Thursday, August 28, 2014

The Real Solution to ASEAN's "Hodge Podge" of Legal Systems

Last week had a piece on how the “hodge podge” of legal systems in Southeast Asia frustrated ASEAN integration.   The author noted that the legacies of colonial and other influences from English, French, Soviet, Dutch and German legal systems retarded ASEAN economic integration (but the author omits the influence of the Spanish legal system in the Philippines).  The article also noted  the purported unprecedented formation this month of a Singapore-based alliance of law firms in the major jurisdictions in ASEAN (although it seemed to overlook a similar Malaysia-based alliance of law firms established in 2011).

Having worked as co-counsel or opposing counsel with both of the lead firms  in these Asian law firm alliances, I have no doubt that increased cooperation among law firms can work to relieve some of the inconsistencies and obstacles that result from the diversity of legal systems in ASEAN. 

However, the article neglects to discuss other ways that regional economic blocs have established to deal with divergent legal systems.  After all, the FT’s home country, the United Kingdom, is part of the European Union (EU), and the various legal systems noted in the FT article also originated in the EU (or otherwise in Europe, in the case of the Soviet legal system).  Yet somehow these differences do not seem to present the “hodge podge” of obstacles that exist in ASEAN.

The reason, of course, is that the EU has a well-developed system of regional institutions such as the Commission, Court of Justice and the like, all based on a cohesive theory of EU law that evolved since the Treaty of Rome.  NAFTA similarly has had to deal with divergent bases of law (English, French and Spanish) but being based on a very detailed treaty and having a robust dispute resolution system, that bloc also has been able to deal with its legal diversity.

In other words, diversity of legal systems need not be a barrier to economic integration, if the regional bloc determines to adopt robust institutions and/or dispute resolution.  Perhaps the article elected not to address this issue because ASEAN currently has decided to do neither, but that does not excuse this oversight. In any event, if the ASEAN Economic Community is to thrive, ASEAN’s leaders need to deal with these institutional and foundational deficiencies.