International businesses take to English law, especially where arbitration is needed
Across jurisdictions, English law has become a platform to settle business disputes
As the UK Legal Trade Services Mission to Dubai convened last month, there was a discussion about the reach of English law. A report produced by Oxera shows the economic value of English law, both to the UK and as a fundamental platform for international business.
It provides a global infrastructure for the trade, financial and commercial contracts on which international business relies, lowering transaction costs and providing network effect benefits for internationally mobile transactions. Businesses from countries without English law commercial concepts such as ‘netting’ or trusts can use these and enter into smart contracts using clearly stated English law without waiting for local legislation to be made.
Businesses do not need to be located in the UK to enjoy these benefits – English law contracts with their clarity, certainty, predictability and flexibility are available to all. When legal disputes about English law contracts occur - and English law needs to be interpreted and adjudicated on - this can be done from all over the world. English law is well-established globally that it can be used by businesses worldwide via numerous international access points.
English law is the source of domestic law in over 81 jurisdictions around the world. Many English precedents and principles are globally familiar. Some legal systems have English judges sitting in their highest courts, and some still have the UK Privy Council as a final court of appeal.
Lawyers have studied English as well as their domestic law. A recent study of 26 common law jurisdictions published by Mishcon de Reya and vLex Justis showed that from 1717 to 2020 English law was cited was cited 313, 111 times by foreign courts (with the nearest competitor being cited 12,156 times). In addition, businesses anywhere can easily use English law itself in a variety of ways.
Preferred way
A traditional route is via international arbitration, where many leading international arbitrators hold English law qualifications and a large proportion of international arbitrations are decided under English law. Businesses can use UK arbitration institutions such as the LCIA, or those with branches in the UK such as ICC.
But arbitrations can be legally based and take place anywhere convenient to the parties, including online. English law is the second most chosen law of arbitrations administered – on the other side of the world from the UK - by both the Singapore International Arbitration Centre and the Hong Kong International Arbitration Centre.
A newer route is to use one of the new international commercial courts established abroad with English law as their legal basis (such as the Dubai International Financial Centre Courts and the Astana International Financial Centre Court in Kazakhstan), or which adopt English law wholesale (the Abu Dhabi Global Markets Court).
Go direct
It is also now easier than ever for international business to go to the source and have English law cases decided by the eminent English judiciary itself, in the Commercial Court in London. There was high use of the Commercial Court by overseas parties before the pandemic, and over the last year this stayed steady at 75 per cent of cases. With the move to remote hearings it is easier than ever for overseas businesses to use the Commercial Court and the truly global English law infrastructure.
English law has achieved this ubiquity and ease of access without any strategic plan - markets and international businesses and jurisdictions have adopted it because it works for them. We should all be alert to the benefits of English law being provided seamlessly to businesses in or from the UK.
Other jurisdictions are alert to the benefits of providing internationally located venues for resolution of legal disputes. Yet, as we see from the readiness of other countries to administer English law governed cases, we can have a win-win situation where businesses around the world access the significant benefits of English law from the comfort of their own locations, wherever those may be.