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Resolving International Commercial Disputes - Coggle Diagram
Resolving International Commercial Disputes
Mediation
Voluntary, nonbinding,
conciliation process
Parties agree on an impartial mediator
The final decision to settle rests with the parties. Private no public records or negative publicity Parties reserve rights to resort to binding arbitration or litigation
Arbitration
More formalized process resulting in a binding award that
the courts of law in many countries will enforce
Frequently used in International Business
Private - no public records or negative
publicity
Arbitration clauses All disputes or claims arising out of this contract, or breach thereof, shall be
resolved by the arbitration before and according to the
rules of that body Any award rendered thereby may be entered in any court of
competent jurisdiction
Enforcement of arbitration awards Courts of most nations recognize and enforce arbitration awards New York Convention (1958 UN Convention on the Recognition and Enforcement
of Foreign Arbitral Awards)
Arbitration: Advantages
“levels the playing field”
Permits the resolution by a third “neutral” party/country
Arbitrator may be chosen
Rules of the arbitrating organisation
Procedural advantages
Cost effective
Right to appeal is limited
Arbitration: Disadvantages
Still expensive
Losing party has limited right to appeal
Discovery is limited
Relaxed procedural rules
Limit rights to approach court
Selection of arbitrator
No precedential value
Parties agree on arbitration, but once they do,
they may not withdraw
Enforcement of Foreign Judgments Winning party can obtain judgment for damages or other
award
Commercial Disputes with Nations Sovereign Immunity: protects foreign governments from suit
when they are acting as political entities
Exception: When foreign governments operate businesses with an
intention to make a profit, they may be sued in court as a corporation
Litigation A case (called a suit or 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 judgment)
Procedural
law
Procedural law (process that must follow)
discovery of evidence
trail by jury
Issue of damages
Right to appeal
Jurisdiction
◦Territorial: power of a Court to hear and decide a case is
said to be a “competent” court
◦In rem: power over property within its geographical
boundaries
Subject matter: jurisdiction over certain types of cases like
torts or contracts
In Personam Jurisdiction Jurisdiction over the person
Requirement for In Personam
Jurisdiction
◦Based upon a notion of
“fairness”
Many other countries have
similar concept
Forum Non Conveniens discretionary power of a court to hear a case
Forum Selection Clauses A forum selection clause is a provision in a contract that fixes in advance the jurisdiction in
which any disputes will be arbitrated or litigated
Conflict of Laws
◦Application to Torts/Delicts. Factors:
(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 g 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”