FIFTH INTERNATIONAL

ALTERNATIVE DISPUTE RESOLUTION

MOOTING COMPETITION

27 JULY – 2 AUGUST 2014

HONG KONG

ON BEHALF OF AGAINST
CLAIMANT RESPONDENT

CONGLOMERATED NANYU REAL QUICK CONVENIENCE

TOBACCO LTD. STORES LTD.

142 LONGJIANG DRIVE 42 ABRAMS DRIVE

NANYU CITY SOLANGA
NANYU GONDWANA

MEMORANDUM FOR CLAIMANT

Team No. 568 C

MEMORANDUM FOR CLAIMANT TEAM NO.568 C

List of Abbreviations

Abbreviation Content

¶ Paragraph

AfA
Application for Arbitration

Art. Article

Bill 275 Godwandan Senate Bill 275/2011

Branded Branded merchandise provided by Conglomerated Nanyu

Merchandise Tobacco Ltd

CIETAC China International Economic and Trade Arbitration

Commission

CIETAC Rules China International Economic and Trade Arbitration

Commission CIETAC Arbitration Rules

CIETAC Model China International Economic and Trade Arbitration

Clause Commission Model Arbitration Clause

CISG
International Sale of Goods (CISG) & Related Transactions,

1980

CLAIMANT Conglomerated Nanyu Tobacco Ltd

MEMORANDUM FOR CLAIMANT TEAM NO.568 C

Clarifications Procedure Order No.2

Cl. Ex. Claimant’s Exhibit

Clause 65.1 The Dispute Resolution Clause of PARITES Agreement (Can

be found at p.11 of the record)

HK. Arb. Ord. Chapter:609 Hong Kong Arbitration Ordinance

IBA Rules International Bar Association, Rules on the Taking Evidence in

International Arbitration

n. footnote

No. Number

NY Convention Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, 1958

p. page

PARTIES Conglomerated Nanyu Tobacco Ltd. and Real Quick

Convenience Stores Ltd.

Res. Ex. Respondent’s Exhibit

RESPONDENT Real Quick Convenience Stores Ltd

Sec. Section
MEMORANDUM FOR CLAIMANT TEAM NO.568 C

SoD Statement of Defense

Sub.
Subsection

Tobacco Products Licensed tabacoo products provided by Conglomerated Nanyu

Tobacco Ltd.

the Agreement The distribution agreement between Conglomerated Nanyu

Tobacco Ltd. And Real Quick Convenience Stores Ltd.

the Tribunal [Link] Fan, Pro. John Worthington and Mr. Richard

Castle(chief).
MEMORANDUM FOR CLAIMANT TEAM NO.568 C

Table of Authority

Book
Cited As Content Citing Paragraph

Born Gary B. Born, 6, 9

International Commercial Arbitration,
Second Edition,
Kluwer Law International (2014).

Kröll [Link] Kröll,, Loukas A Mistelis & Pilar Perales Viscasillas 31, 32, 33
Stefan,
UN Convention on Contracts for the International Sale
of Goods (CISG) : [commentary] ,
Beck/Hart (2011).

Schlechtriem Peter Schlechtriem(editor), 34

Commentary on the UN Convention of the
International Sale of Goods(CISG),
Second Edition,
Oxford University Press(2010).

BRUNNER Christoph Brunner, 31

Force Majeure and Hardship under General Contract
Principles,
Kluwer Law International (2008).
MEMORANDUM FOR CLAIMANT TEAM NO.568 C

Article
Cited As Content Citing Paragraph

Sturinin & Hui Andrea Sturini & Lorrain Hui, 20

Commentary on the Arbitration Rules of the
Chian International Economic and Trade
Arbitration Commission,
15 THE VINDOBONA JOURNAL OF
INTERNATIONAL COMMERCIAL LAW AND
ARBITRATION 267(2012).

Jolles Alenxander Jolles, 6

Consequences of Multi-tier Arbitraion Clauses:
Issues of Enforcement,
72 Arbitration 329(2006)

Levine Eugenia Levine, 24

Amicus Curiae in International Investment
Arbitration: The Implications of an Increase in
Third-Party Participation,
29 BERKELEY JOURNAL OF INTERNATIONAL
LAW 200(2011).

Internet Resource
Cited As Content Citing Paragraph

Herbert Smith Herbert Smith , 7

The Inside Track-How Blues Chips Are Using
ADR(2007),
available at : [Link]/m-
rcbg/CSRI/ga/smith_adr.pdf(2007).
MEMORANDUM FOR CLAIMANT TEAM NO.568 C

Merriam-Webster Merriam-Webster Online Dictionary 11th 12

edition,
available at : [Link]
[Link]/dictionary/a's

IBA Subcommitee 1999 IBA Working Party & 2010 IBA Rules of 22
Evidence Review Subcommittee,
Commentary on the revised text of the 2010 IBA
Rules on the Taking of Evidence in International
Arbitration,
available
at :[Link]
x?DocumentUid=DD240932-0E08-40D4-9866-
309A635487C0

ILA Report International Law Association, 39

Committee on International Commercial
Arbitration, New Delhi Conference (2002),
Final Report on Public Policy as a Bar to
Enforcement of International Arbitral Award,
available at: [Link]
[Link]/en/committees/[Link]/cid/19

Jan van den Berg Jan van den Berg, 35

The New York Convention of 1958: An
Overview, A.J. van den Berg (ed.),
available at: [Link]

Cases
Cited As Content Citing Paragraph

AAA
MEMORANDUM FOR CLAIMANT TEAM NO.568 C

Adviso Case Adviso N.V. v. Korea Overseas Construction 40

Corp., YCA XXI (1996), 612

German Case CLOUT Case No. 443: MAL 36(1)(a)(i); 40

36(1)(b)(ii),
Germany: Oberlandesgericht Dresden; 11 Sch
06/98

Macromex v. Globex American Arbitration Association(2007) 32

Case No. 50181T 0036406
Macromex Srl. v. Globex International Inc.
[Link]

ICC

ICC Case No. 8445 Final Award, Case Number 8445 11

ICCA Yearbook Commercial Arbitration XXVI
(2001) p.167

Netherland

Malaysia v. Dairex Rechtbank's-Hertogenbosch(1998) 31

rolnr. 9981 / HA ZA 95-2299
Malaysia Dairy Industries Pte. Ltd. v. Dairex
Holland BV
[Link]

Parsons Case Parsons & Whittemore Overseas Co., Inc., v. 39

Société Générale de l’Industrie du Papier
RAKTA and Bank of America, 508 F.2d 969
(2nd Cir., 1974).

SCC
Stockholm Chamber of Commerce
MEMORANDUM FOR CLAIMANT TEAM NO.568 C

Licensor v. Licensor and buyer v. Manufacturer 6

Manufacturer Interim Award and Final Award
17 July, 1992

United States

BG Group v. BG Group PLC v. Republic of Argentina 8

Argentina Supreme Court of the United States
March 5, 2014
572 U.S. ___(2014)
Him Portland v. HIM PORTLAND, LLC v. DEVITO 6
Devito Builders BUILDERS, INC ,317 F.3d 41
United States Court of Appeals, First Circuit
No. 02-1955.
Heard Dec. 4, 2002.
Decided Jan. 17, 2003.
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

   Table of Content
Argument  ...............................................................................................................................  3  
I.   THE TRIBUNAL HAS JURISDICTION OVER THE LIQUIDATED
DAMAGES CLAIMS.  ........................................................................................................  3  
A.   PARTIES INTENDED TO SUBMIT THEIR DISPUTES TO ARBITRATION BY
SIGNING AN ARBITRATION AGREEMENT.  ..................................................................  3  
B.   THE PRE-ARBITRAL PROCEDURES ARE THE PROCEDURAL REQUIREMENTS,
BECAUSE THE PARTIES DO NOT INTENT TO MAKE THEM CONDITION TO
ARBITRATION.  ...............................................................................................................  4  
C.   EVEN IF THE PRE-ARBITRAL PROCEDURES EXCLUDE ARBITRAL
JURISDICTION, PARTIES HAD FULFILLED ALL OF THE PROCEDURES
REQUIRED.  .....................................................................................................................  7  
II.   THE ARBITRAL TRIBUNAL SHOULD NOT TAKE INTO ACCOUNT
THE AMICUS CURIAE BRIEF FROM THE GONDWANDAN GOVERNMENT.
  8  
A.   NEITHER THE IBA RULES NOR THE CIETAC RULES ALLOW THE
DOCUMENTS PROVIDED BY NON-PARTIES ON THEIR OWN INITIATIVES.  ............  8  
B.   EVEN IF THE TRIBUNAL COULD ACCEPT THE AMICUS CURIAE BRIEF, THE
TRIBUNAL SHOULD NOT ACCEPT THE AMICUS CURIAE BRIEF.  .............................  9  
a.   The Tribunal Should Exclude the Amicus Curiae Brief Pursuant to
Art.9.2 IBA Rules  .................................................................................................  9  
b.   The Amicus Curiae Brief from Gondwandan Government Will
Cause Additional Cost and Delay the Arbitral Proceedings.  .................  10  
c.   The Amicus Curiae brief will involves political concerns, which
might deters PARTIES from coming to a settlement.  .............................  11  
III.   RESPONDENT’S OBLIGATIONS UNDER THE AGREEMENT
WERE NOT VITIATED BY BILL 275 AND OTHER REGULATIONS.  ...........  12  
A.   RESPONDENT IS CONTRACTUALLY OBLIGED TO PAY THE LIQUIDATED
DAMAGES.  ...................................................................................................................  12  
B.   THERE ARE NO GROUNDS RESPONDENT TO VITIATE THE OBLIGATIONS
UNDER THE AGREEMENT.  ........................................................................................  13  
a.   The Obligation to Display and Purchase Tobacco Products Could
Still be Performed.  ...........................................................................................  13  
b.   Even if Tribunal Holds that the Fulfillment of the Obligation of
1
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

Purchasing Tobacco Products Impossible, Bill 275 Meets no

Requirements of Exemption Provided in Art. 79 CISG.  .........................  14  
c.   Even if the Application of Bill 275 did Constitute an Exemption
Provided in Article 79, the Duty to pay the Liquidated Damages Still
Exists.  .................................................................................................................  15  
IV.   THERE WILL BE NO RISK OF ENFORCEMENT, SHOULD THE
TRIBUNAL ISSUE AN AWARD IN FAVOR OF THE CLAIMANT.  ..................  16  
A.   THE AWARD FALLS WITHIN THE SCOPE OF APPLICATION UNDER THE NY
CONVENTION.  ..............................................................................................................  17  
B.   THERE IS NO GROUND FOR THE REFUSAL OF ENFORCEMENT OF THE
AWARD AT THE STATE OF GONDWANA UNDER ARTICLE V OF THE NY
CONVENTION.  ..............................................................................................................  18  
a.   The Enforcement of the Award does not Involve Public Policy.  ...  18  
b.   The Enforcement of the Award does not Constitute a Violation to
Public Policy, Hence is not a Valid Reason to Refuse Enforcement.  ....  19  
 

2
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

Argument

I. THE TRIBUNAL HAS JURISDICTION OVER THE

LIQUIDATED DAMAGES CLAIMS.

1. CLAIMANT submits that the Tribunal has jurisdiction because PARTIES had

entered into a valid arbitration agreement as provided in Clause 65.1.

2. The CIETAC has the power to decide its own jurisdiction [Art.6 (1) CIETAC Rules]

and the CIETAC should authorize the Tribunal to deal with the liquidated

damages claims for the following reasons: [A] PARTIES intended to submit their

disputes to arbitration by signing an Arbitration Agreement, [B] the pre-arbitral

procedures are the procedural requirements, which by nature cannot exclude

arbitral jurisdiction, and [C] even if the Tribunal considers the pre-arbitral

procedure as a precondition for the arbitral jurisdiction , CLAIMANT submits

that PARTIES had acted in compliance with the procedures.

A. PARTIES INTENDED TO SUBMIT THEIR DISPUTES TO ARBITRATION BY

SIGNING AN ARBITRATION AGREEMENT.

3
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

3. PARTIES had shown clearly their intent to arbitrate in Clause 65.1, which states,

“In the event of a dispute, controversy, or difference arising out of or in

connection with (emphasis added) this Agreement, the Parties shall initially seek a

resolution through consultation and negotiation. If, after a period of 12-month has

elapsed from the date on which the dispute arose, the Parties have been unable to

come to an agreement in regards to the dispute, either Party may submit the

dispute to the CIETAC...The arbitral award is final and binding upon both

parties.”

4. The scope of the Arbitration Agreement includes “differences arising out of or in

connection with” the Agreement. The dispute at issue involves the liquidated

damage claim stemmed in the Clause 60.2, which obliged the Buyer to pay

liquidated damages if he sought to terminate the Agreement. Besides, the award is

final and binding upon PARTIES. There is no doubt that such dispute falls within

the scope of the Agreement and PARTIES intended to recourse to arbitration by

signing the Arbitration Agreement.

B. THE PRE-ARBITRAL PROCEDURES ARE THE PROCEDURAL REQUIREMENTS,

BECAUSE THE PARTIES DO NOT INTENT TO MAKE THEM CONDITION TO

4
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

ARBITRATION.

5. Clause 65.1 contained two pre-arbitral procedures:(a) the negotiation and

consultation procedures and (b) the second 12-months period dated from the time

when the dispute arose. [Claimant memo ¶3]. CLAIMANT submits that these

procedures are not the premise for arbitral jurisdiction.

6. There must be express terms in the Agreement at issue to provide the

pre-arbitration procedure with an effect to exclude the arbitral jurisdiction [Jollies,

p.335]. Otherwise, the pre-arbitration rules are presumed to be procedural [Born, p.

936]. In addition, a Tribunal expressed the same opinion by stating, “If the Parties'

common intention had been to make the right to resort to arbitration contingent

upon the fulfillment of more specific conditions, they should have so stipulated in

express terms [Licensor v. Manufacturer].” The express terms should be as

specific as, for example, "... be subject to mediation as a condition precedent

(emphasis added) to arbitration..." [Him v. Devito]. In the present case, PARTIES

clearly did not have the intention to set preconditions for the right to arbitration.

7. Instead, the wording in Clause 65.1 should be read as an encouragement for

negotiation and consultation procedures, which might successfully solve the

5
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

disputes by themselves. In commercial practices, the parties often refuse to adopt

the compulsory ADR clause other than arbitration [Herbert Smith].

8. In short, the 12-month period should not be presumed as exclusion for arbitration

in that period. At most, the temporal requirement determines “when” the

contractual duty to arbitrate arose, rather than “whether” a contractual duty to

arbitrate existed [BG Group v. Argentina]. That is to say, PARTIES may resort to,

although they are not obliged to, arbitration, before the period has elapsed. Clause

65.1 stipulated: “if, after a period of 12 months has elapsed from the date on

which the dispute arose...either Party may submit the dispute to the CIETAC for

arbitration.” If the parties had indented to exclude arbitral jurisdiction, they could

have formed the sentences in more imperative way, such as using the word

“unless” or “only if” in the said Clause.

9. To conclude, the pre-arbitral procedures are procedural rules, which do not affect

the parties' substantive right to be heard [Born, p.935]. As elaborated previously,

the negotiation and consultation procedures and the 12-month period are both

procedural rules, and not complying fully with the two procedures does not affect

the parties right to arbitration. Therefore, the Tribunal still has jurisdiction.
6
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

C. EVEN IF THE PRE-ARBITRAL PROCEDURES EXCLUDE ARBITRAL

JURISDICTION, PARTIES HAD FULFILLED ALL OF THE PROCEDURES

REQUIRED.

10. Even if the Tribunal considers the pre-arbitral procedures exclude arbitral

jurisdiction, CLAIMANT submits that PARTIES had complied with pre-arbitral

procedures set out in the Clause 65.1.

11. CLAIMANT argues that the requirements of negotiation and consultation are

fulfilled, once the parties have commenced them. The clause calling for attempts

to settle a dispute amicably should not be applied to oblige the Parties to engage in

fruitless negotiations again [ICC Case No.8445]. In the present case, PARTIES

had negotiated on 11 April 2013 and they saw no possibility in further

negotiations on the matter.

12. In addition, CLAIMANT argues the 12-months period requirement has elapsed.

The period commenced at the time when the difference arose. In the present case,

date should be 5 April 2011. The word “difference” means a “disagreement in

opinion” [Merriam-Webster]. RESPONDENT had informed CLAIMANT the

alleged necessity to renegotiate the contract on 21 March 2011 [p.18, Cl. Ex. No.3
7
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

¶3], and CLAIMANT turned down the request to renegotiate on 5 April 2011

[p.19,Cl. Ex. No.3 ¶3]. The opinions between PARTIES have already differed on

that day. The 12-month would elapse on 5 April 2012. CLAIMANT applied for

arbitration on 12 January 2013 [p.1, AfA], which was almost 8 months after the

period have expired.

II. THE ARBITRAL TRIBUNAL SHOULD NOT TAKE INTO

ACCOUNT THE AMICUS CURIAE BRIEF FROM THE

GONDWANDAN GOVERNMENT.

A. NEITHER THE IBA RULES NOR THE CIETAC RULES ALLOW THE

DOCUMENTS PROVIDED BY NON-PARTIES ON THEIR OWN INITIATIVES.

19. The amicus curiae brief provided by Gondwandan Government, as non-party, is

not allowed under IBA Rules, which PARTIES had adopted [p.35, clarification

¶6]. The IBA rules only allows a disputing party to request for an external

document or enable the Tribunal to obtain the document on its own initiative

[Art.3.9; Art.3.10 IBA Rules]. There is no space for the RESPONDENT's

8
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

government, which is not a party or the Tribunal itself, to submit documents to the

Tribunal.

20. As to the institutional rules adopted by PARTIES [p.11, [Link].2, Clause 65.1],

no provision under the CIETAC Rules recognizes the admissibility of documents

submitted by a non-party. Art. 41 CIETAC Rules grants the Tribunal the general

powers to accept documents not provided by the parties. However, this power is

confined to the evidences, which are collected on its initiative as it consider

necessary. The power of Tribunal to launch evidence collection does not imply

that the Tribunal can accept documents non-disputing party could actively submit

documents to the Tribunal [Sturini & Hui, p.282].

21. CLAIMANT submits that neither IBA Rules nor CIETAC Rules enable the

non-disputing party to submit document to the Tribunal. Therefore, the Tribunal

should not accept the amicus curiae brief.

B. EVEN IF THE TRIBUNAL COULD ACCEPT THE AMICUS CURIAE BRIEF, THE

TRIBUNAL SHOULD NOT ACCEPT THE AMICUS CURIAE BRIEF.

a. The Tribunal Should Exclude the Amicus Curiae Brief Pursuant to

9
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

Art.9.2 IBA Rules

22. Even if the Tribunal does have the competence to accept the amicus curiae brief,

the Tribunal shall exclude evidence that might harm procedural economy, fairness

and equality of the parties [Art. 9.2(g) IBA Rules]. This provision obliges the

Tribunal to maintain fairness between PARTIES to present the case. [IBA

Subcommittee, p.22]. In the present case, acceptance of amicus curiae brief would

raise concerns about the inequality and unfairness of the proceeding, because

CLAIMANT was not given the chance to resort to a non-party’s help.

b. The Amicus Curiae Brief from Gondwandan Government Will Cause

Additional Cost and Delay the Arbitral Proceedings.

23. The amicus curiae brief about the Bill 275 is not necessary for dispute resolution,

the Tribunal should interpret and apply Bill 275 on its own. If the Tribunal

decides to accept the amicus curiae brief, it shall be examined by PARTIES

[CIETAC Rules Art.40]. The examination will waste time and money [Gömez,

p.552]. Therefore, CLAIMANT suggests that the Tribunal not to accept the

amicus curiae brief, which is not necessary.

10
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

c. The Amicus Curiae brief will involves political concerns, which might

deters PARTIES from coming to a settlement.

24. If the Tribunal allows the amicus curiae brief from RESPONDENT’s State, then

political concerns are involved in the private dispute. Once the dispute was

exposed in public domain, PARTIES are faced with great pressure to wait for a

final award, instead of resorting to settlement during the arbitration procedures

[Leivin, p.220].

25. CLAIMANT hereby submits that the Tribunal has no competence to allow the

amicus curiae brief from the Gondwandan Government. And even if the Tribunal

could allow the amicus curiae brief, CLAIMANT insists that the Arbitral

Tribunal not take into account the amicus curiae brief for the abovementioned

reasons.

11
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

III. RESPONDENT’S OBLIGATIONS UNDER THE AGREEMENT

WERE NOT VITIATED BY BILL 275 AND OTHER

REGULATIONS.

26. CLAIMANT submits that, RESPONDENT shall pay the liquidated damage

pursuant to Clause 60.2 of the Agreement for the following two reasons: [A]

RESPONDENT is contractually obligated to pay the liquidated damages for

exercising its right to terminate the Agreement, [B] There are no grounds for

RESPONDENT to vitiate the said obligations.

A. RESPONDENT IS CONTRACTUALLY OBLIGED TO PAY THE LIQUIDATED

DAMAGES.

27. RESPONDENT has the right to terminate the Agreement any time pursuant to

Clause 60.2, and the exercise of termination right lead to the duty to pay

liquidated damage [p.11, Cl. Ex. No.1 (Clause 60.2)]. RESPONDENT had

terminated the Agreement on 1 June 2013 [p.20, Cl. Ex. No.8¶ 1], therefore are

liable for liquidated damage of USD $75,000,000 pursuant to Clause 60.2 of the

12
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

Agreement.

B. THERE ARE NO GROUNDS RESPONDENT TO VITIATE THE OBLIGATIONS

UNDER THE AGREEMENT.

a. The Obligation to Display and Purchase Tobacco Products Could

Still be Performed.

28. Only the Display and Purchase obligations of Branded Merchandise may be

hindered by the prohibition on distribution of promotional materials containing

trademarks or marks associated with tobacco products [p.11, Cl. Ex. No.2 ¶4].

RESPONDENT alleged that it was no longer possible to perform the purchase

obligation of the minimum quantity and intervals of Tobacco Products [p.30, Res.

Ex. No.3, ¶3], which was not true. Bill 275 did not ban the sales of Tobacco

products per se. RESPONDENT only experienced difficulties in terms of

marketing. These difficulties could not serve as an exemption provided in Art. 79

CISG [Schlechtriem, p.617].

29. At most, only the damages arose from the non-performance of Branded

Merchandise may be exempted, the selling of which is prohibited by Bill 275.

13
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

Other obligations, in fact, were still possible to perform despite the launch of Bill

275, which should neither be exempted nor vitiated.

b. Even if Tribunal Holds that the Fulfillment of the Obligation of

Purchasing Tobacco Products Impossible, Bill 275 Meets no

Requirements of Exemption Provided in Art. 79 CISG.

30. Art. 79(1) CISG stipulates that, “A party is not liable for a failure to perform any

of his obligations if he proves that the failure was due to an impediment beyond

his control and that he could not reasonably be expected to have taken the

impediment into account at the time of the conclusion of the contract or to have

avoided or overcome it or its consequences.” There are three requirements for the

application of this provision, namely the impediment is uncontrollable,

unforeseeable and unavoidable to the obligator.

31. CLAIMANT agreed that “acts of public authority” is an impediment contained in

Art. 79 CISG [BRUNNER, p.265; Kroll [Link], p.1072; Malaysia v. Dairex], and do

not argue the uncontrollability and unavoidability. CLAIMANT submits

RESPONDENT is expected to foresee the application of Bill 275.

14
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

32. Foreseeability will be determined by virtue of an objective standard pursuant to

Art. 8(2) CISG, which refers to reasonable person standard. Anything that falls

within the ordinary range of commercial probability is foreseeable [Macromex v.

Globex ; Kroll [Link]., p.1076]. The Gondwandan government adopted series of

actions from 2001 onwards, which revealed the trend of stricter regulations on

tobacco products. Although the conclusion of the Agreement was on 2010,

RESPONDENT, as the largest and most important distributor for CLAIMANT

since 2000 [p.3, AfA ¶5], should have been aware of Gondwandan Government’s

anti-tobacco policy before the conclusion of the Agreement. The prohibition on

the sales of Branded Merchandise was in fact foreseeable to RESPONDENT at

the time of the conclusion of the contract, thus RESPONDENT is still liable for

the failure to perform its obligations.

c. Even if the Application of Bill 275 did Constitute an Exemption

Provided in Article 79, the Duty to pay the Liquidated Damages

Still Exists.

a) Art. 79 (5) CISG refers to compensational damages

15
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

only and does not include penalty damages.

33. The excused “damages” under Art. 79 (5) CISG only refers to “compensate for the

loss of the obligation” pursuant to Art. 74 CISG. The scope of the damages

covered should be judged “according to the effect of the impediment” [Kroll [Link].

p.1060].

b) The PARTIES deem the liquidated damage as a

penalty damages and should not be subjected to Art.

79 (5) CISG.

34. Whether liquidated damage can be exempted by the application of Art. 79 (5)

CISG depends on the common purpose of PARTIES'S intention to the clause

[Schlechtriem,p.607 ;Kroll [Link]. p.1060]. In the present case, PARTIES had

deemed the “liquidated damages” as Termination Penalties [p.21, Cl. Ex. No.9;

p.25, SoD ¶21c], and it reveals that the liquidated damage was of a penalty

character. In conclusion, the liquidated damage was not a form of compensational

damage, so the duty to pay liquidated damages cannot be excluded.

IV. THERE WILL BE NO RISK OF ENFORCEMENT, SHOULD

16
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

THE TRIBUNAL ISSUE AN AWARD IN FAVOR OF THE

CLAIMANT.

35. Since Gondwana is party to NY Convention [p.6, AfA, ¶24], it is obliged under Art.

III to recognize Convention awards as binding and to enforce them in accordance

with rules of procedure. Recognition and enforcement may be refused only on the

grounds provided in Art.V, which should be construed narrowly and exhaustively

[Jan van den Berg, p.13]. The Convention sets maximum standards so that

Contracting States cannot adopt legislations that add grounds for resisting

recognition and enforcement. That is to say, if [A] an award falls within the scope

of application, and [B] falls short of grounds to defense enforcement, national

courts are obliged under the NY Convention to recognize and enforce foreign

awards. CLAIMANT submits that the two requirements were fulfilled.

A. THE AWARD FALLS WITHIN THE SCOPE OF APPLICATION UNDER THE NY

CONVENTION.

36. According to Art. I, “the Convention applies to arbitral awards made in the

territory of a State other than the State where the recognition and enforcement of

such awards are sought.” In the present case, the award would have been made by
17
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

the Tribunal of CIETAC, situating Hong Kong, while seeking enforcement in the

State of Gondwana. Therefore, it falls within the scope of application under the

NY Convention.

B. THERE IS NO GROUND FOR THE REFUSAL OF ENFORCEMENT OF THE AWARD

AT THE STATE OF GONDWANA UNDER ARTICLE V OF THE NY CONVENTION.

37. RESPONDENT has asserted that should the Arbitral Tribunal issue an award in

favor of CLAIMANT, such award would be contrary to the Gonwandan public

policy. The assertion is groundless, because [a] the enforcement of the award is

not associated with the public policy of Gondwana; and [b] even if it is, the

enforcement of the award does not constitute a violation to public policy.

a. The Enforcement of the Award does not Involve Public Policy.

38. The obligation for RESPONDENT to pay the liquidated damage lay in the

Agreement, which stipulated that once the RESPONDENT exercise its right to

terminate the Agreement, it shall be liable for the liquidated damages, in which the

figures were negotiated between both PARTIES [p.11, Cl. Ex. No.1 (Clause

60.2)]. Should the Tribunal issue an award in favor for CLAIMANT, it simply

18
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

demonstrates the effectiveness of the Agreement, and by no way can be associated

with harming public policy of Gondwana thereof.

b. The Enforcement of the Award does not Constitute a Violation to

Public Policy, Hence is not a Valid Reason to Refuse Enforcement.

39. Even if the enforcement of the award is associated with public policy, it does not

constitute a violation to it. The public policy exception set out on Art.V(2)(b) is an

acknowledgment of the right of the State and its Courts to exercise ultimate

control over a foreign award [ILA Report]. However, this defense is only available

“where the enforcement would violate the forum State’s most basic notions of

morality and justice [Parsons Case].”

40. In fact, courts throughout the world have taken a strict attitude toward the defense.

In this sense, the mere fact that the enforcement of an award violates mandatory

provisions in the forum State does not necessarily constitute a valid reason to

refuse enforcement [Adviso Case]. For example, a case decided in Germany

[German Case], liquidated damage, though not in conformity with German law

were not considered contrary to the public policy.

19
MEMORANDUM FOR CLAIMANT TEAM NO. 568 C

41. In the present case, should the enforcement of the award leads to the payment of

liquidated damage, it shall not be held contrary to public policy since it is a

contractual obligation rather than a serious breach to the public policy of

Gondwana.

REQUEST FOR RELIEF

CLAIMANT hereby submits that the Tribunal render in favor of CLAIMANT:

1. The Tribunal Has Full Jurisdiction over the Liquidated Damage Claim.

2. The Tribunal Should Not Accept the Amicus Curiae Brief from the

Gondwandan Government.

3. RESPONDENT’s Obligations under the Agreement were by No Way

Vitiated.

4. There Will be No Risk for Future Enforcement of the Arbitration Award.

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