COMMLAW 2502 LEGAL ASPECTS OF INTERNATIONAL

BUSINESS II

INSTRUCTIONS

ASSIGNMENT

THIS ASSIGNMENT COMPRISES 9 QUESTIONS.

ALL QUESTIONS ARE TO BE ANSWERED.

THE TOTAL MARKS FOR THIS ASSIGNMENT ARE 25 MARKS.

THIS ASSIGNMENT REPRESENTS 25% OF THE TOTAL ASSESSMENT OF THE

COURSE.

THIS ASSIGNMENT IS DUE TO BE LODGED ONLINE THROUGH TURNITIN

BY 2PM MONDAY 22ND MAY 2017

104258 Legal Aspects of International Business II Semester 1, 2017 Assignment Page 2 of 4

Question 1
State A is a newly developing State which is undergoing rapid industrial growth. Pollution
controls on the many new factories now operating in State A are virtually non-existent at this
time and as a result much thick black smoke is constantly drifting into the airspace and many
toxic chemicals are regularly being washed onto the coastline of a neighbouring State, State
Y.
State Y wishes to take the matter to the International Court of Justice and both States A and
Y have consented to the International Court of Justice having jurisdiction in this matter.

How will the International Court of Justice rule in this dispute? What reasons will it
give for its decision?
3 marks

Question 2
The Computer Company in Country D manufactures computers for business and personal
use. It has decided to expand its market into Country N. To do so, it offers retailers
throughout Country N heavily discounted prices (prices well below cost).
The Abacus Company in Country N also manufactures computers and it has been carefully
watching the Computer Companys attempts to produce sales in Country N.
For the last year, The Computer Company offered its heavily discounted prices to retailers
and it conducted an extensive advertising campaign in Country N. Its sales during this
period, however, were minimal. Recently, the Computer Company raised its prices to those
it offered retailers in its home country and cut back on its advertising campaign. Strangely
however, the sales of its computers in Country N began to increase dramatically (notably
after a famous celebrity in Country D endorsed the Computer Companys computers).
The Abacus Companys computer sales also have risen recently but it is unhappy that its
market share in Country N has dropped (even though profits overall have increased).
After having lost market share for nearly six months, The Abacus Company went to the
Country N Antidumping Authority and asked it to impose antidumping duties on the
Computer Companys computers.
The Authority conducted an investigation and concluded that the Computer Company had
dumped its computers in Country N and that the local market had been injured. Accordingly,
it imposed the duties.
Aim Straight is now appealing to a Country N court.
Should the court affirm the Authoritys decision to impose antidumping duties?
Discuss.
3 marks

Question 3
You are advising an Australian investor who is looking at an investment proposal to invest a
large sum of money in a foreign country.
What could be some of the Australian investors more important concerns in any
foreign investment proposal?
2 marks
104258 Legal Aspects of International Business II Semester 1, 2017 Assignment Page 3 of 4

Question 4
Camel Co is a US-based multinational company that has manufactured and sold cigarettes in
the US for many years. For the last 10 years or so the US Food and Drug Administration has
required cigarette manufacturers to place warning labels on its cigarette packets that
disclose the health risks of smoking. As a consequence the sales of cigarettes in the United
States have been declining significantly since this time. To compensate for this decline in US
sales Camel Co has increased selling cigarettes overseas with most of its profits now
generated from these overseas sales.

In State C no warnings are required to be placed on cigarette packets. Some 10,000 citizens
of State C have now contracted lung cancer caused by smoking cigarettes produced by
Camel Co and these citizens have launched a class action against Camel Co in a US court
arguing that by selling cigarettes in State C without any health warnings that Camel Co has
acted negligently. State C laws provide a maximum for compensation payments for product
liability cases of $1,000.
Camel Co argues that since the cigarettes involved were sold outside of the USA, US courts
have no jurisdiction to hear the case.

How will a US court rule on this legal action brought by citizens from State C?
Explain.
3 marks

Question 5
Beuna Banana Company (B) is a US corporation that has subsidiaries in Central America
that purchase bananas from local producers.
B then sells the bananas under its trademark to wholesalers in the USA.
The Compania del Platano Puro S.A. (Puro) is an Argentinian company that markets
bananas throughout South America and that has recently set up subsidiaries in Central
America in direct competition to B.
Puro pays its local producers prices that are 30% above world market prices.
Puro is considering expanding into the US market soon and in preparation for this it has set
up a small branch in Florida and is testing the local market with sales to up-market
supermarket chains. B is concerned about loss of market share and loss of profits.
Can the actions of Puro be challenged in a US Court? Please explain.
3 marks

Question 6
A US investor wants to build a 100% US owned processing plant in Nigeria. In order to
facilitate approval for this type of project, the US investor pays $2,000 for some restaurant
meals and wine for some senior Nigerian government officials in Lagos (capital of Nigeria).
Soon afterwards the investor is successful in building this 100% owned processing plant at a
cost of $50m. Two years later, the US investor wants to sell the plant in Nigeria but the
Nigerian government refuses (as it was 100% foreign owned) and will only approve the sale
if the US investor paid a $30m fee to some Nigerian government officials.
US Department of Justice officials are now investigating the actions of this US
investor. Does the US investor have anything to be concerned about based on the
application of the Foreign Corrupt Practices Act (US) based on the facts as set out?
3 marks
104258 Legal Aspects of International Business II Semester 1, 2017 Assignment Page 4 of 4

Question 7
Elvira is a painter with incredible talent but little fame. One of her paintings entitled Blue
Lady is a work of intense power and sensuality. In 2016 she sold it to Big Pty Ltd for display
in the main public entrance of the businesss new headquarters building. Several art critics
who attended the opening of the building mistook the painting for a long lost work of the
famous French artist Monet. These art critics wrote about it in their newspaper columns as
though they had made a great discovery. When people began flooding into the Big
Company headquarters building to see the painting Blue Lady the directors of Big Company
were delighted and claimed that the painting was probably painted by Monet during his blue
period.

Assuming these facts take place in India, does Elvira have any rights affected and is
there anything she can do? Explain.

3 marks

Question 8
M, a member of the intelligence agency of Q State defects to A State. M discloses that Q
State had planned and financed several terrorist attacks inside A State over the past 10
years and that this included the kidnapping and torture of the chief executive officer (CEO) of
one of the largest business firms in A State. M has disclosed that this kidnapping and murder
was made with this knowledge of the intelligence agency and the Q States Prime minister.
The daughter of the murdered CEO demanded that A State sue Q State in the ICJ. Both Q
and A State have recognised the jurisdiction of the ICJ to hear this international dispute.
Is Q State liable for the acts of these terrorists? How should the ICJ rule?

2 marks

Question 9
Work Co. (Work) in Country W contracted to purchase 100,000 tonnes of steel from Steel
City Co. (Steel City) in Country G at US$64 per tonne. Steel City delivered 85,000 tonnes to
Work at Works plant but it then informed Work it was not able to deliver any more. Work
was forced to purchase the remaining total of 15,000 tonnes of steel on the market but
waited 12 months later to purchase the steel at which time the steel price had jumped to US$
121 per tonne. Work then sued Steel City for the difference between the market price it had
paid and contract price on the 15,000 tonnes of steel that Steel City had not delivered.
Both Countries W and G are signatories of the United Nations Convention on Contracts for
the International Sale of Goods (CISG) and the parties contract designated the CISG as the
governing law.
What remedies would Steel City have to pay to Work? Please explain.
3 marks