Chief Justice Sundaresh Menon: Conference on the Future of International Commercial Courts: Towards Transnational Justice: "International Commercial Courts as Catalysts of Legal Convergence"

1. A very good morning. Let me take a moment to acknowledge the tremendous work undertaken over the past two years to put together all of the arrangements for this climactic set of events. I begin by acknowledging Marike for leading her team and for all that she has done to see us to this point and, again, to our Bahraini hosts for the tremendous hospitality and warmth with which we have been received. Please join me in thanking them.

2. A very good morning. I am deeply honoured to join Your Excellency Sheikh Khalid bin Ali bin Abdullah Al Khalifa in delivering the welcome remarks for this historic conference that follows the launch of the Bahrain International Commercial Court (“BICC”) yesterday. Let me begin by echoing the sentiment expressed by Chief Justice Khalid that we are witnessing a dramatic transformation of the global legal system and with this, the architecture of the supporting legal infrastructure is also being reshaped. In that context, the BICC has not only written a new chapter in Bahrain’s legal history, it has become a co-author of the future of the transnational system of commercial justice, which is the theme for this Conference. This morning, I want to explore how international commercial courts like the BICC will perform this broader systemic function in concert with the International Committee of the Singapore International Commercial Court (“SICC”) and thereby play a critical role in driving the convergence of commercial norms in important commercial regions throughout the world, including right here in the Middle East.

4. In a world as interconnected as ours, the law serves as a global currency of trust² that keeps the wheels of commerce turning. It is a shared language through which nations, institutions and businesses are able to transact across borders with confidence. The rule of law is not simply a domestic construct, but a universal bridge that sustains commerce and enables commercial parties to effectively work across communities, continents and cultures. But for the law to perform these functions well, it needs a degree of coherence and consistency across borders and that is the core purpose of thinking about this in terms of the transnational system of commercial justice.

5. Some nations contribute to this endeavour by serving as de facto law-givers. They develop commercial laws that are widely acknowledged as sound and sophisticated, and these are adopted in a myriad of international transactions by parties who may have no other connection with those jurisdictions. International institutions, too, have become influential law-givers by participating significantly in the project to harmonise and modernise commercial law, through the production and generation of significant instruments such as the UNIDROIT Principles of International Commercial Contracts, the UNCITRAL Model Law on International Commercial Arbitration, and more recently, on Cross-Border Insolvency.

6. But on top of this, international commercial courts constitute another significant driver of convergence, because they provide a neutral venue to ensure that disputes are resolved according to principles that transcend geography and culture. Not only do they adjudicate individual cases, they also serve as superintendents of the transnational system of commercial justice and play a central role in steering and overseeing the development of that system. This stems from three key features that such international commercial courts have.³

7. First, international commercial courts handle a significant share of complex cross-jurisdictional disputes in areas of commercial significance. International commercial courts such as the SICC operate at the crossroads of common law, civil law and international commercial practice and because of that, they contribute significantly to the development of the modern lex mercatoria that promotes convergence beyond domestic systems. The fact that their judgments are invariably reasoned and almost always published engenders trust in the value of neutral, rules-based adjudication and, at the same time, this makes a real and direct contribution to the corpus of transnational commercial law.

8. Consider the thorny question of whether crypto assets constitute property despite their intangible nature and their decentralised structure – and if so, what type of property they constitute. Not long ago, the Singapore Court of Appeal had to consider this question in the case of Quoine v B2C2, in an appeal from the SICC. We expressed the tentative view that cryptocurrencies are property capable of being held on trust.⁴  Just two months later, that decision was considered by the New Zealand High Court, which ruled that cryptocurrencies are property,⁵ and since then the courts of England, Australia and Hong Kong have all followed suit.⁶  As international commercial courts take on a growing share of such significant commercial cases, with their judgments almost invariably and universally accessible, we can expect the same cross-citation of decisions and the accompanying cross-pollination of ideas to shape discourse and promote convergence in important global principles and norms.⁷

9. This trend of convergence extends beyond substantive law to procedural norms, which leads to the second feature, which is the ability of international commercial courts to steward and manage the transnational system of commercial justice in a sensible manner. Because international commercial courts almost invariably deal with cross-border disputes, much of their work concerns the resolution of jurisdictional conflicts and the sensible management of parallel proceedings across jurisdictions. This places the body of commercial courts in the driver’s seat in shaping transnational procedural norms to discourage forum shopping and abusive re-litigation. This is a matter of great significance and value to parties involved in such disputes.

10. International commercial courts play a similar role in international arbitration in exercising their jurisdiction as supervisory and enforcement courts. Under the paradigm created by the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration, the grounds for challenging the validity of an award are carefully circumscribed and courts are meant to apply broadly uniform standards for upholding and enforcing awards. By paying due regard to the underlying philosophy of these instruments and by interpreting and applying them in a manner that is faithful to that philosophy while also being broadly consistent across jurisdictions, international commercial courts can significantly reduce unnecessary inefficiencies and the resulting cost of dispute resolution. Such a systemic perspective is reflected in another decision of our Court of Appeal, where we held that the doctrine of transnational issue estoppel applies to prior decisions of a seat court that had ruled on challenges against an arbitral award. What this meant in that case, was that the respondent was precluded from resisting the enforcement of the award in the SICC by relitigating grounds that had already failed before the seat court.⁸  By adopting this position, we promoted a more streamlined and convergent approach to the resolution of challenges to awards and thus promoted the legitimacy and finality of arbitration as a process.⁹ 

11. It follows from this, as the Chief Justice observed, that international commercial courts do not displace arbitration but instead they lend robust support to arbitration where this is the parties' chosen mode of dispute resolution. This is a critically important function of such courts because under the instruments governing the conduct of international commercial arbitration, as Marike observed, the courts act as the gatekeepers through which international awards are integrated into domestic legal systems and enforced in essentially the same way as domestic judgments. A tremendous effort has gone into the development of international arbitration as a globally available means of resolving international commercial disputes and it remains a very important mode of achieving justice. International commercial courts play a vital role in securing this, and by performing this role, they enhance the access that commercial parties have to an array of credible dispute resolution options.¹⁰ 

12. Third, international commercial courts belong to a wider network of courts. The network is organised around platforms that promote judicial collaboration and dialogue on contemporary issues of commercial justice. This encourages the harmonisation of standards and promotes transnational consistency, which are hallmarks of a systemic approach to the administration of commercial justice. A notable example is the Standing International Forum of Commercial Courts (“SIFoCC”), a platform for exchange among judges of commercial courts, so far from nearly 60 jurisdictions, including 70% of the G20 countries.¹¹ SIFoCC holds its sixth full meeting in New Delhi later this week, and it will there explore issues such as common standards in the enforcement of commercial judgments, commercial law issues with reference to climate change and the use of artificial intelligence in legal systems. But at a more granular level, as the examples of the BICC and the SICC demonstrate, international commercial courts can contribute to the growth and vitality of the network by supporting the establishment of new courts or “nodal jurisdictions”. This serves to augment their collective capacity to meet the needs of commerce across the globe.

13. Each of these hallmarks of international commercial courts contribute to their effectiveness as superintendents of the transnational system of commercial justice. But what we have established this week here in Bahrain, I suggest, goes beyond this and breaks entirely new ground, because we have institutionalised a system that incorporates a transnational appellate mechanism as a capstone to the global architecture of commercial justice. Let me explain.

14. The International Committee of the SICC will hear prescribed appeals and related proceedings from prescribed foreign courts, the first of which is the BICC. The Committee draws not only on the expertise of Judges of the Supreme Court of Singapore, but equally on International Judges of the SICC and ad hoc judges from the jurisdiction that refers an appeal. Although the International Committee is Singaporean in nationality, it is utterly international in character and outlook.

16. These features make the International Committee a truly transnational proposition. It is designed to resolve disputes in a manner that accords with the laws and procedures of the legal system from which it receives appeals, even as it formally exists and operates outside of those legal systems. At the same time, users can be assured of the quality of commercial justice and the commitment to neutrality that the International Committee will provide, and this is grounded in the SICC’s experience and reputation as a trusted international forum for dispute resolution. Indeed, from the moment that a claim is commenced in the BICC through to the conclusion of any appeal in the International Committee, we expect the experience of users to be seamless and cohesive. Parties will have their cases heard by two international adjudicative bodies that look, feel and operate in very similar ways and with similar standards that serve the needs of international commerce.

17. The International Committee is unique, and we are confident that it will make a lasting contribution to the transnational system of commercial justice. Let me just outline three reasons for this.

18. First, the Committee provides a robust mechanism for error correction which ensures that genuine errors will not be left unremedied. Where parties have limited means of challenging erroneous decisions, however glaring or consequential these errors may be, the sense of substantive injustice that the losing party experiences can erode trust in the system. By affording the parties the assurance of a second opportunity to make their case before an equally strong and independent forum, we are taking a very important step in the effort to strengthen the legitimacy of the transnational system of commercial justice over the long run.¹⁶

19. Second, this additional layer of error correction in turn enhances the efficiency of proceedings, because it challenges and changes the very psychology of litigation. Parties would no longer have any incentive to front-load proceedings, which is what typically happens when they are presented with a “one-shot” opportunity to make their case without the possibility of an appeal. We have seen this phenomenon play out at times in arbitration, where some parties seek to cover all bases by raising every conceivable argument and taking every available technical objection to the arbitration and even in the effort to set aside an award or resist its enforcement. And this can lead to considerable costs and proceedings that are unnecessarily protracted and contentious.¹⁷

20. The third reason, which is critical, is that there is simply nothing like the transnational appeal mechanism to drive convergence in commercial law. And here, if I may borrow the language of Chief Justice Khalid, the international commercial courts are engines for legal convergence, and this is a mission they discharge, in his words, through judgments rooted in reason and principle. But together, the BICC and the International Committee of the SICC will take this one step further. Imagine for a moment, if you will, a well-established and active transnational body that regularly hears appeals from key nodal jurisdictions. Such a body would have the rare ability to identify recurrent themes that cut across jurisdictions, on issues such as contractual interpretation and standards in arbitration, such as the legal status of crypto assets, and such as the many emerging legal issues arising from the rise of generative AI. Such a body would also have the rare opportunity to develop sensible frameworks for approaching these issues in a broadly aligned manner. All of this can be achieved with a transnational mechanism that funnels a diverse range of cases to the body, enabling it to adopt a truly systemic perspective in the development of transnational commercial law - and that precisely is what we have done here in Bahrain.

21. With the events of the past few days, we have had a glimpse into the future of international commercial dispute resolution through the doorway that the BICC and the International Committee of the SICC have now opened. These institutions are the fruit of an unprecedented collaboration between two sovereign nations to undertake a project that is uniquely designed to advance the rule of law globally. They join the network of international commercial courts not only as its newest members, but as serious contributors fully dedicated to strengthening the legitimacy of the transnational system of commercial justice. This has been a tremendous undertaking that we are all immensely proud and privileged to be a part of, and to bear witness to today. Looking ahead, we are fully committed to continuing our collaboration with Bahrain and to ensuring that these institutions fulfil their extraordinary potential as catalysts of legal convergence and as standard-bearers for the continued development of the transnational system of commercial justice. 

22. Thank you, and I wish all of us a most meaningful and inspiring conference ahead.