How to Sue a Corporation in a Foreign Country?
A big UK company sue a corporation in a foreign country

How to Sue a Corporation in a Foreign Country?

Introduction

In the 21st century, almost every business or corporation has branches worldwide. Thus it becomes difficult to track the working place of these businesses. It will be very stressful to deal with foreign companies. Increasing globalization will increase litigation in foreign countries. It is possible to sue a corporation in a foreign country if the corporation has breached some terms of the contract. 

It is always a possibility for businesses they can get sued if their business practices are out of line. What will happen if someone sues a corporation in a foreign country? This article will discuss in detail all the steps which must be followed if you want to sue a corporation in a foreign country.

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Why Sue a Foreign Corporation in a Foreign Court?

Legal action in your national courts may be complex if the courts cannot provide appropriate relief or compensation. Another difficulty that may arise in a federal court is that the national courts won’t be able to track the leading corporation responsible for providing you the relief. Legal obstructions may be faced in national courts, such as the country cannot proceed against a giant corporation because of an international treaty.

Foreign courts will be useful where the parent company is situated outside your local country.

Parent companies in Transnational Corporations (TNCs)

A transnational corporation is a corporation that does business in more than one country. If you want to take action against a parent company, it would not be easy if the subsidiary company is residing in your local country. The parent company’s assets will be in another country, so the national courts might not have jurisdiction in those countries.

In order to hold a parent company liable, one must show that the parent company itself was responsible for the injury and the subsidiary company was acting as an agent of the parent company, or the parent company was jointly responsible for the claims. If the parent company controls the subsidiary company, then the parent company will owe a duty of care to the plaintiff, and therefore all claims will be successful.

Companies in Global Supply Chains

Checking the supply chain management to sue a Corporation in a Foreign Country

Generally, most corporations work as a part of the supply chain. More than one company is involved in a global supply chain. The leading company may be located outside the country’s jurisdiction. Human Rights organizations can hold these corporations accountable for their negligence and faulty services in a foreign country. One example was Doe v. IFC, where the two World Bank Group members pleaded guilty to aiding and abetting gross human rights violations.

Deciding where to Sue a Corporation in a Foreign Country

The wooden hammer, hand cuffs and books represent suing foreign corporations

Whether you can sue a corporation in a foreign country or not depends on the foreign country’s court jurisdiction. So it would be helpful to establish a connection between the corporation and the nation where you intend to sue the corporation.

Courts in Countries where the corporation is Domiciled

Usually, the parent company is the one who is getting sued, and thus it becomes essential to find out where the parent company is incorporated or domiciled. The court’s jurisdiction can be established if the parent company has the principal place of business in that country or if the parent company has its assets in that country.

National Courts with Universal Jurisdiction

Corporations that have breached human rights can often be sued in courts with universal jurisdiction. Australia is one such country that has universal jurisdiction to try cases of another jurisdiction. Universal jurisdiction can help countries to claim criminal jurisdiction over corporations that have committed international crimes.

Difficulties while Suing a Corporation in Another Country

Legamart lawyers meeting to discuss suing a Corporation in a Foreign Country

You can face several difficulties if you want to sue a corporation in a foreign country. It is very exhausting to hold a corporation accountable for its acts in a foreign country, especially if you are not aware of the rules and regulations of the foreign country.

Forum non conveniens

Forum non conveniens, also called the inconvenient forum, states that even if a state has jurisdiction over the defendant, the state cannot conduct the trial since the forum is not convenient for the defendant. Corporations use this defense to prove that the lawsuit will be more convenient for them if it is conducted in the country where their place of business resides. The court will dismiss this defense if it feels that the plaintiff is not likely to get justice in the country chosen by the defendant.

Applicable Law

In addition, when you want to bring a lawsuit against the corporation in another country, the applicable law may allow you to obtain relief or compensation. A lawyer can help you make your options aware before proceeding with a trial in a foreign country. You will not be able to claim more damages if your country has a narrow scope of claiming damages.

Procedure to sue a corporation in a foreign country

A client discusses issues regarding suing a Corporation in a Foreign Country

The procedure to sue a corporation may vary depending on the selected country. It must be decided whether legal action is permissible in a foreign country or not. After that, the trial can proceed further. You must know specific details, like whom to sue and where to sue.

Forum Selection Clause

Usually, all contracts signed with the corporation have a forum selection clause. According to that clause, any dispute will only be litigated in a particular country. The governing law clause will state which country’s law will apply to any dispute under the contract, and the jurisdiction clause will state where legal action must be brought. 

Filing a Suit

The forum selection clause often will not govern a dispute or claim. In those cases where it does not, a plaintiff may file a suit abroad where the parent company has its main branch or where the parent company has its assets. In addition to providing details of the claims against the corporation, the complaint should contain a general description of the alleged wrongdoing. File the suit in the district in which the contract was signed or the one specified by the contract. The plaintiff must petition the court clerk by paying the filing fees with the help of an international lawyer. The filing process will vary from country to country. 

Serving notice to the other party

The best thing after filing a suit is to serve notice to the other party. If there is no reservation on service by mail, it will take much less time to summon the party this way. If the company or individual you wish to sue is outside the EU, the court’s permission is needed to serve the claim in a foreign country, which will give notice of the claim to the other party, who will be required to go to this country to defend it. 

The Hague Convention

This convention is most helpful in serving notice to the defendants. When a U. S. plaintiff is serving a defendant who is a member of this convention, it is necessary to follow the provisions set out in this convention. The service occurs through a Central Authority established by each member country. The plaintiff’s lawyer will deliver the documents to the Central Authority, and then the Central Authority, through local officers of the defendant’s nation, will send the notice to the defendant. This process is quite lengthy and time-consuming.

Conclusion

It may happen that your trial will be all about deciding the jurisdiction or venue. Eventually, the corporation may escape because of these issues. To obtain justice against the corporation, it is crucial to decide in which country the claim will be satisfied. Search for a lawyer to assist you in filing a lawsuit against a corporation in another country.

Litigation against businesses in foreign countries is challenging because of the legal system in that nation. Thus it becomes crucial to know all the difficulties faced if you want to sue a corporation in a foreign country. So you must always consult a lawyer who can help you with all your claims. Legamart offers the best solution for your issues regarding litigation. They have a network of excellent lawyers who can help you bring relief for your injuries or damages.

Legamart offers the translation of various documents into several different languages. You can also get your legal queries solved through Legamart. Depending upon your requirement, you can choose from a dozen of lawyers in the directory offered by Legamart.

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