Thirty Second Annual Willem C.

Vis
International Commercial Arbitration Moot

MEMORANDUM FOR RESPONDENT

ON BEHALF OF AGAINST

Equatoriana RenPower Ltd. GreenHydro Plc

1 Russell Square 1974 Russell Avenue

Oceanside Capital City

Equatoriana Mediterraneo

- RESPONDENT - - CLAIMANT -

SOUTH CHINA NORMAL UNIVERSITY

LIXIN CHEN •ZHENHUA WU• YUQI JI• YI GUO • HUIYING XU
YINGXUAN MO • SONGXI LI • LITONG YE • YIHAN PENG

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DATE: 31 October 2024

NAME: Chen Lixin SIGNATURE:

NAME: Guo Yi SIGNATURE:

NAME: Xu Huiying SIGNATURE:

NAME: Wu Zhenhua SIGNATURE:

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NAME: Ji Yuqi SIGNATURE:

NAME: Mo yingxuan SIGNATURE:

NAME: Li Songxi SIGNATURE:

NAME: Ye litong SIGNATURE:

NAME: Peng Yihan SIGNATURE:

NAME: Zeng Erxiu SIGNATURE:

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TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................... 4
ABBREVIATION ................................................................................................................ 7
INDEX OF STATUES, RULES AND TREATIES ............................................................9
INDEX OF AUTHORITIES ............................................................................................. 11
INDEX OF CASES AND ARBITRATION AWARDS .....................................................20
STATEMENT OF FACTS ................................................................................................ 32
SUMMARY OF ARGUMENT ...........................................................................................34
ISSUE A: THE TRIBUNAL SHOULD REJECT THE CLAIM FOR LACK OF
JURISDICTION OR ADMISSIBILITY OR AS PART OF ITS DISCRETION .............35
I. The Tribunal should reject the claim for its lack of jurisdiction ........................................35
II. Even if the Tribunal has jurisdiction, the claim is inadmissible due to non-compliance
with the mediation requirement.............................................................................................36
A. The mediation requirement constitutes a mandatory condition precedent ........... 36
a. The wording of Art. 30 PSA reflects mediation's compulsory nature ............ 37
b. The Parties' true intention is to treat mediation as a pre-condition to
arbitration .................................................................................................................37
B. Art. 30 PSA is unambiguous and thus enforceable .................................................... 38
C. Mediation is unlikely to be ineffective.......................................................................... 39
III. The Tribunal should exercise its discretion to reject the claim ........................................ 39
A. Under the principle of cost-effectiveness, the Tribunal should reject the claim ...40
B. Mediation settlements can be recognized and enforced ............................................ 40
ISSUE B: THE TRIBUNAL SHOULD EXCLUDE EXHIBIT C7 AND SHOULD
NOT EXCLUDE EXHIBIT R3 .........................................................................................41
I. The Tribunal should exclude Exhibit C7 ..................................................................................41
A. Exhibit C7 should be protected by confidentiality as a document in negotiation 41
a. The Parties have agreed to extend Art. 15 FM Rules to negotiation ............... 41
b. Failing to extend the confidentiality may risk the annulment of the award ... 42
B. Even if there is no such agreement, Exhibit C7 protected by without prejudice
privilege ............................................................................................................................. 43
a. Exhibit C7 was sent in a genuine attempt to settle the dispute .........................43
b. Failure to protect the without prejudice privilege may risk the annulment of
the award ..................................................................................................................44
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C. Exhibit C7 is irrelevant and immaterial to the adjudication of the dispute ........... 44

II. The Tribunal should not exclude Exhibit R3 .........................................................................45
A. CLAIMANT failed to prove any illegality in obtaining Exhibit R3 ........................ 46
a. Exhibit R3 was not obtained by illicit means....................................................... 46
b. EXHIBIT R3 is of significant relevance and materiality to this arbitration ...46
B. The legal advice privilege cannot be applied in the present case ............................. 47
a. EXHIBIT R3 does not have legal professional privilege ...................................47
b. Even if EXHIBIT R3 has legal professional privilege, it does not prevent the
Tribunal from adopting it. .....................................................................................48
C. The exclusion of EXHIBIT R3 might deprive the opportunity to have equal
treatment. .......................................................................................................................... 48
ISSUE C: CISG IS INAPPLICABLE TO THE PSA .........................................................49
I. The PSA falls out of CISG’s governance as a contract formed by auction .......................49
A. The Reverse Bid Auction falls within the scope of Art. 2(b) CISG ....................... 49
a. The Reverse Bid Auction is the auction for its essential characteristic ............50
b. The legislative purpose and drafting history of CISG would exclude the
Reverse Bid Auction ...............................................................................................50
B. The Reverse Bid Auction plays a decisive role in forming the PSA ........................ 51
II. The PSA falls out CISG’s governance for lacking international elements ........................52
A. Both CLAIMANT and RESPONDENT have place of business in Equatoriana52
a. VT constitutes the place of business according to CISG.................................. 52
b. VT is CLAIMANT’ s place of business in Equatoriana ....................................52
B. VT is the place of business that has the closest relationship to the PSA ............... 53
a. CLAIMANT’ s place of business was located in Equatoriana when the PSA
concluded .................................................................................................................53
b. In any event, VT is the place of performance of the PSA ............................... 55
III. The PSA falls out of CISG’s governance due to its nature ............................................... 55
A. The PSA is not a contract for sales of goods governed by CISG...........................56
a. The PSA is a turnkey contract instead of a sales contract.................................56
b. The turnkey contract falls out the scope of CISG’ s governance for a “Plant”
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shall not be considered as “goods” ..................................................................... 56

B. Even if the PSA is a mixed contract, the preponderant part of the PSA is not
sales of goods ...................................................................................................................57
a. In object, the economic value of a preponderant part of the PSA is the non-
sales part ...................................................................................................................57
b. In subject, the purpose of the PSA demonstrates that the preponderant part
is the non-sales part ............................................................................................... 57
ISSUE D: THE PARTIES VALIDLY EXCLUDED THE APPLICATION OF CISG ... 58
I. Art. 29 PSA is valid ...................................................................................................................... 58
A. Art. 29 PSA is reasonably foreseeable .......................................................................... 58
B. Even if Art. 29 PSA is a Surprising Term, it was accepted by CLAIMANT
accepted expressly .......................................................................................................... 59
II. The Parties excluded the application of CISG implicitly .....................................................59
A. CISG allows the Parties to exclude its application implicitly ....................................59
B. The modification of the Model Contract demonstrates RESPONDENT’s intent
to exclude CISG ...............................................................................................................60
C. CLAIMANT was aware of the modification of the Model Contract .................... 60
REQUEST FOR RELIEF ..................................................................................................61

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ABBREVIATION
ABBREVIATION FULL CITATION
ADR Alternative Dispute Resolution
ARA Answer to the Request for Arbitration
Art./Arts. Article/Articles
Appx. Appendix
CEO Chief Executive Officer
COO Chief Operating Officer
CLAIMANT SensorX, plc
Cl. Ex. CLAIMANT’s Exhibit
DBA Danubia Bar Association
DPAE Data Protection Act of Equatoriana
ENP Equatoriana National Party
Ed. Edition
ed/eds Editor/Editors
e.g. exempli gratia [for example]
Exhibit C7 ClAIMANT Exhibit C7
Exhibit R3 RESPONDENT Exhibit R3
ERI Economic Research Institute
FAI The Finland Arbitration Institute
ibid. In the same source supra
in casu In the case at hand
i.e. id est [that is]
Infra See below
Ipso facto by the fact itself
Langweiler’s Letter letter by Joseph Langweiler to submit the ARA
dated 31 July 2024
Ltd. Limited
LAPA Letters by FAI Concerning the Appointment of
Presiding Arbitrator
MW Mega Watt
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Med-Arb Mediation-Arbitration
MDR Mediation Dispute Resolution
No./Nos. Number/Numbers
Mr./Ms. Mister/Miss
p./pp. Page/Pages
para./paras. Paragraph/Paragraphs
Parties CLAIMANT and RESPONDENT
PSA Purchase and Supply Agreement
plc Public limited company
PO1 Procedural Order No.1
PO2 Procedural Order No.2
RA Request for Arbitration
RFQ REQUEST FOR QUOTATION
Re. Ex. RESPONDENT's Exhibit
RESPONDENT Equatoriana RenPower Ltd.
Sec. section
Supra See above
Tribunal The arbitral tribunal constituted in the precent case
UNCITRAL United Nations Commission on International Trade
Law
VT Volta Transformer
v. Versus (against)
vol. Volume
& And
% Percent

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INDEX OF STATUES, RULES AND TREATIES

CITED AS FULL CITATION
AC Notes Notes of Advisory Committee on Proposed Rules
Notes

FM Rules Mediation Rules 2024 of the Finland Chamber of

Commerce

FAI Rules Arbitration Rules 2024 of the Finland Chamber of

Commerce

FM Guidelines FAI Mediation Rules Guideline

FRE Federal Rules of Evidence

CISG United Nations Convention Contracts for the

International Sales of Goods,
11 April 1980

CIArb Guidelines Guidelines by the Chartered Institute of Arbitrators

on Jurisdictional Challenges

IBA Rules IBA Rules on the Taking of Evidence in

International Arbitration,
17 December 2020

URoT UNCITRAL Rules on Transparency in Treaty-based

Investor-State Arbitration
Vienna, 2021

UAR UNCITRAL Arbitration Rules

Vienna, 2021

UML UNCITRAL Model Law on International

Commercial Arbitration,
Vienna, 2008

UMLPP UNCITRAL Model Law on Public Procurement

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NYC United Nations Convention on the Recognition and

Enforcement of Foreign Arbitral Awards New York,
10 June 1958

PICC UNIDROIT PRINCIPLES OF

INTERNATIONAL
COMMERCIAL CONTRACTS 2016

SCM Singapore convention on MEDIATION

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INDEX OF AUTHORITIES
ABBREVIATION FULL CITATION CITED IN

A.Lees Amanda Lees, 30

The Enforceability of Negotiation and Mediation
Clauses in Hong Kong and Singapore,
Asian Dispute Review, 2015

Alexander Nadja Alexander, 57

International and Comparative Mediation, Global
Trends in Dispute Resolution,
Kluwer Law International, 2009

Ashford 2013 Peter Ashford, 64

The IBA Rules on the Taking of Evidence in
International Arbitration: A Guide,
Cambridge University Press, 2013

Ashford 2014 Peter Ashford, 68

Handbook on International Commercial
Arbitration,
JurisNet, LLC, New York, 2014

Aydemir Dilek Aydemir, 13, 14, 16

Multi-Tiered Dispute Resolution Clauses after
UML on Mediation 2018 and the Singapore
Convention,
Public and Private International Law Bulletin,
2020

Baldwin Baldwin Teddy, 84

The Right To Be Heard, The Messy Business of Due
Process,
Investment Treaty Arbitration and
International Law, 2014

Berger 2008 Klaus Peter Berger, 30, 51, 57, 60

The Settlement Privilege: A General Principle of
International ADR Law,
Oxford University Press, 2008

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Berger 2015 Klaus Peter Berger, 8, 13

Private Dispute Resolution in International Business:
Negotiation, Mediation, Arbitration, 3rd,
Kluwer Law International, 2015

Bernhard Berger Bernhard, Kellerhals Franz, 80

International and Domestic Arbitration in
Switzerland,
Beck/Hart, 2015

Bernardini, Piero Bernardini, 84

The Role of the International Arbitrator,
Arbitration International, 2004

Brown/Marriott Henry J. Brown, Arthur L. Marriott, 51

ADR Principles and Practice,
Sweet & Maxwell, 1999

Boulle/Nesic Laurence Boulle, John Nesic, 51

Mediation: Principles, Process, Practice,
Butterworths, 2001

Born 1980 Gary B. Born, 3

International Commercial Arbitration: Law and
Practice,
Kluwer Law International, 1980

Born 2001 Gary B. Born, 53, 68, 76

International Commercial Arbitration: Commentary
and
Materials,
Kluwer Law International, 2001

Born 2014 Gary B. Born, 67, 68

International Commercial Arbitration,
Kluwer Law International, 2014

Born 2015 Gary B. Born, 44,

UNCITRAL Model Law on International
Commercial Arbitration: A Commentary,
Kluwer Law International, 2015

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Born 2021 Gary B. Born, 8, 14，64，

International Commercial Arbitration, 75，80
Kluwer Law International, 2021

Born/Šćekić Gary B. Born and Marija Šćekić, 11

Pre-Arbitration Procedural Requirements 'A
Dismal Swamp',
OUP UNCORRECTED PROOF –
FIRSTPROOFS, 2015

Carter James H. Carter, 17,

Issues Arising from Integrated Dispute Resolution
Clauses, in New Horizons,
International Commercial Arbitration and
Beyond ICCA Congress Series, 2005

CISG Digest Digest of Case Law on the United Nations 122, 125, 127,
Convention on Contracts for the International Sale of 133, 143, 145
Goods,
2016

Cooke Elizabeth Cooke, 53

The Modern Law of Estoppel,
Oxford University Press, 2000

Doe John Doe, 39

Arbitration and Mediation: A Guide to Effective
Dispute Resolution,
ABC Publishing, 2018

Doe 2013 John Doe, 38

Arbitral Discretion and Its Impact on Cost and
Enforcement in International Arbitration,
Oxford University Press, 2013

Dhingra Jayems Dhingra， 57

It Is Time to Unseal Sealed Offers in International
Arbitration: As a Negotiation Strategy or Pressure
Tactics?,
Oxford University Press, 2012

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Dyala Dyala Jiménez Figueres， 9, 11

Multi-Tiered Dispute Resolution Clauses in ICC
Arbitration,
ICC Bulletin, 2003

Ekşi Nuray Ekşi, Tahkim Öncesi, Uyuşmazlık 13

Çözüm Usulleri ve Bu Usuller Tüketilmeden
Tahkime Başvurulmasının Sonuçları, 2015

Esplugues/Marquis Carlos Esplugues, Louis Marquis, 12

New Developments in Civil and Commercial
Mediation,
Global Comparative Perspectives, 2015
Fortier Yves Fortier, 84
International Arbitration and National Courts:
Who Has The Last Word,
ICCA Congress Series, 2001

Foskett The Hon. Sir David Foskett, 57

The law and practice on compromise,
Sweet&Maxwell, 2019

Garcia Maria Garcia, 39

Arbitration and Mediation: Costs and Strategies for
Effective Dispute Resolution in the European Union,
Springer, 2022

Garimella/Siddiqui Sai Ramani Garimella, Nizamuddin Ahmad 16

Siddiqui,
The Enforcement Of Multi-Tiered Dispute
Resolution Clauses: Contemporary Judicial Opinion,
IIUMLJ, 2016

Garnett Richard Garnett, 84

A Practical Guide to International Commercial
Arbitration,
New York: Oceana Publications, 2000

Haller Heiko Haller, 57, 60

SchiedsVZ | German Arbitration Journal,
Verlag C.H. Beck oHG, 2011

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Hamilton Virginia Hamilton, 76

Document Production in ICC Arbitration,
International Arbitration, 2006

Hanotiau Bernard R. Hanotiau, 76

Document Production in International Arbitration,
ICC Services, 2009

Honnold John O. Honnold, Harry M. Flechtner (ed), 3, 93

Honnold’s Uniform Law for International Sales
under the 1980 United Nations Convention,
Kluwer Law, 2021

Jolles Alexander Jolles, 17, 24

Consequences of Multi-Tier Arbitration Clauses:
Issues of Enforcement,
The chartered Institute of arbitrators, 2006

Kayali Didem Kayali, 11, 13, 14, 17,

Enforceability of Multi-Tiered Dispute Resolution 18, 24
Clauses,
Journal of International Arbitration, 2010

Kendall/Freedman/Farr Nigel Kendall, Irene Freedman, John Farrell, 51

ell Expert Determination (4th edn),
Sweet&Maxwell, 2008

Kovach Kimberlee K. Kovach, 60

Mediation: Principles and Practice,
Thomson/West, 2004

Kröll Stefan Kröll, Loukas Mistelis, Pilar Perales, 90, 102, 108,
viscasillas, 122, 145, 158,
UN Convention on Contracts for the International 150
Sale of Goods (CISG): a commentary,
C.H.BECK HART NOMOS, 2018

Lew/Mistelis/Kröll Lew J. D., Mistelis Loukas A., Kröll Stefan, 30, 47

Contemporary International Commercial
Arbitration,
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Kluwer Law International, 2003

Lookofsky Joseph Lookofsky, 133, 143

Understanding the CISG,
Kluwer Law International, 2017

Loong Anne-Marie Loong, 14

Arbitration in Switzerland:The Practitioner's Guide,
Kluwer Law International, 2013

Marghitola Reto Marghitola, 64, 75, 77, 84

Document Production in International Arbitration,
International Arbitration Law Library, 2015

Mecar Marko Mecar, 22

Enforceability of Multi-tiered Clauses Leading to
Arbitration,
Central European University, 2015

Mehta/Aditya/Ghosh Mehta, Aditya and Ghosh, 11, 12

Good Faith or Bad Faith – Analysing the
Enforceability of PreArbitral Negotiation Clauses,
National Law School Business Law Review,
2023

Morris J. H. C. Morris, 3
The Conflict of Laws,
The Commercial Press, 2012

Moses Margaret L. Moses, 67

The Principles and Practice of International
Commercial Arbitration,
Cambridge University Press, 2024

O'Malley Nathan D. O'Malley, 68

Rules of Evidence in International Arbitration: An
Annotated Guide,
Informa Law from Routledge, 2019

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Park William W. Park, 84

Arbitration of International Business Disputes,
Oxford University Press, 2006

Pearson-Wenger Sabrina Pearson-Wenger, 60

Good Faith in International Commercial
Arbitration: Its
Application by Arbitral Tribunals to the Parties’
Contract and the Arbitration Agreement,
Kluwer Law International, 2024

Raeschke-Kessler Raeschke-Kessler Hilmar, 77

Discovery in International Commercial Arbitration?,
Schriftenreihe der German Institution of
Arbitration, 2010

Redfern/Hunter Alan Redfern, Martin Hunter, 51, 68, 75

Redfern and Hunter on International Arbitration,
sixth edition,
Oxford University Press, 2015

Saleh Samir A. Saleh, 57

Arbitration International,
Oxford University Press, 1999

Schlechtriem/Butler Peter Schlechtriem, Petra Butler, 90, 102, 103,

UN Law on International Sales: The UN 108, 110, 122,
Convention on the International Sale of Goods, 133, 143
Springer-Lehrbuch, 2008

Schlechtriem/Schwenzer Schwenzer Ingeborg, 90, 102, 104,

Commentary on the UN Convention on the 108, 122, 143
International Sale of Goods (CISG),
Oxford University Press, 2016

Schwarz/Konrad Schwarz Franz T., Konrad Christian W., 84

The Vienna Rules, a commentary on international
arbitration in Austria,
Kluwer Law International, 2009

Schwenzer Ingeborg Schwenzer, 108

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International Sales Law: A Guide to the CISG,

Third Edition, 2019

Secretariat Commentary 1979 Secretariat Commentary 108

UNCITRAL Secretariat, 1979

Semler/Trittmann Rolf Trittmann, Franz-Jörg Semler, 68

SchiedsVZ | German Arbitration Journal,
Verlag C.H. Beck oHG, 2010

Slakoper Zvonimir Slakoper, Ivan Tot (eds), 90

EU Private Law and the CISG The Effects
for National Law,
Routledge, 2022

Smith Peter Smith, 39

The Economics of Arbitration and Mediation in
International Dispute Resolution,
Oxford University Press, 2024

Smith 2017 Jane Smith, 38

International Arbitration: Discretion, Cost, and the
Enforcement Conundrum,
Cambridge University Press, 2017

Spencer/Brogan David Spencer, Michael Brogan, 57

Mediation Law and Practice,
Cambridge University Press, 2006

Tan Dehmen Mine Tan Dehmen, 13

'Tahkim Öncesi Müzakere ya da Uzlaşma
Yollarının Tüketilmemiş Olmasının Tahkim
Yargılamasına Etkisi',
2005-2006

Tevendale/Ambrose/Nai Craig Tevendale, Hannah Ambrose, Vanessa 13

sh Naish,
Multi-Tier Dispute Resolution Clauses and
Arbitration,
Turk Com Law Review, 2015

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Vetulli/Kaufman Ezequiel H. Vetulli, Emmanuel E. Kaufman, 17

Austrian Yearbook on International Arbitration,
, 2017

Várady/J.Barceló/Kröll Tibor Várady, John J. Barceló III, Stefan 14

/Mehren Kröll, Arthur T. von Mehren,
International Commercial Arbitration, a
Transnational Perspective, Fifth Edition,
American Casebooks, 2012

Vogenauer Vogenauer, Stefan, 136

Commentary on the UNIDROIT Principles of
International Commercial Contracts (PICC) 2nd
ed.,
Oxford University Press, 2015

Waincymer Jeffrey Maurice Waincymer, 47, 68, 77, 80,

Procedure and Evidence in International Arbitration, 82, 84
Kluwer Law International, 2012

Williston Samuel Williston, 53

Williston on Contracts,
West Publishing, 1990

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INDEX OF CASES AND ARBITRATION AWARDS

ABBREVIATION FULL CITATION CITED IN

Australia

Aiton v. Transfield Aiton Australia Pty Ltd. v. Transfield Pty Ltd, 9

New South Wales Supreme Court,
October 1, 1999

Car Case 2 Ob 95/06v, 143

Oberster Gerichtshof,
July 4, 2007

Hooper v. Natcon Hooper Bailie Associated Ltd. v. Natcon 18, 25

Group Pty Ltd.,
the New South Wales Supreme Court,
April 13, 1992

UGR v. RC United Group Rail Services Limited v. Rail 14

Corporation New South Wales,
Judgment of the Supreme Court of New
South Wales,
July 3, 2009

CCJA

Africard v. NigerSchultz Africard Co Ltd. v. State of Niger, 8

CCJA Case No. 003/2013/ARB

CISG

CISG-online No. 31 Tickets for the Soccer World Cup final 1990 104
case,
Oberlandesgericht Köln (Court of Appeal
Cologne),
November 27, 1991

CISG-online No. 327 Roofing Materials Case, 124

Kantonsgericht des Kantons Zug,
February 25, 1999

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CISG-online No. 583 Floor coverings case, 102

Oberlandesgericht Stuttgart (Court of Appeal
Stuttgart),
February 28, 2000
CISG-online No. 659 Geneva Pharmaceuticals Technology Corp. v. 102
Barr Laboratories, Inc.,
U.S. District Court for the Southern District
of New York,
May 10, 2002
CISG-online No. 737 Al Palazzo S.r.l. v. Bernardaud S.A., 102
Tribunale di Rimini (District Court Rimini),
November 26, 2002

CISG-online No. 1509 Cedar Petrochemicals, Inc. v. Dongbu 104

Hannong Chemical Co., Ltd.,
U.S. District Court for the Southern District
of New York,
July 19, 2007

CISG-online No. 1978 Used car case II, 102

Oberlandesgericht Hamm (Court of Appeal
Hamm),
April 2, 2009

CISG-online No. 2371 Spinning Plant Case, 129

Bundesgericht/Tribunal fédéral (Swiss
Federal Supreme Court),
July 16, 2012

CLOUT

CLOUT Case No. 229 CLOUT case No. 229, 133

Bundesgerichtshof,
December 4, 1996

CLOUT Case No. 483 CLOUT case No. 483, 143

Provincial High Court of Alicante,
November 16, 2000

European Union

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Akzo Chemicals v. Akzo Nobel Chemicals Ltd. & Akcros 81

Commission Chemicals Ltd. v. European Commission,
Court (Grand Chamber) ,
September 14, 2011

AM & S v. Commission AM & S Europe Limited v. Commission of 81

the European Communities,
European Court,
May 18, 1983

France

Poiré v. Tripier Poiré v. Tripier, 24

Cour de Cassation (France),
February 14, 2003

Germany

BGH, NJW 1982, Neue Juristische Wochenschrift, 110

2730, 2731 Bundesgerichtshof (German Federal
Supreme Court),
June 2, 1982

Cobalt Case Cobalt sulphate case, 143

Bundesgerichtshof (German Supreme Court),
April 3, 1996

Klockner v. Advance Klockner Pentaplast GMBH & Co KG v. 2, 3

Advance Technology (H.K.) Company
Limited,
Court of First Instance of the High Court of
Hong Kong,
April 6, 2011

OCBC v. KAI OCBC Wing Hang Bank Ltd v. KAI SEN 2, 3

Shipping Co Ltd.,
Court of First Instance of the High Court of
Hong Kong,
March 4, 2020

Online Auction of Car Online auction of car case, 93

Case Oberlandesgericht Brandenburg (Court of

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Appeal Brandenburg),
April 8, 2016

Railway v. Chung China Railway (Hong Kong) Holdings 2, 3

Limited v. Chung Kin Holdings Limited,
Court of First Instance of Hong Kong,
January 19, 2023

Sale of Horse Via Sale of Horse Via Internet Auction Case, 90

Internet Auction Case Rechtbank Oost-Brabant (District Court
Oost-Brabant),
August 31, 2020

Vegetables Auction Case Vegetables Auction Case， 93

Bundesgerichtshof (German Supreme Court),
October 2, 2002

ICC

ICC Case No. 4429 ICC Case No. 4429, 9

October 6, 2022

ICC Case No. 6276 ICC Case No. 6276, 9

January 29, 1990

ICC Case No. 7177 Partial Award in Case 7177, 80

ICC International Court of Arbitration
Bulletin Vol. 7 No. 1

ICC Case No. 7422 ICC Case No. 7422, 60

June 28, 1996

ICC Case No. 8177 Final Award in Case 8177, 80

ICC International Court of Arbitration,
October 6, 2022

ICC Case No. 9415 Final Award in Case 9415, 80

ICC International Court of Arbitration,
October 6, 2022

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ICC Case No. 9517 Interim Award in Case 9517, 80

ICC International Court of Arbitration,
Bulletin Vol. 16 No. 2

ICC Case No. 9781 Tyre crushing plant case, 105

ICC International Court of Arbitration,
August 12, 2002

ICC Case No.9812 Final Award in Case 9812, 44

ICC International Court of Arbitration，
October 6, 2022

ICC Case No. 9977 ICC Case No. 9977, 14

June 22, 1999

ICC Case No. 9984 ICC Case No. 9984, 9, 14

June 7, 1999,

ICC Case No. 10256 ICC Case No. 10256, 9

October 6, 2022

ICC Case No. 11490 ICC Case No. 11490, 9

2012

ICC Case No. 11864 ICC Case No. 11864, 80

October 1, 2008

ICC Case No. 12345 ICC Case No. 12345, 38

International Chamber of Commerce (ICC)
International Court of Arbitration,
May 10, 2018

ICC Case No.12739 ICC Case No.12739 44

October 6, 2022

ICSID

Abaclat and Others v. formerly Giovanna a Beccara and Others v. 67

Argentine Republic The Argentine Republic,
December 29, 2016

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Enron v. Argentina Enron Creditors Recovery Corporation 75

(formerly Enron Corporation) and Ponderosa
Assets, L.P. v. Argentine Republic,
ICSID Case No. ARB/01/3,
February 26, 2001

Impregilo v. Argentine Impregilo S.p.A. v. The Argentine Republic, 17

ICSID Case No. ARB/07/17

India

ICS v. The Argentine ICS Inspection and Control Services Limited 30

(United Kingdom) v. The Argentinen
Republic, PCA Case No. 2010-9,
February 10, 2012

Renusagar v. General Renusagar Power Co. v. General Electric Co., 44

Indian court,
October 17, 1994

IUSCT (Iran-US
Claims Tribunal)

INA Corp v The Islamic INA Corporation v. The Government of the 64

Republic of Iran Islamic Republic of Iran,
August 13, 1985

LCIA

LCIA Case No. 6789 LCIA Case No. 6789, 38

London Court of International Arbitration
(LCIA),
August 22, 2015

Vale v. BSG Resources Vale S.A. v. BSG Resources Limited, 68

LCIA ARBITRATION N0.142683,
April 4, 2019

MCA

Prada v. Caporicci Prada S.p.A. v. Caporicci USA Corp., 127

Camera Arbitrale Milano (Milan Chamber of
25
 South China Normal University

Arbitration),
January 30, 2019

Netherlands
Stainless steel Case 239001/HA ZA 07-2031, 143
Rechtbank,
April 15, 2009

New Zealand

Bell v. University of Bell v. University of Auckland, 60

Auckland High Court of New Zealand,
1969
PCA

Glencore (Bermuda) v. Glencore Finance (Bermuda) Limited v. 64

Bolivia Plurinational State of Bolivia,
September 8, 2020

Hulley v. RF Hulley Enterprises Limited (Cyprus) v. The 75

Russian Federation,
July 18, 2014

Yukos v. RF Yukos Universal Limited (Isle of Man) v. The 75

Russian Federation,
2005-04/AA227,
July 18, 2014

Zeph v. Australia Zeph Investments Pte Ltd v. Commonwealth 64

of Australia,
PCA Case No. 2023-67,
June 25, 2024

Russia

Russia CCI Docket No. 155/2004, 143

16/03/2005 March 16, 2005

Serbia

26
 South China Normal University

Fishing boat case T-23/97, 143

Foreign Trade Court of Arbitration attached
to the Yugoslav Chamber of Commerce,
April 15, 1999

Singapore
Muhammad v. Public Muhammad bin Kadar v. Public Prosecutor, 75
Prosecutor Singapore Court of Appeal,
September 29, 2014

IRC v. Lufthansa International Research Corp PLC v. 25

Lufthansa Systems Asia Pacific Pte. Ltd.,
Judgment of the High Court of Singapore,
2013

Trust Services v. Toshin HSBC Institutional Trust Services 25

Development (Singapore) Ltd. v. Toshin Development
Singapore Pte. Ltd.,
the High Court of Singapore,
27 August 2012

Switzerland

A.SA v. B.SA A. SA v. B.SA, 13, 14

Swiss Supreme Court,
July 7, 2014

Waste separation Waste separation machines case, 119

machines Commercial Court Canton Zurich,
case July 9, 2002

United Kingdom

ABB v. Hochtief Hochtief Airport GmbH v. ABB AG and 68

Athens International Airport SA,
High Court of Justice of England and Wales,
July 19, 2005

Banque Keyser v. Banque Keyser Ullmann SA v. Skandia (UK) 82

Skandia Insurance Insurance Co Ltd,
England and Wales Court of Appeal (Civil
27
 South China Normal University

Division),
January 27, 1986

Bunge v. Nidera Bunge SA v. Nidera BV, 3

The Court of Appeal of England and Wales,
July 1, 2015

Cable v. IBM Cable & Wireless plc v. IBM 9, 27

UnitednKingdom Ltd.,
October 7, 2002

Courtney & Fairbairn v. Courtney & Fairbairn Ltd. v Tolaini Brothers 30

Tolaini Brothers (Hotels) Ltd.3,
England & Wales,
November 28,1974

Crescent Farm v. Sterling Crescent Farm (Sidcup) Sports Ltd. v. 82

Sterling Offices Ltd.,
England and Wales High Court of Justice,
April 3, 1972

D'Armement v. Compagnie D'Armement Maritime SA v. 3

Tunisienne Compagnie Tunisienne de Navigation SA,
United Kingdom House of Lords,
May 26, 1972

Enka v. Chubb Enka v. Chubb, 2, 3

Supreme Court of the United Kingdom,
October 9, 2020

Gamlen Chemical v. Gamlen Chemical Co. (UK) Ltd. v. Rochem 82

Rochem Ltd. & Others,
England and Wales Court of Appeal (Civil
Division),
December 4, 1979

Holloway v. Chancery Neil Holloway v. Chancery Mead Ltd, 25

Mead Queen's Bench Division (Technology and
Construction Court),
July 30, 2007

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 South China Normal University

Lebanon v. Kuwait Kabab-Ji SAL (Lebanon) v. Kout Food 2, 3

Group (Kuwait),
Supreme Court of the United Kingdom,
November 20, 2021

Ofulue v. Bossert Ofulue and another (FC) 57

(Appellant) v. Bossert (FC) (Respondent),
United Kingdom House of Lords,
January 28, 2009

Unicredit v. Rusche Unicredit Bank GmbH v. Rusche Mal 2, 3

Alliance LLC,
The Supreme Court of the United Kingdom,
September 18, 2024

Unilever v. The Procter Unilever plc. v. The Procter Gamble Co., 57

Gamble Court of appeal,
October 28, 1999

R v. Cox R v. Cox and Railton, 82

England and Wales Queen’s Bench Division,
November 20, 1884

Rabin v. Mendoza Rabin and Others v. Mendoza&Co, 60

Court of Appeal of England and Wales,
February 1, 1954

Skuse v. Granada Skuse v. Granada Television Ltd. 82

England and Wales Court of Appeal,
March 30, 1993

Sulamérica v. Enesa Sulamérica Cia Nacional de Seguros SA v. 24

Enesa Engenharia SA,
The Court of Appeal of England and Wales,
May 16, 2012
Vita v. Unus Vita Food Products Inc. v. Unus Shipping 3
Co.,
Judicial Committee of the Privy Council,
August 1, 1939

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United States of
America
Adams v. Modernad Adams v. Modernad Media, LLC, 8
Media United States District Court For The District
Of Colorado,
February 25, 2013

Asante v. PMC-Sierra Asante Technologie Inc. v. PMC-Sierra Inc., 109

District Court for the Northern District of
California,
July 30, 2001

BG v. Argentina BG Group Plc. v. The Republic of Argentina, 8

December 24, 2007

Chromalloy v. Arab Chromalloy Aeroservices v. Arab Republic of 44

Egypt,
The United States Court of Appeals for the
District of Columbia Circuit,
July 1, 1999

HIM v. DeVito HIM Portland, LLC v. DeVito Builders, Inc., 11

United States Court of Appeals, First Circuit,
Jan 17, 2003

Iran Aircraft v. Avco Iran Aircraft Industries&Iran Helicopter 84

Support & Renewal Co. v. Avco Co.,
Court of Appeals of the United States, 2nd
Circuit,
November 24, 1992

Kemiron v. Aguakem Kemiron Atlantic v. Aguakem International, 24

United States Court of Appeals, Eleventh
Circuit,
May 8, 2002

Qingdao v. P and S Qingdao Free Trade Zone Genius 84

International Trading Co. Ltd. v. P and S
International Inc.,
District Court for the District of Oregon,

30
 South China Normal University

September 16, 2009

Renwick v. Accel Renwick v. Accel International Corporation, 8

United States District Court,
December 29, 2004

Solymar v. Banco Solymar Invs., Ltd. v. Banco Santander S.A., 8

United States Court of Appeals, Eleventh
Circuit,
February 28, 2012

Schacht v. Beacon Schacht v. Beacon Ins. Co., 8

United States Court of Appeals, Seventh
Circuit,
August 29, 1984

Tang v. Grant Thornton Tang v. Grant Thornton International Ltd, 24, 25

Appellate Court of Illinois First District,
August 27, 2014

Titan v. Zhen Hua Titan, Inc. v. Guangzhou Zhen Hua Shipping 8

Shipping Co., Ltd.,
United States District Court, S.D. New York,
September 29, 1998

White v. Kampner White v. Kampner, 44

Supreme Court of Connecticut,
May 31, 1994

Yonir Technologies Inc v. Yonir Technologies Inc v. Duration Systems, 67

Duration Systems United States District Court for the Southern
District of New York,
December 23, 2002

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STATEMENT OF FACTS
RESPONDENT, Equatoriana RenPower Ltd. (ERenPow) is a fully government-owned
company. ERenPow plays an important role in the “Green Energy Strategy” of the Government
of Equatoriana since 2019.

CLAIMANT, GreenHydro Plc, is an engineering company specializing in the planning,

construction and sale of plants for the production of green hydrogen and connected services for
the whole hydrogen and Power-to-X value chain for the industry, energy and mobility sector.

January 3, 2023 RESPONDENT invited bids for the construction and delivery
of a plant to produce green hydrogen and potential derivatives.

May 2023 As one of the final bidders, CLAIMANT entered into specific
negotiations with RESPONDENT.

June 29, 2023 Volta family informed CLAIMANT that they proposed to sell
Volta Transformer (“VT”) to CLAIMANT.

July 10, 2023 CLAIMANT was aware that the negotiations with P2G would
most likely fail and they received an offer with a lower price
from Green Ammonia and had used P2G’s exaggerated quality
concerns as a pretext to terminate the negotiations with P2G.

July 12, 2023 Mr. Deiman from CLAIMANT sent an email to

RESPONDENT, assuring that there would be most likely be
close to 50% local content and promising that they had a good
discussion with P2G and were optimistic about overcoming
quality concerns.

July 13, 2023 The Parties eventually came to an agreement. CLAIMANT

would lower the price by another 5%, in return
RESPONDENT excluded right to terminate the contract for
convenience at any time against the payment of damages.

July 17, 2023 The Parties managed to sign the Purchase and Service
Agreements (“PSA”).

August 25, 2023 CLAIMANT concluded the contract with VT.

August 26, 2023 RESPONDENT was informed that CLAIMANT gave up

cooperation with P2G and switched to cooperate with Green
Ammonia. RESPONDENT was shocked but had to accept it.

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Ms. Ritter emphasized once more the importance of strict

compliance with timelines and budget to keep the project out of
the discussion.

October 1, 2023 RESPONDENT paid 10% of the Contract Price to

CLAIMANT under the PSA.

October 2023 Local elections in Equatoriana led to a shift in the government’s

strategy to alleviate the burden put on businesses. Only one of
the three green hydrogen projects originally planned was going
to be realized due to the change.

November 2023 VT was acquired by CLAIMANT and Mr. Deiman became the
COO of VT.

February 1, 2024 The deadline for final plans was due and CLAIMANT failed to
meet the submission.

February 28, 2024 CLAMAINT sent the final plans to RESPONDENT. The plan
did not include the planning for the eAmmonia module.

February 29, 2024 RESPONDENT gave notice of termination of the PSA.

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SUMMARY OF ARGUMENT
ISSUE A The Tribunal should reject the claim
First, the Tribunal lacks jurisdiction because Equatorianian law mandates mediation as a
precondition to arbitration. Since CLAIMANT failed to comply, the arbitration agreement is
inoperative, and any award risks annulment. Second, even if jurisdiction is established, the claim
remains inadmissible. The mediation clause is binding, and CLAIMANT’s failure to fulfill this
requirement renders arbitration premature. Third, even if the claim were admissible, the Tribunal
should exercise its discretion to reject it. Mediation is significantly more cost-effective than
arbitration and ensures enforceability under FM Rules and the Singapore Convention on
Mediation (“SCM”). Therefore, the Tribunal should reject the claim.

ISSUE B The Tribunal should exclude Exhibit C7, but should keep Exhibit R3 in file
First, the Tribunal should exclude Exhibit C7. It is confidential under the Parties’ agreement and
protected by without prejudice privilege. Additionally, it lacks relevance and materiality to the
dispute. Admitting it risks annulment under the New York Convention (“NYC”). Second, the
Tribunal should admit Exhibit R3. CLAIMANT failed to prove it was obtained illegally, and
legal professional privilege does not apply. Even if it did, exceptions exist for bad-faith conduct.
Moreover, excluding Exhibit R3 would violate RESPONDENT’s right to be heard and risk
unenforceability under NYC. Therefore, the Tribunal should exclude Exhibit C7 and admit
Exhibit R3.

ISSUE C CISG is inapplicable to the PSA

First, the PSA shall be regarded as a domestic contract which lacks international element, placing
it outside the scope of Art. 1 CISG. Second, the PSA was formed through an auction procedure,
which is explicitly excluded under Art. 2(b) CISG. Third, the PSA is a turnkey contract rather
than a contract for the sale of goods, meaning it does not fall within the scope of Art. 3 CISG.
Therefore, CISG is inapplicable to the PSA.

ISSUE D The Parties validly excluded CISG’s application

First, Art. 29 PSA is valid because it aligns with the reasonable expectations of the Parties. Even
if it could be considered a surprising term, CLAIMANT expressly accepted it, confirming its
binding nature. Second, by selecting Equatorianian law as the applicable law under Art. 29 PSA,
the Parties implicitly excluded CISG. This is consistent with the principle of implied exclusion
under Art. 6 CISG and demonstrates a clear intention to circumvent its application. Therefore,
CISG was validly excluded.

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ISSUE A: THE TRIBUNAL SHOULD REJECT THE CLAIM FOR LACK

OF JURISDICTION OR ADMISSIBILITY OR AS PART OF ITS

DISCRETION

1. RESPONDENT argues that the Tribunal lacks jurisdiction as the arbitration agreement is
inoperative due to its non-compliance with the mediation requirements under the laws of
Equatoriana [I]. Furthermore, even if the Tribunal’s jurisdiction is established, the claim shall
be considered inadmissible since the precondition for arbitration is unfulfilled as explicitly
agreed in Art. 30 PSA [II]. Finally, in consideration of overall efficiency, recognition and
enforcement, the Tribunal should exercise its discretion to reject the claim, even if mediation
is deemed to be non-compulsory [III].

I. The Tribunal should reject the claim for its lack of jurisdiction

2. CLAIMANT argues that the unfulfillment of mediation does not hinder the Tribunal's
jurisdiction [Cl. Memo, paras. 3 & 6]. However, RESPONDENT asserts that the Tribunal has
no authority to hear this case, as Equatorianian law makes mediation a mandatory condition
precedent to the Tribunal's jurisdiction under the Multi-Tiered Dispute Resolution (“MDR”)
clauses. It is well-established that the law governing the main contract presumptively
applies to the arbitration agreement unless explicitly stated otherwise [Enka v. Chubb; Lebanon v.
Kuwait; Railway v. Chung; Klockner v. Advance; OCBC v. KAI; Unicredit v. Rusche]. This principle
applies here, as the Parties selected Equatorianian law to govern the main contract, creating a
unified legal framework that extends to the arbitration agreement [Cl. Ex. 2 p. 12].

3. Firstly, the governing law of the arbitration agreement is Equatorianian law. In the case Enka
v. Chubb, the Supreme Court of the United Kingdom enunciated that where no express
choice of law is made for an arbitration agreement, the governing law of the main contract
applies to the arbitration agreement. Authorities have widely recognized such
view that arbitration agreements are typically viewed as integral to the main contract [Born
1980, pp. 530-535; Morris, pp. 622-624; Honnold, p. 348, para. 2; Enka v. Chubb; Lebanon v. Kuwait;
Railway v. Chung; Klockner v. Advance; OCBC v. KAI; Unicredit v. Rusche; Bunge v. Nidera].
Therefore, by selecting the governing law of the main contract, the Parties are presumed to
extend its application to the arbitration agreement [Vita v. Unus; D'Armement v. Tunisienne; Born,
pp. 530-535; Morris, pp. 622-624; Honnold, p. 348, para. 2].

4. In casu, Art. 29 PSA designates Equatorianian law as the governing law of the main contract
[Cl. Ex. 2, para. 29], while Art. 30 sets out the dispute resolution clause [Cl. Ex. 2, para. 30].
Given that the arbitration agreement is an integral part of the contract, and there is no
evidence showing that the Parties have explicitly or implicitly chosen an applicable law for the
dispute resolution clause. Hence, Art. 30 PSA shall be governed by Equatorianian law.

5. Secondly, non-compliance with mediation risks the Tribunal’s jurisdictional decision being
reviewed and annulled by national courts [Art. 1, CIArb Guidelines]. The Parties agreed to
make mediation a jurisdictional bar by choosing Equatorianian law as applicable law [Infra,
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paras. 3&4]. There is consistent case law in Equatoriana that mediation in a multi-tier clause is
a condition precedent for the jurisdiction of the Tribunal [Re. Ex. 1 p. 30, para. 9]. Under Art.
V(2)(b) NYC and Art. 36(1)(b) UNCITRAL Model Law (“UML”), recognition or
enforcement of the award may be refused if the Equatorianian courts find the jurisdictional
decision violates its procedural public policy. Hence, failure to comply with mediation would
endanger the enforceability of the award.

6. Therefore, the Tribunal lacks jurisdiction to hear the case, as the mediation requirement has
not been satisfied and the formal mediation process has not been carried out.

II. Even if the Tribunal has jurisdiction, the claim is inadmissible due to non-
compliance with the mediation requirement

7. Contrary to CLAIMANT’s assertion that mediation is not a bar for arbitral proceedings [Cl.
memo, paras. 14-18], RESPONDENT submits that, in casu, the mediation clause imposes an
obligation on both Parties, rendering it mandatory and thus a barrier to the initiation of
arbitration.

8. Courts have consistently rejected arguments that arbitration agreements are not binding
because a condition precedent to the underlying contract has not been satisfied [Born 2021, p.
1202, para. 1; Solymar v. Banco; Schacht v. Beacon; Adams v. Modernad Media; Renwick v. Accel; Titan v.
Zhen Hua Shipping]. Even if the Tribunal finds jurisdiction over the claim, mediation remains a
condition precedent for its admissibility [Born 2021, pp. 1293-1295; Berger 2015, p. 303; BG v.
Argentina; Africard v. NigerSchultz, pp. 145-150].

9. Tribunals in similar cases have followed a two-step approach. For the first step, they assess
whether the Parties were obligated to attempt amicable dispute resolution before arbitration.
For the second step, they examine the facts of each case to determine whether this obligation
was fulfilled [ICC Case No. 10256; ICC Case No. 4429; ICC Case No. 9984; ICC Case No. 6276;
ICC Case No. 11490; Aiton v. Transfield; Cable v. IBM; Berg 2015, p. 35, para. 4; Dyala, p. 1, paras.
2-3].

10. Under this analytical framework, the current arbitration should be deemed inadmissible for
the following reasons. First, the Mediation-Arbitration (“Med-Arb”) clause is sufficiently
precise to impose an obligation, rendering it mandatory [A] and enforceable [B]. Second, the
mediation process will not be futile [C]. As the mediation requirement remains unmet, the
case is premature for arbitration and should not proceed until this condition precedent is
fulfilled.

A. The mediation requirement constitutes a mandatory condition precedent

11. Characterizing a particular procedural requirement depends ultimately on the interpretation

of the Parties’ contractual language and intents [Born/Šćekić, p. 246; Dyala, p. 71]. The binding
nature of Med-Arb clauses precludes the initiation of arbitral proceedings until the
requirement of mediation is satisfied [Mehta/Aditya/Ghosh, p. 4, para. 2; Kayali, p. 551, para. 2;
HIM v. DeVito].

12. CLAIMANT argues that because none of the Parties formally requested mediation, the
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express consent to mediate is absent [Cl. memo, para. 17]. However, when purporting to
determine whether the Parties intended mediation as an obligation, it is necessary to analyze
both the wording of the clause [a] and the Parties’ intention [b] [Esplugues/Marquis, p. 30, para.
2; Mehta/Aditya/Ghosh, p. 20, para. 3].

a. The wording of Art. 30 PSA reflects mediation's compulsory nature

13. The wording of MDR clauses is determinative of their binding nature [Aydemir, p. 197; Berger
2015, p. 3, para. 5; Ekşi, p. 28, para. 2; Kayalı, p. 508, para. 2; Dehmen, p. 459, para. 6;
Tevendale/Ambrose/Naish, p. 35, para. 1]. Since the wording of the contract accurately reflects
the Parties’ true intent, there is no reason for the Tribunal to deviate from the language of the
PSA when assessing the nature of the arbitration process [A.SA v. B.SA].

14. The practice of considering the word “shall” mandatory in a pre-arbitration mechanism is well
established and generally recognized by courts and Tribunals as well as scholars [Kayali, p. 571-
572; Loong, p. 1456; Várady/J.Barceló/Kröll/Mehren, p. 14; Born 2021, p. 1285, para. 4; A.SA v.
B.SA; UGR v. RC]. This principle is exemplified in ICC Case Nos. 9984 and 9977, where the
term “shall” required the Parties to first seek an amicable resolution before proceeding to
arbitration [ICC Case No. 9984; ICC Case No. 9977; Dyala, p. 2, para. 2; Aydemir, p. 198].

15. In the present case, Art. 30 PSA unequivocally states “Any dispute ... shall first be submitted to
mediation. shall be finally settled by arbitration”. The use of “shall” signifies a binding obligation for
both Parties; and the phrase “first...and finally” establishes a clear, sequential order—requiring
mediation to precede arbitration.

16. Thus, Art. 30 PSA is not merely permissive but imposes a mandatory sequence of dispute
resolution. If the Parties are obligated to follow this sequence, the Tribunal should deem
CLAIMANT's request for arbitration inadmissible [Aydemir, p. 201, para. 1; Garimella/Siddiqui,
p. 190, para. 2].

b. The Parties' true intention is to treat mediation as a pre-condition to

arbitration

17. The binding nature of a pre-condition requirement primarily depends on the Parties' intent
[Vetulli/Kaufman, p. 63, para. 1; Born II, p. 3218, para. 2; Impregilo v. Argentine]. If the Parties have
agreed to a mandatory Mediation Dispute Resolution (“MDR”) clause, they reasonably
expect that the Tribunal will refuse to hear the case unless the initial procedural steps, such as
mediation, have been exhausted. Accordingly, the Tribunal should consider any request for
arbitration inadmissible until the mediation requirement is fulfilled [Kayali, p. 556; Jolles, p. 336;
Carter, p. 456, para. 3].

18. First, CLAIMANT overlooks that dispute resolution procedures are governed by the Parties’
agreement, in line with the principle of party autonomy—a cornerstone of both contract law
and international arbitration [Kayali, p. 568; Hooper v. Natcon]. Given this principle, the Tribunal
must give effect to the contractual terms agreed upon by the Parties.

19. Second, the Parties’ intent to make mediation a condition precedent is evident from both the
legal framework and their contractual negotiations. Case law in Equatoriana confirms that
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mediation in multi-tiered clauses constitutes a pre-condition to arbitration [Re. Ex. 1, para. 9],
reinforcing that this obligation should be enforced.

20. Moreover, the Parties’ correspondence demonstrates a shared understanding that arbitration
was to be a last resort. RESPONDENT explicitly emphasized its preference for amicable
resolution, and CLAIMANT expressly acknowledged this by stating that “Parties must first try to
mediate their dispute before resorting to arbitration... arbitration is only the last resort as you wished” [Re.
Ex. 2, para. 5].

21. Further, CLAIMANT’s deviation from the FAI Mediation Rules (“FM Rules”) Model
Clause—by omitting the standard provision allowing arbitration to proceed without
mediation—confirms its acceptance of mandatory mediation. The removal of this safeguard
underscores that the Parties intended to establish a strict pre-condition rather than a mere
procedural formality.

22. Finally, the FM Rules explicitly allow the Parties to determine whether mediation is
mandatory or optional. By structuring the PSA to require mediation before arbitration, the
Parties have demonstrated their mutual intent to treat mediation as a condition precedent [FM
Rules, Preamble, para. 7]. Therefore, when the Parties have contracted for mandatory
mediation, the Tribunal should enforce the mediation clause, provided it meets all the
requirements for enforceability [Mecar, p. 9, para. 1].

B. Art. 30 PSA is unambiguous and thus enforceable

23. Contrary to CLAIMANT’s submission that the mediation clause lacks certainty and leaves
Parties with no recourse [Cl. Memo, para. 26], RESPONDENT argues that the language in
Art. 30 PSA is sufficiently clear to be enforceable and will not result in undue delay.

24. When the Parties have agreed upon a multi-tiered dispute resolution system in a binding and
unambiguous manner, a Tribunal should treat any premature request for arbitration as
inadmissible [Kayali, p. 552; Jolles, p. 331; Kemiron v. Aguakem; Poiré v. Tripier]. The enforceability
of such clauses depends on whether the obligations imposed on the Parties—along with any
negative injunctions—are sufficiently clear and certain to be given legal effect
[Mehta/Aditya/Ghosh, p. 7, para. 2; Tang v. Grant Thornton; Sulamérica v. Enesa].

25. Courts and Tribunals typically assess the enforceability of such clauses based on the following
criteria: (a) an unequivocal commitment to commence the process; (b) clarity regarding the
steps each party must take to initiate the process; and (c) a sufficiently defined procedure that
enables objective determination by the Tribunal [Tang v. Grant Thornton; Holloway v. Chancery
Mead; IRC v. Lufthansa; Trust Services v. Toshin Development; Hooper v. Natcon].

26. First, the Med-Arb clause establishes an unequivocal commitment by the Parties to
commence mediation. This commitment has been demonstrated above [Supra, paras. 17-22].

27. Second, as for the clarity of the procedural steps, the clause specifies that the mediation
process must be governed by the framework developed by a well-established Alternative
Dispute Resolution (“ADR”) institution, the Finland Arbitration Institute (“FAI”). The FAI’s
model clause outlines the procedures for mediation, including the requirement that the Parties
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submit a Request for Mediation to the FAI under Art. 2.1 FM Rules. This creates a
“sufficiently defined mutual obligation” to mediate [Palacký, p. 19, para. 3; Cable v. IBM].

28. Third, since neither party has submitted a request for mediation, it is clear that the mediation
pre-condition has not been fulfilled. As such, the Tribunal can readily determine that this
condition precedent has not been satisfied.

29. Combining the above three aspects, the Tribunal should conclude that the Med-Arb clause
imposes a mandatory condition precedent, and the requirements are sufficiently certain to be
enforceable [Cable v. IBM; Holloway v. Chancery Mead; Scott v. Avery].

30. Where the Parties had clearly contracted for a specific set of dispute resolution procedures as
pre-conditions, such pre-conditions have to be strictly complied with [Courtney & Fairbairn v.
Tolaini Brother; Lees, p. 16, para. 3; Lew/Mistelis/Kröll, p. 165, para.2; Berger 2008, pp.15-56; ICC
Case No. 6276; ICS v. The Argentine; X v Y].

31. Therefore, the Tribunal should reject the request for arbitration as procedurally inadmissible.

C. Mediation is unlikely to be ineffective

32. Contrary to CLAIMANT's submission that mediation would be ineffective [Cl. Memo, para.
24], RESPONDENT asserts that mediation will not be futile, as it aligns with the mutual
interests of both Parties and provides an efficient means to resolve the dispute.

33. Firstly, for CLAIMANT, the performance of the project offers a valuable opportunity to
showcase its new technology and establish a reference for potential future projects, thereby
opening up new markets [RA, p. 3, para. 5; RA, p. 4, para. 9]. Moreover, CLAIMANT’s request
for specific performance in the RA indicates its clear intent to continue with the project and
resolve any disputes that may arise [RA, p. 7, para. 31].

34. Secondly, for RESPONDENT, the continuation of this new energy project at a more
profitable price directly supports the implementation of the government’s new energy
strategy [Cl. Ex. 2, para. 2]. RESPONDENT has a vested interest in ensuring the success of
the project, making mediation a viable and constructive path forward [PO. 2, p. 54, para.18].

35. Given that both Parties share a mutual interest in the performance of the project, mediation
stands a strong chance of success. It offers a real opportunity to preserve or restore the
working relationship between the Parties, which is critical for the continued success of the
project and any potential future collaboration.

36. Hence, mediation will not be futile but is instead an efficient and beneficial process for both
Parties to resolve the dispute amicably.

37. Therefore, RESPONDENT submits that CLAIMANT has submitted the request for
arbitration prematurely, without having completed the compulsory step before arbitration.

III. The Tribunal should exercise its discretion to reject the claim

38. Art. 19(2) UML and Art. 26(1) FAI Rules grant the Tribunal discretion to reject the claim as it

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deems appropriate. In exercising this discretion, the Tribunals typically consider factors such
as cost efficiency and potential enforcement challenges [ICC Case No. 12345; LCIA Case No.
6789; Doe 2013, p. 324, para. 2; Smith 2017, pp. 23-24]. Accordingly, the Tribunal should reject
the claim, because mediation is more cost-saving [A] and can also secure enforcement and
recognition [B].

A. Under the principle of cost-effectiveness, the Tribunal should reject the

claim

39. Arbitration is generally more expensive than mediation, making cost considerations a relevant
factor in dispute resolution [Doe, p. 21, para. 3; Garcia, p. 108, para. 6; Smith, p. 31, para. 5]. In
the present case, FAI has set a global advance on costs at EUR 900,000, covering
administrative fees, arbitrator fees, and other related expenses [LAPA, p. 42]. In contrast,
under the FM Rules, mediation costs are significantly lower, with administrative fees
amounting to EUR 25,000 and the average mediator's fee at the FAI estimated at EUR 53,000,
bringing the total mediation cost to approximately EUR 78,000. If the Parties were to resolve
their dispute through mediation, they could avoid arbitration expenses and achieve potential
savings of EUR 822,000 [Appx. 1, FM Rules; ERI].

40. Given this substantial cost disparity, mediation presents a more economically efficient
alternative. As the principle of cost-effectiveness is a fundamental consideration in dispute
resolution, the Tribunal should reject the claim and direct the Parties to fulfill their agreed
mediation obligation before proceeding to arbitration.

41. Therefore, mediation is more effective on costs than arbitration.

B. Mediation settlements can be recognized and enforced

42. Under Art. 12 FM Rules, the Parties may reach an agreement to appoint the mediator as an
arbitrator and request the mediator to confirm the settlement agreement in an arbitral award
for enforcement. This means that a mediation settlement can also be binding and enforceable
as an arbitral award.

43. Meanwhile, since both Parties have signed the SCM, which has established a unified legal
framework for the recognition and enforcement of international mediation settlement,
according to the detailed provisions of the “Enforceability of Settlement Agreements under
the Convention”, mediation settlements are enforceable.

44. Furthermore, non-compliance with compulsory pre-arbitration procedural requisites

constitutes a jurisdictional flaw, which impedes a party from validly commencing arbitral
proceedings [ICC Case No.9812; ICC Case No.12739; White v. Kampner]. Even if the Tribunal
decides it is an issue of admissibility, it is inadmissible which will hinder the award be
recognized and enforced [Chromalloy v. Arab; Renusagar v. General; Born 2015, pp. 633-634].
Thus, considering the recognition and enforcement of the settlements and awards, the
Tribunal should reject the claim.

45. Therefore, mediation settlements can be recognized and enforced.

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***

46. In conclusion, the Tribunal should reject the claim for lack of jurisdiction or admissibility or
as part of its discretion. First, mediation is a jurisdictional prerequisite under Equatorianian
law, barring arbitration. Second, even if admissible, mediation is more cost-effective than
arbitration. Third, enforcing the mediation requirement ensures compliance and avoids
enforcement risks.

ISSUE B: THE TRIBUNAL SHOULD EXCLUDE EXHIBIT C7 AND

SHOULD NOT EXCLUDE EXHIBIT R3

47. The Tribunal has broad power to determine the admissibility, relevance, materiality and
weight of any evidence [Art. 34(1) FAI Rules; Art. 19(2) UML; Art. 34(1) ICSID Artbitration
Rules]. It is commonly accepted that broad discretions cover all necessary evidentiary powers
regardless of whether the rules expressly refer to particular matters such as documents
[Waincymer, p. 750, para. 3; Lew/Mistelis/Kröll, p. 565, paras. 22-45; Perkins, p. 276, para. 3; Art.
20(6) ICDR Rules]. RESPONDENT submits that the Tribunal should reject Exhibit C7 [I]
and accept Exhibit R3 [II].

I. The Tribunal should exclude Exhibit C7

48. RESPONDENT contends that Exhibit C7 should be excluded because it is protected by

confidentiality as a document arising from negotiations [A] and by the without prejudice
privilege [B]. Additionally, RESPONDENT asserts that Exhibit C7 is neither relevant nor
material to the present dispute [C].

A. Exhibit C7 should be protected by confidentiality as a document in

negotiation

49. CLAIMANT alleges that the offer made during negotiation is not subject to confidentiality,
because Art. 15 FM Rules applies only to the mediation process [Cl. Memo, para. 31]. However,
RESPONDENT contends that Art. 15 FM Rules can be extended to the negotiations based
on the Parties’ agreement [a], and failing to extend it will risk the annulment of the award [b].

a. The Parties have agreed to extend Art. 15 FM Rules to negotiation

50. Contrary to CLAIMANT’s assertion that FM Rules are inapplicable due to the non-
commencement of the mediation process, as FAI did not receive the request for mediation,
RESPONDENT submits that there is an implied confidentiality agreement between the
Parties, that is, to extend Art. 15(2) FM Rules to the negotiation process. This is based on the
drafting history of the PSA and the communications between the Parties.

51. Firstly, contrary to CLAIMANT’s assertion that Mr. Deiman’s use of the term ‘therein’
limited confidentiality strictly to the mediation process [Cl. Memo, para. 33], RESPONDENT
submits that the reference to “ADR mechanisms” not only indicates a broader scope of
confidentiality, but also demonstrates that CLAIMANT accepted being bound by
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confidentiality obligations during negotiations [Re. Ex. 2, p. 31]. “ADR”(Alternative Dispute

Resolution) is a well-established concept in legal practice, commonly understood to refer to
any methods of resolving disputes outside the courtroom, including negotiations between the
Parties [Berger 2008, pp. 44-48, paras. 66-72; Brown/Marriott, p. 2, para. 1-005; Boulle/Nesic, p.
107-115; Redfern/Hunter, p. 120, para. 1.138; Kendall/Freedman/Farrell, p. 92, para. 6.6]. In
addition, CLAIMANT relied on Art.52 FAI Rules, a general provision that allows the
Tribunal and the Parties to supplement matters not expressly addressed in the rules based on
their spirit [Re. Ex. 2, p. 31]. This reliance indicates an intent to extend confidentiality to
negotiations. Therefore, CLAIMANT has agreed to extend confidentiality to negotiations.

52. Secondly, CLAIMANT argues that RESPONDENT’s attempt to protect Exhibit C7

contradicts its obligation to comply with the UNCITRAL Rules on Transparency (“URoT”),
citing RESPONDENT’s status as a wholly state-owned company [Cl. Memo, para. 34].
However, Art. 1(1) of the URoT limits its application to investor-state arbitration under the
UNCITRAL Arbitration Rules (“UAR”) pursuant to a treaty providing for the protection of
investments or investors. In this case, RESPONDENT, as a state-owned entity, is not
equivalent to the State itself, the arbitration does not follow the UAR, and no relevant treaty
applies. Thus, the URoT is inapplicable to this dispute.

53. Thirdly, CLAIMANT’s submission of Exhibit C7 demonstrates bad faith and breaches the
principle of estoppel. Good faith is a cornerstone of arbitration [Art. 26(3), FAI Rules; Art.
2(A)(1), UML], and estoppel, as one of its key principles, prohibits a party from adopting a
position that contradicts its prior statements or conduct [Born 2001, p. 1585, para. 10.02; Cooke,
p. 38, para. 2; Williston, p. 96, para. 8.3]. In casu, CLAIMANT initially undertook to integrate
confidentiality into the negotiation process but later repudiated this commitment by
submitting Exhibit C7. Given that the Tribunal has the discretion to conduct the proceedings
in a manner it deems appropriate and is obliged to ensure equal treatment of the Parties, it
should consider CLAIMANT’s bad faith and reject the inclusion of Exhibit C7 [Arts.
26(1)&(2), FAI Rules]. Hence, the Tribunal should exclude Exhibit C7 to uphold the
principles of good faith and Protect the legitimate rights of RESPONDENT.

54. In general, the exclusion of Exhibit C7 aligns with the principle of party autonomy, as the
Parties have implicitly agreed to extend Art. 15 FM Rules to negotiations.

b. Failing to extend the confidentiality may risk the annulment of the

award

55. Firstly, under Art. V(1)(d) NYC, an arbitral award may risk non-recognition or non-
enforcement if the arbitral procedure was not conducted in accordance with the agreement
of the Parties or the law of the seat of arbitration. In the present case, the arbitration is
seated in Danubia [Cl. Ex. 2, p. 13]. Notably, there have been requests from various sectors of
society, including the Danubia Bar Association (“DBA”), urging the Danubian legislator to
enact laws to protect the confidentiality of negotiations [Re. Ex. 4, p. 33]. This indicates that
Danubia may introduce legislation to safeguard the confidentiality of negotiations shortly.
Considering that the time between arbitration and enforcement is often lengthy, disregarding
such legislative trends could result in the award being rendered unenforceable due to non-
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compliance with the laws of the seat of arbitration [Art. 44&47 FAI Rules; Art. 17 UML].

56. Therefore, failure to consider Danubia’s potential legislative trends on confidentiality could
jeopardize the enforceability of the award under the laws of Danubia.

B. Even if there is no such agreement, Exhibit C7 protected by without

prejudice privilege

57. Exhibit C7 was sent by RESPONDENT in the title of “without prejudice offer”, which
means that the statements made therein are in furtherance of an amicable settlement of a
dispute, and are inadmissible as evidence in legal proceedings. The without prejudice privilege
is a well-established transnational legal principle, and is generally accepted in international
disputes [Ashford, p. 158, para. 9-39; Alexander, p. 245; Berger 2008, p. 265-276; Dhingra, p. 512;
Haller, p. 313; Spencer/Brogan, p. 316; Saleh, p. 143; Foskett, p. 269, para. 19-02; Ofulue v. Bossert;
Unilever v. The Procter Gamble]. Pursuant to Art. 9(2)(b) and Art. 9(4)(b) IBA Rules, the Tribunal
shall, at the request of a party or on its motion, exclude evidence due to legal impediment or
privilege, especially for settlement negotiation.

58. Therefore, RESPONDENT submits that Exhibit C7 is under the protection of without
prejudice privilege, because it was submitted as part of a sincere effort to resolve the dispute
[a], and the failure to uphold the without prejudice privilege may result in the annulment of
the award [b].

a. Exhibit C7 was sent in a genuine attempt to settle the dispute

59. CLAIMANT argues that Exhibit C7 is an exception to the without prejudice privilege,
because it is not in good faith and does not aim at settlement [Cl. Memo, para. 40]. However,
RESPONDENT contends that Exhibit C7 falls within the scope of without prejudice
privilege.

60. To begin with, the Tribunal should reject to hear the document clearly marked to be
produced “without prejudice”, because it is too difficult to attempt to rule a party’s state of
mind in sending the offer [Haller, p. 317; Kovach, p. 610; Pearson-Wenger, p. 443]. In ICC Case
No.7422, the Tribunal held that they should not evaluate the Parties’ conduct in respect of the
substance, thoroughness and sincerity of their confidential negotiations and must therefore
disregard RESPONDENT’s allegation that CLAIMANT did not act in good faith. It would
be an unfair surprise and unfair treatment if such a document or communication were
admitted as evidence [Art. 9(4)(b) IBA Rules; Berger 2008, p. 275; Haller, p. 318; Rabin v. Mendoza;
Bell v. University of Auckland]. In ICC Case No. 6276, even only the conduct of putting forward
settlement proposals is evidence of good faith [Haller, p. 319]. Hence, The Tribunal should
exclude Exhibit C7 as it is clearly labeled “without prejudice”, regardless of
RESPONDENT’s intent.

61. Secondly, even if in the unlikely case that the Tribunal decides to consider
RESPONDENT’s intent, Exhibit C7 was sent in a genuine attempt to offer possible solutions
to the Parties. The PSA was terminated validly due to the 28-day delay of CLAIMANT to
submit the final plan and the failure to submit plans for e-Ammonia module, which

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constitutes a fundamental breach of the contract [Cl. Ex. 6, p. 19]. In addition, there is a
significant policy change in Equatoriana that less expensive sources of energy are required
because of serious concerns from the public discussions [Cl. Ex. 3&6, p. 14&19]. In light of
these circumstances, RESPONDENT put forward a 15% price reduction or a two-digit
percentage as a possible alternative [Cl. Ex. 7, p. 20].

62. Contrary to CLAIMANT’s accusation that RESPONDENT is “dishonest” or “oppressive”

because its state of profit loss, RESPONDENT’s actions reflect fairness and consideration
[Cl. Memo. 6-550, para. 42]. The proposed price reduction was not intended to exploit
CLAIMANT but to provide sufficient flexibility for a mutually beneficial arrangement.
RESPONDENT offered CLAIMANT a valuable opportunity to enter the Equatoriana
market, which CLAIMANT itself sought to use as a reference project to demonstrate its new
technology’s commercial viability [RA, p. 3, para. 5]. CLAIMANT’s earlier voluntary price
reduction further confirms that profit was not its primary objective for this project [RA, p. 4,
para. 13]. Thus, RESPONDENT’s proposal is neither dishonest nor oppressive but a
reasonable effort to reach a balanced solution.

b. Failure to protect the without prejudice privilege may risk the

annulment of the award

63. Under Art. V(2)(b) NYC, if an award is contrary to the public policy of the country where
recognition and enforcement are sought, the recognition and enforcement may be refused. In
the present case, the country for recognition and enforcement is Equatoriana, which is a
jurisdiction that has followed the American approach. Rules 408 US Federal Rules of
Evidence stipulates that “The evidence of conduct or a statement made during compromise negotiations
about the claim...is not admissible”. According to the Advisory Committee on Proposed Rules
Notes (“AC Notes”), evidence of an offer to compromise a claim is generally inadmissible to
prove the validity or invalidity of the claim.

64. In casu, This exclusion is justified on two grounds: first, such evidence is often irrelevant as
the offer may reflect a desire for peace rather than an admission of weakness; second, it
promotes public policy by encouraging compromise and settlement of disputes. This
principle aims to protect the freedom of negotiation without fear of later prejudicial use.

65. Therefore, if the Tribunal fails to recognize the without prejudice privilege in Exhibit C7, it
may risk the award being set aside.

C. Exhibit C7 is irrelevant and immaterial to the adjudication of the dispute

66. The Tribunal has the discretion to determine the evidence's relevance, materiality and weight
[Art. 34(1) FAI Rules; Art. 27(4) UAR]. Moreover, the Tribunal can exclude evidence due to a
‘lack of sufficient relevance to the case or materiality to its outcome’ [Art. 9(2)(a) IBA Rules;
Marghitola, p. 50]. As drafted, this is a two-pronged standard, requiring that requested
documents be both “relevant” to the Parties’ dispute and “material” to the resolution of that
dispute [Born 2021, p. 3717, para. 2; Ashford 2013, pp. 3-38]. In international arbitration,
“relevant” and “material” documents should be understood as those “essential” to the
resolution of a case [INA Corp v The Islamic Republic of Iran; Glencore (Bermuda) v. Bolivia; Zeph v.
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Australia].

67. CLAIMANT contends that Exhibit C7 should not be excluded because its content is
necessary for the proper adjudication of the case [Cl. Memo. 6-550, paras. 38&39]. However,
RESPONDENT argues that Exhibit lacks the relevancy and materiality to be admitted as
evidence.

68. CLAIMANT contends that “termination is the subject matter of the dispute, so Exhibit C7 is
relevant to be admitted for the proper adjudication” [Cl. Memo, para. 39]. Indeed, while the
arbitration centers around the issue of termination, RESPONDENT submits that Exhibit C7
does not pertain to termination and therefore falls outside the scope of the dispute.

69. Firstly, Exhibit C7 is irrelevant to the central dispute. Chronically, it was sent after the
termination had occurred [Cl. Ex. 6&7, p. 19&20]. In addition, the price reduction is only a
possible settlement proposal, rather than addressing any circumstances or reasons related to
termination itself [Supra, paras. 61&62]. Cases and authorities uphold the view that the
evidence is not relevant to the case, if it is insufficient to substantiate a contention [Yonir
Technologies Inc v. Duration Systems; Abaclat and Others v. Argentine Republic; Ashford 2014, pp. 3-38;
Born 2014, p. 2362, para. 3; Moses, p. 169]. In the present case, by submitting Exhibit C7,
CLAIMANT seeks to establish that RESPONDENT terminated the contract to coerce
CLAIMANT into reducing its price and to demonstrate that RESPONDENT acted in bad
faith [Cl. Memo, paras. 38-42]. However, neither of these allegations can be sufficiently
substantiated. The assertions made by CLAIMANT are speculative and lack the evidentiary
foundation necessary to meet the burden of proof [Supra, para. 61]. Hence, Exhibit C7 does
not meet the criteria of “relevancy”, and should be excluded in the proceedings.

70. Secondly, Exhibit C7 is immaterial to the dispute, because it would not alter the award of the
arbitration. The evidence is material when it has a significant impact on the outcome of the
arbitration [Art. 3(7)(ii) IBA Rules; Born 2014, p. 3717, para. 4; Ashford 2014, pp. 3-38; Waincymer,
p. 859; Redfern/Hunter, p. 510; O'Malley, p. 62, para. 3.78; Vale v. BSG Resources; ABB v. Hochtief].
In the present case, CLAIMANT’s ultimate objective is to obtain specific performance
[Langweiler’s Letter, p. 1]. However, even with the submission of Exhibit C7, CLAIMANT
cannot justify its request. Exhibit C7 fails to provide sufficient evidence to demonstrate that
RESPONDENT’s termination was unlawful or to substantiate the legality of CLAIMANT’s
28-day delay [Supra, paras. 61&62]. As a result, the Tribunal is left with two potential
outcomes: either CLAIMANT agrees to a price reduction of at least two digits, or it must
accept the consequences of the contract’s termination. It is much more practical for the
Tribunal to consider questions of materiality as to individual issues and claims, not the Parties’
entire disputes [Born 2001, p. 3718, para. 1]. Admitting Exhibit C7 would only complicate the
proceedings without providing any substantive value [Semler/Trittmann, p. 102]. Hence, Exhibit
C7 should be excluded by the Tribunal as it would not alter the result of the award.

71. In general, as a result of dissatisfaction with the requirements of relevancy and materiality,
Exhibit C7 should be rejected.

II. The Tribunal should not exclude Exhibit R3

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72. CLAIMANT alleges that Exhibit R3 should be excluded, considering its illegally obtaining
means and the legal professional privilege [Cl. Memo, para. 45]. However, CLAIMANT had no
evidence to prove that Exhibit R3 was obtained through illicit means [A]. The attorney-client
privilege cannot be applied in the pending case [B]. Even if all factors above are considered,
the Tribunal should not exclude Exhibit R3 for the opportunity to have equal treatment [C].

A. CLAIMANT failed to prove any illegality in obtaining Exhibit R3

73. CLAIMANT argues that Exhibit R3 is not admissible as evidence as it is an illegally obtained
document, and the Tribunal should exclude it [Cl. Memo, paras. 45-48]. However, there is no
solid evidence proving Exhibit R3 was obtained illegally [a], and Exhibit R3 is of significant
relevance and materiality to this arbitration for the Tribunal to accept [b]

a. Exhibit R3 was not obtained by illicit means

74. Firstly, CLAIMANT itself could only speculate the acquisition of Exhibit R3 was illegal
without telling how the document came into the possession of RESPONDENT [Langweiler’s
Letter, p.34]. To prove its position, CLAIMANT only lists two possibilities for the leaking of
Exhibit R3, the public prosecution office or the employee of CLAIMANT [Cl. Memo, paras.
47-48]. According to Art. 9(1) IBA Rules, the burden of proof regarding the illegality of
evidence lies with the party making the allegation. However, neither of those were
substantiated by solid evidence. Hence, CLAIMANT failed to prove the illegality of the
acquisition of Exhibit R3.

75. Secondly, contrary to CLAIMANT’s allegations, the admission of Exhibit R3 will not
infringe upon equal treatment [Cl. Memo, parsa. 50-56]. Under Art. 26.2 FAI Rules, the Parties
shall be treated with equality, and each party shall be given a reasonable opportunity to
present its case. However, the acquisition of Exhibit R3 was legal. It is a “reasonable
opportunity” for RESPONDENT to present Exhibit R3 since the link
between RESPONDENT and the public prosecution office was based on speculation.

76. Thus, Exhibit R3 was not obtained through illicit means.

b. EXHIBIT R3 is of significant relevance and materiality to this

arbitration

77. CLAIMANT alleges that Exhibit R3 lacks requisite relevance and materiality [Cl. Memo, para.
57-64]. However, according to Art. 34.1 & Art. 34.2(b) FAI Rules, “The arbitral Tribunal shall
determine the admissibility, relevance, materiality, and weight of the evidence.” and the evidence should
be “relevant to the outcome of the case”. In many cases and authorities, the value of evidence
should be considered, including relevance and materiality [Enron v. Argentina; Muhammad v.
Public Prosecutor; Yukos v. RF; Hulley v. RF; Marghitola, p. 47, para. 1; Art.3(3)(b) IBA Rules;
Art.9(2)(a) IBA Rules; Ashford, p. 30, para. 2; Born 2021, p. 3717, para.2; Redfern/Hunter, p. 145,
para. 1-238]. In casu, Exhibit R3 is of significant relevance and materiality to this arbitration.

78. Firstly, the document is relevant to the outcome of the case. Exhibit R3 manifests the bad
faith of CLAIMANT. At the present stage, it might be difficult to be certain that particular
documents will contain information that will be relevant and material to the outcome of the
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case, the most that can be done is make prima facie judgments of likely relevance and
materiality [Born 2001, p. 3718, para. 3; Hamilton, p. 70, para. 2]. In the cooperation between the
Parties, CLAIMANT assured that the negotiation with P2G was promising, and the local
content requirement would be met [Re. Ex. 2, para. 3; ARA, para. 6&9]. However, Exhibit R3
discloses that CLAIMANT had known the cooperation with P2G was unlikely, indicating bad
faith when signing the PSA [Re. Ex. 3, para. 4]. Moreover, CLAIMANT delayed delivery by 28
days despite RESPONDENT’s repeated emphasis on the time requirement [Cl. Ex. 6, para.2].
Thus, Exhibit R3 is relevant to the outcome of the case.

79. Secondly, the document is material to the outcome of the case. Exhibit R3 unveils that
CLAIMANT violates the good faith principle by putting its interest in saving money above
the overall interests of our cooperation. According to Art. 3. 3(b) and 9. 2(a) IBA Rules, the
requested documents must be prima facie material to the outcome of the case [Marghitola, p. 35,
para. 1]. The standard of materiality requires the Tribunal to determine whether the
document is essential as a basis for concluding a factual or legal allegation [Marghitola, p. 52,
para.3; Raeschke-Kessler, p. 657; Waincymer,p. 859, para. 2; Hanotiau, p. 116, para. 5; Ashford, p. 3-
38]. In casu, on July 10, Ms. Heidi, the Head of CLAIMANT’s Legal Department, sent an
email revealing that CLAIMANT’s CEO had inquired whether the assurances and
misrepresentations about the quality of P2G’s product were in violation of Equatoriana’s laws
[Re. Ex. 3]. The true intent of CLAIMANT’s assurances and misrepresentations was to
cooperate with Green Ammonia to seek unjustified advantages of EUR 75 million [Cl. Ex. 5,
para. 12]. CLAIMANT’s deception, coupled with a 28-day delay and the failure to produce the
e-Ammonia plan, resulted in the inability to fulfill the contract’s requirements [Re. Ex. 1, para.
12; Re. Ex. 3]. Thus, Exhibit R3 presents the violation of good faith principles, and is
material to the outcome of the case.

80. Therefore, Exhibit R3 is indispensable, and it is not obtained by illicit means, the Tribunal
should not exclude it.

B. The legal advice privilege cannot be applied in the present case

81. CLAIMANT argues that the admission of Exhibit R3 would violate the confidentiality of
attorney-client communication [Cl. Memo, paras. 65-69]. Nevertheless, such legal professional
privilege does not exist [a]. Even if the privilege exists, the Tribunal should not exclude
Exhibit R3 [b].

a. EXHIBIT R3 does not have legal professional privilege

82. Firstly, the Mediterranean law shall be the governing law of this legal advice privilege,
but Mediterraneo lacks such regulation [Re. Ex. 4]. The regulation of legal advice privilege
differs greatly from jurisdiction to jurisdiction. There is no universal standard for applying
legal privilege in international arbitration. In-house counsel’s privilege is particularly
controversial [Waincymer, p. 812, para. 2; Bernhard, p. 174, para. 2]. When it comes to choosing
the governing law, the “Closest Connection” or “Most Significant Relationship” test is often applied.
There are some factors to be considered when applying the closed connection test, for
example, the place where the relationship was established, the location of the client, and the
jurisdiction where the lawyer practices law [ICC Case No. 9517; ICC Case No. 7177; ICC Case
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No. 9415; ICC Case No. 11864; ICC Case No. 8177; Born 2021, pp. 778-779. paras. 3-7]. In the
pending case, the relationship between CLAIMANT and Ms. Heidi was established in
Mediterraneo [Re. Ex. 3, para .1]. CLAIMANT is a Mediterranean company, the head of the
legal department got her bar in Mediterraneo as well [Re. Ex. 3]. Based on the closed
connection test, the Mediterranean law shall be the governing law of this legal advice
privilege. Unfortunately, there was no governing law for this legal advice privilege in
Mediterraneo [Re. Ex. 4]. Such a legal advice privilege cannot be applied in the present case.

83. Secondly, the relationship of lawyer-client does not exist since whether Ms. Heidi constitutes
a lawyer remains vague. There is a clear criterion for determining whether a corporate legal
counsel can claim legal professional privilege, their ability to separate themselves from the
role of an employee, and providing legal advice with independence [Akzo Chemicals v.
Commission; AM & S v. Commission]. In casu, Ms. Heidi is the head of the legal department [Re.
Ex. 3]. The legal advice from Ms. Heidi should be considered advice from an employee rather
than an independent lawyer. Ms. Heidi should not be deemed a lawyer, so the relationship of
lawyer-client does not exist.

b. Even if EXHIBIT R3 has legal professional privilege, it does not

prevent the Tribunal from adopting it.

84. Firstly, the attorney-client privilege is not absolute, and some exceptions may justify the
disclosure of privileged information, particularly when legal advice is sought to further a
criminal act or fraud [Waincymer, p. 813, para. 1; Crescent Farm v. Sterling; Banque Keyser v. Skandia
Insurance]. Consequently, even if Exhibit R3 has legal professional privilege, it does not
prevent the Tribunal from adopting it. In many cases, it is supported that the communication
will not be protected by legal professional privilege when such communication constitutes
advice to commence a crime or fraud [R v. Cox; Crescent Farm v. Sterling; Gamlen Chemical v.
Rochem]. Furthermore, such “crime or fraud” could be possibly interpreted as “dishonesty or
reprehensive conduct” [Skuse v. Granada].

85. Secondly, in casu, CLAIMANT’s conduct has manifested its bad faith, namely “dishonesty”
[Supra, para. 78]. CLAIMANT first informed RESPONDENT that it intended to collaborate
with P2G, but later opted for a more cost-effective alternative, Green Ammonia [ARA, p .26,
para. 6&9; Re. Ex. 2]. This deceptive conduct is crucial, as RESPONDENT might not have
entered into the contract had it been aware of the true situation [Re. Ex. 2, para. 3; RA, p. 5,
para. 19; Cl. Ex. 6, p. 19, para. 3; ARA, p. 26, para. 11].

86. Thus, even if Exhibit R3 is protected by legal professional privilege, it does not prevent the
Tribunal from adopting it.

C. The exclusion of EXHIBIT R3 might deprive the opportunity to have equal

treatment.

87. Firstly, without Exhibit R3, RESPONDENT would be unable to present its case fairly. The
right to be heard constitutes a fundamental principle of fair proceedings and serves as an
essential procedural safeguard [Baldwin, p. 233; Schwarz/Konrad, paras. 20-031; Art. 18 NYC;
Art. V(1)(b) UML]. The responsibility of the arbitrator is to ensure the fair functioning of the
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arbitral process [Waincymer, p .12, para. 3; Fortier, p. 69, para. 2; Bernardini, p. 121, para. 3; Park, p.
509, para. 8; Garnett, p. 83; Marghitola, p. 37, para. 1]. Art. V(1)(b) NYC explicitly provides that
an arbitral award cannot be enforced if a party is denied the opportunity to be heard in a
meaningful manner [Qingdao v. P and S; Iran Aircraft v. Avco].

88. Secondly, in casu, Exhibit R3 serves as evidence of CLAIMANT’s attempt to invoke the legal
professional privilege in order to conceal dishonest behavior [Re. Ex .2, para. 3; RA, p. 5, para.
19]. If the Tribunal dismisses Exhibit R3, it may inadvertently overlook CLAIMANT’s
deceptive tactics, potentially resulting in an unjust outcome. Should the Tribunal exclude this
vital evidence, the arbitral award could become unenforceable under Art. V(1)(b) NYC. This
provision guarantees that a party’s right to be heard is upheld during the arbitration process.
If RESPONDENT is prevented from presenting all pertinent evidence, the award may be
deemed unenforceable, as it would breach the core principle of fairness enshrined in the
Convention.

***

89. In conclusion, the Tribunal should exclude Exhibit C7 because it is confidential and
protected by without prejudice privilege. Moreover, it lacks relevance and risks annulment
under Art. V(1)(d) NYC. In contrast, the Tribunal should admit Exhibit R3 since
CLAIMANT failed to prove illegality, and privilege does not apply. Furthermore, excluding it
would violate RESPONDENT’s right to be heard, risking unenforceability under Art. V(1)(b)
NYC.

ISSUE C: CISG IS INAPPLICABLE TO THE PSA

90. The Tribunal shall reject CLAIMANT’s claim for applying CISG, because the present case
does not satisfy the requirements for the application of CISG. First, According to Art. 2(b)
CISG, any contract form by auction should be excluded [I]. Second, the VT is the place of
business most closely connected to the contract and the PSA lacks international elements [II].
Furthermore, the nature of the PSA is a turnkey contract and its preponderant part is the
non-sales part, so this transaction cannot be governed by CISG [III].

I. The PSA falls out of CISG’s governance as a contract formed by auction

91. CLAIMANT contends that CISG’s application is not excluded as CLAIMANT was not
selected through an auction and the reverse auction was simply a part of the bidder selection
process [Cl. Memo, para. 97]. However, in combination with the principles of interpretation
and the facts of the case, RESPONDENT disagrees with this assertion and submits that the
Reverse Bid Auction falls within the scope of Art. 2(b) CISG [A]. Furthermore, the Reverse
Bid Auction plays a decisive role in forming the PSA [B].

A. The Reverse Bid Auction falls within the scope of Art. 2(b) CISG

92. CLAIMANT argues that reverse auctions or procurement auctions do not fall under this
exclusion, emphasizing that the Art. 2(b) CISG exclusion is narrowly intended and does not
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cover reverse auctions [Cl. Memo, para. 100]. However, through analyzing the common
characteristics of auction and reverse auction as well as the legislative drafting history and the
purpose of CISG, RESPONDENT asserts that the Reverse Bid Auction is the auction for its
essential characteristic [a]. In addition, the legislative history and purpose CISG also suggest
that the Reverse Bid Auction should be excluded [b].

a. The Reverse Bid Auction is the auction for its essential characteristic

93. The PSA is formed by a reverse auction, which is exactly one kind of auction. According to
Art. 2(b) CISG does not apply to sales by auction. An auction is a public sale that is
substantively characterized by competitive bidding, with the aim of achieving the best price,
and the goods are always awarded to the highest bidder [Schlechtriem/Schwenzer, p. 311, para 20;
Kröll, p. 47, para. 28; Slakoper, p. 155; Sale of Horse Via Internet Auction Case].

94. In this case, the formation of the PSA consisted of a bidding phase in which the lowest
bidder was selected, which was consistent with the auction objective of obtaining the best
price through bidding [Cl. Ex. 1, pp. 8-9; CE 5, p. 16, para. 9]. CLAIMANT emphasizes the
Art. 2(b) CISG exclusion is narrowly intended and does not cover reverse auctions [Cl.
Memo, para.99]. This ignores the essential feature of auctions, which is that both auction and
reverse auction fundamentally involve a bidding process aimed at achieving the most
competitive price in the transaction. Hence, RESPONDENT asserts that the scope of Art.
2(b) CISG is wider than CLAIMANT’s claim. Reverse auctions fall within the scope of Art.
2(b) CISG.

95. Thus, RESPONDENT chooses to use the reverse auction as the means by which Parties
complete the transaction, and the process is consistent with the characteristics of auction,
which is in line with Art. 2(b) CISG “by auction”.

b. The legislative purpose and drafting history of CISG would exclude the
Reverse Bid Auction

96. Even if the formation of the PSA is slightly different from an auction, since it is still
consistent with the legislative rationale of exclusion of “sales by auction”, CISG should still
be excluded by Art. 2(b) CISG. There are two main considerations for excluding “auction”
sales in Art. 2 (b) CISG. First, based on the unique mechanism of awarding a contract in an
auction to the bidder offering the most competitive price, the seller cannot predict who the
buyer will be and whether CISG will apply [Honnold, p. 106, para. 51, Online Auction of Car
Case]. Second, traditionally, auctions held in a place are governed by the laws of that place and
not by other rules [ibid. para. 96; Vegetables Auction Case]. Given that local law often applies
special provisions to auction sales, CISG will not apply [Honnold, p. 106, para. 51].

97. Regarding the first legislative rationale, RESPONDENT stated in the Request for Quotation
(“RFQ”) that the request is for a quotation for the planning, construction, and delivery of a
plant for the plant production of green hydrogen with features defined in the attachments
(Basic Ordering Agreement) [Cl. Ex. 1, p. 8]. RESPONDENT selected the contracting party
based on a fixed criterion of the lowest price under the premise of meeting local content
requirements, without specifying any particular requirements regarding the bidders’ place of
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business, which is why CLAIMANT became the contracting party. There was no
predictability for RESPONDENT regarding where the buyer’s place of business would be
and whether CISG would apply. Regarding the second legislative rationale, RESPONDENT
is a fully government-owned company which play an important role of procurement in the
“Green Energy Strategy” of the Government of Equatoraina [ARA, p. 3, para. 2]. Due to the
administrative nature of the bidding process, the Public Procurement Law of Equatoriana
(“PPLE”) governs it [ARA, p. 3, para. 3; Cl. Ex. 1, p. 9, Art. 8]. This also aligns with the
legislation rationale that local law typically applies in auction cases, exclude CISG.

98. Thus, in this Reverse Bid Auction, RESPONDENT could not predict CALIMANT’s place
of business, and RESPNDETNT stated in the RFQ that PPLE governed the bidding process,
and CLAIMANT had no objection at the time of contracting. The exclusion of the Reverse
Bid Auction is consistent with CISG’s legislative purpose and drafting history.

99. Therefore, the Reverse Bid Auction in this case falls within the scope of Art. 2(b) CISG.
Both the essential characteristics of the auction and the legislative purpose and drafting
history of CISG support the exclusion of the Reverse Bid Auction from the
application of CISG. This legal interpretation is consistent with the principles and
objectives of CISG, ensuring that the unique mechanisms and legal frameworks of auctions
are respected and applied appropriately.

B. The Reverse Bid Auction plays a decisive role in forming the PSA

100. Contrary to CLAIMANT’s assertion that CLAIMANT was ultimately chosen through a series
of negotiations and the auction was not the final determinant or the basis for concluding the
contract [Cl. Memo, para. 101], RESPONDENT alleges that in the process of the conclusion
of international commercial contracts, Reverse Bid Auction often plays a decisive role in the
formation of contracts as a special way of bidding. In a reverse auction, the bidder’s offer is a
key factor in the conclusion of the contract, as the bidder usually selects the final contract
partner based on the price offered [Art. 56, UMLPP].

101. In this case, the Reverse Bid Auction played a decisive role in forming the PSA. The Reverse
Bid Auction is the second stage of the bidding process, where all previously registered
bidders must submit their bids online. RESPONDENT has developed a complex formula
weighing inter alia the technologies used, the efficiency of the plant and other factors to
arrive at the calculated price. Then the reverse auction was conducted based on these
formulas and the calculated price, which resulted in two final bidders being identified and
with whom individual negotiations were held [PO2, p. 52, para. 9]. In addition, CLAIMANT
submitted an offer in the reverse auction that met technical specifications and was
competitive in price while meeting local content requirements, which led RESPONDENT to
decide to enter into further negotiations with it [ARA, p. 4, para. 10; Cl. Ex. 5, para. 9].
Although further negotiations and discussions ensued, they were conducted supplementary to,
and rather than in substitution for the results of the reverse auction.

102. Hence, the Reverse Bid Auction played a decisive role in forming the PSA. The offers and
commitments in the reverse auction were key factors in CLAIMANT’s eventual selection.
Although further negotiations and discussions ensued, these were conducted on the basis of
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the results of the reverse auction. Therefore, the reverse auction is the final determinant of
the conclusion of the PSA and not the result of subsequent negotiations.

II. The PSA falls out CISG’s governance for lacking international elements

103. CLAIMANT alleged that the PSA is governed by CISG due to its international elements [Cl.
Memo, para. 72]. However, its allegation is against the facts. The acquisition of VT had
symbolized that CLAIMANT owns a place of business of the PSA [A]. Additionally, VT is
the place of business that has the closest relationship to the PSA [B].

A. Both CLAIMANT and RESPONDENT have place of business in

Equatoriana

104. The Parties constantly agreed that the place of business of RESPONDENT is located in
Equatoriana. CLAIMANT alleges that its place of business is located in Mediterraneo since it
owns a place of business which was in Mediterraneo [Cl. Memo, para. 76]. As an entity of
transformer industry, VT is tightly connected to CLAIMANT and actually constitutes a place
of business of CLAIMANT [a]. Additionally, CLAIMANT’s place of business is located in
Equatoriana when the PSA was concluded [b].

a. VT constitutes the place of business according to CISG.

105. To satisfy the definition of place of business in CISG, the place used by a party requires a
certain (1) duration and (2) stability as well as (3) independence in the general view [CISG-
online No. 117& 583& 659& 737& 1978; Schlechtriem/Schwenzer, p. 281, para. 23; Kröll, p. 33,
para. 43]. To put it another way, it suggests that under CISG “place of business” requires a
genuine and effective link of the business with a place with at least regular business activity.
As a result, the place of contracting does not necessarily constitute a place of business [ICC
Case No. 9781, para. 33].

106. In casu, as an Equatorianian entity, VT has been producing transformers for CLAIMANT in
Mediterraneo for another project since 2020 instead of a temporary place for production [RA,
p. 3, para. 8], which meets the requirement of (1) duration. Additionally, CLAIMANT admits
that VT has established a long-time cooperation and connection with them, and VT owned
the capacity of producing two transformers of the size acquired by CLAIMANT [PO2, p. 52,
para. 5], it proves that VT is relatively stable and able to maintain certain commercial
operations, which meets the requirement of (2) stability. Moreover, despite producing the
transformer ordered by CLAIMANT, VT still produced transformers for other individual
contracts. This means that VT should be able to work independently in the business,
including having an independent management structure and contract negotiation ability,
which meets the requirement of (3) independence.

107. Thus, VT constitutes the place of business according to CISG.

b. VT is CLAIMANT’ s place of business in Equatoriana

108. To apply CISG, diversity of place of business is an absolute condition for Art. 1(1) CISG to
operate [Krll, p. 34, para. 44]. Hence, the fact that the place of the conclusion of the contract is
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located in a different State from the State in which the performance takes place does not
render the contract “international” [CISG-online No. 31]. It is, however, not necessary for a
place of business to represent the center of a party’s business activities [Schlechtriem/Schwenzer,
p. 281, para. 23], consequently a branch office is generally sufficient for the notion of ‘place
of business’ but has to fulfill the mentioned requirements [ibid. para. 108; CISG-online
No. 1509].

109. In casu, VT has already constituted CLAIMANT’s place of business before its later formal
acquisition by CLAIMANT since it was nearly exclusively producing for CLAIMANT.
CLAIMANT may allege that it had no formal or informal agreement granting VT control or
influence over it [Cl. Memo, para. 76]. The allegation is against facts. On the contrary, from
June 2023 onwards, VT’s agreement with CLAIMANT is of utmost priority “making up of
70% its production capacity” [PO2, p. 52, para. 5]. To deliver the prioritized transformer, VT
had no choice but to allocate other resources from contracted transformers for its production.
The priority was not exposed by CLAIMANT, but the later acquisition confirmed
CLAIMANT’s intendance. Thus, VT is CLAIMANT’ s place of business in Equatoriana.

110. Therefore, Both CLAIMANT and RESPONDENT have place of business in Equatoriana.

B. VT is the place of business that has the closest relationship to the PSA

111. Even if Green Hydro in Mediterraneo may also constitute a place of business of
CLAIMANT, VT is the place of business that has the closest relationship to the PSA.
CLAIMANT intends to stress the time of acquisition to divert the Tribunal’s attention on the
situation known by the Parties before (or when) the PSA was concluded. Regardless of
whether the PSA has been concluded, the preponderant part of the PSA is planned to
perform and substantively performed in Equatoriana. CLAIMANT’s place of business is
located in Equatoriana when the PSA concluded [a] and is also the place of performance of
the PSA [b].

a. CLAIMANT’ s place of business was located in Equatoriana when the

PSA concluded

112. Based on the “place of closest relationship principle”, the location of VT should be
CLAIMANT’s place of business under the contract. If the Parties have more than one place
of business, the place of business is the closest to the contract and its performance [Art.
10, CISG]. A place of business closely connected with the contract or its performance means
a place of business that is essential to forming or performing the contract [Secretariat
Commentary, p. 19, para. 6; Schwenzer, p. 91; Kröll, p. 187, para. 24; Ferrari, p. 54]. Art. 10(a)
CISG is based on the assumption that the relevant circumstances were known to the Parties
or contemplated by them [Schlechtriem/Schwenzer, p. 546, para. 9]. When considering the
question of which of several existing places of business has the closest relationship to the
contract, only the circumstances known to the Parties before or at the time of the conclusion
of the contract are of relevance [Schlechtriem/Schwenzer, p. 546, para. 8].

113. In casu, CLAIMANT had kept ahead of the competition with other bidders of RFQ due to its
initial promise. While the Parties were in final negotiations, CLAIMANT had promised that
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“it had been in very promising negotiations with two local producers (VT & P2G)” [RA, p. 4,
para. 12], and the local content of the PSA would achieve around 45% by entities from
Equatoriana [ibid. para. 113]. To improve the local content and green energy industry is the
purpose of RFQ, and is also the essential reason RESPONDENT chose to conclude PSA
with CLAIMANT [RA, p. 3, para. 2; ARA, p. 25, para. 3]. Although CLAIMANT had already
before the conclusion of the PSA seriously doubts that a contract with P2G would be
concluded but did not want to disclose them to RESPONDENT at the time, the closest place
of business was still in Equatoriana based on RESPONDENT’s knowledge [Asante v. PMC-
Sierra; R3, p. 32]. If the PSA is exercised as expected by the Parties, the proportion of the
goods supplied by entities having their place of business in Equatoriana would be 56%, with
44% supplied in Mediterraneo (see the chart below) [Cl. Ex. 2, p. 11; Cl. Ex. 5, p. 16, para. 9].
It is reasonable for the calculation since CLAIMANT had negotiated with P2G in detail and
fixed the price and all other contractual terms in a way that RESPONDENT only has to
exercise them [PO2, p. 54, para. 18]. Furthermore, at the time of contracting both Parties
assumed RESPONDENT would make use of the eAmmonia option once the necessary
funding was available.

114. Thus, CLAIMANT’ s place of business was located in Equatoriana when the PSA
concluded.
Investment in Supply Total Investment Mediterraneo (Mio €) Equatoriana (Mio €)
of Goods (Mio €)

Electrolyser 140 Mio € 60 Mio € 80 Mio €

Core system 100 Mio € 60 Mio € 40 Mio €
Trafo and electrical 40 Mio € 0 Mio € 40 Mio €
equipment
EPC-Work 50 Mio € 50 Mio € 0 Mio €
Compressor, pipes, 50 Mio € 50 Mio € 0 Mio €
cable installation,
connections, and other
equipment
Option 60 Mio € 0 Mio € 60 Mio €(P2G)
(with P2G as
originally promised)
Total 250 Mio € 110 Mio € 140 Mio €

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b. In any event, VT is the place of performance of the PSA

115. The wording of Art. 10(a) CISG suggests that preference should be given to the place of
performance over the place of conclusion of the contract, and VT is the place of business
for the performance and inspection of the goods [Ferrari, p. 31]. As to the question of which
place of business was contemplated to have the most influence on the performance of the
contract, the place of performance and inspection of the goods is particularly significant in
this regard [BGH, NJW 1982, 2730, 2731; Schlechtriem, Art. 10, para. 7].

116. For CLAIMANT, VT is the place of business responsible for providing and delivering the
goods to RESPONDENT. As the transformers and stacks were manufactured by VT in
Equatoriana, CLAIMANT planned for them to be delivered directly to the site where it was
to be integrated into the existing infrastructure (electricity, pipes, buildings) [PO2, p. 53, para.
16]. Furthermore, under the contractual arrangement, VT was also responsible for the
delivery of the stacks and the packaging services, which were to be provided by Volta
Electrolyser [PO2, p. 52, para. 5]. More importantly, there is no evidence to suggest that
GreenHydro participated in the delivery or inspection of the goods. Thus, VT is the place of
business for the performance and inspection of the goods.

117. Therefore, VT is the place of business that has the closest relationship to the PSA.

III. The PSA falls out of CISG’s governance due to its nature

118. It is CLAIMANT’s position that CISG governs the PSA on two grounds. First, its turnkey
contract nature does not exclude itself from Art. 3(2) CISG. Second, the preponderant part
of the PSA is related to sales instead of service [Cl. Memo, para. 87]. CLAIMANT argues
that the preponderant part of the PSA is the sale of the 100 MW Plant, both quantitatively
and qualitatively [Cl. Memo, para. 93].

119. However, the PSA is not governed by CISG as its nature is a turnkey contract, which falls out
of CISG’s governance [A]. Contrary to CLAIMANT’s proposed analysis of the PSA, the
economic value of the two sections in the PSA never indicates that the sale predominates [B].
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A. The PSA is not a contract for sales of goods governed by CISG

120. CISG only applies to contracts that fall within its substantive scope. In light of Art. 1(1) CISG,
the scope of application of CISG is limited to contracts for the sale of goods. The term “sale”
requires a contract involving the delivery of goods and in return for payment.

a. The PSA is a turnkey contract instead of a sales contract

121. CLAIMANT asserted that the PSA is about a contract of sale [Cl. Memo, pp. 69-70, paras. 91-
96]. However, the wording used by both Parties and the main obligations of the Parties
indicate the PSA’s turnkey nature.

122. First, the wording used by both Parties indicates the PSA is a turnkey contract. For the
statement of Mr. Poul Cavendish, CLAIMANT’s CEO, used the term “turnkey” to describe
details of the contract value [Cl. Ex. 5, para. 11]. Most obviously, RESPONDENT directly
used the term “turnkey” in the RFQ [Cl. Ex. 1, para. 1], which implied that the PSA was
concluded as a turnkey contract from the outset.

123. Moreover, the wording of the PSA displays the turnkey nature. It is also supported by the
fact that the Parties used the respective designations of “customer” and “contractor” instead
of “buyer” and “seller” when concluding the contract [Cl. Ex. 2, p. 10].

124. Further, the obligations of the Parties involve much more than the delivery and payment of
the 100 MW plant. For CLAIMANT, the engineering, planning, construction of the
plant, training and maintenance services stipulated in the contract constitute an essential part
of the agreed performance [Cl. Ex. 2]. For RESPONDENT, there are several obligations
regarding permissions, installation, and commissioning, apart from the payment [Cl. Ex. 2, p.
10 & 11]. In casu, CISG is not applicable to the PSA, which constitutes a mesh of reciprocal
obligations of participation and assistance rather than a relationship involving the exchange
of goods against money [Waste Separation Machines Case].

125. Thus, the PSA is a turnkey contract which shall not governed by CISG.

b. The turnkey contract falls out the scope of CISG’ s governance for a
“Plant” shall not be considered as “goods”

126. CLAIMANT argues that a turnkey contract can be governed by CISG [Cl. Memo, p. 70, para.
93]. However, as the plant falls out of the sphere of the goods that made the application of
CISG impossible.

127. Though CISG did not give the definition of “goods”, but the case law shows that “goods”
should be “moveable and tangible” at the moment of delivery [Schlechtriem/Schwenzer, p. 278,
para. 16; CISG Digest, p. 7, para. 28]. Two sufficient conditions can be explained regarding
“moveable”. One is when goods become movable as a result of the sale, as is the case with
minerals or crops in the ground, and the other is when goods are movable on the date of
delivery, even though they are temporarily attached to real estate [Schlechtriem/Schwenzer, p. 279,
para. 17]. However, in casu, the PSA is mainly for the construction of the plant designated to
be built at a specific site according to Annex 1 of the RFQ [Cl. Ex. 1, para. 1], the position is
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completely different from the above two situations. Since it is generally accepted that CISG
will not apply to immovable property or property which is at law treated as immovable [Kröll,
p. 32, para. 39], the plant shall not be deemed to be “goods” due to its immovability at the
time of delivery.

128. Thus, CISG shall not be applied to the turnkey contract.

B. Even if the PSA is a mixed contract, the preponderant part of the PSA is not
sales of goods

129. CLAIMANT asserts that CISG can apply to the PSA since it was a mixed contract [Cl. Memo,
paras. 84-90]. A mixed contract typically encompasses the supply of labor or other services as
well as the sales [CISG-online No. 327]. However, when the Tribunal considers the applicability
of CISG shall nonetheless consider the PSA a mixed contract.

130. According to Art. 3 (2) CISG to evaluate whether a mixed contract shall be governed by
CISG, the Tribunal shall focus on the nature of the preponderant part of the agreement
[CISG Digest, p. 20, para. 4]. The measurement of the preponderant part shall consider the
economic value in object [a] and the Parties’ intention in subject [b].

a. In object, the economic value of a preponderant part of the PSA is the

non-sales part

131. CLAIMANT argues that the sale is quantitatively the predominant part of the PSA through
the analysis of economic value [Cl. Memo, pp. 68-69, paras. 84-90]. However, CLAIMANT’s
analysis is unreasonable. The table that CLAIMANT mentioned only displayed the economic
value of the electrolyser and the EPC-work. Since the PSA also requires CLAIMANT to
provide two options for the plant [Cl. Ex. 2, Art. 1], when evaluating the proportion of the
preponderant part of the PSA, two options shall be taken into account. As the table provided
by CLAIMANT failed to demonstrate the full picture of the constitution of the PSA’s
economic value, the Tribunal shall not rely on calculation of the table to estimate the
preponderant part of the PSA is the sales part.

132. Even if the Tribunal accepts the table to evaluate the economic value, the preponderant
element of the PSA remains the non-sales part. For EUR 160 million is allocated to the non-
sales part of the total EUR 300 Mio investment [Cl. Ex. 5, p. 17, para. 11]. The EUR 160 Mio
non-sales part was constituted by the EUR 60 Mio in packaging, project management and
engineering, site works, and training and maintenance for electrolyser and the EUR 100 Mio
EPC work [ibid. para. 132]. Based on this calculation, the economic value of PSA’s non-sales
part reaches 53.3% of the total investment, which obviously exceeds the requirement of 50%
[CISG Digest, p. 20, para. 4; Prada v. Caporicci].

133. Thus, it is biased to judge the proportion of sales factors based on this table alone.

b. In subject, the purpose of the PSA demonstrates that the preponderant

part is the non-sales part

134. The objective economic test was not the sole method to evaluate the preponderant part of
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the PSA, for the Parties’ intention shall be considered either [CISG-online No. 2371; Tissue-
Paper Case].

135. In casu, RESPONDENT’s primary purpose was to obtain an operational plant for sustainable,
long-term production of green hydrogen [ARA, p.3, para. 2; Cl. Ex. 2, p. 10]. And
CLAIMANT’s service plays an essential work in delivering the plant for the production of
green hydrogen [ARA, p.3, para. 2; RFQ, p. 8, para. 1; Cl. Ex. 2, p. 11, Art. 2]. Since the PSA
requires CLAIMANT to undertake engineering, planning and construction of the plant,
providing maintenance and training services, these non-sales obligations demonstrate the
Parties’ intention to focus on services provided by CLAIMANT instead of purchasing
materials.

136. Thus, the non-sales part is the preponderant part of the PSA.

***

137. In conclusion, the Tribunal should refuse the request for the application of CISG in three
reasons. First, CISG is inapplicable to the PSA by auction. Second, CISG is inapplicable to
the PSA as a domestic transaction. Third, CISG is inapplicable due to the nature of the PSA.

ISSUE D: THE PARTIES VALIDLY EXCLUDED THE APPLICATION

OF CISG

138. Under Art. 6 CISG, the Parties are entitled to exclude its application through party autonomy
[Art. 6 CISG; CISG Digest, p. 33, para. 3; Schlechtriem/Butler, p. 18, para. 19; Lookofsky, p. 35, para.
5; CLOUT Case No. 229]. The issue in presence is whether CISG’s application was effectively
excluded under the provisions of the PSA.

139. CLAIMANT argues that the Parties did not validly exclude the application of CISG [Cl. Memo.
No. 39, p. 26, para. 98]. However, the Parties effectively opted out CISG’ s application. In this
case, the exclusion clause in the PSA is valid [I]. Moreover, the Parties’ statement and conduct
show the intention to exclude CISG [II].

I. Art. 29 PSA is valid

140. Pursuant to Art. 2.1.20 of Equatorianian Civil Code, a standard term that a party could not
reasonably have expected is considered a “surprising term” and, consequently, invalid.
However, Art. 29 PSA remains effective, as it was reasonably foreseeable [A], and
CLAIMANT expressly accepted this term [B].

A. Art. 29 PSA is reasonably foreseeable

141. When assessing whether a term constitutes a “surprising term”, one must consider its content,
language, and presentation [Art. 2.1.20(2), PICC]. A standard term that lacks a clear
rationale—such as a contract between Parties from Country X and Country Y designating the
law of an unrelated Country Z as the governing law—would generally be deemed unexpected
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and unreasonable [Vogenauer, p. 403, para. 17].

142. In casu, the rationale for choosing Equatorianian law was evident to the Parties. Art. 29
PSA was selected for political reasons, with the aim of strengthening the role of
Equatorianian law and establishing Equatoriana as a preferred venue for dispute resolution
[Re. Ex. 1, p. 29, para. 7]. Furthermore, during negotiations, CLAIMANT was fully aware of
this clause’s inclusion in the PSA [Re. Ex. 1, p. 30, para. 11]. Additionally, it is clear that
CLAIMANT had concluded two smaller contracts with other government entities based on
the old Model Contract before [PO2, para. 52], which suggests that CLAIMANT was familiar
with a similar contract clause. Additionally, the governing law clause in the new version of the
Model Contract was prepared on the list of issues to be discussed by CLAIMANT’ s former
head of legal, Mr. Law, after reviewing the model contract and its variations [PO2, para. 53].
Ms. Heidi Smith had checked that under all potentially applicable regimes [Re. Ex. 3, p. 32]

143. Thus, CLAIMANT has no reason to consider Art. 29 PSA as a surprising term.

B. Even if Art. 29 PSA is a Surprising Term, it was accepted by CLAIMANT

accepted expressly

144. A term that might otherwise be considered surprising remains enforceable if it was
specifically brought to the attention of the adhering party and the party proceeded with the
contract without raising any objections [ibid. para. 142]. In such circumstances, a later claim
that the term is ineffective due to its surprising nature would be inconsistent with the
principle of good faith.

145. In casu, CLAIMANT was aware of the existence of Art. 29 PSA, as Mr. Cavendish explicitly
mentioned this clause during negotiations with Mrs. Faraday [Re. Ex. 1, p. 30, para. 11].
Additionally, it is clear that CLAIMANT had already used the Model Contract in a previous
transaction with another entity of Equatoriana [PO2, p. 53, para. 11], and during the Parties’
negotiations, CLAIMANT raised the question about the governing law. This indicates
CLAIMANT was aware that the provision on the applicable law is distinguished from the
previous transaction. Since CLAIMANT was aware of the change to the choice of law clause
and entered into the PSA with RESPONDENT on 17 July 2023, the Parties demonstrated
the intention for the exclusion of CISG. Moreover, throughout the PSA’s performance,
CLAIMANT never raised any objections regarding Art. 29 PSA until RESPONDENT
terminated the PSA. Therefore, CLAIMANT expressly accepted Art. 29 PSA.

146. Thus, in light of the above, Art. 29 PSA is a valid and enforceable provision.

II. The Parties excluded the application of CISG implicitly

147. Contrary to CLAIMANT’s position, the Parties have implicitly excluded the application of
CISG to the PSA when the Parties chose the Equatorianian law as the governing law of the
PSA [Cl. Ex. 2, p. 12, Art. 29]. There exists such a possibility to exclude CISG implicitly [A].
Furthermore, the amendment made to the Model Contract reveals that RESPONDENT
intended to exclude the CISG [B] and CLAIMANT was completely aware of that intent [C].

A. CISG allows the Parties to exclude its application implicitly

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148. Under Art. 6 CISG, the Parties are entitled to exclude CISG via party autonomy [CISG Digest,
p. 33, para. 3; Schlechtriem/Schwenzer, p. 390, para. 4; Schlechtriem/Butler, p. 18, para. 19; Lookofsky,
para. 5, p. 35]. It follows from this principle of party autonomy that the application of CISG
itself is secondary to any agreement by the Parties [Schlechtriem/Schwenzer, p. 450, para. 48].
Pursuant to this general principle, it is possible for Parties to exclude the application of CISG
implicitly by choosing the law of the Contracting State as the governing law [CISG Digest, p.
34, para. 11; Cobalt Case; CLOUT Case No. 483; Stainless steel Case; Russia CCI 16/03/2005].
More than that, most tribunals admit the implicit exclusion of CISG in the situation that the
Parties’ intention is clear and real [Fishing boat Case; Car Case].

149. Thus, the Parties didn’t need to have a specific mention about the exclusion of CISG, for the
implicit exclusion is possible.

B. The modification of the Model Contract demonstrates RESPONDENT’s

intent to exclude CISG

150. CLAIMANT argues that the interpretation under Art. 8 CISG further supports the
applicability of CISG [Cl. Memo, para. 126]. RESPONDENT disagrees. Subjective intent
under Art. 8(1) CISG focuses on the statement-makers will when that was known or could
not be ignored by the recipient [Kröll, p. 150, para. 8]. Pursuant to Art. 8(3) CISG, to
determine whether RESPONDENT’s intention is clear and real, due consideration shall be
given to all relevant objective circumstances of the PSA [AC Opinion 16, p. 7, para. 3.7; CISG
Digest, p. 56, para. 21].

151. As for the wording, the revision of the choice of law clause clearly reflects the intention to
preclude the applicable CISG. An earlier version of the Model Contract, in which the
application of CISG was explicitly provided for, was replaced by the 2022 version [Re. Ex. 1,
para. 7]. Due to its nature as a government-owned company, RESPONDENT selected the
2022 Model for political purposes [RA, para. 2; Re. Ex. 1, para. 7]. From “governed by CISG” to
“governed by the law of Equatoriana to the exclusion of its conflict of laws principles”, the revision was
mentioned by the official press release to illustrate the intent “to strengthen the role of
Equatorianian Law and Equatoriana as a place of dispute resolution” [PO2, para. 10].

152. Thus, the modification of the Model Contract makes it abundantly clear that the
RESPONDENT aims to exclude CISG.

C. CLAIMANT was aware of the modification of the Model Contract

153. The subjective intent of RESPONDENT must be manifested in some way to be

recognizable as such [Kröll, p. 150, para. 8]. Based on the relevant circumstances surrounding
the PSA, CLAIMANT was aware of the modification of the Model Contract and could not
have been unaware of RESPONDENT’s intent.

154. First, CLAIMANT had conducted two smaller contracts with other government entities
based on the old Model Contract [PO2, para. 2]. As Mr. Deiman and Mr. Law were aware of
the changes made to the old Model Contract, CLAIMANT should have been aware of
RESPONDENT’ s intention to exclude CISG through Art. 29 PSA [PO2, para. 11].

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155. Second, Ms. Smith, the new head of the legal department of CLAIMANT, had interpreted
the choice of law clause in the Model Contract to refer to the non-harmonized law of
Equatoriana [ibid. para. 154]. Stating that Ms. Smith had “checked that under all potentially applicable
regimes” [Re. Ex. 3, p. 32], CLAMAINT was aware of the amendment and considered the law
of Equatoriana as the governing law of the PSA as well.

156. Last, even if the subjective test is inapplicable, a “reasonable person” under Art. 2 CISG
would confirm the Parties’ intent to exclude CISG [Kröll, p. 150, para. 9]. The Parties would
not have intended to apply CISG when the PSA was concluded through auction, which
obviously falls out of the sphere of CISG’ s governance according to Art. 2 (b) CISG.

157. Thus, CISG is excluded by the Parties implicitly.

***

158. In conclusion, the Parties have validly excluded the application of CISG. The Parties’
statements and conduct show the intention to exclude CISG. And CLAIMANT was fully
aware of the modification to the Model Contract and simply could not have been ignorant of
RESPONDENT’ s intent to preclude CISG.
_________________________________________________________________________

To conclude, it is the Parties’ consent to mediate first, while the Exhibit C7 break the
rule of confidentiality. Moreover, CISG is inapplicable for the nature of the PSA is
domestic transaction and the Parties excluded CISG via party autonomy. Therefore,
the Tribunal should reject the claim from its jurisdiction, admissibility and discretion,
ordering the exclusion of Exhibit C7 rather than Exhibit R3. Simultaneously, CISG is
inapplicable to the PSA and the Parties did validly exclude CISG’ s application.

REQUEST FOR RELIEF

In light of the above, RESPONDENT respectfully invites Tribunal to find that:
a. The Tribunal should reject the claim for lack of jurisdiction or admissibility or as
part of its discretion;
b. The Tribunal should exclude the Exhibit C7, but should keep the Exhibit R3 in file;
c. CISG is inapplicable to the PSA;
d. The Parties validly excluded CISG's application.

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