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5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 TABLE OF CONTENTS MEMORIAL for RESPONDENT Page | 1 e (^) TEAM CODE: 35R 5 th^ NLIU-JUSTICE R.K. TANKHA MEMORIAL INTERNATIONAL ARBITRATION MOOT COURT COMPETITION, 2 020 Before THE ARBITRAL TRIBUNAL, BARATHEON CITY, STARK PROVINCE ARCEBOR POWER PRIVATE LIMITED CLAIMANT v. RENVIDORA NATIONAL POWER COMPANY LIMITED RESPONDENT CASE CONCERNING The Agreement between Arcebor Power Private Limited and Renvidora National Power Company Limited MEMORIAL for RESPONDENT
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 TABLE OF CONTENTS MEMORIAL for RESPONDENT Page | I
TABLE OF CONTENTS
TABLE OF CONTENTS .............................................................................................................. I
TABLE OF ABBREVIATIONS ................................................................................................ IV
INDEX OF AUTHORITIES ................................................................................................... VIII
STATEMENT OF FACTS ...................................................................................................... XIV
ISSUES RAISED.................................................................................................................... XVII
SUMMARY OF ARGUMENTS.......................................................................................... XVIII
PLEADINGS ................................................................................................................................. 1
I. THE TRIBUNAL DOES NOT HAVE JURISDICTION OVER THE DISPUTE, OWING TO THE
ABSENCE OF A VALID ARBITRATION AGREEMENT BETWEEN THE PARTIES .............................. 1
A. There was no unequivocal consent of the Respondents to refer the disputes to arbitration .............................................................................................................................. 1
_1. On account of the non-existence of arbitral institution mentioned in the clause, the agreement loses validity. ..................................................................................................... 1
- The ambiguity of the arbitration clause must be interpreted against the Claimant according to the contra proferentem rule ........................................................................... 2_ B. Forum Clause ................................................................................................................ 2 _1. The existence if of a forum selection clause in the main agreement ......................... 2
- The general presumption in favour of arbitration must be disregarded .................. 2_ II. THE INSOLVENCY PROCEEDINGS UNDERWAY AGAINST THE RESPONDENT IN YEVADU BARS THE JURISDICTION OF THIS TRIBUNAL ............................................................................. 3 A. Add heading...................................................................... Error! Bookmark not defined. _1. Imposition of Moratorium prohibits the continuation of Arbitration proceedings... 4
- The ongoing Arbitration proceedings can affect the assets of the Respondent. ....... 4
- It can sabotage the rights of the other creditors of the respondent. ......................... 5_
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 TABLE OF CONTENTS MEMORIAL for RESPONDENT Page | III ii. The involvement of the Power Ministry in the performance and execution of the contract is insufficient for the purposes of joinder. ...................................................... 15
2. The parties did not consent to the joinder of Power Ministry to the arbitration agreement at any point...................................................................................................... 16 iii. There is no existence of a common intent of the parties to join the Power Ministry to the arbitration ............................................................................................................ 17 ii. No implicit or implied consent to bind the Ministry to the arbitration agreement can be made out. ........................................................................................................... 18 V. THE CLAIMANT’S CONDUCT BREACHED THE AGREEMENT AND THE RESPONDENT WAS JUSTIFIED IN TERMINATING THE AGREEMENT. ...................................................................... 19 A. Claimant’s Conduct lead to Fundamental breach of the Agreement. ................... 20 _1. Respondent suffered a substantial deprivation of what he was entitled to expect under the contract. ............................................................................................................ 20
- Time was of the essence of the contract. ................................................................. 21
- The Claimant committed multiple breaches throughout the span of the contract.. 21
- there has been anticipatory repudiation of the agreement by the claimant. .......... 22_ B. The respondent has validly exercised its right to avoidance under the CISG ...... 24 _1. The respondent fulfilled the conditions of giving notice. ........................................ 25
- Pursuant to Art. 73 of the CISG, Claimant is entitled to avoid future instalments of an instalment contract....................................................................................................... 26
- The claimant cannot invoke article 79 to exempt the breach. ................................ 27
- The Respondent is not obliged to renegotiate the Agreement................................. 27_ PRAYER ................................................................................................................................... XIV
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 TABLE OF ABBREVIATIONS MEMORIAL for RESPONDENT Page | IV
TABLE OF ABBREVIATIONS
ABBREVIATION EXPANSION
% Percentage §(§) Section(s) ¶ Paragraph ¶¶ Paragraphs AC Appeal Case Anr. Another Arb. Arbitration Art. Article BIL Bilateral Investment Treaty Cf. Confer Ch. Chapter Cir. Circuit CISG United Nations Convention on Contracts for the International Sale of Goods (1980) Co. Company Comm. Commentary
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 TABLE OF ABBREVIATIONS MEMORIAL for RESPONDENT Page | VI NYC United Nations Convention on the Recognition and Enfrocement of Foerign Arbitral Awards, New York, 1958. Ors. Others p. Page pp. Pages Pvt. Private Q.B. Queen’s Bench Rep. Reporter SIAC Singapore International Arbitration Centre U.S. United States of America u/ Under UN United Nations UNCITRAL United Nations Commission on International Trade Law UNIDROIT International Institute for the Unification of Private Law UOI Union of India USA United States of America v. Versus
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 TABLE OF ABBREVIATIONS MEMORIAL for RESPONDENT Page | VII vol. Volume
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 INDEX OF AUTHORITIES MEMORIAL for RESPONDENT Page | IX ICC Case no. 4 972 ........................................................................................................................ 15 ICC Case No. 6519 ....................................................................................................................... 15 ICC case no. 6673 ......................................................................................................................... 15 ICC Case No. 6697 ......................................................................................................................... 7 ICC Case No. 7337 ....................................................................................................................... 16 ICC Case No.10818 ...................................................................................................................... 17 ICC Case No.4727 .......................................................................................................................... 2 Innoventive Industries Ltd. v. ICICI Bank, (2017) S.C.C., 678 ..................................................... 5 Ins Con of Hartford v. TIG Ins. Co. 360 3d, 322 (2nd^ Cir. 2004). ................................................ 15 K.S. Oils Ltd. v. The State Trade Corp. of India Ltd. & Anr., (2018) S.C.C., 475 ........................ 5 L'HamidSaadi v. Huan, CA, 246 (Paris 2000). .............................................................................. 2 Power Grid Corporation of India Ltd. v. Jyoti Structures Ltd., (2018) 246 DLT, 485................... 4 Punjab National Bank v. James Hotels, (2017) S.C.C., 456 ........................................................... 5 TBK v. Astro Nusantara International BV & Ors., 226 SGCA, 57 (2013) .................................. 16 Vivendi SA et al. v. Deutsche Telekom AG et al. &Elekrim SA et al,Swiss Fed. SC, 428 (2009) ..................................................................................................................................................... 6 Volt Information Sciences v Leland Stanford, U.S., 468 (1989). .................................................. 16 X v. Y & Z, ICC Proc. Order, (2012). .......................................................................................... 12 Yarn Case, App. Ct. Frankfurt, 199 (Ger. 2000 ............................................................................ 24 CONVENTIONS New York Convention ................................................................................................................. 16 Dispute Settlement , United Nations Conference on Trade and Development, UNITED NATIONS (Jan 13, 2020, 3PM), https://unctad.org/en/Docs/edmmisc232add39_en.pdf. ................................... 1 Nina Gumzej, Global Development: New York Convention - Reconsidered: Contribution to the 45d' Anniversary of the Convention: Certain Aspects of Public Policy in the Enforcement of Foreign Arbitral Award ', 2003 CROAT. ARB. Y.B.,39 ............................................................... 5 UNCITRAL Model Law on International Commercial Arbitration (1985) with amendments as adopted in 2006 ........................................................................................................................... 9 BOOKS
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 INDEX OF AUTHORITIES MEMORIAL for RESPONDENT Page | X
14 BERNARD HANOTIAU, COMPLEX ARBITRATIONS: MULTIPRTY, MULTICONTRACT, MULTI-
ISSUE AND CLASS ACTIONS 49 (2006) ....................................................................................... 17
37 STAVROS BREKOULAKIS, THE EVOLUTION AND FUTURE OF INTERNATIONAL ARBITRATION 119.
Julian David & Mathew Lew eds. (2016). ................................................................................ 18 7 GEORGIOS PETROCHILOS, MULTIPARTY ARBITRATION 119 (Bernard Hanotiau & Eric Schwartz eds.) (2010) ............................................................................................................................... 17 ALAN REDFERN et al., LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION 71 (2004). ......................................................................................................................................... 4 BERNARD HANOTIAU, INTERNATIONAL ARBITRATION 2006: BACK TO BASICS? (Albert Jan Van Den Berg ed.) 341 (2007 .......................................................................................................... 17 BLACKABY et al., REDFERN AND HUNTER ON INTERNTIONAL ARBITRATION 202 (6th^ ed. 2015). 5, 6 EMMANUEL GAILLARD & JOHN SAVAGE, FOUCHARD GAILLARD GOLDMAN ON INTERNATIONAL COMMERCIAL ARBITRATION 734 (1999) ..................................................................................... 6 FOUCHARD PHILIPPE ET AL., FOUCHARD, GAILLARD, GOLDMAN ON INTERNATIONAL COMMERCIAL ARBITRATION. KLUWER LAW INTERNATIONAL, 1280 (1999). .................................................... 10 FRANCOIS POUDRET & SEBASTIEN BESSON, COMPARATIVE LAW OF INTERNATIONAL ARBITRATION 281 (2007) ................................................................................................................................... 6 GABRIELLE KAUFMANN- KOHLER & ANTONIO RIGOZZI, INTERNATIONAL ARBITRATION: LAW AND PRACTICE IN SWITZERLAND 160 (3rd^ ed. 2015). .......................................................................... 4 GARY B. BORN & MATTEO ANGELINI, FINANCES IN INTERNATIONAL ABITRATION 43 (Sherlin Tung & Fabricio Fortese eds.) (2019)........................................................................................ 1 GARY B. BORN & PETER B. RUTLEDGE, INTERNATIONAL CIVIL LITIGATION IN UNITED STATES COURTS 19 9 (5th^ ed. 2011) .......................................................................................................... 6 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 567 (2nd^ ed. 2014) ..................... 4, 5 ICC Case No. 4132 ......................................................................................................................... 8 INGEBORG SCHLECHTRIEM AND PETER SCHWENZER, COMMENTARY ON THE UN CONVENTION ON THE INTERNTIONSL SALE OF GOODS 175 (Ingeborg Schwenzer ed.) (4th ed. 2016)............ 19, 20 Jean Rouche et al., French Arbitration Law and Practice: A dynamic Civil Law approach to International Arbitration 37 (2nd^ ed. 2009). ................................................................................ 1 JEffREY WAINCYMER, PROCEDURE AND EVIDENCE IN INTERNATIONAL ARBITRATION 644 (2012)11, 15
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 INDEX OF AUTHORITIES MEMORIAL for RESPONDENT Page | XII Arjun Gupta et al., An Introduction to Joinder and Consolidation in Institutional Arbitration 4 IJAL, 134 (2015) ....................................................................................................................... 16 B Hanotiau, Problems Raised by Complex Arbitrations Involving Multiple Contracts-Parties- Issues – An Analysis , 18 JOURNAL OF INT. L. ARB., 253 (2001) ............................................... 16 Bernard Hanotiau, Non-signatoires, Groups of Companies and Groups of Contracts in Seleceted Asian Countries: A case Law Analysis, 32 JOURNAL OF INT. ARB., 571 (2015) ....................... 16 Bernardo M. Cremades and Ignacio Madalena, Parallel Proceedings in International Arbitration 24(4) Arb. Int. 507 (2008)........................................................................................................... 7 Burcu Osmanoglu, Third-Party Funding in International Commercial Arbitration and Arbitrator Conflict of Interest 32 JOURNAL OF INT. ARB., 332 (2015). ........................................................ 9 Francisco Blavi, It’s About Time to Regulate Third-Party Funding KLUWERARBITRATION (2015) ..................................................................................................................................................... 9 Georges Affaki, Third Party Funding in International Arbitration ICCWBO, 234 (2013........... 10 Ileana M., The Scope of the duty to maintain confidentiality , 22 KLUWER LAW INTERNATIONAL, 27 (2011). ............................................................................................... 16 Jean Kalicki, Security for Costs in International Arbitration , Transnational Dispute Mgt., 1 (2006) ........................................................................................................................................ 11 Mauricio PestillaFabbri, Inapplicability of the arbitration agreement due to the impecuniousity of the party 94 REV. BRASIL. DE ARBITRAGEM (Joao Bosco Lee & Daniel de Andrade Levy eds.) 2018 ............................................................................................................................................. 7 Mohamed Abdulmohsen al-Kharafi & Sons Co. v. The Govt. of Libya & Ors. INT.JAL, 250 (2014). ....................................................................................................................................... 16 Sykes, The Contra Proferentem Rule and the Interpretation of International Commercial Arbitration Agreements: The Possible Uses and Misuses of A Tool for Solutions to Ambiguities, 8 Vindobona J. Int’l Comm. L. & Arb., 33 (2004). .............................................. 2 11 Legislative Guide on Insolvency , UNCITRAL (Jan.14, 2020, 11AM) , https://uncitral.un.org/en/texts/insolvency/legislativeguides/insolvency_law ........... 3, 5 MISCELLANEOUS
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 INDEX OF AUTHORITIES MEMORIAL for RESPONDENT Page | XIII BARRINGTON, Third Party Claims an Arbitration , 432 (2017 ................................................. 10 C.M. Bianca, M.J. Bonnell, Commentary on the International Sales Law – The 1980 Vienna Sales Convention, 211 (2015). .................................................................................................. 19 Denice Forstén, Parallel Proceedings and the Doctrine of Lis Pendens in International Commercial Arbitration OATD (Jan 31, 2020, PM) https://oatd.org/oatd/record?record=oai%5C%3ADiVA.org%5C%3Auu- 253169 .................... 7 Eric Schwartz & Yves Derains , Guide to the IC Rules of Arbitraion , 41 ( 2nd^ ed. 2005) .......... 17 GOELER, Disadvantages of Third Party Funding, 293 (2015) ................................................... 10 ICC Bull. XVI , 9 4 - 98 (2001). ...................................................................................................... 16 Insolvency and Bankruptcy Code, 2016 ..................................................................................... 3, 4 Report on the Insolvency Law Committee , March 2018, MCAGOI, http://www.mca.gov.in/Ministry/pdf/ReportInsolvencyLawCommittee_12042019.pdf ........... 4 Report on the Insolvency Law Committee, March 2018, MCAGOI, http://www.mca.gov.in/Ministry/pdf/ReportInsolvencyLawCommittee_12042019.pdf ........... 4 Robert Koch, The concept of fundamental breach of contract under the United Nations Convention on Contracts for International Sale of Good ̧ REVIEW OF THE CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (CISG) 1998 ............. 20
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 STATEMENT OF FACTS MEMORIAL for RESPONDENT Page | XV
- The Respondent concurred with the concern of the Claimant, however, due to procedural and time constraints, suggested concluding a separate agreement at a later stage.
- However, the in-house legal advisor of the claimant drafted an Addendum containing an arbitration clause, which envisaged submitting the disputes to arbitration under the jurisdiction of Singapore Arbitration Centre (SAC).
- The addendum was signed by both the parties on January 14, 2015, along with the Part Supply Agreement. FINANCIAL HARDSHIP OF THE CLAIMANTS AND ATTEMPTS AT RENEGOTIATION
- Around the beginning of the year 2018, Xanier imposed high tariffs on raw materials sourced from Zorastra on the allegation of Zorastra’s indulgence in unfair trade practices.
- Since Zorastra was the major source of raw materials for the Claimants, the trade war between Xanier and Zorastra impacted the business operations of the Claimant, and resulted in huge losses.
- Due to its financial hardships, the Claimant requested renegotiation of the Part-Supply Agreement, claiming that the performance of its obligations under the present part supply agreement became commercially unviable for the Claimant. In this regard, claimant requested to renegotiate the terms and conditions of the Part supply agreement with the senior management of the respondent.
- The Respondent believed that the pricing of the agreement was in line with the market practice. On December 14, 2018, the respondent declined the proposition to negotiate vide a letter, and directed the timely delivery of parts due on 31st^ December. The claimant was informed that the failure to deliver the instalment on time, the Respondent would be constrained to take an action under the Agreement. TERMINATION OF CONTRACT
- The claimants effected the delivery of parts for the last quarter of 2019 in the second week of January, after a delay of two weeks. Moreover, an additional claim of USD 100,000 was also made.
- The respondent refused to accept the delivery of the consignment, alleging that the Claimant had failed to perform its obligations wsithin the stipulated timeline.
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 STATEMENT OF FACTS MEMORIAL for RESPONDENT Page | XVI
- On January 20, 2019, the Claimant was served with a termination notice from the respondent. Aggrieved by the termination of the Agreement, the Claimant filed a notice of arbitration.
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 SUMMARY OF ARGUMENTS MEMORIAL for RESPONDENT Page | XVIII
SUMMARY OF ARGUMENTS
i. THE TRIBUNAL DOES NOT HAVE JURISDICTION OVER THE DISPUTE, OWING TO THE LACK OF CONSENT & ABSENCE OF A VALID ARBITRATION AGREEMENT BETWEEN THE PARTIES The Jurisdiction of this tribunal is contested by the Respondent. The arbitration agreement concluded between the parties is invalid since there is no manifestation of an unequivocal consent of both the parties to arbitrate. Further, the parties had inserted a forum selection clause in the main agreement, indicating that they had contemplated dispute resolution by courts. Thus, the general presumption in favour of the validity of the arbitration clause must be disregarded and the case be studied in light of the facts and circumstances. Moreover, the arbitration clause is pathological as it confers jurisdiction to an institution which is not in existence. Therefore, the tribunal constituted pursuant to such clause should not have jurisdiction over the dispute ii. THE INSOLVENCY PROCEEDINGS UNDERWAY AGAINST THE RESPONDENT IN YEVADU BARS THE JURISDICTION OF THIS TRIBUNAL The moratorium imposed upon the institution and continuation of proceedings against the Respondent in the state if Yevadu deprives this tribunal to exercise jurisdiction over the concerned matter. If the arbitration proceedings are allowed to be continued, it can affect the assets of the respondent and can thereby sabotage the rights of other creditors of the Respondent Moreover, any award rendered against the Respondent during the moratorium period is likely to be set aside due to the public policy consideration of the state of Yevadu. Therefore, if the arbitral tribunal is not able to render an enforceable award, it is obliged to decline its jurisdiction. iii. THE POWER MINISTRY SHOULD NOT BE JOINED AS A THIRD PARTY TO THE ARBITRATION PROCEEDINGS
5 TH^ NLIU-JUSTICE R.K. TANKHA INTERNATIONAL MOOT COURT COMPETITION 2020 SUMMARY OF ARGUMENTS MEMORIAL for RESPONDENT Page | XIX The Power Ministry should not be joined to the present arbitration proceedings since it is not prima facie bound by the arbitration agreement. The respondent is a separate legal entity and has entered the agreement in its individual capacity. There is no privity of contract between the claimant and the Power Ministry. Moreover, the involvement of the Power Ministry in the performance and execution of the contract is insufficient for the purposes of joinder. In addition to this, the parties did not consent to the joinder of Power Ministry to the arbitration agreement at any point. There is no common intent of the parties to join the Power Ministry to the Arbitration. Additionally there wasn’t any implied consent to bind the Ministry to the Arbitration Agreement. iv. THE CLAIMANT SHOULD BE MADE TO DISCLOSE THIRD PARTY FUNDER AND ISSUE SECURITY OF COSTS. The Claimant ought to disclose before the tribunal whether it is being funded by a third party under SIAC Rule 27(c) as the Respondent came to know about the funder through a news report. Further if the Tribunal has jurisdiction to hear the claim then it must order the Claimant to furnish security of legal costs incurred by the Respondent in defending these arbitration proceedings pursuant to Rule 27(j). v. THE CLAIMANT BREACHED THE AGREEMENT AND THE RESPONDENT WAS JUSTIFIED IN TERMINATION The Respondent contends that the termination of the Agreement was based on the fundamental breaches of the Agreement committed by the Claimant. The claimant did not supply the fourth quarterly instalment as a result of which the Respondent suffered Substantial detriment and Fulfilled all the essentials of avoidance under article 49 .Further the Claimant cannot be exempted under article 79 of CISG since the Respondent is will within its right to avoid the Agreement. The Respondent is not obliged to renegotiate the terms of the Agreement.
