Lyon Catholic University MEMORANDUM FOR RESPONDENT

THIRTY-SECOND ANNUAL

Willem C. Vis International Commercial Arbitration Moot

11th– 17th April 2024

MEMORANDUM FOR RESPONDENT

Case Reference: FAI MOOT 100/2024

On behalf of RESPONDENT Against CLAIMANT

Equatoriana RenPower Ltd Green Hydro Plc

1 Russel Square 1974 Russell Avenue
Oceanside, Equatoriana Capital City, Mediterraneo

Counsel for RESPONDENT

Chloé Fodera ǀ Daria Dmitrievskaia ǀ Sarah Lorraine Trazo

 Lyon Catholic University MEMORANDUM FOR RESPONDENT

ACADEMIC INTEGRITY AND ARTIFICIAL INTELLIGENCE DISCLOSURE

STATEMENT

University: Lyon Catholic University

Country: France

ACADEMIC INTEGRITY YES UNSURE NO

We confirm that this memorandum does not include text ●

from any source, whether the source was in hard copy or
online available, which has not been properly distinguished
by quotation marks or citation

USE OF AI YES UNSURE NO

We have used AI enhanced search engines for researching ●

sources and (factual or legal) information on the Moot
Problem.

We have used AI-enhanced proof-reading tools. ●

We have used AI enhanced translation tools to translate ●

sources relevant for our work on the Moot Problem.

We have used AI enhanced translation tools to translate ●

parts of the text submitted in this Memorandum into
English from any other language.

We have used AI to generate overviews or briefings on ●

relevant factual and legal topics which are not submitted
as part of the memorandum but have been solely used to
advance our own understanding.

We have used AI tools to generate statements that are ●

now included in the memo. Please tick yes even if you
have altered or amended the text generated by AI before
submission.

We have trained an AI tool on Vis Moot documents. ●

2
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

We have used an AI tool that has been trained on Vis ●

Moot documents to generate text that is part of our
Memorandum.

Other (please specify):

We hereby certify the truthfulness of our statements and confirm that we have not used AI-applications
in any other way in preparing the submission of this memorandum.

DATE: 30 January 2025

SIGNATURES

Chloé Fodera Daria Dmitrievskaia Sarah Lorraine Trazo

3
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Table of Content
TABLE OF ABBREVIATIONS AND DEFINITIONS ................................................................................................................... 6
STATEMENT OF FACTS .................................................................................................................................................................. 8
INTRODUCTION ............................................................................................................................................................................ 11
ARGUMENTS ON PROCEDURE .................................................................................................................................................. 13
ISSUE 1: THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION. ...................................................................... 13
A. THE TRIBUNAL DOES NOT HAVE JURISDICTION. ........................................................................................................ 13
I. MEDIATION IS MANDATORY ACCORDING TO THE CONTRACT. .......................................................................................... 13
II. COMPLIANCE WITH THE MEDIATION PRECONDITION IS A CONDITION PRECEDENT FOR THE OPERABILITY OF THE
ARBITRATION AGREEMENT. .......................................................................................................................................................... 14

B. THE CLAIM IS NOT ADMISSIBLE. ........................................................................................................................................ 15

I. THE MEDIATION CLAUSE IS ENFORCEABLE EVEN WITHOUT A DEFINED TIMEFRAME. ..................................................... 15
II. EVEN IF THE TRIBUNAL HAD JURISDICTION, THE CLAIM WOULD STILL BE INADMISSIBLE BASED ON THE CONTRACT... 17
III. COMPLIANCE WITH MEDIATION WOULD NOT HAVE BEEN FUTILE. ................................................................................... 17
ISSUE 2: THE TRIBUNAL SHOULD EXCLUDE EXHIBIT C7 AND INCLUDE EXHIBIT R3. ........................................ 18
A. EXHIBIT C7 SHOULD BE EXCLUDED.................................................................................................................................. 19
I. EXHIBIT C7 IS A WITHOUT PREJUDICE OFFER. ................................................................................................................ 19
II. EXHIBIT C7 IS PROTECTED BY THE FAI MEDIATION RULES. .......................................................................................... 20
B. THE TRIBUNAL SHOULD KEEP EXHIBIT R3. .................................................................................................................. 21
I. EXHIBIT R3 IS RELEVANT AND MATERIAL FOR THE TRIBUNAL. ...................................................................................... 21
II. CLAIMANT DID NOT SUBMIT PROOF OF AN ILLEGAL ACQUISITION OF EXHIBIT R3. .................................................... 22
1. The burden of proof rests upon CLAIMANT. ....................................................................................................................... 22
2. CLAIMANT did not prove any forgery. .................................................................................................................................. 23
III. THE INCLUSION OF EXHIBIT R3 WOULD NOT NECESSARILY BE A BREACH OF PROCEDURAL FAIRNESS. ........................ 24
IV. EXHIBIT R3 DOES NOT BREACH ANY CLIENT-ATTORNEY PRIVILEGE. ............................................................................. 24
1. The privilege does not apply due to a lack of independence. ....................................................................................... 25
2. The ethical rule for lawyers does not protect Exhibit R3. ............................................................................................. 25
ARGUMENTS ON SUBSTANCE ................................................................................................................................................... 27
ISSUE 3: THE PSA IS NOT GOVERNED BY THE CISG. ......................................................................................................... 27
A. THE PSA DOES NOT MEET THE “INTERNATIONALITY” REQUIREMENT SET FORTH IN ART. 1 (1) OF
THE CISG. ......................................................................................................................................................................................... 27
I. CLAIMANT HAS SEVERAL PLACES OF BUSINESS, ONE OF THEM IS VOLTA TRANSFORMER, A COMPANY INCORPORATED
IN EQUATORIANA. ......................................................................................................................................................................... 27
II. CLAIMANT’S PLACE OF BUSINESS, LOCATED IN EQUATORIANA, HAS THE CLOSEST RELATIONSHIP TO THE PSA. ..... 29
B. THE PSA IS A MIXED CONTRACT WITH OBLIGATIONS THAT PREDOMINANTLY CONSIST OF
SERVICES, HENCE, THE CISG DOES NOT APPLY UNDER ART. 3 (2) OF THE CONVENTION. ............................... 30
I. SERVICES AND POST-SERVICES INCLUDED IN THE PSA SHOULD NOT BE QUALIFIED AS ANCILLARY. ............................. 30
II. SERVICES AND POST-SERVICES IN THE PSA CONSTITUTE THE PREPONDERANT PART OF IT, HENCE, THE CISG IS NOT
APPLICABLE. .................................................................................................................................................................................. 32
III. THE CISG IS NOT APPLICABLE TO THE PSA, WHICH IS A TURNKEY CONTRACT.............................................................. 33
C. THE PSA IS A RESULT OF THE REVERSE AUCTION, HENCE, SHOULD BE EXCLUDED FROM THE CISG
APPLICABILITY UNDER ART. 2 (B). ....................................................................................................................................... 34
I. A REVERSE AUCTION SHOULD BE UNDERSTOOD AS AN AUCTION IN THE SENSE OF ART. 2 (B) OF THE CISG. ............... 34
II. THE CISG IS INAPPLICABLE TO AN ONLINE REVERSE AUCTION UNDER ART. 2 (B) OF THE CONVENTION. ................... 35

4
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

III. THE PSA WAS CONCLUDED BY THE REVERSE AUCTION AND NOT BY A PUBLIC PROCUREMENT PROCESS...................... 36
ISSUE 4: THE PARTIES VALIDLY EXCLUDED THE APPLICATION OF THE CISG UNDER THE PSA. .................... 37
A. INTENT OF THE PARTIES, AS ASSESSED UNDER ART. 8 OF THE CISG, CONFIRMS EXCLUSION OF THE
CONVENTION. ................................................................................................................................................................................ 37
I. SUBJECTIVE INTENT OF THE PARTIES SHOULD BE INTERPRETED PURSUANT TO ART. 8 (1) AS AN IMPLICIT EXCLUSION
OF THE CISG.................................................................................................................................................................................. 38
II. THE OBJECTIVE INTENT UNDER ART. 8 (2), (3), LEADS A REASONABLE PERSON TO INFER THE EXCLUSION OF CISG. 39
B. ART. 29 OF THE PSA EXPRESSLY EXCLUDES THE CISG BY ADOPTING EQUATORIANIAN DOMESTIC
LAW AND EXCLUDING CONFLICT OF LAW PRINCIPLES. ................................................................................................. 41
REQUEST FOR RELIEF ................................................................................................................................................................. 43
INDEX OF AUTHORITIES ............................................................................................................................................................ 44
BOOKS, MATERIALS, AND SCHOLARLY WORK ............................................................................................................................ 44
ARTICLES ....................................................................................................................................................................................... 45
INDEX OF COURT DECISIONS.................................................................................................................................................... 45
INDEX OF ARBITRAL AWARDS ................................................................................................................................................ 49
INDEX OF LEGAL ACTS AND RULES ........................................................................................................................................ 50
MODEL RULES OF PROFESSIONAL CONDUCT, 2024 ........................................................................................................ 50

5
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

TABLE OF ABBREVIATIONS AND DEFINITIONS

ARfA RESPONDENTS’ Answer to CLAIMANT’s Request for

Arbitration of 14 August 2024
Art./Arts. Article/Articles

CISG / Convention United Nations Convention on Contracts for the International Sale
of Goods, 11 April 1980
CISG-AC Op. CISG Advisory Council Opinion

Cl. Ex CLAIMANT’s Exhibit

Co. Company

e.g. exempli gratia [for example]

et al. et alii / et aliae [and others]

EUR Euro currency

Ex. Exhibit

FAI The Finland Arbitration Institute

FAI Mediation Rules Mediation Rules 2024 of the Finland Chamber of Commerce

FAI Rules FAI Arbitration rules

ICC International Chamber of Commerce

ICC Rules Arbitration Rules of the International Chamber of Commerce,

effective 1 March 2017
ICC Rules 2021 Arbitration Rules of the International Chamber of Commerce,
effective as from 1 January 2021
Inc. Incorporated

Ltd Limited Company

MfC Memorandum for Claimant Middlesex University Dubai
Mr Mister

Ms Miss

No. Number

p./pp Page/pages

6
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Para./Paras. Paragraph/Paragraphs

Plc Public limited company

PO. 1 Procedural Order No. 1 of 11 October 2024

PO. 2 Procedural Order No. 2 of 13 November 2024

PSA Purchase and Service Agreement

R. Ex. RESPONDENT's Exhibit

Rules Rules for Expedited Arbitration 2024 of the Finland Chamber of

Commerce
RfA CLAIMANT’s Request for Arbitration of 14 August 2024
RFQ Request for Quotation
U.S. United States of America

UNIDROIT International Institute for the Unification of Private Law

UNIDROIT UNIDROIT Principles of International Commercial Contracts,

Principles 2016
v. versus

7
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

STATEMENT OF FACTS

1. Equatoriana RenPower Ltd. (‘RESPONDENT’) is a government-owned entity based in

Equatoriana, which plays a pivotal role in implementing Equatoriana’s ambitious “Green
Energy Strategy.” GreenHydro Plc (‘CLAIMANT’), based in Mediterrano, is a medium-
sized engineering company specialized in the planning, construction and sale of plants for
the production of green hydrogen and connected services. Equatoriana’s strategy targets
carbon neutrality by 2040 through the development of a sustainable hydrogen
infrastructure to decarbonize key industries, including steel and transport.

2. To achieve this aim on carbon neutrality, RESPONDENT planned significant investments

and issued a Request for Quotation (‘RFQ’) on 3 January 2023 for constructing and
delivering a green hydrogen plant with optional expansions [R. Ex. 1, p. 29, para.7; Cl. Ex.
1 p. 8-9].

3. The RFQ emphasized the necessity of a minimum local content requirement of 25% to
uplift Equatoriana’s economy [Cl. Ex. 1, p. 8-9, para. 9]. RESPONDENT’s approach aimed
to use its resources and contacts to collaborate with the growth of local industries in
renewable energy production, as, it seemed that there were no domestic contractors
capable of independently executing a project of this magnitude.

4. RESPONDENT, sought the PSA to showcase its proton exchange membrane (‘PEM’)
electrolysis technology and therefore presented its offer to CLAIMANT to secure the
project, underscoring its strategic intent rather than economic viability [Cl. Ex. 5, p. 16-17,
paras. 7, 10].

5. During negotiations, RESPONDENT's CEO emphasized the significance of local

content, to CLAIMANT’s representative, Mr Deiman, particularly for the eAmmonia
module, and expressed intention to involve the Equatorian company P2G as the primary
subcontractor [R. Ex. 1, p. 29, para.4]. CLAIMANT assured RESPONDENT that they
were doing their best to increase the share of locally produced goods and services and
stated that it would likely approach 50%, a critical factor in RESPONDENT's selection of
CLAIMANT as the contractor [Cl. Ex. 5, p. 17, para.11].

8
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

6. On 17 July 2023, the Parties signed the Purchase and Service Agreement (the ‘PSA’), which
included the main plant’s construction and an optional eAmmonia production module [Cl.
Ex. 2, p. 10]. However, unknown to RESPONDENT at the time, CLAIMANT had
anticipated challenges in meeting the agreed local content levels due to ongoing difficulties
with P2G, a fact CLAIMANT failed to disclose during negotiations [R. Ex. 2, p. 31].

7. Passed the PSA’s execution, CLAIMANT’s inability to finalize an agreement with P2G
resulted in a significant deviation from the agreed local content requirement. CLAIMANT
contracted with Green Ammonia, a Danubian entity, for the eAmmonia module, reducing
the local content to 40% instead of the initially promised 50%, this was informed via email
by CLAIMANT to RESPONDENT on the 26 August, 2023 [Cl. Ex. 4, p. 15].
RESPONDENT expressed its concerns about this development, and reiterated the
importance of compliance with the local content requirement. After the notification, and
considering the interest in the project, RESPONDENT accepted the change under explicit
expectations that CLAIMANT would strictly adhere to project timelines and budgets to
mitigate public scrutiny [R. Ex. 3, p. 32].

8. Following an Equatoriana’s governmental shift in October 2023, Equatoriana’s energy

priorities changed under the leadership of the new Minister of Energy, Ms. Vent.
RESPONDENT’s new leadership was instructed to reassess ongoing projects and align its
contracts, including the PSA, with new directives prioritizing economic relief for
businesses, there including the hydrogen plant project [Cl. Ex. 5, p. 17].

9. Despite RESPONDENT’s warnings on possible delays, CLAIMANT failed to meet the

first milestone under the PSA. Detailed plans due on 1 February 2024 were submitted 28
days late and were incomplete, lacking the required eAmmonia module planning which
was of key importance for RESPONDENT [Cl. Ex. 6, p. 19]. This failure exacerbated
RESPONDENT’s concerns about CLAIMANT’s capacity to deliver the project as agreed
and represented a fundamental breach of the terms agreed upon the PSA.

10. RESPONDENT, having lost confidence in CLAIMANT’s performance, terminated the

PSA on 29 February 2024, citing both the delay in deliverables and the government’s

9
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

revised policies and permitting termination for convenience under Equatorianian law [Cl.
Ex. 6, p. 19].

11. CLAIMANT contested the termination, alleging that the right to terminate for
convenience had been excluded during negotiations [Cl. Ex. 5, p. 17]. However,
RESPONDENT’s termination was valid under Equatorianian law, and the revised policies
provided additional justification for this change and were of CLAIMANT’s knowledge
[R. Ex. 3, p. 3].

12. Subsequent negotiations initiated by RESPONDENT to explore potential project

continuation revealed CLAIMANT’s lack of flexibility. RESPONDENT’s proposal to
proceed with a price reduction was reasonable, considering the circumstances
CLAIMANT’s lack of performance and failures. CLAIMANT’s refusal to this proposal
left RESPONDENT with no alternative but to pursue termination [Cl. Ex. 7, p. 20].

13. RESPONDENT’s decision to terminate the PSA was further justified by the subsequent
discovery of issues involving CLAIMANT’s subcontractor, Volta Transformer, which was
implicated in criminal investigations. While no direct wrongdoing was attributed to
CLAIMANT, the association generated negative publicity that would have jeopardized the
project’s public perception [R. Ex. 4, p. 33].

14. The PSA’s governing law, as expressly agreed on its Article 29, is the law of Equatoriana,
excluding its conflict of laws principles. The Civil Code of Equatoriana provides
RESPONDENT with the right to terminate for convenience, and this contractual
framework aligns with Equatoriana’s public procurement regulations [R. Ex. 1, p. 29]. The
exclusion of the CISG further underscores RESPONDENT’s reliance on domestic legal
principles to ensure compliance and fairness in its public contracts [Cl. Ex. 6, p. 19].

10
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

INTRODUCTION

15. CLAIMANT has initiated arbitration proceedings against RESPONDENT in accordance

with Art. 30 of the PSA. CLAIMANT argues that RESPONDENT’s termination might
constitute a fundamental breach under the United Nations Convention on Contracts for
the International Sale of Goods (the ‘CISG’) or the PSA, as it was based on a 28-day delay
in the delivery of the final plans. Despite the PSA's prohibition on termination without
cause and RESPONDENT's obligation to use its best efforts to complete the project,
CLAIMANT argues that the termination was due to political and economic factors.
Notwithstanding, these arguments lack of legal basis and therefore should not be accepted
by the Tribunal. RESPONDENT will demonstrate that the termination was fully legal,
based on CLAIMANT’s failure to comply with its obligations under the PSA’s.
Consequently, RESPONDENT refutes any breach and maintains that the termination is
justified by CLAIMANT’s failure to comply with its obligations.

16. Issue 1: The Tribunal lacks jurisdiction and the claim is inadmissible. With regard to the
Tribunal's jurisdiction, the necessary precondition of mediation explicitly required under
the disputes resolution clause in the PSA before initiating arbitration has not been met.
Regarding the admissibility of the claim, it should be remembered that the mediation clause
provides for a preliminary step before recourse to arbitration, in accordance with the terms
of the PSA. As a result, CLAIMANT's claim must be rejected, both on the grounds of the
Tribunal's lack of jurisdiction and the failure to comply with the PSA’s terms, which render
the claim inadmissible.

17. Issue 2: The Tribunal should exclude Exhibit C7, a "Without Prejudice offer”, considering
it is a Without Prejudice Offer and thus is protected by confidentiality under the FAI
Mediation Rules. On the other hand, Exhibit R3 is relevant to the resolution of the dispute,
as proves the issue of misrepresentation that is crucial to RESPONDENT’S arguments
and this case. Moreover, CLAIMANT has not proven the illegal acquisition or forgery of
Exhibit R3, and the burden of proof rests with CLAIMANT. Lastly, the client-attorney
privilege invoked by CLAIMANT to challenge Exhibit R3 should not apply, as
RESPONDENT’S legal advisor was not independent, and Mediterraneo’s laws do not

11
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

provide adequate protection in this case. Therefore, the Tribunal should exclude Exhibit
C7 while admitting Exhibit R3.

18. Issue 3: The PSA is not governed by the CISG since it does not meet the applicability
conditions set by Art. 1 (1) of the Convention. First, the PSA does not meet the
“internationality” requirement set by the CISG. Although CLAIMANT has several places
of business, from 2020, the closest place of business to the PSA pursuant to Art. 10 of the
Convention was Volta Transformer, located in Equatoriana. Second, the “preponderant”
part of the PSA, based not only on subjective calculation of CLAIMANT but also on other
objective circumstances of the present case, should be defined as services. Moreover, the
PSA is a turnkey contract where services are more central to the contract, hence, the CISG
is inapplicable to it pursuant to Art. 3 (2) of the Convention. Finally, the PSA resulted from
a reverse auction and not a public procurement procedure, accordingly, it is excluded from
the CISG applicability by Art. 2 (b) of the Convention.

19. Issue 4: RESPONDENT argues that the parties have excluded the application of the
CISG by choosing Equatoriana's law as the applicable law, under Art. 29 of the PSA.
Although Equatoriana, as a signatory to the Convention, is in principle subject to the latter,
the selection of a Model Contract revised in 2022, which does not explicitly mention the
CISG, bears witness to the Parties' deliberate subjective intention not to subject their
contract to the Convention. Futhermore, CLAIMANT should know or should have
known the intention of RESPONDENT with the change of Model Contract considering
their prior relationship and pursuant to Art. 8 CISG and Art. 1.7 UNIDROIT Principles.
Since the CISG was intended by the Parties to be excluded, it has to be considered as a
rule of conflict of law under the PSA, leaving full effect to the domestic law of Equatoriana.

12
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

ARGUMENTS ON PROCEDURE

ISSUE 1: THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION.

20. In determining its jurisdiction and the admissibility of the claim, the Tribunal should
consider several important points. Regarding its jurisdiction first, it is important to note
that RESPONDENT is not bound by its obligation to resort to arbitration. Even if it were,
the conditions to file for arbitration are not met (A). On the arguments on the admissibility
of the claim, the mediation clause is fully enforceable based on the PSA, and the
circumstances were not hopeless as argued by CLAIMANT, making the mediation step
reasonable and not futile. Based on these grounds, the Tribunal should dismiss
CLAIMANT’s demands (B).

A. THE TRIBUNAL DOES NOT HAVE JURISDICTION.

21. CLAIMANT asserts the mediation step is not mandatory while it is explicitly stated in the
PSA that the mediation step shall be complied with before recursing to arbitration (I).
Additionally, regarding the question of operability, RESPONDENT argues that
CLAIMANT’s request for declaring that mediation is not a condition precedent to the
operability of the agreement is hopeless and should be rejected (II).

I. Mediation is mandatory according to the contract.

22. The PSA underlying the intentions of the Parties should be the basis for any assessment
of the Tribunal. According to Art. 1.3 of the UNIDROIT Principles, the contract, in this
case the PSA, is the law binding for the Parties. In the case of Pacific Carriers Ltd v BNP
Paribas, the High Court of Australia reaffirmed the importance of relying on the contract
to determine the intention of the Parties. Indeed, the Court stated: “The construction of the
letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have
understood them to mean. That requires consideration, not only of the text of the documents, but also the
surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction”
[Emphasis added].

13
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

23. CLAIMANT interprets the intentions of RESPONDENT based on scholarly doctrine

which goes directly against the clear and express meaning of the PSA [MfC, para. 7]. The
term “shall” be addressed in the contract indicates a solid expression of the Parties’
intention to go through mediation before any arbitration [Gutierrez de Martinez v. Lamagno].
This is confirmed with the insistence that the matter “shall finally be settled by arbitration”
[Art. 30, PSA, pp. 12-13]. The Parties, therefore, made it mandatory to go through
mediation before resorting to arbitration.

24. At no moment during the negotiations, the possibility of skipping mediation was discussed.
On the other side, CLAIMANT reassured RESPONDENT that arbitration would be the
final resort [R. Ex 2, p. 31]. CLAIMANT’s sources, therefore, change the real aim of the
clause. Mediation is, according to the PSA, a condition for the Tribunal to admit a claim
and thus declare its jurisdiction to rule in any matter.

II. Compliance with the mediation precondition is a condition precedent for the
operability of the arbitration agreement.

25. RESPONDENT does not follow the interpretation that CLAIMANT gives to its sources
[MfC, para. 11]. Indeed, the three first cases do not, at any moment, address a matter
involving meditation. [Lucky-Goldstar International (HK) v Ng Moo Kee Engineering; Alstom
Technology Ltd. v. Insigma Technology Co. Ltd. (II); HKL Group Co Ltd v. Rizq International
Holdings Pte Ltd].

26. The second case addressed the issue of whether non existing rules, rendered the PSA
inoperable. However, the judge held that this could not prevent the contract from being
effective. One ground that could have rendered the agreement inoperable was the Parties’
intention: “Perhaps other terms in the contract contradicts the parties’ intention to arbitrate” [Lucky-
Goldstar International (HK) v Ng Moo Kee Engineering]; [Emphasis added]. Regarding the case
of Alstom Technology Ltd. v. Insigma Technology Co. Ltd. (II), Alstom actually complied with the
tentative of amicable settlement before filing for arbitration according to the contract:
“Any and all such disputes shall be finally resolved by arbitration” [Alstom Technology Ltd. v. Insigma
Technology Co. Ltd. (II)]; [Emphasis added]. The HKL Group Co Ltd v. Rizq International
Holdings Pte Ltd actually supports RESPONDENT’s claim. Indeed, the Tribunal decided

14
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

to make the Parties fulfill all the necessary steps in the contract before starting the
proceedings. In this case, the Party had to give some security of costs as agreed in the
contract before the arbitration proceedings start [HKL Group Co Ltd v. Rizq International
Holdings Pte Ltd].

27. Every case mentioned by CLAIMANT leads to the same conclusion: the Parties’ intention
is essential and compliance with the preconditions is necessary. In the case at stake, the
Parties required the recourse to mediation before arbitration. They insisted that arbitration
should be the last step in the same way as in Alstom Technology Ltd. v. Insigma Technology Co.
Ltd. (II) [Art. 30, PSA, pp. 12-13].

28. The Tribunal should, therefore, conclude that CLAIMANT has not observed its
obligations under Article 30 of the PSA, making the arbitration clause inoperable.

B. THE CLAIM IS NOT ADMISSIBLE.

29. In case the jurisdiction of the Tribunal is upheld, CLAIMANT’s claims are inadmissible.
In the following sections, RESPONDENT will answer to each argument of CLAIMANT.
First, the fact that a defined timeframe was not set up in the contract cannot prevent the
enforceability of the mediation clause since this timeframe could be fixed by the filing Party
(I). Second, the only fact that the contract makes the mediation a necessary condition
should render the claim inadmissible (II). Lastly, the argument that compliance would
have been futile comes from the fact that CLAIMANT is convinced that RESPONDENT
did not want to settle their disagreement. The Tribunal should consider the objective fact
that the majority of mediation actually succeeds (III).

I. The mediation clause is enforceable even without a defined timeframe.

30. CLAIMANT argues that the mediation clause is uncertain. Nevertheless, this argument is
hopeless [MfC, para. 14]. According to Art. 2.2 (e) of FAI Mediation Rules, the party filing
for the commencement of mediation indicates the time limit for the conduct of the
mediation proceedings. Moreover, the proceedings go at the pace the filing party set up.
Contrary to what CLAIMANT argues, the Parties have, thus, addressed one “usage or practice

15
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

concerning the enforceability of the mediation clause” and were not “uncertain on the enforceability of the
mediation precondition” [MfC, para 14]; [Emphasis added].

31. The incorporation of institutional rules was recognized as sufficient in Cable & Wireless plc
v IBM United Kingdom Ltd. The Court found that these rules were sufficiently exhaustive to govern the
mediation clause. As a result, not enforcing this clause would be “an ascertainable breach of the agreement”
[Emphasis added]. Flexibility is not an issue as long as long there is: “(a) a sufficiently certain
and unequivocal commitment to commence a process (b) from which may be discerned what steps
each party is required to take to put the process in place and which is (c) sufficiently clearly
defined to enable the Court to determine objectively (i) what under that process is the minimum
required of the parties to the dispute in terms of their participation in it and (ii) when or how
the process will be exhausted or properly terminable without breach” [Tang v. Grant Thornton
International Ltd]; [Emphasis added].

32. In this case, the mediation clause makes mediation mandatory in the event of a dispute or
disagreement, which is the clear expression of a commitment to commence the mediation
process in case these disagreements arise [Art. 30, PSA, p. 12]. Moreover, the steps are
clearly defined by incorporation of the FAI Mediation Rules with provisions on how the
process starts and how it is exhausted or terminated [e.g. FAI Mediation Rules, pp. 11-12; p.
16]. Indeed, upon filing for mediation, CLAIMANT would have been able to set a time
limit adequate to its urgency [Art. 2.2 (e) FAI Mediation Rules]. Far from being unclear, this
provision shows some flexibility.

33. CLAIMANT complains about the lack of a defined timeframe which, in its opinion, was
not suitable due to its urgency. However, this urgency is quite relative since CLAIMANT
only filed for arbitration two months after the Without Prejudice Offer date [RfA p. 1; R.
Ex. 3, p. 14]. This time could have been used for mediation.

34. Therefore, the mediation clause was not uncertain, and CLAIMANT should have
respected the multi-layered clause.

16
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

II. Even if the tribunal had jurisdiction, the claim would still be inadmissible based
on the contract.

35. Arbitration derives directly from the contract of the Parties. This is expressed in many
provisions of international law, including the FAI Arbitration Rules [Art. 1.1 (b), FAI
Arbitration Rules]. As a result, the Tribunal should respect the conditions set out in the
contract where they take the source of their power. The obligation to respect the mediation
step before filing for Arbitration was stated in Sulamérica Cia Nacional de Seguros SA v. Enesa
Engenharia SA where the Tribunal found that only an illegal provision could be bypassed.

36. The multi-tier dispute resolution’s provisions are internationally recognized, and their
legality usually does not make any doubt to Tribunals. Indeed, there is a “General
encouragement of the use of ADR” [Halsey v. Milton Keynes General NHS Trust]; [Emphasis added].
In multiple cases, parties were forced to respect the preliminary procedure before coming
back before the Tribunal [Emirates Trading Agency LLC v. Prime Mineral Exports Private
Limited; Cable & Wireless plc v. IBM United Kingdom Ltd].

37. Therefore, CLAIMANT’s failure to comply with the mediation step renders its claims
inadmissible.

III. Compliance with mediation would not have been futile.

38. Mediation was an essential point for the Parties. It is “an assisted and facilitated negotiation
carried out by a third party” [Goldberg/Sander/ Rogers]; [Emphasis added].

39. The utility of a mediator is not only to be present in a room with parties. It is a worldwide
recognized dispute resolution mechanism because it can have a transformative view. When
parties enter the room, they are full of assumptions about each other, but the moment they
leave, they feel like breathing new air [Maryam Salehijam]. As stated in Halsey v Milton Keynes
General NHS “Mediation often succeeds where previous attempts to settle have failed” [Emphasis
added]. Indeed, “Skilled mediators are now able to achieve results satisfactorily to both parties in many
cases which are quite beyond the power of lawyers and courts to achieve” [Cable & Wireless Plc v IBM

17
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

United Kingdom Ltd]; [Emphasis added]. Therefore, if mediation were not different from a
mere negotiation, it would not exist. The presence of an expert, a third party, can transform
the situation.

40. However, CLAIMANT was already convinced that the new government would not
cooperate with it [Cl. Ex. C5, p. 18, para. 12]. Based on this belief, it possibly started
negotiations with a closed mind, which could not lead to success. RESPONDENT tried
to make an offer, but, unfortunately, CLAIMANT assumed that the negotiations were not
conducted in good faith. [RfA, p. 6, para. 21; Cl. Ex. 5, pp. 17-18, para. 12]. These
assumptions could have been resolved by mediation.

41. In regard to these developments, not only should the Tribunal not uphold its jurisdiction
because of the misrepresentation and the default of compliance with the mediation step
but it should also reject the admissibility of the claim. Indeed, the lack of time frame in the
PSA does not render the mediation enforceable. The contract is clear on the mandatory
step of mediation and the mere fact that CLAIMANT doubted RESPONDENT’s good
faith does not render mediation futile.

42. Consequently, CLAIMANT’s argument that mediation would have been inefficient has no
solid ground. As a result, the arguments of time and cost efficiency should not be upheld
due to the notorious unexpected results of mediation.

ISSUE 2: THE TRIBUNAL SHOULD EXCLUDE EXHIBIT C7 AND INCLUDE

EXHIBIT R3.

43. The protection of Exhibit C7 is necessary as it is a “Without Prejudice Offer.” This offer
complied with the standard of “genuine attempt to resolve the dispute” and is, therefore,
not a mere commercial agreement. Moreover, Exhibit C7 is covered by the confidentiality
protection under the FAI Mediation clause even if there was no mediation (A). Regarding
Exhibit R3, it is both relevant and material for the dispute as it demonstrates an issue of
misrepresentation, necessary for RESPONDENT’s arguments in Issue 1. Additionally,
CLAIMANT did not prove, at any moment, an illegal acquisition nor the forgery of Exhibit
R3. The fact that CLAIMANT raised a claim without solid grounds had the opportunity
to bring proof of his allegations but did not do it raises RESPONDENT’s concerns.
Finally, the client-attorney privilege does not apply to Exhibit R3 (B).

18
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

A. EXHIBIT C7 SHOULD BE EXCLUDED.

44. Exhibit C7 should be excluded as it is Without Prejudice Offer. Indeed, it is not a mere
commercial document but a genuine attempt to settle the dispute as the offer was real and
reasonable (I). Moreover, it should be protected by the FAI Mediation Rules as, with the
reading of the contract, the failure of this proposal would have led to mediation.
Additionally, the Parties gave a broad scope to the confidentiality provision (II).

I. Exhibit C7 is a Without Prejudice Offer.

45. CLAIMANT asserts that on top of the labelling “Without Prejudice”, there is a need for a
“genuine attempt to settle a dispute” [MfC, para. 26]. According to CLAIMANT, the
Without Prejudice Offer was a mere commercial discussion and not a real opportunity to
negotiate [MfC, para. 31].

46. In contrast to CLAIMANT’s submissions, it is clear that there was a genuine attempt to
settle the dispute. Indeed, contrary to what CLAIMANT asserts, it was not in such a
difficult economic state. CLAIMANT is not a new company. It has been in place for more
than 12 years with a greater amount of employees [Cl. Ex. 5, p. 16, paras. 3-4]. Moreover,
the fact that CLAIMANT changed its supplier of eAmmonia from P2G to Green
Ammonia made it go from making no profit to saving 7.5 million euros [Cl. Ex. 5, pp. 17-
18, paras. 12].

47. The government was in a situation where the political climate would difficultly have
allowed the continuation of the project [Cl. Ex. 3, p. 14]. This is the reason why the
previous government did not publish the failures of CLAIMANT and tried to continue
with the lower percentage of local content [R. Ex. 1, p. 30, para. 10]. However, a delay in
the project would have been more difficult to hide as the population was waiting for the
results of this new energy project in which they already lacked trust [Cl. Ex. 3, p. 14].

48. Conscious that CLAIMANT was left with hydrogen in which it had invested the first
payment of the PSA, RESPONDENT decided to make an offer that would have been

19
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

suitable for everyone [Cl. Ex. 7, p. 30]. It would have helped CLAIMANT use the
hydrogen, potentially making some profit and increase its goodwill. Indeed, the new project
being less costly than the first one, it made sense to reduce the price [Cl. Ex. 7, p. 30; Cl.
Ex. 3, p. 14]. Regarding RESPONDENT, it would have increased public’s and
governmental confidence on the project if there was less money at stake [Cl. Ex. 3, p. 14].
It also made sense that RESPONDENT asked for a competitive price since it is a matter
of public procurement and that the resources of the States cannot be spent inadvertently.

49. Considering the savings that CLAIMANT made from the reduction of the promised level
of local content, the fact that the new project was well known and cheaper and that even
with a 15% reduction, CLAIMANT would still have made a good profit, saying that
RESPONDENT was not being reasonable does not align with the facts [R. Ex. 2, p. 31;
Cl. Ex. 7, p. 30].

50. Therefore, the Tribunal should conclude that the criteria of genuine attempt of dispute
resolution is met, and the privilege should be upheld on Exhibit C7. And, even if the
Tribunal considers keeping Exhibit C7, RESPONDENT will argue that Exhibit C7 is
actually against CLAIMANT as it shows that its reading of the negotiations was biased.

II. Exhibit C7 is protected by the FAI Mediation Rules.

51. CLAIMANT contends that Exhibit C7 was not covered by the FAI Mediation Rules.
However, according to the ICC Mediation Guidance Notes, every statement made during the
mediation proceedings should be covered by the mediation privilege [ICC Mediation
Guidance Notes, p. 14, para. 33]. These communications can also be extended to the ones
made for purposes of “considering, conducting, participating in, initiating, continuing, or reconvening
a mediation” [Uniform Mediation Act, p.1]; [Emphasis added].

52. It is clear that the Parties intended to recourse to mediation before any Arbitration in the
event of dispute, controversy or claim related to the agreement [Art. 30, PSA, pp. 12-13].
However, as mediation involves some costs, it is common for the Parties to first try to
settle the dispute with negotiations [James Churchill v. Merthyr Tydfil County Borough Council].
The Without Prejudice Offer was in the line of trying to settle the disagreement since, in
case of failure of this tentative, the logic of the PSA designed mediation as the next step.

20
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Therefore, any tentative of settlement between the Parties would have been for the
purpose of considering mediation.

53. Additionally, CLAIMANT knew the importance of confidentiality for RESPONDENT

due to the political atmosphere. When RESPONDENT asked for the confidentiality of all
their negotiations, CLAIMANT indicated the FAI Mediation and Arbitration Rules,
therefore, giving them a broad meaning encompassing negotiations [R. Ex. 1, pp. 29-30,
para. 10; R. Ex. 2, p. 31].

54. Consequently, the Tribunal should conclude that Exhibit C7 is protected by the
confidentiality granted under the FAI Mediation Rules.

B. THE TRIBUNAL SHOULD KEEP EXHIBIT R3.

55. RESPONDENT submits that there are many relevant reasons why the Tribunal should
accept Exhibit R3. Contrary to what CLAIMANT argues, Exhibit R3 is relevant and
material to the Tribunal as it relates to the issue of the validity of the arbitration agreement
and highlights that CLAIMANT was not necessarily acting in the best way possible (I).
Moreover, CLAIMANT does not fulfill the burden of proof and merely alleges a potential
illegal acquisition to attack the veracity of Exhibit R3 (II). Regarding the question of
fairness, RESPONDENT thinks that CLAIMANT was granted the opportunity to defend
its case (III). Finally, the alleged client-attorney privilege should not be opposed to
RESPONDENT nor the Tribunal since it is a mere ethical duty for the lawyer and Mr.
Heidi is not independent (IV).

I. Exhibit R3 is relevant and material for the Tribunal.

56. CLAIMANT asserts that Exhibit R3 lacks relevance to the dispute. Indeed, it states: “The
main issues in this arbitration concern the legitimacy of RESPONDENT’s termination of the PSA and
the parties’ contractual obligations. R EX 03 does not address these central issues and instead discusses
peripheral matters that are not pertinent to the dispute” [MfC, para. 73]; Additionally, CLAIMANT
considers that Exhibit R3 cannot change the Tribunal findings on central points of the
dispute [MfC, para. 79].

21
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

57. RESPONDENT disagrees with this assertion. Exhibit R3 helps illustrate why there was
no choice but to terminate the PSA. Indeed, Exhibit R3 reveals that CLAIMANT was
dishonest during the procedure and probably misrepresented RESPONDENT on the
percentage of local content to secure the bid [R. Ex. 3, p. 32].

58. As a fully owned governmental entity, RESPONDENT was pressured to prove that
CLAIMANT was effectively chosen on objective grounds [Cl. Ex. 3, p. 14]. Indeed, M.
Cavendish admitted that the bid was concluded thanks to his relationship with Ms. Faraday
[Cl. Ex. 5, para. 10, p. 17]. Consequently, CLAIMANT had to fulfill its obligations,
especially the time ones, very precisely [Art. 3, PSA, p.11]. When CLAIMANT drastically
failed to do that, continuing the PSA, on top of knowing that the reasons why CLAIMANT
obtained the bid did not exist anymore, would have caused a more stressful political
environment [Cl. Ex. 3, p. 14].

59. To conclude, Exhibit R3 is an essential element explaining the reasons for

RESPONDENT's termination of the contract. It is an essential piece of evidence that
must be included in the record.

II. CLAIMANT did not submit proof of an illegal acquisition of Exhibit R3.

60. While CLAIMANT keeps stating that Exhibit R3 might be illegal, it did not submitted any
relevant prove to their unfunded assertions. Even if, the burden of proof relies on
CLAIMANT (1). Not only does CLAIMANT not prove any forgery or illegal acquisition,
but it also confirmed the veracity of Exhibit R3 (2).

1. The burden of proof rests upon CLAIMANT.

61. The burden of proof is a key concept in procedures. It is defined as the fact, for a party,
to prove something that it alleges [Mullary v. Broad; Rompetrol Group v. Romania]. If the other
party wants to challenge it, it is expected to bring some opposite evidence. For example,
in Siag v. Egypt, the fact that Mr. Siag provided a “prima facie evidence” of its nationality,
therefore, shifting the burden of proof. Egypt, then, was expected to prove that Mr. Siag
did not have the asserted nationality [Emphasis added].

22
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

62. This is exactly what happened in this case. RESPONDENT submitted Exhibit R3 in order
to provide the Tribunal with all the necessary information to judge the case [ARfA, p. 26,
para. 7]. However, CLAIMANT ascertains that this evidence is not reliable [MfC, para 84].
Nevertheless, the mere fact of saying that evidence is not reliable is not proof per se,
especially in the case of an allegation of fraud. Indeed, “fraud must be distinctly alleged and as
distinctly proved, and that if the facts pleaded are consistent with innocence it is not open to the court to find
fraud” [Mullary v. Broad]; [Emphasis added].

63. Consequently, the Tribunal should declare that the burden of proof of the reliability or not
of the evidence relies on CLAIMANT, not on RESPONDENT.

2. CLAIMANT did not prove any forgery.

64. In its attempt to prove that evidence is not reliable, the party on which relies the burden
of proof must first deny the veracity of the evidence submitted by the opposing party.
Moreover, in order to shift the burden of proof again, the response cannot only consist in
saying that the opposing party’s evidence is not true it has to prove it. In Siag v. Egypt, the
Tribunal gave grounds for this condition: “Because negative evidence is very often more difficult to
assert than positive evidence, the reversal of the burden of proof may make it almost impossible for the
allegedly fraudulent party to defend itself” [Siag v. Egypt].

65. Similarly, in Methanex Corporation v. United States of America, it was held that “adjudicator would
be reluctant to find the allegation proved in the absence of a sufficient weight of positive evidence – as opposed
to pure probabilities or circumstantial inferences (…) They must be substantiated with solid evidence to
meet evidentiary standards”.

66. However, in its submissions, CLAIMANT never refutes that Exhibit R3 was an actual
communication with its lawyer. On the contrary, it admits that the evidence at stake was
in the office of its negotiator, Mr. Deiman [Cl. Ex. 8, p. 36, para. 7]. On top of that,
CLAIMANT only addresses the issue of illegal acquisition as “potential” [MfC, para. 84].
Therefore, CLAIMANT cannot argue is not the non-reliability of Exhibit R3 as
CLAIMANT admits, itself, that this letter existed. A “potential illegal acquisition” is not in

23
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

direct opposition with the veracity of an evidence, especially when the party admits that
this evidence actually existed.

67. On top of that, merely saying that something is not true or does not exist fall into negative
evidence. CLAIMANT does not come with any evidence to refute RESPONDENT’s
assertions, making the reversal of evidence impractical.

68. Therefore, the Tribunal should consider that CLAIMANT does not present prove over
the veracity of the Exhibit R3.

III. The inclusion of Exhibit R3 would not necessarily be a breach of procedural

fairness.

69. The reading of CLAIMANT’s arguments causes confusion for RESPONDENT. Indeed,
CLAIMANT argues that it did not have any opportunity to contest Exhibit R3 but only to
object to its submission. RESPONDENT will answer that this memorandum was exactly
the opportunity for CLAIMANT to rebuke RESPONDENT’s evidence.

70. However, instead of that, CLAIMANT had repeated the allegations of illegal acquisition
while confirming that Exhibit R3 was an actual communication with its lawyer. The
Tribunal has given a fair opportunity to CLAIMANT to present its case and should
therefore not be in any breach of procedural fairness. Additionally, even if Exhibit R3 was
illegally obtained, its admission would not necessarily be a breach of public policy [Stephan
Balthazar & others, p. 29, para. 62].

IV. Exhibit R3 does not breach any Client-attorney privilege.

71. The Client-attorney privilege is not relevant to Exhibit R3. On one hand, Mr. Heidi does
not fulfill the condition of independence necessary to protect Exhibit R3 (1). On the other
hand, the only provision of Mediterraneo regarding client-attorney privilege is an ethical
duty applying to the lawyer but not to third Parties such as RESPONDENT or the
Tribunal (2).

24
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

1. The privilege does not apply due to a lack of independence.

72. The client-attorney privilege is a protection granted to communications between a client

and its lawyer, in the course of the provision of legal advice. However, this protection does
not apply to every client-lawyer communication. In a decision, the Grand Chamber
referred to AM & S Europe v Commission according to which: “an independent lawyer, that is to
say one who is not bound to his client by a relation employment” [Emphasis added].

73. This is far from being the case for Exhibit R3. Indeed, in the letter, Mr. Heidi referred to
himself as Head of legal department [Cl. Ex. 3, p. 14]. This can lead to think that he is an
employee of CLAIMANT. In this case, Mr. Heidi should not be considered independent.

74. Therefore, in the event that the Tribunal considers that Exhibit R3 is a piece of legal advice,
the privilege should not apply due to the relationship of hierarchy between the lawyer and
CLAIMANT.

2. The ethical rule for lawyers does not protect Exhibit R3.

75. CLAIMANT invokes a client-attorney privilege on Exhibit R3 [MfC, para. 91]. However,
this privilege should not apply to protected Exhibit R3.

76. The only protection granted to client-attorney privilege in Mediterraneo is in the ethical
rules for lawyers [R. Ex. 4, p. 33]. This ethical duty is completely different from the
obligation to third Parties, not use the document in proceedings since it is only binding on
the lawyer [Art. 1.6, American Bar Association].

77. Mr. Heidi is from the bar of Mediterraneo and, as such, the ethical rules for lawyers of
Mediterraneo regulate its profession. Therefore, relying on this provision is saying that Mr.
Heidi had the obligation to protect its communications with CLAIMANT [R. Ex. 4, p. 33]
This obligation should not be binding of RESPONDENT nor the Tribunal.

78. In the event that the Tribunal considers the provision to be a legal privilege, it should take
into consider that this provision was considered not to be protective enough in Danubia
itself, leading to a lot of procedures where the said documents were accepted as evidence.

25
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Danubia itself has considered that a deep modification of its confidentiality provision is
deemed, considering the internal standard [R. Ex. 4, p. 33].

79. Therefore, in regard of Mediterraneo’s internal law and the consistence of international
law, the Tribunal should consider that if there is any privilege, the provisions are too weak
to be applied.

80. In light of these arguments, the Tribunal should conclude that Exhibit C7 should be
excluded and Exhibit R3, included. In the event that the Tribunal considers keeping
Exhibit C7, it should not consider the reading of CLAIMANT.

26
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

ARGUMENTS ON SUBSTANCE

ISSUE 3: THE PSA IS NOT GOVERNED BY THE CISG.

81. Under Art. 1 (1) (a) of the CISG, “the Convention applies to contracts of sale of goods between Parties
whose places of business are in different States, when the States are Contracting States” [Emphasis
added]. However, in the present case, considering that the PSA does not meet the
“internationality” requirement (A) and that the services constitute the “preponderant” part
(B), the PSA does not meet the CISG applicability conditions set by Art. 1 (1) of the
Convention. Moreover, the PSA was concluded through a reverse auction, hence, should
be excluded from the CISG applicability under Art. 2 (b) (C).

A. THE PSA DOES NOT MEET THE “INTERNATIONALITY”

REQUIREMENT SET FORTH IN ART. 1 (1) OF THE CISG.

82. In the present case, even though RESPONDENT does not deny that CLAIMANT has
several places of business, RESPONDENT asserts that one of them, from 2020, was Volta
Transformer, located in Equatoriana (I). Considering all circumstances of the case, the
Tribunal should conclude that Volta Transformer was the closest place of business to the
PSA pursuant to Art. 10 of the Convention (II). Accordingly, knowing that places of
business of CLAIMANT and RESPONDENT were in the same state, namely in
Equatoriana, the CISG should not apply to the PSA as it is not an international contract.

I. CLAIMANT has several places of business, one of them is Volta Transformer,

a company incorporated in Equatoriana.

83. Art. 1 (1) of the CISG states that the Convention is applicable to the international sale of
goods where “international” means that the places of business of the Parties are in the
different States at the moment of the conclusion of the contract [Kröll / Mistelis / Perales
Viscasillas, p. 33, para. 42]; [Clout case No. 867]; [CISG-Online 511]. However, if the parties
have their places of business in the same country, the “internationality” requirement is not
met, accordingly, the CISG does not apply.

27
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

84. Even though the CISG does not define the exact definition of “place of business”, it was
defined by case law as a place from where a party de facto carried out its activity, and such
activity is required to have a certain duration, stability and autonomy [CISG-Online 583].
Therefore, under the CISG, to be qualified as a “place of business”, there has to be a
genuine and effective link of the business with a place with at least regular business activity
[Kröll / Mistelis / Perales Viscasillas, p. 33, para. 43].

85. Even though the PSA was concluded in July 2023 [PSA, p. 13] and formal acquisition of
Volta Transformer by CLAIMANT was only in November 2023 [ARfA, p. 28, para. 20; Cl.
Ex. 8, p. 36, para. 2], the proposition from Volta Family, the owner of Volta Transformer,
to sell it to CLAIMANT was made in June 2023 before the conclusion of the PSA [RfA,
p. 4, para. 11]. Such a proposition was not unreasonably made. In 2020, CLAIMANT
ordered from its long-time Equatorianian business partner – Volta Transformer, a
transformer for another project to be delivered in early 2024, and since that project was
cancelled due to the insolvency of the customer, CLAIMANT had a chance to use it for
the PSA project with only a few modifications to be done [RfA, p. 3, para. 8; Cl. Ex. 5, p.
16, para. 8].

86. Volta Transformer, in principle, had the capacity of producing two transformers of the
size acquired by CLAIMANT. And depending on existing deadlines, the workforce, and
other resources, one of the projects was always prioritized, and, in the current case, it was
CLAIMANT’s one [PO. 2, p. 52, para. 5]. This means that from 2020, even before the
conclusion of the PSA in 2023, Volta Transformer was producing nearly exclusively for
CLAIMANT. The fact that the contract with CLAIMANT was the most important for
Volta Transformer, making up 70% of its production capacities, only proves the effective
link of the business with Equatoriana as a place with regular business activity. In addition,
the Tribunal should also take into account that Mr. Deiman, before having become the
CEO of Volta Transformer, used to be the Head of Contracting at CLAIMANT and was
involved as the main negotiator on CLAIMANT’s side in the conclusion of the PSA [Cl.
Ex. 8, p. 36, para. 1]. Relocation of the Head of Contracting to Equatoriana only proves
the existence of such “place of business” as Volta Transformer.

87. Thus, though RESPONDENT does not deny that CLAIMANT had several places of
business, RESPONDENT asserts that from 2020 the place from where CLAIMANT de

28
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

facto carried out its activity, that can be characterized as stable, autonomous and as having
a certain duration of time, was Volta Transformer located in Equatoriana.

II. CLAIMANT’s place of business, located in Equatoriana, has the closest

relationship to the PSA.

88. Under Art. 10 of the CISG, “if a party has more than one place of business, the place of business is
that which has the closest relationship to the contract and its performance” [Emphasis added]. In order
to define which of the several places of business has the closest relationship to the contract
and its performance, into consideration should be taken not only the places from where
the parties conducted the communications, as CLAIMANT may argue, but also such
factors as where the goods are to be produced, according to which standards and how the
goods are to be delivered [MfC, p. 21, para. 104]; [Clout Case No. 727]; [CISG Digest, p. 69,
para. 3].

89. Indeed, in Clout Case No. 1021, while deciding which place of business was the one most
closely connected to the contract, the arbitrator considered not only the place from where
negotiations were conducted and who signed the contract, but also from where the goods
were delivered and who received the payment. In Clout Case No. 433, the Court defined the
main place of business basing on the seller’s corporate headquarters, inside sales, marketing
office, public relations department, principal warehouse and not only on the place from
where the seller was conducting negotiations with the buyer [MfC, p. 21, para. 104].

90. In Clout Case No. 727, a company was incorporated in Cyprus, however, because the goods
were to be produced in Russia, according to Russian standards and delivered on Russian
ships – and all these circumstances were perfectly known by the parties, Russia was defined
as a main place of business of the Cyprus company. In the present case, Volta Transformer,
an Equatorianian company, was not only to provide the transformer for the project but
also 40% of the electrolyser stacks as well as the packaging of all stacks at the site in
Greenfield in Equatoriana [RfA, p. 4, para. 11]. The transformer and the stacks were to be
produced in Equatoriana and to be delivered directly to the site in Equatoriana where they
were to be connected to the existing infrastructure [PO. 2, p. 53, para. 16].

29
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

91. Moreover, in the present case, the attention should be paid not to the place of formal
incorporation of CLAIMANT, which is Mediterraneo [PSA, p. 10], but in contrast, to the
place from where CLAIMANT de facto conducted its activity, which is where Volta
Transformer, an Equatorianian company, is incorporated [Kröll / Mistelis / Perales
Viscasillas, p. 33, para. 43].

92. Thus, even though the communications from CLAIMANTS’ side was conducted from
Mediterraneo, and formal place of CLAIMANT’s incorporation was Mediterraneo,
Equatoriana has the closest relationship to the contract and its performance.

B. THE PSA IS A MIXED CONTRACT WITH OBLIGATIONS THAT

PREDOMINANTLY CONSIST OF SERVICES, HENCE, THE CISG DOES
NOT APPLY UNDER ART. 3 (2) OF THE CONVENTION.

93. Considering that services and post-services included in the PSA are not just simple delivery
or packaging but rather a range of interconnected services of planning, construction and
engineering, it should not be defined as ancillary services (I). The “preponderant” part of
the PSA, based not only on subjective calculation of CLAIMANT but also on other
objective circumstances of the present case, should be defined as services (II). Moreover,
the PSA is a traditional turnkey contract where services are more central to the contract
(III). Therefore, the CISG is inapplicable to the contract with the “preponderant” part of
services over goods pursuant to Art. 3 (2) of the Convention.

I. Services and post-services included in the PSA should not be qualified as ancillary.

94. Under Art. 3 (2) of the CISG, the Convention “does not apply to contracts in which the
preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or
other services” [Emphasis added]. As it was stated in the CISG-AC Opinion No. 4, ancillary
services such as mere delivery, packaging, dispatching of goods or entering into agreements
with subcontractors or carriers and other traditional basic obligations should not lead to a
change in the qualification of the contractual relationship between the parties [CISG-AC
Opinion No. 4, para. 3.1]; [CISG-Online 1657, “...the work necessary for the production and the
packaging of the goods cannot be considered a service in the sense of Art. 3 (2) of the CISG..."; [Emphasis
added]]; [Kröll / Mistelis / Perales Viscasillas, p. 58, para. 15]. However, a mixed contract

30
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

should be carefully analyzed in question of what exactly constitutes the preponderant part
of it, in particular, when the parties undertake services that could be qualified as a subject
of an independent contract. For instance, such services as the installation, assembly of the
parts of a plant to manufacture future goods, training the employees of the purchaser in
the operating of a machine sold, marketing of the goods to be manufactured by a plant
sold, should be taken into consideration [CISG-AC Opinion No. 4, para. 3.1]; [Clout Case No.
881, “... the assembly, adaptation and training work and similar operations stipulated in the contract
constituted an essential part of the agreed performance...”, [Emphasis added]].

95. In paras. 124 – 127 CLAIMANT claims that a preponderant part of the PSA is ancillary
services [MfC, p. 25, paras. 124 – 127]. However, in the present case, the services and the
post-services that are included in the PSA should not be defined as ancillary because of the
following. First, a considerable part of the PSA consists of the planning, construction and
engineering work to be done by CLAIMANT [ARfA, p. 28, para. 20]; [RFQ, p. 8, para. 1].
It is not just a simple delivery or packaging but rather a delivery of a large-scale plant to be
manufactured and connected to the existing infrastructure (electricity, pipes, buildings).
Second, such a connection of the main transformer, of the stacks and other various
elements of the core system was to occur in a special way that would allow a potential
easy removal in case of maintenance or replacement [PO. 2, pp. 53-54, para. 16]. This means
that a certain level of knowledge and expertise is required to perform the connections
needed, hence, it should not be considered a simple installation. Third, the PSA also
includes different site works, training and maintenance, building and foundations, other
remaining EPC services for constructing the turnkey facility [Cl. Ex. 5, p. 17]. In addition,
the PSA includes two additional options to be exercised by RESPONDENT until 31
December 2026 that consequently involves a range of crucial services to be provided [PSA,
p. 11, Art. 2 (2), (3)]. Indeed, in the Waste separation machines case the content of the contract
was “the planning, delivery, assembly and putting into operation of a complete plant”. In that case, the
fact that “very different components of the plant need to be put together to form a whole new unit” proves
that “the supply of labor for the assembly, supervision of the assembly and the putting into operation of the
plant plays a very important role” [Emphasis added]. Knowing that a large-scale plant is simply
not a facility that can just be placed somewhere, but a facility that needs looking-after
during the initial phase, the court ruled that “the assembly, adaptation, instruction and similar
works constitute a considerable part” of the contract [Clout Case No. 881]; [Emphasis added].

31
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

96. Thus, the services and post-services under the PSA, including two additional options to be
exercised, should not be qualified as ancillary, rather they should be taken into
consideration while assessing the value of the goods and services in the mixed contract.

II. Services and post-services in the PSA constitute the preponderant part of it, hence,
the CISG is not applicable.

97. CLAIMANT states that the “preponderant part” should be assessed in terms of the
economic value of obligation regarding the supply of goods and the supply of services in
the contract based on the use of the percentages of values [MfC, p. 25, para. 123]. However,
the overall assessment should also include the denomination and entire content of the
contract, the structure of the price and the weight given by the parties to the different
obligations under the contract [CISG-AC Opinion No. 4, para. 3.4]; [Kröll / Mistelis / Perales
Viscasillas, p. 59, paras. 18, 19]. For instance, although the German court ruled in favor of
the applicability of the CISG in Clout Case No. 346, the unified price of goods and services
(including post-services) made it impossible to determine the value of the seller's
obligations. Subsequently, the court took into account both the contractual documents and
the circumstances of the formation of the contract [Clout Case No. 346, paras. 19, 20]. If,
nevertheless, a fixed percentage of value is used, that obligation which represents more
than 50% of the overall obligations should be defined as “preponderant” [Kröll / Mistelis /
Perales Viscasillas, p. 59, para. 18]; [CISG-AC Opinion No. 4, para. 3.4]; [CISG-Online 1780].

98. In the present case, Art. 7 of the PSA while defining a final price “for the delivery of the Plant
and the additional maintenance and training services” as 285 million EUR, does not separately
precise prices for goods and services [PSA, p. 11, Art. 7]; [PO. 2, pp. 55,56, para. 35 (b)];
[Emphasis added]. In addition, internal calculations presented by CLAIMANT, without
additional sources, cannot be taken as a basis to conduct the assessment of the economic
value of obligations in the contract, as being subjective calculations [Cl. Ex. 5, p. 17, para
11]. Economic value should be assessed by the Tribunal together with consideration of the
Parties’ intentions and surrounding circumstances. As it was proven in the previous

32
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

paragraphs, the crucial part of this large-scale project consists of the planning, construction
and engineering work to be done [ARfA, p. 28, para. 20]; [RFQ, p. 8, para. 1]. Accordingly,
as a “preponderant part’ of the PSA is services over goods, the CISG should not apply to
the contractual relationship between the Parties [Art. 3 (2) of the CISG].

III. The CISG is not applicable to the PSA, which is a turnkey contract.

99. Even though CLAIMANT might argue that the PSA prioritizes goods over services, the
CISG should not be applicable to the PSA as a turnkey contract [RfA, p. 3, para. 4]; [RFQ,
p. 8, para. 1]; [Cl. Ex. 5, pp. 16,17, paras. 9, 11]; [R. Ex. 3, p. 32].

100. CLAIMANT argues in para. 128 that the PSA is not a traditional turnkey contract
as the customer has obligations beyond mere payment. This argument is flawed because a
turnkey contract is a network of mutual duties to collaborate with and assist the other
party, rather than a simple exchange of goods for money [MfC, p. 26, para. 128]; [CISG-AC
Opinion No. 4, para. 3.5]; [Clout Case No. 881]. Thus, RESPONDENT’s obligations defined
in Art. 4 of the PSA cannot change the nature of a turnkey contract and lead to the CISG
applicability [PSA, p. 11, Art. 4].

101. Several courts together with scholarly opinion state that such contracts are not
covered by the Convention because “assembly, adaptation, instruction and similar works constitute
a considerable part of the contractual performance” [CISG-AC Opinion No. 4, para. 3.5]; [Kröll /
Mistelis / Perales Viscasillas, p. 58, para. 16]; [Clout Case No. 881, “in accordance with
scholarly opinion, the Court therefore assumes that the CISG is not supposed to
apply to turnkey contracts”, [Emphasis added]].

102. Moreover, CLAIMANT, in order to support its arguments, cited cases where a
simple installation of goods did not require the correct configuration of multiple parts and
their coordination with each other as it requires in the present case [MfC, p. 26, para. 131;
CISG-Online 248]. Thus, the simple installation of the container filled with salt water in
CISG-Online 248 case should not be compared with a long-scale plant to be constructed and
connected to all pipes, electricity and buildings.

33
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

103. Given that the PSA is a traditional turnkey contract where services are more central
to the project, CISG should not apply to it.

C. THE PSA IS A RESULT OF THE REVERSE AUCTION, HENCE, SHOULD

BE EXCLUDED FROM THE CISG APPLICABILITY UNDER ART. 2 (B).

104. Contracts of sales that are concluded through auctions are excluded from the CISG
pursuant to Art. 2 (b). In the present case, the PSA was concluded through a reverse
auction that shares similar features with auctions (I). Considering that the CISG is not
applied to online auctions, it should not apply to online reverse auctions (II). The PSA
resulted from a reverse auction and not a public procurement procedure (III).
Accordingly, the exclusion set forth by Art. 2 (b) should be applied.

I. A reverse auction should be understood as an auction in the sense of Art. 2 (b)

of the CISG.

105. Under Art. 2 (b) of the CISG, the Convention “does not apply to sales by auction”
[Emphasis added]. The CISG itself does not define “auction”, but according to Black’s
Law Dictionary, it is “a public sale of property to the highest bidder; a sale by consecutive bidding,
intended to reach the highest price of the article through competition for it” [Emphasis added]. In the
present case, however, the PSA was concluded by use of a reverse auction [RfA, p. 3, para.
3; RFQ, p. 8, “Reverse Bid Auction”; PO. 2, p. 52, para. 9]. A “reverse auction” according
to the Online Cambridge Dictionary is “an occasion when several companies compete to offer the
lowest prices for supplying goods or doing a job” [Emphasis added]. Indeed, a reverse auction is
not the same as an auction, but they share a number of common features that allow the
CISG Art. 2 (b) exception to be applicable in both cases.

106. CLAIMANT argues that traditional auctions involve processes where participants
continuously outbid one another to secure a sale, while reverse auctions lack this
competitive feature [MfC, p. 23, para. 113]. However, the present case only proves that
reverse auctions can be characterized as competitive processes. The reverse auction was
evaluated in terms of overall efficiency with respect to the competitive price [RfA, pp. 3-4,
paras. 3, 13; RFQ, p. 8, para. 1 (c) (3) “Presentation of the Lowest Bib”; PO. 2, pp. 52-53, para. 9].

34
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Even though it is not the highest price that wins, bidders still outbid each other offering
the lowest price for the contract.

107. CLAIMANT also argues that reverse auctions lack autonomy and anonymity of
the bidders [MfC, p. 22, para. 111]. As stated before, there is no unified legal definition of
an “auction.” Hence, such a characteristic as autonomy should not be considered the only
one when comparing auctions and reverse auctions. Especially since CLAIMANT did not
demonstrate a lack of autonomy in the present reverse auction. Moreover,
RESPONDENT does not support the statement that the identities were disclosed from
the very beginning. The idea why auctions are excluded from the CISG application by Art.
2 (b) is that they normally are only of local relevance, meaning that the criterion of
internationality knowingly cannot be reached [Kröll / Mistelis / Perales Viscasillas, p. 48, para.
31]. In the present case, as can be seen from the RFQ, one of the conditions for winning
this reverse auction was that the amounts of materials, services, and works to be supplied
by entities located in Equatoriana (RESPONDENT’s place of business) should have been
40% and higher [RFQ, p. 9, para. 9]. Considering that the percentage of local participation
was huge, although the reverse auction was not limited to local suppliers, local specificity
is clear in this case. Furthermore, as proven by RESPONDENT in Issue 3 (I), the minimum
requirement of 40% resulted in the main place of business of CLAIMANT (winning
bidder) being in Equatoriana, which means that the criterion of internationality set out in
Art. 1 (1) of the CISG was not met.

108. RESPONDENT does not argue that an auction is the same as a reverse auction.
Nevertheless, a reverse auction shares the same characteristics and corresponds to the main
idea of the auction’s exclusion of the CISG. Thus, a reverse auction should be understood
as an auction in the sense of Art. 2 (b) of the Convention, and correspondingly, the PSA
shall be excluded from the CISG applicability.

II. The CISG is inapplicable to an online reverse auction under Art. 2 (b) of the
Convention.

109. CLAIMANT argues that the PSA was concluded by an online procedure while
online auctions fall outside the CISG’s scope under Art. 2 (b) [MfC, p. 23, para. 113].
However, the reverse auction in the present case was not conducted online as a whole. The

35
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

reverse auction was the second step out of three which was conducted in person [PO. 2, p.
52, para. 9]. Even though CLAIMANT may argue that it was an online reverse auction,
with what RESPONDNET never agrees, the majority of scholars consider that auctions
and online auctions should be included in the exception under Art. 2 (b) [Kröll / Mistelis /
Perales Viscasillas, p. 48, para. 31]. There are also a number of cases where online auctions
were set aside from the CISG applicability. In Clout Case No. 1770, the Swiss Supreme
Court held that an online auction via an internet website is an “auction” in the sense of
Art. 2 (b) and ruled that the CISG was inapplicable to the commercial relationship between
parties [CISG-Online 2803]. The same conclusion can be found in CISG-Online case 5398,
where the Dutch District Court stated that sales by internet auction were also excluded
from the Convention’s scope. Considering that reverse auctions should be understood as
auctions in the sense of Art. 2 (b), the same rule of inapplicability of the CISG to online
auctions is applied.

III. The PSA was concluded by the reverse auction and not by a public procurement
process.

110. In para. 114 CLAIMANT agrees with the similarities between auctions and reverse
auctions but at the same time CLAIMANT states that sales were conducted in a post-
auction way [MfC, p. 23, para. 114]. While RESPONDENT does not argue with the fact
that sales post auctions do not fall within the scope of Art. 2 (b) exclusion,
RESPONDENT does not agree with CLAIMANT’s statement. Even though there were
two final bidders of the reverse auction [RfA, p. 4, para. 10], CLAIMANT was very
promising from the beginning ensuring RESPONDENT of the success of the contract by
conducting negotiations with local producers and by lowering the already competitive price
of the contract by another 5 % [RfA, pp. 4-5, paras. 10, 13]. All these facts led to the second
bidder dropping out of the game immediately after the reverse auction ended. Thus, the
PSA should be considered as concluded by the reverse auction.

111. Knowing that the list of exceptions in Art 2. of the CISG is of exhaustive nature,
RESPONDENT does not argue that public procurement is excluded from the Convention
by this Art. 2 Nevertheless, RESPONDENT cannot agree with CLAIMANT’s view that
the PSA was concluded by the public procurement process and not by the reverse auction

36
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

itself. As can be seen from RFQ, it is a “Reverse Bid Auction” and not a procurement
tender [RFQ, p. 8, the title; para. 1 (c)]; [Emphasis added]. From the very beginning, both
Parties were aware that the process was conducted in the form of a reverse auction [RfA,
p. 3, para. 3; PO. 2, p. 52, para. 9]. CLAIMANT argues that procurement mechanisms lack
the essential element of continuous competitive bidding [MfC, p. 24, para. 117], however,
as it was already proven by RESPONDENT, a reverse auction is a competitive process
where the lowest bidder wins by outbidding others.

112. Thus, the PSA was concluded by the reverse auction rather than by the public
procurement procedure, and the CISG should not be applicable pursuant to Art. 2 (b).

ISSUE 4: THE PARTIES VALIDLY EXCLUDED THE APPLICATION OF THE

CISG UNDER THE PSA.

113. Under Art. 6 of the CISG, the parties are free to derogate from the Convention,
which illustrates the fundamental principle of private autonomy. This principle enables
them to agree on stipulations which modify or, expressly or tacitly, exclude the application
of the Convention altogether. This option was highlighted in CISG-Online case 2228, thus
reinforcing the principle of contractual autonomy. The CISG-Digest also confirms that the
parties can either expressly exclude application of the Convention through a standard
clause expressly excluding the CISG, or exclude it implicitly based on clear and real intent
of the parties [CISG-Digest, pp. 33-34, paras. 7, 9].
114. More objectively, CLAIMANT should know or should have known the intention
of RESPONDENT to exclude the CISG with the change of Model Contract pursuant to
Art. 8 CISG and Art. 1.7 UNIDROIT Principles (A). Since the CISG was intended by the
Parties to be excluded, it has to be considered as a rule of conflict of law under the PSA,
leaving full effect to the domestic law of Equatoriana (B).

A. INTENT OF THE PARTIES, AS ASSESSED UNDER ART. 8 OF THE CISG,

CONFIRMS EXCLUSION OF THE CONVENTION.

115. In the present case, the Parties demonstrated clear and shared intent to exclude the
CISG from its applicability, and this was known by both CLAIMANT and

37
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

RESPONDENT. Accordingly, such an intent should be confirmed by the Tribunal in

accordance with Art. 8 (1) (I). While this intent might also be interpreted pursuant to Art.
8 (2) and Art. 8 (3), the Tribunal should take into consideration all the objective
circumstances that lead to the inapplicability of the CISG (II).

I. Subjective intent of the Parties should be interpreted pursuant to Art. 8 (1) as an

implicit exclusion of the CISG.

116. Art. 29 of the PSA states that it “is governed by the law of Equatoriana to the exclusion of
its conflict of laws principles” [Emphasis added]. In the present case, the Parties opted for the
sole application of Equatoriana law, thus, they implicitly excluded the application of the
CISG. Such an approach was validated by several court decisions [CISG-Online 965];
[CISG-Online 226].

117. In para. 4 of the CISG-AC: Opinion No. 16 there are several factors that could be
taken into consideration by the Tribunal to decide on the real intent of the parties,
including the choice of the law of a Contracting State. Equatoriana is a Contracting State
of the Convention [PO. 2, p. 50, para. 4]. And although RESPONDENT agrees that a clear
intent “should not be inferred merely from” this single choice of an Equatorianian Law, “the
evidence of intent must be analysed on a case-by-case basis pursuant to Art. 8” of the CISG [CISG-
AC: Opinion No. 16, paras. 3.8 and 4 (b) (i)]; [Emphasis added].

118. Under Art. 8 (1) of the CISG, “statements made by and other conduct of a party are to be
interpreted according to his intent where the other party knew or could not have been aware what that intent
was” [Emphasis added]. This article presents the “subjective intent” or “actual intent” of
the party [Kröll / Mistelis / Perales Viscasillas, p. 150, para. 8]. In the present case,
CLAIMANT cannot deny its awareness about the “actual intent” of RESPONDENT to
exclude the CISG from its application, and it should be supported by the Tribunal, because
of the following.

119. The Old Model Contract, that had been widely used by RESPONDENT in the
previous transactions with other government entities, indeed, had included the specific
wording that “the Agreement is governed by the CISG” [Emphasis added]. However, in 2022,
right after the amendments had been made to the choice of law clause “to strengthen the role

38
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

of Equatorianian Law” by excluding the CISG, the official press release made the changes in
the choice of law clause publicly known [PO. 2, p. 53, para. 10]; [Emphasis added]. The
PSA itself was signed only in August 2023, one year and a half after the amendments were
made [RfA, p. 4, para. 11]. Moreover, the list of issues to be discussed, including the
applicable law, had been prepared by CLAIMANT’s own head of legal at the time, Mr.
Law. This list was prepared based on the changes made to the Old Model Contract,
meaning that CLAIMANT should have been aware of the intent of RESPONDENT to
exclude the CISG [PO. 2, p. 53, para. 11].

120. Thus, even though CLAIMANT denies clear and shared understanding regarding
applicable law [MfC, p. 30, para. 151], RESPONDENT submits that CLAIMANT knew or
could not have been unaware of RESPONDENT’s intent to exclude the CISG from its
application to the PSA.

II. The objective intent under Art. 8 (2), (3), leads a reasonable person to infer the
exclusion of CISG.

121. Even if the intent was not sufficiently clear and precise under Art. 8 (1), which in
any event is not true, the Tribunal could still clarify that intent under Art. 8 (2) and (3).
Art. 8 (2) addresses “the understanding that a reasonable person of the same kind as the other party
would have had in the same circumstances” while Art. 8 (3) lists the factors used to understand
that intent, including “the negotiations which the parties have established between themselves, usages,
and subsequent conduct of the parties” [Emphasis added]. Under Art. 4.1 of UNIDROIT
Principles the notion of “reasonable person” entails that a person placed in circumstances
like those of the parties to the contract and sharing the same level of experience or
knowledge in comparable situations are expected to achieve the same reasoning or
conclusions from a particular scenario. This implies that a reasonable person must interpret
the decisions and conduct of the parties in the light of standard commercial and contractual
practice.

122. Accordingly, even if the Tribunal finds no subjective intent under Art. 8 (1), a
“reasonable person”, aware of the newly revised Model Contract’s removal of the CISG,
the official announcements, and the final wording in Art. 29 of the PSA, would conclude

39
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

that the Convention was excluded. This conclusion is further substantiated by the
following points.

123. CLAIMANT states in paras. 145 and 154 that RESPONDENT did not challenge
its characterization of the CISG as the “Golden Standard” for international sales, thereby
indicating both a clear preference for its application and RESPONDENT’s awareness
[MfC, p. 29, 31, paras. 145, 154]. Such affirmation should not be supported. CLAIMANT
never revealed in detail its preferences and practices of the CISG application to
RESPONDENT. Rather, the reference occurred only in an internal communication
between Mr. Deiman and Mr. Law (who are both workers from CLAIMANT’s side),
where the last made the statement concerning the CISG being the “Golden Standard” to
the first [PO. 2, p. 52, para. 2]. Moreover, according to the “Witness Statement of J. Ritter”,
Mr. Cavendish merely mentioned to Ms. Faraday that in the previous transactions with
other entities the CISG was the “Gold Standard”. Interpreting this “mere mention” as
establishing that the CISG is seen by both Parties as a “Golden Standard” is, undoubtedly,
an inaccurate conclusion [R. Ex. 1, p. 30, para. 11].

124. In para. 154, CLAIMANT asserts that in earlier contracts with the Equatorianian
entities, the CISG was included [MfC, p. 31, para. 154]. However, Art. 8 (3) of the CISG
allows to apply usages to understand the real intent of the parties, only when such usages
were established between the parties themselves. The mere fact that earlier transactions
with different entities applied the CISG does not indicate a relevant usage here. Thus, this
statement is not susceptible to use when defining the real intent of the Parties.

125. In para. 156, CLAIMANT concedes that both Parties had opportunity to clarify
their intent, however, neither party succeeded with it [MfC, p. 29, para. 146]. Instead,
RESPONDENT demonstrated its intent multiple times through means discussed above,
but most notably through the choice of law clause in the PSA [PSA, p. 12, Art. 29].
CLAIMANT simply accepted the choice of law provision, which had been taken directly
from the New Model Contract, knowing the real intent of RESPONDENT to exclude the
CISG from its application to the PSA [R. Ex. 1, p. 30, para. 11]. This choice implicitly
demonstrates that CLAIMANT deliberately renounced the application of the CISG in
favor of the New Model Contract and did so with full knowledge of the facts. A
“reasonable person” would consider that the absence of an explicit the CISG reference in

40
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

the New Model Contract, suggests that the PSA would not be governed by the CISG. The
behavior of the Parties throughout the negotiations, particularly the discussion on the
choice of Model Contract, confirms the CLAIMANT's intention of excluding the CISG.

126. Additionally, the principle of good faith set out by Art. 1.7 of UNIDROIT
Principles requires each party act in accordance with good faith in international trade, and
such an obligation is a mandatory obligation, meaning that “the parties may not exclude or limit
this duty”. In the present case, the Parties have deliberately negotiated and opted for the
New Model Contract, to waive the application of the CISG. A “reasonable person”
therefore, would read the revised clause as an intentional choice to exclude the
Convention’s application. Consequently, invoking the principle of good faith to claim
application of the CISG would be inconsistent, given that CLAIMANT has consciously
chosen it to exempt itself from this Convention.

127. To conclude, considering that CLAIMANT knew and at least should have been
aware of RESPONDENT’s intent and that CLAIMANT accepted the choice of
Equatorianian law clause without any objection, the intent of the Parties should be
interpreted as inapplicability of the CISG to the PSA.

B. ART. 29 OF THE PSA EXPRESSLY EXCLUDES THE CISG BY ADOPTING

EQUATORIANIAN DOMESTIC LAW AND EXCLUDING CONFLICT OF
LAW PRINCIPLES.

128. The conflict of laws principles or rules describes the body of law and principles of
each country or State that is designed to resolve problems arising from the differences
between legal systems of parties in a contractual relationship. Art. 29 of the Agreement
clearly states that the governing law is "the law of Equatoriana, with the exception of its conflict of
laws principles” [PSA, p.12 art.29]. As proven earlier, the intention of the parties was to rely
solely on Equatorianian domestic law by excluding its conflict of law principles together
with the CISG.

129. Despite the Parties’ impliedly agreeing on excuding the CISG, CLAIMANT wants
to circumvent it by using Rome I to state that the CISG is not applicable [MfC, para. 63].
Nevertheless, Equatoriana being a common law system, the rules in force in Equatoriana

41
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

are more similar and relatable to those in the United States than the ones in the European
Union [R. Ex. 4, p. 33]. Consequently, the application of European texts such as Rome I
would seemingly not apply unless the country was a party to such convention, which is
not. Indeed, the latter is intended exclusively for Member States of the European Union
[Rome I, p. 1].

130. Moreover, the exclusion of the CISG is aligned with Equatoriana’s domestic law.
Indeed, in practice, U.S. Courts sometimes tend to ignore or reinterpret contractual clauses
excluding conflict of law principles, when such exclusion conflicts with mandatory rules
of domestic law [Michael Gruson]. Standing with the facts, the new standard clause adopted
in the contract is perfectly compatible with Equatoriana's change of policy as it does not
contravene any mandatory rule but is in line with a logic of public policy preference, namely
the exclusion of the CISG [ARfA, p. 27, para. 19]. Thus, this exclusion merely affirms the
sovereign choice of the parties to apply exclusively the domestic law of Equatoriana,
without the influence of an international convention which they have expressly decided to
reject.

131. The Tribunal should, therefore, not rely on Art. 25 of Rome I, as Equatoriana rules
likely differ from those of the European Union and should recognize that the latter is the
sole set of rules applying to the contract.

132. In conclusion, the express intention of the parties to exclude the CISG must be
respected. In this case, the parties clearly expressed their intention to submit their contract
exclusively and implicitly to the law of Equatoriana, excluding the application of the CISG.
As such, this rule is binding on States under the UNIDROIT Principles. The Tribunal
should respect the parties' choice, which reflects a clear and deliberate preference for
Equatoriana's domestic law, without the application of the CISG.

42
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

REQUEST FOR RELIEF

Considering the above, RESPONDENT respectfully request the Tribunal to:

a. Declare that it has no jurisdiction to hear the case;

b. Exclude CLAIMANT’S Exhibit C 7 from the file;
c. Declare that the CISG is not applicable to the PSA;
d. Reject the Claim; and
e. Order CLAIMANT to bear the costs of these arbitration proceedings, including the cost
incurred by RESPONDENT for legal representation.

43
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

INDEX OF AUTHORITIES

Reference Details

CISG-AC Opinion No. 4 CISG-AC Opinion No. 4, Contracts for the Sale of Goods to Be
Manufactured or Produced and Mixed Contracts (Article 3 CISG),
24 October 2004. Rapporteur: Professor Pilar Perales
Viscasillas. Adopted at the 7th meeting in Madrid.
Cited in paras: 93, 96, 99, 100

CISG-AC Opinion No. 16 CISG-AC Opinion No. 16. No additional details provided in
the given data.
Cited in para.: 116

Books, Materials, and Scholarly Work

Reference Details
Goldberg/ Sander/ Rogers Goldberg, Sander, and Rogers, Dispute Resolution:
Negotiation, Mediation, and Other Processes, Second Edition,
1992, as cited in Av. Nilgün Serdar Şimşek, Av. Kerim Bölten,
Mediation as a Charming Dispute Resolution Mechanism, p.2
Cited in para: 38

Kröll / Mistelis / Perales Kröll, S., Mistelis, L. A., & Del Pilar Perales Viscasillas, M.
(2018). UN Convention on Contracts for the International Sale of
Goods: A Commentary. Beck/Hart.
Cited in paras.: 83, 84, 90, 93, 96, 100, 106, 108, 117

Maryam Salehija Maryam Salehijam, Mediation Clauses: enforceability and

impact, p. 607, para. 1.
Cited in para: 39

44
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Stephan Balthazar & others International Commercial Arbitration: International

Conventions, Country Reports and Comparative Analysis
(2016).
Cited in para: 70

Articles

Reference Details
Michael Gruson Michael Gruson, Governing Law Clauses Excluding Principles of
Conflict of Laws, 37 INT’L L. 1023 (2003)
[Link]
Cited in para: 129

INDEX OF COURT DECISIONS

Reference Details

Alstom Technology Ltd. v. Court of Appeal of Singapore; Alstom Technology Ltd. v.

Insigma Technology Co. Ltd. (II) Insigma Technology Co. Ltd. (II); 2 June 1998 (Case No. 087)
Cited in paras: 25-27

AM & S Europe v Commission Judgment of the Court; AM & S Europe v Commission; 18

May 198 (No. 155/7)
Cited in para: 72

Cable & Wireless plc v. IBM England and Wales High Court (UK); Cable & Wireless Plc v
United Kingdom Ltd IBM United; 11 October 2002 (EWHC 205)
Cited in paras: 31, 36, 39

CISG-Online 226 Cour d'appel de Colmar (Court of Appeal Colmar) (France);

Musgrave Ltd. v. Ceramique Culinaire de France SA; 26
September 1995 (No. 1 B 9400488)
Cited in para.: 115

45
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

CISG-Online 248 Handelsgericht des Kantons Zürich (Commercial Court

Canton Zurich) (Switzerland); Floating center case; 26 April
1995 (HG 920670)
Cited in para.: 101
CISG-Online 511 Oberlandesgericht Dresden (Court of Appeal) (Germany);
Ethyl acetate case; 27 December 1999 (No. 2 U 2723/99)
Cited in para.: 83

CISG-Online 583 Oberlandesgericht Stuttgart (Court of Appeal) (Germany);

Floor coverings case; 28 February 2000 (No. 5 U 118/99)
Cited in para.: 84

CISG-Online 965 Tribunal Cantonal du Jura (Court of Appeal Canton Jura)

(Switzerland); Construction materials case IV; 3 November
2004 (No. Ap 91/04)
Cited in para.: 115

CISG-Online 1657 Cour d’Appel de Colmar (Court of Appeal Colmar) (France);

Printed flyers case; 26 February 2008 (No. 1 A 07/03426)
Cited in para.: 93

CISG-Online 1780 Tribunal di Forlì (District Court Forlì) (Italy); Officine Maraldi
S.p.A. v. Intessa BCI S.p.A. et al.; 16 February 2009
Cited in para.: 96

CISG-Online 2228 Polimeles Protodikio Athinon (Multi-member Court of First

Instance Athens) (Greece); DSM Dyneema B.V. v.
Electromichaniki Kimis EPE; 2009 (No. 4505/2009)
Cited in para.: 112

CISG-Online 5398

46
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Rechtbank Oost-Brabant (District Court Oost-Brabant)

(Netherlands); Sale of horse via internet auction case; 31
August 2020 (C/01/360225/KG ZA 20-386)
Clout Case No. 346 Cited in para.: 108

Landgericht Mainz (District Court Mainz) (Germany);

Cylinder for the production of tissue-paper case; 26 November
1998 (No. 12 HKO 70/97): CISG-Online 563
Clout Case No. 433 Cited in para.: 96

Federal District Court for the Northern District of California

(United States); Asante Technologies, Inc. v. PMC-Sierra, Inc.;
30 July 2001 (No. C 01-20230 JW); CISG-Online 616
Clout Case No. 881 Cited in para.: 88

Handelsgericht des Kantons Zürich (Commercial Court of the

Canton of Zurich) (Switzerland); Waste separation machines
case; 9 July 2002 (No. HG000120/U/zs); CISG-Online 726
Clout Case No. 867 Cited in para.: 94, 99, 100

Tribunale dì Forlì (Italy); Mitias d.o.o. v. Solidea S.r.L.; 9

December 2008 (No. 2280/2007); CISG-Online 1729
Cited in para.: 83

Clout Case 1770 Bundesgericht (Federal Supreme Court) (Switzerland); Online

auction of photography case; 8 November 2016 (No.
4A_451/2016); CISG-Online 2803
Cited in para.: 108

Emirates Trading Agency LLC v. High Court of Justice of England and Whales (UK); Prime
Prime Mineral Exports Private Mineral Exports Private Limited (“PMEPL”) v. Emirates
Limited Trading Agency LLC (“ETA”); 1 July 2014 (EWHC 2104)
Cited in para: 36

47
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Gutierrez de Martinez v. Lamagno Supreme Court of the United States; Katia Gutierrez De
Martinez, Eduardo Martinez Puccini and Henny Martinez De
Papaiani, Petitioners v. Dirk A. Lamagno Et Al.; 14 June 1995
(No. 94-16)
Cited in para: 23

Halsey v. Milton Keynes General Court of Appeal (UK); Halsey v. Milton Keynes General NHS;
NHS 11 May 2004 (Civ 576)
Cited in paras: 36, 39

HKL Group Co Ltd v. Rizq High Court (Singapore); HKL Group Co Ltd v. Rizq
International Holdings Pte Ltd International Holdings Pte Lt; 19 February 2013 (Summons
No. 6427 of 2012/ No. 70 of 2013)
Cited in paras: 25, 26

James Churchill v. Merthyr Tydfil Court of Appeal of England and Wales (UK); James Churchill
County Borough Council v. Merthyr Tydfil County Borough Council; 29 November
2023 (No. H42YJ54)
Cited in para: 52

Lucky-Goldstar High Court (Hong Kong); Lucky-goldstar International (h.k.)

International (HK) v. Ltd. v Ng Moo Kee Engineering Ltd. ; 05 May 1993
Ng Moo Kee Engineering (HCA94/1993)
Cited in paras: 25, 26

Mullary v. Broad Court of Appeal (UK); Mullarkey & Anor v. Broad; 22 January
2003 (No. A3/2002/2215 & A3/2002/221)
Cited in paras: 61, 62

48
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Sulamérica Cia Nacional de Court of Appeal (UK); Sulamérica Cia. Nacional De Seguros
Seguros SA v. Enesa Engenharia and others v. Enesa Engenharia and other; 19 January 2012.
SA Cited in para: 35

Tang v. Grant Thornton England and Wales High Court (UK); Wah (Aka Alan Tang)
International Ltd & Anor v. Grant Thornton International Ltd & Ors
Cited in para: 31

INDEX OF ARBITRAL AWARDS

Reference Details
Clout Case 727 Chamber of National and International Arbitration of Milan
(Italy); Steel wire case; 28 September 2001 (Final Award); CISG-
Online 1582
Cited in para.: 87, 89

Clout Case 1021 Foreign Trade Court of Arbitration attached to the Serbian
Chamber of Commerce (Serbia); Equipment for packaging of milk
case; 15 July 2008 (No. T-4/05); CISG-Online 1795
Cited in para.: 88

Methanex Corporation v. Methanex Corporation v. United States of America, Arbitrage ad

United States of America hoc, 3 August 2005
Cited in para: 65

Pacific Carriers Ltd v. BNP TMCO Ltd. v. Green Light Solutions R&D Corp., International
Paribas Chamber of Commerce (Case No. 20663/MHM). Final Award, 20
January 2016.
Cited in para: 22

49
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

Rompetrol Group v. The Rompetrol Group N.V. v. Romani, International Center for
Romania Settlement of Investment Disputes (Case No. ARB/06/3). Final
Award, 6 May 2013.
Cited in para: 61

Siag v. Egypt Waguih Elie George Siag and Clorinda Vecchi v. Arab Republic
of Egypt, International Center for Settlement of Investment
Disputes (Case No. ARB/13/1). Final Award, 1 June 2009.
Cited in paras: 61, 64

INDEX OF LEGAL ACTS AND RULES

Cited as Reference

American Bar Association Model Rules of Professional Conduct, 2024

ICC Mediation Guidance Notes ICC Mediation Guidance Notes, 2013

CISG United Nations Convention on Contracts for

the International Sale of Goods, 1980

CISG-Digest UNCITRAL Digest of Case Law on the United

Nations Convention on Contracts for the
International Sale of Goods, 2016

FAI Mediation Rules Mediation Rules 2024 of the Finland Chamber

of Commerce

FAI Rules Arbitration Rules 2024 of the Finland

Chamber of Commerce

50
 Lyon Catholic University MEMORANDUM FOR RESPONDENT

UNIDROIT Principles PICC UNIDROIT Principles on International

Commercial Contracts, 2016

Uniform Mediation Act Uniform Mediation Act, 2003

Rome I Regulation (EC) No 593/2008 of the

European Parliament and of the Council of 17
June 2008 on the law applicable to contractual
obligations (Rome I)

Certificate
We hereby confirm that this Memorandum was written only by the persons whose names are listed
below and who signed this certificate:

Chloé Fodera Daria Dmitrievskaia Sarah Lorraine Trazo

51