An American corporation contracted to have athletic footwear manufactured by a foreign company overseas. The American company later was horrified to learn that the foreign company used slave labor to manufacture the shoes and refused to honor the contract. Slave labor clearly violates American law but is legal in the foreign country. The contract in question contained an arbitration clause requiring an arbitration panel made up of members from outside the U.S. to meet and decide in a neutral, third-party country, and a choice of law clause designating the law of the foreign company's location. In what forum would the matter be heard, what law applied, and what is the likely outcome if the foreign company claims breach of contract?© BrainMass Inc. brainmass.com April 3, 2020, 5:30 pm ad1c9bdddf
The arbitration clause says that the members of the panel are to use the venue of a neutral, third party country but apply the law of the foreign country. However, because it would be an undue hardship and impractical for a third party country to apply the law of the foreign country since they may not know the law or don't usually apply such law, the choice of law used will probably ...