What is the main advantage and the main disadvantage of litigating international commercial disputes in your jurisdiction?
Litigation (2nd edition)
The Austrian state courts rank amongst the most efficient in the European Union. The average duration of first instance proceedings with cross-border implications at the district court level is 6 -12 months. This, combined with relatively moderate court fees (calculated by reference to the amount in dispute and capped at 1.2% where the amount in dispute is exceptionally high), makes litigation an accessible dispute resolution tool. On the negative side, there is only limited flexibility on the part of the Austrian state courts as regards the use of foreign languages, in particular English. While there are of course judges who have an excellent command of foreign languages, the Code of Civil Procedure requires that the proceedings are conducted exclusively in German. The resulting need to involve professional translation/interpretation service providers regularly contributes to elevated procedural costs in litigation proceedings involving a foreign party.
One advantage of litigating international commercial disputes in Japan is the relatively low court filing fees. For example, if the amount being claimed is JPY 100 million, the filing fee is only JPY 320,000, and if the amount being claimed is JPY 1 billion, the filing fee is only JPY 3,020,000. Another advantage is that, in general, throughout Japan, the quality of judges is relatively high and judges are free from corruption. This is due to the rotation system in which judges are transferred to different courts on a three- to four-year basis.
On the other hand, one disadvantage is that foreign documents must be translated into Japanese for submission in court, which costs both time and money. Also, it takes a relatively long time to effect service in a foreign country because of the procedure described in #8.
Also, as described in #14, the limited form of document disclosure is an aspect that should be considered before commencing litigation in Japan. This can be either an advantage or a disadvantage, depending on the type of material evidence in question.
Comparatively to other jurisdictions, the time frame to obtain a Court decision is rather short.
It can also be seen as an advantage/disadvantage that the winning party’s lawyer fees are not to be systematically and integrally supported by the losing party.
Security is not commonly required from the applicant to obtain interim measures such as bank account attachments.
Also, depending from the standpoint, the lack of full disclosure requirements may be an advantage or a disadvantage.
One obvious advantage of Chinese litigation is its convenience on enforcement. In recent years, Chinese courts adopted a series of measures to enforce the judgments. For disputes involving a losing party whose assets are mainly located within the territory of China, the winning party could make full use of the enforcement mechanism to execute the judgment.
One obvious disadvantage of Chinese litigation is the language being used in court. Chinese is the only language used in court. All the documents written in other language shall be translated into Chinese first and then be used for Chinese litigation. Meanwhile, any documents produced in a foreign country shall be notarized at first and then authenticated by the Chinese embassies in that foreign country before being submitted to the Chinese court. Such process may cost substantial time and resources for the litigant to prepare.
The main advantage may be the low value of the stamp fee, in comparison with other countries, calculated in accordance with the value of the claim. For example, for a claim valued over 50.000 EUR, the value of the stamp fee will represent 1% of the value plus 1500 EUR. Also, there is the possibility for instalment, therefore, if the stamp fee is of high value, it can be paid in successive months.
The main disadvantage would be the time periods for the hearings in court. Therefore, in order to obtain a binding decision, the trial may last from several months to years, based on its complexity.
Another disadvantage consists in the fact that the interpretation of the law and the jurisprudence are not unitary, the chances for success of a litigation depending on the legal opinion of the competent court.
Given that Cyprus has been an established centre for international business for many years, Cypriot judges and legal practitioners have extensive experience in dealing with complex international commercial disputes. Arguably the main advantage of litigating such disputes in Cyprus is the readiness of the Cypriot courts to grant effective interim relief, especially in cases involving fraud or other serious wrongdoing. The main disadvantage are the often inordinate delays in the processing of cases. The Supreme Court of Cyprus and the Ministry of Justice and Public Order, with the assistance and support of the Structural Reform Support Service of the European Commission and the Irish Institute of Public Administration, are in the process of taking drastic measures to deal with the problem of delays. Such measures include the large-scale reform of the Civil Procedure Rules and the establishment of a separate Commercial Court to deal with high-value commercial disputes.
The process of court litigation in Denmark is safe and ensures a high level of compliance with fundamental principles of due process. Additionally, the costs of litigation in Denmark are reasonable.
The main disadvantage of litigating commercial disputes in Danish courts is that resolving complicated disputes is time-consuming. Moreover, it should be noted that the discovery/disclosure rules in Denmark are not as extensive as in other jurisdictions.
The advantages to litigating international commercial disputes, is that the Egyptian law is extremely comprehensive, accordingly, parties usually are able to expect the outcome, that there are many channels of challenging a judgment and alternative methods of resolving disputes in Egypt. The disadvantages of litigating international commercial disputes is that the timeframe is not set and thus the proceedings may take longer than expected, and that the proceedings are usually bureaucratic. However, the Economic Courts provide a speedy and more efficient specialized alternatives to the normal courts.
Compared to other jurisdictions, Russian commercial litigation is rather fast and allows to get an enforceable judgement within 6 months (the time for consideration in both first and appellate instance courts). Also, over the recent years Russian courts have developed electronic systems of filings and databases for monitoring of cases, which significantly simplifies the process.
The main disadvantage is the high workload of the judges and, as a consequence, more complex cases may not be given a required attention. Also, Russian commercial ligation still remains to be predominantly based on documentary evidence, paying less attention to the parties’ witnesses and experts. For many years Russian judges have been known for rather formalistic approach in application of law, however now the situation is changing due to the approaches and guidance of the Supreme Court.
In our opinion, the main advantage in litigating international commercial disputes in Mexico is the fact that there are no fixed court costs or taxes, so no matter the amount of the controversy, the Courts are compelled to hear the claim, provided that they are competent.
On the other hand, a disadvantage might be that legal proceedings in Mexico take a substantial amount of time to be resolved in whole (20-24 months), basically due to the overload of work of the Courts.
German courts and legal practitioners have continuously demonstrated pronounced legal expertise and have, therefore, built up a strong reputation in the international legal community. German courts are neutral and independent and, in almost all cases, administer the proceedings highly efficiently, in particular in comparison with certain other European and non-European legal systems. Moreover, the litigation costs are predictable due to the caps provided for by the respective statutes on court and attorney fees.
From an international perspective, the main disadvantage is probably that the official language of court proceedings is German, although there have been attempts in several federal states to establish specialised English-speaking chambers for commercial matters (cf. Question 3).
The main advantages of litigating international commercial disputes under the Hong Kong court system are the wealth of its jurisprudence combined with an independent judiciary and sophisticated legal infrastructure which upholds the rule of law. Perceived disadvantages for commercial parties may include the lack of confidentiality of the proceedings as well as inflexibility in terms of selecting an adjudicator for the relevant dispute, compared to alternative forms of dispute resolution such as arbitration. Costs of litigation in Hong Kong may be perceived to be relatively high compared to other local jurisdictions.
Following the recent US$1 billion Carlyle Capital Corporation case, Guernsey has already demonstrated that it is more than capable of dealing with even the most complex and significant international commercial cases. Perhaps the main advantage is the jurisdiction is small and flexible enough to be able to deal relatively quickly with such cases. A minor disadvantage is that those appearing in Court cases in Guernsey would be advised to travel to the Island the night before, just in case the infamous Guernsey fog descends!
A structured approach in terms of procedure is a one of the many advantages of litigating international commercial disputes in India. The Code of Civil Procedure, 1908 and the Evidence Act, 1872 are two of the primary statutes for this purpose and proceedings largely take place in accordance with the provisions of these acts. Further, Indian courts are increasingly rendering investor-friendly decisions and also respecting the choice of parties in choosing a foreign law to resolve their disputes in international commercial litigations. A transparent, independent and the recent investor-friendly approach of the Indian judiciary augurs well for the dispute settlement mechanism in the country.
In so far as disadvantages are concerned, time taken to resolve disputes in courts due to the huge backlog of pending cases remains a major cause of concern.
Isle of Man
The main advantage is that the judiciary are very supportive of the island’s commercial litigation sector (Oxleys of Douglas Ltd 2003-05 MLR 57 at para 18 and Dev Property Development plc 7 May 2008 at paras 19-24). Moreover, the local judiciary and legal profession have vast experience of dealing with high value, cross-border commercial disputes. There is an established body of local law that largely recognises English court decisions and decisions from other leading common law jurisdictions as persuasive. This in turn facilitates, where necessary, input from specialist leading English counsel who may where appropriate be granted temporary licences to appear in the local courts for specific cases.
The main disadvantage may be perceived by some to be the cost, in terms of time and money, of travelling to the island but this would only be necessary in the event that oral evidence in person is required at the final hearing if the dispute has not been settled.
Surely the greatest disadvantage of an international trade dispute in Italy is the time it takes to get a judgement. In fact, about 800 days are required to obtain a first instance ruling , about 1000 days for a second degree judgement and about 1300 days for a decision of the Corte di Cassazione. This problem is so overwhelming that the regulation 44/2001 has been recasted in order to avoid unfair procedural practices (one of which was to start cases in Italy in advance, the ill reputed “Italian Torpedo”). A further problem lies in the chronic lack of material resources for judges (whose number is, however, adequate).
The main advantage, however, could be found in the cost of commercial proceedings, significantly lower than the European average.
The main advantage of litigating international commercial disputes in our jurisdiction is the system of laws and procedures which has due process at its core. The principles underlying Philippine laws and procedures have a mix of Anglo-American and Spanish roots. Thus, Philippine procedural rules are similar, if not identical to, internationally accepted standards of due process and fair play, including notice to the parties, a fair opportunity to be heard, and a strong discovery procedure. In fact, Philippine procedural rules are considered to be mere tools to facilitate the attainment of justice. Thus, procedural rules may be relaxed, if necessary, to serve the broader interests of justice.
Although there are discernible efforts to streamline the litigation process in the Philippines, such as the adoption of rules on witness statements in the form of affidavits and prohibitions against extensions of time to file pleadings, considering the importance of due process, there is still a possibility of protracted litigation. As mentioned, Philippine courts will exert every effort to ensure that parties to a case will be fully heard, even if such would entail a relaxation of procedural rules.
In Portugal, commercial disputes can be adjudicated upon in judicial courts or arbitration courts.
Arbitration courts are faster than the judicial ones when it comes to analysing and ruling on the matter but the case can become more expensive since parties have to pay not only the Court fees but also the arbitrators (that are usually well known attorneys or professors at Law Faculties), in addition to lawyers.
For more than 10 years, the Portuguese judicial system has operated via an online platform – CITIUS – where judicial files are accessible: papers have to be submitted through this platform and judges’ decisions are also registered here. As a result, parties are able to understand what is happening in their proceedings at any time and print whatever they need to.
If the claim’s amount does not exceed € 250.000,00, judicial court fees will not be as expensive as in arbitration proceedings. In a realistic scenario, if the case is not too complex and no extraordinary circumstances arise, it can be ruled approximately in 1 to 1,5 years in the first instance court.
The main advantage is the ongoing electronization of the court system in the Slovak Republic and simple, and in particular fast, exercise of claims in shortened procedures by electronic court payment orders.
Among the disadvantages upon international litigations in commercial matters in Slovakia is the obligation to conduct the proceedings exclusively in Slovak language which necessitates the hiring of professional interpreters and translators and it is impossible (e.g. on agreement of the parties) to conduct the proceedings in English.
Among the disadvantages is also the average duration of civil litigations in Slovakia - it was 21.6 months in 2017. The average duration of civil litigations has been increasing since 2011.
Arbitration is the preferred dispute mechanism for commercial disputes in Sweden, and Sweden has a strong position as a venue for international arbitration. However, Sweden has advantages also as regards litigation in court. Sweden has a modern court system and international commercial disputes can be expected to be handed quickly and efficiently. One disadvantage of litigating in Sweden might be that court proceedings in Sweden are in general public.
One of the main advantages of the English courts is their global reach. London’s status as a global commercial centre means that defendants face a heavy price if they do not obey the court’s orders as significant commercial actors can rarely afford to be unable to come to London or have assets in the jurisdiction. This makes London a popular forum for fraud cases, where the power to compel worldwide asset preservation and disclosure is key. Costs are commonly considered the main disadvantage of litigating in England, although the parties can mitigate this by having up front conversations with their legal advisors about the economies of litigation and ways of limiting litigation costs (for example, by using the Shorter Trials Scheme).
With the new developments in the case management process for both the commercial courts and BCDR, cases are settled in a fairly good range of time. This is in our view one of the main advantages of our developing judicial systems. The main disadvantage in our view is the delays in executing judgments and the mechanisms of enforcement, although these are being addressed and developed continuously.
The main advantages of litigating international commercial disputes can be summarized into two groups: (i) the legal system is generally open to international affairs, as it is explicitly provided both in the Constitution and in the law concerning private international matters (Law 544-14), therefore legislation largely prohibits discriminatory practices such as solve et repete and the controversial judicatum solvi bond, and thus foreign individuals may act as plaintiffs or defendants within the same boundaries of national citizens, and (ii) the law acknowledges internationally-recognized remedies such as forum non conveniens and has adopted a globally-harmonized arbitration technique, particularly because of the ratification of the New York Convention in 2002 and the influence of the 1985 UNCITRAL Model Law on Commercial Arbitration.
The main disadvantages are, fundamentally,
- that there are no genuine differences between civil and commercial procedures (besides the fact that the standard of evidence and the appointment of geographical jurisdiction are more flexible in commercial matters), which leads to an old-fashioned judicial interpretation of the law without a deep understanding of commercial practices and philosophies, and
- that historically there has been a worrying backlog in commercial matters given the excessive culture of litigation as the basic method of resolving disputes.
As a signatory to the New York Convention, it is beneficial to pursue litigation through arbitration in Indonesia for its universal enforceability. By attempting to settle an international commercial dispute in an arbitration in Indonesia, the rendered award can be enforced in multiple jurisdictions. On the other hand, there are a few disadvantages in resolving an international commercial dispute in Indonesia. The disadvantages are, among others: non-execution of a foreign judgment in the Indonesian court as mentioned earlier and the non-enforceability of a foreign arbitral award if the award contradicts with Indonesian public policies.
One of the arguments that many uses to challenge the enforceability of a foreign arbitral award is that the underlying contract from which the dispute arises is written in a foreign language, despite the involvement of an Indonesian party in the contract. Many international commercial contracts involving an Indonesian party used a foreign language as the language of the contract (English/Chinese/etc.). However, under Law Number 24 of 2009 on Flag, Language, State Symbol and National Anthem (Language Law), a memorandum, agreement or contract that involves any Indonesian government institution, Indonesian private entity or Indonesian citizen must use the Indonesian language. The absence of Indonesian language may be a ground for a party to nullify the contract based on violation of the Language Law.
The main advantage of litigation in Malaysia is the low cost factor and the speedy resolution of dispute. In recent years, there have been a significant increase in the appointment of new judges and setting up of additional courts for effective disposal of civil and commercial cases. Apart from the Civil and Commercial Courts, the Malaysian judicial system has set up specialized courts such as Intellectual Property Courts, Cyber Courts, Admiralty Courts, Construction Courts and Family Courts. The possible disadvantage may be the lacking of foreign law expert and foreign language interpreter although this can be resolved through assistance from foreign lawyers and the consulate office.
The main advantage would be that Chile recognizes the application of foreign law in a civil or commercial dispute in Chile. The Court will apply foreign law if the parties agreed to, or there is foreign law or treatises that make the foreign law applicable in Chile. The only challenge will be to prove the foreign law which might require foreign experts’ legal reports and depositions.
Whilst litigating international commercial disputes in Malta may take long due to court delays, there is a possibility that costs incurred in Malta may be lower when compared to some other jurisdictions.
Swiss courts are considered to be independent and efficient, and Swiss judges usually have pro-found judicial expertise. Especially the commercial courts are very well reputed both on a nation-al and an international level. Important advantages of the specialised commercial courts are the speed of the proceedings due to them being single-instance courts on the cantonal level and their extensive expertise in commercial matters (see questions 1, 3 and 16). The costs of court proceedings may generally be predicted quite accurately since they are calculated on the basis of the value in dispute and based on the applicable statutory provisions. Moreover, Switzerland provides for a network of highly qualified attorneys who are specialised in the competent representation of national and international clients in commercial disputes.
In our opinion, with regard to international commercial disputes, the fact that it is at present impossible to conduct proceedings in English before Swiss courts is one of the major disadvantages, because the translation tasks often generate substantial (and often unnecessary) expenditures, noting however that courts in larger cities (such as Zurich) nowadays tend to accept the filing of exhibits – not however briefs – in the English language. At the moment, efforts are being made in Zurich and in Geneva to create specialised courts for international commercial disputes before which the proceedings could be conducted in English. However, at this time, it is not predictable by when one might expect the introduction of such specialised courts in Switzerland.
Litigating commercial disputes in Greek jurisdiction is less costly in relation to most jurisdictions. On the other hand, the duration of proceedings may end up to be rather relatively extensive in some cases; however the legislator has succeeded in accelerating the procedure before the courts of first instance with its latest reform of the GCCP.
In contrast to many other court systems, Norway has courts that handle all subject matters in both civil and criminal law. This is a huge advantage in many cases, as it ensures judges that are highly qualified generalists. Whether the case requires specialized knowledge is always addressed in the consultation between the court and the parties immediately after the reply. In large and/or complicated commercial disputes, expert lay judges are common.
The main disadvantage of litigation disputes in Norway is the processing time. This has increased in the last couple of years, especially in the court of appeals. With appeals it can take a considerate amount of time to get a final judgement.
In our opinion, the main disadvantage of litigating international commercial disputes in Luxembourg is that, under Luxembourg law, as already mentioned, there is no discovery procedure. In accordance with the adversarial principle, it relies upon each party to file in due time and on a voluntary basis the necessary evidence to justify its claims.
A party will only disclose documents that comfort its position. It is not required to disclose documents that would damage its position.
The main advantage of litigating commercial disputes in Luxembourg, on the other hand, lays in the absence of any hurdles to the enforcement of judicial decisions against assets of foreign states or of central banks of foreign states, while such hurdles exist in foreign countries like Belgium (Article 1412quinquies Belgian judicial code) or France (Article L153 French monetary and financial code). Also, recovery of costs from the losing party is extremely limited.
The main advantage is that the United States has a sophisticated judiciary with experience resolving a broad range of commercial disputes and expertise on commercial matters. The main disadvantage is that there are potentially many jurisdictions from which litigants can choose—each with their own laws and procedures. Therefore, potential litigants must think carefully about which U.S. jurisdiction would be best suited to resolve their disputes, including considering how various claims are defined and when the statute of limitations period will run in a given jurisdiction.
The main advantages of a commercial litigation in Iran are (i) relatively low court costs and tactics to defer payment of such costs; and (ii) no disclosure procedure.
The main disadvantages are (i) unavailability of witness cross-examination; (ii) unavailability of English language in proceedings; (iii) no strict timetable for proceedings, which will result in prolongation of proceeding; and (iv) limited number of countries with which Iran has reciprocal treatment for enforcement of judgments.
The Dutch jurisdiction is an attractive location to litigate, due to various reasons:
- The Netherlands is the seat of many multinational corporations and a main port of entrance to continental Europe. Simply due to domicile or residence by the defendant, collective action plaintiff parties can often create jurisdiction for the Dutch courts (e.g., see Regulation (EU) No 1215/2012, Article 4).
- International benchmark studies show that the Dutch judiciary is generally considered professional, predictable, honest, efficient and fast, making it an attractive venue for both plaintiff and defendant.
- Litigation in the Netherlands is relatively inexpensive, due in part to low rates of compensation for the costs of litigation the losing party must pay in procedures.
- The Dutch legislator deliberately promotes the Netherlands as a forum for resolving international disputes. A recent example is the start of the NCC (The Netherlands Commercial Court) early 2019. The NCC consists of specialised judges and the proceedings, with a quick throughput time, are conducted in English. Both the NCC District Court and Court of Appeal are set up in Amsterdam.
An advantage of litigating in Ecuador is that, as compared to other countries, there are no filing fees.
The main disadvantage, we feel, is to be found in arbitration proceedings. In our country, an arbitral award can be the subject of an appeal for annulment that is heard by the chief judge of the Provincial Court. His decision can, in turn, be the subject of a special action for protection of constitutional rights that falls within the jurisdiction of the Constitutional Court.
Thus, while many users opt for resolving their conflicts at arbitration centers in order to skirt the defects of the common justice system, the matters at issue eventually wind up being heard by the regular courts of justice and even by the Constitutional Court.
The main disadvantage in my opinion is that litigation can be quite lengthy. There are no strict time tables and there are many delay tactics which parties can adopt to prolong the life span of a dispute.
Cost can be also viewed as a disadvantage especially if compared to neighbouring countries. However, it could be deemed as an advantage if compared to other methods of dispute resolution such as arbitration.
As for the advantages, there are many. The main advantages in my opinion is that there is always a strive to develop the judicial system.
In addition, the judicial system is quite independent and there is no political or governmental interference which would influence the courts findings.
The main advantage generally concerns the economic side of the litigation: the court fees are relatively low, and attorney fees even for complex litigations are not very high, there is no costy discovery procedures etc. Another advantage may refer to the effectiveness of judicial decisions: in terms of international enforcement the RA court decisions are recognized in the territory of countries member to CIS (foreseen by Minsk and Chisinau conventions between the members of those).
Secondly, it is worth mentioning that the RA signed the ECHR and is obliged to ensure the right to a fair trial, which made Armenia constantly change its legislation and legal practice to adjust to standards created by the ECHR. The latter established quite a strong legal basis for procedural rules. For example with the latest amendments, the Civil Procedure Code states that the judge has to decide on distribution of burden of proof in a form of a separate written decision, so from the parties are to file evidence in the manner and within periods prescribed by that decision before the end of the preliminary hearings, which creates predictable proceedings, where the legal questions are dealt in a separate written decision and the evidence is disclosed within a foreseeable time without costly discovery procedures. The process at the same time is still administered well and is predictable at large.
On the other hand, the main disadvantage is the overall length of the proceedings, mostly because of the absenteeism of the parties that leads to no legal consequences. There is also a concern of the court applying the RA legislation in case there is a necessity to apply the foreign law that has some similarities with the latter. The issue stands in different interpretations or even more, in some cases of progressive legislation that developed an even more detailed attitude to the legal issue subject to a trial, but the court is more familiar with the RA legislation is inclined to apply it, if the norms are more or less similar.