Monday, 04 March 2019

Can I Enforce an NDA Overseas?

Written by Tom Willis

Reading Time: 2 minutes

What is an NDA?

A Non-Disclosure Agreement (NDA) otherwise known as a confidentiality agreement is a document designed to protect a business’s confidential information. Read our earlier blog post to hear about the 10 key points to consider before using one & use LawPath’s free NDA. It is best practice to engage with a contract lawyer to ensure that the NDA is clear and concise.

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Often heard about regularly in popular media, they play a key role to prevent the distribution of confidential information. With the world becoming a global economy, cross-border NDAs are surging and inevitable for most businesses. With this in mind, it is important to recognise the need to protect your information if a breach occurs overseas. As mentioned in the Top 5 Enforceability Issues for NDAs, potential jurisdiction issues arise depending on which state(s) or country you expect to enforce your NDA.

Enforceability Overseas

It is generally accepted that each jurisdiction you are engaging with will have its own rules around the enforcement of those NDAs. It is important the NDA mentions the jurisdiction in which it will be enforced.

  • For example, the relationship between Australia and the United States provides no guarantee that a remedy will be recognised. If damages were awarded by an Australian court there is no guarantee that the US court will enforce it.

Often the parties will agree to choose the same jurisdiction and governing law to apply. Because there is more certainty of the outcome and requires fewer hurdles. However, there is nothing stopping you from choosing different localities for these two criteria.

  • For example, if you are doing business with a Singaporean company, the NDA may agree that Singaporean law is to apply but the matter will be ruled by an Australian court.

These two sections of jurisdiction and governing law should be separate and clear. NDAs do this as a compromise between international parties if the parties don’t wish to follow only one jurisdiction. It is important to ensure that lawyers from both jurisdictions have reviewed the NDA and approve its enforcement.

Breach?

If there is a breach of your NDA by an overseas party, arbitration or judgement may be the options available. Therefore a potential breach could result in pursuing action in your jurisdiction and then having to enforce it in the other party’s country as another lawsuit.

Conclusion

Overseas NDAs is a growing space and requires careful inspection before engaging business. Ultimately remedies and enforcement vary depending on the jurisdiction. Keep in mind that international litigation can be particularly expensive and time-consuming. Feel free to reach out to one of our business lawyers to gain a better understanding of your position when engaging with overseas businesses.

Unsure where to start? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

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