DANIEL ARTHUR LAPRES

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INTERNATIONAL BUSINESS LAW
 
 
 

COURSE DESCRIPTION

This 42 hour course is dispensed at the Institut Supérieur de Commerce in Paris to students in the MBA program in International Business Management. The course is intended to familiarize participants with the rules of international business law in particular as they relate to issues of current interest.

More particularly, it is comprised of two modules. The first introduces the students to the basic rules of public international law and to international economic regulation; the second to the basic rules of private international law and those governing international trade, and the settlement of private international commercial disputes.

Frequent recourse is made to economic analysis to explain legal rules.
 
 

MATERIALS

In addition to the book of readings which will be distributed to participants, ample use should be made of the materials on the Professor's Webliography on International and Comparative Business Law, in particular the sections on Public and private international law and on International trade

For a genreal introduction to the subject matter, students are also referred to the aricles of Daniel Laprès on comparative law, on the relations between law, morals and ethics, on international law and on e-commerce law.

For additional readings, students are referred to Richard Schaffer, Beverly Earle, and Filiberto Agusti, International Business Law and its Environment, South-Western, New York, 2005 in particular chapters 4, 5, 6, 7, 9, 10, 11, 12, 16 and 17.
 
 

STUDENT WORK ASSIGNMENTS

Each assignment below should be prepared before the class, including those for the first class. They will be collected before the cases are discussed. Reports should contain about 500 words and should identify the relevant facts, the decisive issues and an analysis of the outcome.
 
 

OUTLINE

CLASSES 1-2:

Topics:
Subjects of public international law
Sources of public international law
Jurisdiction

Web Reading:
Jessup on Public International Law
Globalex, Introduction to Public International Law

Assignment:
LICRA vs Yahoo, the nazi memorabilia case

Assignment:
Barcelona Traction Light and Power, International Court of Justice

A group of shareholders who are citizens of Belgium invest in a company
incorporated in Canada, the only business of which consists in the production and distribution of electricity in Spain. The operations in Spain are carried on through a branch of the Canadian company.

At a certain point in time, a group of Spanish holders of bonds issued by the Canadian company sue the Canadian company before the Spanish courts alleging that the Canadian company has defaulted on the payments on the bonds. The Spanish court of first instance finds in favour of the Spanish bondholders, declares the Canadian company in default on the bonds, seizes the Canadian company's assets in Spain, auctions them off, and declares the Canadian
company bankrupt.

What are the recourses of the Belgian shareholders and what are their chances of success?

CLASS 3:

Topics:
Introduction to the principal international governmental organizations (IGOs) affecting international trade
Constitution of IGOs

Functioning of IGOs
Immunities of IGOs

Web reading:
Write a case report on the case involving A Legal Status for NGOs in Contemporary International Law? Emanuele Rebasti and Luisa Vierucci

Assignment:
Select an IGO that regulates international business and identify its objects and describe its decision-making process.

Assignment:
Is the European Union an IGO or a state?

Assignment:
Write a case report on the case involving Dominique Strauss Kahn ? Sofitel, New York - International Monetary Fund - Immunities

CLASSES 4-5:

Topics:
Introduction to the principal international governmental organizations (IGOs) affecting international trade
WTO internal decision-making
WTO principal rules (trade concessions, quantitative restrictions, dumping, subsidies, exceptions)
WTO and regional groupings
WTO and developing countries
WTO dispute settlement

Web Reading:
Introduction to the World Trade Organization

Assignments:
Japan v European Union - the Screwdriver case
Mexico v United States - the dolphin case
La République Populaire de Chine est-elle coupable de dumping social?

CLASS 6:

Topics:
Regulation of international finance
International corruption
Money laundering

Web readings:
The OECD Anti corruption Convention
The OECD Anti Money Laundering Standards
JP Morgan agrees to pay $ 264 M of hiring princelings
BNP Paribas to pay $8.9 billion to U.S. for sanctions violations
Le risque pénal dans les relations d'affaires avec la République

Assignment

Un avocat parisien reçoit un de ses meilleurs clients dans son cabinet et apprend que le client veut engager ses services pour monter une société à Hong Kong.

Le client dit à l'avocat qu'il amassé une somme d'environ 100.000 Euros en espèces provenant de ventes en liquide non déclarées à partir des diverses boutiques dans son réseau de magasins de détail.

Le client propose de porter la somme en plusieurs fois jusqu'à Hong Kong dans ses valises et de déposer l'argent dans un compte qu'il contrôlera à travers un prête-nom.

Ce prête-nom ensuite fera des avances de trésorerie à la société française.

Le client demande à l'avocat de lui dire quel est le montant maximum qu'il peut sortir du territoire sans avoir à le déclarer aux douanes. Aussi, il demande à l'avocat parisien de le mettre en relation avec un confrère de Hong Kong qui saura assurer la mise en oeuvre du projet sur place.

Si vous étiez l'avocat parisien, que feriez-vous?

CLASS 7:

Topics:
Subjects of private international law
Sources of private international law
Choice of law
Jurisdiction
Enforcement of foreign judgments

Web sources:
United Nations Convention with respect to the International Sale of Goods (Vienna Convention)
Hague Institute for Private International Law

Case studies:
LICRA vs Yahoo, the nazi memorabilia case
International Shoe - Judas Priest

Assignment: Applicable law in matters of contract
An American tourist comes to France for a holiday. He goes into a boutique on Boulevard Saint-Germain and buys a couch. He pays cash. He gets a receipt on the letterhead of the boutique which identifies the couch, indicates the price, that it has been paid, and that the price includes the cost of freight, insurance and duties to the New York apartment of the buyer.

72 hours later, after his return to New York, the customer measures his living room and decides that the couch is too big. So he immediately sends a fax to the Paris boutique, which the boutique receives, stating that he cancels the order.

In the meantime, the boutique has already had the couch loaded onto a ship toward New York.

Suppose that under French law, any consumer has the right to cancel any contract with a merchant within 7 days of the conclusion of the contract. Suppose that under New York law, any consumer has the right to cancel any contract with a merchant within 48 hours of the conclusion of the contract.

Assuming that either a New York or a Paris court would accept jurisdiction to hear the case, what are the US customer's chances of getting his money back?
 

CLASS 8:

Topics:
International contracts (I):
- offer and acceptance
- battle of the forms
- electronic contracts

Web sources:
Guide to International Trade Law Sources on the Internet
European Union Electronic Commerce Directive
International Institute for the Unification of Private Law (UNIDROIT) articles 3.4,

Assignment - The battle of the forms in international sales
A French exporter of textile weaving machinery receives a letter from an American company containing a document on the letterhead of the US firm and which is entitled "Order". The US firm orders a weaving machine from the French exporter and indicates the seller's stock keeping unit reference and a price of € 500,000 DDP as per the catalogue, delivery whenever possible. The American buyer's form states on its front that "All other terms and conditions of this order appear on the back hereof". On the reverse side, there are such terms which include the following provision: "This contract shall be governed by the law of the State of New York."

The French exporter decides to accept the order and mails back to his US customer, who receives, his standard form of "Conditions de vente" (terms of sale). On its face, the French exporter reproduces the stock keeping unit, the price of € 500,000 and states that delivery will be carried out within 30 days. This form also makes reference on its face to the "Autres conditions de vente" (other terms of sale) on the reverse side. Indeed on the reverse side of the "Conditions de vente", there is a provision which states that "Ce contrat sera régi par la loi française" (This contract shall be governed by the law of France).

After exchange of these documents, the French exporter makes the machine for delivery. But, in the meantime, the US buyer has run into a major problem: his own customer, for whose production it has ordered the French machine, has gone bankrupt and the US firm no longer needs (or wants) the French exporter's machine.

Can the US buyer get out of the deal? On what basis? Please refer to the relevant articles of the UN Convention on the International Sale of Goods (Vienna Convention).

Suppose now that the French exporter's shipment reaches the buyer's warehouse where it is received and, after inspection, the buyer claims deficiencies in the machine and writes the seller to take it back without charge. Would the result be the same?

Suppose now that the transaction is conducted by e-mail and that the respective standard forms are sent as PDF file attachments which neither party ever actually opens though they reach their respective designated (in advance) e-mail boxes. Applying the EU Directive's relevant provisions, what would the result be?

CLASS 9:

Topics:
International contracts (II)
- representations, errors and fraud in international contracts
- transfer of ownership - reservations of property
- warranties - implied and contractual
- transfer of risks - INCOTERMS etc.
- international transportation
- international insurance

Web sources:
Guide to International Trade Law Sources on the Internet
European Union Electronic Commerce Directive
International Institute for the Unification of Private Law (UNIDROIT) articles 3.4, 3.5 and 3.6

Assignment: Ownership
On April 10, 2001, an art dealer from New York City places an order with a French dealer for an original Picasso painting. The price is F 5 million FOB Paris Roissy Charles de Gaulle. The price is paid at the time of signing the order. According to the contract, the painting is to be loaded on board no later than May 15.

On May 1, 2001, a well known Museum in New York City, not knowing that the painting has already been sold, offers the French dealer F 6 million. The French dealer decides to sell the painting to the Museum; they sign a bill of sale and the second buyer walks away with the painting.

Considering himself to be quite honest, the French dealer then writes to the New York dealer apologizing for the change of plans, returning his payment and offering him a special effort on his next purchase as compensation for his disappointment. In closing he consoles the New York dealer by telling that in any case he will have easy access to the painting which will be on exhibit at the  Museum right around the corner from his Gallery!

The New York dealer decides to sue to get the painting. What are his chances of success?
 

CLASS 10:

Topics:
transfer of risks - INCOTERMS etc.
international transportation
international insurance
warranties - implied and contractual
breaches
remedies
excuses for non-performance

Web sources:
Pace University Center for International Commercial Law in USA

Cases:
United Airlines - Bates - Falcone

Assignment :
In pre-Khadafi times, a French engineering and construction company accepts a contract to build a highway across the desert in Libya. The contract is with a Libyan company owned by a group of private Libyan investors.

Shortly after work is started on the highway, Khadafi takes power. The new government promptly triples the import duties on all imported asphalt.

Secondly the new government enacts a law requiring that all transportation within Libya of certain products (including specifically asphalt) must be carried out by Libyan nationals. Consequently, the French company must now contract the transportation of its asphalt through Libyan companies whereas it had intended to organize internally this strategic activity. The result of the law in practice is that the fuel supplies are sporadic, unpredictable and insufficient. Consequently, the contractor's equipment progressively rots in the Libyan desert.

Still the French company considers itself force to continue building the highway, otherwise how would it ever get paid anything. And the Libyan companies and officials with which it has contact all say that eventually the Libyan Government will make an effort to reward total completion of the highway.

Finally the highway is completed but late.

The Libyan invokes the delay to refuse to make the last payment of 33% of the price of the project.

The contract expressly provides that:

"A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences."

The French contractor asks what are its chances of success in the upcoming arbitration.

Assignment:
A French importer and a Japanes exporter have concluded a contract for the importing of rice into France. The contract was concluded on June 1. The contact price is US $ 100 per ton. The delivery was to be made CIF (cost, insurance and freight) Le Havre. The goods were to be loaded onto a vessel at Yokohama on June 30. Payment was to be made by presentation by the exporter of the invoice and shipping documents at the counters of the bank of the importer in France.

Had the goods been loaded on time, the documents would have reached the French bank on July 30, and the goods would have reached Le Havre on August 30.

In the end, the Japanese seller does not deliver the goods and does not inform the buyer that no delivery has been made.

Considering that the exporter has breached the contract, the importer wants to know what might the damages that it would collect in court.

Assume that

On June 30, the price of a ton of rice at Yokahma is $ 100 per ton, but at Le Havre at that date it is $ 110 per ton;

On July 30, the price at Yokohama is $120 per ton, and at Le Havre $ 130 per ton;

On August 30, the price at Yokohama is $ 140 per ton, and at Le Havre $ 150 per ton.

Please refer to the provisions of the Vienna Convention to prepare your answer.

Assignment:

Write a report on the 9/11 insurance case

World Trade Center insurance dispute settled for $2 bn

A group of seven major insurance companies has agreed to a $2 billion payment to settle a long-running dispute over insurance claims for New York's destroyed World Trade Center, clearing the way for the redevelopment of the iconic site, reports said Thursday.

The seven-strong group consisted of Allianz Global Risk, the Travelers Companies, Zurich American, Swiss Re, Employers' Insurance, Industrial Risk Insurers and Royal Indemnity, The New York Times reported.

The deal concludes a five-year legal battle between Larry Silverstein, who leased the WTC site just six weeks prior to the Twin Towers' destruction in the Sep 11, 2001 terrorist attacks, and insurers.

The settlement brings to $4.5 billion the amount awarded to Silverstein in insurance settlements, and provides a green light for the $9 billion redevelopment of the site to proceed.

All parties to the deal signed a confidentiality clause barring them from revealing how much each insurer had paid out.

The settlement was the largest in industry history, said Andreas Shell, claims crisis coordinator for Allianz, adding that his company was "extremely happy with the result".

The proceeds of the settlement will be split between the Port Authority of New York, which owns the site, and Silverstein Properties, which is spearheading its rebuilding.

Officials said the deal would enable them to obtain private financing for the project, which involves the $3 billion "Freedom Tower" as well as retail and other office towers, the newspaper reported.

"The unsettled insurance claims were the last major barrier to rebuilding and have been bitterly and intensely contested for almost six years," said New York Governor Eliot Spitzer, who in recent weeks had taken part in talks aimed at ending the dispute.

"This means we can now fund construction, access the financial markets and move on to what should be our primary focus: rebuilding," Spitzer told The New York Times.

As part of the deal, the Port Authority and Silverstein had to relinquish their claim that the companies owed more than $500 million in interest resulting from delays in making the payments. The insurers, in turn, abandoned their claim that they did not owe the money until the project was completed, in 2012.

At the time of the 9/11 terrorists attacks some two dozen insurers were engaged in an uncompleted deal with Silverstein to provide $3.5 billion in coverage for the WTC.

Conflict ensued amid disputes over which policy was in force at the time of the attack, and over claims by Silverstein that he was entitled to a twin payout as two jetliners had been involved in the attacks.

In 2004 following lengthy proceedings a court ruled that the developer was owed a maximum $4.6 billion, less than the $7 billion he had sought.

CLASS 11:

Topics:
International trade finance
Letters of credit
Bills of exchange

Web reading:
Uniform Customs and Practice for Documentary Credits - (UCP 500)

Assignment:
A French importer has its French bank open a letter of credit (L/C) in favour of its Chinese supplier to pay for a shipment of goods. The L/C is payble at sight upon presentaiton of various documents including a commercial invoice conform with the pro forma invoice. It is expressly stipulated in the L/C that partial shipments are prohibited. A few days before the expiration of the L/C, the supplier realizes that it will be not be able to deliver the entire shipment on time. So the supplier sends a message to the French buyer requesting an extension of the L/C . But the French buyer replies that any extension is refused and that it wants the entire shipment or nothing. In these conditions, the Chinese exporter decides to deliver the goods that are ready before the expiration of the L/C, and to set down documents indicating falsely that the shipment is complete as required on the pro forma invoice. Thus the documents presented to the French bank for payment are conform with those required in the L/C. Still the Chinese exporter sends to the French buyer a message explaining that in fact the shipmnet is only partial and that it has overinvoiced in order to ensure conformity of the documents and get paid on the L/C. But the Chinese supplier states that the excess in the invoice presented to the bank will be refunded on the French buyers next order. But the French buyer does not appreciate its suppliers behaviour and it asks its bank if there is any way to avoid paying the supplier off the L/C. If you were the advisor of the French bank, what would you advise it to do?

CLASS 12:

Topics:
Intellectual property and its protection
International agency agreements
International distribution agreements
International e-commerce
Competition law

Web research:

Convention on the law applicable to agency

Find a model agency agreement or an actual agency agreement and bring it to class.

Delegatus non potest delegare, by William Chapman

Case studies

Pro Golf - Reyes - Chester - Wolfe

Kanavos - Simmons - O'Boyle - Detroit Pure Milk
 
 

Web research:
World Intellectual Property Organisation, What is intellectual property
Articles 81 and 82 of the consolidated version of the Treaty establishing the European Economic Community

Case studies:
Red Owl - Bates - Mattis - Louis Vuitton c eBay / Tiffany v eBay
 
 

CLASS 13:

Topics:
Dispute settlement
Administrative remedies
Litigation
Alternative Dispute Resolution
Arbitration

Web research:
Court of Arbitration of the International Chamber of Commerce (ICC) in Paris
China International Trade and Economic Arbitration Commission (CIETAC)
International Center for the Settlement of Investment Disputes (ICSID) of the World
International Articles by Daniel Laprès on international arbitration

Case studies:

Mitsubishi Motors v Soler Plymouth Dodge
Affaire Danone c Wahaha
Affaire Tapie - le texte intégral de la sentence arbitrale, voir en particulier les pages pages 4-8, 15-16, 24-25, 28-32, 33-35, et 52-94.
 
 

EVALUATION

At the end of the course, a written exam is held. The exam consists of theoretical and practical questions as well as case studies. Below is one of the questions that will appear on the exam for 20% of the grade.

In the final evaluation account is taken of participation in class work and discussions, in particular the assignments submitted during the course.
 
 

__________________________________________________________
 
 
 

DANIEL ARTHUR LAPRES

Cabinet d'avocats
29 boulevard Raspail, 75007 Paris
tel: (331) 01.45.04.62.52 - fax: (331) 45.44.64.45

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