FAQ: Jurisdiction or applicable law?

“Jurisdiction” refers to the forum in which a dispute is to be resolved.  The same concept is sometimes called “competence”. The questions that arise under this broad heading include:

(i) Should the dispute be resolved in court or in arbitration?

(ii) If the forum is a court, which country’s court is appropriate (or should a transnational forum be used)?

(iii) If the forum is arbitration, where should that arbitration be based and what institutional rules (if any) apply?

By contrast, questions as to the applicable law are concerned with the system of law that is to govern the matter in dispute. This will almost always be the law of a particular country.  A case might raise several issues, each of which is governed by a different system of law.

The two concepts are distinct.  They need to be addressed independently of one another.  So, for example, a dispute might arise under a contract where the English courts have jurisdiction, but the law governing the contract is New York law.

It is worth remembering that jurisdiction and applicable law issues are crucial to the outcome of a dispute.  This is because they frame the very parameters of a dispute.  Once they are resolved, it is often the case that the settlement of the dispute is much easier to achieve.  To the extent possible, they should be agreed or decided at the outset.

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