Late last month, the local media was flooded with reports of UAE-based operator Etisalat initiating legal proceedings in Indian courts against its Indian JV partner alleging fraud and misrepresentation. Given that the Indian court system is often criticized for its protracted judicial processes and accumulation of huge arrears of cases, the first question that comes to one’s mind is whether Indian courts will be able to resolve this dispute in a timely manner. Read more about the case by Etisalat against its Indian JV partner.
We’ve all heard the adage, “Justice delayed is justice denied.” and that is why choosing the right forum for business disputes is of paramount importance. When two companies enter into a cross-border joint venture, they do not generally envisage future conflicts or discrepancies to arise. However, it is sometimes inevitable for differences to occur. Therefore, joint venture partners should negotiate the choice of forum clause for a contract as seriously and thoroughly as any other clause in the contract. But, how does a contracting party know which forum is more suitable? The answer is that such party should be fully informed not only of the advantages and disadvantages, but also of the full implications of their choices. The most common considerations in choosing a forum are:
- the location of the assets of the party that is most likely to default,
- the nature of the likely dispute,
- the preferred language for dispute resolution,
- the likely value of the dispute,
- the applicable law,
- enforceability of rights,
- timing, and
- convenience of the selected forum.
Clearly, the importance of choosing the right forum for dispute resolution in an international joint venture agreement cannot be understated. It is also of equal importance, however, to ensure that the clause is properly drafted and well-thought through and that appropriate legal advice is taken. Taking time to get this right at the outset should provide parties with a degree of clarity and certainty and will ensure that the most appropriate dispute resolution procedure is adopted in the event a dispute does indeed arise. Diaz Reus has significant experience in cross-border litigation and advises clients on a variety of issues relating to international dispute resolution, including forum selection, jurisdiction and service of process, and judgment enforcement issues.