• Identify what way of doing international business is involved in the case from pickingoneof the below ways:
  • Direct Contract(import/export of goods)
  • Foreign Agent Representation(hiring of a person or representative in the foreign host country)
  • Direct Foreign Investment(opening a branch office in the foreign host country by way of opening up a branch office or opening up a subsidiary)
  • Franchising(issuing a franchise to another to operate in the foreign host country)
  • Licensing(issuing a license to another to operate in a foreign host country)
  • None of the above(the case does not involve any of the forgoing ways of doing international business)
• Explain how this litigation and legal risk involved in the other student's case could have been avoided, mitigated or reduced.

Electra-Amambay S.R.L. v. Compania Antartica Paulista Ind. Brasileira de Bebidas E Conexos Order No. 827 (November 12, 2001) Paraguay Supreme Court of Justice BACKGROUND AND FACTS is no similar law protecting Paraguayan distributors or The Paraguayan government enacted a law that specif- other representatives of Paraguayan-based enterprises. ically protects Paraguayan representatives of foreign Compania Antartica, a Brazilian firm, terminated companies. Among other things, the law requires a for- Electra-Amambay, its Paraguayan representative. Electra- eigncompany to make an extraordinarily large payment Amambay argued that the termination was not for good to the Paraguayan representative if the representative is cause and sought its statutory penalty. Compania Antartica terminated for some reason other than "just cause." The countered by arguing that the Paraguayan statute was an Paraguayan statute narrowly defines "just cause." There unconstitutional discrimination based on national origin. continues8 Part 4: Regulation of the International Marketplace ontinued JUDGE CARLOS FERNANDEZ GADEA notes] Article 9 [of the law] presumes to rise to the level Compania Antartica advances the objection that [the] of "public order" [but] in this case, the social order is Articles ... of the Law No. 194/93, on which the [Electra- not implicated. The implicated interests involv Amambay] bases its lawsuit, are unconstitutional. minority of the population and not the general interest. The objection maintains that Articles 1, 4, 5, 6, 7, and 8 constitute an unjust and arbitrary discrimina- With respect to this point, I believe that it is not tion against foreign manufacturers and companies ... . logical to think that the foreign manufacturers have They establish obligations, assumptions, and sanctions an interest only in a simple purchase and sale transac- only and exclusively against foreign manufacturers tion. The relationship between the parties can go much and firms, but not against persons domiciled within further than a single transaction. Such a relationship the country. [The objection is that] this inequality vio- should be found to exist [before the efore the statute applies]. As lates Articles 46 and 47, paragraph 2 of the National to Article 9 ... the law was clothed as a matter of "public Constitution. order" when it was enacted as such by the public legis- . .. lative power. This Law, 194/93, is of a special character, regulating the relationships between foreign manufacturers and Finally, it is important to emphasize that this law firms and their representatives, agents, and distributors does not reflect an exaggerated protectionism of the of their products domiciled in the country. And in the State, but rather legal security and equality, bearing case of the termination of these relationships without in mind that one of the parties (the foreign company) a statement of just cause, it sets forth how the amount is in better economic condition than its local repre- of damages should be calculated. It is customary that a sentative and that the latter finds itself in a unequal foreign firm which contracts for the services of physi- state, whether for lack of technical training, economic cal and legal persons domiciled in Paraguay lays down resources or qualified personnel. It is because of this the ground rules of said relationship, establishing the that the State intervenes in this relationship, setting rights and obligations of both parties. With the prom- ulgation of this law, the parties are placed on an equal forth precise rules with which the parties must com- footing, establishing the damages that should be paid ply, especially when the foreign enterprise unilaterally by the foreign firm in the case of a rupture of the con- decides to terminate this relationship, without cause. It tractual bond without just cause. The firm or persons s in this situation, when the national representative is who find themselves in the country, for the promotion, economically prejudiced, that [the law] compensates for sale, or placement within the republic of products or this prejudice in some way by an award of damages ... . services provided by the foreign firm necessarily had As has been said, there exist causes that are justifi- to incur expenses in investments so that the referred cations exempt from the obligation to pay damages product would have success in the local market. How- through which the foreign enterprise can exonerate ever, it is necessary to underscore that if there exists itself from this responsibility. These causes are found just cause, the foreign firm or provider has suitable and itemized in the law. appropriate means at its disposal to seek exoneration from liability for the damages. Decision. The court rejected the objection as inadmis- sible and charged Compania Antartica with all costs. [Compania Antartica makes the further point] that Article 2 of the mentioned law ... in defining the different types of contractual relationships, abusively exceeds the intention, will and interest of the manufac turers who simply wish to export their products without creating any contractual relationship other than that of the simple purchase and sale of goods. [Moreover, it