SIXTH ANNUAL

INTERNATIONAL ALTERNATIVE DISPUTE RESOLUTION

MOOTING COMPETITION

MEMORANDUM FOR CLAIMANT

CLAIMANT RESPONDENT

Albas Watchstraps Mfg. Co. Ltd Gamma Cellteach Co Ltd

241 Nathan Drive, Yanyu City 17 Rodeo Lane, Mulaba

Yanyu Wulaba

TEAM CODE- 237C

 -Table of Contents- -Claimant-

TABLE OF CONTENTS

TABLE OF DEFINITIONS ii

TABLE OF AUTHORITIES iv

STATEMENT OF FACTS xiii

STATEMENT OF ISSUES xv

WRITTEN SUBMISSION 1

1. THE TRIBUNAL HAS JURISDICTION TO DEAL WITH THE PAYMENT CLAIMS 1-4

RAISED BY THE CLAIMANT

[I.] The Tribunal has jurisdiction to hear the dispute in the light of the requirement 1

to negotiate.

A. Claimant has satisfied the requirement to negotiate

B. Amicable settlement is not a mandatory precondition to arbitration

[II.] Claimant did not satisfy the requirement to amicably settle the dispute 2

[Link] GOVERNS THE CLAIMS ARISING UNDER THE SALE AND PURCHASE 5-8

AGREEMENT AND THE SALE AND PURCHASE AGREEMENT NO. 2

[I.] The Convention is applicable to the contract consistent with Art 1(1), CISG 5

[Link] THAT CISG DOES APPLY, THE PROVISIONS OF CISG HAVE BEEN 8-12

INVOKED ON ACCOUNT OF THE FOLLOWING:

[I.] Lack of insurance coverage in the first transaction 8

[II.] Timing of the delivery of prototype 9

[II.] Non-conformity of goods 10

[IV.] Payment of money under the transaction 11

Request for Relief A

i
-Table of Definitions- -Claimant-

TABLE OF DEFINITIONS

Agreement(s)/ Sale and Purchase Agreement Signed on 23rd July 2014 and 7th

SPA/SPA2 November 2014, respectively, between the parties

& And

¶ Paragraph

Art. Article

CIETAC China International Economic and Trade Arbitration Commission

CIETAC Rules CIETAC Arbitration Rules effective as of 1 January 2015

CISG United Nations Convention on Contracts for the International Sale of

Goods

Claimant Albas Watchstraps Manufacturing Co. Ltd, a company incorporated

under the laws of Yanyu

Dispute Dispute between the Parties as set out in Application for Arbitration

dated 18 November 2015, Answer and Statement of Defence dated 18

December 2015 and narrowed by procedural Order No.1 dated 14

March 2016

DDP Delivery Duty Paid, INCOTERMS 2010, Issued by ICC

ICSID International Centre for the Settlement of Investment Disputes

INCOTERMS INCOTERMS Guidelines 2010, DDP, A3(b)

Guidelines

Model Law UNCITRAL Model Law with 2006 amendments

Moot Problem The Sixth International Alternative Dispute Resolution Mooting

Competition Moot Problem 2016

New York Convention on the Recognition and Enforcement of Foreign Arbitral

ii
-Table of Definitions- -Claimant-

Convention/NYC Awards

P. Page number

Parties Claimant and Respondent collectively

PCIJ Permanent Court of International Justice

Respondents Gamma Celltech Co. Ld., a company incorporated under the laws of

Wulaba

Secretariat Commentary Secretariat Commentary Guide to CISG 1978 Draft

Tribunal The arbitral tribunal formed on 15th March, 2016 for the present

proceeding

UNCITRAL United Nations Commission of International Trade Law

USD United States Dollars

UNCITRAL Model Law UNCITRAL Model Law with 2006 amendments

UNIDROIT PICC UNIDRIOT Principles on International Commercial Contracts, 2010

iii
-Table of Authorities- -Claimant-

TABLE OF AUTHORITIES

Index of Legal Sources

CITED AS FULL CITATION

CEITAC Rules CIETAC Arbitration Rules effective as of 1

January 2015

CISG CISG, Vienna, 11 April 1980, [Link]

Document Number 98-9 (1984), UN Document

Number A/CONF 97/19, 1489 UNTS 3

Model Law UNCITRAL Model Law with 2006 amendments

Index of Authorities

CITED AS FULL CITATION CITED AT

PARAGRAH

A/CONF.97/C.1/SR.3 Report of the UNCITRAL on the summary of [21]

discussion of the preliminary Draft, English Session,

A/CONF.97/C.1/SR.3, paras. 53-65, reprinted in

Official Records 247-248.

Adam Adam Newhouse , CISG, A tool for Globalisation(2): [34]

American and Japanese Perspective

iv
-Table of Authorities- -Claimant-

Bianca Bianca, in Bianca-Bonell, Commentary on International [37]

Sale of Goods, (3rd ed, 2009), 51.

Bonell V Knapp, ‘Arts. 74–77 CISG’ in CM Bianca and MJ [20], [39]

Bonell (eds), Commentary on the International Sales

Law: The 1980 Vienna Sales Convention (1987)

Born Gary B Born, International Commercial Arbitration [1], [3],

(Kluwer Law International, 2nd ed, 2014) [6], [9]

Curran Vivian Curran, The Interpretive Challenge to [24]

Uniformity Review of Les premières applications

jurisprudentielles du droit uniforme de la vente

internationale by Claude Witz, in: 15 Journal of Law

and Commerce (1995)

Jones Dough Jones, Dealing with Multi-Tiered Dispute [5]

Resolution Process ((2009) 75 Arb. 2)

Enderlin/Moskow Fritz Enderlein & Dietrich Maskow , Commentary [36]

by Fritz Enderlein & Dietrich Maskow ( Oceana

Publications, 1992)

Feltham Feltham, The United Nations Convention on Contracts [23]

for the International Sale of Goods, 1981 J. Bus. L.

Fouchard/Gaillard/Go Emmanuel Gaillard and John Savage (eds), Fouchard [12]

ldman Gaillard Goldman on International Commercial

Arbitration (Kluwer Law International, 1999)

Gutteridge Gutteridge, An International Code of the Law of Sale, [19]

14 Brit. Y.B. Int'l L. 75, 82 (1933)

v
-Table of Authorities- -Claimant-

Hague records I Hague Conference Records & Documents 33 [19]

Honnold [Link] , Uniform Law for International Sales [38], [39]

under the 1980 United Nations Convention, 3rd edition

(1999) .

Koneru Phanesh Koneru, The International Interpretation of the [24]

UN Convention on Contracts for the International Sale

of Goods: An Approach Based on General Principles,

in: 6 Minnesota Journal of Global Trade (1997)

Lookofsky Lookofsky,Understanding the CISG, (2008) [19], [36]

Magnus Magnus, Staudinger Kommentar (2005) [31], [38]

Posch Willibald Posch, Kommentar, UN-Kaufrecht, in: [24]

SCHWIMANN, ABGB-Praxiskommentar, Volume 5, pp.

1011-1057, Wien 1997

Redfern/Hunter Nigel Blackaby and Constantine Partasides, Redfern and [20]

Hunter on International Arbitration (OUP, 5th edition,

2009)

Schlechtriem/Schwen Ingeborg Schwenzer (ed), Peter Schlechtriem and [21], [22],

zer Ingeborg Schwenzer, Commentary on the UN [24], [31],

Convention on the International Sale of Goods (CISG), [40]

(Oxford University Press, 3rd ed, 2010)

Tunc Tunc, The Uniform Law on the International Sale of [20]

Goods: A Reply to Professor Nadelmann, 74 Yale L. J.

1409, 1411-1413 (1965)

vi
-Table of Authorities- -Claimant-

UNCITRAL Report Report of UNCITRAL on the work of its eleventh [21]

session, A/33/17, paras. 15-18 (1978), reprinted in

[1978] IX Y.B. UNCITRAL

Witz Witz/ Salger/ Lorenz, Kommentar (2000) [31]

Index of Cases

Arbitral Awards

CITED AS FULL CITATION CITED AT

PARAGRAH

Ad Hoc

Ad-hoc Case of 4 May ‘Final Award in ad-hoc case of 4 May 1999’ [3]

1999 (2000) XXV Yearbook of Commercial Arbitration

13

CEITAC

G&M China July 2006 CIETAC Arbitration proceeding [36]

(Granite and marble case)

Mung bean case China 22 March 2001 CIETAC Arbitration [40]

proceeding (Mung bean case)
Souvenir China 2000 CIETAC Arbitration proceeding [36], [39]

(Souvenir coins case)

CLOUT Cases

CLOUT Abstract no. CLOUT Abstract no. 1400, SWITZERLAND, [23]

1400 Pretore del Distretto Lugano 19 April 2007

ICC

vii
-Table of Authorities- -Claimant-

Buckwheat ICC Arbitration Case No. 9773 of 1999 [36]

ICC Case No 6276 ‘Partial Award in ICC Case No 6276’ (2003) [1]

14(1) ICC International Court of Arbitration

Bulletin 76

ICC Case No 8445 ‘Final Award in ICC Case No 8445’ (2001) XXVI [3]

Yearbook of Commercial Arbitration 167

ICC Case No 10256 ‘Interim Award in ICC Case No 10256’ (2000) [1], [3]

14(1) ICC International Court of Arbitration

Bulletin 82

ICC Case No 11490 ‘Final Award in ICC Case No 11490’ (2012) [3], [5], [9]

XXXVII Yearbook of Commercial Arbitration 32

Licensor v. Licensee Licensor (Germany) v. Licensee (France), (1992) [12]

ICC Award No. 6709

Russia Case Russia 24 January 2002, Arbitration Proceeding [28]

27/2001, available at.

[Link]

Steel Bar Case ICC Arbitration Case No. 6653 of 26 March 1993 [23]

ICSID

Biwater Biwater Gauff (Tanzania) Ltd v United Republic [5]

of Tanzania (Award) (ICSID Arbitral Tribunal,

Case No ARB/05/22, 24 July 2008)

viii
-Table of Authorities- -Claimant-

Foreign Cases

France

CCC France Chambre Arbitrale de paris case no 9926 [37]

of 2007

(chemical compound case)

Mobile Germany 29 March 2001 District Court Trier [38]

Mussels Germany 8 march 1995 SC (new Zealand Mussels [36]

case)

Memory module case Germany 12 November 2001 Appellate [40]

Court Hamm

Shoes Case Germany 1 July 2002 Appellate Court München [33]

(Shoes case)

Hong Kong

Astel Astel-Peiniger Joint Venture v Argos Engineering [5], [9]

& Heavy Industries Co Ltd [1994] HKCFI 276

Fai v Sui Fai Tak Engineering Co Ltd v Sui Chong [5], [9]

Construction & Engineering Co Ltd [2009]

HKDC 141

Hercules Hercules Data Comm Co Ltd v Koywa [9]

Communications Ltd [2000] HKCFI 71

Hyundai Case Hyundai Engineering and Construction Company [6]

Ltd v Vigour Ltd [2004] HKCFI 205

Lucky-Goldstar Lucky-Goldstar International (H.K.) Limited v. Ng [10]

Moo Kee Engineering Limited, (1993) 2 Hong

ix
-Table of Authorities- -Claimant-

Kong Law Reports 73

Japan

XvY X v Y [2011] 2116 Hanrei Jiho 64 (Tokyo Koto [9]

Saibansho [Tokyo High Court])

New Zealand

Marnell. Marnell Corrao Assoc. Inc. v. Sensation Yachts [13]

Ltd, [2000] 15 PRNZ 608,623 (Auckland High

Ct.)

PCIJ

Mavrommatis Mavrommatis Palestine Concessions Case [1]

(Greece v UK) (1924) PCIJ (ser A) No 2

Judgment of 15 March Judgment of 15 March 1999’ (2002) 20 ASA [5]

1999 Bulletin 373 (Kassationtgericht Zurich [Zurich

Appellate Court])

Singapore

Lufthansa Case International Research Corp PLC -v- Lufthansa [6]

Systems Asia Pacific Pte Ltd. [2013] SGCA 55

Spain

Madrid Spain 22 March 2007 Appellate Court Madrid

Rolled Spain 3 November 1997 Appellate Court [32]

Barcelona (Rolled steel case)

UK

Chalbury Chalbury Mccouat Int’l ltd. v. PG Foils Ltd [13]

[2010] EWHC 2050

x
-Table of Authorities- -Claimant-

Holloway Case Holloway v Chancery Mead Ltd [2007] EWHC [6]

2495 (TCC)

Fiona Fiona Trust & Holding Corp v. Privalov, [2007] [10]

UKHL 40

Mangistaumunaigaz Mangistaumunaigaz Oil Production Association [12]

v. United World Trade Inc.[1995] 1 Lloyd’s Law

Rep. 617

Grand Thorton Case Tang Chung Wah (Aka Alan Tang) and another [6]

v Grant [Link] Limited and ors

[2012] EWHC 3198 (Ch)

USA

. Wolf American Broadcasting Companies v. Wolf, 52 [6]

N.Y. 2d394 (1981)

Central Iron New York Central Iron Works Company v. United [12]

States Radiator Company, 174 N.Y. 331 (1903)

Colfax v. Local Colfax Envelope Corp. v. Local No. 458-3M, 20

F.3d 750 (7th Cir. 1994)

Dalton v .Educational Dalton v .Educational Testing Service, 87 N.Y.2d [12]

384, 389 (N.Y., 1995)

Howard v. Frank Howard Elec. v. Frank Briscoe Co., 754 F.2d 847 [10]

(9th Cir. 1985)

Solutia Case Fluor Enters Inc v Solutia Inc 147 F Supp 2d 648 [6]

(SD Tex 2001)

Kowalchuk Case Kowalchuk v. Stroup, 61 AD 3d 118, 121 (First [15]

Dept. 2009)

xi
-Table of Authorities- -Claimant-

Moses v. Mercury Moses H. Cone Mem'l Hosp. v. Mercury Const. [10]

Corp., 460 U.S. 1 (1983)

Nicaragua v. Standard Republic of Nicaragua v. Standard Fruit Co., 937 [10]

F.2d 469 (9th Cir. 1991)

Publicker Industries Publicker Industries v. Union Carbide Corp., 17 [22]

Case U.C.C Rep. Ser. 989.

R.G. v. Horn R.G. Group, Inc. v. Horn and Hardart Co., 751 [15]

F.2d. 69 (2nd Cir. 1984)

U. S. v. Horn Case United States v. Horn, 29 F.3d 754, 759 (1st Cir. [22]

1994).

White v Kampner White v Kampner, 229 Conn 465 (Conn, 1994) [6]

Wood v Lucy Wood v. Lucy, 222 N.Y. 88 (1917) [12]

Yankee v. Stein Yankee Lake Press Association v. Stein, 68 AD 3d. [15]

1603 (Third Dept. 2009)

CISG Cases

Asante Case Asante Technologies v. PMC-Sierra [USA], U.S. [19]

Federal District Court in California, 27 July 2001,

CISG Database, Pace University,

[Link]

ICC Case No. 7929 ICC Arbitration Case No. 7929 of 1999, in: CISG [19]

Database, Pace University,

[Link]

xii
-Statement of Facts- -Claimant-

STATEMENT OF FACTS

1. Albas Watchstraps Mfg. Co. Ltd. (“Albas” or “the Claimant”) is one of the

leading manufacturers and exporters of leather watchstraps in Yanyu since 1973. The

Claimant sells its watchstraps to importers of watchstraps and watch producers all

over the world, as well as to local distributors in Yanyu.

2. Gamma Celltech Co. Ltd. (“GCT” or “the Respondent”), formed in 2002, is one

of the fastest growing traders of smart mobile phones in Wulaba. In 2011 it expanded

its product range to include smart mobile phone accessories.

3. The timeline of the Dispute is mentioned below:

 23 July 2014: The parties concluded the Sales and Purchase Agreement where

the Claimant would buy certain amount of leather watchstraps for Cherry

Watch from the Respondent.

 31 July 2014: The Respondent paid the initial deposits of USD 3 million

pursuant to the Sale and Purchase Agreement.

 14 August 2014: The Claimant sent a handmade approval prototype for the

Respondent to confirm the order.

 15 August 2014: The Respondent approved the prototype with a slight

amendment concerning the stitching colour.

 10 October 2014: The Claimant arranged for the ordered watchstraps to be

shipped by the sea.

 28 October 2014: The Claimant received a notice from the shipping Company

that the watchstraps were lost at sea.

The Claimant offered to provide a replacement shipment provided the Respondent

accepted responsibility and made full payment for the lost goods to which the

xiii
-Statement of Facts- -Claimant-

Respondent reluctantly proceeded and the Parties entered into a subsequent Sale and

Purchase Agreement for the replacement goods.

 29 December 2014: After having received the balance payment for the Sale

and Purchase Agreement 1 and deposit for the Sale and Purchase Agreement

2, the Claimant managed to arrange for an expedited production and finally

shipped the watchstraps on this day.

 27 February 2015: The Claimant received a message from the Respondent

claiming that it was not going to make the balance payment, as it was not

satisfied with the quality of the watchstraps. A reply was sent by the Claimant

in which it was said that the goods were in conformity with the prototype

which was approved by the Respondent.

4. There was no reply made to the Claimant to his letter dated 27th February 2014. The

claimant didn’t get any message from the Respondent for around 9 months and hence

finally application for Arbitration was made by the claimant on 18th November 2015

as per Article 19 of the Sale and Purchase Agreement.

5. In the light of the mentioned facts, the Claimant is asking for the damages due to

nonpayment of money by the Respondent.

xiv
-Statement of Issues- -Claimant-

STATEMENT OF ISSUES

I. Does the Tribunal have jurisdiction to deal with the payment claims raised by the

Claimant?

II. Does the CISG govern the claims arising under the Sale and Purchase Agreement

and the Sale and Purchase Agreement no.2

III. Assuming that CISG does apply, have its provisions been invoked on account of

the following:

i. Lack of insurance coverage in the first transaction;

ii. Timing of delivery of prototype;

iii. Non- conformity of goods;

iv. Payment of money under the transaction

xv
-Pleadings- -Claimant-

WRITTEN SUBMISSION

1. THE TRIBUNAL HAS JURISDICTION TO DEAL WITH THE PAYMENT

CLAIMS RAISED BY THE CLAIMANT

[I.] The Tribunal has jurisdiction to hear the Dispute in light of the requirement
to negotiate

1. Amicable settlement requires not more than indicating an availability to exchange

views about a dispute and doesn’t impose an obligation to compromise or engage in

bargaining with party1.

A. Claimant has satisfied the requirement to negotiate

2. Claimant satisfied the requirement in Art.19(a) because it indicated an availability to

exchange views about dispute2 by instantly replying to all the allegations made by

Respondent3. But Respondent refused to amicably settle the dispute by continuing to

withhold the balance payment and by making no replies to Claimant thereafter4.

3. Tribunals frequently rely on the asserted futility of negotiations to justify the

rejection of jurisdictional objections to a party’s claim5. Parties are not required to

engage in fruitless negotiations or to delay an orderly resolution of the dispute6. It

was only after 9 months that the Claimant filed for arbitration7 as the parties had

reached a deadlock.

1
Born, 932; Mavrommatis; ICC Case No. 6276; ICC Case No 10256
2
Moot Problem, 18
3
Moot Problem, 13
4
Moot Problem, 18
5
Born, 933
6
ICC Case No 8445; Case of 4 May 1999; ICC Case No 10256; ICC Case No 11490
7
Moot Problem, 1

1
-Pleadings- -Claimant-

4. It must also be noted that Claimant adhered to the time frame of not more than 14

days before filing for arbitration8.

[ARGUENDO]

5. Even if, the pre-requirement of negotiation was not complied with, the Respondent

cannot challenge the jurisdiction because the non-compliance was due to their fault9.

B. Amicable settlement is not a mandatory pre-condition to arbitration

6. An enforceable negotiation agreement must set out parties’ obligations with

sufficient certainty10. Sufficient certainty is obtained when clauses specify the

number of negotiation sessions required11, or designated negotiation participants12, or

content or form of amicable settlement13.

7. Article 19(1) neither specifies the discernible steps that each party is required to take

to put the process in place or a sufficiently defined process to be complied with by

parties. Therefore, it is not precise and is unenforceable.

[II.] The Tribunal has jurisdiction to hear the dispute

8. Pursuant to the principle of kompetenz-kompetenz, the tribunal is competent to

determine its jurisdiction14.

9. The Tribunal should exercise jurisdiction regardless of the negotiation requirement

because it should not deny parties access to adjudicative proceedings on the basis of

non-compliance with procedures that, even if enforceable, are

8
Art. 19(a), Moot Problem, 12
9
Judgment of 15 March 1999 ; Biwater; ICC case no 11490; Fai v. Sui; Astel- Peiniger v. Argos; Jones, 191
10
Wolf Case; Holloway Case; Hyundai Case; Lufthansa Case
11
White v. Kampner
12
Solutia Case; Born, 919
13
Grand Thorton
14
A. 6(1), The CIETAC Rules; Art II(3), NYC

2
-Pleadings- -Claimant-

unlikely to resolve the parties’ dispute15. Secondly, a negotiation requirement is

regarded as a contractual obligation and not a condition precedent, even when it is

mandatory16. Therefore, a breach of a contractual obligation only entitles the

wronged party to damages and not to prevent arbitration17. Consequently, the

Tribunal has the competence and the jurisdiction to hear the Dispute even if the

negotiation requirement has not been met18.

10. Also, Art.19(1) establishes the clear intention of the parties to submit ‘disputes

concerning payments’ to arbitration. Moreover, the clear weight of authority holds

that the most minimal indication of parties’ intent to arbitrate must be given full

effect, especially in international disputes19.

11. Furthermore, Article 19(3), which provides for the interpretation of the arbitration

clause with the laws of the State of New York also assents for Article 19(1) to be

binding because of following threefold reasons:

A. Application of good faith

12. An arbitration agreement, as also recognized by New York Courts is to be interpreted

according to the principle of good faith20. Applying this principle, an arbitral

Tribunal has to investigate the real intent of the parties21. When the real intent of the

parties can be established by interpretation of the clause, an arbitral Tribunal shall

give full effect to it22.

15
X v. Y
16
Born, 930
17
Fai v Sui; Hercules; Astel; ICC Case No 11490; Born, 930
18
Saint Gobain; PTA v. ZTE.; Avex v. Socata
19
Nicaragua; Moses. v. Mercury; Howard v. Frank; Fiona Trust,; Lucky-Goldstar; Hunter, 193
20
Dalton v .Educational; Central Iron Case; Wood v. Lucy
21
Mangistaumunaigaz Case; Licensor v. Licensee
22
Amco; Fouchard, 477

3
-Pleadings- -Claimant-

B. Doctrine of effet-utile

13. Doctrine of effect utile prescribes that an arbitration clause is to be interpreted in a

manner which gives it effect rather than leaves it devoid of meaning23.

14. In the instant case, both parties have signed the agreement with A.19(1) providing for

arbitration for dispute resolution24. Applying the principle, it can be stated that both

the parties intended to submit to arbitration any ‘dispute concerning payments’25.

C. Therefore, the arbitration clause in Article 19(1) is a binding clause

15. In New York, a contract is binding if there is an intent to be bound all the essential

terms26. Furthermore, when a party gives reasonable signals that it means to be bound

by an agreement that intent of the parties must not be frustrated27.

16. In the instant case, both the parties have signed the agreement containing arbitration

clause, therefore, have shown their intention to submit the disputes concerning

payments to arbitration.

23
Marnell. Case; Chalbury. Case
24
Art II(2), NYC; Art. 7, Model Law
25
Moot Problem, 12
26
Kowalchuk Case; Yankee v. Stein
27
R.G. v. Horn

4
-Pleadings- -Claimant-

2. CISG GOVERNS THE CLAIMS ARISING UNDER THE SPA AND SPA2.

17. CISG applies to a contract when both parties have their seat of business in

Contracting States. In this case, Article 1(1)(a) and 1(1)(b) are applicable as

Countries Yanyu and Wulaba are parties to CISG28 and also CISG applies to

contracts of sale of goods between parties who have their places of business in

different states when rules of PIL lead to the application of the law of Contracting

State.

[I.]The Convention is applicable to the contract consistent with Art. 1 (1) CISG

18. In accordance with Art. 1(1) CISG the Convention only applies to contracts of sale of

goods between parties whose places of business are in different States. The disputed

contract concerns the sale of leather watchstraps, indisputably a sale of goods in the

context of the provision. Moreover, Claimant and Respondent have their places of

business in Yanyu and Wulaba respectively which are in different states. Exemptions

stated in Arts. 1 (2), 2, and 3 (2) CISG are not pertinent to this case. Consequently,

CISG is applicable to the contract concerning material aspects (rationes materiae)

and internationality.

A. The Contractual choice of law by the parties is a rule of conflict as required

by Article 1(1) (b) CISG

19. CISG case law confirms that reference in an international contract to the law of a

contracting state must imply a reference to CISG, as this is the law governing

international sales of [Link] CISG applies by default, a choice-of-law

28
Moot Problem, 20
29
Asante Case; ICC Case No. 7929.

5
-Pleadings- -Claimant-

clause should be interpreted in accordance with Art. 8 CISG30. Under Art. 8(2)

CISG statements made by parties are to be interpreted according to the

understanding of reasonable person of the same kind in the same circumstances.

When the parties agreed to arbitration in Hong Kong,31 they agreed on submitting

any disputes to an international forum32. The only logical measure would then be

to apply an international set of rules.

20. .A deviation from the default law must be clear33. CISG pre-empts the State domestic

law in cases where a national law is agreed upon, and the mere expression of a

specific applicable national law in an arbitration clause does not constitute the

exclusion of the Convention under Art. 6 CISG34.

21. The choice of law of a Contracting State with no reference to CISG is not to be

considered an exclusion of CISG per se35. The suggestions in legislative history of

CISG included inserting phrase “the application of Convention shall be excluded if

the parties have stated that contract is subject to a specific national law and CISG is

not applicable36.” It thus becomes apparent that the drafters of CISG were against the

possibility of excluding CISG by pointing to a certain legal system.

22. So it must be presumed that parties intended the application of CISG by expressly

choosing the law of a Contracting State without further qualifying such choice. This

presumption is widely accepted in domestic case law concerning matters of

international trade37. The court ruled that “in absence of clear language indicating

that both contracting parties intended to opt out of CISG, the court rejects the

30
Lookofsky, 42; Gutteridge,75 & 82.
31
Moot Problem, 7
32
Hague Records, 330.
33
Tunc, 1409, 1411-1413.
34
¶ 15-18, Bonell
35
¶ 22, Schwenzer; ¶ 53-65, UNCITRAL Report.
36
A/CONF.97/C.1/SR.3
37
¶ 138, Schlechtriem,

6
-Pleadings- -Claimant-

contention that the choice of law provision precludes the application of CISG”.38

In the case at hand there is no indication that the parties wanted to opt out of

CISG.

23. The court stated that “the choice of law without an explicit declaration that the

Convention be excluded does not constitute an implicit exclusion.39 It is thus

intended in the referral and takes precedence over the no unified law which would

otherwise be applicable”.40 The courts repeatedly have rejected assertions which

called for exclusion based on the choice of law of a Contracting State without

expressly excluding CISG. Thus, due to its ambiguous wording, this clause cannot

lead to an exclusion of CISG as CISG is itself Wulaban Law41.

[Link] exclusions can be ascertained from the remaining contract

24. The fact that CISG is not derogated by choosing choice of law clause does not

completely rule out the possibility of the parties’ intention to exclude CISG. This is

not significant for the current arbitration as an implicit exclusion may only be

assumed if the corresponding intent of the parties is sufficiently clear. It is the

“opting out” rather than the “opting in” system which CISG drafters retained.42 So

CISG has to be applied if it cannot be established with sufficient clarity that an

exclusion of CISG was intended, taking into account the criteria provided by Art. 8

CISG.43 Art. 6 CISG is not meant to be an easy escape clause from CISG44, such an

intention must be determined objectively according to Art. 8 CISG.45

38
US v. Horn; Publicker Industries Case
39
Feltham; CLOUT Abstract no. 1400; Steel Bar Case.
40
Supra note. 9
41
OLG Frankfurt Case 2000
42
Curran, 184
43
Posch,1011-1057.
44
Koneru, 146
45
¶ 18, Art. 6, Schwenzer

7
-Pleadings- -Claimant-

25. In this case there has been absolutely no exclusion of CISG explicitly and hence the

applicability of CISG via the law of Wulaba pursuant to Article 1(1)(b) pertains.

3. ASSUMING THAT CISG DOES APPLY, THE PROVISIONS OF CISG HAVE

BEEN INVOKED ON ACCOUNT OF THE FOLLOWING:

[I.] Lack of insurance coverage in the first transaction

26. Both parties agreed to DDP in the agreement, according to which there is no

obligation on the Claimant to insure the cargo when in transit.

27. DDP imposes maximum obligations on the seller but it doesn’t include insurance as

an obligation46. Also there was no specific obligation on the Claimant for insurance

coverage in the agreement.

28. Secondly, the seller is bound to deliver the goods in accordance to the contract47 and

at a particular place of destination only if the contract explicitly says so48. In the

present case there was no such mention in the agreement regarding the place of

delivery49.

29. Thirdly, a reference in a contract to trade terms, like INCOTERMS, should not be

taken as an exclusion of the Convention. In determining whether parties at any point

agreed on delivery of goods at a particular place, due consideration is to be given to

the circumstances of the case including the negotiations, any subsequent conduct of

the parties50. In the present case the Respondent agreed to the

46
INCOTERMS A3 (b)
47
Art. 30, CISG
48
Russia Case
49
Moot Problem, 8
50
Art. 8(3), CISG

8
-Pleadings- -Claimant-

application of INCOTERMS as the Respondent was new to the field of business

and not to oblige the seller to deliver the goods to a particular destination.

30. Finally, according to CISG in case of contracts involving carriage of goods the risk is

transferred to the seller when the goods are put in transit in the first carrier51. It can

be seen from the facts that the goods were safely delivered to the carrier and the

appellant transferred the risk to the Respondent along with the liability of insurance.

[II.] Timing of delivery of prototype

A. The prototype was delivered in time pursuant to Art.33CISG.

31. Although, Art.33 addresses only the obligation to deliver goods, it also indicates time

period regarding performance of other obligations of the seller.52 In terms of Art.33,

timely performance only includes the time when the seller puts the goods to

transmission53 and the time of arrival of the goods at the destination is irrelevant54.

The Agreement requires the seller to deliver prototype within 14 days which the

seller complied with55.

B. Even if the Tribunal decides that there is a delay it can’t be held so under
Art.47(1) CISG.
32. According to Art 47(1), the buyer may fix additional period of time for performance

by the seller of his obligation which the buyer did by tolerating delay which is

equivalent to granting of additional time provided in Art.47.56

33. The Claimant assert that the late delivery is not a fundamental breach per se. 57And

the delay of prototype has caused no delay in the final delivery of goods.

51
Art.67(1),CISG
52
¶3, Magnus.
53
¶13, Schwenzer.
54
¶7, Witz
55
Moot Problem, 8
56
Rolled
57
Shoes Case

9
-Pleadings- -Claimant-

34. Secondly, the equitable principle of estoppels flows directly from the obligation to

act in good faith58. The principle avoids injustice by preventing a party who does an

act on which the other party relies.59 The buyer on receiving prototypes never raised

any objection to the delay.

[III.] Non-conformity of goods

35. Article 35 CISG has been invoked here and the allegation of non-conformity are

rejected.

36. The watchstraps were of the description required by the contract, Art.35(1)CISG. The

description stated in Agreement-2 was abided. Prototypes provided by the seller and

accepted by the buyer constitute an implicit agreement that the goods are of the same

quality as the sample.60 When a sample is referred in the contract as in Art.561, the

characteristics of the sample becomes a contractual term.62 The contract may require

the seller to send prototype as source of description and the buyer having received

the sample doesn’t raise any objection, samples are an accurate representation of

party’s intention as to conformity63. The Claimant follows a practice in cases of

customised goods by sending handmade prototype for approval and is valid under

Art.9 CISG, these usages prevail over the objective standards imposed by Art.35

CISG.64

58
Article 7(1), CISG
59
Adam , 46.
60
¶ 71,74 & 86, Lookofsky; Mussels 1
61
Moot Problem, 7
62
Enderlein, 112
63
G&M; Souvenir .
64
Buckwheat

10
-Pleadings- -Claimant-

A. Even if the Tribunal concluded that a lack of conformity exists, Claimant

isn’t liable for it.

37. When the prototype provided was examined by the buyer they raised no question as

to the non-conformity which excludes seller’s liability under Art 35(3) CISG.65 Also

the prototype provided was handmade not machine made so the buyer can’t rely on

the apparent qualities he knows in reality not to be present in the goods he is going to

buy.66

B. Respondent failed to give timely notice pursuant to Art.39 CISG.

38. A buyer who fails to notify within a reasonable time loses its right to all remedies

relating to the non-conformity.67The Respondents received watchstraps on 29th

January’14 and could only inform the Claimants on 27th Feburary’15 which is

unreasonable as the defects asserted are of apparent [Link] in cases of durable

goods period of 14 days or less is considered reasonable.68

[IV.] Payment of money under the transaction

A. The buyer is obliged to make the payment under the first transaction

39. Here Article 6 of CISG has been invoked which allows the parties to derogate from

any of its provisions by adopting provisions in their contract providing solutions

different from those in the Convention.69The Convention applies only to the extent

that no contrary intention of the parties can be established.70It does not

65
CCC
66
Bianca, 51.
67
Honnold, 259; Mobile
68
¶22, Magnus
69
.Honnold, 77
70
Bonell, Art.74-77

11
-Pleadings- -Claimant-

invalidate proscribed contracts and oppressive terms.71It was held that agreement

to limit liability clause by parties will supersede provisions of CISG72. It can be

thus concluded that the seller relied on the buyer’s promise to make the payment

for 1st transaction and then only came to a subsequent Agreement.2 Thus the

general principle of estoppel applies with the principle of good faith73.

[Link] 53 obliges the buyer to pay due amount of the second transaction.

40. It is obligation of the buyer to take delivery of goods and pay the contract price of the

goods. In this case, seller delivered the goods as per Agreement.2 hence entitled for

balance payment by Respondent as they committed fundamental breach of contract

under Art.25 CISG by not paying for goods. Seller’s main expectation under any

contract is payment of money for the goods he provides to other party74which is

denied to the seller in the present case. Article 7(1) of CISG applies not only to

interpretative issues but also to the manner in which parties act. 75 In this case

Respondent acted in bad faith by not replying to Claimant’s letter76, as it was clear

that the Claimant had sent confirming goods as per the agreement. Also the prototype

was approved by Respondent.

71
Honnold, 27
72
Souvenir
73
Art.7(1), CISG
74
Memory Module ; Mung Bean.
75
Schlechtriem, 37.
76
Moot Problem, 13

12
-Pleadings- -Claimant-

REQUEST FOR RELIEF

In the light of above submission, counsel for Claimant respectfully requests the Tribunal to

find that:

a) The Tribunal has jurisdiction to deal with the payment claims raised by the Claimant

b) CISG governs the claims arising under the Sale and Purchase Agreement and the Sale

and Purchase Agreement No. 2,

c) The provisions of CISG have been invoked on account of the following:

i. Insurance coverage in the first transaction is the burden on the buyer under Article
66;

ii. Claimant has done the delivery of prototype within the stipulated time Article 33;

iii. The Claimant delivered goods confirming to the contract under Article 25;

iv. Claimant is entitled to get the payment for both the transactions Article 6 and 53;

Respectfully Submitted

Counsel for the Claimant

Sd/-