Two private U.S. corporations enter into an agreement to conduct mining operations in the newly formed Middle

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Two private U.S. corporations enter into an agreement to conduct mining operations in the newly formed Middle Eastern nation of Euphratia. As part of the agreement, the companies include an arbitration clause and a choice-of-law provision. The first states that any controversy arising out of the performance of the agreement will be settled by arbitration. The second states that the agreement is to be governed by the laws of the location of the venture, Euphratia. A dispute arises, and the parties discontinue operations. One of the parties claims sole ownership to the Euphratian mines and orders the other party to remove its equipment from the mines. The other party disputes the claim of sole ownership and seeks an order from a U.S. federal court compelling the parties to submit to arbitration over the ownership issue and alleged breaches of the agreement. How should the court rule if the laws of Euphratia state that, whereas arbitration agreements are to be enforced generally, matters of ownership of natural resources can only be resolved in a Euphratian court of law? Does it matter that two U.S. companies engaged in international commerce would be governed by the Federal Arbitration Act? Explain.
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The Legal Environment Of Business Text And Cases

ISBN: 9781285428949

9th Edition

Authors: Frank B. Cross, Roger LeRoy Miller

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