Dispute Resolution in International Procurement

In any trade relationship there is potential for dispute. The multi-jurisdictional nature of international procurement, combined with volatile markets, can make that potential particularly difficult for businesses and other organisations trading in different countries.

Resolving disputes between international parties can be highly complex; the rules governing international trade are multifaceted and wide ranging and corporations need to consider widely different national laws and regulations. The best approach to dealing with individual disputes therefore varies from case to case. These methods can be employed:

International litigation: The defendant must establish jurisdiction over a foreign defendant, which can be difficult, affect international service of process, request evidence including evidence of foreign bank accounts and present the evidence at trial before a judge (or jury). Once a judgment is obtained, the plaintiff must take steps to enforce the judgment.

International arbitration: Arbitration is a type of alternative dispute resolution method where the parties to a dispute agree to arbitrate or operate under a contract that specifies that arbitration is the remedy. Disputes are heard outside of the courts, before one or more arbitrators. Parties agree to abide by the arbitrators‘ decision. Arbitration is usually a more informal process than litigation, with the parties choosing the arbitrator and many of the procedural aspects. International arbitration is often faster and more efficient than international litigation.

International negotiation: In some cases, formal litigation or arbitration may not be necessary to resolve an international law dispute. Instead, experts are consulted to employ dispute resolution to conduct informal negotiations between the parties to resolve a dispute or remedy an international contract breach.

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