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Choosing Jurisdiction and Applicable Law in Distribution Contracts: Strategies and Recent Trends

This text discusses the strategies and recent trends in choosing the jurisdiction and applicable law in distribution contracts with a focus on critical countries such as China, Russia, and India. It covers important aspects such as the court systems, enforcement of contracts, and dispute resolution options.

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Choosing Jurisdiction and Applicable Law in Distribution Contracts: Strategies and Recent Trends

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  1. CHOOSING JURISDICTION AND APPLICABLE LAW IN DISTRIBUTION CONTRACTS:STRATEGIES AND RECENT TRENDSLITIGATING IN CRITICAL COUNTRIES:中国(CHINA), РОССИЯ (RUSSIA), INDIA Paul Jones, Toronto (China) Vladimir Lobastov, St. Petersburg (Russia) Avninder Singh, New Delhi (India) IDI Annual Meeting June 14, 2013 München, Deutschland 1 1 1 1

  2. Introduction • The People’s Republic of China (“PRC”) and the Russian Federation are civil law jurisdictions • Both are modeled on Germany • India is a common law jurisdiction modeled on English law 2

  3. Introduction – PRC Courtroom 3

  4. Introduction – Russian Courtroom 4

  5. Introduction - India 5

  6. Going to Court around the World • Enforcement of Contracts – • World Bank – www.doingbusiness.org/EconomyRankings • Based on procedures, time and cost • Germany - 5th • United States – 6th • France – 8th • Hong Kong – 10th 6

  7. Going to Court around the World • Enforcement of Contracts – • World Bank – www.doingbusiness.org/EconomyRankings • Based on procedures, time and cost • Russian Federation – 11th 7

  8. Going to Court around the World • Enforcement of Contracts – • World Bank – www.doingbusiness.org/EconomyRankings • Based on procedures, time and cost • Russian Federation – 11th • Australia – 15th 8

  9. Going to Court around the World • Enforcement of Contracts – • World Bank – www.doingbusiness.org/EconomyRankings • Based on procedures, time and cost • Russian Federation – 11th • Australia– 15th • People’s Republic of China– 19th 9

  10. Going to Court around the World • Enforcement of Contracts – • World Bank – www.doingbusiness.org/EconomyRankings • Based on procedures, time and cost • Russian Federation – 11th • Australia– 15th • People’s Republic of China– 19th • Canada – 62nd 10

  11. Going to Court around the World • Enforcement of Contracts – • World Bank – www.doingbusiness.org/EconomyRankings • Based on procedures, time and cost • Russian Federation – 11th • Australia– 15th • People’s Republic of China– 19th • Canada – 62nd • Brasil – 116th • India - 184th 11

  12. FACT SITUATION – Sloppy Sally • Sloppy Sally Inc. based in New York • entered into a franchise agreements and a area development agreements in the PRC, Russia and India • no disclosure document was given 12

  13. FACT SITUATION – Sloppy Sally • Franchisees signed U.S. standard form of franchise agreement • defaulted • not following standards regarding cleanliness, • using an unauthorized trademark in the system, • not submitting reports and • not paying royalties 13

  14. FACT SITUATION – Sloppy Sally • governing law is that of New York State Disputes, except those involving intellectual property, shall be resolved by arbitration in New York City • Intellectual property disputes shall be resolved by the exclusive jurisdiction of the courts of the Southern District of New York. • The franchisor retains the option of using the local courts for all disputes. 14

  15. FACT SITUATION – Sloppy Sally • Inhouse counsel: • How best to terminate the franchisees? • arbitration in New York tales about 3 months to a year; costs about $50,000 to $100,000 USD 15

  16. QUESTIONS – Sloppy Sally 1. How long would it generally take to obtain an initial court decision in your jurisdiction? What would it cost? 16

  17. QUESTIONS – Sloppy Sally 2. How long would it generally take to obtain court recognition for an arbitral award in your jurisdictions? What would it cost? 17

  18. QUESTIONS – Sloppy Sally • 3. What evidence would be required with respect to the claim about each of the issues and what formalities would be required: • The cleanliness issue and the local standards defense? • The use of the unauthorized trademark? • The failure to file reports? • The failure to pay? 18

  19. QUESTIONS – Sloppy Sally 4. Would a court in your country accept jurisdiction if Sloppy Sally exercised its option to use the local court? 19

  20. QUESTIONS – Sloppy Sally 5. Would there be enforcement of any interim measures with respect to the trademark issue, or any other issues, in arbitration or in court? 20

  21. CHOOSING JURISDICTION AND APPLICABLE LAW IN DISTRIBUTION CONTRACTS:STRATEGIES AND RECENT TRENDSLITIGATING IN CRITICAL COUNTRIES:中国(CHINA), РОССИЯ (RUSSIA), INDIA Paul Jones, Toronto (China) Vladimir Lobastov, St. Petersburg (Russia) Avninder Singh, New Delhi (India) IDI Annual Meeting June 14, 2013 München, Deutschland 21 21 21 21

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