The information provided here is part of Online export import business guide course




In this article you will learn about the procedures and formalities to resolve and settle disputes between buyer and seller in Import Export Business.


We have discussed and concluded that Litigation is not suitable to settle trade disputes due to its delay in court process, necessity of witnesses and other documentary proof, lack of knowledge to Judges in turn the difficulty of convincing judges, consumption of time for both parties and so on. However Arbitration is the best tool to settle disputes arising from import and export of international business because of its quickness, less expensiveness, maintenance of Goodwill for both parties and its privacy.


As you are aware, export import business is carried out on the basis of an Export Import Contract of Sale between buyer and seller. All necessary terms and conditions are required to be mentioned in such Sale contract of Import and Export. Future Dispute Clause must be included in the said export import sale contract between exporter and importer. Suitable arbitration clause for referring the future disputes indicating the name of arbitrator, venue of arbitration and applicability of law may be incorporated at the time mentioning dispute clause to protect mutual interests of exporter and importer.



Arbitration clause has not been included in an Import Export contract. Can it be added separately with a written agreement?


Yes, i n case the arbitration clause is not included in the export contract originally , a subsequent written agreement may be entered into, referring to the earlier contract. The later agreement is called ‘Submission agreement’.


Arbitration is a procedure for settlement of disputes, under which the parties agree to be bound by the decision of an arbitrator whose decision is, in general, final and legally binding on both parties.


While, the term 'international commercial arbitration' means "an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law of a country and where at least one of the parties is:- (i) an individual who is a national of, or habitually resident in, any country other than the said country ; or (ii) a body corporate which is incorporated in any country other than the said country ; or (iii) a company or an association or a body of individuals whose central management and control is exercised in any country other than the said country or (iv) the Government of a foreign country".


The major purpose in an arbitration is to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their respective legal systems.  The arbitration can be taken place either in the importer’s country or exporter’s country. So it is necessary to have a legal system for the recognition and enforcement of arbitral award given in any of foreign country.


Law for Enforcement of Foreign Awards in a country.

A country need to be a party to International Conventions. Countries, which are members to the International Convention, have to pass the necessary legislation for enforcement. According Foreign Awards ( Recognition and Enforcement) Act, 1961 has been passed. Any person interested in the award can pray the court, having jurisdiction, for filing the award. After giving notice to the parties why the award should not be filed, court pronounces the judgment according to the award, if the court is satisfied that the foreign award is enforceable under the above Act. Upon the judgment so pronounced, decree shall follow. No appeal can lie except when the judgment is in excess or not in accordance with the award.


Enforcement of Awards of a Country in Foreign Countries

It is understood that awards made in a country are enforceable in foreign Countries similarly, if the other country is a member of International Conventions. Where the other country is not a member of International Conventions or does not adhere to similar international regulations, enforcement of arbitration is beset with more difficulties.

disputes between buyer and seller

In this article, I have tried to introduce about Arbitration which is the best method for settling dispute between importer and exporter in international business. You may collect more information about Arbitration and Awards and other legal guidelines in your country for necessary action. If you would like to add more information about settling of dispute in exports and imports trade of international business, you can write below.



Comment below your thoughts about settling of disputes under imports and exports of international business.


The above information is a part of Guide on howtoexport and import 

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Anand: We would like to know, if any sea import coming to nhava sheva port from any origin, and after arrival the shipment cnee/ cha /shipping line done the all formalities with customs, and at the time of delivery cnee /Cha found short materials how much declare in dox that much materials not in side in the box as well in side of container in that case what frequentation need to take. We are very much thanks full if you can advice us regard same.

Admin: Hi Anand, You may contact custodian of cargo on short arrival of cargo.

Abdul Rashid : I am working in an export firm as an export documentation executive for the last four years. I have a good knowledge of export procedure and documentation but I have very little knowledge of export marketing. So please advice me how can i improve my knowledge in export marketing.

Admin: Hello Abdul Rashid, Please read our post HOW TO GET EXPORT ORDER in this website

Siddharth: we would like to know, if any overseas agent do fraud with freight forwarder in India and keep the original MBL and blackmailing that give them some amount then he will release the MBL at that time what should we do,where we should have to go and what action we should have to take because container already reached at the destination. We are very much thanks full if you can advice us regard same.

Tamjeed Adil: Sir,we are manufacturer and whole sale distributor of hosiery products and undergarments from kanpur.I want to enter into export market,Is there any scope of these product in exporting?If yes, then these product come under which export promotion council ?The major problem I am arising is how to find buyers of any product.Obtaining rcmc of export promotion council can help me to find buyers?

Manoj Nikam: Dear Admin, i really appreciate your work, its a great work. I am exporting spices to SriLanka. we have done shipment last month but still dint get payment, our term of payment was DP, but when cargo reached there my buyer started asking for DA. that time we accepted and changed because cargo was perishable. after clearance they started making issue related to quality, and before my person reached, they sold cargo at more than 60 % price(as they said)discount. but through our friends we come to know that quality was good. what actions should we take now ? we also approached FIEO & High Commission of India, Srilanka, but we don't want to take any legal actions. please help Consignment value is apprx USD 21000. mail id: +91 9175071454

jagat bhatnagar : Please guide me about the contract between two parties between indian and outside indian. It must be on stamp paper. If it will be on normanl paper it is valid or not. Because we are doing collaboration with ukrain company. Please guide me.

Ravi Narayan: We have purchased a flex printing machine in Oman from India, New Delhi. We have paid 100% payment in advance to the supplier. Printer received after 3 months from receipt of payment, although supplier informed that within 18 days delivery period. After receipt, most important part of the machine - print heads were missing. Continuously contacted the supplier, but no reply, ultimately contact India Embassy here and through their involvement, we have received the heads. For installation, we have arranged express visa for their technician, as per their advice, that also they did not materialize. Hence we had to arrange a local technician to install it, but the machine is not working, as the heads are not moving. Contacted this supplier in New Delhi, as usual no response. Technician also contacted from his end, but no reply. we use to import from all part of the world, but never face this type of problem before - that too from an Indian supplier. We are again taking up the matter with Indian Embassy for doing the needful.

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