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Memo

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Seventeenth Annual

Willem C. Vis International Commercial Arbitration Moot

March 26 – April 1, 2010

Vienna

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Memorandum for Claimant

        Mediterraneo Engineering Co.                                        ….Claimant

        415 Industrial Street

        Capitol City, Mediterraneo

        Telephone: (0) 148-2020

        Telefax: (0) 146-9850

        Email: info@engineering.me

Vs.

        Equatoriana Super Pumps S.A.                                        ….Respondent

        58 Industrial Road

        Oceanside, Equatoriana

        Telephone: (0) 927 8415

        Telefax: (0) 927 8410

        Email: info@pumps.eq

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Case Concerning Breach of Contract on International Sale and Purchase of Goods

        

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Amity Law School, Noida

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Vibhu Anshuman · Dipesh Patel · Chirojit Mukherjee

Isha Aggarwal · Ashmita Ganguly


Contents

Index of Authorities        3

Statement of Facts        4

Summary of Argument        5

Arguments Advanced        5

Prayer        5



Statement of Facts

  1. On May 4, 2008 Claimant’s Director Mr. Samuel Barber informed Respondent’s Sales Manager Mr. Richard Haycock in a telephonic conversation about the anticipated contract between the claimant and Oceania Water Services [“Water Services”] against the tender floated by Water Services for the renewal of an irrigation project in Northwestern portion of Oceania that was similar to the irrigation project carried out by the two companies in Patria two years ago. Claimant’s Director stated interest in purchasing pumps for the project from the Respondent, subject to the award of tender contract. The Respondent also showed interest in the anticipated deal with the Claimant and a draft contract for the purpose was also prepared.
  2. Claimant’s bid was successful and Water Services awarded the contract to Claimant on June 25, 2008 for supplying pumps for the irrigation project IR 08-45Q which was immediately communicated to the Respondent vide Claimant Director’s Letter dt. June 25, 2008 [Cl. Ex. No.2]. The Claimant’s Director proposed for finalization of the deal between the companies and inter alia highlighted the significance of meeting delivery date and strict performance of time for performance of contract would otherwise impair Claimant’s ability to execute the tender contract and the penalties that Claimant would face in such circumstances.
  3. On July 1, 2008 the contract which is the subject-matter of this arbitration was concluded between the parties. It stipulated supply of three P-52 pumps and certain kinds of pumps prescribed by Water Services with delivery to be made in single shipment in pursuant to DES Trade at the Capitol City Port, Mediterraneo and be effected by December 15, 2008. The technical specifications sought by Oceania for the pumps were also provided to the Respondent [Cl. Ex. No.3].
  4. Restrictions were imposed by Oceania on August 1, 2008 on the use of beryllium in all products made of copper and steel that were to be used in enclosed spaces [Cl. Ex. No.4] which was subsequently notified to the Respondent by the Claimant on the same date and since three P-52 pumps fell under the restriction and therefore warranted rectification to make it saleable [Cl. Ex. No. 5].
  5. The anticipated date for the manufacture of the pumps was October 30, 2008 as communicated to the Claimant by Respondent themselves [Cl. Ex. No.6]. The manufacture was delayed due to the procurement of steel from outside Equatoriana and hence the anticipated date for manufacturing the pumps was extended to November 15, 2008. Thence pumps were loaded on the ship which left the port on November 22, 2008 but meanwhile got held up at the Isthmus Canal due to an accident involving another ship that caused damage to the locks which took around 10 days to repair [Cl. Ex. No.9]. Consequentially, the ship left the Isthmus canal on December 12, 2008 and arrived at the Capitol City port on January 6, 2008 much later than anticipated arrival date of December 22, 2008 [Cl. Ex. No.7]. The Claimant reluctantly accepted the delivery of goods.
  6. Contrary to the DES Trade Terms, the Respondent even before effecting delivery of the goods presented the Bill of Credit to the Claimant which was thenceforth cleared. Resultantly, the position was that even before the goods were delivered, all payments had been made to the Respondent by the Claimant.
  7. On December 1, 2008 the Government resigned and military took over in Oceania. It passed a decree on December 28, 2008 which effected from January 1, 2009 prohibiting the use of beryllium on all products and terminated all contracts pertaining to the irrigation project that had not been substantially performed. Pursuant to the aforesaid development, the tender contract with Claimant was terminated on January 5, 2009 due to non-performance of Claimant to deliver the goods by the prescribed time [Cl. Ex. No.12].
  8. Claimant immediately notified Respondent of its termination of tender contract.  Consequentially, Claimant avoided the contract with the Respondent on the ground of the failure to deliver regulatory compliant pumps by contract deadline even after being duly aware of the significance of time schedule [Cl. Ex. No. 13] and hence claimed refund of the payment made by the Claimant under the contract i.e. US$1,214,550 and damages to the tune of US$320,000 [Cl. Ex. No.14].
  9. With Respondent reiterating to have fulfilled all contractual obligations [Cl. Ex. No.15], the Claimant proposed the resolution of dispute through the Conciliation as per Cl.18 of the contract [Cl. Ex. No.3] which was agreed thereto by the Respondent.
  10. Conciliation proceedings were held at Vindobona, Danubia during May 28-30, 2009. Claimant was represented by Mr. William Holzer, Dept. CEO and Respondent by Mr. James Stecker, CEO. The name and address of the persons representing the Claimant  was duly communicated to the Respondent. Both the parties actively participated in the conciliation proceedings but could not reach to an amicable settlement and hence the Conciliator after consultation with both the parties referred the matter to arbitration.
  11. Hence the present dispute is before the Arbitral tribunal.

Summary of Argument

  1. THE ARBITRAL TRIBUNAL DOES NOT HAVE THE AUTHORITY TO ADJUDICATE UPON THE PRESENT DISPUTE.

Respondent disputes the jurisdiction of the tribunals it contends that tribunal the conciliation proceedings which was a pre-requisite to arbitration have not been fulfilled. The non-fulfillment of such precondition is established on the basis that the CLAIMANT was represented by the Deputy CEO instead of being represented by the designated CEO in the conciliation proceedings. RESPONDENT further contends that the arbitration clause is not binding between CLAIMANT and RESPONDENT. Finally, it is submitted that the RESPONDENT has not waived its right to object on the ground that such objection was raise promptly and without undue delay.

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