International Recruitment Dispute Resolution

Posted on Mar 14, 2025 in Law & Jurisprudence

Methods of Dispute Resolution in International Recruitment

1. Risk Courts and the “Market” for Dispute Resolution Mechanisms

International Agreement

Determine the legal framework. In every legal system, it is regulated differently by different contracts.

What happens when the contract is breached? Risk court (in domestic contracts because there is no litigated in national courts). There are various mechanisms for dispute resolution:

  1. State Justice.
  2. ADR’s (Alternative Dispute Resolution).
  3. International Trade Arbitration (between two private parties).

1 and 3 are exclusive, i.e., if one is agreed upon, you cannot go to the other. The contentious nature? Decisions are binding on the parties.

2 are not exclusive. Usually, before going to a binding method. They are called “friendly”? The two sides seek cooperation/reconciliation to reach an agreement/solution to the problem.

2. The Alternative to State Justice

National courts have a double significance:

  • Knowing where we have to litigate.
  • Knowing the applicable law.

To determine which court can raise the demand, there are rules of international jurisdiction. These determine when the courts of each State, as a whole, have jurisdiction to prosecute an international contractual situation.

a) The different European states have Community Rules: 94/2001 – Brussels I Regulation
b) Not applicable Community law: 22 LOPJ
It is valid throughout the EU. It is applied if the defendant is domiciled in the EU; if it is not, LOPJ is applied.

Brussels I establishes a pyramid scheme formed by a set of forums (primacy over others). We met with 3 steps, starting from the top we have:

  • Exclusive materials (Article 22).
  • Includes the principle of autonomy of the will. The parties expressly agree (Article 23 – submission expresses). It is agreed between the two parties which courts shall have jurisdiction (it is agreed a priori or a posteriori). It can also be an implied submission (Article 24), i.e., the courts are chosen by the plaintiff, and the defendant should not challenge, but if he should accept. The premium implied submission provided on the submission expresses, because it always has to enforce the parties.
  • At the bottom of the pyramid, we find two options:
    • General Forum (article) – can sue in the courts of the domicile of the defendant.
    • Special Forum or by reason of the matter (Article 5.1) – remove the defendant from his home and take it to another place (called forums attack) to sue.

Article 2

To realize the domicile of legal persons (Article 60) provides an independent concept of domicile. Which it will:

  • Statutory Headquarters
  • Central Administration.
  • Principal place of business.

Article 5.5

It provides a forum – auxiliary branch forum. It’s for when the counterparty does not have legal personality. It opens a possibility further defendant’s domicile. If the act is held by a branch, the courts in the branch where you are.
Note: if that subsidiary is legally separate and independent of the matrix.

Article 5.1

Establishes a special rule in 2 types of contracts:

  • International Sale of Goods: The competent courts shall be the place of delivery of the goods.
  • Service Delivery: the competent courts shall be the place of service.

Article 23

This overrides any previously viewed items.

Submission clauses are not automatically known, namely that if there is such an agreement of submission, for example, by giving competition to the Spanish courts and the other party sues us in Portuguese courts, we must go to specify that there is a pact. By doing so, the Portuguese court loses jurisdiction. If we answer the demand, then the Portuguese courts are competent to do so.

Pact of Submission

  • Prorogatory effect: extending the jurisdiction of the courts chosen.
  • Derogatory effect: while the former, repealed the jurisdiction of other courts.

Requirements Set Out in This Article:

a) Materials: at least one of the two parts must be in a Member State.

b) Formal: There are 3 ways to establish the agreement:

  • In writing.
  • In a manner consistent with practices which the parties have established between them.
  • Uses the parties know or ought to know. It is made to specific sectors.