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RESOLVING INTERNATIONAL COMMERCIAL DISPUTES - Coggle Diagram
RESOLVING INTERNATIONAL COMMERCIAL DISPUTES
Avoiding business disputes and alternative dispute resolution (ADR)
Long-term business relationships are the most profitable. Trust is essential in these relationships, especially in international business. Disputes threatening trust can harm future business opportunities and reputations. Amicable settlements are the ideal outcome to maintain business relationships. A reservoir of trust and goodwill is beneficial for resolving conflicts amicably. An effective contract can mitigate future disagreements and promote harmony in business dealings.
Cultural attitudes affect dispute resolution approaches. Americans see win or lose in businesses; Asians seek amicable settlements. There are differences in negotiation.
ADR offers faster, cheaper and more efficient alternative to resolving international commercial disputes than litigation. Parties must voluntary submit to the resolution process.
1st form of ADR is Mediation: Voluntary, non-binding, conciliation process; Parties agree on an impartial mediator; Final decision to settle rests with the parties; No public records on negative publicity; Parties reserve rights to resort to binding arbitration or litigation.
2nd form of ADR is Arbitration: More formalized process resulting in a binding award that the courts of law in many countries will enforce; Parties agree on arbitration, but once they do they may not withdraw; Frequently used in International Business; Private.
Litigation is the last resort for dispute resolution, predominantly utilized in the United States. The role of judges varies; they may act as impartial arbitrators or actively seek the truth by examining witnesses. The differences in legal systems can significantly impact litigation outcomes. Contract parties can influence the choice of substantive law and procedural rules through choice of law clauses. Forum selection clauses in contracts can determine the litigation's geographical venue.
Jurisdiction is the court's authority to hear and decide a case, characterized as a "competent" court. Territorial jurisdiction: power over crimes committed within a specific territory. In rem jurisdiction: authority over property within geographical boundaries. Subject matter jurisdiction: court's ability to hear specific types of cases like torts or contracts. Personal jurisdiction (in personam) focuses on the court's power over individual or corporate defendants. Jurisdiction is typically obtained via summons served on an individual or a legal agent of a corporation.
Jurisdiction is distinct from venue; venue indicates the geographic location of a competent court to hear a case. Federal rules allow cases to be heard where plaintiffs or defendants reside, or where the cause arose. Plaintiffs generally choose where to file, but defendants can request a venue change for convenience and relevance.
Forum non conveniens allows courts to decline cases despite proper jurisdiction and venue for convenience. It favours hearing cases in jurisdictions more connected to the cause of action. Factors influencing decisions include the location of the action, witness and evidence locations, party residences, and applicable laws.
Forum selection clauses in contracts help clarify jurisdiction and venue for international disputes. Such clauses stipulate in advance where disputes will be arbitrated or litigated, providing certainty to parties. They prevent last-minute "forum shopping," where lawyers seek favourable jurisdictions for lawsuits.
Conflict of Laws
Conflict of laws refers to rules for determining applicable jurisdiction’s laws. Choice of law influences court jurisdiction, rights, liabilities, and judgment enforcement. Determining applicable law for contracts resembles locating a contract's "centre of gravity."
Application to Contracts
Five factors for consideration are:
Place of contracting (where acceptance occurred).
Place of negotiation (significance of detailed negotiations).
Place of contract performance.
Location of the contract's subject matter.
Parties' domicile, residence, nationality, incorporation, and business location.
Application to Torts/Delicts: Factors
Place where injury occured.
Place where conduct causing injury occured.
Domicile, residence, nationality, place of incorporation, and place of business of the parties
Place where the relationship between the parties is centered.