How To Sue A Business In Another Country

One of the most stressful things to deal with in business is to find yourself embroiled in a commercial dispute with another company. This can happen for a number of reasons including non payment, defective goods or services or other breaches of contract. If the business you are in conflict with is located in another country, this can be even more stressful. In this article, how to sue a business in another country, we will take a look at the options open to you if you find yourself in this position.

Free Initial Telephone Discussion

For a free initial discussion on how we can help you sue an overseas company, get in touch with us today. We will review your situation and discuss the process involved in a clear and approachable manner. Early expert legal assistance can help you avoid making mistakes, saving you money and also avoiding the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.

What are the steps to take?

If you are involved in a dispute with a foreign business, the first thing to establish is whether you can take legal action in this country. If you have a contract with the foreign company, carefully check the terms within it as it will often contain governing law and jurisdiction clauses. If the contract specifies a single mandatory jurisdiction then this will be binding. However, after Brexit there is in fact a better chance companies can sue in the UK under certain types of contract. This is particularly the case where a contract has a jurisdiction clause that provides for a choice of jurisdiction by the parties or cites a range of permitted jurisdictions (see scenario 2 below).

 Scenario 1 – Exclusive (mandatory) jurisdiction clause  

The Country stated in the clause will still be determinative (by virtue of our accession to the Hague Convention in January). Unless the contract was created before Jan 2021 when the UK acceded to the Hague Convention, in which case you might have to rely on the common law rules instead if you are looking to sue in the UK. (EU courts are undecided as to whether accession is retroactive)

The common law rules are the rules that would apply if there were no jurisdiction clause. i.e you will have to prove some connection to England/Wales.

Scenario 2 – Any clause other than an exclusive jurisdiction clause.

The common law rules must be relied on as grounds to sue in the UK. This is a low bar, making it potentially easier to sue in the UK than when we were part of the EU. However, an English court can reject proceedings if another jurisdiction is more closely connected to the case.

We are seeking to join the Lugano Convention. This applies to all types of clauses and would make what is written in the contract determinative of jurisdiction. However, the EU has not agreed (as of writing) to allow the U.K to join yet. Being part of Lugano would benefit enforcement.

If there is no written contract, then if either party has standard terms and conditions of business, these may form part of the contract and may contain law and jurisdiction clauses. In some instances, both businesses will be looking to rely upon their own standard terms and if this happens, it is important to seek expert legal advice. Blackstone solicitors will be able to assist you in this matter.

If there is no legal agreement, which country’s law applies?

With regards to jurisdiction, if your contract is with a party based in the European Union, you can sue the defendant in its local courts. Alternatively, you can sue the defendant in the courts of the EU state where the contract was performed or was supposed to be performed.

If the company or individual you wish to sue is based outside the EU,  you will normally need the court’s permission to serve the claim in a foreign country, which will give notice of the claim to the other party who will be required to go to this country to defend it. The court will look at many factors to decide whether to grant permission, but as a general guide will only give permission if the claim has some connection to England or Wales. Generally, the fact that one of the parties is based in England or Wales will be enough. However, a CPR amendment is set to be introduced removing the need to obtain the court’s permission to serve outside the UK. This is to inspire business confidence in suing abroad. This will only apply to exclusive jurisdiction clauses and there is no date for implementation.

How do I enforce a judgement of the English courts against a foreign business?

If you take legal action against a foreign company, sole trader or individual in the English courts, and are successful, the next step, if the other party does not correct the breach of contract straight away, will be to enforce the judgement.

There is a similar arrangement between England and Wales and Commonwealth countries. In order to carry out enforcement, you will need to appoint lawyers or agents in a foreign country.

There are no reciprocal agreements with the rest of the world, so national or state law will apply, and you will generally need to commence fresh proceedings to remedy the breach of contract.

Finally, if we join the Lugano convention (this will require EU members consent, which has not yet been gained) this will largely reinstate the enforcement rules as per pre-Brexit.  This is desirable as otherwise enforcement rights are limited to exclusive jurisdiction clauses and a patchwork of older bilateral agreements.

How we can help

We have a proven track-record of dealing with litigation against businesses in foreign countries. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to Contact our Commercial Litigation Solicitors

It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of reducing risk, saving you money and ensuring you achieve a positive outcome.

To speak to our Litigation solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in Litigation, News Tagged as