TEAM CODE- 14C

8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL

INTERNATIONAL ARBITRATION MOOT, 2023

Before

THE ARBITRAL TRIBUNAL

LONDON, UNITED KINGDOMS

UNDER THE RULES OF THE

SINGAPORE INTERNATIONAL ARBITRATION CENTRE, 2016

IN THE MATTER BETWEEN

R2 DETOUR LIMITED

(CLAIMANT)

V.

SHUTTLE-UP LIMITED

MORBUS CAPITAL LLP

(RESPONDENT)

MEMORANDUM for CLAIMANT, 2023

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
MOOT, 2023

TABLE OF CONTENTS

TABLE OF ABBREVIATIONS...............................................................IV

INDEX OF AUTHORITIES...................................................................VI

STATEMENT OF FACTS..................................................................XIII

ISSUES RAISED............................................................................XV

SUMMARY OF ARGUMENTS............................................................XVI

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

I. The Tribunal Has The Jurisdiction To Decide This Dispute........................................1

A. ENGLISH LAW SHALL BE THE APPLICABLE LAW TO DECIDE THE CAPACITY OF DR .

GOH TO EXECUTE THE LSA................................................................................................1

i. The Tribunal has the Power to Rule on its own Jurisdiction.............................1

ii. The Substantive Validity and Interpretation of ¶ 25 of the LSA shall be

Governed by the Laws of England.................................................................................2

a. The express choice of law in the LSA extends to the arbitration agreement.....2

b. Implied choice of the parties is the English law................................................3

c. The English Law has the closest connection with the arbitration clause...........4

iii. ¶ 1 Of Clause 25 of the LSA is Valid................................................................4

B. THE LSA WAS VALIDLY EXECUTED BY THE FIRST RESPONDENT UNDER THE INDIAN
LAW 5

i. The Capacity of Part-Time Director is Same as that of Other Directors...........5

ii. Authorization is not Needed for Entering into Transactions in Ordinary Course
ff Business......................................................................................................................6

iii. The Contract is Valid and Binding as per the Doctrine of Indoor Management8

II. Morbus Capital Should Be Joined As A Party To The Proceedings............................8

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A. THE SIAC RULES GOVERN THIS ISSUE.......................................................................8

i. The Procedure of the Joinder shall be Governed by the Rule 7.1 of the SIAC. 9

ii. The English Law Governs the Parties to the Agreement...................................9

B. MORBUS CAPITAL IS PRIMA FACIE BOUND BY THE ARBITRATION AGREEMENT......10

i. Morbus Capital is a ‘True’ Party to the Arbitration Agreement......................10

a. Morbus Capital is a third-party beneficiary of the LSA..................................11

b. There is an implied consent to arbitrate...........................................................11

ii. The Present Circumstances Are In Favour Of The Joinder.............................13

iii. The Requirements of Rule 7.1 of the Siac Rules are Satisfied........................13

III. The RESPONDENTS’ Claims Are Barred By The Limitation Act, 1980...................13

A. THE CAUSE OF ACTION AROSE WHEN THE RESPONDENTS ACQUIRED ‘SUFFICIENT

KNOWLEDGE’....................................................................................................................14

B. THE LIMITATION PERIOD WAS TRIGGERED IMMEDIATELY AFTER THE CAUSE OF

ACTION AROSE..................................................................................................................15

IV. The CLAIMANT Is Not Liable For Misrepresentation.................................................16

A. THE RESPONDENTS ARE NOT ENTITLED TO AVOID THE LSA ON ACCOUNT OF

MISREPRESENTATION........................................................................................................16

i. There was No Inducement on Basis of Material Facts....................................16

ii. The Respondent is not Permitted to Rescind the LSA.....................................18

B. THE RESPONDENT WAS MADE WELL AWARE OF THE FACTS BEFORE THERE WAS ANY
KIND OF PAYMENT MADE FOR THE THIRD-PARTY SERVICE..............................................19

C. THE RESPONDENTS ARE NOT ENTITLED TO RECOVER THE MISCELLANEOUS

PAYMENTS MADE TO THIRD PARTIES UNDER AN IMPLIED TERM......................................20

i. The Officious Bystander Test is not Fulfilled..................................................20

ii. The Business Efficacy Test is not Satisfied.....................................................21

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V. The Entire Legal And Arbitration Costs Shall Be Borne By The

Other Party................................................................................................................22

A. THE APPLICABLE LAW DOES NOT PROVIDE FOR PARTIES TO SHARE LEGAL COSTS. .22

B. THE RESPONDENTS MUST BEAR THE COST OF THEIR OPPORTUNISTIC AND

UNFOUNDED CLAIMS.........................................................................................................23

C. LOSER PAYS PRINCIPLE IS APPLICABLE IN THE PRESENT ARBITRATION PROCEEDINGS

24

PRAYER..................................................................................XXIX

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 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
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TABLE OF ABBREVIATIONS

ABBREVIATIONS EXPANSIONS

§ Section

¶/¶¶ Paragraph/ Paragraphs

AC Appeal Cases

AIR All India Report

Art. Article

Cl. Clause

edn Edition

Govt. Government

HC High Court

Hon’ble Honourable

i.e. Id Est

Ltd. Limited

No. Number

NYC New York Convention, 1958

Ors Others

p./ pp. Page/ Pages

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MEMORANDUM for CLAIMANT TABLE OF ABBREVIATION

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
MOOT, 2023

Pvt. Private

R. Rule

r/w Read with

SC Supreme Court

SCC Supreme Court cases

SCR Supreme Court Reporter

SIAC Singapore International Arbitration Centre

TPA Third Party Act

U/S Under Section

UK United Kingdom

UNCITRAL UNCITRAL Model Law on International

Commercial Arbitration 1994

v. Versus

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MEMORANDUM for CLAIMANT TABLE OF ABBREVIATION

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
MOOT, 2023

INDEX OF AUTHORITIES

STATUTES

Art. V(1)(a), NEW YORK CONVENTION 1958...........................................................3, 5, 10

Limitation Act, 1980, No. 58, British Acts of Parliament, 1980 (England)............................16

The Arbitration Act, 1996, No. 26, British Acts of Parliament, 1996 (England)................4, 22

The Companies Act, 2013, No. 18, Acts of Parliament, 2013 (India)...................................7, 8

The Rights of Third Parties Act, 1999, No. 31, British Acts of Parliament, 1999 (England). 11

RULES AND REGULATIONS

§ 28.2, SINGAPORE INTERNATIONAL ARBITRATION CENTRE RULES 2016............2

Rule 7.1, SINGAPORE INTERNATIONAL ARBITRATION CENTRE 2016...............12, 13

UC.C. § 1-203 (1978). Restatement (Second) of Contracts & 205 & comment c (1981).......19

AWARDS REFERRED

ICSID AWARDS

Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID Case No.
ARB/09/2.................................................................................................................................22

Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID Case No.
ARB/09/2.................................................................................................................................23

Libananco Holdings Co. Limited v. Republic of Turkey, ICSID Case No. ARB/06/8...........23

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 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
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Railroad Development Corp. (RDC) v. Republic of Guatemala, ICSID Case No. ARB/07/23
..................................................................................................................................................22

Rumeli v. Kazakhstan, ICSID Case No. ARB/05/16...............................................................24

UNCITRAL AWADS

International Thunderbird Gaming Corporation v. Mexico, Award, IIC 136 UNCITRAL

(2006)......................................................................................................................................24

PCA AWARDS

IC Power Asia Development Ltd. v. Republic of Guatemala, PCA Case No. 2019-43..........24

BOOKS

43 Gustav Flecke-Giammarco, The Allocation of Costs by Arbitral Tribunals in International

Commercial Arbitration, in WTO Litigation, Investment Arbitration, and Commercial
Arbitration, Global Trade Law Series (2013)..........................................................................22

Alan Redfern et al, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION,

Oxford University Press (6th edn 2015)................................................................................2, 5

Andrew BURROWS, A RESTATEMENT OF THE ENGLISH LAW OF CONTRACT,

Oxford University Press (2nd edn 2016).................................................................................20

AV Dicey, J H C Morris, et al., DICEY, MORRIS & COLLINS ON THE CONFLICT OF

LAWS, London Sweet & Maxwell (14th edn 2006).................................................................3

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MEMORANDUM for CLAIMANT TABLE OF AUTHORITIES

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
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Bernard Hanotiau, COMPLEX ARBITRATION: MULTI-PARTY, MULTI-CONTRACT

AND MULTI-ISSUE, International Arbitration Law Library Wolters Kluwer (2nd edn 2020).
..................................................................................................................................................12

BRIAN A. GARNER, BLACK'S LAW DICTIONARY (8TH ED. 2004).................................7

G.K Kapur, COMPANY LAW AND PRACTICE, Taxmann Publications Pvt. Limited (15 th
edn 2009)............................................................................................................................6, 7, 8

Gary Born, INTERNATIONAL COMMERCIAL ARBITRATION, Wolters Kluwer (3rd edn

2020)..................................................................................................................................10, 12

Hugh Beale, CHITTY ON CONTRACTS, Sweet & Maxwell Ltd. (30th edn 2014).............17

J. Beatson, ANSON’S LAW OF CONTRACT, Oxford University Press (28th edn 2002)...17,
20, 21

Julian David Mathew Lew QC, COMPARATIVE INTERNATIONAL COMMERCIAL

ARBITRATION, Kluwer Law International (1st edn 2003).....................................................9

Mauro Rubino-Sammartano, INTERNATIONAL ARBITRATION LAW AND PRACTICE,

Juris Net Llc ( 3rd edn 2014).....................................................................................................2

Samuel-Adam, JURISDICTIONAL PROBLEMS IN INTERNATIONAL ARBITRATION:

A STUDY OF BELGIAN, DUTCH, ENGLISH, FRENCH, SWEDISH, SWISS, US AND
WEST GERMAN LAW, Schultess Polygraphischer Verling Zurich (1st edn 1989)...............1

Sir Guenter Treital, THE LAW OF CONTRACT, London Sweet & Maxwell (10th edn
1999)........................................................................................................................................20

ARTICLES

Alastair Henderson, Lex Arbitri, Procedural Law And The Seat Of Arbitration: Unravelling
the Laws of the Arbitration Process, SINGAPORE ACADEMY OF LAW JOURNAL

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MEMORANDUM for CLAIMANT TABLE OF AUTHORITIES

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
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(2014).......................................................................................................................................10

Andrea Meier, Commentary on the ICC Rules, Introduction to Articles 7–10 ICC Rules, in
Arbitration in Switzerland: The Practitioner’s Guide, KLUWER LAW INTERNATIONAL
(2013).......................................................................................................................................11

Bondar Kateryna, Allocation of Costs in Investor-State and Commercial Arbitration:

Towards a Harmonized Approach, OXFORD ARBITRATION INTERNATIONAL (2016).
..................................................................................................................................................24

Gordon Smith, Comparative Analysis of Joinder and Consolidation Provisions Under

Leading Arbitral Rules, XXXV JOURNAL OF INTERNATIONAL ARBITRATION,
KLUWER LAW INTERNATIONAL (2018).................................................................4, 9, 13

Jeffrey M Waincymer, Costs in Arbitration in Procedure and Evidence in International

Arbitration, KLUWER ARBITRATION BLOG (2012).........................................................23

Klaus Peter Berger, Re-examining the Arbitration Agreement: Applicable Law – Consensus
or Confusion?, XIII KLUWER LAW INTERNATIONAL (2006)......................................1, 9

Lawrence W. Newman & David Zaslowsky, The Difference Between Commercial and
Investment Arbitration, THE PRACTICE OF INTERNATIONAL LITIGATION (2010)....24

Manuel Gómez Carrión, Joinder of third parties: new institutional developments, XXX1
OXFORD UNIVERSITY PRESS (2015)..................................................................................9

N Voser, Multi-party Disputes and Joinder of Third Parties, KLUWER LAW

INTERNATIONAL (2009)......................................................................................................12

Piero Bernardini, Arbitration Clauses: Achieving Effectiveness in the Law Applicable to the
Arbitration Clause/ Improving the Efficiency of Arbitration Agreements and Awards,
KLUWER LAW INTERNATIONAL (1999)...........................................................................2

Rachel Engle, Party Autonomy in International Arbitration: Where Uniformity Gives Way to
Predictability, TRANSNAT’L LAW (2002)...........................................................................23

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Ronán Feehily, Separability in international commercial arbitration; confluence, conflict

and the appropriate limitations in the development and application of the doctrine, XXXIV
OXFORD UNIVERSITY PRESS (2018)..................................................................................3

Sapna Jhangiani, Conflicts of Law and International Commercial Arbitration – Can Conflict
Be Avoided?, II BCDR INTERNATIONAL ARBITRATION REVIEW (2015).....................4

Stavros Brekoulakis et al, The Evolution and Future of International Arbitration,

INTERNATIONAL ARBITRATION LAW LIBRARY (2016).............................................12

Trukhtanov, The proper law of arbitration agreement – A farewell to implied choice?,

INTERNATIONAL ARBITRATION LAW REVIEW (2012).................................................3

CASES REFERRED

UNITED KINGDOM CASES

Attorney General of Belize v. Belize Telecom Ltd., [2009] 1 W.L.R. 1988...........................20

Atwood v. Small, [1838] 6 Cl & F 232....................................................................................17

Boyse (International) Ltd v. NatWest Markets plc and anr., [2021] EWHC 1387 (Ch).........15

British Telecommunications plc v. Telefónica O2 UK Ltd., [2014] UKSC 42.......................23

C v. D, [2007] EWCA Civ 1282................................................................................................4

Car and Universal Finance Co. Ltd. v. Caldwell, [1965] 1 QB 525........................................18

Clough v. London and North Western Railway Co., (1871) LR 7 Exch 26............................18

Cox v. Bankside, [1995] 2 Lloyd’s Rep. 436...........................................................................21

Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs Pakistan, [2010]
UKSC 46..................................................................................................................................10

Derry v. Peek, [1889] 14 App Cas 337....................................................................................17

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Edgington v. Fitzmaurice, [1882] 29 Ch. D 459......................................................................17

Enka v. Chubb, [2020] UKSC 38........................................................................................3, 10

European Real Estate Debt Fund (Cayman) Ltd v. Treon and Ors., [2021] EWHC 2866 (Ch).
..................................................................................................................................................14

Fiona Trust & Holding Corp v. Privalov [2007] Bus LR 1719.................................................5

Hedley Byrne & Co Ltd v. Heller & Partners, [1964] AC 465................................................17

Law Society v. Sephton and Co., [2004] EWCA Civ 1627.....................................................14

Leaf v. International Galleries, [1950] 2 KB 86......................................................................18

Libyan Investment Authority v. Credit Suisse International and Ors., [2021] EWHC 2684
(Comm)....................................................................................................................................14

Liverpool CC v. Irwin, [1977] 1 AC 239.................................................................................21

Luxor (Eastbourne) Ltd. v Cooper, [1941] 1 AC 108..............................................................21

Mediterranean Salvage & Towage Ltd v. Seamer Trading & Commerce Inc., The Reborn,
[2009] EWCA Civ 531............................................................................................................20

MSC Mediterranean Shipping Company S.A. v. Cottonex Anstalt, [2016] EWCA Civ 789.
..................................................................................................................................................24

Nisshin Shipping Co. Ltd. v. Cleaves & Co Ltd., [2003] EWHC Comm. 2602.....................11

Pacific Coast Coal Mines Ltd. v. Arbuthnot, 1917 AC 607……………………………………

8

Pan Atlantic Ins. Co Ltd. v. Pine Top Ins. Co., [1995] 1 A.C. 501.........................................17

Paragon Finance Plc v. DB Thakerar, [1999] 1 All ER 400....................................................15

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Re South of England Natural Gas and Petroleum Co, [1911] 1 Ch. 573.................................19

Scally v. Southern Health and Social Services Board, [1992] 1 AC 294................................21

Scheme v. West Bromwich, [1998] 1 WLR 896.....................................................................21

Scheme v. West Bromwich, [1998] 1 WLR 896.....................................................................21

Shirlaw v. Southern Foundries Ltd., [1939] 2 K.B..................................................................21

Smith v. Chadwick, [1884] 9 App Cas 187.............................................................................17

Strive Shipping Corporation and Another v. Hellenic Mutual War Risks Association, [2002]
2 Lloyd’s Rep. 88.....................................................................................................................19

Su v. Clarksons Platou Futures Ltd., [2018] EWCA Civ 1115...............................................14

Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA, [2012] EWCA Civ 638.2 3

Royal British Bank v. Turquand (1856) 6 E&B 327……………………………………………

8

William Lacey (Hounslow) Ltd. v. Davis, [1957] W.LR. 932, 934 (Q.B.).............................19

XL Insurance Ltd. v. Owens Corning, [2001] All ER (Comm) 530....................................4, 10

SINGAPORE CASES

Aloe Vera Am. Inc. v. Asianic Food (S) Pte Ltd., [2006] SGHC 78.......................................10

PT First Media TBK v. Astro Nusantara International BV and others [2013] SGCA 57.......12

Daimler South East Asia Pte Ltd. v. Front Row Investment Holdings Pte Ltd., [2012] 4 SLR
837…………………………………………………………………………………………......9

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INDIAN CASES

Beejay Engineers Pvt. Ltd. In re., [1983] 53 Comp Cas 918.....................................................6

Jagjivan Hiralal Doshi v. Registrar of Companies, [1989] 65 Comp. Cas. 553 (Bom.)............6

Monark Enterprises v. Kishan Tulpule and Ors., [1992] Vol.74 CC 89....................................8

Official Liquidator, Manasube & Co. (P.) Ltd. v. Commissioner of police, [1968] 38 Comp.
884 (Mad)...................................................................................................................................8

Supreme Bank Ltd. v. P A Tendolkar [1973] 43 Comp Cas 382..............................................6

Unknown vs The Registrar Of Companies, (2017) Mad...........................................................7

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STATEMENT OF FACTS

R2 Detour, [“THE CLAIMANT”] is a company incorporated in England and Wales which

provides low-cost launch services. Shuttle-Up [“THE FIRST RESPONDENT”] is a start-up
company incorporated in India, specializing in the production of picosatellites, also known as
CubeSats. Morbus Capital LLP is an alternative investment fund that specializes in the
acquisition of distressed debt. Shuttle-Up and Morbus Capital are collectively the
RESPONDENTS.

The Claimant and the Respondents (“THE PARTIES”) entered into an Agreement called the
Launch Services Agreement (“THE LSA”) dated 13 November 2014.

DATE EVENTS

December 18, 2012 The FIRST RESPONDENT had secured a credit agreement of USD
400M with the SECOND RESPONDENT.

November 4, 2014 The FIRST RESPONDENT provided the CubeSat design plans and
specifications and reviewed the heads of the terms of LSA with
external counsel.

November 13, 2014 Dr. Julius Goh on behalf of the FIRST RESPONDENT executed the
LSA and down payment of GBP 40,000,000 was made.

December 20, 2014 The FIRST RESPONDENT expressed its concerns about invalid
execution of the LSA and reserved all rights to contest the validity
of the LSA in the future.

January 4, 2015 A newspaper article was published by Space UK News that

highlighted the increasing customer dissatisfaction against the

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CLAIMANT.

January 15, 2015 The RESPONDENT requested the CLAIMANT for design and
manufacturing contacts which are UK/US based.

January 12, 2018 The FIRST RESPONDENT incurred losses of GBP 7,000,000 for
services provided between 2015 and 2017.

December 12, 2018 The RESPONDENTS expressed their concern and dissatisfaction with
the design and manufacturing contacts provided between 2015-17
and the losses of GBP 7M incurred.

November 22, 2019 The CLAIMANT informed the FIRST RESPONDENT of the technical
incompatibility of the satellites with the internal systems.

July 5, 2021 The RESPONDENTS expressed their dissatisfaction with the

capabilities of the CLAIMANT and withheld the milestone payment.

August 8, 2021 The CLAIMANT demanded an immediate payment of GBP

88,300,000.

December 5, 2021 The FIRST RESPONDENT did not make the required payment and the
CLAIMANT refused to launch the picosatellites.

January 12, 2022 The Parties attempted to resolve the concerns amicably.

May 6, 2022 The Arbitral Tribunal [“the Tribunal”] framed the issues on the
substantive matter to be addressed in the forthcoming hearing

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commencing from April 14, 2022.

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MEMORANDUM for CLAIMANT STATEMENT OF FACTS

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ISSUES RAISED

WHETHER THE TRIBUNAL HAS JURISDICTION TO DECIDE THIS DISPUTE:

(A) WHAT IS THE APPLICABLE LAW TO DETERMINE WHETHER DR GOH HAD CAPACITY
TO EXECUTE THE LAUNCH SERVICES AGREEMENT?

(B) IF INDIAN LAW WERE THE APPLICABLE LAW TO DETERMINE WHETHER DR GOH
HAD CAPACITY, DID SHUTTLE-UP VALIDLY EXECUTE THE LAUNCH SERVICES
AGREEMENT?

II

WHETHER MORBUS CAPITAL IS A PARTY TO THE ARBITRATION AGREEMENT.

III

WHETHER THE RESPONDENTS’ CLAIMS ARE BARRED BY THE RELEVANT

LIMITATION PERIOD.

IV

IN THE EVENT THAT THE RESPONDENTS’ CLAIMS ARE NOT TIME-BARRED,

WHETHER THE CLAIMANT IS LIABLE FOR MISREPRESENTATION.

WHETHER THE ENTIRE LEGAL AND ARBITRATION COSTS SHALL BE BORNE BY THE
OTHER PARTY.

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MEMORANDUM for CLAIMANT ISSUES RAISED

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
MOOT, 2023

SUMMARY OF ARGUMENTS

I. THE TRIBUNAL HAS THE JURISDICTION TO DECIDE THIS DISPUTE.

The CLAIMANT submits that Tribunal has jurisdiction to decide the present dispute. A valid
arbitration agreement exists between the Parties as the agreement was duly signed by the
FIRST RESPONDENT. It is submitted that the Tribunal has the jurisdiction to decide this
dispute. The CLAIMANT submits that; first, the applicable law to decide whether Dr. Goh had
capacity to validly execute the agreement shall be the English law as it is the governing law
and the law of the seat. Since English law is in the closest connection to the LSA, it shall be
applied to decide upon the capacity of Dr. Goh to enter into the agreement; second, even if
Indian law were to be applied, the LSA has been validly executed as Indian Companies Act,
2013 does not distinguish between a part-time and full-time director. Furthermore,
authorization by board of director is required only for related party transactions under Indian
law and the present transaction was unrelated. And finally, by application of doctrine of
indoor management, the RESPONDENTS shall be held liable for valid execution of the LSA.

II. MORBUS CAPITAL SHOULD BE JOINED AS A PARTY TO THE

PROCEEDINGS.

The CLAIMANT submits that Morbus Capital shall be joined as a party to the proceedings. The
Parties exercising their procedural autonomy have adopted the SIAC Rules, and the same
shall govern the present issue; first, the Rule 7.1 of the SIAC Rules states that the parties to
the arbitration agreement shall be identified, either through their relation to the arbitration
agreement or their consent to arbitrate; and second, Morbus Capital has given its implied
consent to arbitrate as the Parties to the arbitration agreement shall be governed by the law
governing the arbitration agreement, i.e., English Law. English Law recognizes the relation
of third-party beneficiary to a contract, and by the virtue of the §1 r/w § 8 of the Rights of
Third Parties Act, 1999. Morbus Capital is a third-party beneficiary to the LSA and hence,
prima facie bound by the Arbitration Agreement. Therefore, the requirements of Rule 7.1 of
the SIAC Rules are satisfied, and the joinder shall be undertaken.

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III. THE RESPONDENTS’ CLAIMS ARE BARRED BY THE LIMITATION ACT,

1980.

The CLAIMANT submits that the claims of RESPONDENTS are barred by the Limitation Act,
1980 as: first, the RESPONDENTS acquired ‘sufficient knowledge’ in 2015 after they inquired
into their concerns and had gathered substantive knowledge to constitute a claim and be
reasonable enough to investigate further. The RESPONDENTS with reasonable diligence could
have discovered the alleged fraud earlier; and second, the cause of the action arose when the
RESPONDENTS acquired sufficient knowledge thereby, triggering the limitation period. The
Limitation Act, 1980 provides for a limitation period of six years to constitute a claim. The
RESPONDENTS failed to adhere to the prescribes time limit. Therefore, their claim is barred by
the Limitation Act, 1980.

IV. THE CLAIMANT IS NOT LIABLE FOR MISREPRESENTATION.

The CLAIMANT submits that no misrepresentation has been caused, thereby the CLAIMANT is
not liable for the same. It is submitted that first, there was no inducement on account of
misrepresentation to enter into the LSA, the LSA clearly laid down all the terms and there
were no additional inducements made by the CLAIMANT. Second, the RESPONDENTS were
made well aware about all the material facts before entering into any kind of transactions
with the contacts provided by the CLAIMANT. Third, the FIRST RESPONDENT shall not be
allowed to rescind the contract as it, by its conduct, affirmed the agreement. The FIRST
RESPONDENT even after discovering about the alleged misrepresentation, impliedly affirmed
the agreement and thereby it shall not be allowed to exercise rescission as a remedy to such
alleged misrepresentation.

V. THE ENTIRE LEGAL AND ARBITRATION COSTS SHALL BE BORNE BY THE

OTHER PARTY.

The CLAIMANT submits that the legal and arbitration costs shall be borne by the other party as
the applicable law i.e., the English law follows an outcome-based approach. The issue is
delineated into; first, § 61 of the Arbitration Act, 1996 aids the tribunals in issuing of costs.
The Act suggests that the costs shall be borne by the unsuccessful party; second, the

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RESPONDENTS shall bear the cost of their opportunistic and unfounded claims. The claims
lack in merit and were a tactic to indemnify the RESPONDENTS against the arbitration
proceeding initiated by the CLAIMANT; and third, the loser pays principle is the prevailing
norm in International Commercial Arbitration. Therefore, the RESPONDENTS shall bear the
legal costs of the CLAIMANT and other arbitration costs.

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ARGUMENTS ADVANCED

I. THE TRIBUNAL HAS THE JURISDICTION TO DECIDE THIS DISPUTE

[¶1] The CLAIMANT and the FIRST RESPONDENT entered into the LSA dated November 13,
2014.1 The Parties agreed that the LSA shall be governed as per the English law, 2 and any
dispute arising out of or in relation to the LSA shall be resolved by arbitration which shall be
governed by the SIAC procedural rules.3 The CLAIMANT submits that the Tribunal has the
jurisdiction to decide this dispute by the application of conflict of law rule. 4 The examination
of the issue shall be delineated into; first, English law shall be the applicable law to decide the
capacity of Dr. Goh to execute the LSA [A]; and second, the LSA was validly executed by the
FIRST RESPONDENT under the Indian law [B].

A. English law shall be the applicable law to decide the capacity of Dr. Goh to
execute the LSA

[¶2] It is submitted that this issue is governed by two laws, i.e., the law governing the
arbitration agreement and the procedural law. The arbitration agreement has a hybrid nature, 5
such that it governs both, the procedural framework of the proceedings and the substantive
rights of the parties.6 Therefore, the CLAIMANT contends the validity of the Tribunal on both
substantive and procedural grounds. The CLAIMANT submits that; first, the Tribunal has the
power to rule on its own jurisdiction [i]; second, the substantive validity and interpretation of
¶ 25 of the LSA shall be governed by the laws of England [ii]; and third, ¶ 1 of Clause 25 of
the LSA [“¶ 3”] is valid [iii].

I. THE TRIBUNAL HAS THE POWER TO RULE ON ITS OWN JURISDICTION

[¶3] It is submitted that the Tribunal decides upon its own jurisdiction. Jurisdiction of an
arbitral tribunal arises from a complex mixture of the will of the parties, the law governing the

1
Case Record, Exhibit C-1, p. 34.
2
Ibid.
3
Ibid.
4
Case record, Response to notice of arbitration, p. 21.
5
Klaus Peter Berger, Re-examining the Arbitration Agreement: Applicable Law – Consensus or Confusion?,
XIII KLUWER LAW INTERNATIONAL 302 (2006).
6
Samuel-Adam, JURISDICTIONAL PROBLEMS IN INTERNATIONAL ARBITRATION: A STUDY OF BELGIAN, DUTCH,
ENGLISH, FRENCH, SWEDISH, SWISS, US AND WEST GERMAN LAW, Schultess Polygraphischer Verling Zurich
39 (1st edn 1989).
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arbitration agreement, the law of the place of arbitration. 7 If the Tribunal is to decide on its
own jurisdiction, it must first assume that jurisdiction. This is what the doctrine of separability
allows it to do.8

[¶4] The usual practice under modern international and institutional rules of arbitration is to
spell out in express terms the power of an arbitral tribunal to decide upon its own jurisdiction,
or its competence to decide upon its own competence.9

[¶5] The arbitral tribunal as per the SIAC rules still holds a contract separable from the
main contract. “The Tribunal shall have the power to rule on its own jurisdiction, including
any objections with respect to the existence, validity or scope of the arbitration agreement.”10
It is submitted that the arbitration agreement has been validly constituted under the LSA and
the Tribunal therefore has the jurisdiction to decide over the present matter.

II. THE SUBSTANTIVE VALIDITY AND INTERPRETATION OF ¶ 25 OF THE LSA SHALL BE

GOVERNED BY THE LAWS OF ENGLAND

[¶6] The law governing the arbitration agreement governs the challenges regarding the
interpretation, the substantive validity of an arbitration agreement, and the substantive rights
of the Parties.11 In cases, where no specific choice by the Parties concerning the applicable
law for the arbitration agreement is provided, the issue of its substantive validity shall be
governed by the law of the seat.12

[¶7] The Tribunal is requested to find that the arbitration agreement is governed by the
laws of England. This shall be proved according to the three-step inquiry laid down in
Sulamerica.13 In the present case, the test is applied such that; the express choice of law in the
LSA extends to the arbitration agreement [a], the Parties have impliedly chosen the English

7
Alan Redfern et al, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION, Oxford University Press 313
(7th edn 2022).
8
Ibid.
9
Ibid.
10
§ 28.2, SINGAPORE INTERNATIONAL ARBITRATION CENTRE RULES 2016.
11
Piero Bernardini, Arbitration Clauses: Achieving Effectiveness in the Law Applicable to the Arbitration
Clause/ Improving the Efficiency of Arbitration Agreements and Awards, KLUWER LAW INTERNATIONAL
(1999).
12
Mauro Rubino-Sammartano, INTERNATIONAL ARBITRATION LAW AND PRACTICE, Juris Net Llc ( 3rd edn
2014).
13
Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA, [2012] EWCA Civ 638.
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law [b], and the laws of England have the closest connection with the arbitration agreement
[c].

a. The express choice of law in the LSA extends to the arbitration agreement

[¶8] The express choice of law provided in the LSA shall extend to the arbitration
agreement, as the doctrine of separability is inapplicable in the present case. The separability
doctrine does not necessarily mean that the law governing the arbitration agreement is
different from the one applicable to the underlying contract. 14 In BCZ,15 it was stated that the
doctrine of separability only applies to ensure the arbitration agreement’s validity, when the
underlying contract is vitiated. Additionally, this doctrine does not insulate the arbitration
agreement from the substantive contract for other purposes.16 The Parties reasonably expect a
single choice of law to apply to the entire contract, including the arbitration agreement, 17
especially when it is included in the underlying contract itself.18

[¶9] It is submitted that inclusion of Cl. 25 as governing law, 19 the Parties intended it to
extend to the contract and thereby also wanting to settle any dispute arising out of or in
relation to the agreement, in accordance with the governing law chosen. It is therefore
submitted that the governing law shall be applicable and be extended to the underlying
arbitration agreement contained in the LSA.20

b. Implied choice of the parties is the English law

[¶10] Art. V(1)(a) of the New York Convention [“NYC”], 1958, clearly states that the law
applicable to an arbitration agreement is; the law expressly chosen by the parties and failing
such choice, the law of the seat.21

14
Ronán Feehily, Separability in international commercial arbitration; confluence, conflict and the appropriate
limitations in the development and application of the doctrine, XXXIV OXFORD UNIVERSITY PRESS 355-383
(2018).
15
BCY v BCZ [2017] 3 SLR 357.
16
Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA, [2012] EWCA Civ 638.
17
AV Dicey, J H C Morris, et al., DICEY, MORRIS & COLLINS ON THE CONFLICT OF LAWS, London Sweet &
Maxwell (14th edn 2006).
18
Trukhtanov, The proper law of arbitration agreement – A farewell to implied choice?, INTERNATIONAL
ARBITRATION LAW REVIEW 142 (2012).
19
Case Record, Exhibit C-1, p. 45, Cl. 25.
20
Ibid.
21
Art. V(1)(a), NEW YORK CONVENTION 1958
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[¶11] In Enka,22 the Hon’ble UK SC upheld the three-stage inquiry of Sulamérica,23 and
clarified the position of law on ‘implied choice’. It was held that in absence of parties’ express
choice of law applicable to the arbitration agreement, the law governing the underlying
contract will be presumed as parties’ implied choice.

[¶12] In C/D,24 and Owens,25 it was held that the choice of the seat implies that the Parties
wanted the law of that seat to govern their arbitration agreement. The Parties’ implied choice
of law applicable to the arbitration agreement, in absence of an express choice of any law to
govern the arbitration agreement is the law of the seat of arbitration. 26 Arbitration Act 1996, §
46(2),27 provides that for this purpose the choice of the laws of a country shall be understood
to refer to the substantive laws of that country and not its conflict of law rules.

[¶13] It is submitted that in present case, the governing law chosen by the parties is the
English law,28 as well as the seat of arbitration is London. 29 Hence, the Parties have impliedly
chosen to subject the arbitral proceedings to the English law and therefore, it shall be the
applicable law to decide over present dispute.

c. The English Law has the closest connection with the arbitration clause

[¶14] The UK SC in Enka,30 held that the law applicable to the arbitration agreement shall,
in absence of implied choice, be the system of law with which the arbitration agreement is
most-closely and significantly connected, which is the law of the seat. 31 Moreover, in C/D,32
the court stated that the arbitration agreement will be most-closely and significantly connected
with the seat where the arbitral proceeding will be conducted, rather than with the law
governing the underlying contract, as the Parties have specifically chosen to arbitrate in that
selected place. Furthermore, the law of the seat governs the procedural framework of the
entire arbitration, and hence, is closely connected with the arbitration agreement. 33
22
Enka v. Chubb, [2020] UKSC 38.
23
Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA, [2012] EWCA Civ 638.
24
C v. D, [2007] EWCA Civ 1282.
25
XL Insurance Ltd. v. Owens Corning, [2001] All ER (Comm) 530.
26
Sapna Jhangiani, Conflicts of Law and International Commercial Arbitration – Can Conflict Be Avoided?, II
BCDR INTERNATIONAL ARBITRATION REVIEW 105 (2015).
27
The Arbitration Act, 1996, § 46, No. 26, British Acts of Parliament, 1996 (England).
28
Case Record, Exhibit C-1, p. 45. Cl. 25.
29
Ibid.
30
Enka v. Chubb, [2020] UKSC 38.
31
Ibid.
32
Supra note 24.
33
Gordon Smith, Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral Rules,
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[¶15] In present case, the Parties have explicitly chosen London as the seat of arbitration, 34
therefore, bringing the English law in closest connection to that of the arbitration agreement.
It is therefore submitted that English law shall be the applicable law to decide over the
dispute.

III. ¶ 1 OF CLAUSE 25 OF THE LSA IS VALID

[¶16] It is submitted that the arbitration clause contained in the LSA is valid. 35 In keeping
with the principle established in Fiona Trust & Holding Corp v Privalov,36 the court cited that
“unless the language of an arbitration clause made it clear that certain questions were
intended to be excluded from the arbitrator's jurisdiction, it was to be assumed that the
parties, as rational businessmen, were likely to have intended any dispute arising out of the
relationship into which they had entered.” The English courts will assume that commercial
parties intended any dispute arising from their relationship to be resolved in a single forum.

[¶17] Art. II (3) of the NYC states that an arbitration agreement can be declared invalid if
the agreement is ‘null and void’.37 This provision lays the fundamental grounds for
invalidating the arbitration agreement.38 The grounds encompassed under ‘null and void’,
include general applicable non-discriminatory rules of contract law, violation of applicable
law, public policy requirements, or violation of basic principles of arbitration.

[¶18] It is submitted that arbitration agreement executed by the Parties is valid and does not
fulfil any ground to be declared null and void. Additionally, the arbitration clause is severable
and capable of being read and enforced independently. It is therefore requested that the LSA
is valid and the arbitration clause in ¶ 1 of clause 25 of the LSA,39 is valid.

B. The LSA was validly executed by the FIRST RESPONDENT under the Indian law

[¶19] It is submitted that by the application of Indian Law, Dr. Goh had the capacity to enter
into the LSA and therefore, the agreement is validly executed. The issue shall be delineated
into; first, the capacity of part-time director is same as that of other directors [i]; second,
XXXV JOURNAL OF INTERNATIONAL ARBITRATION, KLUWER LAW INTERNATIONAL 130 (2018).
34
Supra note 28.
35
Ibid.
36
Fiona Trust & Holding Corp v. Privalov [2007] Bus LR 1719.
37
Art. II (3), NEW YORK CONVENTION, 1958.
38
Alan Redfern et al, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION, Oxford University Press (6th
edn 2015).
39
Supra note 28.
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authorization is not needed for entering into transactions entered into ordinary course of
business [ii]; and third, the contract is valid and binding as per the doctrine of indoor
management [iii].

I. THE CAPACITY OF PART-TIME DIRECTOR IS SAME AS THAT OF OTHER DIRECTORS

[¶20] In Indian law, the Companies Rules, 2014 construes concept of executive director
under Rule 2(k).40 The Act does not seek to define who is or who is not a part-time director.
Companies Act, 2013 makes no distinction between a full time and a part-time director. 41

[¶21] In Jagjivan Hiralal Doshi v. Registrar of Companies, the court held that “the plain
meaning of director is the person occupying the position of director, call him a part time
director or a full-time director.”42 The rules of construction do not call for any modification or
qualification of this meaning. ‘Any director’ is an officer of the company. The Legislature
which defined the word ‘officer’ has made no distinction based on full time and part time
performance of duty.

[¶22] In the matter of proceedings of negligence, default, breach of duty, misfeasance and
breach of trust, the Act and the rules admit of no distinction between members of the Board of
directors based on their part time or full-time performance of duties. 43 In Supreme Bank Ltd.
v. P A Tendolkar, the Supreme Court held that “a director cannot shut his eyes to what must
be obvious to everyone who examines the affairs of the company even superficially.”44

[¶23] No distinction can be drawn amongst the directors for fastening the liability or
granting a relief from the liability on the consideration that a person is on the Board purely by
virtue of his technical skill or because he represents certain special interests and there are
other directors who are in effective control of the management and affairs of the company. 45

[¶24] It is submitted that Indian law provides similar powers and liability to non-executive
as well as the executive directors. There is no such distinction provided between these two in
the Indian law.46 Therefore, by virtue of it, Dr. Goh had the capacity to enter into the LSA on

40
Companies (Appointment and Qualification of Directors) Rules, 2014, § 2(k) (India).
41
G.K Kapur, COMPANY LAW AND PRACTICE, Taxmann Publications Pvt. Limited 444 (15th edn 2009).
42
Jagjivan Hiralal Doshi v. Registrar of Companies, [1989] 65 Comp. Cas. 553 (Bom.).
43
Supra note 41.
44
Supreme Bank Ltd. v. P A Tendolkar [1973] 43 Comp Cas 382.
45
Beejay Engineers Pvt. Ltd. In re., [1983] 53 Comp Cas 918.
46
Supra note 41.
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behalf of the RESPONDENT even if he was only a part-time, 47 non-executive director. It is

therefore submitted that the agreement was validly executed by the R ESPONDENT and is
therefore, binding on them.

II. AUTHORIZATION IS NOT NEEDED FOR ENTERING INTO TRANSACTIONS IN ORDINARY

COURSE FF BUSINESS

[¶25] It is submitted that no authorization is needed for entering into transactions in ordinary
course of business. Ordinary course of business is defined as the transaction of business
according to the usages and customs of the commercial world generally or of the particular
community or of the particular individual whose acts are under consideration.48

[¶26] While directors have the authority to regulate the affairs of the company collectively
as Board, their duties of good faith and fair dealings are owed by each director individually. 49
While authorization is required for entering into transactions with related parties, 50 the Act,51
clearly states that § 188 is not applicable on transactions if they are made in normal course of
business and are at Arm Length Price.52

[¶27] The Hon’ble court in Unknown vs The Registrar of Companies,53 observed that
transactions made in ordinary course of business are exempted from the ambit of § 188(1) of
the Companies Act, 2013.54 It is submitted that the LSA was entered into by parties in
exercise of their ordinary course of business. There was no related agreement between the
parties and therefore the LSA is outside the ambit of application of § 188 of Companies Act,
2013.55 Furthermore, in such case, it is nowhere mentioned that agreements entered need
approval of the board.

[¶28] The RESPONDENT executed the LSA through Dr. Goh who was acting as a part-time
director,56 but was nonetheless a representative of the company. Additionally, the
RESPONDENTS went ahead with performance of the agreement, which proves that the
47
Case record, Dramatis Personae, p. 3.
48
BRIAN A. GARNER, BLACK'S LAW DICTIONARY (8th ed. 2004).
49
Supra note 41.
50
The Companies Act, 2013, § 188, No. 18, Acts of Parliament, 2013 (India).
51
Ibid.
52
Ibid.
53
Unknown vs The Registrar Of Companies, (2017) Mad.
54
Supra note 50.
55
Ibid.
56
Case Record, Dramatis Personae, p. 3.
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RESPONDENTS impliedly ratified the Agreement which was executed by Dr. Goh. Therefore, it
is submitted that the LSA did not need authorization of board of directors under § 188 of the
Companies Act.57 Dr. Goh being a part-time director, and in same capacity as that of other
directors,58 validly executed the LSA.

III. THE CONTRACT IS VALID AND BINDING AS PER THE DOCTRINE OF INDOOR
MANAGEMENT

[¶29] It is submitted that as per the doctrine of indoor management, the LSA is valid and is
binding on the RESPONDENTS. Doctrine of indoor management holds that a third party dealing
with a company is entitled to assume that the internal procedures required to authorize the
transaction have been properly observed.59 An outsider “is presumed to know the constitution
of a company; but not what may or may not have taken place within the doors that are closed
to him.”60

[¶30] In case of Official Liquidator, Manasube & Co. (P.) Ltd. v. Commissioner of police,61
the learned judge observed that the lender to a company should acquaint themselves with
memorandum and articles but they cannot be expected to embark upon an investigation as to
legality, propriety and regularity of acts of directors.

[¶31] In Monark Enterprises v. Kishan Tulpule and Ors.,62 the Company Board held that
“the validity of the impugned transaction was not affected even if no resolution for entering
into it was actually passed by the board of the company as the company had entered into and
adopted the transaction throughout and implemented it after receiving consideration thereof.”

[¶32] It is submitted that the execution of the LSA by Dr. Goh was suggested by the
RESPONDENTS,63 therefore, leading the CLAIMANT to go ahead with the execution with the
assumption that Dr. Goh was in lawful capacity to execute the contract validly. It is therefore
submitted that by the application of doctrine of indoor management in consonance with the
Indian Law, the LSA is binding and is validly executed.

57
Supra note 50.
58
Supra note 41.
59
Royal British Bank v. Turquand (1856) 6 E&B 327.
60
Pacific Coast Coal Mines Ltd. v. Arbuthnot, 1917 AC 607.
61
Official Liquidator, Manasube & Co. (P.) Ltd. v. Commissioner of police, [1968] 38 Comp. 884 (Mad).
62
Monark Enterprises v. Kishan Tulpule and Ors., [1992] Vol.74 CC 89.
63
Case Record, Exhibit C-5, p. 58.
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II. MORBUS CAPITAL SHOULD BE JOINED AS A PARTY TO THE PROCEEDINGS

[¶33] The CLAIMANT has submitted a motion for joinder of Morbus Capital in the present
proceedings, pursuant to Rule 7.1 of the SIAC Rules. This issue is delineated into; first, the
SIAC Rules govern this issue [A]; and second, Morbus Capital is prima facie bound by the
arbitration agreement [B].

A. The SIAC Rules govern this issue.

[¶34] It is contended that in non-signatory joinder cases, substantive and procedural issues
frequently project on each other. 64 The substantive aspect of the issue, i.e., ‘who are the
parties,’ is to be answered using the principle by which a ‘non-signatory party’ can be
considered to be bound by the arbitration clause, and governed by the law governing the
arbitration agreement.65 Subsequently, the procedural aspect, i.e., the ‘administration’ of the
joinder, shall be governed by institutional rule. 66 Therefore, the procedural aspect of the
Joinder shall be governed by Rule 7.1 of SIAC [i] and English law governs the parties to the
agreement [ii].

I. THE PROCEDURE OF THE JOINDER SHALL BE GOVERNED BY THE RULE 7.1 OF THE SIAC

[¶35] The principle of party autonomy empowers the parties to agree upon their choice of
procedural laws and rules for governing the internal arbitral procedures, which can be
different from the law of the seat of the arbitration.67 The adopted institutional rules shall then
govern all the procedures.68

[¶36] In the present case, both the parties have mutually agreed that all the disputes shall be
resolved in accordance with the SIAC Rules, 69 and the present motion has been submitted
under Rule 7.1 of the SIAC Rules. Hence, the present joinder will be governed by Rule 7.1 of
the SIAC Rules, and the ingredient laid down therein of the identification of the parties to the
arbitration agreement has to be fulfilled.
64
Julian David Mathew Lew QC, COMPARATIVE INTERNATIONAL COMMERCIAL ARBITRATION, Kluwer Law
International (1st edn 2003).
65
Manuel Gómez Carrión, Joinder of third parties: new institutional developments, XXX1 OXFORD
UNIVERSITY PRESS 479-505 (2015).
66
Gordon Smith, Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral Rules,
XXXV JOURNAL OF INTERNATIONAL ARBITRATION, KLUWER LAW INTERNATIONAL 173-202 (2018).
67
Daimler South East Asia Pte Ltd. v. Front Row Investment Holdings Pte Ltd., [2012] 4 SLR 837.
68
Klaus Peter Berger, Re-examining the Arbitration Agreement: Applicable Law – Consensus or Confusion?,
XIII KLUWER LAW INTERNATIONAL 335-364 (2006).
69
Case Record, Exhibit C-1, p. 45, Cl. 25.
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II. THE ENGLISH LAW GOVERNS THE PARTIES TO THE AGREEMENT

[¶37] In Aloe Vera Am. Inc. v Asianic Food (S) Pte Ltd., it was stated that the question of the
identity of the parties to the arbitration agreement, can be answered through the interpretation
of the arbitration agreement and by understanding its basis of formation and existence. 70 A
party that is not directly bound by the arbitration agreement, can be deemed to be bound on
the basis of the applicable rules of contract and commercial law. 71 Thus, the present case shall
be governed by the law governing the arbitration agreement.

[¶38] Art. V(1)(a) of the NYC,72 and the Art. 34(2)(a)(i) of UNCITRAL, 73 provide that when
the parties have not expressly chosen any applicable law to the arbitration agreement, the law
of the seat will impliedly govern the arbitration agreement. 74 Moreover, in Enka v. Chubb, it
was held that, the law applicable to the arbitration agreement shall be the one which is most-
closely and significantly connected to the arbitration, i.e., the law of the seat. 75 In the present
case, the Parties have not explicitly chosen any law to govern the arbitration agreement, 76 but
have selected London, England as the arbitral seat. 77 Thus, English law will govern the
Arbitration Agreement.

B. Morbus Capital is prima facie bound by the Arbitration Agreement

[¶39] The CLAIMANT respectfully requests the Tribunal to adjudge that Morbus Capital is
prima facie bound by the arbitration agreement and should be joined in the present
proceedings as; Morbus Capital is a ‘true’ party to the arbitration agreement [i]; the present
circumstances are in favour of the joinder [ii]; and, the requirements of Rule 7.1 of the SIAC
Rules are satisfied [iii].

I. MORBUS CAPITAL IS A ‘TRUE’ PARTY TO THE ARBITRATION AGREEMENT

[¶40] An arbitration agreement is not said to be ‘extended’ to the other parties, rather ‘true’
parties are to be identified, and made bound by the agreement. 78 Whether a party is bound by
70
Aloe Vera Am. Inc. v. Asianic Food (S) Pte Ltd., [2006] SGHC 78.
71
Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs Pakistan, [2010] UKSC 46.
72
Art. V(1)(a), NEW YORK CONVENTION 1958.
73
Art.34(2)(a)(i), UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION
1994.
74
XL Insurance Ltd. v. Owens Corning, [2001] All ER (Comm) 530.
75
Enka v. Chubb, [2020] UKSC 38.
76
Supra note 69.
77
Ibid.
78
Gary Born, INTERNATIONAL COMMERCIAL ARBITRATION, Wolters Kluwer (3rd edn 2020).
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the agreement for the purpose of joinder is subject to a prima facie test, which has been
universally adopted by several institutional rules, including SIAC.79

[¶41] This prima facie test provides that it is adequate if proven that a reasonable possibility
might exist of the third party being involved in the arbitration agreement. 80 It is humbly
submitted that Morbus Capital is prima facie bound by the arbitration agreement as: Morbus
Capital is a third-party beneficiary of the LSA [a]; and there is an implied consent to arbitrate
[b].

a. Morbus Capital is a third-party beneficiary of the LSA

[¶42] § 1(1) of the Rights of Third Parties Act, 1999, [“TPA”] provides that a non-signatory
to a contract can be granted the rights of that contract as a third-party beneficiary, and be
bound by the obligations therein.81 Subsequently, § 1(3) of TPA states that such a third party
has to be identified in the contract either expressly or impliedly through its description. 82

[¶43] In the present case, Clause 1 of the LSA, clearly defines the Related Third Parties,
which excludes any investor or financer of Shuttle-Up. 83 Subsequently, the CLAIMANT did not
waive the right to sue under Waivers clause. 84 Therefore, following the description of Related
Third Parties, Morbus Capital was included as a third-party in the LSA who can be sued,
thereby satisfying the essentials of §1(1) r/w §1(3) of the TPA.

[¶44] Also, § 8 of the TPA, provides that when rights conferred u/s. 1 are subjected to a
valid arbitration agreement, the third-party beneficiary shall be considered as a party to that
arbitration agreement.85 In Nisshin Shipping, it was held that when a third-party cannot be
identified even after proper construction of the arbitration agreement, then the third-party’s
right and obligations can be made enforceable in an arbitration proceeding, by the conjoint
reading of § 1 and § 8 of the TPA.86

79
Alastair Henderson, Lex Arbitri, Procedural Law And The Seat Of Arbitration: Unravelling the Laws of the
Arbitration Process, SINGAPORE ACADEMY OF LAW JOURNAL 95-196 (2014).
80
Andrea Meier, Commentary on the ICC Rules, Introduction to Articles 7–10 ICC Rules, in Arbitration in
Switzerland: The Practitioner’s Guide, KLUWER LAW INTERNATIONAL (2013).
81
The Rights of Third Parties Act, 1999, § 1(1), No. 31, British Acts of Parliament, 1999 (England).
82
Ibid.
83
Case Record, Exhibit C-1, p. 37.
84
Case Record, Exhibit C-1, p. 40, Cl. 7.1.
85
The Rights of Third Parties Act, 1999, § 8, No. 31, British Acts of Parliament, 1999 (England).
86
Nisshin Shipping Co. Ltd. v. Cleaves & Co Ltd., [2003] EWHC Comm. 2602.
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[¶45] In the present case, the LSA contains an arbitration agreement, 87 and the arbitration
agreement in itself does not identify the parties, however, provides for a dispute resolution
mechanism amongst the parties to the underlying contract. 88 Thus, Morbus Capital is prima
facie bound to the arbitration clause as a third-party beneficiary.

b. There is an implied consent to arbitrate

[¶46] The joinder can be undertaken based on the Parties’ implied consent to arbitrate. 89 The
implied consent can be ascertained from the provisions of the contract and the intention of the
parties.90 Where the parties have indulged in the same commercial transaction, a similar
course of dealings, having connected contractual obligations, they can be considered as
impliedly bound by the arbitration agreement and accepting joinders.91

[¶47] In the present case, the LSA was signed to ensure the launch of Shuttle-Up’s
CubeSats.92 Additionally, Morbus Capital provided a USD 400 million credit facility for
Shuttle-Up’s operations.93 Dr. Taniya Vaidya also assisted Shuttle-Up to introduce them to
various manufacturing and design companies specializing in space objects. 94 This
demonstrates that entire commercial transactions and business dealings are intricately related
between three parties, i.e., the CLAIMANT, the RESPONDENT and Morbus Capital.

[¶48] The adoption of SIAC Rules itself constitutes a consent to joinders and request for
joinder should not be rejected only because the party was not a party to the arbitration
agreement.95 In the PT First Media case,96 it was stated that consent in any form is sufficient to
negate the contentions raised that there was no consent to arbitrate by and with the party to be
joined.97 In the present case, the parties have submitted to the SIAC Rules, 98 and these

87
Supra note 69.
88
Ibid.
89
Bernard Hanotiau, COMPLEX ARBITRATION: MULTI-PARTY, MULTI-CONTRACT AND MULTI-ISSUE,
International Arbitration Law Library Wolters Kluwer 311-360 (2nd edn 2020).
90
Stavros Brekoulakis et al, The Evolution and Future of International Arbitration, INTERNATIONAL
ARBITRATION LAW LIBRARY 119 – 160 (2016).
91
Gary Born, INTERNATIONAL COMMERCIAL ARBITRATION, Wolters Kluwer (3rd edn 2020).
92
Case Record, Exhibit C-1, p. 35.
93
Case Record, Exhibit C-6. p. 60.
94
Case Record, First Witness Statement of Dr Vaidya, p. 27, Cl. 8.
95
N Voser, Multi-party Disputes and Joinder of Third Parties, KLUWER LAW INTERNATIONAL (2009).
96
PT First Media TBK v. Astro Nusantara International BV and others [2013] SGCA 57.
97
Ibid.
98
Supra note 69.
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institutional rules have the provision for joinders. 99 Hence, the adoption of such rules
showcase the implied consent of Morbus Capital for joinder.

[¶49] Therefore, the CLAIMANT submits that given the same commercial transaction, similar
course of dealings and the parties choose to be procedurally governed by the SIAC Rules,
RESPONDENT and Morbus Capital both have impliedly agreed that Morbus Capital has
consented to be party to the present arbitration agreement and to be joined as an additional
party to the present proceedings.

II. THE PRESENT CIRCUMSTANCES ARE IN FAVOUR OF THE JOINDER

[¶50] Joinder of a third party increases procedural efficiency by reducing the possibility of a
conflicting award and total cost. 100 Moreover, the joinder of a third-party help in an extensive
assessment of the dispute, and produce an appropriate award, especially when the parties and
the contractual transaction are closely related.

[¶51] In the instant case, when the claim was raised, Morbus Capital was still under the
credit facility Agreement.101 This shows the intricate connection of Morbus Capital, and that
the joinder will help in rendering a comprehensive award. Thus, the present circumstances are
in favour of the joinder.

III. THE REQUIREMENTS OF RULE 7.1 OF THE SIAC RULES ARE SATISFIED

[¶52] Rule 7.1 of the SIAC Rules lays down the provision of conducting a joinder of
parties.102 It provides two-step test that, the party is prima facie bound by the arbitration; and
all the parties including the party to be joined consent to the joinder.103

[¶53] In the present case, Morbus Capital comes under the ambit of a third-party beneficiary
relationship by the virtue of applicable legal doctrines and the TPA, and hence, is prima facie
bound by the arbitration clause. Additionally, it is submitted that the procedure of joinder
under the LSA, and the intricacies of the commercial transaction at its entirety, shall be
governed by SIAC rules. The R ESPONDENTS have impliedly consented to be bound by the

99
Rule 7.1, SINGAPORE INTERNATIONAL ARBITRATION CENTRE 2016.
100
Gordon Smith, Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral
Rules, XXXV JOURNAL OF INTERNATIONAL ARBITRATION, KLUWER LAW INTERNATIONAL 173 – 202 (2018).
101
Supra note 93.
102
Rule 7.1, SINGAPORE INTERNATIONAL ARBITRATION CENTRE 2016.
103
Ibid.
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arbitration agreement, and thereby have also consented to the motion of the joinder. Thus, as
the conditions under Rule 7.1 of SIAC Rules are satisfied, the joinder shall be valid.

III. THE RESPONDENTS’ CLAIMS ARE BARRED BY THE LIMITATION ACT, 1980

[¶54] The CLAIMANT submits that the claim put forth by the R ESPONDENTS of alleged
misrepresentation is barred by the Limitation Act, 1980 or any other relevant act. The
examination of the present issue shall be delineated into; first, the cause of action arose when
the Respondent acquired ‘sufficient knowledge’ [A]; and second, the limitation period was
triggered immediately after the cause of action arose [B].

A. The cause of action arose when the RESPONDENTS acquired ‘sufficient

knowledge’

[¶55] It is submitted that the claim of alleged misrepresentation made by the CLAIMANT to
induce the FIRST RESPONDENT to enter into the LSA are false and deceptive. The CLAIMANT
did not make any misrepresentation and actively informed the R ESPONDENTS of the various
relevant details. However, the claims of alleged misrepresentation are barred by the
Limitation Act, 1980 as the RESPONDENT acquired sufficient knowledge to plead the claim in
2015.

[¶56] In Su v Clarksons Platou Futures Ltd.,104 the Court of Appeal emphasised that “while
it would require more than mere suspicion of the facts about the damage, it would be
‘sufficient’ if the claiming party knew enough for it to be reasonable to begin further
investigation.” A CLAIMANT will have discovered a fraud when he is aware of sufficient
material properly to be able to plead it.105

[¶57] In European Real Estate Debt Fund (Cayman) Ltd v Treon and others,106 a fraud claim
was concerned under § 32(1)(a) where it was alleged that the defendants had fraudulently
misrepresented the financial position of a care home business and had induced the fund to
make a principal investment of £11 million. The defendants claimed that the action was time-
barred as it had commenced more than six years after the date of the principal investment. The
court affirmed. “A reasonably diligent investor, when it reviewed the financial information

104
Su v. Clarksons Platou Futures Ltd., [2018] EWCA Civ 1115.
105
Law Society v. Sephton and Co., [2004] EWCA Civ 1627.
106
European Real Estate Debt Fund (Cayman) Ltd v. Treon and Ors., [2021] EWHC 2866 (Ch).
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provided to it before the investment, would have been put sufficiently on inquiry to ask some
basic questions and demand further information.”107

[¶58] In Libyan Investment Authority v Credit Suisse International and others,108 the Libyan
Investment Authority alleged that certain transactions had been procured by bribery or undue
influence. The court summarily ruled that the claims were time-barred. It held that the
“Libyan Investment Authority had been in possession of ‘sufficient information’ and had
opportunities to make enquiries to enable it to discover the relevant facts at an earlier stage
than it had asserted.”

[¶59] The RESPONDENTS claim that they discovered about the delay in 10 th launch due to
‘regulatory issues and concerns’ through a newspaper article dated 17 December 2014. 109
Furthermore, in 2015, Ms. Korzenski inquired into the matter concerning significant
dissatisfaction among the other market players regarding the CLAIMANT’s services and
capabilities.110

[¶60] The CLAIMANT submits that the RESPONDENTS had inquired into their concerns and
had gathered substantive knowledge to constitute a claim and be reasonable enough to
investigate further. The question is not whether the RESPONDENTS should have discovered the
fraud, but whether they could have with reasonable diligence.111 The burden of proof is on the
RESPONDENTS to establish that it could not have discovered the fraud without exceptional
measures which it could not reasonably have been expected to take. 112 Therefore, the
RESPONDENTS acquired ‘sufficient knowledge’ in 2015 to enable it to plead a claim
concerning the alleged misrepresentation. However, the RESPONDENTS decided to refrain from
acting.

B. The Limitation Period was triggered immediately after the cause of action arose

[¶61] The CLAIMANT contends that the limitation period was triggered immediately after the
cause of action arose in 2015. Limitation period commences at the time the cause of action
accrues to the party so claiming, which refers to the earliest time that legal proceedings could

107
Ibid.
108
Libyan Investment Authority v. Credit Suisse International and Ors., [2021] EWHC 2684 (Comm).
109
Case Record, Exhibit R-5, p. 76.
110
Case Record, Exhibit R-6, p. 77.
111
Boyse (International) Ltd v. NatWest Markets plc and Anr., [2021] EWHC 1387 (Ch).
112
Paragon Finance Plc v. DB Thakerar, [1999] 1 All ER 400.
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have been brought.113 In Boyse (International) Ltd v NatWest Markets plc and another, the
Chief Master had described a “trigger” as the point in time from which the limitation period
began to run, because the necessary facts to plead a case where available to the CLAIMANT.114

[¶62] § 2 and 32 of the Limitation Act, 1980 provides that “claims for fraud must be made
within six years of the date the cause of action accrued. Time does not begin until the fraud
has, or with reasonable diligence would have been, exposed, if the defendant purposely covers
any fact relevant to the cause of action.”115 The limitation period will only commence when
the RESPONDENT becomes aware of these relevant facts, or the date that he or she should have
become aware of them giving rise to the cause of action. 116 Every fact to satisfy each essential
ingredient required to commence an action must have happened before time on the limitation
period begins to run.117

[¶63] The RESPONDENTS acquired ‘sufficient knowledge’ to plead a claim regarding the
alleged fraudulent misrepresentation in 2015, thereby causing accrual. The limitation period
was therefore triggered in 2015 immediately after the cause of action arose. The limitation
period continued for a period of six years as is prescribed under §2 of the Limitation Act,
1980.118 It was in 2021 that the remedy of the RESPONDENTS to bring a claim ceased to exist.

[¶64] The RESPONDENTS, however, brought their claim in response to notice of arbitration
dated March 14, 2022 which is far beyond the limitation period. The CLAIMANT submits that
the claim of alleged misrepresentation is outside the limitation period prescribed by the
Limitation Act, 1980 and is therefore, barred by the Act.

IV. THE CLAIMANT IS NOT LIABLE FOR MISREPRESENTATION

[¶65] The CLAIMANT submits that there has been no misrepresentation on CLAIMANT’s part
as contested by the RESPONDENTS. The CLAIMANT strongly contends that they are not liable
for any kind of misrepresentation whatsoever and that the R ESPONDENT shall not be eligible to
rescind the LSA on the same ground, and requests the Tribunal to find the same as; first, the
RESPONDENT are not entitled to avoid the LSA on account of misrepresentation [A]; second,

113
Supra note 111.
114
Ibid.
115
Limitation Act, 1980, §2, 32, No. 58, British Acts of Parliament, 1980 (England).
116
Hall Ellis Solicitors, https://hallellis.co.uk/rescission-contract-law-meaning/ (last visited March 31, 2023).
117
Ibid.
118
Limitation Act, 1980, § 2, No. 58, British Acts of Parliament, 1980 (England).
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the RESPONDENT was made well aware of the facts before there was any kind of payment
made for the third party service [B]; and third, the RESPONDENTS are not entitled to recover
the miscellaneous payments made to third parties under an implied term [C].

A. The RESPONDENTS are not entitled to avoid the LSA on account of

misrepresentation.

[¶66] In Derry,119 misrepresentation was defined as an untrue statement of fact made by one
party to the other in the course of negotiating a contract, that induces the other party to enter
into the contract. It is submitted that the RESPONDENT is not entitled to avoid the LSA as;
there was no inducement on basis of material facts [i] and, the RESPONDENT is not permitted
to rescind the LSA [ii].

I. THERE WAS NO INDUCEMENT ON BASIS OF MATERIAL FACTS

[¶67] The person is said to be induced if he relied on non-disclosure of a fact and entered
into the contract.120 In Pan Atlantic,121 it was stated that materiality of the facts is ascertained
through the effect it has on the mind of the insurer in assessing the risk and not his willingness
to enter into the contract. Additionally, the duty of disclosure is limited to the facts that the
assured reasonably thinks are material to the subject matter, 122 such that when examined, it
must be of the nature of a “material inducement”.123

[¶68] In Smith v. Chadwick,124 the English court was of the opinion that to be actionable, the
misrepresentation must influence a party in deciding whether or not to enter into the contract.
Thus, misrepresentation is not actionable if representee did not allow it to affect their
judgement.125 Furthermore, if a statement has been incorporated as a term and the person fails
to comply with the statement, then there is an automatic right to damages for the breach of
contract. In the event that the statement has not been incorporated as a term but as a
representation, there is not an automatic right to damages if the representation turns out to be
untrue.126

119
Derry v. Peek, [1889] 14 App Cas 337.
120
Hugh Beale, CHITTY ON CONTRACTS, Sweet & Maxwell Ltd. (30th edn 2014).
121
Pan Atlantic Ins. Co Ltd. v. Pine Top Ins. Co., [1995] 1 A.C. 501.
122
J. Beatson, ANSON’S LAW OF CONTRACT, Oxford University Press 335 (28th edn 2002).
123
Edgington v. Fitzmaurice, [1882] 29 Ch. D 459.
124
Smith v. Chadwick, [1884] 9 App Cas 187.
125
Atwood v. Small, [1838] 6 Cl & F 232.
126
Hedley Byrne & Co Ltd v. Heller & Partners, [1964] AC 465.
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[¶69] In the present case, the CLAIMANT during the negotiations presented all the facts
which were material for entering into an agreement with the R ESPONDENT. Also, the forward-
looking estimations that the CLAIMANT made, it was very well clarified that the CLAIMANT
didn’t assure regarding their confirm materialization and that the outcomes may differ. 127
Additionally, the RESPONDENTS’ contention regarding having a good business network that
might be helpful for the FIRST RESPONDENT was an additional benefit marked by the
CLAIMANT which was neither a term nor a promised perk of the LSA. Also, there was no
misrepresentation in the statement where CLAIMANT claimed to have substantial prior
experience in launch services, since same was true.

[¶70] The representation made by the CLAIMANT was not a material fact or a condition
which induced the RESPONDENT to enter into the LSA with the CLAIMANT. The
representations made by the CLAIMANT were not the inducements which led the R ESPONDENT
to enter into the LSA, rather it was the comparatively low-cost launch services which the
CLAIMANT was providing to the RESPONDENT for which the RESPONDENT entered into the
LSA. Thus, there was no misrepresentation of any sort. Hence, the CLAIMANT is not liable for
any misrepresentation as the fact was not material in nature and there was no inducement on
the basis of false statement or claims in form of additional perks.

II. THE RESPONDENT IS NOT PERMITTED TO RESCIND THE LSA

[¶71] It is submitted that the RESPONDENT shall not be entitled to rescind the contract. The
RESPONDENT cannot rescind a transaction which he or she has affirmed. Two conditions must
be satisfied before the transaction can be considered to have been affirmed. First, the
CLAIMANT must know of the circumstances which enable him or her to rescind the
transaction, as will be the case where the CLAIMANT discovers that he or she was induced to
enter into the contract by virtue of the defendant’s misrepresentation.128
[¶72] Secondly, the RESPONDENT must unequivocally show by words or conduct that he or
she has decided not to rescind the contract. 129 It is not necessary for the R ESPONDENT to
communicate this affirmation to the defendant. 130 In Sharpley v Louth and East Coast Railway

127
Case Record, Exhibit C-3, p. 51.
128
Car and Universal Finance Co. Ltd. v. Caldwell, [1965] 1 QB 525.
129
Clough v. London and North Western Railway Co., (1871) LR 7 Exch 26.
130
Supra note 128.
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Co,131 the CLAIMANT was induced by a misrepresentation of the defendant company to

purchase shares in that company. The CLAIMANT sought to rescind the contract but was
unable to do so as he continues to act as a shareholder through his conduced. Subsequently, it
was held that the CLAIMANT intended to affirm the contract.

[¶73] Principles of contract law provide the parties with the remedy of recession in cases
where the contract was obtained through non-disclosure amounting to material
misrepresentation,132 meaning that under a contract of utmost good faith, the party induced has
the right to rescind.133 Therefore, the CLAIMANT submits that the RESPONDENT shall not be
allowed to avoid the contract as there is no non-disclosure of material facts amounting to
misrepresentation on the part of the CLAIMANT. Additionally, the RESPONDENT discovered
about the alleged misrepresentations during the span of 2015-17, 134 however, they chose to
affirm the LSA by their conduct by moving ahead with the performance of the LSA. It is
therefore requested that the RESPONDENT affirmed the LSA and shall not be allowed to
rescind the agreement.

B. The RESPONDENT was made well aware of the facts before there was any kind of
payment made for the third-party service

[¶74] As an English judge expressed it, "he undertakes this work as a gamble, and its cost is
part of the overhead expenses of his business which he hopes will be met out of the profits of
such contracts as are made.135 This aleatory view of negotiations rests upon a concern that
limiting the freedom of negotiation might discourage parties from entering negotiations.
Although a duty of fair dealing is now generally imposed on the parties to a contract, that duty
is not formulated so as to extend to precontractual negotiations.136

[¶75] While entering into the LSA, the R ESPONDENTS were clearly made aware of the fact
that any and every additional service that the R ESPONDENTS may avail, the CLAIMANT shall
bear no obligation and duty regarding the same.

131
Leaf v. International Galleries, [1950] 2 KB 86.
132
Strive Shipping Corporation and Another v. Hellenic Mutual War Risks Association, [2002] 2 Lloyd’s Rep.
88.
133
Re South of England Natural Gas and Petroleum Co, [1911] 1 Ch. 573.
134
Case Record, Exhibit R-7,8, p. 78.
135
William Lacey (Hounslow) Ltd. v. Davis, [1957] W.LR. 932 (Q.B.).
136
UC.C. § 1-203 (1978). Restatement (Second) of Contracts & 205 & comment c (1981).
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[¶76] The RESPONDENTS were provided only a suggestive list of connections and the
CLAIMANT nowhere implied that the same would be the ‘best’ for the R ESPONDENT.
Furthermore, before availing any of the services provided by any of these contacts i.e., Alek
Rebane or that with Sanjid Suerella. All of them clearly disclosed the actual status and skill
set and the RESPONDENT was made fully aware about their capabilities and limitations.

[¶77] Mr. Alek had proactively disclosed the fact that he was not so experienced in space
engineering and had major experience in oil and gas industry. 137 Similarly, Mr. Sanjid
complied with full disclosure to inform the RESPONDENTS about their material position
regarding the needs of the RESPONDENTS. They disclosed that they weren’t UK based but
were planning to open up an office there.138

[¶78] Clear from the facts, the RESPONDENTS were made very well aware about the position
of the connections given by the CLAIMANT. There was no concealment of any kind of fact or
any misrepresentation made. The R ESPONDENTS willingly decided to avail the services of the
personnels as suggested by the CLAIMANT. Hence, any and every such third-party transaction
which took place was completely on the RESPONDENT’S discretion, therefore, CLAIMANT
cannot be held liable for any sort of misrepresentation.

C. The RESPONDENTS are not entitled to recover the miscellaneous payments made
to third parties under an implied term

[¶79] The CLAIMANT submits that the upfront payment cannot be recovered on account of an
implied term in the LSA. Implied terms are the terms which are not specifically laid down in
the contract, but are read into the contract. 139 These implied terms can be read into the contract
by virtue of fact.140 It is contended that the implied term: “Shuttle-Up shall be entitled to be
indemnified for any losses incurred by it for the performance of the launch service
agreement.” shall not be read into Clause 7.2 of the LSA by fact.

[¶80] In Belize Telecom,141 it was held that in order to imply any term by virtue of fact one
must satisfy it on the basis that, the term is; reasonable and equitable; 142 obvious enough to
137
Case Record, Exhibit C-8, p. 86.
138
Case Record, Exhibit C-9, p. 64.
139
Andrew Burrows, A RESTATEMENT OF THE ENGLISH LAW OF CONTRACT, Oxford University Press (2nd edn
2016).
140
J. Beatson, ANSON’S LAW OF CONTRACT, Oxford University Press (28th edn 2002).
141
Attorney General of Belize v. Belize Telecom Ltd., [2009] 1 W.L.R. 1988.
142
Mediterranean Salvage & Towage Ltd v. Seamer Trading & Commerce Inc., The Reborn, [2009] EWCA Civ
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consider ‘it goes without saying’;143 absolutely necessary for the commercial effectiveness of
the contract.144 The RESPONDENT respectfully requests the Tribunal to find that the above
stated term cannot be implied by fact in the present LSA as; the officious bystander test is not
fulfilled [i]; and, the business efficacy test is not satisfied [ii].

I. THE OFFICIOUS BYSTANDER TEST IS NOT FULFILLED

[¶81] The officious bystander test lays down that, the understanding of any term of the
contract must be done through the purview of any prudent man aware about the relevant facts
and circumstances.145 The test provides that if an officious bystander while looking at the
contract suggests to incorporate a term, the parties would suppress him with ‘Oh, of
course!’146 Furthermore, the intention of the parties gives effect to such implied term with
regards to the relevant background.147

[¶82] In the instant case, the CLAIMANT through LSA meant indemnification of losses
incurred during performance of the agreement and related launch service. It never implied
inclusion of extra services sought by the R ESPONDENT in the indemnification clause, in case
the RESPONDENT incurred any lose due to same. CLAIMANT acted in suggestive capacity and it
was implied that any losses incurred due to such suggestion was not to be covered by the
indemnification clause.

[¶83] The LSA provides for indemnification of loss incurred in relation to the performance
of the launch service agreement.148 Nowhere under the agreement it has been provided that
loss incurred by the RESPONDENT in personal capacity on suggestion of the R ESPONDENT shall
also be covered by the indemnification clause. Thus, such loss incurred by the R ESPONDENTS
shall not be covered by the CLAIMANT.

II. THE BUSINESS EFFICACY TEST IS NOT SATISFIED

[¶84] According to the business efficacy test, such term to be implied must be proved
absolutely necessary to the commercial efficacy of the contract. 149 Here, necessity of the term
531.
143
Sir Guenter Treital, THE LAW OF CONTRACT, London Sweet & Maxwell 183 (10th edn 1999).
144
Ibid.
145
J. Beatson, ANSON’S LAW OF CONTRACT, Oxford University Press 163 (28th edn 2002).
146
Shirlaw v. Southern Foundries Ltd., [1939] 2 K.B.
147
Scheme v. West Bromwich, [1998] 1 WLR 896.
148
Case Record, Exhibit C-1, p. 40.
149
Luxor (Eastbourne) Ltd. v Cooper, [1941] 1 AC 108.
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does not mean an alternative,150 or a term that might help in better construction of the contract
as whole,151 rather it means that without such a term the performance of the contract may
become erroneous.152

[¶85] In the present case, the CLAIMANT is known for providing low-cost launch services for
picosatellites.153 Subsequently, the CLAIMANT asked the RESPONDENT for their requirement
and provided them with personalized presentation which would fit the needs of the
RESPONDENT 154 and came up with a personalized LSA. The CLAIMANT nowhere intended to
include covering additional loss incurred by the R ESPONDENT due to extra services they
availed on the CLAIMANT’s suggestion. In fact, as clearly stated at occasions, such contacts
and any additional costs incurred were not to be included in execution of LSA. 155 Therefore, it
won’t be erroneous to hold that such was not intended to be a term of the LSA. Hence, any
such loss incurred by the RESPONDENT by willingly availing additional services, CLAIMANT
cannot be held liable for the same.

V. THE ENTIRE LEGAL AND ARBITRATION COSTS SHALL BE BORNE BY THE

OTHER PARTY

[¶86] The CLAIMANT contends that the RESPONDENT shall bear all of the CLAIMANT’s costs
and expenses of this arbitration, including without limitation, SIAC administrative expenses,
the Tribunal's fees and expenses, and the CLAIMANT 's legal and other fees. The rationale
behind allocating costs to a successful party is that the party should not be at a
disadvantageous position with respect to monetary terms in order to seek adjudication, to
enforce or vindicate its legal rights. 156 Recovery of the costs by the successful party, therefore,
presupposes that they must ultimately be incurred by the losing party.157

[¶87] The loser pays principle is enshrined in many municipal laws and its application is
covered under the Tribunal's discretionary power under § 61 of the Arbitration Act, 1996. 158

150
Cox v. Bankside, [1995] 2 Lloyd’s Rep. 436.
151
Scally v. Southern Health and Social Services Board, [1992] 1 AC 294.
152
Liverpool CC v. Irwin, [1977] 1 AC 239.
153
Case record, first witness statement of Tania Vaidya, p. 27.
154
Case Record, Exhibit C-3, p. 52.
155
Case Record, Exhibit C-8, p. 63.
156
Railroad Development Corp. (RDC) v. Republic of Guatemala, ICSID Case No. ARB/07/23.
157
Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/09/2.
158
The Arbitration Act, 1996, § 61, No. 26, British Acts of Parliament, 1996 (England).
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English law follows an outcome-based approach. 159 The CLAIMANT contends that it shall be
granted legal costs in the arbitration as; first, the applicable law does not provide for parties to
share legal costs [A]; second, The RESPONDENTS must bear the cost of their opportunistic and
unfounded claims. must bear the cost of its opportunistic and unfounded claims [B]; and
third, Loser Pays principle is applicable in the present arbitration proceedings [C].

A. The applicable law does not provide for parties to share legal costs

[¶88] It is submitted that in the absence of explicit guidance in the parties’ arbitration
agreement, arbitrators’ power to award and allocate costs is governed by the applicable law of
the arbitration.160 Furthermore, the Tribunal should take into consideration mandatory law
applicable while deliberating upon the issue of costs, as the provision on costs in the
arbitration agreement must not be in contravention of the mandatory provisions of the
applicable law.161

[¶89] The Arbitration Act, 1996 provide specific guidance to aid tribunals in issuing cost
awards. § 61 of the 1996 Act provide that the costs of the arbitration shall in principle be
borne by the unsuccessful party or parties. 162 In the present case, the Parties have adopted the
Arbitration Act, 1996 as the applicable law in the present proceedings and the applicable law
provides to follow the loser pays principle. Therefore, the loser pays principle should be
adopted by the Tribunal in absence of any explicit agreement by the parties.

B. The RESPONDENTS must bear the cost of their opportunistic and unfounded
claims

[¶90] The CLAIMANT contends that the RESPONDENTS’ opportunistic and unfounded claims
are a ground to award legal costs to the CLAIMANT. It is submitted that R ESPONDENTS must
bear the costs of the CLAIMANT as the claim of the RESPONDENT lacks fundamentally on
merits. In Deutsche Bank v. Sri Lanka, the Tribunal awarded the CLAIMANT a full recovery of
its costs, legal fees and expenses, by finding that the breaches by the respondent were

159
43 Gustav Flecke-Giammarco, The Allocation of Costs by Arbitral Tribunals in International Commercial
Arbitration, in WTO Litigation, Investment Arbitration, and Commercial Arbitration, Global Trade Law Series
412 (2013).
160
Rachel Engle, Party Autonomy in International Arbitration: Where Uniformity Gives Way to Predictability,
TRANSNAT’L LAW (2002).
161
Jeffrey M Waincymer, Costs in Arbitration in Procedure and Evidence in International Arbitration, KLUWER
ARBITRATION BLOG (2012).
162
The Arbitration Act, 1996, § 61, No. 26, British Acts of Parliament, 1996 (England).
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egregious and in bad faith.163 In Libananco v. Turkey, the Tribunal admitted that the
apportionment of costs may also be used to encourage unmeritorious actions and also of
providing an incentive to initiate unnecessary litigation.164

[¶91] This is an implied obligation in English contract law to exercise a contractual

discretion in good faith and not arbitrarily or capriciously. 165 In the present case, the claim of
the RESPONDENT reveals its serious shortcomings from the beginning as the R ESPONDENTS
acted in bad faith while making the CLAIMANT liable for the breach of the LSA. The
RESPONDENTS accused the CLAIMANT of misrepresenting various facts to induce it to enter
into the LSA. Such accusations were just another tactic to indemnify itself against the
arbitration proceeding initiated by the CLAIMANT.

[¶92] In MSC Mediterranean Shipping Company S.A. v Cottonex Anstalt, 166 the court held
that “an innocent party’s decision to terminate or affirm a contract after a counterparty’s
repudiatory breach, akin to a contractual discretion, must be exercised in good faith and
must not be exercised arbitrarily, capriciously or unreasonably.” The RESPONDENTS,
however, invalidly and arbitrarily rescinded the LSA. Therefore, it is unfair for CLAIMANT
to bear the costs of defending itself from a claim that is unnecessary and in bad faith.

C. Loser Pays principle is applicable in the present arbitration proceedings

[¶93] It is submitted that the principle of ‘loser pays principle’ is more prevalent in
International Commercial Arbitration.167 In Thunderbird v. Mexico, the tribunal held that the
loser pays principle in regards to costs should be applicable to international arbitrations and
the costs were allocated against the losing party. 168 Further, in IC Power v. Guatemala,169 the
tribunal held that the RESPONDENTS are unsuccessful in this case and thus, the R ESPONDENTS
should bear the entirety of the costs of the arbitration. 170

163
Deutsche Bank AG v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/09/2.
164
Libananco Holdings Co. Limited v. Republic of Turkey, ICSID Case No. ARB/06/8.
165
British Telecommunications plc v. Telefónica O2 UK Ltd., [2014] UKSC 42.
166
MSC Mediterranean Shipping Company S.A. v. Cottonex Anstalt, [2016] EWCA Civ 789.
167
Bondar Kateryna, Allocation of Costs in Investor-State and Commercial Arbitration: Towards a Harmonized
Approach, OXFORD ARBITRATION INTERNATIONAL (2016).
168
International Thunderbird Gaming Corporation v. Mexico, Award, IIC 136 UNCITRAL (2006).
169
IC Power Asia Development Ltd. v. Republic of Guatemala, PCA Case No. 2019-43.
170
Rumeli v. Kazakhstan, ICSID Case No. ARB/05/16.
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MEMORANDUM for CLAIMANT ARGUMENTS ADVANCED

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
MOOT, 2023

[¶94] The present dispute between the RESPONDENTS and the CLAIMANT arises from a
commercial contractual relationship,171 and thus, the present arbitration is an International
Commercial Arbitration. Therefore, the CLAIMANT requests the Tribunal to apply the ‘Loser
Pays’ principle and order the RESPONDENTS to bear the cost of the CLAIMANT.

171
Lawrence W. Newman & David Zaslowsky, The Difference Between Commercial and Investment
Arbitration, THE PRACTICE OF INTERNATIONAL LITIGATION (2010).
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MEMORANDUM for CLAIMANT ARGUMENTS ADVANCED

 8TH NLIU-JUSTICE R. K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION
MOOT, 2023

PRAYER

In light of the above submissions, Arguments Advanced, and authorities cited, it is humbly
prayed by the CLAIMANT that may the Hon’ble Tribunal be pleased to:

I. ORDER THAT THE RESPONDENTS SHALL COMPENSATE THE CLAIMANT FOR ALL OF ITS
LOSSES CAUSED BY THE RESPONDENTS’ BREACH OF THE LAUNCH SERVICES AGREEMENT.

II. ORDER THAT THE RESPONDENTS SHALL PAY ALL OF THE CLAIMANT'S COSTS AND

EXPENSES OF THIS ARBITRATION, INCLUDING WITHOUT LIMITATION, SIAC ADMINISTRATIVE

EXPENSES, THE TRIBUNAL'S FEES AND EXPENSES, AND THE CLAIMANT'S LEGAL AND OTHER

FEES.

III. AWARD PRE AND POST-AWARD INTEREST ON THE ABOVE SUMS AT SUCH RATE AND

FROM SUCH DATES AS THE TRIBUNAL SEES FIT.

All of which is most humbly & respectfully prayed.

Place: London, England Sd/-

Date: April 03, 2023 Counsel for CLAIMANT

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MEMORIAL for CLAIMANT PRAYER