A Crocodonian business firm chartered an airplane owned by the Republic of Crocodonia to fly cargo to Country U. The cargo was a load of crocodile skins that are legal to own and sell in Crocodonia but that are considered contraband in Country U. The business firm, knowing this, mislabeled the cargo as cowhides. When the plane landed in Country U, Country U’s Contraband Enforcement Agency seized both the plane and its cargo. The cargo was destroyed and the plane was sold in accordance with a Country U anti-racketeering statute. The government of Crocodonia was incensed. It sent a diplomatic message to Country U protesting that its national honor had been sullied by Country U’s actions.

Crocodonia and Country U are parties to an Arbitration Treaty, and they agree to submit the dispute to arbitration. Crocodonia seeks compensation for the airplane and, on behalf of the Crocodonian business firm, compensation for the destroyed cargo. What will the arbitration tribunal decide? Discuss.

Law of the Sea: Precautionary Principle