Shopping for justice: strategic forum choices and the rise of international commercial courts

Tiwalade Aderoju
Olympus Solicitors and Advocates, Lagos
tiwaade@ymail.com

The turn of the 21st century saw the emergence of a globalised world, driven primarily by significant advances in transportation   (ie increased speed of travel) and communication technologies as well as the explosion of the internet and social media.[1] This prepared the stage for the rapid adoption of cross-border commerce, creating new opportunities for countries to trade and invest across borders. However, with this widespread adoption of cross-border commerce comes the rise of complicated disputes between parties from various jurisdictions.[2] In these types of conflicts, selecting a forum for the settlement of disputes is a crucial strategic choice that frequently affects the case's result and the enforceability of judgments or awards. This practice, also referred to as 'forum shopping', enables parties to choose jurisdictions that have advantageous procedural laws, reduced legal expenses, and increased prospects of success.

In this context, international commercial courts have emerged, gaining popularity as a specialized option for resolving cross-border commercial disputes and offering advantages over traditional national courts and arbitration in terms of efficiency, expertise in the law on international trade, and streamlined procedures.[3] By providing impartial forums, knowledgeable judges, and adaptable procedures, these courts—which are situated in major global hubs such as Singapore, Dubai, Paris, and Amsterdam—are designed to satisfy the needs of cross-border business conflicts.[4]  Their increasing popularity highlights the interaction between national legal systems and alternative dispute resolution procedures like mediation and arbitration, signals a change in the way international conflicts are settled.

This article examines the ethical implications of forum shopping, conflict of laws, and the strategic considerations that go into choosing a forum in business disputes. The emergence of international commercial courts, the function of international legal frameworks, and the difficulties these courts encounter in providing effective and efficient justice in an increasingly interconnected world are also covered.

Strategic forum choices in commercial disputes

In international commercial disputes, selecting the appropriate forum is an important decision that can significantly impact the outcome of a case. To make the choice of the most suitable jurisdiction for settling disputes, businesses and legal professionals carefully consider a number of legal, procedural, and financial considerations. Forum selection is often addressed in contracts through forum selection clauses, which specify the court or tribunal that will have jurisdiction in case of a dispute.[5] Parties can take advantage of jurisdictional advantages, procedural rules, and enforcement procedures that suit their interests by carefully selecting a forum.

Jurisdictional advantage is one of the main criteria affecting forum selection.[6] Certain courts are favoured due to their established and advanced commercial legislation and track record of effectively resolving intricate business disputes. Common law jurisdictions like Singapore and the United Kingdom, for example, are frequently preferred because of their strong case law precedents and judicial expertise in commercial litigation.[7] With their efficient and streamlined processes, civil law states like France and the Netherlands present a different but no less alluring model. The stability and impartiality of a jurisdiction's judiciary is an important consideration as well, since businesses look for courts that have a history of making decisions that are fair and predictable.

Forum selection is also influenced by procedural guidelines and flexibility.[8] Some jurisdictions may be more appealing than others due to the availability of legal tools including fast-track procedures, interim relief (such as freezing orders and injunctions), and summary decisions. Furthermore, different jurisdictions have different laws on evidence; some, like the US, permit broad discovery, while others, like Switzerland, put in place more stringent restrictions. A jurisdiction's appeal is further increased by the existence of specialized commercial courts with judges skilled in resolving cross-border conflicts.

Accessibility and legal fees are important considerations too. The costs of litigation, such as court fees, legal counsel, and potential damages, vary greatly between jurisdictions. Another important factor to take into account is the length of the procedures, since protracted litigation increases expenses and fosters uncertainty in the business world. Certain jurisdictions are more attractive to corporations because they have accelerated dispute resolution processes. Language issues may also need to be taken into account; for example, the Singapore International Commercial Court (SICC) and other jurisdictions that permit proceedings in English are more appealing to international firms.

Jurisdiction battles and practical considerations

Determining jurisdiction is one of the most contentious aspects of cross-border commercial litigation. Courts consider factors such as the location of the parties, the place of contract execution or performance, and the applicable governing law in deciding whether they have jurisdiction.[9] Personal jurisdiction (whether a court has authority over a defendant), subject-matter jurisdiction (whether a court can hear a particular type of dispute), and the doctrine of forum non conveniens (whether another forum is more appropriate) all come into play.

Jurisdictional challenges can lead to prolonged legal battles. To avoid unnecessary complications, businesses should ensure that their contracts contain well-drafted forum selection clauses. Litigants can also employ tactics such as seeking anti-suit injunctions to prevent a party from pursuing a case in an unfavourable jurisdiction or responding with anti-anti-suit injunctions to counter such moves. These jurisdictional manoeuvres highlight the complexity of cross-border dispute resolution.

Forum shopping and fair play: strategic selection v ethical considerations

While forum shopping is a legitimate legal strategy, it raises ethical concerns about fairness and procedural integrity. Some litigants engage in "abusive" forum shopping by selecting courts that are biased, inefficient, or known for favouring certain parties, particularly plaintiffs.[10]  This can result in procedural unfairness, where one party gains an advantage over the other regardless of the substantive merits of the dispute.

Judicial systems have developed various mechanisms to curb excessive forum shopping. Courts may decline jurisdiction on grounds of forum non conveniens or dismiss cases where they find that the plaintiff has engaged in bad faith forum selection.[11] Additionally, international treaties and conventions seek to standardise jurisdictional rules and prevent forum shopping abuses.[12]  Nevertheless, the debate continues as to how to balance the right of parties to select their forum with the need for fairness in judicial proceedings.

The rise of international commercial courts

Recognising the increasing demand for neutral and efficient dispute resolution, many jurisdictions have established specialised international commercial courts. These courts are designed to handle high-value cross-border commercial disputes and offer an alternative to traditional national courts and arbitration.

Key international commercial courts include the Singapore International Commercial Court (SICC), the Dubai International Financial Centre (DIFC) Courts, the Paris International Commercial Chamber, and the London Commercial Court. These courts have distinct advantages, such as specialized commercial law judges, streamlined procedures, and the use of English as the language of proceedings. Many also incorporate common law or hybrid legal systems, which enhance their attractiveness to multinational businesses.

Technological innovation is another distinguishing feature of international commercial courts.[13]  Many have adopted electronic filing, virtual hearings, and expedited case management processes to enhance efficiency. By providing a neutral venue with high judicial expertise, these courts are positioning themselves as formidable competitors to arbitration and traditional litigation.

As cross-border commerce expands, the need for efficient and effective dispute resolution mechanisms has become more pressing. Traditional litigation in national courts often presents challenges such as delays, challenges to jurisdiction, and difficulties in enforcing judgments internationally. International commercial courts offer a solution by providing a globally recognized forum tailored for business disputes.

However, these courts are not without competition. Arbitration remains a preferred choice for many businesses due to its confidentiality, party autonomy, and ease of enforceability under the New York Convention. Mediation is also gaining traction as a faster and less adversarial means of resolving disputes. The interplay between these mechanisms highlights the evolving landscape of commercial dispute resolution.

Challenges and criticisms of international commercial courts

Despite their growing popularity, international commercial courts face criticism and challenges. One major concern is legitimacy—some argue that these courts primarily serve the interests of multinational corporations, potentially disadvantaging smaller businesses.[14]  Additionally, concerns over judicial sovereignty arise, as some governments fear that reliance on foreign-style commercial courts could undermine their national legal systems.[15]

Cost and accessibility are also debated issues. While international commercial courts offer efficiency, their fees can be substantial, raising questions about whether they truly provide access to justice for all litigants.[16]  Another challenge is the enforceability of judgments, as the global legal framework for recognizing judgments from these courts is still evolving.

The role of multilateral instruments in reshaping dispute resolution

Multilateral treaties play a crucial role in harmonizing jurisdictional rules and enhancing the enforceability of judgments. The 2005 Hague Convention on Choice of Court Agreements strengthens party autonomy by ensuring that chosen courts have exclusive jurisdiction and that their judgments are recognized internationally.

The 2019 Hague Judgments Convention aims to facilitate the recognition and enforcement of foreign judgments, much like the New York Convention does for arbitration. If widely adopted, this convention could significantly enhance the effectiveness of international commercial courts. Additionally, forthcoming Hague Conventions in relation to parallel proceedings seek to resolve conflicts arising from multiple legal actions in different jurisdictions, further refining the global dispute resolution framework.

Conclusion

The strategic selection of litigation forums remains a crucial aspect of international commercial disputes. Businesses carefully weigh jurisdictional advantages, procedural efficiencies, and enforceability considerations when choosing a forum. The rise of international commercial courts provides a viable alternative to traditional litigation and arbitration, offering neutral, efficient, and highly specialised judicial processes.

However, challenges persist, including concerns over fairness, legitimacy, and the enforcement of judgments. The evolving landscape of multilateral instruments, such as the Hague Conventions, will play a critical role in shaping the future of global dispute resolution. As businesses continue to operate in an increasingly interconnected world, the demand for specialized dispute resolution mechanisms will only grow, reinforcing the importance of strategic forum choices in commercial litigation.

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