from abu dhabi to singapore: the rise of international ... · addition, the english language has...

Abstract—This paper discusses the creation of two new

international commercial courts in Abu Dhabi and Singapore,

respectively. These judiciaries appear to be partly building

upon the success of specialized court systems in Dubai and

Qatar that follow the common law model

Keywords— International Business Law, Courts, Abu Dhabi,

Singapore.

I. INTRODUCTION

S international trade volumes and foreign investment

flows grow, there is bound to be an increase in

transnational business disputes. Some of these disputes

are handled by means of litigation in dedicated courts with

judges who have expertise in resolving complex commercial

matters. Many others end up being arbitrated.

Presently, Abu Dhabi and Singapore are both in the process

of setting up international commercial courts to handle certain

types of transnational business disputes. This paper will briefly

discuss these new judiciaries. The paper will argue that the

authorities in both places appear to have been inspired by the

success stories of courts in certain other jurisdictions.

To varying degrees, Dubai and Qatar seemed to have

influenced Abu Dhabi and Singapore. As will be described

later, both Dubai and Qatar established specialized courts that

use the common law model to resolve transnational business

disputes

II. COMMERCIAL COURTS

Those business disputes, like contracts cases, that cannot be

resolved through nonbinding means such as negotiation or

mediation are normally resolved through either commercial

arbitration or litigation. When it comes to litigation, some

jurisdictions have developed specialized courts to handle

business disputes [1].

The idea of a specialized commercial court can be traced

back at least to England's Commercial Court, which has its

roots in the late 19th century [2]. The Commercial Court,

which is based in London, is a part of the Queen's Bench

Division of the High Court [3]. Given London's status as a

global business destination, a significant number of the cases

in the Commercial Court have a foreign dimension.

Damien P. Horigan is an Associate Professor of Business at the American

University of Afghanistan, Kabul, Afghanistan (e-mail:

[email protected])

Although there is no exact equivalent to the Commercial

Court in the United States, many large business disputes are

heard by a federal trial court known as the United States

District Court for the Southern District of New York, which

mostly sits in Manhattan [4]. Business disputes can also be

heard in state courts. For instance, the Delaware Court of

Chancery handles many matters related to corporate law

because numerous American corporations are legally

incorporated in Delaware regardless of where the actual

corporate headquarters might be located [5].

III. THE COMMON LAW

The common law is a system of law that developed over the

course of several centuries in England and Wales [6]. Largely

as a result of the British Empire, English law reached far

beyond the British Isles. As it spread to various parts of the

world, the common law was modified to suit local conditions.

Today one can speak of a family of different jurisdictions that,

despite significant individual differences among them, all

share the common law.

Another major legal family is the civil law family, which

traces its origins to Roman law [7]. Most jurisdictions in

Europe and Latin America clearly belong to this family

although each is unique. Yet, a number of other jurisdictions

have mixed legal systems that combine elements of civil law,

the common law, and sometimes additional influences [8].

Besides the common law and civil law, there are other legal

systems such as Islamic law [9]. However, many Muslim

nations including various Arab countries actually follow a

mixed system based on aspects of both civil law and Islamic

law [10].

Customary law is yet another source of law in some

countries. For example, the Afghan legal system mixes aspects

of civil law, Islamic law, and customary law [11]. In other

words, Afghanistan exhibits a high degree of legal pluralism.

The common law is significant to this paper because several

key financial hubs, like London, New York, and Hong Kong to

name but three, happen to be in common law jurisdictions. In

addition, the English language has become the global language

of business. As a result, many international contracts are

drafted in English [12].

IV. ABU DHABI

Because this conference is being held in Abu Dubai, it

makes sense to start with Abu Dhabi rather than Singapore.

Briefly, Abu Dhabi is one of the seven emirates that comprise

From Abu Dhabi to Singapore: The Rise of

International Commercial Courts

Damien P. Horigan

A

International Journal of Humanities and Management Sciences (IJHMS) Volume 3, Issue 2 (2015) ISSN 2320–4044 (Online)

78

the federation known as the United Arab Emirates, or UAE,

with the six other emirates being Dubai, Sharjah, Ras Al

Khaimah, Ajman, Umm Al Quwain, and Fujairah [13]. The

city part of Abu Dhabi functions as the capital of the UAE

[14].

Among the seven emirates, Abu Dhabi is the largest in terms

of land area [15]. The UAE is a major energy producer with

Abu Dhabi having most of the country’s oil and natural gas

reserves [16]. Hydrocarbons have fueled Abu Dhabi's

development, but now the emirate is diversifying its economy

[17].

V. ABU DHABI GLOBAL MARKET

In an effort to further diversify its economy, the government

of Abu Dhabi announced plans to establish a financial free

zone. This zone is now known as the Abu Dhabi Global

Market or ADGM [18].

The ADGM appears to have been partly inspired by earlier

projects in the neighboring emirate of Dubai and the nearby

Arab country of Qatar [19]. Dubai has a financial free zone

called the Dubai International Financial Center or DIFC [20].

Qatar's capital of Doha has a somewhat similar entity in the

form of the Qatar Financial Centre or QFC [21]. The DIFC is

slightly older than the QFC. Although they have not been

without their shortcomings, both projects have attracted

significant investment from banks, financial institutions, and

related businesses.

The DIFC and the QFC have their own court systems that

are separate from those of the rest of Dubai and Qatar,

respectively. It should be pointed out that these are actual

courts of law rather than arbitral bodies although institutional

arbitration is also available within the DIFC and QFC as well

as more generally in Dubai and Doha.

The judiciary for the DIFC, which consists of the DIFC

Court of First Instance and the DIFC Court of Appeal, is

collectively known as the DIFC Courts [22]. Unlike the Dubai

Courts, which are the regular local court system, the DIFC

Courts use the English language. As for substantive law, the

DIFC Courts normally apply DIFC law, which is generally

derived from common law principles. By contrast, the Dubai

Courts use the Arabic language and follow a mixed legal

system based on civil law and Islamic law [23]. Arabic is the

official language of the UAE and Islam is the state religion

[24].

Originally, the DIFC Courts had jurisdiction over only

certain non-criminal matters connected with the financial free

zone. Later, the jurisdiction of the DIFC Courts was expanded

to enable parties without any connection to the DIFC to bring

disputes to the DIFC Courts under certain conditions [25].

This opt-in, or consensual, jurisdiction means that a dispute

from Kabul between, say, an Afghan company and an

American company could theoretically be heard by the DIFC

Courts.

As for the QFC, it is technically not a free zone. Rather, it is

more of a financial services platform. However, the QFC is

otherwise comparable to the DIFC [26]. The judiciary of the

QFC is the Civil and Commercial Court of the Qatar Financial

Centre, which has become a part of the Qatar International

Court and Dispute Resolution Centre or QICDRC [27]. A

related entity is the QFC Regulatory Tribunal. The QICDRC

has consensual jurisdiction to handle disputes from outside the

QFC or even beyond Qatar. These courts operate in English

and look to the common law [28]. Hence, they are different

from the mainstream court system in Qatar.

VI. ADGM COURTS

In the law establishing the Abu Dhabi Global Market, there

is a provision for a special judiciary for the financial free zone

consisting of a Court of First Instance and a Court of Appeal

[29]. The judiciary is referred to as the ADGM Courts [30]. As

this paper is being written (early 2015), the ADGM Courts

have not yet begun to function, but we do know that they will

operate in English. Also, the common law would be a source

of law for the ADGM legal system although the exact extent of

this is not yet clear [31]. Presumably, the bench will feature

judges drawn from different countries, as has been the case

with the DIFC Courts and the QICDRC.

In light of Dubai's experience, one expects that the free

zone's status as a separate jurisdiction as well as the existence

of a specialized judiciary will be among the selling points of

the ADGM to potential investors. Indeed, all this could make

the ADGM a competitor of sorts to the DIFC. Be that as it

may, the legal features of the ADGM will help to distinguish it

from certain other financial hubs in the region such as the

Bahrain Financial Harbour in Manama or the King Abdullah

Financial District in Riyadh, Saudi Arabia [32].

VII. SINGAPORE

Singapore is a secular republic that is a member of the

Commonwealth [33]. During the British colonial era,

Singapore became an important trading port [34]. After

independence, Singapore emerged as a financial hub for

Southeast Asia and beyond [35]. With its very open economy,

political stability, and excellent infrastructure, the entire

country could be compared to a free zone. Indeed, Singapore

has become especially attractive to multinationals [36].

Singapore has long been a common law jurisdiction [37]. Its

judiciary is arguably one of the most modern, efficient, and

least corrupt in Asia [38]. English is one of the country's four

official languages [39]. In practice, English is the working

language of the government and many businesses as well as

the link language between different ethnic groups.

During recent decades, Singapore has become a popular

location for international commercial arbitration [40]. In

particular, the Singapore International Arbitration Centre, or

SIAC, has become one of the leading arbitral institutions in the

region [41]

VIII. SINGAPORE INTERNATIONAL COMMERCIAL COURT

Building upon Singapore's previous experience with

arbitration and the generally good reputation of its judiciary

among the international business community, in 2013, the

country's Chief Justice announced plans for the creation of an

international commercial court in Singapore [42].


79

On January 5, 2015, the Singapore International Commercial

Court, or SICC, was officially launched [43]. Like the DIFC

Courts and the QICDRC, the SICC can hear offshore cases.

Another similarity is that the SICC has judges from various

countries. In addition, foreign lawyers can appear before the

SICC.

Nevertheless, unlike the DIFC Courts and the QICDRC, but

like the English Commercial Court, the SICC is fully

integrated into the local judiciary. This is a potential

advantage. Specifically, the SICC is a division of the

Singapore High Court. Appellate jurisdiction is exercised by

the Singapore Court of Appeal, which is Singapore's highest

court. Collectively, the High Court and the Court of Appeal

are known as the Supreme Court.

Although it is too early to tell how much of an impact the

new court will have, the SICC does appear to be well thought

out. The SICC seems to fill an important gap in Asian dispute

resolution. Accordingly, it will likely be a success story.

IX. CONCLUSION

Specialized international commercial courts have become a

global trend. Although both litigation in regular courts and

arbitration will continue to be used to resolve business

disputes, the existence of international commercial courts

should prove attractive to many parties.

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Rijn, The Netherlands: Kluwer Law International, 2006, pp. 1-33.

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[42] Report of the Singapore International Commercial Court Committee,

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http://www.sicc.gov.sg/..

Copyright © Damien P. Horigan, 2015


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