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  • Intellectual property framework

    Overview

    Protection of intellectual property rights is required by the Federal Constitution and by several multilateral treaties. The main statutes in this area are federal statutes. However, in case of litigation, some matters are subject to federal jurisdiction, and others to provincial jurisdiction.

  • Commercial contract framework

    Overview

    Commercial contracts are governed by the Civil and Commercial Code. This code came into effect in 2015 and it replaces the previous separate Civil Code and Commercial Code. It is part of the federal legislation, but jurisdiction regarding its implementation and litigation resulting thereunder corresponds primarily to the provincial courts.

    The Civil and Commercial Code includes general provisions on contracts, which are applicable to all contractual transactions. These provisions govern matters such as the formation of contracts, offer and acceptance, possible subject matter of contracts, legal formalities, the legal effects of contracts, contract termination and others.

    In addition, the Civil and Commercial Code includes provisions applicable to specific types of contracts, such as sale agreements, leases, franchise agreements and agency agreements. More than 30 types of agreements are subject to specific provisions of this kind. These specially regulated agreements are thus subject to the general rules applicable to contracts –described above – and to the special rules applicable to the relevant type of agreement. Agreements that are not subject to special rules are nevertheless valid, and they are governed primarily by the general contract rules and – to the degree possible – by the rules applicable to analogous specially regulated contracts.

    Other laws include provisions on specific types of commercial contracts. For instance, the Copyright Law includes certain provisions of contracts related to software and to publishing; the Patent Law includes rules on license agreements; and the Insurance Law includes rules on insurance contracts. However, in all these specially regulated contracts, the general contract law rules included in the Civil and Commercial Code are also applicable.

    Commercial contracts with the federal or provincial governments or with other governmental entities are also governed by administrative law. Special rules on contracts with state entities have been included in federal or provincial laws, or have been developed by case law.

  • Copyrights

    Nature of right

    Copyright protects intellectual creations in all fields of science, art and literature. Article 1 of the Copyright Law includes a non-exhaustive list of possible intellectual works protected by copyright. These include, among others, literary and artistic works, music, architectural works and software.

    Copyright protects intellectual expressions, but not ideas. For example, the contents of a book in terms of sentences and other literary expressions are protected by copyright, but the creative idea underlying the book as a whole is not.

    Copyright results from the creation of an intellectual work. Registration is not necessary for copyright to exist, although it is necessary for the exercise of some rights by local authors. Upon creation of a protected work, copyright belongs to the original author or authors, who then may transfer their right, by contract or by the operation of certain legal rules.

    Copyright includes economic and moral rights. Economic rights consist, basically, in the exclusive right to use and exploit the protected work. The Copyright Law lists some of the elements of this exclusive right, such as the right to reproduce the relevant work, to market copies, to prepare derivative works or to have the work performed publicly.

    Moral rights include the so call "integrity right" – that is, the right to preserve the text, title and other contents of the work, even if property rights on such work have been assigned; the "paternity right," the author’s right to be named and identified as such together with the work; the "publication right," the right to decide whether the right will be published; and the "alteration right," the right to modify the work, even after it has been published. Moral rights belong to the author and they are generally non-assignable.

    Legal framework

    Copyright law is included in Law 11, 723, as amended. In addition, multiple laws and regulations govern matters such as related rights, publishers' rights and collective management societies.

    Argentina is part of the main multilateral international copyright agreements, such as the Trips Agreement, the Berne Convention and the Rome Convention. The provisions of these agreements are actively enforced by the courts.

    Duration of right

    The general rule is that copyright protection lasts for a term of seventy years, counted as of January 1 of the first year after the death of the author, as well as through the life of the author.

    In the case of work done through cooperation, the 70-year term is computed from the death of the last person who participated in the joint authorship of the work involved.

    In the case of posthumous works, the 70-year term is computed from the death of the author.

    The duration of protection of anonymous works whose copyright belongs to institutions, corporations or legal entities is 50 years from the date of publication of the work.

    Special rules on copyright duration apply to specific types of copyrightable works, such as photographs and cinematographic works.

    Ownership / licenses

    The basic rule is that ownership belongs to the author. Special rules have been developed in connection with special types of works, such as cinematographic works, derivative works and software.

    There are several types of joint ownership. It may apply to works done through cooperation, which imply a creative collaboration between different authors; to collective works, which are those created through the initiative or direction of one or more individuals, who coordinate or direct the efforts of several other individuals to achieve a joint result; and to composite works, which are the result of adding different separate works, each with a possible separate author and owner, into one final result.

    Works created by employees who have been hired for that purpose belong to the employer.

    Copyright may be subject to licenses, generally as part of broader contractual arrangements such as publishing agreements.

    Remedies for infringement

    Damages may be claimed before civil courts for all types of copyright violation. Registration of works is not necessary, except for local authors, whose rights may be suspended until registration takes place.

    It is also possible to file civil action to prevent further copyright violation, and to obtain preliminary remedies, such as injunction, in the course of civil procedures.

    Criminal remedies, particularly fines, are possible, but are not frequently applied.

  • Mask works / topographies

    Nature of right

    Mask works and topographies are not separately protected under Argentine law. They may be protected under patent law or by way of confidentiality.

    Legal framework

    Argentina has enacted no specific rules on chip protection. Although Argentina is part of the WTO and has approved the Trips Agreement, it has not yet implemented any rules on chip protection.

    The provisions on chip protection included in the Trips Agreement have not been deemed immediately applicable under Argentine law. In addition, Argentina has not ratified or implemented other multilateral treaties on chip protection, in particular the Treaty of Washington of 1989.

    Semiconductor technology, generally, and topographies, in particular, may be protected under the traditional intellectual property rules applicable to all types of technology, specially patent law and the rules on confidential information. Therefore, matters such as the duration of the relevant rights, ownership and remedies depend on the type of protection used in connection with each specific mask work or topography.

    Duration of right

    Not applicable for this jurisdiction.

    Ownership / licenses

     Not applicable for this jurisdiction.

    Remedies for infringement

    Not applicable for this jurisdiction.

  • Patents

    Nature of right

    Patents are a statutory right. The granting of patents is required by the Argentine Constitution and by different international documents, particularly the Trips Agreement. Patent rights imply an exclusive right to exploit a process or a product. The Argentine Patent Law defines the limits of these exclusive rights, on the basis of the provisions of the Trips Agreement.

    Legal framework

    Patents are governed by the Patent Law – Law 24,481, as amended. In addition, they are governed by the Trips Agreement and by the Paris Convention. Argentina is not a party to the Patent Cooperation Treaty.

    Duration of right

    The basic rule is that patents expire 20 years after the date in which the relevant patent application was filed. Argentina uses a "first to file" system, but it also applies the priority rules derived from the Paris Convention.

    Argentine law provides special rules on compulsory licenses and on patent termination due to lack of exploitation of the patented invention. Compulsory licenses may be granted in case of non-exploitation, competition law violations or sanitary emergencies, among other cases. Patent termination may result when, after a compulsory license was granted for lack of exploitation, no exploitation of the invention takes place for two years after the license was granted.

    Ownership / licenses

    Joint ownership is permissible. The Patent Law includes provisions on the exercise of patent rights by the joint owners. In addition the Civil and Commercial Code rules on joint property apply to patents.

    The Patent law includes rules on licenses. Licenses are not exclusive, unless the parties provide otherwise. Competition law rules are applicable to restrictive clauses included in license agreements.

    Remedies for infringement

    The Patent law provides both civil and criminal law remedies for cases of infringement.

    Civil remedies include the compensation of damages and termination of the infringing activities.

    A complex system of rules for preliminary remedies in patent cases is included in the Patent law. Generally, suspension of an alleged infringer's exploitation requires a preliminary procedure, with the participation of expert witnesses.

    Criminal procedures and sanctions are rare.

  • Trademarks

    Nature of right

    A trademark may consist of one or more words, with or without conceptual content, drawings, commercial symbols, monograms, engravings, prints, seals, images, stripes, color combinations, letter and number combinations, the special graphics of letters and numbers, advertisement phrases, reliefs, and any other sign with distinctive capacity.

    A trademark is normally protected by means of its registration. However, de facto trademarks, that is those that are used but not registered, are also protected in a more limited way.

    Legal framework

    Trademarks are governed by the Trademark Law – Law 22,362, as amended.

    In addition, trademarks are protected by the rules included in Trips Agreement and in the Paris Convention.

    Duration of right

    Registered trademarks are protected for a period of ten years, from the moment of registration. Trademark registration may be renewed indefinitely.

    Registration may be cancelled for lack of use during a period of five years. In addition, renewal of registration requires proof of the trademark's prior use.

    Ownership / licenses

    Ownership is acquired by means of registration. However, use of unregistered trademarks may result in certain rights for the user.

    Trademarks may be subject to joint ownership. The Trademark Law and the Civil and Commercial Code provide the rules applicable to these joint ownership relationships.

    Trademark licenses are possible. They are valid even if they are not registered with the trademark office.

    Remedies for infringement

    The Trademark Law provides both civil and criminal law remedies for cases of infringement.

    Civil remedies include the compensation of damages and the termination of the infringing activities.

    Special preliminary remedies are applicable in cases of trademark infringement. The trademark owner may obtain an injunction against the infringer, when the trademark is registered and its violation is immediately evident.

    Criminal law remedies are rarely used in practice.

  • Trade secrets

    Nature of right

    Argentine law provides protection for trade secrets and confidential information. A complex set of rules creates rights against conduct whereby access is gained illegally to confidential information, or which implies illegal use of trade secrets or confidential information or which results in the unauthorized and harmful disclosure of confidential or secret information.

    Confidential information is characterized by the fact that it is kept in a reserved manner and that it is not generally available for technicians working in the relevant technical field. Trade secrets receive a special degree of protection, particularly under criminal law.

    Legal framework

    Confidential information is governed and protected by Law 24,766. It is also protected by the Trips Agreement and by the Paris Convention.

    In addition, multiple rules and statutes protect confidential information and trade secrets. Labor law protects the confidentiality and ownership of information used in employment relationships.

    Several criminal law rules apply to special types of violations of confidentiality. In particular, disclosure of trade secrets and unfair competition by means of the illegal use or appropriation of trade secrets are subject to criminal law penalties.

    Duration of right

    Confidential information and trade secrets is protected for as long as the relevant information is kept confidential. The degree of protection diminishes if the information ceases to be objectively a secret, due to its previous disclosure or because it has been obtained independently by other parties.

    Ownership / licenses

    Ownership results from the obtention of the information, accompanied by legal or practical measures aimed at restricting access to that information by third parties. No registration requirement is applicable.

    Joint ownership is possible.

    Trade secret or know-how licenses are common and enforceable.

    Remedies for infringement

    Argentine law provides civil and criminal law remedies for cases of trade secret infringement.

    Damages caused by these violations must be compensated. It is also possible to obtain court orders requiring termination of the violation.

    Preliminary remedies include injunctions against further exploitation or disclosure of trade secrets.

    Criminal remedies are applicable in cases of disclosure of trade secrets acquired in the course of employment and other professional relationship, as well as in cases in which the violation of the rights to confidential information or trade secrets results in unfair competition.

  • Other key IP rights

    Nature of right

    Industrial designs

    Industrial models and designs are protected by special industrial property rights. An industrial model or design consists in the forms embodied in or the aspect applied to an industrial or artisan product, which confer an ornamental character to such product.

    Exclusive rights on industrial models and designs result from registration of the relevant model or design.

    Industrial designs

    Industrial designs

    Legal framework

    Industrial designs

    Industrial models and designs are protected by Decree 6673/1963, as amended. They are also protected in accordance with the Trips Agreement and the Paris Convention.

    Duration of right

    Industrial designs

    The rights derived from the registration of an industrial model or design last for a five-year period, counted from the date of filing of the relevant application. The registration may be renewed for two successive five-year period, if the owner requests such renewal.

    Ownership / licenses

    Industrial designs

    Ownership belongs to the author. There is a rebuttable presumption to the effect that the first applicant of an industrial model or design registration is the author of such industrial model or design. Joint ownership is possible, and is governed by the Civil and Commercial Code and by Decree 6673/1963 as amended.

    Industrial models or designs may be the subject matter of license agreements. No registration is necessary for the validity of these agreements.

    Remedies for infringement

    Industrial designs

    Civil and criminal law remedies are applicable in case of infringement. Civil remedies include the compensation of damages and termination of the violation.

    Preliminary injunctions and remedies are possible in accordance with general procedural rules.

    Criminal sanctions have been recently reinforced, but they are rarely applied.

  • Intellectual property in employment context

    Employees

    Special rules on employee inventions are included in the Patent Law and in the Labor Contract Law.

    There are basically three types of invention, from the perspective of employer-employee relationships. First, inventions made in technological areas for which the employee was hired as a researcher or developer belong to the employer. The employee may be entitled to a special compensation if he or she develops a patented invention which exceeds the normal scope of the employee's work. Second, inventions related to the employee's work or related to the employer's know-how or activities belong to the employee, but allow the employer to exercise an option to acquire rights over the invention. If the option is exercised, the employee is entitled to a payment reflecting the value of the invention. Third, inventions that do not fall into the two previous categories belong to the employee.

    Similar rules are applicable in the case of other types of technology or intellectual property rights. In the case of software, the law applies the “work for hire” doctrine, but allows the parties to agree to different contractual rules.

    Consultants / contractors

    The law is not explicit about the rights of consultants and contractors, who do not qualify as employees, with regard to technology and other intellectual property they develop. Generally, the parties may agree as to the rules which will apply to such rights. In the absence of a contractual framework, the technology or intellectual property generated by a consultant or contractor who was hired with the purpose of developing such items that will belong to the person paying for such work.

  • Key commercial contract considerations

    Registration of commercial agreements

    The general rule is that commercial agreements are not registered, and that their validity and effect is not subject to registration requirements. However, certain types of agreement must be registered to be effective or to have full effects against third parties. Agreements subject to registration include business association agreements, certain publishing agreements, certain chattel mortgages and certain agreements related to real estate. International transfer of technology agreements are subject to registration for tax purposes.

    Recognized language of commercial agreements

    Agreements are generally entered in Spanish. However, it is legally possible to enter agreements written in other languages. These agreements must be translated when presented in court. Spanish language may be necessary in consumer transactions.

    Country-specific issues for online content

    Argentina has ratified the WIPO conventions applicable online content and practices. However, enforcement of these conventions is weak.

    Enforceability of online/clickwrap/shrinkwrap terms

    The general rule is that acceptance of terms included in online, click wrap or shrink wrap elements is valid and effective, provided such acceptance is clearly stated and applies to terms that were known to the person giving the acceptance. However, several rules may limit the effects of agreements entered by these mechanisms, particularly consumer protection rules and rules on adhesion contracts.

    Governing law

    The basic rule is that the parties may agree as to the law that will govern their contractual rights and as to the applicable jurisdiction in case of dispute. This freedom of election is subject to several limitations. Non-Argentine law will not be enforced in Argentine courts if it  is contrary to Argentine public policy. Also, certain matters are necessarily governed by Argentine law. For example, if a business association is created in Argentina, its organization and other corporate aspects will be governed by Argentine law. Decisions made by non-Argentine courts or arbitration tribunals are enforceable in Argentina only after going through a special procedure before the Argentine courts, in the context of which the decision will only be enforced if it complies with certain rules, particularly not violating Argentine public policy. In addition, certain matters – ie, deciding the validity of a patent issued in Argentina – are necessarily subject to Argentine jurisdiction.

  • Key commercial contract terms

    Enforceability of warranty disclaimers

    Argentine law provides certain warranties, generally applicable to all types of contracts implying the transfer of rights. These warranties apply, in particular, to the validity of the rights being transferred and to the fitness of the goods regarding which rights are transferred.

    The general rule is that these warranties may be limited or eliminated by agreement between the parties. However, these disclaimers are totally or partially invalid in several types of cases: if the transferor had prior knowledge of the invalidity of the transferred rights or of the deficiency of the goods involved; if the transferor is a merchant and the parties waiving his or her rights are not; and if the warranty disclaimer is included in a consumer or adhesion contract.

    Enforceability of exclusions/limitations of liability indemnification

    Exclusions or limitations of liability indemnification are valid if they meet the general conditions applicable to contractual. However, they may be unenforceable in the following cases: when they extend to willful violations or defaults, or to violations or defaults resulting from gross negligence; when they are imposed in adhesion or consumer contracts; or when they result in the violation or annulment of rights that may not be removed or limited contractually.

    Indemnification

    The basic rule under Argentine law if full indemnification of economic or moral damages caused by illegal conduct, whether that conduct constitutes a contractual or a tort violation.

    The parties are free to include contractual rules as to the extent of their indemnification obligations.

    Penalty clauses and liquidated damages clauses are acceptable, but they may be limited or amended by the courts if their terms are deemed abusive.

    In the absence of contractual provisions, the indemnification's extent will depend on circumstances such as the willful or negligent nature of the violation, foreseeability of the damages caused and the comparative fault of the parties.

    Electronic signatures

    Electronic signatures are valid and effective under Argentine law. However, certain legal effects require that the signature comply with a special certification regime.

  • Key contacts
    Guillermo Cabanellas
    Guillermo Cabanellas
    Senior Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio

Key commercial contract considerations

Governing law

Argentina

The basic rule is that the parties may agree as to the law that will govern their contractual rights and as to the applicable jurisdiction in case of dispute. This freedom of election is subject to several limitations. Non-Argentine law will not be enforced in Argentine courts if it  is contrary to Argentine public policy. Also, certain matters are necessarily governed by Argentine law. For example, if a business association is created in Argentina, its organization and other corporate aspects will be governed by Argentine law. Decisions made by non-Argentine courts or arbitration tribunals are enforceable in Argentina only after going through a special procedure before the Argentine courts, in the context of which the decision will only be enforced if it complies with certain rules, particularly not violating Argentine public policy. In addition, certain matters – ie, deciding the validity of a patent issued in Argentina – are necessarily subject to Argentine jurisdiction.

Australia

Governing law and choice of jurisdiction (venue for resolution) clauses will generally be upheld by state and Federal Courts in commercial contracts, provided such choice of law does not (and will not) avoid any mandatory law (eg, the ACL for consumer contracts) that would otherwise be applicable. That is, for example, one cannot contract out of the ACL for a consumer contract in Australia by choosing the law of a foreign jurisdiction to apply to govern the contract.

Austria

Governing law and venue for resolution of disputes (including arbitration) specified in a commercial contract will generally be accepted and recognized, under certain limitations. The governing law is in general subject to ordre public reservation. Additional and more severe limitations apply to business-to-consumer contracts and employment contracts. Dispute resolution and arbitration clauses that materially disrupt the equilibrium between the parties (eg, one-way arbitration clauses) should be carefully assessed in the specific case.

Belgium

Subject to the case law of the European Union on the conclusion of cross border online agreements, the Rome I and Recast Brussels I regulations, and the limitations they impose on consumer contracts and employment contracts, the governing law and venue for resolution of disputes (including arbitration) specified in a commercial contract will generally be accepted and recognized.

Brazil

According to the conflict of laws principles set forth in Federal Decree-Law No. 4,657/1942 (the Introductory Law to the Brazilian Law Provisions), the obligations shall be governed by the law of the place where they are created and, when the parties are not at the same place when they sign a contract, the law of the place of the proposing party shall govern such contract. Even if a contract specifies foreign law as the governing law, if the agreement is performed in Brazil, Brazilian law may be applicable and local courts would always have jurisdiction in relation to such contract.

An exception to the above rule are the agreements with an arbitration clause. Federal Law 9,307/1996 (Arbitration Law) expressly allows the parties to choose the laws or institutional rules governing the contract and the arbitration. The parties may also agree that the decision shall be based on equity.

Canada

Choice of law and forum selection clauses are enforced based on contract principles applicable in the province in question. Courts as a rule will enforce such clauses in contracts that parties have negotiated. However, standard principles such as inequality of bargaining power (particularly in the case of consumer transactions), ambiguity or manifest unfairness of the clause may make such a clause unenforceable in a particular case.

Chile

Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized in Chilean Courts.

Dispute resolution is litigation in Chile unless an alternative dispute resolution procedure, such as mediation or arbitration, is specified in the contract.

China

Generally, governing law can be foreign law if a contract involves foreign related issues. But, if a party seeks intellectual property protection in China, the Chinese law must apply in respect of ownership and content of the intellectual property as well as the liability for infringement.

The dispute resolution can be resolved by foreign arbitration if the contract has foreign related issues. However, as it is almost impossible to enforce a judgment rendered by a foreign court in China, it is advisable not to choose a foreign court for dispute resolution if one of the contracting parties is a Chinese party.

Colombia

As a rule, the law governing intellectual property is the Colombian law and the Decisions of the CAN. Nonetheless, it is desirable that parties include a mechanism for resolution of disputes, such as arbitration, especially in cross-border transactions, in which case parties may choose the governing law applicable to their commercial agreement.

Czech Republic

Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized by courts.

Dispute resolution is litigation before state courts, unless agreed otherwise which typically would be an arbitration before an established or ad hoc arbitral tribunal.

Denmark

The parties have contractual freedom in relation to the choice of law. Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized by Danish courts.

In business-to-consumer relations, specific rules may apply.

District courts have jurisdiction over disputes unless an alternative dispute resolution procedure, such as arbitration, is specified in the contract. Arbitration is only enforceable in business-to-consumer relations if the consumer consents after the conflict has arisen.

Finland

Clauses regarding choice of jurisdiction are generally considered binding between business parties, even in the case of shrinkwrap online terms.

In the B2C context, however, consumers are always granted access to the local legal system regardless of the governing law specified in the contract.

France

Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted. However, a consumer in France will be entitled to the protection of French law, if French law is more favorable to the consumer than the stipulated governing law. In all cases, French law that is considered by French courts to rise to the level of public policy will be applied by a French court. In respect of international contracts (eg, where a party is not French) there is little case law holding which types of French law are public policy in international matters.

Germany

The interpretation and enforceability of commercial contracts is a matter of governing law. The governing law is the law of the country chosen by the parties or, for lack of a valid choice of law provision, the law applicable on the basis of the relating legal provisions. Regulation 593/2008/EC on the law applicable to contractual obligations (Rome I Regulation) in case of disputes before the courts within the European Union sets out the principles relating to law applicable in the absence of choice of law of the parties. As a general rule, as regards consumers, contracts are governed by the law of the country where the consumer has his/her habitual residence if the business party pursues its commercial or professional activities in that country or where the business party directs such activities to and the relevant contract falls within the scope of such activities.

The choice of law of the parties is generally accepted, provided that the choice is made expressly or is clearly demonstrated by the terms of the contract or the circumstances of the case.  In case of consumer contracts such a choice may not, however, have the result of depriving the consumer of the protection afforded to him by provisions that cannot be derogated from by agreement by virtue of the law which, in the absence of choice, would have been applicable (Art. 6 ROME I Regulation).

Where all other elements relevant to the situation at the time of the choice of law are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.

Hong Kong

Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized by Hong Kong courts.

The parties are free to opt for litigation or alternative dispute resolution such as arbitration and mediation.

Hungary

Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized. As a member of the EU the regulations on applicable law (Rome I, 593/2008/EC and Rome II, 864/2007/EC) and jurisdiction (1215/2012/EU) shall be applicable.

Dispute resolution is litigation in courts unless an alternative dispute resolution procedure, such as mediation or arbitration, is specified in the contract.

India

Governing law

Contracting parties have the right to choose the governing law of a contract. However, where the governing law is not mentioned in the contract, courts in India follow the "closest connection" test, to determine governing law, meaning that the court would identify the legal system with which the transaction has its closest and most real connection. Various factors that the courts would look into are: the place where the contract was made, place of performance, place of domicile, residence or business of parties, subject matter of contract.

It may be relevant to note that foreign law is not recognized by Indian courts, and is required to be pleaded as facts, with expert evidence, under the Indian Evidence Act 1872.

Jurisdiction / venue

Jurisdiction of Indian courts arises from the Code of Civil Procedure, 1908 (CPC). The jurisdiction of civil courts is subject to territorial and pecuniary limitations. In cases of international commercial contracts, parties may choose the jurisdiction/venue of disputes. However, even in such cases, Indian courts may assume jurisdiction, after analyzing the balance of convenience in cases where a party claims that the choice of foreign jurisdiction would result in undue disadvantage to that party.

Alternate dispute resolution 

Parties may specify an alternative dispute resolution mechanism, such as arbitration, conciliation or mediation. Indian courts recognize and enforce decisions of recognized foreign arbitral tribunals, subject to limitations prescribed under the Indian Arbitration and Conciliation Act 1996.

Indonesia

The governing law and venue for dispute resolution, as specified in a commercial contract, will generally be accepted and recognized by the Indonesian Courts under the principles of "freedom of contract" based on Article 1338 of the Indonesian Civil Code.

However, foreign court judgments are not recognized by Indonesian Courts as Indonesia is not a party to any treaty on the reciprocal enforcement of court judgments. This means that a lawsuit must be filed in Indonesia for a foreign court judgment to be enforced in Indonesia.

If the parties intend to apply foreign law as the governing law of the contract, then the better alternative is to use such foreign law and to elect a foreign arbitration as the dispute resolution mechanism. Indonesia has ratified the New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards). Accordingly, Law Number 30 of 1999 on Arbitration and Alternative of Dispute Resolution (Arbitration Law) facilitates the enforcement of foreign awards in Indonesia, provided they meet certain conditions, being:

  • The international arbitration award must be made by an arbitrator or panel of arbitrators in a country which is bound by agreement with Indonesia, either bilateral or multilateral, on the acknowledgment and enforcement of international arbitration awards
  • The international arbitration award in paragraph (a) is limited to awards which pursuant to Indonesian law is in the scope of commercial law
  • The international arbitration award as referred to in paragraph (a) can only be enforced in Indonesia if it is not contrary to public policy
  • The international arbitration award can only be enforced in Indonesia after obtaining an execution judgment from the Head of the Central Jakarta District Court and
  • The international arbitration award in paragraph (a) involving the State of the Republic of Indonesia as a party in the dispute, can only be enforced after obtaining an execution judgment from the Supreme Court of the Republic of Indonesia which is further assigned to the Central Jakarta District Court.

For its enforcement in Indonesia, a foreign award must be registered at the Central Jakarta District Court (CJDC). To enforce an international arbitration award, the Head of CJDC must recognize the foreign arbitration award and issue an execution enforcement judgment. If the Head of CJDC recognizes the foreign arbitration award through its judgment then the judgment becomes final and binding. If the Head of CJDC does not recognize the foreign arbitration award through its judgment thus the judgment still may be appealed to the Supreme Court. The judgment of the Supreme Court is a final and binding judgment.

Ireland

The Irish courts will generally recognize the governing law and venue for resolution of disputes (including arbitration) specified in a commercial contract. Specific rules apply to consumer contracts.

It is a specific requirement that business-to-consumer traders must include a link on their website to the European Commission's Online Dispute Resolution platform.

Israel

In general, governing law provisions, including foreign governing law provision, specified in a commercial contract will be accepted and recognized by Israeli courts. However, in certain circumstances, the Israeli courts might be prepared to apply Israeli law such as, when immediate temporary relief is required, with regard to civil legal procedures or where the agreement is deemed to be a standard Contract (as further discussed above).

It should be noted that in some recent decisions of the Israeli district courts (which are not binding case law, but rather guidance for lower courts), it has been ruled that with respect to standard contracts entered into between multi-national corporations and numerous Israelis, with respect to services provided to or targeting Israelis, that determine a foreign jurisdiction and foreign governing law, Israeli courts will apply Israeli jurisdiction and law, on the basis that such determination of foreign jurisdiction and law is considered a prejudicial term in a standard contract. In addition, the Supreme Court ruled in May 2018, in a case relating to a major technology company, that notwithstanding the agreement between the parties (which constituted a standard contract), Israeli courts would have jurisdiction but the governing law would be the contractually agreed foreign law, as the plaintiff had failed to demonstrate that such law was unfairly prejudicial. This decision constitutes a binding precedent. 

Italy

With regard to B2B contracts, governing law can be freely specified by the parties.

With regard to B2C contracts some provisions shall necessarily be governed by the Italian law irrespective of the governing law of the agreement.

Japan

Choice of governing law and venue for resolution of disputes specified in a contract is generally accepted and recognized by courts in Japan.

It should be noted that under Japanese conflict law, in consumer contracts, a consumer may require additional application of the law of the consumer's residence in addition to agreed governing law.

Luxembourg

Subject to the case law of the European Union on the conclusion of cross border online agreements, the Rome I and Brussels Ibis regulations, and the limitations they impose on consumer contracts and employment contracts, the governing law and venue for resolution of disputes (including arbitration) specified in a commercial contract will generally be accepted and recognized.

Mexico

Governing law and venue for resolution of disputes specified in a commercial contract corresponds to Federal Courts although State Courts may accept venue.

Dispute resolution is litigation in Federal Courts unless an alternative dispute resolution procedure, such as mediation or arbitration, is specified in the contract.

Netherlands

Subject to the conflict of law provisions as laid down in the Rome I and Brussels I regulations and in the Dutch Civil Code, and the limitations they impose on, for example, consumer contracts and employment contracts, the governing law and venue for resolution of disputes (including arbitration) specified in a commercial contract will generally be accepted and recognized.

New Zealand

Governing law and choice of forum for disputes that have been expressly specified in a commercial contract will generally be accepted and recognized in New Zealand courts. However, in some cases the subject matter or the type of contracting party (consumers for example) may justify challenging an express choice of law clause. There are also particular statutes that may apply regardless of any express choice of law clause (such as the Commerce Act 1986, the Consumers Guarantees Act 1993 and the Fair Trading Act 1986).

Arbitration may be a preferred option for parties and is governed by the Arbitration Act 1996. There are also a number of alternative dispute resolution procedures including private mediation and judicial settlement conferences. In some industries, such as telecommunications and utilities, specific dispute resolution forums have been established.

Norway

The parties have a contractual freedom in relation to choice of law. Governing law and venue of resolution of disputes specified in a commercial contract will generally be accepted and recognized by Norwegian Courts.

In a business-to-consumer situation, specific rules may apply.

District courts have jurisdiction over disputes unless an alternative dispute resolution procedure, such as arbitration, is specified in the contract.

Poland

The parties are free to choose any governing law for the contract. However, Polish law may contain so-called overriding mandatory provisions which would be applicable despite the law chosen by the parties.

Portugal

The interpretation and enforceability of contracts is a matter of governing law. The choice of law by the parties is accepted as a general principle, except when otherwise provided for by law (please, however, note that in certain cases there are rules of mandatory application – for instance, in the scope of contracts concluded with consumers). 

Romania

Governing law and venue for resolution of disputes specified in a contract will generally be accepted and recognized subject to mandatory provisions in relation to the jurisdiction of the Romanian courts.

Jurisdictions clauses in consumer contracts that provide for a different court than the court located in the area where the consumer lives are not enforceable if signed before the consumer's right to damages arises.

Russia

The law can be freely chosen by the parties. However, the parties must consider the possibility of certain "super-imperative" provisions of Russian laws which may be applicable regardless of the choice of law (eg, registration of contract, currency control regulations, consumer laws etc.).

Saudi Arabia

Contracting parties generally have the right to choose the governing law of a contract. However, even if the parties state the law of a foreign jurisdiction as the governing law of the contract, if it is considered that there is sufficient nexus to the KSA, there is a risk that the courts in the KSA may in their absolute discretion accept jurisdiction and hear any dispute. If a KSA court accepts jurisdiction over a dispute, it will apply KSA law.

Consideration should be given to the most suitable governing law and jurisdiction for resolving disputes to be specified in the contract, depending upon the nature of the contract and specific circumstances. 

Singapore

The governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized by the courts. It should be noted that the use of Singapore law as governing law and the Singapore International Arbitration Centre as the forum for any disputes has become increasingly common.

Slovak Republic

Choice of governing law and choice of forum for resolution of disputes specified in a commercial contract will generally be accepted and recognized by courts. In the absence of a specification in contract, rules under the Slovak Act No. 97/1963 Coll. on International Private and Procedural Law, as amended, Regulation No. 593/2008 (Rome I) and Regulation No. 1215/2012 (Brussels I) shall apply.

If specified by the parties in the contract, alternative dispute resolution procedure, such as mediation or arbitration, is in general also possible.

South Korea

While the choice of law agreed by parties is generally respected by the Korean court and thus designating a foreign law for a contact would be valid, the Korean court may apply mandatory Korean laws and deny the application of the selected foreign law which violates Korean public order and good morals.

In general, the forum selection agreed between the parties is enforceable under Korean law. In order to select a foreign court as exclusive jurisdiction (and contractually preclude the jurisdiction of Korean courts), however, Korean courts require that:

  • The case is not under the exclusive jurisdiction of the Korean courts under Korean law
  • The foreign court in question selected by the parties has valid jurisdiction under the laws of the foreign court
  • The case has reasonable connection with the foreign jurisdiction
  • The agreement on the exclusive jurisdiction is not grossly unreasonable or unfair

Spain

Under Regulation No. 593/2008 of the European Parliament and of the Council of June 17, 2008 on the law applicable to contractual obligations (Rome I), directly applicable in Spain, the parties to a contract are allowed to choose the law governing the contracts, whether or not it is the law of a EU member state. If the contracting parties do not make a choice (or if the choice is invalid), the law of the country of habitual residence of the characteristic performer when the contract is concluded, or in the case of a company, of its central administration, in principle applies.

Alongside this general rule, the EU Rome I regulation on the law applicable to contractual obligations establishes certain guarantees as to the requirements for the parties to be able to determine the applicable law in certain cases (consumer contracts and individual employment contracts) and if no choice is made, specific forms of jurisdiction that take precedence over the presumptions referred to above. Spanish laws (eg, Consumers and Users Protection Act RDL 1/2007) also do establish certain limitations on the  choice of law of the parties when dealing with certain specially protected groups, like consumers.

Sweden

The parties' contractual freedom applies to choice of law. Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized by Swedish Courts.

In a business-to-consumer situation, specific rules may apply.

Dispute resolution is litigation in district courts unless an alternative dispute resolution procedure, such as mediation or arbitration, is specified in the contract. Arbitration is generally not enforceable in a business-to-consumer situation.

Switzerland

Governing law and forum specified in a commercial contract will generally be accepted and recognized by state courts.

Dispute resolution is litigation in state courts unless an alternative dispute resolution procedure, such as mediation or arbitration, is specified in the contract.

Taiwan

Governing law and jurisdiction for resolution of disputes specified in a commercial contract will generally be accepted and recognized by Taiwan courts. The parties are free to opt for litigation or alternative dispute resolution such as arbitration and mediation.

Ukraine

Under Ukrainian legislation, parties to the agreement may choose the governing law provided that a foreign element is present in respective contractual relations. In particular, a foreign element is considered to be present in the following cases:

  • One of contracting parties is a foreign legal entity
  • An object of legal relationship is located on the territory of the foreign state
  • Legal fact in result of which legal relations arise, which changes or terminates legal relationship takes place in the territory of the foreign state

At the same time, it should be noted that Ukrainian legislation envisages certain exceptions when governing law regulated by agreement shall not apply and
Ukrainian law shall be found applicable.

Namely, the governing law of the agreement will not apply if its application causes consequences that are incompatible with the public order of Ukraine. In addition, the imperative (mandatory) norms of the Ukrainian legislation will still apply. At this point, we note that Ukrainian law does not define which provisions are imperative (presumably, these are provisions of public nature, for instance payment of taxes, antimonopoly issues etc., but it should be decided in each particular case based on complex analysis of Ukrainian law whether certain provisions of Ukrainian law should be treated as imperative).

Furthermore, please note that according to Ukrainian law, the law applicable to legal relations in the area of protection of intellectual property rights shall be the law of the country where the protection is sought. In the event there is any dispute between the parties to the agreement in connection with the protection of intellectual property rights within the territory of Ukraine, the laws of Ukraine will apply.

Ukrainian laws also provide that if it turns out that application of the chosen law is not possible in determining the order of fulfilment of the agreement or measures to be applied in the event of non-fulfilment or improper fulfilment of such agreement, the law of the country of performance of the agreement shall be applied. Therefore, theoretically Ukrainian law may be found applicable to the agreement in regard to the order of its fulfilment and the measures to be applied in the event of its non-fulfilment or improper fulfilment.

In relation to the choice of jurisdiction, the parties to the contractual relations with foreign element, eg, foreign entities, are free to choose foreign jurisdiction. However, it should be noted that Ukrainian courts would still have exclusive jurisdiction over some kinds of disputes with a foreign element, in particular, in disputes regarding intellectual property rights which are subject to patenting or obtaining a certificate in Ukraine, regarding real estate located within the territory of Ukraine, etc.

United Arab Emirates

While parties are free to choose a foreign law to govern an agreement, the UAE Courts may as a matter of practice set aside such a provision and apply UAE law. Issues may arise as to the enforceability of a foreign law decision on disputes which relate to the infringement of intellectual property rights where there is a nexus with the UAE, eg, where one or more of the infringers reside in the UAE. This is because such infringements are considered to be criminal in nature, which allows UAE Courts to assume exclusive jurisdiction and apply UAE laws.

United Kingdom

Parties are free under Scots and English law to choose the governing law and jurisdiction of a contract as well as any arbitration institution they may see fit. Generally, both the Scottish and English Courts uphold an express choice of law. However, such freedom of choice is unlikely in the case of a consumer contract. Moreover, in some circumstances, an express choice of law may be challenged and the applicable law modified (eg, if a different law has been chosen solely to avoid the application of the UK's "unfair contract terms" legislation). In the event that there is no express choice of law in the contract, then, for contracts created on or after December 17, 2009, the provisions of Rome I Regulation apply. For contracts created before December 17, 2009, the provisions of the Rome Convention apply.

Arbitration is often used by parties to resolve commercial disputes. It is private and confidential and governed by the Arbitration Act 1996 and, in Scotland, Arbitration (Scotland) Act 2010. There are also a number of alternative dispute resolution procedures. These include mediation, early neutral evaluation and adjudication. Typically, traders now have access to alternative dispute resolution (ADR) providers in their sectors, should they choose to resort to ADR, to resolve any contractual disputes with consumers.

United States

Governing law and venue for resolution of disputes specified in a commercial contract will generally be accepted and recognized by state and Federal courts.

Dispute resolution is litigation in state and Federal Courts unless an alternative dispute resolution procedure, such as mediation or arbitration, is specified in the contract. Waivers of class action arbitrations require special attention to be enforceable against consumers.