Top 7 Mistakes South American Businesses Make in U.S. Arbitration and How to Avoid Them

When South American companies expand into the U.S. market, disputes are almost inevitable. Many contracts require arbitration in the U.S., especially in industries like international trade, real estate, and joint ventures. Arbitration can be faster and more private than court litigation, but it also has its pitfalls. Too often, businesses from South America walk into arbitration unprepared, and the results can be costly.

As attorneys who regularly handle international business disputes, we’ve seen common mistakes repeat themselves. Here are the top seven missteps and practical ways to avoid them. 

1. Not Understanding How U.S. Arbitration Differs from Local Courts

One of the biggest surprises for South American businesses is how different arbitration feels compared to home-country litigation. Arbitration panels have more discretion, and the rules are less formal. Businesses that expect a court-like process often struggle.

How to Avoid this Mistake: Work with counsel who understands both U.S. arbitration rules and international business culture. They can prepare you for what to expect and adjust your strategy accordingly.

2. Signing Contracts Without Reviewing Arbitration Clauses

Arbitration clauses often dictate where the arbitration will take place, which laws will apply, and even which language will be used. Many South American businesses agree to contracts drafted by U.S. partners without realizing how restrictive these clauses are.

How to Avoid this Mistake: Before signing any contract with a U.S. counterparty, have the arbitration clause reviewed by an attorney experienced in cross-border disputes. Small wording choices, like “exclusive jurisdiction in Miami under AAA rules,” can make a huge difference.

3. Failing to Preserve Evidence Early

Unlike litigation, arbitration often moves quickly once filed. If emails, financial documents, or internal records are missing, your case can suffer. South American businesses sometimes underestimate how aggressively evidence will be requested in U.S. proceedings.

How to Avoid this Mistake: Put a document preservation plan in place as soon as a dispute arises. Work with counsel to secure communications, contracts, and financials before they’re requested.

4. Choosing Arbitrators Without Strategy

Many arbitration rules give the parties some say in who the arbitrator will be. South American businesses sometimes treat this as a formality, not realizing the choice of arbitrator can shape the entire case.

How to Avoid this Mistake: Select arbitrators who understand cross-border issues and, ideally, have experience with Latin American companies. The right arbitrator can make the process smoother and ensure cultural and business contexts are understood.

5. Underestimating the Cost of U.S. Arbitration

While arbitration is often marketed as “cheaper than court,” the reality is more complicated. Arbitrator fees, administrative costs, and U.S. attorney fees can add up quickly. Businesses that don’t plan for these expenses may run into financial strain mid-dispute.

How to Avoid this Mistake: Budget realistically and discuss potential costs upfront with your legal team. Some disputes may warrant negotiations to share costs or even to move proceedings to a more cost-effective forum.

6. Ignoring the Importance of Language and Translation

Even if contracts specify that English will be the official language, documents, witnesses, and testimony may be in Spanish or Portuguese. Inconsistent or poor translations can harm credibility and weaken arguments.

How to Avoid this Mistake: Invest in professional, legal-grade translations. Make sure your attorneys are fluent or have reliable interpreters who understand legal terminology.

7. Not Planning for Enforcement of the Award

Winning in arbitration is only half the battle. The other half is collecting. Many South American businesses win U.S. arbitration awards but fail to enforce them properly back home or in other jurisdictions.

How to Avoid this Mistake: From the start, consider where assets are located and how enforcement will work under treaties like the New York Convention. This planning ensures your arbitration award doesn’t become just a symbolic victory.

Why These Lessons Matter for South American Businesses

The U.S. market offers enormous opportunities, but it also brings complex legal risks. Avoiding these common arbitration mistakes can save your company time, money, and reputation. More importantly, it allows you to stay focused on business growth instead of being sidelined by costly disputes.

Talk to Attorneys Who Understand Both Worlds

At Ayala Law, we represent businesses navigating cross-border disputes, including arbitration between South American companies and U.S. counterparts. Our attorneys combine litigation experience with a deep understanding of international business realities.

If your company is entering into contracts with U.S. businesses or is already facing arbitration, contact one of our experienced international business attorneys in Miami at 305-570-2208.

You can also reach our founding attorney, Eduardo A. Maura, directly at eduardo@ayalalawpa.com.

Schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case.]