1Resolving Commercial Disputes 

INTERNATIONAL COMMERCIAL LAW

2Avoiding Business Disputes

Cultural Attitudes toward Disputes. Old adage “hope for the best but plan for the worst.” Americans see “win or loose” in business; Asians seek

amicable settlements. Americans view negotiation as a means to an end to close

the deal; most other cultures see negotiations as time to build relationships and trust.

Methods of Resolution. mediation, arbitration, and litigation.

3Mediation

Mediation: voluntary, nonbinding, conciliation process.

4Arbitration

Arbitration: binding award that can be enforced by courts of law in different countries.

5Litigation Jurisdiction.

Territorial: power to hear cases related to crimes committed within a territory.

Subject matter: jurisdiction over certain types of cases like torts or contracts.

Diversity of citizenship: federal courts have jurisdiction over matters between citizens of different states or citizens of one state.

Requirement for In Personam Jurisdiction: Minimum Contacts.

Venue: geographical location of a court of competent jurisdiction.

Forum Non Conveniens: discretionary power of a court to hear a case.

6Conflict of Laws

Refers to rules by which courts determine which jurisdiction’s law applies to a particular case. Restatement (Second) of the Conflict of Laws. Absent a choice of law

clause, generally the court will apply the law of the state, country or jurisdiction that has the closest relationship to the transaction.

Application to Contracts under Restatement (Second). Five factors: (1) place of contracting, (2) place where the contract was negotiated, (3) place of contract performance, (4) location of the subject matter, and (5) domicile, residence, nationality, place of incorporation, and place of

business of the parties.

7Conflict of Laws Application to Torts under Restatement (Second). 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; and (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 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.”

8Conflict of LawsJudicial Assistance: Discovery and

Collection of Evidence. 1970 Hague Convention on the Taking of Evidence Abroad in

Civil or Commercial Matters. Letters Rogatory: most countries will accept requests for

assistance, except for Japan and China. Antisuit Injunctions: U.S. courts have power to enjoin a party

over whom they have jurisdiction from bringing a lawsuit in a foreign country.

9Enforcement of Foreign Judgments Winning party can obtain judgment

for damages or other award. In the U.S. judgments can be enforced in

another state under the “full faith and credit clause” of the U.S. Constitution.

Some 30 states allow for enforcement of foreign awards.

10Commercial Disputes with Nations When foreign governments operate

businesses with an intention to make a profit, they may be sued in court as a corporation. See the Convention on the Settlement of Investment

Disputes Between States and Nationals of Other States (Washington 1966).

11Conclusion

When negotiating with a business in a foreign country, hope for the best, plan for the worst. Prepare a contract in such a way that you

anticipate worst-case scenarios and include language that is very clear (in both languages) and protects your interests.

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Based on the negotiation your group has entered into How will you Meditate? How will you Arbitrate? How will you Litigate? What are the Conflict of Laws?

In class group workOn top of your papers Names of group members present Company name

All assignments must be handed in at the end of class