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Choice of Contractual Governing Law and Dispute Resolution Jurisdiction

Stephen Antle, Jennifer K. Choi, Mining Agreements: Contracting for Goods and Services

Many mining operations are international. The minerals are in a different country from the headquarters of the company or companies leading the excavation. In many cases, contractors are necessary to facilitate both the mining and the shipment of the excavated ore. Often, these contractors are from different countries than both the lead company and where the mine is located. All of these parties are tied together in the venture through contracts.

Many disputes can arise over the life of a mine, including compliance and environmental obligations arising in the development and closing phases, and shipment of minerals during the operation of the mine. Due to the international nature of the efforts that go into extracting minerals, one of the major issues in these contract disputes is the law which governs the relevant contract. Another is the court in which the dispute will be resolved. In most international ventures, parties to a contract should agree at the time of contracting on the law that governs the contract and on the court (or other tribunal) where disputes will be resolved. These provisions are called choice of law and choice of jurisdiction clauses, respectively. Parties can create predictability and certainty in their contractual relationships by including them in their contracts.

There are options other than litigation in court to resolve disputes. I