Answer

International Business Transactions and the Law (79603)

Autumn 2020

Take-Home Exam (50% of final mark in IBTL)

This exam includes two questions. You must answer both questions. Each question is of equal weighting.  Approx. 1,250 words (10% leeway) should be sufficient to answer each question.

The questions require you to advise hypothetical clients regarding their rights and/or liabilities in the scenarios outlined, with reference to relevant rules/laws and case law.

It is recommended that students use some headings and sub-headings, because that usually assists in providing a clear and easy-to-follow structure. Students may use footnotes if they wish; if so, consistency is the key — the AGLC is recommended. A bibliography may also be provided (recommended).

Where relevant, your answers should clearly state any assumptions you are making, and/or any additional information that would change the advice provided to your hypothetical clients

For the questions below, assume that Kamaria is a member of the World Trade Organisation (WTO) and has ratified all relevant WTO agreements.

Furthermore, please assume that Kamaria has also ratified the following: 

• the Amended Hague-Visby Rules;
• The Vienna Convention on Contracts for the International Sale of Goods (CISG)
• the UNCITRAL Model Law on International Commercial Arbitration; and
• the UN Conference on International Commercial Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards;

Student answers to this exam must be submitted by 5.00pm on  Wednesday 17 June 2020 via Turnitin. There is no requirement to submit paper copies of your answers.

QUESTION 1

Kamaria Garden Supplies Inc (KGS) is a company based in Kamaria which is a leading retailer of garden supplies. KGS has been in email communications with the Australian company Brisbane Garden Gnomes Pty Ltd (BGG) to negotiate a contract for a large consignment of fluorescent garden gnomes.

After exchanging several emails BGG agrees to deliver to KGS a consignment of 500 fluorescent garden gnomes, CIF Port Smith in Kamaria. This will be one of the largest single consignments that BGG has delivered so far. As BGG and KGS are looking to develop a long term business relationship, they agree that any disputes will be resolved by a panel of three arbitrators at the Singapore International Arbitration Centre.

BGG packs and sends the consignment of 500 fluorescent garden gnomes to KGS. However when the fluorescent garden gnomes arrive in Port Smith, KGS finds that a large number of the garden gnomes have been smashed and cracked during the voyage. Also, when the shipping documentation for the consignment arrives at its office, KGS notices there are no indications of an insurance policy for the consignment. The General Manager of KGS is very annoyed with this situation as several of his customers have placed orders for the fluorescent garden gnomes. He emails BGG and demands that they send another consignment of 500 fluorescent garden immediately. However the manager of BGG demands full payment for the first consignment from KGS.   

After several further emails, BGG and KGS agree to have their dispute resolved by a panel of three arbitrators at the Singapore International Arbitration Centre. After considering the submissions from both parties (including the email correspondence), the arbitral panel finds in favour of KGS and orders BGG to deliver a replacement consignment to KGS, and to compensate KGS for the costs it has incurred in relation to the arbitration.

The manager of BGG is not happy with the arbitral panel’s determination; therefore, he seeks your advice on the correctness of the panel’s decision, and is also interested in whether this arbitral award may be enforced through the Australian courts.

QUESTION 2

Over recent years, Kamaria has significantly expanded its car manufacturing industry, which has flourished due to Kamaria’s very low labour costs and the generous government grants and tax exceptions which the Kamarian government provides to exporters.

Kamaria has progressively increased the numbers of cars that it is exporting to overseas markets, including Australia. By contrast, due to increasing production costs, Australia’s car market has been struggling. It has been estimated that Kamarian-made cars sell for around half the price of Australian-made cars.

The Australian Car Manufacturing Council, which is the peak body for Australian car manufacturers, is very concerned at Kamaria’s practices – which it sees as undermining the “level playing field” in car manufacturing. The Council fears Kamaria’s practices could make Australian car manufacturing plants unviable and ultimately lead to the collapse of Australia’s car manufacturing industry. After consulting with their members, the Council decides to request the Australian federal government to take urgent action to address the current situation. 

The Australian Car Manufacturing Council seeks your advice about the possible measures it could request the Australian federal government to take in this scenario.