International Disputes When Business Internationally Issues Settling Essay

Download this Essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Essay:

International Disputes

When business internationally issues settling legal disputes international transactions. What practical consideration taking legal actions a foreign business partner-based country? Which laws precedence.

Dealing with conflict in the new global economy

The rise of the new global economy has generated profits for many enterprises because of the connections it has fostered. However, in addition to the positive benefits of international agreements, there has also been a rise in international disputes. "As international commerce increases, so does the volume of international business disputes…new inbound and outbound foreign investment surpassed previous levels. Some of these deals will fail, and not all contracts will be performed as planned" (A new way to resolve international business disputes in Illinois, 2013, CIDRA). Two of the most common methods of dealing with international disputes between business entities are international litigation and international arbitration. Litigation has certain superficial advantages, from the point-of-view of a firm: "judges are mostly independent, filing fees are much less than arbitration fees, and one has the right to appeal" (Aliment 2009: 12). So why do so many international firms prefer arbitration? The difficulty in determining which laws should preside in a dispute between parties from different nations has caused a shift in the international business community in favor of arbitration. This paper suggests that arbitration is the most effective solution to legal problems between business entities from different nations, when it is unclear which laws of the land apply.

First and foremost, there may be a substantive legal conflict between the laws of the business' home country, with which it is familiar, and the laws of the foreign business partner. This lack of cultural legal fluency can make arbitration, where the negotiating partners set mutually-agreed upon terms for one another, seem preferable to litigation. Even between two relatively similar nations such as say, France and the United States, there are many legal differences governing business. The French justice system is underlined by a different conceptual foundation -- it is inquisitorial or fact-finding rather than adversarial like the U.S. And it is also bound by regulations governing the EU, unlike the United States. "Most businesses are reluctant to be subjected to another country's unfamiliar laws, legal process, jury systems, and discovery procedures. Some question the partiality of local judges and attorneys toward local business. There are also problems with the unpredictability of outcomes and enforcement of judgments from one country to another" (A new way to resolve international business disputes in Illinois, 2013, CIDRA). Instead of procedural and jurisdictional wrangling, arbitration allows for a 'meeting of the minds' and establishes common ground between the participants even before talks begin. This common ground can be fruitful in reaching a final decision.

Another issue is that "confusion, delay, and expense may be visited upon both parties in the event of parallel litigation in competing jurisdictions, with the possibility of conflicting judgments" (Aliment 2009: 15). When it is possible to get a different judgment or settlement, there is often a strong incentive to file parallel litigation. This acts as a form of 'risk mitigation' in case the initial decision does not go the plaintiff's way (Aliment 2009: 16). However, the parallel litigation may result in such prolonged legal action there is little ultimate value for either party in the result, hence once again a preference for arbitration.

Large, international businesses may also be wary of the public outcry that may be generated by a protracted legal battle, while arbitration can remain confidential, according to the agreed-upon terms of the parties. Arbitrations tend to be speedier, with some lasting as few as two days, versus court cases which can take years to settle. Also, arbitration often conveys a greater sense of overall control upon the proceedings. "The ability to select the arbitrator, the language of proceedings, and the place of hearings are other important reasons that favor commercial arbitration. In addition, complicated rules of procedure and evidence can be modified or excluded in arbitration but not in court proceedings. The extent of the award or type of damages may be contemplated beforehand, which allows parties to draft a proper arbitration clause and plan ahead with appropriate reserves" (Aliment 2009: 13). In arbitration, it is thought there is less likely to be 'winners' and losers' because the…[continue]

Cite This Essay:

"International Disputes When Business Internationally Issues Settling" (2013, July 20) Retrieved October 28, 2016, from

"International Disputes When Business Internationally Issues Settling" 20 July 2013. Web.28 October. 2016. <>

"International Disputes When Business Internationally Issues Settling", 20 July 2013, Accessed.28 October. 2016,

Other Documents Pertaining To This Topic

  • Business Comparative Law and Business a Company

    Business Comparative Law and Business A company has decided to expand its operations to another nation. The company is involved in information technology (IT) and is headquartered in Malaysia. The desire is to grow assets by beginning operations in Thailand. The fact that these are two separate countries makes the transition difficult, but it complicated by the fact that the two nations have different sets of laws which govern aspects of

  • International Development Law and Banking and Finance Law

    English Right of Set-Off and Combination in the Circumstance of Insolvency The right of combination and set-off, as developed under English law offer a number of safeguards to banks and creditors in general. These rights were expanded under the principles that they were necessary to effect substantial justice and that they would stimulate economic growth and trade. In the following paper, I suggest that the judicial application of these rights

  • Northampton Based Organization Expanding to International Market

    Northampton-Based Organisation Wishes Expand Market Internationally Strategy of International Trade A firm may decide to operate internationally due to a wide variety of reasons. These reasons include but are not limited to market imperfections at home, gaining market power and favourable environment overseas. In order to operate internationally, firms need an appropriate strategy so that their resources are put to best use and the whole process of internationalization proceeds according to

  • Freedom of Association in Malaysia When One

    Freedom of Association in Malaysia When one talks about the foundation of a powerful civil society, freedom of association is very important for the foundation along with the rule of law, freedom of religion, freedom of expression and free and competitive elections. Freedom of association is also an important part of the pluralistic democracy (Tekle, 2010). The previous communist countries of the Central and Eastern Europe which had been, in the

  • Mediation a Process in Which

    Hence, those people who are particularly concerned about privacy are far more comfortable with mediation as compared to litigation or arbitration for dispute resolution. Confidentiality is particularly important in settlement proceedings as people are often reluctant to reveal their "bottom line" to the opposing party; in mediation, they may reveal their bottom lines to the mediator in confidence who can use the information to settle the dispute. Cost Reduction Mediation is,

  • Legitimization and Effectiveness of Denationalization

    " (Zurn, 2004) VII. GATT Zurn (2004) states of GATT that this regime is a primary example of an international institution in the traditional sense in that the form of GATT regulation has three features, which are distinctive as follows: 1) the states are the ultimate and exclusive addressees of the regulation. They are issued with directives not to increase customs tariffs or to apply them in a discriminating way. The objective of

  • Water in the Middle East

    While on one hand, the Nile gets the highest discharge from rainfall on the highlands of Ethiopia and upland plateau of East Africa, located well outside the Middle East region; on the other hand, discharge points of the other two rivers, Euphrates and Tigris, are positioned well within the Middle East region, prevailing mostly in Turkey, Syria along with Iraq. In other areas, recurrent river systems are restricted to

Read Full Essay
Copyright 2016 . All Rights Reserved