ARTICLE
12 May 2023

International Trade Dispute Resolution Mechanism-An Overview

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LEGALLANDS LLP

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LEGALLANDS, a LEGAL500 full-service Law firm based in New Delhi, India having an international presence in the United States of America (LEGALLANDS INC.) and United Arab Emirates (LEGALLANDS LLC FZ). We are a leading global corporate firm, research and strategy driven, with reach in several countries having an unparalleled reputation for groundbreaking work and having Legal Attorneys who qualified Bar in several foreign jurisdictions and Corporate Professionals as an integral part of our team. We are the go-to specialists for Corporate Houses, HNIs and Govt. enterprises around the world, looking to conduct businesses in India, UAE, USA and for entities having roots in India, UAE and USA considering business expansion across the globe. While being long known as a dominant player in the International and Corporate business World, we come in our present avatar as ‘LEGALLANDS’ after building capabilities in diverse areas such as Corporate & Commercial Services, Management Services, Dispute Resolution, and litigation
Trade & commerce are the two main aspects of the economy and finance which completes the business cycle.
India International Law

INTERNATIONAL TRADE DISPUTE RESOLUTION MECHANISM-AN OVERVIEW

Trade & commerce are the two main aspects of the economy and finance which completes the business cycle. As the trade barriers no longer exist amongst the countries, there is a persistent risk of disputes for various reasons which could relates to quality, quantity, delivery, packing, shelf life, warranties, modes and terms of payments, timelines, and regulations prevailing country, and so on so forth.

Generally, the dispute resolution mechanism is agreed upon between the parties before the start of the trade transaction and entering of a contract or issuance of a purchase order or letter of Intent, etc. Accordingly, in the courts of the country as agreed in the contract, settles the disputes as per their established law or through the process of Arbitration and Mediation the disputes can be settled and resolved. The trial of the dispute by a court or arbitration tribunal has its own legal processes and depending upon the tricks and complexities of the legal recourse chosen the decree or award is passed which further be taken up for execution in the country in which the same is to be accomplished.

LEGALLANDS has the requisite experience and skills and network to deal with such Dispute Resolution Mechanisms in International Trade transactions whether it is the process of mediation, arbitration or obtaining an Award or Decree or Execution of the same. Our Expert professional team can study, interpret, research, strategies- legal and lobbying, negotiate, formulate, draft contracts, prepare suits & claims & petitions, etc., for all sorts of International Disputes such as Sale & Purchase of Goods or Services, Joint Ventures & Collaborations, Technology Transfers, IPR License, Government Contracts, E-Commerce, Banking and Payment Settlements, Third Party Guarantees and many more.

INTERNATIONAL PUBLIC DISPUTES & INTERNATIONAL PRIVATE DISPUTES:1

  • INTERNATIONAL PUBLIC DISPUTES

International Public Disputes are those disputes that arise between nations, as in some cases, an agreement among some nations may involuntarily subject other nations to that law. These disputes are related to international criminal law, maritime law, the law of war, human rights law, refugee law, and the law established by treaties between nations.

In such cases, nations empower a common court or tribunal to resolve international disputes. These nations agree to submit disputes to these courts or tribunals, which are charged with applying the sources of international law (along with any codifications or common law derived by those courts or tribunals) in resolving the conflict.

  • INTERNATIONAL PRIVATE DISPUTE

International Private Disputes concern disputes between individuals or businesses (not nations) in situations where the law of more than one nation may apply. This is often referred to as an international conflict of law. These situations commonly arise through commercial transactions undertaken by parties from different nations.

DELINEATION OF ALTERNATIVE DISPUTE RESOLUTION PROCEDURES:

  • LEGAL NOTICE:

The first step towards initiating the dispute resolution is preparing & sending Legal Notice for the Recovery of the outstanding amount, enforcement of contracts, etc. through Jurisdictional Commercial/ Civil courts and Appointment of Arbitrator in case of Arbitration Clause specified in the Trade and Commercial Contract between the parties.

  • LEGAL STRATEGY:

Based on the queries, concerns and particular nature of the dispute a research for laws of various countries is carried out to formulate a legal & lobbying strategy for trade recoveries and dispute resolution.

  • ALTERNATIVE DISPUTE RESOLUTION, LITIGATION, CRIMINAL PROCEEDINGS & GENERAL LOBBYING:
  1. ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION, MEDIATION, NEGOTIATION ETC.:

Wherein the existing Trade Contract executed between the parties shall have a clause providing for resolution of disputes through Alternative Dispute Resolution(ADR) Mechanisms like Arbitration, Mediation, or Negotiation at the first instance instead of Litigation proceedings, providing a seat for the conduct of the proceedings and the manner of choosing Arbitrator/s or Mediator/s, such clauses shall govern the conduct of proceedings unless the contrary is mandated by statutes of the particular jurisdictions.

In India, the statutes allow the resolution of disputes through ADR mechanisms and allow contractual clauses to define the procedure to be followed in such proceedings. The intervention of courts in reopening Arbitral Awards or Mediation settlements is greatly restricted as per the laws of India. Similar provisions exist across other jurisdictions around the world where the scope of interference in the finality of Arbitral Awards or Mediation Settlements is limited.

  • APPLICABILITY OF ARBITRATION CLAUSE:

The Trade Contract generally consists a predefined Arbitration Clause mentioning the applicable arbitration law, procedure for choice of the arbitrator, language of arbitration and the place for the arbitration proceedings. We at Legallands provides the client with the assistance in enforcing the clause as per the mentioned terms and conditions, whereas in case the parties are unable to choose the respective arbitrator for the dispute resolution, an alternative Arbitrator shall be appointed by the Judicial Authority based on Jurisdiction after filing of the requisite application before the Hon'ble authorities.

  • ASSISTANCE AND REPRESENTATION IN DISPUTE RESOLUTION(S):

We at LEGALLANDS aid in the resolution of all the trade & commercial disputes between individuals and entities within the country and outside the country like in the jurisdictions of India, UAE, Singapore, Europe, UK, USA, etc., and the subsequent appearance, representation, resolution before the Arbitration Tribunal or any other forum as decided by the parties.

  • OBTAINING AWARDS

We represent parties in Arbitration proceedings to file claims, suits, petitions, complaints, etc. obtain decrees or awards anywhere in the world through the court process or alternate dispute resolution mechanisms such as mediation or arbitration and in the manner of proceedings whether virtual or physical and obtain awards for the parties.

  • ENFORCEMENT OF AWARDS
  • IN INDIA:

We represent parties for enforcing various Arbitration Awards or execution of decrees through the mechanisms of the courts of India. Further such award or decree could have been passed anywhere in the world, we represent parties to enforce such awards or decrees in India according to laws in force in India which recognizes foreign awards.

  • IN OTHER JURISDICTIONS:

Further, we engage the services of qualified Counsels, Attorneys, and Solicitors in any other Jurisdictions like the USA, UAE, UK, Europe, Japan, Singapore, etc., for the enforcement of awards or decrees in such jurisdictions.

  • EXISTING FACILITIES AND POTENTIAL OPTIONS FOR INTERNATIONAL DISPUTE RESOLUTION
  • INTERNATIONAL COURT OF JUSTICE (ICJ), HAGUE:

The headquarters of the International Court of Justice is situated in Hague, Netherlands. It was founded on 26th June 1945 in San Francisco. Its jurisdiction depends entirely on the willingness of the parties involved. This along with arbitration is commonly known as the judicial way of settling a dispute. Consent of the parties is a prerequisite for the cases to be heard in the ICJ. While the judges of the court are appointed by the General Assembly and the Security Council of the United Nations, the arbitrators are appointed by the parties themselves.

ICJ's primary function is known to be resolving disputes amongst sovereign states. Only States can be parties to the dispute that is brought before it. The International Court of Justice has recently decided on the Kulbhushan Jadav case. India and Pakistan were the parties to the dispute in this case.

  • LONDON COURT OF INTERNATIONAL ARBITRATION, LONDON:

The LCIA was est. on November 23, 1892, in the city of Guildhall, London and provides efficient, flexible, and impartial ADR proceedings and over 80% of parties in pending LCIA cases are not of English nationality. The LCIA's dispute resolution services are available, without any membership requirements. LCIA administers arbitrations under its own rules (LCIA Arbitration Rules) and theUNCITRALArbitration Rules.

  • SINGAPORE INTERNATIONAL ARBITRATION CENTER, SINGAPORE:

SIAC was established on the 1st of July 1991 as a not-for-profitinternational arbitrationorganization, which administers arbitrations under its own rules of arbitration and theUNCITRALArbitration Rules. SIAC is a global arbitral institution providing case management services to parties from all over the world. SIAC arbitration awards have been enforced in many jurisdictions including Australia, China, Hong Kong SAR, India, Indonesia, Jordan, Thailand, UK, USA, and Vietnam, amongst other New York Convention signatories.

  • HONG KONG INTERNATIONAL ARBITRATION CENTER, HONG KONG:

HKIAC is a non-profit organization, which was established in 1985. HKIAC also offers state-of-the-art hearing facilities, which have been ranked first worldwide for location, value for money, IT services, and helpfulness of the staff. HKIAC is the third most preferred and used arbitral institution worldwide. HKIAC administers arbitrations under its own rules (HKIAC Administered Arbitration Rules) and under UNICTRAL Arbitration Rules.

  • INTERNATIONAL COURT OF ARBITRATION, PARIS

The International Court of Arbitration was established in 1923 and has been helping to resolve difficulties in international commercial and business disputes to support trade and investment. The International Court of Arbitration is an arm of the International Chamber of Commerce. It plays an essential role by providing various customizable services for every stage of their dispute.

The purpose is to ensure proper application of the ICC Rules, as well as assist parties and arbitrators in overcoming procedural obstacles. These efforts are supported by the Court's Secretariat, which is made up of more than 80 lawyers and support personnel from over 37 nationalities speaking almost 30 languages. The International Court of Arbitration administers under its ICC (International Chamber of Commerce) Rules for Arbitration.

  • WIPO ARBITRATION & MEDIATION CENTER, GENEVA:

The WIPO Arbitration and Mediation Centre was est. on 14th of July 1967,to offer Alternative Dispute Resolution (ADR) options for the resolution of international commercial disputes between private parties. The arbitration, mediation, and expert determination procedures offered by the Centre are widely recognized as particularly appropriate for technology, entertainment, and other disputes involving intellectual property. WIPO administers arbitrations under WIPO Arbitration Rules and under UNICTRAL Arbitration Rules.

  • AMERICAN ARBITRATION ASSOCIATION, NEW YORK:

TheAmerican Arbitration Association(AAA) is a not-for-profit organization in the field ofalternative dispute resolution, providing services to individuals and organizations. TheInternational Centre for Dispute Resolution(ICDR), established in 1996 by the AAA, administersinternational arbitrationproceedings initiated under the institution's rules. ICDR currently has offices inNew York City, London,Mexico City,Singapore, andBahrain. AAA administers arbitrations under UNICTRAL Arbitration Rules.

  • DUBAI INTERNATIONAL ARBITRATION CENTER, UAE:

The Dubai International Arbitration Centre (DIAC) is the largest in the Middles East. It was initially established by the Dubai Chamber of Commerce and Industry (Dubai Chamber) in 1994 as the Centre for Commercial Conciliation and Arbitration.

The DIAC provides local and international business communities with commercial arbitration services, including modern and well-equipped meeting and hearing rooms, and has a pool of experienced arbitrators from different nationalities and legal backgrounds. DIAC administers arbitrations under DIAC Arbitration Proceedings Rules and under UNICTRAL Arbitration Rules.

  • INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES:

TheICSID is aninternational arbitrationinstitution funded by theWorld Bank Group and established in 1966 for legaldispute resolution and conciliation between international investors and States. ICSID administers arbitrations under ICSID Convention Arbitration Rules as well as under other rules such as UNICTRAL Arbitration Rules and takes up ad-hoc investor-state and state-state cases.

The procedural rules for arbitration under the ICSID Convention may be used to settle disputes between an ICSID Contracting State—the term given to States that have ratified the ICSID Convention—and nationals of another Contracting State. The rules benefit from a robust enforcement mechanism, as Contracting States agree that an ICSID Convention award will be treated as a final judgment of their courts. As of May 2016, 153 contracting member states agreed to enforce and upholdarbitral awardsin accordance with the ICSID Convention.

  • STATUTES GOVERNING INTERNATIONAL ADR
  • UNICTRAL ARBITRATION RULES:

The UNCITRAL Arbitration Rules provide a comprehensive set of procedural rules upon which parties may agree for the conduct of arbitral proceedings arising out of their commercial relationship and are widely used in ad hoc arbitrations as well as administered arbitrations.

The Rules cover all aspects of the arbitral process, providing a model arbitration clause, setting out procedural rules regarding the appointment of arbitrators and the conduct of arbitral proceedings, and establishing rules concerning the form, effect, and interpretation of the award.

As per Queens Marry Arbitration Survey, 2021, UNCITRAL Arbitration Rules were chosen by three-quarters (76%) of respondents. UNCITRAL Arbitration Rules are used across all sectors in both commercial and investment treatyarbitration.

  • NATIONAL ARBITRATION LAWS:

National arbitration laws can be found in the civil code of the relevant jurisdiction. This section provides suggestions for subject-specific resources collecting national arbitration statutes from countries around the world. The National Arbitration Laws were chosen by 28% of respondents as per Queens Marry Arbitration Survey, 2021.

  • BESPOKE REGIMES AGREED BY THE PARTIES:

Bespoke Regimes are those terms and conditions, which are discussed and agreed upon by the parties. Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties insert an arbitration clause stating the applicable regime for arbitration.

Parties are free to adapt the clause to their circumstances. For instance, they may wish to stipulate the number of arbitrators. Also, it may be desirable for them to stipulate the place and language of the arbitration and the law applicable to the merits.

As per Queens Marry Arbitration Survey, 2021, "BESPOKE REGIMES AGREED BY THE PARTIES" were chosen by 26% of respondents.

  • LONDON MARITIME ARBITRATORS' ASSOCIATION:

The LMAA Terms are terms of procedure that are available to parties for incorporation into dispute resolution clauses in their maritime contracts. Where members of a tribunal accept their appointments on the LMAA Terms, those Terms then apply to and govern the procedure to be adopted in the arbitration reference.

As per Queens Marry Arbitration Survey, 2021, "LMAA RULES" were chosen by 13% of respondents.

  1. LITIGATION PROCEEDINGS:

If there are no provisions for the resolution of disputes through ADR mechanisms in the subject contract of the client, litigation will be resorted to directly.

OR

In case of failure of resolution of disputes through ADR Mechanisms, litigation in courts can be resorted to. The manner of resolving the dispute through litigation varies with the amount claimed in the dispute between the parties.

LEGALLANDS has tie-ups with prominent international law firms all across the globe in furtherance of which we are able to represent our clients in case of International Disputes and can provide hassle-free services like drafting and serving legal notices, filling for recovery suits, handling, appearing, and representing for the proceeding(s) and litigation, etc.

  • GENERAL PROCEDURE OF LITIGATION PROCEEDINGS:
  • Initial Step: Legal Notice shall be sent to the opposite party contemplating the concerns and requirements based on the activities performed, delineating the claims of the client.
  • Subsequent Steps: A commercial/civil suit shall be filed before the jurisdictional judicial authority as per the Indian Laws. Fast track mechanisms like Commercial Courts can be resorted to, based on the valuation of the claim.
  • Matters relating to Recovery of Monetary obligations: A Recovery suit shall be drafted and filed before the jurisdictional judicial authorities considering the jurisdiction along with the intimation to the Ministry of External Affairs, India followed by the Police compliant against the defaulter who has not made good the payment, in New Delhi, India and subsequent place of business where the defaulter is registered.
  • RECOVERY SUIT:

LEGALLANDS aids in drafting and filing of Recovery Suit arising due to non-fulfillment of any trade practice(s) or payment/ repayment of the trade obligations as per the contract between the parties before the appropriate Judicial Authority in India. Such appropriate judicial authorities include specialized commercial courts which have jurisdiction over commercial disputes for a minimum amount of INR 3,00,000 (Rupees Three Lakhs only) or about USD 4000 (Four thousand US Dollars only). Further, there are provisions regarding the proceedings before the Commercial Courts, which provide for deciding the dispute within a time period of 6 months after the filing of documents wherein admission or denial of claims by the parties are recorded.

  • ASSISTANCE IN HANDLING PROCEEDING(S) IN COURT AND OTHER FORUMS / TRIBUNALS:

LEGALLANDS aids in handling, appearing, and representing for the proceeding(s) and litigation, which are already existing or arising in the future for the matters related to all spheres of law including Civil, Criminal, Corporate, IPR, Money Laundering, Tax laws.

  1. CRIMINAL PROCEEDINGS:
  • CRIMINAL COMPLAINT TO LAW ENFORCEMENT:

Criminal Compliant under the concerned section of Indian Penal Laws before the concerned Law Enforcement Officers based upon the Jurisdiction and depending upon the nature of default concluded by the concerned party.

  • CRIMINAL COMPLAINT TO CUSTOMS AUTHORITIES:

A criminal Complaint shall be made to the Customs Authorities in India from where the party in Default or opposite party trades in export and import of the goods/services requesting the authorities to take appropriate action against the fraudulent act of the defaulting party.

  • CRIMINAL COMPLAINTS TO AUTHORITIES WITH RESPECT TO (w.r.t.) NATURE OF DEFAULT:

Criminal complaint to be filed against the defaulter with the authorities based on the default concluded by the concerned party depending upon the nature of the default, such as:

  • Default w.r.t. Joint Venture Business Project:
  • Default w.r.t. Recovery of goods for payment
  • Default w.r.t Non-fulfillment of Trade Obligations by the company incorporated in India or having principal place of business in India
  • Default w.r.t. Trade Practices of an Indian Resident
  • Default w.r.t. Investments in India
  • Default w.r.t. Non-compliance with the duties and obligations as mentioned in the contract between the parties.
  1. CEASE AND DESIST MEASURES:

We at LEGALLANDS consider this approach as a fruitful attempt to influence statutory bodies and government through either written or oral communication to propose, support, oppose, amend, or repeal any action against the defaulter.

  • CORPORATE ADVISORY & CONTRACT FORMATIONS: DRAFTING & VETTING LEGAL AGREEMENTS & CONTRACTS:

We at LEGALLANDS believe that a sound foundation shall help in prevailing in the dispute ultimately and hence the contract which is the foundation for the trade transactions should be legally sound. We shall aid in drafting and vetting of Legal Agreements and Contracts for our clients who may be individuals/Companies etc., with any trade associate entity in any country around the world. The nature of agreements include:

  • Joint Venture Agreements
  • Collaboration Agreements
  • Supply/ Receipt of Goods & Services- Sale, Purchase & Distribution Agreements
  • Contractor Agreements
  • Facilitation Agreements
  • IPR Agreement
  • Any other trade or mutually accepted agreements and contracts between the parties.

Footnote

1. https://legallands.com/portfolio-item/international-dispute-resolution-mediation-arbitration-litigation/

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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