Browsing by master's degree program "Kansainvälisen liikejuridiikan maisteriohjelma (International Business Law)"

This thesis in law examines the legal effects that companies may face if they use carbon dioxide (CO2) offset as a basis for their carbon neutrality claim and this offset is in later scrutiny revealed as double counted. Double counting renders the carbon neutrality claim void, as the offset is also counted for elsewhere and therefore does not deliver climate change mitigation outcome for the company. Avoiding double counting is one of the established quality criterions of carbon offset, however it is not straightforward to assess the criterion ex-ante as the practise occurs ex-post. Double counting can occur unintentionally but also intentionally by fraud. This thesis examines the topic in relation to EU law and draws examples from national legislations of the Member States, notably from Finland. Companies can purchase carbon offset from the voluntary carbon market. They can purchase it for varied reasons related to corporate social responsibility. However, most often offset is purchased to claim carbon neutrality. Carbon neutrality is a voluntary goal for companies. It can be achieved by reducing CO2 emissions that can be reduced and then compensating the residual emissions by purchasing offset. Carbon offset is a commodity - one kiloton of CO2 emissions equivalent is valued as a one carbon credit. Carbon credits are constructed under different schemes, and as such are based on different standards and have different prices. The market is international in nature, and in many cases the actors are in different countries. The voluntary carbon market is not regulated by substantive law and therefore, the market remains regulated by self-regulation. This creates issues in quality assurance and also the problem of lack of oversight and enforcement. The differently constructed commodities are also difficult to compare, and the market includes information asymmetry and integrity risks. The legal effects of double counting in relation to carbon neutrality claims is a phenomenon currently related also to the Paris Agreement, as both offset project host country and a company might claim the same emissions reductions. This current state of affairs makes it probable that the corporate offset is double counted. If the corporate claims are rendered void, it has negative effect on climate change mitigation but also to the company’s reputation which can in turn can lead to significant monetary losses. In relation to ‘green’ consumer products, companies may face accusations of misleading marketing practices or greenwashing, if it is revealed that compensation was purchased from a poor-quality offset project. Also, the rise of human rights consciousness in relation to emissions reductions under the Paris Agreement may play part in the risk of environmental litigation also for companies.

Two Abstracts

There has always been an imbalance between a small buyers and professional sellers. Understanding and managing the market ecosystem for ones’ advantage requires resources. Given the larger amounts of resources professional seller parties often possess, especially compared to small buyers, they have the possibility to find out the key elements of prevailing market ecosystem, and correspondingly understand and utilize better the existing options. Hence professional sellers often have the upper hand in trade negotiations and ability to dominate trade related negotiations and terms of trade. There is a demand for a different kind of trading approach that would provide quickly better temporary or permanent bargaining position for small buyers. Small buyers could benefit from a functional, scalable, international, and effective way to access and form legally qualified buyer groups that can gain negotiation leverage and correspondingly discounts that usually only a large buyer organisation can access. Fundamental challenges in grouping parties in order to obtain leverage in trade negotiations culminates in how to first identify and group different parties into buyer groups and then to define the rights and responsibilities between the group members. It becomes evident that technology, such as an online platform, is required to perform such a procedure. The platform is a plug-and-play business model that allows multiple participants (e.g. small buyers and professional sellers) to interact with each other and create and exchange value. This thesis will present core concepts and regulation related to digital grouping of buyers into buyer groups in the EU. With the information obtained, a Buyer Grouping Process Framework, sort of an algorithm, is developed. This Framework provides a way to efficiently group buyers with similar demand, and then to define appropriate legal entity under which buyers can group, conduct bidding, and make desired trade with a leverage and consequently with better terms.

The recent shift in paradigm caused by the increasing democratisation and commercialisation of outer space, commonly referred to as ‘NewSpace’, has once again rekindled humankind’s interest in space and space exploration. The trend to global digitalisation is changing the traditional face of space activities and the space industry is now subject to a commercialisation wave. With technological advancements, private commercial entities have taken it up to the stars in order to turn a profit. New actors in NewSpace range from the pragmatics of the space industry, dealing with, for instance, satellite communications and connectivity, satellite components, satellite navigation, and launch services, all the way to the dreamers postponing immediate rewards, working towards concepts such as mining and utilising space resources, in-orbit servicing of satellites, space tourism, where space is conceived as an instrument for implementing new business models and ideas. While the traditional space industry dates back to the space race, States are no longer the only actors with spacefaring capabilities. The emergence of NewSpace, private non-governmental actors taking part in space activities, and new business models call for new technologies and implementation practices that create new legal and regulatory challenges that NewSpace companies and the traditional commercial space sector need to take into account in their business activities. To answer whether the current international and national legal framework is sufficient to accommodate the recent paradigm shift and new trends and the approach of the Nordic countries, this thesis will provide a cursory look on the issue and scrutinise the main legal and regulatory challenges faced by NewSpace companies, and, when appropriate, the impact on and the response of Nordic countries in tackling these challenges. First, it will provide the necessary historical background on the space industry as a whole, explaining the roots of NewSpace and how the industry has developed to its current state. Second, it will introduce the basic concepts of space law, the five international space treaties – which compose the international legal framework on space activities – and a more in-depth look on the basic requirements and conditions for authorisation in national space legislation. The national legal framework for space activities in Norway, Sweden, Finland, and Denmark will be examined comparatively and their impact of national legislation on the private space industry in the Nordic countries. Finally, this thesis analyses the main legal issues surrounding both the traditional space sector, such as contract practices in the space industry, aspects of space insurance, and export, and hallmark projects typical of NewSpace, such the exploitation of space resources from the Moon and other celestial bodies, and suborbital flights, and active debris removal.

Giving the consolidation of a framework that allows for the operations of drones for commercial purposes by the new implemented Regulation (EU) 2019/947 on the rules and procedures for the operation of unmanned aircraft, this thesis introduces the reader to both the origin of the technology, the potential business applications of drones in the civil environment, and the current provisions regarding the risk-based operational characteristics of the Regulation as means to analyse the previously existing air and contractual law’s provisions. Through the exploration of the relevant legal principles and regulatory guidelines available for the interpretation of liability assignment and applicability, and by comparing the regulation to the contractual model in order to provide a deeper understanding of how the technology can be commercialized on a Drone-as-a-Service model, the author presents the relevant need of further legislation addressing the application of liability regimes harmonization between Member States from the perspective of the Unmanned Aircraft Systems Operator to satisfy the modern Cloud-Based Services Agreements model and allow the use of Internet as a platform for cross-jurisdictional performance. The first chapter revolves around the historical development and the growing civil interest in the application of drones to activities as a novel, as well as to already established activities that are currently performed by different technologies. Furthermore, it presents the possibility of its characterisation under the framework currently employed by cloud-based services regarding its commercial contractual format. The second chapter focuses on introducing the new Regulations (EU) 2019/947 and 2019/945, which have set the legal and regulatory frame for the safe conduction of activities of unmanned aircrafts, including the principles that served as base for the development of the provision;, the operational rules; machinery requirements and classifications; and the categories’ classification system that have been created for risk assessment. Overall, the frame serves as a guide for anyone interested in venturing in this business. The third chapter explores the international laws and EU air laws that will influence the ruling and potential jurisprudence regarding liability decisions. It aims at presenting both the relevance of Member States autonomy over regulatory decisions and importance towards contractual liabilities disputes. The focus is strongly focused on Operators that will be employed by service providers under the conceptualised cloud-based services agreements contracts framework. Finally, the thesis presents its conclusions and recommendations towards the commercial parties and legislators.

Avhandlingen är en rättsdogmatisk undersökning av den nationella lagstiftningen gällande konkurrensförbud i anställningsförhållanden. Konkurrensförbud begränsar arbetstagarens rätt att vid anställningsförhållandets slut ingå arbetsavtal med arbetsgivare som bedriver konkurrerande verksamhet med den ursprungliga arbetsgivaren samt att för egen räkning idka konkurrerande verksamhet. Arbetsavtalslagen (55/2001, ArbAvtL) innehåller tvingande reglering av konkurrensförbud och har som syfte att säkerställa balansen mellan parterna: Arbetsgivaren skall ha möjlighet att ingå konkurrensförbud för att skydda att känslig information kommer i händerna på konkurrenterna, samtidigt som arbetstagarens näringsfrihet måste tryggas. Lagstiftningen de lege lata lämnar en del utrymme för tolkning. Vad är giltiga konkurrensförbud i anställningsförhållanden? Hurdana arbetstagare betraktas som sådana ledare att ArbAvtL:s begränsning av giltighetstiden och storleken för avtalsvitet inte gäller? Avhandlingen inleds med att granska faktorerna som spelar roll vid bedömningen av konkurrensförbuds giltighet. Konkurrensförbud är i sin helhet ogiltiga och binder inte parterna om det inte finns synnerligen vägande skäl för dem. Det saknas synnerligen vägande skäl om arbetsgivaren inte har ett faktiskt behov, arbetstagaren inte är i någon form av nyckelposition, naturen av arbetsgivarens verksamhet inte förutsätter konkurrensförbud, eller verksamheten som förbjuds inte är konkurrerande verksamhet. Konkurrensförbud är partiellt ogiltiga om dess giltighetstid eller avtalsvite överskrider den lagstadgade gränserna. Vad som är giltiga konkurrensförbud avgörs enligt en helhetsbedömning från fall till fall. Vidare granskas vilka arbetstagare som på basis av sina uppgifter och sin ställning anses leda ett företag, en sammanslutning eller en stiftelse eller en självständig del av sådana eller anses inneha en självständig ställning som är direkt jämförbar med en sådan ledande uppgift, och därmed kan bindas av längre konkurrensförbud än tolv månader och högre avtalsviten än sex månaders lön. Arbetstagare som objektivt sett har hög lön; har större befogenheter och ansvar än ordinarie arbetstagare; har andra arbetstagare hierarkiskt underordnade sig; samt har möjlighet att bestämma om sin egen arbetstid kan anses omfattas av ledarbegreppet i ArbAvtL och kan därmed bindas med strängare konkurrensförbud än vad lagstiftningen påbjuder. Arbetstagare som självständigt bestämmer om sin arbetstid och innehar olika typer av sakkunniguppgifter kan anses inneha sådana självständiga ställningar som direkt jämförs med ledande uppgifter och därmed kan de också bindas av strängare konkurrensförbud än vad lagstiftningen påbjuder. Eftersom arbetsgivarorganisationer varierar när det kommer till storlek, verksamhet, uppbyggnad etc. är det inte möjligt att dra svartvita riktlinjer för vilka arbetstagare som omfattas av undantagsregleringen och vilka som inte gör det. Undantagets personrelaterade omfattningsområde måste avgöras enligt en helhetsbedömning från fall till fall. Avslutningsvis diskuteras rättsläget de lege ferenda. Diskussionen tar avstamp i en ytlig granskning av Sveriges konkurrensförbudsreglering. Det faktum att den nuvarande lagstiftningen lämnar så pass mycket tolkningsutrymme och att det i sista han är domstolen som retroaktivt avgör konkurrensförbuds giltighet, leder till osäkerhet på arbetsmarknaden. Arbetstagares begränsade möjligheter att i praktiken pröva konkurrensförbuds giltighet, i kombination med de stränga påföljder som brott mot konkurrensförbud resulterar i, gör att arbetstagare riskerar följa konkurrensförbud som i verkligheten är ogiltiga. Jag argumenterar att detta leder till att arbetsgivare kan utnyttja situationen och godtyckligt använda konkurrensförbud. En obalans mellan arbetstagare och arbetsgivare uppstår. Användningen av konkurrensförbud skall visserligen även i framtiden möjliggöras, eftersom arbetsgivare i vissa situationer behöver kunna skydda information. Däremot behöver arbetstagares svagare ställning tryggas. Jag föreslår de lege ferenda att definitionen av ”synnerligen vägande skäl” för konkurrensförbud samt det personliga omfattningsområdet för arbetstagare i ledande ställning specificeras för att minska behovet av retroaktiva ställningstaganden. Vidare framför jag att arbetsgivare skall betala skälig ersättning åt arbetstagare redan från tidpunkten då konkurrensförbudet inleds. Den balanserade regleringen skulle leda till en minskad osäkerhet bland parterna och en mera övervägd användning av konkurrensförbud.

Abstract Faculty: Faculty of Law Degree programme: International Business Law Programme Author: Aitor Sevillano Orbegozo Title:” Exclusivity agreements in international business operations; Risks and best practices. Level: Master’s thesis Month and year: November 2023 Number of pages: 79 Keywords: Exclusive dealings, competition law, international law, employment law, freedom of contract, choice of law, EU Law, exclusive clauses, contract law. Supervisor: P. Sean Morris Where deposited: E-thesis Helsinki University Abstract: This thesis will address the question of exclusivity clauses in business operations at the international level, consequentially establish what the risks are, and determine the best practices for entering into an exclusive commercial agreement in an international context. I will explore the international business environment and how companies interact with other undertakings in this environment. We will proceed by studying exclusivity in its different forms and aspects in a contractual context and dissecting exclusivity dealings exposing its features and effects, as well as looking at them through a dimensional prism. This will serve to understand and see how exclusivity terms affect the parties to an international business arrangement and the effects they have in the market they operate. Using principles of legal theory such as freedom of contract, and using a theoretical approach, a study of the effects of exclusivity will be elaborated considering the factors and attributes inherent to the inclusion of exclusivity terms in a commercial contract. Classifying and studying the effects of exclusivity considering the effects as isolated items and how these shape the relationship between the parties and play a role in international business operations. We will examine how exclusivity clauses position the parties in respect to their contractual relationship. Laws and regulations applicable to exclusivity agreements will be identified and considering these, the applicability and validity of exclusivity clauses and agreements will be scrutinised. Competition law and employment law will be the main fields of exploration to observe and study how these two fields of law regulate exclusivity terms in view of the horizontal and vertical direction of exclusivity agreements between the parties. We will use the examples of EU and UK regulations as they have a different angle in approaching the validity of exclusivity agreements. Following the identification of the main elements of exclusivity agreements, based on Competition end employment regulations as well as business elements, I will classify and identify the risks that the use of exclusivity agreements has for international commercial agreements, from an operational and legal perspective. Considering the risks and the features of exclusivity agreements, I will propose best practices to avert or remedy the risks and to achieve the best efficient use of exclusivity agreements.

Freedom of establishment granted to nationals of Member States which is enshrined in the Article 49 of the Treaty on the Functioning of the European Union (TFEU) is one of the fundamental freedoms granted by the Treaty that extends to companies by virtue of Article 54 of TFEU. In the absence of company law harmonisation, the increased corporate mobility may lead to a competition between legal orders which in turn can produce laxer law in the Community and this fear is known as fear of Delaware effect in the European Union. Since company law is not harmonised in the EU, there are differences among national conflicts of laws rules of the Member States and many Member States felt justified to use the real seat doctrine as a defensive mechanism for negating the European Delaware. However, the judgment in Centros changed this situation and established legal forum shopping as a good practice. Subsequently the judgment in Überseering reaffirmed the principle of mutual recognition in the EU. Therefore these two judgments established the market for company incorporations and as a result it was feared that, a European Delaware is going to emerge. The purpose of this paper is to assess whether this fear is justifiable. For this purpose the traditional way of conducting legal research; looking for sources and by reading and evaluating them, using them with critical thinking and judgments, was used as a method in this paper. The paper found that, although after the judgments in Centros, Überseering and Inspire Art it was feared that a European Delaware is going to emerge; this fear was unreasonable. It is particularly because the regulatory competition not only needs the establishment of a market for company incorporations but also needs the willingness of the Member States and the companies to compete. The judgments in Centros and Überseering only established a partial market for company incorporation because a market for company incorporation needs both the ability to forum shop and the ability to reincorporate a company in another Member State. This paper also looked into the incentives for competition from the Member State’s and company’s perspective. Eventually, market for company incorporations was established after the judgment in Polbud which allowed cross-border conversion of companies; making regulatory competition possible in the EU. As a result, this paper proposed company law harmonisation as possible solution to the problem. It is high time the Commission took the initiative to make Community company law uniform so that a European Delaware does not emerge.

Tiivistelmä – Referat – Abstract The main research question addressed in this thesis, namely “are perpetual agreements valid and enforceable?”, is enticing from a general contract law perspective, as well as in the comparative law setting. The chapters of this thesis are built in a way such that Chapter 1 serves as an introduction to the research question, legal sources and methodology. Chapter 2 aims to clarify the main confusions around discussions of perpetual agreements. Chapter 3 is dedicated to the binding force of a perpetual agreement, which has not been given enough attention in the research literature as a separate question. Chapter 4 and 5 address the two main categories of perpetual agreements: everlasting contracts and contracts with undefined duration. These chapters include topics which can be addressed to either category, therefore the division of the topics does not provide too strict a systematic distinction. Chapter 6 is dedicated to comparative research from Finnish and Russian contract law perspectives by observing the systems independently in order to bring out the perspectives in which these jurisdictions address the questions of perpetual agreements in the light of their positive contract norms. Chapter 7 presents the research findings in the form of general conclusions about the validity of such contracts as well as systematization in the form of a roadmap to evaluate perpetual agreements. The roadmap then serves the purpose to present the research findings related to Finnish and Russian perspectives on perpetual agreements. The possibility existence of perpetual agreements from the perspective of limiting the freedom contract by mandatory rules of contract law. In conclusion, the research failed to identify a fundamental principle by which the general ban of everlasting contractual obligations could be explained. The research opposes the notion, that perpetual agreements may not exist as an “everlasting” nature of any legal contractual bind would be inherently unjust as such. This is mainly due to the fact, that the legal systems struggle to even comprehend, what eternity means in legal sense. In short, legally speaking, there is nothing inherently unreasonable in eternity. However, undoubtedly, each everlasting agreement should be evaluated based on the nature and purpose of the contract in the light of the intention of the parties, the specific contract type and the relevant mandatory rules in place in connection with type, the circumstances in which the contract was concluded and the requirements of good faith and fair dealing. The roadmap aims to differentiate questions of the validity of the contract (as such, as a legal fact), validity of the perpetual term (everlasting contract), and possibility of termination from each other. The roadmap illustrates the holistic view of the bundle of considerations related to perpetual agreements, without getting stuck in one particular outcome. For example, even if there is no consensus among scholars, whether an everlasting term is valid or not (in a specific case or as a whole) the roadmap allows to elaborate the outcomes by systematizing various scenarios. This provides and essential framework for evaluation of the research questions in various legal systems. The roadmap differentiates questions of the validity of the contract (as such, as a legal fact), validity of the perpetual term (everlasting contract), and possibility of termination from each other. The short answer to the question whether a perpetual contract may be terminated, is yes. But as in all contracts, the pacta sunt servanda provides that contracts should be honoured, and therefore the there is nothing inherently unreasonable in not being able “get out” of a contractual relationship. The ultimate limit to this are the rules of hardship, which the parties may not as such exclude, however they may arrange their risk allocation in the contract so, that some circumstances, which in some contracts could allow the party to terminate the contract, would not be applicable in their situation. Thus, even an everlasting contract may be enforceable until the point of hardship. While this may be true, albeit not inherently unreasonable, there is no doubt, that an everlasting contract may not be unreasonable ever. Therefore, the roadmap explicitly shows, that this is the ultimate question, which requires balancing between the pacta sunt servanda and reasonableness from the perspective of the will of the parties fair dealing, etc. The roadmap shows that in cases in which the everlasting contract term is found invalid, the reasoning is does not follow directly to the default rule of indefinite contracts being terminable, but instead points to the “incomplete contracts”. In practice this means that a consideration should be make in accordance with the rules of supplementation of contracts and omitting a missing term, taking in account the intentions of the parties. In case it would follow directly to the default rule, the default rule might fail to take these into account and reach an unreasonable outcome as well. In a sense, this is also, why in balancing the pacta sunt servanda and reasonableness the outcome leads to similar conclusion as dictated by the default rule. Based on the case law of Finnish Supreme Court it may be argued that the Finnish contract law sems to consider that perpetual agreements are at least somewhat possible, but as an exception may be terminated. The exceptional termination is not as exceptional as it would be in a classical hardship case, but instead reflect the Nordic perspective of reasonableness. There is no legislative rule in the Russian Civil Code prohibiting eternal contractual obligations, however limitations towards terms may be imposed by the Civil Code relevant to specific contract types. Thus, the qualification of a contract to a type, although not obligatory, is of high importance. The default rule for indefinite contracts is not universally valid in accordance with Russian law.

International maritime transportation of goods is an inevitable part of global trade and economics. Over 90 percent of global trade are seaborne. Shipping is considered as cost-effective transport mode and it emits less greenhouse gases than e.g. freight or air cargo. Global trade is expected to rise. Shipping industry must be able to answer to the increasing demand of delivering shipping services while adapting to sustainability requirements such as reducing GHG emissions. Shipping interests both public and private sectors and engages complex cross-border supply chain stakeholders from various interest groups. International sustainability and maritime policies are affecting shipping industry from multiple levels. Both the European Union and the United Nations are implementing new normative tools and mechanisms to enhance a sustainability trajectory into all areas of business and society. Traditional treaties and conventions are supplemented by new objectives to meet the overarching sustainable development and economic growth requirements. Three complex subject matters are discussed – the international maritime regulatory scheme, climate and sustainability regulatory scheme and, the wicked problem of reducing shipping industry GHG emissions. An interdisciplinary method is used. The overarching research theme is – what actions and measures are needed in order to safeguard that shipping industry can answer (i) to the increasing demand of delivering shipping services and, (ii) to the increasing sustainability requirements. Two research questions are asked: 1) who governs international maritime affairs and shipping sustainability objectives in the context of shipping GHG emissions reductions, and 2) how to implement the GHG reductions objectives in the shipping industry? In order to attain sustainable development objectives into shipping industry practices, innovative administrative solutions and governance models are needed from the maritime affairs policy makers on both national and international level. Interdisciplinary and innovative solutions are needed to tackle emissions reductions objectives.