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International Legal Challenges File

The vice president is concerned that the company is undertaking a number of international projects without a complete understanding of the risks that such activities entail. Specifically, the VP would like further thoughts on the following issues:

1. In one case, a subsidiary of Colossal Corporation has negotiated a contract that calls for any disputes to be settled in the courts of Zintar, a relatively small African country that supplies raw materials for some of Colossal’s European operations. The VP would like a discussion on the wisdom of this contract provision and thoughts on possible alternative approaches if the contract were to be renegotiated.
2. In a second case, a Colossal subsidiary in Bartan, an Asian country, wants the company to enter into a sales contract with a subsidiary there, using the UN Convention on Contracts for the International Sale of Goods (CISG) as the controlling law. The VP needs to know the ramifications of this option and decide whether it is a good idea.
3. Colossal management also needs to know whether arbitration is a good idea for a dispute resolution provision for both domestic and international contracts and why.
4. The parent company, Colossal Corporation, has been sued in the country of Notso in South America. The lawsuit claims millions of dollars in damages due to supposed pollution at a mine that Colossal owned there. Since Colossal has already decided to exit that country and sold the mine there, the company’s regional VP believes there is no risk if the company is taken to court in Notso. He says that even if Colossal loses there and a court judgment is rendered against it, there is no danger because the company will have left the country. The VP needs to know if he is right.
5. Finally, one of Colossal’s suppliers in the country of Edfin no longer wants to supply needed raw materials for Colossal’s factories in the United States, unless Colossal agrees to pay them by opening a letter of credit. Up to now, the company has paid them after delivery to the United States, which has allowed Colossal to inspect the quality of the shipments before sending payment. What are the ramifications of granting Edfin’s request?

Resources:

Step 5: Review Colossal’s International Legal Challenges

Successfully completing the Turnip Plaza report, you’re ready to review your next assignment: the International Legal Challenges case file.

You open the file and read over the specifics of this situation. You soon see that VP Dodger is concerned about some of the risks involved with a number of Colossal’s international projects.

In the next step, you will gather the information you need to identify important issues for the VP.

Step 6: Gather and Analyze the Information

While you have some general awareness that there are many ramifications of international transactions from a legal perspective, including dispute resolution provisions, you realize that you need to know a lot more about this subject before you can attempt to respond to the VP’s questions.

You begin by researching international law, international contracts, an introduction to alternative dispute resolution, and international dispute resolution.

Step 7: Engage in the International Legal Challenges Discussion

Discussion with Colleagues

Now that you’ve gathered and analyzed information on the International Legal Challenges case file, Vice President Dodger would like you to discuss your thoughts with the other members of his special investigations team. He sends you two requirements for this discussion:

First, each participant is to post an initial response to at least two of the five questions noted in the International Legal Challenges file. This should be completed during Week 5 and should meet the following requirements:

• Include a specific recommendation of what action, if any, the VP should take based on your analysis and conclusions.
• Support your conclusion with references to legal principles and laws.
• These posts can be as long or as short as you need in order to effectively make your points.

Second, each participant must provide a substantive response to at least one posting from a colleague in the discussion, critiquing the initial post by appealing to legal and business considerations. This should be completed during Week 5.