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    Dispute Settlement

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    ABC is a multinational enterprise (MNE) incorporated in State X. ABC entered into a joint venture agreement with XYZ, an MNE incorporated in State Y, to jointly produce a new line of hydraulic equipment in ABC's new factory in State Z, a developing nation. ABC & XYZ have mutually agreed to have the law of State Y govern any disputes or concerns arising under the joint venture agreement. Shortly after the conclusion of the agreement, a wiring defect in ABC's factory caused it to burn to the ground, killing five tourists in the immediate vicinty who were nationals (citizens) of State Q. XYZ, fearing bad publicity, sued ABC to rescind the joint venture agreement. X,Y, & Z are all common law states, while Q is a civil law jurisdiction.

    My question is, should a civil lawsuit between ABC and XYZ be filed, I am trying to analyze the possible arguments and counter-arguments that counsel for either ABC or XYZ would reasonably make for having the case heard in the municipal courts of:

    State X

    State Y

    State Z

    State Q

    As part of my answer I am to review whether any other cases are relevant to this question-i.e. if they support or refute the arguments I have articulated for having the case heard in the municipal courts of each State listed above. I am also suppose to indicate when filing suit (either criminal and/or civil) which is not legally viable in a particular State and come with a rationale for my conclusion. I have reviewed cases susch as Case 3-7 Shell v R.W. Sturge, Ltd. also I looked at case 3-1 Concerning the military and paramilitaryactivities in and against nicaragua.

    This is the web site I use. Please assist


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    Solution Preview

    While it is legal to limit the powers of individual partners through a joint venture or joint venture agreement, those agreements do not bind the rest of the world. Since businesspeople outside of the joint venture have no knowledge of the limitations, they are entitled to rely on the apparent authority of an individual partner as determined by the usual course of dealing or customs in the trade. XYZ thus become equally liable for the acts of ABC and so might sue ABC to rescind the joint venture agreement. The argument that XYZ may forward is that the ABC has exercised gross and serious neglect in the conduct of its affairs and that has led to the death of five persons. Since, this type of neglect can happen in future, since this event has brought disrepute to XYZ and to distance itself from the lax safety precautions taken by ABC, XYZ may seek court intervention to rescind the joint venture. This civil suit may be filed.
    Normally ABC or XYZ will not want the case to be heard in the court of Q. Even though the victims were citizens of Q, the tragedy happened in the state of Z. So, normally, the jurisdiction of the state of Z will apply in case the prosecutor moves a criminal case. The case may be moved against ABC or against ABC and XYZ. On the other hand the relatives of the victims may file a case in the State Q an insist that a criminal case be filed in the state of Q against the officers of ABC and XYZ. The relatives of the victims may feel that they may get a more favorable judgment if the ...

    Solution Summary

    Dispute Settlement case is investigated.