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International Trade Disputes

Vesna from Croatia asked:

A new foreign Netherlands client company offered me a credit of €5600 Euros for sending back bad goods. After that through our ambassy (who don't want to comunicate with me any more) they offered just €3500. I disagreed and their last offer was €4300. Now through attorney I asked for €12000 (less than the real value) but they said it isn't their fault (bad goods instead the ones we agreed on). They are unethical and they misrepresent each word. Is there any advice to help me other then go to the Court?

Our Answer:

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Sorry to hear about your trade challenges, disputes that require lawyers are usually the sign that something went wrong at an earlier stage. International deals are very difficult to mediate - given different countries' laws and the prohibititve costs of legal action. You have done the right thing by asking your Embassy to assist you. Given the size of your dispute, we would suggest that legal action would be prohibitively expensive for your size of deal. Disputing business deals in court usually costs more than you expect, and takes longer than you hope, with the added distraction and time lost from focussing on your business.

Here are a few suggestions that you may find helpful:

• Perhaps they can return the goods goods to you.
• Perhaps you can talk with them in more friendly tones, and build a relationship. When people are aggressive, it's human behaviour to react by stonewalling and not listening or even communicating. I'm reading from your post that you've come out fighting. It's our experience that the Dutch as a nation prefer to settle things reasonably in a conversational style.
• Ask your attorney or another party to intervene on your behalf by attempting to talk with your Dutch client. It sounds like you've had both the client and Embassy's doors slammed in your face.

The following points should prove useful in your future business negotiations:

• Ideal would be to have the other party sign your contract, and making your contract enforceable in a Croatian/Slovenian or European court. This would give you recourse at a much more managable cost. If you've not structured the deal in this way, then I'm afraid at this point you need to negotiate with the other side.
  
• Additionally, it won't help you on this occasion - but in the future we suggest you find the client's local Companies Registration or Reporting body and look into your client's previous financial records. Many countries provide this to members of the public for a small fee. It's also possible to reference a company's credit history. The investment is worthwhile.
  
• Finally, it's good to see that you're using the internet to do research and get informed. With the proliferation of blogs and other aspects of social media on the internet, we suggest you use your favourite search engine to research your prospective client before sending them goods.

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