The research from global law firm Reed Smith, conducted by The Economic Intelligence Unit (EIU), found that breaches of contract and payment defaults are the biggest causes of commercial disputes for companies operating overseas today.

Developed markets

But concerns over IP issues will steal the headlines as it is set to become one of the biggest areas of commercial dispute in the next few years.
Among the report’s key findings were that three in ten companies identify breach of contract as the most common reason behind an international commercial dispute in developed markets, while a third of businesses operating overseas expect to have an issue over IP theft in BRICs and other rapid growth markets in the next two years.
Charles Weller - a partner at Reed Smith specialising in international arbitration in the shipping sector - commented: ‘The main cause for an international commercial dispute is breach of contract. Particularly as technology evolves, and negotiations are developed electronically, disputes can arise as to whether contracts have been concluded.’

Protection

Carolyn Pepper, Reed Smith partner and expert in intellectual property and dispute resolution, added: ‘Companies which rely heavily on the value of their IP are increasingly worried about IP infringement and enforcement and don’t expect the situation to improve quickly, our report found. Many businesses will regard these perceived risks as an acceptable cost of conducting business in certain markets, but others won't.
‘Unless strong messages are sent out on enforcement companies will continue to be wary and executives may think more carefully about investing in or doing business in territories where they do not think that the protection available for IP rights is as strong as they would like.’