Negotiations University Selection Rounds (2013)

Strategy Paper: Government of Indira and Plunder Co.For Plunder Co.

Team Code: 25

National Law School of India University, Bangalore

Strategy Paper for Plunder Co.Parties: Government of Indira and Plunder Co.Interests of Plunder Co.: To ensure that the Government of Indira does not arbitrarily shift from quantum basis to ad valorem basis and explore the possibility of maintaining status quo. To ensure that there is no unreasonable imposition of export duty when royalty rates are open to negotiation. To ensure that there is no unrealistic obligation to employ local, untrained and unqualified people that will drain the company of its resources, time and profits. To protect the companys financial interest and value of its investments and ensure there is no expropriation of the same. To negotiate environment guidelines in such a way that the burden of protecting the environment doesnt fall entirely on the company. To reach a final and binding agreement that will prevent the Government from changing its stance arbitrarily in the future

Conflicting Interests of Government of Indira: To shift to an ad valorem basis of royalty. To impose an export duty on both processed and raw apart from the royalty that is being charged. To impose obligations on the company to employ maximum number of local people. To impose binding, mandatory guidelines on the company to protect the neighbouring surroundings and environment.

Viable and Conciliatory Options: The Government of Indira imposes a different and reasonable royalty on quantum basis maximum of 225 Rahools per metric tonne, with no export duty, with complete autonomy to set employment figures, terms and conditions and recruitment standards, reach model guidelines on environment protection, with minimal liability. The Government of Indira imposes a reasonable royalty on ad valorem basis not exceeding 6.5%, no export duties on raw and processed coal, negotiable employment figures but complete autonomy on recruitment standards and terms and conditions of employment and negotiable guidelines on environment protection, with minimal liability. The Government of Indira imposes minimal royalty on ad valorem basis of 5%, minimal export duty on raw and processed coal of 5% each; negotiable employment figures but complete autonomy on recruitment and terms and conditions and negotiable mandatory guidelines on environment protection, without immediate effect and shared liability. The Government of Indira imposes a royalty on ad valorem basis of 7.5% however with export duty not exceeding 2.5%, negotiable employment figures and terms and conditions but complete autonomy on recruitment standards and negotiable guidelines on environment protection, without immediate effect and minimal liability. Best Alternative to Negotiated Agreement (BATNA): If expropriation is inevitable, then to initiate civil proceedings for compensation on the principles of equity and promissory estoppel. Extra-Legal Arguments: Even if the principle of eminent domain is invoked, justice and equity demands that compensation be paid for the expropriation of the coal mines and devaluation of the investment. The principle of promissory estoppel prevents the Government from going back on its representations in the concession contract and hence, if a settlement cant be reached, compensation is to be paid. 2