Why Should ADR Be Used in a Cross-Border Dispute Instead of Litigation?
One of the key purposes of using ADR to resolve a cross-border dispute is reciprocity.
In accordance with the 1958 New York Convention, of which over 150 states are signatory, arbitration decisions are enforceable in domestic courts, which is not necessarily the case with domestic judicial decisions.
With regard to mediation, reciprocity in enforcement is provided through the United Kingdom’s (current) membership of the EU, with the Mediation Directive allowing for settlements to be recognised across EU member states.
What Are the Benefits of ADR in Cross-Border Disputes?
Among the advantages of ADR is the freedom of parties to choose:
- Applicable law for the dispute. If the parties are to turn to litigation in domestic courts, the procedural rules of that jurisdiction will govern which law applies. Instead, the parties can reach agreement as to which rules they wish their dispute to be governed by.
- Choice of arbitrator. In addition to impartiality, an arbitrator will be selected by the parties for the benefits of their specialist industry knowledge. By comparison, a national court judge may lack a desirable level of expertise in the subject area of the dispute.
- Neutrality of forum. A party may be reluctant to subject themselves to a judicial forum in another party’s country. ADR permits the parties to agree on their own time, place and location for proceedings to take place.
- ADR proceedings are held in private, thereby avoiding the publicity of court proceedings, which can harm business reputation. Both parties can agree non-disclosure restrictions on information shared between themselves.
When Should an ADR Provision Be Considered in a Cross-Border Transaction?
As a contract between parties can provide for ADR to be exhausted prior to recourse to courts, it is important to consider the inclusion and restriction of an ADR clause from the preliminary negotiation stage.
One of the main disadvantages of ADR to note is the lack of power an arbitration tribunal has to compel the presence of parties at a hearing or the provision of evidence once a dispute actually arises. As a result, it is especially important to consider binding ADR clauses in contracts involving multiple parties.
Are There Time Limits for the Enforceability of Court Judgments?
Where a judgement is awarded in favour of a party, for example a judgement in favour of a creditor against a debtor, the Limitation Act imposes a six-year limitation on the right to bring an action on a judgement.
What Statutory Limitations Exist for Claims?
In England & Wales, the Limitation Act 1980 (as amended) prescribes time limits within which proceedings must be brought, depending on the subject matter of the claim.
- Tort claims (aside from personal injury): six years from the date upon which the cause of action arose, principally when the damage occurs.
- Contractual claims: six years from the date of the alleged breach.
- Fraud claims: six years from discovery of the fraud, or when it could reasonably have been discovered.
- Claims regarding formal deeds: twelve years from the alleged defect.
Parties can agree via contract to shorter limitation periods for claims to be brought than those prescribed by law. In construction contracts, for example, it is common to include a defects liability period of around one to two years post-completion.
Shorter limitation periods agreed by contract are subject to a test for reasonableness, which can be challenged in court if there is an imbalance of bargaining power.
Are There Any Exceptions to the Statutory Limits?
There exist exceptions for tort claims, for example, where the underlying factual basis is unknown until a later date. In such cases, a three-year limit applies from discovery of the facts, subject to an overarching fifteen-year limit from when the cause of action arose.
In contract claims, exceptions include deliberate concealment of facts relevant to a potential claim.
Where a contractual relationship involves a corporate debtor in insolvency, the statutory limitation ceases when the company enters liquidation.
Where the claimant seeks a remedy such as an injunction, the doctrine of laches may apply unreasonable delay can bar relief even within time limits.
How Can Contractual and Statutory Limitations Be Bypassed to Allow for ADR?
If a limitation period is approaching during ADR proceedings, there are two possible solutions:
- Agree that the defendant waives the right to raise limitation as a defence.
- Agree to extend contractual limitation periods pending ADR outcomes.
Under the Practice Direction on Protocols, ADR should be attempted before court proceedings. If this is not possible, courts may allow proceedings to be issued to preserve the claim, then stay proceedings until ADR concludes.
Is the Position Different for ADR in Cross-Border Transactions?
For cross-border transactions, the EU Mediation Directive may apply.
If a dispute arose on or after 20 May 2011, statutory limitations are paused, and parties have eight weeks after mediation concludes to bring a claim in court
Global Enforcement and Strategy in Cross-Border Disputes
Our team understands that success in international litigation depends on anticipating procedural differences across jurisdictions.
We provide strategic advice on:
- Enforcing arbitral awards and foreign judgments in England and abroad
- Coordinating multi-jurisdictional defence and disclosure strategies
- Managing evidence gathering under foreign law
- Engaging local counsel and experts in foreign courts or arbitration centres
Lewis Nedas Law has a deep understanding of international dispute resolution frameworks, including the New York Convention, Hague Service Convention, and Brussels Recast Regulation, allowing us to deliver cohesive, practical strategies for clients in complex international disputes.
Contact Our Cross-Border and International Litigation Lawyers in London
Whether you are enforcing a judgment abroad, defending foreign proceedings in the UK, or negotiating jurisdiction in a commercial dispute, our cross-border dispute resolution solicitors in London can help.
Call 020 4572 1866Â or complete our online contact form to speak with our experienced international litigation team today.
