COMPARATIVE COMMERCIAL ARBITRATION

Comparative Commercial Arbitration



Comparative Commercial Arbitration

Was there a valid agreement to arbitrate between the parties? Examine the possible objections to the arbitrator's jurisdiction under 1) English law 2) French law 3) Swiss law 4) Belgian law 5) the UNCITRAL Model Law's two different 2006 versions and (6) Article II of the New York Convention. (7) If you were the lawyer representing the Bed Company, what would you ask your client to look for in his papers, records or computers?

Ans: From the scenario of the case, there seems no valid agreement between both the parties but both the parties were trying to get in the contract of distribution. It is possible for both parties to provide for certain circumstances, selling the product to escape the exclusivity granted to the distributor. When negotiating the contract market, the parties must be able to identify the problematic situations that may arise. For example, a manufacturer and distributor should consider the following situations:

The possibility that a client makes business in different jurisdictions, but centralize its purchases in the same area, whether within the exclusive territory or not;

Internet sales, which by definition ignore the territories;

The possibility that a customer wants to deal directly with the manufacturer without any intermediary.

In such cases, and in any analogous situation, potential problems must be considered before entering into an exclusive contract. To avoid friction, the parties must define from the beginning of their relationship whether these problematic situations shall constitute contractual exceptions to exclusivity.

Traditional designs of breach of contract do not pose difficulties. Indeed breach of a contractual obligation entitles the other party to break that contract. You will be entitled to rescission or termination of the contract in this case without risking liability for you. But the regime applicable to such failures can lead to difficulties because of its evolution. Indeed NRE clarified the scope of this rule, including the assessment criteria must be met before any break. In particular, it set the rules on notice that you must meet before breaking. If I would have been a lawyer I would have ask them to look for in the records for the existence of valid agreement.

Redbach is the Chief Executive not just of the Furniture Distribution Company but also of two other companies, namely: (1) the Furniture Manufacturing Company, and (2) the Furniture Company which is the parent company and 100% owner of the Furniture Distribution Company and the Furniture Manufacturing Company. The Bed Company Limited commences arbitration against all three companies, claiming that the Furniture Manufacturing Company and the Furniture Company is the real parties to the contract. Analyse this argument on the basis that the seat is (i) England and (ii) France.

Ans: Under Article L442-6 of the Commercial Code a trader can be held liable if he breaks sharply, even partially, a commercial relationship, without written notice having regard to the duration of the commercial relationship and uses. Also be aware that failure may be considered wrong even in pre-contractual stage ...