Participants are required to rely on the hypothetical fact situation as it is. The Republic of Indiras laws, rules, regulations, by-laws, orders etc. or governmental policies are not in pari materia with those of the Republic of India or any other jurisdiction. Participants may look at a sample mining concession contract for their reference alone. The Mining QuandaryThe Republic of Indira is a vast, resource-rich country surrounded by the Indiran Ocean on two sides. Indira is governed by the secular Digress party under the leadership of Mama Mia. Recently, the ruling party of Indira came under the media spotlight for all the wrong reasons. The most subscribed newspaper of the country, The Tales of Indira, published a series of news reports bringing to the fore the collusion between the Digress party and leading corporate houses to systematically loot the country of its mineral wealth. The government of Indira was accused of playing into the hands of corporates, without any regard for the countrys development. The news reports, as was to be expected, led to widespread anger amongst the populace of Indira which held the government responsible for allowing foreign entities to exploit the countrys mineral resources without any tangible benefits accruing to the people. The news reports also had a significant impact on investor confidence as reflected in the steep fall in the capital markets. Indira came to be seen as a country where crony- capitalism, corruption and misgovernance flourished.Economic growth in Indira has faltered and the government has realised that it must do something drastic to ensure that growth targets are met. Additionally, the government has also realised that if it is to stay in power, then it must satisfy popular demands, including those for more jobs and better infrastructure. To make matters worse, the government has been under constant attack from the major opposition parties who demand an enquiry into the allocation of mineral resources to private players for exploitation.Plunder Co., a company with its headquarters in the United States for Oil, had benefited significantly from the lenient terms on which the government of Indira had handed out concession contracts for the exploitation of mineral resources. In particular, the government of Indira had welcomed foreign investment in the exploitation of key resources such as coal, petroleum and natural gas as it did not possess the technical capability to explore, exploit, process and market these resources. Five years back, a mining concession agreement was entered into between Plunder Co. and the Ministry of Natural Resources, Government of Indira which enabled Plunder Co. to develop and operate a coal mine located in the Tihar- Upper Pradesh border regions. In return, Plunder Co. only had to make royalty payments in the form of a specific levy of 150 Rahools[footnoteRef:2] per metric tonne to the government of Indira. Plunder Co. was free to market the coal at prevailing market rates to domestic consumers and in the foreign market. Plunder Co. was under no obligation to employ Indiran labour in its mines or to contribute to the development of the people of the Tihar-Upper Pradesh region. Plunder Co. exploited these lenient terms extensively by heavily mechanising its operations to gain greater profits from the mine. Plunder Co. made enormous investments to develop the coal mine and it has just started reaping the dividends. Plunder Co.s profits for this year have been boosted by the fact that coal prices are at an all-time high. [2: Rahools is the currency of the Republic of Indira.]

Unfortunately, popular sentiment has forced the government of Indira to change its stance towards foreign corporate houses engaged in the exploitation of Indiran natural resources. In a recent press conference, the Prime Minister of Indira, Mr. Mauni Singh, made clear the governments new policy, Indiras natural resources belong to the citizens of Indira and are to be exploited for the development of Indira and the well being of the sons and daughters of Indira. The Prime Minister also hinted at a spate of new measures, including legislation, which would aim at ensuring that the benefits of foreign investment are enjoyed by the citizens of Indira. It is rumoured that the government wants to increase royalties by pegging the royalties to market price (ad valorem basis). Further, the government has proposed an export duty at the rate of 5% on the export of coal in its raw or processed form.Naturally, these developments led to much alarm among the top management of Plunder Co. Plunder Co. also realised that the government of Indira had the power to expropriate the coal mine altogether, thus bringing all its investment in the coal mine to naught. Plunder Co.s position was made all the more precarious by the fact that there existed no bilateral investment treaty between the Republic of Indira and United States for Oil. The CEO of Plunder Co., Mr. Ju Gaad, hastily made phone calls and shot off emails to the Prime Minister of Indira as well as the Minister for Natural Resources in order to voice his concerns. However, the Indiran government could not be persuaded to change its new stance. The government, however, seemed willing to discuss a possible re-negotiation of the contract.Mr. Ju Gaad was keen to clutch at any straw and so he scheduled an appointment to discuss re-negotiation of the concession contract with the Minister for Natural Resources, Indira. The Minister represents the Government of Indira. The issues that will be discussed include royalty payments, the proposed export duty, employment of local people, development of the surrounding regions etc. The negotiations are not limited to these issues and related issues may be addressed during the negotiations.