978-1285427041 Chapter 3

subject Type Homework Help
subject Pages 8
subject Words 3679
subject Authors Filiberto Agusti, Lucien J. Dhooge, Richard Schaffer

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
CHAPTER 3
RESOLVING INTERNATIONAL COMMERCIAL DISPUTES
CASES IN THIS CHAPTER
Scherk v. Alberto-Culver
Asahi Metal Ind. v. Superior Court of California, Solano County
Pebble Beach Company v. Caddy
Iragorri v. United Technologies Corp. & Otis Elevator Co.
M/S Bremen v. Zapata Off-Shore Co.
Finnish Fur Sales Co., Ltd. v. Juliette Shulof Furs, Inc.
TEACHING SUMMARY
Dispute resolution in international disputes must be cognizant of various cultures, legal systems,
and mechanisms for resolution. In terms of procedure, international legal disputes begin with
questions of jurisdiction, venue, and conflict of laws. The recent popularity of the Internet
(advertising items on Web sites and on-line ordering and contract-negotiation) has added a
wrinkle to these issues.
Alongside procedural issues are practical choices of which available mechanism or forum is
best suited for the parties. In business disputes, parties may choose to have their dispute heard
in their home or foreign court, or instead select mediation, arbitration, or inquiry. The choice of
where to hear a dispute, what law applies to resolving it and how a decision will be enforced are
factors that need to be considered. If an international business dispute is against a foreign
government or one of its agencies, special defenses may shield the governmental organization
from liability.
CASE QUESTIONS AND ANSWERS
Scherk v. Alberto-Culver
1. What were the Court’s reasons for upholding the arbitration provision?
2. What needs of international businesses were served by the Court’s holding? How were
these needs addressed?
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
page-pf2
Chapter 3: Resolving International Commercial Disputes
3. What factors would Alberto-Culver need to have shown in order to have overturned the
arbitration provision?
Asahi Metal Ind. v. Superior Court of California, Solano County
1. Why did the Court refuse to hold that the California courts had personal jurisdiction over
Asahi?
2. What activities would Asahi need to have engaged in order for the Court to determine
that it had purposefully availed itself of California law? Are some of these activities more
important than others? If so, which ones?
3. Did the Court give adequate weight to California’s interest in the safety of products dis-
tributed in the state? Why or why not?
1. On what basis did the court hold that Caddy had insufficient minimum contacts with the
United States such as to support the exercise of personal jurisdiction?
2. Is the court's focus on the passivity of Caddy’s website valid? What factors determine
whether a website is interactive or passive?
page-pf3
3. Is the Internet sufficiently different from non- electronically-based businesses to merit
different treatment for purposes of jurisdiction? Why or why not?
Answer: No. There still needs to be some action in the jurisdiction to meet minimum
contacts test.
Iragorri v. United Technologies Corp. & Otis Elevator Co.
1. What were the court’s reasons for refusing to apply forum non conveniens to the case
and requiring refilling of the litigation in Colombia?
2. Does the court’s opinion reward forum shopping to the extent the plaintiffs were likely to
receive a larger damages award in the United States than in Colombia? Why or why
not?
3. The court cited concern regarding the unstable political situation in Colombia as a
reason for refusing to apply forum non conveniens. Given the changes that have
occurred in the country in the past decade, would the court reach the same conclusion
today?
Answer: This question calls for student opinion. However, students may be requested to
review analyses of the Colombian judicial system prepared by the U.S. government and
the World Bank in formulating their opinions.
M/S Bremen v. Zapata Off-Shore Co.
1. What was the Court’s holding with respect to the general enforceability of forum
selection clauses?
page-pf4
Chapter 3: Resolving International Commercial Disputes
2. How would you define “public policy reasons” or “serious inconvenience” for purposes of
refusing to uphold a forum selection clause? What factors would you take into
consideration?
Answer: This question calls for student opinion.
Finnish Fur Sales Co., Ltd. v. Juliette Shulof Furs, Inc
1. What was the court’s holding with respect to the enforceability of the choice of law
clause?
2. What factors did the court utilize in its decision to uphold the choice of law provision?
3. How would you define a “fundamental” public policy that would cause a court to refuse to
enforce a choice of law provision?
Answer: This question calls for student opinion.
QUESTIONS AND CASE PROBLEMS
1. Answer: Jurisdiction refers to the power of a particular court to hear and decide a
2. Answer: The U.S. Court of Appeals for the Second Circuit vacated the district
page-pf5
Chapter 3: Resolving International Commercial Disputes
record was unclear as to the manner of protection afforded Feraud’s fashion shows by
French law as well as the protections afforded to alleged infringers generally, and
photographers specifically, under French law. The determination of whether the
protections provided by French law were sufficiently comparable to that required by the
public policy of New York was a question best addressed by the district court on a fully-
3. Answer: No. The subsidiaries of Goodyear did not have the necessary “
continuous and systematic” affiliation with the state of North Carolina so they could not be
sued there.
5. Answer: The favorability of a suit in U.S. courts depends on the interests of the
7. Answer: There is no correct answer to this question. The reciprocity requirement
has been subject to much criticism. These criticisms include the absence of similar
8. Answer: The court of appeals affirmed the district court's dismissal of the case
page-pf6
Chapter 3: Resolving International Commercial Disputes
other economic and cultural values. The court held that it would be inappropriate for a U.S.
9. Answer: The district court dismissed Hy Cite’s complaint for lack of personal
jurisdiction. The court held that badbusinessbureau did not have “continuous and systematic
MANAGERIAL IMPLICATIONS
1. Answer: Yes, I would include mandatory, binding arbitration provisions in the
contract with United States law and venue governing the transaction. My plans would not
2. Answer: The existence of a Web site, alone, will not confer foreign jurisdiction in
Alaska. The question, however, makes it appear that the consumer has now purchased the
Chapter 3: Resolving International Commercial Disputes
ETHICAL CONSIDERATIONS
The answer to this scenario depends on the ethical theory one applies to the question. For
example, applying the theory of ethical egoism, it is clear that Union Carbide acted in its own
self-interest in forcing the litigation to India. Applying the teleological framework of moral
relativism, it may be contended that the terms of the settlement were proper given the location
of the catastrophe and financial circumstances of the largely poor and undereducated victims of
the gas leak. Applying utilitarianism, the financial well-being of the victims may have been
enhanced had the litigation been permitted to proceed in the United States, although it is equally
possible that this well-being would have been diminished by procedural delays and appeals. On
the other hand, if one determines that the greater good resides with those interested in the
continued financial well-being of Union Carbide, then the outcome was ethically defensible.
Applying deontological frameworks, in particular, the categorical imperative, it may be seriously
questioned whether anyone would want Union Carbide’s conduct to serve as an example for
confronted with similar catastrophes in the future. Furthermore, the settlement may be viewed
as a means to the end of preserving the company’s assets and shareholder value at the
expense of the victims.
Finally, applying contractarianism, it may be asked whether Union Carbide abided by its duties
and responsibilities to the community, especially given the lethal nature of its product and the
information gap between itself and the surrounding inhabitants.
TEACHING SUGGESTIONS / COOPERATIVE LEARNING ACTIVITIES
1. Internet Jurisdiction
An interesting issue of late is whether a company that maintains an Internet presence is,
by virtue of that presence, subject to the jurisdiction of various fora. While the law is still
evolving, courts have begun to follow a “spectrum analysis.” The spectrum analysis considers
the extent of interactivity and affirmative commercial aspects of sites
Provide students with the names of two-four Web sites, or make up your own, that fall on
this spectrum of activity (i.e., an informational site that does not allow on-line orders, a site that
provides an e-mail address and answers questions, an on-line store, such as
www.amazon.com).
a) Ask students to assess whether a customer in Germany could sue the respective
businesses in Germany.
b) Do any of the sites include forum selection or choice of law clauses?
Internet Exercises
1. Arbitration continues to enjoy popularity as a method of international dispute
resolution. Nonetheless, the arbitration process will be only as good as the arbitration clause
drafted agreeing to it. Dividing students into groups (perhaps as part of a larger contract
negotiation exercise), ask paired groups to negotiate and draft an arbitration clause. One helpful
link to various international ADR sites is: http://www.cpradr.org/
2. Once a party obtains a foreign arbitral award, it still must be able to enforce that
award. As apparent from jurisdictional cases concerning due process and minimum contacts,
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom
use.
Chapter 3: Resolving International Commercial Disputes
countries may enforce awards to differing extents and under differing circumstances. To provide
some clarity, several countries adhere to the UN Conventions on Arbitral Recognition and
Enforcement. Using www.google.com, find the text of U.N.C.A.R.E. and apply it to one of the
cases discussed in Chapter 3 or one of your own. Ask students to research and consider
whether the arbitration award would be enforced under this convention.
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom
use.

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.