Cover PageStudent Name Saranda Cunaku
Student Number 509815
Assignment Name Memorandum for Claimant
Word Count excluding footnotes 1838
RWS Moot Scenario
27 September 2018
MEMORANDUM FOR CLAIMANT
ON BEHALF OF: AGAINST:
Feed Processing Corp. Grain Dealers PLC.
TOC o “1-3” h z u Cover Page PAGEREF _Toc525844393 h 1INDEX OF ABBREVIATIONS PAGEREF _Toc525844394 h IIINDEX OF AUTHORITIES PAGEREF _Toc525844395 h IIII.Mr. Dean’s witness statement should not be excluded PAGEREF _Toc525844396 h – 2 -A.Mr. Dean’s witness statement safeguards the fairness and equality between the parties PAGEREF _Toc525844397 h – 2 B.Exceptional circumstances apply to keep Mr. Dean’s statement PAGEREF _Toc525844398 h – 3 -C.In the alternative, Mr. Harold Dean’s s witness statement should be given less than full weight…………………………………………………………………………………………………………………………………………… PAGEREF _Toc525844399 h – 3 -II.A valid arbitration agreement exists between CLAIMANT and RESPONDENT PAGEREF _Toc525844400 h – 4 -III.A contract of sale was concluded between CLAIMANT and RESPONDENT PAGEREF _Toc525844401 h – 4 -A.The conditions for the formation of contract were satisfied PAGEREF _Toc525844402 h – 5 -B.RESPODNENT intended to contract with CLAIMANT PAGEREF _Toc525844403 h – 5 -C.In addition to Mr. Dean’s statement, the opening of the letter of credit by CLAIMANT and not Imports should be considered PAGEREF _Toc525844404 h – 5 -D.Doctrine of Alter Ego does not apply PAGEREF _Toc525844405 h – 6 -IV.RESPONDENT breached the contract PAGEREF _Toc525844406 h – 6 -A.RESPONDENT was not hindered from making full delivery as no impediment existed PAGEREF _Toc525844407 h – 6 –
INDEX OF ABBREVIATIONSLCIA
London Court of International Arbitration
International Chamber of Commerce
CISG United Nations Convention on Contracts for the International Sale of Goods
Cl. Ex CLAIMANT’s Exhibit
Res. Ex RESPONDENT’s Exhibit
Req. Arb. Request for Arbitration
Ans. Req. Arb.
Answer to Request for Arbitration
¶/ ¶¶ Paragraph/ Paragraphs
INDEX OF AUTHORITIESRULES
United Nations Convention on the International Sale of Goods
Cited as: CISG
Cited in: ¶¶16, 17, 18, 24, 26
Convention on Agency in the International Sale of Goods
Cited as: Convention on Agency
Cited in: ¶19
London Court of International Arbitration Rules
Cited as: LCIA Rules
Cited in: ¶¶6, 9, 13
UNCITRAL Model Law on International Commercial Arbitration
Cited as: Danubian Law
Cited in: ¶13
Agricultural Products case
Austria Supreme Court
http://cisgw3.law.pace.edu/cases/011022a4.html22 October 2001
Cited as: Agricultural Products case
Cited in: ¶18
Provincial Court of Appeal Hamburg
http://cisgw3.law.pace.edu/cases/970704g1.html4 July 1997
Cited as: Court of Appeal Hamburg, 1997
Cited in: ¶26
BCY v BCZ
High Court of Singapore
Cited as: BCY v BCZ
Cited in: ¶14
United States of America (USA)
United States District Court S.D.
Florida MCI Telecommunications Corporation v. O’Brien Marketing
5 September 1995
Cited as: MCI Telecommunications v. O’Brien
Cited in: ¶22
United States District Court, S.D. New York
Keystone Shipping Co. ; Chas. Kurz ; Co. v. Inc.Texport Oil, Co.
Cited as: Keystone v. Inc. Export
Cited in: ¶23
Court of Arbitration of the International Chamber of Commerce
Gulf Resources Corp v Republic of Congo
ICC Court of Arbitration – Paris
29 December 2005
Case No.: 12990
Cited as: ICC Case 12990
Cited in: ¶9
Industrial Product case
ICC Court of Arbitration – Paris
Case No.: 10329
Cited as: ICC Case 10329
Cited in: ¶14
DiMatteo, Larry A.
Critical Issues in the Formation of Contracts under the CISG, Belgrade Law Review, Year LIX (2011) no. 3, p.71
Cited as: DiMatteo
Cited in: ¶16
GÉLINAS, Paul A
Arbitration and Oral Evidence, ‘Evidence through Witnesses’, in Laurent Lévy and V.V. Veeder eds, Dossiers of the ICC Institute of World Business Law, Volume 2 © Kluwer Law International; International Chamber of Commerce ICC 2004 p.36
Cited as: GélinasCited in: ¶7
HOLDSWORTH, Judith L
“Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods “CISG” 2001
Cited as: Holdsworth
Cited in: ¶18
LEW, Julian D
“Document Disclosure, Evidentiary Value of Documents and Burden of Evidence”, in Teresa Giovannini and Alexis Mourre eds, Written Evidence and Discovery in International Arbitration: New Issues and Tendencies, Dossiers of the ICC Institute of World Business Law, Volume 6 © Kluwer Law International; International Chamber of Commerce ICC 2009 p.1
Cited as: Lew
Cited in: ¶8
O’MALLEY, NATHAN D
Rules on Evidence in International Arbitration, an Annotated Guide Informa 2012, 127
Cited as: O’ MalleyCited in: ¶10
“The Challenges and the Future of Commercial and Investment Arbitration”, Beata Gessel-Kalinowska vel Kalisz eds, Warsaw 2015, p.180
Cited as: RajskiCited in: ¶11
STATEMENT OF FACTS
Feed Processing Corp. “CLAIMANT” is a company operating in Mediterraneo. Grain Dealers, PLC “RESPONDENT” operates in Danubia.
19 February 2016 CLAIMANT and RESPONDENT entered into a contract of sale for the delivery of 6000 tons of standard feed wheat by July 2016.
17 April 2016 The Government of Danubia declared an export prohibition due to floods in the standard feed wheat region.
5 May 2016 RESPONDENT informs CLAIMANT about the replacement of the export prohibition with a system of export.
21 May 2016 CLAIMANT rejected RESPONDENT’s request for a shipment of 4,800 tons in July, and of 1,200 tons in October.
29 May 2016 RESPONDENT received CLAIMANT’s letter of credit for which it required amendment.
2 June 2016 CLAIMANT informed RESPONDENT that the amendment of the letter of credit was not in line with the contract.
16 June 2016 RESPONDENT avoided the contract.
25 May 2017 CLAIMANT initiated arbitration proceedings before the LCIA.
SUMMARY OF ARGUMENT
Mr. Dean’s statement should not be excluded by the Arbitral Tribunal (I). Mr. Dean’s witness statement provides fairness and equality between the parties (A) and exceptional reasons exist not to produce him at the oral hearing (B). In the alternative, it should not be excluded altogether but given less than full weight (C).
A valid arbitration agreement was concluded between CLAIMANT and RESPONDENT evidenced by their mutual assent (II).
CLAIMANT and RESPONDENT entered into a contract of sale (III). CLAIMANT submits that the conditions of contract formation were satisfied (A), RESPONDENT was aware it contracted (B), the letter of credit was opened by CLAIMANT and not Imports (C) and alter ego is inapplicable (D).
The contractual relationship between CLAIMANT and RESPONDENT was breached by RESPONDENT as a consequence of non-delivery of the goods (IV), notwithstanding it could do so (A).
Mr. Dean’s witness statement should not be excluded
RESPONDENT asserts that Mr. Dean’s witness statement should be excluded from the record of this arbitration Pro. Or. 1, p. 34. Contrary to RESPONDENT’s assumptions, CLAIMANT will demonstrate that Mr. Dean’s statement should not be excluded as it safeguards the fairness and equality between the parties (A) and exceptional circumstances apply (B). In the alternative, Mr. Dean’s statement should be given less than full weight (C).
Mr. Dean’s witness statement safeguards the fairness and equality between the partiesParties to the present arbitration agreed in the applicability of the LCIA Rules Cl. Ex. 1, p. 6. Pursuant to these Rules, it is the Tribunal’s discretion to allow, refuse or limit the written and oral testimony of witnesses Art. 20.2, LCIA Rules.
Contrary to RESPONDENT’s allegations to exclude Mr. Dean’s statement, CLAIMANT asserts that the Tribunal should keep it Cl. Ex. 12, p. 28 since an exclusion would have direct effect on the proceedings outcome and fairness and equality between parties will lack Gélinas.
Furthermore, such exclusion violates a prime arbitration feature which is for arbitrators to have the essential evidence to decide a case Lew. Therefore, Mr. Dean’s witness statement should not be excluded.
Exceptional circumstances apply to keep Mr. Dean’s statementCLAIMANT asserts that Mr. Dean’s statement should be kept in the record. Art. 20.4 of the LCIA Rules stipulates that a written statement may be excluded only if the witness does not have good cause to attend the hearing Art. 20.4, LCIA Rules. When good cause exists, the Arbitral Tribunal may not exclude a witness statement ICC Case 12990.
O’Malley considers non-valid reasons those circumstances foreseeable at the time of the communication of the written statement O’ Malley. In this case, when the written statement of Mr. Dean was communicated, CLAIMANT could not have foreseen termination of employment or legal hindrance to contact. Consequently, the Tribunal should keep his witness statement.
In the alternative, Mr. Harold Dean’s s witness statement should be given less than full weight
RESPONDENT argues that Mr. Dean’s statement should be excluded altogether Pro. Or. 1, p. 34. In contrast, CLAIMANT holds that in the event that the Arbitral Tribunal does not consider Mr. Dean’s witness statement by its full weight due to absence at the hearing, it should give less than full weight, but in no way exclude it altogether Rajski.
A valid arbitration agreement exists between CLAIMANT and RESPONDENTCLAIMANT submits that a valid arbitration agreement was concluded between parties by virtue of the arbitral clause incorporated into the contract Cl. Ex. 1, p.6.
Pursuant to LCIA Rules, the Tribunal has the power to decide about the existence of an arbitration agreement Art.23.1, LCIA Rules. In addition, the Danubian law, governing the contract, provides that the existence of such agreement is evidenced by the parties’ communications and statements Art.7 (2), Danubian Law.
CLAIMANT urges the Tribunal to adopt the views of ICC and High Court of Singapore in appraising the exchange of correspondence when concluding if mutual assent to arbitrate existed BCY v BCZ ; ICC Case 10329. In the case at hand, the evidence that RESPONDENT intended to be bound by the arbitration agreement can be observed from the telephone conversation when the contract was concluded Cl. Ex. 12, p. 28. During this conversation Mr. Dean informed Mr. Stern that he was the responsible person for purchasing at CLAIMANT. Moreover, the telephone conversation was confirmed by a CLAIMANT email account and the signature provided Mr. Dean’s position as a purchasing agent on behalf of CLAIMANT Cl. Ex.2, p. 7. Hence, no confusions could have been drawn out of this situation.
A contract of sale was concluded between CLAIMANT and RESPONDENTRESPONDENT emphasizes that it entered into a contract of sale with Imports and not CLAIMANT Res. Req. Arb., p. 22. Conversely, CLAIMANT asserts that contract formation conditions were satisfied (A), RESPONDENT intended to contract with CLAIMANT (B) and the letter of credit was opened by CLAIMANT (C). Moreover, should RESPONDENT argue alter ego, CLAIMANT holds it inapplicable (D).
The conditions for the formation of contract were satisfiedArt. 14 (1) of CISG provides that contract offer must specify the goods, quantity and the price Art. 14 (1), CISG, as the definitiveness will show clear intent to be bound DiMatteo.
In the case at hand, these were specified since RESPODENT accepted the offer pursuant to Art. 18 of CISG Art. 18, CISG, for the delivery of 6,000 tons of standard feed wheat for the price of $60.00 per ton Cl. Ex. 2, p. 7.
RESPODNENT intended to contract with CLAIMANT Art. 8 (1) of CISG provides for a subjective test where behavior and statement should be interpreted according to the intent that the other party could have not known what it was Art. 8 (1), CISG; Agricultural Products case; Holdsworth.
Furthermore, Art. 12 of the Convention on Agency to which both states are parties of Pro. Or. 2, p. 36, ¶3, states that where a third party knew that an agent was acting for its principal, a contractual relationship is formed between the principal and that party was Art. 12, Convention on Agency.
In the case at hand, RESPONDENT could not have misinterpreted the circumstances since Mr. Dean made it clear that it was a purchasing agent at CLAIMANT and that PROCESSING was breaking ties with Imports Cl. Ex. 12, p. 28, the latter confirmed by Mr. Stern’s statement Res. Ex. 1, p. 24.
In addition to Mr. Dean’s statement, the opening of the letter of credit by CLAIMANT and not Imports should be considered
In the past, when Imports purchased for CLAIMANT, Imports opened the letter of credit Pro. Or. 2, p. 38, ¶16. However, in this case, CLAIMANT opened the letter of credit, acknowledged by RESPONDENT on 29 May 2016 Cl. Ex.8, p. 13; Pro. Or. 2, p. 40, ¶39. Consequently, it is CLAIMANT’s position that had RESPONDENT not intended to contract with CLAIMANT from the beginning it would not have required the opening of a second amended letter of credit Cl. Ex.10, p. 15.
Doctrine of Alter Ego does not applyShould RESPONDENT argue the alter ego doctrine, CLAIMANT submits that it is inapplicable since superior financial and managerial control to commit fraud must exist MCI Telecommunications v. O’Brien.
CLAIMANT asserts that such circumstances do not apply. The fact that the companies were connected is insufficient Keystone v. Inc. Export. Although CLAIMANT owned 51% of shares at Imports and had three board members the firms operated completely separately and financial results were not consolidated for tax or other purposes Pro. Or. 2, p. 42, ¶54. Thus, alter ego doctrine does not apply.
RESPONDENT breached the contractCLAIMANT holds that RESPONDENT is in breach of Arts. 25 and 31 of the CISG for non-delivery of goods Arts. 25, 31, CISG. RESPONDENT argues that full shipment of goods was not possible due to floods leading to insufficient allocations by Government Cl. Ex. 7, p. 12. In contrast, CLAIMANT will show that full delivery of goods was possible since no impediment existed (A).
RESPONDENT was not hindered from making full delivery as no impediment existedRESPONDENT approached CLAIMANT on 21 May 2016 requesting amendment of the letter of credit Cl. Ex. 5, p. 10. According to RESPONDENT, 4,800 tons of standard feed wheat was to be shipped in July, while the other 1, 200 tons in October. CLAIMANT rejected it as its availability was not secured Stat. Def., p. 31 and CLAIMANT needed full delivery of the goods Pro. Or. 2, p. 37.
RESPONDENT is not in the position to argue Art. 79 of CISG as the floods in Danubia did not constitute an impediment that would exempt fulfillment of contract Art. 79, CISG. RESPONDENT could have foreseen such floods as they occurred in the past Pro. Or. 2, p. 41, ¶44. In similar circumstances, the Appellate Court of Hamburg held liable a seller for non-delivery of tomato concentrate despite of heavy rains that had damaged the tomato crop Court of Appeal Hamburg, 1997. Furthermore, RESPONDENT could deliver since it received allocations from the Government to cover all obligations with parties who it had firm contractual obligations as of 17 April 2016 Cl. Ex. 4, p. 9. A quota of 240,000 tons of standard feed wheat Cl. Ex. 5, p. 10, was more than sufficient. RESPONDENT seemed to not have objections towards this decision since it did not use recourse procedures Pro. Or. 2, p. 38, ¶19.
However, although not foreseen by export control regulations RESPONDENT chose to supply at a higher price its regular customers with whom it did not have firm contract as of 17 April 2016 Pro. Or. 2, pp. 38, 42, ¶¶21, 50, depriving CLAIMANT of its right.
PRAYER FOR RELIEF
Given the above submissions, CLAIMANT requests the Tribunal to find that:
Mr. Dean’s witness statement should not be excluded;
An arbitration agreement exists between CLAIMANT and RESPONDENT;
RESPONDENT contracted with CLAIMANT;
RESPONDENT breached the contract.