Will Dubai become the most connected commercial court in the world?
When the lord chief justice of England and Wales invited some of the common law world’s leading commercial courts to join a new forum, nobody was surprised that one of the invitations sent out on his behalf by Mr Justice Blair went to the courts of the Dubai International Financial Centre (DIFC).
Lord Thomas of Cwmgiedd had, after all, visited Dubai at the beginning of February to discuss his plans for ‘commercial justice in the global village’. And the DIFC courts, established in 2004 as islands of English common law in the civil law ocean, have made extraordinary progress in the decade since my last visit – as has Dubai itself.
The DIFC is no longer unique in providing banks and businesses with courts that speak their language and enforce their laws. But Dubai seems to have attracted more work than its Gulf neighbours – for which much of the credit must go to Mark Beer, the courts’ dynamic chief executive and registrar who started his career as a commercial solicitor in London. By negotiating mutual enforcement agreements with courts as far apart as Korea, Kenya and Kazakhstan (as well as Australia and New York), Beer hopes to make Dubai the most connected commercial court in the world.
By contrast, the Qatar international court, headed by Lord Phillips of Worth Matravers, delivered its last significant judgment a year ago – although three short rulings came out later in 2015. The new Abu Dhabi global market court, headed by Lord Hope of Craighead, is still at the stage of recruiting some of its judges – a process that has not gone smoothly.
There’s already a busy list at the DIFC courts, sometimes described as ‘offshore Dubai’ to distinguish them from the local ‘onshore’ Arabic-speaking courts. In 2011, the DIFC courts’ jurisdiction was expanded to include, by consent, disputes arising outside the DIFC free-trade zone. Following the retirement of Sir Anthony Evans, the chief justice of the DIFC courts is the Singapore lawyer Michael Hwang SC and his deputy is Sir David Steel, formerly judge in charge of the Commercial Court in London.
One of Hwang’s innovations is the so-called conduit jurisdiction. In DNB Bank v Gulf Eyadah, he and two other appeal judges decided that parties could enforce foreign money judgments in the DIFC courts and then take the resulting order across town for execution in Dubai’s onshore courts. The ruling, delivered in February, makes it much easier to enforce a judgment against assets anywhere in Dubai and, in principle, in other states of the United Arab Emirates and the Gulf Cooperation Council.
The chief justice is more cautious. ‘We don’t guarantee that you’ll be able to do what you want with our judgments,’ he tells me. ‘We enforce foreign judgments under common law principles. Beyond that, it’s up to any other enforcing courts that litigants want to take our judgments to.’
Hwang’s other great innovation has been to make offshore judgments enforceable in other jurisdictions, even if no mutual recognition treaties exist. Under a practice direction he issued last year, parties to a money judgment from the DIFC courts may agree that any dispute over non-payment should be referred to arbitration.
The term ‘dispute’ covers the judgment debtor’s refusal to pay. An arbitrator would normally make an award in favour of the judgment creditor and that award should be enforceable in more than 150 countries that have acceded to the 1958 New York convention, while the original judgment remains unaffected.
As Hwang modestly admits, that too is a significant change. ‘Theoretically, yes,’ he says with a smile. ‘I’ve done my bit.’ But there are limits: a creditor can’t marry those innovations together and enforce a foreign judgment around the world unless the debtor is prepared to sign a new arbitration agreement.
Hwang welcomes Thomas’s planned forum of commercial courts, while reminding me of the Asian Business Law Institute, launched in January by Sundaresh Menon, chief justice of Singapore. Among its aims is the further convergence of business law among Asian countries. It follows the launch last year of the Singapore International Commercial Court (SICC), four of whose judges are from London.
The DIFC courts and the SICC have fundamental similarities, Menon said in a recent speech. But a significant difference is that the SICC can handle cases that originate from civil law jurisdictions.
Are they rivals? Hwang told me that Dubai and Singapore could divide the commercial world between them, one taking the Middle East/North Africa region while the other has Asia. Will Thomas’s forum compete with Menon’s institute? Hwang thought they could be overlapping circles.
And the most interesting question of all: which commercial court will Thomas join after he retires as chief justice next year? Judging by his support for convergence, it may be all of them.