which country law will apply in case of dispute between companies of two different nations
30 Jul 2011, 11:48
An Indian company enters into a contract with an american company that indian company would supply 1 million engineering goods @ $2/Piece on january 1st 2011 for 6 months.
at time of contract the value of rupees was Rs. 45/$1
After 4 months the rupee devalued to rs 50/dollar.
until now american company had received the goods worth $ 100,000
Noew the indian company writes the letter to american company to make rest of the payment in Dollars or at Rs.50/ dollar. and stops supplying goods.
The american company charges the indian company for breach of contract.
NOW HELP ME OUT THAT WHICH COUNTRY’S LAW WILL BE IMPLIED. OR WILL IT BE LAWS OF WTO AND ALL
5 Replies
IT SEEMS STRANGE AS TO HOW COME THE AGREEMENT OF CONTRACT HAS NOT TAKEN CARE OF THE RATES OF EXCHANGE,NOW IF IT IS SO THE CONTRACT ONLY CAN GUIDE YOU BETTER,IF THAT IS ONE CAPABLE OF SO.
THE AMERICAN COMPANY WILL SUE YOU IN THEIR OWN COUNTRY.IN ABSENCE OF DETAILS YOU CANNOT GET BETTER ANSWER …
hi…
Basically the applicable law should be there in contract terms and condition only.. if not then the contract makers are fool… nevertheless in case of any disputes the LAW as ratified by India & as well as US ie UNCITRAL will apply,
i hope this will suffice..if not then put a comment.
USUALLY IT HAPPENS THAT RESPONDENT’S COUNTRY LAWS ARE IMPLIED IN CASE OF SUCH DISPUTES.
THE PLAINTIFF IS AMERICAN COMPANY. THUS THE LAWS IMPLIED SHOULD BE OF DEFENDENT’S COUNTRY
“AS STUDIED BY ME”
SO WILL IT BE INDIAN CONTRACT LAW THAT WILL BE IMPLIED…
# Vishal— the international market has undergone in a drastic changes due to such irregularty of contact agreement because in such cases the interest & trade policies of two nation are also involved , if a country firm is called in question into ICJ then obviously the acceptable decision could not be given by the court, there may be all the chances that the law od one couuntry is totally diffres drom another.
therefore there are convention & many bilateral treaty which bound two countrys trade & commerce. As said earlier the UNICITRAL law will be applicable.
# raj :: thank you very much for the information. if you could do one more favour to me, then please provide me with a case similar to this one.