A new research institute has been formed to ensure that Asian business law keeps up with the accelerating pace of economic integration in the region.
The Asian Business Law Institute (Abli) aims to address inconsistent regulations and standards across the region that can increase uncertainty, add costs and impede cross-border trade.
Chief Justice Sundaresh Menon announced the initiative at the Singapore Academy of Law (SAL) conference yesterday, noting that tackling the barriers to cross-border trade is becoming significant in the light of rising integration through developments such as the Asean Economic Community, the Asian Infrastructure Investment Bank, China's "One Belt One Road" and the Trans-Pacific Partnership.
"This confluence of watershed developments suggests that the integration of Asian markets will happen on a scale, and at a pace, not yet seen," he told 500 senior judges, lawyers and business leaders at the conference.
"To capitalise on this monumental opportunity, it is imperative that our business laws keep up."
SURVIVING TOUGH TIMES
The pressure test for harmonisation oflegal systems and financial rules comes not when marketsare good, but when the situation startsto deteriorate, because that's when the mutual trustthat is needed to achieve convergence is really tested.
MR HENRI DE CASTRIES, AXA chairman and chief executive.
Ensuring certainty when it comes to enforcing court judgments will give businesses greater confidence to invest and trade freely.
"There is nothing more frustrating ... than for a business to obtain a judgment in one jurisdiction, and then find that it is in fact only a paper judgment in others," he added.
Abli will be steered by a 12-member board of governors drawn from the judiciary and academia in Singapore, China, India and Australia.
Its first task will be to publish a comprehensive review on harmonising rules on enforcing foreign judgments in Asia. Other priorities are to draw up global principles on data privacy and develop rules for contracts in cross-border deals.
Mrs Lee Suet Fern, managing partner of Morgan Lewis Stamford and chair of SAL's steering committee on legal convergence, said legal convergence will help the region to sooner realise the benefits of the recent trade pacts. "We are trying to simplify, clarify and make consistent the laws at a time when there is economic turmoil... It will help the upswing."
While they back legal convergence, some business leaders noted yesterday that there may be challenges driving the initiative.
"The pressure test for harmonisation of legal systems and financial rules comes not when markets are good, but when the situation starts to deteriorate, because that's when the mutual trust that is needed to achieve convergence is really tested," AXA chairman and chief executive Henri de Castries said.
Singtel chairman Simon Israel noted that there are considerable risks to building digital businesses when the model may be undermined by future laws.
"Some of our challenges are about countries having different laws over who owns the data, where it can be stored, and who can access it," he said.
"While harmonising is a critical first step, its impact and effectiveness are contingent on a... framework that goes hand in hand with a common interpretation and implementation of laws, and... timely resolution."
Even as the pace of business integration may be decelerating in the light of economic woes, legal convergence should still be pursued, said Professor Ashish Nanda, director of the Indian Institute of Management.