This article is written by Leela Madhuri of 9th semester of BA.LLB of G.S.K.M Law College affiliated with Adikavi Nannya University, an intern under Legal Vidhiya.
Abstract:
The international setting of commercial transactions is impacted by the legislation of various nations, illustrating the similarities and differences in the world of business and the obstacles that firms deal with while operating overseas. The five nations under consideration in this study had been chosen for their distinct economic and legal systems: India, the United States, China, Germany, and Brazil. This study explores the worldwide influence of domestic corporate regulations by comparing them to foreign versions. It analyses essential legal ideas, contractual structures, arbitration processes, and intellectual property safeguards. The research examines aspects changing international corporate decision-making. It also investigates the influence of international treaties and organizations that affect the commercial legal environment. The findings can assist firms, attorneys, governments, and students with mastering the complicated nature of international trade.
Keywords:
Domestic laws, International laws, Commercial laws, Legislation, Governing bodies, Trade Agreements, Conventions, Treaties, and Foreign Investments, India, United States, China, Germany, and Brazil.
Introduction:
Commercial law is essential in global trade because business entities trade internationally and engage in cross-border transactions. This article looks into the complex world of domestic and international business law, setting forward the fundamental contrasts and similarities between the legal systems of five different nations. The goal is to give a helpful understanding of the complicated world of commercial law, assisting firms in negotiating the complex landscape of international commerce. Each country brings a distinct set of rules and practices to discuss, ranging from contract creation and arbitration to intellectual property protection and trade legislation. The goal is to provide readers with a better understanding of the complex world of commercial law by studying these distinctions and similarities. This thorough introduction aims to provide business entities and legal experts with what they need to make sensible choices, reduce risks, and capitalize on the possibilities presented by international trade.
Overview of Domestic Commercial Laws:
Domestic commercial norms have significance for maintaining peace, defending the interests of businesses and consumers, and ensuring the domestic economy functions efficiently. Domestic markets are controlled by several regulations, including antitrust, competition, intellectual property, insolvency, employment, labor, environmental, and e-commerce legislation. These rules ensure fair competition, preserve intellectual property rights, and alleviate financial difficulty in domestic firms. They also deal with concerns regarding the minimum wage, working conditions, labor unions, workplace safety, and environmental regulations. Establishing, enforcing, and interpreting contracts between people engaged in domestic commerce is an aspect of economic growth and licensing. Contract law, on the other hand, covers the formation, enforcement, and understanding of contracts between parties engaged in domestic commercial activities.
India: Domestic commercial law and its legal framework and recent development:
India’s commercial laws, which are a mixture of British common law and indigenous traditions, have greatly improved India’s efficiency of commerce. However, difficulty and backlog of legal processes might pose challenges for Indian enterprises engaged in foreign trade. India strongly supports commercial activities through different regulations, enabling smooth and equitable operations. These regulations have grown significantly in recent years, allowing company owners to operate within legal restrictions while preserving a functioning economy [1]. The Companies Act, the Goods and Services Act, the Indian Bureau of Commerce, the Indian Contract Act, the Arbitration and Conciliation Act, the Competition Act, and the Consumer Protection Act are all parts of India’s commercial law. The formation, administration, and operation of businesses are governed by these laws, making tax payments easier and encouraging successful competition.
Amazon vs. Future Group [2]:
Amazon and Future Group are caught up in a complicated legal battle in India, where Amazon argues that its ownership of its retail stores to Reliance Retail violates its legal obligations. The case focuses on contract enforcement, foreign investment in India’s retail industry, and the function of foreign mediation rulings in Indian courts. The case has been extensively followed by legal scholars, corporations, and shareholders given the potential impacts on foreign investment and contract enforcement in India. It emphasizes the value of comprehensive contracts besides the necessity of a solid legal framework in India for settling business disputes.
United States: Domestic commercial law and its legal framework and recent development:
The United States has a distinct legal system, with each state exercising authority in enacting laws. This is regulated by the Constitution, which confines federal powers to particular state-level sources [3]. The Uniform Commercial Code, contract law, consumer protection legislation, monopoly legislation, and securities regulation compose the US legal framework, assuring fulfillment of federal laws and fair competition. Due to the expansion of e-commerce, digital payments, cryptocurrencies, and blockchain technology, as well as the impact of the COVID-19 epidemic, the US has implemented major advances in commercial laws, especially in data privacy
Epic Games vs. Apple [4]:
Epic Games sued Apple for offering an online payment option in its Fortnite game, which infringed Apple’s 30% in-app purchase fee. Apple banned Fortnite from the App Store because of policy violations. Epic Games then sued, referring to unlawful practices and questioning Apple’s control over software distribution on iOS devices. The lawsuit addresses fundamental legal questions in the US, especially whether Apple’s dominance over the iOS App Store constitutes unlawful conduct, how App Store regulations are interpreted and enforced, and how appropriate markets are defined.
Germany: Domestic commercial law and its legal framework and recent development:
The German constitution, EU rules, and codified legislation passed by the Bundestag or state legislatures are the core sources of law, with intricate interactions between these sources [5]. The legal framework is critical in German commercial law, which includes topics like agreements, firms, and finance, but also adopting German civil law, notably in contract and liability problems. Germany has made substantial modifications in commercial law, such as e-commerce regulations, and business management worries, proving its dedication to digital adaption.
Volkswagen “Dieselgate” Scandal [6]:
Volkswagen’s “Dieselgate” incident in 2015 revealed regulatory offenses in diesel-powered vehicles, creating ecological issues and possible legal liabilities. The dispute centered on charges of violations of pollution rules and regulations in both Germany and the United States. Customers demanded compensation, investors sued, and officials launched inquiries against Volkswagen officials and staff. The case highlighted the necessity of corporate accountability, consumer protection, and the legal ramifications of corporate wrongdoing in Germany and elsewhere.
China: Domestic commercial law and its legal framework and its recent development:
China’s legal framework is a complex system that governs domestic and international enterprises, influencing Company Law, Contract Law, Foreign Investment Law, Intellectual Property Rights, E-Commerce Law, Antitrust and Competition Law, and the Belt and Road Initiative. The international Investment Law combines the legal framework, protecting investors from all over the world equally. China has improved antitrust and competition laws to prevent unfair practices and ensure fair competition.
Alibaba and Ant Group Regulatory Analysis [7]:
In China, the case of Alibaba and Ant Group represents the State Commission for Fair Regulation’s inspection and illegal inquiry. The lawsuit focused on Alibaba’s suspected restrictive practices and the rejection of Ant Group’s IPO, emphasizing the need for more intense capital standards and improved control. This case highlights China’s efforts to govern the country’s rapidly evolving technological field.
Brazil: Domestic commercial law and its legal framework and its recent development:
Brazilian business law controls several elements of economic interactions, such as contracts, duties, and legal capacity. The Brazilian Corporations Law governs corporate affairs, whereas consumer protection laws affect business transactions. Through programs emphasizing economic and hygienic tools, operationalizing the National pharmacy surveillance System, and modernizing organizational structure, Brazil, in cooperation with the Brazilian Cooperation Agency, seeks to enhance regulation [8]. Brazil is undertaking substantial governance reforms, such as the implementation of new legal frameworks for Internet commerce, environmental restrictions, and corporate governance.
Operation Car Wash [9]:
The enormous bribery analysis in Brazil identified as Operation Car Wash commenced in 2014 and has notable legal and political consequences. It involves Brazilian construction firms, which resulted in corruption and embezzlement scams. High-ranking chief executives, legislators, and entrepreneurs, including the prior president, were arrested and convicted as part of the controversy. The case also resulted in the President’s suspension and widespread mistrust in the judiciary.
Overview of International Commercial Laws:
International law supervises global issues and interactions among states, guaranteeing that there is no one authoritative legislative source or world court accountable for interpreting international law. Due to the absence of a global executive branch tasked with enforcing international law, global corporate matters remain vulnerable to potential challenges and uncertainties [10]. Infringement of international rules may result in severe penalties like monetary penalties, any compensation of diplomatic relations, strikes, or even wars. The primary objective of international law is to give economies more control over their internal affairs while maximizing the monetary benefits obtained from trade and developing partnerships with other nations. Primary sources of international law include international customs, treaties, and organizations. Agreements can be bilateral or multilateral, with bilateral agreements being formed by two nations and multilateral ones by several nations [11]. International organizations such as the United Nations and the European Union monitor shared interests, pass resolutions, and develop consistent trade and commerce laws. International commercial law covers the laws, concepts, and customary practices that regulate private cross-border trade. It is a branch of individual international law, whereas global trade policy controls state-to-state trade ties [12]. Despite cultural disparities in these laws, there is a significant drive for uniformity and integration in international business law.
India: International commercial law and its legal framework and recent development:
India has developed a firm basis for international trading, safeguarding successful and effective business practices worldwide. India’s dedication to international law is seen in its ongoing progress in the country’s courts. Although India has accepted international treaties, it has not established fundamental principles. The means of adopting international law is influenced by the country’s aims and values, with international tribunals interpreting it even if it violates home policy [13]. Recently, India has experienced significant advances, attracting multinational corporations through plenty of policies and measures.
India-US Trade Dispute on Import Tariffs [14]:
In 2019, the United States launched a WTO case opposing India’s tariffs on American exports such as agricultural commodities and steel. The United States claimed that India’s tariffs breached its responsibilities under the Agreement on Tariffs and Trade (GATT) and were contrary to WTO standards. The conflict demanded debates and an arbitration board, which eventually affected the commercial ties between them and the world economy.
United States: International commercial law and its legal framework and recent development:
International commercial law in the United States is governed by state and federal legislation, international treaties, and conventions. The United Nations Committee on World Trade Law promotes commercial law in global transactions, seeking to coordinate and improve the legal framework for investment and trade [15]. Recent developments in international trade have seen significant changes in the United States, with the United States-Mexico-Canada Agreement modernizing rules and addressing challenges such as e-commerce, and environmental and labor standards.
Germany: International commercial law and its legal framework and recent development:
Germany, an influential nation in the global economy, has a solid legal structure controlled by a mix of domestic laws and international treaties. Germany is a member of various international arbitration agreements. Germany’s international framework has an enormous impact on its sustainability, needing protection in areas such as technology, privacy, climate, and sanctions, necessitating adaptation to guarantee business interests are safeguarded.
Airbus-Boeing Subsidy Dispute [16]:
The Airbus-Boeing subsidy dispute is an international dispute between the EU and the United States over alleged benefits supplied to their respective airplane suppliers. WTO decisions and additional taxes on each other’s products have resulted in the dispute. In 2021, the EU and the US agreed to a brief halt of tariffs associated with the dispute, indicating a desire to work towards a resolution. The lawsuit shows the difficulties of international trade disputes and the role of the WTO in resolving them.
China: International commercial law and its legal framework and its recent development:
The China International Commercial Court (CICC) was a major step ahead in China’s developing capacity initiatives, focused on national dispute resolution infrastructure, judicial staff, and the creation of a regional law [17]. Chinese law provides a diverse set of regulating regulations for foreign commodities contracts. Foreign business partners must prove their eligibility, such as being a Foreign Trade Operator or holding multiple business licenses. China has ratified the United Nations Convention on Contracts for the International Sale of Goods, which governs sales contracts between international corporations and Chinese parties.
U.S. and China Trade Controversy [18]:
The United States-China commercial controversy, which began in 2018, is a major global economic war between the world’s two largest economies. Duties and trade obstacles are involved in the conflict, with the US adding duties on Chinese imports and China reacting with charges on US merchandise. A first-stage trade agreement was agreed in 2020, encompassing intellectual property protection, innovation transfer, and agro-purchasing. The extended disagreement illustrates the complexity of international economic relations and the difficulties in achieving solutions.
Brazil: International commercial law and its legal framework and its recent development:
Brazil is a party to several international agreements regulating various aspects of international trade, including trade, investment, and dispute settlement. Brazil’s economy has enacted trade remedies, supporting free trade and worldwide existence, using methods rationalized by the Ministry of Economy [19]. Brazil’s legal landscape has seen substantial changes, demonstrating dedication to world laws that advance its arbitration framework to attract foreign investment and integrate environmental factors.
U.S. and Brazil Steel and Aluminum Tariff Dispute [20]:
In 2018, the United States put taxes on steel and aluminum imports, impacting Brazil, a major steel and aluminum supplier. Brazil participated in WTO debates with the USA, claiming that its exports posed no danger to national security. The matter remained unsolved for several years, highlighting the importance of international trade ties and the role of international organizations such as the WTO in settling disputes.
Similarities and Differences Between Domestic and International Commercial Laws:
In both national and international contract law, contracts are created, upheld, and interpreted to preserve property rights. Both systems include procedures for resolving disputes in local and global economic transactions, such as courts, arbitration, and mediation. International law and domestic laws are systems of rules enforced within countries to control behavior. Domestic laws ensure equal rights, while international law governs relationships between nations. Both systems can be influenced by external organizations [21]. Domestic laws and international commercial laws differ in sovereignty and validity, with international law attempting to unite to encourage global trade through instruments. Domestic norms vary greatly when overseas corporations operate in increasingly complicated regulatory contexts.
Conclusion:
Finally, the complex interaction between national and global commercial regulations is discussed, highlighting significant insights and future trends for organizations that effectively handle and promote international success. Because of global developments such as digital transformation, environmental sustainability, and regulatory uniformity, commercial law is changing dramatically, affecting supply chains, international trade agreements, and consumer rights. Domestic law and international law are essential components of international law, with governments fully adopting international law. However, in my opinion, it is advantageous for governments to acknowledge international law’s supremacy over local laws in their constitutions and statutes, assuring compliance with state laws and treaty commitments.
References:
- COMMERCIAL LAW IN INDIA A BIRD’S-EYE VIEW
https://lawsisto.com/artcileread/Mzg0/Commercial-laws-in-India-a-Birds-eye-view
- Commercial law
- The relationship between international and domestic law
- About CLDP
https://cldp.doc.gov/about-cldp
- The law governing international commercial contracts and the actual role of the UNIDROIT Principles
https://academic.oup.com/ulr/article/23/1/15/4944890
- International law with Chinese characteristics: Beijing and the “rules-based” global order
- The Commercial Law of Nations and the Law of International Trade
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