NINETEENTH ANNUAL WILLEM C.

VIS INTERNATIONAL
COMMERCIAL ARBITRATION MOOT
30 MARCH- 5 APRIL 2012

On Behalf of
MEDITERRANEO ELITE CONFERENCE
SERVICES, LTD.
45 Conference Place,
Capital City
Mediterraneo
CLAIMANT

Against

MEMORANDUM FOR THE

EQUATORIANA CONTROL SYSTEMS, INC.
CLAIMANT 286 Second Avenue
Oceanside
Equatoriana
RESPONDENT

Counsels for the Claimant

NALSAR UNIVERSITY OF LAW, HYDERABAD

JAGDISH MENEZES ▪ ISHITA BHARDWAJ ▪ RIDHI KABRA

 TABLE OF CONTENTS

INDEX OF AUTHORITIES .................................................................................................... I

INDEX OF ABBREVIATIONS .........................................................................................XXVI

STATEMENT OF FACTS ....................................................................................................... 1

PLEADINGS ............................................................................................................................. 3

I. DR. MERCADO CAN CONTINUE TO BE PART OF CLAIMANT’S LEGAL

TEAM......................................................................................................................................... 3
A.] THE TRIBUNAL LACKS JURISDICTION TO DECIDE ON A COUNSEL’S APPOINTMENT ....... 3
A.1] A DETERMINATION OF THE ISSUE IS NOT WITHIN THE SCOPE OF THE TRIBUNAL‟S

POWERS ............................................................................................................................... 3

A.2] THE TRIBUNAL DOES NOT HAVE AN INHERENT POWER TO ADJUDICATE ON THE ISSUE . 4

B.] THE TRIBUNAL’S AWARD WOULD BE UNENFORCEABLE UNDER THE NYC ..................... 4

C.] IN ANY EVENT, DR. MERCADO’S APPOINTMENT HAS NOT CREATED EXTRAORDINARY

CIRCUMSTANCES AFFECTING PROF. ARBITRATOR’S INDEPENDENCE AND IMPARTIALITY .. 5

C.1] A CONFLICT OF INTEREST CAN BE ESTABLISHED ONLY IF IT IS SHOWN THAT THE

ARBITRATOR MAY NOT ACT INDEPENDENTLY OR IMPARTIALLY .......................................... 5

C.2] THE RELATIONS BETWEEN DR. MERCADO AND PROF. ARBITRATOR IMPUGNED BY

RESPONDENT DO NOT AFFECT THE INDEPENDENCE OR IMPARTIALITY OF THE ARBITRATOR 5

II. RESPONDENT CANNOT CHALLENGE THE CONTINUANCE OF PROFESSOR

PRESIDING ARBITRATOR AS A MEMBER OF THE ARBITRAL TRIBUNAL ........ 9
A.] RESPONDENT’S SUBSEQUENT CHALLENGE TO PROF. PRESIDING ARBITRATOR’S
CONTINUANCE AS A MEMBER OF THE TRIBUNAL MUST BE TIME-BARRED ............................ 9

A.1] THE CHALLENGE TO THE ARBITRATOR MUST BE MADE WITHIN A CERTAIN TIME

PERIOD AFTER THE REASONS FOR SUCH A CHALLENGE ARISE .............................................. 9

A.2] THE RESERVATION OF THE RIGHT TO CHALLENGE THE ARBITRATOR IS INCONSISTENT

WITH THE OBJECTIVE OF PLACING A TIME PERIOD WITHIN WHICH THE CHALLENGE MUST BE

MADE ................................................................................................................................ 10

B.] IN ANY EVENT, DR. MERCADO’S APPOINTMENT HAS CREATED NO CONFLICT OF

INTEREST FOR PROF. PRESIDING ARBITRATOR .................................................................. 11

III. THE TRIBUNAL HAS THE JURISDICTION TO DECIDE ON THE LEASE
CONTRACT AND ITS CONSEQUENCES IN THIS DISPUTE ...................................... 12
A.] THE LEGALITY OF THE PAYMENT MADE TO PROCURE THE LEASE CONTRACT CAN BE
ARBITRATED UNDER THE ARBITRATION AGREEMENT ......................................................... 12

B.] THE TRIBUNAL CAN CONSIDER THE LEASE CONTRACT AND ITS CONSEQUENCES AS

THE LEASE HAS BEEN VALIDLY PROCURED UNDER THE APPLICABLE LAW ......................... 13

B.1] THE PAYMENT MADE BY THE YACHT BROKER IS NOT ILLEGAL UNDER THE APPLICABLE
LAW .................................................................................................................................. 13

B.2] THE LAW OF PACIFICA DOES NOT HAVE THE FORCE OF A MANDATORY PROVISION OF
LAW .................................................................................................................................. 13

C.] THE CONSEQUENCES OF THE LEASE CONTRACT CAN BE ARBITRATED IRRESPECTIVE

OF WHETHER THE YACHT BROKER PROCURED THE CONTRACT BY BRIBERY .................... 14

C.1] THE TRIBUNAL HAS JURISDICTION TO DETERMINE CONTRACTUAL DISPUTES BETWEEN

THE PARTIES EVEN IF THE LEASE CONTRACT IS TAINTED BY BRIBERY ................................ 15

C.2] CLAIMANT IS NOT LIABLE FOR THE UNAUTHORIZED ACTS OF THE BROKER ............... 15

D.] THE TRIBUNAL’S AWARD WOULD BE ENFORCEABLE AGAINST RESPONDENT’S ASSETS

IN EQUATORIANA.................................................................................................................. 17

D.1] THE AWARD WOULD NOT VIOLATE THE PUBLIC POLICY OF EQUATORIANA ............... 17
D.2] THE AWARD WOULD NOT VIOLATE INTERNATIONAL PUBLIC POLICY ......................... 18

IV. RESPONDENT HAS BREACHED THE CONTRACT WITH CLAIMANT ........... 20

V. CLAIMANT IS ENTITLED TO DAMAGES AMOUNTING TO USD 670, 600

UNDER THE CONVENTION [CISG, ARTICLE 74] ......................................................... 21

A.] THE DAMAGES CLAIMED BY THE CLAIMANT ARE RECOVERABLE UNDER THE

CONVENTION ........................................................................................................................ 21
A.1] DAMAGES ARE THE APPROPRIATE REMEDY AS RESPONDENT‟S BREACH CAUSED THE

LOSS .................................................................................................................................. 21

A.2] THE LOSSES WERE FORESEEABLE TO THE SELLER AT THE TIME OF CONCLUDING THE
CONTRACT ........................................................................................................................ 22

B.] CLAIMANT UNDERTOOK REASONABLE MITIGATION MEASURES [CISG, ART. 77] ....... 26

C.] IN ANY EVENT, THE CHARTER OF M/S PACIFICA WAS ITSELF A MITIGATION MEASURE
AND THE COSTS INCURRED THEREBY ARE RECOVERABLE UNDER THE CONVENTION ....... 26
VI. RESPONDENT IS NOT EXEMPT FROM PAYING DAMAGES TO THE
CLAIMANT FOR ITS BREACH OF CONTRACT UNDER THE CONVENTION
[CISG, ARTICLE 79] .............................................................................................................. 27
A.] RESPONDENT IS NOT EXEMPT UNDER THE CONVENTION FOR ITS FAILURE TO

PERFORM ITS CONTRACTUAL OBLIGATION ......................................................................... 28

A.1] THE FIRE ACCIDENT AT THE FACTORY OF HIGH PERFORMANCE WAS NOT AN

IMPEDIMENT ...................................................................................................................... 28

A.2] ALTERNATIVELY, EVEN IF THE FIRE WAS AN „IMPEDIMENT‟, IT WAS NOT THE „SOLE

REASON‟ FOR THE RESPONDENT‟S BREACH OF CONTRACT ................................................ 29

A.3] RESPONDENT IS LIABLE FOR THE FORESEEABLE FAILURE OF ITS SUPPLY CHAIN ........ 29

B.] RESPONDENT REMAINS LIABLE TO PAY DAMAGES BECAUSE SPECIALTY DEVICES

WOULD NOT BE EXEMPT UNDER THE CONVENTION [CISG, ARTICLE 79(2)]...................... 31

B.1] SPECIALTY DEVICES IS A „THIRD PERSON‟ FOR THE PURPOSE OF THE CONVENTION .. 31
B.2] SPECIALTY DEVICES WOULD NOT BE EXEMPTED UNDER ARTICLE 79(1) ................... 32
B.3] RESPONDENT IS LIABLE FOR THE BREACH CAUSED BY FAILURE OF THE „THIRD
PERSON‟ TO PERFORM ITS PART OF THE CONTRACT ........................................................... 33

B.4] ALTERNATIVELY, IF SPECIALTY DEVICES IS NOT A „THIRD PERSON‟, RESPONDENT IS

STILL LIABLE FOR THE FAILURE OF ITS SUPPLIER ............................................................... 34

PRAYER FOR RELIEF ......................................................................................................... 35

 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

INDEX OF AUTHORITIES

CASES

BELGIUM

1. Maglificio Dalmine v. Covires, District Court Brussels, Nov. 13, 1992, available at:
http://cisgw3.law.pace.edu/cases/921113b1.html
Cited as: Maglificio Dalmine v. Covires (Belgium) at ¶61

CHINA

1. Water Pump Case, CIETAC Arbitration Award, Aug. 3, 2006, available at:
http://cisgw3.law.pace.edu/cases/060803c1.html
Cited as: Water Pump Case (China) at ¶85

COSTA RICA

1. Scott Paper Company, S.A. v. Dario Express R. Castro e hijos, S.A., May 3, 2002 (First
Chamber of Supreme Court of Justice)
Cited as: Scott Paper Company v. Dario Express (Costa Rica) at ¶14

EUROPEAN COURT OF JUSTICE

1. Eco Swiss China Time Ltd v Benetton International NV, (C-126/97) [1999] ECR 1-3055
Cited as: Eco Swiss v. Benetton Intl. (ECJ) at ¶55

FRANCE

1. Annahold BV v L'Oréal, Cour d‟appel Paris, Jan. 12, 1996, 1996 REV. ARB. 483
Cited as: Annahold BV v. L'Oréal (France) at ¶8

2. Calzados Magnanni v. Shoes General International, Appellate Court Grenoble, Oct. 21,
1999, available at: http://cisgw3.law.pace.edu/cases/991021f1.html
Cited as: Calzados Magnanni v. SARL Shoes (France) at ¶74

3. Société Nihon Plast v. Takata Peri Aktiengesellschaft, Cour d‟appel Paris, March 4, 2004
REV. ARB. 452
Cited as: Nihon Plast v. Takata-Petri (France) at ¶27

4. Universal Pictures v. Inex Films & Inter-Export, Cour d‟appel of Paris, March 16, 1978,
1978 REV. ARB. 501
Cited as: Universal Pictures v. Inex Films (France) at ¶27

5. Zanzi v. J. de Coninck, Cour de Cassation, Jan. 5, 1999, 1999 REVUE DE L‟ARBITRAGE

260
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Cited as: Zanzi v. J. de Coninck (France) at ¶44

GERMANY

1. Case No. 26 Sch 21/07, Higher Regional Court of Franfurt, Jan. 10, 2008
Cited as: Case No. 26 Sch 21/07 (Germany) at ¶20

2. Cheese Case, Supreme Court, Oct. 24, 1979, available at:

http://cisgw3.law.pace.edu/cases/791024g1.html
Cited as: Cheese Case (Germany) at ¶69

3. Chinese Goods Case, Hamburg Arbitration Proceeding, June 21, 1996, available at:
http://cisgw3.law.pace.edu/cases/960621g1.html
Cited as: Chinese Goods Case (Germany) at ¶¶97,98

4. Computer Chip Case, Appellate Court Koblenz, Sep. 17, 1993, available at:
http://cisgw3.law.pace.edu/cases/930917g1.html
Cited as: Computer Chip Case (Germany) at ¶70

5. Computer Components Case, District Court Heidelberg, July 3, 1992, available at:
http://cisgw3.law.pace.edu/cases/920703g1.html
Cited as: Computer Components Case (Germany) at ¶¶66,71

6. Frozen Bacon Case, Appellate Court Hamm, Sep 22, 1992, available at:
http://cisgw3.law.pace.edu/cases/920922g1.html
Cited as: Frozen Bacon Case (Germany) at ¶80

7. Iron Molybdenum Case, , Appellate Court Hamburg , Feb. 28, 1997, available at:
http://cisgw3.law.pace.edu/cases/970228g1.html
Cited as: Iron Molybdenum Case (Germany) at ¶97

8. Oberlandesgericht (Munchen) (34 SchH 003/07)

Cited as: OLG Munchen 34 SchH 003/07 (Germany) at ¶26

9. Pallets Case, District Court Saarbrücken, June 1, 2004, available at:

http://cisgw3.law.pace.edu/cases/040601g1.html
Cited as: Pallets Case (Germany) at ¶66

10. Tannery Machines Case, Appellate Court Köln, Jan. 8, 1997, available at:
http://cisgw3.law.pace.edu/cases/970108g1.html
Cited as: Tannery Machines Case (Germany) at ¶¶81,85

11. Used Car Case, Appellate Court Köln, May 21, 1996, available at:
http://cisgw3.law.pace.edu/cases/960521g1.html
Cited as: Used Car Case (Germany)) at ¶71

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HONGKONG

1. Logy Enterprises Ltd. v. Haikou City Bonded Area Wansen Products Trading Co.,
[1997] 2 H.K.C. 481
Cited as: Logy Enterprises v. Haikou Trading (HK) at ¶12

ICC COURT OF ARBITRATION

1. ICC Court of Arbitration Case of Dec 20, 1999

Cited as: Copper Cable Case (ICC) at ¶68

2. ICC Court of Arbitration Case No. 1110 of 1963

Cited as: ICC Case 1110/1963 at ¶¶43,46,49

3. ICC Court of Arbitration Case No. 3916 of 1982

Cited as: ICC Case 3916/1982 at ¶43

4. ICC Court of Arbitration Case No. 6320 of 1992

Cited as: ICC Case 6320/1992 at ¶37

5. ICC Court of Arbitration Case No. 6474 of 2000

Cited as: ICC Case 6474/2000 at ¶43

6. ICC Court of Arbitration Case No. 6497 of 1999

Cited as: ICC Case 6497/1999 at ¶78

7. ICC Court of Arbitration Case No. 7047 of 1994

Cited as: ICC Case 7047/1994 at ¶60

8. ICC Court of Arbitration Case No. 7197 of 1992

Cited as: ICC Case 7197/1992 at ¶94

9. ICC Court of Arbitration Case No. 8113/1996

Cited as: ICC Case 8113/1996 at ¶¶50,77

10. ICC Court of Arbitration Case No. 8128/1995

Cited as: ICC Case 8128/1995 at ¶¶85,98

11. ICC Court of Arbitration Case No. 8459 of 1997

Cited as: ICC Case 8459/1997 at ¶38

12. ICC Court of Arbitration Case No. 8574 of 1996

Cited as: ICC Case 8574/1996 at ¶85

13. ICC Court of Arbitration Case No. 8879 of 1997

Cited as: ICC Case 8879/1997 at ¶6

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14. ICC Court of Arbitration Case No. 8891 of 1998

Cited as: ICC Case 8891/1998 at ¶59

15. ICC Court of Arbitration Case No. 9187 of 1999

Cited as: ICC Case 9187/1999 at ¶80

16. ICC Court of Arbitration Case No. 9333 of 1998

Cited as: ICC Case 9333/1998 at ¶¶38,50,59,78

17. ICC Court of Arbitration Case No. 9488 of 1999

Cited as: ICC Case 9448/1999 at ¶61

ICSID

1. Hwatska Elektroprivreda, d.d. v. The Republic of Slovenia, ICSID Case No. ARB/05/24,
Decision regarding the Participation of David Mildon QC, May 6, 2008
Cited as: Hrvatska v. Slovenia (ICSID) at ¶5

2. Perenco Ecuador Limited v. Republic of Ecuador and Empresa Estatal Petróleos del
Ecuador, ICSID Case No. ARB/08/6, Decision on Challenge to Arbitrator, Dec. 8, 2009
Cited as: Perenco Limited v. Ecuador (ICSID) at ¶12

2. Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3, Decision of the Tribunal
on the Participation of a Counsel
Cited as: Rompetrol v. Romania (ICSID) at ¶¶4,5,7,13

3. SGS Société Générale de Surveillance SA v Islamic Republic of Pakistan, ICSID Case

No. ARB/01/13, Decision on Claimant's Proposal to Disqualify Arbitrator, Dec. 19, 2002
Cited as: SGS v. Pakistan (ICSID) at ¶¶12,16

4. Canfor Corp (Canada), Tembec Inc (Canada), Terminal Forest Prods. Ltd (Canada) v.
USA, Joint Order on the Cost of Arbitration and for the Termination of Certain Arbitral
Proceedings, ICSID Case, NAFTA/UNCITRAL, July 19, 2007.
Cited as: Tembec v. United States (ICSID) at ¶19

5. Wena Hotels Ltd v Arab Republic of Egypt, ICSID Case No. ARB/98/4, Decision on
Annulment Proceedings, Feb. 05, 2002
Cited as: Wena Hotels v. Egypt (ICSID) at ¶59

6. World Duty Free Co Ltd v Republic of Kenya, ICSID Case No.ARB/00/7, Decision on
Jurisdiction based on Contract not BIT, Oct. 4, 2006
Cited as: World Duty Free v. Kenya (ICSID) at ¶¶58,59

7. Zhinvali Development Ltd. v. Republica de Georgia, ICSID Case no. ARB/10/1,

Decision on Respondent‟s Proposal to Disqualify Arbitrator, Jan. 19, 2001
Cited as: Zhinvali Development Ltd. v. Georgia (ICSID) at ¶20
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INDIA

1. Renusagar Power Co Ltd (India) v General Electric Co (US) (1995) XX YBK COMM.
ARB. 681
Cited as: Renusagar v. General Electric (India) at ¶55

IRELAND

1. Bromstrom Tankers AB v. Factorias Vulcano SA, Case No. HC 198/04 (High Court of
Ireland)
Cited as: Bromstrom Tankers v. Factorias (Ireland) at ¶58

ITALY

1. Nouva Fucinati v. Fondmetall International, District Court Monza, Jan. 14, 1993,
available at: http://cisgw3.law.pace.edu/cases/930114i3.html
Cited as: Nouva Fucinati v. Fondmetall International (Italy) at ¶¶89,93

KUWAIT

1. Westacre Investments Inc. v. Jugoimport-SDPR Holding Co. Ltd., [1999] APP.L.R. 05/1
Cited as: Westacre v. Jugoimport (Kuwait) at ¶43

LUXEMBOURG

1. Kersa Holding Co v. Infancourtage, (1996) XXI YBK COMM. ARB. 617

Cited as: Kersa Holding Co. v. Infancourtage (Luxembourg) at ¶57

PAKISTAN

1. The Hub Power Co. Ltd. v. Pakistan WAPDA and Federation of Pakistan, 15(7)
MEALEY‟S INT‟L ARB. REP. A-1 (2000)
Cited as: HUBCO v WAPDA (Pakistan) at ¶¶43,59

PHILIPPINES

1. Alfredo Montelibano et al. v. Bacolod-Murcia Milling Co., 95 Phil., G.R. No. L-5416,
Jul 24, 1954
Cited as: Alfredo v. Bacolod-Murcia (Philippines) at ¶110

RUSSIA

1. Arbitration Proceeding 406/1998, June 6, 2000, available at:

http://cisgw3.law.pace.edu/cases/000606r1.html
Cited as: Arb. Proceeding 406/1998 (Russia) at ¶85

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2. Metallic Sodium Case, Arbitration Proceeding 155/1994, March 16, 1995, available at:
http://cisgw3.law.pace.edu/cases/950316r1.html
Cited as: Metallic Sodium Case (Russia) at ¶¶92,97

3. Sojunefteexport v. Joc Oil Ltd., XV YBK COMM. ARB. 384 (1990)

Cited as: Sojuznefteexport v. Joc Oil (USSR) at ¶57

SINGAPORE

1. AJU V. ACT, [2010] S.G.H.C. 201

Cited as: AJU v. ACT (Singapore) at ¶54

SWITZERLAND

1. Aluminium foil film wrap case, District Court Schaffhausen, Oct. 20, 2003, available at:
http://cisgw3.law.pace.edu/cases/031020s1.html
Cited as: Aluminum Foil Film Wrap Case (Switz.) at ¶66

2. Egyptian Cotton Case, Supreme Court, Sep. 15, 2000, available at:
http://cisgw3.law.pace.edu/cases/000915s1.html
Cited as: Egyptian Cotton Case (Switz.) at ¶98

3. Judgement of 10 June 2003, 21 ASA Bull. 829, 840 (Swiss Federal Tribunal)
Cited as: Federal Tribunal Judgement of 10 June 2003 (Switz.) at ¶26

4. Judgment of 20 March, 2008 Case No. 4A_506/2007 26 ASA Bull. 575 (2008) (Swiss
Federal Supreme Court)
Cited as: Case No. 4A_506/2007 (Switz.) at ¶14

5. Meat Case, Supreme Court, Oct. 28, 1998, available at:

http://cisgw3.law.pace.edu/cases/981028s1.html
Cited as: Meat Case (Switz.) at ¶¶69,71

6. National Power Corporation (Philippines) v Westinghouse (USA), Sep. 2, 1993, ATF

119 II 380 (Swiss Federal Tribunal)
Cited as: National Power Corp. v. Westinghouse (Switz.) at ¶43

7. Omnium de Traitement et de Valorisation (OTV) v Hilmarton Ltd, Case No.

4P.263/1989, [1993 ] ASA Bull 253 (Swiss Federal Supreme Court)
Cited as: OTV v. Hilmarton (Switz.) at ¶¶34,38,60

8. Rhône-Poulenc Rorer Pharmaceuticals Inc. v. Roche Diagnostic Corp., Feb. 17, 2000,
172 Die Praxis des Bundesgerichts (Basel) [Pra.] 4, 1999
Cited as: Rhône-Poulenc Pharma. v. Roche Corp. (Switz.) at ¶27

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9. Sizing Machines Case, Commercial Court St. Gallen, Dec. 3, 2002, available at:
http://cisgw3.law.pace.edu/cases/021203s1.html
Cited as: Sizing Machines Case (Switz.) at ¶68

9. X. Ltd. v. Y.BV, Case no. 4P.226/2001, Feb. 1, 2002, ATF 128 III 234 (Swiss Federal
Tribunal)
Cited as: X. Ltd. v. Y.BV (Switz.) at ¶59

10. X (U.K.) v. Y (F)/Algeria, Feb. 23, 1988, [1988] ASA Bull. 136 (CCIG)
Cited as: X (U.K.) v. Y (F)/Algeria, (Switz.) at ¶38

11. Westacre Investments Inc. v. Jugoimport-SDPR Holding Co. Ltd., Dec. 30, 1994, ATF
119 II 380 (Swiss Federal Tribunal)
Cited as: Westacre v. Jugoimport (Switz.) at ¶43

UNITED KINGDOM

1. Aerial Advertising Co. v. Batchelor's Peas Ltd., 2 All E.R. 788 (K.B. 1938)
Cited as: Aerial Advertising v. Batchelor’s Peas (UK) at ¶74

2. Bremer GmbH v. ets Soules et Cie & Anthony G Scott, [1985] 1 Lloyd's Rep 160
Cited as: Bremer GmbH v. Soules et Cie (UK) at ¶8

3. Blackburn Bobbin Co. v. TW Allen, [1918] 2 KB 467

Cited as: Finland Birch Timber Case (UK) at ¶¶98,99

4. Fiona Trust & Holding Corporation v. Privalov, [2007] UKHL 40

Cited as: Fiona Trust v. Privalov (UK) at ¶¶43,44,49

5. Freeman & Locklyer v Buckhurst Park Properties (Mangal) Ltd., [1964] 2 Q.B. 549
Cited as: Freeman v. Buckhurst (UK) at ¶47

6. GB Gas Holdings Limited v Accenture (UK) Limited and others, [2010] EWCA (Civ)
912
Cited as: GB Gas Holdings v. Accenture (UK) at ¶75

7. Hadley v. Baxendale, 1854] 9 Ex 341; 156 ER 145

Cited as: Hadley v. Baxendale (UK) at ¶75

8. Lemena Trading Co Ltd v African Middle East Petroleum Co Ltd., [1988] 1 All ER 513
Cited as: Lemena Trading v. African Middle East Petroleum Co. (UK) at ¶59

9. Mustafa v. K.G. Palos (1972) 116 S.J. 354

Cited as: Mustafa v. Palos (UK) at ¶51

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10. Omnium de Traitement et de Valorization SA v. Hilmarton Ltd, [1999] 2 All ER

(Comm) 146
Cited as: Omnium v. Hilmarton (UK) at ¶58

11. Porter v. Magill [2002] 2 WLR 37

Cited as: Porter v. McGill (UK) at ¶12

12. Rustal Trading Ltd v. Gill & Duffus S.A. [2000] 1 Lloyd's Rep. 14
Cited as: Rustal Trading Ltd. v. Gill & Duffus S.A. (UK) at ¶12

13. SMC Electronics v. Akhtar Computers Ltd. [2001] 1 B.C.L.C. 433

Cited as: SMC Electronics v. Akhtar Computers (UK) at ¶48

14. Westacre Investments Inc. v. Jugoimport-SDPR Holding Co. Ltd., [2000] QB 288
Cited as: Westacre v. Jugoimport (UK) at ¶¶43,57

UNITED STATES OF AMERICA

1. Anne Pasqua, et al. v. Hon. Gerald J. Council, et al., 186 N.J. 127 (2006)
Cited as: Anne Pasque v. Gerald Council (USA) at ¶6

2. Barbarossa & Sons, Inc. v. Iten Chevrolet, Inc., 265 N.W.2d 655
(Minn. 1978)
Cited as: Barbarossa v. Iten Chevrolet (USA) at ¶97

3. Beatrice R. Ruddle v. Luke C. Moore, 411 F.2d 718 (D.C. Cir. 1969)
Cited as: Beatrice Ruddle v. Luke Moore (USA) at ¶110

4. Chicago Prime Packers, Inc. v. Northam Food Trading Co., 408 F.3d 894 (7th Cir. 2005)
Cited as: Chicago Prime Packers v. Northam Food Trading (USA) at ¶75

5. Delchi Carrier S.P.A. V. Rotorex Corp. 71 F.3d 1024 (2d Cir. 1995)
Cited as: Delchi v. Rotorex (USA) at ¶75

6. J.J. Ryan & Sons, Inc. v. Rhone Poulenc, 863 F.2d 315 (4th Cir. 1988)
Cited as: J.J. Ryan Inc. v. Rhone Poulenc (USA) at ¶32

7. Karaha Bodas Co LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
XXVII YBK COMM. ARB. 814 (2002)
Cited as: Karaha Bodas Co. v. Perusahaan (USA) at ¶58

8. Loucks v. Standard Oil Co. of New York, 224 N.Y. 99 (1916)

Cited as: Loucks v. Standard Oil Co. (USA) at ¶55

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9. Ministry of Defence of the Islamic Republic of Iran v. Gould Inc, 969 F 2d. 764, 770 (9th
Cir. 1992)
Cited as: Ministry of Defence, Iran v. Gould (USA) at ¶57

10. Neal-Cooper Grain Co. v. Texas Gulf Sulphur Co., 508 F.2d 283 (7th Cir. 1974)
Cited as: Neal-Cooper Grain v. Texas Gulf (USA) at ¶101

11. Oscanyan v Arms Co, 103 US 261 (US S. Ct. 1880)

Cited as: Oscanyan v. Arms Co. (USA) at ¶59

12. WellPoint Inc. v. John Hancock Life Insurance Company, 576 F.3d 643 (7th Circuit
2009)
Cited as: WellPoint v. John Hancock (USA) at ¶27

BOOKS

A. TWEEDDALE AND K TWEEDDALE ARBITRATION OF COMMERCIAL DISPUTES:

INTERNATIONAL AND ENGLISH LAW
PERSPECTIVE, Oxford University Press (2005)
[Cited as: TWEEDALE, paragraph] at ¶57

ABDULHAY SAYED CORRUPTION IN INTERNATIONAL TRADE AND

COMMERCIAL ARBITRATION, Kluwer Law
International (2004)
[Cited as: SAYED, page] at ¶¶34,43,50,59,77

ALAN REDFERN AND MARTIN HUNTER LAW AND PRACTICE OF INTERNATIONAL

COMMERCIAL ARBITRATION, South Asian
Ed., Sweet and Maxwell Publication, (2006).
[Cited as: REDFERN/HUNTER, paragraph]
at. ¶¶1,3,32,55

ALBERT JAN VAN DEN BERG AND JAN REPORT ON THE CHALLENGE PROCEDURE, THE
SCHUTLZ (EDS.) ARBITRAL PROCESS AND THE INDEPENDENCE
OF ARBITRATORS, ICC Publishing (1991)
[Cited as: VAN DEN BERG/SCHUTLZ, page]
at ¶23

ALBERT KRITZER (ED.) GUIDE TO PRACTICAL APPLICATION OF THE

UNITED NATIONS CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE
OF GOODS, Kluwer Law International (1989).
[Cited as: KRITZER, page] at ¶86.

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ANDREAS KEIL DIE HAFTUNGSBEFREIUNG DES SCHULDNERS

IM UN-KAUFRECHT IM VERGLEICH MIT DEM
DEUTSCHEN UND US-AMERIKANISCHEN
RECHT, Frankfurt a. M.: Lang (1993)
[Cited as: KEIL, page] at ¶¶110,112

BRUNO ZELLER CISG AND THE UNIFICATION OF

INTERNATIONAL TRADE LAW, Routledge-
Cavendish (2007)
[Cited as: ZELLER, page] at ¶¶75,79,81,83

CARLOS J. HILADO FLAMMABILITY OF ELECTRICAL AND

ELECTRONIC MATERIALS, Technomic Pub. Co.
(1985)
[Cited as: HILADO(NFPA), page] at ¶109

CRISTOPH BRUNNER FORCE MAJEURE AND HARDSHIP UNDER

GENERAL CONTRACT PRINCIPLES: EXEMPTION
FOR NON-PERFORMANCE IN INTERNATIONAL
ARBITRATION, Kluwer Law International
(2009)
[Cited as: BRUNNER, page] at ¶¶79,98,105

DENIS TALLON Bianca, Bonell (eds.), COMMENTARY ON THE

INTERNATIONAL SALES LAW, THE 1980
VIENNA SALES CONVENTION, Milan (1987).
[Cited as: BIANCA/BONELL/Tallon,
paragraph] at ¶¶93,94,112

EMMANUEL GAILLARD AND JOHN FOUCHARD GAILLARD GOLDMAN ON

SAVAGE (ED.) INTERNATIONAL COMMERCIAL ARBITRATION,
Kluwer Law International (1999)
[Cited as:
FOUCHARD/GAILLARD/GOLDMAN,
paragraph] at ¶¶3, 39

FRANCIS M.B. REYNOLDS AND WILLIAM BOWSTEAD AND REYNOLDS ON AGENCY,

BOWSTEAD Sweet and Maxwell, London (17th ed. 2001).
[Cited as: BOWSTEAD, paragraph] at ¶48

FRITZ ENDERLEIN AND DIETRICH INTERNATIONAL SALES LAW, UNITED

x
NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

MASKOW NATIONS CONVENTION ON CONTRACTS FOR

THE INTERNATIONAL SALE OF GOODS, Oceana
Publications (1992)
[Cited as: ENDERLEIN/MASKOW, page] at
¶68

GARY BRIAN BORN INTERNATIONAL COMMERCIAL ARBITRATION,

Kluwer Law International (2009)
[Cited as: BORN, page] at ¶¶6,26,43.

GARY BRIAN BORN INTERNATIONAL ARBITRATION AND FORUM

SELECTION AGREEMENTS: DRAFTING AND
ENFORCING, Kluwer Law International (3rd
ed. 2010)
[Cited as: GARY BORN, page] at ¶32

HERBERT BERNSTEIN AND JOSEPH M. UNDERSTANDING THE CISG IN EUROPE,

LOOKOFSKY Kluwer Law International (1997).
[Cited as: BERNSTEIN/LOOKOFSKY, page]
at ¶¶87,103

H.G. BEALE (ED.) CHITTY ON CONTRACTS, Sweet and Maxwell,

London (29th ed. 2004)
[Cited as: CHITTY, paragraph] at
¶¶47,48,51

HEUZE LA VENTE INTERNATIONALE DE

MERCHANDISES – DROIT UNIFORME, Paris (2nd
ed. 2000)
[Cited as: HEUZE, page] at ¶¶94,114

JAMES M. KLOTZ INTERNATIONAL SALES AGREEMENTS: AN

ANNOTATED DRAFTING AND NEGOTIATING
GUIDE, Kluwer Law International (2008)
[Cited as: KLOTZ, page] at ¶100

JEAN-FRANCOIS POUDRET AND COMPARATIVE LAW ON INTERNATIONAL

SEBASTIEN BESSON ARBITRATION, Sweet and Maxwel, London
(2nd ed. 2007)
[Cited as: POUDRET/BESSON, page] at ¶3,23

xi
NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

JOHN O. HONNOLD UNIFORM LAW FOR INTERNATIONAL SALES

UNDER THE 1980 UNITED NATIONS
CONVENTION, Kluwer Law International, (2nd
ed., 1991)
[Cited as: HONNOLD, page] at
¶¶89,92,93,100

JOSEPH LOOKOFSKY THE 1980 UNITED NATIONS CONVENTION ON

CONTRACTS FOR THE INTERNATIONAL SALE
OF GOODS in J. Herbots (ed.) / R. Blanpain
(gen. ed.), INTERNATIONAL ENCYCLOPAEDIA
OF LAWS - CONTRACTS, Suppl. 29 (December
2000)
[Cited as: LOOKOFSKY, page] at
¶¶63,75,100,109

JULIAN LEW APPLICABLE LAW IN INTERNATIONAL

COMMERCIAL ARBITRATION: A STUDY IN
COMMERCIAL ARBITRATION AWARDS, Oceana
Publications (1978)
[Cited as: LEW, page] at ¶55

JULIAN LEW, LOUKAS MISTELIS AND COMPARATIVE INTERNATIONAL COMMERCIAL

STEFAN KRÖLL ARBITRATION, Kluwer Law International
(2003).
[Cited as: LEW/MISTELIS/KROLL,
paragraph] at ¶¶1,10,53,59

KARL H. NEUMAYER AND CATHERINE Convention de Vienne sur les contrats de

MING vente internationale de marchandises.
Commentaire, CEDIDAC (Vol. 24, 1993)
[Cited as: NEUMAYER/MING, page] at ¶68

Mª DEL PILAR PERALES VISCASILLAS EL CONTRATO DE COMPRAVENTA

INTERNACIONAL DE MERCANCIAS,
Convención de Viena de (1980)
[Cited as: VISCASILLAS, page] at ¶109

MA QUINCY COMPUTER AND ELECTRONIC

EQUIPMENT/NATIONAL FIRE PROTECTION
ASSOCIATION, Fire Analysis and Research
Division

xii
NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

[Cited as: QUINCY(NFPA),] at ¶109

MARIANNE JENNINGS BUSINESS: ITS LEGAL, ETHICAL, AND GLOBAL

ENVIRONMENT, Cengage (9th ed. 2009)
[Cited as: JENNINGS, page] at ¶100

MICHAEL R. WILL Bianca, Bonell (eds.), COMMENTARY ON THE

INTERNATIONAL SALES LAW, THE 1980
VIENNA SALES CONVENTION, Milan (1987).
[Cited as: BIANCA/BONELL/Will,
paragraph] at ¶66

MAURO RUBINO-SAMMARTANO INTERNATIONAL ARBITRATION LAW AND

PRACTICE, Kluwer Law International (2001)
[Cited as: SAMMARTANO, page] at ¶37.

NIGEL BLACKABY, CONSTANTINE REDFERN AND HUNTER ON INTERNATIONAL

PARTASIDES, ALAN REDFERN AND ARBITRATION, Oxford University Press (5th
MARTIN HUNTER ed. 2009)
[Cited as:
BLACKABY/PARTASIDES/REDFERN/HUNTER,
page] at ¶8

PETAR SARCEVIC AND PAUL VOLKEN THE INTERNATIONAL SALE OF GOODS

REVISITED, Kluwer Law International (2001)
[Cited as: SARCEVIC/VOLKEN, page] at ¶86

PETER HUBER AND ALASTAIR MULLIS THE CISG: A NEW TEXTBOOK FOR STUDENTS
AND PRACTITIONERS, European Law
Publishing (2007)
[Cited as: HUBER/MULLIS, page] at ¶¶66,85

PETER SCHLECHTRIEM UNIFORM SALES LAW - THE UN-CONVENTION

ON CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS, Vienna (1986)
[Cited as: SCHLECHTRIEM, page] at
¶¶62,64,86,94,112

PETER SCHLECHTRIEM AND INGEBORG COMMENTARY ON THE UN CONVENTION ON

SCHWENZER THE INTERNATIONAL SALE OF GOODS, Oxford
University Press (2nd ed. 2005)
[Cited as:
SCHLECHTRIEM/SCHWENZER/Stoll/Gruber,
xiii
NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

page] at
¶¶62,66,68,80,81,85,86,89,94,100,106,112

COMPARATIVE ARBITRATION PRACTICE AND

PIETER SANDERS (ED.), PUBLIC POLICY IN ARBITRATION, Kluwer Law
International (1987)
[Cited as: SANDERS, page] at ¶37.

ROLF HERBER AND BEATE CZERWENKA INTERNATIONALES KAUFRECHT, Beck (1991)

[Cited as: HERBER/CZERWENKA,
paragraph] at ¶71

STEVEN C. BENNET ARBITRATION: ESSENTIAL CONCEPTS, ALM

Publishing (2002)
[Cited as: BENNET, page] at ¶6

VICTOR KNAPP Bianca, Bonell (eds.), COMMENTARY ON THE

INTERNATIONAL SALES LAW, THE 1980
VIENNA SALES CONVENTION, Milan (1987).
[Cited as: BIANCA/BONELL/Knapp, page] at
¶¶70,81,83,85

ARTICLES

ALEXIS MOURRE AND Conflicts of Interest: Towards Greater Transparency and

ALEXANDRE VAGENHEIM Uniform Standards of Disclosure, available at:
http://kluwerarbitrationblog.com/blog/2009/05/19/
conflicts-of-interest-towards-greater-transparency-and-
uniform-standards-of-disclosure
[Cited as: Mourre/Vagenheim] at ¶28

ANA BARBARA BAIDE CISG Through the Willem C Vis Moot Casebook:
Seventeen Years of the CISG Evolution Explored
Through Annual Global Discussion, available at:
http://researcharchive.vuw.ac.nz/bitstream/handle/10063/
1246/thesis.pdf?sequence=1
[Cited as: Baide, page] at ¶86.

ANTONIO CRIVELLARO Arbitration Case Law on Bribery

Issues of Arbitrability Contract Validity, Merits and
Evidence in Andrew Berkley and Kristine Karsten (eds.),
ARBITRATION- MONEY LAUNDERING, CORRUPTION AND
FRAUD, ICC Publishing (2011)

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

[Cited as: Crivellaro] at ¶43

B. PILTZ Internationales Kaufrecht. Das UN-Kaufrecht (Wiener

Übereinkommen von 1980) in PRAXISORIENTIERTER
DARSTELLUNG, MÜNCHEN, BECK (1993)
[Cited as: PILTZ, page] at ¶69

BARRY NICHOLAS AND Impracticability and Impossibility in the U.N.

MATHEW BENDER Convention on Contracts for the International Sale of
Goods in Galston and Smit (eds.), THE UNITED NATIONS
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS, Juris Publishing (1984)

(1972) [Cited as: GALSTON/Smit/Nicholas, page] at

¶¶104,112.

BARTON S. SELDEN Going Global: Essential International Law for Business

Transactions National Business Institute, San Francisco,
available at: http://www.gghslaw.com/pubs/Selden%20-
%20Going%20Global%20(NBI).pdf
[Cited as Selden, page] at ¶101.

BERNARDO CREMADES Transnational Public Policy in International Arbitral

AND DAVID J. A. CAIRNS Decision-making- The Cases of Bribery, Money
Laundering & Fraud Andrew Berkley and Kristine
Karsten (eds.), ARBITRATION- MONEY LAUNDERING,
CORRUPTION AND FRAUD, ICC Publishing (2011)
[Cited as: Cremades/Cairns, page] at ¶43

BRUNO MANZANARES The Independence And Impartiality Of Arbitrators In

BASTIDA International Commercial Arbitration, available at
http://www.emercatoria.edu.co/PAGINAS/VOLUMEN6/
PDF01/independence.pdf
[Cited as: Bastida] at ¶¶8,17

BRUNO ZELLER Comparison between the provisions of the CISG on

mitigation of losses (Art. 77) and the counterpart
provisions of PECL (Art. 9:505), available at:
http://www.cisg.law.pace.edu/cisg/text/peclcomp77.html
[Cited as: Zeller, Section] at ¶¶81,83.

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

CARLA SPIVACK Of Shrinking Sweatsuits and Poison Vine Wax: A

Comparison of Basis for Excuse under U.C.C. § 2-615
and CISG Article 79, 27 PENNSYLVANIA JOURNAL OF
INTERNATIONAL ECONOMIC LAW 757 (2006)
[Cited as: Spivack, page] at ¶¶89,97,98,101,104,112

CARLO LOMBARDINI Corruption et blanchiment, ANWALTS- REVUE, 9/2001

[Cited as: Lombardini, page] at ¶60

Fraud and Corruption in International Arbitration in

CAROLYN B. LAMM, MA Fernandez-Ballesteros and David Arias (eds.), LIBER
HANSEL T. PHAM AND AMICORUM BERNARDO CREMADES, Kluwer Law
RAHIM MOLOO International (2010)
[Cited as: Lamm/Pham/Moloo, page] at ¶¶34,59

CHRISTINE MCISAAC Challenging by the Rules of the Game: Certainty

Through Procedural Harmonisation of Challenges in
International Commercial Arbitration, 13(4) INT. ARB. L.
REV. 127 (2010)
[Cited as: McIsaac, page] at ¶23

D. FOSTER AND D. 'Challenges to Arbitrators‟, THE EUROPEAN AND MIDDLE

EDWARDS EASTERN ARBITRATION REVIEW (TRANSNATIONAL
DISPUTE MANAGEMENT, 2008)
[Cited as: Foster/Edwards, page] at ¶27

DIONYSIOS P. The Doctrines of Impossibility of Performance and

FLAMBOURAS clausula rebus sic stantibus in the 1980 Vienna
Convention on Contracts for the International Sale of
Goods and the Principles of European Contract Law: A
Comparative Analysis, 13 PACE INTERNATIONAL LAW
REVIEW 261 (2001)
[Cited as: Flambouras, page] at ¶98

DIONYSIOS P. Comparative Remarks on CISG Article 79 & PECL

FLAMBOURAS Articles 6:111, 8:108, available at:
http://cisgw3.law.pace.edu/cisg/text/peclcomp79.html#er
[Cited as: Flambouras (2002), page] at ¶¶89

DJAKHONGIR SAIDOV Methods of Limiting Damages under the Vienna

Convention on Contracts for the International Sale of
Goods, 14(2) PACE INT'L L. REV. 307 (2002)
[Cited as: Saidov] at ¶¶69,83
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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

DOAK BISHOP AND LUCY Practical Guidelines for Interviewing, Selecting and
REED Challenging Party-Appointed Arbitrators in International
Commercial Arbitration, 14 ARB. INT‟L 395 (1998).
[Cited as: Bishop/Reed, page] at ¶¶14,20.

DOMINIQUE HASCHER ICC Practice in Relation to the Appointment,

Confirmation, Challenge and Replacement of Arbitrators,
6 ICC INT‟L CT. ARB. BULL. 4 (1995)
[Cited as: Hascher, page] at ¶20

ERIC SCHWARTZ The Domain of Arbitration and Issues of Arbitrability:

The View from the ICC, TENTH JOINT ICC/AAA/ICSID
COLLOQUIUM ON INTERNATIONAL ARBITRATION (1998)
[Cited as: Schwartz, page] at ¶43

FRANÇOIS KNOEPFLER Corruption et arbitrage international in Roland Bieber

and Ivan Cherpillod (eds.), LES CONTRATS DE
DISTRIBUTION, CONTRIBUTIONS OFFERTES AU
PROFESSEUR DESSEMONTET , Centre du droit de
l'entreprise (1998)
[Cited as: Knoepfler, page] at ¶¶50,78

GÜNTHER J. HORVATH The Duty of the Tribunal to Render an Enforceable

Award, 18(2) J. INT‟L ARB 135 (2001)
[Cited as: Horvath, page] at ¶53

H. ARFAZADEH Considerations pragmatiques sur la Compétence

Respective de l'Arbitre et du Juge en Matière
de Corruption, 19 ASA BULLETIN 672 (2001)
[Cited as: Arfazadeh, page] at ¶59

HANS STOLL Commentary on Article 74 in Peter Schlechtriem (ed.),

COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS, Clarendon Press:
Oxford (1998)
[Cited as: Stoll, page] at ¶101

HARVEY PRAGER AND International Arbitration and Bankruptcy: United States,

ROSELL France and the ICC, 18 J. INT‟L ARB. 431 (2001)
[Cited as: Rosell/Prager, page] at ¶54

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

JAMES H. CARTER Living with the Party-Appointed Arbitrator: Judicial

Confusion, Ethical Codes and Practical Advice, 3 AM.
REV. INT'L ARB. 153 (1992).
[Cited as: Carter, page] at ¶14.

JAMES BARRATT AND Bribery, available at:

HAYLEY ICHILCIK http://www.globalarbitrationreview.com/reviews/30/the-
European-middle-eastern-arbitration-review-2011/
[Cited as: Barratt/Ichilcik, Section] at ¶¶45,59

JEFF WAINCYMER Reconciling Conflicting Rights in International

Arbitration: The Right to Choice of Counsel and the
Right to an Independent and Impartial Tribunal, 26 (4)
ARB. INT‟L 597 (2010)
[Cited as: Waincymer, page] at ¶6

JENIFFER M. BUND Force majeure Clauses: Drafting Advice for the CISG
Practitioner, 7 JOURNAL OF LAW AND COMMERCE 381
(1998)
[Cited as: Bund, page] at ¶100

JESWALD W. SALACUSE Renegotiating International Business Transactions: The

Continuing Struggle of Life Against Form, 35 INT'L LAW
1507 (2001)
[Cited as: Salcuse, page] at ¶100

KENNETH D. BEALE AND Emergent international attitudes towards bribery,

PAOLO ESPOSITO corruption and money laundering, 75(3) ARBITRATION
360 (2009)
[Cited as: Beale/Esposito, page] at ¶34

LANDO OLE The Law Applicable to the Merits of the Dispute, in

SARCEVIC (ED.), ESSAYS ON INTERNATIONAL
COMMERCIAL ARBITRATION, Boston, London (1991)
[Cited as: Ole, page] at ¶40

LAURENCE SHORE AND A Comment on the IBA Guidelines on Conflicts of

EMMANUELLE CABROL Interests : the Fragile Balance between Principles and
Illustrations, and the Mystery of the "Subjective Test",
15 THE AMERICAN REVIEW OF INTERNATIONAL
ARBITRATION 599 (2004)
[Cited as: Shore/Cabrol, page] at ¶12

LEON TRAKMAN The Impartiality and Independence of Arbitrators

Reconsidered, University of New South Wales Faculty of
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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

Law Research Series, available at

http://law.bepress.com/unswwps/flrps/art25
[Cited as: Trakman, page] at ¶8

LORETTA MALINTOPPI Independence, Impartiality, and Duty of Disclosure of

Arbitrators in Peter Muchlinski, Federico Ortino
and Christoph Schreuer (eds.), OXFORD HANDBOOK OF
INTERNATIONAL INVESTMENT LAW, Oxford University
Press (2008)
[Cited as: Malintoppi, page] at ¶8

MATTHIAS SCHERER Circumstantial Evidence In Corruption Cases Before

International Arbitral Tribunals, 5(2) INT‟L ARB. L. REV.
29 (2002)
[Cited as: Scherer, page] at ¶50

MARC BLESSING Mandatory Rules of Law versus Party Autonomy in

International Arbitration, 14(4) J. OF INT‟L ARB. 30
(1997)
[Cited as: Blessing, page] at ¶41

MICHAEL JOACHIM The UN Convention on the International Sale of Goods:

BONELL AND FABIO A Critical Analysis of Current International Case Law-
LIGUORI 1997 (Part 1), UNIFORM L. REV. (1997)
[Cited as: Bonell/Liguori, page] at ¶6

NATHALIE ALLEN Party instigated arbitrator challenges: a practical guide,

77(1) ARBITRATION 59 (2011)
[Cited as: Allen, page] at ¶¶8,12,23,30

OTTO L O DE WITT Background Information on the IBA Guidelines on

WIJNEN, NATHALIE Conflicts of Interest in International Arbitration, 5(3)
VOSER AND NEOMI RAO BUSINESS LAW INTERNATIONAL 432 (2004)
[Cited as: Wijnen/Voser/Rao, page] at ¶¶8,16,27

P. LALIVE Transnational (or Truly International) Public Policy and

International Arbitration in P. Sanders (ed.),
COMPARATIVE ARBITRATION PRACTICE AND PUBLIC
POLICY IN ARBITRATION, ICCA Congress, Series No. 3,
New York (1987)

[Cited as: Lalive, page] at ¶57

PETER RIZNIK Reasonableness of the Measures Undertaken to Mitigate

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

the Loss, available at:

http://cisgw3.law.pace.edu/cisg/biblio/riznik.html
[Cited as: Riznik, Section] at ¶80

PETER SCHLECHTRIEM Calculation of Damages in the event of Anticipatory

Breach under the CISG, available at:
http://cisg.pace.law.edu/cisg/biblio/schlechtriem20.html
[Cited as: Schlechtriem, Section] at ¶¶74,85,104

PHILIPPE REYMOND Trafic d'influence et contrats de distribution: quelques

aspects de droit international privé in I. Cherpillod (ed.)
LES CONTRATS DE DISTRIBUTION, CONTRIBUTIONS
OFFERTES AU PROFESSEUR DESSEMONTET, CEDIDAC
(1998)
[Cited as: Reymond, page] at ¶60

PIERRE MAYER Mandatory Rules of Law in International Arbitration,

2 ARB. INT‟L 274 (1986)
[Cited as: Mayer, page] at ¶¶37,39

PIERRE MAYER AND A Final ILA Report On Public Policy As A Bar To The
SHEPPARD Enforcement Of International Arbitral Awards, 19
ARBITRATION INTERNATIONAL 249 (2003)
[Cited as: Mayer/Sheppard, page] at ¶58

SARAH HOWARD Exemption for Nonperformance: UCC, CISG,

JENKINS UNIDROIT Principles -- A Comparative Assessment, 72
TULANE L. REV.2015 (1998)
[Cited as: Jenkins, page] at ¶¶89,105.

TOM SOUTHERINGTON Impossibility of Performance and

Other Excuses in International Trade, available at:
http://cisgw3.law.pace.edu/cisg/biblio/southerington.html
[Cited as: Southerington, Section] at
¶¶87,89,97,98,101

U. HUBER DER-UNCITRAL - Entwurf eines Ubereinkommens

uber international Warenkaufvertrage‟, 43 RABELZ 413
(1979)
[Cited as: Huber , page] at ¶114

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WILLIAM W. PARK Arbitrator Integrity: The Transient And The Permanent,

46 SAN DIEGO L. REV. 629 (2009)
[Cited as: Park, page] at ¶¶11,15,27

YVES DERAINS La lutte contre la corruption--Le point de vue de l'arbitre

international, 34th AJIA CONGRESS (1996) at 9.
[Cited as: Derains, page] at ¶¶53,77

INTERNATIONAL INSTRUMENTS

CCBE CODE OF Charter of Core Principles of the European Legal

CONDUCT Profession and Code of Conduct for European Lawyers,
2010
[Cited as: CCBE, Gen. Principle] at ¶4.

CIETAC ETHICAL RULES CIETAC Rules for Arbitrators, 1993

[Cited as: CIETAC Ethical Rules, Rule] at ¶12.

CIETAC RULES Arbitration Rules of the China International Economic

and Trade Arbitration Commission, 2011
[Cited as: CIETAC Rules, Article] at
¶¶1,3,4,5,6,8,24,25,26,28,30,36,53

IBA GUIDELINES ON IBA International Principles on Conduct for the Legal

LEGAL PROFESSION Profession, 2011
[Cited as: IBA Guidelines on Conduct of Legal
Profession, Guideline] at ¶4.

IBA GUIDELINES ON IBA Guidelines on Conflicts of Interest in International

CONFLICT OF INTEREST Arbitration, 2004
[Cited as: IBA Guidelines, Gen. Std.] at
¶¶4,12,14,18,19,20,26,27.

ICC RULES Rules of Arbitration of the International Chamber of

Commerce, 1998
[Cited as: ICC Rules, Article] at ¶26.

ICSID CONVENTION Convention on the Settlement of Investment Disputes

Between States and Nationals of Other States, 1966
[Cited as: ICSID Convention, Article] at ¶¶5,12.

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

INTER-AMERICAN Inter-American Convention Against Corruption, 1996

CONVENTION ON [Cited as: OAS Corruption Convention, Article] at
CORRUPTION ¶59.

LCIA ARBITRATION London Court of International Arbitration Rules, 1998

RULES [Cited as: LCIA Rules, Rule] at ¶6.

NEW YORK CONVENTION Convention on the Recognition and Enforcement of

Foreign Arbitral Awards, New York, 1958
[Cited as: NYC, Article] at ¶¶6,53,54,55,57.

OECD CONVENTION ON OECD, Convention on Combating Bribery of Foreign

BRIBERY Public Officials in International Business Transactions,
1997
[Cited as: OECD Convention, Article] at ¶¶38,56,59.

ROME CONVENTION Convention on the Law Applicable to Contractual

Obligations, Rome, 1980‟
[Cited as: Rome Convention, Article] at ¶¶37,39.

SIAC RULES Arbitration Rules of the Singapore International

Arbitration Centre, 2010
[Cited as: SIAC Rules, Art.] at ¶26.

SCC RULES Arbitration Rules of the Arbitration Institute of the

Stockholm Chamber of Commerce, Stocholm, 2007
[Cited as: SCC Rules, Art.] at ¶26.

UN CONVENTION ON United Nations Convention Against Corruption, 2003

CORRUPTION [Cited as: UNCAC, Article] at ¶¶38,59.

UNCITRAL UNCITRAL Arbitration Rules, GA Res. 31/98

ARBITRATION RULES [Cited as: UNCITRAL Arbitration Rules, Article] at
¶6.

UNCITRAL MODEL UNCITRAL Model Law on International Commercial

LAW Arbitration, 1985 with amendments adopted in 2006
[Cited as: UNCITRAL Model Law, Art.] at
¶¶3,4,6,26.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

DOMESTIC INSTRUMENTS

1. BRAZIL- LAW NO. 9.307, 1996

[Cited as: Arbitration Act, Art. (Brazil)] at ¶26.

2. CIVIL CODE OF AUSTRIA, Zivilprozessordnung, 1895

[Cited as: Zivilprozessordnung, Section (Austria)] at ¶26.

3. ENGLISH ARBITRATION ACT, 1996

[Cited as: Arbitration Act, Section (UK)] at ¶26.

4. FEDERAL ARBITRATION ACT, 9 USC, 1947

[Cited as: Federal Arbitration Act, Section (USA)] at ¶12.

5. FOREIGN CORRUPT PRACTICES ACT, 15 USC, 1977

[Cited as: FCPA, Section (USA)] at ¶¶38,59.

6. FRENCH CIVIL CODE, 1804

[Cited as: French Civil Code, Article] at ¶47.

7. INDEPENDENT COMMISSION AGAINST CORRUPTION ACT, 1988 (AUSTRALIA)

[Cited as: Independent Commission Against Corruption Act, Section (Australia)] at
¶¶38,59.

8. PORTUGUESE CIVIL CODE, CODIGO CIVIL, 1967

[Cited as: Portugal Civil Code, Article] at ¶48.

9. PREVENTION OF CORRUPTION ACT, 1947 (INDIA)

[Cited as: Prevention of Corruption Act, Section (India)] at ¶¶38,59.

10. SWITZERLAND‟S FEDERAL CODE ON PRIVATE INTERNATIONAL LAW, 1987

[Cited as: Private International Law Act (PILA), Article (Switzerland)] at ¶26.

MISCELLANEOUS DOCUMENTS

1. Electronic Industry Code of Conduct, available at:

http://www.eicc.info/PDF/EICC%20Code%20of%20Conduct%20English.pdf
[Cited as: EICC (2009)] at ¶109.

2. HP Electronic Industry Code of Conduct (Version 3.01 -I June 2009), available at:
http://www.hp.com/hpinfo/globalcitizenship/environment/pdf/supcode.pdf
[Cited as: HP EICC Report (2009)] at ¶109.

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

3. International Finance Corporation Environmental, Health and Safety Guidelines,

available at:
http://www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/gui_EHSGuidelines2007
_GeneralEHS/$FILE/Final+-+General+EHS+Guidelines.pdf
Cited as: IFC Guidelines (2007)] at ¶109.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

INDEX OF ABBREVIATIONS

¶ Paragraph

Art. Article

ASA Bulletin Association suisse de l‟arbitrage

C. Supp. Cummulative Supplement

CC Cour de Cassation

c.f. confer (compare)

CISG United Nations Convention on Contracts

for the International Sale of Goods

Cl. Claimant

Co. Corporation

DC District Court

Div Division

Dr. Doctor

Ex. Exhibit

F. Supp Federal Reporter Supplement

f.n. Footnote

Gen. General

IBA International Bar Association

ICC International Chamber of Commerce

International Center for Settlement of

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

ICSID Investment Disputes

i.e. Id est (that means)

Inc. Incorporation

Lloyd’s Rep. Lloyd‟s List Law Reports Ltd.

Ltd. Limited

M/S Motor Ship

N.E.2d North Eastern Reporter 2nd series

No. Number

Nos. Numbers

NYC New York Convention on the Recognition

and Enforcement of Foreign Arbitral
Awards

OLG Oberlandesgericht (Court of Appeal,

Germany)

p. Page

Proc. Procedural

Prof. Professor

Q.B. Queen‟s Bench

Rev. arb. Revue de l‟arbitrage

RIW Recht der internationalen Wirtschaft

S.A. Sociedad Anónima

xxvii
 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

SIAC Singapore International Arbitration Center

SCC Stockholm Chamber of Commerce

S.P.A. Societa per azioni

SC Supreme Court

Sec. Section

St. Statement

Std. Standard

Switz. Switzerland

UK United Kingdom

U.S.A. United States of America

U.S.R. United States Report

UN United Nations

UNCITRAL Model Law Model Law of the United Nations

Commission on International Trade on
International Commercial Arbitration

v. versus (against)

Vol. Volume

YCA Yearbook of Commercial Arbitration

xxviii
 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

STATEMENT OF FACTS

PARTIES:
CLAIMANT: Mediterraneo Elite Conference Services, Ltd. is incorporated in Mediterraneo. It
operation high-end venues in which it provides a complete conference package.
RESPONDENT: Equatoriana Control Systems, Inc. is incorporated in Equatoriana.

MATERIAL FACTS:
CLAIMANT purchased a luxury yacht, M/S Vis in Spring 2010 to use as its seventh
conference venue which was to be refurbished with the latest cabin and conference
technologies. CLAIMANT contracted with RESPONDENT to supply, install and configure the
Master Control System, which is critical for the yacht‟s operation on May 26, 2010. As per
the contract, the installation and configuration of the control system was to be completed by
November 12, 2010. RESPONDENT contracted with Oceania Specialty Devices [Hereinafter
“Specialty Devices”] for the manufacture of a series of processing units, which form the core
element in the overall control system. Specialty Devices, in turn contracted with Atlantis
High Performance Chips [Hereinafter “High Performance”] for the manufacture and supply
of the D-28 “super chip”, superior to any other chip available in the market, to be used in the
processing units. The chip was scheduled for production in the middle of August 2010.

CLAIMANT had contracted with Worldwide Corporate Executives Association

[Hereinafter “Corporate Executives”], its long standing client, to host its event on the M/S
Vis during February 12-18, 2011. On September 13, 2010, RESPONDENT informed
CLAIMANT that the contract could not be performed before the middle of January 2011,
because of a fire that had destroyed the factory of High Performance. High Performance had
a limited supply of the chips in its warehouse which it could have used to fulfill its obligation
towards Specialty Devices; instead it delivered the entire stock to its regular customer
Atlantis Technical Solutions [Hereinafter “Atlantis”] ostensibly because the CEOs of the two
companies were close friends.

As promised after the fire, RESPONDENT delivered the control system on January 14,
2011 and installation, configuration and verification was completed on March 11, 2011,
pursuant to which payment of the contract was made. Due to RESPONDENT‟S delay in
performance of the contract, CLAIMANT offered one of its on-shore venues as a substitute to

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

Corporate Executives; however this offer was rejected. Since termination of the contract
would result in huge losses for the CLAIMANT, it chartered a substitute yacht, M/S Pacifica
Star at a cost of USD 404,000 plus port and handling fees of USD 44,000 and paid a
brokerage commission of USD 60,600 and success fee of USD 112,000. It also paid USD
112,000 as ex gratia payment to Corporate Executives.

On April 25, 2011, CLAIMANT asked RESPONDENT to pay damages for the losses it
incurred, which was rejected by RESPONDENT on9 May, 2011.

On July 25, 2011, CLAIMANT filed an application for arbitration against RESPONDENT
with the China International Economic and Trade Arbitration Commission (CIETAC),
seeking damages for the losses it incurred in chartering the substitute yacht and the ex gratia
payment made to Corporate Executives. The CIETAC finalized the composition of the
tribunal on August 30, 2011.

On 2 September, 2011, RESPONDENT filed its Statement of Defense. It questioned the

authority of the tribunal to decide the issue of the lease contract on the basis that it was
tainted by corruption. It also challenged the continuance of Dr. Mercado in CLAIMANT‟S legal
team since she allegedly shared a personal and professional relationship with Professor
Presiding Arbitrator, since both Dr. Mercado and Professor Presiding Arbitrator work at
Danubia National University and she is godmother to one of his children. It reserved its rights
to challenge Professor Presiding Arbitrator‟s appointment in case the challenge to Dr.
Mercado‟s continuance is rejected by the Tribunal. On the merits of the case, it contested
payment of damages on grounds of the lease contract being tainted by corruption.
Specifically on the payment of the success fee, the RESPONDENT contested its claim since the
payment was used in part by the broker to bribe Mr. Goldrich‟s assistant. Further, an ex gratia
amount had been given by CLAIMANT to Corporate Executives, to make a partial refund to the
conference delegates. RESPONDENT alleged that the payment was voluntary as Corporate
Executives had not demanded such a payment and had not threatened the withdrawal of
future business. Finally, it contested its liability under Article 79 of the CISG.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

PLEADINGS

ARGUMENT ON JURISDICTION

I. DR. MERCADO CAN CONTINUE TO BE PART OF CLAIMANT’S LEGAL

TEAM

1. The principle of kompetenz-kompetenz recognizes the Tribunal‟s competence to

determine its own jurisdiction [REDFERN/HUNTER, ¶5-39; LEW/MISTELLIS/KROLL, ¶14-
16]. Pursuant to the CIETAC Rules, the power to determine jurisdiction has been
delegated to this Tribunal by CIETAC [CIETAC Rules, Art.6.1; Secretariat Letter dated
9th Sep 2011].

2. Dr. Mercado need not withdraw as a member of CLAIMANT‟S legal team as the Tribunal
lacks jurisdiction to decide a dispute concerning a counsel‟s appointment [A.] and any
award rendered by it on the issue will not be enforceable [B.]. In any event, in any event,
her appointment does not create a conflict of interest for Prof. Arbitrator, which would
warrant her removal [C.].

A.] THE TRIBUNAL LACKS JURISDICTION TO DECIDE ON A COUNSEL’S APPOINTMENT

3. Arbitrability of a dispute is governed by the law governing the arbitration
[POUDRET/BESSON, ¶523; FOUCHARD/GAILLARD/GOLDMAN, ¶429], which the parties have
designated as the CIETAC Rules [Appl. for Arb. ¶3; Cl. Ex. 1]. Moreover, any
mandatory provisions of the UNCITRAL Model law adopted by Danubia, which is the
seat of arbitration, are relevant [REDFERN/HUNTER, ¶3-50]. Under the designated lex
arbitri, Dr. Mercado‟s appointment as a member of CLAIMANT‟S legal team cannot be
determined by the Tribunal [A.1], neither does it have inherent powers to determine the
issue [A.2].

A.1] A DETERMINATION OF THE ISSUE IS NOT WITHIN THE SCOPE OF THE TRIBUNAL‟S POWERS
4. The lex arbitri only provides the grounds and procedure for challenge to an arbitrator‟s
impartiality [CIETAC Rules, Art. 30; UNCITRAL Model Law, Art. 12,13], but does not
provide for a challenge to a party‟s counsel. This omission stems from an essential
difference in the duties of an arbitrator and a counsel [Rompetrol v. Romania (ICSID)].
An arbitrator has a fundamental duty to remain impartial and independent [UNCITRAL

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

Model Law, Art. 12; CIETAC Rules, Art. 33; IBA Guidelines, Gen. Std. 1]. However, a
counsel has a duty to treat his client‟s interest as paramount and is therefore allowed to
be partial and dependant in favour of his client, as long as standards of honesty and
fairness are maintained [IBA Guidelines on Conduct of Legal Profession, Guidelines 2,5;
CCBE, Gen. Principle 2.7]. Thus, the Tribunal is precluded from deciding on withdrawal
of Dr. Mercado from CLAIMANT‟S legal team.

A.2] THE TRIBUNAL DOES NOT HAVE AN INHERENT POWER TO ADJUDICATE ON THE ISSUE
5. RESPONDENT may argue that the Tribunal has an inherent power to decide on Dr.
Mercado‟s withdrawal. However, the only authority recognizing such inherent power of
an arbitral tribunal is an ICSID tribunal‟s decision in Hrvatska v. Slovenia [Rompetrol v.
Romania (ICSID)]. Even in that case, the inherent power was recognized because the
tribunal was governed by public international law and implicated public interest
[Hrvatska v. Slovenia (ICSID)]. Moreover, the power was traced to the provisions of the
ICSID Convention which allowed the tribunal to decide on “any question of procedure”
[Hrvatska v. Slovenia (ICSID)]. The dispute between the CLAIMANT and the
RESPONDENT is a commercial dispute not governed by public international law.
Moreover, as the CIETAC Rules do not contain any specific provision granting the
Tribunal an authority similar to the ICSID Convention, there is no scope for it to source
any inherent power.

B.] THE TRIBUNAL’S AWARD WOULD BE UNENFORCEABLE UNDER THE NYC

6. The Tribunal is duty bound to pronounce an enforceable award [Supra, ¶53], but an
award ordering Dr. Mercado‟s withdrawal from CLAIMANT‟S legal team would render
the award unenforceable under the NYC, for lack of opportunity to be heard and fair
hearing [NYC, Art. V(1)(b); BORN, 2291]. The parties‟ freedom to be represented by
counsel of their choice has been recognized by the CIETAC Rules [CIETAC Rules, Art.
20]; other institutional rules [LCIA Rules, Rule 18.1; UNCITRAL Arbitration Rules, Art.
5], judicial opinions [ICC Case 8879/1997; Anne Pasque v. Gerald Council (USA)] and
academic discussions [BENNET, 177; Waincymer, 597]. Under Article 18 of the
UNCITRAL Model Law too, a party has the right to a full opportunity to present his
case, which includes the right of legal representation of one‟s choice [BORN, 2291,2301;
Waincymer, 614]. Therefore, an award to exclude Dr. Mercado affects CLAIMANT‟S right
to present his case, and enforcement would be refused under Art. V(b)(1) of the NYC.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

C.] IN ANY EVENT, DR. MERCADO’S APPOINTMENT HAS NOT CREATED EXTRAORDINARY

CIRCUMSTANCES AFFECTING PROF. ARBITRATOR’S INDEPENDENCE AND IMPARTIALITY

7. Assuming that the tribunal has an implied power to decide on a counsel‟s appointment,
such a power must be exercised only in extraordinary circumstances which genuinely
affect the integrity of the tribunal [Rompetrol v. Romania (ICSID)]. The tribunal‟s
integrity can only be affected if it is proved that the arbitrator may not act impartially and
independently [C.1]. In the given case, the relation between Dr. Mercado and Prof.
Arbitrator do not raise any justifiable doubts affecting Prof. Arbitrator‟s independence
and impartiality [C.2].

C.1] A CONFLICT OF INTEREST CAN BE ESTABLISHED ONLY IF IT IS SHOWN THAT THE

ARBITRATOR MAY NOT ACT INDEPENDENTLY OR IMPARTIALLY

8. RESPONDENT has challenged Dr. Mercado‟s continuance as a member of CLAIMANT‟S

legal team by citing several circumstances which allegedly establish a „close
relationship‟ and conflict of interest for Prof. Arbitrator [St. of Defense, ¶23]. In this
regard, CLAIMANT submits that arbitration is quasi-judicial [Bastida; García-
Bolívar,76], and requires the arbitrator to act independently and impartially [CIETAC
Rules, Art. 19; Wijnen/Voser/Rao,441; Allen,61]. Independence objectively measures
proximity between the arbitrator and counsel, in terms of personal, social and financial
relationships [Malintoppi,807; Annahold v. L‟Oréal (France)]. Impartiality subjectively
assesses the arbitrator‟s equal and fair treatment of the parties [Trakman; Bremer v.
Soules (UK)]. These considerations are applied in combination to examine actual or
apparent bias by an arbitrator in relation to a dispute
[BLACKABY/PARTASIDES/REDFERN/HUNTER, 267-268; Luttrell,21].

9. Consequently, as long as relations between Dr. Mercado and Prof. Arbitrator do not
affect his ability to act independently and impartially, the conflict of interest is not
established.

C.2] THE RELATIONS BETWEEN DR. MERCADO AND PROF. ARBITRATOR IMPUGNED BY

RESPONDENT DO NOT AFFECT THE INDEPENDENCE OR IMPARTIALITY OF THE ARBITRATOR

10. Lack of independence or impartiality derives from a problematic relationship between
the arbitrator and a counsel that may provide economic or emotional stake in the dispute
[LEW/MISTELIS/KROLL, ¶¶11-11,11-19]. CLAIMANT submits that conflict of interest is

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

founded on a high standard of „justifiable‟ doubts [a.]. Neither such personal

relationships [b.], nor professional relationships [c.], exist between Dr. Mercado and
Prof. Arbitrator, as to warrant her removal from CLAIMANT‟S legal team.

(a) The relationships between Dr. Mercado and Prof. Arbitrator must raise
“justifiable doubts” about his independence or impartiality to warrant her removal
11. The standard to decide the effect of the impugned relationships between Dr. Mercado
and Prof. Arbitrator is not available either in the Code of Ethics of Dr. Mercado‟s Bar
Association [St. of Defense, ¶23], or in any relevant rules of the seat [Proc. Order 2,
Q.40]. It is left to be found in the rules of the arbitral organization and the International
Bar Association Rules on Conflict of Interest [Proc. Order 2, Q.40], or in other widely
accepted standards [Park, 629].

12. CIETAC‟s ethical rules merely reiterate that the arbitrator is duty-bound to act fairly and
impartially [CIETAC Ethical Rules, Rule 1]. On the other hand, the IBA Guidelines
discuss circumstances raising „justifiable doubts‟ about an arbitrator‟s independence or
impartiality [IBA Guidelines, Gen. Std. 2(b)], reflecting international practice [Allen,61].
The doubts are „justifiable‟ if a reasonable and informed third party would conclude that
there was a likelihood that the arbitrator would decide the dispute by factors other than
its merits [IBA Guidelines, Gen. Std. 2(c); Porter v. McGill (UK)]. This has been
recognized to be a high standard [Perenco v. Ecuador (ICSID)]. In fact, it is a settled
position that the standard for assessing conflicts is a rigorous one, as seen in the use of
terms such as „real danger of bias‟ [Rustal Trading v. Duffus S.A. (UK); Logy
Enterprises v. Haikou Trading (HK)], „evident partiality‟ [Federal Arbitration Act, Sec.
10(a)(2) (USA)], „manifest lack‟ (of independent judgment) [ICSID Convention,
Art.14(1),57; SGS v. Pakistan (ICSID)]. Thus, the intensity of the relationship between
Dr. Mercado and Prof. Arbitrator must meet the exacting standard of „justifiable doubts‟
[Shore/Cabrol,599].

(b) The professional relationships described by RESPONDENT do not establish dependence

or partiality
13. RESPONDENT has cited professional relationships between Dr. Mercado and Prof.
Arbitrator to challenge her continuance [St. of Defense, ¶23]. However, for such

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

challenge to be sustained, the mere subjective claim of a professional relation between a

counsel and the arbitrator is not sufficient [Rompetrol v. Romania (ICSID)].

14. First, the RESPONDENT bases its challenge on the fact that both Dr. Mercado and Prof.
Arbitrator are lecturers at the Danubia National University [St. of Defense, ¶¶17,18].
However, while Prof. Arbitrator is the Schlechtriem Professor of ITL at the University,
Dr. Mercado is only a Visiting Lecturer, treated as a third party service supplier, and is
not salaried but paid per lecture [St. of Defense, ¶¶18,19]. Such a professional relation is
part of the Green List under the IBA Guidelines, implying that it is an insufficient
disqualifying factor [IBA Guidelines, Green List, ¶4.4.1]. This is because
disqualifications based on such a generic professional relationship would deprive the
parties of the practical benefit of appointing a professional and knowledgeable tribunal
consisting of leaders in that field of law [Carter, 164; Bishop/Reed, 17-18; Case No.
4A_506/2007 (Switz.)]. In particular, the Supreme Court of Costa Rica ruled that though
the lawyer and arbitrator were lecturers at the same university, it did not in itself create
„justifiable doubts‟ about the arbitrator‟s independence because relationships based on
academic freedom are far separated from the general understanding of friendship and
loyalty among colleagues [Scott Paper Company v. Dario Express (Costa Rica)].

15. Moreover, for a professional acquaintance to disqualify a counsel, there must exist
regular interactions between the counsel and the arbitrator [Park, 629]. In this case,
while Dr. Mercado enjoys extensive contact with the ITL faculty‟s full time staff,
particularly the course directors; her professional communications with Prof. Arbitrator
are limited and consequent only to the lectures she delivers to the ITL faculty [St. of
Defense, ¶20]. Even the phone call that she received from Prof. Arbitrator‟s assistant to
apply for the post of a Visiting Lecturer at the University does not establish such
relationship because the call was made to several individuals, pursuant to the University
Committee‟s decision to invite additional applications [St. of Defense, ¶18; Proc. Order
2 Q.20].

16. Second, the challenge to Prof. Arbitrator‟s impartiality cannot be sustained if the alleged
bias is not manifest but is based on a mere supposition or speculation [SGS v. Pakistan
(ICSID); Wijnen./Voser/Rao, 441]. In this regard, Dr. Mercado‟s success in three
previous arbitrations before Prof. Arbitrator has no bearing on the determination of a

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

conflict in the present case. In two of those three proceedings, the award was rendered in
favour of Dr. Mercado by a unanimous tribunal [St. of Defense, ¶22]. Therefore, the fact
that in one of those three proceedings, Prof. Arbitrator issued a dissenting opinion in her
favour [St. of Defense, ¶22] is a mere speculation, not sufficient to create a justifiable
doubt as to his independence and impartiality.

(c) The personal relationships described by RESPONDENT do not establish dependence or

partiality
17. The personal relations between Dr. Mercado and Prof. Arbitrator are not proximal so as
to render the arbitrator „dependent‟ [Bastida].

18. First, the fact that Dr. Mercado is the godmother of the Prof. Arbitrator‟s youngest child
[St. of Defense,¶21] does not imply a close family relationship with the arbitrator [IBA
Guidelines, Waivable Red List, ¶2.3.8]. This is because the term „close family member‟
refers to a spouse, sibling, child, parent or life partner, and does not include a
„godmother‟ of the arbitrator‟s child [IBA Guidelines, Waivable Red List, f.n. 3].

19. Second, it is evident that Dr. Mercado is personally better acquainted with Prof.
Arbitrator‟s wife, whom she befriended after beginning work in Danubia, and
occasionally meets in the city [St. of Defense, ¶21; Proc Order 2, Q.38]. In fact, it was
Prof. Arbitrator‟s wife who asked her to be the godmother of their youngest child [Proc.
Order 2, Q.32]. What emerges is that close personal relations exist between Dr. Mercado
and Prof. Arbitrator‟s wife rather than with himself. Such a connection is insufficient, as
seen in Tembec v. United States (ICSID), where the party relied on the IBA Guidelines,
to unsuccessfully challenge an arbitrator whose wife was a cousin of the President of the
United States, who was personally involved in the dispute.

20. Lastly, even if Prof. Arbitrator does have occasional personal contact with Dr. Mercado,
the fact he is so acquainted does not in itself create conflict of interest [Hascher,11;
Bishop/Reed,17]. Under the IBA Guidelines Orange List, which itself elaborates
circumstances which do not necessarily justify a challenge [Case No. 26 Sch 21/07
(Germany)], a „close personal friendship‟ exists if the arbitrator and the counsel spend
considerable time together unrelated to professional work commitments [IBA Guidelines,
Orange List, ¶3.3.6]. However, as elucidated above, Dr. Mercado occasionally interacted
with Prof. Presiding Arbitrator‟s wife and not with him [Supra, ¶20]. Moreover, to

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

suggest that such occasional purely social contact in the absence of any additional facts
would influence his mind is purely speculative [Zhinvali Development Ltd. v. Georgia
(ICSID)].

II. RESPONDENT CANNOT CHALLENGE THE CONTINUANCE OF PROFESSOR

PRESIDING ARBITRATOR AS A MEMBER OF THE ARBITRAL TRIBUNAL

21. RESPONDENT has alleged that Prof. Arbitrator and Dr. Mercado share a close relationship
which raises doubts over his independence and impartiality [St. of Defense, ¶23].
Consequently, it has reserved its right to challenge Prof. Arbitrator‟s continuance on the
Tribunal [St. of Defense, ¶16]. However, such a challenge must be time-barred [A.].
Moreover, it cannot be sustained because no conflict of interest exists in the present case
[B.].

A.] RESPONDENT’S SUBSEQUENT CHALLENGE TO PROF. PRESIDING ARBITRATOR’S

CONTINUANCE AS A MEMBER OF THE TRIBUNAL MUST BE TIME-BARRED

22. RESPONDENT has „reserved‟ its right to challenge Prof. Arbitrator, if its challenge to Dr.
Mercado‟s continuance as a member of CLAIMANT‟S legal team is not accepted by the
Tribunal [St. of Defense, ¶16]. CLAIMANT submits that such any challenge to an
arbitrator must be made within a certain time period under the applicable rules [A.1], and
RESPONDENT‟S reservation of right to challenge the arbitrator is invalid as being
inconsistent with the objective behind mandating such time periods [A.2].

A.1] THE CHALLENGE TO THE ARBITRATOR MUST BE MADE WITHIN A CERTAIN TIME PERIOD

AFTER THE REASONS FOR SUCH A CHALLENGE ARISE

23. CLAIMANT accepts that a party‟s right to challenge an arbitrator, if he does not meet
requisite standards, is fundamental to the confidence and integrity of the arbitral process
[VAN DEN BERG/SCHULTZ, 416; Allen, 61]. However, that right is not absolute throughout
the proceedings, as a time limit is mandated, within which the party alleging a conflict of
interest must raise the challenge [POUDRET / BESSON, 357; McIsaac, 127].

24. The parties have agreed that the applicable procedural law is the CIETAC Rules [Appl.
for Arb., ¶3; Cl. Ex. 1]. Under these rules, a challenge of an arbitrator must be made
within 15 days of becoming aware of the facts which form the basis of the challenge

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

[CIETAC Rules, Art. 30(3)]. Also, the challenge must be made in writing, and should state
the facts and reasons on which it is based, along with supporting evidence [CIETAC Rules,
Art. 30(2)].

25. RESPONDENT became aware that Dr. Mercado would be part of CLAIMANT‟S legal team
on 30th August, 2011 [Proc. Order 2, Q.29]. Ostensibly, this information raised doubts
about the independence or impartiality of Prof. Arbitrator in RESPONDENT‟S mind;
however, he simply advanced these grounds in his Statement of Defence, on 2nd
September, 2011 [St. of Defense, ¶¶16-23], rather than following the appropriate
procedure [CIETAC Rules, Art. 30]. Assuming the reasons for the challenge arose
between 30th August and 2nd September, 2011, when the Statement of Defence was filed,
the 15 day period has clearly elapsed as of date. Consequently, the time period for the
Respondent to formally challenge Prof. Arbitrator under the CIETAC rules has elapsed.

A.2] THE RESERVATION OF THE RIGHT TO CHALLENGE THE ARBITRATOR IS INCONSISTENT WITH
THE OBJECTIVE OF PLACING A TIME PERIOD WITHIN WHICH THE CHALLENGE MUST BE MADE

26. As with the time limit imposed by CIETAC [CIETAC Rules, Art. 30(3)], the Rules of
almost all leading arbitral institutions [SCC Rules, Art. 15(2); SIAC Rules, Rule 12.1;
ICC Rules, Art. 11(2)], and national legislations [Arbitration Act, Sec. 73(1) (UK);
Private International Law Act (PILA), Art. 180(2) (Switz.); Zivilprozessordnung, Sec.
589(2) (Austria); Arbitration Act, Art. 20 (Brazil)], impose a relatively short time period
on the parties from the date when the challenger becomes aware of the facts that suggest
a conflict. This marks a period after which the right to challenge the arbitrator can no
longer be exercised [OLG Munchen 34 SchH 003/07 (Germany); Federal Tribunal
Judgement of 10 June 2003 (Switz.); BORN, 1558]. The party is thereafter deemed to have
waived its objections [UNCITRAL Model Law, Art. 4; IBA Guidelines, Gen. Std. 4].

27. The objective of the time period is that the party investigate the arbitrator immediately
and lose the incentive to raise doubts after the Tribunal does significant work [McIssac,
127; Universal Pictures v. Inex Films (France)]. The party may otherwise wait and see
whether an award is rendered in its favour before raising the challenge [WellPoint v.
John Hancock (USA); Nihon Plast v. Takata-Petri (France)], or use challenges of
arbitrators to delay the arbitration [Foster/Edwards, 2-3; Rhône-Poulenc Pharma. v.
Roche Corp. (Switz.)] or simply to deny the opposing party the arbitrator of its choice

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

[IBA Guidelines, Introduction, 1]. Consequently, RESPONDENT cannot be allowed to

raise the challenge at a later stage and disrupt proceedings by its fears, whether real or
feigned [Wijnen/Voser/Rao,451; Park,629]. Therefore, permitting RESPONDENT to
reserve its right to challenge the arbitrator would defeat these objectives.

28. RESPONDENT may argue that the CIETAC Rules do not expressly prohibit reservation of
right to challenge the arbitrator at a later stage. However, CLAIMANT submits that though
arbitration procedures vary; it cannot take away from the general rule of transparency,
predictability and efficiency in international arbitration. [Mourre/Vagenheim]. If
RESPONDENT believed that there was a conflict of interest with Prof. Arbitrator, it should
have raised the challenge within the prescribed time limit of 15 days, so that it could be
finally decided by the Chairperson of the CIETAC, as provided under the applicable
procedure [CIETAC Rules, Art. 30(5),30(6)]. Consequently, the reservation of right is
invalid, and RESPONDENT has waived his right to challenge Prof. Arbitrator.

B.] IN ANY EVENT, DR. MERCADO’S APPOINTMENT HAS CREATED NO CONFLICT OF

INTEREST FOR PROF. PRESIDING ARBITRATOR

29. The challenge to the arbitrator‟s impartiality and independence can only be sustained if
the facts give rise to „justifiable doubts‟ as to his impartiality [Supra, ¶¶11-12]. As has
been argued above, the relationship that Prof. Arbitrator and Dr. Mercado share is not
sufficient to raise justifiable doubts about his impartiality [Supra, ¶¶13-20]. In fact,
CLAIMANT and RESPONDENT jointly agreed to appoint him as the Chair due to his vast
experience and reputation in the field [St. of Defense, ¶17; Letter from H. Fasttrack to
CIETAC Sec. dated 2 August 2011; Letter from J. Langweiler to CIETAC Sec. dated 2
August 2011]. Having concurred on his credibility, RESPONDENT should not allege
doubts over his impartiality and independence, based on speculative reasoning [Supra,
¶¶13-20].

30. Furthermore, although Prof. Arbitrator did not submit a new statement of independence
once he became aware of Dr. Mercado‟s involvement [Proc. Order 2, Q.36], it does not
have any bearing on the assessment of the issue. Such a statement must only be
submitted if he knows of facts or circumstances that are of „such nature‟ as would call
into question his independence or impartiality [CIETAC Arbitrator Statement of
Independence; CIETAC Rules, Art. 29(2)]. However, Prof. Arbitrator did not find these

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facts to be of such nature as to affect his independence, and hence need not disclose facts
about himself that are irrelevant to the parties [Allen, 60].

III. THE TRIBUNAL HAS THE JURISDICTION TO DECIDE ON THE LEASE

CONTRACT AND ITS CONSEQUENCES IN THIS DISPUTE

31. The Tribunal has jurisdiction to decide the consequences of the lease contract, as the
legality of the payment made by the Broker to procure it can be arbitrated [A.]. The lease
itself is validly procured, under the applicable law [B.]; alternatively, the arbitrability of
the consequences of the contract is unaffected, even if the payment is considered a bribe
[C.]. Finally, the Tribunal‟s award would be enforceable in all jurisdictions [D.].

A.] THE LEGALITY OF THE PAYMENT MADE TO PROCURE THE LEASE CONTRACT CAN BE

ARBITRATED UNDER THE ARBITRATION AGREEMENT

32. The arbitration agreement is contained in Clause 15.1 of the contract for supply and
installation of the Master Control System for the M/S Vis, between CLAIMANT and
RESPONDENT, and provides that all disputes „arising from‟ or „in connection with‟ the
contract may be submitted to arbitration [Appl. for Arb., ¶3; Cl. Ex. 2]. The use of an
expansive phrase like „in connection with‟ in the clause shows that the parties intend it to
embrace every dispute having some reasonable relationship to the contract
[REDFERN/HUNTER, ¶3-38; GARY BORN, 41; J.J. Ryan Inc. v. Rhone Poulenc (USA)].

33. Following RESPONDENT‟S breach of contract, CLAIMANT was compelled to lease another
yacht to meet its own commitments, for which it entered into the lease contract with Mr.
Goldrich [Appl. For Arb., ¶¶16-18]. Consequently, the damages sought by CLAIMANT
include the cost of chartering the substitute yacht and related expenses [Appl. For Arb.,
¶4]. The allegation of corruption raised by RESPONDENT concerns the legality of the
payment made by the yacht broker to Mr. Goldrich‟s assistant [St. of Defense, ¶¶13-15;
Resp. Ex. 1]. As the legality of the payment would determine whether the lease contract
was procured and tainted by bribery, and affect CLAIMANT‟S ability to recover costs
incurred under it, the dispute on legality of the aforesaid payment is reasonably related to
and „in connection‟ with the contact between CLAIMANT and RESPONDENT and can be
arbitrated.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

B.] THE TRIBUNAL CAN CONSIDER THE LEASE CONTRACT AND ITS CONSEQUENCES AS THE
LEASE HAS BEEN VALIDLY PROCURED UNDER THE APPLICABLE LAW

34. When it is alleged that a contract is tainted by bribery, the applicable law will provide the
appropriate result in determining whether it affects the arbitration of claims made
thereunder [SAYED, 43; Pryles, 6; Lamm/Pham/Moloo,728]. For instance, where Swiss
law was chosen by the parties, a Tribunal could not prefer Algerian law to declare certain
payments as bribes, invalidate the contract, and refuse to provide damages to the
claimant [OTV v. Hilmarton (Swiss); Beale/Esposito, 360]. Similarly, as the payment by
the Broker to procure the lease is not illegal under the applicable law, the Tribunal can
consider the consequent costs incurred by CLAIMANT [B.1]. Moreover, Pacifica‟s law is
not a mandatory principle of law to be considered by the Tribunal [B.2].

B.1] THE PAYMENT MADE BY THE YACHT BROKER IS NOT ILLEGAL UNDER THE APPLICABLE LAW
35. First, all losses, including costs and expenses arising out of breach of contract constitutes
damage suffered, and are recoverable [Infra, ¶¶62-63]. In this regard, due to
RESPONDENT‟S breach of contract, CLAIMANT was forced to lease another yacht to meet
its own commitments, for which it entered into the lease contract with Mr. Goldrich, and
thereby incurred damage of various costs, fees and expenses [Appl. For Arb., ¶¶16-18].

36. Second, the issue of damage is to be decided under the applicable proper law of contract
[CIETAC Rules, Art. 47.2]. The parties have agreed in Clause 15.2 that the contract is
subject to the law of Mediterraneo [Cl. Ex. 1]. Under this law, the Broker‟s payment to
Mr. Goldrich‟s assistant does not constitute bribery [Resp. Ex. 1; Proc. Order 2, Q.27].
As the payment made by the yacht broker is entirely legal under the applicable law, the
Tribunal‟s jurisdiction to consider the lease contract and its consequences is unaffected.

B.2] THE LAW OF PACIFICA DOES NOT HAVE THE FORCE OF A MANDATORY PROVISION OF LAW
37. Mandatory provisions are those which apply irrespective of the law chosen by the parties
to govern the contract [ICC Case 6320/1992; Rome Convention, Art. VII; Mayer, 275],
and can be determined by reference to a State‟s domestic public policy or transnational
public policy [SANDERS, 228; SAMMARTANO, 505]. CLAIMANT submits that Article 1453
of Pacifica‟s Criminal Code [Resp. Ex. 2] does not qualify as such a mandatory rule.

38. First, the act designated as an offence in Pacifica‟s law is not accepted to be a crime in
most other jurisdictions and therefore does not affect transnational public policy. While

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

the illegality of bribery of public officials is considered part of international public policy
[Infra, ¶59], trafic d‟influence or „trading in influence‟ by making payments to private
officials is not uniformly considered illegal in all jurisdictions [UNCAC, Art. 21,23;
OECD Convention, Art. 1(4)(a); FCPA, Sec. 78-dd(2)(a) (USA); Prevention of
Corruption Act, Sec.7,8,9 (India); Independent Commission Against Corruption Act, Sec.
8 (Australia)]. Several courts and arbitral tribunals have acknowledged this proposition
as well [ICC Case 9333/1998; ICC Case 8459/1997; X (U.K.) v. Y (F)/Algeria (CCIG-
Switz.); OTV v. Hilmarton (Swiss)]. In fact, Danubia, Equatoriana and Mediterraneo do
not consider bribery of a private official illegal either [Proc. Order 2, Q.27].

39. Second, importance may be placed on a particular domestic law by the Tribunal if that
country is closely connected to the dispute or has a legitimate interest in it [Rome
Convention, Art. 7(1); Mayer, 275; FOUCHARD/GAILLARD/GOLDMAN, ¶533]. The
relationship of Pacifica to this dispute is solely that it was the State in which Mr.
Goldrich resided and the M/S Pacifica was registered [Proc. Order 2, Q.25]. Moreover,
Mr. Goldrich‟s assistant has been convicted in Pacifica under for accepting the payment
by the broker and is not concerned with this dispute [Proc. Order 2, Q.26].

40. Lastly, if the effect of a particular domestic law would render an award unenforceable,
the law will have a „mandatory‟ character [OLE, 152]. In this dispute, the Tribunal‟s
award would be enforceable by the parties in Mediterraneo and Equatoriana respectively
[Infra, ¶¶53-60], as neither State considers the actions of the Broker or the Assistant as
illegal and such that it would invalidate the contract [Proc. Order 2, Q.27].

41. Consequently, Pacifica‟s law cannot be applied as a mandatory rule impairing the party
autonomy [Blessing, 30] in selecting Mediterraneo as the applicable law. Thus, the
Tribunal can consider the lease contract and its consequences in evaluating CLAIMANT‟S
claims.

C.] THE CONSEQUENCES OF THE LEASE CONTRACT CAN BE ARBITRATED IRRESPECTIVE OF

WHETHER THE YACHT BROKER PROCURED THE CONTRACT BY BRIBERY

42. Even if the lease was procured by bribery, the Tribunal retains its jurisdiction to decide
the contractual dispute between the parties concerning the consequences of the lease
contract [C.1]. Alternatively, CLAIMANT is not liable for the unauthorized acts of the
Broker and is hence not precluded from arbitrating those claims [C.2].

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

C.1] THE TRIBUNAL HAS JURISDICTION TO DETERMINE CONTRACTUAL DISPUTES BETWEEN THE
PARTIES EVEN IF THE LEASE CONTRACT IS TAINTED BY BRIBERY

43. The Tribunal can decide claims involving alleged underlying acts of illegality
[Crivellaro; Cremades/Cairns, 65,85]. Parties do not “forfeit their right” [ICC Case
1110/1963; HUBCO v. WAPDA (Pakistan)] to approach a Tribunal to decide claims
arising from corrupt agreements [National Power Corp. v. Westinghouse (Switz.)]. The
consensus among judicial rulings [ICC Case 6474/2000; ICC Case 3916/1982; Westacre
v. Jugoimport (UK); Westacre v. Jugoimport (Switz.); Westacre v. Jugoimport (Kuwait)]
and academic opinion [BORN, 804; SAYED, 64-65; Schwartz,4] is that arbitrators have
jurisdiction to determine claims even where issues of corruption arise. For instance, in
the Fiona Trust case, it was alleged that since certain charterparties were procured by
bribery, the arbitration agreements within them were void as well. The Court held that
the allegation of illegality must relate to the arbitration clause itself, else the tribunal can
decide the dispute, including the allegation of bribery [Fiona Trust v. Privalov (UK)].

44. The allegation of illegality has arisen in relation to the lease contract, between CLAIMANT
and Mr. Goldrich, as the lease was secured ostensibly by the Broker‟s payment to Mr.
Goldrich‟s assistant [St. of Defense, ¶¶13-15; Resp. Ex. 1]. The arbitration clause is
contained in Clause 15.2 of the contract between CLAIMANT and RESPONDENT, which
was entered into independently, much before the conclusion of the lease contract, and
does not concern the yacht broker [Appl. For Arb., ¶¶3, 7; Cl. Ex. 1]. Thus, the two
contracts are not inseparably linked and clearly stand independent of each other. In fact,
the arbitration agreement is considered to be separate even from the main contract in
which it is contained [Fiona Trust v. Privalov (UK); Zanzi v. J. de Coninck (France)].

45. Consequently, as there is no corruption specifically in the conclusion of the arbitration

agreement [Barratt/Ichilcik, §2], the Tribunal‟s jurisdiction to decide damages for delay
cannot be precluded. These damages include costs incurred under the lease contract
[Appl. for Arb., ¶¶4, 17-18]; thus the Tribunal can decide whether these are payable.

C.2] CLAIMANT IS NOT LIABLE FOR THE UNAUTHORIZED ACTS OF THE BROKER
46. Respondent argues that CLAIMANT‟S claims in relation to the lease contract should not be
arbitrated as it is tainted by illegality [St. of Defense, ¶15]. This is akin to the reasoning
in ICC Case 1110/1963 that an entity engaging in a corrupt contract forfeits access to

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

arbitral justice [Supra, ¶43]. However, CLAIMANT submits that its claims relating to the
lease contract are arbitrable as the Broker was not authorized to make any payment to
Mr. Goldrich‟s Assistant [a.], and the success fee given to him does not imply it
sanctioned such payment [b.]; hence, it cannot be made liable for the unauthorized acts
of its agent.

(a) Claimant did not authorize the Broker to make any payment to the Assistant
47. The agent‟s power to affect the legal position of his principal depends on his authority
[CHITTY, ¶31-041; French Civil Code, Art. 1998]. „Actual‟ authority requires consensual
agreement between principal and agent [Freeman v. Buckhurst (UK)]. But CLAIMANT
did not instruct the Broker to make any payment to the Assistant in order to secure the
lease, nor did it indicate that it was an acceptable act [Proc. Order 2, Q.27]. On the
contrary, it was unaware of such payment [Resp. Ex. 1].

48. Moreover, the agent‟s authority is implied to extend to acts that are ordinarily incidental
to the due performance of his express authority [SMC Electronics v. Akhtar Computers
(UK); Portugal Civil Code, Art. 1159(2)] or those that are usually done by similar agents
[BOWSTEAD, ¶3-006]. Accordingly, CLAIMANT submits that such a material inducement
was neither incidental to the Broker‟s task of securing the lease, nor is it usually offered
by similar yacht brokers. Crucially, even if the agent believes that an act would promote
the principal‟s interest, he cannot do it, if it exceeds his authority. [CHITTY, ¶31-111].

(b) The success fee given to the Broker does not imply that CLAIMANT authorized that
part of it to be used to pay Mr. Goldrich‟s Assistant
49. The success fee paid to the Broker does not indicate CLAIMANT‟S authorization, even if a
part of that sum was used to pay the assistant of Mr. Goldrich [Resp. Ex. 1].

50. First, percentage success fees may be commercially justifiable [ICC Agent Guidelines 8;
Proc. Order 2, Q.23], and are the rule in most agency agreements [ICC Case 8113/1996;
SAYED 271]. It cannot be a “red flag” for arbitrators, unless unusually high in the
circumstances, having considered the long-term potential of the project and the
principal‟s chance of success [Knoepfler, 368; Scherer, 29]. For instance in ICC Case
9333/1998, a commission of 27 percent of the contract was found justifiable in the
circumstances. Similarly, the Broker had a tough time as few yachts could appropriately
replace the M/S Vis; and none were available at the time, with the exception of Mr.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

Goldrich‟s yacht [Proc. Order 2, Q. 21,23]. Additionally, Mr. Goldrich had rarely leased
his yacht [Proc. Order 2, Q.21]. Considering these circumstances, the success fee
stipulated by CLAIMANT was merely to incentivize the Broker, and not an implied
authorization to secure the contract by bribing the Assistant.

51. Second, CLAIMANT‟S non-authorization of the use of any part of the success fee for
bribery, or intent that it be so used, is also evident from the fact that the actual payment
of the success fee was made only after the lease contract was signed [Proc. Order 2,
Q.22]. This complies with the accepted principle that commission of an agent is not
payable until the contract is made [Mustafa v. Palos (UK); CHITTY, ¶31-134]. However,
the Broker paid the Assistant for an „introduction‟ to Mr. Goldrich, indicating that this
payment was made at the pre-contractual stage, before the fee was given to the Broker by
CLAIMANT.

52. In summary, the Tribunal retains its authority to rule on the consequences of the lease
contract and adjudicate the claims advanced by CLAIMANT thereunder, irrespective of
whether the Broker procured the lease contract through bribery.

D.] THE TRIBUNAL’S AWARD WOULD BE ENFORCEABLE AGAINST RESPONDENT’S ASSETS IN

EQUATORIANA
53. The Tribunal must ensure that the award it renders will not be set aside by the Court
where enforcement is sought [CIETAC Rules, Art. 53.2; DERAINS,385; Horvath,135].
The place of business in a particular country is adequate to establish jurisdiction for an
enforcement action [LEW/MISTELIS/KROLL,¶26-56]. RESPONDENT is incorporated and
conducts its business in Equatoriana [Appl. For Arb., ¶¶2-7]. Equatoriana is a party to
the NYC [Appl. For Arb.,¶21] and is bound by its terms [NYC, Art. I]. Thus, CLAIMANT
can seek enforcement of the award against RESPONDENT in Equatoriana.

54. The enforcement of an award can be refused on grounds of public policy [NYC, Art.
V(2)(b); AJU v. ACT (Singapore); Rosell/Prager,431]. However, CLAIMANT submits that
the award would not violate the public policy of Equatoriana [D.1], nor would it violate
transnational public policy norms[D.2]; hence rendering it enforceable in that
jurisdiction.

D.1] THE AWARD WOULD NOT VIOLATE THE PUBLIC POLICY OF EQUATORIANA

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

55. The text of Article V(2) of the NYC shows clearly that the public policy referred to is the
public policy of the State, where enforcement is sought [Renusagar v. General Electric
(India); Eco Swiss v. Benetton Intl. (ECJ); REDFERN/HUNTER, ¶11.107]. The „public
policy‟ of a State comprises its fundamental economic, legal, moral, political, and social
standards, which are so sacrosanct as to require their maintenance at all costs and without
exception [LEW, 532; Loucks v. Standard Oil Co. (USA)]. The standards differ among
States depending on their character [LEW, 532].

56. Equatoriana criminalizes bribery of a foreign government official to procure a contract

with that country‟s government, as well as acceptance of a bribe by an Equatorianan
government official [Proc. Order 2, Q.27]. However, it does not criminalize similar
behaviour in respect to an official of a private company [Proc. Order 2, Q.27]. The
OECD Convention, to which Equatoriana is a party [Proc. Order 2, Q.27], does not
criminalize bribery of private employees either [OECD Convention, Art. 1; Commentary
on OECD Convention, ¶¶3-10]. Therefore, enforcing the award in Equatoriana would
not violate any of its fundamental standards to constitute a breach of its public policy.

D.2] THE AWARD WOULD NOT VIOLATE INTERNATIONAL PUBLIC POLICY

57. RESPONDENT may argue that the concept of public policy referred to in the New York
Convention [NYC, Art. V(2)(b)] includes the concept of transnational public policy
[TWEEDDALE, 430; Westacre v. Jugoimport (UK)], which is distinct from the domestic
public policy of each State [Lalive, 318; Kersa Holding Co. v. Infancourtage
(Luxembourg)]. However, even if norms of transnational public policy were to be
applied by the enforcing Court in Equatoriana, the award would still be enforceable since
criminalization of payments made to private persons to procure or initiate business is not
universal and therefore lacks a transnational character. In this regard, the party alleging
that a ground for refusing enforcement of an award would exist, has a heavy burden to
discharge [Defence Ministry, Iran v. Gould (USA); Sojuznefteexport v. Joc Oil (USSR)].

58. „Transnational public policy‟ is a narrow [Mayer/Sheppard, 251] collection of

universally accepted principles, the violation of which extends to every State‟s most
fundamental notions of morality and justice [World Duty Free v. Kenya (ICSID); Karaha
Bodas Co. v. Perusahaan (USA); Bromstrom Tankers v. Factorias (Ireland)]. This policy

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

is violated where the arbitration endorses universally condemned activities such as drug
trafficking, terrorism etc. [Omnium v. Hilmarton (UK); Mayer/Sheppard, 254].

59. CLAIMANT accepts that the condemnation of corruption is considered as a rule of

transnational public policy [Lamm/Pham/Moloo, 708]. However, international
conventions [UNCAC, Art. 15-19; OECD Convention, Art. 1; AU Corruption, Art. 4,7;
OAS Corruption Convention, Art. VI], national statutes [FCPA, Sec. 78-dd(2)(a) (USA);
Prevention of Corruption Act, Sec. 7,8,9 (India); Independent Commission Against
Corruption Act, Sec. 8 (Australia)] and court decisions [Oscanyan v. Arms Co. (USA); X.
Ltd. v. Y.BV (Switz.); HUBCO v. WAPDA (Pakistan); Fiona Trust v. Privalov (UK)],
arbitral awards [World Duty Free v. Kenya (ICSID); Wena Hotels v. Egypt (ICSID); ICC
Case 1110/1963; ICC Case 8891/1998] and commentaries [SAYED; WUTHI-UDOMLERT,
9-16; LEW/MISTELIS/KROLL, ¶¶9-75,9-89] relate to bribery of foreign public officials.
Consequently, the development of the doctrine of international public policy has
focussed upon that form of bribery [Barratt/Ichilcik, §2]. In ICC Case 9333/1998, a
Moroccan broker bribed several persons to help a French builder secure a contract; the
Tribunal noted that combating corruption was a widely shared objective, but the specific
forms of illegal conduct vary among States, and thus it was difficult to identify
universally accepted rules that qualify as part of transnational public policy. The reason
is that bribery of public officials concerns issues of public interest, where damage is
borne by the public due to revenue loss, poor quality work or goods supplied; however,
these are not at stake when the alleged corruption takes place among private entities
[Lemena Trading v. African Middle East Petroleum Co. (UK); Arfazadeh, 672].

60. In fact, of the States connected to the dispute, neither Mediterraneo, Equatoriana nor
Danubia criminalize such payments, though they criminalize bribery of public officials
[Proc Order 2, Q.27, Resp. Ex. 1]. In summary, as a majority of jurisdictions have not
outlawed influence peddling [Lombardini, 8; Reymond, 311; OTV v. Hilmarton (Switz.);
ICC Case 7047/1994], as was done by Mr. Goldrich‟s Assistant in the present dispute
[St. of Defense, ¶13; Resp Ex. 1] or private bribery, its prohibition does not constitute a
rule of transnational public policy. Accordingly, the enforcing Court in Equatoriana will
not deny the enforcement of the award.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

CONCLUSION ON JURISDICTION: The Tribunal has the jurisdiction to consider the lease
contract in deciding the claims for damages. The Tribunal does not have jurisdiction to
adjudicate on Dr. Mercado‟s appointment to the CLAIMANT‟S legal team. In addition,
RESPONDENT cannot „reserve its right‟ to challenge Prof. Arbitrator‟s continuance as a
member of the Tribunal.

ARGUMENT ON MERITS

IV. RESPONDENT HAS BREACHED THE CONTRACT WITH CLAIMANT

61. The parties have designated the law of Mediterraneo as the applicable substantive law to
the Contract [Cl. Ex. 1, Clause 15.2]. Mediterraneo is a Contracting State to the
Convention [Appl. for Arb., ¶20]. Such designation of the law of a Contracting State as
the applicable law is equivalent to an implied choice of the applicability of the
Convention [Bonell/Liguori, 155; Maglificio Dalmine v. Covires (Belgium); ICC Case
9448/1999], and this has been accepted by RESPONDENT as well [St. of Defense, ¶2].
Therefore, the Convention will determine whether RESPONDENT has breached the
contract with CLAIMANT.

62. RESPONDENT had a duty to supply, install and configure the Master Control System [Cl.
Ex. 1, Clauses 1-3] as stipulated by the contract [CISG, Art. 30]. Where a date for
delivery is stipulated in the contract, that date is conclusive [CISG, Art. 33(a)]. Seller
must deliver exactly on the date contractually stipulated [SCHLECHTRIEM, 395], and any
delay in performance is a breach of contract [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber,
395].

63. CLAIMANT expressly required RESPONDENT to complete the supply, installation and
configuration of the Master Control system by November 12, 2010 [Cl. Ex. 1, Clause 3;
Appl. for Arb., ¶7]. However, RESPONDENT did not perform these contractual obligations
till March 11, 2011 [Appl. for Arb., ¶16], that is, three months after the agreed date.
Thus, this delay in performance was a breach of contract on its part [LOOKOFSKY, 84].

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

V. CLAIMANT IS ENTITLED TO DAMAGES AMOUNTING TO USD 670, 600

UNDER THE CONVENTION [CISG, ARTICLE 74]

64. RESPONDENT‟S failure to deliver the Master Control System by the contractually
stipulated date [Supra, ¶¶60-63] is sufficient to warrant the remedy of damages under
the Convention [CISG, Art. 45(1)(b), Art. 74; SCHLECHTRIEM, 394]. CLAIMANT seeks
damages amounting to USD 670, 600 which includes costs incurred in chartering M/S
Pacifica and the ex-gratia payment paid to Corporate Executives [Appl. for Arb., ¶4].
The damages claimed by the CLAIMANT are recoverable under the Convention [CISG,
Art. 74] [A.]. CLAIMANT took reasonable measures to mitigate the damages [CISG,
Art.77] [B.]. In any event, the loss was incurred in mitigating damages, and is therefore
recoverable under the Convention [C.].

A.] THE DAMAGES CLAIMED BY THE CLAIMANT ARE RECOVERABLE UNDER THE

CONVENTION
65. The damages claimed are the appropriate remedy as Respondent‟s breach of contract
caused the loss of Claimant [A.1], and were foreseeable at the time of concluding the
contract [A.2].

A.1] DAMAGES ARE THE APPROPRIATE REMEDY AS RESPONDENT‟S BREACH CAUSED THE LOSS
66. Damages are recoverable by the buyer, where a loss is suffered due to the breach of
contract [CISG, Art. 74], irrespective of the availability of other remedies [CISG, Art.
45(2); BIANCA/BONELL/Will, ¶2.12]. „Loss‟ includes all costs incurred in pursuing one‟s
rights as a result of the breach of contract [Pallets Case (Germany)]. Specifically, where
late delivery of goods results in disadvantages, the costs incurred in entering into a
substitute transaction are recognized to have a causal link with the breach of contract
[HUBER/MULLIS, 270; SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 759; Aluminum Foil Film
Wrap Case (Switz.); Computer Components Case (Germany)].

67. RESPONDENT breached its contract with CLAIMANT by failing to install the Control
System for the M/S Vis on time [Supra, ¶¶60-63]. This threatened the due performance
of the contract between CLAIMANT and Corporate Executives, to host the latter‟s event
on that yacht [Appl. for Arb., ¶17]. Consequently, CLAIMANT had to enter into a
substitute contract to charter the M/S Pacifica for hosting the event [Appl. for Arb., ¶18]

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

incurring costs amounting to USD 558,600. Furthermore, since Corporate Executives

was an important and long-standing client of CLAIMANT [Appl. for Arb., ¶11, Cl. Ex. 4],
it made an ex gratia payment of USD 112,000 to Corporate Executives to retain its
goodwill and future business [Appl. for Arb., ¶18]. As these costs incurred by CLAIMANT
have a causal link with the RESPONDENT‟S breach of contract, damages are the
appropriate remedy in this case.

A.2] THE LOSSES WERE FORESEEABLE TO THE SELLER AT THE TIME OF CONCLUDING THE

CONTRACT

68. The seller is liable for all losses that it ought to have foreseen as a reasonable person
[SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 768; Copper Cable Case (ICC)], as possible
consequences of the breach of contract [CISG, Art. 74; ENDERLEIN/MASKOW, 301;
NEUMAYER/MING, 490; Sizing Machines Case (Switz.)]. RESPONDENT is liable for USD
670,600 to the CLAIMANT because a reasonable person could have foreseen the losses
that CLAIMANT suffered to discharge its obligations towards its Clients, including the
costs related to chartering M/S Pacifica [a.], and the ex-gratia amount paid to Corporate
Executives [b.]. Specifically, the success fee paid to the Broker for securing the charter is
recoverable [c.].

(a) The need to charter an equivalent yacht as a substitute was a foreseeable loss
69. RESPONDENT is deemed to have foreseen all losses which a reasonable merchant would
have expected under the circumstances [Saidov, 335; Cheese Case (Germany)]. In this
determination of foreseeability, hints as to the objective of the contract and the special
requirements for the goods, are of decisive relevance [PILTZ, 291; Meat Case (Switz.)].

70. First, CLAIMANT‟S business is to provide complete conference packages [Appl. for Arb.,
¶5]. M/S Vis was purchased to be used as a luxury venue for such conferences [Appl. for
Arb., ¶6]. Though RESPONDENT denies independent knowledge of the CLAIMANT‟S
business [St. of Defense, ¶1], it can be reasonably expected to have known that the
CLAIMANT, „Elite Conference Services‟, was a service provider, given the nature of their
contractual dealings [App. for Arb. ¶¶7,8; Computer Chip Case (Germany);
BIANCA/BONELL/Knapp, 542].

71. Second, RESPONDENT accepts that the Master Control System it was delivering and
installing was critical to the operation of M/S Vis as a „venue‟ [App. for Arb., ¶8; St. of

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

Defense, ¶2]. It is thus evident that the contract between the parties provided sufficient
hint to RESPONDENT that the yacht was being refurbished for use as a luxury, high-tech
venue for conferences. RESPONDENT was specifically informed of CLAIMANT‟S contract
with Corporate Executives on August 5, 2010 [Proc. Ord. 2, Q.14]. However, a
reasonable person in RESPONDENT‟S position would have understood from the objective
of the contract and special requirements of its performance that CLAIMANT, as a service
provider, would enter into other contracts with Clients. A breach of this contract would
thus cause it to incur losses relating to those contracts, to protect its business
[HERBER/CZERWENKA, Art. 79 ¶7; Computer Components Case (Germany); Used Car
Case (Germany). Therefore, RESPONDENT is assumed to have accepted this risk [Used
Car Case (Germany); Meat Case (Switz.)] at the time of conclusion of the contract with
CLAIMANT.

72. RESPONDENT‟S breach compelled CLAIMANT to incur costs of USD 558,600 to charter the
M/S Pacifica as a substitute venue, to perform its contract with Corporate Executives
[Appl. for Arb., ¶18]. These costs include the Charter Fee, the standard brokerage
commission and success fee paid to the Broker [Appl. for Arb., ¶4]. Respondent has not
contested the charter fee or the standard brokerage commission [St. of Defense, ¶¶10-
15], while CLAIMANT has established that the success fee was a foreseeable loss [Infra,
¶77]. Accordingly, as the need to charter a substitute yacht was a foreseeable loss,
RESPONDENT is liable to CLAIMANT for these expenses.

(b) The ex-gratia payment made to Corporate Executives was a foreseeable loss
73. Respondent has argued that the ex-gratia payment of USD 112,000 made by the
Claimant to Corporate Executives, is a voluntary payment for which it should not be held
liable [St. of Defense, ¶11]. However, the ex-gratia payment was not a voluntary
payment; rather it was made to retain the goodwill and future business from Corporate
Executives [Appl. for Arb., ¶18], and is hence foreseeable .

74. Pecuniary losses incurred in protecting one‟s reputation is compensable under the
Convention so long as it can be established with reasonable certainty [Adv. OP. 6;
Schlechtriem, §2; Aerial Advertising v. Batchelor‟s Peas (UK); Calzados Magnanni v.
SARL Shoes (France)]. As a consequence of RESPONDENT‟S breach of contract,
CLAIMANT had to enter into a cover purchase of M/S Pacifica to host Corporate

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

Executives‟ event [Appl. for Arb., ¶17]. However, Corporate Executives had emphasized
in its event‟s publicity that M/S Vis would be the venue for its event [Appl. for Arb., ¶11,
17; Proc. Order 2, Q.20], which was positively received by its member and caused the
event to be fully booked [Appl. for Arb., ¶¶11,17]. Moreover, the substitute yacht M/S
Pacifica did not have all the features that had been publicized to the membership [Proc.
Order 2, Q.20]. Given the situation, Corporate Executives “expressed its unhappiness”
over the non-availability of the M/S Vis and indicated to the CLAIMANT that it would
appreciate a refund [Proc. Ord. 2, Q.20]. These circumstances establish with reasonable
certainty that the RESPONDENT‟S breach could damage CLAIMANT‟S reputation and
goodwill. Consequently, CLAIMANT made the ex-gratia payment since it could not afford
to lose business from its long standing and important client, Corporate Executives [Appl.
for Arb., ¶11].

75. Second, an ex gratia payment made to customers for poor customer service is a „loss‟
arising directly from the breach of contract [GB Gas Holdings v. Accenture (UK)], and
therefore recoverable under the Hadley v. Baxendale standard. The Convention‟s
foreseeability standard [CISG, Art. 74] is identical to the rule laid down in Hadley v.
Baxendale [Delchi v. Rotorex (USA); LOOKOFSKY, 151]. Further, the decision in Hadley
v. Baxendale, can be applied to interpret the Convention since the relevant provision on
foreseeability is similar in both [ZELLER, 81; Chicago Prime Packers v. Northam Food
Trading (USA)]. Since CLAIMANT also made the payment to remedy its failure to provide
“top of the line service”, as promised [Appl. for Arb., ¶5], it is a loss arising directly
from the RESPONDENT‟S breach of contract [Supra, ¶¶60-63], and thereby, recoverable.

(c.) The success Fee paid to the Broker is recoverable under the Convention [CISG,
Article 74]
76. The payment of the Success Fee to the Broker was foreseeable [c-i], and not
unreasonably high [c-ii]. In addition, the allegation of illegality of the „success fee‟ is not
relevant to the determination of payable damages under the Convention [CISG, Art. 74]
[c-iii].

(c-i) The success fee paid by Claimant to the Broker was a foreseeable loss
77. RESPONDENT‟S was intimately involved in the refurbishment of the M/S Vis, through
supply, installation and configuration of the Master Control System, which was critical

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

for its operation [Appl. for Arb., ¶¶7,8]. Hence, it ought to have known that M/S Vis was
superior to any other yacht available in the market and there were few comparable yachts
available as suitable alternative [Appl. for Arb., ¶¶6,18; Proc. Order 2, Q.21].
Consequently, it ought to have foreseen that in the event of a breach on its part,
CLAIMANT would have to pay a success fee for the difficulty experienced by its Broker in
locating and securing a lease of an alternative yacht [Proc. Ord. 2, Q.23]. In fact, such
„success fee‟ is considered the rule and not the exception in agency agreements [SAYED,
271; Derains, 9; ICC Case 8113/1996] and is paid to Brokers from time to time where
the circumstances in which the charter is procured demand it [Proc. Order 2, Q. 23]. The
fee was hence an entirely foreseeable loss.

(c-ii) The success fee paid was not unreasonably high to preclude its foreseeability
78. CLAIMANT submits that it cannot be argued the success fee paid was an unreasonably
high amount, which precludes its foreseeability. It is an accepted position that the
reasonableness of a fee must be judged in light of the circumstances [Knoepfler, 368];
consequently fees ranging from 27 percent to 33.33 percent have been considered
reasonable [ICC Case 6497/1999; ICC Case 9333/1998]. Therefore, the evident
difficulty faced by the Broker in locating a substitute yacht for M/S Vis [Proc. Ord. 2,
Q.23], prevents RESPONDENT from claiming that Success Fee paid by CLAIMANT at the
rate of 12.38 percent [(USD 50,000 x 100) ÷ USD 404,000] was unreasonably high and
consequently unforeseeable.

(c-iii) The allegation of illegality is irrelevant to the determination of damages payable

under the Convention [CISG, Art. 74]
79. The issue of invalidity of contract arising from illegality should be governed by the
applicable domestic substantive law and not the Convention [BRUNNER, 242, ZELLER, 73]
since the Convention expressly excludes the determination of validity of contracts
[CISG, Art. 4; BRUNNER, 242]. RESPONDENT has argued that the lease contract is “tainted
by corruption”, and should not be considered by the Arbitral Tribunal [St. of Defense
¶15]. Neither the payment made by the Broker to secure the lease, nor the „success fee‟
paid is illegal under the applicable law of Mediterraneo [Supra, ¶¶35-36]. The Pacifican
Criminal Code which considers the payment illegal [St. of Defense, ¶14; Resp. Ex. 2] is
not a mandatory provision that binds the Tribunal either [Supra, ¶¶37-41], nor is there

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

any transnational public policy norm that could be affected [ZELLER 73; Supra, ¶¶90-92]
by an award for the costs incurred under the lease contract. Consequently, these damages
can be granted by the Tribunal.

B.] CLAIMANT UNDERTOOK REASONABLE MITIGATION MEASURES [CISG, ART. 77]

80. RESPONDENT is liable to compensate CLAIMANT for the full amount of USD 670,600,
considering that CLAIMANT, on its part, fulfilled its duty to mitigate the damages [CISG,
Art. 77]. The burden is on RESPONDENT to prove that CLAIMANT did not take adequate
measures to mitigate its losses [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 793; Riznik,
§4.1; Frozen Bacon Case (Germany); ICC Case 9187/1999].

81. CLAIMANT is required to take only reasonable measures to mitigate losses under the
Convention [CISG, Art. 77; SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 790; Zeller, §2;
Tannery Machines Case (Germany)]. Measures need not be excessive or extraordinary,
and are judged from the position of a prudent businessman [BIANCA/BONELL/Knapp, 560;
SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 790].

82. First, when CLAIMANT realized that the M/S Vis would not be available to host
Corporate Executives‟ event [Cl. Ex. 2], it made all necessary efforts to convince
Corporate Executives to use of one of its on-shore facilities for the event. But they
refused, insisting that the conference be held on a „super-yacht‟ [Appl. for Arb., ¶17;
Resp. Ex. 1]. This establishes CLAIMANT‟S earnest attempts to mitigate loss by requesting
use of its own alternative venues.

83. Second, the Convention [CISG, Art. 77] does not require an aggrieved party to adopt
measures which would mitigate the loss, but would be excessive and would entail
unreasonably high expenses in the light of the facts of the case [BIANCA/BONELL/Knapp,
559; Saidov, 354; Zeller, §II]. Thus, CLAIMANT need not have repudiated its contract
with Corporate Executives since that entailed greater monetary loss, and loss of a „long
standing customer‟ [Appl. for Arb., ¶11].

C.] IN ANY EVENT, THE CHARTER OF M/S PACIFICA WAS ITSELF A MITIGATION MEASURE

AND THE COSTS INCURRED THEREBY ARE RECOVERABLE UNDER THE CONVENTION

84. RESPONDENT‟S breach of contract [Supra, ¶¶62-63], threatened to prevent CLAIMANT‟S

performance of its contract with Corporate Executives to host its event on the M/S Vis

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NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

[App. for Arb., ¶11,17]. In order to avoid a greater loss by repudiating the contract with
Corporate Executives [Proc. Ord. 2; Q.17], CLAIMANT entered into a substitute contract
to charter the M/S Pacifica for the event [App. for Arb., ¶18].

85. Such substitute contracts which help to avoid consequential losses from the breach of
contract are a reasonable measure of mitigation [HUBER/MULLIS, 291;
BIANCA/BONELL/Knapp, 579; ICC Case 8574/1996; Arb. Proceeding 406/1998 (Russia)].
Specifically, a „cover purchase‟ meant to complement the seller‟s performance is
considered to be a reasonable measure [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 791;
HUBER/MULLIS, 292]. Therefore, the lease of the M/S Pacifica was itself a reasonable
mitigation measure to avoid the losses which CLAIMANT would have incurred if its
contract with Corporate Executives was repudiated. In fact, costs incurred in entering
into such substitute transactions have been held to be recoverable under the Convention
[Schlechtriem, §4; Tannery Machines Case (Germany); ICC Case 8128/1995; Water
Pump Case (China)]. Accordingly, RESPONDENT is liable for the sum of USD 558,600,
incurred in chartering M/S Pacifica.

VI. RESPONDENT IS NOT EXEMPT FROM PAYING DAMAGES TO THE

CLAIMANT FOR ITS BREACH OF CONTRACT UNDER THE CONVENTION
[CISG, ARTICLE 79]

86. Liability to pay damages for breach of contractual obligations is exempted only when
breach is caused by an „impediment‟ which is unforeseeable, unavoidable and beyond the
party‟s control [CISG, Art. 79; SCHLECHTRIEM, 812]. This exemption is intentionally
construed narrowly and rarely allowed [KRITZER, 516; SARCEVIC/VOLKEN, 32; Baide, 69].
The „burden of proof‟ is on RESPONDENT to prove the existence of the preconditions for
the exemption [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 837].

87. Moreover, the Convention [CISG, Article 79(2)] contains a “double force majeure”
regulation [BERNSTEIN/LOOKOFSKY, 155; Southerington, §3.2.2], where the seller and the
„third person‟ engaged by the seller must both be exempt, applying the standard set out in
Article 79(1). Thus, RESPONDENT is not exempt from liability itself [CISG, Art. 79(1)]
[A.], nor is the „third person‟ engaged by it, Specialty Devices, exempt from liability, if
the standard were applied to it [CISG, Art. 79(2)] [B.].

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

A.] RESPONDENT IS NOT EXEMPT UNDER THE CONVENTION FOR ITS FAILURE TO PERFORM
ITS CONTRACTUAL OBLIGATION

88. The RESPONDENT is not exempt [CISG, Art. 79], because the fire at the factory of High
Performance was not an „impediment‟ to the performance of the contract by the
RESPONDENT [A.1], and the fire did not „cause‟ the non-performance [A.2]. Moreover,
Respondent is liable for the foreseeable failure of its supply chain was a foreseeable risk
[A.3].

A.1] THE FIRE ACCIDENT AT THE FACTORY OF HIGH PERFORMANCE WAS NOT AN IMPEDIMENT
89. The Convention recognizes only those „impediments‟ which absolutely bar performance
[SCHLECHTRIEM, 101]. A party cannot be exempt where performance is physically
possible [Southerington, §2.1; Spivack, 801; Flambouras(2002), §4]. Therefore, a party
is exempt only if performance is rendered impossible [HONNOLD, ¶427; Jenkins, 2024].
The equating of „impediment‟ with „impossibility‟ has been accepted and applied
judicially [Nouva Fucinati v. Fondmetall International (Italy); Southerington §3.2.2].

90. First, when the fire occurred at the facility of High Performance [Appl. for Arb., ¶12], it
had a supply of D-28 Chips in its warehouse, which had not yet been designated for any
customer [Appl. for Arb., ¶13]. The shipment to the RESPONDENT‟S sub-contractor,
Specialty Devices, was already due at this time [Appl. for Arb., ¶13].

91. Second, Specialty Devices‟ order for D-28 Chips would have been satisfied with only a
small portion of the stock of chips available in the warehouse, if High Performance had
decided to fill the smaller orders first [Appl. for Arb., ¶14; Cl. Ex. 3], or if it had decided
to supply the remaining chips by distributing them pro rata [Proc. Order 2, Q.9].

92. Third, it is evident that the interruption to RESPONDENT‟S performance of the contract
was not caused by objective impossibility [HONNOLD, ¶432.1], but a subjective refusal of
High Performance to supply the D-28 chips to Specialty Devices [Appl. for Arb., ¶14;
Cl. Ex. 3]. It instead unduly favored Atlantis Technical Solutions solely because of the
strong friendship between the CEOs of both companies [Appl. for Arb.,¶15; Cl. Ex. 6,7;
St. of Defense, ¶5]. The refusal was arbitrarily made despite the physical availability of
chips [Appl. for Arb., ¶¶13,14; Proc. Order 2, Q.9] and the legal soundness of such
allotment to Specialty Devices. Thus, it does not reach the threshold of „impediment‟

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

required for exemption of liability under the Convention [Metallic Sodium Case
(Russia)].

93. Lastly, RESPONDENT cannot rely on „impracticability‟ or „hardship‟ of performance, as a

ground for exemption, because the Convention does not contemplate such a remedy
[CISG, Art. 79; Nuova Fucinati v. Fondmetall International (Italy); HONNOLD, ¶435.1;
BIANCA/BONELL/Tallon, 592,594].

A.2] ALTERNATIVELY, EVEN IF THE FIRE WAS AN „IMPEDIMENT‟, IT WAS NOT THE „SOLE REASON‟
FOR THE RESPONDENT‟S BREACH OF CONTRACT

94. For a party to be exempt from damages [CISG, Art. 79] it must prove that an
„unforeseeable‟ and „insuperable‟ impediment was the sole reason for the failure to
perform [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber 812,818; BIANCA/BONELL/Tallon, 582;
ICC Case 7197/1992]. Where failure to perform is due to a conjunction of events, but
even one of these could have been foreseen or avoided, the exemption under the
Convention is not available [SCHLECHTRIEM, 819; HEUZE‟, n. 472].

95. Notwithstanding the fire at High Performance‟s factory, there were enough D-28 Chips
remaining to satisfy its contract with Specialty Devices [Supra, ¶¶90-92]. It was not the
fire accident, rather the internal firm policy of High Performance to supply all of its chips
to Atlantis Technical Solutions [Appl. for Arb., ¶15; Cl. Ex. 6,7] was the real reason
which prevented RESPONDENT‟S performance. Therefore, even if the fire accident
operated as an impediment, it was not the sole reason for RESPONDENT‟S breach, and
RESPONDENT will not be exempt.

A.3] RESPONDENT IS LIABLE FOR THE FORESEEABLE FAILURE OF ITS SUPPLY CHAIN
96. The failure of Respondent‟s supply chain is foreseeable [a.] and Respondent must bear
that risk [b.]. Moreover, it failed to guard against it by an express exclusion clause for
such risks in the contract with CLAIMANT [c.].

(a) Failure of the Respondent‟s supply chain was foreseeable

97. A partial failure of a seller‟s source of supply is a foreseeable contingency [Barbarossa
v. Iten Chevrolet (USA); Spivack, 792] and should be anticipated by it [Chinese Goods
Case (Germany); Iron Molybdenum Case (Germany)]. Thus, it is not exempt for a
breach of contract caused by its supplier‟s default [UNCITRAL Digest 14; LIU, §6.3].

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

This is particularly applied where the supplier is chosen independent of the contract
between the buyer and seller [Infra, ¶¶112-113]. For instance, where a sodium
manufacturer, chosen independently by the seller, stopped production due to an
emergency, his refusal to supply the goods did not exempt the seller from liability to the
buyer [Metallic Sodium Case (Russia); Southerington §3.2.2]. Thus, RESPONDENT ought
to have foreseen that its supply source, SPECIALTY DEVICES might fail to perform its
contractual obligation to deliver the processing units [Appl. for Arb., ¶¶8,9] and should
have prepared to guard against its consequences.

(b) RESPONDENT bears the risk of the failure of its supply chain
98. First, events that affect the supply of the goods are within the seller‟s sphere of control
[Egyptian Cotton Case (Switz.)]. The seller‟s responsibility for his suppliers is an
integral part of his procurement risk [ICC Case 8128/1995; Chinese Goods Case
(Germany); LIU, §6.3; Spivack, 792]. Second, where the source of goods is not
contractually stipulated, even total failure of the source selected by the seller does not
exempt him [BRUNNER, 181; Flambouras, 267]. For instance, where the seller‟s intention
to use only one specific source of wood was neither known nor shared by the buyer, the
failure of that source did not exempt the Seller [Finland Birch Timber Case (UK);
Southerington, §5.3.1.4].

99. RESPONDENT must bear the risk of failure of its supply chain, especially since CLAIMANT
had not specified the suppliers to be used, and was not even specifically aware that a
„third party‟ would be manufacturing the processing units to be installed [Proc. Order 2,
Q.6]. The processing units were designed by Specialty Devices to use the D-28 chip
[Appl. for Arb., ¶9]. CLAIMANT was not specifically aware of the contractual relationship
between RESPONDENT and Specialty Devices, and consequently was equally unaware that
High Performance was the sole manufacturer of the D-28 Chips to be used in the
processing units. Therefore, there could have been no implied agreement to limit the
RESPONDENT‟S procurement risk [Finland Birch Timber Case (UK)].

(c) RESPONDENT did not include an express exemption clause in the contract
100.First, interruptions to performance occur more frequently in international transactions
than in domestic ones [KLOTZ, 217; JENNINGS, 538]. Contractual „force majeure clauses‟,
which explicitly limit liability, are common in international trade

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

[SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 835; LOOKOFSKY, 159] to counter liability

arising due to interruptions in performance of contract [Salacuse, 1507]. In fact, the
adoption of standardized force majeure clauses [ICC Publication No. 421] has been
urgently recommended to avoid conflicts arising from the interpretation of the
Convention when performance is interrupted [SCHLECHTRIEM, 103; HONNOLD ¶432.1;
Bund, 405].

101.Second, when an unconditional contract is entered into, in spite of foreseeable risks, the
risks are assumed and exemptions cannot be claimed at a later stage [Southerington,
§3.2.2; Stoll, 611]. For instance, where delivery of Potash was interrupted due to the
shutdown of a supplier‟s mine, the seller was not exempt for the breach, since the
contract did not contain an exemption clause [Neal-Cooper Grain v. Texas Gulf (USA);
Spivack, 793]. The destruction of the subcontractor‟s factory by fire is a type of
interruption which could have been protected against using a force majeure clause
[Selden, 12].

102.Therefore, in the absence of any contractual limitation to liability [Proc. Ord. 2, Q.4] an
unconditional contract has been entered into, and RESPONDENT has allocated to itself the
risks of a failure in the supply chain. It cannot claim exemptions due to an interruption
therein.

B.] RESPONDENT REMAINS LIABLE TO PAY DAMAGES BECAUSE SPECIALTY DEVICES WOULD
NOT BE EXEMPT UNDER THE CONVENTION [CISG, ARTICLE 79(2)]

103.RESPONDENT is not exempt under the Convention because it has not met the standard of
„unforeseeable and insuperable impediment‟ itself, as established previously [Supra,
¶¶89-92]; and Specialty Devices, as a „third person‟ [B.1], is not exempt under the test
of unforeseeable and unavoidable impediment [B.2], as required under the Convention‟s
“double force majeure” regulation [CISG, Art. 79(2); BERNSTEIN/LOOKOFSKY, 155].
RESPONDENT remains liable for breach of contract due to the third person‟s failure to
perform the contract [B.3]. Alternatively, RESPONDENT is liable as Specialty Devices‟ is
its supplier [B.4].

B.1] SPECIALTY DEVICES IS A „THIRD PERSON‟ FOR THE PURPOSE OF THE CONVENTION
104.First, a „third person‟ includes a subcontractor, who makes component parts of a
machine, to help the seller fulfill its own obligation to manufacture and supply the

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machine under the contract with the buyer [GALSTON/SMIT/Nicholas, Impracticability,

§5.04]. RESPONDENT entrusted Specialty Devices with designing and manufacturing the
processing units required to fulfill its contract with the CLAIMANT [Appl. for Arb., ¶9].
Thus, this contract is in the nature of a subcontract [Schlechtriem, 617; Spivack, 776],
and Specialty Devices is a „third person‟ for the purpose of the Convention [CISG, Art.
79(2)].

105.Second, a subcontractor performs a specific task connected to the primary contract

entered into by the seller [LIU, §5.2]. For instance, a third party involved in the
production of independent components of a plant to be delivered by the seller was
considered to be a subcontractor [BRUNNER, 187]. In contrast, a „general supplier‟ only
provides “products for a wide range of purposes to a wide range of clients” [LIU, §5.2l;
Jenkins, 2025]. The processing units designed and manufactured by Specialty Devices
were to be used specifically to fulfill RESPONDENT‟S contract with CLAIMANT [Appl. for
Arb., ¶¶8,9]. Thus, Specialty Devices was not RESPONDENT‟S „general supplier‟, but in
fact its subcontractor.

106.Last, it is not necessary for the third party to come into contact with the buyer himself to
be a sub-contractor [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 820]. Therefore, the
absence of direct contact between the CLAIMANT and Specialty Devices is irrelevant to
the determination of whether the latter was a subcontractor.

B.2] SPECIALTY DEVICES WOULD NOT BE EXEMPTED UNDER ARTICLE 79(1)

107.Specialty Devices is not exempt under the test of Article 79(1), as it ought to have taken
the foreseeable „impediment‟ into account [a.], and it could have avoided or overcome
the impact of the „impediment‟ [b.].

(a) Specialty Devices ought to have taken the „impediment‟ into account
108.First, a failure in the supply chain in always to be considered foreseeable by the seller
[Supra, ¶¶98-99]. Therefore, Specialty Devices ought to have foreseen the contingency
that its supplier High Performance might fail.

109.Second, the fire accident cannot be termed „unforeseeable‟, and therefore cannot exempt
Specialty Devices [QUINCY(NFPA); HILADO(NFPA)]. Fires are fairly common in
Electronics Factories, such as the facility of High Performance where D-28 Chips were

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being produced [Appl. for Arb., ¶¶9,12] , which is why many Corporations [HP EICC
Report (2009)] and Agencies [EICC (2009); IFC Guidelines (2007)] have paid special
attention to procedures and guidelines to guard against fire hazards. Such occurrences
which interrupt performance, while unusual, are still predictable, such as a meteorite
strike [VISCASILLAS, ¶180], and to that extent are foreseeable [LOOKOFSKY, 161; Sec.
Comm. (Article 65) ¶5]. Accordingly, Specialty Devices ought to have foreseen the risk
of a fire accident.

(b) Specialty Devices was reasonably expected to overcome the „impediment‟ or its
consequences
110.Even if the fire at the factory of High Performance was an unforeseeable impediment,
Specialty Devices was reasonably expected to take measures to overcome the effect of
the fire and ensure its supply of D-28 Chips from High Performance. In this regard, if
part of the stock is destroyed as a result of an unforeseeable and unavoidable event, the
seller is obliged to make pro rata deliveries to those buyers to whom he has agreed to
sell goods [SCHLECHTRIEM, 816; Keil 126]. This obligation arises due to the just and
equitable character of pro rata distribution where individual ownership is difficult to
trace [Beatrice Ruddle v. Luke Moore (USA); Alfredo v. Bacolod-Murcia (Philippines)].
For instance, where a quantity of oil made up of contributions from different owners was
stored in a tank, and it was accidently partially destroyed by fire, the oil which was
salvaged was distributed pro rata [Jennings-Heywood v. Houssiere-Latrelle (USA)].

111.Considering that the law of Atlantis did not make pro rata distribution mandatory [Appl.
for Arb., ¶13], Specialty Devices ought to have contractually required pro-rata
distribution of the D-28 Chips in the warehouse in case of an unforeseeable event.
Therefore, Specialty Devices could have overcome the consequences of the
„impediment‟ through a contractual stipulation, and is liable for its failure to do so, since
pro rata distribution of the D-28 Chips would have sufficed to make the Master Control
system for the CLAIMANT [Proc. Order 2, Q.9].

B.3] RESPONDENT IS LIABLE FOR THE BREACH CAUSED BY FAILURE OF THE „THIRD PERSON‟ TO
PERFORM ITS PART OF THE CONTRACT

112.The seller is liable for the „third persons‟ default

[SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 819]. The exception is only of „total

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impossibility‟ [BIANCA/BONELL/Tallon 584,585; Liu §5.1], where the seller neither chose
nor controls the „third person‟ [SCHLECHTRIEM, 613; Spivack, 776;
Galston/Smit/Nicholas, Impracticability §5.04]. Even if he was not free to choose a
different „third party‟ because of a monopoly over the goods, he is not exempt under the
Convention [SCHLECHTRIEM/SCHWENZER/Stoll/Gruber, 820; Keil, 152].

113.As established previously, RESPONDENT independently chose to engage Specialty

Devices to design and manufacture the processing units [Appl. for Arb., ¶¶8,9; Proc.
Order 2, Q.6]. Specialty Devices‟ performance was not interrupted by total physical
impossibility [Supra, ¶92], but by the questionable decision of High Performance to
supply its entire stock of D-28 Chips to only one of its customers, Atlantis. As
RESPONDENT chose the „third person‟, by independently contracting with Specialty
Devices, it is liable for the breach to CLAIMANT.

B.4] ALTERNATIVELY, IF SPECIALTY DEVICES IS NOT A „THIRD PERSON‟, RESPONDENT IS STILL

LIABLE FOR THE FAILURE OF ITS SUPPLIER

114.Even if Specialty Devices is assumed to be a general supplier, RESPONDENT should still

be held liable for its non-performance mutatis mutandis to that of a „third person‟ under
the Convention [Huber 20,21; HEUZE‟ n.474;; Vine wax Case (Germany)]. This is
because the risk of the supplier‟s conduct is included in the procurement risk of the
seller, as discussed previously [Supra, ¶¶98-99]. Therefore, even if Specialty Devices is
not a „third person‟ for the purpose of the Convention, RESPONDENT cannot be exempted
under the Convention [CISG, Art. 79] for the breach of contract with CLAIMANT.

CONCLUSION ON MERITS: RESPONDENT breached its contract with CLAIMANT, compelling it

to incur losses to enter a substitute contract. The losses suffered by the CLAIMANT were
foreseeable, and CLAIMANT took reasonable steps to mitigate these losses, as required by the
Convention. Further, RESPONDENT is not exempt from discharging its liability to pay
damages to CLAIMANT since there was no insuperable impediment which interfered with its
performance. Therefore, RESPONDENT is liable to pay damages amounting to USD 670, 600
to the CLAIMANT by the application of the Convention.

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 NALSAR, UNIVERSITY OF LAW Memorial for the Claimant

PRAYER FOR RELIEF

In light of Procedural Order No. 1, Procedural Order No. 2, and the pleadings
advanced, Counsels for the Claimant respectfully request the Tribunal to declare that:
1. The Tribunal has jurisdiction to consider the lease contract for the M/S Pacifica Star;
2. The Tribunal does not have jurisdiction to order that Dr. Mercado should terminate her
role in the legal team representing Claimant;
3. In any event, there exists no conflict of interest between Dr. Mercado and Prof. Presiding
Arbitrator as would affect his independence or impartiality;
4. Respondent cannot challenge the continuance of Prof. Presiding Arbitrator at this stage;
5. Respondent breached the contract of May 26, 2010, and is liable for the resulting
damages to the Claimant;
6. The breach of contract by Respondent is not exempted under the Convention;

Consequently, the Tribunal is requested to order the Respondent to pay to the Claimant:
1. Damages in the amount of USD 670,600 which includes:
a. USD 448,000 for the cost of chartering the substitute vessel M/S Pacifica Star;
b. USD 60,600 for the standard yacht broker commission;
c. USD 50,000 for the yacht broker‟s success fee;
d. USD 112,00 for the ex gratia payment made to Worldwide Corporate Executives
Association;
2. Costs of Arbitration;
3. Interest on the aforesaid amounts.

COUNSELS
(Signed)
________________________ ______________________ ______________________
JAGDISH MENEZES ISHITA BHARDWAJ RIDHI KABRA

Hyderabad, India
8 December, 2011

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