How the disputes between seller and buyer arise in international trade/ UAE?


International Trade Law regulates international trade and commerce. It deals with two aspects i.e. private and public. Private International Law focuses on the international commercial transactions between people and different States. Public International Law deals with the coordination of various State Policies. The basic aim is the creation of an enabling environment and infrastructure for accelerated growth of exports. It also mandates to develop and promote International Trade among various provisions.

The sole purpose of International Trade Law is to promote free trade among States and Nations. Freedom of trade denotes where people are free to buy and sell goods without any hindrance or hurdles. People should become capable to buy products freely from anywhere throughout the world, it aims International Trade Law.

International Commercial Disputes

‘Dispute’ may be defined as a conflict or a controversy. Dispute between two parties arises when one asserts a particular proposition and the other denies the same. The term ‘dispute’ refers to a quarrel between two or more rival parties based on the subject matter which is in controversy. It implies a kind of disagreement between the concerned parties; it also refers to the difference in opinion resulting in the interests, rights, and liabilities of the concerned parties.

In International Commercial transactions, the legal relationship will be there between the parties where one party is the buyer and another one is the seller who deals in buying and selling the goods and products. International commerce also maintains relationships with persons willing to transfer goods from one State to another State. It has a relationship with financial institutions regarding financing or payment. It dealt with statutes of States from where goods are exported and they are imported.

The United Nations Principles of International Commercial Contracts provide an ingenious tool for the cross-border contract which deals with dispute resolution on neutral ground. This is so if the choice is combined with an arbitration clause, under many arbitration laws, “the Arbitral Tribunal shall decide the dispute by such rules of law which are chosen by the parties as applicable to the substance of the dispute”.

Types of disputes


  • Disputes with agents: This happens in tripartite agreements wherein there are middlemen and agents involved between the buyer and seller. It also brings three different legal jurisdictions into a single agreement.
  • Collection of payments due: This may be difficult as well as expensive litigation if one of the parties breaches the contract and avoids making the committed payments. This may also include the holding of the payments; due to the defects in goods or delays in shipment, warranty issues, insurance claims, etc.
  • Breach of contract or warranty: It includes post-sale warranty terms that might run for years requiring continued cooperation between the contracting parties for the long term.
  • Intellectual property rights: The agreements must include IP rights for each contracting party. The agreement must also include terms whether the trade agreement includes the assignment of the IP rights between the parties or not.


International Trade and Arbitration

International Sales of goods contract will refer to the governing body of law; in case of resolution of disputes methods such as arbitration must be adopted rather than litigation. Specialized arbitral institutions have been set up in most countries for the use of commercial arbitration. It plays an important role in developing infrastructure for international commercial arbitration.

Issues about domestic laws of arbitration

  1. Inadequacy of domestic laws of arbitration- The global survey revealed that considerable disparities are there in the domestic laws related to arbitration. Most of the domestic laws are not comprehensive; hence there was an urgent need for international commercial arbitration.
  2. The disparity between National laws of arbitration- The domestic law with the risk of frustration may adversely affect the functioning of the arbitral process and also the selection of place of arbitration.

The International business community all across the globe has accepted international commercial arbitration as an effective mechanism for resolving commercial disputes. The unwillingness of parties to have matters resolved in the National Court of the other disputing party, with unfamiliar law, language and culture, is treated as one of the major reasons for this preference.

‘Commercial arbitration’ may be international or domestic. Arbitration is international if the parties to an arbitration agreement have their places of business in different countries or if the place of arbitration or a substantial part of the obligations of the commercial relationship is in a country outside that of the place of business of the parties.


International trade agreements are aimed at the removal of trade barriers. It partly contains obligations for countries to restrict the trade related to certain dangerous goods or products. This causes certain tension between trade and environmental agreements. It leads to risk that international trade agreements narrow down the scope of States to establish environmental protection measures.