INTERNATIONAL BUSINESS DISPUTE RESOLUTION Disputes are always possible, so anticipate them.

Best time to determine how the dispute is to be resolved is when the parties first enter into the relationship - parties will be friendly and optimistic then. Bringing a lawsuit is likely to terminate the business relationship. Issues to consider in preparing an agreement: Choice of Forum parties will probably want disputes settled in their own country in U.S., forum clause will be upheld, absent a strong showing that it should be set aside Generally requires bad faith, fraud or over-reaching to set aside E.g., sneak in a reference to an obscure regulation in a foreign language Choice of law (in absence of agreement) not same as choice of forum three approaches: Lex loci - where is that, in this day of electronic communications? Still followed in 15 States Most significant relationship to the transaction - balancing of factors Flexible, but uncertain Governmental interests analysis Law of the jurisdiction most interested in the outcome May be a consideration important to only one country what about choice of law provisions in substantive law of chosen jurisdiction? Choice Of Law Clauses In general, chosen law will govern if The issue is one the parties could have resolved by direct negotiations (Cant negotiate away the FCPA, for example) As to any issue, unless: 1. Chosen state has no substantial relationship, or there is no other reasonable basis for choice Example - parties might want to agree to law of England, as to insurance issues 2. Application of that law would violate a fundamental policy of a state with greater interest in the matter

Jurisdiction of court 1

in international law, jurisdiction is a concept of sovereignty Prescriptive Binding authority over subjects to do and dont Extraterritorial effect - controversial Enforcement Adjudicative in U.S., concept of due process Minimum contacts Territorial jurisdiction - physically located Doing business committing a tortious act Owning property? Clearly jurisdiction over a dispute over the property In U.S., not sufficient for personal jurisdiction Is sufficient in other places If not related to the transaction at issue, minimum contacts must be systematic and continuous for personal jurisdiction Forum non conveniens Court may decline jurisdiction if inconvenient to the parties, witnesses or places an undue burden on the Court Alternative Dispute Resolution Mediation Voluntary, non-binding Arbitration - method usually chosen to resolve international business disputes By contract, binding decision Principal centers for international arbitration: International Chamber of Commerce - Paris London Court of Arbitration Stockholm Chamber of Commerce Awards covered by United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention of 1958) - both US and RU Presumes validity of award - burden of proving otherwise is on the party opposing enforcement of the award - Invalidity of the underlying agreement - Subject matter of the dispute is non-arbitrable - Lack of due process - Award exceeds submission to arbitration - Improper arbitral procedure or composition of the panel - Violates some public policy of forum country Anti-trust Acts? Agreements to arbitrate have been 2

upheld, where anti-trust raised as a defense Also, in U.S., Federal Arbitration Act (1994) Legal climate in U.S. is strongly favorable to enforcement Federal courts have jurisdiction to enforce the awards Other issues: service of process - fundamental issue is fairness Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents - both US and RU - three methods Letter of Request from U.S. Court to foreign authority Diplomatic or Consular officer Private Commissioner, appointed by foreign state enforcement of judgments in other country jurisdiction over parent/subsidiary - look to Degree of control Common officers, directors, etc. Is the sub merely a Marketing conduit Public marketing materials do not distinguish between the two Failure to observe corporate formalities Common participation in the conduct complained of obtaining evidence Possible, but can be tricky - outside scope of our discussion discovery U.S. takes very broad view of pre-trial discovery Other countries may not approve - blocking statutes Canada has specific laws against U.S. style discovery in Canada Act of State Doctrine U.S. courts will not rule on the legality of the act of a foreign government What if more than one proceeding brought in more than one country? Three possible results: 1. International Comity One nation recognizes the laws of another One court orders dismissal, defers to other 2. Allow both cases to proceed 3. Issue an anti-suit injunction against one of the parties (not the other court) from proceeding in the other case Courts can be reluctant to do this Can add to international tensions and undermine international comity