As we all know, America is a highly litigious society. We can debate whether this is a good or a bad thing, preferably over a drink after work some night. But I believe there is a correlation between a stable political system and ready access to the courts.

No matter what you think of our legal system in general, most would agree that litigation can be overused and even abused. As a result, alternatives like arbitration may be preferable in some circumstances. In past issues of the Litigation & Counseling Alert, we have discussed the downsides of arbitration and reasons why this alternative might not be the right tool in all circumstances. However, there is one situation in which it is almost always a good idea to include an arbitration clause in your contract: when you are doing business internationally.

U.S. companies face a range of common challenges when conducting business in foreign jurisdictions, including intellectual property and tax issues, concerns about contract enforceability and ever-changing legislation. In this environment, international commercial disputes will inevitably arise. Although America may be the most litigious country in the world, it is certainly not the most difficult in which to do business. In foreign jurisdictions, American companies invariably encounter bias, as well as difficulties related to unfamiliar court procedures. Therefore, U.S. businesses should take appropriate steps to avoid having to resolve their disputes in foreign courts.

This is not a uniquely American challenge. According to Jacob Christian Jorgensen of Sand & Partners in Copenhagen, his clients face similar challenges when litigating disputes in courts outside Denmark. Jorgensen, who concentrates his practice in international arbitration and construction law, says that is why he advises his clients to arbitrate their disputes whenever possible.

One place to do so is before the International Chamber of Commerce (ICC) International Court of Arbitration. As one of Europe's leading arbitrators of commercial and business disputes, this organization functions in much the same way as the American Arbitration Association. There are other, smaller bodies that serve similar purposes, but the ICC is a reliable, well-established resource for U.S. companies. In fact, the ICC handles the highest volume of cases among foreign arbitration bodies, and offers a standard arbitration clause that can be inserted into every international contract.

Because there are so many complicated issues that can arise when doing business in foreign countries, U.S.-based companies should prepare for the possibility of a dispute. One of the best ways to avoid the risks associated with litigation in a foreign court is to incorporate a provision in all agreements for arbitration before the ICC International Court of Arbitration.

Much Shelist can offer additional assistance in navigating these challenging waters. Through our membership in the International Alliance of Law Firms—a network of business-oriented law firms in 37 countries—we provide clients with access to excellent legal advice no matter where they find themselves doing business across the globe. The Alliance has grown rapidly since it was formed in 1990, now totaling 53 firms located worldwide, including North and South America, Europe, Asia, Australia and New Zealand. As a result, members can deliver swift and effective legal advice, as well as litigation capabilities, virtually anywhere in the world. Click here for more information on the services we offer through our Alliance partners.

Now that you’re better prepared to handle foreign disputes, it’s time to relax and enjoy a nice glass of wine.