Colin Monaghan
Mason Hayes & Curran, Dublin
cmonaghan@mhc.ie

Caoilinn Carney
Mason Hayes & Curran, Dublin
ccarney@mhc.ie

The rise of ICCs

Over the last 20 years, the number of judicial institutions referred to as ICCs has grown significantly. Although the title might suggest otherwise, the various ICCs have been established by individual states and not at the instigation of an overarching international body. The recently established ICCs are located in multiple jurisdictions spanning Asia and Europe. In Asia, examples include the Dubai International Financial Centre Courts (DIFC), the Singapore International Commercial Court, and the China International Commercial Court. In Europe, examples include the Netherlands Commercial Court, the Paris International Chamber of Commerce, and the Chamber for International Commercial Disputes Frankfurt.

The reasons that have led to the establishment of ICCs are wide-ranging. The ICCs in Europe were in part motivated by Brexit and the desire to present international parties with an alternative to the London Commercial Court, which has historically been a leading legal hub for international commercial disputes. Following Brexit, English judgments ceased to enjoy mutual recognition by reference to the Brussels I Recast Regulation (‘Brussels Recast’). This development has motivated European Union Member States to create alternative legal hubs in the form of ICCs with the objective of handling international commercial disputes. From an Irish perspective, Brexit has also led to the promotion of the Irish Commercial Court as an attractive destination for the resolution of international commercial disputes, because Irish judgments remain enforceable under Brussels Recast and Ireland is one of the oldest common law jurisdictions in the world. The Irish courts are also largely English speaking, which is of particular importance in circumstances where most international commercial contracts are drafted in English.

The ICCs that have been established around the world have incorporated features of common law and some of the more attractive aspects of international arbitration, including the provision of a neutral forum for the resolution of disputes. Similar to arbitration, a choice of court agreement dictates the jurisdiction of an ICC and excludes national courts as the relevant forum to resolve a dispute. The ICCs also emulate international arbitration by affording parties greater procedural flexibility compared to litigation in national courts. The confidential nature of international arbitration is often identified by international parties as one of the main advantages of this form of dispute resolution. Although some ICCs allow for confidential proceedings or confidentiality orders in certain circumstances, the majority of ICC proceedings are public, but this arguably provides greater transparency and consistency when it comes to the development of ICC case law compared to international arbitration.

There is no one overarching model for ICCs, and there are procedural and substantive differences between the various ICCs. By way of example, the DIFC is located in a special economic zone: it operates entirely independently of the legal system in the United Arab Emirates and applies a form of common law. In contrast, the Singapore International Commercial Court operates as a division within the existing domestic courts of Singapore and applies local civil procedure.

Practical advantages of ICCs

Despite the differing approach between the ICCs in terms of procedure and substantive law, a common feature of ICCs is that they are designed to adjudicate disputes of an international nature. International disputes are often highly complex, both factually and legally, and ICCs aim to cater for the unique challenges presented by these disputes. Parties to international disputes will value ICCs that provide increased autonomy, procedural flexibility and efficiency compared to domestic courts. In terms of practical advantages, most ICCs conduct proceedings in English despite the fact that it may not be the language of the local court. The use of English as the court language reduces the need for translation costs and makes proceedings more accessible to foreign parties. Some ICCs have also cultivated judiciary benches consisting of foreign judges who can provide expertise from multiple jurisdictions.

Challenges facing ICCs

There are practical challenges facing ICCs. For example, issues can arise in relation to the recognition of choice of court clauses in favour of ICCs and the international enforcement of judgments handed down by ICCs. The Hague Convention on Choice of Court Agreements (the ‘Hague Convention’) was initially perceived as the solution to these particular challenges. More recently, the Hague Convention has been expanded in the form of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the ‘Hague Judgments Convention’). While the Hague Convention deals with choice of courts agreements, the Hague Judgments Convention regulates the enforcement of foreign judgments in the absence of exclusive jurisdiction clauses.

The objective of the Hague Convention is to ‘promote international trade and investment through enhanced judicial co-operation’. The preamble to the Hague Convention recognises that enhanced judicial cooperation is achieved through an international legal regime that ensures the effectiveness of exclusive choice of court agreements and recognises judgments arising out of proceedings based on those agreements. The Hague Convention could provide the ICCs what the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 provides for international arbitration: namely an international legal regime that ensures the enforcement of arbitral agreements and awards.

Despite the ostensible benefits of the Hague Convention in providing a common international framework that recognises and enforces civil and commercial judgments across jurisdictions, certain countries have yet to ratify the Hague Convention, which could present a stumbling block to its success. While the EU Member States have signed and ratified the Hague Convention, major international players including the US and China have signed but not yet ratified it.

Conclusion

ICCs are still in a relatively nascent period: the success of the model as an alternative to international arbitration or litigation in national courts remains to be seen. It will take time for ICCs to build a significant caseload. In turn, this will help establish a strong judicial reputation that would encourage international parties to agree a choice of court clause in favour of ICCs. The enforceability of judgments handed down in ICCs is also likely to have a significant impact on the success of these institutions.

Although the ICCs are changing the international dispute resolution landscape and present considerable potential, there is currently nothing to suggest that they will replace commercial international arbitration or national courts as the preferred method for the resolution of international disputes in the short term.