In a globalised business world, laws transcend borders as often as business opportunities. It is therefore extremely important to consider the impact of paperwork, local laws and possible legislative agenda changes when doing business abroad.  

It is key to ensure that contractual terms agreed are clear, understood by all parties and properly translated and also to consider what happens if there is a dispute, non-payment or a claim against your business.

Which Court in which country will have jurisdiction over the dispute and which law applies to any dispute that arises, for example German law could apply in English courts if the contract provides that as a condition.  We don’t like to assume that things won’t work out but start with the end in mind.  What if things do go wrong and how do we resolve them?

Assuming it is better to apply English Law and jurisdiction, the best way to ensure that English Law applies and the Courts of England and Wales have exclusive jurisdiction to deal with any dispute or claim arising is to specify exactly that in the contract which is signed by duly authorised representatives of both parties. The basic rule is that is that if the parties to the contract have agreed to adopt the Law and the Courts of a particular Jurisdiction then any subsequent disputes if not resolved will be dealt with by those Courts and subject to which Law applies. 

If there is a claim is for a debt and the Debtor resides outside the UK it is not always straight forward to issue proceedings in England and Wales. 

The key is always to seek legal advice from the outset when a dispute is about to arise and also how to start proceedings particularly following Brexit in order to navigate through the matrix of conventions and law that apply to any given situation. 

Businesses may have a clear understanding of debt recovery legislation in the UK and collecting a debt from abroad doesn’t have to be a tricky issue.

It is essentially a matter of credit control procedures being in place in the first instance which are both established and agreed with a customer.  The approach to credit control should be no different between dealing with a customer in this jurisdiction or abroad. It is vital to know your customer. Who are you dealing with and what is their financial worth having taken the appropriate credit checks. 

When working with overseas businesses, it is important to stay aware of warning signs of an inability or unwillingness to pay debt and take effective action accordingly. Taking “action” early is important and having established procedures in place to do. 

It is one thing to be able to start proceedings here in England and Wales, obtain judgment etc but the important point will be when it comes to enforcement. How will a creditor enforce judgment outside jurisdiction? How long will it take and how costly and effective will the enforcement process be?

Else Solicitors deal with cross border cases regularly and in one case that springs to mind, we acted for a UK based Client and dealt with a Debtor based in India. To successfully enforce the debt we had to deal with a Delhi based Director of the Debtor company upon which we were instructed to recover a significant sum.  Ultimately the best approach in this case was to maintain a dialogue and working relationship with the Director of the Debtor company who often had to travel to London to deal with business issues.  Because of this dialogue and connection we were able to meet with the Debtor in London and agree an amount to settle the debt. There was no dispute apart from the Debtor’s Director being insistent upon only paying the amount that he decided that he wanted to pay in specific circumstances. There were other UK companies apart from our Client involved in chasing this particular Debtor however meeting him was the main and most important approach which eventually recovered payment.

Although the UK has left the EU, it is still important to understand EU law and how it relates to businesses you are working with within the single market. This is because EU law still applies to your Debtor and can bestow upon them privileges under EU law which you must navigate.

Rather than waiting for something to go wrong, keep an eye out for warning signs and as soon as you do not receive a payment or a response, attempt to contact them and open up the lines of communication.  We can assist with this along the way and if the inevitable happens and the debtor goes quiet and the payments stop arriving, taking action sooner rather than later is your best approach!

Speak to our expert in Debt Recovery, Laura Charles on 01283 526200 or via email on for more information on how we can help you.

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