QUESTION 4 - Anti-competitive Conduct Law

Gazda and Monda both manufacture cars in State J.They recently entered into a noncompetition agreement with the approval of State J's government.

The non-competition agreement provides that (a) Gazda will sell its vehicles in the US and that Monda will not and (b) that Monda will sell its cars in Australia and Gazda will not.As a result of this agreement Gazda quickly builds up a significant interest in the US car market and Monda does the same in Australia.

Also, after the signing of this agreement FR Car Company, a US company, finds it very difficult to obtain Monda produced vehicles for importation into the US.As a result, FR Car Company has commenced legal action in a US Court claiming that both Gazda and Monda have violated the US Sherman Act.

Gazda has argued in its defence that the US Court should dismiss the case for lack of subject matter jurisdiction.

How should the US Court rule on the Sherman Act issue against Gazda and Monda?