Application of International Law
Donna Turner
Argosy University – Online
Business Law and Corporate Ethics

International law does not have a defined area or governing body. International law is made up with a collection of agreements, treaties, charters, protocols, tribunals, memorandums, and legal aspects of the International Court of Justice also known as the World Court. There are three main legal principles recognized in international law, which are not required, but are based on courtesy and respect:
- Principle of Comity – this is when two nations share common public policy ideas, one of them submits to the laws and judicial decrees of the other.
- Act of State Doctrine - respects that a nation is sovereign in its own territory and the judicial bodies of another country may not question its official domestic actions. It dissuades courts from deciding cases that would interfere with a country’s foreign policy.
- Doctrine of Sovereign Immunity - deals with actions brought in the court of one nation against another foreign nation and prevents the sovereign state from being tried in court without its consent. In the U.S., the Foreign Sovereign Immunities Act (FSIA) of 1976 governs this.
There are both national laws and international agreements which govern/regulate international business transactions that can include investments, offshore banking, contracts, imports/exports, tariffs, dumping, trade and more. International law can also be considered as public or private. Public International law covers the rules, laws and customs that govern and oversee the conduct and dealings between nations and/or their citizens. The UN deals with public international law. Private International law handles disputes between private citizens of different nations (HG.org, 2015). In the United States, arbitration law comes from five sources; constitutions, international treaties, statues, regulations communicated by regulatory agencies, and appellate viewpoints of courts. The Federal Arbitration Act is the arbitration law controlling body at both the state and federal levels of the United States. The purpose of this Act is to enforce courts to honor contractual agreements to arbitrate disputes, even though state legislature makes an effort to restrict the ability to enforce the arbitration agreements. The New York Convention was approved in 1958, although the U.S. did not concede to it until 1970 (Kesikli, 2014). While New York Convention is the most successful mechanism in place to promote international trade, its scope is limited, as it primarily focuses on creating a standard for recognition and enforcement of the arbitration agreement and award, rather than the conduct of the proceedings. In 1990, the United States joined the Panama Convention, which only applies to commercial disputes and arbitration agreements. The most important step for the parties to be able to take control of their arbitration is in the drafting of their arbitration clause. During this phase, the parties have significant freedom in altering the details of their arbitration susceptible to certain legal restrictions. The most important law to govern the legitimacy of the "arbitration agreement" is the New York Convention. This sets forward, the criteria that must be satisfied to determine the validity of the Arbitration Agreement. The New York Convention and Panama Convention outline the requirements that need to be met for an arbitral agreement to be enforceable by the authority of the treaties. Both Conventions include many of the same requirements for enforcing arbitral agreements. The Agreement must be in writing, deal with an existing or future dispute, and cover a dispute that arises in regards to the legal relationship, and include a condition that the general requirements for construction of a contract to be met.
In Russia, the Federal Law on International Commercial Arbitration, 1993 (the "Law") governs international commercial arbitration throughout the entire territory of Russia. Plainly, this has a combination effect and orchestrates legal practice in Russia. The Law is mainly a mirror image of the UNCITRAL Model Law on International Commercial Arbitration (1985) and puts Russia on the map of the countries with modern arbitration legislation. Based on other cases, the Supreme Commercial Court outlined the non-binding guidelines for setting aside, recognition and enforcement of arbitral awards. These guidelines are an important legal tool for passage within the Russian legal setting. Russia is a member of the New York Convention and has been one of the original member states since 1958 as USSR. According to the Law any disputes of a commercial nature involving a foreign party, along with commercial disputes where at least one party is a Russian company with foreign investments, can be assigned to international commercial arbitration. The law does not specify the required level of foreign participation and enforcement of legal basis for Russia is the New York Convention. An exchange of letters, faxes, emails, or other forms of written arbitration agreements is acceptable. In my opinion, the dispute should be handled in Russia according to the New York Convention. Vladir Unlimited wrote the arbitration agreement and included an arbitration clause that all legal and nonlegal disputes would be handled in Russia which also allows the Russia Arbitration Institution to choose the panel members who all live in Russia. Therefore, the United States would need to concede to the arbitration agreement and handle all disputes in Russia as agreed upon when signing the joint venture agreement. There are advantages and disadvantages to using arbitration as a means to settle disputes. The advantages of arbitration usually include cost, speed, fairness, finality, simplified procedures, and confidentiality. It is cheaper to arbitrate then to take the dispute to a courtroom as there is less work to do to hear the case. Arbitrations tend to be speedier as there is not a waiting period to be heard in a courtroom as well as less preparation. The process is fair because both parties usually choose the arbitrators for the hearing and agreed upon. Arbitration decisions are difficult to appeal to the court system, therefore resulting in the finality of the decision. Procedures of arbitration are simplified because it does not involve ligation the mounds of work needed to appear in court in front of a judge and jury. The most advantageous is the confidentiality of the dispute because the transcript of the hearing does not become a part of public record (FindLaw, 2014). Some of the disadvantages of arbitration mirrors the advantages but for different reasons that can lead to another result. Those disadvantages include cost, fairness, speed, and finality. At times, the cost of arbitrating can be expensive especially if the decision is not binding which allows those involved in the dispute to have the ability to still take it to court in front of a judge. Fairness could be in jeopardy if one party is familiar with the arbitrators or the dispute could be settled in small claims court. The speed of the arbitration can take longer if there are more parties involved in the dispute and the case is complicated causing it to take more time then was anticipated. The finality can be a disadvantage because the final decision is rarely allowed to be appealed to the court and one party may experience an unfair result according to the arbitrator’s final decision. The other disadvantages include the location of the hearing and having no jury. In the instance of location, this can be an inconvenience and costly to one party over another. During arbitration, there is no jury, therefore the arbitrator becomes the judge and jury who make the final decision, which is usually binding and not allowed to be appealed in the court. As the in-house counsel for Monarch Associates’ I would advise them to negotiate future joint ventures with Russian businesses where both parties share the location. In this sense, maybe if the Russians have a dispute, then you go to their location and vice versa. I would not negotiate that no matter who has the dispute it would be arbitrated in only one location throughout the contract. Counsel should review all contracts before being executed and put in place with any other business that you are about to enter into a venture with no matter if they are foreign or domestic. There are considerations to keep in mind with any contract, but with foreign companies I feel that a more detailed contract needs to be in place. In the contract, certain conditions need to be in writing such as location(s) in the event an arbitration occurs, both parties are involved in the choice of arbitrators that both agree upon, and willing to accept the finality of the decision of the arbitrator without further court action. Once all matters of the contract are considered and agreed upon, this is when it would be appropriate for all parties involved to sign the agreement and put it in play. Arbitrations and court hearing could be avoided if everyone took the time to get advice from and counsel as well as review the agreement thoroughly before entering into a venture with another business. This process would help to protect all those who are involved.

References
FindLaw (2014). Arbitration Pros and Cons. Retrieved from http://www.findlaw.com/arbitration-pros-and-cons.html
HG.com (2015). International Law. Retrieved from http://www.hg.org/international-law.html
Kesikli, Omer (2014). United States: International Arbitration and Arbitrability From The United States Perspective. Retrieved from http://www.mondaq.com/unitedstates/x/309172/Arbitration+Dispute+Resolution/ International+Arbitration+And
Russian Arbitration Association (2013). Arbitration in Russia. Retrieved from http://www.arbitrations.ru/en/dispute-resolution-in-russia.php