NEGOTIATIONS

UNIVERSITY SELECTION ROUNDS (2013)

STRATEGY PAPER: GOVERNMENT OF INDIRA AND

PLUNDER CO.

FOR GOVERNMENT OF INDIRA

TEAM CODE: 25

NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE

STRATEGY PAPER FOR GOVERNMENT OF INDIRA

PARTIES: GOVERNMENT OF INDIRA AND PLUNDER CO.

INTERESTS OF GOVERNMENT OF INDIRA:

1) To impose the highest possible royalty on an ad valorem basis.

2) To impose a minimum of 5% export duties on raw and processed coal each.

3) To secure the best possible employment opportunities for the local people in Plunder

Co.

4) To impose obligations on Plunder Co. to develop the neighbouring surroundings and

protect the environment.

5) To restore the peoples’ faith in the Government of Indira, while boosting investor

confidence and rise in the capital market.

6) To ensure such a situation of blatant exploitation of Indira’s resources does not take

place in the future.

CONFLICTING INTERESTS OF PLUNDER CO.:

1) To ensure that the Government of Indira does not arbitrarily expropriate the coal

mines altogether and bring its investments to null.

2) To ensure that the Government of Indira does not depart from a quantum royalty to an

ad valorem royalty.

3) To ensure an export duty is not imposed when a royalty is already being paid to the

Government of Indira.

4) To ensure that the labour, time, resources and profits are not compromised only for

the sake of employing local people.

5) To ensure that the Government of Indira does not unilaterally shift the burden for

developing surrounding areas on the company.

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VIABLE AND CONCILIATORY OPTIONS:

1) The Government of Indira imposes a reasonable royalty on ad valorem basis,

minimum of 5%, two separate export duties on raw and processed coal at 7.5 and 10%

respectively, secure maximum employment for locals at all levels of management

with minimum wages, bonus, pension and dearness allowance and mandatory

guidelines on environment protection, acceptable to both parties.

2) The Government of Indira imposes royalty on ad valorem basis at 7.5%, export duties

of 5% and 7.5% on raw and processed coal; employ at least 50% manual labour and

30% in managerial positions with negotiable figure on wages, bonus, pension et al,

mandatory guidelines on environment protection, with reasonable liability imposed.

3) The Government of Indira imposes a royalty on ad valorem basis of minimum 7.5%

however with minimum 5% export duty on both processed and raw coal, 30% manual

labour and 20% in managerial positions with negotiable figures on wages, bonus,

pension et al, mandatory guidelines on environment protection, with strict liability.

4) The Government of Indira imposes a high royalty on quantum basis of minimum 300

Rahools per metric tonne, however with 7.5% and 10% export duties on raw and

processed coal, 30% manual labour and 20% in managerial positions with negotiable

figures and working conditions on wages, bonus, pension et al, and mandatory

guidelines on environment protection, with reasonable liability.

BEST ALTERNATIVE TO NEGOTIATED AGREEMENT (BATNA):

To expropriate the coal mine altogether and bring the investment of Plunder Co. to null and

call for fresh investments in the mining sector.

EXTRA-LEGAL ARGUMENTS:

The Government of Indira is under no obligation to treat Plunder Co. with special status as

there is no Bilateral Investment Treaty. Moreover, the principle of eminent domain allows the

Government of a country to expropriate resources in the interest of the nation.

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