The Harvester Company entered into a contract with Country R to harvest lumber on government land in Country R for a period of 20 years. The contract provided that if there were any disputes, the matter was to be resolved by arbitration, with the International Chamber of Commerce appointing the arbitrator and the arbitrator applying the rules of international law, the general principles of law, and equity. Two years later, Country R told Harvester to cease operations and leave the country. Country R made no effort to recompense Harvester for the country’s breach of the contract.

Harvester has now initiated an arbitration proceeding. Country R claims that contracts between a state and a private person can be broken at any time by the state because to do otherwise would be to deny the state its sovereignty. Discuss.

Customary International Law