Entering a contract with a foreign firm carries significant risk, especially if a dispute arises. Suing a business in another country can make an overseas lawsuit difficult, if not impossible, to win. The process largely depends on where the contract was signed and if it contains specific terms about lawsuits. You may need a lawyer or international law specialist to navigate this.
When the United States Constitution was being drafted, interstate and international commerce were already vital. The Commerce Clause (Article 1, Section 8, Clause 3) grants Congress authority to regulate trade “with foreign Nations, and among the several States, and with the Indian Tribes.”
The term “commerce” isn’t defined in the Constitution, leaving room for interpretation by scholars, lawyers, and judges. The founding fathers couldn’t foresee the global interconnectivity we experience today, with products sourced worldwide. Modern international supply chains allow producers to assemble end products from components originating in many countries.
Reviewing the Contract
Your contract may include terms on how to pursue a lawsuit against the other party. A choice-of-law clause often appears, specifying a U.S. jurisdiction for any litigation. If your contract includes this clause, there’s no need to navigate international law.
However, without this clause, you’ll need to prove the contract was executed in the U.S. for it to fall under U.S. law. Contracts made in foreign countries are subject to those countries’ legal systems.
Filing a Lawsuit in the U.S.
In U.S. law, a plaintiff must notify the defendant of legal proceedings. Without jurisdiction, a court can’t try a case. Personal jurisdiction over non-residents, especially foreign nationals or businesses, has long been a contested issue in U.S. courts.
Serving a Foreign Business
One of the biggest challenges in suing a foreign business is serving notice. If the other party resides abroad, you may need a local process server. In the U.S., you can hire a sheriff or a private process server to deliver the lawsuit.
Service Procedure Abroad
The Hague Convention on Private International Law provides a method for notifying a foreign company. The Convention’s signatories assign a central authority to manage service requests. After making a request, judicial officers send a service certificate to the relevant central authority, which arranges service according to local laws.
Suing a Foreign Business With a U.S. Subsidiary
If a foreign business has a U.S. subsidiary, serving notice through the U.S. office may suffice. In a notable case, Herwig Schlunk claimed a defect in her parents’ Volkswagen led to their deaths. She served Volkswagen of America (VWoA), which denied responsibility. However, the court allowed the notice based on VWoA’s U.S. presence.
Other Service Methods
If a country isn’t a Hague Service Convention member, lawyers may need to use diplomatic channels. They can also file letters rogatory – formal requests from the U.S. court to the foreign court. This method, according to the Department of Justice, can take a year or more.
Before Moving Forward
Ensure the service of process on the defendant is complete before proceeding with a lawsuit against a foreign organization. Otherwise, the case may be dismissed without a chance to present your evidence.
What to Expect
Jurisdiction and venue can be contentious in international lawsuits. You’ll need to provide proof, such as a choice-of-law clause or the contract’s signing location. Make sure to present strong evidence for your legal arguments and demonstrate specific violations.
Lawyers from other countries practice law in the United States
Most American companies lack the global reach that would necessitate hiring a pricey law firm with opulent locations across the world. It’s a good thing the United States has international law offices and lawyers who know how to sue a company in another country successfully.
Do you have any queries about international law?
The Florida Bar has recognized Francis M. Boyer, Esq. as an Expert in International Law, and he has a board certification to prove it. To learn more about how we can assist you in suing a business in a foreign country, give us a call right away or schedule a meeting with Attorney Boyer or a member of his team.
