Tabesh University Memorandum for Claimant Write LTD · PDF fileLords, Bailii, CA 1995) ......

24th annual Willem C. Vis International Commercial Arbitration Moot

In the matter of arbitration under

International commercial Arbitration Moot – Hong Kong

Tabesh University

Memorandum for Claimant

Counsel

Fazilah Sadat ● Hameedullah Hamdard ● Parwiz Hammidi ●

Mohammad Aman Akrami ● Faridon Salehi

Kabul - Afghanistan

Claimant Write LTD

232 Garrincha Street

Oceanside

Equatoriana

Respondent Santos DKG

77 Avenida O Rei

Cafucopa

Mediterraneo

vs

Tabesh University Memorandum for Claimant

I | P a g e

TABLE OF CONTENTS Page

LIST OF ABBREVIATIONS ................................................................................................................... IV

INDEX OF AUTHORITIES ........................................................................................................................ VI

INDEX OF COURT CASES ....................................................................................................................... IX

INDEX OF LEGAL ACTS AND RULES ................................................................................................. XII

STATEMENT OF FACTS ......................................................................................................................... 1

SUMMURY OF ARGUMENT .................................................................................................................. 3

ISSUE I: ARBITRAL TRIBUNAL DOES NOT HAVE POWER TO ORDER CLAIMANT TO

GRANT SECURITY FOR RESPONDENT’S COSTS. ...................................................................... 6

A. THE ARBITRAL TRIBUNAL DOES NOT HAVE THE POWER, EVEN IF IT DOSE,

THE ARBITRAL TRIBUNAL SHOULD NOT ORDER CLAIMANT FOR THE SECURITY

OF RESPONDENT’S COST. ............................................................................................................ 6

I. THE ARBITRAL TRIBUNAL LACKS OF POWER TO ORDER CLAIMANT TO

PROVIDE SECURITY FOR COST UNDER THE ART. 8(1) OF CAM-CCBC RULES. .......... 6

ii. CLAIMANT SHOULD NOT BE HELD RESPONSIBLE FOR RESPONDENT’S COSTS

BASED ON THE INTERNATIONAL PRACTICE, THE DSA. ................................................... 7

B. EVEN IF THE TRIBUNAL HAS THE POWER TO ORDER CLAIMANT TO PAY

RESPONDENT’S COSTS, RESPONDENT HAS NOT PROVIDED ANY EVIDENCE TO

SUPPORT ORDERING SECURITY FOR COST. ......................................................................... 9

i. ACCORDING TO ART. 17(E)(1) UNICITRAL RESPONDENT DOES NOT MEET

THE REQUIREMENTS TO REQUEST SECURITY FOR COST DUE TO THE SUBJECT-

MATTER OF THE DISPUTE ......................................................................................................... 10

ii. ART. 23(4) ICC RULES DO NOT ALLOWED THE PARTIES FOR ADDING NEW

CLAIMS AFTER THE TERMS OF REFERENCE HAVE BEEN SIGNED. ............................ 11

ISSUE II: THE ARBITRAL PROCEEDINGS WERE INITIATED ON TIME, WITHIN 60

DAYS AS PER THE DSA, AND THUS CLAIMANT’S CALIMS ARE ADMISSIBLE. .......... 13

A. THE ARBITRAL PROCEEDINGS WERE INITIATED BY CLAIMANT AFTER THE

FAILURE OF NEGOTIATIONS AND IT IS WITHIN 60 DAYS. .............................................. 14


II | P a g e

B. CLAIMANT fulfilled its obligation to commence Arbitral proceedings based on Art 4.3

CAM-CCBC rules. ............................................................................................................................ 15

C. CLAIMANT’S COMMENCEMENT OF ARBITRAL PROCEEDINGS MET ALL

REQUIREMENTS SET UNDER ART 4.1 CAM-CCBC RULES ............................................... 16

D. BASED ON ART. 12.5 CAM-CCBC RULES, THE AMENDMENTS GIVEN BY

CLAIMANT MAY NOT EFFECT ANY FAILURE TO THE COMMENCEMENT OF

ARBITRATION PROCEEDINGS. ................................................................................................. 17

ISSUE III: RESPONDENT IS OBLIGED TO PAY THE OUTSTANDING AMOUNT OF

$2,285,240.00 TO CLAIMANT BASED ON ARTICLES. 53 AND 54 OF THE CISG. ............. 19

A. CLAIMANT IS ENTITLED TO THE REMAINING $2,285,240.00 OF THE CONTRACT

PRICE FROM RESPONDENT, BASED ON THE ARTICLE 53 OF CISG; RESPONDENT IS

IN VIOLATION OF THE DUTY TO PAY THE PRICE IN FULL AS PROVIDED ............... 19

B. THE PARTIES DID NOT INTEND TO APPLY A FIXED EXCHANGE RATE TO THE

PRICE FOR THE BLADES. ........................................................................................................... 21

i. BASED ON ART 8(1) CISG, THE SUBJECTIVE INTENT OF THE PARTIES WAS NOT

TO APPLY A FIX EXCHANGE RATE FOR THE ENTIRE AGREEMENT, BUT TO APPLY

THE FIXED RATE ONLY TO THE CLAMPS. ........................................................................... 21

ii. PURSUANT TO THE ARTICLE 8(2) OF CISG AND UNIDROIT PRINCIPLE 4.1, A

REASONABLE PERSON WOULD UNDERSTAND THE FIXED EXCHANGE RATE

CLAUSE IN THE ADDENDUM TO APPLY TO THE CLAMPS ONLY, AND NOT THE

BLADES............................................................................................................................................. 22

iii. PURSUANT TO ARTICLE 8(3) CISG, THE PARTIES’ INTENT WAS TO ONLY

APPLY THE FIX EXCHANGE RATE TO THE CLAMPS, DEMONSTRATED BY THE

DISCUSSIONS, TRADE USAGES, AND LATER CONDUCT................................................... 23

ISSUE IV: PURSUANT TO THE DSA CLAIMANT IS ENTITLED TO THE BANK FEES

ASSESSED FROM RESPONDENT. .................................................................................................. 24

A. THE PARTIES ESTABLISHED BASED ON CONTRACT THAT RESPONDENT WILL

PAY THE FULL AMOUNT OF THE PURCHASE PRICE TO THE CLAIMANT’S

ACCOUNT AT THE EQUATORIANIAN NATIONAL BANK. ................................................. 25

B. RESPONDENT BREACHED ITS OBLIGATIONS UNDER ARTICLE 54 CISG TO

ENABLE FULL PAYMENT TO BE MADE TO THE CLAIMANT BY FAILING TO PAY


III | P a g e

THE INSPECTION LEVY NECESSARY FOR THE TRANSFER OF THE FULL

PURCHASE PRICE. ........................................................................................................................ 26


IV | P a g e

LIST OF ABBREVIATIONS

& And

§ Section

¶/¶¶ Paragraph/paragraphs

Answ. Answer

App. Application

Art. Article

Cl. CLAIMENT

CISG United Nations Convention on Contracts for

the International Sale

COO Chief Operating Officer

DSA Development and Sales Agreement

e.g. (for example)

Ed. Edition

Et seq. Et sequens (and following)

Exh. Exhibit

GER German

ICC International Chamber of Commerce

i.e. In Example

Ltd. Limited


V | P a g e

LCIA London Court of International Arbitration

M Million

Memo Memorandum

Mr. Mister

Ms. Miss

No. Number(s)

Ord. Order

P. Page

Proc. Procedural

Rec. Record

Res. RESPONDENT

Req. Request

UML UNCITRAL Model law

UN United Nation

UNCITRAL United Nations Commission on International

Trade Law

UNIDROIT Institute International pour L’Unification du

droit

UPICC UNIDROIT Principles of International

Commercial Contracts

US United States

USD United Sates Dollar

Vol. Volume


VI | P a g e

INDEX OF AUTHORITIES

Herbet,

Ludmilla

Farris Partner, Ludmila Herbst, authors an article that

appeared

May 15, 2009 edition of The Lawyers Weekly.

Available at:

http://www.farris.com/images/uploads/LBH_-

_The_Lawyers_Weekly.pdf==

Referred to in: ¶ 19

of the memorandum

(cited as: Ludmilla

Herbet)

ClArB Application for Security for Cost Guideline

Chartered Institute of Arbitration

2015


of the memorandum

(cited as: Art. 4.1

ClArB)

W. Newman,

Lawrence

Litigating International Commercial Disputes

1996 Edition


of the memorandum

(Cited as:

Lawrence)

Roth &

Geistlinger

Yearbook on International Arbitration 166, VIII, A

Available at:

www.kluwerarbitration.com/book-

toc.aspx?book=TOC_AYIA_2013


of the memorandum

(Cited as: Roth &

Geistlinger)

Firmminho,

Paolo

Yearbook on International Arbitration 166, VIII, B

Available at:


of the memorandum

(Cited as: Paolo)

http://www.farris.com/images/uploads/LBH_-_The_Lawyers_Weekly.pdf====

http://www.farris.com/images/uploads/LBH_-_The_Lawyers_Weekly.pdf====

http://www.kluwerarbitration.com/book-toc.aspx?book=TOC_AYIA_2013

http://www.kluwerarbitration.com/book-toc.aspx?book=TOC_AYIA_2013


VII | P a g e

https://www.walderwyss.com/publications/1769.pdf

Ono, Eduardo.

Villar,Rafael

Adicione uma descrição a este tópico.

Available at:

http://www.jusbrasil.com.br/topicos/96367867/rafael-

villar-gagliardi-eduardo-ono-terashima


of the memorandum

(Cited as: Eduardo

Ono, Rafael Villar

Art 4.21 CAM-

CCBC)

Att. Ezgi Babur

/ Erdem Erdem

Law Office Istanbul / Erdem Erdem

Available at:

http://www.erdem-erdem.av.tr/publications/law-

post/enforcement-of-interim-and-conservatory-

measures-ordered-by-arbitrators/


of the memorandum

(Cited as:

ErdemErdem / Law

Office Istanbul)

Julian D. M.

Lew

CAM-CCBC Commentary, Comparative

International Commercial Arbitration, Lew, Mistelis,

et al. (2003)

Available at:

http://www.kluwerarbitration.com/CommonUI/book-

toc.aspx?book=TOC_Lew_2003_V05_V06IBA


of the memorandum

(Cited as: Julian M.

D. Lew, Loukas A.

Mistelis and Stefan

M. Kroll, op. cites.,

pp. 506-514)

Schlechtriem,

Peter

Uniform Sales Law - The UN-Convention on

Contracts for the International Sale of Goods

Available at:


of the memorandum

(Cited as: Uniform

Sales Law, Peter

https://www.walderwyss.com/publications/1769.pdf

http://www.jusbrasil.com.br/topicos/96367867/rafael-villar-gagliardi-eduardo-ono-terashima

http://www.jusbrasil.com.br/topicos/96367867/rafael-villar-gagliardi-eduardo-ono-terashima

http://www.erdem-erdem.av.tr/publications/law-post/enforcement-of-interim-and-conservatory-measures-ordered-by-arbitrators/



http://www.kluwerarbitration.com/CommonUI/book-toc.aspx?book=TOC_Lew_2003_V05_V06IBA

http://www.kluwerarbitration.com/CommonUI/book-toc.aspx?book=TOC_Lew_2003_V05_V06IBA


VIII | P a g e

http://www.cisg.law.pace.edu/cisg/biblio/schlechtrie

m.html

Schlechtriem, Sec. 1,

Para 1)

Bradley R.

Coppedge

GPSolo Magazine - September 2005 and

International Law News, winter 2005

Available at:

http://www.americanbar.org/content/newsletter/publi

cations/gp_solo_magazine_home/gp_solo_magazine

_index/2005_sep_index.html


of the memorandum

(Cited as: Bradley

R. Coppedge)

Farnsworth, E.

Allan

Bianca-Bonell Commentary on the International

Sales Law, Giuffrè: Milan (1987) 95-102.

Reproduced with permission of Dott. A Giuffrè

Editore, S.p.A.

Available at:

http://www.cisg.law.pace.edu/cisg/biblio/farnsworth-

bb8.html


of the memorandum

(Cited as: CISG

commentary Art.

8(2). p 96)

Beisteiner, Lisa Conduct of Arbitration Proceedings

CAM-CCBC, § 549


of the memorandum

(Cited as: Lisa

Beisteiner, § 549,

conduct of

Arbitration

Proceedings)

http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html

http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html

http://www.americanbar.org/content/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/2005_sep_index.html



http://www.cisg.law.pace.edu/cisg/biblio/farnsworth-bb8.html

http://www.cisg.law.pace.edu/cisg/biblio/farnsworth-bb8.html


IX | P a g e

INDEX OF COURT CASES

US Ramot Gill Development Corporation vs. Precision

Homes Corporation Inc.

[1979] O.J. No. 4485 (Div. Ct.)


of the memorandum

(Cited as: O.J. No

4485 Case)

US KEARY DEVELOPMENTS Vs. TARMAC

CONSTRUCTIONS

House of Lords, Bailii, CA 1995


of the memorandum

(Cited as: House of

Lords, Bailii, CA

1995)

England Yorkshire Regional Health Authority -vs- Fairclough

Building Ltd


of the memorandum

(Cited as: Cmnd

6923 &1977)

Russia &

Turkey

Russian Federation (Claimant) and Turkey

(Respondent) NO, 478 ruled in 1998 by

“Tribunal of International Commercial

Arbitration at the Russian Federation

Chamber of Commerce and Industry)


of the memorandum

(Cited as: CLOUT

Case No. 478)

Belarus Supreme Economic Court of the Republic of

Belarus between Belparquet LLC (Seller) and

Belarusian Company (Buyer)

Available at:

https://www.google.co.uk/url?sa=t&rct=j&q=

&esrc=s&source=web&cd=1&cad=rja&uact=

8&ved=0ahUKEwjBx7ywp8TQAhXMDiwK


of the memorandum

(Cited as: CLOUT

Case No. 498)

http://www.bailii.org/uk/cases/UKHL/2001/48.html


https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjBx7ywp8TQAhXMDiwKHYZwAL4QFgggMAA&url=https%3A%2F%2Fwww.uncitral.org%2Fpdf%2Fenglish%2Fclout%2F08-51939_Ebook.pdf&usg=AFQjCNEjvo1sWO




X | P a g e

HYZwAL4QFgggMAA&url=https%3A%2F

%2Fwww.uncitral.org%2Fpdf%2Fenglish%2

Fclout%2F08-

51939_Ebook.pdf&usg=AFQjCNEjvo1sWO

MrOwZtnR8ZA4-

5RRBr7g&bvm=bv.139782543,d.bGg

CISG, Digest Journal of law and Commerce

UNCITRAL Digest of case law on CISG,

Volume 30, para, 30, p.58


of the memorandum

(Cited as: Journal of

law and commerce,

UNCITRAL Digest

of case law on CISG,

Volume 30, para, 30,

p.58)

Germany

Amtsgericht (lower court) Freiburg)

Shoe Case

(6 July 2007)

Available at:

http://cisgw3.law.pace.edu/cases/070706g1.ht

ml


of the memorandum

(Cited as: shoe case,

4 C 4003/06)

Germany Sprau in Palandt

Verlag C.H. Beck München 2011

Available at:

https://www.google.co.uk/url?sa=t&rct=j&q=

&esrc=s&source=web&cd=2&cad=rja&uact=


of the memorandum

(Cited as:

Commentary on





http://cisgw3.law.pace.edu/cases/070706g1.html

http://cisgw3.law.pace.edu/cases/070706g1.html

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwiR5NrypcTQAhWElSwKHfCvACMQFggpMAE&url=http%3A%2F%2Fwww.beck-shop.de%2Ffachbuch%2Finhaltsverzeichnis%2FPalandt-Buergerliches-Gesetzbuch-BGB-9783406610004_0305201206152968_ihv.pdf&usg=AFQjCNF4F0boYbaVa8vnTt7QBSbWbDZkbA&bvm=bv.139782543,d.bGg



XI | P a g e

8&ved=0ahUKEwiR5NrypcTQAhWElSwKH

fCvACMQFggpMAE&url=http%3A%2F%2

Fwww.beck-

shop.de%2Ffachbuch%2Finhaltsverzeichnis%

2FPalandt-Buergerliches-Gesetzbuch-BGB-

9783406610004_0305201206152968_ihv.pdf

&usg=AFQjCNF4F0boYbaVa8vnTt7QBSb

WbDZkbA&bvm=bv.139782543,d.bGg

BGB, 66 ed, § 714 n.

24)










XII | P a g e

INDEX OF LEGAL ACTS AND RULES

CAM-CCBC Center For Arbitration And Mediation Of The

Chamber Of Commerce Brazil-Canada

CISG Convention on contract for International sales of

goods Vienna 1980

ICC International Chamber of Commerce Rules of

Arbitration

ICDR International Center for Dispute Resolution

LCIA London Court of International Arbitration Rules,

effective 1 October 2014

NYC Convention on the Recognition and Enforcement

of Foreign Arbitral Awards, New York 197

UNCITRAL Model Law UNCITRAL Model Law on International

Commercial Arbitration 1985, with amendments

adopted in 2006.

ULIS Uniform Law on the Formation of Contract for the

International Sales of Goods

PICC UNIDROIT Principles on International

Commercial Contracts, 200


1 | P a g e

STATEMENT OF FACTS

1. Wright Ltd (“Cl …”) is one of the best producers of fan-blades for jet engines located in

Equatoriana.

2. Santos D KG (“Resp …”) is a medium sized company in Meditrraneo that produce jet

engines.

3. Until 2010, both parties (RESPONDENT and CLAIMANT) were the subsidiaries of

Engineering International SA, a multinational company based in Oceana and active in

various fields of aircraft engineering. In 2010, due to the financial problems of Engineering

International SA, CLAIMANT was sold to the CLAIMANT’S present parent company,

Wright Holding PLC. One month later, RESPONDENT was sold to Speed Run, a private

Equity Fund.

4. In 2010, CLAIMANT and RESPONDENT began discussion regarding an agreement

where in CLAIMANT would provide version TRF 192-I swept fan blades for

RESPONDANT’S new version of the JE/76TL, 14b engine. The objective of the new

engine was to reduce the noise emitted by 3db, and for use in the newest version of the

signature executive line 100 jet of Earhart SP, a world-wide company of aircraft

manufacturer for medium size passenger and business jets.

5. On 1 July 2010, both parties entered in to a Development and Sales Agreement (Exhibit

C 1). The Agreement includes flexible price structure for fan blades, for the purpose of

allowing the parties to share the risk of exchange rate fluctuation. RESPONDENT insisted

to set in US dollars, despite the CLAIMANT is incurring production cost in Equatoriana

Dinar.

6. On 1 August 2010, RESPNDENT ordered 2,000 swept fan blades moder TRF192-I, from

CLAIMANT, with a price per balder of between US 9,975$ to US 13,125$ (Exhibit C2).

The price was determined based on the price structure of the Development and Sales

Agreement between the parties.

7. RESPONDENT planned to buy clamps to attach the blades from the other company, but

the clamps from other companies were unsuitable. Thus, RESPONDENT decided to buy

clamps from CLAIMANT. The parties executed an addendum to the contract for the sale

of the clamps and RESPONDENT insisted on a fixed exchange rate for the price of the


2 | P a g e

clamps. Therefore, CLAIMANT agreed to a fixed exchange rate with regards to the

clamps.

8. On 14 January 2015, CLAIMANT delivered the fan blades and clamps to the

RESPONDENT, with invoices attached. (Exhibit C3).

9. On 14 January 2015, Ms. Beinhorn asked from Mr. Lee the person who was not familiar

in the contract between two parties, to make invoices for the both goods, because the

responsible person for making the invoice was sick and due to the lack of experience and

not having knowledge Mr. Lee had made a mistake that instead of applying the current

exchange rate for the blades he applied the fixed exchange rate of the clamps for the

blades.

10. On 15 January 2015, RESPONDENT’s Chief Financial Officer Mr. Cyril Lindbergh

immediately paid the amount of the invoice to the bank account of CLAIMANT and sent

a confirmation of the amount US$ 20,438,560 for fan-blades and US$ 183,343.28 for the

clamps. (Exhibit C3).

11. On 15 January 2015, Ms. Beinhorn mailed to Mr. Lindbergh to indicate the mix up in

accounting department with the invoice of fan blades. She apologized for the mistake and

cleared that the exchange rate for the fan blades which is identical at the time of

production for US$ = EQD 1.79 which the full purchase price for 2000 fan blades

amounts to US $22,723,800 (Exhibit C5).

12. On 9 February 2015, CLAIMANT confirmed the amount of US$ 20,336,367.20 was

credited to the Bank account. Furthermore, the amount of US$ 2,387,432.80 was

deposited


3 | P a g e

SUMMURY OF ARGUMENT

13. First, the tribunal should not order CLAIMANT for providing of security cost because

RESPONDENT has not provided any facts which would justify the requested order of

the RESPONDENT. International Arbitration security for cost is normally approved in

exceptional circumstances. When both parties entered in to contract, the CLAIMANT’s

financial situation has not unpredictably deteriorated. And also RESPONDENT didn’t

provide any facts that showed which CLAIMANT is in bad financial situation. Thus

RESPONDENT is the party who has financial problem because of non-payment of the

price due under the Development and Sales Agreement. (FIRST ISSUE).

14. Second, RESP has to bear the costs of the Arbitration because RESP denied paying the

outstanding amount of US$ (2,285,240) from the blades and also amount of US$

(102,192.80) related to bank charges which was incurred by Claimant. Then

CLAIMANT was forced to initiate the Arbitration proceedings as the parties had agreed

at section 21 of the Development and Sales Agreement that if no agreement can be

reached, each party has the right to initiate arbitration proceedings within 60 days after

the failure of the negotiation (CLAIMANT’s Exhibit C 2). So in line with this Agreement

first CLAIMANT requested amicably way to show their good faith trough their

commitments in the DSA that they had. Which First made a second invoice to

RESPONDENT by sent the correct amount of the 2000 blades and also by the good faith

by accepting of the mistakes from CLAIMANT’s accounting department which is done

by Mr. Lee (CLAIMANT’s Exhibit C 4). In contrast RESPONDENT didn’t agree to pay

the mentioned amount so CLAIMANT was forced to initiate Arbitration Proceedings.

Consequently, Claimant did its obligations and informed RESP at 1st April 2016 for

initiating Arbitral Proceedings. There for Claimant requested for arbitration at 31st May

2016 within 60 days. In addition, the initiation of Arbitration was due to RESPONDENT

non-compliance performance of its obligations. (SECOND ISSUE)


4 | P a g e

15. Third, After the both parties signed the DSA RESPONDENT planned to buy clamps

from CLAIMANT and so Paul Romario from RESPONDENT’s side emailed Ms.

Beinhorn to purchase clamps from claimant and as Paul Romario said to Ms. Beinhorn

in his email the easiest way to regulate the purchase of clamps is to sign an addendum to

our Development and Sales Agreement it means that all issues in addendum is belong to

clamps and not to the blades thus the fixed exchange rate is only for clamps not for blades

and so CLAIMANT is entitled for the outstanding amount of (2,285,240) US$ because

the production cost per blade was charged (19,586) EQD to CLAIMANT (Stf, para,12

p, 5) and multiplied with the current exchange rate, which is identical to that at the time

of production of 1US$ = 1.79 EQD. The purchase price is US$ (10,944.90) per blade and

according to section 4 of development and sales agreement claimant made an invoice of

(22,723,800US$) for 2000 blades to RESPONDENT in 15th January 2015 (R. 14, Cl.

Exh. 5, para. 1). But RESPONDENT denied the paying of outstanding amount of

(2,285,240) US$ to CLAIMANT. Instead RESPONDENT got benefits from this obvious

mistake of CLAIMANT which was done by Mario Lee (L. 13, Cl. Ex. No. 4, para. 3)

which made a wrong invoice. Instead of providing the amount of US$ (22,723,800)

which was due under the section 4 of the Development and sales contract, the invoice

was mistakenly made only for US$ (20,438,560). And RESPONDENT directly paid the

amount invoiced and informed CLAIMANT about the payments made. (L. 12, Cl. Ex.

No. 3, Para. 1). RESPONDENT insisted on fixed exchange rate for the blades which was

the parties made for the clamps in an addendum in the contract as Ms. Beinhorn had

asked Iliena Jaschin the chief financial officer of the Claimant that Whether they could

agree for the clamps to a fixed exchange rate before of signing the addendum. {R. 50,

Cl. Exh, 9para 5}. By this fact it is to be clear that the Claimant intend was apparent that

the fixed exchange rate was fit only regarding to the Clamps not blades beside this

Claimant never showed their willingness or agrees with then fixed exchange rate related

to the entire of DSA.Thus the both parties focus according to addendum was to make a

fixed exchange rate for the clamps and not for whole contract. (THIRD ISSUE)


5 | P a g e

16. Fourth, RESPONDENT is supposed to pay the bank charge in the amount of US$

(102,192.80) to the Equatoriana Central bank which is under section 11 regulation

ML/2010C if the payment exceeds US$ 2 million the financial investigation unit

investigated the payment in regard to money laundering. Under section 11 Regulation

ML/2010C the financial investigation unit subtracts 0.5% levy from every sum of money

investigated (R. 17, Cl. Ex. No. 8, para. 2). Because both CLAIMANT and

RESPONDENT agreed that the bank charges for the transfer of the amount are to be

borne by the BUYER under the section 4 part 3 of the Development and Sales Agreement

(R. 10, Cl. Exh, 2, para. 3). Consequently, both parties agreed on bank charges to be

borne by the BUYER (RESPONDENT) so the amount of US$ (102,192.80) is direct the

bank charges of Equatoriana Central Bank so in line with this fact RESPONDENT is

obliged to pay the mentioned charges amount of Equatoriana Central Bank to

CLAIMANT (FOURTH ISSUE).


6 | P a g e

ISSUE I: ARBITRAL TRIBUNAL DOES NOT HAVE POWER TO

ORDER CLAIMANT TO GRANT SECURITY FOR RESPONDENT’S

COSTS.

17. Claimant is not obliged to provide security for respondent’s cost and also the Arbitral

tribunal jurisdiction lacks of power to order CLAIMANT for granting the security for

cost in the present case. The arbitral tribunal does not have the power, even if, the arbitral

tribunal has the power it should not order for the security of Respondent’s cost (A). Even

if the tribunal has the power to order Claimant to pay Respondent’s costs, Respondent

has not provided any evidence to support ordering security for costs (B).

A. THE ARBITRAL TRIBUNAL DOES NOT HAVE THE POWER, EVEN IF IT

DOSE, THE ARBITRAL TRIBUNAL SHOULD NOT ORDER CLAIMANT

FOR THE SECURITY OF RESPONDENT’S COST.

18. Even though the tribunal has the power to order for RESP security cost, the tribunal

cannot order in this case because the circumstances are different. (i)The Arbitral Tribunal

lacks of power to order Claimant to provide security for cost under the Art. 8 (1) of CAM-

CCBC rules. (ii), Claimant should not be held responsible for respondent’s costs based

on the international practice, and DSA

I. THE ARBITRAL TRIBUNAL LACKS OF POWER TO ORDER

CLAIMANT TO PROVIDE SECURITY FOR COST UNDER THE ART. 8(1) OF

CAM-CCBC RULES.

19. The Arbitral Tribunal lacks the power to order security for cost based on the CAM-CCBC

rules. Even if the Arbitral Tribunal has the authority to order Claimant to provide Security

Costs for Respondent, it should consider that both parties did not agree on such a clause

in the contract or in the Terms of Reference signed after the arbitration proceeding. The

Arbitral Tribunal can grant provisional measure to the requesting party subject to the


7 | P a g e

rulings under Article 8.1 CAM-CCBC. Article 8.1 CAM-CCBC states, “…the arbitral

tribunal can grant provisional measures, both injunctive and anticipatory, that can, at

the discretion of the arbitral tribunal, be subject to the provision of guarantees by the

requesting party.” (Art 8.1 CAM-CCBC) This article sets the standards for requesting

security costs showing that an interim injunction is often sought where the other party, if

unrestrained, might cause irreparable or immeasurable damage by continuing the conduct

which has led to the dispute. Respondent does not suffer irreparable harm or

immeasurable damage whether or not the security costs are given. Due to the fact

RESPONDENT requested security for cost from Arbitral proceedings on 6th September

2016 because respondent thinks that it will be the winner of this dispute in the Arbitral

proceedings, so RESPONDENT wants from tribunal to order CLAIMANT for providing

of security for RESPONDENT’s cost. [R, PP, ¶ 45 46, 1,} however stated by

{LudmillaHerbst} “Arbitrators have long been recognized as lacking inherent power to

order security for costs...”.

20. As in the case of (Ramot Gill Development Corporation vs. Precision Homes

Corporation Inc., [1979] O.J. No. 4485 (Div Ct.) stated that Arbitral jurisdiction

derives from the agreement between the parties and the statue applicable to their

arbitration. Correspondingly, arbitrators have long been recognized as lacking inherent

power to order security for costs or stay an arbitration pending the posting of such

security. Consequently, from the mentioned facts and comments and also the case which

was expressed in the above it becomes clear that the request for the security for cost by

the RESPONDENT is unreasonable and illegitimate. [O.J. No 4485 Case]

21. At hence CLAIMANT respectfully request from honorable tribunal to reject the request

for the security of cost

ii. CLAIMANT SHOULD NOT BE HELD RESPONSIBLE FOR

RESPONDENT’S COSTS BASED ON THE INTERNATIONAL PRACTICE,

THE DSA.

22. The authority of Arbitral Tribunal for granting requests for security of costs relies upon

the surrounding circumstances of the case. Respondent’s argument for requesting


8 | P a g e

security costs does not meet any of the requirements set in Article 4(1) of Chartered

Institute of Arbitrators Guideline on Application of Security Costs (CIArB). Article 4(1)

CIArB states “…in light of all of the surrounding circumstances, it would be fair to

make an order”. (Art. 4(1) CIArB)

23. Arbitrators should consider whether an application has been made at an appropriate time

taking in consideration the circumstances of the case. The circumstances of the case do

not show that Respondent will win the case that shall require Claimant to pay the

arbitration costs. Because claimant’s revenue will greatly improve once the sale of newly

developed fan blades start liquid means are built up again (Rec, P 50, ¶ 2).

24. On 22 of August 2016 both parties and the Arbitral Tribunal signed the Terms of

Reference [Rec, P.41] although, Respondent made the request for Security of Costs on 6

September 2016 [Rec, P.46]. Normally parties are not allowed to change, modify or

amend the claims once the Terms of Reference is signed and for support of above claim

(Art. 4.21 of CAM-CCBC) states that “the parties can only change, modify or amend

the claims and causes of action until the date the Terms of Reference are signed”. (Art.

4.21 CAM- CCBC commentary)

25. That is clear that Respondent’s claims violate this article and should not be granted by

the Arbitral Tribunal. However as stated by (Lawrence W. Newman) before proceeding

to make such an order, they should consider the conduct of the party applying for security

both before and during the course of the arbitration to date and all of the surrounding

circumstances in order to determine whether it would be fair to require security.

[Lawrence]

26. In addition, before making an order requiring a party to provide security for costs,

arbitrators should consider When deciding whether to make an order for security for

costs, however the Respondent did not meet even a sole requirement. The Arbitrators

may consider these followings:

27. (1) The prospects of success of the claims and defenses. (Art. 2, CIArB)

Due to the fact respondent will not be the winner of this arbitral proceeding because the

proceedings are not come to the end yet although this prediction unreasonable howevre

it is respondent which failed of performance of its obligations under the DSA (Rec, p.10

§4 DSA) not the claimant and also respondent has not provided any strong evidence


9 | P a g e

which entitle respondent for security for cost that should be provided by claimant. (Rec,

p.46 req, DAF, for sec. cost ¶¶ 2&3)

28. (2) The claimant’s ability to satisfy an adverse costs award and the availability of the

claimant’s assets for enforcement of an adverse costs award. (Art. 3, CIArB) Financial

health of the CLAIMANT is good and it can provide any amount of the security for cost

because due to the fact totally CLAIMANT has 61.800.000.00. [PO.2, Rec. P,59

Turnover]

29. (3) Whether it is fair in all of the circumstances to require one party to provide security

for the other party’s costs, (Art. 4, CIArB) based on the circumstances the tribunal can

order for the security for costs but from the circumstances it becomes clear that the

requests of the RESPONDENT for the security for cost was late and it was not included

in the terms of the reference and RESPONDENT requested for the security for cost on

6th September of 2016 [Rec. 46, ¶ 1] and the terms of reference was signed by both

parties on 22 August of 2016 [Rec. 43&44]. In the light of the facts and documents

mentioned in the above it is clear that the request of the RESPONDENT for security for

cost is not reasonable and fair.

At hence CLAIMANT respectfully request from the honorable tribunal to reject the

request for the security cost which is raised by the RESPONDENT.

B. EVEN IF THE TRIBUNAL HAS THE POWER TO ORDER CLAIMANT TO

PAY RESPONDENT’S COSTS, RESPONDENT HAS NOT PROVIDED ANY

EVIDENCE TO SUPPORT ORDERING SECURITY FOR COST.

30. Respondent has not met the burden of demonstration and there is no fact which would

justify the requested order, let alone proven the need for such an order. (Rec, P.49, SFC)

as per [Roth & Geistlinger] stated, which test the request for security of costs there

was no jurisdiction involve when respondent dealing with claimant (Yearbook on

International Arbitration 166, VIII, A) although the financial situation of the claimant

is the most obvious and most often applied criterion by the tribunal to determine whether

to make an order for security. [Roth & Geistlinger]


10 | P a g e

31. The tribunal may grant the order only where there is a clear risk that a defeated claimant

will not comply with his obligation to pay the respondent’s costs. In this instance it is

important for the respondent to bring to light credible evidence about the claimant’s

poor liquidity (such as statutory returns, audited annual accounts, low valuation of

operating assets or previous history of entering into voluntary arrangements,

receivership or liquidation). If the respondent can show that the claimant lacks the means

to pay up it may simultaneously be able to support its argument that an eventual award

of costs is likely to go unpaid thereby winning the tribunal’s favor to order a security

for costs award.

32. In the similar case of [KEARY DEVELOPMENTS Vs. TARMAC CONSTRUCTIONS]

stated that “The court will properly be concerned not to allow the power to order

security for cost to be used as an instrument of oppression such as by stifling a

genuine claim by an indigent company against a more prosperous company. But it

will also be concerned not to be so reluctant to order security that it becomes a weapon

whereby the impecunious company can use its inability to pay costs as a means of

putting unfair pressure on the more prosperous company” [House of Lords, Bailii,

CA 1995]

33. However, as stated by Paolo Firmminho where the claimant has sufficient assets to

satisfy any costs award, it has been held that in such situations an order for security for

costs should not be made. (Yearbook on International Arbitration 166, VIII, B), so in

conclusion CLAIMANT has sufficient assets to satisfy any costs award and respondent

does not submit enough evidence to request for security for costs. [Paolo]

i. ACCORDING TO ART. 17(E)(1) UNICITRAL RESPONDENT DOES

NOT MEET THE REQUIREMENTS TO REQUEST SECURITY FOR COST

DUE TO THE SUBJECT-MATTER OF THE DISPUTE

34. RESPONDENT did not meet the measure which is stated in the Art. (17) (E)(1) of

UNICITRAL because the it is reciprocal, so RESPONDENT cannot request for the

security for cost. Pursuant to Art. 17 (E) (1) states: The arbitral Tribunal may require

the party requesting an interim measure to provide appropriate security in connection



11 | P a g e

with the measure [Art 17 (E)(1)] Nevertheless, RESPONDENT requested security for

cost from Arbitral proceedings on 6th September 2016 [Rec.45&46, RSC] because

respondent believes that it will be the winner of dispute in the Arbitral proceedings, so

RESPONDENT asks from tribunal to order CLAIMANT for providing of security for

RESPONDENT’s cost however this request is inappropriate and unreasonable.

35. Inline to Art.17 (E)(1) of the UNICITRAL RESPONDENT did not meet the measures

which are mentioned in this Article. In Article mentioned the amount which is requested

by the RESPONDENT from CLAIMANT the same amount should be provided from

the RESPONDENT side because the Article is reciprocal. however, RESPONDENT did

not meet that specific measure.

36. In light of the fact and applicable laws in this case which is raised by both sides

RESPONDENT and CLAIMANT it becomes clear that Claimant is not the only party

who incurred this cost.

37. So finally CLAIMANT respectively asks from the Arbitral tribunal to reject the request

for the security cost by the RESPONDENT and understands RESPONDENT that its

clam is false and unreasonable.

ii. ART. 23(4) ICC RULES DO NOT ALLOWED THE PARTIES FOR

ADDING NEW CLAIMS AFTER THE TERMS OF REFERENCE HAVE

BEEN SIGNED.

38. The parties do not have the allowance to add something new after signing the terms of

reference according to the ICC rules.

39. Based on the Art. 23 (4) of the ICC which states: After the Terms of Reference have

been signed or approved by the Court, no party shall make new claims which fall

outside the limits of the Terms of Reference unless it has been authorized to do so by

the arbitral tribunal, which shall consider the nature of such new claims, the stage of

the arbitration and other relevant circumstances. [ICC Art. 23 (4)]

40. It means that no party has the admission of adding any other claim after the signing of

the terms of the reference because all of the matters are mentioned in the terms of the


12 | P a g e

reference and it would be signed by the satisfaction of the two sides after their

assessment and evaluation of the subject matters of the terms of the reference, so the

signing of the terms of reference can be binding and final.

41. As stated by (Eduardo Ono Tershima and Rafael Villar Gagliardi) that, once parties

and arbitrators sign the terms of reference they will be bound by the scope and limits

of that specific arbitration this means that the parties will not be able to add new

claims or modify their claim. [Eduardo Ono, Rafael Villar Art 4.21 CAM-CCBC]

42. In addition, the main purposes of the Terms of reference are to fix the subject matter of

the arbitration, to specify the claims of the parties but in contrary the Respondent try to

add the new claims and furthermore (Att. EzgiBabur / ErdemErdem) stated that in ICC

arbitrations, the terms of reference play an important rule. One of the purposes of the

terms of reference is to establish the parties claim. If the parties make claims that fall

outside of the signing of the terms of reference, the provisions to be applied to these new

claims shall be invalid [ErdemErdem / Law Office Istanbul].

43. Nevertheless, In ICC arbitration, Art. 23(4) of the rules sets forth under which conditions

new claims may be advanced in ICC arbitration. Pursuant to this provision, after the

terms reference have been signed or approved by the court, no party shall make new

claims that fall outside the limits of the terms of reference. (Art. 23(4) ICC RULES)

44. In the case of (Yorkshire Regional Health Authority -vs- Fairclough Building Ltd)

The 1980 Act was enacted in order to implement the recommendations of the Twenty-

First Report of the Law Reform Committee (Final Report on Limitation of Actions)

[Cmnd 6923 &1977]. “The committee recommended that no change was required in

the rules which enabled a new cause of action to be added out of time and also

amendments after the expiry of the limitation period, nor were they intended to cover

amendments which, though made after the expiry of the limitation period, were not

statute-barred. It would have been completely outside the committee's terms of

reference to make any recommendation of the latter kind” (Final Report on Limitation

of Actions) (Cmnd 6923) (1977)

45. Due to the fact On 22 of August 2016 both parties and the Arbitral Tribunal signed the

Terms of Reference [Rec, P.41] although, Respondent made the request for Security of


13 | P a g e

Costs on 6 September 2016 [Rec. P.46]. Normally parties are not allowed to change,

modify or amend the claims once the Terms of Reference is signed.

46. Consequently, from the above statements and commentaries and also the case which

mentioned it becomes clear that the request for the security for cost is outside of the

terms of reference and it is rejected through the 23(4) of the ICC rules.

47. At the hence, the CLAIMANT respectfully ask from the honorable tribunal to reject the

claims of RESPONDENT regarding the security for cost.

● ● ●

48. From the above mentions and provided documents based on the evidence by the

different laws, commentaries, cases law, international practices and facts which were

provided for the first issue, it becomes clear that the request for the security of cost

which is raised by the REPONDENT is not reasonable and legitimate. So the

CLAIMANT respectfully asks from the honorable tribunal to reject the request for the

security of cost and understands it regarding its unfair and incorrect request.

ISSUE II: THE ARBITRAL PROCEEDINGS WERE INITIATED ON TIME,

WITHIN 60 DAYS AS PER THE DSA, AND THUS CLAIMANT’S CALIMS

ARE ADMISSIBLE.

All disputes arising between the parties have to be settled in a good faith and amicably.

If no agreement reached between the parties, after the failure of negotiations, each party

has the right to initiate arbitral proceedings within 60 days. CLAIMANT to this

arbitration, through sending an email to RESPONDENT on 1 April 2015, have indicated

that the outcome of meeting shows it is not possible to find an amicable solution.

CLAIMANT informed RESPONDENT for initiating arbitral proceedings. However,

CLAIMANT did not hope to take such a step, but RESPONDENST’S insist of not

making any further payments of outstanding amount leaved CLAIMANT no other

options. Therefore, CLAIMANT submitted its request for arbitration and initiated

arbitral proceedings on time which is according to DSA (A). In addition, CLAIMANT


14 | P a g e

met all the requirements for Arbitral proceedings set under CAM-CCBC rules and

UNCITRAL model law principles to empower admissibility of Claims (B). Claimant’s

commencement of Arbitral proceedings met all requirements set under Art 4.1 CAM-

CCBC rules (C). Based on Art. 12.5 CAM-CCBC Rules, the amendments given by

CLAIMANT may not affect any failure to the commencement of Arbitration

Proceedings. (D)

A. THE ARBITRAL PROCEEDINGS WERE INITIATED BY CLAIMANT

AFTER THE FAILURE OF NEGOTIATIONS AND IT IS WITHIN 60 DAYS.

49. After the failure of negotiations between both parties, CLALIMANT sent an email on 1

April 2016 to inform RESPONENT for commencement of arbitral proceedings. Even

CLAIMANT remained open for any meaningful negotiations, but RESPONDENT

insisted of not making further payment which leaved CLAIMANT no other option.

Furthermore, CAM-CCBC president confirmed the receipt of request for Arbitration

which means it was on time and acceptable. [EXH R3 & R 22].

50. To initiate Arbitration Proceedings, according to Art. 4.1 of CAM-CCBC Rules “The

party desiring to commence an arbitration will notify the CAM/CCBC, through its

President, in person or by registered mail, providing sufficient copies for all the parties,

arbitrators and the Secretariat of the CAM/CCBC to receive a copy, enclosing: …” As

stated by Julian D. M. Lew, when problems regarding the validity of the request for

arbitration arises, the time limit issues may be relevant. For example, the CLAIMAT sent

a notice requesting the commencement of an Arbitration Proceedings without the copy

of arbitration agreement. It is the last day before the claim barred by a limitation period.

Thus, the Tribunal can extend the time for noticing RESPONDENT in order to receive

further information to solve any doubt arises. [Julian M. D. Lew, Loukas A. Mistelis and

Stefan M. Kroll, op. cites., pp. 506-514]

51. Furthermore, pursuant to Art. 4.2 of ICC rules, “the date on which the request is received

by the secretariat shall, for all purposes, be deemed to be the date of the commencement

of arbitration.” To do so, CLAIMANT requested arbitral proceedings on time which


15 | P a g e

informed RESPNDENT on 1 April 2016 and initiated Arbitration on 31 May 2016 which

is within 60 days.

52. At the case in hand, the order of Arbitration proceedings indicates that CLAIMANT

initiated arbitral proceedings on 31 May 2016, have to amend the power of attorney to

Write LTD and fix the mistake of registration fees (R19 ¶ 2). For the sake of good order,

CLAIMANT procured power of attorney to Write LTD and paid remainder amount of

registration fees which covered the mistake. Furthermore, CLAIMANT fulfilled its

obligation under the Art. 12 of CAM-CCBC which paid to the table of expenses on the

date of request for commencement of arbitration [R 20 ¶2 & PO2 ¶32].

53. In addition, based on Art. 1.4 LCIA International Arbitration Rules “The date of receipt

by the Registrar of the Request shall be treated as the date upon which the arbitration

has commenced for all purposes (the “Commencement Date”), subject to the LCIA’s

actual receipt of the registration fee.” Effective to this rule, the commencement date for

Arbitration Proceedings is the date which CLAIMANT requested for Arbitration.

54. Based on Art. 2.2 ICDR Rules “The arbitration shall be deemed to commence on the

date on which the Administrator receives the Notice of Arbitration.” Which indicate

the commencement of Arbitration is the date of Notice received by Secretariat of CAM-

CCBC.

55. Hence, given CAM-CCBC, LCIA & ICC rules, this Tribunal should not hesitate to

consider commencement of Arbitration on time based on DSA. Therefore, CLAIMANT

initiated Arbitral Proceedings on time based on DSA.

B. CLAIMANT fulfilled its obligation to commence Arbitral proceedings based

on Art 4.3 CAM-CCBC rules.

21. In general, an arbitral tribunal must conduct the arbitration in accordance with the

procedure agreed by the parties in agreement. To initiate arbitral proceedings, based on

DSA, each party shall solve disputes amicably and in good faith. If the parties did not

reach any settlement, each party has the right to initiate arbitral proceedings after the

failure of negotiation. CAM-CCBC demanded amendment and never asked for a second


16 | P a g e

request after the amendment, therefore the request was accepted on 31 May, 2016. [R 19

¶ 1].

22. Pursuant to Art 2.6 (f) CAM-CCBC rules the duties of the president of CAM-CCBC are

to “issue complementary rules to resolve doubts and provide guidance for the

application of these rules, including in cases gaps.” In the light of this article, president

of CAM-CCBC requested through its secretariat to resolve doubts in the power of

attorney which provide guidance to CLAIMANT for the good order of claim.

23. According to Art. 4.3 CAM-CCBC rules “The Secretariat of the CAM-CCBC will send

a copy of the notice and respective documents that support it to the other party,

requesting that, within fifteen (15) days, it describe in brief any matter that may be the

subject of its claim and the respective amount, as well as comments regarding the seat

of arbitration, language, law or rules of law applicable to the arbitration under the

contract.”

24. As stated by Lisa Beisteiner, “to conduct Arbitral Proceedings in which each party have

the right to be represented or advised by persons of their choosing”. In doing so,

CLAIMANT discussed the issue with its parent company which the power of attorney

was prepared in the matter of Write Holding PLC and was amended later by

CLAIMANT. Thus the amendment cannot fail the commencement of Arbitration [Lisa

Beisteiner, § 549, conduct of Arbitration Proceedings].

25. As per given evidence and facts with their respective rules, it is clear that CLAIMANT

is entitled for commencement of Arbitral Proceedings in which both parties agreed to

initiate the Arbitral Proceedings after failure of negotiations within 60 days. In light of

above explanations, CLAIMANT did its obligation based on DSA.

C. CLAIMANT’S COMMENCEMENT OF ARBITRAL PROCEEDINGS MET

ALL REQUIREMENTS SET UNDER ART 4.1 CAM-CCBC RULES

26. CLAIMANT toke the necessary steps to initiate Arbitral Proceedings which met all the

requirements set under Art. 4.1 CAM-CCBC rules. Art. 4.1 indicates that “The party

desiring to commence an arbitration will notify the CAM/CCBC, through its


17 | P a g e

President, in person or by registered mail, providing sufficient copies for all the

parties, arbitrators and the Secretariat of the CAM/CCBC to receive a copy”.

27. Assuming an arbitration agreement signed by both parties, whenever a dispute arises out

of such contractual relationship, the damaged party should notify CAM-CCBC’s

president, requesting a commencement of arbitration. Such a notification shall contain

all the information and documents listed in Art. 4.1 of CAM-CCBC rules.

28. Naturally, under the provision set forth by Art. 4.1 (C) CAM-CCBC rules, the

CLAIMANT may determine all scope of dispute at his own in which CLAIMANT have

to provide necessary documents to ensure the validity of the notification. Thus

CLAIMANT requested for Arbitration in time and sent the necessary documents, the

only comment which CLAIMANT received from tribunal was to change the subject

matter from Wright Holding PLC to Wright LTD. CLAIMANT sent an official letter to

Arbitral Tribunal stating that the original power of attorney had been signed on behalf

of CLAIMANT’S parent company that all important decisions are taken at the level of

the Holding, for the sake of good order CLAIMANT approached the power of attorney

from Wright Ltd.

29. CLAIMANT provided sufficient documents to initiate arbitral proceedings. The

document which needed amendment was the power of attorney and the registration fee.

Notwithstanding, Write Holding PLC has 88% of shares and CLAIMANT discusses all

the important decisions which go beyond day to day business, to initiate arbitral

proceedings, CLAIMANT submitted the power of attorney in the matter of Write

Holding PLC (PO2, ¶2).

D. BASED ON ART. 12.5 CAM-CCBC RULES, THE AMENDMENTS GIVEN

BY CLAIMANT MAY NOT EFFECT ANY FAILURE TO THE

COMMENCEMENT OF ARBITRATION PROCEEDINGS.

30. Art. 12.5 Indicated that “At the time of presentation of the notice for commencement

of arbitration, the claimant must pay to the CAM/CCBC the Registration Fee, in the

amount stated in the Table of Expenses, which cannot be set off or reimbursed.” In


18 | P a g e

order of initiating Arbitral Proceedings, CLAIMANT submitted necessary documents

along with Registration Fee. CLAIMANT received a notice from President of

Arbitration on 1 June, 2016 which noticed for solving doubts in request for Arbitration

that the President has the authority at his discretion based on Art. 2.6 (f) to order

complementary issues. CLAIMANT, at first, mistakenly paid 400 Brazilian Reais

instead of 4000 Brazilian Reais in which paid the remained amount after receiving notice

from Arbitral Tribunal and has apologized for (R 20 ¶ 3).

31. Furthermore, based on Art 6.4 CAM-CCBC rules “the time periods provided in these

rules can be extended, at the description of Arbitral Tribunal.” In the light of Art. 4.3

CAM-CCBC rules, the secretariat of CAM-CCBC will send a copy of notice and

respective documents that within 15 days it describes its brief any matter may be the

subject of claim, respective amount, seat of arbitration, language, laws or rules of laws

applicable to the arbitration under the contract. In doing so, CAM-CCBC president

extended the time of sending notice to RESPONDET while the commencement of

arbitration is 31 May, 2016 in which Arbitral Tribunal ordered CLAIMANT to resolve

doubts and amend the power of attorney. Coupled with, Arbitral Tribunal sent the notice

for commencement of Arbitration Proceedings on 08 June, 2016.

32. The supplement which President of CAM-CCBC requested from CLAIMANT clarified

uncertainty, CAM-CCBC gave the opportunity to CLAIMANT in order to present

amendments to the request for Arbitration, not any second request. Therefore,

amendment cannot cause the failure of commencement as per the president ordered to

solve any doubts arising from CLAIMANT’S request.

● ● ●

33. In case the Tribunal, for given reasons, may order admissibility of CLAIMANT’S claims

for commencement of Arbitration based on section 21 of DSA which initiated Arbitral

Proceedings on time. The supplementary of request for Arbitration cannot cause the

failure of commencement, because the CAM-CCBC did not order CLAIMANT to

provide another request, but ordered CLAIMANT to amend doubts and questions rises.


19 | P a g e

Therefore, respected Tribunal should kindly order RESPONDENT that CLAIMANT’S

claims are admissible and initiated Arbitral Proceedings on time.

ISSUE III: RESPONDENT IS OBLIGED TO PAY THE OUTSTANDING

AMOUNT OF $2,285,240.00 TO CLAIMANT BASED ON ARTICLES. 53 AND

54 OF THE CISG.

34. The Parties are in agreement that the contract is governed by the CISG [R. 53, P. O. No.

1, para. 4]. Art 53, 54 grants the right to recover the additional amount $2,285,240.00

based on DSA. Claimant Is Entitled to The Remaining $2,285,240.00 Of The Contract

Price From Respondent, Based On The Article 53 Of CISG; Respondent Is In Violation

Of The Duty To Pay The Price In Full As Provided (A). The parties did not intend to

apply a fixed exchange rate to the price for the blades (B).

A. CLAIMANT IS ENTITLED TO THE REMAINING $2,285,240.00 OF THE

CONTRACT PRICE FROM RESPONDENT, BASED ON THE ARTICLE 53

OF CISG; RESPONDENT IS IN VIOLATION OF THE DUTY TO PAY THE

PRICE IN FULL AS PROVIDED

35. According to Article 53 “The buyer must pay the price for the goods and take delivery

of them as required by the contract and this convention”. [CISG, Art. 53]. Additionally,

Article 54 CISG states that “The buyer’s obligation to pay the price includes taking such

steps and complying with such formalities as may be required under the Contract or any

laws and regulations to enable payments to be made.” [CISG, Art. 54] Also in case

number 478 between Russian Federation (Claimant) and Turkey (Respondent) ruled in

1998 by “Tribunal of International Commercial Arbitration at the Russian Federation


20 | P a g e

Chamber of Commerce and Industry”, the tribunal awarded that “Consequently,

according to Articles 53 and 54 of the CISG the [buyer] is obliged to pay the price for

the delivered and taken goods. Based on the above reasoning, the Tribunal concluded

that the [buyer] must pay the outstanding debt to the [seller].” [CLOUT Case No. 478]

Another case ruled by Supreme Economic Court of the Republic of Belarus between

Belparquet LLC (Seller) and Belarusian Company (Buyer), concluded on 14 and 21

May 2001 two contracts for the sale of parquet with STEMAU Srl (the buyer), an Italian

company.

36. The goods were delivered to the buyer. However, the buyer paid only part of the total

agreed price of DM 105,753.6. The seller sued the buyer to recover the outstanding

sum of 9,006.68 Euros. The defendant did not appear in court. The court also stated

that, according to article 53 CISG, the buyer has an obligation to pay the price of the

goods. Since the buyer had failed to pay in full the price of the goods, the court entered

a judgment against the buyer for the full amount of 9,006.68 Euros requested by the

seller. [CLOUT Case No. 498]. Moreover, Peter Schlechtriem states that “The buyer

must pay the price either as fixed in the contract or as determined according to

contractual terms” [Uniform Sales Law, Peter Schlechtriem, Sec. 1, Para 1]

37. Due to the facts, under section four of the “DSA” the price due for the blades is

$22,723,800, however respondent only fulfilled part of its obligation to pay the price by

crediting $20,336,367.20 to claimant’s account. That leaves the remainder of

$2,285,240.00 as an outstanding amount rendering respondent’s obligation unfulfilled,

and that is supported further by the identical ruling of Supreme Economic Court of the

Republic of Belarus where it deemed an incomplete payment as insufficient to fulfill the

abovementioned obligation.

38. Hence taking into consideration, the rules, cases, and commentary presented above, the

buyer (RESPONDENT) did not fulfill its obligation to pay the price according to the

DSA.


21 | P a g e

B. THE PARTIES DID NOT INTEND TO APPLY A FIXED EXCHANGE

RATE TO THE PRICE FOR THE BLADES.

39. Based on Art 8(1) CISG, the subjective intent of the parties was not to apply a fix

exchange rate for the entire Agreement, but to apply the fixed rate only to the clamps

(i). Second, Pursuant to the Article 8(2) of CISG and UNIDROIT Principle 4.1, a

reasonable person would understand the fixed exchange rate clause in the addendum to

apply to the clamps only, and not the blades (ii). Third; Pursuant to Article 8(3) CISG,

the parties’ intent was to only apply the fix exchange rate to the clamps, demonstrated

by the discussions, trade usages, and later conduct (iii).

i. BASED ON ART 8(1) CISG, THE SUBJECTIVE INTENT OF THE PARTIES

WAS NOT TO APPLY A FIX EXCHANGE RATE FOR THE ENTIRE

AGREEMENT, BUT TO APPLY THE FIXED RATE ONLY TO THE CLAMPS.

40. The addendum framed only For provisioning of the clamps, therefore, addendum has

added to the Development and Sales Agreement [St f. CL. Para 8, p. 5], does not means

that parties agreed on fixed exchange rate for the whole transaction, this could be

understood from Claimant’s Exhibit 4 of the Claimant which provides that the invoiced

were prepared under abnormal condition and it was understood that then addendum

contained exchange rat i.e. is applicable to the whole transaction, while it was entirely

opposite [Exh.C4, Pg.13], the conducts and the parties past conducts and relevant

circumstances demonstrate that they did not intend to apply a fixed exchange rate to the

price for the blades.

41. The intent of a party in a commercial transaction could be understood from the parties

which is elaborated in the CISG, the parties have agreed upon the CISG to govern their

contract [Exh.C2, Pg.10] and according to Article 8(1) CISG, Claimants conducts and

statement should be interpreted according to its intended, and Claimant did not intended


22 | P a g e

to apply the exchange rate in the addendum to the price for the blades. Article 8(1) states

as: (for the purposes of this Convention 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 unaware what that intent was)

42. Courts and arbitral tribunals have taken into account while interpreting the conducts and

statements of a party. In a similar case the appeal court of Spain decided to take into

account one party’s intent based on Article 8 of the CISG that the contract price was

based on the bales of rubber roles rather than meters [Rolls of rubber case]

At hence the should consider all the claims of claimant regarding to the intentions so

claimant respectively ask from Tribunal to order Respondent to pay the outstanding

amount.

ii. PURSUANT TO THE ARTICLE 8(2) OF CISG AND UNIDROIT

PRINCIPLE 4.1, A REASONABLE PERSON WOULD UNDERSTAND THE

FIXED EXCHANGE RATE CLAUSE IN THE ADDENDUM TO APPLY TO

THE CLAMPS ONLY, AND NOT THE BLADES.

43. If the preceding paragraph is not applicable, statements made by and other conduct of a

party are to be interpreted according to the understanding that a reasonable person of the

same kind as the other party would have had in the same circumstances. Based on the

facts and actions of both parties it can be clearly seen that both parties had no intention

of applying the exchange rate in the addendum to the price for the blades at all. Both

parties had only contracted for the blades but when respondent found out that the clamps

it was going to get from the other party was not suitable then decided to buy the clamps

from the claimant as well (R. p.5, para. 8) therefore, and addendum was added in order

to add the clamps in the contract as well. It clearly shows that there was no intention of

applying the exchange rate in the addendum for the price for the blades whatsoever and


23 | P a g e

it was all about the clamps. There is no way that respondent was unaware of the fact that

the addendum was only added for the clamps and not the blades.

44. However as stated by [E.Allan Farnsworth]: Art 8(2) is based on Art, 3(3) of ULIS

which provided “ if neither of the preceding paragraph is applicable, the statements by

and the acts of the parties shall be interpreted according to the intend that reasonable

person would have had in the same situation as the parties” [CISG commentary Art.

8(2). p 96]

45. Conduct of the parties that would demonstrate that they did not fix the exchange rate for

the blades’ price and it only agreed for clamps [CL. St F, Para 22, p.9] as established.

46. Moreover, according to the plain meaning rule the statement in the addendum was so

simple and clear that the price of the exchange rate only applies to the clamps only, and

plainly states fixing of price exchange to the clamps without indicating anything to the

blades [P. 12, article 21. R]. According to Article 8(2) of the CISG as well as Article 4.1

of UNDRIOT, a reasonable person would interpret the fixed exchange rate clause in

addendum not to be applied to the price of the blade.

47. Therefore, it should be considered that the intention of the parties not intended to include

the exchange rate in the addendum to the price for blades.

iii. PURSUANT TO ARTICLE 8(3) CISG, THE PARTIES’ INTENT WAS TO

ONLY APPLY THE FIX EXCHANGE RATE TO THE CLAMPS,

DEMONSTRATED BY THE DISCUSSIONS, TRADE USAGES, AND LATER

CONDUCT.

48. As per Article 8(3) of CISG which states that “in determining the intent of a party or the

understanding a reasonable person would have had, due consideration is to be given to

all relevant circumstances of the case including the negotiations, any practices which

the parties have established between themselves, usages and any subsequent conduct of

the parties” so if we look at the parties’ previous negotiations and practices, one can

easily understand what the actions of the parties meant. The negotiations of the parties

both were only decided for the blades and not the clamps. Consecutively, it was the


24 | P a g e

respondent’s insistence that Claimant accepted the fixed exchange rate for the clamps

which was exceptional in their contract. (R. p.5, Para 8.)

49. In addition, the parties never intended to not fix the exchange rate for the blades and any

interpretation [GPSolo Magazine - September 2005/ page 1 of International Law News,

winter 2005 (34:1)] by the Respondent on inclusion of the statement in the addendum is

against the contract formation. [Bradley R. Coppedge]

50. CLAIMANT explains what he meant to do not fix the price for the blades [CL. St F,

para 12, p. 21, 22]. As provided in the Journal of law and Commerce: the wording of

this provision can also be understood in a way that contradictory conduct by a party bars

that party relying on a different meaning of its former conduct [Journal of law and

commerce, UNCITRAL Digest of case law on CISG, Volume 30, para, 30, p.58],

considering that, the Respondent is a contradictory statement where already agreed for

non- fixing of exchange rate price for the blades in Development and Sales contract

2010 and also the addendum.

51. Therefore, they never intended to apply the exchange rate agreed in the addendum to

the price of the blades.

● ● ●

52. At the case at hand, RESPONDENT have to pay the outstanding amount of 2,285,240

which is requested from CLAIMANT for the 2000 blades as the parties agreed on the

DSA, because the production cost per blade is 19,586 EQD and when claimant multiply

this amount to current rate which is US$ 1= 1.79 it became 10,941 and according to

section 4 of DSA the full amount of 2000 blades became 22,723,800 which

RESPONDENT was fail to pay the certain amount to CLAIMANT’s account.

ISSUE IV: PURSUANT TO THE DSA CLAIMANT IS ENTITLED TO

THE BANK FEES ASSESSED FROM RESPONDENT.


25 | P a g e

53. Due to the fact (R. 10 section 4(3) DSA) both parties accepted that the bank charges for

the transfer of the amount are to be borne by the buyer and the buyer will deposit the

purchase price in full in to seller’s account at the Equatorianian National Bank, and

according to rules of this bank, levy is a part of the bank charges.

54. Nevertheless, this bank is not only a national bank of CLAIMANT what that Respondent

said. In contrary this bank the most reputable bank among six countries worldwide

bank in world that the private parties had to pay a fee for such type of investigation and

clearness. (R. 55 PO 2 para 7) But RESPONDENT denied paying the full amount of

bank charges. The parties established based on contract that respondent will pay the full

amount of the purchase price to the CLAIMANT’s account at the Equatorianian

National Bank(A). RESPONDENT breached its obligations under Article 54 CISG to

enable full payment to be made to the CLAIMANT by failing to pay the inspection levy

necessary for the transfer of the full purchase price (B).

A. THE PARTIES ESTABLISHED BASED ON CONTRACT THAT

RESPONDENT WILL PAY THE FULL AMOUNT OF THE PURCHASE

PRICE TO THE CLAIMANT’S ACCOUNT AT THE EQUATORIANIAN

NATIONAL BANK.

55. In present case CLAIMANT was the party whom proposed the bank charges provision

in the DSA {R. 55 para 6 PO 2} due to the fact in previous course of dealing of claimant

with their customers in particular with Jumbo Fly to their contract, both parties did not

contain any rules and regulations on that time that which party had to bear the bank

charges, so CLAIMANT decided not to claim the levy deducted from the amount

transferred and credited to CLAIMANT’s account. {PO 2 R. 56 para 9}.

56. But in this case circumstance are something different because Claimant at the very first

steps obstruct the bank charges issue in the DSA (R,10. Sec. 4, Para 3) as mentioned

above CLAIMANT has predicted earlier that the parties will never face such this

problem again, therefor CLAIMANT suggested this rule to DSA, and CLAIMANT’s

intend was that the levy should be pay by respondent as a bank charges as well as it

accepted by RESPONDENT


26 | P a g e

57. But RESPONDENT denied of paying the bank charges to mention bank and so claimant

request from this Arbitral tribunal to order respondent for paying the full payment of

bank charges.

B. RESPONDENT BREACHED ITS OBLIGATIONS UNDER ARTICLE 54

CISG TO ENABLE FULL PAYMENT TO BE MADE TO THE CLAIMANT BY

FAILING TO PAY THE INSPECTION LEVY NECESSARY FOR THE

TRANSFER OF THE FULL PURCHASE PRICE.

58. RESPONDENT was obliged to pay the full amount price of the goods to under the

contract but RESPONDENT was failed to perform its obligation.

According to the Art 54 CISG “|The buyer’s obligation to pay the price includes taking

such steps and complying with such formalities as may be required under the contract

or any laws and regulations to enable payment to be made

59. Due to the fact Claimant made an invoice for full amount of 2000 blades on 15 January

2015 under the DSA, and according to DSA RESPONDENT was obliged to pay the full

amount price of goods to CLAIMANT’s account (R. 10 DSA sec 4 para 3).

60. In similar case of (shoe case) “RESPONDENT fail to pay the full amount price of

forty-one pairs of shoes to CLAIMANT. The Seller (CLAIMANT) sought to have the

court order the (Buyer) to Pay the full amount of the goods to CLAIMANT. The

ordered the (Buyer) to pay the full amount of the price which has made by

CLAIMANT (Amtsgericht (lower court) Freiburg) [shoe case, 4 C 4003/06].

61. However, The Claimant’s action is also justified. Pursuant to Art 54 CISG, As a stated

by (Sprau in Palandt), Respondent is obligated to pay the remaining sales price as

specified in the claim. (Commentary on BGB, 66 ed, § 714 n. 24)


27 | P a g e

62. At hence claimant is entitled for the full amount of price which RESPONDENT failed

to perform its obligation under the DSA and Art 54 CISG. Thus Claimant request from

Arbitral Tribunal to order RESPONDENT to pay the full amount of price from the

goods.

● ● ●

63. RESPONDENT must to pay the outstanding amount of 2,285,240 which is requested

from CLAIMANT for the 2000 blades as the parties agreed on the DSA, because the

production cost per blade is 19,586 EQD and when claimant multiply this amount to

current rate which is US$ 1= 1.79 it became 10,941 and according to section 4 of DSA

the full amount of 2000 blades became 22,723,800 which RESPONDENT was fail to

pay the certain amount to CLAIMANT’s account.


28 | P a g e

REQUEST FOR RELIEF

On the basis of the above mentioned facts, Rules and Cases, CLAIMANT requests the

Arbitral Tribunal to:

1. Order RESPONDENT to pay the still outstanding purchase price in the amount of US$

2,285,240 and the bank charges in the amount of US$ 102, 192, and 80.

2. Order RESPONDENT to bear the cost of the arbitration.

Kabul, Afghanistan, November 25, 2016

On behalf of Write Ltd.

XFazilah Sadat

XHameedullah Hamdard

XParwiz Hammiddi

XMohammad Aman Akrami

XFaridon Salehi

Tabesh University Memorandum for Claimant Write LTD · PDF fileLords, Bailii, CA 1995) ......

Documents

Transcript of Tabesh University Memorandum for Claimant Write LTD · PDF fileLords, Bailii, CA 1995) ......