DIFC AND OXFORD TO WORK ON TRADE LAWS
Dubai judiciary and the University of Oxford will research issues related to exchanges under Belt and Road
Dubai International Financial Centre’s judicial authority signed an early-stage agreement with the University of Oxford to research legal and contract issues hindering the Arabian Gulf and other investments in China’s $5 trillion-plus “Belt and Road” initiative, the two parties said yesterday.
“We are looking at practical solutions for the future of dispute resolution for one of the world’s most ambitious projects,” Michael Hwang, chief justice of DIFC Courts and head of the DIFC’s Dispute Resolution Authority, said in a statement.
“Belt and Road goods and services will seamlessly cross borders as they travel the world, so we need a seamless legal platform, based on legal convergence, that can do the same.”
Launched in 2013 as “One Belt, One Road”, the initiative involves China underwriting billions of dollars of infrastructure investment in countries located along the old Silk Road linking it with Europe.
Under the preliminary agreement between the DRA (which incorporates DIFC Courts) and the University of Oxford’s China Centre, the two parties will look at how to protect largescale investments by linking China and the world’s court systems.
They will also explore the development of judicial systems – including arbitration, a method of resolving disputes out of court – relevant to the investment opportunities created by the Belt and Road initiative, also known as ‘BRI’.
“In particular, BRI countries need to find ways in which judgments and awards issued from each BRI country or territory can be enforced in other BRI countries,” DIFC Courts said in the statement.
China is spending around $150 billion per year in the 72 countries that have signed up to the scheme. All of the six GCC countries, including the UAE, have signed up.
China is the UAE’s biggest trading partner, with UAE-China bilateral trade crossing $35bn in the first nine months of 2017. The two countries are seeking increased economic collaboration, with the UAE introducing visa-on-arrival for Chinese tourists last year, and China reciprocating at the start of 2018.
Abu Dhabi strategic firm Mubadala Investment Company, together with its partners in China, committed $1bn this month towards around 10 opportunities as part of its $10bn joint investment fund with Beijing. These initiatives are part of the emirate’s plans to diversify the economy away from hydrocarbons.
DIFC Courts is a common law jurisdiction that hears cases from all across the world, including through its new virtual courts system. As more investment flows into the BRI region, helping parties solve complex cross-border commercial conflicts is increasingly important, it said.
The agreement with Oxford’s China Centre will initially seek to pool expertise on the legal guarantees, protections and contract enforcement needed for Chinese and international investors to participate in the initiative. “Gathering such knowledge is the first step, hopefully, to legal convergence of some degree within the BRI region,” DIFC Courts said.
“The opportunities of the Belt and Road initiative are substantial, but so are the potential legal complexities and risks,” added Professor Rana Mitter, director of the China Centre. A 2016 survey by Lexisnexis and the China Institute of Corporate and Legal Affairs reported that nearly half of respondent Chinese firms engaged on BRI deals faced legal challenges, she added.
To date, BRI projects worth an estimated $350bn have been financed, mainly by Chinese development banks. To encourage foreign investment, robust dispute resolution systems and transnational enforcement mechanisms – including guarantees that money can be collected after winning a case in a foreign court – must be put in place to foster legal certainty and investor confidence, according to DIFC Courts.
“The answer is to make sure that when a dispute is resolved, court systems can deliver a judgment that can be executed across the full extent of the belt and road,” said Mr Hwang.