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  1. Litigation/arbitration

Beyond the pandemic: rethinking the supply chain

Litigation/arbitration

If formal renegotiations fail or a party refuses to renegotiate at all, the requesting party (in Germany for example) may be able to unilaterally adjust the contract on their own terms. Where this option isn’t available, the dispute may need resolving via litigation or arbitration instead.

The courts’ approach to dealing with contract disputes inevitably vary across jurisdictions.

In England and Wales and certain US states for example, the courts will look at the words on the page, ie they won’t look into what the sides envisaged when the contract was originally negotiated and agreed upon.

Other courts will try to roll back the years to understand the economic rationale behind the original agreement before reaching a decision.

However, the older the contract, the more difficult this might be given there will likely be fewer (electronic) records indicating how the original agreement was reached.

In some jurisdictions, such as France and Germany, the parties can ask the court or arbitral tribunal to actually revise the contractual terms.

In contrast, the courts in Hong Kong for example will not intervene to rewrite terms of a contract.

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