HI5015 Final Assessment T1 2022: International Business Law Analysis

This document presents a comprehensive solution to the HI5015 Final Assessment for Term 1, 2022, focusing on key principles of international business law. The assessment addresses critical concepts such as the subjects of international law (states, international organizations, and natural persons), and the role of international law in relation to individuals, supported by relevant case studies and legal principles. It compares and contrasts the National Treatment and Most Favored Nation principles under GATT and GATS, analyzing their similarities and differences within the context of international trade. Furthermore, the assessment explores the circumstances under which a state is held responsible for injuries to aliens or foreign businesses within its territory, examining the legal obligations and liabilities of states. Finally, it delves into the Doctrine of Piercing the Company Veil, detailing the circumstances under which courts may disregard the separate legal entity of a company, offering a thorough understanding of corporate law principles.

Assessment Weight: 50 total marks
Instructions:
 All questions must be answered by using the answer boxes provided in
this paper.
 Completed answers must be submitted to Blackboard by the published
due date and time.
Please ensure you follow the submission instructions at the end of this paper.
Purpose:
This assessment consists of six (6) questions and is designed to assess your level of
knowledge of the key topics covered in this unit
HI5015 Final Assessment T1 2022

Question 1 (7 marks)
(a) Who is the proper subject under International Law – is it states, their subdivisions
and international organisations or natural persons (i.e. human beings)? (4 marks)
Discuss your answer using relevant international business law principles and applicable
cases.
(Word limit 200 words)
ANSWER a): ** Answer box will enlarge as you type
International law is a system that make contract with different treaties between various
nation that helps in building corporation with them and also governs relationship between
nations. It has been divided into two parts such as public international that deals with
human rights and matters or issues of particular areas and it also include environmental
law. On other hand, private international law deals with relationships between nations
(Crawford, 2018). Although subject of international law means various entities that have
international personality. Thus, it simple means entities that have rights and power of
international law within them.
States: It is considered as original and major subject of international law as all states
enjoy equal rights and international personalities.
International organization: It is known as association of various states that are formed
with the help of contract between different countries and its functions goes beyond the
states and deals with conflict of nations (Eggett, 2019).
Special case entities: It is subject of international law and are divided into two part like
sovereign order of Malta and the Holy see as well as Vatican City.
Indigenous Peoples: They are special issues that came under international law and it is
considered as specific category of minorities with special needs. This law has also stated
human rights so that individual can have equality.
(b) How does International Law regard natural persons? (3 marks)
Discuss your answer using relevant international business law principles and applicable
cases.
HI5015 Final Assessment T1 2022

(Word limit 200 words)
ANSWER b):
Individualism in legal sense is a broader term and in international law individual include
human being, foundation and legal companies. In year of 1945 the law recognizes natural
person as subject but still do not provide rights and duty to direct them. After world wars
international consider individual as legal responsibility and made them subject of the act.
International law protects individuals or natural person through IIAS (International
Investment Agreements) as well as legal person like companies, corporation and juridical
person. The protection is available to natural person that possess nationality of a states
other than the states in which investment is made (Connelly, 2018). Although the person
can take advantage of this protection is identify by their nationality as individual that hold
nationality of host state cannot bring claim against the states. However, the issues of
nationality of natural person arise when it holds nationality of more than one state or have
specifically taken nationality with the purpose of obtaining protection under an IIA.
Moreover, international law rules are applied to the legal relationships and conducts of the
individual as well as rights and duties are defined under this act. Along with this,
companies can also participate in international law making and it can institute its case of
protection of their right under judicial and quasi-judicial court.
Question 2 (7 marks)
Compare (i.e. similarities) and contrast (i.e. differences) the National Treatment
Principle and Most Favoured Nation Principle under the General Agreement on Tariffs
and Trade (GATT) and the General Agreement on Trade in Services (GATS).
(Word limit 400 words)
ANSWER:
HI5015 Final Assessment T1 2022

National Treatment: In this act local and foreigners are treated equally and their import
and export of foreign goods are treated properly when entered market areas. Along with
this, the same law is applied in case of local and international services, trademarks,
patents and copyrights. Although the principles of national treatment means treating local
and foreigner equal and it is also present in the three main WTO agreements like article 3
of GATT, 17 of GATS and 3 of TRIPS and in each of the section this principle is treated
differently. Moreover, national treatment is only applied to service, items, products and
intellectual property that has entered the market area (Yusika, 2020).Thus, charging
customs duty on an import is not considered as violation of national treatment even
though local products are not charged with similar tax. In WTO law the motive of such
act is to prevent sates from discrimination among international products and services and
local.
Most Favoured Nation: This means threatening other people equally and under WTO
contract nations cannot discriminate among local and foreign markers. All have to follow
the same rules related to lower customs duty rate. Although this contract does not mean to
treat all members with special treatment but in WTO it actually means not to discriminate
and treating virtually everyone equally.
Moreover, both the principle is applied to nationals like legal person, natural person that
own intellectual property rights. There are few difference between them such as concept
of national treatment is more narrow and it is applied to foreigner’s intellectual property
rights and it is first applied to local people of the member countries. Thus, it states that
couture should treat locals and foreigner equally (Apriliani and Santika, 2022). There
should be no less favour given to the foreigner and proper protection for their intellectual
property is given to them.
On other hand, in article 4 of the TRIPS contract Most Favoured Nation Treatment has
been define that states that a country should give same privileges or immunity as well as
protect their intellectual property advantage should be applied to local members and
nationals of any other country. Thus, most favoured nations have boarder term such as
one country giving privileges to other states member then it must immediately have
applied to all other members.
Another difference MFN has been designed to promote fair treatment in nations of each
state members on other hand national treatment forbids discrimination between members
of foreign and local.
HI5015 Final Assessment T1 2022

Question 3 (7 marks)
Discuss when a state will be held responsible for an injury to an alien or a foreign
business present within that state’s territory.
(Word limit 400 words)
ANSWER:
States responsibility occurred when states commits a wrongful act against another at
international level. In article 2(4) of UN charter prohibits non-intervention by stating that
every states are under legal obligation for not using or threatening force against others.
Although a state is responsible for any wrongful act or omission under international law
and wrongfully cause injury to an alien. It is the duty of sates to act upon such act or
omission as well as make reparation to the injured alien or anyone claiming through it or
to state that have right to present a claim on behalf of the individual claimant (Greenman,
2018).
Alien is only entitled to present claim under this convention only after it has made use of
all he local remedies that have been provided by state against which claim is made.
A state is entitled to present claim under this convection only on behalf of person who
possess nationality of that state and it has made use of local remedies and any special
remedies that have been provided by state against which claim is made and have
exhausted.
Moreover, it is the responsibility of state that it should not avoid international
responsibility by invoking its municipal law and nothing in this convention shall
adversely affects any right that alien enjoys under local law of the states against which the
claim has been made.
Moreover, every state is under international obligation not to mistreat nationals that are
present in its territory and if any violation occurs then it may incur international
responsibility to the state of whom the person is a national.
In addition to this, states are guilty for not fairly treating aliens and they are obliged to
admit aliens to their territory and if they permit aliens to come it should treat them with
civilised manner. However, states are held liable for the breach of trust if it inflicts any
HI5015 Final Assessment T1 2022

injury to aliens a time when they are outside of its territory (Van Aaken and Simsek,
2021).
Moreover, a state is only liable for its own acts and omissions and in this context the state
is identified with its government group and not with the population. If the police attack a
foreigner states are liable and if the attack is done by any private individual, then state is
not liable.
Many developed states of world maintain the treatment of foreign nationals according to
international minimum standards. Along with this, means every state must treat alien
within its territory by reference to a minimum international standard no matter how
national law allows that state to treat its own citizens.
Question 4 (7 marks)
Discuss the Doctrine Piercing the Company Veil. What are the circumstances under
which a court will pierce the corporate veil?
(Word limit 400 words)
ANSWER:
The company has their separate legal entity in the eyes of law and it has their own name,
seal and it can enter into contract, buy and sell property, have bank account as well as sue
and can be sued in the same manner as an individual.
A corporate veil is a shield that protects the member from the action of the company such
as if organization have done any illegal activity then its members will not be held liable.
Moreover, this protection is also enjoyed by the shareholders of company (Suharna,
2022).
In the case of Salomon VS Salomon and Co Ltd the doctrine of lifting up of or piercing
of Corporate veil was introduced to hold the employees liable in case of making use of
dishonest and fraudulent separate legal entity.
Fact of the case: Salomon established a company name Salmon and Colt with seven
members including itself. It was a secured creditor and shareholder of the company and
there were other unsecured creditors. Later on the company decided to wind up and time
of that unsecured creditors claimed that it should be paid before Salomon as it was owner
of firm.
HI5015 Final Assessment T1 2022

Judgement: The case held that company has their own legal existence and shareholders or
members are not held liable for the acts of the organization even though it hold share
capital of firm.
Thus, whole law of company is fact based on the principle of separate legal entity and it
must be used for legal purpose only (Sableman, 2019).
Moreover, Doctrine of lifting up of corporate veil was implemented to hold other
member liable in case of fraud and dishonest use of separate legal entity.
This doctrine of lifting up of or piercing of corporate veil:
There are several case in which it was found that the members are misusing the privilege
then the individual concerned will not able to take shelter behind the corporate personality
(Tsang, and Ng, 2022). The court will break through corporate shell and apply doctrine of
lifting of or piercing the corporate veil. The cases in which court has ordered lifting up of
veil in case where the organization commits a fraud and the case in which company do not
have physical presence. If the criminal activities are being hidden behind firm names
(Tikhon, 2018).
The lifting of the corporate veil can be of two type such as judicial and statutory lifting.
Statutory lifting is when the organization violets companies act 2013 and the acts
provides for the lifting of the veil then it is termed as statutory lifting.
Judicial lifting if the organization violets corporate act 2013 and the act does not provide
for lifting of the veil then judge can pass order for the lifting of the veil.
Question 5 (11 marks)
Consider the following extract from Case 10 – 6 The Shoe Seller’s Case:
“The CISG expects a buyer to accept deliveries of nonconforming goods [unless they are
fundamentally nonconforming] and to invoke remedies other than avoidance (such as
reduction of the price and damages) as compensation for the defects. For example, there
would be no fundamental breach of contract [and no right to avoid the contract] in cases
where the buyer is able to use some of the goods.”
Using your knowledge from Week 10 – Sales and Logistics and with reference to the case
HI5015 Final Assessment T1 2022

above, explain the CISG “Avoidance” provisions for both the buyer and seller.
(Word limit 600 words)
ANSWER:
CISG avoidance is right of party to terminate its agreement by giving declaration and
such contracts is very important in sales agreement if other party has breached the
contract. Article 49(1) (a) provides that avoidance is possible if there is any failure by the
seller to perform obligations under the contract and this convention will lead to
fundamental breach of contract.
Although there are some rights of seller in this contract in order to safeguard them from
illegal activities. Moreover, purchaser have right to delivery of goods, reject and cancel,
sue, claim damages and examine (Heid, Larch and Yotov, 2021). On other hand duties of
buyer are to accept goods, pay consideration, pay damages and performed agreement.
In case of shoe seller’s plaintiff an Italian business that contracted to sell women shoes to
defendant a German woman. The company was late in making delivery and the shoes was
not similar to the original sample that have been shown to the defendant. Although buyer
has only paid for two bills and due to that plaintiff has brought suit in court of German to
recover the amounts of invoke. The defendant relied on the remedy of avoidance and
stated that it was entitle to avoid contract and it will not pay any inability on the unpaid
invoice as it received late delivery, non-conformity of the goods.
In this case buyer must have examine the goods as soon as it was received or
approachable as mentioned in art 38 and give notice to the seller regarding the nature of
the goods and lack of conformity with reasonable time. It can be done within two years
from receiving the goods as stated in article 39.2 (Malkawi, 2020). A buyer has right to
excuse from paying the amount of material if the buyer can avoid the contract and price
for damages need to be made If avoidance of a contract released both the parties from
their contractual obligations.
Avoidance
The buyer has a right to declare the contract avoided if there is any kind of failure from
the side of the seller and there is any kind of obligations under the agreement that
amounts to fundamental breach of contract as mentioned under Article 49. 1a (Nguyen,
Nguyen and Tran, 2022). Although this right to declare the contract avoid is not
applicable in case where there is delay in delivery in expected frame of time as well as in
respect of any other breach within set time after it have knowledge of the breach.
HI5015 Final Assessment T1 2022

Although in this case buyer need to proof through evidence about the exact nature of the
defects, shows that the goods cannot be used in any other way or if a buyer does not do
this then court will be unable to give judgement related to any fundamental breach. A
breach of contract is fundamental If the other party is expecting material that has been
mentioned under the contract unless the opposite party has done some act which would
have be foreseen by reasonable person.
Along with this, in case of non-delivery buyer may declare contract avoided if the seller
has not deliver in case of additional period of time or limit has been fixed. In the above
mentioned case no such period was defined by the defendant so it cannot avoid contract
on this basis.
Question 6 (11 marks)
Consider the following extract from Case 12 – 2 Mair v. Bank of Nova Scotia:
“To constitute an apparent alteration within the meaning of the Bills of Exchange Act it
should be apparent upon inspection of the bill that its text has undergone a change. The
document itself must show that some revision of the text has taken place and its
appearance must be consistent with the revision having occurred after completion or
issue, although it may also be consistent with the revision having occurred before
completion.”
Using your knowledge from Week 11 – Financing International Business and with
reference to the case above, explain where the burden lies for determining the validity of
an endorsement, if it is deemed ineffective under Common Law. (Word limit 600
words)
ANSWER:
Issue: It has been identified from the case of Mair vs Bank of Nova Soctia that Mair has
hired Hill so that it can get help in agricultural projects and 6000 advance has been given
to him. The amount was paid in the form of cheque but Hill has not received the price at
reasonable time due to alteration process of cheque. Although this case has raised
HI5015 Final Assessment T1 2022

question on policy related to negotiable instrument as in international business NI rules
are followed properly and needed to be done accurately.
Relevant Law:
The Australian Bill of Exchange Act 1909 stated that allow negotiable instruments are
considered under this act. It has been identifying from this act that amount payee need to
be paid on the right time and it is very essential otherwise it will lead to violation of the
policy and set rules. Although applicant can apply to the court in order to gain justice.
Moreover, endorsement will be considered in effective if the amount has been given to
payee and it will be considered as fraud (KULSHRESTHA and et.al., 2020). In the case
of Mair it can be stated that alteration of bill of exchange is considered as violation. The
Act define that negotiable instrument like bill are payable on demand basis so it need to
focus on the payment to the payee and it can either be payable to bearer or order.
Application of Law:
The bill need to paid on reasonable time so it is important to focus on the payment
within set time limit. In the present case hill was not able to receive cheque on the time
and due to alteration and it has lead delay in the payment. In the case of international
business transcation it is very much important to maintain the vailidity of bills and
negaotiable instruments so that there is no issue between the parties relating to payment
(Anju, 2019). Although validity of pay cheques need to be ensure so that payee is able to
get payment on time. Thus, it can be identify that validity of bill is very much importat
and it play crucial role to implement negitiable instrumnets (Peari, 2021). In the baive
mentioned case payment was made after due date. Moreover, in the case of wrong date
inserte the bill reach to the holder in due course.
Conclusion:
From the above case study it has been concluded that the validty of ngetiable instruments
is very important in financial transactions and developing international trade. Although
the burden of proof is on buyer if the endiresemnet is conidere ineffective under common
law.
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