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International Commercial Law - Random Test Questions
Can you answer these practice questions about international commercial law? Good luck!
You need to focus on a specific class? Try the rest of the series
Based on a course by Andreas von Goldbeck.
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Last updated: October 15, 2024
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| First submitted | October 12, 2024 |
| Times taken | 35 |
| Average score | 70.0% | Report this quiz | Report |
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1.
A company based in Country A (an EU member) plans to provide construction services
in Country B (also an EU member). The workers’ union in Country B demands that the
company comply with higher local labor standards, including specific wage rates. The
company argues that this requirement infringes on its freedom to provide services
across borders. Based on the Laval case (C-341/05), what is the most likely outcome
regarding the company’s obligation to comply with the local wage standards in Country
B?
The company must comply with the local wage standards in Country B as a requirement to provide services.
✓
The company is not required to comply with the local wage standards if they conflict with the terms agreed upon in Country A.
✓
The company must comply with local wage standards only if they are in line with EU directives on cross-border services.
✓
The company can ignore the local wage standards as long as it provides a minimum level of wages according to Country A’s standards.
✓
In the Laval case (C-341/05), the ECJ ruled that imposing local wage standards on a company from another EU member state could infringe on the company’s freedom to provide services across borders. The ruling favors the labor standards of the home country unless there is a clear reason to impose local rules. Thus, 9 the company from Country A would not have to comply with Country B’s wage standards under the Laval precedent.
2.
An EU member state introduces a new tax on sugary drinks to reduce health
issues. A multinational beverage company files an ISDS claim against the state. What could be a valid argument for the state to defend its tax?
The tax is a temporary measure
✓
The tax is necessary for public health initiatives.
✓
The company can afford to pay the tax.
✓
The tax will increase overall revenue.
✓
Defending the tax as a public health measure supports the state’s regulatory rights.
3.
A foreign investor has chosen ICSID as the forum for resolving a dispute with the government
of country M. If country M refuses to comply with the final arbitration award, what is the
investor’s best course of action to ensure enforcement?
Appeal the decision in the courts of country M
✓
Seek enforcement under the New York Convention
✓
Use ICSID’s enforcement mechanism, which is valid in over 160 countries
✓
File for a retrial under institutional arbitration rules
✓
ICSID’s enforcement mechanism allows for awards to be enforced directly in over 160 member countries, without the need to go through local courts.
4.
In the Karaha Bodas case, Pertamina argued that enforcement of the arbitral award violated
public policy. How did the U.S. court respond?
The court agreed and refused enforcement.
✓
The court narrowly interpreted the public policy exception and enforced the award.
✓
The court sent the case back for arbitration.
✓
The court refused to rule on the issue.
✓
The U.S. court held that public policy exceptions must be interpreted narrowly, allowing enforcement.
5.
A UK investor, Sarah, finds that her ISDS claim against an EU member state
for revoking mining rights has been dismissed due to lack of evidence.
What issue does this highlight about the ISDS process?
The process lacks fairness for investors.
✓
The burden of proof is on the investor.
✓
Investors can’t win claims against sovereign nations.
✓
All cases must go to public court first.
✓
Investors need to provide sufficient evidence to support their claims in ISDS cases.
6.
A global fast-food chain challenges a new regulation in a developing country
aimed at reducing unhealthy eating.
How might the government justify the regulation in ISDS proceedings?
By saying it follows international trends.
✓
By arguing it promotes public health and welfare.
✓
By claiming it will boost tourism.
✓
By asserting that the regulation is voluntary.
✓
This justification aligns with the state’s right to regulate for public health, reinforcing its legal standing.
7.
A beverage company from country F was operating in country G when civil unrest broke out.
The government of country G took no steps to protect the company’s assets, which were
destroyed in the violence. Under ISDS, what protection could the investor invoke?
Full protection and security
✓
National treatment
✓
Fair compensation for expropriation
✓
Cooling-off period requirements
✓
Full protection and security (FPS) obligates host states to take reasonable measures to protect foreign investments, including from damage during civil unrest or violence. The investor can argue that the state failed to meet this obligation.
8.
A contract specifies that the contractor will pay £2,500 per day for each day of delay in
completing a project beyond the agreed completion date. The parties agree that this amount is a reasonable estimate of the losses the client will incur.
What type of clause is this?
Penalty clause
✓
Liquidated damages clause
✓
Termination clause
✓
Indemnity clause
✓
The pre-agreed amount of £2,500 per day is described as a “reasonable estimate” of losses, not a penalty, making it a Liquidated Damages clause.
9.
A Canadian company and a Japanese company include a clause in their contract stating, “Any
dispute arising out of this contract may be resolved in the courts of Tokyo, but either party may
also pursue other jurisdictions.” Later, the Canadian company files a lawsuit in the U.S.
2
What kind of forum selection clause does this contract contain?
Exclusive forum selection clause
✓
Non-exclusive forum selection clause
✓
Mandatory forum selection clause
✓
General jurisdiction clause
✓
The clause allows disputes to be resolved in Tokyo or other jurisdictions, indicating that parties can choose more than one forum.
10.
An investor from country X has built a luxury resort in country Y. Recently, country Y passed
a law that significantly reduced the value of the resort by restricting tourism activities in the
area. The investor believes this amounts to an indirect expropriation. Which forum would likely
be the best venue for the investor to seek compensation, provided both countries are signatories
to the ICSID Convention?
The national courts of country Y
✓
Institutional arbitration through ICSID
✓
Ad hoc arbitration using local laws
✓
Appeal to the World Trade Organization (WTO)
✓
ICSID (International Centre for Settlement of Investment Disputes) is the most common forum for investor-state disputes when both countries are signatories. It provides neutrality, specialized expertise in handling investment disputes, and strong enforcement mechanisms.
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