The 5 things not to do in international trade disputes.
When we talk about international trade disputes, we refer to those issues that arise between two or more subjects of different countries in the execution of commercial contracts.
That generally refers to disputes relating to the manner of executing and/or interpreting the contracts themselves.
The management of these disputes must be appropriately provided during the drafting of the contract and can not be left to the free inspiration of the parties but must be entrusted to experienced professionals.
Normally the analysis will focus on preferring the jurisdiction of one of the parties and referring to the court of the latter or choose a joint international arbitration chamber.
However, even in the subjectivity of any commercial relationship, it is possible to draw up a general handbook of 5 things to avoid when speaking about or dealing with international trade disputes, especially intending to choose arbitration clauses.
# 1. Automatically delegate litigation to a Court instead of an Arbitration Chamber.
It is necessary to dispel the cliché of the excessive burden of international arbitration concerning an ordinary judgment at the Court. Normally, when it comes to international trade disputes, reference is made to economically important agreements.
In the event of a dispute, one will look to define the value of the dispute. Therefore it is absolutely not excluded that a dispute before a magistrate is more expensive in economics and time.
Moreover, the dispute managed by an Arbitration Chamber will have the advantage of being sometimes the only way to see a sentence executed, especially if there is no agreement on the mutual recognition between the two countries of the parties involved.
#2. Choose the Arbitration Chamber without taking into account the nationality of a counterpart.
Even not making a careful selection of the body that will decide the dispute in the arbitration is a risk not to be taken when it is decided to insert the arbitration clause in the contract.
Based on the geographical area to which the counterparty belongs, there are arbitration Chambers of reference, which will encourage the latter to accept the reduced clause in case of doubts during the drafting of the contract.
For example, Americans will tend to impose the AAA (American Arbitration Association) or, Middle Eastern counterparts will tend to point to London or Switzerland as their preferred locations.
The essential thing will be first to assess the clause’s drafting, both the regulation of the Chamber itself that could lead to some problems from a legal point of view, both the tariffs.
# 3. Incorrectly identify the location of the arbitration.
If arbitration is chosen to resolve disputes, it will be necessary to identify exactly where it is located.
A fundamental point because the clause could be considered null or even could affect the internationality of the award.
# 4. Preferring the arbitration board with respect to the sole arbiter.
Sometimes, the choice of the college of three referees is not only the most reliable but also the most prestigious. In reality, this choice risks being really wasteful and should be relegated to really complex cases.
# 5. Improvise.
The prediction of the possible international commercial disputes that may arise from the execution of a contract is a fundamental point to keep in mind when drafting a contract with foreign counterparts. We need an overview of all the possible consequences and tools for resolving the dispute.