Economic activity is heavily regulated, both nationally and internationally. Internationally, there are two types of regulations that can affect an international business.
Intergovernmental business law
Intergovernmental business law refers to bilateral or multilateral agreements between states. An example of multilateral agreements are those of the World Trade Organization, WTO*, based in Geneva, Switzerland. Intergovernmental business law is either directly applicable to companies (self-executing) or must first be transposed into national law by the contracting states (non-self-executing).
*The purpose of the WTO is to ensure that international trade flows as smoothly, predictably, and freely as possible. It provides a permanent institutional framework for negotiating trade agreements, reducing trade barriers, and settling disputes between its members.
National international business law
National international business law are national rules that apply to international situations. One example of this is the Swiss Federal Act on Private International Law (PILA). The purpose of the PILA is to determine which jurisdiction’s courts are competent, which law applies, and how foreign judgments and arbitral awards are recognized and enforced in Switzerland in international cases.
Soft law
In addition, there is also an increasing amount of self-regulation by private international organisations. These rules are also known as «soft law» because they are not enforced by state authorities or courts, but by the organisations themselves. This means that if a member of an organisation violates the rules, they are sanctioned within the organisation. Examples of this are the codes of the International Chamber of Commerce (ICC) based in Paris, France.
The international business law is the legal compass for the world economy.
When is a business legal case international?
In general, a business legal case is international if it involves at least two parties and at least two parties come from two different countries.
First main legal questions in an international legal case
In an international legal case, two important questions arise in advance. Which law of which country applies? → Applicable Law. If the parties wish to have the case judged by a (state) court, the question arises as to which court has jurisdiction in which country and at which location → Court of Jurisdiction.
Problem to teach international law
Teaching international law is also challenging because law is generally national or territorial and not international.