Resolving cross-border commercial disputes: jurisdiction and enforcement considerations

In today’s globalised business landscape, cross-border commercial disputes have become increasingly common. As businesses expand their operations and engage in international transactions, navigating the complexities of resolving disputes across jurisdictions has become a critical aspect of doing business. This article explores the key considerations and challenges involved in resolving cross-border commercial disputes, with a particular focus on jurisdiction and enforcement.

Jurisdiction

Jurisdiction refers to the authority of a court or legal system to hear and decide a case. In cross-border disputes, determining the appropriate jurisdiction can be complex due to the involvement of multiple countries and legal systems. The following factors should be considered:

Jurisdictional agreement

Parties can proactively address jurisdictional issues by including a choice of forum clause in the contracts. This clause specifies that disputes will be resolved exclusively or non-exclusively within a particular jurisdiction, such as the courts of England and Wales. A well-drafted choice of jurisdiction clause can provide certainty and predictability in determining the appropriate court.

International conventions and treaties

In the absence of a choice of forum clause, or if the clause in the contract is not drafted clearly, the situation can become more complicated. The parties may rely on International Conventions and Treaties, which may facilitate the recognition and enforcement of judgments across borders. An example includes the Hague Convention on Choice of Court Agreements.

Forum non conveniens

In cases where no jurisdictional agreement exists, the principle of forum non conveniens may apply. This principle allows a court to decline jurisdiction if it determines that another forum is more appropriate for the resolution of the dispute. Factors considered include the convenience of the parties, and the connection between the dispute and the jurisdiction in question.

Enforcement

Once a judgement is obtained, enforcing it across borders can present significant challenges. Here are important considerations for the enforcement of judgements in the context of cross-border commercial disputes:

Recognition and enforcement of judgments

Each jurisdiction has its own rules and procedures for recognising and enforcing foreign judgments. Some jurisdictions may require the judgment to meet certain criteria, such as being final and conclusive, before enforcement can take place.

International arbitration

Arbitration is often chosen as the preferred method of dispute resolution in cross-border commercial transactions. Arbitral awards are generally easier to enforce across borders due to the existence of international conventions and treaties.

Asset tracing and recovery

In cases where a judgment debtor attempts to evade enforcement, asset tracing and recovery strategies become crucial. Claimants should consider litigating in the place where the assets are located to avoid having to transport a judgment from elsewhere: the rules on enforcing foreign judgments can be complex.

Conclusion

Resolving cross-border commercial disputes requires careful consideration of jurisdictional issues and enforcement challenges. By proactively addressing jurisdiction in contractual agreements, understanding the principles of forum non conveniens, and leveraging international conventions and treaties, parties can navigate jurisdictional challenges more effectively. Additionally, understanding the enforcement mechanisms available, such as recognising and enforcing judgments and utilising international arbitration, enhances the chances of achieving successful outcomes in cross-border commercial dispute resolution.

How we can help

If you would like any advice on resolving cross-border commercial disputes, please do not hesitate to contact our commercial dispute resolution team who will be happy to help.