When UK businesses engage in international trade, a consistent approach to resolving disputes becomes crucial. This article highlights key factors UK businesses should consider in cross-border disputes, including jurisdiction, service of proceedings, and enforcement.
At the outset, the contract between the parties should clearly specify their chosen dispute resolution process. Any disputes will be handled through this method and in the forum specified by the dispute resolution clause, whether that is a national court or arbitration. Advance arbitration agreements can pre-empt jurisdictional challenges and reduce associated costs.
When handling cross-border disputes, you must determine whether the court will decide the dispute by applying English law or foreign law. The parties can specify the applicable law in a contract’s governing law clause, or a court will decide it based on a particular legal system.
If the governing law is foreign, parties should consider how that foreign law will operate within English court proceedings, including on interim applications such as jurisdiction challenges. A party relying on foreign law must plead it and prove it in evidence. Even where English law applies, foreign rules can still affect parts of the process, for example, disclosure of evidence held abroad. Limitation periods must also be reviewed, as they may differ under English law and the relevant foreign law.
Your choice of jurisdiction is significant because it could prevent you from pursuing your case in the location you want. Even where a contract specifies England, the other party may still challenge the English court’s jurisdiction, or connected claims may be issued elsewhere. Taking advice early helps you assess the risk of parallel proceedings and the practical and cost implications of having to litigate in a foreign court.
Service is often the next hurdle. Serving court papers on a defendant outside England and Wales must comply with specific procedural rules and, in many cases, the requirements of the country where service takes place. Some jurisdictions require formal service through local authorities, while others allow faster methods. Mistakes can cause significant delays and added costs and may prompt applications to set aside service. For that reason, the method of service, the accuracy of the address details, and clear evidence that service was properly performed all need careful attention.
Enforcement is where strategy meets reality; a judgment is only valuable if it can be turned into recovery. Before committing significant time and cost to litigation, it is sensible to identify where the debtor’s assets are located such as bank accounts, receivables, stock, property, or any available guarantees.
The ease of enforcing a UK judgment varies from country to country and may depend on local law, applicable treaties and the terms of your dispute resolution clause including whether you have an exclusive jurisdiction agreement or an arbitration award. Arbitration is often preferred in cross-border contracts because arbitral awards can be enforced in many jurisdictions worldwide.
Nath Solicitors are a leading boutique law firm with over 30 years’ legal experience. We provide structured advice on commercial disputes. If you need assistance, please call us today on 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.