05 International Litigation and Alternative Dispute Resolutions
People don’t just want to have rights, they also want to enforce them. In this chapter, we use the term «litigation» for the process of resolving disputes through the courts, where the parties bring a case before a judge to obtain a legally binding decision. The term here covers not only the proceedings before a state court, but the whole way there: the negotiation with the other party and the alternatives to a state court, the Alternative Dispute Resolutions (ADR). One thing already here: a court case is the worst case – it costs money, time and nerves and should be prevented whenever possible.
A legal dispute is international if one of the parties is from another country. What counts is the seat or domicile of the parties, not the nationality of their owners.
Think of dispute resolution as a ladder. On the lowest rung, the parties negotiate themselves. If that fails, they climb to mediation and arbitration (see Chapter 05.05). Only on the top rung stands the state court. Every rung costs more money and time than the one below – so the aim is to stay as low as possible.
The first questions in an international legal dispute are the applicable law and the court of jurisdiction (see Chapter 05.03). In contracts, the parties should settle both questions explicitly. If they do not, the answer must be found in national conflict-of-laws rules or in international treaties – which is slow, expensive and often unpredictable (!).
Exercise: international or not?
Decide for each case whether the dispute is international, and name the first two questions you would ask:
- Rigi Roasters AG (Lucerne) sells coffee machines to a hotel in Lugano. The hotel refuses to pay.
- Rigi Roasters AG sells the same machines to a hotel in Milan.
- The Swiss subsidiary of a US group buys machines from Rigi Roasters AG and claims they are defective.
- A student from your country orders a machine in the online shop of Rigi Roasters AG and wants to return it.
Discuss in pairs. Which of the four cases would you try hardest to keep on the lowest rung of the ladder – and why?
05 International Litigation and Alternative Dispute Resolutions