Interplay of Ethics
Question 1- (33 Points)Both for-profit businesses (multinational or a family business) and not for profit organizations (charitable, universities, NGO’s) are increasingly confronted with ethical and “soft law” issues (“soft law” being not clearly legally binding obligations which nonetheless may become “hard” legally binding on organizations -such as company “Codes of Conduct”). Dealing with these issues may be difficult as the organizations may be “caught in the middle” between legitimate objectives (growth, profit, employee and shareholder welfare, NGO’s publicity…) and the risk of legal liability, loss of commercial reputation, demoralization of employees. The issues are wide-ranging and include environmental protection, corruption, humanitarian and human rights and privacy.Using examples (for instance, Alstom and Alstom/Veolia, Texaco-Chevron) the subject of assigned readings and class discussion and other sources if you desire (eg. Volkswagen, Siemens, Google, Total (Myammar, Mozambique, Holcim-Lafarge in Syria…) discuss the legal and managerial context of the need to deal with the interplay of ethics, soft and hard law in international business.Question 2 –(33 points)The recent stranding of the EVER GIVER super container ship in the Suez Canal for several days provide an excellent, if exceptional, example of the legal issues that may arise out of the transport of goods internationally.Note the possible interplay of many national legal systems in this situation that has already engendered claims that will surely give rise to disputes before law courts and arbitration tribunals:OWNER of Ship: JAPANESE -Shoei KisanLEASEE (renter) of the Ship : TAIWANESE-EvergreenOPERATOR of the Ship-GERMAN- Berhard SchultsCREW-INDIANSHIP REGISTERED in PANAMA flag of the ship-governing lawINSURANCE-LONDON (of course!)CERTIFIER of the Ship -USA-Bur shipping“TERRITORY”- thus Jurisdiction-EGYPT – Court of IsmaliaCONTAINERS 18,000!!! with the potential for disputes between sellers/buyers who owned the goods in an unknown number of ‘jurisdictions’ (countries)Claimsalready made include:EGYPTIAN Authority (Governmental -operates Suez Canal)-$916 MillionsYour first task is to provide an explanation of how two inter- connected international “lex mercatoria” mechanisms-INCOTERMS and LETTERS OF CREDIT arrangements used to greatly facilitate international sales contracts would govern a good portion of the disputes that may arise from this complicated situation, and notably those between sellers and buyers of the containers.You should discuss (A diagram with boxes is recommended to supplement your answer) the 4 party arrangement usually used to effect international sales of goods across borders (often as here by water). How do INCOTERMS allocate risk an responsibility? How do Letters of Credit protect the payment process and facilitate financing?Your second task is to discuss concepts of “excuses for non-performance” such as FORCE MAJEURE (and others if you believe they may be applicable) and how such a concept would apply in disputes relating to the late delivery of goods or waste (perishable goods) in the containers.Finallly, feel free to add any analysis you may wish on possible disputes arising between Insurers, shipowners, certifiers…. )3. Question 3 (34 points)International Business by definition involves more than one country and therefore potentially more than one’s national law system. However, there is no comprehensive, coherent international legal system for international business. Regulation, dispute resolution and legal professions remain overwhelmingly national with the exception of “lex mercatoria” mechanisms (of which the ICC in Paris is the best known developer-Incoterms, LC’s, Intlarbitration.Conflict is therefore inevitable.In addition, national legal systems may seek to extend their laws outside of the territory of their country, leading to intense debates over the Extraterritorial Application of law (especially but not exclusively, from the USA).Please first discuss how the conflict between national laws plays out in international business-you need to discuss the fundamental concepts of Jurisdiction, Choice/Conflict of laws and issues that may arise in the enforcement of Court judgments of arbitration awards issued in one country in another country. You should provide examples (cases studied in class-eg. Pyramids) or if you desire from outside research.Then, analyze issues that arise out of the extraterritorial application of law also with examples drawn from assignedreadings ad class discussions and, if you desire, outside research.THE EXAM MUST BE SENT IN typed, double spaced WORD FORM by AUP return email to the professor. You may wish to make a pdf form in copy for your records.Do not use ZIP, Internet as the professor will probably not be able to open them.