Process/conflicts arising from different agreements
Proceedings relating to the business relationship may include matters such as exclusivity/non-exclusion, termination, compensation in the event of termination, sales to third parties, minimum purchase, advertising, etc. If a conflict arises, this conflict may have to be brought to court. The rules for the referral of disputes are as follows:
- The primary rule of referral is choice of law; see Article 3 of the Convention on the law applicable to contractual obligations (Rome I Convention). Choice of law means that the parties are free, at the time they enter into the contract, to determine the law applicable to their disputes. It is very important to determine this, especially if you are doing business with a party from another country or even continent.
- Objective referral rule. The objective referral rule means that the exclusive/sales/distribution relationship is governed by the law of the country where the distributor/seller/concessionaire is established.
Therefore, if you are doing business with a Chinese party and you do not agree on anything when entering into a commercial agreement, it is possible that you will have to travel to China for a dispute.
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Would you like support in choosing a forum? Or do you have a dispute about the choice of forum? Our lawyers will be happy to assist you. Please feel free to contact us for more information.
Specialist forum selection
A dispute is annoying enough, by including a good choice of forum clause, you avoid having to travel to a foreign country for this.