Cross-border deals for closely held companies

A session report from the IBA’s Annual Conference held in Copenhagen from 4 to 9 October 2026

Rapporteur

Michael P Maxwell

Potter Anderson & Corroon, Wilmington

Co-chairs

Nathalie van Woerkom

AKD, Amsterdam

Santiago Fontana

Ferrere, Montevideo

Speakers

Meyyappan Nagappan

Trilegal, Mumbai

Ignacio Pesqueira

Galicia Abogados, Mexico City

Huawei Sun

Zhong Lun, Beijing

Werner Federico Ahlers

Sullivan & Cromwell, New York

Katharina Prasuhn

HEUKING, Munich

The panel examined how advisers to closely held companies can structure cross-border transactions and partnerships to reduce friction, focusing on the missteps that arise when US-style agreements are deployed in non-US deals. Co-Chair Nathalie van Woerkom opened the session with a deceptively simple question: when familiar contractual language is used in a cross-border deal, can counsel be sure it will operate as intended? A single transaction may touch several legal systems; parties choose a governing law, but local mandatory rules may still have a bearing on the deal and familiar drafting may be read differently from what the parties intended.

Common law concepts in civil law settings

The panellists observed that much of the boilerplate parties freely contract around in common law M&A cannot be contracted around as readily in civil law jurisdictions. Risk allocation concepts illustrate the gap. ‘Material adverse effect’, built on Delaware case law, does not translate easily into civil law systems, such as those in Brazil and the rest of Latin America, a difference encountered daily. The distinction between negligence and gross negligence is largely absent in civil law countries and concepts such as consequential damages and lost profits may not exist. A recurring theme was that civil law drafting tends to exclude concepts rather than exhaustively contract for them as common law drafting does.

The panel discussed adapting representations, warranties and indemnities, non-competes and non-disclosures across systems and compared US disclosure and sandbagging practice, pro-sandbagging positions versus anti-sandbagging or silence, particularly for private equity buyers. Because efforts standards such as ‘best efforts’ and ‘commercially reasonable efforts’ are not sharply distinguished even in Delaware case law, and may have no civil law counterpart, the practical lesson was to define terms such as best efforts, ordinary course and material adverse change (MAC) expressly.

Governing law and arbitration

Agreements typically select the law of one party’s jurisdiction and civil law counsel are needed to flag where a common law choice will not work. On neutral law, Swiss law was identified as a common European Union choice, similar to German law but more flexible, and Singapore law as the common choice in Asia.

From the US perspective, the law of lead counsel’s jurisdiction is often preferred over a neutral third-party law. The panel stressed that choice of forum matters as much as choice of law, noting internal affairs and conflict-of-laws issues that are easily overlooked, for example, a New York-governed arrangement involving a Mexican company must still account for Mexican law.

International arbitration was presented as a way to manage the risk that a foreign law choice is not respected locally and to address forum non conveniens concerns.

On institutional versus ad hoc arbitration, the panel noted that institutional arbitration supplies more structure and rules, while ad hoc arbitration depends on party cooperation, with United Nations Commission on International Trade Law offering a middle path in regard to appointing arbitrators. The guiding priority was enforceability first, then speed and cost.

Tax and local counsel

The panel urged involving tax counsel as early as possible, because structuring issues can kill a deal. Representations and warranties and tax liability insurance increasingly cover tax exposures. Mexico, for instance, allows insurance of known liabilities and India’s indirect transfer rules were cited as a frequently overlooked issue requiring early local advice.

The same early engagement message ran through the discussion on local counsel generally: although clients press for cost efficiency, late involvement tends to cost more time and money and create delay, with an Indian carbon credits matter offered as an example of how early engagement and asking the right questions avoid red flags.

The session closed on a discussion of multi-jurisdictional due diligence and negotiation styles, including reconciling differing definitions of ‘material’ and differing disclosure obligations and adapting the negotiation strategy across legal and business cultures.

Throughout the session, the panellists shared practical examples and approaches intended for use in practitioners’ own transactions.