The world is becoming more globalized each day. Instant communication across oceans and time zones is simpler than ever. It’s becoming increasingly easy to set up a business in Detroit with a partner in Delhi.
The ease of international collaboration creates many opportunities for developing businesses. However, it also brings its share of complications. When conflict arises with a partner, vendor or manufacturer, there can be additional legal challenges when the disputing parties reside in different countries.
If you decided to sue your local supplier, your case would go to court in Michigan. However, if you and your Indian supplier got into a legal battle, should a court in India or the United States handle the case? There is a risk of bias towards the local party in either case. For this reason, arbitration is often a preferred method of dispute resolution in international legal conflicts.This method can help ensure that a neutral party hears your case and that the outcome is enforceable worldwide.
The laws of each country
When you enter into a business relationship with a party from another country, it’s important to ensure that the terms of your contract are legal and enforceable both in your country and in your partner’s country. For example, it would be impossible to require that your supplier in India provide a NAFTA certificate on all goods they ship to you, because such certification is not possible outside of North America.
It is highly advisable to have an attorney experienced in international dispute resolution review any international business contract before you sign it to ensure that the terms are fulfillable according to the laws of both countries. Conducting this important step at the onset can help you avoid legal challenges down the road.