International trade arrangements can be more complicated than domestic trade arrangements for many apparent reasons, including that the obvious ones that contracting parties are not based in the same jurisdiction and hence inviting the applicability of different laws, provisions and potential conflicts. There are many other factors that may also cause disputes, such as the factors of language barriers, as well as cultural and geographical factors. Contracting parties must therefore ensure that they are entering into specific as well as an all-encompassing international trade agreement that ensures to take into account possible dispute scenarios and ensures definite dispute resolution.

Types of disputes that might occur in international trade could include:

• Disputes with agents: This is especially so in tripartite agreements that have middlemen and agents involved and can in turn, also bring in three different legal jurisdictions into a single agreement.
• Collection of payments due: This may prove to be both difficult and could involve expensive litigation if one of the parties breaches the contract and does not make the committed payments. Further, also instances wherein the payments are held due to ongoing disputes, whether it be concerning the defects in goods or delay in shipment, warranty issues, insurance claims etc.
• Breach of contract or warranty: Most international contracts also include post-sale warranty terms that might run for years and therefore require continued cooperation between the contracting parties for many years altogether.
• Intellectual property rights: the international trade agreement should clearly include terms for protecting the intellectual property (IP) of each contracting party, including trademarks, copyrights, patents, industrial designs etc. It should include terms whether the trade agreement includes the assignment of the IP rights between the parties or not.

A well-founded disputed resolution mechanism is critical in international trade agreements in order to ensure that the proper resolution can be practically completed in the instance of breach of the contractual terms. Also, the dispute resolution mechanism chosen should be cost-effective and should not tie the contracting parties in high litigation costs. International arbitration might be an adequate choice, as it essentially allows wide discretion to the arbitral tribunal and also allows for virtual hearing, which can be cost-effective and convenient. International arbitration usually has express provisions and procedures incorporated in the rules that allow for conducting of witness hearings through electronic means of communication such as video conferencing. In the Covid era, these flexible rules are highly convenient, and demonstrate resilience and effectiveness of international arbitration.

Most common problems in international business contracts occur due to differences in the laws of each jurisdiction. When different laws are applied to a given situation, different results may occur, and hence it is also important that the parties pre-determine the applicable law which is to govern the international agreement in order to bring in more clarity. In such instances, also seek legal advice before incorporating a choice of law in an international agreement due to its far-reaching effects.