International business litigation, also referred to as transnational business litigation, is the litigation which is practiced in cases of disputes arising between two or more individuals or organizations which are based in different countries. International litigation differs from domestic litigation in the fact that it has to deal with two conflicting sets of laws and regulations and has to contend with different issues such as obtaining information and evidence from abroad, enforcing judgments from different nations and the service of process.
Another key area of difference between domestic and international litigation is the enforcement of long arm jurisdiction. This grants local courts the power of jurisdiction over defendants residing in other states. However, there are many countries which dispute this statutory power, claiming that it is too broad and therefore refuse to recognize judgments based on this principle. In a similar way, there are international business litigation concepts regularly enforced in other countries which courts in the US would consider to be unfair jurisdiction. These disputes in legal proceedings make international business litigation all the more difficult as a common ground needs to be established to allow the case to move forward.
Under international business litigation rules, service of process is another procedure which differs between countries. In the US, this task is usually performed by private lawyers but in many other countries this forms part of the judicial proceeding and can only be carried out for the government. To try and solve this issue, and to facilitate international business litigation, many nations have signed an agreement known as The Hague Service Convention (1965) which asks each member nation to formally appoint a central authority to process all service of process requests from foreign courts.
A similar body has been set up which is known as the Hague Evidence Convention which helps facilitate the request for evidence from one country to another. Again, under international business litigation principles, each of the member states must appoint a central authority to regulate and process any requests made for evidence which is located in the receiving country.
When it comes to the recognition of judgments, the United States is not part of a multilateral convention or treaty to help facilitate this area of international litigation.
The US courts are, however, fairly liberal in recognizing judgments made outside of the country. Most of the US states have decided to enforce the Uniform Foreign Money-Judgments Recognition Act which helps to establish the reasons for not recognizing judgments made by foreign courts.
Under this Act, non-recognition can result for a number of different reasons, including:
- A lack of conclusiveness: if the legal system which has passed the judgment does not adhere to international standards in providing impartial tribunals and a fair trial or does not meet satisfactory requirements of the due process of law then the judgment can be considered inconclusive.
- The court passing the judgment lacks personal jurisdiction over the defendant.
- The court passing the judgment is not entitled to jurisdiction over the topic of the case itself.
- The defendant was not given notice of the proceedings against them and therefore was unable to defend him/herself.
- The judgment was reached in a fraudulent manner.
- The judgment of the court is a contradiction of a previous out of court agreement reached by the parties involved.
- All or part of the judgment intends to enforce foreign taxation laws.