Lesson 2, Unit 6: The mechanics of the law affecting international business
Litigation
Avoiding business disputes
Long term businesses are the most profitable agreement. They are built based on trust
Disputes will impact future profits
Important to note: Different cultures react differently to disputes
Alternative Dispute Resolution
This a voluntary process to try resolve a problem rather than undergoing litigation
Mediation:
Voluntary, nonbinding, conciliation process
THIS PROCESS IS PRIVATE
Arbitration:
A formal process that results in a binding award. Parties may not withdraw after agreeing to undergo arbitration.
THIS PROCESS IS PRIVATE
Advantages: 1. Cost effective 2. Permits the resolution by a third party that is neutral 3. Arbitrator can be chosen
Disadvantages: 1. Discovery is limited 2. losing party has limited right to appeal 3. it is still an expensive process
Many contracts contain arbitration clauses and in most countries the courts will enforce arbitration awards.
Conflict of Laws
The rules by which courts determine which jurisdiction's law applies to a particular case.
Application to Contacts: 1. Place of contacting 2. Where was contact negotiated 3. Place of contact performance 4. location of the subject matter 5. Place of business of the parties.
Application to Torts/Delicts: 1. Place where injury occurred 2. Place where conduct caused injury 3. Place of business of the parties 4. Place where the relationship between parties is centered.
Choice of law Clauses: Parties may stipulate what country/ jurisdiction of law should be applied to the contract.
Commercial disputes with Nations: Sovereign nations are protected from foreign governments when they act as political entities.
Definition:
A case is brought before a court of law suitably empowered to hear the case, by the parties involved for resolution.
Procedural law:
- role of the presiding officer 2. discovery of evidence 3. trail by jury 4. issue of damages 5. right to appeal
Substantive law- law of the case ( choice of law clause)
Jurisdiction: Power of a court to hear and decide a case
Venue: Geographical location of a court of competent jurisdiction.
In rem: Power over property within its geographical boundaries
Subject matter: Jurisdiction over certain types of cases like torts or contacts.
In Personam Jurisdiction: Jurisdiction over a person. Is based upon a notion of fairness.
European countries: Jurisdiction is determined by domicile of defendant.
China: Nonresident defendant must have a meaningful relationship to China.
Forum selection clauses: a provision in a contract that fixes in advance the jurisdiction in which any disputes will be litigated or arbitrated.