International Agreements

CROSS-BORDER BUSINESS DISPUTE RESOLUTION AND THE IMPORTANCE OF PROPER INTERNATIONAL ARBITRATION PROVISIONS

By: Christian C. Walters, Esq., Barry L. Miller, P.A. Offices Orlando.

Most agree the world market is becoming smaller and smaller due to the advent of additional telecommunication technology and more efficient means of transportation. As a result, on the world-stage, more and more domestic businesses are setting their sights abroad for the sale and marketing of their products, goods, and services. However, peculiar problems arise in the terms of international agreements that cannot be addressed by conventional legal principles. Specifically, in terms of international agreements the colloquialism “I’ll see you in Court,” is often meaningless. Specifically, what court will you be resorting to? What law will govern the interpretation of the contract? Where will be the case be heard? Will there be a court case at all? If a judgment is reached, how can I enforce it in the other party’s home country? These conundrums present unique business questions only presented on the international stage.

Some international conventions attempt to place ground rules for international business. Perhaps the most prominent is the United Nations Convention on the International Sale of Goods (“CISG”), which governs the formation and terms of an international sale of goods contract—similar to the way the Uniform Commercial Code does within the United States. However, while the CISG and similar, substantive international treaties, are great for providing a basis for analyzing a dispute, they do not answer the questions on how best to resolve a dispute between parties to a contract. Rather, such treaties merely set forth the substantive law to be applied by the court or arbitrator in the event of any dispute.

The principal method of resolving international business disputes is binding arbitration. Arbitration is a process by which a private person (usually a lawyer) examines the facts and arguments presented by each party and determines who is the prevailing party in a contractual dispute. Arbitration is preferred because it skips the mess of countless hours spent researching what to do in the event a contractual relationship falls apart, what court has jurisdiction to hear a dispute, how to enforce a judgment in the defendant/respondent’s home country, and so on. Thus, when engaging in international business, it’s crucial to understand how a particular arbitration clause needs to work. The parties to an international contract are free to negotiate between themselves, (1) what law applies (whether to apply an international treaty, such as the CISG, whether to apply local laws of a particular State or country, such as the Uniform Commercial Code), (2) where the arbitration will be held, (3) what damages may be awarded to the prevailing party by the arbitrator, (3) the timeframe applicable to the dispute resolution and its conclusion, (4) whether there can be any appeal of that judgment to further arbitrators and so on.

In typical practicality, the preeminent forum for international arbitration is London, given its central location on the world stage. Similarly, the laws of New York or the United Kingdom are frequently chosen as the law which will govern the interpretation of the contract, and any dispute arising pursuant to it. However, international transactions need not be drafted by a solicitor qualified in the United Kingdom or New York lawyer, rather, Florida lawyers may assist in the preparation of these documents, regardless of what law or forum will govern in any dispute—though it bears noting that frequently the parties may even choose the State of Florida be the forum where there arbitration will be held and that the laws of the State of Florida will be the deciding rules in the action.  By drafting your agreement to have Florida law apply and the Arbitration in Florida, this will save thousands of dollars in litigation and travel costs.  This with other carefully drafted terms will create an advantage for the business owner if a dispute arises.

Fortuitously, the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, colloquially referred to as the “New York Convention,” provides a solid international framework for the enforcement of judgments and awards entered in arbitration. The vast majority of countries have adopted the New York Convention (save for a relatively small number of countries spread throughout Africa and the Middle East, and a few others) and allow the submission of an award entered by an arbitrator into their domestic court systems for enforcement. Thus, upon conclusion of the arbitration and the entry of an arbitral award or judgment, the prevailing party may submit that judgment to the courts of the country in which the defendant resides, and collect upon it through that country’s methods of enforcement (typically, garnishment, execution, levy, and lien).

The attorneys at Barry L. Miller, P.A. are familiar with the complex workings of international transactions and are available to assist you in completing your international business transaction. Call us today at 407-423-1700, or visit our website at www.BarryMillerLaw.com to arrange a consultation to discuss how our office can best assist you.