MEMORANDUM for CLAIMANT

Himachal Pradesh National Law University, Shimla

APCAM’S INTERNATIONAL

METAVERSE ARBITRATION MOOT, 2023

24th – 26th November 2023

MEMORANDUM for CLAIMANT

IN THE MATTER OF AN ARBITRATION CONDUCTED BEFORE THE ARBITRAL TRIBUNAL ,

THAMESBURG

BETWEEN:

EstateX LLC

789 VR Avenue, Cyberspace City,

CA 9513, Stotia **CLAIMANT

AND

1. MetaTerrain Pvt. Ltd.

15/5 Seafloor Plaza, Merfolk City,
Celestia
2. Oorbus Ltd.
123 Tech Avenue, Verdantis Valley,
CA 95101, Lumina ** RESPONDENT

Abhishek Bisht | Avnee Katoch | Saumya Rajpal | Shauryaa Singh | Vihaan Acharya

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 MEMORANDUM for CLAIMANT

TABLE OF CONTENTS

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

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

STATEMENT OF FACTS ................................................................................................................. XIV

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

PLEADINGS .............................................................................................................................................. 1

ISSUE 1: WHETHER THE CLAIMANT’S ARBITRATION REQUEST IS PREMATURE IN NATURE?

................................................................................................................................................................... 1

[1.1] The pre-arbitral proceedings are not premature in nature. .................................................. 1

[1.2] The tribunal has the jurisdiction to try and settle the disputes. .......................................... 3

[1.3] The arbitration clause cannot be nullified by the tribunal even if the main contract is
found void. .......................................................................................................................................... 5

[1.4] The Claimant can enforce the award of the tribunal according to the New York
Convention. ......................................................................................................................................... 6

ISSUE 2: WHETHER THE CLAIMANT IS ENTITLED TO DAMAGES TO THE EXTENT OF 2.4

MILLION USD? ...................................................................................................................................... 7

[2.1] Claimant is entitled to seek Interim injunctions against the transfer of plot #3223 to
Crimson Construction. ...................................................................................................................... 7

[2.2] The Claimant is entitled to seek compensation of 2.4 million USD including loss of
business. ............................................................................................................................................. 10

[2.3] Claimant is entitled to seek specific performance in the form of transfer of plot #3223
to itself. ............................................................................................................................................... 12

ISSUE 3: WHETHER A VALID CONTRACT HAS BEEN FORMED AND CONCLUDED UNDER
THE CISG? ............................................................................................................................................ 14

[3.1] There is a valid contract of sale of goods pursuant to various provisions of CISG. ..... 14

[3.2] Smart Contracts are covered within the purview of CISG................................................ 16

[3.3] NFTs are covered within the purview of sale of goods. .................................................... 16

[3.4] The Tribunal cannot exempt Respondents from liability for performance under various
provisions of the CISG. ................................................................................................................... 18

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 MEMORANDUM for CLAIMANT

ISSUE 4: WHETHER RES NO. 2, OORBUS LTD., A PARTY TO THE PRESENT ARBITRATION
PROCEEDINGS? .................................................................................................................................... 18

[4.1] The application of the implied consent establishes that Res No. 2 is a party to the
agreement. .......................................................................................................................................... 19

[4.2] Res No. 2 had sufficient relationship and interest in the business and functioning of
Res No. 1. .......................................................................................................................................... 20

[4.3] The arbitration agreement can be extended to Oorbus Ltd. under the Group of
Companies Doctrine. .......................................................................................................................... 21

REQUEST FOR RELIEF ...................................................................................................................... 25

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 MEMORANDUM for CLAIMANT

TABLE OF ABBREVIATIONS

ABBREVIATIONS MEANING
% Percent
& And
¶ Paragraph
APCAM Asia Pacific Centre for Arbitration and
Mediation
APCAM Rules Arbitration Rules of the Asia-Pacific Centre
For Arbitration And Mediation
Art. Article
CISG United Nations Convention on Contracts for
the International Sale of Goods, 1980
Cl Claimant
Doc. Document
Ed. Edition
Exh. Exhibit
Hon’ble Honourable
i.e. That is
ICC International Chamber of Commerce
ICCA International Council for Commercial
Arbitration
ICJ International Court of Justice
ICSID International Centre for Settlement of
Investment Disputes
Int’l International
Ltd. Limited
NFT Non-Fungible Tokens
No. Number
NoA Notice of Arbitration
NY New York

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 MEMORANDUM for CLAIMANT

Ors. Others
PCA Permanent Court of Arbitration
PCIJ Permanent Court of International Justice
pg. Page
PO Procedural Order
Pvt. Private
Res Respondent
RNoA Reply to Notice of Arbitration
ToU Terms of Use
UK United Kingdom
UNCITRAL United Nation Commission on International
Trade Law
US United States
v. Versus
w.r.t. With respect to

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 MEMORANDUM for CLAIMANT

INDEX OF AUTHORITIES

REFERENCE CITATION

BHARUCHA M. P. Bharucha et. al., The Extension of Arbitration Agreements to

Non-Signatories: A Global Perspective, 5(1) Indian J. Arb. L. 35
(2016); ICC Case No. 5721, 117 J.D.I. (Clunet) 1019, 1024
(1990).
BORN 1. 1 GARY B. BORN, INTERNATIONAL
ARBITRATION AND FORUM SELECTION
AGREEMENTS: DRAFTING AND ENFORCING 37
(The Netherlands, Kluwer Law International BV) 2010.
2. 1 GARY B. BORN, INTERNATIONAL
COMMERCIAL ARBITRATION (Wolters Kluwer Law
& Business 2021).
CISG Commentary on the Draft Convention on Contracts for the
International Sale of Goods prepared by the Secretariat,
Official Records, at 20, U.N. Doc. A/CONF.97/5 (1979)
[hereinafter Secretariat Commentary] at 24.
DAIMSIS Anthony R. Daimsis, How heuristics misshape reasoning and lead to
increased costs in arbitration?, SSRN (2008).
FOUCHARD/GAILLARD FOUCHARD GAILLARD GOLDMAN,
INTERNATIONAL COMMERCIAL ARBITRATION
(Kluwer Law International 1999).
ICC BULLETIN Yesilirmak, Interim and Conservatory Measures in ICC Arbitral
Practice, 11 lICC Bulletin (2000).
KRYVOI Yaraslau Kryvoi, Piercing the Corporate Veil in International
Arbitration, 1 GLOBAL BUSINESS LAW REVIEW (2011).
LOOKOFSKY JOSEPH LOOKOFSKY, CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS (CISG) 65 (Kluwer Law International 2012).
MODEL LAW UNCITRAL’s Model Law on Electronic Commerce and the
Guide 1996.

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 MEMORANDUM for CLAIMANT

NY CONVENTION Albert Jan Van Den Berg, The 1958 NY Arbitration Convention
Revisited.
REDFERN/HUNTER ALAN REDFERN AND MARTIN HUNTER, REDFERN
AND HUNTER ON INTERNATIONAL
ARBITRATION, 617 (Oxford University Press 2015).

REUTERS Thomas Reuters Practical Law, Lex Arbitri (2023).

SCHMIDT-KESSEL Martin Schmidt & Peter Schlechtriem, Commentary on the
UN Convention on the International Sale of Goods (CISG) 4
Oxford University Press 151 (2016); ICC Case no. 7331 of
1994.
WILSKE Stephan Wilske,et. Al., The group of companies’ doctrine – where is
it heading? 17 AMERICAN REVIEW OF
INTERNATIONAL ARBITRATION, 74 (2006).
MEHTA/ GHOSH Aditya Mehta and Swagata Ghosh, Good Faith or Bad Faith –
Analysing the Enforceability of PreArbitral Negotiation Clauses, 27
NLSBLR, (2021).

MISTELIS Loukas Mistelis et. al., The Judicial Solution to the Arbitrator’s
Dilemma: Does the ‘Extension’ of the Arbitration Agreement to Non-
Signatories Threaten the Enforcement of the Award?, 39 JIBR (2022).

ZHANG Yufei Zhang, The Applicability and Prospects of CISG on Smart

Contracts, ICMETSS (2022).
1
UNCITRAL’s Model Law on Electronic Commerce and the
Guide 1996.

DALY Michael P. Daly, Come One, Come All: The New and Developing
World of Non-Signatory Arbitration and Class Arbitration, 62 U.
MIAMI L. REV. 95 (2007).

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 MEMORANDUM for CLAIMANT

INDEX OF CASES

Australia

Federal Court of Australia Olivaylle v. Flottweg KGAA (No 4) [2009]

FCA 522.

China

China International Economic and Trade Xiamen Xinjingdi Group Ltd v.

Arbitration Commission EtonProperties Ltd CAP No. 54 of 2007.

France

Court of Cassation (Commercial Division) Ceramique Culinaire v. Musgrave Recueil

Dalloz [1997] 337

Hong Kong

High Court of Hong Kong T v. B, [2021] HKCFI 3645.

High Court of Hong Kong C v. D [2021] HKCFI 1474.

India

Bombay High Court Tapadiya Construction Ltd., Aurangabad v.

Sanjay Suganchand Kasliwal and Anr.
(LAWS) BOM-2015-12-62
Delhi High Court Ayub Ali v. Union of India 86 (2000) DLT
869
Delhi High Court [Link] vs Mahanagar Telephone Nigam
Ltd. 2009 Latest Caselaw 2375 Del
Delhi High Court Mahanagar Telephone Nigam ltd. v. Canara
Bank 2023/DHC/001430

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 MEMORANDUM for CLAIMANT

Delhi High Court Shapoorji Pallonji and co. pvt. ltd. v. Rattan
India Power Ltd. & Anr. [TARB .P.
716/2019]
Gujarat High Court Nirma Ltd. v. Lentjes Energy (India) Pvt. Ltd.
(2002) 5 SCC 520
Supreme Court of India Uttarakhand Purv Sainik Kalyan Nigam Ltd.
v. Northern Coal Field Ltd., (2020) 2 SCC
455.
Supreme Court of India M/S N.N. Global Mercantile Private ltd. v.
M/S Indo Unique Flame Ltd. (2021) 4 SCC
379.
Supreme Court of India Modi Entertainment Network v. WSG
Cricket Pte Ltd
Supreme Court of India NTPC Ltd. v. Siemens Ltd (2007) 4 SCC 451.

Supreme Court of India Kailash Nath v. Delhi Development

Authority (2015) 4 SCC 136
Supreme Court of India Maya Devi v. Lalta Prasad (2015) 5 SCC 588.
Supreme Court of India Construction & Design Services v. DDA
(2015) 14 SCC 263
Supreme Court of India Mohd Salamatullah v. Government of
Andhra Pradesh AIR 1977 SC 1481
Supreme Court of India A.T. Brij Paul Singh v. State of Gujarat AIR
1984 SC 1703
Supreme Court of India Trojan & Co. v. RMNN Nagappa Chettiar
[1953] SCR 789.
Supreme Court of India Tata Consultancy Services v. State of Andhra
Pradesh [271 ITR 401 (SC)]

International Chamber of Commerce Cases

ICC Case No. 22627/ZF/AYZ Dresser Rand B.V. v. Al Rushid Petroleum

Investment Company (Final Award)
226627/ZF/AYZ, at 29 July, 2019

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 MEMORANDUM for CLAIMANT

ICC Case No. 5103 ICC Case No. 5103 Journal du Droit
International (1988)ICCA

International Court of Justice Cases

Germany v. Poland Chorzów Factory (Germany v. Poland (1928)

PCIJ Series A No 17.
United States v. Germany (United States v. Germany), Decision of the
Mixed Claims Commission of 1 November
1923, 7 RIAA.
United States v. Italy Elettronica Sicula S.p.A. (ELSI) (United
States v. Italy) 1989 ICJ

Singapore

High Court of the Republic of Singapore BCY v. BYZ, [2016] SGHC, 249.
High Court of the Republic of Singapore Win Line (UK) Ltd v. Masterport (Singapore)
Pte Ltd [2000]

Switzerland

First Civil law Court Y.S.A.L. v Z Sarl ATF 129 III 727-
4P.115/2003 ) ( X.S.A.L)

UNCITRAL Cases

CLOUT case No. 125 Oberlandesgericht Hamm, Germany, 9 June

1995
CLOUT case No. 138 U.S. Court of Appeals (2nd Circuit), United
States, 6 December 1995
CLOUT case No. 166 Schiedsgericht der Handelskammer Hamburg,
Germany
CLOUT case No. 271 Bundesgerichtshof, Germany, 24 March 1999
CLOUT case No. 271 Bundesgerichtshof, Germany, 24 March 1999

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 MEMORANDUM for CLAIMANT

CLOUT case No. 427 Oberster Gerichtshof, Austria, 28 April 2000

CLOUT case No. 541 Oberster Gerichtshof, Austria, 14 January
2002.
CLOUT case No. 594 Oberlandesgericht Karlsruhe, Germany, 19
December 2002
CLOUT case No. 631 Supreme Court of Queensland, Australia, 17
November 2000

United Kingdom

Court of Exchequer Chamber Robinson v. Harman, (1848) 1 Exch 850, 855.

Court of King's Bench Cutter v. Powell (1795) 6 Term Rep 320.
England & Wales High Court (Commercial AA v. Persons Unknown [2019] EWHC 3556
Court) (Comm)
House of Lords American Cyanamid Co v. Ethicom Ltd
[1975] AC 396.
House of Lords Livingstone v. Rawyards Coal Co., [1880] 5
App. Cas. 25 (H.L.) 39 (Eng.).
House of Lords Rose & Frank Co. v. J. R. Crompton Ltd.
[1923] 2 K.B. 261.
House of Lords National Provincial Bank v. Ainsworth [1965]
1 AC 1175
Queen's Bench Division (Commercial Court) Zim Integrated Shipping Services Limited v
European Container KS and European
Container KS 11 [2013] EWHC 3581
(Comm).

United States of America

District Court for the District of In Hewlett-Packard, Inc. v. Berg 867 F. Supp.
Massachusetts 1126.
International Centre for Settlement of The Rompetrol Group N.V. v. Romania,
Investment Disputes ICSID Case No. ARB/06/3, Award, 2013 .
International Centre for Settlement of Técnicas Medioambientales Tecmed, S.A. v.
Investment Disputes United Mexican States ICSID Case No.

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 MEMORANDUM for CLAIMANT

ARB(AF)/00/2, Chromalloy Aeroservices

Inc. v. Arab Republic of Egypt 939 F. Supp.
907.
International Economic Arbitration, Klaus Peter Berger, ICC Award No. 9797,
Deventer ASA Bull. 2000, at 514 et seq.
NY State Court of Appeals W.M. Girvan, Inc. v. Robilotto, 33 N.Y.2d
425, 309 N.E.2d 422, 353 N.Y.S.2d at 958
(1974).
Permanent Court of Arbitration Chevron Corporation and Texaco Petroleum
Corporation v. Ecuador (II) PCA Case No.
2009-23.
US Court of Appeals Blumenthal v. Merrill Lynch, Pierce, Fenner
& Smith, 910 F.2d 1049, 1053 (2d Cir. 1990).
US Court of Appeals RSM Production Corp. v. Freshfields
Bruckhaus Deringer U.S. LLP 682 F.3d 1043
(D.C. Cir. 2012).
US Court of Appeals Wm. PassalacquaBuilders v. Resnick
Developers 933 F.2d131(2d Cir.1991).
US Court of Appeals First Nat. Bank v. Mitchell (1899) 92 Fed.
565.
US Court of Appeals for the Second Circuit Stone v. Williams 873 F.2d 620 (2d Cir. 1989).
US Court of Appeals for the Seventh Circuit Board of Trade of City of Chicago v. SEC
677 F. 2d 1137, 1142 (7th Cir. 1982).
US Court of Appeals, First Circuit McCarthy v. Azure, 22 F.3d 351, 355-56 (1st
Cir. 1994).
US District Court for the Southern District of Filanto S.p.A. v. Chilewich Int’l Corp., 201 F.
New York Supp. 2d 236 (S.D.N.Y. 1992), CLOUT Case
No. 23 [14 Apr. 1992].
US District Court for the Southern District of Geneva Pharmaceuticals Tech. Corp. v. Barr
New York Laboratories, Inc., 789 F. Supp. 1229
(S.D.N.Y. 2002).
US District Court for the Southern District Mississippi Fleet Card, LLC v. Bilstat, Inc.,
of Mississippi 175 F. Supp. 2d 894 (S.D. Miss. 2001).

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 MEMORANDUM for CLAIMANT

US District Court of Southern District of Dresser Rand B.V. v. Al Rushid Petroleum

Texas Houston Division Investment Company (Final Award)
226627/ZF/AYZ, at 29 July, 2019.
US District Court, D. Columbia Chormalloy Aeroservices Inc. v. Arab
Republic of Egypt 939 F. Supp 907.
US District Court, District of Columbia First Nat. Bank v. Mitchell (1899) 92 Fed.
565.
US District Court, Southern District of New Gen. Mills v. Champion Petfoods USA, No.
York 20-CV-181 (KMK), 2020 WL 915824, at *3
(S.D.N.Y. Feb. 26, 2020).
US District Courts for the Second Circuit Fisser v. Int'l Bank, 82 F.2d 231 (2d Cir.
1960).

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STATEMENT OF FACTS

INTRODUCTION

1. The CLAIMANT, EstateX LLC, founded in 2010 and led by CEO Ms. Olivia Hughes,
is a prominent real estate company. It has recently expanded its operations into the
Metaverse.
2. The RESPONDENT (1), MetaTerrain Pvt. Ltd., established in 2020 by computer
scientist Ms. Yoza Ila, operates in the Metaverse with its platform 'MetaTerrain,' a
blockchain-based virtual world for trading virtual land parcels as non-fungible tokens
(NFTs).
3. The RESPONDENT (2), Oorbus Ltd., a multinational conglomerate, invested $50
million in MetaTerrain to diversify into the Metaverse.

BACKGROUND

4. The Metaverse is a digital realm where blockchain technology enables the ownership and
trade of digital assets, giving rise to a digital economy.
5. EstateX recognized the opportunities in the Metaverse and established a virtual office
within MetaTerrain.
6. A Metaverse conference in Stotia introduced the idea of virtual land parcel auctions in
MetaTerrain.
7. EstateX, led by Ms. Olivia Hughes, identified a prime virtual land parcel (#2332) for
purchase due to its strategic location.

THE AUCTION

8. The auction used blockchain smart contracts, with bidding exclusively in TerraTokens, the
platform's native cryptocurrency. Participants converted their currencies into
TerraTokens.
9. TerraTokens facilitated purchases of assets on the MetaTerrain platform, including virtual
land parcels NFTs and digital assets. The platform had its Terms of Use.
10. EstateX won the auction with a bid of 300,000 TerraTokens, securing the ownership of
land parcel #2332 through the smart contract 47RZ*K.

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 MEMORANDUM for CLAIMANT

DISPUTE

11. The Terms of Use stated that acquisitions would be displayed on the buyer's dashboard
within 10 business days. However, no information regarding land parcel #2332 was visible
on EstateX's account dashboard.
12. Mr. Turner contacted Mr. Kumar, who explained that due to a blockchain network
overload, land parcel #2332 was mistakenly assigned to the second-highest bidder,
Crimson Constructions. A refund was promised within ten days.
13. EstateX communicated its decision to retain ownership of land parcel #2332. Discussions
between Ms. Hughes and Ms. Ila failed to reach an agreement.
14. Mr. Robert Drew invoked the arbitration clause on July 01, 2023, due to the Respondents'
failure to resolve the issue. EstateX suffered a loss of 300,000 TerraTokens.

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 MEMORANDUM for CLAIMANT

SUMMARY OF ARGUMENTS

ISSUE 1: WHETHER THE TRIBUNAL HAS JURISDICTION TO TRY THE DISPUTES?

The Hon’ble Tribunal has jurisdiction as it is competent to determine its own jurisdiction under
the doctrine of Kompetenz-Kompetenz. It is also contended that the Arbitral Proceedings commenced
are not pre-mature in nature as the process of Negotiation (pre-arbitral proceedings) are not
compulsory in nature. Moreover, time is of an essence in contracts which related to metaverse and
non-fungible tokens owing to their volatile nature and hence, expeditious proceedings are required.
Furthermore, Lex arbitri, also recognizes that arbitrators are competent to determine the
jurisdiction of their tribunal.

ISSUE 2: WHETHER THE CONTRACT WAS VALIDLY FORMED UNDER T HE CISG?

It is humbly submitted to the Hon'ble Tribunal that the Cl seeks an interim injunction to prevent
the transfer of plot #3223 to Crimson Constructions by Res No. 1 in order to maintain the current
situation and balance the convenience of both parties. The Cl claims compensation of total USD
2.4 million, including damages for loss of business opportunities, loss of profits, and moral
damages. These claims are in line with the legal framework and the specific circumstances of the
case, supported by existing precedents. In case the tribunal cannot grant the compensation, the Cl
requests an alternative remedy: specific performance of contract 47RZ*K, which would require
Res No. 1 to transfer plot #3223 to the Cl. This request is based on the principle that if monetary
compensation is insufficient, the tribunal can order specific performance.

ISSUE 3: WHETHER O ORBUS PVT. LTD. AND METATERRAIN PVT. LTD. ARE JOINTLY
LIABLE TO COMPENSATE THE CLAIMANT FOR USD 2.4 MILLION, INCLUDING THE LOSS
OF OPPORTUNITY TO THE CLAIMANT?

It is humbly submitted before the Hon'ble Tribunal that a valid contract has been established
under the CISG because it fulfils all the necessary conditions for a valid contract, including a clear
and unambiguous acceptance of a valid proposal and the intention of both parties to be bound by
the contract. Also, the sale of virtual land parcels through smart contracts falls under the category
of sales of goods, and NFTs (Non-Fungible Tokens) which is covered by the CISG, further
reinforcing the validity of the contract. The Cl argues that the contract is valid under various
provisions of the CISG, as all requirements have been met and requests that the respondents

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 MEMORANDUM for CLAIMANT

should not be exempted from their performance obligations under the CISG in order
to ensure justice.

ISSUE 4: WHETHER RES NO. 2, OORBUS LTD. A PARTY TO THE PRESENT ARBITRATION
PROCEEDING?

The Cl submits that Res No. 2 is a party to the arbitration proceedings. The arbitration clause
covers non-signatories as it had implied consent and the arbitration agreement binds them. Res
No. 2 impliedly consented to the arbitration agreement and this can be inferred from their active
involvement and strategic influence through significant investment in MetaTerrain Pvt. Ltd. Res
No. 2 had sufficient interest as they had full ownership of all Intellectual properties along with
holding a significant profit-sharing percentage in MetaTerrain Pvt. Ltd. Res No. 2 claims benefit
through its line of capital but did not sign the arbitration agreement to disregard any future dispute.
Furthermore, the Group of Companies Doctrine enables Res No. 1 to arbitration proceedings,
and thus, shall be liable where they have indirectly or directly benefited from the contract.
Therefore, Res No. 2 shall be made a party to the arbitration agreement.

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PLEADINGS

ISSUE 1: WHETHER THE CLAIMANT’S ARBITRATION REQUEST IS PREMATURE IN

NATURE?

1. It is humbly submitted that this Hon’ble Tribunal has sufficient jurisdiction to try the present
arbitration as firstly, the pre-arbitral proceedings are not premature in nature, since it is not a
precondition to engage in pre-arbitral proceedings before filing a case [1.1], secondly, the
Hon’ble Tribunal has the power and the authority to decide on its own jurisdiction [1.2],
thirdly, even if there arises a case wherein the contract is declared null and void, the arbitration
Clause cannot be invalidated [1.3] and fourthly, the burden of proof is on the Res No. 1 to
show that the Cl cannot enforce the award in any foreign country[1.4].

[1.1] The pre-arbitral proceedings are not premature in nature.

2. It is humbly submitted before this Hon’ble Tribunal that pre-arbitral proceedings are not a
condition precedent before filing a case before the tribunal. Any matter concerning the
compliance or non-compliance of arbitral pre-conditions is a question of admissibility and not
jurisdiction, even though the parties and the arbitrator in the instant case referred to it as a
'jurisdictional challenge'.1
3. It is prudent to deem pre-conditions as a matter of admissibility rather than jurisdiction as the
same would be in line with the general trend of judicial restraint in interfering with the
Arbitration proceedings and would facilitate expeditious disposal of matters rather than
annulling awards after a long and expensive process on non-fulfilment of pre-conditions,
which would render the arbitration process as circuitous and would defeat the very object of
time-bound and expeditious disposal of arbitration proceedings.2
4. The challenge, often faced while interpreting such clauses (those requiring the parties to
negotiate in good faith), is the uncertainty and ambiguity arising from bad or inappropriate
drafting.3 Such clauses often require parties to simply negotiate in good faith or engage in
friendly discussions to resolve their disputes before such disputes are referred to arbitration,

1 T v. B, [2021] HKCFI 3645.

2 C v. D [2021] HKCFI 1474.
3 Candid Productions v. International Skating Union 530 F Supp 1330 (SDNY 1982).

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 MEMORANDUM for CLAIMANT

and do not provide any additional constraints or requirements defining what should actually
be done, and how it should be done.
5. Such clauses have been held to be nebulous, implicating factors that are so indefinite and
uncertain that the intent of the parties can only be understood by conjecture. In the present
case there is no such mechanism in place to amicably resolve the dispute and there are no
other remedies available to the Cl. Hence, the Cl filed the case before the present tribunal
without wasting any time.4
6. The Cl humbly contends that in order to determine whether there has been sufficient
compliance with an agreement to negotiate in good faith, it must be seen whether the parties
were willing to comply with honest standards of conduct having regard to the interest of the
parties.
7. In a good faith negotiation, each party is expected to reveal true and accurate information, put
forward their best proposal having regard to the commercial interests of both parties and make
concessions to the extent possible. In the present matter, after the series of correspondences
through email it was clear that both the parties were not on the same page which encouraged
the Cl to file the case directly without wasting the time by indulging in pre-arbitral proceedings.
8. In order to determine if such clauses are enforceable, it needs to be ascertained whether such
clauses are sufficiently certain. However, the omission of any guidance as to the quality or
nature of the attempts to be made to resolve disputes or differences have rendered courts
unable to determine compliance with pre-arbitral steps. In the present case also, there were
no rules and procedures with regard to how negotiations have to be dealt with. Moreover,
there was proper communication through emails which suggested that both the parties did
not reach a mutual consensus and no agreement could be reached through the discussions.5
9. A duty to negotiate in good faith was unworkable in practice and lacked certainty as it did not
provide for a duration of the obligation to negotiate and made no provision for termination
of such negotiation.6 No such time period was mentioned in the present case and the delay in
proceedings would affect the time bound result.
10. When a contract involves goods that are subject to rapid deterioration or fluctuation in value,
time becomes an essential element of the contract. The digital tokens used in the present case
were volatile in nature and time can be of the essence in contracts involving goods that are

4 Aditya Mehta and Swagata Ghosh, Good Faith or Bad Faith – Analysing the Enforceability of PreArbitral Negotiation Clauses,
27 NLSBLR, (2021).
5 ¶ 15, NoA, pg. 10.
6 Walford v. Miles, [1992] 2 AC 128.

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 MEMORANDUM for CLAIMANT

volatile or perishable in nature.7 Therefore, engaging in pre-arbitral proceedings would only

be a wastage of time.
11. The existence of a precondition to arbitration requiring the parties to amicably settle the matter
via mutual discussions or mediation before resorting to arbitration cannot bar the Cl from
referring the matter to arbitration without ensuring compliance with pre-arbitral requirements.
Imposing an obligation on the parties to satisfy the preconditions will cause prejudice to the
Cl.
12. It is submitted that keeping in mind the time spent in restoring to pre conditions even if the
prior requirements for referring a dispute to arbitration are not compiled with, cannot prevent
the Cl from exercising its right to seek arbitration of a dispute, as the same preconditions have
to be understood only as a directory and not a mandatory requirement.

[1.2] The tribunal has the jurisdiction to try and settle the disputes.

13. It is humbly submitted before this Hon'ble Tribunal that the doctrine of kompetenz-kompetenz
shall apply in this case, according to which an arbitral tribunal has the power to decide on its
own jurisdiction, including the existence and validity of the arbitration agreement.8 The
arbitrators are competent to determine their jurisdiction although the effective exercise of that
jurisdiction remains subject to the inherent competence of the court to decide.
14. The Hon’ble Supreme Court of India has also held that the doctrine of kompetenz-kompetenz
implies that the arbitral tribunal has the competence to determine and rule on its own
jurisdiction, including objections with respect to the existence, validity, and scope of the
arbitration agreement, in the first instance.9
15. Art. 23 of the APCAM Rules states that,“The arbitral tribunal shall have the power to rule on its own
jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.”
Hence, the APCAM Rules have empowered the tribunal to decide the validity of its own
jurisdiction.
16. Moreover, Clause XX of the Smart Contract stated that “In case the negotiation fails, then such
dispute, difference or controversy shall be referred to and determined by arbitration as per the applicable
arbitration law of the seat of arbitration by APCAM in accordance with its Arbitration Rules.” Both the
parties wilfully conferred the tribunal with the APCAM Rules and Thamesburg as the seat of

7 Cutter v. Powell (1795) 6 Term Rep 320.

8 Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., (2020) 2 SCC 455.
9 M/S N.N. Global Mercantile Private ltd. v. M/S Indo Unique Flame Ltd. (2021) 4 SCC 379.

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 MEMORANDUM for CLAIMANT

the arbitration. Therefore, the tribunal has valid jurisdiction as they derive powers from the
arbitration agreement wilfully consented by both parties.
17. It is submitted that an arbitral tribunal is empowered and is competent to rule on its own
jurisdiction, including determining all jurisdictional issues, and the existence or validity of an
arbitration agreement. The very underlying object of the doctrine is to minimize judicial
intervention in matters entrusted to the tribunal by the parties in a flexible alternative dispute
mechanism such as arbitration.
18. It is well established that international tribunals may, and should rule on their jurisdiction
proprio motu, even in the absence of a jurisdictional challenge. The corollary of this principle is
that a tribunal is not bound by the parties' legal positions on jurisdiction. The doctrine of
kompetenz-kompetenz is rooted in the arbitration agreement itself. In application of the
separability doctrine, the arbitral tribunal's authority to decide on its own jurisdiction therefore
exists irrespective of whether the legal instrument containing the arbitration agreement has
been terminated.
19. The purpose of the Doctrine of Separability is to safeguard an Arbitral Tribunal's jurisdiction by
enforcing the parties' agreement to arbitrate and not to treat the arbitration agreement distinct
from the main agreement generally, including to determine the proper law of arbitration
agreement.10
20. Therefore, the Cl humbly submits that the tribunal has sufficient jurisdiction to try the present
matter. It is difficult to negotiate a submission agreement once a concrete dispute has arisen
and litigation tactics have been explored.11 Hence, most disputes are arbitrated because of pre-
existing arbitration clauses in the parties’ underlying commercial contract.12
21. It is humbly submitted that lex arbitri is the law chosen by the parties to govern arbitral
procedure, or the procedural law governing the conduct of the arbitration.13 Lex arbitri plays a
crucial role in determining the procedural and substantive rules that govern the arbitration
proceedings. In the present case, Clause XX of the Smart Contract specified the dispute to be
governed by the arbitration as per the applicable arbitration rules of the seat of arbitration by
APCAM in accordance with its rules. Hence, the present tribunal has jurisdiction to try the
case.

10 Anthony R. Daimsis, How heuristics misshape reasoning and lead to increased costs in arbitration?, SSRN, (2008).
11 1 GARY B. BORN, INTERNATIONAL ARBITRATION AND FORUM SELECTION AGREEMENTS:
DRAFTING AND ENFORCING 37 (The Netherlands, Kluwer Law International BV, 2010).
12 Id.
13 Thomas Reuters Practical Law, Lex Arbitri (2023).

4
 MEMORANDUM for CLAIMANT

[1.3] The arbitration clause cannot be nullified by the tribunal even if the main contract is
found void.

22. The Cl humbly contends that the Doctrine of Separability is defined in Art. 16 of the Model Law,
which states that “the arbitral tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration agreement. For that
purpose, an arbitration clause which forms part of a contract shall be treated as an agreement
independent of the other terms of the contract. A decision by the arbitral tribunal that the
contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.”14
23. The arbitration agreement is independent of the other terms of the contract and this
independence is limited to the arbitral tribunal's jurisdiction to consider challenges to its own
jurisdiction. The principle of separability means that the invalidity or rescission of the main
contract does not necessarily entail the invalidity or rescission of the arbitration agreement.15
24. Hence, even if the main agreement entered by both the parties is found invalid by the Hon’ble
Tribunal, it does not bar the Cl from seeking remedy. In an arbitration proceeding, the intent
of the parties is of paramount importance.16 The only purpose of the Doctrine of Separability is
to give legal effect to the parties’ intention of resolving disputes through arbitration and not
to insulate the arbitration agreement from the substantive contract for all purposes.
Accordingly, it was held that an express choice of law governing the substantive contract is a
strong indication of the parties' intention in relation to the agreement to arbitrate.17
25. Moreover, the same approach was also held by the Singapore High Court wherein it held that
under the Doctrine of Separability, a party cannot avoid the obligation to submit a dispute to
arbitration by merely denying the existence of the underlying contract. However, it does not
mean that because of this doctrine, parties intended to enter into an arbitration agreement
independent of the underlying contract.18 Therefore, the Res cannot claim that if in any case
the main contract is held void by the Hon’ble Tribunal the arbitration agreement should get
rejected as well.

14 UNCITRAL Model law on International Commercial Arbitration, 1994, Art. 16.

15 Premium Nafta Products Limited & Ors. v. Fili Shipping Company Limited & Ors. [2007] EWCA Civ 20.
16 Loukas Mistelis et. al., The Judicial Solution to the Arbitrator’s Dilemma: Does the ‘Extension’ of the Arbitration Agreement to

Non-Signatories Threaten the Enforcement of the Award?, 39 JIBR (2022).

17 Sulamerica CIA Nacional De Seguros SA & Ors v. Enesa Engenharia SA & Ors [2012] EWCA Civ 638.
18 BCY v. BYZ, [2016] SGHC, 249.

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 MEMORANDUM for CLAIMANT

[1.4] The Claimant can enforce the award of the tribunal according to the New York
Convention.

26. It is submitted before this Hon’ble Tribunal that the NY Convention shall apply to the
recognition and enforcement of arbitral awards made in the territory of a State other than the
State where the recognition and enforcement of such awards are sought, and arising out of
differences between persons, whether physical or legal.19 In the present case, Thamesburg was
a part of the NY Convention and hence would be governed by it.
27. Art. V(1)(a) of the NY Convention states that the recognition and enforcement of award can
be refused where the parties were, under the law applicable to them, under some incapacity.
28. The recognition and enforcement of the award may be refused only if the party against whom
such measures are sought can establish that the arbitration agreement is not valid under the
law to which the parties have subjected it.20 Both the parties while entering into the agreement
were capable of contracting and no incapacity was there, also there were no conditions to
show that the contract was null and void and the court should at the request of one of the
parties, should refer the parties to arbitration.21
29. Moreover, awards can also be enforced in the absence of original arbitration agreement or
without a written arbitration clause at all.22 The reciprocity reservation also limits the scope of
the NY Convention i.e., instead of applying to all the foreign awards it is limited to ‘Convention
Awards’ only. However, in the present case, Thamesburg was a party to the convention and
therefore the problem does not arise.
30. Under the NY Convention and the Model Law, the burden of proof is not upon the party
seeking recognition and enforcement.23 Hence, the burden of proof is not on the Cl but on
the Res. Art. V(1) & (2) of the Convention says that enforcement ‘may’ be refused, the language
is permissive and not mandatory.24
31. The Cl humbly submits that one of the grounds for refusal under the convention and under
the Model law is a situation where the arbitral tribunal is alleged to have acted in excess of its
authority i.e. ultra petita and to have dealt with a dispute that was not submitted to it, but the

19ALAN REDFERN AND MARTIN HUNTER, REDFERN AND HUNTER ON INTERNATIONAL

ARBITRATION, 617 (Oxford University Press 2015).
20 FOUCHARD GAILLARD GOLDMAN, INTERNATIONAL COMMERCIAL ARBITRATION (Kluwer Law

International 1999).
21 NY Convention, 1958, Art. II (3).
22 In Hewlett-Packard, Inc. v. Berg 867 F. Supp. 1126.
23 Supra note 18.
24 Chormalloy Aeroservices Inc. v. Arab Republic of Egypt 939 F. Supp 907.

6
 MEMORANDUM for CLAIMANT

courts have invariably rejected this defence.25 Hence, the Res also cannot take the defence of
jurisdiction.

ISSUE 2: WHETHER THE CLAIMANT IS ENTITLED TO DAMAGES TO T HE EXTENT OF

2.4 MILLION USD?

32. Firstly, the Cl seeks interim injunction on the transfer of plot #3223 to Crimson Constructions
by Res No. 1 to maintain the status quo, and the balance of convenience for both the parties
[2.1]. Secondly, The Cl is entitled to seek compensation amounting to USD 2.4 million which
includes the loss of business opportunities that the Cl suffered as a result of the contractual
breach and moral damages [2.2]. The claims are consistent with both the legal framework and
the specific circumstances of the case and are justified on the basis of the present
circumstances and existing precedents. Thirdly, the Cl requests an alternate relief, in case the
Hon’ble Tribunal is unable to award the required compensation of USD 2.4 million, it can
order the Res No. 1 for specific performance of the contract 47RZ*K and order it to transfer
plot #3223 to the Cl [2.3].

[2.1] Claimant is entitled to seek Interim injunctions against the transfer of plot #3223 to
Crimson Construction.

33. Arbitrators wield broad power when they fashion remedies and promote justice and, thus,
possess the freedom to grant injunctive reliefs26 as well as mandatory injunctions.27 Since the
UNCITRAL Model Law has been interpreted by Courts to establish that an injunction can be
passed against a third party not involved in the arbitration28 if the subject matter of the
arbitration is with a third party without having any independent right in relation thereof.29
34. In accordance with Rule 13 of the APCAM Rules, a party is entitled to seek interim relief from
the Arbitral Tribunal at any point during the arbitration proceedings. Such interim relief aims
to prevent current or imminent harm, safeguard the integrity of the arbitral process, and ensure
the preservation of assets and evidence crucial to the resolution of the dispute.

25AlbertJan Van Den Berg, the 1958 NY Arbitration Convention Revisited.

26 Cook v. Mishkin 95 A.D.2d 760, 464 N.Y.S.2d at 763 (1983).
27 W.M. Girvan, Inc. v. Robilotto, 33 N.Y.2d 425.
28 Nirma Ltd. v. Lentjes Energy (India) Pvt. Ltd. (2002) 5 SCC 520.
29 Tapadiya Construction Ltd., Aurangabad v. Sanjay Suganchand Kasliwal and Anr. (LAWS) BOM-2015-12-62.

7
 MEMORANDUM for CLAIMANT

35. The claim for interim injunction is required to ensure that the subject matter of the Arbitration
is preserved and follows all the American Cyanamid Guidelines30 for interim reliefs. It is within
this framework that we assert the necessity of a temporary injunction to prevent the transfer
of plot #3223 to Crimson Constructions, as this transfer poses a significant threat to the Cl's
interests and overall business operations and will cause irreparable loss and safeguard the Cl's
interests and protect their rights. The Cl has the right to a fair and just arbitration process and
is entitled to an arbitral process that upholds the principles of equity and justice.

[2.1.1] Interim injunctions are needed to preserve the subject matter of the Arbitration
proceedings.

36. Arbitral Tribunals have been given the power to make an order for interim relief in cases of
urgency and for the purpose of preserving evidence or assets31 and ensuring the ultimate
satisfaction of a judgment or final award.32 The gravity of protecting assets and evidence during
arbitration proceedings was established in the case of RSM Production Corp. v. Freshfields
Bruckhaus Deringer U.S. LLP33 and Chevron Corporation and Texaco Petroleum Corporation v. Ecuador
(II).34
37. In the present case, the Cl requests for a temporary injunction to halt the transfer of the plot
#3223 to Crimson Constructions given that arbitration can become a hollow formality if
parties are able to alter irreversibly the status quo before the arbitrators are able to render a
decision in the dispute.35 Hence, the Cl’s demand for temporary injunction is justified so as to
preserve the subject matter of the contract36 and prevent any impending risk of irreparable
harm.
38. The importance of this temporary injunction cannot be overstated and are meant to maintain
the status quo and protect the rights of all parties until the final resolution of the dispute as
the subject piece of land, plot #3223, holds vital significance for the Cl's business and thus
aligns with established principles in international arbitration jurisprudence.

30 American Cyanamid Co v. Ethicom Ltd [1975] AC 396.

31 Zim Integrated Shipping Services Limited v European Container KS and European Container KS 11 [2013] EWHC
3581 (Comm).
32 Yesilirmak, Interim and Conservatory Measures in ICC Arbitral Practice, 11 lICC Bulletin (2000).
33 682 F.3d 1043 (D.C. Cir. 2012).
34 PCA Case No. 2009-23.
35 Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, 910 F.2d 1049, 1053 (2d Cir. 1990).
36 Girish Mulchand Mehta v. Mahesh S. Mehta 2009 SCC OnLine Bom 1986.

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 MEMORANDUM for CLAIMANT

[2.1.2] The current case fulfils the American Cyanamid Test for grant of interim reliefs

39. The tribunal’s power to pass an injunction was discussed and established in case of American
Cyanamid Co. v. Ethicon Ltd.37 wherein the Court guidelines were set out to establish whether
an applicant has an adequate case for the granting of an interlocutory injunction which were-
(a) Whether the Cl had a strong or merely an arguable case. (b) The adequacy of damages as a
remedy. (c) The balance of convenience. (d) Whether the status quo should be maintained.
Applying the test to the present case-
a. Whether the claimant had a strong or merely an arguable case- The Cl’s claim is
arguably strong since the grant of interim reliefs during arbitration has been widely
accepted to ensure dispensation of justice.38 Applying the Doctrine of Lashes, an essential
part of equity,39 the Cl decided to bring a claim of interim injunctions.40
b. Adequacy of damages as a remedy- The Cl argues that Plot #3223 is of paramount
importance to its business operations. Given the unique nature of the property and its
significance to the Cl's business, an injunction is necessary to ensure that their interests
are adequately protected.
c. Balance of convenience- Considering the balance of convenience, granting a temporary
injunction to prevent the transfer of the plot to Crimson Constructions would not in any
manner inconvenience the opposing party. However, denying the injunction would
severely prejudice the Cl, as they would suffer irreparable harm to their business
operations. Hence, an injunction is necessary to protect the Cl's interests without causing
disproportionate inconvenience to the other party.
d. Whether the status quo should be maintained- The claim for injunctions ensures that
no irreparable harm results to either of the parties and the status quo is maintained so as
to protect the rights of the parties involved until a final determination is reached. 41
Granting a temporary injunction to prevent the transfer of plot #3223 to Crimson
Constructions ensures that the current state of affairs, vital to the Cl's business, is
preserved until the arbitration process reaches a final determination.
40. Since the claim for interim reliefs fulfils all the criteria as laid down under the American
Cyanamid case, the Cl’s claim is maintainable and tenable in the eyes of law.

37 American Cyanamid Co v. Ethicom Ltd [1975] AC 396.

38 Gen. Mills v. Champion Petfoods USA, No. 20-CV-181 (KMK), 2020 WL 915824.
39 Marico Limited v. Mr. Mukesh Kumar & Ors. 2018 SCC OnLine Del 10823.
40 Stone v. Williams 873 F.2d 620 (2d Cir. 1989).
41 Modi Entertainment Network v. WSG Cricket Pvt. Ltd. (2003) 4 SCC 341, NTPC Ltd. v. Siemens Ltd (2007) 4

SCC 451.

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 MEMORANDUM for CLAIMANT

[2.2] The Claimant is entitled to seek compensation of 2.4 million USD including loss of
business.

41. The rule of the common law states that where a party sustains a loss by reason of a breach of
contract, he is, so far as money can do it, to be placed in the same situation, with respect to
damages, as if the contract had been performed.42 Thus, by the principle of damages, the Cl is
justified in demanding USD 2.4 million so as to it can be put in the same position as he would
have been in if he had not sustained the wrong for which he is now getting his compensation
or reparation as nearly as possible.43 The amount stipulated as liquidated amount is the ‘upper
limit beyond which the court cannot grant reasonable compensation.44
42. Additionally, in cases where the entire amount stipulated is a genuine pre-estimate of loss, the
actual loss need not be proved. Burden to prove that no loss was likely to be suffered is on
the party committing breach, as already observed.45
43. The CISG is based upon a principle of full compensation for losses in the event of breach 46
by virtue of which an aggrieved party is entitled to claim full compensation on account of
breach.47 This ensures that the aggrieved party is restored to its original economic position or,
as an alternative, to compensate the aggrieved party for expenses he reasonably incurred in
reliance on the contract when the purpose of those expenses is lost because of the breach.48
44. The quantum of the compensation of USD 2.4 million is calculated regardless of the fact that
the non-performance resulted due to the seller’s fault.49 Art. 46 of the CISG50 grants the buyer
the right to require the seller to perform its contractual obligations which extends to
demanding the disputed obligation to be fulfilled.51 Since, Res No. 1 made a breach of contract
by not delivering the plot #3223, then they are liable to compensate the Cl for the same by
compensating the Cl in monetary terms52 owing to the losses incurred on account of loss of
business opportunities.
45. By virtue of Art. 45(1)(b), CISG a buyer is entitled to claim damages in case the seller does
not fulfil his or her obligation and the same stems from the duty a seller owes towards the

42 Robinson v. Harman, (1848) 1 Exch 850, 855.

43 Livingstone v. Rawyards Coal Co., [1880] 5 App. Cas. 25 (H.L.) 39 (Eng.).
44 Kailash Nath v. Delhi Development Authority (2015) 4 SCC 136; Maya Devi v. Lalta Prasad (2015) 5 SCC 588.
45 Construction & Design Services v. DDA (2015) 14 SCC 263.
46 Case 651: CISG 6; 7; 25 – Italy: Tribunale di Padova Ostroznik Savo (Vzerja Kuncev) e Eurotrafic s.r.l. v. La Faraona

soc. coop. a.r.l. (11 January 2005).

47 CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14 January 2002].
48 CLOUT case No. 138 [U.S. Court of Appeals (2nd Circuit), United States, 6 December 1995].
49 CLOUT case No. 271 [Bundesgerichtshof, Germany, 24 March 1999].
50 CISG 1980, Art. 46.
51 CLOUT case No. 594 [Oberlandesgericht Karlsruhe, Germany, 19 December 2002].
52 CLOUT case No. 125 [ [Oberlandesgericht Hamm, Germany, 9 June 1995].

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 MEMORANDUM for CLAIMANT

buyer.53 Additionally, Art. 74 CISG provides that an aggrieved party’s damages consist of a
monetary sum to compensate him for loss, including loss of profit, “suffered as a consequence of
the breach”. 54
46. In the present case the contract entered between the parties was avoided by the Res by not
performing their part of contract and hence awarding the impugned virtual plot #3223 to the
second highest bidder. The fluctuations caused in the technical system of the Res resulted in
severe loss to the Cl who had to bear the burden even when it was not even remotely related
to the actions of the Cl.

[2.2.1] Claimant entitled to USD 2.2 million on account of Loss of Profit.

47. A party is entitled to claim for loss of opportunities or loss resulting from a contractual breach
to compensate the innocent party, who was deprived of the chance to receive a particular
benefit or avoid a particular risk, due to such a contractual breach.55 While awarding damages
in arbitrations especially for loss of profits, tribunals exercise an element of ‘honest guesswork’
based on the evidence on record as to the loss of profits suffered.56
48. Thus, an aggrieved party is entitled to claim differences between the price paid by a party and
the price which it would have received if it had resold them in the market forthwith after the
purchase, in presence of a fair market conditions.57 Art. 76 allows the aggrieved party to claim
damages for breach of contract by one party consisting of a sum equal to the loss, including
loss of profit, suffered by the other party as a consequence of the breach.58
49. The Cl’s claim is justified because it is already established that if the seller suffers loss of a sale
of good when he could have had sold the same to other persons had the buyer not breached
the terms of the contract, thereby impairing his ability to make a second sale which it is entitled
to recover the lost profit from the first sale.59

53 CISG,1980, Art. 45(1)(b).

54 CLOUT case No. 631 [Supreme Court of Queensland, Australia, 17 November 2000].
55 [Link] vs Mahanagar Telephone Nigam Ltd. 2009 Latest Caselaw 2375 Del.
56 Mohd Salamatullah v. Government of Andhra Pradesh AIR 1977 SC 1481; A.T. Brij Paul Singh v. State of Gujarat.

AIR 1984 SC 1703; Ayub Ali v. Union of India 86 (2000) DLT 86; [Link] v. Mahanagar Telephone Nigam Ltd.
2009 Latest Caselaw 2375 Del.
57 Trojan & Co. v. RMNN Nagappa Chettiar [1953] SCR 789.
58 CISG,1980, Art. 76.
59 CLOUT case No. 427 [Oberster Gerichtshof, Austria, 28 April 2000].

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 MEMORANDUM for CLAIMANT

[2.2.2] The Claimant is entitled to claim USD 0.2 million as Moral Damages

50. Compensation for moral damages has been defined as compensation for non-pecuniary harm
suffered by a party, such as injury to reputation, mental anguish, or emotional distress. 60 Also
known as non-pecuniary damages or damages for moral prejudice, such damages are intended
to compensate for the harm caused to the injured party's feelings, reputation, or dignity and
are separate from and in addition to any economic or pecuniary losses suffered.61
51. Moral damages can be granted in presence of reliable and concrete evidence of actual losses
and are not computed mathematically or with any degree of accuracy or by any use of any
precise formula.62 Furthermore, they are purely discretionary in nature to offer moral solace
and subvert the burden of proof and the rules of evidence.63
52. The Cl had clarified their intention to set up an office at the said plot in the metaverse setting
but the same could not be incorporated because of the technical glitch on the side of the Res.
No. 1 which has caused mental distress and agony to the Cl. The plot #3223 was not
transferred to the Cl despite making a payment of USD 1.5 million.
53. It must be noted that a very hefty amount of money was debited from the Cl.’s account for
the payment of Terra tokens and the ‘gas’ and still no return was given to the Cl. at any point
of time by the Res. No. 1 which has caused grave distress to the Cl. and hence the additional
demand for moral damages’ compensation is valid which makes the total compensation to be
paid to be USD 2.4 million. Here, and hence it seeks additional USD 0.2 million compensation
for the moral damage that has occurred to them because of the whole sequence of events.

[2.3] Claimant is entitled to seek specific performance in the form of transfer of plot #3223
to itself.

54. In case the Hon’ble Tribunal cannot award compensation of USD 2.4 million, the Cl is entitled
to seek specific performance of the contract.64 Arbitrators in most jurisdictions in the world
have jurisdiction to make a specific performance order, so as to put the Cl as close as possible

60 Elettronica Sicula S.p.A. (ELSI) (United States v. Italy) 1989 ICJ Rep. 15.
61 Chorzów Factory (Germany v. Poland (1928) PCIJ Series A No 17.
62 Opinion in the Lusitania cases (United States v. Germany), Decision of the Mixed Claims Commission of 1

November 1923, 7 RIAA, pg. 36.

63 The Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3, Award, 6 May 2013, para. 289.
64 CISG, 1980, Art. 46 (1); ICC Arbitral Award No. 12173.

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 MEMORANDUM for CLAIMANT

to the situation in which it would have been in had the contract been performed according to
its terms65 even in the absence of an express contractual provision authorizing the remedy.66
55. Moreover, the UNCITRAL Model Law adopted a provision which states that empowers an
arbitral tribunal to make an award requiring specific performance of a contract unless
otherwise agreed by the parties.
56. The validity of a specific performance is checked by investigating whether granting of specific
performance would amount to an adequate remedy67 and can be granted when a tribunal feels
it necessary but only at equity and when it appears appropriate in comparison with damages.68
57. Since MetaTerrain has already failed to fulfil its obligations under the agreement, its inability
to perform and its ability to do so in the future is uncertain, the Cl is well justified to seek
specific performance as it should not be compelled to remain in a relation of neighbourhood
with a person in deliberate breach of his obligations.69
58. Art. 28 of the CISG, allows the Tribunal to look at the availability of such relief under its own
substantive law.70 This includes not only present and future loss of economic benefits, but also
any other type of adverse consequences, such as damage to the subject matter, loss of business
opportunities, etc.71
59. The plot #3223 hold vital role for the business conduct of the Cl and even after completing
the required formalities including putting the highest bid, the same was not transferred to the
Cl which has caused severe loss to the Cl and hence it is requested to the tribunal to award
specific performance in the form of transfer of plot #3223 to Estate X by the Res. Thus, a
mere award of damages in the instant case would result in sufficient injustice to the Cl and can
be remedied only by the delivery of the Plot.72
60. In the present case, Cl’s business plan included setting up of a virtual office within MetaTerrain
and its significant importance plot #3223 to the Cl was reiterated to the Res,73 thereby
highlighting the Cl’s reason to claim the virtual plot #3223.

65 Xiamen Xinjingdi Group Ltd v. EtonProperties Ltd CAP No. 54 of 2007, ICCA Yearbook Commercial Arbitration
2009, available at [Link]
properties-ltd-and-eton-properties-holdings-ltd-judgment-of-the-high-court-of-hong-kong-2008-hcct-54-2007-
tuesday-24th-june-2008.
66 Suffolk Development Corp. v. Pat-Plaza Amusement Corp. 236 N.Y.S.2d 71 (N.Y. Sup. Ct. 1962).
67 JSTOR Maudsley, R. H. The Modern Law Review, vol. 18, , 524 no. 5, 1955.
68 1 JOSEPH CHITTY ET. AL., CHITTY ON CONTRACTS, GENERAL PRINCIPLES (Sweet & Maxwell 2004).
69 Shiloh Spinners v. Harding [1973] A.C. 691.
70 CISG, 1980, Art. 28.
71 Angela Maria Romito, CISG: Italian Court and Homeward Trend- Queen Mary Case Translation Programme Corte

d'Appello di Milano 20 March 1998 Italdecor s.a.s Yiu's Industries (H.K.) Limited (default), 14 PILR 179, 2002.
72 Dresser Rand B.V. v. Al Rushid Petroleum Investment Company (Final Award) 226627/ZF/AYZ2019.
73 Cl Exh. C-5.

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 MEMORANDUM for CLAIMANT

61. Since a significant business opportunity for the Cl was lost due to a technical glitch on the part
of the Res, it is the duty of the Res to compensate for the same and maintain the reasonable
and justified status quo as any monetary damage below USD 2.4 million will not suffice and
the Cl is entitled to seek the specific performance of the contractual obligations ruled by the
CISG.74
62. Hence, the Cl humbly submits that the non-performance of the Contract occurred despite the
Cl having fulfilled its part of the contract thereby justifying the claim for specific performance
in case the USD 2.4 million cannot be awarded by the contract to secure the interest of the
Cl.

ISSUE 3: WHETHER A VALID CONTRACT HAS B EEN FORMED AND CONCLUDED UNDER
THE CISG?

63. A valid contract has been formed under the CISG since the contract fulfils all the prerequisites
for the formation of a valid contract as entailed in the CISG. firstly, the Cl argues that there is
a valid contract formed between the parties under various provisions of the CISG as all the
requirements under the provisions have been fulfilled [3.1]. secondly, it is pertinent to mention
that all the components of this contract have been held valid which includes Smart Contracts
which are covered within the purview of the CISG [3.2] thirdly, NFTs, which are also a key
component of this contract are covered under the CISG and hence, makes the contract valid
[3.3] and fourthly, the Cl argues that the Res should not be exempted from liability for
performance under various provisions of the CISG in order to ensure justice [3.4].

[3.1] There is a valid contract of sale of goods pursuant to various provisions of CISG.

64. Under the doctrine of the proper law of the contract, issues affecting the validity of a contract,
including contractual capacity, should be determined by the law of the contract,75 which, in
the instant case, is the CISG. The extent to which the parties have intended to be bound
should be determined by examining the contract’s wording.76 In the instant case, the Cl

74 Técnicas Medioambientales Tecmed, S.A. v. United Mexican States ICSID Case No. ARB(AF)/00/2, Chromalloy
Aeroservices Inc. v. Arab Republic of Egypt 939 F. Supp. 907.
75 First Nat. Bank v. Mitchell (1899) 92 Fed. 565.
76 MARTIN SCHIMDT ET. AL., COMMENTARY ON THE UN CONVENTION ON THE

INTERNATIONAL SALE OF GOODS (CISG), (Oxford University Press 2016).

14
 MEMORANDUM for CLAIMANT

highlights the clause in the ToU (Clause XVIII) explicitly subjecting all transactions and
agreements to the CISG.77
65. According to the offer and acceptance model of contract formation, an offer constitutes the
starting point in the contract formation process.78 The Cl contends that a valid proposal was
made according to Art. 14,79 which necessitates indicating the intention to be bound if the
addressee accepts the proposal which was duly accepted by Res 1 along with a party’s intention
to be bound in the event of acceptance i.e., animus contrahendi which is one of the essentials of
a valid contract.80
66. Under the CISG, an offer can be accepted explicitly by statement, implicitly by conduct81 or
even by silence,82 although not by itself, and must comply exactly with the offer 83. The Cl
unequivocally accepted the terms of the contract by their conduct thereby forming a valid
contract as per the provisions of the Convention. CISG stipulates a valid contract to be
concluded at the moment when acceptance of an offer becomes effective.84 The confirmation
of payment has been mentioned by the Res No. 1 in their email submitted as Exh. C-485 which
hereby confirms the intention of the parties and presence of consideration.
67. Art. 30 of the CISG specifies the seller's obligations, including the delivery of goods, handing
over related documents, and transferring the property as required by the contract and the
Convention which the Res No. 1 clearly failed to uphold as seen in the Exh. C-486 where the
Res No. 1 has accepted the fact that all the pre-requisites has been done by the Cl and still
they will not be able to deliver the said virtual plot because of a technical glitch thereby
resulting in a breach of its obligation and making the Cl entitled to seek damages under Art.
45, CISG.87
68. The rule of Contra Proferentem states that when a contract contains obscure or ambiguous terms,
such terms should be interpreted against the party who prepared the contract and relied on
those terms.88 The rule suggests that any ambiguities in the contract should be construed
against the party responsible for drafting the contract and advocating for the contested terms.

77 ¶ 17, NoA, pg. 16.

78 JOSEPH LOOKOFSKY, CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS (CISG) 65 (Kluwer Law International 2012).
79 CISG, 1980, Art. 14.
80 Rose & Frank Co. v. J. R. Crompton Ltd. [1923] 2 K.B. 261.
81 Geneva Pharmaceuticals Tech. Corp. v. Barr Laboratories, Inc., 789 F. Supp. 1229 (S.D.N.Y. 2002).
82 Filanto S.p.A. v. Chilewich Int’l Corp., 201 F. Supp. 2d 236 (S.D.N.Y. 1992), CLOUT Case No. 23 [14 Apr. 1992].
83 Commentary on the Draft Convention on Contracts for the International Sale of Goods prepared by the Secretariat,

Official Records, at 20, U.N. Doc. A/CONF.97/5 (1979) [hereinafter Secretariat Commentary] at 24.
84 CISG,1980, Art. 23.
85 Cl Exh. C-4.
86 Id.
87 CISG, 1980, Art. 45.
88 Maye v. Colonial Mutual Life Assurance Society (1924) 35 CLR 14.

15
 MEMORANDUM for CLAIMANT

In this instance, the lack of an express exclusion clause for the CISG in the contract favors
EstateX, indicating that the impugned contract governed by the CISG must be interpreted
while giving the Cl due consideration.
69. Hence, a valid contract has been formed under the provisions of the CISG fulfilling all the
criteria needed for forming a valid contract.

[3.2] Smart Contracts are covered within the purview of CISG.

70. A smart contract is defined as a transaction protocol that fulfils the conditions of a contract
and is concluded through a computer.89 The Cl humbly contends that the CISG should be
interpreted to accommodate cross-border electronic auctions, asserting that smart contracts,
utilizing block chain technology, maintain validity as contracts under the CISG.90
71. The CISG does not require written evidence for a contract of sale and includes oral or
acceptance by conduct,91 and in line with its overall intent, digital signatures in smart contracts
should hold the same legal effect as traditional signatures.92 Hence, it can be reasonably
concluded that the signing/authorization is hereby concluded on the side of both parties.
72. Moreover, the UNCITRAL's Model Law on Electronic Commerce and the Guide 1996
consider data messages, including paperless messages generated by computers, as originating
from the computer's legal entity.93 Thus, block chain technology of a smart contract in no way
hinders the validity as a contract under CISG.94
73. Thus, the contract between EstateX and MetaTerrain Pvt. Ltd. is, indeed, a valid contract
under the CISG, as it fulfils the necessary criteria for the formation of a valid contract between
the parties. The intent of the Res to enter into the contract has been unequivocally established.

[3.3] NFTs are covered within the purview of sale of goods.

74. It is humbly submitted that the sale of NFT which forms an essence of the contract in dispute,
falls within the ambit of goods under Art. 2 of the CISG. The sale of virtual land and the
contractual terms in the present case can be categorized as a sale of goods.

89 Nick Szabo, Smart Contracts: Building Blocks for Digital Markets, ALAMUT BASTION OF PEACE AND
INFORMATION (1996).
90 2 PETER SCHLECHTRIEM ET. AL., COMMENTARY ON THE UN–CONVENTION ON THE

INTERNATIONAL SALE OF GOODS (CISG) (Oxford University Press 2005).

91 CISG 1980, Art.11; CLOUT case No. 429 [Oberlandesgericht Frankfurt a.M., Germany, 30 August 2000].
92 Yufei Zhang, The Applicability and Prospects of CISG on Smart Contracts, ICMETSS (2022).
93UNCITRAL’s Model Law on Electronic Commerce and the Guide 1996, available at
[Link]
94 Supra note 92.

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 MEMORANDUM for CLAIMANT

75. In the landmark judgment of Tata Consultancy Services Vs. State of Andhra Pradesh95 the Apex
Court of India laid down a three-part test for a software to classify as goods i.e. (a) its utility
(b) capable of being bought and sold (c) capable of being transmitted, transferred, delivered,
stored and possessed. NFTs satisfy all the aforementioned criteria-
a. NFTs are widely recognized as a means of representing ownership or authenticity of
digital or physical items, and they can facilitate digital transactions, making them highly
utilitarian.
b. NFTs are not only capable of being bought and sold. This tradability aligns with the
requirement for classification as goods.
c. NFTs are highly transferable. Their ownership can be transferred from one party to
another, either as part of a sale or as a form of collateral or security in transactions.
76. NFTs have been held to be ‘commodities’ in the eyes of law.96 Section 1a(9) of the US
Commodity Exchange Act defines ‘commodity’ to include, among other things, "all services,
rights, and interests in which contracts for future delivery are presently or in the future dealt in.".97 The
definition of a commodity is broad. Bitcoin and other virtual currencies are encompassed in
the definition and properly defined as commodities.98
77. A cryptocurrency, as per the case of National Provincial Bank v Ainsworth99 can be considered a
property if it is capable of (a) being definable, (b) identifiable by third parties, (c) capable in its
nature of assumption by third parties, and (d) having some degree of permanence. Since Terra
Coins fulfil all the aforementioned criteria, it is well covered within the definition of
property.100
78. In light of the various above-mentioned legal precedents, the Cl contends that the contract
was validly formed because the subject matter of the impugned contract constitutes a valid
criterion for the purpose of goods. As a result, the Res should be held liable for the
performance of the contract, as it is indeed a valid and an enforceable agreement. NFTs Exh.
the characteristics of goods and, therefore, can be subject to the rules governing the sale of
goods, including remedies for breach of contract.

95 Tata Consultancy Services v. State of Andhra Pradesh [271 ITR 401 (SC)].
96 In re Coinflip Inc CFTC Docket No. 15-29 dated 17-09-2015.
97 7 U.S.C. § 1a (9), US Commodity Exchange Act, 1936).
98 Board of Trade of City of Chicago v. SEC 677 F. 2d 1137, 1142 (7th Cir. 1982).
99 National Provincial Bank v. Ainsworth [1965] 1 AC 1175.
100 AA v. Persons Unknown [2019] EWHC 3556 (Comm).

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 MEMORANDUM for CLAIMANT

[3.4] The Tribunal cannot exempt Respondents from liability for performance under
various provisions of the CISG.

79. Art. 6 of the CISG allows parties to exclude themselves from the application of the
Convention. Such an exclusion is valid only when it has been- (a) mutually agreed to, and (b)
must be expressly stated in the contract.101 Notably, in this case, neither the ToU nor the emails
exchanged between the Cl and the Res contain any such exclusion clause.102
80. The presence of exemption clause, however, cannot be used to undermine the Convention’s
basic approach of imposing liability for a seller’s delivery of non-conforming goods regardless
of whether the failure to perform resulted from the seller’s fault.103
81. Art. 79 of the CISG provides exemption from performance of contract if the party’s non-
performance was “due to an impediment beyond his control”. The word impediment is used in
context of “an unmanageable risk or a totally exceptional event, such as force majeure, economic impossibility
or excessive onerousness”.104 Since, there were no such ‘unmanageable’ circumstances which were
out of control of the Res, the Court cannot grant any sort of exemption from the performance
of its obligations.
82. Hence, it is humbly submitted before the Hon’ble Tribunal that based on the application of
the relevant legal principles, it is evident that the Res should not be exempted from performing
specific performance, namely the transfer of plot #3223 to Estate X. The absence of an
exclusion clause in the contract, coupled with the interpretation of Art. 79 and the application
of legal precedents, strongly support the assertion that the CISG governs this dispute and no
exemption from the contractual performance can be granted.

ISSUE 4: WHETHER RES NO. 2, OORBUS LTD., A PARTY TO THE PRESENT

ARBITRATION PROCEEDINGS?

83. The Hon’ble Tribunal has jurisdiction over Res No.2 based on the arbitration agreement that
the Cl concluded with Res No. 1 because, in that agreement, both the parties opted for the
APCAM Rules and thus agreed on the joinder mechanism in Art.17(5) of the APCAM Rules.
It is humbly submitted to the tribunal that Res No. 2 is party to the arbitration agreement as

101 Ceramique Culinaire v. Musgrave Recueil Dalloz [1997] 337; Corn case; Olivaylle v. Flottweg KGAA (No 4) [2009]
FCA 522.
102 Cl Exh. C-1.
103 9 CLOUT case No. 271 [Bundesgerichtshof, Germany, 24 March 1999].
104 6 CLOUT case No. 166 [Schiedsgericht der Handelskammer Hamburg, Germany].

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 MEMORANDUM for CLAIMANT

firstly, the application of the implied consent establishes that Res No. 2 is a party to the
agreement [4.1], secondly, Oorbus Ltd. had sufficient relationship and interest in the business
and functioning of MetaTerrain Pvt. Ltd. [4.2], and thirdly, the arbitration agreement can be
extended over Oorbus Ltd. under the Group of Companies Doctrine [4.3].

[4.1] The application of the implied consent establishes that Res No. 2 is a party to the
agreement.

84. The arbitration clause covers non-signatories as it had implied consent, and the arbitration
agreement binds them.105 Various arbitral tribunals have applied the principles of international
law to ascertain the parties to an international arbitration agreement.106 The tribunals have held
that, implied non-signatories are bound to submit to the arbitration once the arbitration
agreement is in writing.107 The moment there is an arbitration clause, the issue of extension to
a non-signatory may be considered.108
85. Despite the clause in the contract that bears the 'non-signatory's' signature, it does not
constitute a formal obstacle to the extension.109 In this regard, it is submitted that the writing
requirement is fulfilled, as the arbitration clause was mentioned in ToU. Therefore, the Res
No. 2 can be a party to the arbitration agreement. All agreements, including arbitration
agreements, can be entered into expressly or impliedly.110 The focus on the consent of non-
signatories to the arbitration agreement is rather less, as the applicable law to the contract is
the right gauging factor to bind a non-signatory to the arbitration agreement.111
86. In this regard, the implied consent of the Res No. 2 can be deduced from the fact that it had
provided a significant investment of sum of USD 50 million to the Res No. 1. The injection
of capital from Oorbus Ltd. was anticipated to expedite MetaTerrain's development schedule,
allowing them to enhance their current technologies, investigate novel use cases, and move
their products closer to widespread acceptance.112 Therefore, even though the Res No. 2 is
not a signatory to the arbitration agreement, the actions showcased an implied consent to
arbitrate in case of a dispute arising out of the agreement.

105 1 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION (Wolters Kluwer Law & Business
2021).
106 Klaus Peter Berger, ICC Award No. 9797, ASA Bull. 2000, at 514 et seq.
107 Fisser v. Int'l Bank, 82 F.2d 231 (2d Cir. 1960).
108 Y.S.A.L. v Z Sarl ATF 129 III 727-4P.115/2003) ( X.S.A.L).
109 McCarthy v. Azure, 22 F.3d 351, 355-56 (1st Cir. 1994).
110 Gary B. Born, Supra note 105.
111 Gary B. Born, Supra note 105.
112 ¶ 3 NoA, pg.8.

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 MEMORANDUM for CLAIMANT

87. Tribunals have considered implied consent based on the conduct of parties as a substitute for
express consent.113 Any party can implicitly be a party to the arbitration agreement by the
conduct of the party.114 A non-signatory may be bound under the theory of assumption if he
manifested the intent to arbitrate through his conduct.115 The conduct would mean that the
non-signatory has given implied consent to enter into the arbitration agreement.116
88. The conduct of the Res No. 2 was very apparent to bind it to the arbitration agreement. The
Res No. 2 extended investment of USD 50 million which showcases the financial impact and
expectations of the funding received from Oorbus Ltd. Moreover, post investment, a
comprehensive restructuring of the board of directors ensued, marked by Oorbus’ strategic
influence as they assumed the privilege of appointing two distinguished members out of the
total panel of six directors which deepens the symbiotic collaboration between Oorbus Ltd.
and MetaTerrain.

[4.2] Res No. 2 had sufficient relationship and interest in the business and functioning of
Res No. 1.

89. Arbitral tribunals have ruled that any non-signatory participating in the negotiation of the
contract should be made a party of the arbitration agreement.117 An arbitration agreement will
be extended to non-signatory if there is any direct implication of the contract on the non-
signatory.118 A direct implication of the contract could be drawn if there is an active role in the
negotiation and execution of the contract.119 In this case, the scope of the arbitration could be
extended to the Res No. 2 as they played an active role in the functioning of the company.
90. The Res No. 2 exclusively owns all intellectual property rights, encompassing copyrights,
trademarks, patents, trade secrets, and everything related to virtual assets, worlds, digital
goods, currency, avatars, real estate, software, transaction systems, and more. In addition to
that, two out of six directors were appointed in the Board of Directors, this indicates an active
role in the negotiation and performance of the contract which is established by consistent
engagement, participation, and fulfillment of obligations and responsibilities.

113 Kaplan v. First Options, 19 F.3d 1503 (3d Cir. 1994).

114 M.P Bharucha et al., The Extension of Arbitration Agreements to Non-Signatories: A Global Perspective, 5(1) Indian J. Arb.
L. 35 (2016); ICC Case No. 5721, 117 J.D.I. (Clunet) 1019,1024 (1990).
115 Michael P. Daly, Come One, Come All: The New and Developing World of Non-Signatory Arbitration and Class Arbitration,

62 U. MIAMI L. REV. 95 (2007).

116 Id.
117 Partial Award in ICC Case No. 13774, in J.-J. Arnaldez, Y. Derains & D. Hascher (eds.), Collection of ICC Arbitral

Awards 2012-2015 287, 293-94 (2019).

118 Final Ad Hoc Award of 24 August 2010,29 ASA Bull.890 (2011).
119 Id.

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 MEMORANDUM for CLAIMANT

91. If the non-signatory claims benefits and disregards the arbitration clause when a dispute arises,
then it is in contravention of the principle of natural justice.120 Oorbus Ltd. is involved in
extending investment to the Res No. 1 and claims benefit through its line of investment but
did not sign the arbitration agreement to disregard any future dispute. Therefore, it can be
made a party to the arbitration agreement.
92. Furthermore, to bind a non-signatory party, there should be an established sufficient
relationship between a signatory and a non-signatory corporation.121 A valid corporate
relationship would amount to a sufficient established relationship.122 There was a valid
commercial relationship between the Res No. 1 and Res No. 2. binding the Res No. 2 to the
arbitration agreement.
93. A non-signatory would be a party to the arbitration agreement if they exercised influence over
the signatory corporation. In this regard, there was sufficient influence of the Res No. 2 on
Res No. 1. After the investment, there was a significant overhaul of the Board of Directors,
characterized by Oorbus' strategic impact as they took on the responsibility of selecting two
prominent individuals from the entire group of six directors. This strategic promotion
strengthens the mutually beneficial partnership between both organizations.
94. Oorbus Ltd. exclusively owns all intellectual property rights, encompassing copyrights,
trademarks, patents, trade secrets, and everything related to virtual assets, worlds, digital
goods, currency, avatars, real estate, software, transaction systems, and more, furthermore, all
profits generated from the operations of the Platform shall be subject to a profit-sharing
arrangement between the Company and Platform Owner.
95. The profits accruing from the Platform shall be divided between the Company and the
Platform Owner in the ratio of 20% to the Company and 80% to the Platform Owner.123 This
indicates sufficient influence and interest of Res No. 2 with MetaTerrain.

[4.3] The arbitration agreement can be extended to Oorbus Ltd. under the Group of
Companies Doctrine.

96. According to the definition given by Wilske,124 under the Group of Companies doctrine, the
arbitration agreement can be extended to “the parent or other affiliate company” of the

120 International Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 418.
121 Republic of Iraq v. BNP Paribas USA. 28 Mar. 2012, 472 Fed. App. 11 (2d Cir. 2012).
122 Sarhank Group v. Oracle Corp., 404 F.3d 657 (2nd Cir.2005).
123 Res Exh.-R1.
124 Stephan Wilske,et. Al., "The group of companies’ doctrine – where is it heading?"17 AMERICAN REVIEW OF

INTERNATIONAL ARBITRATION, 74 (2006).

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 MEMORANDUM for CLAIMANT

signatory of the arbitration agreement “provided that such non-signatory was somehow
involved in the conclusion, performance or termination of the contract in dispute”.
97. It is important to consider that the UNCITRAL Working Group on Arbitration sustained that
the Group of Companies fact pattern might not require a written arbitration agreement, noting
that this theory had been applied repeatedly by arbitral tribunals and even had been approved
by some courts.125 The arbitral tribunal must find that the arbitration agreement can be
extended over Oorbus Ltd. under the Group of Companies Doctrine because the Group of
Companies Doctrine is used in international arbitration to justify the extension of arbitration
agreement. and the requirements under the same have been fulfilled.
98. The application of the doctrine is most precisely described in Dow Chemical case,126 where the
arbitral tribunal held that “The arbitration clause that specific companies within the group have willingly
agreed to should obligate the other companies. These other companies, due to their involvement in the creation,
execution, or termination of contracts containing such clauses, and in line with the shared intention of all parties
involved in the proceedings, should be considered as if they were directly involved in these contracts and primarily
affected by any disputes that may arise from them.”
99. The Group of Companies doctrine is a legal theory that enables non-signatory parties to
arbitration. It arose out of the Dow Chemical ICC award,127 where the tribunal held that,
notwithstanding the distinct legal entities of its members, a group of companies constitutes
one and the same economic reality. Moreover, through their involvement in the conclusion,
performance, or termination of the contract, all the parties had consented to the participation
in the arbitration agreement included in the underlying contract.
100. As for the common law system, the Win Line128 case establishes Group of Companies Doctrine
as valid law within the jurisdiction. U.S. courts are inclined to recognize the extension of an
arbitration agreement to non-signatories. Also, NY courts have found non-signatories bound
by an agreement to arbitrate where the signatories are their alter egos.129
101. The “one economic reality” theory is applicable to the issue of contractual liability. The tribunal
reasoned that “the security of international commercial relations requires that account must be taken of these
economic realities and that all the companies of the corporate group must be held jointly and severally liable
[where] they have directly or indirectly benefited” from the contract.130

125 YaraslauKryvoi, Piercing the Corporate Veil in International Arbitration, 1 GLOBAL BUSINESS LAW REVIEW (2011).
126 Dow Chemical France et al v. ISOVER Saint Gobain, ICC Award No. 4131.
127 Id.
128 Win Line (UK) Ltd v. Masterpart [1999] SGHC 94.
129 Wm. PassalacquaBuilders v. Resnick Developers 933 F.2d131(2d Cir.1991).
130 ICC Case No. 5103 Journal du Droit International (1988).

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 MEMORANDUM for CLAIMANT

102. The fact that Oorbus Ltd. has invested a significant sum of USD 50 million in MetaTerrain
along with its two directors appointed in board of directors of Res No. 2 establishes significant
involvement with the functioning of the company. Moreover, Res No. 2 can be said to an
affiliate company of Res No. 1 as all the intellectual property rights’ ownership is with them.
103. The principle that rights and obligations of an arbitration agreement apply only to the
agreement’s parties is a straightforward application of the doctrine of Privity of Contract,
recognized in both common and civil law jurisdictions. However, the Group of Companies
doctrine envisages, under certain circumstances, the extension of an arbitration agreement
signed only by one or some of the companies of a group to other non-signatory companies of
the same group.
104. The question of extending an arbitration agreement to non-signatory parties consequently
involves extending the jurisdiction of the Arbitral Tribunal to or over such parties.131 It was
held that the Group of Companies doctrine can be invoked to bind the non-signatory affiliate of
a parent company, or inclusion of a third party to an arbitration, if there is a direct relationship
between the party which is a signatory to the arbitration agreement, direct commonality of the
subject-matter or a composite nature of transaction between the parties.132
105. Res No. 2 holds the position of a third-party beneficiary in this case. A third party beneficiary,
in the law of contracts, is a person who may have the right to sue on a contract, despite not
having originally been a party to the contract. This right arises where the third party is the
intended beneficiary of the contract, as opposed to an incidental beneficiary.
106. In the case of Mississippi Fleet Card v. Bilstat, Inc.,133 the judgment recognises the non-signatory
as a third-party beneficiary of the contract subject to arbitration, thereby binding them to
submit to arbitration. The Court laid down a comprehensive test for determination of entity
as the third-party beneficiary (a) The spectrum of the contractual terms can be subjective of
interpretation vis a-vis the inclusion of third-party. Mention by name or a specific class can be
an implication of the same. (b) The third-party has significance to the contract subject to
arbitration. The ‘intent’ to encompass the third-party in the form of a beneficiary must be
explicit. (c) The subject matter of Contract has substantial interest in rendering genuine benefit
to the third-party on its enactment.
107. These conditions are fulfilled as there is an explicit mention of Res No. 2 in ToU implicating
inclusion of third-party in the agreement. Moreover, Res No.1 is rendering genuine benefit to
Res No. 2 through the contract as a significant percentage of profits is with Res No.2. The

131 Mahanagar Telephone Nigam ltd. v. Canara Bank 2023/DHC/001430.

132 Id.
133 Mississippi Fleet Card, LLC v. Bilstat, Inc., 175 F. Supp. 2d 894 (S.D. Miss. 2001).

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 MEMORANDUM for CLAIMANT

fulfilment of these conditions makes Oorbus Ltd. binding to the contract and thus, holding
joint liability towards the Cl.
108. In the present case, Res No. 2 is legally bound by the arbitration agreement. This is a result
of their significant investment and control (2 members of Oorbus in MetaTerrain’s Board of
Directors) over Res No.1. This active involvement can be interpreted as their implicit
agreement to adhere to the arbitration terms stated in the terms of use.
109. A non-signatory can be compelled to arbitrate if the benefit arising was direct and not
indirect.134 Importantly, the direct benefit conferred does not have to be for the sole benefit
of the third party as long as it is for its direct or substantial benefit.135
110. It was expressly stated that all intellectual property rights, including but not limited to
copyrights, trademarks, patents, and trade secrets, pertaining to the virtual assets, virtual
worlds, digital goods, virtual currency, avatars, virtual real estate, platform interfaces,
proprietary software, transaction systems, and any other content, technology, or innovation
maintained by MetaTerrain, shall be under the exclusively ownership of Oorbus Ltd. which
establishes a fiduciary relationship between the parties. Therefore, it is humbly submitted by
the Cl that Res No.2 should be made a party to the arbitration agreement.

134 Shapoorji Pallonji and co. Pvt. ltd. v. Rattan India Power Ltd. & Anr.[TARB .P. 716/2019].
135 Advanced Concepts Chicago, Inc. v. CDW Corp. 405 Ill. App. 3d 293.

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 MEMORANDUM for CLAIMANT

REQUEST FOR RELIEF

In the light of the above submissions, the counsel for the CLAIMANT respectfully invites the
Tribunal to:

DECLARE that

I. The Tribunal has jurisdiction to hear the present dispute.

II. The Arbitral Proceedings are not pre-mature in nature.

ADJUDGE that

I. Interim injunction should be granted on transfer of plot #3223 to Crimson Constructions.

II. Damages of USD 2.4 million should be granted to the CLAIMANT by both the
RESPONDENTS.

OR

RESPONDENTS should be made liable for the specific performance of the contract.

III. The contract was validly formed under the provisions of the CISG.
IV. RESPONDENT NO. 2 is jointly liable and hence, bound by the arbitration agreement.

25