Wealth Talk: Jonathan Cogan on Opportunities and Risks from Utilizing U.S. Courts in Joint Venture Disputes


December 22, 2020

Publication: Family Wealth Report

In the eighth episode of Kobre & Kim’s ten-part Wealth Talk series with Family Wealth Report on global challenges facing high-net-worth individuals (HNWIs) and their advisers, Kobre & Kim’s Jonathan Cogan, who focuses on financial, joint venture and partnership disputes, examined the power of utilizing U.S. courts in foreign business disputes.

Unlike many other jurisdictions in the world, the U.S. is an attractive location for legal action because parties can go to court with relatively little information at hand, instead developing their evidence during the process. Another reason is the broad discovery rights available in the U.S., not just over the defendant but also against third parties. In fact, through Section 1782, parties to foreign proceedings, not just U.S. proceedings, can ask U.S. courts for discovery, allowing parties to obtain evidence and gain leverage.

This presents a risk to HNWIs who want to avoid being subject to these broad discovery rules. Cogan recommends them to game plan these possibilities early on and consider adding provisions in the contract preventing parties from seeking discovery in the U.S. Even if a U.S. court will not honor this provision, a counterparty may be found in breach of contract and be liable for damages. In such high-stakes, cross-border disputes, Cogan advises individuals to find specialized counsel experienced in these disputes in order to reach the best solution.

Click here to watch the full episode.