Businesses that have international locations or do business internationally have to consider the laws in each one as they make decisions for the company. Because of this, international business disputes are common. But what happens when the same issue occurs in multiple countries?
When related claims are moving through the legal process in multiple countries at the same time, parallel proceedings are occurring. These can be used as a legal strategy, but only if it’s handled properly.
Why consider parallel proceedings?
Parallel proceedings may make it possible to seek faster relief, broader discovery, asset restrictions or a more favorable forum. Because of this, it’s critical to consider the specifics of the country where the filing may occur. Even once a complaint is filed in one country, another party may choose to respond by filing a claim in a different country based on the laws or procedures there.
Some international companies prefer parallel proceedings because this can create multi-jurisdictional pressure that may influence the pace and direction of the dispute. One court may be the best option for freezing assets, but another may have stronger discovery rules.
Parallel proceedings aren’t always the best option because they can come with risks. Courts in different countries may reach different decisions about the same matter. Besides that, overlapping deadlines, higher legal costs and disputes over which court will hear something first make these proceedings challenging. This could all mean that a favorable judgment may require additional steps before it’s enforced in other jurisdictions.
What planning should a company consider?
Companies can plan for parallel proceedings before they face any. Using forum selection clauses, arbitration provisions, governing law terms, enforcement language and service rules can help to protect the company during parallel proceedings.
Parallel proceedings can be rewarding and challenging, so it’s critical that companies have people on their side who understand how to use these proceedings in a way that’s best for the business. Ideally, companies will do this as early as possible so they can develop a comprehensive plan.