Court Jurisdiction and Enforcement

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Recommended: How does the legal environment affect international business

Conducting a business on a global scale presents as many profit opportunities as it does risks. The types of risks characterizing international business transactions lurk in the economic, social, political, technological, cultural, environmental, and legal environments (Hatchondo & Martinez, 2011 & Hill, 2011). Before expanding into the global market, therefore, companies should conduct an environmental scan to understand the imminence of the risks they would be exposed to and subsequently formulate a response strategy. The range of risks often includes strategic, operational, political, geographical, technological, environmental, economic, financial, as well as the risk of terrorism Kotabe & Helsen (2011). A company can either choose to retain a particular risk, reduce it, externalize it, or avoid it altogether. This essay focuses on international business transaction risks, the bases for determining the competence of the court to hear cases arising from them, and enforcement of court decisions. The discussion concludes with specific recommendations for companies engaged in international business transactions involving carriage of goods.

Determining Territorial Jurisdiction

Jurisdiction is the power of a court to hear and decide a case after it has established that the defendant had satisfied the minimum contacts condition (Schaffer, Agusti, Dhooge, & Earle, 2012). The minimum contacts test requires that the accused has had substantial interaction with a state where a court resides. Such interactions should either involve the defendant’s activity in the territory being continuous and systematic and related to the cause of action; the defendant’s continuous activities were substantial yet unrelated to the cause of action (UCC ...

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...tation of evidence and witnesses by the prosecution. International courts, such as the International Criminal Court (ICC) and the International Court of Justice (ICJ), tribunals, and organizations such as the World Trade Organization (WTO), World Bank, and International Monetary Fund, were established to minimize the disharmony in the international legal environment among others (Ibrahim, 2008 & Wang, 2008). These institutions use various forms of settling trade disputes. It seems their intent is to establish a culturally sensitive conception of rule of law that neutralizes imperialistic tendencies of imposing western conception of the rule of law on all nations (Modak-Truran, 2008). In view of the foregoing, companies wishing to conduct business on a global scale should assess their risks and ensure their contingency plans cover as many legal bases as practicable.

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