When a commercial dispute arises, businesses often focus immediately on the available legal remedies. However, the first strategic step should usually be the review of the contract itself. A cross-border commercial agreement may already contain provisions that influence how, where and under which legal framework the dispute should be addressed.
Many disputes become more complex because the parties discover only after the conflict has started that certain contractual clauses significantly affect the available options. Reading those provisions carefully before deciding on litigation, arbitration or negotiation helps avoid strategies that are inconsistent with the contractual framework.
Rather than asking whether a dispute should go before a court or an arbitral tribunal, it is often more useful to begin with a different question: what does the contract actually require?
Why the contract should be reviewed before choosing a dispute strategy
International commercial contracts rarely contain a single dispute clause. Instead, they usually include several provisions that influence different aspects of a dispute.
A structured review allows legal counsel and company management to understand:
- which country’s law governs the agreement;
- whether the parties have selected a specific court;
- whether arbitration has been agreed;
- how contractual evidence should be managed;
- whether termination procedures affect the available remedies;
- whether mandatory pre-dispute procedures apply.
Reviewing these clauses before taking action helps reduce uncertainty and allows the dispute strategy to be built around the contractual framework rather than assumptions.
Which contractual clauses deserve immediate attention
Governing law clauses
The governing law clause identifies the legal system that regulates the interpretation of the contract and the parties’ respective rights and obligations.
It does not necessarily determine where the dispute will be decided, but it strongly influences the legal analysis and the substantive rules applicable to the case.
Jurisdiction clauses
Jurisdiction clauses determine which national courts may hear the dispute.
Their wording should be analysed carefully because exclusive and non-exclusive jurisdiction clauses may produce different procedural consequences.
Their effectiveness may also depend on mandatory legal rules applicable to the specific contractual relationship.
Arbitration clauses
An arbitration agreement may replace court proceedings entirely for disputes falling within its scope.
Before assuming that arbitration is mandatory, it is important to verify:
- the exact wording of the clause;
- the categories of disputes covered;
- the chosen arbitral institution, if any;
- the seat of arbitration;
- the applicable procedural rules.
Even apparently standard arbitration clauses may have significant practical consequences once a dispute arises.
Evidence and document management clauses
Commercial contracts increasingly regulate how evidence should be preserved and exchanged.
These provisions may concern:
- notice requirements;
- documentation standards;
- reporting obligations;
- contractual deadlines;
- electronic communications.
Ignoring these clauses may complicate the presentation of evidence during later proceedings.
Termination and default provisions
Termination clauses often interact with dispute resolution mechanisms.
Before initiating formal proceedings, it may be necessary to determine whether:
- contractual notice periods have been respected;
- cure periods remain available;
- termination conditions have actually been satisfied;
- contractual remedies must be exercised in a specific sequence.
These provisions may significantly affect both litigation strategy and commercial negotiations.
A practical example: when the contractual dispute clause was not the best solution
A practical case illustrates why reading a contract is only the starting point of a dispute strategy.
One of our clients, a Belgian company, became involved in a significant commercial dispute with an Italian business partner following the non-payment of substantial commercial invoices.
The contract provided that any dispute should be resolved through arbitration in the United Kingdom and that English law governed the agreement. At first glance, the contractual framework appeared clear.
However, the client’s primary objective was not to obtain a declaration of liability after lengthy proceedings. It was to recover the outstanding debt as quickly as possible.
Commencing an international arbitration under English law would have involved additional time, procedural complexity and costs that were not necessarily aligned with the client’s commercial priorities.
Instead, after analysing both the contractual documentation and the factual circumstances, we proposed a different legal solution.
The parties negotiated and signed a repayment schedule in which the Italian debtor expressly acknowledged the outstanding debt. The repayment agreement was governed by Italian law and provided for the jurisdiction of the Italian courts.
When the debtor paid only the first instalments and subsequently defaulted again, the new agreement allowed us to act rapidly before the competent Italian court.
We obtained an Italian order for payment within a short timeframe and were then able to enforce it by attaching the debtor’s Italian bank accounts.
The original arbitration clause had not disappeared, nor had it been incorrectly drafted. It simply did not represent the most effective instrument for achieving the client’s immediate commercial objective under the particular circumstances of the dispute.
What this case demonstrates
This example highlights an important practical principle in cross-border commercial disputes.
A dispute clause should never be analysed in isolation or treated as an automatic answer to every disagreement between the parties.
An effective dispute strategy requires a broader assessment that considers:
- the wording of the contract;
- the commercial objective to be achieved;
- the urgency of the situation;
- the available evidence;
- the debtor’s assets and their location;
- whether a subsequent agreement can legitimately provide a more efficient procedural route.
In some situations, the original contractual framework remains the most appropriate option. In others, a carefully structured legal solution developed after the dispute has arisen may provide a faster and more effective outcome while remaining fully consistent with the applicable legal principles.
For this reason, before deciding how to pursue a cross-border commercial dispute, it is advisable to analyse both the contract and the factual circumstances with an experienced commercial lawyer. The objective is not simply to identify the dispute clause, but to determine whether it truly serves the client’s interests in the specific case or whether another legally sound approach may offer a more effective path towards recovery or dispute resolution.