CLC Stream A: Corporate and commercial law – Are special commercial courts a bad idea?

June 1st, 2013
x
Bookmark

By Mapula Sedutla

Under the topic of corporate and commercial law, a session was held to consider whether special commercial courts were a good or a bad idea.

The chairperson of the session was Nigerian Bar Association council member, Miannaya Essien SAN; while the speakers were Engish solicitor, David Greene; President of the Ghana Bar Association, Nene Amegatcher; and British Virgin Islands Attorney-General, Dr Christopher Malcolm.

Purpose of commercial courts

Mr Greene said that the purpose of a commercial court was to offer a service to the business community and to, hopefully, have ‘a trickle-down effect’ in easing the caseload of other courts.

However, Mr Greene questioned –

  • whether the trickle-down effect, in fact, existed;
  • if investing in commercial courts was ‘worth it’;
  • what effect such a court would have on the domestic attorneys’ profession, as it could be exclusionary;
  • how such courts would affect the wider justice process;
  • whether commercial courts would have a positive impact on the country; and
  • whether such a court would lead to further investment in the country.

Jurisdiction

Mr Greene said that the jurisdiction of commercial courts was determined by a mixture of quantum and the nature of the claim. He added that commercial courts needed specialist judges with practice experience in commercial disputes. He suggested that a ‘ticketing’ system be used, whereby only judges with extensive experience in commercial matters are assigned such cases. He added that commercial courts tended to have a ‘free market and World Bank thinking’ on enforcement of contracts and became pressurised by investors.

African commercial courts

Mr Greene said that a commercial court was established in Tanzania in 1999. He said that the court was a stand-alone court that had a court-users committee, whose role was to appoint mediators for court-annexed mediation. He added that the jurisdictional limit of the court was 1 million Tanzanian Shillings. Mr Greene spoke about another African commercial court, which was situated in Uganda. He said that the Ugandan commercial court was a busy court that used the ticketing system and which started court-annexed mediation in 2003. He added that, at the time, Uganda did not have trained mediators to fill the role of mediators at the court; therefore, the court used second-year law students as mediators.

European commercial courts

In England and Wales, Mr Greene said that the commercial court was not part of the main court process, while in Ireland the court had jurisdiction and discretion to hear non-commercial matters. Mr Greene added that the commercial court in Ireland was popular with practitioners and was successful.

The Ghana experience

Opening his address, Mr Amegatcher said that the move towards specialist commercial courts in countries such as Uganda and Ghana was largely influenced by delays in the court process and the need for expert handling of commercial matters. He noted that the business sector drives the economy of any country and if governments do not assist the business sector, the economy suffers. In his opinion, commercial courts should be tailored to deal with the different disputes that form part of the commercial community and the court should avoid unnecessary delays in the process.

In Ghana, in 2001, to ease congestion and fast track court matters, the courts were automated. Proceedings were recorded digitally and the recordings were saved on computers. This did not help with commercial matters as few of these were heard by the courts, he said. The migration to digital recording was an expensive exercise for the courts; therefore, the courts gradually reverted to recording proceedings manually, he added.

Mr Amegatcher said that, with the declaration of the ‘golden age of business’ in 2002, the government saw the need to streamline the judiciary and make it responsive to the needs of the commercial community. He said that, at the time, the courts were congested, which frustrated litigants. He added that another issue that added to the delay of the court process in Ghana was that the court procedings were recorded manually and in long hand. Also, judges had little or no expertise in commercial matters and relied on lawyers to arrive at their decisions. Lack of infrastructure and delays in disputes led to less business activity and no business progress in Ghana, he said. To address the needs of the commercial sector, a commercial court was established, said Mr Amegatcher.

Mr Amegatcher added that the objective of the Ghanaian commercial court was to offer speedy, efficient service to the business sector in order to promote trade and investment. He said that the rules of other Ghanaian courts applied in the commercial court. He added that the commercial court had six court rooms, one Judge President, administrative staff, a registrar, a library, an accountant and two standing committees that ensured the efficient functioning of the court.

The pre-trial process was a mandatory alternative dispute resolution (ADR) process to attempt settlement; no case will proceed to be heard by the court until this process is followed. One in five cases was resolved through ADR and disposed of before trial, said Mr Amegatcher.

He added that one negative aspect was that digitised recording by the commercial court made other judges perceive commercial court judges as receiving special treatment, as other courts still recorded manually. Lastly, he said that the main challenge of the commercial court was that no specialist appellate division existed.

The future

In closing, Mr Greene said that the success of commercial courts depended on the ability of litigants to enforce judgments from the court.

Dr Malcolm, in answering the question posed by the title of the session, said: ‘The short answer is: “Yes”.’ He said that a critical element of commercial disputes was time.

‘Governments should see courts as their critical arm to ensure that they do not undermine the “goose that lays the golden egg”,’ he said.

Mapula Sedutla, mapula@derebus.org.za

This article was first published in De Rebus in 2013 (June) DR 26.

X