercise jurisdiction. For instance, while SICC allows litigants to opt into its jurisdiction contractually, the SICC Rules, 2021, grants SICC the power to refuse to hear a dispute if exercise of jurisdiction by SICC would contradict its international and commercial character or constitute an abuse of its process. If other ICCs adopt similar thresholds to prevent jurisdictional overreach, the overall reception of ICC decisions by other nations will stand enhanced.
• Adoption of clear enforcement standards across nations, similar to enforcement mechanisms for arbitral awards under Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the New York Convention) would be a step in the right direction. For instance, contradiction of public policy is a ground to refuse enforcement of foreign arbitral awards, and if countries delineate similar standards with respect to decisions of ICCs, litigants and practitioners would be better equipped to assess the viability of taking recourse to ICCs.
• Similarly, the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the Hague Convention) allows courts to deny recognition if enforcement would violate, among other things, (1) procedural fairness, (2) the judgment contradicts a prior ruling, or (3) if parallel proceedings are ongoing in the requested state. In this context, even if states choose to not be party to the Hague Convention, they can adopt similar standards towards creating a strict but well-defined enforcement mechanism, which would provide greater certainty to litigants and practitioners.

Conclusion

As demonstrated above, ICCs hold the promise of transforming cross-border dispute resolution by blending judicial legitimacy with arbitration-like efficiency. While concerns regarding forum shopping and procedural laxities are valid, they are not insurmountable. As explored in this article, strategic reforms – such as implementing jurisdictional thresholds and establishing strategic recognition mechanisms – can help ICCs strike a practical balance between efficiency and fairness.