International Trade Law Essays Text

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Typically, it is less expensive than litigation, since fewer legal professionals are required. It is also perceived to lead to a speedier resolution of disputes due to decreased formality, the removal of the need to schedule around the timetable of the formal court system, and, typically, the absence of a right of appeal schmitthoff, 2007. Arbitration allows the parties to control a number of variables in the dispute resolution process through prior agreement mustill amp boyd, 2008.

These include the choice of an arbitrator with specialist knowledge of the relevant area, the scope of the arbitration, the location of arbitration and the choice of law. In addition, arbitration is a private rather than public procedure and therefore will not be subject to public record: this is likely to be advantageous if the subject matter is particularly damaging to public image of company. By contrast, many of these same factors may prove disadvantageous to the parties in a different factual scenario. The lack of a right to appeal may become a disadvantage if the arbitrator makes an error of fact, or the arbitrator appointed is not as impartial as the parties would wish.

In addition, arbitration is disadvantageous because it lacks formal mechanisms for the enforcement of arbitral awards or attendance at the arbitration, and cannot compel third parties to attend. It determines cases according to a fixed substantive law without reference to the general principles of fairness that an arbitrator might refer to moses, 2008. It also provides for an appeal procedure, should that be perceived as an advantage. In addition, there are fewer variables for the parties to control or anticipate in advance of the dispute arising, and litigation is supported by formal enforcement mechanisms, including contempt of court and proprietary remedies. By contrast, judges may not be specialists in the given dispute area, which my be deemed more important than their appearance of impartiality to the litigation process.

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Formal litigation is associated with delays, inflexible timetabling and higher costs, although it should be noted that the costs of any given dispute resolution mechanism are dependent on the facts of the case particularly its complexity, length and the number of legal professionals employed. It is also important to discuss the possible limitations that domestic laws may place on the nature of the arbitration, and the effect, therefore, that they may have to tip the balance in favour of one method over the other in any given situation. There are significant theoretical difficulties in determining the source and content of the arbitrator's power: the form and nature of arbitration may be limited by the way in which law governing the contractual relationship between the relevant parties conceives of arbitration lew, 1978. Most legal systems adopt the position either that the arbitration agreement constitutes an autonomous source of authority wholly independent of any national legal system goode, 2004: 1178 or, alternatively, that the arbitration agreement brings into play an autonomous arbitral order derived from the institutional character of arbitration and based on principles common to civilized states mustill and boyd, 2008: 66.

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There is, therefore, a conflict between the autonomous nature of the arbitration and its reliance on the law of the forum in order to confer this autonomy. This conflict may place a practical limitation on the form that the arbitration takes if the lex fori arbitrae does not permit the parties to consent out of particular legal mechanisms goode, 2006. Despite the intentions of the parties to contract out of it, litigation may be the only available mechanism. International trade is a legally complex field due to the disparate bodies of national commercial law that may apply to any given transaction sealy amp hooley, 2008.

There is widespread recognition that international commercial codes are necessary to avoid the difficulties inherent in conducting international commercial transactions using the laws of individual nation states goode, 1991 and, as a result, significant efforts have been made to generate substantive legal codes that parties can incorporate by reference to govern their international trade transactions. Further to these attempts at harmonization, bonell 2003 has proposed that a global commercial code is developed that has an application to all members of the international trade community. However, an equally significant movement has been underway which intends to secure harmonization of procedure in international trade goode, 2006.

It is often overlooked that the substantive regulation of international trade takes place in a framework outside that of the national courts, and the harmonization of the procedures of dispute resolution is arguably as important as that of the substantive rules of international trade stephan, 19. In this respect, the efforts of the european union in harmonizing the conflicts of laws rules under the brussels i regulation and the rome ii convention are particularly notable briggs, 2008. what reforms are necessary to improve the legal position of international traders? stephan 19 takes this observation to its logical conclusion, and argues that the legal profession should stop trying to unify substantive rules of trade law until a comprehensive framework has been developed for the dispute resolution mechanisms in which those rules will apply. Parry argues that inherent limitations arise when uniform international trade rules are implemented in different national legal systems. He assesses the benefits of further harmonization under three headings: the reduction of legal risks in international commerce, legal reform, and enhanced roles of international legal advisers. His argument is that harmonization operates in favour of one of those interests at any given time, but is likely to work against the other. Personally, i would seek to make the broader argument that further reform in the field of substantive harmonization is likely to suppress discussion of procedural harmonization.

To my eyes, the most important reforms for the harmonization of the international trade system at present include a more uniform approach to dispute resolution, and an extension of a conflict of laws system such as the rules in place within the eu member states, to members of the international trade community more broadly. The question of which courts have jurisdiction to hear the dispute will be determined by the brussels i regulation. The regulation applies to all civil and commercial matters art 1 1 and this dispute is likely to fall squarely within that definition as a contractual dispute between two incorporated bodies. Art 5 1 states that in relation to contractual disputes, the court of the member state in which the characteristic performance of the contract takes place shall have jurisdiction.

The characteristic performance is the performance for which payment is made by the counterparty briggs, 2008: 171 , and will therefore be the place where the goods are due to be delivered by the seller. Since the contract stipulates that the goods are to be provided fob southampton, then the place of performance is england. In the absence of a choice of law by the parties, art 4 2 states that in contractual disputes where the contract is entered into in the course of a trade or profession, then the country in which the principal place of business is situated shall be the company or performance is to be made is the country whose law governs the contract. On the facts, it would appear that english law therefore governs: products plc is an english registered company, and the place of performance of the characteristic performance was england. For the avoidance of doubt, the contract between products plc and produits sa was a contract for sale rather than carriage of goods, and therefore art 4 4 does not apply. products plc v nee soon wat pty the question of jurisdiction in this case will depend on whether the claimants can argue that the office held by the defendant company in rotterdam constitutes residence within a member state of the european union for the purposes of the brussels regulation.

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