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Chief Justice Sundaresh Menon: Lecture to the National Judges College, Beijing

“Transnational Commercial Law and
the Development of the Modern-Day lex mercatoria

Wednesday, 29 November 2023

The Honourable the Chief Justice Sundaresh Menon*
Supreme Court of Singapore

Justice Liu Guixiang, Standing Member of the Adjudication Committee of the Supreme People’s Court of the People’s Republic of China (or “SPC”)
Dr Li Chengyu, President of the National Judges College and President of the Judicial Case Academy of the SPC
My fellow Judges, colleagues, and distinguished guests

I. Introduction 

1.         Good morning. It is a great honour for me to be addressing you this morning, and I am delighted to be back at the National Judges College. I am also extremely pleased to hear that the tree that I planted when I first visited the College in 2017 is flourishing – it continues to serve as a symbol of the strong and enduring friendship between Singapore and China’s judiciaries.

2.         I last spoke at the College in 2019, and at that time, few could have predicted that the world would soon be gripped by the COVID-19 pandemic, which shocked our economic and healthcare systems and laid bare the costs of global interconnectedness.(1) But even before the pandemic, various crises and disruptions had already placed globalisation and our broader rules-based multilateral order under considerable strain. Given that these have been the bedrock of the peace and prosperity that the international community had enjoyed since the Second World War,(2) these realities are deeply troubling. In the aftermath of the pandemic, I suggest that it is more important than ever for us to carefully consider the future of international commerce, because international trade and commerce is a cornerstone of the multilateral order. In particular, my focus this morning is to consider how we can ensure that the legal frameworks that support and govern international commerce continue to be fit for purpose in tomorrow’s world, as we encounter new and changing realities.

3.         In a number of earlier lectures, I have suggested(3) that, despite the absence of a supranational governing body, a transnational system of commercial justice (which I will refer to as the “Transnational System” or the “TSCJ”) has been taking shape over the last several decades, and this has happened organically rather than through any centralised authority. The emergence of this system can be traced to the need for us to facilitate the efficient resolution of international commercial disputes, which are a particular type of disputes. The Transnational System is a complex structure comprising both legal institutions, such as dispute resolution bodies, courts and international organisations, and also the laws and principles that these institutions create and apply.(4) My central thesis this morning is that all of these institutions, and in particular our courts, should adopt a systemic approach to the resolution of transnational commercial disputes and issues. By a “systemic approach”, I mean that we should be resolving the disputes that come before us with appreciation for the fact that our decisions have an impact on the other institutions that form part of the Transnational System. In this way, we can develop what may be thought of as a “modern-day lex mercatoria”,(5) which is a body of commercial laws and practices that operate transnationally, and that can support the Transnational System and sustain our rules-based international order in the face of the challenges that it confronts today.

4.         This morning, I will first describe my vision for the modern-day lex mercatoria. I will then explain how this vision can be realised through meaningful convergence in the approach we take to the interpretation and application of procedural and substantive norms within the Transnational System, as well as between the institutions of the Transnational System.

II. The modern-day lex mercatoria

5.          Let me begin by suggesting a definition of the modern-day lex mercatoria by pointing to a prominent historical example: the medieval law merchant, which emerged in Europe during the Middle Ages. This consisted of a mix of state and private rules, principles and customs which were widely adopted for the purposes of trade and commerce across Europe, and these were eventually absorbed into the national legal systems of European countries, and as a result ceased to exist as a transnational body of laws.(6) There is much academic disagreement over the origins of the lex mercatoria; whether it can be regarded as “law”; and whether it operates as a freestanding supranational body of rules or depends on being incorporated into national laws in order to have legal effect.(7) I do not propose to delve into these debates today. For present purposes, I suggest that this perspective of how the lex mercatoria supplied a body of rules and principles to meet the needs of the merchants in Europe, can help us to understand the modern-day lex mercatoria in broad terms as the matrix of laws, principles, norms and networks that govern various aspects of transnational commercial activity today.(8)

6.         This view of transnational commercial law comes from the perspective of understanding law as the servant of commerce.(9) We have seen the emergence of law and dispute resolution systems over time to meet the needs of commerce and trade.(10) Thus, the medieval law merchant is widely understood to have emerged in response to the commercial renaissance in the Middle Ages,(11) when European merchants needed a set of common rules to govern cross-border trade that would be broadly acceptable to commercial parties regardless of where they came from, and which would facilitate the expeditious and economical resolution of their disputes.(12) In recent times, the modern wave of globalisation has brought about a dramatic expansion of transnational trade and commerce, especially as China and India have emerged as key players in the world economy. In this context, the law must provide a global “currency of trust” that can sustain international commerce when parties are dealing with unfamiliar counterparties around the world. As the law comes to provide a legal framework to govern cross-border commercial transactions, it will also need to ensure that there are trusted, reliable and appropriate mechanisms in place to resolve the disputes that will inevitably arise from these transactions.(13) In order to do this, the law must recognise that international commercial disputes form a special category of disputes – not only because they engage at least two systems of laws with differences in rules, procedures and cultures, but also because the interaction of those systems can give rise to unique and difficult legal questions.(14)

7.         Perhaps the most striking illustration of this point can be seen in the Belt and Road Initiative (or “BRI”), which marks its tenth anniversary this year. To date, China has signed more than 200 BRI cooperation agreements with more than 150 countries and 30 international organisations across five continents, and the BRI has generated US$2 trillion in construction contracts.(15) Given the vast economic and physical scale of the projects involved in the BRI, it is clear that these transactions must be supported by a robust legal infrastructure, and in particular by an effective system for managing the disputes that may arise from it. And to understand the needs of that system, we can imagine the characteristics of the types of disputes that we will encounter. These will often be cross-jurisdictional in scope, complex and technical in nature, and vast in terms of their value and implications.(16)

8.         I suggest that, to effectively regulate projects and disputes like these, the Transnational System and the broader rules-based international order must have at least four key features:

(a) First, it must operate as a coherent system that is more than a collection of separate parts, and this system must be equipped to manage the various conflicts that may arise within the Transnational System itself and among its discrete parts.(17)
(b) Second, it should strive to achieve general consistency, predictability and harmonisation in the outcomes produced by the Transnational System, despite its decentralised structure.
(c) Third, it should provide certainty and predictability as to the legal rights and obligations that are upheld within the Transnational System,(18) including by ensuring finality in the Transnational System’s method of dispute resolution.
(d) Fourth, it should foster collaboration and ensure that transnational commercial law, as it develops, remains grounded in the wider global commercial community of which it is part, and indeed which it is meant to serve.

9.         With this picture in mind, I turn to consider how the Transnational System can be seen in terms of procedural, substantive, and institutional convergence.

III. Procedural convergence

10.         I deal first with convergence in the procedural norms of the Transnational System. This is important because procedural rules regulate the ability of commercial parties to access and obtain the remedies that can realise their legal rights.(19) I will focus on three areas of procedural convergence: first, the allocation of jurisdiction between institutions in the Transnational System; second, the standards governing the process of adjudication within the Transnational System; and third, the effect and enforcement of dispute resolution outcomes within the Transnational System.

A. Allocation of jurisdiction between institutions

11.         First, the rules on the allocation of jurisdiction between institutions in the Transnational System should be developed in a way that helps to reduce the fragmentation of disputes into smaller sub-disputes that are dealt with and managed separately. I can illustrate this point with reference to a decision of the Singapore Court of Appeal in the case of Tomolugen, which concerned a complex dispute, some parts of which were governed by an arbitration agreement between some of the parties, and some parts of which were not governed by the arbitration agreement.

12.         The matter began with an action commenced in the court against all the parties, and those parties who were subject to an arbitration agreement applied to stay the court proceedings to force that part of the dispute to be taken to arbitration. Under Singapore law, if there is an international arbitration agreement between the parties, the court is obliged to stay the court proceedings and refer that matter to arbitration. The first question we had to deal with was whether any part of this very complex dispute was in fact governed by the arbitration agreement. To determine this question, we had to consider what standard of review we had to apply. We chose to apply a low prima facie standard to satisfy ourselves that there appeared to be a valid and operable arbitration clause. In choosing to apply this low standard of review, we were influenced by principles such as judicial non-intervention in arbitration proceedings, and kompetenz-kompetenz, which is the principle that it is for the arbitral tribunal to determine matters of its own jurisdiction. These principles are reflected in the UNCITRAL Model Law on International Commercial Arbitration.(20)

13.         Applying this standard, we concluded that a relatively small part of the overall dispute between some of the parties was governed by the arbitration agreement. But this gave rise to a complication because the arbitration agreement did not apply to some other parts of the dispute, or to some of the other parties involved in the dispute. This gave rise to a risk of separate and concurrent proceedings, some before an arbitral tribunal and some before a court, which was highly unsatisfactory because it could give rise to a real risk of inconsistent outcomes in the two forums. We decided that there was a need for some co-ordination, and we took the lead in co-ordinating the entire dispute. We gave orders to sequence the way in which the dispute would be heard, beginning with the arbitration and then coming to the court proceedings or the remaining issues. We also gave various directions to avoid the risk of inconsistent findings.(21)

14.         This reflects what I suggest is a systemic approach to transnational commercial law and disputes, because it promotes coherence and consistency within the system, and the court acts in this way because it recognises that arbitration and litigation are each complementary and legitimate partners in the system for resolving transnational disputes. The court did not simply deal with the narrow question of whether some part of the dispute was governed by the arbitration agreement, but took into account the entire set of disputes, and strove to make orders that would ensure that these disputes were resolved in a coherent and orderly manner.(22) The Tomolugen case is also a useful illustration of how courts can promote a convergent approach to the resolution of some of the issues that we will face within the Transnational System. Another issue in Tomolugen was whether the dispute pertained to a “matter” covered by the parties’ arbitration agreement. The term “matter” is derived from the UNCITRAL Model Law. In concluding that the court should not take an excessively broad view of a “matter” when determining the scope of the arbitration agreement,(23) an important consideration for the Singapore Court of Appeal was that courts in Australia, the British Virgin Islands and England had retreated from such an approach.(24) Two months ago, in its decision in the Mozambique case, the UK Supreme Court considered Tomolugen and subsequent Australian cases and observed that there was “now a general international consensus”, among leading common law jurisdictions involved in international arbitration, on the determination of “matters” that had to be referred to arbitration.(25) It then proceeded to develop English law in line with that consensus. In this way, different dispute resolution institutions can, over time, come to speak with one voice on the principles governing the allocation of jurisdiction between them in the broader Transnational System.

B. Standards governing the process of adjudication

15.          The second area of procedural convergence I wish to touch on relates to the standards that govern the process of adjudication and the way in which cases are conducted within the Transnational System. In this context, we must strike a balance between ensuring that the process of adjudication is fair and legitimate on one hand, and ensuring the finality of outcomes and resisting cynical attempts to overturn outcomes that have gone adversely.(26)

16.         In the context of international arbitration, because of the increasing tendency to raise arguments that the tribunal was unfair, it has been suggested that arbitrators are sometimes too careful. This has been referred to as “due process paranoia”. This is a negative development because it makes arbitration proceedings much longer and more inefficient. In Jaguar Energy, the Singapore Court of Appeal held that the court should consider what a reasonable and fair-minded tribunal might have done when assessing such challenges, and should give a suitable degree of respect and deference to the decision of the tribunal in procedural matters.(27) We applied this standard because we wanted to assure arbitrators that we would give due regard to their assessment of how they viewed the fairness of the situation that they were confronted with. Standards like these help to deter parties from invoking due process arguments cynically to undermine the finality of arbitral awards, and empower arbitral tribunals to act decisively and robustly in managing the cases before them, while ensuring that safeguards remain in place to protect parties against breaches of natural justice. Similar approaches have been taken in other important jurisdictions, including China, the US and the UK.(28)

C. Effect and enforcement of dispute resolution outcomes

17.         I turn to the third main area of procedural convergence, which concerns the effect and enforcement of dispute resolution outcomes that are arrived at in the Transnational System. I will touch on two avenues for promoting this sort of convergence: first, international instruments for recognition and enforcement; and second, the development of one of our doctrines in the common law that we refer to as transnational issue estoppel.

i.         International instruments for recognition and enforcement

18.         First, international organisations in the Transnational System create and promote instruments that facilitate the recognition and enforcement of dispute resolution outcomes. For example, treaties have established regimes for the enforcement of arbitral awards;(29) or judgments arising from exclusive jurisdiction agreements(30) or international commercial mediated settlement agreements.(31) Then, there are non-binding instruments like the Memorandum of Guidance signed by the Supreme Courts of Singapore and China, on the recognition and enforcement of money judgments in commercial cases.(32) And then there are academic works that provide practical guidance, such as the Asian Principles for the Recognition and Enforcement of Foreign Judgments published by the Asian Business Law Institute (or “ABLI”).(33)

19.         These instruments all generally point to a common picture, and provide for the recognition and enforcement of judgments or awards with only narrow grounds of challenge relating to jurisdiction, due process violations or public policy. They also prevent the merits review of the earlier decisions, so as to prevent the relitigation of matters and to promote certainty and finality.

20.         But these principles are only part of the picture, and the more important question is how these principles are applied by courts within the Transnational System. Let me give an example from the field of insolvency. The UNCITRAL Model Law on Cross-Border Insolvency establishes simplified procedures for the recognition of certain orders issued by foreign courts,(34) and provides a useful framework for securing the orderly resolution of cross-border insolvencies.(35) But the scope and effect of the Model Law in practice will depend on how its wording – or the wording of legislation based on it – is interpreted by the courts in each jurisdiction. In the recent case of Ascentra Holdings, the Singapore Court of Appeal had to consider the interpretation of the term “foreign proceeding” in Art 2(h) of the Model Law, as enacted in Singapore. We adopted what we referred to as the “Broad Approach”, holding that it was not necessary to establish that a foreign company was insolvent or in severe financial distress before a proceeding concerning it could be recognised as a “foreign proceeding”. We proceeded to recognise the foreign liquidation in this case as a foreign main proceeding in Singapore.(36)

21.         Notably, one factor that militated in favour of adopting the Broad Approach was our desire to ensure that our interpretation of Art 2(h) was broadly harmonious with the approaches taken in other jurisdictions.(37) We therefore considered the positions taken by the US, the UK, Australia and New Zealand in arriving at our conclusion on this issue. This international perspective pays regard to the international origin of instruments like the Model Law,(38) and contributes to ensuring consistency in the Transnational System.

ii.         Transnational issue estoppel

22.         Another tool that common law courts can use to achieve convergence is the doctrine of transnational issue estoppel. Although this is a common law principle, we were introduced at yesterday’s Roundtable to a similar concept in Chinese law, known as the principle of moderate courtesy in parallel proceedings. In essence, final and conclusive judgments of a foreign court of competent jurisdiction will preclude the merits of the dispute subsequently being relitigated before a court in another jurisdiction. This is an important way in which the common law courts, as dispute resolution bodies in the Transnational System, can ensure the finality of decisions emanating from elsewhere in the Transnational System. The doctrine of transnational issue estoppel was accepted and applied by the Singapore Court of Appeal in the case of Merck Sharp.(39)

23.         This takes a systemic approach to transnational commercial justice, instead of one that is narrowly court- or jurisdiction-centric.(40) But even as a systemic approach calls for consistency and finality on the transnational plane, the important constitutional role of national courts in safeguarding their domestic legal orders must also be preserved. Thus, in Merck Sharp, the court was cognisant of the delicate balance that had to be struck between these competing considerations in determining the precise contours of the doctrine of transnational issue estoppel.(41) For example, the doctrine might not apply where the issue in question engages the public policy of the forum, or where there is a mandatory law of the forum that applies irrespective of the foreign elements of the case and irrespective of any choice of law rule.(42) Managing this tension between diversity and uniformity is important for the coherence of the Transnational System as a system because national courts, too, are legal institutions of the Transnational System; and their legitimate space as custodians of the rule of law within their respective jurisdictions must continue to be respected, even as we adopt an increasingly international outlook.(43) The common law courts should therefore have both their domestic and transnational roles in mind as they develop the specific rules on transnational issue estoppel in their respective jurisdictions.

IV. Substantive convergence

24.         I want to turn to make some remarks on substantive convergence in the Transnational System, which has been more modest. This is unsurprising given that the substantive laws of different jurisdictions must account for legitimate differences in their domestic legal systems, such that the modern-day lex mercatoria should not seek to be a supranational body of law governing all aspects of commercial life.(44) But some degree of harmonisation of substantive law would still be beneficial. If the primary function of commercial law is to “provide tools for economic and social enterprise”, general consistency in substantive outcomes is a key aspect of securing, for commercial parties, greater confidence in a “worldwide market”;(45) conversely, the fragmentation of commercial laws across jurisdictions will increase business risks and transaction costs, and diminish the attractions of cross-border trade. As I observed on the last occasion that I spoke at this College, the variance and heterogeneity of laws within Asia is a particular concern because we have different systems of law operating here and these are fused with local customs and conventions.(46)

25.         To achieve a meaningful harmonisation of substantive law, I suggest that the modern-day lex mercatoria should strive for convergence not only in what might be regarded as “traditional” areas of commercial law, but also in two adjacent areas that are important to the continued health and resilience of the Transnational System: namely, the law’s responses to broader global issues with implications for commercial practice, and norms of governance and commercial behaviour.

A. Traditional areas of commercial law

26.         There has already been significant convergence in some “traditional” areas of commercial law. Let me give two examples:

(a) First, in the law of international sales, the widely used Vienna Convention on Contracts for the International Sale of Goods(47) has driven convergence in national laws on domestic sales by serving as a model for such laws in – among other jurisdictions – China.(48)
(b) Second, in the law of contract, non-binding codes of legal principles like the UNIDROIT Principles of International Commercial Contracts (or “UPICC”) have inspired some degree of harmonisation of general contract law, across the common law and civil law divide. For instance, China’s Civil Code, enacted in May 2020, draws on the UPICC.(49) Harmonisation has also been advanced through the prevalence of standard form contracts in specialised areas like international construction law, due to the wide use of instruments like the International Federation of Consulting Engineers’ standard form contracts in cross-border construction projects.(50)

27.         Let me also mention, with particular relevance to the BRI, the work of the Singapore Judicial College and the National Judges College in publishing a compendium of Singapore and Chinese cases relevant to the BRI. We have also conducted several joint case forums where selected cases from both our jurisdictions are discussed. These efforts help us understand each other’s laws, and identify common ground and potential areas of substantive convergence within our systems even though we have different legal traditions.

B. Broader global issues with implications for commercial practice

28.         The modern-day lex mercatoria cannot, however, only be concerned with traditional domains of commercial law and practice; nor should it approach these areas as a purely private enterprise. Instead, international commerce today is inextricably bound up with the global realities of our day, which require collective action and multilateral solutions.(51) The law’s responses to these broader issues, which themselves have implications for commercial practice, will therefore assume increasing importance – and transnational commercial law should thus seek convergence in the substantive norms that will form part of the global response to these challenges.(52) I will focus on two areas where there may be a particularly pressing need for such convergence: climate change, and the regulation of digital assets.

i.         Climate change

29.         The first is climate change, which poses a grave existential threat to humanity. If we are to mount a cohesive response to this threat, it will be imperative for all of us, as a global community, to stand together in committing to a more sustainable model of economic growth that does not come at the cost of our collective future.(53) The institutions of the Transnational System can play an important role in leading such change.

30.         Dispute resolution bodies, such as international commercial courts and arbitral tribunals, can help to develop the legal framework governing climate change issues by articulating the environmental obligations owed by various actors. For example, in Aven v Costa Rica, an arbitral tribunal held that an investor could in principle be held liable for breaching international legal obligations relating to the environment.(54) These institutions may also be called upon to interpret and enforce environmental obligations in the process of resolving climate change-related commercial disputes, and in doing so, they can give content and effect to those obligations.(55)

31.         Beyond dispute resolution bodies, the broader legal and commercial communities can also play their part in facilitating a convergence of commercial practice in relation to environmental protection. For example, the Chancery Lane Project – a global collaboration between lawyers – has published template clauses that advance climate-related goals, such as clauses that embed green obligations into a company’s articles of association, and contractual provisions that link the ultimate sum payable under a contract to the meeting of emissions targets.(56) And in relation to the BRI, the Green Investment Principles (“GIP”) – which were developed by the China Society for Finance and Banking’s Green Finance Committee and the City of London Corporation’s Green Finance Initiative – encourage signatories to incorporate environmental, social and governance factors into their corporate strategies and management systems, and to utilise green financial instruments and green supply chain practices.(57) When companies incorporate environmental protection and sustainability considerations into their private dealings and operations, without the need for national or international intervention or legislative action,(58) they make a powerful contribution to shaping global standards that support our collective fight against climate change.

32.         In this way, the Transnational System can, over time, facilitate the emergence of a “lex mercatoria climatique(59) – a body of norms that can guide and govern the greener conduct of global commerce.(60)

ii.         Regulation of digital assets

33.         Another area in which the modern-day lex mercatoria should address and achieve substantive convergence is in the regulation of digital assets, such as cryptocurrencies, non-fungible tokens, and works created by artificial intelligence. This is a vast, complex and ever-changing field, and there is as yet no international framework that regulates these issues. Given the borderless nature of these assets, some degree of substantive convergence in how different jurisdictions regard and regulate them may be not only desirable, but indeed a practical necessity.

34.         Dispute resolution bodies in the Transnational System can provide valuable guidance on the legal properties of new digital assets, and these decisions can contribute to the development over time of a body of international jurisprudence on the subject. For example, in its 2020, the Singapore Court of Appeal in the Quoine case suggested that cryptocurrencies may be capable of being recognised as property, and this was then followed by the New Zealand High Court a few months later.(61) By considering what other courts have said, we can see the emergence of a broadly consistent approach to these very new and challenging issues. What is unusual is that, traditionally, the law has come behind commercial practice; but we see that in the modern Transnational System, the law is having to keep pace with the rapid changes in society. Quoine was also referred to by courts in England and Australia.(62) And just a few months ago, in the case of ByBit Fintech, our High Court held that the holder of a crypto asset has, in principle, an incorporeal right of property recognisable by the common law as a thing in action and so enforceable in court.(63) If jurisdictions around the world adopt broadly similar positions, the Transnational System as a whole would be able to offer a consistent response to questions regarding the legal nature and properties of digital assets. This, in turn, would offer the holders of such assets some certainty that similar kinds of protection would be afforded to them across jurisdictions.

35.         Looking ahead, international instruments can also assist in driving convergence by drawing on the rich and varied experiences and expertise of different jurisdictions to chart possible paths forward. For instance, the UNIDROIT Principles on Digital Assets and Private Law – which treat digital assets as capable of being subject to proprietary rights, and which seek to provide clear rules for key aspects of commercial transactions involving such assets – were developed by a Working Group comprising experts from a range of legal systems and backgrounds.(64) The draft Principles also underwent public consultation with the express aim of ensuring their suitability for application across civil and common law jurisdictions, as well as in developing and developed economies and emerging markets.(65)

36.         These are just two areas in which I suggest substantive convergence will be important, and there are no doubt others. But what these areas highlight is the need for the modern-day iteration of the lex mercatoria to seek to lead some aspects of the development of commercial practice, by setting standards for the future. In 2015, I observed that the lex mercatoria had historically lagged behind commercial practice, in that it had either been a result of or a reaction to prevailing economic conditions, and that we could ill afford to be so passive in an age of globalisation and rapid technological change.(66) The past eight years have more than borne out this observation – indeed, the urgency of the threat posed by climate change, and the pace and scope of technological change, are exponentially greater today. An important dimension of the modern-day lex mercatoria will therefore be its role in shaping our collective responses to these global issues, as well as the others that will no doubt emerge in time to come.

C. Norms of governance and commercial behaviour

37.         Aside from coordinating efforts to address the global issues of the day, the modern-day lex mercatoria should also facilitate and reinforce substantive convergence in an area of enduring importance – strengthening the international rule of law. It can do so by developing and enforcing norms of governance and commercial behaviour,(67) some of which may in turn come to be considered norms of transnational public policy in the Transnational System.

38.         An example of such a norm is the law’s strong and uniform condemnation of bribery and corruption.(68) In the case of Lao Holdings, the Singapore International Commercial Court (or “SICC”) was faced with an application to set aside two investor-state arbitral awards, where the parties had reached an agreement not to admit any further evidence after a certain point in time. The arbitral tribunals, however, read into this agreement an exception for “compelling circumstances”, which would include cases where there was an attempt to introduce evidence of corruption. Before the SICC, the applicants argued that the tribunals should not have admitted the further evidence that they did, as this departed from the parties’ agreed procedure. The SICC dismissed this challenge to the awards on the ground that the tribunals’ interpretation of the parties’ agreement could not be reviewed de novo by the court. But the SICC also went further by holding, obiter, that arbitrators had a public duty to proactively consider evidence of possible corruption – which included illegal conduct, bribery and fraud – and this could not be precluded by the parties’ agreement.(69) The problem of bribery and corruption tainting arbitration proceedings came to the fore very recently in the case of Nigeria v Process & Industrial Developments Limited, where the English High Court held that the arbitral tribunal’s awards had been procured by fraud and were contrary to public policy. The company that had succeeded in the arbitration got an award for more than US$6 billion, and was found to have knowingly provided false evidence and to have bribed a civil servant in Nigeria. As the court noted, what had happened in this case was very serious indeed, and it was important that Nigeria had been able to successfully challenge the awards in order to maintain the rule of law.(70) The decision was a victory for the rule of law.

39.         We have seen similar examples of the courts enforcing the international rule of law in other cases, and in doing this, the modern-day lex mercatoria can support a more sustainable vision of globalisation, development and transnational commerce, and safeguard the legitimacy of the Transnational System as a rules-based international legal order.(71)

V.         Institutional convergence

40.         The third and final type of convergence that I wish to discuss today is convergence between the institutions of the Transnational System. The unprecedented interconnectivity we enjoy today allows for a level of transnational communication, collaboration and exchange between institutions in the Transnational System that the medieval lex mercatoria could not have dreamt of, and this enables the modern-day lex mercatoria to supplement procedural and substantive convergence with institutional convergence.(72) I will focus on two specific forms of such convergence: mechanisms for international judicial cooperation, and international commercial courts (or “ICCs”).

A. Mechanisms for international judicial cooperation

41.         I deal first with mechanisms for international judicial cooperation. Our two jurisdictions have collaborated closely and as a result, over the past few years, we have established several frameworks to facilitate and strengthen such cooperation. Let me give two examples.

42.         First, our Supreme Court has concluded memoranda of understanding (“MOUs”) on references of questions of foreign law with several courts,(73) including the SPC. Our MOU with the SPC establishes an innovative mechanism for one party to provide the other with information and non-binding opinions on its domestic law and judicial practice in civil and commercial matters, for the purpose of ongoing proceedings,(74) and this greatly simplifies the process of ascertaining complex points of foreign law.(75)

43.         Second, just this April, our Supreme Court concluded an MOU with the SPC on the management of international commercial disputes in the context of the BRI through a “Litigation-Mediation-Litigation” (or “LML”) framework.(76) The LML framework will be developed and implemented through the SICC and the China International Commercial Court (or “CICC”). Under the framework, each party will recommend the adoption of certain LML Model Clauses, and each party will share with the other information on its LML framework and other dispute management practices. This is a historic milestone in our endeavour to develop a bespoke dispute management framework for disputes arising from complex and large-scale BRI projects,(77) and I am confident that it will yield considerable benefits in the years to come.

44.         In an age where commercial disputes increasingly have foreign or international elements, mechanisms like these enable our courts to work together to surmount practical obstacles that would have been much more difficult to deal with alone. These mechanisms also help our courts to harness one another’s expertise to advance the aim of contextuality, by tailoring dispute management processes to the nature of the dispute and the circumstances of the parties in each case;(78) and they encourage synergy between different types of dispute resolution bodies with a view to ensuring the effective and efficient overall resolution of the dispute at hand. As we develop the modern-day lex mercatoria, we should make full use of these mechanisms in managing transnational commercial disputes, while continuing to explore new and innovative ways in which our institutions can collaborate with and learn from one another.

B. International commercial courts

45.         The second form of institutional convergence is the rise of ICCs, such as the SICC and the CICC, which have emerged to meet the unique demands of modern transnational commerce. ICCs form an important part of the modern-day lex mercatoria because they provide a mode of dispute resolution that is thoroughly international in outlook, going beyond what may be possible within domestic legal systems.(79) This is so in at least three ways.

46.         First, ICCs – with their bespoke procedural regimes – can offer specialised procedural rules and tools that are tailored to the resolution of complex international commercial disputes, and that can be more responsive to international best practices and cutting-edge innovations.(80) For instance, the SICC’s voluntary Simplified Adjudication Process Protocol offers the option of streamlined processes for technology, infrastructure and construction cases, which might otherwise easily become unwieldy due to the technical complexity and voluminous evidence involved.(81)

47.         Second, ICCs can draw on the richness of international expertise and experience, thus expanding the pool of commercial legal talent on the bench and at the bar. For example, the SICC is tremendously enriched by its more liberal rules on foreign representation and its bench of International Judges, who are eminent commercial jurists hailing from a variety of common law and civil law jurisdictions.(82) Most recently, the SICC welcomed Justice Zhang Yongjian to its ranks.(83) Similarly, the CICC’s International Commercial Expert Committee includes both Chinese and foreign experts, such as my colleague Justice Steven Chong.(84)

48.         Third, ICCs can drive inter-jurisdictional dialogue and cooperation by participating in global networks like the Standing International Forum of Commercial Courts (or “SIFoCC”). These networks, in turn, can also offer valuable opportunities for engagement with other kinds of institutions in the Transnational System – for example, at its Full Meeting last year, the SIFoCC invited representatives from arbitration and mediation institutions to join its discussions.(85)

49.         These features make ICCs uniquely positioned to take the lead in driving further procedural and substantive convergence.(86) For example, in the field of procedural norms, ICCs are often called upon to rule on jurisdictional conflicts between courts, as well as between courts and arbitral tribunals. And in the field of substantive norms, the international character of ICCs enables their decisions to influence the development of the law in other countries, making them important contributors to the development of a coherent and sophisticated body of transnational commercial law.(87) For example, it has been suggested that the “outsized global influence” of the decision in Quoine – which was decided by the Singapore Court of Appeal on appeal from the SICC – is attributable in part to networks such as the “overlapping professional circles” of the English judges involved in the work of both the SICC and the English High Court; the fact that some of the SICC’s International Judges practise as arbitrators, which may have further facilitated the diffusion of the SICC’s jurisprudence into international commercial law; and the shared lingua franca of the English common law, which enabled the rapid migration of legal concepts.(88)

50.         In these ways, ICCs are both a product and an important driver of convergence. As such, they are poised to play a central role in developing the modern-day lex mercatoria.

VI. Conclusion

51.         Let me conclude by taking a step back to consider the place of the modern-day lex mercatoria in the evolution of transnational commercial law. The modern-day lex mercatoria has developed in a decentralised and fairly organic way to support transnational commerce and its growth over the last few decades. Yet, the fact that there has already been a significant degree of procedural, substantive and institutional convergence in the Transnational System suggests that it rests on solid foundations.(89)

52.         When I addressed the College in 2019, I described the “story of convergence” in this field as “an endeavour without end”.(90) Four years later, this story continues to be written – and the principal authors of its next chapter will be all of us who are in a position to shape the development of the modern-day lex mercatoria. The new and varied challenges that confront our societies and the world mean that this will not be an easy task. But, by adopting a systemic approach to these issues, I believe we can establish a modern-day lex mercatoria that can overcome these challenges, secure the strength of the Transnational System, and support transnational commerce and its development in the next chapter.

53.         Thank you very much.

* I am deeply grateful to my colleagues, Assistant Registrars Tan Ee Kuan and Wee Yen Jean, for all their assistance in the research for and preparation of this address.

1       See Sundaresh Menon CJ, “Introduction: Justice in a Globalised Age” in Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Sundaresh Menon and Anselmo Reyes (eds)) (Hart Publishing, 2022) (“Justice in a Globalised Age”) at p 7.

2       See Sundaresh Menon CJ, “The Transnational System of Commercial Justice and the Place of International Commercial Courts”, Lecture in Bahrain (9 May 2023) (“Bahrain Lecture”) at paras 14–15.

3       See, eg, Sundaresh Menon CJ, “The Law of Commerce in the 21st Century: Transnational Commercial Justice Amidst the Wax and Wane of Globalisation”, lecture hosted by the University of Western Australia Law School and the Supreme Court of Western Australia (27 July 2022) (“UWA Lecture”) at paras 17 and 45; the Bahrain Lecture at paras 18 and 30; and Sundaresh Menon CJ, “International Collaboration in the Transnational System of Commercial Justice”, speech to the Indonesian Judiciary (7 November 2023) at para 2.

4       See the Bahrain Lecture at paras 2, 4 and 12.

5       See Sundaresh Menon CJ, “SIFoCC Playing its Part as a Cornerstone of a Transnational System of Commercial Justice”, address at the 4th Full Meeting of the Standing International Forum of Commercial Courts (20 October 2022) (“SIFoCC Address”) at para 12; UWA Lecture at para 19; and Sundaresh Menon CJ, “Doing Business Across Asia: Legal Convergence in an Asian Century”, keynote address (21 January 2016) (“Legal Convergence in an Asian Century”) at para 17.

6       See the Bahrain Lecture at para 5 and Sundaresh Menon CJ, “Developing a System of International Commercial Dispute Resolution: The Role of Commercial Courts”, speech to the Indonesian Judiciary (14 March 2023) (“Speech to the Indonesian Judiciary”) at para 5.

7       See Tiong Min Yeo, “Developing the lex mercatoria” in Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Sundaresh Menon and Anselmo Reyes (eds)) (Hart Publishing, 2022), ch 10 (“Developing the lex mercatoria”) at pp 270–272.

8       See Developing the lex mercatoria at p 276.

9       See Lord Bingham of Cornhill, “The Law as the Handmaid of Commerce”, speech at the 16th Sultan Azlan Shah Law Lecture 2001 (5 September 2001).

10       See James Allsop and Samuel Walpole, “International Commercial Dispute Resolution as a System” in Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Sundaresh Menon and Anselmo Reyes (eds)) (Hart Publishing, 2022), ch 2 (“ICDR as a System”) at p 49.

11       See ICDR as a System at p 49 and Legal Convergence in an Asian Century at para 17.

12       See Developing the lex mercatoria at p 269 and the Bahrain Lecture at para 5.

13       See Sundaresh Menon CJ, “The Settlement of International Commercial Disputes: Alternative Dispute Resolution, Commercial Courts and the Convergence of Commercial Laws”, lecture to the National Judges College (29 August 2019) (“2019 NJC Lecture”) at para 5; Justice in a Globalised Age at pp 3–4; and the Bahrain Lecture at paras 2 and 13.

14       See 2019 NJC Lecture at paras 10–14.

15       See The State Council Information Office of the People’s Republic of China, “The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future”, white paper (10 October 2023) at

16       See 2019 NJC Lecture at para 20.

17       See Developing the lex mercatoria at pp 277–278 and 282.

18       See Pak Hei Li, “A Bird’s Eye View of International Commercial Dispute Resolution” in Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Sundaresh Menon and Anselmo Reyes (eds)) (Hart Publishing, 2022), ch 1 at pp 32–33; see also ICDR as a System at p 72.

19       See the Bahrain Lecture at para 19.

20       Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 (“Tomolugen”) at [63], [65] and [67]–[68].

21       Tomolugen at [186]–[190].

22       See the Bahrain Lecture at paras 32–33; Justice in a Globalised Age at pp 23–24; and ICDR as a System at p 60.

23       Tomolugen at [113].

24       Tomolugen at [115]–[120].

25       Republic of Mozambique (acting through its Attorney General) v Privinvest Shipbuilding SAL (Holding) and others [2023] UKSC 32 at [64], [71] and [76].

26       See the Bahrain Lecture at paras 34–35.

27       China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another [2020] 1 SLR 695 at [104(c)] and [104(d)].

28       See the Bahrain Lecture at para 36 and Sundaresh Menon CJ, “Dispelling Due Process Paranoia: Fairness, Efficiency and the Rule of Law”, Chartered Institute of Arbitrators Australia Annual Lecture 2020 (13 October 2020) at para 25.

29       United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958).

30       Hague Conference of Private International Law, Convention on Choice of Court Agreements (The Hague, 30 June 2005).

31       United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore, 20 December 2018).

32       Memorandum of Guidance between the Supreme People’s Court of the People’s Republic of China and the Supreme Court of Singapore on Recognition and Enforcement of Money Judgments in Commercial Cases (31 August 2018).

33       See the Asian Business Law Institute, “Asian Principles for the Recognition and Enforcement of Foreign Judgments”:

34       United Nations Commission on International Trade Law, Model Law on Cross-Border Insolvency (1997).

35       See the Bahrain Lecture at para 43.

36       Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd [2023] SGCA 32 (“Ascentra Holdings”) at [98] and [114]–[115].

37       Ascentra Holdings at [69]–[92].

38       See also Art 8 of the Model Law, which provides that “[i]n the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith”.

39       See Merck Sharp & Dohme Corp (formerly known as Merck & Co, Inc) v Merck KGaA (formerly known as E Merck) [2021] 1 SLR 1102 (“Merck Sharp”) at [25] and [35].

40       See the UWA Lecture at para 24.

41       See Merck Sharp at [33], [34] and [52].

42       See Merck Sharp at [54]–[55] (obiter).

43       See Developing the lex mercatoria at pp 274–275.

44       See the Bahrain Lecture at para 23 and the Speech to the Indonesian Judiciary at para 6.

45       See Arthur Rosett, “Unification, Harmonization, Restatement, Codification, and Reform in International Commercial Law” (1992) 40 American Journal of Comparative Law 683 at 685, cited in ICDR as a System at p 71.

46       See the 2019 NJC Lecture at para 38 and Legal Convergence in an Asian Century at para 6.

47       United Nations Convention on Contracts for the International Sale of Goods (11 April 1980; entered into force on 1 January 1988).

48       See the Bahrain Lecture at para 23(a); see also Michael Joachim Bonell, “The CISG, European Contract Law and the Development of a World Contract Law” (2008) 56(1) The American Journal of Comparative Law 1.

49       See Developing the lex mercatoria at p 280.

50       See the Bahrain Lecture at paras 23(b) and 23(c); see also (in respect of the UPICC) International Bar Association, “Perspectives in Practice of the UNIDROIT Principles 2016” (2019).

51       See Justice in a Globalised Age at p 11.

52       See Pamela Bookman and Alyssa King, “Conclusion: Transnational Dispute Resolution, International Commercial Courts, and the Future of International Commercial Law” in Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Sundaresh Menon and Anselmo Reyes (eds)) (Hart Publishing, 2022) (“The Future of International Commercial Law”) at p 338; see also the Bahrain Lecture at para 16.

53       See Justice in a Globalised Age at pp 6–7 and 9.

54       David Aven v The Republic of Costa Rica, Case No UNCT/15/3, Final Award at [738] and [742].

55       See (in the context of international commercial arbitration) Lucia Bíziková, “On Route to Climate Justice: The Greta Effect on International Commercial Arbitration” (2022) 39(1) Journal of International Arbitration 79 at 80.

56       See The Chancery Lane Project, “Green Company Articles” and “Climate-Linked Contractual Discretions”: and; see also the Bahrain Lecture at para 16.

57       See the Green Investment Principles website at; see also the Green Finance & Development Center, “The Green Investment Principle (GIP) for the Belt and Road Initiative”:

58       See Jason Lin, “An Anatomy of the lex mercatoria” in Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Sundaresh Menon and Anselmo Reyes (eds)) (Hart Publishing, 2022) ch 9 (“Anatomy of the lex mercatoria”) at p 252, citing Mathilde Hautereau-Boutonnet, “Une illustration du droit global, la lex mercatoria climatique” (2017) 14 Revista de Direito Internacional 31 (Brazil Journal of International Law, Global Environmental Law supplement).

59       See Anatomy of the lex mercatoria at p 252.

60       See the SIFoCC Address at para 11.

61       Ruscoe v Cryptopia Ltd (in liquidation) [2020] 2 NZLR 809 at [77]–[84].

62       See The Future of International Commercial Law at p 332.

63       ByBit Fintech Ltd v Ho Kai Xin and others [2023] SGHC 199 at [36].

64       See the International Institute for the Unification of Private Law (“UNIDROIT”), “Digital Assets and Private Law”:

65       See UNIDROIT, “Digital Assets and Private Law – Public Consultation”:

66       See Sundaresh Menon CJ, “Roadmaps for the Transnational Convergence of Commercial Law: Lessons Learnt from the Convention on Contracts for the International Sale of Goods” (23 April 2015) at para 31.

67       See Sundaresh Menon CJ, “Dispute Resolution at the Intersection of Domestic and Transnational Justice Systems: The Case for International Commercial Courts”, keynote address at the 7th International Bar Association Asia Pacific Regional Forum Biennial Conference (23 February 2023) (“IBA Address”) at paras 35–36.

68       See ICDR as a System at p 67 and Stavros Brekoulakis, “Transnational Public Policy in International Arbitration” in The Oxford Handbook of International Arbitration (Thomas Schultz and Federico Ortino (eds)) (Oxford University Press, 2020) at p 135.

69       Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter [2021] 5 SLR 228 at [152]–[154]; upheld on appeal by the SGCA in Lao Holdings NV and another v Government of the Lao People’s Democratic Republic [2023] 1 SLR 55.

70       The Federal Republic of Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638 (Comm) at [493]–[497] and [574]–[575].

71       See Justice in a Globalised Age at pp 2, 9, 15 and 25 and ICDR as a System at pp 63–64.

72       See Justice in a Globalised Age at p 14 and ICDR as a System at p 79.

73       See SG Courts, “References of questions of law between Singapore and foreign courts”:

74       Memorandum of Understanding on Cooperation between the Supreme Court of the Republic of Singapore and the Supreme People’s Court of the People’s Republic of China on Information on Foreign Law (3 December 2021).

75       See the Bahrain Lecture at para 45(b).

76       Memorandum of Understanding on Cooperation between the Supreme Court of the Republic of Singapore and the Supreme People’s Court of the People’s Republic of China on the Management of International Commercial Disputes in the Context of the Belt and Road Initiative through a Litigation-Mediation-Litigation Framework (1 April 2023).

77       See Sundaresh Menon CJ, remarks at the signing ceremony for the Memorandum of Understanding on Cooperation between the Supreme Court of the Republic of Singapore and the Supreme People’s Court of the People’s Republic of China on the Management of International Commercial Disputes in the Context of the Belt and Road Initiative through a Litigation-Mediation-Litigation Framework (7 February 2023) at paras 2–4.

78       See the Bahrain Lecture at para 61.

79       See the IBA Address at paras 4, 6 and 13.

80       See the Bahrain Lecture at paras 60–63 and the IBA Address at paras 21–27.

81       See the Singapore International Commercial Court Rules 2021, O 28 r 10 and Appendix E.

82       See the Bahrain Lecture at paras 56–59 and 64–65, and the IBA Address at paras 14 and 19–20.

83       See Supreme Court of Singapore, “New appointment of International Judge to the Singapore International Commercial Court” (3 January 2023):

84       See Supreme Court of Singapore, “Appointment of Justice Steven Chong as an Expert Member of the International Commercial Expert Committee” (9 December 2020):

85       See the Bahrain Lecture at paras 10 and 47 and the SIFoCC Address at para 33.

86       See the IBA Address at para 34.

87       See the 2019 NJC Lecture at para 47.

88       See The Future of International Commercial Law at pp 332–334.

89       See the Bahrain Lecture at para 18.

90       See the 2019 NJC Lecture at para 50.


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