Gentura is a biotechnology company that CadMex had decided to conduct business with. Gentura is based in Candore, a small developing country on a high growth curve. Gentura has evolved from an enzyme manufacturer to a full-fledged biotechnology company focused on biopharmaceutical products. Gentura had recently developed a drug called ProPez. ProPez is a breakthrough anti-diabetes agent that the company believed had enormous potential. However, the company did not have the resources for manufacturing and marketing ProPez globally. Hence, Gentura was in discussion with CadMex to establish a partnership.
CadMex was planning to license the manufacturing technique to Gentura for the manufacture of ProPez. In return for licensing the technique, CadMex would have had exclusive marketing rights for ProPez. All was well until Gentura was faced with a couple of issues. The president of Candore had been overthrown in a coup by a nationalist organization. The organization promised to establish democracy in Candore, which would bring about many political changes.
These political changes would include a change in the way that Candore conducts business. Apart from the political turmoil, Candore was in the midst of a rare viral epidemic. Health authorities estimated that one percent of the population would be infected. ViroBlax is one of the drugs used in the treatment of this viral epidemic. Gentura was under severe pressure from the new government to produce ViroBlax at a subsidized price. This would cause a breach of the contract because subsidized production of ViroBlax violated the payment terms of the contract between Gentura and CadMex.. Most importantly, CadMex would lose financially if the price of the drug was modified.
Taking legal action to protect CadMex's business interests was an option, however, there would be legal fees and time spent in court. To avoid legal fees and other issues, CadMex decided...