

If the parties should agree on how to settle disputes, what should they include in their agreement?

The parties to an international contract should probably include at least the governing law and the forum.  What does that term "forum" mean? 

For courts it means specifying which nation's (or province's or state's) courts are to hear any dispute that arises.  It can also mean specifying arbitration instead of litigation.  Mediation can be a tool for settlement, and can be required as an initial step, but as covered in an earlier note, it is not binding and so is not a "forum"  for final settlement if the parties are unwilling to settle their differences.  The provisions on governing law and on forum are complex and a bit tricky; they need to be tailored to the case at hand, by a legal professional, or they might be of no effect or even have a result different from what the parties thought they had agreed on.  For example, specifying "The laws of the United States,"  will have no effect and will be the same as not specifying at all, because contract law is state-based in the US, not federal.  A similar issue arises in several other countries.   If the parties agree on litigation, they should specify the courts carefully to avoid a problem similar to that of governing law, and if they agree on arbitration they need to fill in the details of organization, rules, location, number of arbitrators, language of the arbitration, and other factors, and should specify that the arbitration is final, exclusive, and binding.  They should also show their agreement on how an arbitral award is to be enforced in the courts. Regarding the language of the arbitration, parties should not be hesitant to specify English.  The language of the arbitration is the language in which all evidence and arguments are to be presented, and while it is likely that all entities that are potential parties to the arbitration have one or more people who speak, read, and write English, it is not as likely that the party in an English-language jurisdiction has members who can speak, read, and write the language of the other party.