T23C
T23C
IN PURSUANCE OF THE DISPUTE RESOLUTION CLAUSE IN THE SUPPLY AGREEMENT DATED 1ST
OCTOBER 2023 READ WITH RULE 20 OF THE SINGAPORE INTERNATIONAL ARBITRATION
CENTRE RULES, 2016
V.
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MEMORANDUM for CLAIMANT
TABLE OF CONTENTS
ISSUE 1: THAT THE ARBITRATION CLAUSE HAS BEEN VALIDLY INVOKED AND THE ARBITRATOR HAS
THE JURISDICTION TO ADJUDICATE UPON THE DISPUTES REFERRED TO ARBITRATION. ................... 1
[1.1] The validity of an arbitration clause stands correct as per the supply agreement
governed by cisg ..................................................................................................................... 1
[I] THE ARBITRATION CLAUSE REMAINS UNAFFECTED UNDER ARTICLE 81(1) EVEN AFTER
TERMINATION ...................................................................................................................... 1
[II] THE DISPUTE RESOLUTION CLAUSE HAS BEEN INCORPORATED BY THE
PARTIES ............................................................................................................................. 2
[1.2] Gourmet Delights Invoked The Clause As Per Adhered Terms Of The Agreement And
The Siac Rules As Per The Stipulated Procedure. .................................................................. 2
[1.3] The arbitrator has jurisdiction to decide the issues because it is under the scope of the
arbitration agreement ............................................................................................................. 4
ISSUE 2: THAT THE APPOINTMENT OF MR. AMAN MATHUR AS SOLE ARBITRATOR IS LEGAL AND
VALID ........................................................................................................................................... 6
[3.1] the fundamental breach of the contract by sunrise egg solutions ................................ 10
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MEMORANDUM for CLAIMANT
RELIEF................................................................................................................................ 1XVIII
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MEMORANDUM for CLAIMANT
INDEX OF AUTHORITIES
Cases
Argentinian high carbon tool steel case, CIETAC, Dec. 31, 1996, CISG/1996/58, 1524 (China).
................................................................................................................................................... 32
Bata India v. AVS International Private Limited 2019 SCC OnLine Del 9801. ........................... 22
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532. .............................. 17
Calzaturificio Piceno di Roberto Catinari & Uvaldo Raccosta v. Vivace Mode GmbH, CLOUT
Case No. 275, (1997). ............................................................................................................... 25
Calzaturificio Piceno di Roberto Catinari & Uvaldo Raccosta v. Vivace Mode GmbH, CLOUT
Case No. 850, (2007). ............................................................................................................... 26
Chateau des Charmes Wines Ltd. v. Sabaté USA, Inc. et al., CISG-online 767, (2003). ............. 16
Chocolate confectionery prods. case, Trib. of International Commercial Arbitration at the Russian
Federation Chamber of Commerce and Industry, Apr. 25, 1995, 200/1994, CISG-Online
206(Russ.). ................................................................................................................................ 31
Chongqing Loncin Engine Parts Co., Ltd. et al. v. New Monarch Mach. Tool, Inc., CIETAC, June
28, (2018), M20161221, CISG-Online 5608(China). ............................................................... 35
Clout case 1180 (José Henrique S. N. de Souza & other v. Construtora Costa Norte
Empreendimentos Imobiliários SC Ltda, Brazil, 2008.)........................................................... 31
CLOUT case 124 (People’s Republic of China: China International Economic & Trade Arbitration
Commission [CIETAC], Shanghai Commission38, China, 2005.)........................................... 32
CLOUT case no. 246 (Audiencia Provincial de Barcelona, Spain, 3 November 1997) ............... 31
Cooling machine case, CLOUT case No. 541, (2002). ................................................................ 27
De Lage Landen Financial Services India Private Limited v. Parhit Diagnostic Private Limited,
AIRONLINE (2021) DEL 1441. .............................................................................................. 18
De Lage Landen Financial Services India Private Limited v. Parhit Diagnostic Private Limited,
AIRONLINE 2021 DEL 1441. ................................................................................................. 18
Duro Felguera, S.A. v. Gangavaram Port Limited (2017) 9 SCC 729 ......................................... 17
Filanto S.p.A. v. Chilewich Int'l Corp., CISG-online 24, (1992).................................................. 15
Foil case, CISG-online 353, (1998 ............................................................................................... 27
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MEMORANDUM for CLAIMANT
General Manager (Project) National Highways and Infrastructure Development Corporation Ltd.
V. Prakash Chand Pradhan (2018) 2 SCC 595. ......................................................................... 22
Hanseatisches Oberlandesgericht Hamburg (Germany, 1996) - Case 1 U 167/95; Electronics Ltd.
v. Asian Distributors (2015) ...................................................................................................... 33
International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another (2013)
SGCA 55. .................................................................................................................................. 17
M/S D.P. Construction v. M/S Vishvaraj Environment Pvt. Ltd., AIRONLINE (2021) BOM 31.
................................................................................................................................................... 18
Manish Chibber v. Anil Sharma & Anr., AIRONLINE (2020) DEL 1126 ................................... 19
Marlboro shoes case, CLOUT Case No. 2, (1991)....................................................................... 26
MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D'Agostino S.p.A, CISG-online 342,
(1998). ....................................................................................................................................... 29
Metal concentrate case, International Ct. of Arbitration, Sept. 1, 1996, 8574, CISG-Online
1293 (Swed.) ............................................................................................................................. 33
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc, 723 F.2d 155, 162 1st Cir. (1983) .... 20
National Highways Authority of India v. Sayedabad Tea Company Limited AIRONLINE (2019)
SC 942....................................................................................................................................... 22
Plastic grass carpets case, CISG-online 1078, (2002). ................................................................ 27
Russian-German sales contract case VI, CISG-online 1083, (2000). .......................................... 15
Seda Umwelttechnik v. Equipment B.V., CLOUT case No. 940, (2006) ..................................... 28
Simar Shipping Ltd v. Global Fishing, Inc., CISG-online 2491, (2013). ..................................... 16
Stolen Touareg R 5 case, Oberlandesgericht München, Mar. 5, 2008, 7 U 4969/06, CISG-Online,
1686 (Ger.). ............................................................................................................................... 34
Ukrainian chemical fertilizer case, CISG-online 526, (1995). ..................................................... 26
Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., (2020) 2 SCC 455. .. 20
Warnes SA v. Harvic International Ltd. (1994) ADRLJ 65. ......................................................... 19
Statutes
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MEMORANDUM for CLAIMANT
Miscellaneous
United Nations Convention on International Sale of Goods art. 72, Apr. 11, 1980, 1489 U.N.T.S.
................................................................................................................................................... 17
Abdullah Ahmed et Mustafa Hussein, Avoidance of Contract as a Remedy under CISG and SGA:
A Comparative Analysis, 61 J.L. POLICY AND GLOBALIZATION 126, 128 (2017). Available at
[Link] ..................................................................... 24
CISG-AC Opinion no. 6: Calculation of Damages Under CISG Article 74, ¶ 7, (2006),
[Link] 30
Gary B. Born, International Commercial Arbitration 3, (3d ed.2021). ......................................... 21
Ilias Bantekas, The Foundations of Arbitrability in International Commercial Arbitration, 73
YALE L.J. 733 (2020) Available at
[Link] ................................... 20
Juan Pablo Hernandez, Arbitration Agreements Under The CISG, available at [Link]
[Link]/files/commentFiles/Hernandez_Arbitration_Agreements_CISG.pdf...................... 16
Juan Pablo Hernandez, Arbitration Agreements Under The CISG, available at [Link]
[Link]/files/commentFiles/Hernandez_Arbitration_Agreements_CISG.pdf...................... 16
Veeder, The Historical Keystone to International Arbitration: The Party Appointed Arbitrator –
From Miami to Geneva, in D. Caron et al. (eds.), Practising Virtue: Inside International
Arbitration 127, 148 (2015). ..................................................................................................... 21
Books
ALASTAIR MULLIS & PETER HUBER, CISG: A NEW TEXTBOOK FOR STUDENTS AND
INTERNATIONAL SALE OF GOODS (1980)—FULL TEXT, PART III SALE OF GOODS, CH.V
PROVISIONS COMMON TO THE OBLIGATIONS OF THE SELLER AND OF THE BUYER, S.I
ANTICIPATORY BREACH AND INSTALMENT CONTRACTS, ARTICLE 72, at ¶21 (2016). ............... 32
GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 1757, (3d ed.2021) ....................... 20
GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 1985, (3d ed.2021). ...................... 21
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MEMORANDUM for CLAIMANT
INTERNATIONAL SALE OF GOODS, 1359, (INGEBORG SCHWENZER, 4th ed, 2016). .................... 25
INGEBORG SCHWENZER ET SCHLECHTRIEM, COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS, 455, (INGEBORG SCHWENZER, 4th ed, 2016). ...................... 16
INGEBORG SCHWENZER ET SCHLECHTRIEM, COMMENTARY ON THE UN CONVENTION ON THE
INTERNATIONAL SALE OF GOODS, 682, (INGEBORG SCHWENZER, 4th ed, 2016). ...................... 26
INGEBORG supra ¶ 17 at 455. ......................................................................................................... 16
KRONSTEIN, BUSINESS ARBITRATION: INSTRUMENT OF PRIVATE GOVERNMENT, 54 Yale L.J. 36
(1944). ....................................................................................................................................... 19
MICHAEL JOACHIM BONELL & C.M. BIANCA, COMMENTARY ON THE INTERNATIONAL SALES LAW:
THE 1980 VIENNA SALES CONVENTION NOTE 2.6.3 (1987). ................................................... 34
SCHLECHTRIEM AND SCHWENZER: COMMENTA NRY ON THE UN CONVENTION ON THE
Moot Proposition
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MEMORANDUM for CLAIMANT
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MEMORANDUM for CLAIMANT
LIST OF ABBREVIATIONS
& And
Arb Arbitration
Art Article
Bom Bombay
Co Corporation
Comm Commercial
Dr. Doctor
edn Edition
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MEMORANDUM for CLAIMANT
Ltd Limited
No Number
Ors Others
Para, Paragraph
PL Public Law
Pvt Private
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MEMORANDUM for CLAIMANT
UN United Nations
v Versus
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MEMORANDUM for CLAIMANT
STATEMENT OF JURISDICTION
The Claimant has approached this Hon’ble Tribunal in pursuance of the Dispute Resolution clause
in the Supply Agreement between the parties dated 1st October 2023.
THE ARBITRAL TRIBUNAL'S RULING SHALL BE REGARDED BY THE PARTIES AS FINAL AND
ENFORCEABLE.
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MEMORANDUM for CLAIMANT
STATEMENT OF FACTS
PARTIES INVOLVED
BACKGROUND
• Gourmet Delights and Sunrise Egg Solutions ventured into an agreement where timely
delivery of egg powder by the latter was crucial for the launch of Gourmet Delights’ new
product, Ramenegg.
• The shipment of egg powder was delayed due to rerouting of the vessel and the subsequent
collision involving Sunrise Egg Solutions' vessel, Odessey B with Vessel Flying Channel
at Duboy Port.
• Despite multiple attempts to contact Sunrise Egg Solutions, Gourmet Delights received no
response or updates regarding the delayed shipment.
MARKET IMPACT
• The delay in delivery forced Gourmet Delights to push back the launch of Ramenegg by
seven months, resulting in significant monetary losses and damage to their market
reputation.
• The collision investigation indicated that the fault lay with Flying Channels, the other
vessel involved, which was found to have crew members under the influence of alcohol at
the time of the collision.
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MEMORANDUM for CLAIMANT
CONTRACTUAL BREACH
• Sunrise Egg Solutions’ failure to communicate and deliver as per the agreement constitutes
a breach of contract. Gourmet Delights had expressly communicated that time was of the
essence for the delivery.
• The anticipatory breach by Sunrise Egg Solutions led Gourmet Delights to terminate the
supply agreement and invoke arbitration as per the agreed terms.
• Gourmet Delights initiated arbitration proceedings and nominated Mr. Aman Mathur as the
arbitrator. Sunrise Egg Solutions was duly notified but failed to adequately respond.
• Gourmet Delights claims USD 10,00,000 as compensation for the losses and damages
suffered due to the delay and non-delivery of the egg powder.
ARBITRATION PROCESS
• The arbitration proceedings were conducted under SIAC rules with Mr. Aman Mathur
confirmed as the arbitrator. Both parties were called to submit their memorials.
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MEMORANDUM for CLAIMANT
STATEMENT OF ISSUES
➢ ISSUE 1: WHETHER THE ARBITRATION CLAUSE HAS BEEN VALIDLY INVOKED ? AND
WHETHER THE ARBITRATOR HAS THE JURISDICTION TO ADJUDICATE UPON THE DISPUTES
REFERRED TO ARBITRATION?
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MEMORANDUM for CLAIMANT
SUMMARY OF ARGUMENTS
ISSUE 1: THAT THE ARBITRATION CLAUSE HAS BEEN VALIDLY INVOKED AND THE ARBITRATOR
The arbitration clause has been validly invoked and the arbitrator has the jurisdiction to adjudicate
upon the disputes referred to arbitration due to three-fold reasons- [1.1] The validity of an
arbitration clause stands correct as per the supply agreement governed by CISG, [1.2] That
Gourmet Delights invoked the Arbitration Clause as per Adhered Terms Of The Agreement And
The SIAC Rules As Per The Stipulated Procedure. [1.3] The arbitrator has jurisdiction to decide
the issues because it is under the scope of the arbitration agreement.
ISSUE 2: THAT THE APPOINTMENT OF MR. AMAN MATHUR AS SOLE ARBITRATOR IS LEGAL AND
VALID
The appointment of Mr. Aman Mathur as sole arbitrator is legal and valid due to two-fold reasons-
[2.1] That the arbitrator appointment clause is valid as per law and [2.2] That the arbitrator has
sufficient qualifications to be appointed arbitrator as per the SIAC Rules.
ISSUE 3: THAT SUNRISE EGG SOLUTIONS IS LIABLE TO COMPENSATE GOURMET DELIGHTS WITH
A SUM OF USD 10,00,000 FOR THE DAMAGES SUFFERED BY GOURMET DELIGHTS.
The Claimant submits that Sunrise Egg Solutions must be liable to pay the amount of USD
10,00,000 for the damages suffered by Gourmet Delights due to the transgression of duties by
Sunrise Egg Solutions and the subsequent loss suffered by the Buyer. The same is reasoned on the
following grounds; firstly, [3.1] the fundamental breach of an obligation due to failure to timely
delivery; secondly, [3.2] the failure to disclose necessary information leading to concealment of
facts and fraudulent conduct; thirdly, [3.3] consequential losses, the loss caused from the future
dealings and prior investments ;and lastly, [3.4] the loss of reputation and goodwill by Gourmet
Delights.
ISSUE 4: CLAIMANT IS NOT LIABLE TO COMPENSATE RESPONDENT WITH A SUM OF USD
15,00,000 FOR THE TERMINATION OF THE 2ND SUPPLY AGREEMENT.
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MEMORANDUM for CLAIMANT
It is humbly submitted that the Claimant is not liable to compensate the respondent due to four
fold reasons-[4.1] There was fundamental breach on part of the respondents [4.2] All requirements
to avoid contract were met by the claimant [4.3] There exists a right to avoid contract as per CISG
[4.4] The respondents claim of USD 150,000 does not reflect damages and is thus inconsistent
with rules of CISG.
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MEMORANDUM for CLAIMANT
ARGUMENTS ADVANCED
ISSUE 1: THAT THE ARBITRATION CLAUSE HAS BEEN VALIDLY INVOKED AND THE ARBITRATOR
¶1. The arbitration clause has been validly invoked and the arbitrator has the jurisdiction to
adjudicate upon the disputes referred to arbitration due to three-fold reasons- [1.1] The validity of
an arbitration clause stands correct as per the supply agreement governed by CISG, [1.2] That
Gourmet Delights invoked the Arbitration Clause as per Adhered Terms Of The Agreement And
The SIAC Rules As Per The Stipulated Procedure. [1.3] The arbitrator has jurisdiction to decide
the issues because it is under the ambit and validity of the arbitration agreement.
[1.1] THE VALIDITY OF AN ARBITRATION CLAUSE STANDS CORRECT AS PER THE SUPPLY
¶2. The claimant submits that first the arbitration clause has been vindicated by Article 81 of
CISG [I.], second, the dispute resolution clause has been incorporated by the parties [II.], and last
the arbitration is invoked as part of trade usage [III.].
[I] THE ARBITRATION CLAUSE REMAINS UNAFFECTED UNDER ARTICLE 81(1) EVEN AFTER
TERMINATION
¶3. The next sentence of Article 81(1) stipulates that any rights and obligations of the parties
remain intact even after the avoidance of the contract which also includes the right to settle the
disputes.1
¶4. This also applies to a written contract which has an arbitration clause being regarded as a
clause “severable” from the rest of the contract and thus having the capability of surviving
independently notwithstanding the avoidance.2
1
United Nations Convention on Contracts for the International Sale of Goods art. 81, Apr. 11, 1980, 1489 U.N.T.S. 3,
55 I.L.M. 2.
2
Filanto S.p.A. v. Chilewich Int'l Corp., CISG-online 24, (1992).
1
MEMORANDUM for CLAIMANT
¶5. The claimant is right in invoking arbitration as a means to resolve a dispute even after the
contract has been avoided as a result of a breach. As under Article 81(1) of CISG, the provision of
arbitration will not be affected. 3
[II] THE DISPUTE RESOLUTION CLAUSE HAS BEEN INCORPORATED BY THE PARTIES
¶6. Offers and acceptances during the contract formation also address the dispute resolution
clause and one of the most significant ones is the arbitration clause. Their validity is questioned
concerning the objective agreement reached between the parties and its substantive validity.4
¶7. An objective agreement is achieved between the parties by means of an offer and
acceptance, concluding the contract. 5 Whenever the declaration by parties of a dispute resolution
clause is directed at the conclusion of the contract, it's incorporated into the contract and governed
by CISG.6
¶8. The substantive validity generally includes the question of formation and interpretation –
matters governed by the contract law generally. 7 Article 8 governs the interpretation of venue
agreements and arbitration clauses.8
¶9. Both the questions of objective agreement and formal validity of the arbitration clause are
justified in the Supply agreement 9by the clause addressing the dispute to be resolved by the
arbitration directed after the contract and interpreted accordingly.
[1.2] GOURMET DELIGHTS INVOKED THE CLAUSE AS PER ADHERED TERMS OF THE
AGREEMENT AND THE SIAC RULES AS PER THE STIPULATED PROCEDURE.
¶10. Gourmet delights invoked the clause as per adhered terms of the agreement and the SIAC
rules and stipulated procedure. as per agreed terms between the claimant and the respondent. When
the claimants tried to contact the respondents regarding the unprecedented delay, they received no
3
Russian-German sales contract case VI, CISG-online 1083, (2000).
4
INGEBORG SCHWENZER ET SCHLECHTRIEM, COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE
OF GOODS, 455, (INGEBORG SCHWENZER, 4th ed, 2016).
5
Simar Shipping Ltd v. Global Fishing, Inc., CISG-online 2491, (2013).
6
INGEBORG supra ¶ 17 at 455.
7
Juan Pablo Hernandez, Arbitration Agreements Under The CISG, available at [Link]
[Link]/files/commentFiles/Hernandez_Arbitration_Agreements_CISG.pdf.
8
Chateau des Charmes Wines Ltd. v. Sabaté USA, Inc. et al., CISG-online 767, (2003).
9
Moot Prop- Annexure A
2
MEMORANDUM for CLAIMANT
reply regarding the same.10 There was a stipulation in the agreement between the claimant and the
respondent according to which time was of essence in the contract.11 The claimant also stipulated
in the notice to respondent that “if there is no response from the latter by 4th of December 2023,
they will be constrained to take legal recourse against them for which they alone shall be liable.12”
¶11. Anticipating breach, the agreement between the Respondent and Claimant was terminated
according to rules of CISG.13 Gourmet Delights addressed a notice invoking arbitration dated 2nd
January 2024 as per the rules and provisions of Singapore International Arbitration Centre
(“SIAC”). The notice invoking arbitration was simultaneously served on the Registrar, SIAC and
on Sunrise Egg Solutions,14 which is a mandatory requirement as per Supreme court.15 In a case,
it was held that if the pre-conditions are defined with sufficient clarity and specificity, then they
should be construed as mandatory in nature.16
¶12. The claimant can invoke arbitration without needing to fulfil additional preconditions as
no such requirement is mentioned in the arbitration clause in the agreement (Rule 2817: Jurisdiction
of the Tribunal - Confirms the tribunal's authority to rule on its own jurisdiction, supporting the
argument that the arbitrator has the power to decide on any jurisdictional challenges).
¶13. A case determined that the arbitrator has the authority to resolve conflicts that are subject
to arbitration and come under the purview of the arbitration agreement.18
¶14. As per Annexure A of Supply Agreement, referring to the clause relating to dispute
resolution, the disputes should be resolved by Arbitration by a sole arbitrator and the arbitrator so
sought to be appointed by the Party initiating arbitration shall be deemed to be appointed if no
response or challenge regarding the same has been received from the other Party within 30 days
of receipt of intimation of his appointment. The arbitration will apply the SIAC Rules, 201619
¶15. Moreover, the due procedure for invoking the arbitration clause was duly followed
according to the SIAC Rules, 2016.
10
Moot Prop ¶ 20.
11
Moot Prop Annexure-A ¶ 4(i).
12
Moot Prop ¶ 19.
13
United Nations Convention on International Sale of Goods art. 72, Apr. 11, 1980, 1489 U.N.T.S. 3
14
Moot Prop ¶ 23.
15
Duro Felguera, S.A. v. Gangavaram Port Limited (2017) 9 SCC 729.
16
International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another (2013) SGCA 55.
17
RULE 28, SIAC RULES, (6th ed. 2016).
18
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532.
19
Moot Prop Annexure-A ¶ 5.
3
MEMORANDUM for CLAIMANT
[1.3] THE ARBITRATOR HAS JURISDICTION TO DECIDE THE ISSUES BECAUSE IT IS UNDER THE
¶17. Arbitration agreements are being sought to be enforceable by national courts, who view
arbitration as a suitable means of settling international commercial disputes wherever possible25
instead of attempting to restrict the agreement's scope in order to maintain the court's jurisdiction.
A private arbitral tribunal should, in theory, have the same authority to resolve any issue as a
national court judge.
20
RULE 3.4, SIAC RULES, (6th ed. 2016).
21
Moot Prop ¶ 31.
22
Moot Prop Annexure-A ¶ 5.
23
Indian Arbitration and Conciliation Act, 1996, § 11(4).
24
Manish Chibber v. Anil Sharma & Anr., AIRONLINE (2020) DEL 1126.
25
Warnes SA v. Harvic International Ltd. (1994) ADRLJ 65.
4
MEMORANDUM for CLAIMANT
¶18. Although article 2060 of the French Civil Code26 provides that parties may not agree to
arbitrate disputes in a series of particular fields generally in all matters that have a public interest
but since this matter is a dispute between two private individuals or corporations, it is not under
the bounds of public interest and thus it is under the scope of arbitration.
¶19. International arbitration agreements pertaining to business disputes or any other issue
amenable to arbitration27 must be recognised, according to Article 1 of the Geneva Protocol. Most
authorities hold that a matter is “not capable of settlement by arbitration” where national law
prevents or bars the arbitrability of particular issues or disputes28 however such is not the case in
the current matter as the Indian Arbitration and Conciliation act 29 does not forbid the arbitrability
of the current factual scenario.30
¶20. To decide the arbitrability of disputes, courts in different jurisdictions have typically
focused on the text of the relevant national legislation, as well as on a common core of recurrent
factors. These factors include the “public values” or “public interests” at issue31 which are non-
existent in the current matter; whether such disputes involve unacceptable, systemic disparities of
bargaining power between the parties32 which is again not applicable since the contract signed
between the parties was done with mutual consent33.
¶21. When evaluating whether a subject matter is arbitrable, care must be taken to make sure
that the dispute is arbitrable not only under the lex arbitri law but also the governing law of the
contract and under the laws and public policies of the states where the enforcement of award will
be sought.34 As per section 28 of the Arbitration and Conciliation Act35 “in international
commercial arbitration,— (i) the arbitral tribunal shall decide the dispute in accordance with the
rules of law designated by the parties as applicable to the substance of the dispute.”
26
The Civil Code of the French, art 2060.
27
Geneva Protocol, art. 1(1).
28
ARFAZADEH, ARBITRABILITY UNDER THE NEW YORK CONVENTION: THE LEX FORI REVISITED, 17 Arb. Int’l 73
(2001).
29
Indian Arbitration and Conciliation Act 1996.
30
Indian Arbitration and Conciliation Act 1996 §16.
31
KRONSTEIN, BUSINESS ARBITRATION: INSTRUMENT OF PRIVATE GOVERNMENT, 54 Yale L.J. 36 (1944).
32
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc, 723 F.2d 155, 162 1st Cir. (1983).
33
Moot Prop ¶7.
34
Ilias Bantekas, The Foundations of Arbitrability in International Commercial Arbitration, 73 YALE L.J. 733 (2020)
Available at [Link]
35
Indian Arbitration and Conciliation Act § 28.
5
MEMORANDUM for CLAIMANT
¶22. The matter falls under the jurisdiction of the arbitration because of the Competence-
Competence doctrine.36 As per the doctrine, Any challenges to the existence or legality of the
arbitration agreement may be heard by the arbitral tribunal, which will have the authority to rule
in its own jurisdiction. Article 16 of the Arbitration and Conciliation Act37 and rule 28.2 of the
SIAC Rules38 state that “The arbitral tribunal may rule on its own jurisdiction, including ruling on
any objections with respect to the existence, validity and scope of the arbitration agreement.”
¶23. The competence-competence doctrine is almost universally accepted in international
arbitration conventions, national arbitration legislation, judicial decisions, institutional arbitration
rules and international arbitral awards.39 Therefore, it is imperative that the fundamental idea that
an international arbitral tribunal presumptively has the authority to assess and decide on its own
jurisdiction be regarded as a widely accepted concept of international arbitration law.40
¶24. The Supreme Court in Uttarakhand Purv case41 observed that The Arbitral Tribunal is
empowered to make decisions about subjects pertaining to its own jurisdiction by virtue of the
competence-competence doctrine. This entails deciding on all jurisdictional issues and
determining if the arbitration agreement is genuine and enforceable. This concept aims to reduce
the amount of judicial intervention, protecting the arbitration process from being impeded at the
outset, particularly in the event that a party raises a preliminary objection.
¶25. Since as per the 2nd Supply Agreement, the arbitration clause clearly mentions that “any
dispute arising…...regarding its existence, validity or termination, shall be finally resolved by a
sole arbitrator”42 , the current factual scenario clearly deals with the termination of the Supply
agreement and thus it is under the ambit of the Arbitration clause where the Tribunal vide its power
conferred by the Competence-Competence Doctrine can adjudicate on the matter.
ISSUE 2: THAT THE APPOINTMENT OF MR. AMAN MATHUR AS SOLE ARBITRATOR IS LEGAL AND
VALID
36
GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 1757, (3d ed.2021).
37
Indian Arbitration and Conciliation Act § 16.
38
Rule 28.2 of the SIAC Rules.
39
U.N. Economic and Social Council, Memorandum on Arbitral Procedure, Prepared by the Secretariat, U.N. Doc.
A/CN.4/35, II Y.B. I.L.C. 157, 165 (1950).
40
ICC Case No. 19127, XLII Y.B. Comm. Arb. 254 (2017).
41
Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., (2020) 2 SCC 455.
42
Moot Prop Annexure A.
6
MEMORANDUM for CLAIMANT
¶26. The appointment of Mr. Aman Mathur as sole arbitrator is legal and valid due to two-fold
reasons- [2.1] That the arbitrator appointment clause is valid as per law and [2.2] That the arbitrator
has sufficient qualifications to be appointed arbitrator as per the SIAC Rules.
¶27. Party autonomy is a distinguishing feature of the arbitral tribunal selection process, as it is
with other components of the international arbitral process. Institutional arbitration rules grant
parties considerable latitude to decide on the identities of the arbitrators in an arbitration and to
choose indirect procedures for choosing such arbitrators.43
¶28. The right of each party to appoint an arbitrator makes the arbitration the parties’ arbitration,
deciding their dispute with their tribunal.44 To ensure that the tribunal has a balanced mix of
members who provide neutrality and objectivity, the parties make use of their opportunity to
choose the arbitrators to select individuals whose backgrounds, expertise, and abilities are well-
suited to resolving their dispute in an effective and dependable manner.
¶29. According to Article 2 of the Geneva Protocol, the determination of the arbitral tribunal's
composition shall take place by the parties' intentions and the laws of the nation where the
arbitration takes place.45 Swiss Law on Private International Law is representative, providing that
“the arbitrators shall be appointed, removed or replaced in accordance with the agreement of the
parties.”46
¶30. Article IV(1)(b) of the European Convention provides that “the parties shall be free inter
alia (i) to appoint arbitrators or to establish means for their appointment in the event of an actual
dispute; (ii) to determine the place of arbitration; and (iii) to lay down the procedure to be followed
by the arbitrators.”47
¶31. Rule 9.2 of the SIAC Rules also state that “If the parties have agreed that any arbitrator is
to be appointed by one or more of the parties, or by any third person including by the arbitrators
43
GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 1985, (3d ed.2021).
44
VEEDER, THE HISTORICAL KEYSTONE TO INTERNATIONAL ARBITRATION: THE PARTY APPOINTED ARBITRATOR –
FROM MIAMI TO GENEVA, IN D. CARON ET AL. (EDS.), PRACTISING VIRTUE: INSIDE INTERNATIONAL ARBITRATION 127,
148 (2015).
45
Geneva Protocol, art. 2.
46
Federal Act on Private International Law, 1987.
47
European Convention, art. IV(1)(b).
7
MEMORANDUM for CLAIMANT
already appointed, that agreement shall be deemed an agreement to nominate an arbitrator under
these Rules.48”
¶32. The NHAI Act Section 3(G)(5)49 states that “any dispute associated with land acquisition
repayment will be cited through arbitration which will be adjudicated through a sole arbitrator
appointed through the Central Government.” This came up in a supreme court case50 where “The
Court held that an application below Section 11 isn't maintainable because the Central Government
solely has the right to designate an arbitrator below Section 3-G (5) of the National Highways
Act.” This was further upheld in the case of National Highways Authority of India v Sayedabad
Tea Company Limited.51
¶33. The MSMED Act52 further entails provisions beneath Section 18 in which The Micro and
Small Businesses Facilitation Council has the authority to arbitrate any disagreement arising from
the buyer's refusal to pay bills.
¶34. The Delhi High Court in a case53 held that the “Section 18 of the MSMED Act could
override the provisions of the arbitration clause agreed to among the parties and allowed for
unilateral appointment of arbitrator.”
¶35. Therefore, it is respectfully submitted before the tribunal that the Arbitrator appointment
Clause is valid.
[2.2] APPOINTMENT IS VALID BECAUSE THE ARBITRATOR IS QUALIFIED AS PER THE SIAC RULES
¶36. Rule 13.5 of the SIAC Rules state that “a nominated arbitrator shall disclose to the parties
and to the Registrar any circumstances that may give rise to justifiable doubts as to his impartiality
or independence as soon as reasonably practicable and in any event before his appointment.” Mr.
Aman Mathur had complied with the aforementioned rules and given his disclosure to the registrar
and the parties before his appointment.54
¶37. Arbitrators who have made a disclosure consider themselves to be impartial and
independent of the parties despite the disclosed facts, or else the arbitrator would have declined
48
Rule 9.2 of the SIAC Rules.
49
The National Highways Act, 1956 No. 13, Acts of Parliament, 1992 (India).
50
General Manager (Project) National Highways and Infrastructure Development Corporation Ltd. V. Prakash Chand
Pradhan (2018) 2 SCC 595.
51
National Highways Authority of India v. Sayedabad Tea Company Limited AIRONLINE (2019) SC 942.
52
Micro, Small And Meduim Enterprises Development Act, 2006 (India).
53
Bata India v. AVS International Private Limited 2019 SCC OnLine Del 9801.
54
Moot Prop ¶31.
8
MEMORANDUM for CLAIMANT
the nomination, or resigned. An arbitrator making a disclosure thus feels capable of performing
the arbitrator’s duties.55 It makes it clear that disclosure itself cannot imply doubts sufficient to
disqualify the arbitrator, or even create a presumption in favor of disqualification.
¶38. Disclosure does not automatically indicate that a conflict of interest exists, nor does it lead
to an assumption that the arbitrator is ineligible or that they are disqualified in and of themselves.
In order to ascertain whether there are legitimate doubts about the arbitrator's independence or
impartiality from an objective perspective—that is, from the perspective of a reasonable third party
with knowledge of the pertinent facts and circumstances—the parties are informed of a situation
that they may want to investigate further regarding the arbitrator’s impartiality or independence.56
¶39. The relationship between the claimant and the arbitrator falls under the green list of the
IBA Guidelines on conflict of interest57 under point 4.4.3 where “The arbitrator and a manager,
director or member of the supervisory board, or any person having a controlling influence on one
of the parties have worked together as joint experts, or in another professional capacity.” As in the
present case scenario, Mr. Aman Mathur was an external consultant and had principally assisted
with formulating a business plan for Gourmet Delights way long back in 2018.58
¶40. As for the relationship falling under green list, the guidelines state that “the Green List is a
non-exhaustive list of specific situations where no appearance and no actual conflict of interest
can exist either under the subjective or the objective standard. Thus, the arbitrator has no duty to
disclose situations falling within the Green List and therefore there is no conflict of interest.”
¶41. Although not expressly mentioned in the contract, arbitrators are expected to have certain
qualifications with reference to the case and this kind of requirements are meant to support one of
the main goals of international arbitration, which is to be able to give a tribunal with specific
commercial and other skills that will be helpful in effectively and fairly resolving the parties'
dispute efficiently and soundly.59 Mr. Aman Mathur in the present case is a respected expert in the
food industry involved in various projects regarding the research and development of various kinds
55
Council of the International Bar Association, International Bar Association Guidelines on Conflicts of Interest, 8
(2024).
56
Council of the International Bar Association, International Bar Association Guidelines on Conflicts of Interest, 23
(2024).
57
Council of the International Bar Association, International Bar Association Guidelines on Conflicts of Interest, 8
(2024).
58
Moot Prop ¶25.
59
GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 3, (3d ed.2021).
9
MEMORANDUM for CLAIMANT
of instant food products and also helps companies in getting legal clearances required for launching
new food products60 and therefore has sufficient knowledge to adjudge the case at hand.
ISSUE 3: THAT SUNRISE EGG SOLUTIONS IS LIABLE TO COMPENSATE GOURMET DELIGHTS WITH
A SUM OF USD 10,00,000 FOR THE DAMAGES SUFFERED BY GOURMET DELIGHTS.
¶42. The Claimant submits that Sunrise Egg Solutions must be liable to pay the amount of USD
10,00,000 for the damages suffered by Gourmet Delights due to the transgression of duties by
Sunrise Egg Solutions and the subsequent loss suffered by the Buyer. The same is reasoned on the
following grounds; firstly, [3.1] the fundamental breach of an obligation due to failure to timely
delivery; secondly, [3.2] the failure to disclose necessary information leading to concealment of
facts and fraudulent conduct; thirdly, [3.3] consequential losses, the loss caused from the future
dealings and prior investments ;and lastly, [3.4] the loss of reputation and goodwill by Gourmet
Delights.
¶43. There are three preconditions for a party to commit a fundamental breach of the contract
under ART. 2561 (IS 680) namely [I.] breach of the contract, [II.] Detriment to the other party,
[III.] foreseeability of result emanating from that breach.
¶44. The principle of Contractual Freedom allows the parties to collectively decide which
breach will be considered to be fundamental in nature taking into consideration the major interest
of parties that will be affected if that breach is likely to be committed.62
¶45. Under ART. 33(a)63, if the date of delivery has been fixed by the contract it will be
considered as conclusive in nature. When the time of delivery or any performance is of essential
60
Moot Prop ¶24.
61
United Nations Convention on Contracts for the International Sale of Goods art. 80, Apr. 11, 1980, 1489 U.N.T.S.
3, 55 I.L.M. 2.
62
Abdullah Ahmed et Mustafa Hussein, Avoidance of Contract as a Remedy under CISG and SGA: A Comparative
Analysis, 61 J.L. POLICY AND GLOBALIZATION 126, 128 (2017). Available at
[Link]
63
United Nations Convention on Contracts for the International Sale of Goods art. 33, Apr. 11, 1980, 1489 U.N.T.S.
3, 55 I.L.M. 2.
10
MEMORANDUM for CLAIMANT
importance either because it is stipulated in the contract per se or evident from the circumstances,
the delay in performing amounts to a fundamental breach.64
¶46. ART. 72(1) of CISG provides “the right to the buyer to avoid the contract if it is certain
that the seller will commit the fundamental breach.” And, if the time permits, the reasonable notice
has to be given to the seller.65 Furthermore, if the assurance of delivery has been asked and the
other party fails to assure the aggrieved party, it is regarded as a basic non-performance in and of
itself, granting the injured party the right to terminate the contract and damages.66
¶47. In addition to having the same rights as in the case of an actual breach, the party exercising
the right to terminate the contract for anticipatory breach is also entitled to pursue any applicable
remedies for actual non-performance, including damages. (ART. 81(1) CISG)67 except those that
would have been excused at the due date.68
¶48. Respondent was well aware that time was the essence of the contract as it was stipulated
in the purchase order 69and that the launch of product Ramenegg was contingent upon the timely
delivery of the egg powder which was due on the 10th of December 202370. After 29th November,
there were no updates on the ship from the Respondent, and even after continuous attempts from
the Claimant to gather any information regarding the delivery of the goods, there was no
reassurance of the same from the Respondent leading him to terminate the contract 71.
¶49. As per ART. 25, “the party affected by the breach must suffer a detriment which must be
as such to substantially deprive of him what he is entitled to expect under the contract.” The
contract not only creates rights and duties but also determines how indispensable it is for the
promisee and the importance of the detriment suffered by him.72
64
Calzaturificio Piceno di Roberto Catinari & Uvaldo Raccosta v. Vivace Mode GmbH, CLOUT Case No. 275, (1997).
65
United Nations Convention on Contract for the International Sale of Goods art. 72, Jan. 1, 1988, 55 I.L.M. 2.
66
INGEBORG SCHWENZER ET SCHLECHTRIEM, COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE
OF GOODS, 1359, (INGEBORG SCHWENZER, 4th ed, 2016).
67
United Nations Convention on Contracts for the International Sale of Goods art. 81, Apr. 11, 1980, 1489 U.N.T.S.
3, 55 I.L.M. 2.
68
MERCÉDEH AZEREDO DA SILVEIRA, anticipatory Breach Under The United Nations Convention on Contracts For
The International Sale of Goods, 2, NORDIC J. COM. L. 2, 32 (2005).
69
Moot Prop- Annexure B.
70
Moot Prop ¶ 8.
71
Moot Prop ¶ 14.
72
INGEBORG SCHWENZER ET SCHLECHTRIEM, COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE
OF GOODS, 682, (INGEBORG SCHWENZER, 4th ed, 2016).
11
MEMORANDUM for CLAIMANT
¶50. Sometimes, the contract itself reveals any obligation or detriment as per their contractual
interests which facilitates the breach analysis.73 In a case, the Appellate court held that- “a breach
of contract is fundamental when the purpose of the contract is endangered so seriously that, for the
concerned party to the contract, interest in the fulfillment of the contract ceases to exist as a
consequence of the breach of the contract”74
¶51. In the present factual circumstance, the Respondent was well aware of the product launch
which was scheduled in March75, and the shelf life of egg powder which was three months 76, and
any delay will result in substantial deprivation in terms of money to the Claimant resulting from
the loss of profits and declining reputation affecting the future business.
¶52. In the contracts that make time the essence of the contract by fixing the specific date of
delivery, the party in breach cannot defend the fundamental breach or prevent avoidance of the
contract by claiming that they did not foresee the detriment to the promise77.
¶53. If the buyer has informed the seller about the obligation he has entered into towards its sub-
buyers or customers, then their significance is distinguishable to both parties, and the results of its
nonfulfillment are foreseeable for the seller. 78 Under ART. 25.79, it is irrelevant if the party's breach
was caused by an obstacle beyond of their control.
¶54. The Respondent knew of the utter importance of the delivery of the egg powder to Claimant
and its further commitment to launch its product and thus the result of any breach was foreseeable,
with no claims of them not being liable for the breach due to an event not under their control or an
act of the third party not foreseeable by them can help to avoid the liability.
¶55. The avoidance of the contract due to the fundamental breach committed by the Respondent
not only led to the direct loss to the Claimant but also resulted in the marketing loss and prior
investments [I.] and loss due to liability incurred to third parties [II.].
73
id. at 683
74
Marlboro shoes case, CLOUT Case No. 2, (1991).
75
Moot Prop ¶ 9.
76
Moot Prop- Annexure B.
77
Calzaturificio Piceno di Roberto Catinari & Uvaldo Raccosta v. Vivace Mode GmbH, CLOUT Case No. 850, (2007).
78
Ineborg supra at 684
79
Ukrainian chemical fertilizer case, CISG-online 526, (1995).
12
MEMORANDUM for CLAIMANT
¶56. The courts in various cases have acknowledged the right of an injured party to recover
reasonable expenditures made in the preparation of the contract or as a consequence of the contract
foreseeable at the time when the contract was concluded. 80
¶57. In the present case, the Respondent was aware of the launch of Ramenegg and the cost
incurred by the Claimant in media, advertising the same, and other marketing costs in sending the
copy of that advertisement.81 This expense was incurred as a result of the contract between the
Claimant and respondent where the Claimant was assured of the timely delivery of goods,
therefore, all the expenditure then made by the Claimant was based on that promise, and hence the
breach of contract resulting in loss of marketing was foreseeable by Respondent and thus
recoverable.82
¶58. The aggrieved party in case of breach may not only suffer the direct or incidental loss but
also the losses from third parties which is termed as consequential damages.83 A buyer may enter
into a contract with third parties or sub-buyers for sale and if the seller does not perform the
contract, the buyer may be able to recover consequential damages due to liability incurred by the
buyer to the third parties due to non-performance as a result of the seller’s breach.84
¶59. To expand the Aryavarta consumer base, it is fair to assume that the Claimant must have
intended to introduce Ramenegg in March in collaboration with dealers and other parties. Liability
for performance failures to those third parties and indemnification for losses are included in the
indemnity clause.85
INFORMATION
80
Cooling machine case, CLOUT case No. 541, (2002).
81
Moot Prop ¶ 9.
82
Plastic grass carpets case, CISG-online 1078, (2002).
83
CISG-AC Opinion no. 6: Calculation of Damages Under CISG Article 74, ¶ 6.1, (2006), [Link]
content/uploads/2023/02/[Link]
84
Foil case, CISG-online 353, (1998).
85
Moot Prop Annexure A.
13
MEMORANDUM for CLAIMANT
¶60. There existed a contractual duty on the part of SES to first, inform regarding the shipment
route and status of cargo as a matter of practice of trade and usage [I.] and then disclose all the
necessary information including the arrest of the Odessey B, the ship carrying the goods of the
Claimant [II.] and any breach of this contractual duty is punitive.
[I] DUTY TO INFORM REGARDING THE CORRECT SHIPMENT ROUTE AND STATUS OF
CARGO AS A MATTER OF TRADE PRACTICE
¶61. ART. 9(1) of CISG binds the parties to ‘any usage to which they have agreed and
established between themselves’. There are two requirements to which a usage has to comply for
it to be treated as a practice and they both exist in the present case [ART. 9(2) CISG], [i] the usage
should be widely known and regularly observed by parties to similar types of contracts in the same
trade. Moreover, [ii] the parties knew or ought to have known of the usage.
¶62. According to ART. 32(2) of CISG, the seller is bound to arrange for carriage of goods
according to the usual terms for such transportation.86 Furthermore as per ART. 30 87of the CISG,
the contract can always provide for further obligations.88 The sending of updates concerning the
goods in transit was a matter of practice adopted by Respondent89. Therefore this is a regularly
observed practice.
¶63. Between two particular parties it will be enough to show that in previous cases under
comparable circumstances, parties acted in a certain way. In the present case, it was already
established that as a matter of practice, the Respondent will be sending regular updates to the
Claimant, and following the same it rightly did so in the early days but suddenly stopped sending
the shipment updates and status of delivery. Under the CISG, “wherever the seller—no matter how,
when, or why—fails to perform as due at least one of its contractual obligations—be it concretely
agreed or derived from usages, practices, or the Convention’s default rules—it breaches the
contract.90”
86
United Nations Convention on Contracts for the International Sale of Goods art. 32, Apr. 11, 1980, 1489 U.N.T.S.
3, 55 I.L.M. 2.
87
United Nations Convention on Contracts for the International Sale of Goods art. 30, Apr. 11, 1980, 1489 U.N.T.S.
3, 55 I.L.M. 2.
88
Seda Umwelttechnik v. Equipment B.V., CLOUT case No. 940, (2006).
89
Moot prop ¶ 12.
90
MIQUEL S. MIRAMBELL FARGAS, THE SELLER’S RIGHT TO CURE UNDER ARTICLE 48 UNITED NATIONS
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, 113, (2017).
14
MEMORANDUM for CLAIMANT
¶64. The parties had the subjective intent to have a duty to inform as per ART. 8(1) CISG which
can be ascertained by the application of ART. 8(2) CISG. 91ART. 8(1) CISG requires a substantial
inquiry into the parties' subjective intent. As long as the other party knew or could not have been
unaware of that intent, it requires that statements and actions by one party be interpreted in
accordance with that intent.92
¶65. Here it can be interpreted that Respondent was bound by the duty to inform as a result of
the established usage and conduct between the parties The lack of intent to inform about the
material change and turn of events and even after when it was discovered by the Claimant, the
Respondent cared least to reply to the emails and calls of the Respondent establishes the mala fide
intention of the Respondent to perform the contract within time.
¶66. Any reasonable person would assume, from the communication of the parties, that they
had the intention to have a duty of disclosure, the same can be inferred through the communication
between the parties under ART. 8(2) in the present case. Therefore, even applying ART. 8(2), the
intent of the parties to have a duty of disclosure, and the subsequent existence of such a duty is
established.
¶67. Damages for loss of goodwill resulting from the breach are due to the aggrieved party.93
The pecuniary damages caused by the goodwill loss are covered under the ambit of the principle
of ART. 74. The court in some decisions has acknowledged the loss of goodwill if the aggrieved
party can reasonably establish the loss of future business94 and declining reputation affecting
business interests.
¶68. The Claimant had made a public announcement to gain publicity and increase market reach
for the successful launch of Ramenegg and it was foreseeable by the Respondent that any
91
United Nations Convention on Contracts for the International Sale of Goods art. 8, Apr. 11, 1980, 1489 U.N.T.S. 3,
55 I.L.M. 2.
92
MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D'Agostino S.p.A, CISG-online 342, (1998).
93
CISG-AC Opinion no. 6: Calculation of Damages Under CISG Article 74, ¶ 7, (2006), [Link]
content/uploads/2023/02/[Link]
94
Art books case, CLOUT case No. 331, (1999).
15
MEMORANDUM for CLAIMANT
divergence from the same would lead to severe harm to its reputation in the market and among the
business partners.
¶69. It is humbly submitted that the Claimant is not liable to compensate the respondent due to
four fold reasons-[4.1] There was fundamental breach on part of the respondents [4.2] All
requirements to avoid contract were met by the claimant [4.3] There exists a right to avoid contract
as per CISG [4.4] The respondents claim of USD 150,000 does not reflect damages and is thus
inconsistent with rules of CISG.
¶70. It is respectfully contended that, Contrary to the contention of the Respondents that
Gourmet Delights is liable to compensate Sunrise Egg solutions for untimely termination of, there
was a fundamental breach on part of Sunrise egg Solutions because of which the Claimant was
entitled to terminate the contract anticipating breach and is therefore not liable to compensate
Sunrise egg solutions.
¶71. As per the contract time was of the essence95. If, before the due date, it becomes clear that
the other party will commit a fundamental breach of contract, the innocent party need not await
the occurrence of the actual breach but may declare avoidance prior to the date for performance.96
¶72. According to the standard of article 25. The seriousness of the future breach must have
been foreseeable by the debtor. In a decision, anticipatory fundamental breach on behalf of the
seller has been admitted where the plans, or the sample products that the creditor had transmitted
to the buyer and which were not conforming to the contract, allowed for the conclusion that the
seller would be unable to produce and deliver conforming goods97. It has been decided that if the
seller consistently delays the delivery of the instalments, the buyer has the right to avoid the
95
Moot Prop Annexure-A ¶ 4.
96
SCHLECHTRIEM AND SCHWENZER: COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE OF
GOODS A 72 (2022).
97
Chocolate confectionery prods. case, Trib. of International Commercial Arbitration at the Russian Federation
Chamber of Commerce and Industry, Apr. 25, 1995, 200/1994, CISG-Online 206(Russ.).
16
MEMORANDUM for CLAIMANT
contract as per the article.98 In this case, the breach was of utmost seriousness. In a case99, doctrine
of exceptio non adimpleti contractus in favour of the buyers who refused to pay the remaining
mortgage instalments because the seller failed to deliver the apartment on time, which constituted
a fundamental breach. The court referred to Article 72 CISG, establishing that “a party who
breaches its obligation cannot compel the other party to perform its counter-obligation.”
Respondent fundamentally breached the 2nd Supply Agreement by failing to deliver the egg
powder on time and not communicating the rerouting and subsequent arrest of the ship. Supreme
Court of India upheld the claimant's immediate termination of the contract due to the supplier's
failure to deliver on time, emphasizing the importance of the "time is of the essence" clause. This
precedent supports Gourmet Delights' decision to terminate the contract immediately due to the
material breach by Sunrise Egg Solutions. 100
¶73. The Tribunal in a case dismissed the buyer's allegations that the seller did not mitigate
damages in a reasonable time and upheld the seller’s claim for the price difference and interest.
Similarly, the Claimant in the current case took reasonable measures by repeatedly attempting to
communicate with the Respondent and seeking alternatives to mitigate their losses. However, the
failure and subsequent non-communication from the Respondent left the Claimant with no choice
but to claim the damages incurred due to the breach.101 Moreover, According to CISG only a high
and obvious probability of breach is necessary102103 and there was a high and obvious probability
on part of the respondents that they would commit breach by being unable to deliver the goods
according to the set timeline, which was of essence to the contract.104 As has been held in Arbitral
Award No. 8786 of ICC International Court of Arbitration105, “a buyer can claim damages for an
ensuing loss when the seller declares in advance that it will be unable to deliver on time.”
98
CLOUT case no. 246 (Audiencia Provincial de Barcelona, Spain, 3 November 1997).
99
Clout case 1180 (José Henrique S. N. de Souza & other v. Construtora Costa Norte Empreendimentos Imobiliários
SC Ltda, Brazil, 2008).
100
National Aluminium Company Limited (NALCO) v. Peak Chemical Corporation Inc, (2006) 9 SCC 325.
101
CLOUT case 124 (People’s Republic of China: China International Economic & Trade Arbitration Commission
[CIETAC], Shanghai Commission38, China, 2005).
102
GABRIEL HENRY DEEB, CONTRACTS FOR THE SALE OF GOODS p. 216 (3rd ed. 2022).
103
Italian shoes case XIII, Landgericht Krefeld, Apr. 28, 1993, 11 O 210/92, CISG-Online 101(Ger.).
104
Moot Prop Annexure-A ¶ 4.
105
Court of Arbitration of the International Chamber of Commerce, January 1997 (Arbitral award No. 8786), ICC
International Court of Arbitration Bulletin, 2000, 70.
17
MEMORANDUM for CLAIMANT
¶74. All the requirements that are necessary be followed before terminating a contract
anticipating breach were followed thus the claim that Claimant is liable to compensate respondent
because of untimely termination is imitative.
i) Notice as a precondition for the right of avoidance- According to CISG106, a notice for
avoidance of contract anticipating breach is a pre-condition. Also, a view107 holds that even
if a notice is omitted, it should not prevent avoidance of contract. A termination notice was
served to Claimant108 as well and even if it was not, it is not a pre-condition to terminate
the contract when breach is anticipated.
ii) Form and Time Limits - The CISG does not provide for a time limit within which the notice
of Article 72(2) must be given. However, the lack of an explicit time limit is no carte
blanche for the creditor. First, the creditor’s claim for damages will be reduced if avoiding
the contract as soon as it was clear that the debtor would commit a fundamental breach in
the future would have avoided losses (Article 77) 109
iii) Reasonability of Notice- The purpose of the notice is to enable the debtor to show its
willingness to perform by issuing assurance. Furthermore, the notice is futile if the
assurance which the debtor would provide could not compensate the impending breach of
contract, if a performance would change its nature over time (seasonal business), or if
different immediate coverage seems indispensable110. If there is not enough time for a
notice, or if the notice would be useless, the innocent party can avoid the contract without
delay.
106
SCHLECHTRIEM AND SCHWENZER: COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE OF
GOODS A 72 ¶ 17 (2022).
107
Argentinian high carbon tool steel case, CIETAC, Dec. 31, 1996, CISG/1996/58, 1524 (China).
108
Moot Prop ¶ 21.
109
FOUNTOULAKIS CHRISTIANA, UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS (1980)—FULL TEXT, PART III SALE OF GOODS, CH.V PROVISIONS COMMON TO THE OBLIGATIONS OF THE
SELLER AND OF THE BUYER, S.I ANTICIPATORY BREACH AND INSTALMENT CONTRACTS, ARTICLE 72, at ¶21 (2016).
110
UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980 UNITED NATIONS CONVENTION A 72 ¶
298 (Flechtner Harry M/ HONNOLD ed., 4th ed. 2009).
18
MEMORANDUM for CLAIMANT
iv) Failure to provide assurances111- Usually, the notice will state a period within which the
debtor is to furnish assurance.112 If the debtor does not provide assurance within the time
granted, it cannot avert the avoidance of the contract.113
¶75. If the requirements of Article 72(1) are met and the debtor has not provided adequate
assurance, or if the debtor refuses to perform its obligations (Article 72(3)), the creditor may avoid
the contract. A declaration of avoidance was done by the claimant since no assurances were made
by the respondent forcing the claimant to terminate the agreement who was continuously trying to
contact the respondent for an assurance but all in vain114
[4.3] THE RESPONDENTS CLAIM OF USD 150,000 DOES NOT REFLECT DAMAGES AND IS THUS
¶76. The RESPONDENT could, alternatively, claim that since they were impeded from
fulfilling their obligation, they are exempt from any liability as per ART. 79 of the CISG. However,
the exemption is not allowed as ART. 79 does not apply to the present case, as the exemption only
applies to claims for damages, not to other specific rights arising out of the contract115.
¶77. Respondent had control over the impact of the perceived impediment. Only an impediment
which lies outside of the respondent’s sphere of control can lead to exemption under ART. 79. Such
exemption must be narrow and objective116. Only circumstances external to the respondent can be
impediments117. Impediments beyond the respondent’s sphere are drawn by contractual risk
allocation, grounded in its typical sphere of risk. It encompasses responsibility for the respondent’s
own sphere. The respondent was made aware that time was of essence in the contract and that there
would be a need of assurance in case of any change in delivery dates and a need of notice. Thus,
111
Hanseatisches Oberlandesgericht Hamburg (Germany, 1996) - Case 1 U 167/95; Electronics Ltd. v. Asian
Distributors (2015)
112
SCHLECHTRIEM AND SCHWENZER: COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE OF
GOODS A 72 ¶ 23 (2022).
113
MICHAEL JOACHIM BONELL & C.M. BIANCA, COMMENTARY ON THE INTERNATIONAL SALES LAW: THE 1980
VIENNA SALES CONVENTION A 72, ¶ 25 (1987).
114
Moot Prop ¶
115
United Nations Convention on Contracts for the International Sale of Goods art. 79, Jan. 1, 1988, 55 I.L.M. 2.
116
LARRY A. DIMATTEO, INTERNATIONAL SALES LAW: A GLOBAL CHALLENGE p.295 (2014).
117
Stolen Touareg R 5 case, Oberlandesgericht München, Mar. 5, 2008, 7 U 4969/06, CISG-Online, 1686 (Ger.).
19
MEMORANDUM for CLAIMANT
the respondent should have communicated about the same to the claimant and given notice for the
same. Thus, this impediment falls within the respondent’s sphere of control and, hence, cannot
claim exemption under ART. 79.
¶78. If it could reasonably foresee them at the time of the contract, respondent is liable118. The
same was foreseeable by the respondent due to the nature of delay and the consequences that would
arise from the delay.
¶79. Even an impediment that the respondent could not have taken into account when
concluding the contract does not exempt it from failing to overcome the consequences of the
impediment. In this respect the requirements applied in international trade must be very strict.
respondent is expected to overcome an impediment in order to perform the contract 119. The
contractual allocation of risks must be used to identify the kind and degree of the efforts that can
be expected of the respondent to remove the obstacle or its effects in specific instances.120. The
respondent knew Time was of essence in the contract. Moreover, the respondent was also aware
that communication was an important part in case of any delay or problems. The respondent was
lackadaisical in communication and even when the claimant tried to contact them there was no
contact on the part of the respondent.
¶80. Thus, anticipating breach, the claimants terminated the contract to avoid any further losses
which was done according to the rules of CISG. - In this case121, the tribunal said that the notice
to avoid contract was valid since the respondent anticipated breach on part of the claimant.
118
MICHAEL JOACHIM BONELL & C.M. BIANCA, COMMENTARY ON THE INTERNATIONAL SALES LAW: THE 1980
VIENNA SALES CONVENTION NOTE 2.6.3 (1987).
119
BURGHARD PILTZ, INTERNATIONALES KAUFRECHT: DAS UN-KAUFRECHT IN PRAXISORIENTIERTER
DARSTELLUNG A.72 (2d ed. 2008).
120
ALASTAIR MULLIS & PETER HUBER, CISG: A NEW TEXTBOOK FOR STUDENTS AND PRACTITIONERS p. 262 (2009).
121
Chongqing Loncin Engine Parts Co., Ltd. et al. v. New Monarch Mach. Tool, Inc., CIETAC, June 28, (2018),
M20161221, CISG-Online 5608(China).
20
MEMORANDUM for CLAIMANT
RELIEF
Therefore, in the light of the facts of the case, issues raised, arguments advanced, and authorities
cited, may this Hon’ble Tribunal be pleased to adjudge and declare that,
[Link] Arbitration clause has been validly invoked and the arbitrator has jurisdiction to adjudicate
the disputes referred to arbitration.
2. That the appointment of Mr. Aman Mathur as sole arbitrator is legal and valid.
3. That Sunrise Egg Solutions is liable to compensate Gourmet Delights with a sum of USD
10,00,000 for the damages suffered by Gourmet Delights.
4. That Gourmet Delights is not liable to compensate Sunrise Egg Solutions with a sum of USD
15,00,000 for the termination of the 2nd Supply Agreement.
AND/OR
“Any other declaration or relief that the Hon’ble Tribunal deems fit in light of justice, equity
and good conscience.”
S/D
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