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Topic:
International Commercial Law
The question is:
“One of the most important aspects of cross border trade and commerce requiring certainty and predictability must be on giving global legal force and effect to the parties’ choice of governing law and choice of a specific court to resolve any resulting disputes, along with recognition and enforcement of the resulting court judgments. Without this certainty in transnational litigation, parties face significant risks. However, the harmonization efforts in these areas have consistently failed and the position internationally remains uncertain and unpredictable. This is why arbitration has become the main choice of international dispute resolution for parties contracting across national borders.
” Critically discuss and evaluate the accuracy of this statement, ensuring that your reasoning is supported by reference to appropriate primary and secondary legal material/resources and focuses clearly on Assessment of the impact of the various harmonization efforts in these areas.
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International Commercial Law
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International Commercial Law
Introduction
The current law that governs international trade and commerce is not satisfactory despite international trade’s growth. Additionally, the increasing rate of international markets in various regions has promoted cross-border transactions, which has led to the growth of business disputes between foreign countries. On the other hand, international trade and commerce’s growth has led to challenges in international commercial contracts, where various legal and judicial remedies have been developed to deal with the big issue.
International commercial laws have been on the front line in addressing cross-border commercial activists. However, international commercial laws are considered part of private international private parties which govern trade relations between various states. However, international commercial laws are a body of laws, rules, and several principles that are used to offer transnational business direction and Help in dealing with conflicts. The paper discusses international commercial laws on cross-border trade and laws governing international trade and commerce.
International commercial laws cover a wide range of areas, such as the international contract, international carriage laws, international trade, investment agreement, foreign investment laws, and international dispute resolution that focus on commercial arbitration. In understanding the international commercial laws, it is essential to understand the private and public international laws; for instance, the public international law is a type of law that applies to various states and reflects the sovereign power. In contrast, private international law is a law that promotes the interaction between private and international parties.
Private international laws are concerned with international carriage, international commercial contracts and consist of several sources. Some of the private international laws include domestic legislation, interaction, legislation, industrial practice, and custom. On the other hand, the public international laws originate from convection and treaties. The most crucial part of international commercial laws is that the laws Help in countering conflicts of laws, which is the legal system used in handling international cases.
Cross borders Trade and Commerce.
Over the years, international trade has grown tremendously since the second world war. In the united states, commercial laws were developed primarily for regulating businesses. Cross-border trade and commerce have been a growing area, where today the process of exporting and importing goods has been typical across different countries. Most countries, including the united states, engage in international trade for the country’s growth and development, especially in earning revenue and taxation. The relationship between trade and economic growth is close, that depends on each other, where a rise in trade leads to economic growth. Trading across the border has been good practice and remains one factor that promotes poverty reduction among several people.
International trade laws originate from several sources, international legislation, international tree custom, and the arbitral tribunals’ decision. International legislation is a body of laws that help ratify laws concerning n commercial matters and formulate laws that the states can adopt. However, international laws are classified into three categories: the laws that address issues concerning international transactions, laws that are made purposely for municipal purposes, convection that governs and addresses conflicts that arise primarily in international trade and commerce.
The international legislation makes laws that Help direct parties in the trade and those that address issues of the third party, especially those affected by trade transactions. International legislation Helps in unifying laws between countries with different social, economic, and legal systems. However, the uniform model of laws Helps in the unification of laws, which raises some issues, although the model Helps in promoting certainty. On the other hand, the international legislation system has several disadvantages, such as not encouraging the adoption of different legal systems, creating reservations, and making change difficult. However, the legislative system does not produce enough and reliable laws that Help address or satisfy international trade needs.
An international trade custom is a standard form of contract and trade conditions formed by many international agencies, such as the united nations economic commission, the international law association, and the international chamber of commerce. International agencies apply many laws that help deal with trade issues, such as improving security and ensuring justice and equality are served in contract terms. The international trade custom’s primary goals are to ensure a balanced economy, promote negotiation, and promote current and modern international trade. On the other hand, parties’ autonomy of parties wilis and its limits and enforce laws that Help in bringing equality among contracting parties. However, the contracting parties are provided with some rights, such as the right to laws that govern the contracts and principles that provide several limitations of the contract. The decision arbitral tribunal is a source of international trade laws that consist of the arbitration clause that is an agreement that is provided in case of a dispute between two contracting parties.
The arbitration clause provides the contracting parties with the right to report and submit any conflict arising, where the arbitration tribunal is either permanent or Adhoc. Some of the ordinary arbitration tribunals mainly used and known include the court of arbitration of the international chamber of commerce, the international trade association’s arbitral tribunal, and the arbitration commission of the socialist nations. However, the arbitral tribunal helps apply the arbitration process, a convenient, flexible method that promotes freedom. The arbitration tribunal applies a justice process similar to the judge’s system. The arbitrator must identify the law applicable to the issue and deal with the issue through the working laws of international trade.
Governing Laws and Court Jurisdiction to Resolve International Trade and Commerce Disputes
The international trade dispute has been a big issue in the twenty-first century, especially when trade is made between two countries with different legal systems and conflicting general and trade laws. One of the main conflicts that arise is the conflict concerning the international transaction, which involves negotiating, the cost of drafting, and the cost of enforcing contracts. Some of the issue that arises from the international transaction is the cost of information, the cost of enforcement, policing, and that of decision making, and enforcing agreements. However, conflict of law rules Helps in determining the type of court required to address international trade cases. To understand which law applies during a dispute. The international trading community has been developing a number is that can Help in solving disputes in the united states court of international trade. Additionally, the united states’ constitution gives power to congress to exercise, collect taxes, and enforce laws concerning international trade and commerce.
Conflict laws are the laws used when two or more countries are conflicting. Conflict laws consist of several principles that govern and Help with cases, such as the comity principle, sovereignty, principle, uniformity, good faith, and party autonomy. Comity is a principle that means consideration and enforcement of several laws by a country to another country. Uniformity, on the other side, means variation of laws between jurisdictions. Simultaneously, the good faith principle involves entering into a contract with the best interest and sincerely aiming to obtain good results.
On the other hand, sovereignty, however, is a principle that applies to powerful countries and does not conform to any external control from other countries, where the laws, however, cannot affect any business across the border. When dealing with conflict laws, the main issue is that the court is always in a dilemma concerning which country takes precedence over the other country. Conflict laws can be categorized into jurisdiction, judgment, and choice of law, where the jurisdiction handles issues closely connected with the united states constitution. On the other hand, jurisdiction deals with cases aiming at achieving statutory requirements. Choice of law is another section of conflict law, where the courts decide and select a relevant law that can be used to deal with some instances; however, selecting the best lawyer to handle international dispute is the main issue, considering that the impact of the national jurisdiction in foreign countries. There are several policy implications when it comes to the application of conflict laws in dealing with international trade and commerce issues. The properties involved in a transaction conflict are allowed to apply laws through the contract, but when the third party is not present.
The principle means that the conflicting parties can choose and use the private welfare of the conflicting parties. Another important lesson concerning the application conflict of law is that default rules matter, especially when the conflicting parties do not choose the law or a particular law has not been reinforced. The rules of conflicting laws are considered default laws because most of the rules lead to uncertainties. Another lesson is that the objective of the conflict of law should be a reduction of the transaction cost, where free movement of judgment is used, where the plaintiff is allowed to chose the court, especially the right to choose an ex-ante court and application of applicable law in court to avoid cases of rent dissipation. Another lesson is the activity’s location, where the act is not relevant to the conflict law and the place of contracting. Additionally, the government interest approach cannot be supported, and the laws and courts should not discriminate against any foreigner; hence equality should be a top priorities,
Conflict of law wasn’t that the laws of two conflicting countries involved in the trade are different; wherein this case, choice of laws has to be made to determine the type of law applicable. The issue of conflict laws originates when there is an issue concerning the international transaction, where the parties are forced to choose a law governing the associated financial agreement. However, the conflict can be resolved by applying a national legal system that is selected by the parties, where the parties chose the law related to the contract. However, laws’ choice is essential, especially in determining the interpretation of the party’s rights, obligations, and agreement clause. On the other hand, the parties determine the jurisdiction, which Helps in resolving the dispute.
The governing law clause is one of the laws applied to solving an international financial transaction issue. However, the governing law clause Helps in selecting the type of jurisdiction that can be used in resolving the dispute that originates from the financial contract. On the other hand, the jurisdiction clause determines the type of court to resolve the case. The parties, however, should adopt a legal position, and work on achieving certainty, when it comes to the choice of law and understanding financial relationship. In case the parties do not use the governing law clause, the complex legal rules can be applied where the court is forced to make decisions concerning the choice of law issue.
However, the court can decide between the use of the law of the forum or the law of site of transaction or occurrence. The contract, however, should be governed by the laws of the country that the contract is closely connected. Some of the factors play an essential role in case a conflict arises, and the parties are forced to chose the laws and the jurisdiction to use. For instance, considering the legal cost of applying the law, the language, and the potential or the likelihood of biases from the arbitrators. It is evident and standard that the parties mainly chose home jurisdiction for several reasons, especially the laws’ familiarity. However, the application of laws should be consistent with the application of the jurisdiction clause.
During the negotiation process, the parties, however, various non-contractual obligations rise during the period after the contract has been entered into force or finalized and pre-contractual negotiation. It’s the parties’ role to decide on the choice of laws or limit the applicability of the law or extend the use of law for future contractual obligations. According to the Rome 11 regulations in article four, the laws that apply to non-contractual obligation are the country’s laws. The event that caused the damage occurred despite the country where the event contributed to the damage occurred. Also, irrespective of the country where the indirect consequences of the event took place. According to article fourteenth, the conflicting parties are allowed or have the freedom to extend their choice of laws clause according to the financial agreement obligations. Conflicting parties are also allowed to draft their laws and jurisdiction according to the law of xxx.
Transnational Litigation, Dispute Resolution, and Arbitration
According to Article three of the constitution, the international trade court of the united states is the supreme court determining a court established for dealing with international trade cases, the judicial power. Additionally, the judges of the inferior and the supreme courts receive compensation, which is not affected by the office’s continuation. However, the international trade court consists of nine judges appointed by the president through advice and direction from the senate.
The court of international trade has a wide range of powers, including powers from the united states’ district courts concerning equity and laws. The public and private transnational and international trade disputes are solved in the ad hoc arbitrary tribunals, tribunals, and international trade. The transnational litigation entails aspects such as the cross border evidentiary issues, law choice, and enforcement of justice. Other areas of concern in transnational litigation include the service of process, jurisdiction, choice of forum, damages, appellate review, and taking witness evidence abroad.
Over the years, international commercial laws have received several concerns, such as litigation transcending the national borders. Dealing with transnational litigation has been an issue, considering most cases have been dealt with in domestic courts and using domestic laws. Most litigants have complained and ask for justice, especially in dealing with transnational cases. The primary concern has been the need to treat transnational cases as distinct and unique cases that require special laws compared to domestic cases. The litigant, however, advocates for the use of international relation theory that seeks to apply international laws instead of losing control and meaning of lawmaking. Some of the most common international trade regimes include the North American Free Trade Agreement (NAFTA) and the world trade organization (WTO).
The transnational litigation’s prominent role is to protect clients from several claims that originate from international trade, hence reducing and preventing several risks that may threaten an organization of a country’s business. However, the international litigation team Helps in addressing or dealing with all cross-border litigation, such as the implementation of global defensive policies, devising, implementing offensive policies, and coordination. The transnational litigation has Helped deal with the top I international trade cases o over the years across the world, such as the high profile case of chevron corporation versus Ecuador.
The transnational litigation deal with other issues, such as cases of tort and contract disputes, technological issues, intellectual property cases, global media management, international arbitration, multi-jurisdictional environmental, and global strategy proficiency. The transnational litigation is familiar with several other areas, such as global fact investigation, UK commonwealth litigation, multinational trademark, intellectual disputes, international supply chain litigation, corporate separateness, and asset recovery. The transnational litigation groups help represent clients in various companies and industries, such as the food industry, transportation industry, procession, and manufacturing industry. Transnational litigation lawyers, however, represent clients in arbitral tribunals alongside some conflicts, for instance, the resolved case of NML capital ltd and the Daimer AG.
Arbitration
Arbitration has become the primary choice of international dispute resolution for parties contracting across national borders. Arbitration is a method that is considered adequate for dealing with significant transaction conflicts, although other alternative methods are still used, such as mediation or the use of legal form. Arbitration is a dispute resolving method that promotes flexibility, and neutrality , which Is internationally enforceable compared to other methods.
Arbitration, however, is a way of resolving disputes through a third party, where for successful dispute resolution, arbitration, ADR, and court proceedings work in handy, especially in resolving international disputes. Choices are, however, made based on the circumstance and laws applicable to the issue. International contracts go through several potential disputes, such as the sale of commodity disputes, the distributorship, and intermediary disputes, procurement disputes, maritime disputes, disputes with customs authority, disputes with pre-shipment inspection agencies, disputes involving banks, employment contract disputes, a dispute involving state, and state-owned industries.
Sales of Commodity and goods dispute: This is a type of dispute that originates from various business processes, such as the quality of the goods, the condition of goods at delivery, the transportation, timing, and the price of the commodity. However, the type of dispute arises when there is a letter of credit, the ambiguity of the contract, the lack of following the insurance and custom procedures, and the international standards by the customs authorities. Additionally, to avoid the type of disputes, the buyers and sellers or rather the contracting parties should follow several laws and adhere to international commercial terms (incoterms), which consist of several international trade rules applied by international traders.
Construction engineering and infrastructural dispute: This is a type of dispute that arises when the construction work performed does not comply with the contractual agreements and requirements. Some of the construction engineering work includes the construction of bridges, dams, highways, and tunnels. Often, a dispute arises when the work is not collected on time or when the government authorities apply new rules and regulations. On the other hand, the most common type of dispute in the field is the dispute that originates from a failure to apply the federation of consulting engineers)FIDIC), which consists of construction standards for big international projects.
Procurement dispute: Procurement dispute is a type of dispute, especially concerning the bidding process, where most of the time, the bidding process is unfair, or the rules of bidding are violated. Another case of procurement dispute is failure to follow the contractual terms.
Intellectual property dispute: Most international trad business es involves intellectual properties, such as issues like trademark, patent, licensing, and technical Helpance, lack of knowledge concerning the restrictions of use of intellectual property rights, the type of compensation that should be awarded for breach, the termination process of the license may cause several issues, royalties due, and lack of product development licence cover. Most of the time, issues that arise from intellectual properties are solved through arbitration.
Dispute with custom authorities: This type of dispute is prevalent, especially when conducting cross-border businesses, such as importation and exportation. Some of the man issues or disputes include the valuation issue and classification issues, which leads to other issues, such as the non-tariff barrier, quota, and inspection restrictions. Dispute of reasonable valuation can arise if the products do not follow the WTO agreement on customs valuation. Also, customs officials may decline the prices offered compared to the quality of goods, also known as under-invoicing. Dispute with the customs authorities requires one to pay customs duties to be made accessible released, although sometimes arbitration is used to solve the case.
Disputes involving states or state-owned entities: This is a type of dispute that arises when a government entity decides to purchase goods abroad. An issue may arise if the contracting parties do not verify whether the contract can be solved through arbitration. The method for settling disputes should be agreed on and issue verified to avoid conflict on how to resolve cases when issues arise, for instance, in a construction project.
Disputes involving banks: the disputes involving banks are central and common types of disputes, especially the documentary credit dispute, which arises when documentation does not follow the ICC requirements.
Commercial Dispute Resolving
International trade and commercial despite can be resolved through several methods such as the contract negotiation, exemption, and adaptation clause, use of non-jurisdiction methods to settle disputes, such as arbitration, alternative dispute resolution, and use of courts. Contract negotiation is a common type of dispute resolution method, where a contract that is clear and drafted is not prone to disputes compared to a contract that is not signed or drafted. In case of a conflict, the parties are expected to negotiate in good faith and reach a mutual agreement. A qualified lawyer or in-house counsel mainly conducts the negotiation method.
According to lawyers and experts, contracts should never be signed or written in a hurry or when the parties are under pressure to reach an agreement. On the other hand, the exemption and adaptation clause is a conflict that rises after the parties fail to pre-suppose the conditions and requirement off a force majeure, which Helps in addressing hardship issues and impossibilities frustration of re-purposing, and failure to follow the act of God laws. Wors such as the international chamber of commerce(ICC) and the force Majeure should be incorporated into the contract.
The non-jurisdiction methods for settling disputes have been primarily the use of arbitration as the primary and preferred method when dealing with international trade and commercial disputes. Arbitration is considered more accessible and effective to apply arbitration in a foreign country, where to get Helpance or services, the parties must first agree to the method and submit an agreement that is signed when the conflict arises. The agreement, however, consist of names of the institution, which must be written correctly, the name of the arbitral institution. The main factor that makes the arbitration process reliable and effective is the use of different languages in the arbitration rules, where mainly the method Help in solving cases concerned with commodity disputes, construction disputes, and maritime cases, for example, the London-based grain and feed trade association is an arbitration service, that deals with all cases concerning sales. Before selecting the arbitration institution, the parties should make sure the institution is conservant with economic issues and have great expertise in the trade. The arbitration institution has increased tremendously due to international cases’ increased nature and the rise of commercial disputes, especially sales and distribution disputes. Not all arbitration institutions deal with all trade matters, and some specialize in some issues, such as maritime disputes or intellectual property disputes. The arbitral institutions offer services, such as supervision of the arbitral process, which comes at a fee, which covers another arbitral process due to the arbitral institution’s expenses.
Types of Helpance from Arbitral Institutions
The arbitral institution offers several Helpance, although various arbitral institution offers different and unique arbitral processes, such as rules and guidelines to be followed by the conflicting parties. Other arbitration institutions Help the parties in appointing arbitrators that would Help in settling disputes if they arise. On the other side, arbitration institutions administer arbitration proceeding s between various conflicting nationals, supervises the whole proceedings, and notifying the parties concerning several arbitral awards.
There is another type of arbitration where the parties can follow or use their rules and procedures, the Adhoc arbitration. Ad hoc arbitration is a type of arbitration that is is also known as the do-it-yourself type of service. Since the parties do not use the institution’s rules and principles, the parties are expected to adhere to and follow the rules formulated to the latter and the arbitration re-numeration basis.
Benefits of Arbitration and Cost
Most of the time, most parties opt for the Adhoc administration compared to f institutionalized arbitration because the administration mode is cheaper and because there is no appointment of arbitrators or services such as supervision. However, the ad hoc arbitration’s success depends on the efforts and discipline of the parties compared to the rules and principles designed to be followed by the institutionalized arbitration. On the other hand, the ad hoc arbitration parties can opt to ask for Helpance from authority or the chamber of commerce in solving several disputes. However, Helpance calls for apportionment of arbitrators and arbitral tribunal courts’ use in dealing with the issues at hand. However, the arbitration clause is necessary for parties involved in an international business into the bilateral treaty, the international convection, or the application of the conflict of law.
An arbitral clause or an agreement should be in written form, where the information depends upon the parties’ will and the intention to resolve the issue. However, the arbitration agreement should be in writing despite the availability of the oral agreement. Parties or exchanges should sign it in emails or other methods such as faxes. However, it is essential fr the parties to include the arbitration clause in the contract instead of settling disputes or considering when a conflict arises.
Several laws are applicable in the arbitration procedure, the Lex Arbitri, mandatory supervision by the arbitration institutions, consolidation laws, where the court allows consolidation o more than one proceeding into one, and statute of limitation. The statute of limitation considers the language used in the arbitral tribunal, where mostly the language should be the language of the country where arbitration is held, together with a translator for the other parties. Also, the limitation applies to the extent of court intervention, registration of award and extent of the court intervention in a case where disrupting tactics and Helpance are sometimes considered.
The court can intervene in two circumstances, when the losing party wants to appeal for the award against the party or when the winning party decides to apply arbitral awards against the losing party. However, in the case of a foreign award, the interaction convection, for instance, the new York international convection, offers several limitations that decline recognition or the parties’ agreement.
The last ward of the arbitral tribunal can be used to end the dispute, or sometimes the award may be having some errors, such as computational and clerical errors. In other instances, the award offered may be unclear and does not consider the date or the interest when granting the interest. On the other hand, the reward can be recorded s by consent, which means that the terms in the award are consented to and settled in a document provided y the court. On the other hand, the parties have the right to withdraw claims in case of an agreement; hence the arbitral tribunal offers the withdrawal.
Conclusion
International trade and commerce are such a vast and growing area today. International trade or commerce disputes had been a significant issue, primarily due to the rising cases of intellectual properties, maritime disputes, and other types of disputes common in cross-border business. Commercial and uniform laws have been in the front line in dealing with international cases, most cases or transaction, which has affected most parties. The uniform laws help unify laws between various countries, mainly when conflict arises, and the laws differ widely. On the other hand, the conflicting laws are however addressed through some methods such as arbitration method, which is a primary method used in solving disputes compared to other methods, such as mediation and negotiation; on the other hand, the international trade courts are taken to the arbitrary tribunal courts, or the international trade courts, which Help in resolving the dispute and Helping the parties to come up with an agreement.
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