VIETNAM NATIONAL UNIVERSITY HANOI

INTERNATIONAL SCHOOL

FINAL EXAMINATION
INTERNATIONAL BUSINESS LAW
Semester 1 – Academic Year 2022-2023

Lecturer: Ngô Trọng Quân

Student name: Vũ Trà
Giang Student code:
20070149 Class: INS3022_02

HANOI, December 2022

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Part I: Multiple Choice Questions
1. B
2. C
3. B
4. D
5. A
6. D
7. A
8. A
9. D
10. C

Part II: Case study question

Case 1.
1. WTO will deal with this dispute. Because one of the main responsibilities of the WTO is
resolving international trade disputes between members, as stated in Article III of the WTO
Agreement.
2. WTO principles which are applicable to the situation:
Most-Favored-Nation:
According to Article I GATT 1994. In this case, that nation A continues to import mackerel and
products related to mackerel from other WTO members but forbids the import of mackerel and
products related to mackerel from country B, which is also a WTO member. Since the Most
Favored Nation (MFN) principle can be used in this situation, nation A is not restricted from
importing mackerel and mackerel-related items from country B.
National Treatment:
According to Article III GATT 1994. To safeguard its own economy, country A in this instance
prohibits the import of mackerel and products connected to mackerel from country B. The
National Treatment (NT) principle can thus be used in this case, which states that when mackerel
and items linked to mackerel are imported into country A, they must be treated equally to (and
not less favorably than) similar products produced in country A.
3.
It can be demonstrated that mackerel products and mackerel-related fish products imported from
country B pose a risk of adverse health effects on the health of consumers of country A. In this
case, country A enacts a measure to ban the import of mackerel and mackerel-related products
from country B on the grounds of consumer protection. According to Article XX of GATT 1994:
b) necessary to protect human, animal, or plant life and health;

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When a dispute arises within the WTO framework between country A and country B, the
decision of country A to apply an import ban on seafood products (mackerel and mackerel-
related products) of country B, on the grounds that consumer protection is a reasonable basis for
the protection of fishery products. The interests of country A are based on the Articles of GATT
1994 that both parties have signed and committed to implementing.
Case 2.
1. In this case, CISG is applied.
According to Article 1.1.a CISG: (1) This Convention applies to contracts of sale of goods
between parties whose places of business are in different States: (a) when the States are
Contracting States. In this situation, seller (VietDecor Company) in Vietnam and buyer (Walter
Company) in France and both are member states of CISG, so the Convention is considered part
of the law of both countries. Furthermore, the two parties did not specify the applicable law for
their contract at the time of conclusion. Therefore, CISG is the applicable law.
2. Yes, Walter could avoid the contract with Vietdecor company and ask for the damages in this
dispute.
According to Article 51 CISG, the buyer may declare the contract avoided if a failure by the
seller to perform is a fundamental breach of contract. Moreover, according to Article 25, a breach
of contract committed by one of the parties is fundamental if it results in such detriment to other
party as substantially to deprive him of what he is entitled to expect under the contract unless the
party in breach did not foresee and a reasonable person of the same kind in the same
circumstances would not have foreseen such a result.
In this situation, according to the contract, Vietdecor must deliver 500 Christmas trees and 1000
costumes to Walter at least two weeks before Christmas Eve on 24 December 2020. However, the
goods ordered from Vietdecor did not arrive until 26 December 2020. Therefore, Walter had to
order from another supplier with a higher price. This results in such detriment to Walter.
→ Walter could avoid the contract and ask for damages.
Part III: I will choose topic 2,4,6
2. WTO principles of nondiscrimination: Unconditional Most - Favored - Nation (MNF) and
National Treatment.
The World Trade Organization (WTO) is an international organization with 164 members. These
164 countries have chosen to be bound by WTO trade rules regardless of their political or
economic development levels of political or economic development in order to lower trade
barriers and assure trade liberalization. Acceptance of the non-discrimination principle is the
most important WTO tenet that underlies all WTO trade agreements.
The World Trade Organization's principle of non-discrimination, which is embodied in the
concepts of Most Favored Nation and National Treatment, is explained in this essay. All WTO
global trade agreements contain these two guiding principles, including the GATT and GATS.
Firstly, the Most Favored Nation principle is outlined in a number of agreements, such as the
General Agreement on Tariff and Trade (GATT) for trade in goods and the General Agreement
on Trade in Services for trade in services (GATS). By lowering tariffs, quotas, and subsidies,
these accords are primarily intended to lower obstacles to international trade, services, and
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service

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providers. The MFN concept of the GATT and GATS prohibits members from discriminating
between "similar" products or services and service providers originating from other members by
requiring equal treatment of imports and domestic goods by the members of the GATT. The
MFN treatment requires WTO members to give any advantages to all WTO members
"immediately" and "unconditionally." In other words, any WTO member who treats one partner
more favorably than another is obligated to treat all WTO members equally. When one GATT or
GATS member treats another member differently, giving one member an advantage over the
others in terms of export and import tariffs and regulations, internal taxes and charges, and
internal regulation, this is regarded as a breach of MFN's responsibility.
National Treatment is a fundamental component of the market access principle of GATT/GATS
in the WTO, alongside Most Favored Nation (MFN). Its main goal is to stop discrimination
between domestic and imported goods, which is forbidden by the National Treatment principle.
The National Treatment concept upholds expectations of fair competition and demands equality
of the playing field. It is acceptable to handle things differently that are dissimilar. In a similar
vein, the General Agreement on Trade in Services includes National Treatment as a principle
(GATS). With regard to services and service providers, national treatment is applicable. The duty
of National Treatment is to ensure access and to treat all providers of "similar" services equally
and without prejudice. Generally, imported and domestic products are regarded as equal, without
discrimination.
In short, Most-Favored-Nation and National Treatment are vital principles that form the non-
discrimination principle, the cornerstone of the WTO. Giving all World Trade Organization
members equal opportunity is the major goal of these principles. All other WTO members should
be subject to both principles "immediately and unconditionally."
4. Advantages of Arbitration and Mediation vs. Litigation in resolving international
commercial disputes.
There are some advantages of mediation over litigation. First, the success percentages of
arbitration and mediation are very high. Considering that the parties are brought together in a
setting where they can openly and covertly express their viewpoints in front of an impartial third
party. Issues are limited and given the right context during mediation.
And any problem can be resolved through mediation at any time, without having to wait until it
escalates to the point of a lawsuit and is brought before a judge. Pre-litigation mediation is
increasingly acknowledged as a fair method of settling disputes before they get to court.
Moreover, comparatively quick and inexpensive, as well as private and non-binding, mediation is
an alternative to litigation.
Next, arbitration is more beneficial than litigation. If the parties cannot agree on the appropriate
jurisdiction, arbitration is frequently relevant in cases involving foreign parties. Additionally, it is
more important when one or both parties demand a final verdict that cannot be challenged.
However, there are times when arbitration should not be utilized to resolve a dispute, such as
when there are more parties involved or when the problem is too complex to be resolved at a
meeting. Finally, because of their reputation and goodwill in the market, many company owners
and entities in the construction sector chose arbitration as a dispute resolution mechanism.
In conclusion, mediation and arbitration are excellent at reducing court and trial processes and
providing a more efficient and cost-effective alternative to litigation.

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6. Discuss challenges/risks of international business
Due to the increased risk of international conflicts, wars, terrorism, corruption, and unstable
political systems, cross-border corporate activity has witnessed an unprecedented level of risk on
a global scale. These dangers are a hidden cost of conducting business internationally. There are
four prevalent sorts of international business dangers that the company may run across at any
time.
Country risk usually referred to as political risk, is the possibility that changes in a foreign
country's political, legal, or economic environment will have a negative impact on a company's
operations and profitability. The risk of a foreign government interfering with a firm's business
operations is a component of country risk. Laws and regulations that could impair a company's
performance and operations are other aspects of country risk. Property rights, intellectual
property protection, product responsibility, and taxation policies are important legal
considerations. Additionally, nations encounter potentially hazardous economic conditions,
which are frequently brought on by high inflation, excessive national debt, and imbalanced global
commerce.
Cross-cultural risk describes a circumstance or an occurrence where a cultural misunderstanding
puts a human value in danger. Language, way of life, mindset, customs, or religious variations
can all pose a risk to cross-cultural communication. Values particular to a culture frequently
endure and are passed down from one generation to the next. These principles have an impact on
consumers' purchasing habits as well as workers' attitudes and working styles. The features of
foreign customers are very different from those of domestic consumers. Culture's crucial
component is language. Language not only makes communication easier, but it also provides
insight into people's philosophies and way of life. Such difficulties obstruct clear communication
and lead to misinterpretations. Cultural differences that cause miscommunication result in
incorrect company tactics and unproductive consumer relationships.
Commercial risk is the possibility of the company suffering a loss or failing as a result of poorly
designed or implemented business strategies, tactics, or procedures. Managers may choose poorly
when it comes to choosing company partners, entering the market at the right time, setting prices,
developing product features, and choosing themes for marketing campaigns. While such failures
do occur in domestic industry, the costs are typically higher when they occur abroad. The firm's
reputation and worldwide performance may be harmed by marketing subpar or dangerous
products, falling short of client expectations, or failing to offer acceptable customer service.
The danger of unfavorable changes in exchange rates is referred to as currency risk (also known
as financial risk). Exchange rates, or the value of one currency in relation to another, fluctuate
often. Due to the frequent usage of multiple national currencies in international transactions,
currency risk exists. However, the value of the company's assets, earnings, and operating income
may be diminished when currencies vary dramatically. Due to the growing interdependence of
national economies, inflation and other unfavorable economic conditions experienced in one
country may have rapid effects on exchange rates.
Even if these dangers cannot be eliminated, they can be foreseen and controlled. International
businesses with experience carry out research to identify prospective hazards, comprehend their
ramifications, and take proactive measures to lessen their consequences.

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References:
1. Diva, R. 2020. International sales contracts under international Commercial Law
blog.Ipleaders.[online] Available at: https://blog.ipleaders.in/international-sales-contracts-
under-international-commercial-law/ (Accessed: December 25, 2022).

2. Melhem, M. (2014) Most-favoured-nations (MFN) and national treatment (NT) principles

under GATT and GATS., Academia.edu.[online] Available at:
https://www.academia.edu/5518155/Most_Favoured_Nations_MFN_and_National_Treat
ment_NT_principles_under_GATT_and_GATS (Accessed: December 25, 2022).

3. Chumley, M.J. (2022) Why mediation offers advantages over litigation when it comes to
employment disputes [online] Available at:
https://www.mondaq.com/unitedstates/arbitration-dispute-resolution/1254596/why
mediation-offers-advantages-over-litigation-when-it-comes-to-employment-disputes
(Accessed: December 25, 2022).

4. United Nations (2010). United Nations Commission on international trade law. Available
at: https://uncitral.un.org/ (Accessed: December 25, 2022).

5. R. Clayton Allen. Arbitration: Advantages and disadvantages (2022) Allen and Allen.
[online] Available at: https://www.allenandallen.com/arbitration-advantages-and-
disadvantages/ (Accessed: December 25, 2022).

6. Cavusgil, S. T., Rammal, H., & Freeman, S. (2014). International business: the new
realities. Pearson Higher Education AU. [online] Available at:
https://sites.google.com/site/ibwvietnam/4-risks-in-internatio (Accessed: December 25,
2022).

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