CHOOSING JURISDICTION AND APPLICABLE LAW IN DISTRIBUTION CONTRACTS:

STRATEGIES AND RECENT TRENDS

LITIGATING IN CRITICAL COUNTRIES:中国 (CHINA),

РОССИЯ (RUSSIA), INDIA

Paul Jones, Toronto (China)Vladimir Lobastov, St. Petersburg (Russia)

Avninder Singh, New Delhi (India)

IDI Annual MeetingJune 14, 2013 München, Deutschland

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Introduction• The People’s Republic of China (“PRC”) and the

Russian Federation are civil law jurisdictions

• Both are modeled on Germany

• India is a common law jurisdiction modeled on English law

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Introduction – PRC Courtroom

3

Introduction – Russian Courtroom

4

Introduction - India

5

Going to Court around the World

Enforcement of Contracts –

• World Bank – www.doingbusiness.org/EconomyRankings

• Based on procedures, time and cost

• Germany - 5th

• United States – 6th

• France – 8th

• Hong Kong – 10th

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Going to Court around the World

Enforcement of Contracts –

• World Bank – www.doingbusiness.org/EconomyRankings

• Based on procedures, time and cost

• Russian Federation – 11th

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Going to Court around the World

Enforcement of Contracts –

• World Bank – www.doingbusiness.org/EconomyRankings

• Based on procedures, time and cost

• Russian Federation – 11th

• Australia – 15th

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Going to Court around the World

Enforcement of Contracts –

• World Bank – www.doingbusiness.org/EconomyRankings

• Based on procedures, time and cost

• Russian Federation – 11th

• Australia– 15th

• People’s Republic of China– 19th

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Going to Court around the World

Enforcement of Contracts –

• World Bank – www.doingbusiness.org/EconomyRankings

• Based on procedures, time and cost

• Russian Federation – 11th

• Australia– 15th

• People’s Republic of China– 19th

• Canada – 62nd

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Going to Court around the WorldEnforcement of Contracts –

• World Bank – www.doingbusiness.org/EconomyRankings

• Based on procedures, time and cost

• Russian Federation – 11th

• Australia– 15th

• People’s Republic of China– 19th

• Canada – 62nd

• Brasil – 116th

• India - 184th 11

FACT SITUATION – Sloppy Sally• Sloppy Sally Inc. based in New York

• entered into a franchise agreements and a area development agreements in the PRC, Russia and India

• no disclosure document was given 12

FACT SITUATION – Sloppy Sally• Franchisees signed U.S. standard form of

franchise agreement

• defaulted

• not following standards regarding cleanliness,

• using an unauthorized trademark in the system,

• not submitting reports and

• not paying royalties

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FACT SITUATION – Sloppy Sally

• governing law is that of New York State

Disputes, except those involving intellectual property, shall be resolved by arbitration in New York City

• Intellectual property disputes shall be resolved by the exclusive jurisdiction of the courts of the Southern District of New York.

• The franchisor retains the option of using the local courts for all disputes.

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FACT SITUATION – Sloppy SallyInhouse counsel:

• How best to terminate the franchisees?

• arbitration in New York tales about 3 months to a year; costs about $50,000 to $100,000 USD

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QUESTIONS – Sloppy Sally

1. How long would it generally take to obtain an initial court decision in your jurisdiction? What would it cost?

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QUESTIONS – Sloppy Sally

2. How long would it generally take to obtain court recognition for an arbitral award in your jurisdictions? What would it cost?

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QUESTIONS – Sloppy Sally

3. What evidence would be required with respect to the claim about each of the issues and what formalities would be required:

• The cleanliness issue and the local standards defense?

• The use of the unauthorized trademark?

• The failure to file reports?

• The failure to pay?18

QUESTIONS – Sloppy Sally

4. Would a court in your country accept jurisdiction if Sloppy Sally exercised its option to use the local court?

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QUESTIONS – Sloppy Sally

5. Would there be enforcement of any interim measures with respect to the trademark issue, or any other issues, in arbitration or in court?

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CHOOSING JURISDICTION AND APPLICABLE LAW IN DISTRIBUTION CONTRACTS:

STRATEGIES AND RECENT TRENDS

LITIGATING IN CRITICAL COUNTRIES:中国 (CHINA),

РОССИЯ (RUSSIA), INDIA

Paul Jones, Toronto (China)Vladimir Lobastov, St. Petersburg (Russia)

Avninder Singh, New Delhi (India)

IDI Annual MeetingJune 14, 2013 München, Deutschland

21212121