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Business Law

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Legal disputes arise when “two or more parties disagree over the existence of legal duty or right” and how a breach of such rights or duty should be compensated. Effective resolution of legal disputes depends on our ability to understand the legal system and the ethical considerations involved. At international level, dispute resolution is mainly influenced by three factors namely, jurisdiction, choice of law and foreign judgment.

Addressing International Legal and Ethical Issues

            The main issues involved in resolving legal disputes associated with international transactions include enforceability, neutrality, procedural flexibility, cost and speed. Enforceability determines whether a court decision made in one country can be applied in another country . The legal institution handling the dispute should be neutral to both parties and the procedure should be flexible enough to accommodate the needs of all parties. The legal process should also lead to a quick and cost-effective resolution.

            The practical considerations associated with taking legal action against a foreign business partner include the choice of law, jurisdiction and foreign judgment. The chosen law determines the outcome of the legal action in most cases. Jurisdiction on the other hand determines whether the foreign court is capable of settling the dispute. Foreign judgment is the ability of the legal systems in both countries to recognize and enforce a ruling made in either of them.

            CadMex’s decision to enter sublicensing agreements can be undermined by its ability to comply with the law. The sublicensing agreement will not be accepted if it violates laws such as import-export laws. Transfer rights over trade secrets can also work against the sublicensing agreement. This is because CadMex may not be willing to reveal some of its trade secrets to its partners.

            When local customs laws conflict with foreign ones, the customs of the country in which the goods are to be sold (importing country) will prevail. This is because custom duties are paid in the importing country and thus the laws of the importing country prevail.

            The issues in the simulation can be compared to domestic legal issues in terms of the factors that influence dispute resolution. At the domestic level, dispute resolution is mainly influenced by the effectiveness of the legal system. However, jurisdictional immunity plays a critical role in resolving disputes at international level. Thus companies should resolve domestic legal issues based on the local laws. International disputes on the other hand should be resolved on the basis of agreements or contracts which specify the jurisdiction and the law to be applied.


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