It’s similar to the issues over Sovereign Risk, for instance when the Andrews Government was considering whether to legislate away the deal that the outgoing Bailieu Government made with private contractors to build the East-West link. Yes, the Victorian parliament could just have passed a law terminating that contract without compensation but this would have led to sovereign risk fears. Investors would fear that the government could walk away from other deals.
Sure, Japan can refuse to hold the Games, but it would be very wary of doing so without the IOC agreeing to discharge the contract. And unlike the Victorian Government it has no way to pass legislation to terminate the contract without compensation. As noted in the article in Paul’s link, the contract allows the IOC to make its claim in Switzerland and I doubt if Japan would thumb its nose at any judgment made against it.
Sure, Japan can refuse to hold the Games, but it would be very wary of doing so without the IOC agreeing to discharge the contract. And unlike the Victorian Government it has no way to pass legislation to terminate the contract without compensation. As noted in the article in Paul’s link, the contract allows the IOC to make its claim in Switzerland and I doubt if Japan would thumb its nose at any judgment made against it.