IV.C.1 Do national laws deal with choice-of-forum and choice-of-law issues relevant to paperless trade facilitation?
Domestic disputes are dealt with in national courts or, within the limits allowed by domestic law, by alternative means discussed below.
However, trade relations almost by definition involve participants from more than one country. If the participants have a dispute, for e.g., about who is responsible for something going wrong, each party may want its own country’s law to apply and for its own country’s courts to hear the dispute.
Most if not all countries have legal rules to decide who hears a dispute with cross-border elements and with different possible legal regimes.
This question focuses on the degree to which parties to a trade dispute have the choice of “forum”, i.e. of the court or the place where the dispute is heard, or a choice of the law to be applied to resolve it, wherever it is heard.
A country may have a regime of “party autonomy”, allowing the parties to agree on their choice of law and choice of forum in their international contracts. Such autonomy implies that individuals and legal entities may choose to have the laws or courts, or both, of a foreign country govern their contractual relationship. In almost every case, that foreign country has some connection with the transaction, normally when another transacting party has its place of business there.
Party autonomy may flow from judge-made law or rules of court or may be in applicable statues such as laws on commercial contracts that are sensitive to international standards.
Often, rules on choice of forum and choice of law in international disputes have a uniform nature. The Hague Conference on Private International Law has prepared a number of texts on choice of forum and mutual legal assistance, and UNCITRAL had done significant work on international commercial arbitration. Those texts, which may take the form of treaties, model laws or model contractual provisions, are often highly relevant for international trade. Article 5 of the Hague Convention on Choice of Court Agreements 2005 gives (conditional) effect to party autonomy in choosing the forum for international litigation.
5. Jurisdiction of the chosen court
1. The court or courts of a Contract State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unlles the agreement is null and void under the law of that State.
2. A court that has jurisdiction under paragraph 1 shall not decline to exercise jurisdiction on the ground that the dispute should be decided in a court of another State.
3. The preceding paragraphs shall not affect rules –
a. On jurisdiction related to subject matter or to the value of the claim;
b. On the internal allocation of jurisdiction among the courts of a Contracting State. However, where the chosen court has discretion as to whether to transfer a case, due consideration should be given to the choice of the parties.
Furthermore, a country may have conventions on the enforcement of foreign judgments and mutual judicial assistance agreements with their foreign counterparts to facilitate the practical enforcement of foreign court judgements in their countries.
While these laws may be of general nature, they normally apply also to cross-border paperless trade. However, a country may have made special provision for these matters in paperless trade, or in trade in any medium.
However, a number of issues relevant to paperless trade are of public, namely administrative, nature, especially when involving public entities such as customs. National laws may insist that such matters be heard within the national justice system. Agreements on cross-border paperless trade may therefore contain special dispute resolution mechanism that take into account the public nature of the parties and interests involved.
Criminal cases are heard in the prosecuting jurisdiction. Cross-border aspects may be limited to mutual legal assistance such as taking evidence abroad, extradition issues, etc.
IV.C.2 Does the law contemplate alternative means of resolving disputes in international trade such as arbitration and mediation? Are the results of any such means clearly enforceable across borders?
The law often allows, encourages or even requires parties to attempt to resolve their disputes through alternative dispute resolution mechanisms such as conciliation, mediation and arbitration. Sometimes the law sets dispute resolution mechanisms. Often those mechanisms are contained in contractual agreement.
Section 33 of the Framework Act on Electronic Documents and Transactions 2016 (Republic of Korea) sets rules regarding the use of mediation to solve disputes, requiring compliance with general principles of accessibility and confidentiality of the proceeding and the impartiality and independence of the mediators.
33. Mediation of disputes
1. Any person who intends to obtain a remedy for any loss or seek mediation of a dispute related to an electronic document or electronic transaction may apply for mediation of the dispute to the committee: Provided, that this shall not apply where the mediation of the dispute has been completed in accordance with other Acts.
Alternative dispute resolutions mechanisms such as arbitration are particularly relevant in international trade due to their perceived neutrality. It is of interest if a country has an arbitration law that follows international standards such as the UNCITRAL Model Law on International Commercial Arbitration 1985 (amended in 2006). A country may also be a party to the international convention to enforce the results of the arbitration across borders. The Convention on the Recognition and Enforcement of Foreign Arbitral Award 1958 is the worldwide standard on such matters.
Alternate dispute resolution laws may also limit the ability to use alternative dispute resolution methods when a public entity is involved. Agreements on cross-border paperless trade may therefore contain special dispute resolution mechanism that take into account the public nature of the parties and interests involved.
IV.C.3 Are online dispute resolution mechanisms used in paperless trade facilitation?
Online dispute resolution mechanisms, such as online mediation or arbitration, are conducted wholly or partially by electronic means of communications. They may be more or less automated and allow different degrees of visual or audio input by the parties. Because of their convenience and economy, they are increasingly popular to settle disputes relating to electronic commerce.
Online dispute resolution mechanisms may be applied to a range of disputes including paperless trade transactions. Such an online procedure may be based on an agreement between the transacting parties or may be permitted or required by statute.