All companies depend on their contracts and terms of business to protect their interests, particularly those that trade internationally. It is imperative to ensure that contracts and terms of business are sound, up-to-date and appropriate to the type of business to be undertaken.

Many businesses do not review their contracts especially frequently and understandably, following the trading challenges that the global pandemic created, limiting costs is viewed by some companies as essential to survival, therefore reviewing and updating a commercial contract may seem like an unnecessary outlay.

Unfortunately, this can prove to be a false economy should a dispute arise and it is discovered that your contract is full of holes and not in line with contemporary business needs or current compliance requirements.

Giambrone & Partners litigation lawyers always aim initially to effect a negotiated resolution through alternative dispute resolution ("ADR") and reserve legal action before a court as the last course of action if either arbitration or mediation proves to be unsuccessful. If a company is faced with an intractable contentious issue the inclusion of current jurisdiction clauses is vital. Such clauses enable the pursuit of a claim in the jurisdiction of your choice that provides the best opportunity for success.

The compelling reason for ensuring that jurisdiction and other clauses related to dispute resolution are incorporated in your contract is the wide variation across jurisdictions concerning costs, procedures and competence. Any company involved with international trade needs certainty and to make sure that the way a dispute, should one arise, is managed is clarified and in which court system a dispute would be handled is defined.

Zahir Iqbal, a senior associate in the London office, pointed out "the most popular jurisdiction for commercial disputes is that of England & Wales and a recent judgment obtained by Giambrone & Partners, the first in Europe and the second worldwide, has demonstrated the court's cutting-edge foresight by embracing the latest technology and granting permission to serve notice of proceedings by non-fungible token ("NFT") through blockchain" Zahir further commented, "this method of service translates into real-world activity and its immutable nature of will prove to be a highly desirable quality in a number of types of dispute."

There are various jurisdiction clauses, exclusive, non-exclusive or unilateral as well as ADR clauses and also governing law clauses.

Exclusive clauses, as the name suggests, limit any dispute to the courts of one jurisdiction an example of which is:

this agreement irrevocably agrees that the courts of England & Wales shall have exclusive jurisdiction to hear, settle and/or determine any dispute, controversy or claim arising out of or in connection with this agreement

With this clause, the parties to the contract are limited to bringing a claim in only the courts designated within the clause in the contract.

Non-exclusive clauses permit either party involved in the dispute to take the dispute to the jurisdiction of their choice. An example of a non-exclusive clause:

The submission to jurisdiction in clause [...as above] does not and is not to be construed to limit the rights of a party to take proceedings against the other party in another court of competent jurisdiction, nor is the taking of proceedings in one or more jurisdictions to preclude the taking of proceedings in another jurisdiction, whether concurrently or not.

This clause applies to either party allowing them to pursue a claim against the other party in any jurisdiction they find suitable.

Unilateral clauses, also known as a one-sided clause or an asymmetrical clause, permit only one party the choice of jurisdiction. Usually applied to financial agreements and permit the borrower to sue in a designated jurisdiction and the lender to sue in any appropriate jurisdiction. This provides an advantage to the lender. An example of a unilateral clause:

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement. This... Clause is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings related to a Dispute in any other courts in any jurisdiction...

Governing law clauses, are also known as choice of law or applicable law clauses, unlike jurisdiction clauses, do not define the jurisdiction but determine the rules and laws to which the trial must adhere to resolve the dispute. As well as governing the rights and obligations of the parties involved. The choice of governing law must be carefully considered. Unfortunately, there are instances where the parties cannot agree due to each party wishing to retain the advantage. In a dispute involving two international household names their failure to agree attracted scathing comment from the judge.

A typical example of a governing law clause is:

This Agreement shall be governed by and construed in accordance with the laws of England & Wales.

It is particularly valuable to include an alternative dispute resolution ("ADR") clause to ensure that there will be an attempt to negotiate a settlement where a dispute occurs. Not only is ("ADR") undertaken in private by means of either arbitration or mediation, it is nearly always a cost-effective and speedier option. The flexibility and confidentiality of ("ADR") negotiations work to protect both parties. Arbitration, in particular, is especially common in cross-border disputes as some parties find that litigating in a foreign jurisdiction is costly and prefer employing a neutral arbitrator.

Mediation, while less common than arbitration when attempting to resolve commercial contract disputes. However, it usually provides even lower costs than arbitration.

It should be noted that ("ADR") clauses enshrined in the contract are binding and you may be prevented from taking court action if you have not attempted ("ADR") before proceeding with litigation. It is vital to be advised on the risks and benefits such provisions.

An example of an ("ADR") clause:

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules

The International Chamber of Commerce ("ICC") encourages disputing commercial entities to adapt this clause to their needs.

In the absence of any clauses in the contract to govern contentious disputes, the parties may be obliged to adhere to rules of private international law.

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.