Case 3-1.

JAPAN TAXES ON ALCOHOLIC

BEVERAGES
World Trade Organization, Appellate Body, 1996

FACTS: The EC, Canada, and the US

complained that Japans application of its

Liquor Tax Law did not comply with the
requirements of the GATT. The WTO Panel
hearing the complaint concluded, among other
things, that panel reports adopted by the
[old] GATT [1947] Contracting Parties and the
[new] WTO Dispute Settlement Bodies
constitute subsequent practice that were to
be treated as an integral part of GATT 1994.
In other words, they were to be regarded as
precedents. On the appeal of this case, the US
argued that the Panel hearing the case had
erred in making this finding.

 4. International Center for the Settlement of

Investment Disputes (ICSID)
a. Created by Convention on the
Settlement of Investment Disputes between
States and Nationals of Other States (the
Washington Convention).

1) Drafted in 1965 by the World Bank.

b. Purpose of ICSID: To encourage private
investment in underdeveloped countries.

1) Rationale: Many individuals and

businesses were reluctant to make
investments out of the fear of having their
investment expropriated.

2) Goal: To provide a reliable mechanism

for impartially resolving disputes between
an investor and the country of investment.

 d. Constituting an ICSID Arbitration

Tribunal.
1) Prerequisites:

a) The state where the investment is

being made (the host state) and the state of
which the investor is a national (the home
state) must both be parties to the
Washington Convention.
b) The host state must have notified ICSID
of the class or classes of disputes that it
considers arbitrable.
1] Note: Only a few states have done so.
c) The investor and the host state must
both consent to ICSID jurisdiction.

2) These prerequisites may not be

 Case 3-3. BUMPER DEVELOPMENT

CORP., LTD. v. COMMISSIONER OF
POLICE OF THE METROPOLIS AND
OTHERS
(Union of India and Others, Claimants)

FACTS: A stone Hindu religious artifact had

been wrongfully removed from India.

Bumper purchased it (or one like it) because
the seller provided false papers. The police
seized the artifact while its provenance
(origins) was being checked at the British
Museum. Bumper then brought suit to get
the artifact back. Among those who
intervened as claimants for the idol was the
Hindu temple and the idol within the temple
to which the artifact belonged.

ISSUE: Should the temple (and the idol) be

 b] give their consent to the

jurisdiction of a court.
(1) Consent arises by:
(a) Appearing in court after a suit has
commenced.
(b) Agreeing to the personal
jurisdiction of a particular court in a
forum selection clause contained in a
contract.
(c) Appointing an agent within a state
to receive service of process on behalf of
the individual.
(d) Minimum business contacts with the
forum state.

Case 3-7. BANK OF INDIA v.

GOBINDRAM NARAINDAS SADHWANI
Hong Kong, High Court, 1982.

 FACTS: Mr. & Mrs. Gobindram Sadhwani (G),

residents of Hong Kong, had acted as guarantors

of a line of credit of 230,000,000 yen that the
Bank of India had provided Sadhwanis (Japan)
Ltd. (SJL). The Bank was an Indian corporation
with branches in Japan and Hong Kong. SJL was a
Japanese firm managed by Mr. Gs brother, Mr.
Kishinchand Sadhwani (K). It had drawn bills of
exchange on corporations in Sri Lanka and
Nigeria (run by other brothers). The bills were
dishonored and the Bank sought payment from
Mr. K as a guarantor. Mr. K told the Bank it would
have to pursue the Hong Kong guarantors, Mr. &
Mrs. G. Although the Bank had given Mr. & Mrs.
G a release, it eventually brought suit against
them anyway. Mr. & Mrs. G. then argued that the
law governing their guarantee contract was
Japanese law and that Japanese law excused
them from liability because the Bank had
released them as guarantors. The Bank argued

 6. Governmental Interest
a. Procedure:
1) Courts will make no choice of law
unless asked to do so by the parties. In
such a case, they will apply the law of
their own state.
2) If asked to make a choice of law, courts
will look to see which state has a
legitimate interest in determining the
outcome of the dispute.

a) If only the forum state has an interest

(a so-called false conflicts case), it will

apply the forum states law.
b) If both the forum state and another
state or states have some legitimate interest

 c) If two states other than the forum

state have legitimate interests (also a
true conflicts case), then the court
may:
1] Dismiss the case if the state in which
the court is located can use the
doctrine of forum non conveniens
(discussed below).
2] Apply whichever law it feels is the
sounder.
3] Apply the law that is most like that
of the forum state.

Case 3 8 Jorge Luis Machuca Gonzales et

al v. Chrysler Corporation et al.