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Paper is patient – as the saying goes: many parties make a choice of forum in advanced of any dispute. The issues of choice of forum and enforcement of judgments are intertwined because in evaluating a choice of forum, a party and its lawyers must consider whether a judgment of the chosen forum will be enforceable in the jurisdiction in which the defendant has assets.

The US and Germany are parties of two treaties. The first treaty is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (“New York Convention”). With limited exceptions it requires member countries to give effect to arbitration agreements and to enforce awards rendered in other countries by arbitration panels. In addition, arbitration offers other advantages: the parties can choose the arbitrators, tailor the procedures to their needs, and provide for confidentiality of the proceeding. The disadvantages are clearly the high costs, lack of reported decisions, and limited possibility of appeal. Even if a contract does not provide for arbitration, the parties may, after a dispute arises, agree to have the dispute resolved by arbitration. Different organizations can provide lawyers with model clauses. However, the lawyer has to consider modifications, deletions, and additions to such clauses.

Author: Melanie Schmitz, Legal Trainee Charlotte Office