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How do I respond to a trade dispute?

A trade dispute suddenly arose in the course of a transaction with an overseas buyer. Over the delivery terms and quality standards in the contract, the counterparty is asserting a breach of contract and refusing to pay, and with respect to some of the volume, they are raising the possibility of anti-dumping and rules-of-origin violations and pressuring us by saying that problems could arise at the local customs clearance stage. In a trade dispute like this, I would like to know in what order a company should respond, and what kind of legal response strategy should be established when a contract dispute, customs clearance problems, and tariff and trade regulation issues are all intertwined at once. I would also like to know whether there are matters that must be checked before proceeding to litigation or arbitration.

trade dispute

Answer to Related Inquiry

Author: 김국일

Hello. This is an international trade attorney at Daeryun Law LLC.

The most important thing in responding to a trade dispute is a precise review of the international transaction contract, and in particular the following matters must be checked.

Which country's law is designated as the governing law
Whether the forum is a court with jurisdiction or international arbitration (ICC, SIAC, HKIAC, and the like)
What the Incoterms are
How the quality standards and inspection methods are stipulated
Whether there are provisions on the scope of damages and exemptions in the event of a dispute

Depending on these contractual provisions, the strategy of whether to proceed to litigation, arbitration, or resolution through negotiation can differ completely, and in practice the direction of winning or losing is often already largely determined at the stage of interpreting the contract.

Trade disputes not infrequently expand into international arbitration or litigation in foreign courts, rather than ending with domestic litigation.

In such a case, a comprehensive international trade litigation strategy is needed that takes into account the appropriateness of the procedure chosen, jurisdictional disputes, strategies for securing, translating, and submitting evidence, and even the feasibility of enforcement abroad.

International arbitration has the advantages of expertise and speed, while foreign litigation involves considerable time and risk, so the most reasonable route must be chosen on a case-by-case basis.

A trade dispute involves a complex interplay of the Customs Act, international trade norms, administrative sanctions, and foreign exchange and sanctions regulations, so the matter can expand unnecessarily or corporate risk can grow.

Daeryun Law LLC provides a one-stop response to trade contract disputes, customs clearance and tariff issues, international arbitration and foreign litigation, and sanctions and import-export regulation, centered on international trade attorneys and customs specialist advisers who hold licensed customs broker qualifications.

In a trade dispute, the response from the moment the dispute begins, rather than after the problem has grown, is the most important.

As an institution contracted under the export voucher program, Daeryun can offer you the advice of an attorney specializing in international trade before a trade dispute arises.

If you establish an accurate legal diagnosis and strategy at an early stage, you can amply prevent unnecessary litigation and losses, so we invite you to request a consultation.