The case was been decided by United States District court, Eastern District of Pennsylvania on 29th August 2000.
The case was been decided by federal court and it is not an international one as the court is a district court.
Litigants are referred to the people who are been involved in a law suit. The person who sues and against whom he sued both are been considered as litigants (McLean et al. 2014). Litigants in this case are Viva Vivo Import Corporation, a U.S corporation who is plaintiff that is who has raised the issue in court and Farnese Vini S.r.l, an Italian company who is defendant in this case.
The exclusive or non-exclusive distribution agreement is been determined by manufactured and vendor. In exclusive agreement specified distributor is sole distributor having the right of selling the product in a given specified location or in various places. The suppliers appoint distributors for distributing the goods in a specified market place. In the agreement suppliers agrees with distributors that they will not sell the products in market or employ any other vendor for distributing the products in market. The suppliers may want something as a return on the exclusivity field (Lafontaine and Slade 2014). Exclusive distribution agreement is also known as “sole distribution agreements”.
The meaning of the issue before the Court was what law governed the issues set out in plaintiff’s complaint is the court fart is facing the problem on imposing the specified law on the complaint raised by the plaintiff. The court is also facing the issue on whether CISG could be applied or not. The main issue is raised as both the company is of different country and therefore imposing the law will be difficult.
The meaning of when two foreign nations are signatories to the CISG, that Treaty governs contracts for the sale of goods between parties whose places of business are in such nations unless the contract contains a choice of law provision to the contrary is when two different countries are signing CISG then the business bond between them are been governed by CISG. The business treaty regulates the contract between the two companies of different nation. The contract is on the distributing or selling the good in between the supplier and distributor company where the place of the companies or performing the business is different. This contract is valid till there exists any contrasts in the selecting the law provision.
CISG the term as suggest Contracts for the International Sales and Goods is considered to be an international agreement which is been applied for selling the goods in between the two companies in different nations till the parties are signing other law sources (Mueller 2016). CISG cannot be applied for distribution agreement as the agreement in between the two companies fails to provide sale of specified amounts of goods on the stated price. Moreover if CISG is applied on distribution agreement the defendant has the scope of declaring it as a contract void as plaintiff will fail to produce any credit letters for the fundamental breach .
Plaintiff claimed that United Nations Convention on Contracts for the International Sale of Goods, codified at 15 U.S.C.A. App. 1998 as they thinks that there is a breach of contracts as well as promissory estoppels. The defendant thinks that Pennsylvania law could be applied as there are no agreements which can support ICSG (CISG.law.pace.edu 2017).
Pennsylvania choices of law are the rules of law that are been applied in the action based on diversity. The analysis under this choice of law allows the court in determining as well as understanding that the existing conflicts in between the competing companies is true or false. The conflict exists is false when there is one interest in jurisdiction will be impaired through application of jurisdiction law or it might be like no difference exists in between jurisdiction law (CISG.law.pace.edu 2017). If the conflict exists is true the court should determine the greater interest in the new jurisdiction.
The judgement is referring the Pennsylvania law rather than US law as it is a restrictive approach. The court infers Pennsylvania has the greater interest in this application of law. However the parties is disagreeing the agreement is negotiated at in Pennsylvania that is in Italy. It is very much cleared that agreements have been performed in the centre of Pennsylvania (CISG.law.pace.edu 2017). Therefore the law of Pennsylvania is been judged as appropriate by the court.
According to the Pennsylvanian choices of law, the law of true conflicts exists between the two companies is applicable here. The conflict existing due contract and tort can be claimed in this issue as Civil Code of Italy has a restrictive approach in formation of contract. The court may also determine in which specified jurisdiction the greater interest has in this case. These are been determined by the place of contract, place of negotiating the contract, place of performance. Therefore after taking all the facts in consideration the court gave the judgement that Pennsylvanian law has more interest that Italy law (CISG.law.pace.edu 2017). The court rejected the defendant argue of applying Italian law as the court came into conclusion that the performance of the agreement was done in Pennsylvania.
The court in making the judgement for applying the best law that is appropriate for the case selected Pennsylvanian law. The factors like place of contracting, place of negotiating the contract, place of performance, location of subject matter of the contract and domicile, residence, place of incorporation as well as place of the business are been evaluated by the court. After considering these factors which showed the disagreement of the companies taking Pennsylvania as the place of negotiating the contract but it was very much evident that the performance of the contract took place in Pennsylvania which made the court to impose the Pennsylvania law legally (CISG.law.pace.edu 2017).
If the civil court treated the same factors then they will come to the conclusion of imposing Italian law as Italian Law had a more restrictive approach in the formation and implementation of contract. The system of Italy for recovering the tort is much restrictive than that of Pennsylvania.
The court always comes to the conclusion in applying their own law rather than using international private law because the court applies the factors place of contracting, place of negotiating the contract, place of performance, location of subject matter of the contract and domicile, residence, place of incorporation as well as place of the business. After evaluating these factors the court naturally applies their own law as the foreign law will not be appropriate in this case and many disputes can arise. It is therefore better to apply the own law than the international law as the domestic people will be aware of the law and rising of dispute will be negligible.
Council on Hemispheric Affairs is an in dependent organization for the information and the researches that was being established for promoting common interest of the hemisphere for raising the visibility of the affairs from all over the world.
As COHA deals with the affairs all over the world for raising the common interest and for creating the awareness all throughout the world, they published this article.
The ministers from the Brazilian government along with the directors of the Petrobas acted as the business actors in the entire scandal.
The government of Brazil directly owns fifty four percent of the common shares of Petrobras’ with the rights for voting. The Brazilian Development Bank and the Brazil’s Sovereign Wealth fund holds five percent of the shares (Leahy, 2016). Sixty-four percent of the direct and the indirect ownership are being earned by the State.
ExxonMobil, is one of the multinational oil and gas company situated in Texas of United States. It is considered to be the world’s largest company by revenue and the seven largest publicly traded companies. Petrobas is considered to be the semi-public multinational company situated in Brazil. It ranks in fifty-eight in the Fortune Global 500 List (Costas, 2014). Therefore, if these two companies finalize or settle down for a deal, the law that, governs the contract will be Private International Law.
Private International laws acts when two different companies, situated in two different countries, contracts and settles down for the purpose of the business.
The failure in the emanated ethics from the company’s infrastructure as most of the directors and the politicians were being bribed and corrupted for winning the bids in a high amount of money. This particular behaviour by the directors was biased by the outcomes on valuing the entire process. The ethical trap was known by the tendency in taking the results into considerations during the evaluation the process in checking and verifying the quality (Leahy, 2015).
The second shortfall of the ethics was caused due to the slipping slope by the director of the Petrobas. He was the person who was the sole witness in the accusation of the funds that was being diverse. Additionally the chairperson was being bribed in the business specially in the part of the infrastructure (Leahy, 2015).
Issue of free competition was considered to be one of the important as it mainly focuses and deals with the freedom from the initiation of the force that is considered to be the physical in nature. It is considered to be one of the most important from the economic and from the ethical views as it is the part that any company can produce any item according to their will and wish and can trade accordingly on the interest of the solo interest (Barnato, 2014).
Petrobas had to lose more than its half value in that particular year. Around $70 million were in capping condition in the entire market. Brazilians had to face huge amount of unemployment set up and the poor and the standard people has a cut in the debt rating, that too in a long term. Brazilians had to face a traumatic identity crisis (Segal, 2015).
As, Petrobas have several shares, held by the Brazilian government, the corrupted directors were completely linked with the government.
The offshore companies were being affected directly with the scandal of Petrobas. Petrobas was also considered to be one of the offshore companies dealing with the export import business.
Offshore companies are the companies that deal with the oil and natural gas and are situated in the off shores of the oceans.
Petrobas was responsible for the dealing in the supplying of the oil from Brazil to the international countries. This is the reason Petrobas sandal is considered as an international ones.
In the scandal of Petrobas, the directors of the company, along with several ministers were the part in the scandal of getting bribed and corrupt the entire situation. If the court would have been dependent to the government then it would have fail to punish the ministers who were being the part of the mission of the bribe. But the court was actually, an independent part, therefore, it judged the criminals unbiasedly and could punish the ministers from the government who were the part of the scandal. Therefore, it is so important for the courts to be independent from the government power (Leahy, 2015).
If the countries lack the law for punishing their business of the own community, when these people tries to bribe the other officials belonging from the other countries, then it would have support that the laws of that particular country on the field of bribing and the corruption (Costas, 2014). It also shows that the country is also encourages the corruption and the bribing situations.
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