International trade focus

THE legal uncertainties involved in international trade are enough to dissuade many Australian firms from venturing into the export world. But it’s not an issue unique to businesses in this country.

This international dilemma has resulted in moves to develop a clearer convention on the way disputes between countries are to be handled.

A survey released last month by the Paris-based International Chamber of Commerce found that a large proportion of companies do not go ahead with international contracts because of doubts about which national courts would resolve any dispute.

Of 110 leading companies worldwide, which together employ more than 3,000,000 people, 40 said they had been affected by uncertainty.

The ICC has presented the survey’s results to a panel of officials, who are drafting a proposed Hague Convention on Jurisdiction and Recognition and Enforcement of Foreign Judgements in Civil and Commercial Matters.

A senior official of the Hague Conference on private international law, Andea Schulz, said the group was taking on board the concerns about the need for certainty and predicability in jurisdictional matters.

ICC international business lawyer Michael Hancock said it was far from an academic issue for business.

“Business needs predicability and certainty in international contracts,” he said.

“When two companies make a choice of a national court in a contract they have a good reason for doing so, and their choice must be respected.”

An ICC statement addressed to the negotiators in The Hague said: “Businesses’ principal expectations are that the convention will respect choice of national court and enforceability of judgements.”

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