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Resolving International Commercial Disputes - Coggle Diagram
Resolving International Commercial Disputes
Part 1 - Avoiding business disputes and Alternative Dispute Resolution (ADR)
Long-term business relationships: most profitable
Long-term relationship built on trust
Any dispute threatens the bonds of trust - impacts future business opportunities
ADR - offers faster, cheaper and more efficient alternative to resolving international commercial disputes than litigation.
Mediation - voluntary, nonbinding and conciliation process
Arbitration - more formalized process resulting in a binding award that the courts of law in many countries will enforce.
Arbitration advantages: 1. Permits the resolution by a third party. 2. Arbitrator may be chosen. 3. Rules of the arbitrating organization. 4. Procedural advantages. 5. Cost effective. 6. Right to appeal is limited.
Arbitration disadvantages: 1. Still expensive. 2. Losing party has limited right to appeal. 3. Discovery is limited. 4. Relaxed procedural rules. 5. Limited rights to approach court. 6. Selection of arbitrator. 7. No precedential value
Litigation
A case (lawsuit) is brought before a court of law suitably empowered (having the jurisdiction) to hear the case, by the parties involved (the litigants) for resolution (the judgement)
Procedural laws for litigation: 1. Role of the presiding officer. 2. Discovery of evidence. 3. Trail by jury. 4. Issue of damages. 5. Right to appeal.
Jurisdiction - Power of a court to hear and decide a case
Territorial - power of a court to hear and decide a case is said to be 'competent' in court
In rem - power over property within its geographical boundaries
Subject matter - jurisdiction over certain types of cases like torts or contracts.
Personam Jurisdiction - based upon a notion of fairness
Jurisdiction determined by domicile of defendant - European countries
Forum selection clauses - is a provision in a contract that fixes in advance the jurisdiction in which any disputes will be arbitrated or litigated.
Conflict of laws
Refers to rules by which courts determine which jurisdiction's law applies to a particular case. Absent a choice of law clause, generally the court will apply the law of the country of jurisdiction that has the closest relationship to the transaction.
Application to contracts: 1. Place of contracting. 2. Place where the contract was negotiated. 3. Place of contract performance. 4. Location of the subject matter. 5. Domicile, residence, nationality, place of incorporation and place of business of the parties.
Application to torts/ delicts: 1. Place where injury occurred. 2. Place where conduct causing injury occurred. 3. Domicile, residence, nationality, place of incorporation and place of business of the parties. 4. Place where the relationship between the parties is centered.
Choice of law clauses: Clauses in which parties stipulate the country or jurisdiction whose law will apply in interpreting the contract or enforcing its terms. In some cases a court may not enforce where 'enforcement would be unreasonable and unjust' or 'invalid for fraud and overreaching'