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Question: The Modern Exploration Co. (MEC), a firm organized in State P, entered into an investment contract with State Q to explore for and harvest magnesium nodules from the seabed of State Q's continental shelf. MEC agreed to pay State Q U.S. $100 million in advance for this privilege. State Q, however, did not inform MEC that it would be promulgating certain environmental protection laws within days after signing this contract that would make the endeavor so expensive that it would be effectively impossible for MEC to perform. When MEC discovered this, it asked State Q to either modify the environmental laws or give MEC back its money. State Q refused. MEC then initiated an arbitration proceeding under the auspices of the ICSID in accordance with the terms of the investment agreement and State Q law. How should the tribunal rule? Discuss.

Management Theories, Management Studies

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