Introduction to Business Law - Assignment Example

Introduction to Business Law Assessment 01: Introduction to Business Law (Undergraduate) ID *Declaration: I hereby declare that this assignment is my own work and understand that if there is any suspicion of plagiarism my work will be referred to a Disciplinary Committee. This may result in my exclusion from the program. Business Law: Coursework 1 Q1 (a) A civil law system is one that is based on the Roman and Greek system of law, which emphasizes substantive rights, foremost of which are personal and real rights, and excludes procedural rights. This system of law is characterised by codification, and during trials, judges’ and courts’ discretions are relatively restricted as opposed to the court-based system of common law. Its advantage lies in its constancy and transparency by virtue of the fact that its provisions have been codified but this advantage is also its greatest disadvantage. On the other hand, common law trials are governed by the decisions previously made by judges in earlier similar cases and the customs of the place (Doeker-Mach & Ziegert 2004 54). (b) Sharia Law is the Islamic system of law and governs all aspects of Muslim life including government, legislature, civil, public and personal. This is because in Islam, church and government are not separate spheres. Its primary sources are the Koran or Qur’an (the Muslim holy book) and Sunna (customs and practices of Muhammad and handed down to his followers). Sharia Law is underpinned by the principle that nothing can take precedence over the Koran or the Sunna, and legislation is allowable only if it does not contravene or conflict them (Khan 2003 185). (c) International Law is the set of rules and regulations that govern the conduct between and among states and has for its sources: international conventions or treaties, international custom, general principles of law, judicial decisions and teachings of respected publicists (Malanczuk & Akehurst 1997 1, 36). The primary arbitrator of international law is the International Court of Justice (ICJ), which supplanted the Permanent Court of International Justice (PCIJ) after the WWII. After WWI, the League of Nations created the PCIJ and was tasked to arbitrate international conflicts. The advent of the second world war, however, necessitated the creation of a new international organization that would veer away from the Versailles System and be responsive to the new world order. The United Nations was born in 1945 and subsequently the International Court of Justice, the establishment of which was provided in the UN Charter itself, in 1946. Its seat is in the Peace Palace in The Hague, Netherlands (Gill 1989 5-10). Its powers and jurisdiction include: interpreting treaties; resolving any question of international law; determining breach of international obligations, and; reparations for such breaches (Art. 36(2), Statute of the ICJ). Q2 (a) The NAFTA or North American Free Trade Agreement is a trilateral economic agreement between the US, Mexico and Canada signed in 1994 whilst the GATS or General Agreement on Trade Services is an extension of the GATT, which governed the liberalisation of merchandise trade, for the liberalisation of the services sector and took effect in 1995 as a result of negotiations during the Uruguay Rounds (Condon et al 87-90). The main differences between the two agreements are: some of the liberalisation tools, like those relating to national treatment, market access and the right of non-establishment, are not compulsory in GATS but are in NAFTA; the agreement coverage in NAFTA is general unless excluded whilst GATS lists only those covered and excludes those not listed; government procurement in NAFTA exceeds that of GATS, and; GATS subjects subsidies for service industries to its provisions whilst NAFTA does not (Hoekman 98-99). (b) The ILO (International Labour Organization) is another IGO that works for the protection of workers’ rights. It is a tripartite arm of the UN that seeks to bring together employers, workers and government to advance the plight of the workers (ILO 2010). Some of the guidelines set forth by OECD for multinationals are: appropriate disclosure of material information to the public; implement fair, lawful, non-discriminatory practices in employment and industrial relations; employ safe environmental practices in all aspects, including educating and training employees in environmental and safety issues, and; help in battling bribery (OECD 2001). Q4 (a) Some sectors traditionally closed to FDIs because they are either sensitive due to security concerns or they are reserved to the nationals for development are mining, petroleum, banking, media and telecommunications (Pollan 2006 58-59). Some exceptions to these traditionally closed sectors to foreign investments are: Russia and Kazakhstan whose mining sectors are open to FDIs (OECD 2002 81); Azerbaijan and Venezuela which have opened themselves to FDI in their petroleum sectors; Brazil and Argentina, both of which have banking sectors made available to foreign investors (GAO 2001 120). (b) The foreign investment agreement must contain provisions on the following guarantees: guarantee against expropriation; dispute settlement, which can be found in the foreign investment legislation of states; tax and non-tax incentives; local collaboration; screening entry of foreign investments; capitalisation requirements; environmental protection; export targets; local equity. The investor’s lawyer must, to protect his client-investor, ensure that the agreement must contain the aforesaid guarantees. It must, for example, guarantee that the property of the investor must not be made subject to expropriation by the government at any time. The agreement must also contain a provision that provides that in the event of disputes between it and other entities or with the state, a provision contained therein provides for a process of dispute resolution to resolve the conflict. In addition, the investor must also be guaranteed that the government will not impose it exorbitant taxes and shall enjoy the same tax incentives as the local counterparts are enjoying. Provision relative to environmental measures must also provide that in the event the state will implement legal measures for the benefit of the environment, that such measures shall be based on reasonable and objective criteria. Finally, the agreement must also provide the investor security against unjustifiable export quota imposed by the state that is impossible to meet by the investor or unfairly forces the investor to compete with its multinational branches in the other parts of the worl (Sornarajah 2010 102). Q5 (a) Two conditions under which a member state may adopt a safeguard measure are: if, after determination, a product or products is/are being imported into its territory in such increased quantities, and; if, the importation causes or threaten to cause injury to the domestic industry which produces the same or similar product (WTO Agreement on Safeguards). An example of the first condition was the case of Argentina, which imposed safeguard measures in the form of specific duties against the EU import of footwear purportedly on the ground that it caused injury on its domestic footwear industry. The WTO Panel however, found Argentina to have breached the condition set forth in the Safeguards Agreement because there was a lack of pre-determination that such imports were of increased quantities causing injury to its domestic industry (Argentina – Safeguard Measures on Imports of Footwear 1999 Dispute S121). Another example is the case of Korea, which imposed an import quota on imports of dairy products of certain EU countries. The Panel held that the definitive safeguard imposed by Korea violated the conditions set forth in Safeguards Agreement because there was no adequate analysis that the dairy imports caused injury to the Korean dairy industry (Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, 1999 Dispute DS98). (b) The Panel should find the Andor Republic to be in violation of the national treatment rule as set forth in Article III:2 of GATT 1994. The national treatment rule provides that once imports have been cleared entry into the domestic market, they should be given the same treatment as that of similar products produced domestically. The cola soft drinks belong to the soft drinks family and directly compete with the other soft drink classes, and therefore, the higher tax sales on the cola imports constitute discriminatory measure against them. This is the same ruling held by the WTO Panel in the case of Korea – Taxes on Alcoholic Beverages, 1997 Dispute DS84, where Korea was found to have violated the national treatment rule when it imposed higher taxes on imported alcoholic beverages in accordance with its Liquor Tax and Education Tax Law, when the same laws was not made to apply to soju, a domestically produced alcoholic drink that competed directly with said imported alcoholic beverages. Q7 (a) The ICSID or the International Centre for the Settlement of Investment Disputes is an independent entity operating internationally and was established under the Convention on the Settlement of Investment Disputes between States and Nationals of other States in 1965. The ICSD was established to serve the function of arbitration and conciliation venue for disputants in international investment cases, especially investors-states disputants. It has membership/signatories of over 140 states. Although it is a medium of dispute resolution, it is not a compulsory process and approval of the parties to have themselves be made subjected to its jurisdiction must first be had. Its end goal is to eliminate the hindrances to the free flow of investments brought about by the lack of dispute resolution medium of investors (ICSD 2010). (b) The facts of the case are that the ISP buyer bought in State A; used item in State B, and; sued in State C. The issue here involves a conflict of laws: which law, A, B or C, should apply? Using the “vesting of rights” approach, the law of the place where the contract was entered into governs the case, in this case State A (Sterba 11-31, 11-32). On the other hand, according to the most significant relationships test there must be a determination of where the following mostly occurred: where the injury or damage occurred; where the conduct causing damage took place; domicile, residence, nationality, place of incorporation of the parties, and; where the relationship between parties started. In most of these questions, the answer is State A. Finally, under the governmental interest test, the court determines which competing states has the most interest in the application of its laws, if the laws conflict. The competing governmental interests may fall under the following: false conflicts, when only one state has interest; true conflicts, more than one has interest, and; unprovided-for, when no states are interested to apply its law (ILO 2005). The only competing interests here are State A, where defendant resides and State C, where the action is filed. On the basis of theses different approaches and the preponderance of results, the court should apply the law of State A. References: Argentina — Safeguard Measures on Imports of Footwear, 1999 Dispute DS121. Collins, M. & Bosworth, B. (1994). The New GATT: Implications for the United States Washington D.C.: Brookings Institution Press. Condon, B. & Sadka, J. & Sinha, T. (2003). Insurance Regulation in North America: Integrating American, Canadian, and Mexican Markets, The Hague: Kluwer Law International. Doeker-Mach, G. & Ziegert, K. (2004) Law and Legal Culture in Comparative Perspective, Germany: Franz Steiner Verlag. GAO (Sept 2001). Free Trade Area of the Americas Negotiators Move toward Agreement that will have Benefits, Costs to U.S. Economy: Report to the Ranking Minority Member, Committee on Finance, U.S. Senate. Washington D.C.: DIANE Publishing. Gill, T. (1989). Litigation Strategy at the International Court: A Case Study of the Nicaragua v. United States Dispute, The Netherlands: Martinus Nijhoff Publishers. ICISD (2010). About ICSID, International Centre for the Settlement of Investment Disputes. http://icsid.worldbank.org/ICSID/ICSID/AboutICSID_Home.jsp. ILO (2005). Choice of Law in Product Liability Actions. http://www.internationallawoffice.com/Newsletters/Detail.aspx?r=11066. ILO. (2010). International Labour Organization. http://www.ilo.org/global/lang--en/index.htm Khan, A. (2003). Islam, Muslims, and America: Understanding the Basis of their Conflict, US: Algora Publishing. Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products, 1999 Dispute DS98. Korea – Taxes on Alcoholic Beverages, 1997 Dispute DS84. Malanczuk, P. & Akehurst, M. (1997). Akehursts Modern Introduction to International Law, 7th ed., New York: Routledge. OECD (2002). Foreign Direct Investment and the Environment: Lessons from the Mining Sector, Paris: OECD Publishing. Organisation for Economic Cooperation and Development (2001). OECD Guidelines for Multinational Enterprises 2001: Focus: Global Instruments for Corporate Responsibility, Paris: OECD Publishing. Pollan, T. (2006). Legal Framework for the Admission of FDI, Ultrecht: Eleven International Publishing. Sornarajah, M. (2010). The International Law on Foreign Investment. Cambridge University Press. Statute of the International Court of Justice. WTO Agreement on Safeguards. Read More