A dispute with an overseas customer, supplier, or commercial partner can quickly become more complicated than a domestic claim. Before deciding what to do, you’ll need to understand which law applies, where the dispute can be resolved, and whether any judgment or award can be enforced against the other party. To help you, this guide explains some of the key points to consider, such as:
- The relevant contract terms
- The applicable law
- The agreed dispute-resolution process
- The potential forum
- The available evidence
- Enforcement prospects
- Relevant time limits
- Whether the likely recovery justifies the cost and management attention involved
If your business is involved in a cross-border dispute or needs advice on navigating international legal issues, our experienced business dispute solicitors are ready to help. We’ll explain the available options, coordinate advice across jurisdictions where necessary and help you determine a commercially proportionate way forward.
Contents:
- Common examples of cross-border disputes
- How to determine what law applies to a cross-border commercial dispute
- What if there is no choice of law clause in the contract?
- Finding out what court or other forum would hear the dispute
- What if there’s no arbitration provision in place?
- What happens if no jurisdiction is specified in a contract
- Remedies for cross-border disputes
- Time limits in cross-border disputes
- How to move forward
Common examples of cross-border disputes
Our team of business disputes solicitors commonly see cross border business disputes occurring due to:
- Non-payment for goods and services
- Disputes over the quality or quantity of goods
- Damage to goods, or goods lost in transit
- Delivery delays
- Breaches of contract
Businesses entering a new market can reduce their exposure to some cross-border risks by considering their structure, regulatory obligations and contractual arrangements at an early stage. Our guide to expanding your business into the UK outlines the legal issues overseas businesses may need to address when establishing a UK presence.
How to determine what law applies to a cross-border commercial dispute
Which law applies to a cross-border commercial dispute is of fundamental importance, but it’s not always immediately clear until a further investigation of the details of the relationship between you and the other company is carried out.
The first step is to check the terms of the commercial contract between yourself and the other party in order to establish whether it contains what’s referred to as a choice of law clause, which is also sometimes referred to as a governing law clause. The purpose of this kind of clause is to express the parties’ agreement as to which country’s law governs the contractual relationship and will ideally have been inserted when the contract was drawn up.
If the contract is governed by English law, it’s usually the case that the parties’ choice of law will be adhered to, subject to certain mandatory rules and exceptions. If there isn’t a choice of law clause present, the relevant conflict-of-law rules will apply: in this scenario, these include what’s known as the Rome I regime.
Overseas businesses entering the UK should therefore consider adapting their international contracts to English and Welsh law before they begin trading.
What if there is no choice of law clause in the contract?
If there is no choice of law clause in the contract, or if the clause is not drafted clearly, the situation can become more complicated.
Generally, in the context of a cross-border contractual dispute, the Rome I rules will apply in courts in England and Wales, and will do so irrespective of whether the law ultimately identified is the law of an EU member state, England and Wales or another country. Rome I contains different rules for different types of contracts and where its specific provisions don’t determine the applicable law, other rules may apply.
Put simply, this means there’s a risk that English law might not apply to your dispute, and the situation can be complicated in situations where the contract involves parties or activities in multiple different countries. It’s strongly recommended that you seek legal advice from a business dispute solicitor on the best way forward if you believe this to be the case. You’re likely to need advice from a business disputes lawyer in the country whose law applies too, and we can assist in finding you the right person.
Finding out what court or other forum would hear the dispute
It’s important to highlight that it may well be possible for court action to be avoided if the dispute can be resolved by alternative means. Again, the terms of the contract between you and the other party will be of significance here, because another item to check will be whether there is arbitration agreement within it.
Arbitration is a formal method of resolving a dispute outside of the arena of the courts and it results in a legally-binding decision, made by a qualified arbitrator, which can generally be enforced in other countries outside of England and Wales, subject to the applicable legal framework. It’s a common provision in cross-border trade contracts, and when a valid arbitration agreement is present, it’s usually expected that the parties will resolve the dispute through arbitration instead of court proceedings, subject to the terms of the agreement and the applicable law.
What if there’s no arbitration provision in place?
If there’s no mandatory term within the contract to compel the parties to engage with this process, then the next factor to consider is whether the contract contains a jurisdiction clause – which in turn would indicate which country’s court the parties have agreed should deal with any disputes arising under the contract.
It’s frequently the case that commercial contracts incorporate jurisdiction clauses that define where a dispute should be litigated and as such, it’s recommended that careful thought is given to this when the contract is drawn up. Jurisdiction and choice of law clauses are often found together in commercial contracts, but they address different things: a choice of law clause identifies the law that will govern the dispute, whereas a jurisdiction clause determines which courts will hear it.
The effect of a jurisdiction clause generally hinges on whether it’s exclusive or non-exclusive and on the countries involved. International conventions, which include the Hague Choice of Court Convention 2005, may also be relevant in the circumstances.
What happens if no jurisdiction is specified in a contract
If your contract is silent on the issue of jurisdiction, the question of whether the courts of England and Wales can hear the dispute will depend on the particular circumstances at hand. Depending on these, the claimant might need to establish that England and Wales is the proper place to bring the claim and may also have to satisfy other requirements before proceedings can be served abroad, in accordance with the rules governing when proceedings can be served on a defendant who’s situated outside of England and Wales.
In determining this issue, the court will look at the facts of the case (for example, where each party is based, where the relevant events occurred, where the evidence and any witnesses are located and which law applies) in conjunction with the relevant jurisdictional rules.
Ultimately, in some cases, the court may have to think about whether a different country is the most appropriate forum for resolving the dispute.
Remedies for cross-border disputes
As is inevitable with the sheer breadth and depth of the nature of international and cross-border commercial disputes, the appropriate remedy for your case will ultimately depend upon which country’s law applies to it. Obtaining a judgment is only one step in the process when the other party or their assets are located in a different country, so it’s important to investigate early on whether a judgment issued by the courts of England and Wales is recognisable and enforceable in the relevant country.
The rules around recognising foreign judgments and the enforcement of them varies from country to country and factors such as domestic law and international conventions (or other special arrangements between the countries involved) will all play a role. There have been changes to take into account since Brexit too. In addition to the possible applicability of the Hague Convention of Choice of Court Agreements 2005, the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019 came into force in the UK on 1 July 2025 and operates as a framework for the recognition and enforcement of qualifying civil and commercial judgments between contracting states.
What’s important is that you seek tailored legal advice so that the enforcement options for any judgment can be properly assessed. Broadly speaking, it’s recommended that advice is obtained on this as early as possible in the litigation process so that time and money isn’t wasted by commencing proceedings in the courts of England and Wales if enforcement in the defendant’s home country will prove difficult.
Time limits in cross-border disputes
The time limit for bringing a cross-border claim will very much depend on the nature of the dispute and the applicable law of the country governing it.
For example, for many claims arising from a simple contract governed by the law of England and Wales, the basic limitation period is six years from the date on which the cause of action accrued, although it’s important to highlight that different limitation periods can apply depending on the precise nature of the claim and the circumstances.
In cases where a different country’s law governs the claim, their rules may apply instead when it comes to limitation. This means that it’s crucial to establish the applicable law and limitation period early on in the litigation process, because if a limitation deadline is missed, it may prevent the claim from being brought altogether.
How to move forward
It’s safe to say that resolving a contract dispute with an international party can be a complex and time-consuming process. The starting point for any legal action will be to look at the written contract for guidance if one is in place, and then a preliminary analysis will be required to decide upon next steps.
At Harper James, our business disputes solicitors work with a network of overseas lawyers to assist with advising and conducting cross-border claims, so you can rest assured that your international dispute will be handled in the most effective and pragmatic way possible.
