Subject: Legal Environment Of Business - Recommended textbook for the subject: Cheeseman, H. R. Legal Environment of Business: Online Commerce, Ethics, and Global Issues. (CHAPTER 26) - Assignment: P

Signature Assignment Title:

Module 8 Signature Assignment

Assignment Description/Directions:

Start by reading and following these instructions:1. You are expected to answer the questions associated with the case. These

questions are intended to elicit thoughtful reactions to the legal and regulatory

environment of business. You are expected to carefully read the assignment

instructions, then thoroughly and explicitly address each component of the

corresponding case study questions. Some answers may require you to do

additional research on the Internet or in other reference sources. Choose your

sources carefully.

2. The responses should reflect higher level cognitive processing (analysis,

synthesis, and evaluation), which is essential for someone in any industry, as legal

decisions affect all levels and stakeholders within the organization and in the

external marketplace.

3. Do not just answer the questions. You should be able to explain the logic behind

your answer and point to a credible source to support your position, even if it is just

the textbook. Invest your time wisely, giving more time to the complex answers in

order to ensure that you demonstrate that you truly understand the answer.

Shorter compelling answers are fine. Answers with needless filler will be marked

down. In addition submissions should include a title page and reference page in

APA style.

4. There is no minimum number of references that need to be utilized to support the

completion of this assignment; however, it is generally understood that any good

case study analysis will incorporate the appropriate quality and quantity of

scholarly sources to support any suppositions and recommendations. Signature Assignment

Assignment:

1. Zapata Off-Shore Company (Zapata) was a Houston, Texas–based American

corporation that engaged in drilling oil wells throughout the world. Unterweser

Reederei, GMBH (Unterweser), was a German corporation that provided ocean

shipping and towing services. Zapata requested bids from companies to tow its self- ele va tin g d rillin g r ig C haparra l fr o m L ouis ia na to a p oin t o ff R ave nna, Ita ly , in th e

A dria tic S ea, w here Z apata h ad a gre ed to d rill c e rta in w ells . U nte rw ese r s u bm it te d

th e lo w est b id a nd w as r e queste d to s u b m it a p ro pose d c o n tr a ct to Z apata , w hic h it

d id . T he c o ntr a ct s u bm it te d b y U nte rw ese r c o n ta in ed th e fo llo w in g p ro vis io n: “ A ny

dis p ute a ris in g m ust b e tr e ate d b efo re th e L ondon C ourt o f J u stic e .” Z apata

e xe cu te d th e c o ntr a ct w it h out d e le tin g o r m od if y in g th is p ro vis io n. U nte rw ese r’s

d eep s e a tu g B re m en d eparte d V en ic e , L ouis ia na, w it h th e C haparra l in to w , b ound

fo r Ita ly . Wh ile th e flo tilla w as in in te rn atio nal w ate rs in th e m id dle o f th e G ulf o f

M exic o , a s e ve re s to rm a ro se .

T he s h arp r o ll o f th e C haparra l in G ulf w ate rs c a u se d p ortio ns o f it to b re ak o ff a nd

fa ll in to th e s e a, s e rio usly d am agin g th e C haparra l. Z apata in str u cte d th e B re m en to

t o w th e C haparra l to T a m pa, F lo rid a, th e n eare st p ort o f r e fu ge, w hic h it d id . Z apata

f ile d s u it a gain st U nte rw ese r a n d th e B re m en in U .S . D is tr ic t C ourt in F lo rid a,

alle gin g n eglig ent to w in g a nd b re ach o f c o n tr a ct. T he d efe ndants a sse rte d th at s u it

c o uld b e b ro ught o nly in th e L ond on C ourt o f J u stic e . W ho is c o rre ct? E xp la in .

A nsw er s h ould a ddre ss fo ru m s e le ctio n c la use e nfo rc e a bilit y a nd ju ris d ic tio n o n th e

basis o f fo ru m n on c o nve nie ns.

2 . B ank o f J a m aic a is w holly o w ned b y th e g ove rn m en t o f J a m aic a . C his h olm & C o.

w as a F lo rid a c o rp ora tio n o w ned b y J a m es H enry C his h o lm , a F lo rid a r e sid ent. T he

U .S . E xp ort– Im port B ank ( E x-Im B ank) p ro vid es fin ancia l s e rv ic e s a nd c re dit

i n su ra nce to e xp ort a nd im port c o m pa nie s. B ank o f J a m aic a a nd C his h olm & C o.

agre ed th at C his h olm & C o. w ould a rra nge lin es o f c re dit fr o m v a rio us b anks a nd

pro cu re $ 50 m illio n o f c re dit in su ra nce fr o m E x-Im B ank to b e a va ila ble to a id

J a m aic a n im porte rs . C his h olm & C o. w as to b e p aid c o m mis sio ns fo r it s s e rv ic e s.

C his h olm & C o. n egotia te d a nd a rra nged fo r $ 50 m illio n o f c re dit in su ra nce fr o m E x-

Im B ank a nd lin es o f c re dit fr o m F lo rid a N atio nal B ank, B anke rs T ru st C om pany,

a nd Ir v in g T ru st C om pany. C his h o lm a ls o a rra nged m ee tin gs b etw een B ank o f

Ja m aic a a nd th e U .S . b anks. U nb ekn o w nst to C his h o lm & C o., B ank o f J a m aic a

w ent d ir e ctly to E x-Im B ank to e xclu de C his h o lm & C o. fr o m th e J a m aic a p ro gra m

and r e queste d th at th e c re dit in su ra nce b e is su ed s o le ly in th e n am e o f th e B ank o f

Ja m aic a . A s a r e su lt , C his h olm & C o.’s E x-Im B ank in su ra nce a pplic a tio n w as n ot

co nsid ere d. B ank o f J a m aic a a ls o o bta in ed lin es o f c re dit fr o m o th er c o m panie s a nd

paid c o m mis sio ns to th em .

Chis h olm & C o. s u ed B ank o f J a m aic a in U .S . D is tr ic t C ourt in M ia m i, F lo rid a,

alle gin g b re ach o f c o ntr a ct a nd s e e kin g d am ag es. B ank o f J a m aic a file d a m otio n to

d is m is s th e c o m pla in t, a lle gin g t h at it s a ctio ns w ere p ro te cte d b y s o ve re ig n

im munit y .

1 . Wh at d oes th e d octr in e o f s o ve re ig n im munit y p ro vid e?

2. D id B ank o f J a m aic a a ct e th ic a lly in tr y in g to a vo id it s c o n tr a ct o blig atio ns

ow ed to C his h olm & C o.?

3 . Wh o w in s, a nd w hy? 4. S um mariz e y o ur p ers o nal o pin io n o n th e d octr in e o f s o ve re ig n im m unit y ?

N ote : s o m e s a y a bolis h th e d octr in e w hile o th ers a rg ue fo r it s m ain te nance .

3 . P rio r to 1 918, th e P etr o gra d M eta l W ork s, a R ussia n c o rp ora tio n, d eposit e d a

la rg e s u m o f m oney w it h A ugust B elm on t, a p riv a te b anke r d oin g b usin ess in N ew

Y ork C it y u nder th e n am e A ugust B elm on t & C o. ( B elm on t) . In 1 918, th e S ovie t

gove rn m ent n atio naliz e d th e c o rp ora tio n a nd a ppro pria te d a ll it s p ro perty a nd

asse ts w here ve r s it u ate d, in clu d in g th e d eposit a cco unt w it h B elm ont. A s a r e su lt ,

t h e d eposit b eca m e th e p ro perty o f th e S ovie t g ove rn m en t. In 1 933, th e S ovie t

gove rn m ent a nd th e U nit e d S ta te s e nte re d in to a n a gre em en t to s e ttle c la im s a nd

co unte rc la im s b etw een th em . A s p art o f th e s e ttle m en t, it w as a gre ed th at th e

S ovie t g ove rn m ent w ould ta ke n o s te ps to e nfo rc e c la im s a gain st A m eric a n

natio nals ( in clu din g B elm ont) a nd a ssig ned a ll s u ch c la im s to th e U nit e d S ta te s. T he

U nit e d S ta te s b ro ught a n a ctio n a gain st th e e xe cu to rs o f B elm ont’s e sta te to

r e co ve r th e m oney o rig in ally d epo sit e d w it h B elm on t b y P etr o gra d M eta l W ork s.

1 . Wh o o w ns th e m oney?

2 . Wh at is th e A ct o f S ta te D octr in e?

3. S um mariz e y o ur p ers o nal o pin io n o n th e A ct o f S ta te D octr in e? N ote : s o m e

arg ue th at it is a s a cre d d octr in e w hile o th ers a rg ue th at it is a c o nfu se d a nd

outm oded d octr in e th at fr u str a te s th e n orm al o pera tio n o f th e c o urts … a nd

pro duce s in ju stic e in in div id ual c a se s.

4 . B anco N acio nal d e C osta R ic a is a b ank w holly o w ned b y th e g ove rn m ent o f

C osta R ic a . It is s u bje ct to th e r u le s a nd r e gula tio ns a dopte d b y th e m in is te r o f

fin ance a nd th e c e ntr a l b ank o f C osta R ic a . T he b ank b orro w ed $ 40 m illio n fr o m a

c o nso rtiu m o f p riv a te b anks lo ca te d in th e U nit e d K in gdom a nd th e U nit e d S ta te s.

T he b ank s ig ned p ro m is so ry n o te s, a gre ein g to r e pay th e p rin cip al p lu s in te re st o n

th e lo an in fo ur e qual in sta llm ents , d ue o n J u ly 3 0, A ugust 3 0, S epte m ber 3 0, a nd

O cto ber 3 0 o f th e fo llo w in g y e ar. T he m on ey w as to b e u se d to p ro vid e e xp ort

fin ancin g o f s u gar a nd s u gar p ro ducts fr o m C osta R ic a . T he lo an a gre em ents a nd

pro m is so ry n ote s w ere s ig ned in N ew Y ork C it y , a nd th e lo an p ro ce eds w ere

te ndere d to th e b ank th ere .

T he b ank p aid th e fir s t in sta llm en t o n th e lo an. T he b ank d id n ot, h ow eve r, m ake th e

oth er th re e in sta llm ent p aym ents a nd d efa ult e d o n th e lo an. T he le ndin g b anks

su ed th e b ank in U .S . D is tr ic t C ourt in N ew Y ork to r e co ve r th e u npaid p rin cip al a nd

in te re st. T he b ank a lle ged in d efe nse th at th e m in is te r o f fin ace a nd th e c e ntr a l b ank

of C osta R ic a h ad is su ed a d ecre e fo rb id din g th e r e paym ent o f lo ans b y th e b ank to

p riv a te le nders , in clu din g th e le nd in g b anks in th is c a se . T he a ctio n w as ta ke n

beca use C osta R ic a w as h avin g tr o uble s e rv ic in g d ebts to fo re ig n c re dit o rs . T he

bank a lle ged th at th e a ct o f s ta te d octr in e p re ve n te d th e p la in tif f s fr o m r e co ve rin g

on th eir lo ans to th e b ank. Wh o w in s? D o y o u a gre e w it h th e d ecis io n o f th e d is tr ic t

co urt? E xp la in . L ib ra B ank L im it e d v . B anco N acio nal d e C osta R ic a , 5 70 F .S upp. 870, Web 1983 U.S. Dist. Lexis 14677 (United States District Court for the Sourhter

District of New York)5.

Nigeria, an African nation, while in the midst of a boom period due to oil exports,

entered into $1 billion of contracts with companies in various countries to purchase

huge quantities of Portland cement. Nigeria was going to use the cement to build

and improve the country’s infrastructure. Several of the contracts were with

American companies, including Texas Trading & Milling Corporation (Texas

Trading). Nigeria substantially overbought cement, and the country’s docks and

harbors became clogged with ships waiting to unload. Unable to accept delivery of

the cement it had bought, Nigeria repudiated many of its contracts, including the

one with Texas Trading. When Texas

Trading sued Nigeria in U.S. District Court to

recover damages for breach of contract, Nigeria asserted in defense that the

doctrine of sovereign immunity protected it from liability .

1. What does the commercial activity exception to the doctrine of sovereign

immunity provide?

2. Did Nigeria act ethically in trying to avoid the contract obligations it owed to

Texas Trading & Milling Corporation?

3. Does the doctrine of sovereign immunity protect Nigeria from liability? Why or

why not?

6. Discuss the functions and governance of the United Nations.