International Commercial Courts and the United States: Past, Present and Future

Although international commercial arbitration has long been considered the preferred means of resolving cross-border business disputes, recent years have seen multiple initiatives seeking to disrupt the arbitral hegemony.  For example, the rise of international commercial mediation led to promulgation of the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention on Mediation),[1] which creates a level playing field between mediation and arbitration by establishing an enforcement mechanism for mediated settlement agreements that is similar to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).^[2]  Ongoing concerns about the private nature of arbitration and mediation inspired the Hague Conference on Private International Law not only to adopt the Hague Convention on Choice of Court Agreements (COCA)^[3] in 2005 but also to persevere with discussions on a new treaty relating to enforcement of foreign judgments.^[4] 

However, the most intriguing development in this field involves specialized international commercial courts lodged within national judiciaries.  Numerous countries, including those in Europe (Belgium, France, Germany, Ireland and the Netherlands), Asia (Singapore) and the Middle East (Abu Dhabi, Dubai and Qatar), hope to replicate the substantive and procedural flexibility that is at the core of international commercial arbitration by developing specialist courts with similar attributes.[5]  However, one country – the United States – is noticeably absent from the fray.

In my paper , I consider the past, present and future of international commercial courts in the United States, focusing in particular on whether existing courts can be considered competitive with new entrants in the international litigation market and whether the United States is likely to increase its forum selling behaviour in the coming years in order to attract foreign litigants to its shores.  In so doing, I focus not only on intangible features such as the current sentiment in the United States towards transnational litigation and forum shopping in general but also on more concrete concerns, including those arising as a matter of U.S. constitutional law.

In some ways, the intangible issues and attitudes may be the biggest obstacle to the development of international commercial courts in the United States.  Many within the United States believe U.S. courts to be among the best in the world, which of course provides little incentive for innovation.[6]  However, an equally daunting issue involves the longstanding U.S. preference for generalist courts, particularly at the federal level.  This is not to say that specialist courts do not exist in the United States; to the contrary, twenty-one of the fifty U.S. states have created some type of business court within their judicial systems.[7]  However, these tribunals incorporate none of the procedural innovations of the new international courts, such as allowing foreign and international judges to sit alongside national judges, and therefore do not offer a truly viable alternative to the new breed of specialist courts.

The United States also faces a number of legal obstacles to the development of international commercial courts.  For example, questions exist as to whether constitutional restrictions on both personal and subject matter jurisdiction could be overcome simply by federal legislation or whether a constitutional amendment would be required.  Other concerns arise with respect to the constitutional right to a trial by jury.

Even if the United States could and did overcome these legal hurdles, it is unclear whether a U.S.-based court would be successful in attracting foreign litigants, since such a court would likely incorporate certain norms (such as U.S.-style discovery and punitive damages) that are considered central to the U.S. legal system.  Indeed, it would appear impossible to set aside some of these features for questions governed by U.S. law, since substantive legal principles often rely on unspoken assumptions about the nature of the applicable procedural law.[8]  While such practices could be excluded in cases governed by something other than U.S. law, that would create tensions with the primary reason for seating an international commercial court in the United States, namely to take advantage of the substantive expertise of U.S. judges in U.S. law. 

Ultimately, the paper concludes that the United States could create specialist international courts if it wanted to.  However, the bigger question is whether there is sufficient political will within the country to increase U.S. engagement with the rest of the world.  To that, only time will tell. 

Prof. S.I. Strong is the Manley O. Hudson Professor of Law, University of Missouri School of Law.