Background:
ABC is a multinational enterprise (MNE) incorporated in State X. ABC entered into a joint venture agreement with XYZ, an MNE incorporated in State Y, to jointly produce a new line of hydraulic equipment in ABC's new factory in State Z, a developing nation. ABC & XYZ have mutually agreed to have the law of State Y govern any disputes or concerns arising under the joint venture agreement. Shortly after the conclusion of the agreement, a wiring defect in ABC's factory caused it to burn to the ground, killing five tourists in the immediate vicinity who were nationals (citizens) of State Q. XYZ, fearing bad publicity, sued ABC to rescind the joint venture agreement. X,Y, & Z are all common law states, while Q is a civil law jurisdiction.
Issue
1.Should a criminal case be filed, analyze the possible arguments and counter-arguments that counsel for either ABC or XYZ could reasonably make for having the case heard in the municipals courts of:
a. State X
b. State Y
To determine whether a criminal case should be filed in the municipal courts of State X or State Y, counsel for ABC and XYZ can make the following arguments and counter-arguments:
a. State X:
Arguments for having the case heard in the municipal courts of State X:
1. Incorporation of ABC: As ABC is incorporated in State X, its operations and activities, including the factory where the incident occurred, fall under the jurisdiction of State X.
2. Location of the incident: The factory where the wiring defect occurred, resulting in the fire and deaths, is located in State Z, which is within State X's jurisdiction. Therefore, the criminal case should be heard in the municipal courts of State X.
3. Application of State X's law: Since ABC is incorporated in State X, the joint venture agreement can be interpreted to subject all disputes or concerns arising from it to the law of State Y. As a criminal case arises from the agreement, it should be under State X's jurisdiction.
Counter-arguments against having the case heard in the municipal courts of State X:
1. Choice of law clause: The joint venture agreement between ABC and XYZ explicitly states that any disputes or concerns arising from it should be governed by the law of State Y. Hence, the parties have mutually agreed to resolve any legal matters in State Y, including criminal cases.
2. Location of the factory: Although ABC is incorporated in State X, the incident occurred in State Z, a developing nation. The jurisdiction where the crime took place may hold more relevance than the place of incorporation.
b. State Y:
Arguments for having the case heard in the municipal courts of State Y:
1. Choice of law clause: The joint venture agreement explicitly states that the law of State Y should govern any disputes or concerns arising from it. This includes criminal matters, and thus the case should be brought before the municipal courts of State Y.
2. Incorporation of XYZ: XYZ, the other party in the joint venture agreement, is incorporated in State Y. Therefore, it would be more appropriate for the case to be heard in the jurisdiction where XYZ is located.
3. Bad publicity concerns: XYZ's decision to sue ABC is based on concerns about bad publicity. By having the case heard in State Y, where XYZ is incorporated, XYZ may have more control over the proceedings and potential publicity.
Counter-arguments against having the case heard in the municipal courts of State Y:
1. Location of the incident: The factory where the incident occurred is located in State Z, not State Y. It may be argued that the jurisdiction where the crime took place should have authority over the case.
2. Application of State X's law: Since ABC is incorporated in State X, it may argue that even though the joint venture agreement specifies State Y's law, the location of the incident and the incorporation of ABC in State X should be taken into consideration.
Ultimately, the decision regarding which municipal court should hear the criminal case will depend on the interpretation of the joint venture agreement, the legal systems of the respective states, and any relevant international laws or treaties. It is advisable for counsel from both ABC and XYZ to review the agreement and consult with legal experts to make an informed argument.