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International Commercial Law - International Law and Global Commerce

Can you answer these practice questions about international commercial law? Good luck!
Based on a course by Andreas von Goldbeck.
Quiz by baptistegorce
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Last updated: October 8, 2024
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First submittedOctober 8, 2024
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1. A foreign technology company restructures its operations, moving its headquarters to a country that has a Bilateral Investment Treaty (BIT) with its target market. Six months later, the target market introduces a new data privacy law that negatively affects the company’s profits. The company files a claim under the BIT. What will the tribunal most likely examine?
Whether the company moved its headquarters solely to benefit from the BIT protections.
Whether the data privacy law violates the country’s constitution
Whether the company has legal standing to sue under local laws
Whether the law provides enough time for the company to comply with its new requirements.
Inspired by the “Philip Morris” case, the tribunal will look at whether the restructuring was a strategic move to gain access to BIT protections after the regulatory risk became apparent, which could be considered "treaty shopping".
2. An international cosmetics brand sues a country under a BIT for implementing new environmental regulations that ban certain ingredients in its products. The country argues that the regulation is in the public interest. Under what circumstances would the country’s defense be valid?
If the ban violates other international environmental treaties.
If the regulation is discriminatory toward foreign companies.
If the regulation is applied equally to all companies and not arbitrarily.
If the regulation is part of a larger trade agreement.
Similar to cases involving regulatory measures, the defense would be valid if the regulation is not discriminatory or arbitrary and serves a legitimate public interest, such as environmental protection.
3. An energy company is accused of complicity in labor rights violations in a foreign country where it operates. Local workers sue the company in a U.S. court under a statute allowing foreign citizens to bring claims for international law violations. The court must decide whether it has subject-matter jurisdiction. What factor is most important?
Whether the company has any assets in the U.S.
Whether the alleged violations occurred in connection with U.S. business operations.
Whether the company’s executives are U.S. citizens.
Whether the workers first sought redress in local courts.
The key issue, as seen in the “Kiobel” case, is whether there is a sufficient connection between the alleged violations and U.S. territory or business operations, which would establish jurisdiction.
4. Foreign nationals file a lawsuit in a U.S. court against a multinational mining corporation, seeking damages for environmental harm caused by a spill at a mining site located outside the U.S. The court dismisses the case, stating that the damages occurred entirely abroad and lack a sufficient connection to the U.S. for the case to proceed. What legal doctrine did the court likely apply?
The doctrine of forum non conveniens.
The presumption against extraterritoriality.
The doctrine of sovereign immunity.
The act of state doctrine.
The presumption against extraterritoriality, as highlighted in the “Kiobel” decision, limits the application of U.S. laws to cases that have a substantial connection to the U.S.
5. A company headquartered in a European country enters into a joint venture with a local firm in Asia. After a change in government, the local firm is nationalized without compensation. The foreign company files for arbitration under a BIT between the two countries. What is the most likely argument the company will use?
That the nationalization violates the local firm’s rights under domestic law.
That the nationalization constitutes an expropriation without compensation, violating the BIT.
That the nationalization breaches environmental regulations.
That the government did not provide enough time for negotiation before the nationalization.
The foreign company will likely argue that the nationalization of its investment violates the BIT’s provision against expropriation without adequate compensation.
6. A global pharmaceutical company initiates investor-state arbitration after a host country revokes its patent rights. The country argues that the revocation was necessary to protect public health and ensure access to affordable medicine. What principle must the tribunal balance in deciding the case?
The country’s right to regulate in the public interest versus the investor’s right to intellectual property protection.
The investor’s right to fair treatment versus the public’s right to affordable medicine.
The country’s sovereignty versus its international trade obligations.
The investor’s right to compensation versus the country’s financial resources.
The country’s right to regulate in the public interest versus the investor’s right to intellectual property protection.
7. Which of the following best describes the main principle of the Calvo Doctrine?
Foreign investors should be compensated promptly and effectively for any expropriated property.
Foreign investors have the right to seek diplomatic protection from their home country in case of disputes with the host state.
Foreign investors must rely on the local legal system of the host state for resolving disputes and cannot seek international intervention or diplomatic protection.
. Foreign investors are entitled to Most-Favored-Nation (MFN) treatment when investing in a host country.
The Calvo Doctrine, named after Argentine jurist Carlos Calvo, argues that foreign investors should not have special rights or protections beyond those granted to local citizens. According to this doctrine, investors must rely on the domestic legal remedies of the host state and cannot seek diplomatic protection or international intervention from their home governments. This principle arose as a reaction against foreign interference in the affairs of developing countries, especially in Latin America. It contrasts with doctrines like the Hull Rule, which advocates for international protection and compensation for foreign investors.
8. A foreign investor from Country A owns a mining operation in Country B. Due to political unrest, Country B’s government seizes the mining operation without offering immediate compensation. Later, the government proposes to compensate the investor in local currency over the course of 20 years, but the total compensation is well below the market value of the mine. The investor brings a claim under a Bilateral Investment Treaty (BIT) between Country A and Country B. If the investor wanted to make a Hull Principle-type argument, what would be their most likely claim?
The compensation offered by Country B violates the Hull Principle because it is neither prompt nor adequate.
The Hull Principle requires compensation only when the expropriation is illegal under international law.
The compensation offered by Country B does not violate the Hull Principle because some form of payment was offered.
The Hull Principle is irrelevant because the investor accepted the risk of investing in a politically unstable region.
Hull Principle-type argument would assert that compensation must be “prompt, adequate, and effective.” The proposed compensation in this case is delayed over 20 years and undervalued, thus failing to meet those criteria.
9. A foreign investor’s property is damaged during civil unrest in Host Country X. The local laws of Country X provide no compensation for such damage. The investor claims that Host Country X has violated its obligations under international law. If the investor is arguing based on the “Minimum Standard of Treatment” in international investment law, what is the most likely basis of the claim?
Host Country X must compensate the investor because international law requires a baseline standard of protection for foreign nationals and their property, regardless of local laws.
Host Country X must apply its local laws equally to foreign and domestic investors, and if domestic investors are not compensated, the same applies to foreign investors.
Host Country X must provide compensation only if it has a bilateral investment treaty (BIT) with the investor’s home country.
Host Country X must compensate the investor under the principle of diplomatic protection, whereby the investor’s home country can intervene on their behalf.
The Minimum Standard of Treatment under international law requires host states to provide a basic level of protection for foreign nationals and their property, even if local laws do not offer compensation in such cases.
10. A foreign investor owns a large manufacturing plant in a country that recently passed a law requiring significant reductions in carbon emissions. The investor argues that this new law violates their investment rights under a bilateral investment treaty (BIT). The government defends the law as necessary for protecting the environment. If this dispute is brought before an international investment tribunal, what is the tribunal’s primary focus likely to be?
Whether the law is part of a broader international environmental initiative.
Whether the law is consistent with global environmental standards and treaties.
Whether the law is a legitimate, reasonable, and non-discriminatory exercise of the state’s regulatory power.
Whether the investor was given adequate notice and time to adapt to the new regulations.
The tribunal’s primary focus will be on whether the law constitutes a reasonable and non-discriminatory public policy measure. This ensures that the law’s impact on the investor is balanced against legitimate public policy objectives.
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