1. PRECAUTION FOR EXPORT CONTRACTS AND DISPUTE RESOLUTION
Presented by:
Knowledgentia Consultants
Address: E-71, L.G.F., Greater Kailash-1
New Delhi
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2. INTRODUCTION
Export Import business is carried out on the basis of a Contract of Sale between buyer and seller.
The contract should comprise of all the necessary terms and conditions.
Presence of dispute resolution and jurisdiction for dispute resolution in the contract is very important.

3. INTRODUCTION Clause for liability and duties.
Scope of work for both parties
Term and Duration
Exit Clause
Arbitration clause is important.
Indemnification clause.
Payment Terms

4. EXPORT/IMPORT CONTRACT
For International sale and purchase of goods/services
The buyer could be a trader, importer, distributor or wholesaler that will sell the products to another company or merchant. 
Seller an exporter, manufacturer or licensee of manufacturer
Usually, contracts are based only on Proforma Invoice, Bill of Lading
It is advisable to have a written and legal contract/agreement in place.

5. ESSENTIAL ELEMENTS OF AN IMPORT/EXPORT CONTRACT
Products, standards and specifications.
Units of measure in both figures and words.
Total value. The total contract value in words and figures, and in a specific currency and bifurcation of taxes ( as applicable).
Inspection/Quality Check.

6. Delivery terms and schedule.
Terms of payment
Amount, mode and currency.
Documentary requirements

7. Clauses for Delay in delivery. 
Insurance of goods against loss, damage or destruction during transportation.
Clause for Intellectual Property Rights to goods/services
Force Majeure.

8. Liability for non-performance of the contract.
Applicable law.
Jurisdiction
Arbitration clause.

9. Cargo claims.
Terms of breach.
Indemnification.
Termination.
Exit Clause.

10. TERMS ON SALES CONTRACT/ PURCHASE CONTRACT
The formal contract consists of the following main terms:
Name of the commodity.
Quality of the commodity.
Quantity of the Commodity.

11. Packaging of the commodity.
Price of the commodity.
Payment terms and Schedule.

12. Insurance.
Quality Check/Inspection.
Force majure.
Exit Clause

13. TERMS ON PRICE METHODS
Below are methods generally followed for Price Methods:
FOB- Free on board
CFR or C&F- Cost and Freight
CIF- Cost, Insurance and Freight
DAF- Delivered at Frontier

14. FREE ON BOARD (FOB)
Free on Board means that the seller fulfills his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment.
The buyer has to bear all costs and risks of loss of or damage to the goods from that point.
FOB terms require the seller to clear the goods for export.
This term can only be used for sea or inland waterway transport.

15. COST AND FREIGHT
Cost and Freight means that the seller must pay the cost and freight necessary to bring the goods to the named port of destination.
But the risk of loss or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered onboard the vessel, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment.
The C & F term requires the seller to clear the goods for export

16. CIF- COST, INSURANCE AND FREIGHT
CIF means that the seller has the same obligations as under C & F.
Seller has to procure marine insurance against the buyer's risk of loss of or damage to the goods during the carriage.
The seller contracts and pays the insurance premium.

17. DAF- DELIVERED AT FRONTIER
DAF means that the seller fulfills his obligation to deliver;
When the goods have been made available;
Cleared for export, at the named point and place;
The term is primarily intended to be used when goods are to be carried by rail or road, but it may be used for any other mode of transport.

18. PAYMENT METHODS IRREVOCABLE L/C(LETTER OF CREDIT) REMITTANCE
DOCUMENTARY COLLECTION
DOCUMENTS AGAINST ACCEPTANCE (D/A)

19. IRREVOCABLE LETTER OF CREDIT
Irrevocable L/C is the one that can not be withdrawn or amended by the opening bank without the agreement of the beneficiary;
Secure;
Internationally Acceptable method;

20. IRREVOCABLE LETTER OF CREDIT
Irrevocable or not;
Guidelines for International Trade - Uniform Customs and Practice Rules (UCP 600) is the latest version with guidelines for comprising L/C;
Bank of buyer and seller are involved in the completion of the contract and payment

21. REMITTANCE
Mail Transfer (M/T),
Telegraphic Transfer (T/T), and
Demand Draft (D/D)

22. MAIL TRANSFER:
Buyer will hand over the payment of the goods to the remitting bank;
Authorizing its branch bank or correspondent bank in the country of the beneficiary by mail to make the payment to the Seller.
Mail transfer is cost effective but takes more time.

23. TELEGRAPHIC TRANSFER:
Buyer will hand over the payment of the goods to the remitting bank;
Buyer authorize their branch bank or correspondent bank in the country of the beneficiary by telegraphic means to make the payment to buyer;
Expensive but quicker.

24. DEMAND DRAFT
Buyer will come to the local bank to buy a banker's bill;
Deliver the Bill to the seller or beneficiary by mail;
When the seller or beneficiary has received it, they will redeem it from the designated Bank.
Apart from banker's bill, promissory notes or cheques can also be used in this way.

25. DOCUMENTARY COLLECTION
D/P AT SIGHT:
Under D/P at sight, the seller might either draw or not draw a draft on the buyer.
Seller shall hand over the shipping documents together with (or without) the draft, and the shipping documents and the draft (or without draft) will be transferred to the collecting bank which will present them to the buyer and ask him to make the payment at sight.

26. The buyer, upon sight, should then make the payment and get the shipping documents.
When the collecting bank has finished the collection, it should immediately notify the remitting bank which will then make the payment to the seller.
Bank shall make payment to the Seller.

27. D/P AT _ DAYS AFTER SIGHT (DATE):
The buyer shall duly accept the documentary draft drawn by the seller at _ day’s sight upon first presentation and make payment on its maturity.
The shipping documents are to be delivered against payment only.

28. DOCUMENTS AGAINST ACCEPTANCE (D/A)
Under D/A, the buyer can get the shipping documents from the collecting bank after he has duly accepted the draft.
This is only applicable to time draft.
These will greatly convenience the buyer, but it means much more risk for the seller, for once he has delivered the shipping documents, he will have lost his title over the goods.

29. DOCUMENTS AGAINST ACCEPTANCE (D/A)
D/A has more risks for the seller, for the buyer might refuse to pay after acceptance of the draft and taken the delivery of the goods.
Certainly the seller might sue the buyer, but as often the case, the buyer claims bankruptcy and then the seller can do nothing to remedy the situation.
Buyer fails to remit payment to seller

30. CONTRACT TERMS ON DOCUMENTATION
Generally there are five kinds of commonly used international trade documents:
Government Control documents.
Commercial Invoice Documents.
Banking Documents.
Shipping Documents.
Insurance Documents.

31. GOVERNMENT CONTROL DOCUMENTS
Export Documents.
Import License and Foreign Exchange Authorization.
Export License - Export Documents.
Certificate of Origin - Export Document.
Inspection Certificate - Export Document.
Consular Invoice.
Customs Invoice.

32. COMMERCIAL INVOICE
Mandatory Information for Invoice :
Buyer's order number.
Invoice number and date.
Shipment terms.
Names and addresses of the seller and buyer.
Country from which the shipment is made.
Description of the goods.

33. Quantity, weight or measurement of the goods.
Unit price
Total amount payable, including price of goods, freight, insurance and so on.
Rebate or similar incentives.
Signature of the exporter.

34. BANKING DOCUMENTS
Below are some generally used banking documents in international trade:
Documentary Credit D/C.
Standby Credit.
Collection Instruction.
Bill of Exchange (B/E) or Draft.
Trust Receipt (T/R).
Promissory Note.

35. SHIPPING DOCUMENTS
Below are few documents which are generally required:
Shipping Order S/O.
Dock Receipt D/R or Mate's Receipt.
Bill of Lading (B/L).
House Bill of Lading.
Sea Waybill.

36. vi. Air Waybill (AWB).
vii. House Air Waybill (HAWB).
viii. Shipping Guarantee.
ix. Packing List (sometimes as packing note).

37. INSURANCE DOCUMENTS
Below are generally required insurance documents:
Insurance Policy.
Insurance Certificate.
Combined Certificate.
Open policy or Open cover.

38. ROADBLOCKS FOR IMPORTERS/EXPORTERS
Absence of adequate terms/ clauses in contract.
Infringement of Intellectual Property Rights
Government control.
Different laws.
Difficulty in payments.

39. Customs duty.
Lack of information.
Economic dependence.
International dispute.
Language difference.

40. MODES OF DISPUTE RESOLUTION
Major modes of dispute resolution are:
Negotiation
Mediation
Arbitration
Litigation

41. INTELLECTUAL PROPERTY ISSUES IN INTERNATIONAL TRADE
IP Rights are Territorial.
Secure Freedom to Operate.
Respect Deadlines.

42. INTELLECTUAL PROPERTY ISSUES IN INTERNATIONAL TRADE
Early Disclosure.
Working with Partners.
Choosing an Appropriate Trademark.

43. WHAT ARE INTELLECTUAL PROPERTY RIGHTS?
INTELLECTUAL PROPERTY RIGHTS ARE:
TRADEMARKS;
COPYRIGHTS;
PATENTS;
DESIGNS.

44. INTELLECTUAL PROPERTY RIGHTS & INTERNATIONAL BUSINESS
IP is of relevance to many aspects of international trade. Crucially it provides exclusive rights, But these rights have to be pursued locally and internationally so as to prevent imitators.

45. TRADE MARKS
Trade Marks are distinctive symbols, signs, logos that help consumer to distinguish between competing goods or services.
Trade marks registration enables to maximize product differentiation, advertising and marketing, thus enhancing the product or services in international markets and establishing a direct link with the foreign consumers.

46. COPYRIGHT
Copyright is the artistic work/logo or combination of artistic work with data on websites or compilation of data in the form of software.
Legal copyright registration allows control the import and export.
Exporting the products outside the country brings company into contact with different legal environment, the rules that apply there may differ.
Therefore, it is important to register creative work in prospective exporting countries

47. PATENT
Patent is an exclusive right granted for an innovation, which is a product or a process or both that provides a new way of doing something, or offers a new technical solution to a problem.
Patents provide licensing opportunities with companies inside and
sometimes even outside a company’s field. An active patent
program generates revenue from the licensing of patents which cover
technology or business processes.

48. PATENT
Possessing a patent help a company to grow by capitalising on the market potential of its inventions. Small companies use patents to
financial backing.
Small scale companies that hold patents attract overseas investment and develop products for exports

49. DESIGN
Design is the ornamental or aesthetic aspect of an article which must appeal to the eye. The design may consist of three-dimensional features, such as the shape or surface of an article, or of two dimensional features, such as patterns, lines or colour.
Design contribute to both innovation and brand building.
Designs helps improve the form of a product, how the brand connects emotionally and engages with consumer.

50. IP RIGHTS ARE TERRITORIAL
All IP rights are only valid in the country or region in which they have been granted, except Copyright. Therefore, applying for such rights in other countries is important if there is an intention to go international.

51. EXCEPTIONS
Copyright is automatically available to all member countries through the provisions of the Berne Convention,
Well known marks have automatic protection,
Trade secrets are by their nature confidential.

52. IP RIGHTS ABROAD
Export & Import the owner of IPR should seek protection from the jurisdiction wherein it is proposing to commence business;
Protection through application of Trademark, Patent, License, Assignment as applicable and agreed between both parties
IPR can be applied for registration either through National route or through Regional Route
Once applied, the seller can claim royalty in lieu of rights to sell the product/service in that jurisdiction

53. IP RIGHTS ABROAD
National route –
Register for the relevant IP in each country/territory.
Obtain IP Rights Internationally –
Regional Route: Below are few International Organization which provide IP rights for their jurisdictions or conglomerate of areas:
Benelux Office for IP (TM and Designs)
ii. African Regional Industrial Property Office (ARIPO)

54. iii. Eurasian Patent Office
iv. European Patent Office
v. Office for the Harmonization of the Internal Market (TM and Designs)
vi. Organisation Africaine de la Propriété Intellectuelle (OAPI)
vii. Patent Office of the Cooperation Council for the Arab States of the Gulf
In INDIA INTELLECTUAL PROPERTY RIGHTS are protected by CONTROLLER GENERAL OF PATENTS, DESIGNS & TRADE MARKS.

55. INTERNATIONAL ROUTE
World Intellectual Property Organization (WIPO) Administers the conventions and systems for the international registration of marks, designs and patents in conformity with the requisite standards and parameters.
Through Madrid and Hague – International application is valid in the designated countries unless rejected within a specified time.
PCT – International application subject to international phase (international search and patentability report – and a preliminary examination report, if required) followed by the national phase. Here the designated countries decide on patentability.

56. FREEDOM TO OPERATE (FTO)
Analyzing FTO is to evaluate whether you are in any way infringing the patents, designs or trademarks of others in the particular jurisdiction.
Such a evaluation is usually done by conducting a search in patent, trademark and design databases for patent applications, granted patents, registered trademarks or designs.

57. FTO - PATENT
Even if there is a potentially conflicting patent that has been granted in the territory in question.
It may have expired or expiring soon.
Its claims may not cover the elements of interest.
If the patent still remains valid and applicable.
It could still be invalidated by finding applicable prior art.
A license could be obtained or
Invent an alternative.

58. FTO - TRADEMARK Same issues nationally as for international:
Search for similar trade name or domain name that may lead to a future dispute.
Analyse the competitors and their brands/mark whether registered or not.
Then create, innovate and coin a mark/logo/tag line for protection.

59. HOW TO DEAL THE CONFLICT?
If the search produces a prior existing patent, trademark or design in the market of interest then clearly it cannot be used as is;
Options available are to change the trademark, design around the patent or design;
Offer to buy or license that right or;
Challenge its validity if its not novel or its obvious.

60. RESPECT DEADLINES Priority Period.
Patents: 12 months Designs: 6 months
Once an application for a patent or design right has been made domestically (priority date) an international application has to be made within the “priority period” .
Priority date can be claimed from domestic priority.
Loss of novelty if filed beyond the stipulated period

61. EARLY DISCLOSURE Novelty is pre requisite for claiming protection.
Disclosure only through Non-disclosure Agreement.
If not, the novelty could be lost and an application for registration be rejected.
Essential for Innovative processes and products for both Designs and Patents to potential partners before protection has been filed.

62. WORKING WITH PARTNERS & IPR
Ownership of IP.
Assignments/licenses for ownership.
Risk of unauthorized use or disclosure of trade secrets by partner.
Risk that partner will use trade secrets of others and expose you to litigation. Insist on indemnification.
Quality of product to be maintained.
Sustain brand image.
Trade marks to be registered in name of original owner only.
If registered in the partners name in the country could create conflicts once the relationship ends.

63. CHOOSING AN APPROPRIATE TRADEMARK
Mark should be innovative, creative
Not deceptive
Not descriptive or generic
Unique and not obvious
Interesting connotations and their translated meanings should be analyses in the territory for interest:
FEW EXAMPLES:
Mitsubishi was dismayed to find that PAJERO means 'Wanker' in Spanish. Ford “NOVA” means “No Go” in Spanish. Whereas Coca Cola was successful in finding a trademark in Chinese to say “Happiness In The Mouth”

64. DISPUTE RESOLUTION

65. NEGOTIATION Basic means of settling differences.
It is back-and-forth communication between the parties.
Goal of trying to find a solution.
You may negotiate directly.
You may hire an attorney to negotiate on your behalf.
No specific procedures to follow.
It works best if all parties are positive and intend to settle
the matter.

66. MEDIATION Mediation is a voluntary process.
An impartial person (the mediator) helps with communication and promotes reconciliation.
Mediator manages the process and helps facilitate negotiation.
Mediator does not make a decision nor force an agreement.
Parties directly participate and are responsible for negotiating their own settlement or agreement.

67. ARBITRATION
Arbitration is the submission of a disputed matter to an impartial person (the arbitrator) for decision.
An out-of-court method for resolving a dispute.
Arbitrator controls the process, will listen to both sides and make a decision.
Appeal rights are limited.

68. LITIGATION
Litigation is the use of the courts and civil justice system to resolve legal controversies.
Used to compel opposing party to participate in the solution.
Specific rules of procedure, discovery and presentation of evidence must be followed.
A formal judicial proceeding allowing full examination and determination of all the issues between the parties.
Decision can conclude the litigation process and be enforceable.
Appeal is available.

69. ARBITRATION V/S CIVIL LAW
Arbitration is the alternative dispute resolution mechanism;
Saves time and cost as incurred in litigation;
Parties are bound by Award of an arbitrator;
Final decision of Arbitrator;

70. ADVANTAGES OF ARBITRATION
(i) Arbitration proceedings are private and confidential.
(ii) Parties can choose the arbitrator.
(iii) Parties can choose the language of the arbitration and its venue.
(iv) Arbitrations can be less formal than court proceedings.
(v) Arbitration awards are final, binding and are enforceable through the
courts.

71. (vi) Avoids hostility. (vii) Usually cheaper than litigation
(vi) Avoids hostility. (vii) Usually cheaper than litigation. (viii) Faster than litigation. (ix) Flexible. (x) Simplified rules of evidence and procedure.

72. LAW FOR ENFORCEMENT OF FOREIGN AWARDS
Member country signatory of International Conventions. 
Members to bring legislation for enforcement.
India has accordingly enacted Foreign Awards ( Recognition and Enforcement) Act, 1961.
Person interested in the award can pray the court, having jurisdiction.
Court pronounces the judgment according to the award.
No appeal can lie except when the judgment is in excess or not in accordance with the award.

73. REAL TIME CASE LAWS
CHAMBER OF ARBITRATION, MILAN – * FACTS: Issue of breach of terms of Technology Transfer Agreement entered in between the parties way back in 2011 between an Italian and German entity. Claimant terminated the contract alleging the non timely delivery of goods and claimed refund of payment made for procurement of materials. ARGUMENTS: According to Claimant, Respondent was unable to package a given quantity of the agreed product within the stipulated time as per the order. Commercialization was to be launched by a client, who cancelled the entire order and the claimant suffered loss of client, income as well as reputation. However, the respondent stated that no deadline was mentioned in the contract and also respondent made all efforts to package the product timely. * Ref: Claimant (Italian company) v. Respondent (German company): Chamber of Arbitration of Milan Award No. 7813, rendered on 10 October 2014.

74. JUDGMENT OF THE COURT: The Sole Arbitrator found that Respondent behavior was in compliance with the standard good faith acceptable in the circumstances and taking into account both parties’ contractual obligations. In fact, on the basis of the evidence presented by the parties and of the expert’s report, the Sole Arbitrator deemed that while Respondent proved to have made its best efforts to try and package the goods, Claimant did not demonstrate that it actually performed the activities which were necessary to put Respondent in the condition to package in case of urgency, not only pursuant to the agreement but also according to the standard practices of the field. Thus, the award was in favour of the Respondent German Company.

75. Playboy Enterprises v. Bharat Malik & Another, Delhi High Court 2001 PTC (21) 328
“INFRINGEMENT OF FOREIGN TRADEMARK”
FACTS:
Playboy Enterprises Incorporation has been the publisher of the widely known magazine PLAYBOY filed for restraining an Indian publisher Mr. Bharat Malick, who launched PLAYWAY.

76. Plaintiff contended that the adoption of the word 'PLAY' by the defendant was ill motivated and illegal. And that the word was phonetically similar to the mark PLAYBOY.
Hence, there was a clear case of infringement of the registered trademark of the plaintiff with the intention of selling the defendant’s magazine using the goodwill and reputation of the plaintiff.
Court held that long and continuous user by Plaintiff of the mark PLAYBOY has given it a global reputation of being well known in that content. Thus, use of mark PLAYWAY for similar content amounts to infringement and passing off.
Defendants were restrained from printing and publishing the magazine under the name PLAYWAY.

77. HORLICKS LTD. & ORS. V. KARTICK SADHUKAN 2002 (25) PTC 126 Del
FACTS:
HORLICKS Ltd. is a foreign company engaged in manufacturing of wide range of food products.
KARTICK CONFECTIONERY started manufacturing a similar look-alike product, namely, toffees under the trademark ‘HORLIKS’ infringing the trademark rights enjoyed by 'HORLICKS’.
SUIT: HORLICKS filed for a suit seeking to permanently restrain
KARTICK CONFECTIONERY from infringing the trademark
“HORLICKS” and also its copyrights which it enjoyed over the
product.

78. JUDGEMENT
The court ruled that use of the label and trademark HORLIKS by defendants in respect of toffees is very likely to cause confusion among the people. It would thereby lead to deception and thus it restrained Kartick confectionary from use of the mark HORLIKS or under any other name that is similar in expression to H’s trademark HORLICKS.

79. ICC DEVELOPMENT INTERNATIONAL V
ICC DEVELOPMENT INTERNATIONAL V. ARVEE ENTERPRISES & ANOTHER 2003 PTC (26) 228
FACTS:
ICC Development (International) Ltd., exclusive owner of rights pertaining to logo/word/ for World Cup.
Arvee Enterprises was an authorized dealer of Philips India Ltd. Launched a Promotional campaign with slogan - "Philips : Diwali Manao World Cup Jao" and "Buy a Philips Audio System win a ticket to the World Cup". They even inserted a pictorial representation of a ticket with an imaginative seat and gate number saying "Cricket World Cup 2003.“

80. SUIT:
ICC approached the Delhi High Court for restrain against the Defendant on the averment of ambush marketing.
JUDGMENT:
Court dismissed the suit of ICC and asserted that the practice of Arvee was neither it was an Unfair trade practice nor misuse of brand of World Cup.
Court upheld that World Cup is a sporting event and not a trademark upon which exclusive rights would vest with Plaintiffs as claimed.

81. WIPRO CYPRUS PRIVATE LIMITED V
WIPRO CYPRUS PRIVATE LIMITED V. ZEETEL ELECTRONICS (44) PTC 307 (MAD)
FACTS:
Wipro Cyprus Private Ltd acquired the trademark ‘Yardley’ and all its variants thereupon from Lornamaed Group Ltd including its Indian registrations.
Zeetel Electronics attempted to import talcum powder and body sprays having the same trademark ‘Yardley’ from
Singapore.
SUIT:
Wipro filed for a suit of permanent injunction
against Zeetel.

82. JUDGEMENT
Madras High Court restrained Zeetel from importing the goods in India thereby it upheld the exclusive right of Wipro on acquisition of brands for India.
Thus, on the basis of license and sale of registered Trademarks competitor was curbed from doing business of goods under that trademark.

83. NOKIA AND SAMSUNG February 1, 2016
The convoluted litigation between Nokia and Samsung concluded with an arbitral award which settled the patent disputes between both the corporates. The award also assessed the compensation for extension of Patent license for a few years.
Multifarious and complicated issues of cross patents, technology its scope and ambit can be best adjudicated by the mode of Arbitration as strict laws of civil procedure and evidence would only impede the decision and not enhance its redressal

84. TESSERA TECHNOLOGIES, INC. VS. AMKOR TECHNOLOGY, INC.
The parties entered into a license agreement in 1996, and agreed that all disputes would be submitted to final and binding arbitration before the ICC.
The tribunal convened by the ICC found that Amkor had intentionally and materially breached the parties' license agreement, and that, as a result, Tessera, Inc. properly terminated the license agreement in 2011.
The total award of approximately $145 million

85. MITSUBISHI MOTORS CORP. VS. SOLER CHRYSLER-PLYMOUTH, INC. 473 U. S
Petitioner brought an action in a US District Court seeking an order compelling the parties to arbitration in pursuance of the sales agreement.
Respondent alleged that the dispute involved antitrust claims (division of markets resulting in restraint of trade), which are not arbitrable.
The court held that International Arbitration can settle all disputes.

86. CONCLUSION Export/Import Contract should always be entered into;
Incorporation of all suitable terms and conditions in the Contract;
Arbitration clause plays an important role for dispute settlement.
Terms of breach, indemnification and insurance plays are of paramount importance;
Payment method should be secure, suitable and acceptable to both;
Exporter/Importer should ensure that the relevant Intellectual property rights are secured both in domestic as well as international arena;
In case of conflict, do not delay, initiate action quickly.

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