TEAM CODE: 27A

5th NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020

Before
THE ARBITRAL TRIBUNAL
BARATHEON CITY, STARK PROVINCE

IN THE MATTER OF AN ARBITRATION BETWEEN

Arcebor Power Private Limited CLAIMANT

v.

Renvidora National Power Company Limited RESPONDENT

UNDER
ARBITRATION RULES OF THE SINGAPORE INTERNATIONAL ARBITRATION CENTRE
(6th EDITION, 1 AUGUST 2016)

CASE CONCERNING
THE PART SUPPLY CONTRACT BETWEEN ARCEBOR POWER PRIVATE LIMITED AND
RENVIDORA NATIONAL POWER COMPANY LIMITED

MEMORIAL ON BEHALF OF THE CLAIMANT

 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Table of Contents]

TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................................ I

TABLE OF ABBREVIATIONS ................................................................................................... III

INDEX OF AUTHORITIES .......................................................................................................... V

STATEMENT OF FACTS ............................................................................................................XI

ISSUES RAISED ..................................................................................................................... XIII

SUMMARY OF ARGUMENTS .................................................................................................XIV

ARGUMENTS ADVANCED ........................................................................................................... 1

I. THERE IS A VALID AGREEMENT IN EXISTENCE BETWEEN THE PARTIES WHICH REFERS

THE DISPUTES TO ARBITRATION UNDER THE AEGIS OF SIAC. .............................................. 1

A. The Arbitration Agreement Shows Clear Intention Of The Parties To Refer To

Arbitration. ......................................................................................................................... 1

B. The Effective Interpretation Of The Arbitration Clause Clearly Indicates To Submit

To SIAC............................................................................................................................... 2

C. The Principle Of Separability Stands Upheld. ............................................................ 3

II. THE INSOLVENCY PROCEEDINGS UNDERWAY AGAINST THE RESPONDENT IN YEVADU

DOES NOT BAR THE JURISDICTION OF THIS TRIBUNAL. ......................................................... 4

A. The Jurisdiction Of The Tribunal Remains Unhampered. .......................................... 4

B. The Act Of The Respondent Violates The Principle Of Good Faith. .......................... 8

C. The Act Of The Respondent Renders The ‘Competence-Competence’ Principle Futile.

..................................................................................................................................... 5

D. Yevadu Insolvency Law Does Not Bar Arbitral Proceedings. .................................... 7

III. THE CLAIMANT IS UNDER NO OBLIGATION TO DISCLOSE ITS SOURCE OF FUNDING FOR
PURSUING THESE ARBITRATION PROCEEDINGS AND THE TRIBUNAL SHOULD NOT ORDER
SECURITY FOR LEGAL COSTS. ................................................................................................. 9

A. The Newspaper Report Of Third Party Funding Submitted by the Respondent Does
Not Have Probative Value. ................................................................................................. 9

B. The Claimant Is Not Bound to Disclose the Third Party Funding Under Any Law. 10

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Table of Contents]

C. The Claimant’s Claim Is Admissible And Genuine. .................................................. 12

IV. THE MINISTRY OF POWER, GOVERNMENT OF YEVADU SHALL BE JOINED AS A PARTY

TO THE PRESENT ARBITRAL PROCEEDINGS. ......................................................................... 14

A. The Respondent Is An Alter Ego Of The Ministry Of Power. ................................... 14

B. The Respondent And Ministry Of Power Form A Single Economic Entity. .............. 15

C. The Respondent Is The Agent Of The Ministry Of Power And Thus Should Be Joined
As It Is The Principal. ....................................................................................................... 16

V. THE CLAIMANT’S CONDUCT DID NOT BREACH THE AGREEMENT AND THE
RESPONDENT WAS NOT JUSTIFIED IN TERMINATING THE AGREEMENT. ............................... 17

A. The Claimant’s Failure To Supply The Parts On Time Is Not The Fundamental Breach
Of The Contract. ............................................................................................................... 17

B. The Claimant’s Failure To Perform As Per The Terms Of The Agreement Is Exempted
From Liability Under Article 79(1) Of CISG. .................................................................. 20

C. The Respondent Was Not Justified In Terminating The Agreement By The Virtue Of
Article 49 Of CISG. .......................................................................................................... 21

PRAYER .................................................................................................................................XVI

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Table of Abbreviations]

TABLE OF ABBREVIATIONS

ABBREVIATIONS FULL FORM

$ United States Dollar
% Percent
& And
¶ Paragraph
Agreement Part Supply Agreement between Arcebor
Power Private Ltd. and Renvidora National
Power Company Ltd. signed on January 14,
2015
AIR All India Reporter
Anr. Another
CIETAC China International Economic and Trade
Arbitration Commission
Cir./Circ. Circuit
CISG United Nations Convention on Contracts
for the International Sale of Goods,1908
Cl. Ex. CLAIMANT’s Exhibit
CLAIMANT Arcebor Power Private Ltd.
CLOUT Cases on UNCITRAL texts
ed. Edition
et al. et alia (and others)
ICSID International Centre for Settlement of
Investment Disputes
Id/Ibid Idem(the Same)
Ltd. Limited
N.Y. New York
no. Number
Resp. Ex. Respondent’s Exhibit
RESPONDENT Renvidora National Power Company Ltd.
SC Supreme Court of India

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Table of Abbreviations]

SCC Supreme Court Cases

SGHCR Singapore High Court Reporter
SIAC Singapore International Arbitration Centre
SIAC Rules Arbitration Rules of the Singapore
International Arbitration Centre Rules, 6th
ed., 2016
SLR Singapore Law Report
Supra above
Tribunal The panel consisting of Sole Arbitrator, Ms.
Ruth Greene
UN United Nations
UNCITRAL United Nations Commission on
International Trade Law
UNDROIT International Institute for the Unification of
Private Law
v. Versus
Vol Volume

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Index of Authorities]

INDEX OF AUTHORITIES

ARBITRAL INSTITUTION RULES

 Arbitration Rules of the Singapore International Arbitration Centre, 6th ed., 2016.
CONVENTIONS
 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 1958, 21 U.S.T. 2518, 330 U.N.T.S. 3.
 UNCITRAL Model Law on International Commercial Arbitration, 1985 without
Amendment, UN Doc A/40/17, Annex I.
 United Nations Convention on Contracts for the International Sale of Goods, 1980,
1489 U.N.T.S. 3.
 UNIDROIT Principles of International Commercial Contracts, 2016.
CASES
 Amtsgericht Ludwigsburg, 21 December 1990, 4 C 549/90; See University of Freiburg
Database, http://www.cisg-online.ch/cisg/urteile/134.htm .................................... 13, 19
 ATA v. Jordan, ICSID Case No. ARB/08/2, Award of May 18, 2010........................ 12
 Bihar State Mineral Development Corporation & Anr. v. Encon Builders (I) (P) Ltd.,
(2003) 7 SCC 418 .......................................................................................................... 1
 Branden burgisches Oberlandesgericht, Germany, 18 November 2008 Internationales
Handelsrecht 2009, 105. .............................................................................................. 20
 Brandenburgisches Oberlandesgericht, Germany, 18 November 2008 Internationales
Handelsrecht 2009 ....................................................................................................... 13
 Bridas S.A.P.I.C. v. Government of Turkmenistan, 447 F.3d 411 (5thCir 2006) (U.S.A.).
...................................................................................................................................... 16
 China National Machinery & Equipment Import & Export Corporation v.
Loebersdorfer Maschinenfabrik AG (Austria), (1996) 4 ASA Bull 623, 629. ............ 17
 CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995]. ............... 20
 CLOUT case No. 166 [Schiedsgericht der Handelskammer Hamburg, Germany, 21
March, 21 June 1996] .................................................................................................. 21
 CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997]..... 13,
19, 20
 CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April, 1997]..... 23
 CLOUT case No. 681 [China International Economic and Trade Arbitration
Commission, People’s Republic of China, 18 August 1997] ................................ 13, 19

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Index of Authorities]

 CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July 2007]
.......................................................................................................................... 13, 20, 23
 CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July
2007]. ........................................................................................................................... 23
 CLOUT case No. 90 [Pretura circondariale di Parma, Italy, 24 November 1989] ...... 20
 Copperweld Corp. v. Independence Tube Corp, 467 U.S. 752 (1984). ....................... 16
 Dow Chemical Co. v. United States, 476 U.S. 227 (1986). ........................................ 16
 FirstLink Investments Corp Ltd v. GT Payment Pte Ltd and others [2014] SGHCR 12
........................................................................................................................................ 4
 Gianelli Money Purchase Plan & Trust v. ADM Inv. Servs., Inc., 146 F.3d 1309, 1313
(11th Cir. 1998) ............................................................................................................ 12
 Guaracachi America, Inc. and Rurelec PLC v. The Plurinational State of Bolivia
,UNCITRAL, PCA Case No. 2011-17, Award of January 31, 2014, at 22, ¶ 66 ........ 12
 Guaracachi America, Inc. and Rurelec PLC v. The Plurinational State of Bolivia
,UNCITRAL, PCA Case No. 2011-17, Procedural Order No. 13 of February 21, 2013,
at 3, ¶8. ......................................................................................................................... 12
 Heyman v. Darwins Ltd [1942] AC 35.......................................................................... 3
 HKL Group Co Ltd v. Rizq International Holdings Pte Ltd, [2013] SGHCR 8............ 2
 Hof van Cassatie, Belgium, 19 June 2009 (Scafom International BV v. Lorraine Tubes
S.A.S.) .................................................................................................................... 21, 22
 Insigma Technology Co Ltd v. Alstom Technology Ltd, [2009] SGCA 24.................. 2
 Interocean Shipping Co. v. National Shipping and Trading Corp. and Hellenic
International Shipping, S.A, 523 F.2d 527, (2nd Cir 1975)......................................... 17
 Ioannis Kardassopoulos & Ron Fuchs v. Georgia, ICSID Case No. ARB/05/18 and
ARB/07/15, Award of March 3, 2010, at 215, ¶691. ................................................... 12
 Jharkhand Bijli Vitran Nigam Limited v IVRCL Ltd., [Company Appeal
(AT)(Insolvency) No. 285 of 2018]. .............................................................................. 8
 K. K. Modi v. K. N. Modi, AIR 1998 SC 1297 ............................................................. 1
 Kirke La Shelle Company v. The Paul Armstrong Company et al., 263 N.Y. 79. ........ 8
 Konkan Railway Corporation Ltd. & Anr. v. Rani Construction Pvt. Ltd 2005 (8) SCC
618.................................................................................................................................. 6
 Kvaerner Cementation India Ltd. v. Bajranglal Agarwal (2012) 5 SCC 214. ............... 6
 Landgericht Oldenburg, 27 March 1996, 12 O 2541/95. See University of Freiburg
Database, http://www.cisg-online.ch/cisg/urteile/188.htm .................................... 13, 19

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Index of Authorities]

 Oberlandesgericht Dusseldorf, 18 November 1993, 6 U 228/92, See University of

Freiburg Database, http://www.cisg-online.ch/cisg/urteile/92.htm. ............................ 19
 Power Grid Corporation of India Ltd. v. Jyoti Structures Ltd, O.M.P (COMM)
397/2016. ....................................................................................................................... 8
 PT Garuda Indonesia v. Birgen Air [2002] 1SLR 393 .................................................. 4
 RSM v. Grenada, ICSID Case No. ARB/05/14, Award of March 13, 2009. .............. 12
 Thomson-CSF, S.A. v. American Arbitration Association 64 F.3d 773 (2nd Cir 1995)
(U.S.A.). ....................................................................................................................... 15
 Tribunal of International Commercial Arbitration at the Russian Federation Chamber
of Commerce, Russian Federation, 22 January 1997 (Arbitral award No. 155/1996),
Unilex........................................................................................................................... 22
 UAB Kistela shareholders v. UAB Kistela, 3K-3-666/2013.........................................2
OTHER AUTHORITIES
 Arbitration and Conciliation Act, 1996 ......................................................................... 3
 CIETAC Arbitration Rules, 2005 .................................................................................. 3
 English Arbitration Act,1996 ......................................................................................... 3
 Insolvency and Bankruptcy Code,2016, Section 238 (India). ....................................... 7
 Law no. 287/2009 of the Civil Code, published in the Romanian Official Journal no.
409/2011. ....................................................................................................................... 2
 Swiss Federal Statute on Private International Law,1990 ............................................. 6
 The Report of the ICCA-Queen Mary Task Force On Third-Party Funding In
International Arbitration .............................................................................................. 10
 The Report of the ICCA-Queen Mary Task Force On Third-Party Funding In
International Arbitration, 86 (31 Oct. 2017) ................................................................ 10
 The Report of the ICCA-Queen Mary Task Force On Third-Party Funding In
International Arbitration, at 146, https://www.arbitration-
icca.org/media/10/40280243154551/icca_reports_4_tpf_final_for_print_5_april.pdf.
...................................................................................................................................... 12
 The Vienna Convention on the Law of Treaties, 1969 .................................................. 6
 Vienna Convention on Law of Treaties , Art. 26, May 23,1969, 1155 U.N.T.S. 331 ... 5
BOOKS
 ANDREA MARCO STEINGRUBER, CONSENT IN INTERNATIONAL ARBITRATION (1st ed.,
2012) .............................................................................................................................. 1

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Index of Authorities]

 ANDREA MARCO STEINGRUBER, CONSENT IN INTERNATIONAL ARBITRATION (OUP, 1st

ed., 2012) ....................................................................................................................... 1
 INGEBORG SCHLECHTRIEM AND PETER SCHWENZER, COMMENTARY ON THE UN
CONVENTION ON THE INTERNATIONAL SALE OF GOODS 431 (Ingeborg Schwenzer ed.,
4th ed., 2016). ......................................................................................................... 13, 21
 JOHN O. HONNOLD & HARRY M. FLECHTNER (ED.), UNIFORM LAW FOR INTERNATIONAL
SALES UNDER THE 1980 UNITED NATIONS CONVENTION, 276 (4th ed, 2009) ............. 18
 NIGEL BLACKBAY, et al., REDFERN & HUNTER: LAW AND PRACTICE OF INTERNATIONAL
COMMERCIAL ARBITRATION 108 (6th ed. 2015). ............................................................ 3
 SIMON GREENBERG ET AL., INTERNATIONAL COMMERCIAL ARBITRATION: AN ASIA-
PACIFIC PERSPECTIVE 199 (1st ed. 2011). ................................................................... 2, 4
 Simon Greenberg et al., INTERNATIONAL COMMERCIAL ARBITRATION: AN ASIA-
PACIFIC PERSPECTIVE 58 (1st ed. 2011). ......................................................................... 4
JOURNAL ARTICLES
 Aceris Law LLC, The Admissibility Of Evidence In International Arbitration, ACERIS
LAW LLC ..................................................................................................................... 10
 Alysha Salinger, The United Nations Convention On Contracts For The International
Sale Of Goods (Cisg): What Is The Relevant Time Of Foreseeability In Article 25?,
PACE LAW SCHOOL INSTITUTE OF INTERNATIONAL COMMERCIAL LAW, ..................... 19
 Andrea Marco Steingruber, The Mutable and Evolving Concept of ‘Consent’ in
International Arbitration-Comparing rules, laws, treaties, and types of arbitration for
a better understanding of the concept of ‘Consent’, OXFORD UNIVERSITY
COMPARATIVE LAW FORUM ........................................................................................... 1
 Andrew Babiak, ‘Defining “Fundamental Breach” Under the United Nations
Convention on Contracts for the International Sale of Goods’ 6 Temple Int’l & Comp.
L. J., 113, 118 (1992) ................................................................................................... 18
 Benson Lim & Andriana Uson, Relooking At Consent In Arbitration, KLUWER
ARBITRATION BLOG ..................................................................................................... 16
 Brendan J. Reilly, Procedural Good Faith In International Arbitration, SQUIRE PATTON
BOGGS (January 16, 2020, 7:26 PM),
https://www.lexology.com/library/detail.aspx?g=76181d62-5604-4c82-a0e5-
f13411e56678. ............................................................................................................... 8
 Chris Parker, A Global Perspective On Availability Of Security For Costs And Claim
In International Arbitration Mirage Or Oasis?, HERBERT SMITH FREEHILLS ....... 13, 14

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Index of Authorities]

 Denis Parchajev, Pathological Arbitration Clauses in Lithuanian Case Law, CIS

ARBITRATION FORUM ..................................................................................................... 3
 Fernando Mantilla-Serrano, International Arbitration and Insolvency Proceedings, 11
ARBITR. INT. 51, 58 (1995) ............................................................................................ 5
 Fernando Mantilla-Serrano, International Arbitration and Insolvency Proceedings, 11
ARBITR. INT. 51, 58 (1995). ........................................................................................... 5
 Filip De Ly, The Place of Arbitration in the Conflict of Laws of International
Commercial Arbitration: An Exercise in Arbitration Planning, 12 NW. J. INT’L L. &
BUS. 62, (1991). ............................................................................................................. 4
 Jae Hee Suh, Interpretation of pathological clauses: a cautionary tale?, THOMSON
REUTERS, ........................................................................................................................ 3
 Janet A. Rosen, Arbitration Under Private International Law: The Doctrines Of
Separability And Competence De La Competence, 17 FORDHAM. INT’L. L.J. 599,608
(1993). ............................................................................................................................ 6
 Julian D M Lew, Does National Court Involvement Undermine the International
Arbitration Processes?, 24 AUILR, 488 (2009).............................................................. 6
 Jurgita Petkutė-Gurienė, The Competence-Competence Principle In Commercial
Arbitration: A Comparative Analysis, SITICS, 91 (2017)............................................... 5
 Karyna Loban, Extension of the Arbitration Agreement to the Third Parties, C.E.U., 19
(2009) ........................................................................................................................... 15
 Konstantin Pilkov, Evidence in International Arbitration: Criteria for Admission and
Evaluation, 80 INT’L. J. ARB.147-155 (2014) .............................................................. 10
 Konstantin Pilkov, Evidence in International Arbitration: Criteria for Admission and
Evaluation, 80 INT’L. J. ARB.147-155 (2014). ............................................................. 10
 Luciano Timm and Isabela Popolizio Morales, Competence-Competence Doctrine: An
Absolute Principle?, INTERNATIONAL LAW OFFICE ....................................................... 6
 Mahwesh Buland, A Study of Single Economic Entity Doctrine in Context of India, 2
IJLMH (2018) .............................................................................................................. 16
 N. Voser, Multi-Party Disputes and Joinder of Third Parties, in 50 Years of the New
York Convention: Icca International Arbitration Conference, 14 ICCA CONGRESS
SERIES, 343, 358 (2009) ............................................................................................... 15
 Paul Comsa, At a crossroads: the case of ‘pathological arbitration clauses’ which
determine a jurisdictional fight, CHALLENGES OF THE KNOWLEDGE SOCIETY PRIVATE
LAW 219 (2018). ............................................................................................................ 2

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Index of Authorities]

 Robert Koch, ‘The Concept of Fundamental Breach of Contract under the United
Nations Convention on Contracts for the International Sale of Goods (CISG)’, in:
Review of the Convention on Contracts for the International Sale of Goods (CISG)
1998 (1999) 177, 236. .................................................................................................. 19
SIAC DOCUMENTS
 Singapore International Arbitration Centre Practice Note, PN – 01/17 (31 March 2017),
Administered Cases under the arbitration rules of the Singapore International
Arbitration Centre, On Arbitrator Conduct in Cases Involving External Funding ...... 14

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Statement of Facts]

STATEMENT OF FACTS

PARTIES
1. Acrebor Power Private Limited, hereinafter referred to as the CLAIMANT is a
multinational company and a leader in market energy in Xanier. It has a major
manufacturing unit in Xanier, which produces, sells and distributes industrial products. It
sources most of its raw material from Zorastra. It is incorporated under the laws of Xanier
and has its principal office in Joeville, Xanier.
2. Renvindora National Power Company Limited, hereinafter referred to as the
RESPONDENT is wholly owned by the Government of Yevadu. It is incorporated under the
laws of Yevadu. It owns and operates thermal power plants in remote Yevadu. One such
thermal power plant is located in Tullyland, Yevadu [“Tullyland Power Plant], for which
this agreement was entered into. It works under the authority and direction of the Ministry
of Power of the Government of Yevadu.
THE PART SUPPLY AGREEMENT
3. The CLAIMANT and the RESPONDENT entered into an agreement in 2015 for the supply of
parts and components of the repair and maintenance Frame 15X turbines for a period of 15
years.
4. The Agreement was devised with the purpose of ensuring that the obsolete parts of the
Frame 15X Turbines are to be inspected and identified by the CLAIMANT and replaced with
new parts. For the same reason Clause 3 in the Agreement stated at the commencement of
each year, there would be an annual inspection by the CLAIMANT. The CLAIMANT for three
years honoured the agreement and sent a designated official to inspect, test and monitor the
turbines and the whole Tullyland Power Plant.
5. Through this Annual Inspection, a Requisition List was prepared by the CLAIMANT’s
officials, which contains a list of parts that are required to be supplied by the CLAIMANT.
These parts, according to Clause 3 would be supplied in installments by the CLAIMANT to
the RESPONDENT after the end of each quarter, i.e., on the 31st of March, June, September
and December. The RESPONDENT was to issue a formal purchase order in the name of the
CLAIMANT for the specified parts requisitioned for the particular quarter, fifteen days prior
to such delivery. The Clause also specified that the CLAIMANT is to maintain at least 85%
of Plant availability.

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Statement of Facts]

RESTRUCTURING POLICY
6. In December, the CLAIMANT notified the RESPONDENT of the new support structure as a
part of the new restructuring policy to improve the technical support and customer service
to its clients globally. Due to this change, the CLAIMANT would be unable to send an official
for the annual inspection of the Tullyland Power Plant in January. However, the CLAIMANT
ensured assistance to the RESPONDENT’s team in finalizing the Requisition List. The
RESPONDENT welcomed this decision and acknowledged the shift in the customer policy,
and agreed to undertake the inspection itself. Subsequently, the RESPONDENT issued the
Requisition List to the CLAIMANT for the year 2018.
UNFAVOURABLE CIRCUMSTANCES
7. Xanier alleged that Zorastra was indulging in unfair trade practices, which subsequently
led to Xanier imposing high tariffs on raw material sourced from Zorastra. The CLAIMANT
due to increased tariffs and an intensifying trade war between the two states incurred huge
losses in its business operations globally as there was an increase in the working capital of
the CLAIMANT and the cost of the manufactured parts. As a result, the CLAIMANT requested
the senior management of the RESPONDENT to renegotiate the terms and conditions of the
Agreement due to the setback. The discussion was specifically on the consideration for the
performance of the CLAIMANT’s obligations, as it was becoming commercially unviable for
the CLAIMANT to continue with the Agreement
TERMINATION OF AGREEMENT
8. The CLAIMANT continued to communicate with the RESPONDENT with the aim of arriving
at a reasonable business proposition. However, the RESPONDENT stopped all the
communication channels with the CLAIMANT.
9. On 14 December 2018, The RESPONDENT wrote a letter to the CLAIMANT wherein it refused
to renegotiate the Agreement and directed the CLAIMANT to supply the parts for the quarter
ending in December 2018, failing which it would terminate the Agreement.
10. The RESPONDENT did not assist the CLAIMANT, and despite incurring huge losses, the
CLAIMANT delivered the parts in the second week of January 2019 with an additional claim
of USD 100,000. RESPONDENT alleging late delivery by breach of stipulated time and that
the CLAIMANT had failed to perform its obligations, refused to accept the delivery of the
consignment. On 20 January 2019, the CLAIMANT received a termination notice from the
RESPONDENT. Aggrieved by this termination of the Agreement, the CLAIMANT filed a
Notice of Arbitration and Statement of Claim under Rule 3 of the SIAC Rules stating that
the termination of the Agreement is wrongful, illegal, arbitrary and mala fide.

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Issues Raised]

ISSUES RAISED

~I~

WHETHER THERE IS A VALID AGREEMENT IN EXISTENCE BETWEEN THE PARTIES WHICH

REFERS THE DISPUTES TO ARBITRATION UNDER THE AEGIS OF SIAC?

~ II ~

WHETHER THE INSOLVENCY PROCEEDINGS UNDERWAY AGAINST THE RESPONDENT IN

YEVADU BARS THE JURISDICTION OF THIS TRIBUNAL?

~ III ~

WHETHER THE CLAIMANT IS UNDER AN OBLIGATION TO DISCLOSE ITS SOURCE OF FUNDING

FOR PURSUING THESE ARBITRATION PROCEEDINGS AND SHOULD THE TRIBUNAL ORDER
SECURITY FOR LEGAL COSTS?

~ IV ~

WHETHER THE MINISTRY OF POWER, GOVERNMENT OF YEVADU MAY BE JOINED AS A

PARTY TO THE PRESENT ARBITRAL PROCEEDINGS?

~V~

WHETHER THE CLAIMANT’S CONDUCT BREACHED THE AGREEMENT AND WHETHER THE
RESPONDENT WAS JUSTIFIED IN TERMINATING THE AGREEMENT?

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Summary of Arguments]

SUMMARY OF ARGUMENTS

I. THERE IS A VALID AGREEMENT IN EXISTENCE BETWEEN THE PARTIES WHICH

REFERS THE DISPUTES TO ARBITRATION UNDER THE AEGIS OF SIAC.
It is humbly submitted before this Tribunal that, there exists a valid agreement between
the parties, which refers the dispute to Arbitration under the aegis of SIAC. Firstly, The
Claimant contends that there is a clear intention of both the parties in the Arbitration
agreement to submit to the Arbitration. Second, it is further contended that an effective
interpretation of the arbitration clause shall strengthen the jurisdiction of the Tribunal.
Thirdly, it is also claimed that the principle of separability validates the Arbitration
clause notwithstanding the breach of the contract by the Respondent.

II. THE INSOLVENCY PROCEEDINGS UNDERWAY AGAINST THE RESPONDENT IN YEVADU

DOES NOT BAR THE JURISDICTION OF THIS TRIBUNAL.
It is humbly submitted before this Tribunal that, the insolvency proceedings do not affect
the jurisdiction of the Tribunal. The Claimant substantiates the argument by stating that
Firstly, jurisdiction of the tribunal remains unhampered on the application of lex arbitri.
Secondly it is also submitted that the doctrine of ‘Competence-Competence’ is rendered
futile Thirdly, if the Insolvency Proceeding is allowed Yevadu Insolvency Laws does
not Bar the Jurisdiction of the Tribunal. Lastly, it is further contended that the
Respondent violates the principle of good faith by not being bound to Arbitration.

III. THE CLAIMANT IS UNDER NO OBLIGATION TO DISCLOSE ITS SOURCE OF FUNDING

FOR PURSUING THESE ARBITRATION PROCEEDINGS AND THE TRIBUNAL SHOULD
NOT ORDER SECURITY FOR LEGAL COSTS.
It is humbly submitted before this Tribunal that, the Claimant is not under any obligation
to disclose its source of funding, as there is no existence of Third-Party Funding. The
Claimant contends that Firstly, the Evidence submitted by the Respondent does not
sufficiently prove the existence of the third party. Secondly, it is further contended that
the Claimant is not bound to disclose the Third Party Funding under any law. Thirdly, it
is also requested that the order of security for the cost is not required in this arbitration
proceeding as Claimant’s claim is meritorious.

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[Summary of Arguments]

IV. THE MINISTRY OF POWER, GOVERNMENT OF YEVADU SHALL BE JOINED AS A

PARTY TO THE PRESENT ARBITRAL PROCEEDINGS.
It is humbly submitted before the Tribunal that, the Ministry of Power, Government of
Yevadu shall be joined as a party to the present Arbitral Proceedings. Firstly, it is
contended that the Ministry of Power, Government of Yevadu and the Respondent form
a single economic entity. Secondly, it is further contended that, the RESPONDENT is an
alter ego of the Ministry of Power. Thirdly, the CLAIMANT contends that the
RESPONDENT is the agent of the Ministry of Power and thus shall be joined, as it is the
principal.

V. THE CLAIMANT’S CONDUCT DID NOT BREACH THE AGREEMENT AND THE
RESPONDENT WAS NOT JUSTIFIED IN TERMINATING THE AGREEMENT.
It is humbly submitted before this Tribunal that, the Claimant’s conduct does not the
breach the Agreement. Firstly, it is contended that the Claimant’s failure to supply the
parts on time is not the fundamental breach of the contract. Secondly, it is further
submitted that the Claimant’s failure to perform as per the terms of the Agreement is
exempted from liability under Art. 79 of CISG. Thirdly, the Claimant also contends that
the Respondent was not justified in terminating the Agreement under Art. 49 of CISG.

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[Arguments Advanced]

ARGUMENTS ADVANCED

I. THERE IS A VALID AGREEMENT IN EXISTENCE BETWEEN THE PARTIES WHICH REFERS

THE DISPUTES TO ARBITRATION UNDER THE AEGIS OF SIAC.
1. The CLAIMANT asserts that there is a valid agreement between the parties which refers
to the dispute under the aegis of SIAC as firstly, [A] The arbitration agreement shows
clear intention of the parties to refer to arbitration; secondly, [B] The effective
interpretation of the Arbitration clause clearly indicated to submit to SIAC; and Thirdly,
[C] The principle of separability stands upheld.
A. THE ARBITRATION AGREEMENT SHOWS CLEAR INTENTION OF THE PARTIES TO
REFER TO ARBITRATION.
2. It is humbly submitted that the intention is a prerequisite of any arbitration agreement
and in particular a consensus ad idem.1 French lawyers have often stressed the need for
‘origine volontaire de la mission de l’arbitre’ as a foundation of arbitration.2 The Apex
Court of India in a case ruled that the parties should also agree that the decision of a
tribunal would be binding on them.3 Moreover, the adjective ‘consensual’ is one of the
essential criteria for an arbitration’s qualification.4
3. The e-mail exchanged on January 14, 2015,5 and the agreement of parties to have a
separate agreement specifically governing the resolution of disputes 6 clearly indicate
the consensus of parties to submit to arbitration under the aegis of SIAC.
4. In the present case, the original dispute resolution clause7 was replaced by the
addendum specifying the dispute resolution and the seat and centre of the arbitration.8
The addendum replaced the original dispute resolution clause to resolve the ambiguity
surrounding the seat of arbitration and the law governing it.

1
Bihar State Mineral Development Corporation & Anr. v. Encon Builders (I) (P) Ltd., (2003) 7 SCC 418.
2
ANDREA MARCO STEINGRUBER, CONSENT IN INTERNATIONAL ARBITRATION (OUP, 1st ed., 2012).
3
K. K. Modi v. K. N. Modi, AIR 1998 SC 1297.
4
Andrea Marco Steingruber, The Mutable and Evolving Concept of ‘Consent’ in International Arbitration-
Comparing rules, laws, treaties, and types of arbitration for a better understanding of the concept of ‘Consent’,
OXFORD UNIVERSITY COMPARATIVE LAW FORUM, (Jan. 15, 2020, 2:05 AM), https://ouclf.iuscomp.org/the-
mutable-and-evolving-concept-of-consent-in-international-arbitration-comparing-rules-laws-treaties-and-types-
of-arbitration-for-a-better-understanding-of-the-concept-of/#a5.
5
Cl. Ex. C5.
6
Cl. Ex. C2.
7
Parts Supply Agreement, clause 11.0
8
Addendum to the agreement dated 14.01.2015, clause 1.0

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[Arguments Advanced]

5. The act of both the parties of signing the contract along with the addendum on the same
date implies their consent to submit to arbitration under the aegis of SIAC. In addition,
the act of not raising any reservation regarding the addendum on the part of respondent
exhibits a clear manifestation of an unequivocal consent to submit to arbitration.
6. Therefore, the CLAIMANT condemns the act of the RESPONDENT of submitting to an
anti-arbitration injunction issued by its national court to bar the jurisdiction this arbitral
tribunal. Hence, the RESPONDENT is not justified in contesting the jurisdiction of this
arbitral tribunal.
B. THE EFFECTIVE INTERPRETATION OF THE ARBITRATION CLAUSE CLEARLY
INDICATES TO SUBMIT TO SIAC.
7. It is humbly submitted that the modern trend in international arbitration law is to apply
an interpretation that favours arbitration and gives meaning and effect to the clause even
if the arbitration agreement has a pathological appearance. This very principle in French
is called ‘effet utile’ (effective interpretation).9 There must be an effective interpretation
of the arbitration clause to give effect to the terms than to deprive some of them.10 This
principle stands incorporated in many international instruments like the Romanian Civil
Code11 and the Trans-Lex principles.12
8. The Singapore High Court also held in the case of HKL Group Co Ltd v. Rizq
International Holdings Pte Ltd, that it will ‘give effect to that clause, preferring an
interpretation, which does so over one, which does not’.13 The Singapore Court of
Appeal in the landmark case of Insigma Technology Co Ltd v. Alstom Technology Ltd
explained that if the parties, in an arbitration agreement, have evinced a clear intention
and the arbitration can thereupon be performed without prejudice to any party then it
should be performed.14 Moreover, refusing to give effect to the arbitration clause will
delay the process of arbitration and violates the right of parties to a speedy trial.15
9. Further, the Lithuanian Supreme Court in the case of UAB Kistela Shareholders v. UAB
Kistela16 ruled that failure to correctly specify the arbitral institution does not render

9
SIMON GREENBERG et al., INTERNATIONAL COMMERCIAL ARBITRATION: AN ASIA-PACIFIC PERSPECTIVE 199 (1st
ed. 2011).
10
UNIDROIT Principles of International Commercial Contracts 2016, Art. 4.5.
11
Law no. 287/2009 of the Civil Code, published in the Romanian Official Journal no. 409/2011.
12
Trans-Lex Principle No. XIII. 1.2.
13
HKL Group Co Ltd v. Rizq International Holdings Pte Ltd, [2013] SGHCR 8.
14
Insigma Technology Co Ltd v. Alstom Technology Ltd, [2009] SGCA 24.
15
Paul Comsa, At a crossroads: the case of ‘pathological arbitration clauses’ which determine a jurisdictional
fight, CHALLENGES OF THE KNOWLEDGE SOCIETY PRIVATE LAW 219 (2018).
16
UAB Kistela shareholders v. UAB Kistela, 3K-3-666/2013.

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[Arguments Advanced]

the arbitration clause null and void as long as there is a clear intention visible to opt the
desired institution and rule out others17 and Francis Russel in his book, ‘Russel on
arbitration’, notes that English Courts would seek to interpret the clause in consonance
with the intention of parties except in cases of ‘hopeless confusion’.18
10. In the present case, an effective interpretation of the arbitration clause contained in the
addendum would direct the tribunal to find that the mention of the terms ‘in accordance
with the recent rules’19 i.e. The 2016 rules, expressly states that the parties intended to
refer to a Singaporean Arbitral Institute which updated its rules in 2016 i.e. Singapore
International Arbitration Centre. This interpretation would clear confusion and specify
the intention of the parties to opt SIAC and not any other arbitral institute.
C. THE PRINCIPLE OF SEPARABILITY STANDS UPHELD.
11. It is humbly submitted that an arbitration clause is to be treated independent of the
contract and the declaration of a contract null and void by an arbitral tribunal does not
dissolve the arbitration clause.20 It would defeat the purpose of arbitration if the
termination of the contract, for whose adjudication an arbitration agreement is entered
into, were enough to terminate the arbitration agreement.21 Unless otherwise agreed,
the arbitration clause, which forms or was intended to form part of another agreement,
will not be rendered invalid, non-existent or ineffective by the termination of that other
agreement and will be considered as a distinct agreement.
12. The English apex court in the case of Heyman v. Darwins Ltd,22 explained the concept
of separability by stating that even though a party claims that the contract has
terminated but the arbitration clause remains for determination of the mode of
settlement of the dispute. Several pro-arbitration countries have adopted the same
approach.23

17
Denis Parchajev, Pathological Arbitration Clauses in Lithuanian Case Law, CIS ARBITRATION FORUM (Jan.
16, 2020, 8:09 AM), http://www.cisarbitration.com/2016/01/28/pathological-arbitration-clauses-in-lithuanian-
case-law/.
18
Jae Hee Suh, Interpretation of pathological clauses: a cautionary tale?, THOMSON REUTERS, ( Jan. 16, 2020,
8:19 AM) http://arbitrationblog.practicallaw.com/interpretation-of-pathological-clauses-a-cautionary-tale/.
19
Addendum to the Agreement, 14 January 2015, Cl. Ex. C2, Clause 1.0, p.14.
20
UNCITRAL Model Law on International Commercial Arbitration, 1985 without Amendment, Art. 16(1).
21
NIGEL BLACKBAY, et al., REDFERN & HUNTER: LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL
ARBITRATION 108 (6th ed. 2015).
22
Heyman v. Darwins Ltd [1942] AC 35
23
CIETAC Arbitration Rules, 2005 Art. 5(4); Arbitration and Conciliation Act, 1996, Section 16(1) (a); English
Arbitration Act, 1996, Section 7; Code of Civil Procedure (CCP), 1887 (Germany) Section 1040(1).

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[Arguments Advanced]

13. In the present case, clause 2.0 of the Addendum,24 states, “the addendum to the
agreement shall stay effective on the date of signing the addendum to the agreement
and shall be valid for the duration of the agreement”. One can clearly infer from the
clause that it nowhere expressly bars the validity of the arbitral agreement after the
termination of the power purchase agreement.
14. Hence, the CLAIMANT reiterates its claim that the separability of the arbitration clause
should be upheld.

II. THE INSOLVENCY PROCEEDINGS UNDERWAY AGAINST THE RESPONDENT IN YEVADU

DOES NOT BAR THE JURISDICTION OF THIS TRIBUNAL.
15. The jurisdiction of the tribunal is not barred by the insolvency proceedings underway
against the RESPONDENT as firstly, [A] the jurisdiction of the tribunal remains
unhampered; secondly, [B] Insolvency proceeding, if allowed, will render the
‘competence-competence’ principle futile; thirdly, [C] Yevadu Law does not bar the
Arbitral Proceedings; and lastly [D] the RESPONDENT by not conforming to be bound
by arbitration, violates the principle of good faith.
A. THE JURISDICTION OF THE TRIBUNAL REMAINS UNHAMPERED.
16. It is humbly submitted that the arbitral tribunal is competent enough to rule on its own
jurisdiction25 and is not affected by the moratorium levied upon the respondent by the
state court. This happens so because in the conflict of laws stemming from national
courts before an arbitral tribunal, the arbitral tribunal would apply the law of the place
of arbitration (lex arbitri) and this provision stands traditionally defended.26 When
parties select country Y as the seat, its automatic effect is that the legal framework of
that country becomes the lex arbitri i.e. the law of the seat of arbitration.27
17. The Singapore High Court in the case of FirstLink Investments Corp Ltd v. GT Payment
Pte Ltd and others28 ruled to the similar effect where it held that the law of the seat of
arbitration is presumed to be the law governing the arbitration agreement, rather than

24
Cl. Ex. C2.
25
Arbitration Rules of Singapore International Arbitration Centre SIAC Rules, 2016, Rule 19.
26
Filip De Ly, The Place of Arbitration in the Conflict of Laws of International Commercial Arbitration: An
Exercise in Arbitration Planning, 12 NW. J. INT’L L. & BUS. 62, (1991).
27
Simon Greenberg et al., INTERNATIONAL COMMERCIAL ARBITRATION: AN ASIA-PACIFIC PERSPECTIVE 58 (1st
ed. 2011).
28
FirstLink Investments Corp Ltd v. GT Payment Pte Ltd and others [2014] SGHCR 12.

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[Arguments Advanced]

the parties chosen substantive governing law. The Singapore Court of Appeal also gave
a judgement to a similar effect in PT Garuda Indonesia v. Birgen Air. 29
18. The seat of arbitration in the present case, Baratheon City, Stark Province has adopted
the UNCITRAL Model Law thereby making it the lex arbitri. The UNCITRAL Model
Law has a power to decide whether arbitration is barred or not, while any parallel
insolvency, proceedings are underway in any foreign state.
19. In the case,30 involving a Syrian and a French party that went bankrupt and pleaded for
the arbitration proceedings to be set aside, the arbitrators held -‘regardless of French
law, the arbitral tribunal, sitting in Damascus and applying Syrian law, considers that
its mission is not to be affected by a Court’s decision rendered subsequently in France
which is not intended to produce effects in Syria.’31 The present case resonates with
this case in as much as this
20. Similarly, in another award rendered by the ICC tribunal in the case (ICC Case 5996,
unpublished award rendered in 1991) involving a Cameroon client and French
defendant wherein the defendant was declared bankrupt, it was held that ‘the arbitral
tribunal, amiable compositeur, sitting in Tunis in an international arbitration, is not
bound by a particular (substantive or procedural) national law.’32
21. It is also submitted that the arbitrators have not, in most of the cases involving parallel
insolvency, resorted to the territorial effects of insolvency and consistent to the
dominant trend rejected the request of parties to suspend arbitral proceedings.33
22. The CLAIMANT thus submits before the honourable tribunal that it should not consider
the foreign legislations and is requested to apply the lex arbitri i.e. UNCITRAL Model
Law on International Commercial Arbitration which nowhere bars the continuance of
arbitration while insolvency proceedings that are ongoing in parallel.
B. INSOLVENCY PROCEEDINGS, IF ALLOWED, WILL RENDER THE ‘COMPETENCE-
COMPETENCE’ PRINCIPLE FUTILE.
23. It is humbly submitted that Article 16 of the UNCITRAL Model Law on International
Commercial Arbitration states that the arbitral tribunal may rule on its own jurisdiction,
including any objections with respect to the existence or validity of the arbitration

29
PT Garuda Indonesia v. Birgen Air [2002] 1SLR 393.
30
Fernando Mantilla-Serrano, International Arbitration and Insolvency Proceedings, 11 ARBITR. INT. 51, 58
(1995).
31
See Ibid.
32
Fernando Mantilla-Serrano, International Arbitration and Insolvency Proceedings, 11 ARBITR. INT. 51, 58
(1995).
33
See Ibid at 57-58

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[Arguments Advanced]

agreement. Jurists have also defined the principle of competence-competence as the one
which allows arbitrators’ themselves to decide on their own jurisdiction
notwithstanding that their jurisdiction is challenged.34
24. The doctrine of ‘competence-competence’ is a fundamental pillar and it is hard to
imagine international arbitration being developed in the absence of this doctrine.35 This
principle has been justified on two grounds: first, there is a rebuttable presumption that
such jurisdictional power has been conferred by the will of the parties when they
entered into an arbitration agreement, and second, the competence-competence power
is innate in all judicial bodies and integral to let them function.36
25. The Supreme Court of India in the case of Konkan Railway Corporation Ltd. & Anr. v.
Rani Construction Pvt. Ltd 37 ruled that the courts cannot interfere in the matters of an
arbitral tribunal and article 16 of the Arbitration and Conciliation Act, 1996, adapted
from Article 16 of UNITRAL Model Law on International Commercial Arbitration,
gave the arbitral tribunals the competence to rule on its jurisdiction. Similarly, in the
case of Kvaerner Cementation India Ltd. v. Bajranglal Agarwal,38 the Bombay High
Court set aside the order passed by a civil court declining the jurisdiction of the arbitral
tribunal.
26. Thus, the application of a moratorium, backed by the non-obstante provision of Section
238,39 gives an over-riding effect to the moratorium over any other law inconsistent
with it, including arbitration. This over-riding effect thereby interferes with the
jurisdiction of the arbitral tribunal, obstructs the power of arbitrators to rule on their
own jurisdiction, and renders the principle of ‘competence-competence’ void.
27. The CLAIMANT thereby submits before the honourable tribunal that, international
arbitration is an entirely autonomous process, functions independent of any national
law, and has a life of its own 40 and any anti-arbitration injunction issued by a national

34
Jurgita Petkutė-Gurienė, The Competence-Competence Principle In Commercial Arbitration: A Comparative
Analysis, SITICS, 91 (2017).
35
Luciano Timm & Isabela Popolizio Morales, Competence-Competence Doctrine: An Absolute Principle?,
INTERNATIONAL LAW OFFICE (Jan. 16,2020, 8:15 PM)
https://www.internationallawoffice.com/Newsletters/Arbitration-ADR/Brazil/Carvalho-Machado-e-Timm-
Advogados/Competence-competence-doctrine-an-absolute-principle.
36
Janet A. Rosen, Arbitration Under Private International Law: The Doctrines of Separability and Competence
De La Competence, 17 FORDHAM. INT’L. L.J. 599,608 (1993).
37
Konkan Railway Corporation Ltd. & Anr. v. Rani Construction Pvt. Ltd 2005 (8) SCC 618.
38
Kvaerner Cementation India Ltd. v. Bajranglal Agarwal (2012) 5 SCC 214.
39
The Insolvency and Bankruptcy Code, 2016, Section 238.
40
Julian D M Lew, Does National Court Involvement Undermine the International Arbitration Processes?, 24
AUILR 488 (2009).

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[Arguments Advanced]

court renders the ‘competence-competence’ principle futile and undermines the spirit
of arbitration.
28. Therefore, the CLAIMANT condemns the act of the respondent of submitting to an anti-
arbitration injunction issued by its national court to bar the jurisdiction this arbitral
tribunal. Hence, the RESPONDENT is not justified in contesting the jurisdiction of this
arbitral tribunal.
C. YEVADU INSOLVENCY LAW DOES NOT BAR ARBITRAL PROCEEDINGS.
29. The claimant contends that section 14 of IBC when read with the non-obstante
provision contained in section 23841 gives an over-riding effect to the Insolvency and
bankruptcy code over anything inconsistent therewith contained in any other law.
Thereby the moratorium also gains an over-riding to anything inconsistent with the law.
However, it is brought to the notice of the tribunal that section 14 of the code, which
imposes moratorium on the corporate debtor, does not bar arbitration proceedings.
30. Section 14 (1) (a)42 of the Insolvency and Bankruptcy Code, 2016 declares and imposes
a moratorium on the corporate and thereby bars the institution or pendency of any
pending suit or proceeding. The word ‘proceedings’ or ‘pending suits’ in section
14(1)(a) does not include arbitral proceedings as the IBC in section 5(6) expressly states
that “dispute” includes a suit or arbitration proceeding and thereby makes a clear
distinction between a suit and an arbitration.
31. Further, in section 8(2) (a) of the code, again a differentiation is made between a suit
and an arbitration proceeding. Thereafter, again in the section 25(2)(b) ‘arbitration
proceedings’ find a separate mention beside ‘judicial’ and ‘quasi-judicial’ proceedings.
32. Thus, it can be construed that whenever a reference is made to arbitration, the word
‘arbitration proceedings’ is specifically used. Therefore, had arbitration proceedings
been barred under section 14 of the code , the word ‘arbitration proceedings’ would
have been used but contrarily these words find no mention and hence imply that
arbitration proceedings are excluded from the ambit of moratorium.
33. The claimant further contend that the prior-cited arguments are backed by the judgment
of Delhi High Court in the case of Power Grid Corporation of India Ltd. v. Jyoti
Structures Ltd,43 in which the court held that the word ‘proceedings’ in section 14(1)
(a) is not preceded by the word ‘all’, implying that not all proceedings are barred against

41
The Insolvency and Bankruptcy Code, 2016, Section 238.
42
The Insolvency and Bankruptcy Code, 2016. Section 14(1) (a).
43
Power Grid Corporation of India Ltd. v. Jyoti Structures Ltd, O.M.P (COMM) 397/2016.

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[Arguments Advanced]

the corporate debtor. Subsequently, the National Company Law Appellate Tribunal of
Hyderabad, India in the case of Jharkhand Bijli Vitran Nigam Limited v. IVRCL Ltd.44
allowed continuance of arbitral proceedings while insolvency proceedings were
underway and affirmed that ‘the claims of a corporate debtor can only be determined
after the counter-claims are filed.’
34. The claimant thus contends that there is a clear distinction made between ‘proceedings’
and ‘arbitration proceedings’ in the code and thus the institution of or continuance of
the arbitration proceedings, as opposed to the respondent’s contention, are not barred
under section 14 of the code.
35. In addition, the CLAIMANT requests the tribunal to set aside the counter-claims filed by
the RESPONDENT and exercise its own jurisdiction in adjudicating the issue.
D. THE ACT OF THE RESPONDENT BY NOT CONFORMING TO BE BEING BOUND BY
ARBITRATION VIOLATES THE PRINCIPLE OF GOOD FAITH.
36. It is humbly submitted that the principle of good faith imposes a positive obligation on
both parties to co-operate and maintain transparency in dealings. It places an obligation
on parties to a contract to act with fairness, reasonableness, and decency in the
formation and performance of the contract.45 The New York Court of Appeals while
explaining the concept of good faith ruled that there is an implied covenant that neither
party shall do anything, which will have the effect of destroying or injuring the right of
the other party, to receive the fruits of the contract.
37. In other words, every contract has an implied covenant of good faith and fair dealing.46
Further, numerous international treaties and conventions talk of the necessity principle
of ‘good faith’. Reference can be made here to Art. 26 of VCLT, 47 which talks about
the principle of Pacta Sunt Servanda, which creates an obligation on the parties of the
treaty to carry out its provisions in good faith. Hence it is an established principle of
international law as well, that agreements need to be carried out in good faith.
38. In the present case, the act of the RESPONDENT of not being bound to arbitration
proceedings impinges upon the right of the CLAIMANT to continue the proceeding and
to enforce the Award.

44
Jharkhand Bijli Vitran Nigam Limited v IVRCL Ltd., [Company Appeal (AT) (Insolvency) No. 285 of 2018].
45
Brendan J. Reilly, Procedural Good Faith In International Arbitration, SQUIRE PATTON BOGGS (January 16,
2020, 7:26 PM), https://www.lexology.com/library/detail.aspx?g=76181d62-5604-4c82-a0e5-f13411e56678.
46
Kirke La Shelle Company v. The Paul Armstrong Company et al., 263 N.Y. 79.
47
Vienna Convention on Law of Treaties, Art. 26, May 23, 1969, 1155 U.N.T.S. 331.

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39. Hence, the CLAIMANT requests the Tribunal to Proceed with the Arbitration and wants
the RESPONDENT to affirm to its obligation of maintaining Good Faith in international
trade Under Art 7 of CISG.

III. THE CLAIMANT IS UNDER NO OBLIGATION TO DISCLOSE ITS SOURCE OF FUNDING

FOR PURSUING THESE ARBITRATION PROCEEDINGS AND THE TRIBUNAL SHOULD
NOT ORDER SECURITY FOR LEGAL COSTS.
40. It is humbly submitted that the CLAIMANT is under no obligation to disclose its source
of funding for pursuing these arbitration proceedings as firstly, [A] the newspaper report
of Third party funding submitted by the RESPONDENT does not have probative value;
secondly, [B] The CLAIMANT is not bound to disclose the Third Party Funding under
any law; thirdly, [C] The CLAIMANT’S claim is admissible and genuine.
A. THE NEWSPAPER REPORT OF THIRD PARTY FUNDING SUBMITTED BY THE

RESPONDENT DOES NOT HAVE PROBATIVE VALUE.

41. The RESPONDENT contends in the present case that the CLAIMANT is being funded by a
third party for this arbitration proceeding. This claim of the RESPONDENT is based on a
public newspaper report Dated February 11, 2019, published in Global Arbitration
News. According to the news report, it has been claimed that the CLAIMANT’S law firm
is being funded by this party and its clients in international arbitration proceedings
around the world.48 The use of a public newspaper report as evidence, the content of
which is ‘unconfirmed’49 is not reliable and credible and thus not admissible in this
arbitral proceeding.
42. It is humbly submitted that evidence in international arbitration is admitted in the
Tribunal if it is relevant and material; however, the weight of the said evidence depends
upon its credibility i.e. its reliability and authenticity of the evidence to show what it
ought to prove.50 The party presenting the evidence should justify the evidence to prove
its allegations.51 The SIAC Rules 2016 Rule 19.2 provides that “The Tribunal shall
determine the relevance, materiality and admissibility of all evidence”. 52 Thus, the
Arbitrator checks the reliability and materiality of any evidence.

48
Resp. Ex. R3.
49
See Ibid.
50
Konstantin Pilkov, Evidence in International Arbitration: Criteria for Admission and Evaluation, 80 INT’L. J.
ARB.147-155 (2014).
51
Aceris Law LLC, The Admissibility of Evidence In International Arbitration, ACERIS LAW LLC (Dec.30, 2019,
7:30 PM) https://www.acerislaw.com/admissibility-evidence-international-arbitration/.
52
Arbitration Rules of Singapore International Arbitration Centre Rules. 6 th ed. 2016, Rule 19.2.

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43. It is further submitted, that, the materiality of any evidence in international arbitration
is connected with its sufficiency of the evidence. The reliability of the evidence
becomes doubtful when it is not sufficient to prove what it is offered to prove.53 In this
situation, the Tribunal may ask the parties concerned to present additional evidence to
support its claim. At the admissibility stage the evidence is required to be prima facie
credible, that is, it must have sufficient indicia of reliability and authenticity to establish
that it appears to show what it is offered to prove.54 Moreover, when a party submits
evidence the opposing party should be provided with an opportunity to comment on the
relevance, materiality, admissibility or probative value of that evidence. 55
44. It is further humbly submitted that the disclosure of third party funding frivolously
challenges the arbitrators and is unfounded requests for security for costs especially
when it is based on some non-credible sources. It is perceived to be procedural and
strategic consequences of disclosure by many funders. These funders also suggest that
the response to disclosure may not simply be a matter of case strategy, but an intentional
effort to drive up the cost of the case.56
45. The CLAIMANT contends that the Evidence Exhibit R3 is not credible and is not enough
to be considered by the Tribunal for evaluating the issue. The information provided in
the newspaper report is based on some unconfirmed reports. Moreover, any official
statement of CLAIMANT’S law firm does not support the very evidence of the existence
of the third party to the CLAIMANT. The RESPONDENT, in this case, is trying to draw
Tribunal’s attention to a baseless claim of the existence of any third party to this
arbitration proceeding. Therefore, this evidence is unsuitable to proof the
RESPONDENT’S contention and hence, does not have probative value in the present case.
B. THE CLAIMANT IS NOT BOUND TO DISCLOSE THE THIRD PARTY FUNDING UNDER
ANY LAW.
46. It is most humbly submitted before this Tribunal, that, the CLAIMANT is not bound to
disclose the Third Party Funding under any law applicable. It is contended by the
CLAIMANT that the CLAIMANT did not opt for third party funding in this arbitral

53
Konstantin Pilkov, Evidence in International Arbitration: Criteria for Admission and Evaluation, 80 INT’L. J.
ARB.147-155 (2014), p.6.
54
Konstantin Pilkov, Evidence in International Arbitration: Criteria for Admission and Evaluation, 80 INT’L. J.
ARB.147-155 (2014), p.7.
55
Konstantin Pilkov, Evidence in International Arbitration: Criteria for Admission and Evaluation, 80 INT’L. J.
ARB.147-155 (2014), p.9.
56
The Report of the ICCA-Queen Mary Task Force On Third-Party Funding In International Arbitration, 86 (31
Oct. 2017), https://www.arbitration-
icca.org/media/10/40280243154551/icca_reports_4_tpf_final_for_print_5_april.pdf.

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proceedings. The RESPONDENT’S request for disclosure of third party funding based on
some non-credible source is frivolous. The RESPONDENT’S contention of conflict of
interest of the arbitrator and any third party is unknown, and could not challenge the
arbitrator in a sense to order for the disclosure of third party funding.
47. It is humbly submitted that the RESPONDENT claims, the existence of the third party is
against the arbitrator’s conduct in terms of conflict of interest. Contrary to the
RESPONDENT’S contention, the CLAIMANT submits that unknown conflicts of interest
cannot be a basis for an effective challenge to an arbitrator or an Arbitral Award. Some
of the US Courts have found that unknown conflicts cannot be a basis for refusing
enforcement of arbitral awards. US Courts while, considering the issue of conflict of
interest stated that absence of knowledge about a conflict, discourages arbitrators from
fulfilling their duty to investigate. It also imposes on the aggrieved party the
unreasonable burden of having to prove actual knowledge about a conflict on the part
of an arbitrator.57 There are no standard rules and regulations set up in International
Arbitration, which specifically says that disclosure of third party funding is mandatory.
48. In the case of Guaracachi America, Inc. and Rurelec PLC v. The Plurinational State of
Bolivia,58 the PCA confirmed it that, there was no conflict of interest whatsoever
between the parties based on the given documents and the Tribunal requires no further
documents. The Tribunal in Ioannis Kardassopoulos & Ron Fuchs v.
Georgia,59 declared that the third-party funding arrangement was irrelevant to
determining the amount of recovery of CLAIMANT’S costs. The two annulment
committees in the two ICSID cases, RSM v. Grenada,60 and ATA v. Jordan,61 applied
the same reasoning.
49. In the present case, the CLAIMANT was alleged to be funded by the Third Party, the
RESPONDENT received the information of which by some unconfirmed news report.62
There is no existence of any third party funding to the CLAIMANT in this Arbitration

57
In the United States, the approach of U.S. courts is summarized in the Reporters’ Notes to the Restatement:
“Some courts have taken the view that an absence of knowledge about a conflict per se precludes a finding of
evident partiality. See Gianelli Money Purchase Plan & Trust v. ADM Inv. Servs., Inc., 146 F.3d 1309, 1313 (11th
Cir. 1998);
58
Guaracachi America, Inc. and Rurelec PLC v. The Plurinational State of Bolivia ,UNCITRAL, PCA Case No.
2011-17, Award of January 31, 2014, at 22, ¶ 66.
59
Ioannis Kardassopoulos & Ron Fuchs v. Georgia, ICSID Case No. ARB/05/18 and ARB/07/15, Award of
March 3, 2010, at 215, ¶691.
60
RSM v. Grenada, ICSID Case No. ARB/05/14, Award of March 13, 2009.
61
ATA v. Jordan, ICSID Case No. ARB/08/2, Award of May 18, 2010.
62
See Resp. Ex. R3.

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proceeding. The RESPONDENT’S request for the disclosure of third-party unnecessary

put the Arbitrator in the position of conflict of interest, which is a strategic attempt on
the part of the RESPONDENT to remove the arbitrator and thus discontinuing the
arbitration proceeding. Such tactical attempt based on some unfounded reports to
disclose the third-party funding defeats the purpose of arbitration to be quick relief to
commercial disputes. Hence, the RESPONDENT’S request to disclose the Third Party
funding stands futile.
C. THE CLAIMANT’S CLAIM IS ADMISSIBLE AND GENUINE.
50. It is most humbly submitted before this Tribunal, that, the claim submitted by the
CLAIMANT is genuine and admissible. Contrary to the RESPONDENT’S contention, the
CLAIMANT contends that the Claimant was not in fundamental breach of the Agreement.
The RESPONDENT’S act of terminating the agreement based on fundamental breach of
agreement is pointless. Order for Security cost against the Respondent would be granted
in the case when there is a high risk that the opposing party will not satisfy any final
award, claim, and cost and that cost has to borne by the Respondent.63 However, in the
present case, the claim of the CLAIMANT is meritorious and has sufficient assets to bear
the cost of the arbitration, if in case required.
51. Under Art. 25 of CISG,64 the breach is said to be fundamental when it substantially
deprive the other party of what it ought to have out of the contract and this fundamental
breach could reasonably have foreseen by the parties.65 It was seen in many cases that
a mere late delivery does not amount to a fundamental breach if the buyer instead of
rejecting it accepts it.66 It is to be further noted, that, one out of several deliveries is just
a simple breach not a fundamental breach.67 The final non-delivery by the seller

63
The Report of the ICCA-Queen Mary Task Force On Third-Party Funding In International Arbitration, at 146,
https://www.arbitration-icca.org/media/10/40280243154551/icca_reports_4_tpf_final_for_print_5_april.pdf.;
Chris Parker, A Global Perspective On Availability Of Security For Costs And Claim In International Arbitration
Mirage Or Oasis?, HERBERT SMITH FREEHILLS (Jan.20,2020, 07:30 AM)
https://www.herbertsmithfreehills.com/latest-thinking/a-global-perspective-on-availability-of-security-for-costs-
and-claim-in.
64
The United Nations Convention on Contracts for the International Sale of Goods, 1980, Art. 25.
65
INGEBORG SCHLECHTRIEM AND PETER SCHWENZER, COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS 431 (Ingeborg Schwenzer ed., 4th ed., 2016).
66
CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July 2007] (a two-day delay that
did not impede the use of the delivery regarded as a non-fundamental breach); CLOUT case No. 275
[Oberlandesgericht Düsseldorf, Germany, 24 April 1997]; CLOUT case No. 681 [China International Economic
and Trade Arbitration Commission, People’s Republic of China, 18 August 1997]; Landgericht Oldenburg, 27
March 1996, 12 O 2541/95. See University of Freiburg Database, http://www.cisg-online.ch/cisg/urteile/188.htm;
Amtsgericht Ludwigsburg, 21 December 1990, 4 C 549/90; See University of Freiburg Database,
http://www.cisg-online.ch/cisg/urteile/134.htm (affirmed by Landgericht Stuttgart, 30 August 1991, 16 S 14/91.
67
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997]; also Brandenburgisches
Oberlandesgericht, Germany, 18 November 2008 Internationales Handelsrecht 2009, 105.

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constitutes a fundamental breach of contract unless the seller has justifying reasons to
withhold its performance.68
52. In the present case, the CLAIMANT’S delayed delivery of the 3rd Quarterly instalment
was accepted by the RESPONDENT, which shows that the time of delivery was not of
significant importance to the RESPONDENT. Thus, failure on the part of the CLAIMANT
does not substantially deprive the buyer. Also, the imposition of tariffs and declaring
of the trade war by the Government of the CLAIMANT’S country to another country
where from the raw material for the CLAIMANT is a justifying reason to withhold its
performance. Therefore, the CLAIMANT did not fundamentally breach the agreement.
Hence, the RESPONDENT’S conduct to terminate the agreement based on fundamental
breach of agreement is invalid and the claim of the CLAIMANT is genuine.
53. It is further humbly submitted that owing to the high-risk involved with respect to non-
fulfilment of the Award and the Cost, the evidence required by requesting party for an
order of security cost should be firm enough to justify the application. Evidence may
involve CLAIMANT’S financial records.69
54. The RESPONDENT has no evidence of the CLAIMANT’S financial condition besides an
allegation of the Third Party Funding. According to SIAC rules on Arbitrator Conduct
in cases involving external funding, “the involvement of an external Funder alone shall
not be taken as an indication of the financial status of a Disputant Party. The Tribunal
may take into account factors other than the involvement of an external funder in order
for security for legal or other costs”.70
55. In the present case, CLAIMANT is a successful business. The CLAIMANT successfully
completed its entire obligation in the first three years of the agreement. In the 4th year,
the CLAIMANT, even after price surge, after 2nd quarterly instalment delivered, was able
to manage its production due to the availability of sufficient funds. For the 3rd quarter,
the CLAIMANT supplied the parts within a week of the scheduled delivery even after
multiple emphases put forth by the CLAIMANT with respect to its lack of viability to

68
CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July 2007] (a two-day delay that
did not impede the use of the delivery regarded as a non-fundamental breach).
69
Chris Parker, A Global Perspective On Availability Of Security For Costs And Claim In International
Arbitration Mirage Or Oasis?, HERBERT SMITH FREEHILLS (Jan.20,2020, 07:30 AM)
https://www.herbertsmithfreehills.com/latest-thinking/a-global-perspective-on-availability-of-security-for-costs-
and-claim-in.
70
Singapore International Arbitration Centre Practice Note, PN – 01/17 (31 March 2017), Administered Cases
under the arbitration rules of the Singapore International Arbitration Centre, On Arbitrator Conduct in Cases
Involving External Funding (Jan. 10, 2020, 12:45 PM), https://www.international-arbitration-attorney.com/wp-
content/uploads/2018/11/Practice-Note-on-Arbitrator-Conduct-in-Cases-Involving-External-Funding.pdf.

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perform the contract and incurring losses. The given circumstances clearly indicate that
the CLAIMANT has sufficient assets to continue with this arbitration proceeding and that
CLAIMANT’S financial situation is not bad.
56. Thus, the CLAIMANT has a meritorious claim and the RESPONDENT does not have
sufficient evidence to prove the poor financial status of the CLAIMANT other than an
alleged third party funding. Therefore, there is no need for the Tribunal to order security
costs in this arbitration proceeding. Hence, the RESPONDENT’S request to order security
costs is futile and may be dismissed.

IV. THE MINISTRY OF POWER, GOVERNMENT OF YEVADU SHALL BE JOINED AS A

PARTY TO THE PRESENT ARBITRAL PROCEEDINGS.
57. It is humbly submitted that the SIAC rules allow for the joinder of a party to an
arbitration proceedings if the party is prima facie bound by the agreement and if all the
parties have agreed for its joining.71 By agreeing to adopt the SIAC Rules, the parties
have consented to a multi-party arbitration, and a non-party should not be prevented
from being made a party to an existing arbitration solely because it was not named as a
party to the arbitration.72
58. The CLAIMANT argues that joinder should take place of Ministry of Power, Government
of Yevadu in the arbitral proceeding as firstly, [A] The RESPONDENT is an alter ego of
the Ministry of Power; secondly, [B] The RESPONDENT and Ministry of Power form a
Single Economic Entity; thirdly, [C] The RESPONDENT is the agent of the Ministry of
Power and thus should be joined as it is the principal.
A. THE RESPONDENT IS AN ALTER EGO OF THE MINISTRY OF POWER.
59. The alter ego doctrine states that a non-signatory can be bound to an arbitration
agreement if it dominates the signatory party. It requires three elements in order to join
a non-signatory to arbitration proceedings, which are the following: a) close
relationship between two entities; b) control exercised by one entity over another, and
c) the use of control over another entity to commit fraud or wrong.73
60. In addition, US courts have recognized the ‘alter ego’ theory thus permitting the
extension of the arbitration clause to non-signatories if that non-signatory has ‘total

71
Arbitration Rules of Singapore International Arbitration Centre Rules. 6 th ed. 2016, Rule 7.1(a) and 7.1(b).
72
N. Voser, Multi-Party Disputes and Joinder of Third Parties, in 50 Years of the New York Convention: ICCA
International Arbitration Conference, 14 ICCA CONGRESS SERIES, 343, 358 (2009).
73
Karyna Loban, Extension of the Arbitration Agreement to the Third Parties, C.E.U., 19 (2009).

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dominion and control’ over the decisions over the signatory party. 74 Thus, if the
signatory party is an alter ego of the non-signatory, the non-signatory may come under
the arbitration clause and further be joined in the arbitration proceedings.75
61. In the present case, it is clear that RESPONDENT is acting as the alter ego of the Ministry
of Power as it has a close relationship i.e. being wholly owned by the Government of
Yevadu to which Ministry of Power is a part and thus, controls it. Further, it exercises
its control through making the company seek permission for business matters over
which company should have full autonomy e.g. requirement to seek permission to
change the contract76 and terminating the contract on the instruction of the Ministry of
Power.77 In addition, the RESPONDENT terminated the contract on undue justifications,
which are not valid for terminating a contract thus committing a wrong against the
Claimant.
62. Thus it is humbly submitted that the corporate veil should be lifted and the Ministry of
Power who is the real power behind the RESPONDENT’S company should be joined to
the arbitral proceeding as RESPONDENT’s company is nothing but an alter ego of
Ministry of Power through which it operates.
B. THE RESPONDENT AND MINISTRY OF POWER FORM A SINGLE ECONOMIC ENTITY.
63. When a company exercises deep and pervasive control on the functioning of other, they
are said to be part of a single economic entity.78 It is an established affair that a company
and its subsidy are separate legal entities but if the subsidy has no autonomy and has to
consult the parent body for taking every decision then they are claimed to be part of a
single economic entity.79
64. Brekoulakis particularly suggests, “What matters is not whether a non-signatory can
demonstrate consent for arbitration, but whether it is inextricably implicated in a dispute
which is the subject matter of the arbitration.”80 In the present case, the Ministry of
Power is inextricably implicated in the dispute regarding the contract as the Respondent
and Ministry form a Single Economic Entity. The American case of Copperweld Corp.
v. Independence Tube Corp,81 held that a parent corporation and a subsidiary wholly

74
Thomson-CSF, S.A. v. American Arbitration Association 64 F.3d 773 (2 nd Cir 1995) (U.S.A.).
75
Bridas S.A.P.I.C. v. Government of Turkmenistan, 447 F.3d 411 (5 thCir 2006) (U.S.A.).
76
Cl. Ex. C4.
77
Cl. Ex. C18.
78
Dow Chemical Co. v. United States, 476 U.S. 227 (1986).
79
Mahwesh Buland, A Study of Single Economic Entity Doctrine in Context of India, 2 IJLMH (2018).
80
Benson Lim & Andriana Uson, Relooking At Consent In Arbitration, KLUWER ARBITRATION BLOG, (Jan.
23,2020, 1:08 PM) http://arbitrationblog.kluwerarbitration.com/2019/02/12/relooking-at-consent-in-arbitration/.
81
Copperweld Corp. v. Independence Tube Corp, 467 U.S. 752 (1984).

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owned by it would constitute a single entity. Therefore, any subsidiary, which have
been administered by its parent corporation in decision-making and has no complete
autonomy, said to be a part of the parent, and together they would comprise of a single
entity.
65. The RESPONDENT has often mentioned consulting the Ministry before executing any
administrative function. Instances such as taking assistance of the Ministry of Power
before issuing of a purchase order,82 mentioning of the ministry as its higher managerial
body83 and the argument put forth by RESPONDENT that consulting the Ministry of
Power was a procedural requirement84 elucidate that RESPONDENT lacks autonomy and
it functions under the aegis and governance of Ministry of Power, Government of
Yevadu and hence, these two form a single economic entity. Therefore, Ministry of
Power may be joined, as RESPONDENT has no clear autonomy over itself without the
authority of Ministry.
C. THE RESPONDENT IS THE AGENT OF THE MINISTRY OF POWER AND THUS SHOULD
BE JOINED AS IT IS THE PRINCIPAL.
66. An agency is “fiduciary relationship created by express or implied contract or by law,
in which one party (the agent)” that is subject to principal’s control “may act on behalf
of another party (the principal) and bind that other party by words or actions”.85 In the
case of Interocean Shipping Co. v. National Shipping and Trading Corp. and Hellenic
International Shipping the court asserted that “agency is a legal concept which depends
on the manifest conduct of the parties, not on their intentions or beliefs” and thus
decided that the acts of the agent bound his agent in the contract.86
67. Further, the Swiss Federal Supreme Court in China National Machinery & Equipment
Import & Export Corporation v. Loebersdorfer Maschinenfabrik AG (Austria) decided
that both principal and agent are bound to arbitrate when they are “one indistinguishable
entity…mutually connected, with a uniform purpose and a mere geographical
separation of tasks”.87

82
Parts Supply Agreement, Clause 3.0 (2), Cl. Ex. C1.
83
Cl. Ex. C4.
84
Opposition to Request for Joinder of Parties, at 39.
85
Black’s Law Dictionary, 7th ed.(1999), “Agency”.
86
Interocean Shipping Co. v. National Shipping and Trading Corp. and Hellenic International Shipping, S.A, 523
F.2d 527, (2nd Cir 1975).
87
China National Machinery & Equipment Import & Export Corporation v. Loebersdorfer Maschinenfabrik AG
(Austria), (1996) 4 ASA Bull 623, 629.

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68. In the present case, the RESPONDENT is clearly in a fiduciary relationship with the
Ministry of Power, as the RESPONDENT has to take permissions from the Ministry and
act on the instructions of the Ministry of Power. Hence, the RESPONDENT acts on behalf
of the Ministry as it produces power from its thermal power plant for parts of Yevadu
and acts an agent of Government and Ministry of Power to produce and supply the
power.
69. Since RESPONDENT acts as an agent and is mutually connected as it is a company wholly
owned by the government and both the Ministry and RESPONDENT have the same
purpose of producing and supplying Power in Yevadu they should be joined in the
arbitral proceeding.

V. THE CLAIMANT’S CONDUCT DID NOT BREACH THE AGREEMENT AND THE
RESPONDENT WAS NOT JUSTIFIED IN TERMINATING THE AGREEMENT.
70. As per the terms of the Agreement88, the CLAIMANT was supposed to supply parts based
on the requisition list and purchase order. However, due to the intensified trade war
between the countries of Xanier and Zorastra, the country supplying raw materials to
the CLAIMANT, the working capital and cost of manufacturing of the CLAIMANT
increased to a considerable amount. Due to this, the CLAIMANT was incurring huge
losses and was unable to supply parts on earlier negotiated prices. This delayed the
manufacturing process and prevented the CLAIMANT from performing its obligations to
its full extent.
71. The CLAIMANT asserts that, Firstly, [A] the CLAIMANT’S failure to supply the parts on
time is not the fundamental breach of the contract; secondly, [B] the CLAIMANT’S failure
to perform as per the terms of the Agreement is exempted from liability under Art. 79;
thirdly, [C] the RESPONDENT was not justified in terminating the Agreement under Art.
49 of CISG.
A. THE CLAIMANT’S FAILURE TO SUPPLY THE PARTS ON TIME IS NOT THE
FUNDAMENTAL BREACH OF THE CONTRACT.
72. It is humbly submitted that for fundamental breach of Contract under Art. 2589 , there
are two limbs tests for that.90 First, it ought to have caused substantial deprivation to

88
Part Supply Agreement, Clause 3.0.
89
The United Nations Convention on Contracts for the International Sale of Goods, 1980, Art. 25.
90
JOHN O. HONNOLD & HARRY M. FLECHTNER (ED.), UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980
UNITED NATIONS CONVENTION, 276 (4th ed, 2009); Andrew Babiak, ‘Defining “Fundamental Breach” Under

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the other party of what it is entitled to expect out of the contract91 and second, this
deprivation caused to the party ought to have been reasonably foreseeable by a
reasonable person of the same kind in the same circumstances.92 Both of these
conditions have to be fulfilled for the contract to be fundamentally breached. It shows
that the aggrieved party is willing to perform its part of contractual obligation.
73. The aggrieved party must have suffered such detriment as to substantially deprive it of
what it was entitled to expect under the contract. The breach must, therefore, nullify or
essentially depreciate the aggrieved party’s justified contract expectations. Art. 25
provides further that a breach is fundamental only if the substantial deprivation of
expectations caused by the breach was reasonably foreseeable to the breaching party.
However, the provision does not mention the time at which the consequences of the
breach must have been foreseeable. It has been expressly stated that the time of the
conclusion of a contract is the relevant time.93
74. The Court denied fundamental breach in a dispute between a German buyer and an
Italian seller, where the seller had dispatched summer clothes one day later than the
stipulated time.94 The Ludwigsberg Court concluded from the fact that the buyer took
delivery of the goods instead of rejecting them that time was not of the essence of the
contract. The Ludwigsburg Petty District Court held that the inconvenience caused by
the delay was only of minor importance to the German buyer and thus did not amount
to a fundamental breach.95
75. The Dusseldorf Court of Appeals rejected the buyer’s arguments and held that mere
non- or late delivery does not constitute a fundamental breach under Art. 25 provided
that delivery is objectively possible and the seller was willing to deliver.96 Although the

the United Nations Convention on Contracts for the International Sale of Goods’ 6 Temple Int’l & Comp. L. J.,
113, 118 (1992).
91
INGEBORG SCHLECHTRIEM AND PETER SCHWENZER, COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS 431 (Ingeborg Schwenzer ed., 4th ed., 2016).
92
Ibid.; Alysha Salinger, The United Nations Convention On Contracts For The International Sale Of Goods
(CISG): What Is The Relevant Time Of Foreseeability In Article 25?, PACE LAW SCHOOL INSTITUTE OF
INTERNATIONAL COMMERCIAL LAW, (Jan. 15, 2020, 4:15 PM)
https://www.cisg.law.pace.edu/cisg/biblio/salinger.pdf.
93
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997]; CLOUT case No. 681 [China
International Economic and Trade Arbitration Commission, People’s Republic of China, 18 August 1997].
94
Landgericht Oldenburg, 27 March 1996, 12 O 2541/95. See University of Freiburg Database, http://www.cisg-
online.ch/cisg/urteile/188.htm; See Robert Koch, ‘The Concept of Fundamental Breach of Contract under the
United Nations Convention on Contracts for the International Sale of Goods (CISG)’, in: Review of the
Convention on Contracts for the International Sale of Goods (CISG) 1998 (1999) 177, 236.
95
Amtsgericht Ludwigsburg, 21 December 1990, 4 C 549/90; See University of Freiburg Database,
http://www.cisg-online.ch/cisg/urteile/134.htm; See Ibid. Koch at 237.
96
Oberlandesgericht Dusseldorf, 18 November 1993, 6 U 228/92, See University of Freiburg Database,
http://www.cisg-online.ch/cisg/urteile/92.htm.

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date for delivery may be fixed by agreement, a short delay may nonetheless not
constitute a fundamental breach if the buyer’s interests are not impaired.97
76. In the present case, the RESPONDENT duly accepted the delayed delivery of goods by
the CLAIMANT for the 3rd Quarterly Instalment in the year 2018.98 Therefore, it is
evident that adherence to the delivery date was not of significant importance for the
RESPONDENT. If only a minor part of the contract is finally not performed i.e. one
delivery out of several deliveries is not made, then the failure to perform is simply not
a fundamental breach of contract.99
77. Moreover, the detriment, if any, caused to the RESPONDENT could not be reasonably
foreseeable by the CLAIMANT. The CLAIMANT could not foresee the trade war between
its country and Zorastra at the time of the conclusion of the contract, which would
become a predicament to complete its obligation on time. Since both of the above-
mentioned conditions have not been fulfilled in the present case, the CLAIMANT did not
commit any fundamental breach of the contract.
78. Complete failure to perform a contractual duty constitutes a Fundamental Breach unless
the party has justifying reason to withhold its performance. It is also decided in cases
of final Non-delivery.100 The CLAIMANT was supposed to perform its obligation in such
a way that it achieves 85% plant availability. As of August 2018, the CLAIMANT was
successful in maintaining the plant availability averaging to about 93% until the Second
Quarter of the Year 2018. As contended by the RESPONDENT, it was not a complete
failure on the part of CLAIMANT to perform its obligation.
79. It is further humbly submitted that change in the country’s tariff policies and price hike
for the raw materials is the justifying reason to withhold the performance by the
CLAIMANT. The CLAIMANT was willing and ready to complete its part of the contract
and tried to communicate to RESPONDENT to re-negotiate the contractual prices. But,
besides continuous efforts of the CLAIMANT to have a meeting with the senior
management of the RESPONDENT, based on emails dated August 20,2018, September
27, 2018, October 17, 2018, and November 11, 2018,101 all the channels of

97
CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July 2007] (a two-day delay that
did not impede the use of the delivery regarded as a non-fundamental breach).
98
Cl. Ex. C.13 at 25; Notice of Arbitration, at 7, ¶ 14.
99
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997]; also Branden burgisches
Oberlandesgericht, Germany, 18 November 2008 Internationales Handelsrecht 2009, 105.
100
CLOUT case No. 90 [Pretura circondariale di Parma, Italy, 24 November 1989] (only partial and very late
delivery); CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995].
101
Cl. Ex. C11, C14, C15, C16.

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communications were stopped from the side of RESPONDENT. Therefore, with respect
to all the above-mentioned submissions, the CLAIMANT denies any fundamental breach
of contract from its part.
B. THE CLAIMANT’S FAILURE TO PERFORM AS PER THE TERMS OF THE AGREEMENT
IS EXEMPTED FROM LIABILITY UNDER ARTICLE 79(1) OF CISG.
80. It is humbly submitted before the tribunal that CLAIMANT’S failure to perform the part
of its obligation as per the agreement is exempted from liability under Art. 79 of
CISG.102 For Art. 79(1) to be applicable, there are certain requirements that are to be
fulfilled: the party’s non-performance was ‘due to an impediment’; the impediment was
‘beyond his control’; the impediment is one that the party ‘could not reasonably be
expected to have taken into account at the time of the conclusion of the contract’.103
81. The Belgian Court of Cassation has indicated that the “impediment” referred to in Art.
79 (1) CISG may include changed circumstances that have made a party’s performance
a matter of economic hardship, even if performance has not been rendered literally
impossible. The Court emphasized that, in order to qualify as an “impediment,” the
change of circumstances ought not to have been reasonably foreseeable at the time of
the conclusion of the contract and performing the contract must involve an
extraordinary and disproportionate burden under the circumstances.104 This
impediment can be an exceptional event such as economic impossibility.105
82. In the present case, the tariffs imposed by the CLAIMANT’S country on the source
country of raw materials are an impediment beyond its control. The tariffs imposed on
the raw materials are as high as 60%. Materials like Cobalt, Nickel & Lithium were
procured from this country, which were used as raw materials for the parts and
equipment CLAIMANT supplies. This impediment of change in government import-
export policies is impediments beyond CLAIMANT’S control. Given this situation, the
manufacturing cost of the CLAIMANT increased tremendously. Due to this, an
extraordinary & disproportionate burden was imposed on the CLAIMANT, and thus the
contract became unviable for the CLAIMANT to perform.

102
The United Nations Convention on Contracts for the International Sale of Goods, 1980, Art. 79.
103
INGEBORG SCHLECHTRIEM AND PETER SCHWENZER, COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS 431 (Ingeborg Schwenzer ed., 4th ed., 2016).
104
Hof van Cassatie, Belgium, 19 June 2009 (Scafom International BV v. Lorraine Tubes S.A.S.),
www.cisg.law.pace.edu. The court also held that, under general principles applicable pursuant to article 7 (2)
CISG, the legal consequences of economic hardship included an obligation by the parties to renegotiate the
contract.
105
CLOUT case No. 166 [Schiedsgericht der Handelskammer Hamburg, Germany, 21 March, 21 June 1996].

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[Arguments Advanced]

83. Where the governmental regulations and any action by government officials prevent
the party’s performance, it would amount to an impediment beyond the party’s
control.106 It is further submitted that the aforementioned change was unforeseeable at
the time of concluding the Contract and the CLAIMANT’s obligation was affected due to
change in the government’s policy of tariffs. The CLAIMANT could not have reasonably
foreseen the impact of the imposition of tariffs on another country and declaration of a
trade war at the time of concluding the contract.
84. The Belgian Court of Cassation, applying general principles pursuant to Art. 7 (2)
CISG, has held that “under these principles, as incorporated inter alia in the UNIDROIT
Principles of International Commercial Contracts, the party who invokes changed
circumstances that fundamentally disturb the contractual balance...is also entitled to
claim the renegotiation of the contract.”107
85. In the present case, re-negotiation tried by the CLAIMANT with the RESPONDENT failed
in every way. The RESPONDENT was not willing to re-negotiate besides many
efforts.108The RESPONDENT, on December 14, 2018, wrote a letter to the CLAIMANT
wherein it refused to renegotiate the agreement and directed the CLAIMANT to supply
the parts for the quarter ending in December 2018, failing which it would terminate the
agreement. The RESPONDENT was under an obligation to renegotiate the contract in the
situation of economic hardship, which in this case denied by the RESPONDENT.
C. THE RESPONDENT WAS NOT JUSTIFIED IN TERMINATING THE AGREEMENT BY THE
VIRTUE OF ARTICLE 49 OF CISG.
86. It is humbly submitted that the RESPONDENT was not justified in terminating the
agreement by the virtue of Art. 49 of CISG.109 In order for the buyer to have proper
grounds to avoid the contract under Art. 49 (1) (a), the seller must have failed to perform
an obligation, and the seller’s non-performance must substantially deprive the buyer of
what he was objectively entitled to expect under the contract.
87. In Contradiction of RESPONDENT’S contention, the CLAIMANT asserts that CLAIMANT’S
failure to perform its part of obligation is not a fundamental breach under Art. 25 of
CISG.110 The final non-delivery by the seller constitutes a fundamental breach of

106
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce, Russian
Federation, 22 January 1997 (Arbitral award No. 155/1996), Unilex.
107
Hof van Cassatie, Belgium, 19 June 2009 (Scafom International BV v. Lorraine Tubes S.A.S.),
www.cisg.law.pace.edu.
108
Cl. Ex. C11, C14, C15, C16.
109
The United Nations Convention on Contracts for the International Sale of Goods, 1980, Art. 49 (1) (a).
110
The United Nations Convention on Contracts for the International Sale of Goods, 1980, Art. 25.

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[Arguments Advanced]

contract unless the seller has justifying reasons to withhold its performance.111
However, if only a small part of the contract, i.e. one of the many instalments, is not
supplied the breach is not fundamental.112 In addition, a little late delivery does not
amount to a fundamental breach.113
88. In the present case, CLAIMANT’S failure to deliver the 3rd Quarterly instalment a week
later was due to the impediment of increased manufacturing cost and trade war. In
addition to that, the failure to deliver the 4th Quarterly Instalment is because of a
justifying reason. The notice of which was communicated to the RESPONDENT but no
re-negotiation of price could be possible due to RESPONDENT’S indifferent behaviour.
The failure to deliver 4th Instalment to the RESPONDENT does not amount to a
fundamental breach. The main objective of the Contract was to maintain the plant
availability above 85%. The CLAIMANT completed this main obligation in all three
years of the contract starting from January 2015 to January 2018 i.e. 94.8%-96%.114
This availability of plants was maintained averaging to 93% until the end of the 2nd
quarter.115 There is no chance or possibility that this plant availability reduces straight
below the 85% threshold even after supplying the 3rd quarterly instalment. Thus, the
CLAIMANT, in entirety, concludes that the termination of the agreement by the
RESPONDENT is not justified.

111
CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July 2007].
112
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April, 1997].
113
CLOUT case No. 846 [U.S. Court of Appeals (3rd Circuit), United States, 19 July 2007].
114
Notice of Arbitration ¶ 12.
115
Cl. Ex. C11.

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 5TH NLIU JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT, 2020
[Prayer]

PRAYER

In the light of all the submissions made, the CLAIMANT hereby respectfully requests the
Tribunal to ADJUDGE and DECLARE that:
1. The RESPONDENT’S counterclaim may be dismissed summarily.
2. The Ministry of Power, Government of Yevadu shall be joined as a party to the
proceedings.
3. The RESPONDENT was not justified in terminating the Agreement.
4. The CLAIMANT’S conduct did not result in a fundamental breach of the Agreement.

And ORDER the RESPONDENT to:

1. Accept the delivery of parts for the 4th Quarterly Instalment.
2. Pay an amount equal to USD 5 Million as damages for its wrongful conduct.
3. Pay all the costs of arbitration, including costs incurred by the parties.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

Sd/

(Counsels on behalf of the CLAIMANT)

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