DIFC Courts Chief Justice Delivers Speech at Standing Forum of International Commercial Courts

  1. I am going to share with all of you the experience of the DIFC Courts in promoting and developing the wider knowledge of laws relating to recognition and enforcement of foreign judgments. This exercise was initially undertaken for our own benefit, but we have come to realize that we have developed a tool that others can also use to their benefit.
  1. When we were established as a court, we realised that we needed to have both domestic as well as international recognition of our legal status as a court. Domestic recognition was achieved by knocking on doors of local government and commercial institutions to explain our status, and by signing Memoranda of Understanding (MOUs) which then gave confidence to our users that our judgements would be enforced within Dubai and the UAE. That led us to conceive of a similar plan for international recognition, which was to persuade the most important commercial courts in the world to recognise our status, and at the same time, educate the business community in those countries about the principles and practice of how to enforce judgements both from and in the DIFC. We published (and continue to keep updated) an Enforcement Guide (which is available both online and in the reception area of our Courts) setting out in detail in which countries our judgments can be recognized and enforced, and how this can be done.
  1. We then created the concept of a Memorandum of Guidance (MOG) between our Court and a friendly court, which sets out those principles and practices without being a document that creates legal rights and obligations. So an MOG is merely a statement of principles and practices by two Courts which is intended to give guidance to the legal and business communities of the countries concerned. The Commercial Court of England and Wales was good enough to be our first partner in this enterprise and, with that precedent, we have been able to enter into MOGs with close to a dozen other countries and territories, including the United States District of the Southern District of New York (courtesy of Senior Judge Loretta Preska). A complete list of these countries is set out in the Schedule.
  1. Where we have not been able to engage with the courts of a particular country for whatever reason, we have still thought it worthwhile to create a Guidance Note along the same lines as our MOGs, except that our Guidance Notes have been prepared with the assistance of a prominent and respected local law firm. So the information we want to convey to the legal and business communities of important countries like China and India is available on our websites as part of our overall programme of public education.
  1. And this is where we think that our experience has relevance to this audience. The draft Multilateral Memorandum that has been prepared by the Standing Forum is the ultimate version of our bilateral MOGs. In this document you can find statements of principle and practice with regard to recognition and enforcement of foreign judgements for virtually all the major commercial courts in the world, and this will be a massive contribution to public knowledge. For example, our MOG with the Supreme Court of South Korea is of particular interest to other common law countries because what is set out in that MOG can apply to any other common law country (and please note that there is no memorandum on Korea in this current draft Multilateral Memorandum).
  1. This in turn should assist the international legal community in its efforts to work towards greater harmonization of laws and practices regarding the enforcement of foreign judgments. For the common law world, such harmonization already exists in the common law doctrine of an action on a foreign judgment, which is available in every common law country, and which does not require either a treaty or reciprocity with the state of origin of the foreign judgment. This is what sets aside common law countries from civil law countries which generally do require reciprocity, either by treaty or by meeting the conditions for establishing reciprocity under the national law of the enforcing court. Reciprocity is a vague legal concept, and can be interpreted differently by different national courts, e.g. you can have broad reciprocity in place of treaty reciprocity but broad reciprocity can be either possible reciprocity (which means studying the law of the state of origin and forming a view of whether that state will enforce the judgements of the enforcing country) or proven reciprocity (which requires a precedent where the courts of the state of origin have actually enforced a judgement of the enforcing court)
  1. So harmonization of enforcement laws in civil law countries will not be simple where there is no multilateral treaty as exists in the European Union, or the Gulf Co-operation Council Convention and the Riyadh Convention, which apply in the Middle East and North Africa, or the Minsk Treaty, which covers the Eurasian region. But before we tackle harmonization, we need to increase our knowledge of the laws of the countries with whom we seek convergence or harmonization. And this Multilateral Memorandum is an important first step in enhancing all commercial courts’ knowledge in this regard.
  1. This Multilateral Memorandum supplements the work done by the Asian Business Law Institute under the direction of Chief Justice Sundaresh Menon of Singapore, which has recently in 2017 published a guide to recognition and enforcement of foreign judgments in 15 Asia Pacific countries in much greater detail than is possible in this Memorandum.
  1. Just to give one example of how important the acquisition of such knowledge is. We all know of the Belt and Road Initiative which will involve a huge amount of trade and investment in the 60 plus countries involved in this initiative. But there is not yet a clear picture of what kind of dispute resolution mechanism can be created to cope with the inevitable cross-border disputes that will result from this increased economic activity. Recently, I was in XiAn at a conference to mark the establishment of the Chinese International Commercial Court. I asked a question: does anyone know how many countries recognise Chinese court judgements? There was silence for quite a while, and then someone said that, according to Chinese government research., about 30 something countries would recognise Chinese judgements. I then pointed out that this figure obviously did not include the entire common law world, where over 50 countries and territories would happily recognise Chinese judgements (indeed judgements from any country, common law or civil law) upon the fulfilment of certain not very difficult conditions. In fact, China arguably has the most connectivity of any country in the world in terms of recognition of their judgments  because, apart from the recognition it gets from the common law countries plus its  treaty partners, it has signed The Hague Choice of Courts Convention, which has given it the additional connectivity to the European Union, which relatively few other civil law counties have (assuming that China ratifies the Convention in due course).
  1. This shows that more research needs to be made of the conditions for enforcement in each country or class of country before we can seriously discuss either the formulation of appropriate dispute resolution regimes to provide for a whole new wave or class of disputes, or eventually more harmonization and convergence, which is what this Standing Forum will help to promote.
  1. What are my closing thoughts?
  • First, knowledge of how to enforce judgments of one country in other countries is necessary in the short term to enable international businesses to plan their trade and investment policies. MOGs serve this purpose well.
  • Second, we should aim at harmonization of commercial law in selected areas and enforcement of judgments is an obvious starting point.  And this Multilateral Memorandum will be an important first step towards the achievement of that aim.