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:

  1. 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.