International trade disputes are increasingly common as businesses operate across borders. Deliveries to foreign clients, international contracts and collaborations with foreign partners bring not only opportunities but also legal risks. In this article, you will read what international trade disputes are, which legal options are available and how entrepreneurs and foreign companies can enforce their rights.
What are international trade disputes?
International trade disputes arise when a conflict occurs between companies from different countries regarding commercial agreements. This may relate to delivery of goods, payment, quality, contractual obligations or termination of collaborations.
Common forms of international trade disputes include:
- non-payment by foreign or Dutch contracting parties;
- disputes over international delivery terms;
- conflicts regarding termination of distribution or agency agreements;
- damage caused by breach of contract in international relationships;
- conflicts between shareholders of different nationalities.
Why are international trade disputes complex?
International trade disputes are legally complex because multiple legal systems may play a role. Entrepreneurs face questions about:
- which court has jurisdiction;
- which law applies;
- how evidence must be presented;
- how a judgment can be enforced internationally.
Without a clear legal strategy, an international trade dispute can quickly escalate and become costly.
Which court has jurisdiction in international trade disputes?
In international trade disputes, the jurisdiction of the court is a key question. In many cases, the Dutch court may have jurisdiction, for example when:
- the opposing party is established in the Netherlands;
- the contract contains a forum selection clause;
- the agreement must be performed in the Netherlands;
- European regulations confer jurisdiction.
Which law applies?
The applicable law determines how the dispute is assessed. In international trade disputes, this may be Dutch law, but also foreign law when contractually agreed.
The absence of a choice of law regularly leads to uncertainty and debate. This makes legal guidance in international trade disputes essential.
International trade disputes: the legal step-by-step plan
Step 1: Analysis of contract and facts
An effective approach to international trade disputes begins with an analysis of the contract, correspondence and the factual course of events.
Step 2: Legal position and feasibility
Next, it is assessed whether litigation is worthwhile. Factors such as the strength of evidence, recovery prospects and the financial interest at stake play a role.
Step 3: Out-of-court resolution
In many international trade disputes, an out-of-court resolution may be preferable, for example through negotiations or settlements.
Step 4: Litigation or arbitration
When an amicable solution is not forthcoming, litigation or – if agreed upon – arbitration may be pursued. The right choice depends on the contract and the circumstances.
Step 5: Enforcement of the judgment
After a judgment, enforcement is essential. In international trade disputes, this may mean that attachment must be placed on foreign or Dutch assets.
International trade disputes and debt collection
Many international trade disputes revolve around outstanding invoices. In that case, international debt collection is often part of the legal strategy.
Read also: international debt collection in the Netherlands and debt collection and payment disputes.
Common mistakes in international trade disputes
- not including a clear choice of law and forum selection clause;
- waiting too long to take legal action;
- insufficient evidence gathering;
- litigating without prospect of enforcement;
- failing to make a strategic assessment.
What can Arslan Advocaten do for you?
Arslan Advocaten assists entrepreneurs and foreign companies in international trade disputes. We advise on jurisdiction, applicable law, strategy and conduct proceedings before the Dutch court or in an international context.
Read more about our services in corporate law and our experience with international cases.
Costs and litigation funding in international trade disputes
In international trade disputes, we generally do not work on a no cure no pay basis. International proceedings require a careful and strategic approach, with clear agreements about costs.
In certain cases, it is possible to handle the case (effectively) on a no cure no pay basis. We work together with an independent litigation funder who – after assessment – may be willing to (partially) finance the legal costs.
If litigation funding is granted, this means for the client that litigation is possible without direct financial risk.
About the author
This article was written by Onur Arslan, attorney and founder of Arslan Advocaten. He specialises in commercial disputes, including international trade disputes, debt collection and contractual conflicts.
Would you like to discuss whether your international trade dispute can be resolved legally?