SC Lawyer, Nov. 2004, #7. Contemplating your next move when resolving cross-border business disputes.

AuthorBy James L. Rogers

South Carolina Lawyer


SC Lawyer, Nov. 2004, #7.

Contemplating your next move when resolving cross-border business disputes

South Carolina LawyerNovember 2004Contemplating your next move when resolving cross-border business disputesBy James L. RogersIn 1905, Theodore Roosevelt sent the U.S. Navy to Santo Domingo to help certain European banks collect debts owed to them by the Dominican Republic. He justified his actions under a policy he termed the Roosevelt Corollary to the Monroe Doctrine. Nowadays, commercial disputes in the international arena are usually resolved more quietly, and calling on the U.S. Navy for help in collecting debts abroad is seldom an option.

In the absence of a military option, resolving international commercial disputes for South Carolina businesses will in the future increasingly depend on the members of the South Carolina Bar, and the amount of work in this arena is likely to grow. A couple of statistics illustrate why. First, upstate South Carolina now has, on a per capita basis, more Foreign Direct Investment (FDI) than any other area of the United States. Second, the Port of Charleston now handles more commercial cargo from overseas than all but one port (Long Beach, CA) in the United States. As South Carolinians increasingly do business beyond America's borders, South Carolina attorneys will necessarily become more involved in the resolution of commercial disputes between South Carolina businesses and their foreign trading partners.

This three-part series of articles is designed to give the average litigator a pragmatic overview of the issues that typically arise in pursuing a commercial claim against a defendant who resides outside the territory of the United States. Hopefully, it will give plaintiff's counsel in pursuit of defendants abroad some notion where certain "bear traps" may lie and how to avoid them.

Initial considerations: filing at home

Initiating legal action to resolve an international commercial dispute forces the practitioner to consider, first and foremost, where the defendant's assets are and which court has actual, physical (as opposed to merely legal or theoretical) jurisdiction over those assets. In other words, the plaintiff's counsel must consider the end-game before beginning. The end-game will dictate the opening moves. (The words plaintiff and defendant will be used in this article although, in some contexts, the discussion may focus on arbitration, where the parties might be more properly labeled claimant and respondent.)

For example, if the foreign national defendant has assets in the United States, and the defendant has a sufficient nexus with South Carolina for our courts to establish personal jurisdiction over him, the initial analysis performed by plaintiff's counsel will not differ greatly from that done before filing a purely domestic lawsuit. The plaintiff may bring suit in South Carolina and execute any judgment against the defendant's U.S.-based assets.

If, however, as is more often the case, the overseas defendant has no U.S. assets, the South Carolina-based plaintiff faces a dilemma. She may, assuming that a basis for personal jurisdiction over the defendant exists, sue the defendant in a South Carolina court, where plaintiff's counsel no doubt feels more comfortable. If plaintiff obtains a South Carolina judgment, however, she must still execute it in the defendant's home jurisdiction or wherever the defendant's assets can be located abroad.

There is no international...

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