Case about International Business Transactions.
Facts:
Langcorp Ltd is a US Chemical Company incorporated in accordance with NY Law. Among different business, it is conducting research in agricultural genetics to improve the strength of crop. Langcorp got several patents in this field. As a result of this, it has entered into negotiations to license a patent for one of the chemical compounds that used to increase crop strength to Boavista a Brazilian Company.
License agreementwas signedwith Boavista containing an arbitration clause in order to decide any dispute that may occur due to breach of contract. No applicable law was drafted.
Besides it was stated in the contract that the licensee has assumed the obligation to guarantee IP rights on behalf the patent holder in Brazil.
The contracts include the delivery FOB on the machines necessary to produce the chemical products.
There is a bilateral investment treaty between Brazil and US Based on the model US treaty of 2012 and stablishing ICSID jurisdiction in case of treaty violation.
Two situations happened:
1. Brazilian government impose a compulsory license based upon the need of access to food. Negotiations happened directly with Langcorp. Boavista took no action.
2. As a result of the compulsory license Boavista revenues decreased substantially and was not able to pay for the machines named in the sales contract. It had only paid half of the price agreed. Machines happened to be delivered on time and worked properly.
Answer the following questions.
1. You are part of the arbitral court and you are asked to decide for the breach of contract and the lack of actions done by Boavista to protect IP rights of Langcorp.As an arbitrator you are asked by Langcorp to revise the compensation imposed by the Braziliangovernment.
2. You need to decide if you accept jurisdiction in all matters,none of them or some of them as well the applicable law.
3. You are Boavista attorney and you need to prepare the strategy for the breach of contract allegation.
4. You are Langcorp attorney. Is the BIT any useful for you?