By Paul Stothard and Alexis Namdar, King & Wood Mallesons

stothard_pThere is intense and constant competition to be a venue of choice for international disputes. To gain an edge, the Dubai International Financial Centre [i](“DIFC”) and the proposed Singaporean International Commercial Court (“SICC”) are exploring whether it is possible to combine the most attractive features of international arbitration and litigation before national courts. Each means of dispute resolution has its own well known set of advantages and disadvantages.[ii]

This article considers two recent announcements:

  • that of a new “umbrella” dispute resolution authority in the DIFC and
  • the further discussion of the proposed SICC at the inaugural congress of the Singapore International Arbitration Centre (“SIAC”).[iii]

We look in particular at the efforts to:

  • ensure the international enforceability of judgments and
  • offer a broad panel of qualified, expert decision makers.

Proposals to Improve Reciprocal Enforceability

The paramount test of the effectiveness of any international dispute resolution process is that the winning party must be confident about the prospects of enforcing the final judgment or award.

International arbitration benefits from a well developed and tested global recognition and enforcement regime for arbitral awards embodied by the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “NYC”), to which there are over one hundred and forty signatories, including all of the major trading nations of the world.

No such comprehensive enforcement regime exists with respect to national court judgments. Various measures have been proposed to address this, including the implementation of world-wide foreign judgments conventions, but so far nothing has been implemented.[iv] The enforceability of national judgments is still governed by diverse domestic national laws and a patchwork of bilateral, multilateral and regional treaty arrangements. Even where treaty arrangements exist between states with concordant legal frameworks and levels of judicial sophistication, judgment creditors often overlook how problematic enforcement can be in practice.

The DIFC Courts and the SICC have proposed contrasting approaches to augment the enforceability of the judgments issued by their respective dispute resolution centres.

Approach 1 to enforcement: The Dubai International Financial Centre – Awards, not Judgments

Since 31 October 2011[v], parties to civil and commercial agreements have been able to choose the courts of the DIFC to resolve disputes relating to their agreements. The implementation of this “opt-in” jurisdiction represented a significant extension of the DIFC Courts’ jurisdiction, which was previously restricted to disputes having a direct nexus to the DIFC. Parties may invoke the jurisdiction of the DIFC Court by making a submission pursuant to Article 5(A)(2) of Law No. 12 (as amended).

There are currently proposals [vi] whereby, as an adjunct to an Article 5 submission, a separate arbitration agreement may be concluded between the disputing parties to refer a dispute concerning the enforcement of a DIFC Court judgment to the DIFCLCIA Arbitration Centre. It is suggested that, like a submission to the DIFC Courts jurisdiction itself, a submission to arbitration may be concluded before or after a dispute arises. Such agreement may in effect convert a DIFC Court judgment into an arbitral award, so that the party seeking to enforce could then take advantage of the NYC to enforce the award quickly and easily in other jurisdictions.

While, on the face of it, this may allow the hybrid judgment/award to benefit from the greater international enforceability of arbitral awards, some doubt has been expressed as to whether such an award would be susceptible to enforcement under the NYC.

The NYC is limited in its application to commercial disputes,[vii] and it has been argued that a referral on a claim for collection or enforcement of a money judgment would not amount to a qualifying commercial dispute for the purposes of the NYC. While English courts would no longer have difficulty in identifying a commercial dispute in these circumstances [viii], such an argument may still be sustained under the national laws of other member states.

Should this argument prove correct, then falling foul of the NYC’s limitations would of course undermine the very purpose of a referral to arbitration at the DIFC-LCIA Arbitration Centre, given it could potentially create uncertainty as to international enforceability.[ix] The implementation of this proposal is still at the consultation stage and so it remains to be seen whether any steps can be taken to avoid this possible pitfall.

Further, any proposals will need to avoid jurisdictional conflicts arising under local law. Setting a number of referral criteria for the DIFC judgment could avoid such issues. These may include requirements that:

  • the DIFC judgment has taken effect [x]
  • such a judgment is for a payment of money
  • there is an enforcement dispute in relation to the judgment
  • the judgment is not subject to appeal and the time permitted for a party to apply to appeal has expired
  • the parties have agreed in writing to refer the enforcement dispute in accordance with the relevant amended practice direction.

Approach 2 to enforcement: The Singaporean International Commercial Court – Judgments, not Awards

In January 2013, the Singaporean Chief Justice announced the formation of a committee to study the possibility of establishing the SICC. The committee published an extensive report detailing proposals for the structure and powers of the proposed court on 3 December 2013.

In relation to enforceability of judgments, it has been reported that the SICC initially considered proposals akin to the “conversion” of judgments into awards currently proposed in the DIFC, but abandoned this at an early stage. Instead, the committee report confirms that the process now under consideration is for the SICC to render a conventional court judgment.

Speakers at the inaugural congress of the SIAC, including Singapore’s Minister for Law, K Shamungan and Michael Hwang, a Senior Counsel of the Supreme Court of Singapore and Chief Justice of the DIFC Courts, confirmed that Singapore was looking to package its dispute resolution offering as a tri-partite offering including SIAC, the SICC and the Singapore International Mediation Centre. In their respective addresses, Minister Shamungan and Mr Hwang both confirmed that the Singaporean government was taking steps to ensure the wide and effective enforceability of SICC judgments.

The SICC report in particular set out various methods to bolster reciprocal enforceability outside of the existing enforcement provisions in place with Singapore [xi] including:

  • an increase in the use of bilateral protocols between national courts of friendly states (with express reference to pursuing an agreement with the English Commercial Court) for reciprocal referral of certain matters
  • exploring further multi-lateral agreements for the recognition and enforcement of judgments, both regionally and internationally. As to the latter option, Singapore is considering becoming a member of the new “Choice of Courts Convention”, which has yet to enter into force.

If it does so, it would require contracting states (including the USA and all EU states other than Denmark), inter alia, to recognise and enforce foreign judgments obtained in proceedings based on a valid exclusive forum agreement.

It should be noted that, until any alternative proposals are implemented in the DIFC, the DIFC Court has also taken steps to enhance the enforceability of its judgments in much the same way as outlined in the recent SICC committee report, including entering into a memorandum of understanding with the Commercial Court in England and with the Supreme Court of New South Wales in Australia, both aimed at facilitating enforcement of judgments on a bilateral basis.

Proposals for Court Procedures

One aspect of arbitration that can be attractive for business is the wide pool of nationalities, backgrounds, legal traditions and expertise from which arbitrators may be drawn, allowing the selection of decision makers with specialist knowledge relevant to the industry or dispute in hand.

The DIFC and the SICC have been looking across both court proceedings and arbitration to create a “best of both worlds” approach with regard to the selection of judges.

In the SICC, the adjudicating panel is intended to include judges drawn from the Supreme Court bench, as the court will be part of the Supreme Court of Singapore, but, crucially, will also include appointed associate judges from more diverse backgrounds from both domestic and foreign pools. The associate judges will be assigned cases on an ad hoc basis depending on their specialism. This process is comparable to the selection of an arbitration tribunal by an appointing authority in that there is scope to tailor both subject matter specialisation and the legal background of the judges to the matter in dispute. The process, of course, is more limited than that of any arbitral panel nomination in that it is the chief justice who will serve as the appointing authority and there is no scope for further party autonomy (beyond selection of the court).

In this respect, there are similarities with the DIFC in that the DIFC judiciary is headed by a Singaporean Chief Justice and is comprised of two Emirati resident judges together with a number of experienced retired judges from other common law jurisdictions.


The proposed reforms in Singapore and Dubai demonstrate an international trend towards the packaging of litigation and arbitration together, or borrowing from the most appealing features of each, aimed at promoting regional dispute resolution hubs capable of attracting international parties.

Singapore and Dubai are emerging dispute resolution hubs, both of which score highly on any list of key considerations which bear upon the choice of arbitral seat (including: geographic convenience; development of infrastructure; typical governing law of disputed contracts; levels of direct foreign investment and presence of international legal advisors). Close consideration of the proposals emanating from their international courts is therefore a valuable exercise, and both the SICC and DIFC proposals, if adopted, may prove to be pioneering.

Finally, in Dubai, the announcement of the tri-partite Dubai Dispute Resolution Authority and the consideration of increasing the enforceability of DIFC Court judgments come at an interesting time for the development of the jurisdiction of the DIFC Court in general. The umbrella institute was announced just a matter of days after the DIFC Court of First Instance confirmed its jurisdiction to enforce a Dubai International Arbitration Centre[xii] award which has no connection to the DIFC and has not been ratified in the Dubai courts.[xiii] This judgment may have ramifications for the enforcement of awards in “onshore” Dubai, in that an applicant who succeeds in arguing the merits of an arbitration award’s enforcement before the DIFC Court may take a DIFC Court Order for enforcement onshore in Dubai, rather than the underlying award. This is significant, as under the relevant legislation, the onshore Dubai courts do not have the jurisdiction to review the merits of a DIFC Court judgment and this could potentially circumvent an often time consuming process of award “ratification” onshore. It will be fascinating to see how the Dubai courts respond, as the status quo would suggest a means of importing both local and foreign arbitral awards through the DIFC Court as a portal to enforcement in the UAE and throughout the GCC.

[i] The Dubai Dispute Resolution Authority pursuant to the issuance of Dubai Law No. 7 of 2014 on 21 May 2014.

[ii] Including but not limited to ease of enforcement of a resulting decision, privacy and confidentiality of the proceedings and parties, the choice of the tribunal, precedent and transparency, flexibility of the process, neutrality of the forum and powers in relation to third parties to the dispute.

[iii] The SIAC inaugural congress took place on 6 June 2014.

[iv] Such as the Convention on Choice of Courts Agreements proposed by the member states of the Hague Conference on Private International Law (the “Choice of Courts Convention”).

[v] Pursuant to Dubai Law No. 16 of 2011 (“Law No.16”) signed on 31 October 2011, amending Dubai Law No. 12 of 2004.

[vi] The DIFC Courts announced a one month consultation period for a Draft Practice Direction on Referral of DIFC Court judgments to DIFC-LCIA Arbitration Centre for enforcement, closing on 6 August 2014.

[vii] Article II NYC “Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.”

[viii] Originally reflected in the Arbitration Act 1975 s.1(i).

[ix] This latter distinction is an issue which has been considered by previous dispute resolution centres, including the nascent Bahraini BCDR, which adopted an ICC approach of the Terms of Reference requirement to circumvent this problem.

[x] For the purposes of Rule 36.30 of the Rules of the DIFC Court.

[xi] Including the Reciprocal Enforcement of Commonwealth Judgments Act and the Reciprocal Enforcement of Foreign Judgments Act.

[xii] An “onshore” arbitration centre.

[xiii] Banyan Tree Corporate PTE Ltd v Meydan Group LLC [ARB-003-2013] on 27 May 2014.