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How to resolve a cross-border trade dispute
Disputes are commonplace in business dealings, whether the dispute relates to business-and-business disputes or business-and-consumer. Most issues can be easily resolved between parties using mediation, but others can become increasingly contentious. When disputes occur across borders, it can be harder to negotiate a resolution.
We will explain the common issues that arise in cross-border disputes, who is responsible for resolving trade agreements and how Brexit has affected trade disputes and their resolution. We will also advise how you can limit the chances of a dispute occurring in the future and when legal advice is necessary.
Click on the links below to jump to that section:
Here are some examples of disputes involving international trade
Understand where the responsibilities lie in resolving an international trade dispute
The impact Brexit has had on the way international disputes are resolved.
How you can help prevent a trade dispute from arising
When you should seek legal advice for your trade dispute
Here’s how our experienced solicitors can help
What are common examples of cross-border trade disputes?
Cross-border trade disputes can occur for numerous reasons, but there are some situations that occur more frequently than others. Payment terms are often disagreed upon, as well as goods or services, despite being stated in a contract and agreed upon. Disputes over the quality of service or goods provided are commonplace.
Contracts should be clear and concise, with four important elements to ensure that they are legally binding; an offer, acceptance, consideration and the intention to create legal relations.
With cross-border business transactions, each party may operate with the currency of their home country. This can lead to exchange rate risks, as the market is highly unpredictable. Disputes can arise when the currency of the buying party depreciates. Also, since Brexit, deals can be derailed, and trade paths can be blocked by new governing laws or a change in Government.
Who is responsible for resolving trade disagreements?
Generally, the World Trade Organisation (WTO) is responsible for efficient, fair trade between different countries. There are defined rules in place that must be followed, and governments must meet their trading standards. Between companies, it is the responsibility of each party involved in the dispute to resolve the matter between themselves. Legal advice and guidance is essential to ensure that the resolution decided upon by the parties involved is viable and legal.
When drafting a contract, you should include a jurisdiction clause, so that prior to a dispute arising the jurisdiction in which the dispute is to be resolved is already decided and agreed upon by both parties. Without a jurisdiction clause, the most applicable law will be considered by the courts. Contracts often reflect the jurisdiction related to the country where the contract is enacted. Also, the jurisdiction of England & Wales is popular due to its perceived fairness and lack of corruption.
If you find yourself involved in a cross-border trade dispute and there is no jurisdiction clause stated, Giambrone & Partners has a range of experienced international lawyers who can assist.
How has Brexit affected negotiations in international disputes?
Since Brexit, trade agreements have been put in place between the UK and the EU to help the process run smoothly. The EU-UK Trade and Cooperation Agreement (TCA) prevented any new tariffs or quotas from being introduced, but it does not eliminate the possibility of new tariffs in the future. To find out more about the TCA, you can read our previous guide here.
The Withdrawal Agreement 2020 stated that civil and commercial disputes brought before the 31st of December 2020 (the 'exit date') would follow existing EU laws governing jurisdiction and applicable law. After this date, the governing laws concerning jurisdiction and applicable law changed. These changes were expressed in the withdrawal agreement, alongside other conventions.
Therefore, if you become involved in a trade dispute, you must either respect and adhere to the contract or refer to the applicable law. You can find out more about Brexit and commercial cross-border disputes here.
How can I reduce the chances of a trade dispute occurring?
It is important to ensure that you have thoroughly reviewed your contracts before signing, and included a jurisdiction clause as previously mentioned. Also, make sure that all clauses within the contract are agreed upon and that both parties are aware of the expectations enshrined in the contract, thus lowering the chances of a dispute occurring.
You should always draft your contract with the guidance and expertise of a legal professional to ensure that any potential problems, loopholes or ambiguities are not present. This way, you can stop trade disputes before they happen. Engaging the services of an international lawyer can also help you overcome any cultural or language barriers, which is so important to avoid any confusion between the parties.
If you need help settling an international litigation case, get in contact with our expert solicitors today to arrange a consultation.
Resolving a trade dispute: when do I need legal advice?
If a trade dispute occurs between you and another party, you should not hesitate to immediately seek legal advice. International disputes can be difficult, and the slightest misstep could be highly detrimental to your business. Expert international lawyers can analyse your case and determine the steps to be taken that are in your best interests.
How Giambrone and Partners can help
Giambrone & Partners have years of experience in dealing with cross-border commercial litigation, settling disputes effectively and efficiently. Our multi-jurisdictional international lawyers can navigate through the applicable law in a wide range of counties, allowing you to focus on your business.
To find out more, or to book a consultation, do not hesitate to get in touch with us today.
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