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Types of commercial cross border disputes and options for resolving them
Any legal dispute can cause stress and strain for all parties involved, but cross-border disputes can be even difficult to manage. There will be at least two jurisdictions to navigate, possibly multiple jurisdictions and international laws to contend with. This may mean that your British law firm may not have the capacity to deal with legal matters in other jurisdictions. Instructing more than one law firm could lead to a degree of confusion, Giambrone & Partners have multi-jurisdictional lawyers all under one roof and can advise on a wide range of jurisdictions.
This guide will explore the potential types of commercial cross-border disputes that can occur, as well as explaining how Brexit has considerably changed how cross-border disputes between the UK and Europe are now dealt with.
Click on a link to that section:
Explore some of the common reasons why individuals and businesses bring cross-border legal proceedings
Before bringing a claim, you will have to consider jurisdiction and applicable law
Understanding how Brexit has affected individuals and businesses make commercial dispute claims
The different Conventions to be aware of, but how has Brexit changed their effect on the UK?
How you can settle your commercial cross border dispute.
How we can help.
We answer some common questions surrounding commercial cross border disputes.
Examples of common commercial cross-border disputes
Commercial disputes typically occur between companies or an individual and a company. Common examples of commercial disputes include:
- Breaches of contract, failure to carry out tasks outlined within the contract
- Disputes between shareholders and business partners
- Insolvency
- Fraud
- Professional and commercial negligence
- Trade issues and provisions.
Disputes sometimes occur when a business has expanded overseas and a legal dispute arises with an overseas business. Businesses may also encounter difficulties with their foreign clients. Understanding the cultural differences and expectations when doing business in another country can often offset the potential for disputes.
What factors need to be considered in a cross-border dispute?
There are additional considerations involving when considering bringing a claim against an overseas business in a cross-border dispute. The key factors are:
Jurisdiction
Jurisdiction is the term applied to the authority granted to a court to enact justice, it is also used to refer to the geographical area in which particular laws apply. The laws within each jurisdiction can vary considerably. Commercial contracts frequently incorporate jurisdiction clauses that define where a dispute should be litigated in the event of a dispute where a resolution cannot be negotiated. This ensures that all parties are aware of the jurisdiction and laws under which a dispute will be legally resolved and prevents one party starting legal proceedings in an unfamiliar or unfavourable jurisdiction.
Appointing Legal representation
Where considering embarking on bringing a claim against an overseas business you should take legal advice that relates to the jurisdiction where the matter may be litigated. Often, UK based businesses take legal advice from a law firm only qualified in the laws of England and Wales, and when faced with a cross-border dispute, choose to instruct a separate foreign law firm. Having to deal with two law firms can lead to errors and misunderstandings and inevitably there will be time delays as information is passed between them. Giambrone & Partners has multi-lingual and multi-jurisdictional lawyers in all our offices. All cross-border matters can be dealt with under one roof.
How Brexit changed the cross-border landscape between the UK and Europe
If your dispute lies with an individual or business in an EU member state, Brexit has changed the landscape surrounding cross-border disputes. The Withdrawal Agreement made sure that civil and commercial disputes brought before the 31st December 2020 would continue follow EU laws governing jurisdiction and applicable law.
After this date when the UK left the EU, governing law on jurisdiction and applicable law changed. These changes were expressed in the withdrawal agreement, alongside other conventions and laws that were enacted post-Brexit.
Brexit and Conventions
The Lugano Convention 2007
The Lugano Convention provided cross-border collaboration for commercial disputes in terms of dealing with jurisdiction and enforcement of judgments across the Europe Union. However, membership to this Convention is dependent on being a member of the EU. Once having left the EU the UK’s membership to the Lugano Convention was terminated. In order to regain membership the UK must be granted permission to do so by the EU, however the UK’s application was refused by the EU.
The Hague Convention 2005
The Hague Convention acts in a similar way to the Lugano Convention for purposes of cross-border litigation and applies to contracts including exclusive jurisdiction clauses. However, there is disagreement between the EU and the UK as to when the UK became a member of the Hague Convention. This impacts jurisdiction clauses as the Hague Convention can only apply to contractual clauses incorporated after membership. The EU contends that the UK did not become a member until 2021 and that only jurisdiction clauses after that date apply.
If no Convention applies
In the event of no enforcement jurisdiction clauses contained in your contract, a claim will be litigated subject to the laws of the country in which the litigation takes place. The UK is now regarded as a third country by the EU. If you have a jurisdiction clause in the relevant contract then any legal action will be taken in the designated jurisdiction. If you do not, it is advised that you take action first which will enable you to choose the jurisdiction.
You can find out more about commercial disputes in our advice centre.
How can a cross-border dispute be settled?
Commercial disputes between cross-border individuals or companies can be settled with the assistance of experienced cross-border lawyers. They will identify whether your contract has a jurisdiction clause; if not, they will be able to put in place a strategy to navigate the laws of whichever country applies.
Alternative dispute resolution (ADR) is strongly recommended as the first course of action. Either mediation or arbitration, whichever is the most appropriate, to settle matters in a less hostile manner. Lawyers familiar with international law can help assess your claim and build a strong case, settling your dispute as efficiently as possible.
International arbitration at Giambrone and Partners
At Giambrone and Partners, we have years of experience in dealing with commercial cross-border disputes, pre- and post-Brexit. We can provide advice on how best to proceed with your case, as well as supporting you through mediation where possible, and helping you build your claim.
Our lawyers specialise in various jurisdictions in the EU, so get in contact today to arrange an appointment.
Common queries
Is there a time limit in commercial cross-border disputes?
Depending on the type of commercial dispute you bring, there could be a time limit. For instance, contractual claims must be brought within six years of the alleged breach. Each case is different, so you should discuss your case with an experienced international lawyer.
How can a dispute be resolved?
With the advice and guidance of an experience international lawyer either a negotiated resolution can be reached or a legal case may be able to be built. There is no guarantee that a court case will be successful.
Related content
Dispute resolution clauses in contracts
A complete guide to resolving a contract dispute
How to make a professional negligence claim