Part two: State Responsibility and Environmental Regulation (15 Marks) Maximum word length is 1500 words

Ecks Company was incorporated in State X, but has its headquarters, operating plant, most of its employees, and most of its shareholders in State Y.  In 1980, a small branch office of Ecks Co. in State Z hired an industrial spy, Mr. O. O. Seven, to obtain secrets from a large competitor in State Z.  The spy was successful.  For more than a year he supplied the branch with the competitor’s most important industrial secrets, which the branch in turn passed on to Ecks Co.  The competitor was a contractor of State Z, and many of the secrets the spy uncovered related to State Z’s national defense.  Unfortunately, Mr. Seven was caught red-handed in 1981.  He was arrested and convicted of espionage.  In bargaining for a reduced sentence, he agreed to testify against the Ecks Co. and its branch office’s manager.  

As a consequence, State Z prosecuted both the Ecks Co. and its branch office’s manager for espionage.  The manager was found guilty, fined, and sentenced to a prison term.  The Ecks Co. did not hire a lawyer to represent it in court, and it did not appear to answer the charges against it.  The court entered a default judgment and confiscated all of the assets of the branch as punishment.  Ecks Co. never appeared to appeal this decision to State Z’s appellate courts.  

Subsequent efforts by Ecks Co. to set up a new branch in State Z were disallowed.  Ecks Co. has long fumed over the loss of its State Z branch and the sentence handed down by the State Z court.  

Finally, this year, it was able to persuade State X to bring a suit on its behalf before the International Court of Justice (ICJ).  Both State X and State Z have recognized the jurisdiction of the ICJ to resolve this dispute.  State X alleges that the Ecks Co. was denied justice.  

Are there any objections to the ICJ’s jurisdiction that State Z may be able to raise?