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Resolution of commercial disputes, Many contracts will contain arbitration…
Resolution of commercial disputes
Alternative dispute resolution
Methods which are faster, less expensive and more efficient than litigation. All parties must voluntarily agree to these alternative resolutions.
Mediation
This resolution is non-binding, and the final decision rests with the parties. Parties will mutually appoint an impartial mediator. There will be no public record of these proceedings. As this process is non-binding the parties involved will reserve the right for litigation or arbitration to take place.
Arbitration
This process is frequently used in the course of International Business, and although it costs less than litigation, it might still end up costly. Parties have to agree on arbitration, as soon as they have agreed they are not allowed to withdraw from the process. Same as mediation, there will be no public record of the proceedings. Parties will only have a very limited right to appeal the verdict. This verdict will be determined by a third/ neutral party.
Litigation
"A case (called 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 judgement)"
www.youtube.com. (n.d.). Unit 6 Lesson 2 2 Litigation. [online] Available at:
https://www.youtube.com/watch?v=zLVSXhBFB4E&t=38s
[Accessed 1 Oct. 2023].
A consideration is that depending on the country or the area there may be differences in the legal systems. These differences would be present in the procedural law as well as the substantive laws. To avoid these differences Choice of law clause could be added to agreements, ect.
When resolving disputes through litigation there are a series of steps to be taken.
Jurisdiction - Jurisdiction needs to be determined. This will determine which court, and its subsequent laws, will hear and try a case. This is not to be confused with venue, as venue only refers to the geographical location of the court.
A court must have In Personam Jurisdiction. This means that the person must some have some sort of connection to the jurisdiction/ court.
Jurisdiction can only be obtained by courts through means of proper service of process. In order for the court to have jurisdiction the defendant must be informed and have knowledge of the proceedings. Each country will have different methods of doing this.
Per Forum
Non Conveniens
- if a case can be heard in more than one country, it must be done in the country which is the most convenient and most relevant to the case.
Through the Forum Selection Clause, entities can add clauses to their contracts which will pre-determine the jurisdiction in which any disputes be arbitrated/ litigated.
Conflict of laws
In some case there may be more than one law that has jurisdiction, there are times where these laws may contradict one another. The court will determine which jurisdiction's law applies to the case.
A court will consider some of the following in regards to contracts:
Place of contracting
Location of where contract was negotiated
Location of subject matter
When countries act in a commercial manner, disputes may also arise, and a country may be summoned to the court of another country.
Choice of law clauses may be added to contracts in order to avoid this problem from happening.
Many contracts will contain arbitration clauses.