5 Common Types of Disputes in International Business Transactions

Jun 25

International business involves complex legal frameworks, and disputes are often inevitable. Understanding the most common types of disputes can help businesses proactively manage risks and protect their interests. Below are five common international business disputes that companies should be aware of, along with insights from DEDICA LAW FIRM.

1. Contractual Disputes in Cross-Border Transactions

One of the most frequent issues in international trade arises from unclear or ambiguous contract terms, language barriers, and inconsistent standards on quality, delivery timelines, and payment methods — as highlighted by ASL LAW and LTS LAW.

Key tip: When drafting international contracts, clearly specify:

Governing law
ADR mechanisms (e.g. arbitration or mediation)
Penalty clauses
Force majeure terms
Currency conversion rules
Withholding tax responsibilities

These elements help minimize disputes over costs and tax obligations.

2. Intellectual Property (IP) Disputes

IP infringement is a growing concern, especially in transactions involving goods, technology, or brand assets. Common issues include unauthorized use of trademarks, counterfeit products, and copyright violations.

Vietnam is ramping up IP enforcement efforts and planning to establish a specialized IP court for faster resolution.

Proactive steps include:

Registering trademarks and patents in detail
Signing Non-Disclosure Agreements (NDAs)
Preparing strong evidence files for enforcement or litigation
Actively monitoring the market for potential IP violations

3. Disputes Related to Tariffs, Origin, and Trade Compliance

Disputes in this area typically involve false declarations of origin, tariff evasion, or lack of supporting documents proving the origin of goods — a concern noted by ASL LAW.

Vietnamese exports are frequently subject to anti-dumping investigations in multiple jurisdictions.

Risk mitigation strategies:

Develop a robust traceability system
Maintain accurate import-export records
Standardize invoices and prove true value-added processes

4. Disputes Over Dispute Resolution: ADR, Arbitration & Court Jurisdiction

Many contracts fail to designate a proper dispute resolution mechanism (e.g., VIAC, SIAC, ICC, or courts), leading to jurisdictional conflicts and loss of legal protection.

Vietnam promotes ADR through the Law on Mediation and Arbitration, allowing parties to select foreign arbitration centers aligned with UNCITRAL rules.

Recommendations:

Insert mediation-arbitration clauses in contracts
Select appropriate international arbitration centers
Prepare to recognize and enforce arbitral awards in Vietnam

5. Labor and Environmental Disputes in Investment Projects

Labor-related conflicts (e.g. dismissal, compensation, occupational safety) are common in investment deals, particularly in light of updates to Vietnam’s Labor Code.

Projects with environmental or cross-border data factors are especially prone to disputes related to environmental law, carbon regulations, and data security.

Legal best practices:

Establish clear labor and safety policies
Include environmental and cross-border data clauses
Comply with EIA (Environmental Impact Assessment) reports and the Cybersecurity Law

DEDICA LAW FIRM – Your Trusted Legal Partner in International Business

At DEDICA Law Firm, we specialize in resolving complex disputes in cross-border commercial transactions. With over 10 years of legal expertise in contracts, international arbitration, and investment law, our experienced team provides: