International NDAs: Cross-Border Confidentiality Agreements

When you need an international NDA

An international NDA is necessary whenever confidential information is shared between parties in different countries. Common scenarios include cross-border business partnerships, hiring remote contractors or employees in other countries, sharing information with international vendors or suppliers, multinational merger and acquisition transactions, joint development agreements with foreign companies, and licensing intellectual property across borders.

International NDAs face challenges that domestic NDAs do not: different legal systems, varying enforceability standards, data protection regulations, language barriers, and the practical difficulty of pursuing legal remedies in foreign courts. Addressing these challenges in the NDA itself is essential for effective protection.

Governing law selection

Choosing the governing law for an international NDA is one of the most important decisions. The governing law determines how the NDA is interpreted, what constitutes a breach, what remedies are available, and what standards of reasonableness apply.

Common approaches include choosing the law of one party's country (usually the disclosing party's jurisdiction), choosing a neutral jurisdiction that both parties find acceptable, or choosing a jurisdiction with well-developed commercial law (such as England and Wales, New York, or Singapore).

English law and New York law are frequently chosen for international commercial agreements because they are well-developed, predictable, and widely understood by international businesses. Singapore and Hong Kong law are popular choices for agreements involving Asian parties.

Whatever governing law you choose, ensure that both parties understand and accept it. A governing law clause is only useful if it is enforceable in the relevant jurisdictions — some countries may refuse to apply foreign law in certain circumstances.

Dispute resolution

For international NDAs, international arbitration is generally preferable to litigation in national courts.

International arbitration offers several advantages: arbitral awards are enforceable in over 170 countries under the New York Convention, the process is typically faster and more predictable than litigation in unfamiliar foreign courts, arbitrators can be selected for their expertise in commercial disputes, and the proceedings are private (unlike court litigation, which is usually public).

Popular arbitration institutions for international commercial disputes include the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), and the American Arbitration Association (AAA) International Centre for Dispute Resolution.

If you choose litigation instead of arbitration, specify which country's courts will have jurisdiction. Be aware that a judgment from one country's court may not be automatically enforceable in another country — unlike arbitral awards under the New York Convention.

Data protection compliance

International NDAs must account for data protection regulations that govern the transfer of personal data across borders.

The European Union's General Data Protection Regulation (GDPR) imposes strict requirements on the transfer of personal data outside the EU/EEA. If your NDA involves sharing data that includes personal information of EU residents, you must ensure that adequate data protection mechanisms are in place. This may include Standard Contractual Clauses (SCCs), binding corporate rules, or reliance on an adequacy decision.

Other countries have their own data protection laws with cross-border transfer restrictions. Brazil's LGPD, China's PIPL, India's DPDP Act, and numerous other national laws may apply depending on the nationalities and locations of the parties.

Your NDA should include provisions acknowledging applicable data protection obligations, requiring compliance with relevant data protection laws, specifying what personal data will be shared and for what purpose, and addressing data breach notification requirements.

Language and translation

When parties speak different languages, the NDA should address language explicitly.

Best practice is to draft the NDA in a single controlling language (usually English for international business) and state clearly that the English version controls in case of any conflict with translations.

If a translation is needed for one party to fully understand the terms, provide one — but always specify which language version is the legally binding document. Having two equally authoritative versions in different languages is a recipe for disputes.

Legal terminology does not always translate precisely between languages. Key terms like confidential information, material breach, and injunctive relief may have different nuances in different legal systems. A legal translator (not just a general translator) should handle NDA translations.

Enforcement challenges

Enforcing an international NDA presents practical challenges that domestic NDAs do not.

Jurisdictional issues: Even with a clear governing law clause, a court in the breaching party's country may not recognize the chosen jurisdiction, particularly if neither party has a substantial connection to the chosen forum.

Enforcement of judgments: Unlike arbitral awards, court judgments from one country are not automatically enforceable in another. You may need to bring a separate enforcement action in the breaching party's country, which adds time and cost.

Discovery limitations: Some countries have strict data privacy laws that limit the discovery process (gathering evidence for litigation). This can make it harder to prove a breach and quantify damages.

Practical considerations: Pursuing legal action in a foreign country requires local legal counsel, understanding of local procedures, and potentially significant travel and translation costs. For smaller breaches, the practical costs of international enforcement may exceed the potential recovery.

These challenges make prevention even more important for international NDAs. Invest in clear drafting, appropriate dispute resolution mechanisms, and practical security measures for shared information.

Practical recommendations

When creating an international NDA, several practical steps improve your protection.

Choose arbitration as your dispute resolution mechanism. The New York Convention makes arbitral awards enforceable in most countries, providing a much more practical enforcement path than foreign court litigation.

Select a governing law that both parties understand and accept. English or New York law is a safe default for most international business transactions.

Address data protection compliance explicitly if personal data will be shared across borders.

Use a single controlling language for the agreement, even if translations are provided for convenience.

Consider the practical enforceability of the NDA in the other party's jurisdiction before sharing your most sensitive information. If enforcement would be impractical, adjust your information-sharing strategy accordingly.

For complex international transactions or relationships involving highly valuable information, consult with an attorney who has experience in cross-border commercial agreements and the specific jurisdictions involved.