Charles Wolofsky is the Managing Partner of Wolofsky PLLC, a New York City law firm advising entrepreneurs, private equity firms, Fortune 500 companies, and high-net-worth individuals on corporate and transactional law, technology transactions, commercial real estate, civil litigation, tax, and restructuring matters. His litigation practice spans cross-border commercial disputes, contract enforcement, fiduciary duty actions, and international arbitration, complementing an advisory practice that includes corporate governance, mergers and acquisitions, and technology licensing. Prior to leading his firm, he served as CEO of Ctrl+e and as Head of Business Development and Operations at Boloro Global Limited. A graduate of Fordham Law School, he is a founding member of the Fordham Entrepreneurial Law Advisory Council and lectures on entrepreneurial law topics, giving him a practical perspective on navigating cross-border commercial disputes.
When a contract dispute crosses international borders, the first decision is often about where and how the dispute will be resolved. A case won in one country is worthless if it can’t be enforced where the losing party’s assets actually sit. For this reason, forum selection and enforcement mechanisms tend to matter more in cross-border disputes than they do in domestic litigation.
Global businesses confront the same disputes that domestic firms face. They include conflicts related to contracts, international transactions, and investments. International commercial litigation, arbitration, and mediation help resolve these conflicts.
Of these three approaches, arbitration tends to be the go-to dispute resolution approach for many businesses in international disputes. It allows parties to opt out of national court litigation in favor of a neutral, private tribunal.
What’s more, resulting awards are generally enforceable across borders thanks to a widely adopted international treaty. The limited grounds for appealing an arbitrator’s decision, however, mean parties have to weigh ease against the loss of a full appellate review.
Arbitration clauses rest substantially on the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Also known as the New York Convention, it was adopted specifically to give parties to cross-border disputes a common legislative framework. The convention ensures that awards made in one contracting country can be recognized and enforced by courts in another.
Not every cross-border dispute goes to arbitration. In some cases, litigation in national courts may be more practical. For instance, parties may enter a contract with a clause specifying which country’s courts will hear any dispute.
The 2005 Hague Convention on Choice of Court Agreements was designed to make choice-of-court clauses enforceable across borders. It ensures that a judgment issued by the parties’ court of choice is recognized and enforced in other contracting states. It has eased international business, as firms have greater certainty on where to go should there be a dispute.
A choice-of-court clause doesn’t mean complication-free cross-border litigation. Issues may arise when a defendant’s assets are in a country that has not agreed to recognize the chosen court’s judgment.
Some countries will only recognize and enforce a foreign court’s judgment if that foreign country would reciprocate. Without reciprocity, a court tussle may ensue, delaying collection for years.
If international arbitration and choice-of-court agreements both fail, parties may resort to mediation. Mediation is a voluntary process where an impartial third party helps the disputing parties resolve their dispute. Mediation has an established legal ground.
In the context of international business, mediation derives its strength from the 2019 Singapore Convention on Mediation. The convention obligates its member states to recognize and enforce international commercial settlement agreements reached through mediation. It works like the New York Convention, but applies to mediated settlements rather than arbitral awards or court judgments.
These three frameworks are designed to complement rather than duplicate one another. Each convention carves out its scope to avoid overlapping with the others. Moreover, they build on universally recognized business ethics and laws, such as the duty of good faith.
Adoption, however, remains slow and uneven across major economies. The practical value of each instrument depends heavily on how widely it has been adopted. Enforcement protections are only as strong as the number of signatory countries.
Dispute resolution strategy is best addressed at the contract-drafting stage, not after a dispute has already emerged.
Navigating a cross-border commercial dispute successfully isn’t about any single dispute-resolution method. It comes down to matching the right approach, be it arbitration, litigation, or mediation, to the specific countries, assets, and legal systems involved. Disputes are much harder to navigate under pressure occasioned by the lack of a predetermined resolution strategy.
About Charles Wolofsky
Charles Wolofsky is Managing Partner of Wolofsky PLLC, a New York City law firm advising entrepreneurs, private equity firms, Fortune 500 companies, and high-net-worth individuals on corporate, transactional, and international business matters. His practice combines transactional and litigation experience, including cross-border transactions, mergers and acquisitions, and real estate investment. He previously served as CEO of Ctrl+e and as Head of Business Development at Boloro Global Limited. A Fordham Law School graduate, he is a founding member of the Fordham Entrepreneurial Law Advisory Council and lectures on entrepreneurial law topics.
David Weber is an experienced writer specializing in a range of topics, delivering insightful and informative content for diverse audiences.