The New Legal Hubs: The Emergent Landscape of International Commercial Dispute Resolution

February 13, 2019

Virginia Journal of International Law 59(3) forthcoming. 

Available at SSRN: https://ssrn.com/abstract=3333765 or http://dx.doi.org/10.2139/ssrn.3333765

Abstract

New legal hubs (NLHs) are “one stop shops” for cross-border commercial dispute resolution, in financial centers, promoted as an official policy by nondemocratic or hybrid (i.e., democratic and authoritarian) states. NLHs address the problems of the legitimacy deficit of host states and also insufficient economic growth. They do so by optimizing conflict of law rules, namely choice of forum and efficiency of procedure, attracting international parties to the hub venue. Further, they suggest a novel heuristic in the study of transnational law, particularly during a period of geo-political and ideological flux. This article is based on empirical fieldwork over a period of two years in six NLHs in four countries across “Inter-Asia,” including in Hong Kong, China, Singapore, Dubai, and Kazakhstan. It analyses legal hubs at two levels: their impact on host states and interhub connections as a form of transnational ordering. This article finds that, first, legal hubs are engines of doctrinal, procedural, and technological experimentation, but they have had limited impact on the reform of the wider jurisdictions within which they are embedded. Second, through relationships of competition and complementarity, legal hubs function to enhance normative settlement. However, many of the innovations (e.g., intrahub cross-institutional mechanisms between courts and arbitration institutions and interhub soft law such as memoranda of understanding) are untested, vulnerable to state politics, or even unlawful. Consequently, NLHs demonstrate the potential and fragility of “rule of law” in nondemocratic states that promote globalization against trends in the West. The article begins with an introduction that defines NLHs, identifies their significance as jurisdictional carve-outs to otherwise weak legal systems of host states, and proposes an anthropology of legal hubs. Part I sets the analysis of NLHs against the backdrop of a partially deglobalizing Euro-American liberal legal order and a globalizing Inter-Asian one. Part II describes the methodology of “para-ethnography.” Part III provides a theory of NLHs. Part IV builds on this theory to generate a continuum of NLHs. Part V assesses how NLHs and their host states affect each other, including hubs’ positive spillover effects and host state pushback. Part VI examines the possibilities for interhub ordering.

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