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									Tutorial Questions
Chapter Twelve
Q1   Soundmaker is an Australian company. Musicart is a company regis-
     tered in Singapore. They made a contract to manufacture and distribute
     VCDs, under which Soundmaker is the manufacturer and Musicart is
     the buyer and distributor. The contract contained, inter alia, the follo-
     wing terms:
      The contract and all documents relating to the contract are subject to the
      law of Freetrade Republic; and
      Disputes between the parties are subject to the non-exclusive jurisdiction
      of the court of Freetrade Republic.
     The contract was made in Australia in October 1998 and the payment
     was made in Singapore by way of cash deposits in two instalments, with
     one payment in advance and the other at completion of the contract.
     Videomaker of New Zealand provided a letter of guarantee to Musicart
     to ensure the Soundmakers’ performance of the contract. The letter of
     guarantee was signed in Singapore, drafted in English and contained
     common law terminology. A large quantity of VCDs supplied by
     Soundmaker were confiscated by the Australian Customs while they
     were being transported to Singapore by Musicart because they were
     pirated products. Musicart alleged that it had no knowledge of the act
     of piracy by Soundmaker and commenced legal proceedings against
     Soundmaker and Videomaker at the Federal Court of Australia. Both
     defendants sought to stay the local proceedings in favour of the Court
     of Free-trade Republic or the Court of Singapore respectively. The
     Freetrade Republic is not a member of any international conventions
     on intellectual property protection.
     Discuss all issues of international commercial law and conflict of laws
     arising from these facts.
Q2   An Australian bank operating in Mainland China concluded a loan
     agreement with a Hong Kong company investing in China. The loan
     was guaranteed by three directors and shareholders of the company,
     who are permanently resident in Hong Kong. The loan agreement was
     written in the Chinese language and the loan was paid in Beijing. The
     currency of the loan was Renminbi. The loan contract also stipulated
     that the interest and the principal of the loan were to be paid in Beijing.
     The letter of guarantee was concluded in English and submitted to the
     Hong Kong branch of the Australian Bank. The Hong Kong company
     assigned its obligation to repay the loan to a Korean company in China
     without receiving consent of the Australian Bank. The Korean com-
     pany was bankrupt and unable to repay the principal of the loan. The
     newly passed Code of Contract Law of China requires the obligator to
     acquire consent of the obligee before assigning an obligation. The
     Australian bank commenced legal proceedings against the Hong Kong
     company and the guarantors at the High Court of Hong Kong.
     Discuss all issues of conflict of laws arising from these facts.
Q3   Foton Ltd is a New Zealand company, which purchased a quantity of
     garments from Mitro Co of Vietnam, CIF Sydney. The contract of sale
     contains a clause which provides that all disputes arising from the
     contract of sale should be submitted to courts in Vietnam. Vietnamese
     law does not require the exporter to provide certificates of origin, but
     Australian law requires either the exporters or importers to provide cer-
     tificates of origin when exporting or importing garments from and to
     Australia. Foton received the goods in December 1998, but discovered
     that about half of the containers which were supposed to carry the
     garments contained chinaware. The bill of lading held by Foton was
     issued by the master of Expressway, a Panama registered vessel owned
     by Merchant Fleet Co Ltd, which is a Japanese company. The bill of
     lading states that X number of containers were shipped in good order
     and conditions, and specifies the Japanese court as the forum for
     dispute settlement and Japanese law as the governing law. Two possibil-
     ities exist: first, the seller packed wrong goods into the containers, and
     second, the shipmaster mixed up the containers containing garments
     and toys. Suppose the Japanese law adopts a limitation on the carrier’s
     liability lower than the limit set out in the Hague-Visby Rules as
     adopted in Australia.
     Advise Foton of the issues of international commercial law and of con-
     flict of laws.
Q4   Advancorp is a US registered company, which holds a patent registered
     in the United States over a design of motherboard for laptop comput-
     ers. In May 1995, it granted an exclusive right to use the patent in the
     area including Australia and New Zealand to Austech Co Ltd, a
     company registered in Australia. The said exclusive right means that
     Austech was permitted to use the patent exclusively within the territo-
     ries of Australia and New Zealand, but the right was not assignable. The
     licensing agreement contained an arbitration clause, stating that all
     disputes arising from the dispute should be submitted to the London
     Court of Arbitration. In September 1996, Austech concluded a licens-
     ing agreement with Hontech, a Hong Kong registered company,
     purporting to grant the right to use the said patent to Hontech in the
     area consisting of Hong Kong, Mainland China and Taiwan. The licens-
     ing agreement contained a choice of law clause, which chose Australian
     law as the governing law of the dispute. Hontech was sued in Hong
     Kong in July 1997 by Advancorp for violating the latter’s intellectual
     property. In December 1997, Hontech was sued in Hong Kong by
     Austech for breach of the licensing agreement, because Hontech had
     stopped paying licensing fees to Austech payable on a quarterly basis
     since July 1997 when Advancorp sued it in Hong Kong.
     Discuss all issues of international commercial law and conflict of laws
     arising from the facts.
Q5   Nisson Shipping Co Ltd is a company registered in Japan. It provides
     shipping services to companies engaged in international trade. It
     concluded a contract of carriage in June 1996 with Hongang Co Ltd, a
     Hong Kong registered company, to carry a quantity of fertiliser from
     South Korea to India. The contract contained a transhipment clause,
     which permitted the carrier to tranship or sub-bail the cargo as the
     carrier deemed necessary. Nisson Shipping engaged the services of the
     Expressor which was a vessel owned by a Taiwanese company. The
     vessel ran aground in October 1996 near the coasts of PRC and both
     the cargo and the vessel amounted to a total constructive loss. The bill
     of lading issued by the Taiwanese company contained a choice of law
     clause which specified Taiwanese law as the governing law; and a choice
     of forum clause which gave non-exclusive jurisdiction to the Taiwanese
     court. Taiwan is a not a member of the Hague-Visby Rules, but Hong
     Kong is. Suppose under the Maritime Law of Taiwan, the maximum
     liability of compensation for the carrier is US$10 per kg, but under the
relevant law of Hong Kong the maximum liability of compensation for
the carrier in the same circumstances is US$20 per kg. Also suppose
that Taiwanese law sets out a limitation period of 12 months and Hong
Kong law sets out a limitation period of 18 months for the same claim.
Hongang Co Ltd sued Nisson Shipping in a Hong Kong court in
March 1998. Nisson Shipping sought to rely on the relevant clauses
contained in the bill of lading issued by the Taiwanese company.
Comment on the relevant conflict of laws issues arising from the above

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