THIRTIETH ANNUAL WILLEM C.

VIS INTERNATIONAL
COMMERCIAL ARBITRATION MOOT

MEMORANDUM FOR CLAIMANT

RAJIV GANDHI NATIONAL UNIVERSITY OF LAW, PUNJAB

PCA CASE NO. 2022-76

ON BEHALF OF:

DRONE EYE PLC

1899 PEACE AVENUE, CAPITAL CITY, MEDITERRANEO

- CLAIMANT -

AGAINST

EQUATORIANA GEOSCIENCE LTD

1907 CALVO RD, OCEANSIDE, EQUATORIANA

- RESPONDENT -

COUNSEL FOR CLAIMANT

JESSICA KAUR ♦ SRISHTI KAUSHAL ♦ HRISHABH KHATWANI

JOTSAROOP SINGH ♦ ROHAN GAJENDRA PRATAP SINGH ♦ SRAJAN YADAV

MEMORANDUM FOR CLAIMANT [TABLE OF CONTENTS]

TABLE OF CONTENTS

Index of Abbreviations ........................................................................................................V

Table of Legislations and Rules ..................................................................................... VIII

Index of Authorities ............................................................................................................ X

I. BOOKS .................................................................................................................. X

II. JOURNAL ARTICLES ..................................................................................... XIV

III. MISCELLANEOUS ............................................................................................ XX

Index of Cases and Awards ............................................................................................ XXI

Statement of Facts ................................................................................................................1

Summary of Arguments ....................................................................................................... 3

Arguments on Procedure ..................................................................................................... 5

I. THE TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE .............. 5

A. There exists an enforceable Arbitration Agreement .............................................. 5

[1] The Parties have validly concluded an Arbitration Agreement ..................................... 5

i. The Parties had intention to arbitrate in case of any dispute ........................................ 6

ii. Parties consented to arbitration ......................................................................................... 6

iii. Subsequent conduct confirms the conclusion of the Arbitration Agreement ........ 6

iv. The Arbitration Agreement meets all the Formal Validity requirements ................ 7

[2] RESPONDENT cannot rely on internal restrictions to renege on its obligation to

arbitrate ............................................................................................................................................. 7

i. RESPONDENT’s actions go against the General Principles of ICA ............................... 8

a. The principle of prohibiting the use of internal restrictions is a general principle of

ICA ............................................................................................................................................. 8

b. Frustration of the Arbitration Agreement would violate the general principle ...... 9

c. Even VCLT does not allow RESPONDENT to invoke its national law ................... 10

ii. RESPONDENT’s actions go against the principle of good faith.................................... 11

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MEMORANDUM FOR CLAIMANT [TABLE OF CONTENTS]

B. The Allegations of Corruption/Misrepresentation do not invalidate the Arbitration

Agreement .................................................................................................................... 12

[1] The allegations of corruption are arbitrable ................................................................... 12

[2] The Arbitration Agreement stands valid due to the doctrine of separability ............ 12

C. The Award rendered by the Arbitral Tribunal is Enforceable .............................. 13

II. THE PROCEEDINGS SHOULD NOT BE STAYED OR BIFURCATED ...... 14

A. Stay cannot be granted in the present case ........................................................... 15

[1] Proceeding with the arbitration will save time and money .......................................... 15

[2] RESPONDENT has failed to show any of the accepted criteria for a stay ................... 16

[3] The parties intended to arbitrate disputes about contractual validity ......................... 17

B. The proceedings should not be bifurcated............................................................ 17

[1] The applicable legal principles and existing arbitral practice would not lead to such a
decision ........................................................................................................................................... 18

[2] A bifurcation of the issue of corruption would not be feasible .................................. 18

[3] Bifurcation would go against the tenets of arbitration ................................................. 19

[4] A request for bifurcation would be unfair to CLAIMANT ............................................. 20

C. RESPONDENT’s concerns regarding the Arbitral Tribunal’s investigative powers

have been exaggerated ................................................................................................ 20

D. There is no credible allegation of corruption with regard to the present contract ..

................................................................................................................................ 21

[1] Charges brought up against Mr. Field do not relate to the present contract ............ 22

[2] The alterations in the scope of the contract have been explained by CLAIMANT .... 22

[3] The Public Prosecution Office and Ms. Fonseca cannot be relied upon to conduct an
objective investigation................................................................................................................... 23

Arguments on Substance ................................................................................................... 23

III. PSA IS GOVERNED BY THE CISG .................................................................. 23

A. The drones were not intended or destined for air transport ................................ 24

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MEMORANDUM FOR CLAIMANT [TABLE OF CONTENTS]

[1] The intended function of objects and purpose of transactions is paramount .......... 24

[2] Kestrel Eye 2010 drones were meant to function as surveillance devices ................. 24

i. Kestrel Eye 2010 was engineered to excel at surveillance alone ................................. 24

ii. RESPONDENT purchased Kestrel Eye 2010 to conduct surveillance alone ............... 25

B. The drones did not need to be registered as aircrafts .......................................... 26

IV. IN CASE PSA IS GOVERNED BY THE CISG, RESPONDENT CANNOT

RELY ON ART. 3.2.5 ICCA TO AVOID THE CONTRACT ................................... 27

A. RESPONDENT cannot rely on Art. 3.2.5 as it is not applicable in the instant factual
situation ....................................................................................................................... 27

[1] RESPONDENT’s misrepresentation claim does not involve an interest arising

independently of contractual claims ........................................................................................... 27

i. Identified factual subject matter would at most raise issues of non-conformity ...... 27

ii. There exist no extraneous/ collateral factual circumstances beyond mere non-
conformity to establish misrepresentation ............................................................................. 28

[2] RESPONDENT’s misrepresentation claim is not based on a fraudulent intention on

behalf of CLAIMANT ...................................................................................................................... 29

[3] RESPONDENT’s misrepresentation claim would result in the same remedy as is

allowed for breach of contract under the CISG ....................................................................... 29

[4] Allowing RESPONDENT’s misrepresentation claim would dilute the purpose and
authority of the CISG ................................................................................................................... 30

B. Even if Art. 3.2.5 ICCA is applicable, RESPONDENT cannot rely on it as there is no

misrepresentation ......................................................................................................... 31

[1] There was no fraudulent representation by CLAIMANT ............................................... 31

i. There was no fraudulent representation by CLAIMANT about the quality of the drones
............................................................................................................................................... 31

ii. CLAIMANT’s interpretation of the term ‘state-of-the-art’ should be adopted by virtue

of the rule of contra proferentem ........................................................................................... 32

[2] There was no fraudulent non-disclosure by CLAIMANT ............................................... 33

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MEMORANDUM FOR CLAIMANT [TABLE OF CONTENTS]

[3] CLAIMANT had no intent to defraud RESPONDENT...................................................... 34

[4] CLAIMANT gained no advantage to RESPONDENT’s detriment ................................... 34

Relief Sought ................................................................................................................XXIX

Certificate of Independence .......................................................................................... XXX

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MEMORANDUM FOR CLAIMANT [INDEX OF ABBREVIATIONS]

INDEX OF ABBREVIATIONS

¶/¶¶ Paragraph/Paragraphs; Clarification/Clarifications

Art. 20 Article 20 of PSA, i.e., the Arbitration Agreement

Art./Arts. Article/Articles

CEO Chief Executive Officer

CISG United Nations Convention on Contracts for the International Sale of

Goods, April 11, 1980

CISG AC CISG Advisory Council

cl. Clause

Cl. Ex. CLAIMANT’s exhibit

CLAIMANT Drone Eye plc

COO Chief Operating Officer

DAL Danubian Arbitration Law; a verbatim adoption of the UNCITRAL

Model Law

ECICA European Convention on International Commercial Arbitration

ed/eds. Editor/Editors

Et al Et alia (and others)

i.e. id est (that is)

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MEMORANDUM FOR CLAIMANT [INDEX OF ABBREVIATIONS]

ICA International Commercial Arbitration

ICC International Chamber of Commerce Court of Arbitration

ICCA International Commercial Contract Act (verbatim adoption of the

UPICC)

Id. Idem

Mediterranean A verbatim adoption of the UNDROIT Principles

Contract Law

Mediterranean Law The Law of Mediterraneo

MND The Ministry of Natural Resources and Development of Equatoriana

No. Number

Notice CLAIMANT’s Notice of Arbitration

NP Development Northern Part Development Program

Program

op. Opinion

p./pp. Page/Pages

Parties Drone Eye plc (CLAIMANT) & Equatoriana Geoscience Ltd.

(RESPONDENT)

PCA Permanent Court of Arbitration

plc Public Limited Company

PO1 Procedural Order No. 1 (Issued on October 8, 2022)

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MEMORANDUM FOR CLAIMANT [INDEX OF ABBREVIATIONS]

PO2 Procedural Order No. 2 (Issued on November 8, 2022)

PSA Purchase and Supply Agreement; entered into by CLAIMANT and

RESPONDENT on December 1, 2020.

RE RESPONDENT’s Exhibit

RESPONDENT Equatoriana Geoscience Ltd

Response RESPONDENT’S Response to the Notice of Arbitration

§/§§ Section/Sections

UAS/UAV Unmanned Aerial Systems/Unmanned Aerial Vehicles

UNCAC United Nations Convention Against Corruption

UNCITRAL United Nations Commission on International Trade Law

UNIDROIT The International Institute for the Unification of Private Law

UPICC UNIDROIT Principles of International Commercial Contracts, 4th

Edition, adopted on May 20, 2016

v. Versus

VCLT Vienna Convention on the Law of Treaties; done at Vienna on 23 May

1969, entered into force on 27 January 1980.

Vol. Volume

Y.B. Comm. Yearbook Commercial Arbitration

Arb/YCA

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MEMORANDUM FOR CLAIMANT [TABLE OF LEGISLATIONS AND RULES]

TABLE OF LEGISLATIONS AND RULES

Algerian Code Algerian Code of Civil Procedure, adopted February 25, 2008

Aviation Safety Act Aviation Safety Act, 1966

CISG United Nations Convention on Contracts for the International

Sale of Goods, effective January 1, 1988

Eq. CONST. Constitution of Equatoriana

DAL Danubian Arbitration Law

ECICA European Convention on International Commercial Arbitration,

of April 21, 1961

ICCA International Commercial Contract Act (verbatim adoption of

UPICC)

NYC Convention on the Recognition and Enforcement of Foreign

Awards, New York, effective June 7, 1959

PCA Rules Permanent Court of Arbitration Rules, 2012

Swiss Law Swiss Law on Private International Law

Tunisian Code Tunisian Code of Arbitration

UNCAC United Nations Convention Against Corruption

UNCITRAL Arbitration Rules UNCITRAL Arbitration Rules (as revised in 2010)

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MEMORANDUM FOR CLAIMANT [TABLE OF LEGISLATIONS AND RULES]

UNCITRAL Expedited UNCITRAL Expedited Arbitration Rules, 2021

Arbitration Rules

UNCITRAL Model Law Model Law on International Commercial Arbitration, adopted

on December 11, 1985, as amended in 2006

UNCITRAL Transparency UNCITRAL Rules on Transparency in Treaty-based Investor-

Rules State Arbitration, adopted on July 11, 2013, effective April 1,
2014

UNIDROIT Principles/ UNIDROIT Principles of International Commercial Contracts,

UPICC/ PICC 4th Edition, adopted on May 20, 2016

VCLT Vienna Convention on the Law of Treaties; done at Vienna on

May 23, 1969, entered into force on January 27, 1980.

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

INDEX OF AUTHORITIES

I. BOOKS

CITED AS REFERENCE CITED IN

Anghelos Anghelos C. Foustoucos ¶ 17

L'arbitrage Interne Et International En Droit Prive
Hellenique
Librairies techniques

Binder Peter Binder ¶¶ 13, 14, 75

International Commercial Arbitration and Mediation in
UNCITRAL Model Law Jurisdictions
4th Edition
Kluwer Law International, 2019

Born Gary Born ¶¶ 9, 12, 13,

International Commercial Arbitration 14, 15, 43
3rd Edition
Kluwer Law International, 2021

Carla Walter Carla Walter ¶ 115

Arts Management: An Entrepreneurial Approach
Routledge, 2015

Caron/ Caplan/ David Caron, Lee Caplan, and Matti Pellonpää ¶ 51

Pellonpää The UNCITRAL Arbitration Rules: A Commentary
Oxford University Press, 2006

Craig/ Park/ Paulsson, W. L. Craig, W. W. Park and J. Paulsson ¶¶ 4, 30

International Chamber of Commerce Arbitration
Oceans, Dobbs' Ferry, NY, 1984

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Daly Brooks Daly, Evgeniya Goriatcheva, Hugh Meighen ¶ 62

A Guide to the PCA Arbitration Rules
1st Edition
Oxford University Press, 2014

Ferrari Concise Commentary on the Rome I Regulation 6th ¶ 92

German Edition by Franco Ferrari

Fouchard Emmanuel Galliard, John Savage (eds.) ¶¶ 7, 17, 18, 31

Fouchard, Gaillard, Goldman on International Commercial
Arbitration
Kluwer Law International, 1999

Hascher Dominique Hascher ¶ 17

European Convention on International Commercial
Arbitration of 1961: Commentary
Vol. XXXV1, Y.B. COM. ARB., 509, (Albert Jan
van den Berg ed., 2011)

Kaufmann-Kohler, Gabrielle Kaufmann-Kohler ¶4

Arbitrage international: Droit et pratique à la lumière de la
LDIP
2nd Edition
Editions Weblaw, Bern, 2010

Kinnear/ Bjorklund/ Meg N. Kinnear, Andrea K. Bjorklund, John F.G. ¶ 70

Hannaford Hannaford
Investment disputes under NAFTA: an annotated guide to
NAFTA Chapter 11
Kluwer Law International, 2006

Kiran Nasir Gore Esmé Shirlow, Kiran Nasir Gore ¶ 28

The Vienna Convention on the Law of Treaties in Investor-
State Disputes: History, Evolution and Future
Kluwer Law International, 2022

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Kröll/ Mistelis/ Stefan Kröll, Loukas Mistelis, Pilar Perales ¶¶ 106, 108,
Viscasillas Viscasillas (eds.) 110
UN Convention on Contracts for the International Sale of
Goods (CISG): A Commentary
2nd Edition
C.H. Beck – Hart – Nomos, 2018

Landwehr Oliver Landwehr, Cecily Rose, Michael Kubiciel ¶ 76

(eds.)
The United Nations Convention Against Corruption – A
Commentary
Oxford Commentaries, 2019

Lew/ Mistelis/ Julian Lew, Loukas Mistelis and Stefan Kröll, ¶¶ 40, 41, 50,
Kröll Comparative International Commercial Arbitration 129
Kluwer Law, 2003

Rajoo/ Klötzel Sundra Rajoo, Thomas Klötzel ¶ 14

UNCITRAL model law & arbitration rules, the
Arbitration Act 2005 (Amended 2011 & 2018) and the
AIAC Arbitration Rules 2018
Sweet & Maxwell Asia, 2019

Redfern/ Hunter I Alan Redfern, Martin Hunter and Nigel Blackaby ¶8

Law and Practice of International Commercial Arbitration
4th Edition
Sweet & Maxwell, 2004

Redfern/ Hunter II Nigel Blackaby, Constantine Partasides, Alan ¶¶ 4, 66

Redfern, Martin Hunter,
Redfern and Hunter on International Arbitration
5th Edition
Oxford University Press, 2009

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Redfern/ Hunter III Nigel Blackaby and Constantine Partasides QC with ¶4

Alan Redfern and Martin Hunter
Redfern and Hunter on International Arbitration
6th Edition
Oxford University Press, 2019

Reisman/ Craig/ Park/ Reisman W. Michael, Craig W. Laurence, Park ¶2

Paulsson William, Paulsson Jan International Commercial
Arbitration Foundation Press, New York, 1997

Schlechtriem Peter Schlechtriem ¶ 121

Uniform Sales Law: The UN-Convention on Contracts for
the International Sale of Goods
Manz, 1986.

Schlechtriem/ Schwenzer Ingeborg Schwenzer (ed.) ¶¶ 90, 92, 108,

Schlechtriem & Schwenzer: Commentary on the UN 110
Convention on the International Sale of Goods
4th Edition
Oxford University Press, 2016

Schwenzer/ Fountoulakis Ingeborg Schwenzer, Christiana Fountoulakis (ed.) ¶ 102

International Sales Law
Routledge-Cavendish, 2007

Van Den Berg Albert Jan van den Berg ¶5

The New York Arbitration Convention of 1958: Towards a
Uniform Judicial Interpretation
Kluwer Law and Taxation, 1981

Vogenauer Stefan Vogenauer (ed.) ¶¶ 126, 132,

Commentary on the UNIDROIT Principles of International 133
Commercial Contracts (PICC)
2nd Edition
Oxford University Press, 2015

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Yalim Ayse Nihan Karadayi Yalim (ed.) ¶ 129

Interpretation and gap filling in international commercial
contracts
Cambridge University Press, 2019

II. JOURNAL ARTICLES

CITED AS REFERENCE CITED IN

Audit Bernard Audit ¶ 22

"Transnational Arbitration and State Contracts: Findings
and Prospects"
Hague Academy of International Law, Centre for
Studies and research in international law and
international relations
Dordrecht/Boston/Lancaster (1987).

Baizeau/ Hayes Domitille Baizeau and Tessa Hayes ¶ 72

'The Arbitral Tribunal’s Duty and Power to Address
Corruption Sua Sponte”
in Andrea Menaker (ed.),
International Arbitration and the Rule of Law: Contribution
and Conformity
ICCA Congress Series, Volume 19 (Kluwer Law
International; 2017) pp. 225 - 265

Beisteiner Lisa Beisteiner ¶¶ 20, 22, 23,

“Right of Legal Persons of Public Law to Resort to 25, 27
Arbitration”
in Gerold Zeiler, Alfred Siwy, Lisa Beisteiner,
ANDREA de la Brena, Markus Schifferl
The European Convention on International Commercial
Arbitration: A Commentary
Kluwer Law International, 2019

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Burton Steven Burton ¶ 30

“Breach of Contract and the Common Law Duty to Perform
in Good Faith”
94 Harvard Law Review 369, (1980)

Calamita/ Sardinha Nicolas Jansen Calamita and Elsa Sardinha ¶ 65

“The Bifurcation of Jurisdictional and Admissibility
Objections in Investor-State Arbitration”
The Law & Practice of International Courts and
Tribunals, 16.1: 44-70

Caprasse/ Hanotiau Olivier Caprasse ¶ 40

“Public Policy in International Commercial Arbitration”
in Domenico Di Pietro, Emmanuel Gaillard, Nanou
Leleu-Knobil (eds.)
Enforcement of Arbitration Agreements and International
Arbitral Awards
Cameron May, 2008

Concepcion Carlos Concepcion ¶ 37

"Combating Corruption and Fraud from an International
Arbitration Perspective"
Disp. Resol. Int'l 11 (2017): 23

De Luca Villy De Luca ¶ 107

"The conformity of the goods to the Contract in International
Sales"
Pace Int'l L. Rev. 27 (2015)

Djakhongir Djakhongir Saidov ¶ 92

“Cases on CISG Decided in the Russian Federation”
Vindobona Journal of International Commercial Law
and Arbitration, Vol. 7, 2003, pp. 1–62.

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Feehily Ronán Feehily ¶ 36

"Separability in international commercial arbitration;
confluence, conflict and the appropriate limitations in the
development and application of the doctrine"
Arbitration International 34.3 (2018): 355-383.

Franco Ferrari Franco Ferrari ¶ 117

"The Interaction between the United Nations Conventions on
Contracts for the International Sale of Goods and Domestic
Remedies (Rescission for Mistake and Remedies in Tort
Law)"
The Rabel Journal of Comparative and International
Private Law H. 1 (2007): 52-80.

Gary Born Gary Born ¶ 73

“Bribery and an Arbitrator’s Task”
Kluwer Arbitration Blog, October 11, 2011

Greenwood Lucy Greenwood ¶¶ 66, 70, 71

“Does Bifurcation Really Promote Efficiency?”
Journal of International Arbitration 28.2 (2011)

Hart-Armstrong/ Slade/ Shelby Hart-Armstrong, Alexander Slade, Robert ¶ 69

Landicho Landicho (Vinson & Elkins LLP)
“How Do Tribunals in Investment Arbitrations Treat
Parallel Domestic Investigations and Proceedings?”
Kluwer Arbitration Blog, June 14, 2020

Hwang/ Lim Michael Hwang and Kevin Lim ¶¶ 34, 36

"Corruption in Arbitration-Law and Reality"
Asian Int'l Arb. J. 8 (2012): 1.

Jones Doug Jones ¶ 37

"Competence-competence”
Arbitration: The International Journal of Arbitration,

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Mediation and Dispute Management 75.1 (2009).

Kröll Stefan Kröll ¶¶ 18, 24, 31

“The European convention on International Commercial
Arbitration: The tale of a Sleeping Beauty”
in Austrian Yearbook on International Arbitration, 4,
p.12.

Luka Groselj Luka Groselj ¶ 42

“Stay of arbitration proceedings – Some examples from
arbitral practice”
in Matthias Scherer (ed.)
ASA Bulletin, (Kluwer Law International 2018,
Volume 36 Issue 3)

McErlaine/ Allsop Michael McErlaine and James Allsop ¶ 65

“Trends in Questions of Jurisdiction and Admissibility in
International Arbitration”
Kluwer Arbitration Blog, November 2, 2021

Miller/ Perry Alan D. Miller and Ronen Perry ¶ 30

“Good Faith Performance”
98 Iowa Law Review 689, 704 (2013).

Monichino Albert Monichino QC ¶ 71

“How Arbitral Tribunals Deal with Jurisdictional Objections
in Practice -- To Bifurcate or Not and Court Review of
Jurisdictional Objections”
Singapore Institute of Arbitrators Newsletter, 2018

Parish Matthew Parish ¶ 37

"The proper law of an arbitration agreement."
Arbitration: The International Journal of Arbitration,
Mediation and Dispute Management 76.4 (2010)

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Paterson JM Paterson ¶ 30
Duty of Good Faith: Does it Have a Place in Contract Law?
74 Law Institute Journal 47, 48 (2000)

Paulsson Jan Paulsson ¶¶ 2, 4, 17, 24,

Interference by National Courts 43
in Lawrence Newman & Richard Hill (eds.)
The Leading Arbitrators' Guide to International Arbitration
(Juris Publishing, 2004)

Paulsson II Jan Paulsson, ¶ 17

“May a State Invoke Its Internal Law to Repudiate Consent
to International Arbitration”
2(1) Arbitratios International, 90, p. 91 (1986)

Pengelley Nicholas Pengelley ¶ 36

"Separability Revisited: Arbitration Clauses and Bribery"
Journal of International Arbitration 24.5 (2007)

Pitkowitz Nikolaus Pitkowitz ¶¶ 17, 19, 20

“Is There Still a Scope of Application of the European
Convention on International Commercial Arbitration”
in Austrian Yearbook on International Arbitration,
93-108, p. 107 (Klausegger and others (eds), 2013)

Razumov Konstantine Leonidovich Razumov ¶¶ 17, 21

“The Law governing the capacity to arbitrate”
in Planning Efficient Arbitration Proceedings: The Law
applicable to Arbitration Proceedings, ICCA Conference
series, Vol 7, pp. 260-267 (Albert Jan Van der Berg,
Kluwer law international, 1996)

Rosell/ Prager José Rosell and Harvey Prager ¶ 37

"Illicit commissions and international arbitration: the question
of proof"

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

Arbitration International 15.4 (1999): 329-348.

Santacroce Fabio G Santacroce ¶ 65

“Navigating the troubled waters between jurisdiction and
admissibility: an analysis of which law should govern
characterization of preliminary issues in international
arbitration”
Arbitration International 33.4 (2017): 539–570.

Schroeter Ulrich G. Schroeter ¶¶ 113, 130,

"Defining the borders of uniform international contract law: 120, 122
The CISG and remedies for innocent, negligent, or fraudulent
misrepresentation"
Vill. L. Rev. 58 (2013): 553.

Thieffry Jean Thieffry ¶ 40

"The Finality of Awards in International 66 Arbitration”
Journal of International Arbitration, (1985, Vol. 2
No. 3, pp. 27 – 48).

Vojtěch Trapl Vojtěch Trapl ¶¶ 59, 61

“Thinking Big – Bifurcation of arbitration proceedings – to
bifurcate or not to bifurcate”
Kiev Arbitration Days 2012, November 16, 2012,
Kiev

Warren Khoo Warren Khoo ¶ 120

Article 4
in M. Bianca/M. Boneil, Commentary on the International
Sales Law: The 1980 Vienna Sales Convention
Giuffrè, 1987

Woods/ Ros/ Guillet/ Louise Woods, Ciara Ros, Elena Guillet and Edward ¶¶ 63, 69
Wilson Wilson (Vinson & Elkins LLP)

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“Procedural Issues”
Global Arbitration Review, June 9, 2021

Yee Woo Pei Yee ¶ 30

“Protecting Parties’ Reasonable Expectations: A General
Principle of Good Faith”
1 Oxford University Commonwealth Law Journal
195, 223 (2001).

III. MISCELLANEOUS

CITED AS REFERENCE CITED IN

CISG Draft Commentary CISG Draft Secretariat Commentary ¶ 102

Off Comm. UNIDROIT Principles of International Commercial ¶¶ 132, 136,

Contracts, 2016 – Official Commentary, 139
https://www.unidroit.org/english/principles/contra
cts/principles2016/principles2016-e.pdf. Accessed
November 24, 2022.

Op. 13, CISG AC Opinion no. 13, CISG Advisory Council ¶ 130

S.D. Myers S.D. Myers v. Canada ¶ 70

NAFTA case
http://www.biicl.org/files/3921_2002_sd_myers_v_
canada.pdf

Trade Secrets, WIPO Trade Secrets. ¶¶ 115, 134

https://www.wipo.int/tradesecrets/en/index.html

Travaux préparatoires Travaux préparatoires, Art. V NYC ¶ 41

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MEMORANDUM FOR CLAIMANT [INDEX OF AUTHORITIES]

UNCITRAL Exp. UNCITRAL, Explanatory Note by the UNCITRAL ¶ 14

Note Secretariat on the 1985 Model Law on International
Commercial Arbitration as Amended in 2006 (2008)

INDEX OF CASES AND AWARDS

AD HOC ARBITRATION

CITED AS REFERENCE CITED IN

Aminoil The American Independent Oil Company ¶ 24

(Aminoil) v. The Government of the State of
Kuwait
Final Award, March 24, 1982

Benteler Dipl. Ing. Erick Benteler KG, Helmut Benteler ¶ 17

KG v. Belgian State, S.A. ABC,
Interim Award, November 18, 1993
X Y.B. COM. ARB. 1985, pp. 37-38 (Pieter
Sanders ed., Kluwer Law International, 1985)

Case No. 262 1929-30 Annual Digest and Reports of Public ¶ 24

International Law Cases, Case No. 262, at p. 434

Elf Aquitaine Iran Elf Aquitaine Iran v. NIOC ¶¶ 17, 21

Ad hoc Preliminary Award by B. Gomard, sole
arbitrator, January 14, 1982
XI Y.B. COM. ARB 97, 1 24 at 104 (1986)

Govt. of Turkey et al Wauquier et Cie v. Government of Turkey et al ¶ 24

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

10 Recueil des Décisions des Tribunaux Arbitraux

Mixtes, 65 (1930)

Revere Copper and Brass Revere Copper and Brass v. Overseas Private ¶ 30
Investment Corporation,
American Arbitration Association award
17 International Legal Materials 1321 (1978),
summarised in V Y.B. COM. ARB. 202 (1980)

AUSTRALIA

Balaji Coke Industry Traxys Europe S.A. v. Balaji Coke Industry Pvt ¶ 41
Ltd.
Federal Court, Australia
March 23, 2012
[2012] FCA 276

Comandate Marine Corp. Comandate Marine Corp v Pan Australia Shipping ¶ 37

Pty Ltd.
Federal Court of Australia
December 20, 2006
[2006] FCAFC 192

Ferris v. Plaister Ferris v Plaister & Anr. ¶¶ 36, 37

Supreme Court of NSW (Young J)
May 6, 1993

CHINA

Cysteine case Claimant (Buyer, German) v. Respondent (Seller, ¶ 130

Chinese)
CIETAC
January 7, 2000

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

CISG/2000/06
Available at:
https://iicl.law.pace.edu/cisg/case/china-january-
7-2000-translation-available

COLOMBIA

Petrotesting Colombia Petrotesting Colombia S.A. & Southeast ¶¶ 41

Investment Corporation v. Ross Energy S.A.
Corte Suprema de Justicia (Supreme Court of
Justice), Colombia
July 27, 2011
Case No. 11001-0203-000-2007-01956-00

FRANCE

Dalico Case Municipalité de Khoms El Mergeb v. Société ¶6

Dalico
French Supreme Court
December 20, 1993
Case no. 91-16828
Available at:
https://www.legifrance.gouv.fr/juri/id/JURITEX
T000007030314/

Ganz Société Ganz et al v Société Nationale des Chemins ¶ 40

de Fer Tunisiens
Paris Court of Appeal
March 29, 1991

SOERNI Société d’études et représentations navales et ¶¶ 6, 15

industrielles (SOERNI) et autres vs. Société Air Sea
Broker limited (ASB)

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

French Supreme Court

July 08, 2009
Case No. 08-16025
Available at:
https://www.legifrance.gouv.fr/juri/id/JURITEX
T000020837816/

Young Pecan Cie Bargues Agro Indus. SA v. Young Pecan Cie ¶ 15

Paris Court of Appeal
June 10, 2004
XXX Y.B. Comm. Arb. 499, 502

GERMANY

Automobile case Plaintiff (Buyer, Latvian) v. Defendant (Seller, ¶ 130

German)
Oberlandesgericht [Court of Appeal] Stuttgart
March 31, 2008
Case No. 6 U 220/07
Available at:
https://iicl.law.pace.edu/cisg/case/germany-
oberlandesgericht-hamburg-oberlandesgericht-olg-
provincial-court-appeal-german-155

HONG KONG

Fung Sang Fung Sang Trading Ltd v. Kai Sun Sea Prods. & ¶ 65
Food Co. Ltd.,
CLOUT case no. 20
High Court—Court of First Instance, Hong Kong
October 29, 1991
[1991] HKCFI 190 (H.K. Ct. First Inst.)

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

Lucky-Goldstar Lucky-Goldstar International (H.K.) Limited v. Ng ¶6

Moo Kee Engineering Limited
CLOUT case no. 57
High Court of Hong Kong
May 5, 1993
(1993) 2 Hong Kong Law Reports 73

Vibroflotation Vibroflotation A.G. v. Express Builders Co. Ltd., ¶ 74

CLOUT case no. 77
High Court—Court of First Instance, Hong Kong
August 15, 1994
[1994] HKCFI 205

ICSID

Blusun Blusun S.A., Jean-Pierre Lecorcier and Michael ¶ 28

Stein v. Italian Republic
ICSID Case No. ARB/14/3
Final Award, December 27, 2016
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw8967.pdf

EDF EDF (Services) Limited v. Romania ¶ 78

ICSID Case No. ARB/05/13
Award, October 8, 2009
Available at:
https://www.italaw.com/sites/default/files/case-
documents/ita0267.pdf

Fraport AG Fraport AG Frankfurt Airport Services Worldwide ¶ 55

v. The Republic of the Philippines
ICSID Case No. ARB/03/25
Award dated August 16, 2007

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

Available at:
https://www.italaw.com/sites/default/files/case-
documents/ita0340.pdf

Glencore A.G. Glencore International A.G. and C.I. Prodeco S.A. ¶¶ 55, 79
v. Republic of Colombia
ICSID Case No. ARB/16/6
Award dated August 27, 2019
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw10767_0.pdf

Gran Colombia GCM Mining Corp. (formerly Gran Colombia ¶ 64

Gold Corp.) v. Republic of Colombia,
ICSID Case No. ARB/18/23
Decision on the Bifurcated Jurisdictional Issue
dated November 23, 2020
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw11995.pdf

Karkey A.S. Karkey Karadeniz Elektrik Uretim A.S. v. Islamic ¶ 55

Republic of Pakistan
ICSID Case No. ARB/13/1
Award dated August 22, 2017
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw9767.pdf

Micula v. Romania (II) Ioan Micula, Viorel Micula and others v. Romania
[II]
ICSID Case No. ARB/14/29
Award dated March 5, 2020
Available at:

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

https://www.italaw.com/sites/default/files/case-
documents/italaw11284.pdf

Slovak Republic Ceskoslovenska Obchodni Banka, A.S. v. The ¶ 28

Slovak Republic
ICSID Case No. ARB/97/4
Decision of the Tribunal on Objections to
Jurisdiction dated May 24, 1999
Available at:
https://www.italaw.com/sites/default/files/case-
documents/ita0144.pdf

TSA Spectrum TSA Spectrum de Argentina S.A. v. Argentine ¶ 55

Republic
ICSID Case No. ARB/05/5
Award, December 19, 2008
Available at:
https://www.italaw.com/sites/default/files/case-
documents/ita0874.pdf

Vladislav Kim Vladislav Kim and others v. Republic of ¶ 78

Uzbekistan
ICSID Case No. ARB/13/6
Decision on Jurisdiction, March 8, 2017
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw8549.pdf

INDIA

McDermott Int’l McDermott International Inc. vs. Burn Standard ¶ 65

Co.
The Supreme Court of India
Appeal (civil): 4492 of 1998

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

May 12, 2006

Available at:
https://indiankanoon.org/doc/996348/

N.N. Global M/S N.N. Global Mercantile v M/S Indo Unique ¶ 37

Flame Ltd.
The Supreme Court of India
Civil Appeal Nos. 3802 - 3803 / 2020
January 11, 2021
Available at:
https://indiankanoon.org/doc/39641512/

Satinder Singh SH. Satinder Narayan Singh v. Indian Labour ¶ 74

Cooperative Society Ltd. & Ors.
High Court of Delhi, India
OMP 471/2007 [2007] INDLHC 1462, 2008 (1)
ARBLR 355 Delhi
December 17, 2007
Available at:
http://www.indiankanoon.org/doc/530842/

Swiss Timing Swiss Timing Ltd. v. Commonwealth Games 2010 ¶¶ 46, 69

Organising Committee
The Supreme Court of India
Arbitration Petition No. 34 of 2013
May 28, 2014
Available at:
https://indiankanoon.org/doc/134382998/

ICC

Dallah Real Estate First Partial Award in Dallah Real Estate and ¶ 31
Tourism Holding Company v. The Ministry of
Religious Affairs, Government of Pakistan

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

ICC Case No. 9987

ICC International Court of Arbitration
2001

Etat tunisien 1987, BEC-GTAF v. Etat tunisien, ¶ 21

ICC International Court of Arbitration
1988 REV. ARB. 732; F. Mechri's note

Framatome Decision on jurisdiction in Framatome v. Atomic ¶¶ 17, 21, 22

Energy Organization of Iran
ICC case 3986
ICC International Court of Arbitration
1982

ICC 1110 Award in ICC Case No. 1110 ¶ 34

ICC International Court of Arbitration
10 Arb. Int’l 277, 1994

ICC 1526 ICC Case No. 1526 ¶ 17

ICC International Court of Arbitration
1968

ICC 1803 ICC Case 1803 ¶¶ 30

ICC International Court of Arbitration
V Y.B. COM. ARB. 177 1980

ICC 1939 ICC Case 1939 ¶ 30

ICC International Court of Arbitration
cited by Y. Derains, 1973 Revue de l'arbitrage 145,
1973

ICC 3327 ICC Case no. 3327 ¶ 17

ICC International Court of Arbitration
[1982] Clunet 973

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

ICC 3779 Award in ICC Case no. 3779 ¶ 129

ICC International Court of Arbitration, 1984
1981

ICC 4145 Interim Award in ICC Case No. 4145 ¶ 34

ICC International Court of Arbitration
XII Y.B. Comm. Arb. 97 (1987)

ICC 4381 ICC Case No. 4381 ¶ 31

ICC International Court of Arbitration
1986

ICC 4472 CLAIMANT (Germany) v. Defendant (Germany), ¶2

ICC Case No. 4472
ICC International Court of Arbitration
Journal du Droit International 1984, pp. 946 – 950.

ICC 5103 Final Award in Case 5103, ¶¶ 17, 21

ICC International Court of Arbitration
(1988), (1988) 115 J.D.I. 1206

ICC 6286 Partial Award in ICC Case No. 6286 ¶ 34

ICC International Court of Arbitration
XIX Y.B. Comm. Arb. 141 (1994)

ICC 6474 Partial Award on Jurisdiction and Admissibility in ¶ 34

ICC Case No. 6474
ICC International Court of Arbitration
XXV Y.B. Comm. Arb. 279 (2000)

ICC 7110 ICC Award No. 7110 ¶ 129

ICC International Court of Arbitration
10 ICC Bull. No. 2, 1999

ICC 7929 Interim Award in ICC case No. 7929 ¶5

ICC International Court of Arbitration

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

XXV Y.B. Comm. Arb. 312, 1995

Italian Co Italian Co. v. African State-Owned Entity ¶ 17

ICC International Court of Arbitration
cited by Yves Derains, Le statut des usages du
commerce international devant les juridictions
arbitrales,
1973 REV, ARB. 122, 145, and 109 J.D.I, 971, 977

Poultry feed case ICC Case No. 10274 ¶2

ICC International Court of Arbitration
1999

ITALY

Allsop Automatic Allsop Automatic Inc. v. Tecnoski snc. ¶ 40

Court of Appeal of Milan
December 4, 1992
XXII Yearbook Commercial Arbitration 725

Corte di Cassazione Société Arabe des Engrais Phosphates et Azotes – ¶ 17

SAEPA and Société Industrielle d’Acide
Phosphorique et d’Engrais – SIAPE v. Gemanco
srl
Supreme Court of Cassation of Italy
Court of Appeal of Bari
May 9, 1996
XXII Y B. COM. ARB. 737 (1997)

NETHERLANDS ARBITRATION INSTITUTE

NAI 4687 Exem Energy B.V. v. Sociedade Nacional de ¶ 34

Combustíveis de Angola - Sonangol E.P.

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

NAI Case No. 4687

Final Award dated July 23, 2021

PARAGUAY

Taller RC Taller RC de Crispin Ruffinelli v. Secretaria ¶ 34

Nacional del Ambiente
Paraguayan Court of Appeal
Judgment of June 6, 2018

PCA

Cairn Energy Cairn Energy PLC, Cairn UK Holdings Limited v. ¶¶ 52, 58

The Republic of India
PCA Case No. 2016-7
Procedural Order No. 3 of March 31, 2017
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw8841.pdf

Croatia v. MOL PLC Republic of Croatia v. MOL Hungarian Oil and ¶ 55

Gas Company PLC
PCA Case No. 2014-15
Final Award dated December 23, 2016
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw94016.pdf

Philip Morris Asia Ltd. Philip Morris Asia Limited v. The Commonwealth ¶ 61
of Australia
UNCITRAL, PCA Case No. 2012-12
Procedural Order No. 4, dated October 26, 2012
Available at:
https://www.italaw.com/sites/default/files/case-

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

documents/italaw1215.pdf

South America Silver South American Silver Limited v. Bolivia ¶ 79

PCA Case No. 2013-15
Award dated November 22, 2018
Available at:
https://www.italaw.com/sites/default/files/case-
documents/italaw10361.pdf

SWITZERLAND

ASA Bull. X. v. Y., Z. ¶ 31

Federal Supreme Court of Switzerland
October 13, 1992
ASA Bulletin, (Kluwer Law International 1993,
Volume 11 Issue 1) pp. 68 – 78
Available at:
https://www.kluwerarbitration.com/document/kli
-ka-1027416-n?title=ASA%20Bulletin

Swiss Federal SC, 2010 X. (France) v. Y. S.A. (Luxembourg) ¶ 42

Federal Supreme Court of Switzerland
December 10, 2010
ASA Bulletin, (Kluwer Law International 2013,
Volume 31 Issue 1) pp. 78 – 79
Available at:
https://www.kluwerarbitration.com/document/kli
-ka-asab3100110?title=ASA%20Bulletin

Westinghouse National Power Corporation (Philippines) v ¶¶ 34, 37, 79

Westinghouse (USA)
Swiss Federal Tribunal
Judgment of September 2, 1993

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

DFT 119 II 380, 384

UNCITRAL

Methanex Corp Methanex Corporation v. United States of America ¶ 51

UNCITRAL
Decision on Amicus Curiae of January 15, 2001
(Exh. RLA-18)
Available at:
https://www.italaw.com/sites/default/files/case-
documents/ita0517_0.pdf

UNITED KINGDOM

Capital Trust Capital Trust Investments Ltd. v. Radio Design TJ ¶ 37

AB and others
Court of Appeal
February 15, 2002
[2002] EWCA Civ 135

Fiona Fiona Trust & Holding Corp v. Privalov ¶¶ 6, 34, 35,

House of Lords 36
October 17, 2007
[2007] UKHL 40

Gatoil International Inc Gatoil International, Inc. v. National Iranian Oil ¶ 17

Co.
England and Wales High Court of Justice
17 Y.B. Comm. Arb. 587 (1992)

Harbour Assurance Harbour Assurance Co. Ltd. v. Kansa General ¶¶ 35, 36

International Insurance Co. Ltd. 1992
Court of Appeal

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

January 28, 1993

[1993] 1 QB 701, [1993] 1 Lloyd’s Law Reports 455

London Steamship London Steam-ship Owners' Mutual Insurance ¶ 34

Owners’ Association Ltd v Kingdom of Spain
Court of Appeal
April 1, 2015
[2015] 2 Lloyd's Rep. 33

Westacre Westacre Investments Inc v Jugoimport-SPDR Ltd ¶¶ 34, 37

Court of Appeal
May 12, 1999
[1999] 2 Lloyd's Rep 65; [1999] 1 All ER (Comm)
865 (CA)

UNITED STATES OF AMERICA

Albertson Albertson v. Art Inst. of Atlanta, ¶ 12

District Court for the Northern District of Georgia
March 23, 2017
2017 WL 9474223, at *7 (N.D. Ga. 2017)

Bauhinia Corp Bauhinia Corp. v. China Nat'l Machinery and ¶6

Equip. Co.,
Court of Appeals, Ninth Circuit
June 9, 1987
819 F.2d 247 (9th Cir. 1987)

Breyer J Dissenting opinion of Justice Breyer in Badgerow ¶ 135

v. Walters
Supreme Court of the United States
March 31, 2022.
Available at:
https://www.supremecourt.gov/opinions/21pdf/

RAJIV GANDHI NATIONAL UNIVERSITY OF LAW PAGE | XXXV

MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

20-1143_m6hn.pdf

Buckeye Buckeye Check Cashing, Inc. v. Cardegna, ¶ 36

Supreme Court of the United States
February 21, 2006
546 U.S. 440 (2006)

Craddock Craddock v. LeClair Ryan, P.C. ¶ 12

District Court for the Eastern District of Virginia
April 12, 2016
2016 WL 1464562, at *3

Delchi Delchi Carrier Spa v. Rotorex Corp. ¶ 118

Court of Appeals, Second Circuit
December 6, 1995
71 F.3d 1024 (2d Cir. 1995)

Did-it.com Did-it.com, LLC v. Halo Group, Inc., ¶ 111

Supreme Court of the State of New York
July 17, 2019
174 A.D.3d 682, 683 (2d Dept. 2019)

First Citizens Mun. First Citizens Mun. Corp. v. Pershing Div. of ¶ 12

Corp. Donaldson, Lufkin & Jenrette Sec. Corp.
District Court for the Northern District of Georgia
September 20, 1982
546 F.Supp. 884, 887 (N.D. Ga. 1982)

Geneva Pharms. Geneva Pharms. Tech. Corp. v. Barr Labs., Inc. ¶ 120
District Court for the Southern District of New
York
May 10, 2002
201 F. Supp. 2d, 236, 285 (S.D.N.Y. 2002)

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

Gorman v. Fowkes Gorman v. Fowkes ¶ 111

Supreme Court, Appellate Division, Second
Department, New York.
July 18, 2012
97 A.D.3d 726, 727 (2d Dept. 2012)

Gvozdenovic Gvozdenovic v. United Air Lines, Inc. ¶ 10

Court of Appeals, Second Circuit
May 22, 1991
933 F.2d 1100, 1105 (2d Cir. 1991).

Hemming Hemming (GB v. US, 1920) ¶ 24

6 Rep. Int. Arb. Awards 51

Kaloti Enters Kaloti Enters. v. Kellogg Sales Co. ¶ 111

Supreme Court of Wisconsin
July 8, 2005
2005 WI 111, 283 Wis. 2d 555, 699 N.W.2d 205

Mañas Mañas v. VMS Associates, LLC, ¶ 111

Supreme Court of New York (Appellate Division)
July 22, 2008
53 A.D.3d 451, 2008 N.Y. Slip Op. 6350, 863
N.Y.S.2d 4 (N.Y. App. Div. 2008)

Mitsubishi Mitsubishi Motors Corp. v. Soler Chrysler- ¶ 40

Plymouth, Inc.
Supreme Court of the United States
March 18, 1985
473 U.S. 614 (1985)

PacifiCare PacifiCare Health Sys., Inc. v. Book ¶ 65

Supreme Court of the United States
April 7, 2003
538 U.S. 401, 407 (U.S. S.Ct. 2003)

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MEMORANDUM FOR CLAIMANT [INDEX OF CASES AND AWARDS]

Prima Paint Prima Paint Corp. v. Flood & Conklin Mfg. Co. ¶ 36
Supreme Court of the United States
June 12, 1967
388 U.S. 395 (1967)

Robert Lawrence Co. Robert Lawrence Co Inc v. Devonshire Fabrics ¶ 37

Inc.
Court of Appeals, Second Circuit
October 28, 1959
[1959] 271 F. 2D 402

Shaw Group Inc. Shaw Group, Inc. v. Triplefine Int’l Corp. ¶ 10

Court of Appeals, Second Circuit
March 4, 2003
2001 WL 883076, at *2 (S.D.N.Y.)

Standard Fruit Republic of Nicaragua v. Standard Fruit Co., ¶6

Court of Appeals, Ninth Circuit
July 1, 1991
937 F.2d 469 (9th Cir. 1991)

Thomson-CSF Thomson-CSF, SA v. Am. Arb. Ass’n. ¶ 10

Court of Appeals, Second Circuit
August 24, 1995
64 F.3d 773, 777 (2d Cir. 1995)

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MEMORANDUM FOR CLAIMANT [STATEMENT OF FACTS]

STATEMENT OF FACTS

Drone Eye plc (CLAIMANT) is a Mediterraneo-based, medium-sized producer of Unmanned

Aerial Systems (UAS). Equatoriana Geoscience Ltd. (RESPONDENT), is a private company
entirely owned by the Ministry of Natural Resources and Development of Equatoriana (MND). It
was set up in 2016 when the Socialist Government announced its “Northern Part Development
Program” (NP DEVELOPMENT PROGRAM).

The Parties entered into a Purchase and Supply Agreement (PSA) for supply of CLAIMANT’s latest
Kestrel Eye 2010 UAS.

DATE DESCRIPTION OF EVENTS

MARCH 20, 2020 RESPONDENT opened a tender process in connection with the NP
Development Program. CLAIMANT was selected as one of the two bidders
with which RESPONDENT entered further negotiation.

NOV. 4, 2020 Mr. J.C. Bluntschli, COO, Drone Eye plc and Mr. David Field, COO,
Equatoriana Geoscience, held a meeting to negotiate the contract. In the
meeting, CLAIMANT made an entirely new offer for 6 UAS including their
service and maintenance which Mr. Field intended to accept.

NOV. 27, 2020 The Arbitration Agreement (Article 20 of PSA) was up for discussion and
approval in the Parliament but was called-off on short notice.

NOV. 29, 2020 Mr. Bluntschli had been arrested for tax evasion and Mr. William Cremer,
CEO, Drone Eye plc, had to replace him in the negotiations. Mr. Cremer
insisted on the inclusion of a merger clause.

DEC. 1, 2020 PSA signed at a formal ceremony by Mr. Cremer, Ms. Wilhelmina Queen,
CEO, Equatoriana Geoscience, and Mr. Rodrigo Barbosa, Equatoriana’s
Minister of Natural Resources and Development.
PSA provided for the delivery of 6 Kestrel Eyes 2010 UAS. The first 3 drones
were supposed to be delivered by January 15, 2022 and the other 3 drones
were to be delivered at later dates. The overall price for the 6 UAS was fixed
at 44 million EUR, with 10 million to be paid by RESPONDENT in advance.

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MEMORANDUM FOR CLAIMANT [STATEMENT OF FACTS]

FEB. 2021 CLAIMANT unveiled its newest UAS, the Hawk Eye 2020, at the air show in
Mediterraneo. RESPONDENT alleged that CLAIMANT had misrepresented the
quality of the drones and that the Kestrel Eye drone were neither state-of-the-
art nor the latest.
CLAIMANT also applied for the patents relating to the technology used in
Hawk Eye 2020 after the air show.

MAY 27, 2021 The Parties held meeting to resolve the issue of misrepresentation on the part
of CLAIMANT. The discussion about the alleged misrepresentation ended until
it suddenly resurfaced in May 2022. In this meeting, RESPONDENT also asked
for amendments to the arbitration clause.

JULY 3, 2021 The Citizen started to publish a series of articles about a massive corruption
scheme surrounding the NP Development Program and led to a public outcry,
which led to the Prime Minister’s resignation and a new government formed
by a coalition of several parties, including the Liberal Party.

DEC. 27, 2021 The new government immediately issued a moratorium for all contracts
concluded under the NP Development Program and appointed Ms. Lyndsey
Fonseca as special public prosecutor to investigate the corruption allegations
surrounding the NP Development Program.

MAY 21, 2022 Announcement by Ms. Fonseca bringing up charges concerned with the
payments made to Mr. Field’s offshore accounts in connection with two other
contracts. She promised that she would also investigate all other contracts
concluded by Mr. Field for signs of corruption.

MAY 30, 2022 Ms. Wilhelmina Queen terminated PSA through legal notice.

JULY 2022 CLAIMANT was granted the patents relating to the technology used in the
Hawk Eye 2020.

JULY 14, 2022 Notice of Arbitration filed by CLAIMANT.

AUG. 15, 2022 Response to the Notice of Arbitration filed by RESPONDENT.

OCT. 7, 2022 Procedural Order No. 1.

NOV. 7, 2022 Procedural Order No. 2.

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MEMORANDUM FOR CLAIMANT [SUMMARY OF ARGUMENTS]

SUMMARY OF ARGUMENTS

Issue 1: The Parties have validly agreed on Tribunal’s jurisdiction. There exists a valid concluded
Arbitration Agreement between the Parties. Parties’ intention to arbitrate and their post
contractual conduct speaks to the Arbitration Agreement’s validity. RESPONDENT cannot rely on
its internal law to revoke its consent to arbitrate. Utilisation of internal law goes against the general
principles of International Commercial Arbitration. Also, any attempt to use national law would
be contrary to the good faith doctrine. Further, the allegations on PSA being obtained by
misrepresentation and corruption do the affect the validity of the arbitration. Such challenges on
the main contract cannot make the Arbitration Agreement invalid due to doctrine of separability.
Moreover, any award rendered by the tribunal will be enforceable.

Issue 2: RESPONDENT’s request to stay or bifurcate the arbitration pending the outcome of the
investigation to be conducted by the Public Prosecutor’s office of Equatoriana has to be denied
because RESPONDENT has failed to demonstrate why a stay would be in the interest of efficiency
and in line with existing arbitral practice, and a stay would not address RESPONDENT’s concerns
either, the proceedings should not be bifurcated as per existing arbitral practice and would make
any further proceeding futile, RESPONDENT’s concerns regarding the Arbitral Tribunal’s
investigative powers have been blown out of proportion as the domestic investigation is not
controlling case law, and third party evidence can be collected by the Arbitral Tribunal via Art. 27
and there is no credible allegation of corruption with regard to the present contract.

Issue 3: The Purchase and Supply Agreement is governed by the CISG since Kestrel Eye 2010
drones do not qualify as aircrafts under Art. 2(e) CISG. They were not destined to carry out the
function of air transport. CLAIMANT engineered them to function as surveillance devices, and
accordingly bestowed them with low payload carrying capacities and superior flight stability
features at a higher cost than the drones manufactured to excel at air transport. The parties were
cognizant of this fact and understood that the purpose of the transaction was to facilitate
surveillance in Northern Equatoriana. They agreed that the drones would be deployed principally
for surveillance. Moreover, fifty percent of the drones completely lacked the capability to transport
cargo owing to the absence of free space in their payload bays. The drones did not even require
registration under Equatoriana’s domestic law and were thus not subject to any special registration
requirements outside the scope of the CISG. Therefore, Kestrel Eye 2010 is not an aircraft and
the sales transaction falls within the sphere of application of the CISG.

Issue 4: In case PSA is governed by CISG, RESPONDENT cannot rely on Art. 3.2.5 ICCA to avoid

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MEMORANDUM FOR CLAIMANT [SUMMARY OF ARGUMENTS]

the contract. First, the provision is not applicable in the instant factual situation. Art. 35 CISG
provides remedy for breach of contract by a party on account of non-conformity of goods.
RESPONDENT’s claim that the Kestrel Eye 2010 drones do not meet the qualities agreed upon by
the parties does not involve an interest arising independently of contractual claims to establish a
case of misrepresentation beyond mere non-conformity. The claim is also not based on a
fraudulent intention on behalf of CLAIMANT, and Art. 3.2.5 ICCA provides the same remedy, i.e.,
avoidance of the contract, as is also allowed under Art. 49 CISG for supplying non-conforming
goods. Therefore, allowing RESPONDENT’s fraud claim to pre-empt a possible non-conformity
claim under the CISG would result in dilution of the latter’s purpose and authority. Second, in the
alternative, even if Art. 3.2.5 ICCA is applicable in the instant case, RESPONDENT cannot rely on
it as there was no misrepresentation. There was no fraudulent representation or non-disclosure by
CLAIMANT. Further, CLAIMANT had no intent to lead RESPONDENT into error and gained no
advantage to RESPONDENT’s detriment.

RAJIV GANDHI NATIONAL UNIVERSITY OF LAW PAGE | 4

 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

ARGUMENTS ON PROCEDURE

I. THE TRIBUNAL HAS JURISDICTION TO HEAR THE DISPUTE

1. On December 1, 2020 CLAIMANT and RESPONDENT concluded PSA for 6 of CLAIMANT’s Kestrel
Eye 2010 Drones [Cl. Ex. C2, p.10]. The PCA Rules [Letter by PCA, p.24], in conjunction with the
UNCITRAL Model Law [PO1, p.43, ¶ 3] and the New York Convention [Id.], govern the arbitral
procedure.

2. According to the well-established principle of Kompetenz-Kompetenz, an arbitral tribunal, at least as

an initial matter, has the authority to determine its own jurisdiction [Reisman/Craig/Park/Paulsson,
p.646; ICC 4472; Poultry feed case]. The seat of arbitration, Danubia, has adopted the UNCITRAL
Model Law, which applies to this dispute [Id.]. Pursuant to Art. 23 PCA Rules and Art. 16(1) Model
Law, the Arbitral Tribunal has the power to rule on its own jurisdiction, including any objections
with respect to the existence or validity of the Arbitration Agreement [UNCITRAL Art. 16(1);
PCA Rules Art. 23], i.e., Art. 20 PSA.

3. CLAIMANT requests the Tribunal to rule that Parties have validly agreed on the jurisdiction of the
Arbitral Tribunal. The challenge to the validity of Arbitration Agreement is based on the claims of
lack of authorization, corruption and misrepresentation [Response, pp.30-31, ¶¶ 20-23]. In deciding
whether the Parties have agreed on the jurisdiction, the tribunal must determine; the existence of
an enforceable Arbitration Agreement [A]; whether the Arbitration Agreement can be avoided for
the claims of misrepresentation and corruption [B]; the award rendered by the Tribunal would be
enforceable [C].

A. THERE EXISTS AN ENFORCEABLE ARBITRATION AGREEMENT

4. An arbitral tribunal bases its jurisdiction only on an enforceable and validly concluded arbitration
agreement [Craig/Park/Paulsson, ¶ 5.01; Kaufmann-Kohler, ¶ 189a; Redfern/Hunter III, ¶¶ 5.85-5.87;
Redfern/Hunter II ¶ 1-13]. Contrary to RESPONDENT’s allegations, both Parties validly concluded
an Arbitration Agreement [1]. The Arbitration Agreement is not invalid for lack of authorization
from the Parliament [2].

[1] The Parties have validly concluded an Arbitration Agreement

5. The foundation of an arbitration proceeding is a valid arbitration agreement [Van Den Berg, pp.144-
145; ICC 7929]. The valid conclusion of the Arbitration Agreement is shown through: the Parties’
intent to arbitrate [i]; their consent to arbitration [ii]; their subsequent conduct [iii]. The

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Arbitration Agreement meets all the formal validity requirements [iv].

i. The Parties had intention to arbitrate in case of any dispute

6. The validity of the arbitration agreement depends primarily on the parties’ common intent [Dalico
Case; SOERNI]. Many courts have given paramount importance to the intent of parties to arbitrate
[Lucky-Goldstar; Fiona]. So much so that, even the minimal indication of intent to arbitrate must be
given full effect by the Arbitral Tribunal [Standard Fruit; Bauhinia Corp.]. Both RESPONDENT and
CLAIMANT showed clear intentions to submit their disputes to arbitration. CLAIMANT gave
RESPONDENT no indication that they would be amenable to any other form of dispute resolution.
The only possible form of dispute resolution mechanism ever discussed between the parties was
Arbitration.

7. The intent of the parties must be examined “by taking into account what the parties reasonably
and legitimately envisaged” [Fouchard, ¶ 477]. In the present case, it was reasonable to expect that
contracting parties would go for arbitration given the tendency of the courts of Equatoriana to
favour the State [PO2, p.46, ¶ 18]. Due to this, even the second bidder who was based in
Equatoriana had an arbitration clause in its offer [PO2, p.47, ¶ 28]. The State-Owned Entities of
Equatoriana regularly submit disputes to PCA Arbitration [Response, p.30, ¶ 21]. CLAIMANT also
regularly goes for arbitration when contracting with state parties [Cl. Ex. C7, p.19 ¶ 14]. Hence, it
was legitimate to anticipate arbitration in case of a dispute.

8. Furthermore, the intention of parties to submit any dispute to arbitration is manifested in an

arbitration agreement [Redfern/Hunter I, ¶ 1-08]. Art. 20 PSA manifests the intention of the Parties
to arbitrate [Cl. Ex. C2, p.12]. Therefore, it forms the founding stone of the present arbitration
proceedings.

ii. Parties consented to arbitration

9. It is settled law that a party’s assent to an instrument presumptively includes assent to all the
instrument’s terms [Born, p.851]. A party’s signature on the underlying contract constitutes consent
to the arbitration clause contained within that contract [Id.]. PSA was signed by both Ms.
Wilhelmina Queen and Mr. William Cremer, RESPONDENT’s and CLAIMANT’s CEOs respectively
[Cl. Ex. C2, p.12; Cl. Ex. C7, p.18, ¶ 8]. Thus, Art. 20 PSA was assented to by both the parties.

iii. Subsequent conduct confirms the conclusion of the Arbitration

Agreement

10. RESPONDENT’s post contractual conduct indicates that it considered itself to be bound by the
Arbitration Agreement. A party may be bound by an arbitration clause if its subsequent conduct

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

indicates that it is assuming the obligation to arbitrate [Thomson-CSF; Shaw Group; Gvozdenovic]. In
May 2021, RESPONDENT requested for an amendment to allow for submission to arbitration under
UNCITRAL Expedited Arbitration Rules, 2021 for a claim of less than 1 million Euros and the
inclusion of UNCITRAL Transparency Rules [Cl. Ex. C7, pp.18-19, ¶¶ 10, 14].

11. The issue of state entities submitting their disputes to arbitration was put up before the Parliament
the following month [Cl. Ex. C7, p.19, ¶ 15]. To defend the practice of submitting disputes to
arbitration, the government argued in favour of arbitration agreements containing transparency
clauses and referred to the Arbitration Agreement in PSA as an example [Cl. Ex. C7, p.19, ¶ 15].
Thereby, it publicly acknowledged the valid conclusion of the Arbitration Agreement. The request
for amendment in the existing Arbitration Agreement and the reference and justification of the
Arbitration Agreement in the parliamentary debate demonstrates that RESPONDENT had assumed
its obligation to arbitrate.

12. Moreover, performance of contractual obligations is regarded as assent to the contract, and in
some cases the arbitration clause contained therein [Born, p.858; Craddock; Albertson; First Citizens
Mun. Corp]. The handing over of advance payment in accordance with Art. 4 PSA was an act in
furtherance of PSA [PO2, p.47, ¶ 30]. This was a clear indication to CLAIMANT that RESPONDENT
considered itself to be bound by the obligations under PSA, thus confirming the conclusion of the
Arbitration Agreement.

iv. The Arbitration Agreement meets all the Formal Validity

requirements

13. The Arbitration Agreement meets all the form requirements under DAL, which is a verbatim
adoption of Model Law [PO1, p.47, ¶ 3]. The Model Law places form requirements on the
Arbitration Agreements [Born, p.185]. Danubia has adopted Option 1 of Art. 7 under which it is
necessary for an arbitration agreement to be in writing [Binder, p.140].

14. Under DAL, a written form requirement is complied when there is a written record of the
agreement to arbitrate (without regard to the manner in which that agreement to arbitrate may
have been concluded) [Binder, p.140; Rajoo/Klötzel, p.729; Born, p.187; UNCITRAL Exp. Note ¶ 19].
The written form requirement is satisfied here because of the existence of a formally signed
contract between both the parties [Cl. Ex. C2, p.12]. The Arbitration Agreement is recorded in
Art. 20 and is signed by both the parties [Id.]. In conclusion, Parties have validly concluded an
Arbitration Agreement.

[2] RESPONDENT cannot rely on internal restrictions to renege on its obligation to

arbitrate

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

15. The NYC's international neutrality and non-discrimination standards should apply to any
limitations that national legislatures have placed on the ability of parties to enter into arbitration
agreements [Born, p.671; Young Pecan Cie; SOERNI]. Contracting States have made a commitment
to the NYC to recognize and enforce international arbitration agreements, save where they are null
and void. This commitment overrides national law rules that single out international arbitration
agreements for special burdens [Born, p.671; NYC, Arts. II, V].

16. Firstly, RESPONDENT cannot rely on its own national laws as its actions go against general
principles of ICA [i]: the principle of prohibiting the use of national restrictions is a general
principle of ICA [a]; frustration of the Arbitration Agreement would be in violation of these
principles [b]; and even the VCLT does not allow RESPONDENT to invoke its national law [c].
Secondly, invoking national law would also go against the principle of good faith [ii].

i. R ESPONDENT ’s actions go against the General Principles of ICA

a. The principle of prohibiting the use of internal restrictions is a general principle of ICA

17. Refusal to accept national law as a jurisdictional bar to international arbitration involving a state
may be seen as a necessary complement to the modern rule of restrictive sovereign immunity
[Paulsson, p.12]. The principle that the state or state entity may not rely on its internal formalities to
deny the validity of an arbitration agreement concluded by it is a general principle of international
arbitration [Fouchard, p.322; Pitkowitz]. This is due to multiple reasons.

❖ Firstly, it is enshrined in international conventions. Art. II(1) ECICA talks about “Rights of Legal
Persons of Public Law to resort to Arbitration” [ECICA, Art. II(1)]. According to Art. II(1), any
legal person of public law has a right to conclude a valid arbitration agreement. Arts. 27 and 46
VCLT contain a similar principle which may be applied between a state and a private party
[VCLT, Arts. 27, 46; Paulsson II].
❖ Secondly, international arbitral case laws and scholarly opinions have recognized this principle.
In Benteler v. Belgium, it was held that the principle of Art. II(1) is a general principle of
international arbitration [Benteler]. There is an abundance of cases and opinions where arbitrators
have arrived at a similar conclusion [ICC 1526; ICC 3327; ICC 5103; Italian Co; Elf Aquitaine Iran;
Framatome; Hascher; Razumov].
❖ Lastly, many jurisdictions have incorporated this principle in their national law. Countries like
Switzerland, Algeria, Tunisia etc [Swiss Law, Art. 177(2); Tunisian Code, Art. 7; Algerian Code Art.
442]. have adopted this principle as a substantive rule. On the other hand, the national courts of
countries like France, England, Greece, Italy, among others, have upheld the validity of
arbitration agreements using this principle [Anghelos; Gatoil International Inc, Corte di Cassazione].

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

18. The rule prohibiting the use of internal restrictions is a general principle of international arbitration
and is regularly applied by arbitral tribunals irrespective of the applicable law and the seat of
arbitration [Fouchard, p.318; Kroll, p.12]. Hence, it must be applied in the instant case.

b. Frustration of the Arbitration Agreement would violate the general principle

19. The invalidation of the Arbitration Agreement on account of lack of consent from the Parliament
would be in violation of the general principle prohibiting the use of internal restrictions. It is an
unsatisfactory situation when a state agency relies on its own law to defeat a contract that it has
freely entered into, by contesting the validity of its agreement to arbitrate on grounds of its own
legislation [Pitkowitz, p.107]. To avoid such a situation, the principle prohibiting the use of internal
restrictions must apply.

20. For the principle to apply, the party relying on internal restriction must be a state-controlled entity
[Beisteiner, pp.56-66; Hascher, p.516; Pitkowitz, p.108]. The sole shareholder of Equatoriana
Geoscience is the State [Notice, p.4, ¶ 2; PO2, p.44, ¶ 5]. Different ministers appoint the supervisory
board which is chaired by the Minister of Natural Resources and Development [id.]. Although it
operates like a commercial company in essence, RESPONDENT is in fact a legal person of public
law.

21. To avoid arbitration, RESPONDENT is trying to rely on its national law that addresses the issue of
contracts for public works [PO2, p.47, ¶ 31; Response, ¶ 21]. The provision relating to administrative
works set out in Art. 75 states that Parliamentary consent in cases of administrative contracts when
the other party is a foreign entity or the arbitration is seated in a different state. Countries such as
Iran and Tunisia have had a similar provision in their national law which allowed the state entities
to back out of an arbitration agreement after consenting to it [Iran CONST., Art. 139; Tunisian Code,
Art. 7]. However, national courts and arbitral tribunals have estopped these States or their entities
from relying on such provisions to retract their consent from international arbitration agreements
[Razumov, pp.260-267; Framatome; Elf Aquitine Iran; Etat tunisien; ICC 5103].

22. A party cannot rely on a failure to comply with its own provisions concerning the extent and the
powers of the governmental entities [Beisteiner, pp.58-66; Audit]. To challenge a tribunal’s
jurisdiction, a party cannot use the irregularities attributable to itself, more so when the arbitration
agreement was entered into with full knowledge and approval of the highest authorities
[Framatome]. In light of the amendment request, it is clear that RESPONDENT had full knowledge
of the arbitration agreement [Cl. Ex. C9, p.22]. The arbitration agreement was knowingly signed
by Mr. Rodrigo Barbosa, Minister of Natural Resources and Development, which he could only
do after proper consent from the Parliament [Cl. Ex. C7, p.18, ¶ 8; Response, p.28, ¶ 12].

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

RESPONDENT alleges that the Mr. Barbosa was acting ultra vires as there was no consent by the
Parliament [Response, p.28, ¶ 12]. However, the onus was on RESPONDENT to get the required
approval from the Parliament and it cannot be allowed to take advantage of this irregularity that
occurred at their own end.

23. The purpose of this principle would be defeated if a foreign party is expected to perform extensive
due diligence into the required domestic formalities of the State it is contracting with [Beisteiner,
pp.56-66]. A reasonable due diligence is enough, the standard of which should not be set too high
[Id.]. In the present case, CLAIMANT performed a reasonable amount of due diligence. Ms. Horacia
Porter examined all the registration/operation/special requirements and possible immunities from
state [Cl. Ex. C7, p.18, ¶ 4]. Although CLAIMANT was aware that approval by the Parliament is
required for arbitration agreement [Cl. Ex. C7, p.18, ¶ 6], it was assured by Mr. Barbosa that the
Parliamentary approval was just a formality and would be forthcoming [Cl. Ex. C7, p.18, ¶ 9].
Given the conduct of RESPONDENT it would not be reasonable to expect CLAIMANT to constantly
keep inquiring about it.

24. Requiring the private investor to question a minister's affirmed authority is hardly conducive to
the aims of either the Government or the private party [Paulsson, pp.90, 91; Kröll, p.12]. It is normal
to presume the capacity of the minister in charge [Aminoil; Govt. of Turkey et al; Case No. 262, p.434;
Hemming]. CLAIMANT had no reason to doubt the words of the minister as RESPONDENT was
already performing its contractual obligations [PO2, p.47, ¶ 30].

25. Prior to the evolution of the principle, private users of arbitration faced a lot of problems with the
uncertainties that exist in the national law of the contracting State party [Beisteiner, pp.56-66]. The
contrary views on requirement of parliamentary consent for amendment in arbitration clause create
an uncertainty in the national law of Equatoriana [PO2, p.48, ¶ 36]. Some believe that Parliamentary
approval is needed for amendment while others do not [Id.]. Through the amendment request
CLAIMANT was led to believe that the Arbitration Agreement was validly concluded [Cl. Ex. C7,
p.18, ¶ 10]. Moreover, after the amendment the State referred to our Arbitration Agreement in the
Parliamentary debate [Cl. Ex. C7, p.19, ¶ 15]. Thus, the uncertainty in the Equatoranian law cannot
go against CLAIMANT.

26. Therefore, the Tribunal must not allow RESPONDENT to frustrate the Arbitration Agreement
through Art. 75, as it would violate the general principle of ICA which prohibits the use of internal
restrictions to avoid arbitration.

c. Even VCLT does not allow RESPONDENT to invoke its national law

27. VCLT confirms the position established by the general principle of ICA which prohibits the use

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

of national law. All three States are parties to the VCLT. Art. 27 forbids states from invoking
internal law as a justification for their failure to perform a treaty [Art. 27, VCLT]. The general
principle expressed therein must apply all the more in the dealings of the State or State-Owned
entity with a private counterparty, as the current issue is similar to the treaties concluded in
contradiction to the provisions of national law [Beisteiner, pp.56-66; Paulsson II, p.91].

28. This principle is bolstered by Art. 46, which provides that a State's right to invoke the violation of
a provision of its internal law regarding competence to conclude treaties is limited to situations
where the violation was “manifest” to the other party [VCLT, Art. 46; Blusun]. A “manifest
violation” is defined as one that would be “objectively evident” to the other party conducting itself
in the matter in accordance with normal practice and in good faith [id.; Kiran Nasir Gore, p.; Slovak
Republic].

29. Although RESPONDENT is attempting to rely on the violation of Equatoriana’s domestic law to
invalidate its consent to arbitrate, its endeavour fails. The alleged violation was not manifest to
CLAIMANT, who was initially under the impression that the Parliament had approved the
submission to arbitration [Cl. Ex. C7 ¶8, 10]. RESPONDENT also reassured CLAIMANT about the
approval by the Parliament, claiming that it was only a matter of time, being a mere formality [Cl.
Ex. C7 ¶9]. CLAIMANT expected subsequent approval to be granted [PO2, ¶ 30]. RESPONDENT
further reinforced the validity of the Arbitration Agreement by seeking an amendment to the same
[Cl. Ex. C7 ¶10]. In light of the same, and acting in good faith, CLAIMANT did not confirm the
explicit approval from Parliament and was thus unaware of the alleged violation. Considering that
the violation of domestic law cannot be said to be objectively evident to CLAIMANT, RESPONDENT
cannot be allowed to rely on the violation of domestic law to thwart arbitration

ii. R ESPONDENT ’s actions go against the principle of good faith

30. The principle of good faith means that one should not frustrate legitimate and reasonable
expectations [Paterson, p.74; Yee; Burton]. It presumes a co-operative obligation, an honest and
reasonable conduct, and to have regard to the reasonable expectations and legitimate interests of
the other party [Miller/Perry, p.98]. This principle of good faith has been applied by international
arbitrators as an imperative norm perceived without reference to any specific national law [Paulsson
II, p.91; Craig/Park/Paulson, §§ 5.02 and 5.07; Revere Copper and Brass; ICC 1939; ICC 1803].
CLAIMANT was reasonable and legitimate in expecting RESPONDENT to perform its obligations.
Every indication given by RESPONDENT showed that it effectively wanted to perform its obligation
under PSA.

31. The principle of good faith is used to avoid a situation where a State uses its legislative power to

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

its advantage and frustrates the arbitral proceedings [ASA Bull; ICC 4381; Dallah Real Estate;
Fouchard, ¶ 553; Kröll, p.13]. CLAIMANT entered into PSA in good faith, and thus deserves
protection of international law. Any ground taken by RESPONDENT to render the Arbitration
Agreement ineffective would be in bad faith. Hence, the Tribunal must not allow RESPONDENT
to use their internal restrictions.

32. In conclusion, the Arbitral Tribunal has jurisdiction as parties have validly concluded an
Arbitration Agreement which meets all the formal validity requirements. Moreover, RESPONDENT
cannot rely on its national law to revoke its consent from Arbitration.

B. THE ALLEGATIONS OF CORRUPTION/MISREPRESENTATION DO NOT

INVALIDATE THE ARBITRATION AGREEMENT

33. RESPONDENT contends that the Tribunal lacks jurisdiction as there is no valid arbitration
agreement as it is most “likely” that the conclusion of PSA was tainted by corruption resulting in
its invalidity [Cl. Ex. C8, p.20]. They argue that PSA and thus also the arbitration clause contained
therein would not have been concluded but for the bribes paid and the misrepresentation by
CLAIMANT [Response, p.30, ¶ 20]. CLAIMANT will demonstrate that: the allegations of corruption are
arbitrable [1]; and the Arbitration Agreement stands valid due to the doctrine of separability [2].

[1] The allegations of corruption are arbitrable

34. RESPONDENT might contend that the Tribunal does not have the jurisdiction to address the
allegations of illegality and corruption. Earlier Tribunals used to show reluctance to resolve matters
relating to corruption or bribery [ICC 1110; Hwang/Lim, pp.43-44]. However, recently, tribunals
have frequently considered disputes where a party claims that the underlying contract was tainted
by, or invalid due to corruption [Westinghouse; Westacre; Fiona; ICC 6474; ICC 6286; ICC 4145; NAI
4687; Taller RC] and held such questions to be capable of resolution by arbitration. As the English
Court of Appeal in the case of London Steamship Owners pointed out, it is necessary to distinguish
between a finding of criminal conduct and a conviction which provides the basis for penal
sanction. The arbitrator ordinarily has the jurisdiction to find facts which constitute a criminal
offence [London Steamship Owners]. Therefore, the allegations of bribery or corruption with regard
to PSA can be heard by and decided upon by the tribunal.

[2] The Arbitration Agreement stands valid due to the doctrine of separability

35. It is well settled that for an arbitration agreement to be considered invalid due to corruption or
misrepresentation, there must be a specific averment that the arbitration agreement was obtained
by corruption/misrepresentation [Harbour Assurance; Fiona].

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

36. This is a usual complaint that if the party had prior knowledge of the fraud, or misrepresentation,
or illegality, or bribery, then they would not have entered the contract as a whole and that logically
and necessarily includes the arbitration clause [Pengelley, pp.450-451]. This argument, however
logical it may seem, is precisely what the tribunals and the courts around the world have rejected
on the grounds of the separability doctrine [Id; Feehily, p.367; Hwang/Lim, p.43; Prima Paint; Harbour
Assurance; Fiona; Buckeye; Ferris v. Plaister].

37. As per Article 16(1) of the DAL, the arbitration clause which forms a part of a contract shall be
treated as an agreement independent of the other terms of the contract. A decision by the Tribunal
that the main contract is null and void would not lead to the invalidity of the arbitration clause
[DAL, Art. 16(1); PCA Rules, Art. 23(1)]. It is well settled that the claims that the underlying
contract is illegal or obtained illegally, do not ordinarily affect the validity of the arbitration clause
[Westinghouse; Westacre; Rosell/Prager, p.330; Concepcion, p.13]. Similarly, claim that the underlying
contract was voidable for misrepresentation or fraud does not affect the validity of the arbitration
clause [Capital Trust; Comandate Marine Corp.; Ferris v. Plaister]. The Arbitration Agreement can
survive even when the main contract is repudiated, breached, terminated or found to be invalid
[Jones, p. 57; Parish, pp.661-679; Robert Lawrence Co; N.N. Global].

38. In the present case, RESPONDENTs have merely alleged that the main contract has been obtained
through corruption and misrepresentation [Response, p.30, ¶ 20]. There is no specific challenge
posed against the arbitration agreement. RESPONDENT have failed to show that the arbitration
agreement specifically was obtained by bribery or misrepresentation. Merely alleging bribery or
misrepresentation in the main contract would not affect the arbitration agreement. Therefore,
RESPONDENTs objection to the jurisdiction of the tribunal on this ground must be declined.

C. THE AWARD RENDERED BY THE ARBITRAL TRIBUNAL IS ENFORCEABLE

39. The sole remaining impediment to jurisdiction is potential non-enforceability of the Tribunal’s
award in Equatoriana. The grounds on which the recognition and enforcement of an award may
be refused are narrow. These grounds are codified in Art. V NYC and Arts. 34 and 36 Model Law
[NYC, Art. V; UNCITRAL, Arts. 34, 36]. RESPONDENT may contend that the award rendered by
the Arbitral Tribunal is against the public policy of Equatoriana, making it unenforceable.
However, the award is not contrary to the public policy of Equatoriana.

40. Under Art. V NYC, the term public policy refers to a narrow international standard otherwise
classed as ordre public [Lew/Mistelis/Kröll, ¶ 9-31]. While the ‘international’ element is not explicitly
referred to in the Model Law or NYC, it is extensively recognised in French jurisprudence and is
supported by both case law and commentary [Mitsubishi; Ganz; Thieffry, p.35; Caprasse/Hanotiau,

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

pp.789-791; Lew/Mistelis/Kröll, ¶ 9-32]. Transnational public policy is a body of universal principles

shared by nations of the same civilization [Allsop Automatic]. The Tribunal must interpret public
policy under Art. V NYC to mean transnational public policy and not ordre public.

41. For an award to be rendered unenforceable, it must not be contrary to the public international
notions of morality [Lew/Mistelis/Kröll, ¶ 9-31]. Also, a mere violation of domestic law is unlikely
to make a ground to refuse recognition or enforcement on the basis of public policy [Travaux
préparatoires, NYC Art. V; Balaji Coke Industry; Petrotesting Colombia]. An award rendered by the
Arbitral Tribunal would not violate public international notions. On the contrary, it fosters
international public policy in form of upholding general principles of ICA. Even if the award
rendered is contrary to the domestic law of Equatoriana, it will not be unenforceable.

II. THE PROCEEDINGS SHOULD NOT BE STAYED OR BIFURCATED

42. While an arbitral tribunal is empowered to ‘stay’ an arbitration proceeding in case of pending
paralle criminal, court, or arbitration proceedings, it is not obliged to do so under any law or
practice in any jurisdiction [Swiss Federal SC, 2010]. On the contrary, there is a legal presumption
to the effect that arbitration proceedings will move on unless exceptional reasons or circumstances
require a stay [Luka Groselj, p.576].

43. Additionally, Art. 17(1) PCA Rules imposes a responsibility on the Arbitral Tribunal to avoid
unnecessary delay and conduct fair and efficient arbitral proceedings [PCA Rules, Art. 17(1)]. The
language of Art. 17(1) appears to accord considerations of efficiency identical status with
mandatory requirements of equal treatment and due process: the references to “unnecessary delay
and expense” and an “efficient process” are phrased in mandatory terms (“shall”) and are referred
to together with considerations of fairness (“fair and efficient process”) [Born, pp.2314-15].
Additionally, to avoid postponing the Tribunal’s own inquiry, the Tribunal must have evidence
that the objection is so serious that it wishes to avoid the risk of wasting its and the parties’ efforts
[Paulsson, p.115].

44. As of now, the Public Prosecutor appointed to investigate corruption in the NP Development
Program, Ms. Lyndsey Fonseca, has only announced charges in 2 unrelated contracts by Mr. Field,
and that the present contract is merely one of those under investigation [Re. Ex. 2, p.33]. Per
RESPONDENT, the investigation by Ms. Fonseca will not be finalised until the end of 2023 at the
latest [Response, p.31, ¶ 22], and a conviction would not occur before July 2024 at the latest [Response,
p.31, ¶ 23]. Additionally, the decision of the special court can be appealed, which would cause an
additional amount of delay [PO2, p.49, ¶ 47].

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

45. The uncertain duration of the investigation has to operate in conjunction with the fact that CEO
of the other bidder, Aerial Systems plc., is Ms. Fonseca’s brother-in-law and her son’s fiancé is the
former personal assistant of Mr. Field, Leonida Bourgeois [Re. Ex. 2, p.33]. Upon Mr. Field’s arrest,
Ms. Bourgeois was promoted to become the head of internal investigation at Equatoriana
Geoscience, from which she moved to the office of the new public prosecutor, her mother-in-law
[Id.]. Thus, the investigation is clearly tainted, and its outcomes would be unreliable.

46. In Swiss Timing Ltd. v. Commonwealth Games, in a case involving a criminal proceeding running
parallel to an arbitration, it was held that shutting out arbitration at the initial stage would destroy
the arbitral intent of the parties [Swiss Timing]. If the matter were not referred to arbitration, and
the criminal proceedings were to result in an acquittal it would have the wholly undesirable result
of delaying the arbitration [Id.]. Thus, in case the investigation fails, or the Court acquits Mr. Field,
then this Tribunal will need to proceed with the arbitration. It is much more efficient for to do
this now. Returning to the Tribunal twelve months later would result in both an unjustified delay
and additional expense, which is contrary to Art. 17 and the general ethos of arbitration.

47. The Tribunal is just as competent as any court to rule on whatever objections RESPONDENT may
raise, and can avoid excessive costs by maintaining jurisdiction. RESPONDENT’s dilatory tactics
should not be rewarded by the Equatorianian courts, which already have a bad reputation [PO2,
p.47, ¶ 28]. RESPONDENT’S request to stay or bifurcate the arbitration pending the outcome of the
investigation to be conducted by the Public Prosecutor’s office of Equatoriana should be denied
for four reasons; stay cannot be granted in the present case [A]; the proceedings should not be
bifurcated [B]; RESPONDENT’s concerns regarding the Arbitral Tribunal’s investigative powers
have been exaggerated [C]; and there is no credible allegation of corruption with regard to the
present contract [D].

A. STAY CANNOT BE GRANTED IN THE PRESENT CASE

48. The CLAIMANT submits that: proceeding with the arbitration will save time and money [1];
RESPONDENT has failed to show any of the accepted criteria for a stay [2]; and the parties intended
to arbitrate disputes about contractual validity [3].

[1] Proceeding with the arbitration will save time and money

49. RESPONDENT’s request that the Tribunal stay its proceedings in order to allow the conclusion of
their domestic investigation is untenable, since it presumes that the investigation by Ms. Lyndsey
Fonseca, will lead to a finding of corruption with regards to PSA. A stay would delay the case and
increase its costs, regardless of the outcome of the proceeding and the court. No decision from
Equatoriana’s special court on the question of Mr. Field’s guilt can be expected prior to the July

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

of 2024 [Response, p.31, ¶ 23], and would be based on a tainted investigation.

50. The Tribunal has already taken steps to mitigate RESPONDENT’s concerns by ordering an initial
argument only on the concerns of jurisdiction, stay or bifurcation, and the more abstract questions
raised by 1c and 1d [PO2, p.50, ¶ 52]. By the time the Tribunal hears the oral arguments in this
matter, both parties will have fully presented their arguments on all of the issues. Arbitral
proceedings, “since their outcome is final and binding, typically take less time than a full review”
by the courts [Lew/Mistelis/ Kröll, p.8]. The primacy of efficiency has already been addressed in
preceding submissions. Thus, it is more prudent for the Tribunal to continue the proceedings
without a stay.

[2] RESPONDENT has failed to show any of the accepted criteria for a stay

51. The provision that grants the authority to the Tribunal to stay proceedings in the present case
would be Art. 17 PCA Rules [PCA Rules, Art. 17]. Art. 15(1) UNCITRAL Arbitration Rules, which
is verbatim as Art. 17 PCA Rules, has been referred to as the “heart” of the UNCITRAL
Arbitration Rules [Caron/Caplan/Pellonpää, p.26]. As noted in Methanex Corp., this provision “grants
the Tribunal a broad discretion as to the conduct of this arbitration”, and “is intended to provide
the broadest procedural flexibility within fundamental safeguards, to be applied by the arbitration
tribunal to fit the particular needs of the particular arbitration [Methanex Corp].” The tribunal must
ensure the avoidance of unnecessary delay, as expressly contained in text of Art. 17 PCA Rules
[PCA Rules, Art. 17].

52. It is in the context of this view of Art. 17 PCA Rules that this tribunal must examine the decision
in Cairn Energy, where the Tribunal, in a proceeding under the PCA Rules, provided the factors
that must be considered for a stay to be granted [Cairn Energy].

i. Whether the stay creates an imbalance between the parties, or causes material prejudice
to one of the parties, thus violating their right to equal treatment;
ii. Whether the stay amounts to depriving a party from the right to present its case;
iii. Whether the stay delays the proceedings unreasonably; and
iv. Where the stay is based on the finalization of other pending proceedings, whether the
outcome of the other pending proceedings is material to the outcome of the arbitration
53. There is material prejudice against CLAIMANT. With regards to the first ground, in the present case,
a stay would cause the proceedings to be delayed to the end of 2023 at the earliest [Response, p. 31,
¶23]. CLAIMANT has ordered surveillance equipment specific to RESPONDENT’s needs, and was
fitting the 3 existing drones, to begin delivering the drones on January 15, 2022, until the
moratorium notified was on December 27, 2021 [Cl. Ex. C6, p.17, ¶; Cl. Ex. C2 p.10; Notice, p.5, ¶

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

8]. Thus, a stay would cause the drones and other equipment to go to waste. The sudden
moratorium, with only 19 days till the delivery date, has clearly caused material prejudice to the
CLAIMANT as they are left with 3 drones specifically designed for use by RESPONDENT [Notice, p.5,
¶ 8]. The said drones also cannot be sold elsewhere without difficulties and significant price
considerations [PO2, p.46, ¶ 24].

54. A stay, if granted, would unreasonable and onerously delay the proceedings by almost 2 years. As
of now, Ms. Lyndsey Fonseca, has only announced charges in 2 unrelated contracts by Mr. Field,
and that the present contract is merely one of those under investigation [Re. Ex. 2, p.33]. The
conviction would not occur before July 2024 at the latest [Response, p.31, ¶ 23]. Additionally, the
decision of the special court can be appealed, which would cause an additional amount of delay
[PO2, p.49, ¶ 47]. RESPONDENT is requesting a stay when the criminal investigation has only just
been initiated. Thus, a stay here would cause unreasonable delay to the arbitral proceedings.

55. The outcome of domestic proceedings is not entirely material. The stay is incumbent on the
ongoing criminal investigation against Mr. Field. However, the materiality of the outcome of the
proceedings is subjective, as the tribunal will conduct their own proceedings and inquiry into
corruption [TSA Spectrum; Fraport AG]. From a procedural perspective, a review of arbitral
decisions suggests that domestic corruption findings or convictions are not binding on arbitral
tribunals [Karkey A.S.; Croatia v. MOL PLC; Glencore A.G.].

56. Thus, considering all the factors provided above, the Tribunal must rule that a stay cannot be
granted in the present case, since it would violate the spirit of preventing “unnecessary delay” as
codified in Art. 17 PCA Rules.

[3] The parties intended to arbitrate disputes about contractual validity

57. RESPONDENT’s request that the Tribunal stay its proceedings contravenes the clear intent of the
parties, as has already been discussed in detail in ¶¶ 5 through 14, Issue I(A) 1.

58. The Tribunal should thus decline complicity with RESPONDENT’s duplicitous request for grant of
stay and rule against granting a stay, since it is more efficient to proceed with the arbitration, a stay
cannot be granted per the Cairn test, and it is the duty and obligation of the tribunal to rule on the
validity of the contract.

B. THE PROCEEDINGS SHOULD NOT BE BIFURCATED

59. Bifurcation is a procedural tool with a basic impact on the merits of the dispute. Thus, it is essential
to address whether the Arbitral Tribunal should first address reason and challenge for bifurcation
of the proceedings, or whether the arbitral tribunal has to deal with all possible claims at the same

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

time without bifurcation [Vojtěch Trapl].

60. RESPONDENT requests for bifurcating the proceeding only to the extent of invalidity of PSA due
to corruption [PO2, pp.49-50, ¶ 52]. CLAIMANT posits that in the present case, the proceedings
should not be bifurcated as such because: the applicable legal principles and existing arbitral
practice would not lead to such a decision [1]; a bifurcation of the issue of corruption would not
be feasible [2]; bifurcation would go against the tenets of arbitration [3]; and a grant of bifurcation
would be unfair to the CLAIMANT [4].

[1] The applicable legal principles and existing arbitral practice would not lead to
such a decision

61. The power to order a bifurcated schedule is conferred by the general power found in Art. 17
UNCITRAL Rules and is at the Tribunal’s discretion, with fairness and efficiency as guiding factors
[Philip Morris Asia Ltd.]. With respect to issues that contain elements of both substance and
procedure, arbitrators could look to norms synthesized from various cases and awards, even if the
Arbitral Tribunal is not bound by previous decisions [Vojtěch Trapl].

62. Recently, tribunals in hearings administered by the PCA Rules have more frequently deferred the
decision whether to bifurcate until receipt of substantive submissions by the parties [Daly, p.85, ¶
5.64]. In one instance, a tribunal denied RESPONDENT’s request to bifurcate the proceedings
because it would have had to investigate the full set of facts to decide on the issue of jurisdiction,
which meant that bifurcation would not “appear . . . to be the most efficient and time-saving way
to structure the proceedings [Id., ¶ 5.63].” In the present case, a determination of bifurcation has
anyway necessitated an inquiry on the part of the Tribunal into the merits of whether there was
any corruption, as is also addressed by the CLAIMANT in Issue II (D). Thus, since in any case the
Tribunal would have to hear the merits of the corruption claim, it would only be practicable to not
bifurcate the proceedings.

[2] A bifurcation of the issue of corruption would not be feasible

63. Bifurcation entails splitting the arguments in a case into two phases, which are typically either (1)
jurisdiction and liability, or (2) liability and damages [Woods/Ros/Guillet/Wilson]. In the present
case, RESPONDENT has proposed a bifurcation request which would only extend to the question
of the invalidity of the contract due to corruption [PO2, p.50, ¶ 52]. Considering the pervasiveness
of corruption concerns throughout the dispute, its bearings on the jurisdiction and on the validity
of PSA, RESPONDENT’s request for bifurcation thus cannot be given effect.

64. The tribunal’s decision will usually depend on whether the objection is a self-contained knowledge

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

of the underlying facts (in which case, bifurcation may well be ordered), or a question that is linked
to the merits and facts of the case [Gran Colombia]. Per the RESPONDENT, the arbitration agreement
stands invalid due to the contract being obtained by corruption [Response, p.30, ¶ 20]. An inquiry
into the jurisdiction of the Tribunal would also entail an inquiry into the question whether the
contract was obtained by corruption or not. This is an issue related to the merits of the case. Thus,
the Tribunal will have to deal with the merits to establish jurisdiction as there is closely interlink in
the merits and jurisdictional issues of the case.

65. It is established that if an arbitral tribunal does not have jurisdiction over an issue, then it cannot
proceed to issue an award on the merits of that issue [Santacroce, p.539; McErlaine/Allsop;
Calamita/Sardinha, p.44; McDermott Int’l; PacifiCare; Fung Sang]. As corruption also pertains to the
jurisdiction, any request of bifurcation would lead the Tribunal to establish complete jurisdiction
only after hearing certain aspects of merits. Any ruling on merits rendered in the first phase goes
against logic and general practice. If the Tribunal later finds out that it does not have jurisdiction
due to corruption, all the prior proceedings of jurisdiction and substance will be rendered futile.

66. When issues are entwined to the extent that they cannot be unraveled from each other, a
bifurcation would only result in the facts being pleaded twice [Greenwood, p110; Redfern/Hunter II,
p.363]. The issues in the present case cannot be argued in vacuum of each other. The same set of
facts apply to all the issues. The Parties will have to make full submissions to the Tribunal on the
facts of the dispute which will likely be repeated in the bifurcated phases of Arbitral Proceedings.

67. For all these reasons, Bifurcation of the issue of invalidity of PSA due to corruption would not be
feasible.

[3] Bifurcation would go against the tenets of arbitration

68. By requesting bifurcation, RESPONDENT seeks for the Tribunal to rely on the outcome of the
domestic judicial proceedings dealing with corruption charges, the decision on which cannot be
expected before July 2024 [Response ¶24]. Pertinently, the verdict so delivered would not be
conclusive since it would be from a first instance court. One of the parties will most likely resort
to challenging it by way of appeal before higher courts of law. Any other decision, let alone a
decision at the first instance, cannot guide the Tribunal in determining issues pertaining to
corruption in any definitive manner. The Tribunal will have to investigate independently in any
event unless it agrees to bifurcate the proceedings until the parties exhaust all appeals and are left
with a final decision on matters of corruption.

69. Thus, the Tribunal would be better served by rejecting bifurcation at the outset to conduct its own
investigation in the matters of corruption that affect PSA [Woods/Ros/Guillet/Wilson; Hart-

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

Armstrong/Slade/Landicho; Swiss Timing], since no other investigation or proceeding would be

definitive enough to assist it timely. Moreover, the time period to obtain the final verdict of
Equatoriana’s judiciary in this matter cannot be predicted. Bifurcating arbitral proceedings until a
first instance decision is delivered would only serve to validate a dilatory practice that cannot
culminate in any authoritative counsel, while bifurcating proceedings indefinitely pending appellate
decisions would go against the tenets of arbitration [Woods/Ros/Guillet/Wilson]. Therefore, the
Tribunal should find that bifurcation is not expedient in this matter.

[4] A request for bifurcation would be unfair to CLAIMANT

70. After bifurcation, a tribunal will render a partial award in relation to the first phase. If this award
is challenged at the court of the seat, it will be truly unfair as a successful party will see itself fighting
on two fronts [Kinnear/ Bjorklund/ Hannaford, p.1135; Greenwood, p.111; S.D. Myers]. Moreover, the
second phase of the proceedings may be jeopardized due to a challenge on the partial award given
after first phase [Greenwood, p.111]. If partial award rendered in the present case, is challenged by
RESPONDENT, it will be expensive and distracting for CLAIMANT. CLAIMANT will have to defend
itself not only in the arbitral proceedings but also in court.

71. Further problems will be caused when the witnesses may need to be called twice [Greenwood, p.110;
Monichino]. As any adverse credit findings in the first phase will compromise the latter phase of the
proceedings [Id.]. The characters associated with the issues of misrepresentation and corruption
are the same. Bifurcation would lead to a situation where all the witnesses will have to be called
twice. Any prejudice created against the witnesses in the first phase will compromise the second
phase of the proceedings. Therefore, the Tribunal must not bifurcate the proceedings as it would
be injustice to CLAIMANT.

C. RESPONDENT’S CONCERNS REGARDING THE ARBITRAL TRIBUNAL’S

INVESTIGATIVE POWERS HAVE BEEN EXAGGERATED

72. RESPONDENT’s primary concern with regards to the continuation of proceedings is that “Unlike
the Arbitral Tribunal, the public prosecutor has broad investigative powers which extend also to
third parties [Response, p.30, ¶ 23].” However, the same is not normally viewed as a bar to the fair
determination of claims in arbitration [Baizeau/Hayes].

73. Additionally, there is little reason why a tribunal would not be able to unearth the truth relating to
bribery allegations any less ably than it does with other allegations that parties vigorously contest
[Gary Born]. Thus, RESPONDENT’s concerns in this regard are essentially building a mountain out
of a molehill.

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

74. These concerns, which are limited to the third-party investigative powers of an Arbitral Tribunal,
can be addressed by Art. 27 DAL [PO1, p.43, ¶ 3], which provides that the arbitral tribunal may
request assistance in taking evidence from a competent court of the State by themselves or on the
request of one or more of the parties [UNCITRAL, Art. 27; Vibroflotation; Satinder Singh].

75. It is well established that the arbitral tribunal frequently lacks the power to enforce decisions for
production of evidence and rely on local courts to issue orders in this regard [Binder, p.388]. The
basic proposition of RESPONDENT’s argument thus falls, since they can request, with the approval
of the Tribunal, that evidence be collected from the necessary third parties.

76. In the present case, in case an order is issued by the courts of Danubia requiring taking of evidence
from Equatorianian individuals under Art. 27 DAL, such as Mr. Field, Equatoriana is bound by a
duty to assist the courts in that endeavour, per Art. 37(5) UNCAC. The provision creates a duty
on the part of one State to encourage persons within their State who can provide substantial
assistance towards the investigation of an offence under the convention by another State.
[UNCAC, Art. 37(5)]. Such persons are usually encouraged through mitigation of punishment or
providing of immunity from prosecution [UNCAC, Art. 37(2)-37(3)]. This provision is especially
critical with respect to complex wrongs such as transnational bribery or laundering of proceeds of
bribery, particularly when several actors are involved [Landwehr, p.378].

77. Equatoriana is a signatory of the UNCAC [PO2, p.43, ¶ 3], and as such, would at least be motivated
to assist the investigation as needed. Thus, the concerns with regards to the investigative powers
of the Arbitral Tribunal have been exaggerated.

D. THERE IS NO CREDIBLE ALLEGATION OF CORRUPTION WITH REGARD TO THE

PRESENT CONTRACT

78. Under both the PCA Rules and the Model Law, each party shall have the burden of supporting its
claim or defense [PCA Rules, Art. 27; UNCITRAL Art 24.1]. As RESPONDENT alleges that
CLAIMANT’s cover agreement with a third party was tainted by bribery, RESPONDENT has the
burden of proving CLAIMANT has committed the alleged corruption [Vladislav Kim; EDF].

79. Additionally, RESPONDENT must satisfy a high evidentiary standard [Micula v. Romania (II); South
American Silver], as most legal systems impose a strict standard of proof for cases involving
allegations of bribery such as Clear & Convincing Evidence [Westinghouse], Irrefutable Evidence as
followed by ICSID tribunals, or the slightly lower standard of Balance of Probabilities or
circumstantial evidence [Glencore A.G.]. CLAIMANT submits that in the present case, RESPONDENT
has failed to even provide a credible allegation of corruption let alone prove it.

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

80. CLAIMANT submits that in any case, there is no credible allegation of corruption regarding the
present contract because charges brought up against Mr. Field do not relate to the present contract
[i]; the alterations in the scope of the contract have been explained by CLAIMANT [ii]; and the
Public Prosecutor Office and Ms. Fonseca cannot be relied upon to conduct an objective
investigation [iii].

[1] Charges brought up against Mr. Field do not relate to the present contract

81. CLAIMANT submits that so far, there is not even a credible allegation that PSA is obtained by
corruption. RESPONDENT’s CEO, Ms. Wilhelmina Queen, in her letter of termination cites that
there is a “considerable likelihood that the Contract had been obtained by corruption [Cl. Ex. C8,
p.20].” Ms. Queen herself states that there is no proof yet as to the payment of any bribes in relation
to this contract. She merely suspects that such proof will emerge in the course of ongoing
investigations [Cl. Ex. C8, p.20].

82. It is pertinent to note here that CLAIMANT has also reviewed all the payments made from their
accounts to RESPONDENT’s from the date of the invitation to tender until two months after the
contract conclusion and found no suspicious payments [Cl. Ex. C3, p.14, ¶ 11].

[2] The alterations in the scope of the contract have been explained by CLAIMANT

83. The primary reason cited by RESPONDENT to bring up the question of illegality of the present
contract is that the scope of the contract was drastically altered during the final stages of
negotiation. The reasons for these changes have been well-explained by CLAIMANT. Due to the
insolvency of another customer which led to the cancellation of a partly paid order, CLAIMANT
was able to deliver the first 3 drones at very favourable conditions [Notice, p.5, ¶ 5; PO2, p.46, ¶ 25].
Additionally, the three other drones had optional front payload bay which would provide
RESPONDENT with the flexibility to employ additional surveillance equipment. This will be useful
for RESPONDENT as 40% of RESPONDENT’s missions were expected to require drones with an
optional payload bay to employ additional surveillance equipment [PO2, p.44, ¶ 8].

84. The increase in the maintenance period was also explained as being based on the negotiations
considering the expected life of the drones and the favourable conditions provided by CLAIMANT
[Cl. Ex. C6, p.17, PO2, p.47, ¶ 26].

85. Based on CLAIMANT’s internal calculations, a gain of 1.5 million EUR is added to the price of each
drone. But in the present case, even after the increase in the scope of the contract, the entire
additional gain to CLAIMANT under the present arrangement was a mere 1.8 million EUR [PO2,
p.47, ¶ 27]. Given the contract with a value of over 44 million EUR, the meagre profits derived do

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

not provide much reason to bribe the officials of RESPONDENT.

[3] The Public Prosecution Office and Ms. Fonseca cannot be relied upon to
conduct an objective investigation

86. It is noteworthy that the newly appointed head of the public prosecution office himself has been
a leading figure in the Liberal Party until his appointment, and has strongly criticized the NP
Development Program since its inception. [Letter by Langweiler to Arbitral Tribunal, p.40]

87. Furthermore, the objectivity of Ms. Fonseca, the specially-appointed prosecutor, and her staff is
also to be questioned. As reported by The Citizen, Ms. Fonseca’s brother-in-law is the CEO of
the other successful bidder, Aerial Systems plc. [Re. Ex. 2, p.33] Therefore, the Tribunal must
exercise its powers to determine its own facts and not rely upon the findings of the Special Public
Prosecutor. Additionally, the statements of Ms. Bourgeois cannot be relied upon given her
relationship with Ms. Fonseca [PO2, p.49, ¶ 43]. Therefore, her statements add no credibility to
the allegations of corruption.

88. It is thus submitted that RESPONDENT’s request to stay or bifurcate the arbitration pending the
outcome of the domestic investigation must to be denied.

ARGUMENTS ON SUBSTANCE

III. PSA IS GOVERNED BY THE CISG

89. The CISG applies to contracts of sale of goods between parties whose places of business are in
different contracting states [CISG, Art. 1(1)(a)]. CLAIMANT’S place of business is in Mediterraneo
[Notice, p.4, ¶ 1] and RESPONDENT is based in Equatoriana [Response, p.27, ¶ 3]. Both states are
contracting states of the CISG [PO1, p.43, ¶ 3]. Further, the parties have agreed that the applicable
law of the contract is the law of Equatoriana [Cl. Ex. C2, p.10]. Equatoriana has not declared any
reservations under Art. 92 CISG [PO2, p.49, ¶ 48]. Thus, PSA falls within the sphere of application
of the CISG.

90. RESPONDENT claims that PSA is not governed by the CISG upon the application of Art. 2(e)
CISG [Response, p.31, ¶ 26]. It may also claim that the drones are classified as aircrafts under
Equatoriana’s domestic law [Re. Ex. 5, p.36]. However, CLAIMANT submits that PSA is indeed
governed by the CISG, under which, only objects which are primarily intended to serve the
function of air transport are to be regarded as aircrafts [Schlechtriem/Schwenzer, p.247]. Contrary to
RESPONDENT’S suggestions, the Kestrel Eye 2010 drones are not aircrafts and the sales transaction

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

falls within the sphere of application of the CISG. The drones were not intended or destined to
transport cargo or humans [A]. Moreover, there was no need to register them as aircrafts under
Equatoriana’s domestic laws [B].

A. THE DRONES WERE NOT INTENDED OR DESTINED FOR AIR TRANSPORT

91. RESPONDENT may claim that the drones could potentially be used as aircrafts. However, the
intended use of objects as well as the purpose of transactions is an important consideration to
determine whether they are excluded under Art. 2(e) CISG [1]. The drones do not qualify as
aircrafts since they were manufactured to be used principally for surveillance and exploration
purposes and the parties understood the same [2].

[1] The intended function of objects and purpose of transactions is paramount

92. All objects capable of flight cannot be indiscriminately excluded from the CISG’s sphere of
application. The envisaged function of objects is the criterion to determine their nature under Art.
2(e) CISG [Ferrari, ¶ 42]. Moreover, the purpose of the transaction is pertinent for interpretation
under Art. 2(e) [Djakhongir] since objects may be sold for purposes other than those for which they
were manufactured. Thus, objects must be destined for air transport to be regarded as aircrafts
[Schlechtriem/Schwenzer, p.254].

[2] Kestrel Eye 2010 drones were meant to function as surveillance devices

93. The Kestrel Eye 2010 drones cannot be regarded as aircrafts because they were not meant to carry
out the function of transport. They were manufactured with a view to conduct surveillance [i];
and the Parties intended to employ them for the same [ii].

i. Kestrel Eye 2010 was engineered to excel at surveillance alone

94. The drones were neither capable of carrying humans nor intended to deliver cargo [PO2, p.44, ¶
9]. Their primary purpose was to facilitate surveillance. This can be demonstrated as follows.

95. First, the drones have been engineered at higher costs to provide greater flight stability that serves
surveillance purposes [PO2, p.44, ¶ 9]. The drones which are manufactured simply to move cargo
have much larger payload bays than Kestrel Eye 2010 and are 30% cheaper since they do not
ensure such great flight stability [Id.]. The use of Kestrel Eye 2010 drones to transport cargo is not
commercially sensible given their small payload carrying capacity and costlier flight stability
features which are not required for standard delivery of cargo [Id.; Re. Ex. 5, p.36]. Moreover,
surveillance equipment occupies the entire weight and volume capacity of the central payload bay
and would need to be removed to make room for cargo [Id.]. The impracticality of employing the
drones for transportation indicates that it is built for surveillance.

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

96. Second, Kestrel Eye 2010 has primarily been used to carry surveillance equipment instead of cargo.
It was used to carry cargo only in rare instances of emergency, when no other means of delivering
small crucial equipment bits or medicine to remote locations was at hand on short notice [PO2,
p.44, ¶ 9]. The deployment of Kestrel Eye 2010 to transport cargo instead of employing
surveillance equipment was always a last resort in urgent cases when cheaper alternatives that are
usually available for such tasks were absent [PO2, pp.44, 46, ¶ 9, 22]. This further demonstrates
that their principal purpose since inception, has always been surveillance.

97. Crucially, at least 3 Kestrel Eye 2010 drones were not even capable of transporting cargo, let alone
intended for the same. The first 3 drones which CLAIMANT had initially planned to sell to another
customer were agreed to be sold to RESPONDENT equipped with geological surveillance equipment
[Cl. Ex. C2, p.10; Notice, p.5, ¶ 8]. However, these 3 drones did not have the optional front payload
bay [PO2, p.44, ¶ 8]. This meant that they had hardly any capacity left to carry cargo [PO2, p.45, ¶
10] since the surveillance equipment takes up the entire capacity of the central payload bay, which
is the only other available bay [PO2, p.44, ¶ 9]. Therefore, at the very least, the first 3 drones are
not aircrafts within the meaning of Art. 2(e) CISG because of their utter inability to serve the
function of air transport.

ii. R ESPONDENT purchased Kestrel Eye 2010 to conduct surveillance

alone

98. Even the versions equipped with the optional front bay are suited only to surveillance because of
low load carrying capacity and higher costs, and RESPONDENT also intended to employ them for
that very purpose. PSA and the Call for Tender indicates that the primary intention behind
acquiring drones is to collect data by way of geological surveillance equipment [Cl. Ex. C2, p.10].
The versions with the optional front payload bay were intended to be used only in 40% of the
missions to employ additional surveillance equipment [PO2, p.44, ¶ 8; Cl. Ex. C1, p.9]. Therefore,
Kestrel Eye 2010 drones were not intended to transport cargo on any mission.

99. RESPONDENT agreed to increase the volume of the transaction in light of the highly favorable price
and a potential additional use of Kestrel Eye 2010 [Cl. Ex. C2, p.10]. It may claim that the additional
use was to use the drones to transport cargo which would otherwise be transported through
cheaper alternatives in cases of emergency. However, RESPONDENT was aware that such cases
would be truly exceptional and involve greater financial costs, to be resorted to only in urgent
situations when cheaper means of transport are unavailable [PO2, p.44, ¶ 9; PO2, p.44, ¶ 22]. This
demonstrates that RESPONDENT did not purchase the drones to transport cargo. The possibility
of such use does not alter the principal intention behind manufacturing and buying the drones, or

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

their primary function. Urgent cases of emergency where all other means of transport are absent
are not likely to occur, and mere possibility of such situations arising and the drones being used to
transport cargo in such cases cannot affect the nature of the drones.

100. Kestrel Eye 2010 drones were manufactured to serve as surveillance devices and were
consequently bestowed with greater flight stability features, smaller payload capacity, and higher
prices than drones meant for air transport. The Parties understood this and agreed that these
drones would be deployed principally for surveillance [PO2, p.46, ¶ 22]. They cannot be classified
as aircrafts merely because it was possible to use them to transport cargo with great inconvenience
when such possibility runs counter to their intended purpose.

101. Like with most other objects, drones can potentially be used for purposes other than for which
they are engineered and purchased. However, in light of their primary function as envisaged by
the manufacturer [PO2, p.44, ¶ 9] and the intention of RESPONDENT to use them primarily for
surveillance [Cl. Ex. C2, p.10], it is apparent that Kestrel Eye 2010 was not destined for air
transport. Thus, the drones cannot be excluded from the sphere of application of the CISG.

B. THE DRONES DID NOT NEED TO BE REGISTERED AS AIRCRAFTS

102. Aircrafts are excluded from the scope of the CISG under Art. 2(e) because they are potentially
subject to special registration rules under domestic legal systems [Schwenzer/Fountoulakis, p.40].
There are varying standards across jurisdictions when it comes to requirements for registration of
aircrafts [CISG Draft Commentary, Art. 2]. This was a contributing factor in aircrafts being excluded
from the CISG’s scope of application for two reasons: to eliminate uncertainties regarding which
objects would be subject to the CISG in light of differing domestic rules of registration, and the
fact that the relevant place of registration and the law governing it might not be known at the time
of the sale [Id.].

103. However, the Parties knew the relevant place of registration, and therefore the law governing the
registration. Per Art. 10 of Equatoriana’s Aviation Safety Act, the drones are not subject to
registration with the aircraft registry because they were purchased and operated by a state-owned
entity [Re. Ex. 5, p.36]. Consequently, the transfer of ownership of Kestrel Eye 2010 was perfected
even without the drones being registered as aircrafts. RESPONDENT merely requested visible
product numbers to be marked on the drones’ tails to identify them if they interfered with other
forms of aerial traffic [Re. Ex. 1, p.32]. The same did not amount to registration [PO2, p.44, ¶ 8].
Therefore, the drones cannot be qualified as aircrafts since they are not required to be registered
as such, and thus fall within the scope of the CISG.

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

IV. IN CASE PSA IS GOVERNED BY THE CISG, RESPONDENT CANNOT

RELY ON ART. 3.2.5 ICCA TO AVOID THE CONTRACT

104. In case PSA is governed by the CISG, RESPONDENT cannot rely on Art. 3.2.5 ICCA of
Equatoriana to avoid the contract as the same is not applicable in the instant case [A]. Even if the
Tribunal finds that Art. 3.2.5 ICCA is applicable, RESPONDENT cannot rely on the same as there
was no misrepresentation thereunder [B].

A. RESPONDENT CANNOT RELY ON ART. 3.2.5 AS IT IS NOT APPLICABLE IN THE

INSTANT FACTUAL SITUATION

105. Art. 35 CISG provides remedy for breach of contract by a party where there is non-conformity of
goods. While Art. 3.2.5 ICCA provides the domestic law remedy for fraud, it is pre-empted by the
CISG in the present case. The domestic law of Equatoriana cannot be relied upon by
RESPONDENT to claim a remedy for fraud as RESPONDENT’s claim of the drones not meeting the
technical qualifications as agreed upon by the parties [Response, p.29, ¶ 17] does not involve an
interest arising independently of contractual claims [1], is not based on a fraudulent intention on
behalf of CLAIMANT [2], and provides the same remedy as is allowed for breach of contract under
CISG [3]. Therefore, allowing such a claim would result in dilution of the purpose and authority
of the CISG [4].

[1] RESPONDENT’s misrepresentation claim does not involve an interest arising

independently of contractual claims

106. Where the parties are contracting states of the CISG, the latter exclusively governs factual
situations involving issues regarding conformity of the goods with the characteristics or qualities
agreed upon by the parties [Art. 35, CISG; Kröll/Mistelis/Viscasillas, p.537]. The drones not meeting
the qualities and characteristics agreed upon by the parties would at most, raise contractual issues
of non-conformity under the CISG [i]. Further, where RESPONDENT does not rely on any facts
beyond lack of conformity, fraud cannot be claimed [ii].

i. Identified factual subject matter would at most raise issues of non -

conformity

107. The CISG has adopted a unitary notion of defective performance. Any difference between what
the parties have contracted for and what the seller provides falls within the concept of lack of
conformity within the Convention [De Luca, p.175]. In the present case, RESPONDENT released a
Call for Tender for four state-of-the-art drones for the collection of geological and geophysical
data [Cl. Ex. C1, p.9]. CLAIMANT responded to the same with a bid that was accepted by

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

RESPONDENT, and the parties entered into a contract wherein they clearly expressed the agreed-
upon specifications of the goods [Cl. Ex. C2, pp.10, 11]. After the negotiations, the resultant
contract specified the obligations of the Seller under Art. 2 [Cl. Ex. C2, p.10]. By virtue of this
provision, PSA obliges the seller to supply 6 of its newest model of Kestrel Eye 2010 drones and
such drones must be equipped with state-of-the-art geological surveillance equipment features [Id.].
If there is any failure on part of CLAIMANT in supplying such drones, it would imply that there is
a difference between what the parties contracted for and what the seller provides and thus, the
factual situation would constitute lack of conformity.

108. Thus, this factual situation would at best raise issues of non-conformity which are regulated
exclusively by Art. 35 CISG. Art. 35 obliges the seller to deliver those goods which are conforming
to the characteristics explicitly established in the contract [CISG, Art. 35(1); Schlechtriem/Schwnezer,
Art. 35 ¶ 6]. The term ‘Quality’ as used in Art. 35 covers physical conditions of the goods which
are agreed upon or justifiably expected [Kröll/Mistelis/Viscasillas, p.492]. Thus, questions relating to
conformity of the drones with characteristics such as “latest” or “equipped with state-of-the-art
technology” as agreed upon in the Contract must be exclusively governed by Art. 35.

109. Hence, in light of the facts stated, RESPONDENT can, at best, rely on Art. 35 CISG to raise
questions as to the conformity of the drones with the specifications agreed upon by the parties
and stipulated in the Contract.

ii. There exist no extraneous/ collateral factual circumstances beyond

mere non-conformity to establish misrepresentation

110. Where it is accepted that remedies under domestic law for the seller’s fraud or deceit are not
excluded, it is essential that parties’ claims are based on special circumstances above and beyond
the mere lack of conformity of the goods [Schlechtriem/Schwenzer, Art. 35, ¶ 51;
Kröll/Mistelis/Viscasillas, p.537].

111. Fraud is “extraneous” to the contract where it concerns matters which do not relate to the quality
or characteristics of the goods for which the parties contracted or the performance under the
Contract [Kaloti Enters]. Thus, when the only fraud alleged is that the party was not sincere when
it promised to perform under the contract, the fraud-based cause of action is duplicative of a
breach of contract claim [Mañas; Gorman v. Fowkes; Did-it.com]. While RESPONDENT claims that
CLAIMANT misrepresented the quality of drones as they were neither “state of the art” nor their
“newest model” [Response, p.29, ¶ 17], these matters relate to the quality or characteristics of the
drones which the parties agreed upon in PSA [Cl. Ex. C2, p.10]. The factual situation concerns
performance under the contract and is not extraneous to the quality of the goods the parties

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

contracted for. It is thus duplicative of a possible breach of contract claim.

112. Since RESPONDENT’s claims for fraud are not based on special circumstances above and beyond
the mere lack of conformity of the goods, these claims cannot be raised.

[2] RESPONDENT’s misrepresentation claim is not based on a fraudulent intention

on behalf of CLAIMANT

113. Domestic law remedies for innocent and negligent misrepresentation relating to matters governed
by the CISG, such as the features of the goods, are pre-empted by the CISG [Schroeter, pp.578, 582-
583]. It can thus be inferred that it is only the element of fraudulent intention that the CISG does
not seek to govern. The present case, however, involves no fraudulent intention on the part of
CLAIMANT, thus preventing the domestic law remedy from pre-empting the remedy as provided
under the CISG.

114. At the time of conclusion of the contract, Kestrel Eye 2010 was Drone Eye plc’s top model
available in the market [Notice, p.5, Para 9]. While CLAIMANT was developing and testing Hawk Eye
2020 at the time, there was no certainty as to when it would have been available for sale. The
Contract was concluded on December 1, 2020 [Cl. Ex. C2, p.12] and even as late as February 2021,
at the time of the airshow, CLAIMANT had not received the patent for its new product, only
receiving it in July 2022 [PO2, p.45, ¶ 15]. As such, till 2022, CLAIMANT could not have been certain
about when it could have sold Hawk Eye 2020. Therefore, it was not commercially viable for
CLAIMANT to release Hawk Eye 2020 as its newest model or the current state-of-the-art drones
available for RESPONDENT’s purpose at the time.

115. Moreover, during the stage of testing and development, the technology behind Hawk Eye 2020
constituted CLAIMANT’s trade secret. It was a commercially valuable secret, the details of which
were known to only a limited group of people within the company [Trade Secrets, WIPO], which
gave Drone Eye plc an opportunity to use the technology that it developed, to obtain an economic
advantage over its competitors whenever it was released [Carla Walter, p.274]. CLAIMANT was thus
under no obligation to disclose it to RESPONDENT during their negotiations.

116. Hence, there was no fraudulent intention involved on the part of CLAIMANT to warrant holding a
domestic law claim of fraud as maintainable.

[3] RESPONDENT’s misrepresentation claim would result in the same remedy as is

allowed for breach of contract under the CISG

117. Given the facts of a case, if the CISG provides solutions that are exhaustive and functionally
equivalent to the otherwise applicable domestic remedies, the CISG pre-empts recourse to those

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

domestic remedies. Thus, if an issue is one of "validity" as autonomously defined under the CISG,
and therefore (potentially) excluded from its scope of application on the grounds of Art. 4, the
applicable domestic law remedy available to the parties must be identified [Franco Ferrari, p.67]. If
the CISG provides solutions that are functionally equivalent to those available to the parties under
the applicable domestic law, it will pre-empt the corresponding domestic remedies and defences
[Id]. In the present case, PSA is governed by the Law of Equatoriana [Cl. Ex. C2, p.12]. Art. 3.2.5
ICCA provides the relevant domestic law remedy for fraud, allowing a party to avoid the contract
if it was induced to enter into it by fraud [UPICC, Art. 3.2.5].

118. Any failure of the goods to conform to the agreed-upon description will constitute a breach of the
seller’s obligations and result in breach of contract [Delchi], which may allow avoidance [CISG,
Arts. 46-52]. To avoid the contract altogether, RESPONDENT would need to establish that the
alleged non-conformity constitutes fundamental breach of contract under Art. 49 CISG. Hence,
the CISG provides the same remedy as Art. 3.2.5 ICCA. The same is thus pre-empted by the CISG
and RESPONDENT cannot rely on the non-harmonised law of Equatoriana to seek the same remedy
for the same factual situation.

119. Given that the CISG provides solutions that are exhaustive and functionally equivalent to the
remedies under the applicable domestic law, the CISG pre-empts recourse to these remedies.
Therefore, the Tribunal should not allow RESPONDENT to claim remedies under the same.

[4] Allowing RESPONDENT’s misrepresentation claim would dilute the purpose

and authority of the CISG

120. The expressly stated goal behind the CISG is to develop and enforce a uniform international
contract law in order to remove legal barriers in international trade [Preamble, CISG; Art. 7(1),
CISG]. This clearly indicates the intent of the Contracting States to have the treaty pre-empt state
law causes of action. [Schroeter, pp.554-555; Warren Khoo, pp.46-47]. Any recourse to local, non-
unified law involves the risk of upsetting the balance of rights and obligations of international
buyers and sellers that has been laid down in the CISG [Schroeter, p.553], and would subject parties
to the very same ambiguities that the CISG was designed to avoid [Geneva Pharms.].

121. RESPONDENT’s misrepresentation claim only asserts a breach of duties created by the contract
itself, as it relates to the specifications of the drones as agreed between the parties, and raises the
question of the drones not conforming to those specifications. A claim for misrepresentation of
such facts as already addressed by the non-conformity provisions of the CISG must therefore be
subsumed and trumped by the CISG [Schlechtriem, p.33]. Allowing a claim of such nature would
enable a party to avoid the treaty altogether by disguising CISG disputes as local claims.

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

122. Furthermore, under the CISG, the requirement of proving “fundamental breach” in order to avoid
a contract is intended to make the burdensome unwinding of contracts an ultima ratio (remedy of
last resort) [Schroeter, pp.553-554]. Thus, if a misrepresentation claim under state law, allowing
avoidance of contract without having to prove fundamental breach, is held maintainable, it would
result in the violation of the doctrine of fundamental breach of contract. Thus, RESPONDENT’s
misrepresentation claim under Art. 3.2.5 ICCA must not be allowed so as to preserve the purpose
and authority of the CISG.

123. Hence, RESPONDENT cannot rely on Art. 3.2.5 ICCA to avoid the contract as it is not applicable
in the instant factual situation.

B. EVEN IF ART. 3.2.5 ICCA IS APPLICABLE, RESPONDENT CANNOT RELY ON IT AS

THERE IS NO MISREPRESENTATION

124. Even if the Tribunal finds that Art. 3.2.5 ICCA is applicable in the present factual situation,
RESPONDENT cannot rely on it to avoid the contract. The ingredients of fraud under Art. 3.2.5 are
not fulfilled since: there was no fraudulent representation [1], or fraudulent non-disclosure by
CLAIMANT [2]. CLAIMANT had no intent to defraud RESPONDENT into error [3]; and gained no
advantage to RESPONDENT’s detriment [4].

[1] There was no fraudulent representation by CLAIMANT

125. It is submitted that there was no fraudulent representation by CLAIMANT about the quality of the
drones [i] and in any case, CLAIMANT’s interpretation of the term ‘state-of-the-art’ should be
adopted by virtue of the rule of contra proferentem [ii].

i. There was no fraudulent representation by C LAIMANT about the

quality of the drones

126. Fraud under Art. 3.2.5 ICCA can be committed by a positive representation of a false fact, either
expressly or by implication [Vogenauer, pp.499-500]. It is argued that CLAIMANT made no false
representation to RESPONDENT with respect to the nature or quality of the drones.

127. As emphasised earlier, Kestrel Eye 2010 constituted CLAIMANT’s top/latest model at the time of
conclusion of the contract [Notice, p.5, ¶ 9]. It was CLAIMANT’s state-of-the-art drone specifically
engineered for surveillance purposes [PO2, p.44, ¶ 9], corresponding to RESPONDENT’s specific
requirement of collecting geological and geophysical data in the Northern part of Equatoriana as
notified in the Call for Tender [Cl. Ex. C1, p.9]. Mr. Bluntschli merely reinforced these facts in his
email to Mr. Field [Re. Ex. 4, p.35]. At the time of contract conclusion, Hawk Eye 2020 was still
in the development and testing phase and, in fact, the patents for the same had not even been

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

applied for until after the airshow the following year [PO2, p.45, ¶ 14-15]. Thus, Hawk Eye 2020
could not have been presented as CLAIMANT’s top model at the time.

128. It may also be noted that the Call for Tender document stated that only offers submitted in
accordance with the detailed conditions described therein would be considered [Cl. Ex. C1, p.9].
RESPONDENT was satisfied with CLAIMANT’s offer and products, had likely conducted due
diligence, and had assured itself of the compliance of Kestrel Eye 2010 with its requirements. In
particular, RESPONDENT had selected CLAIMANT’s bid after likely comparison of the Kestrel Eye
2010 with other products available in the market, including drones that were similar to the Hawk
Eye 2020 [PO2, p.45, ¶ 14]. Clearly, RESPONDENT considered Kestrel Eye 2010 to be a state-of-
the-art drone for its purpose, making its subsequent claim of misrepresentation unfounded and
merely an attempt to facilitate wrongful avoidance of the contract.

ii. C LAIMANT ’s interpretation of the term ‘state-of-the-art’ should be

adopted by virtue of the rule of contra proferentem

129. The contra proferentem rule is a rule of interpretation which holds that a party which drafted or
otherwise supplied a contractual term may be responsible for its formulation and should bear the
risk of the ambiguity of that particular term [Yalim, pp.79-96]. It has been noted that when
arbitrators use the contract to determine a dispute, in principle, clauses should be interpreted contra
proferentem [Lew/Mistelis/Kröll, ¶ 18-85]. This rule has been applied as a general principle of law [ICC
3779; ICC 7110]. In the instant case, the Tribunal must apply the rule for interpretation of the term
‘state-of-the-art’ as used in Art. 2 PSA, which states that the seller must supply the buyer with
Kestrel Eye 2010 drones, equipped with ‘state-of-the-art geological surveillance features’ and that
the seller must provide maintenance service after delivery of the ‘respective state-of-the-art UAS’
[Cl. Ex. C2, pp.10, 11].

130. The Rule is also found within the provisions of CISG which by virtue of Article 8(2) places the
burden to communicate clearly on the party which prepares a communication or drafts a contract
[Op. 13, CISG AC]. According to this rule of interpretation, where both parties’ interpretation of
a contractual term makes sense to a certain extent but if contract terms supplied by one party are
unclear, an interpretation against that party shall be adopted [Cysteine case; Automobile case]. The term
‘state-of-the-art’ is a subjective term. CLAIMANT interpreted it to mean latest drones it had released
in the market at time of the tender which suited the purpose of surveillance and date collection
[Notice, P.5, ¶ 9]. As opposed to this, RESPONDENT interpreted the term to mean the latest drones
present in the market at time of delivery. Since both the interpretations make sense to a certain
extent, and RESPONDENT drafted PSA [Cl. Ex. C7, p.19, ¶ 18], the rule of contra proferentem should

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

be adopted to conclude that interpretation against RESPONDENT should be preferred. Thus,

CLAIMANT’s interpretation should be adopted and Kestrel Eye should be regarded as the state-of-
the-art drone.

131. Therefore, there was no fraudulent representation by CLAIMANT to constitute fraud under Art.
3.2.5 ICCA.

[2] There was no fraudulent non-disclosure by CLAIMANT

132. Fraud may occur by a failure on the part of one party to disclose the true state of affairs to the
other [Vogenauer, p.500]. Art. 3.2.5 ICCA imposes a duty to disclose as per “reasonable commercial
standards of fair dealing”, which means a general duty for a party to act in good faith and fair
dealing in international trade [Off Comm., pp.19, 20].

133. In the present case, it was generally known in the market that CLAIMANT was developing a new
drone using technology acquired through the acquisition of Drone-Aircraft. RESPONDENT,
however, at no point inquired from CLAIMANT as to whether it was developing a new drone during
the time of negotiations, or if such drone might be better suited for its purpose [PO2, p.45, ¶ 15].
In deciding the extent of the duty of disclosure, the degree of difficulty with which the other party
can obtain information is a relevant factor [Vogenauer, p.501]. Here, RESPONDENT could have
discovered the factum of development of a new drone through reasonable due-diligence and
therefore, is not entitled to claim a breach of CLAIMANT’s duty of disclosure.

134. On the other hand, the information that CLAIMANT was specifically developing the Hawk Eye
2020 based on aerodynamic life technology and was in the testing phase of the same, was a
commercially valuable trade secret [Trade Secrets, WIPO] of CLAIMANT at the time of contract
conclusion. The text of the CISG casts no duty on a party to disclose such business secrets to the
other party. Even if the Tribunal finds that CISG does not govern the contract in the instant case,
Art. 3.2.5 ICCA also does not impose such far-reaching disclosure obligations on parties.

135. The judgment of the Equatorianian Supreme Court that is sought to be relied upon by
RESPONDENT to impose such far-reaching disclosure obligations on CLAIMANT was delivered in
an entirely domestic setting, involving a dispute between two domestic parties under the domestic
Contract Act [Response, p.29, ¶ 18]. In Equatoriana, while a special legislation, i.e., the ICCA, exists
to govern international commercial contracts, the relevant contract law for domestic contracts is
the Contract Act. The interpretation of fraudulent non-disclosure given by the Court in its
judgment is not relevant in a case such as ours, involving an international contract and being
governed by a different legislation altogether. It is a principle of statutory interpretation that a
statute must be interpreted in light of its object [Breyer J]. The object of the two legislations is

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

different in that one seeks to regulate contracts between domestic parties, while the other regulates
contracts with foreign parties in an international setting. The State may not impose the same
obligations on foreign private entities as it does on its domestic parties without sufficient basis in
law. In any case, it is not for the Tribunal to extend the interpretation of one statute to another.
Thus, CLAIMANT was not subject to the far-reaching and unjustified disclosure obligation as may
be suggested by RESPONDENT and as such, there was no fraudulent non-disclosure by CLAIMANT.

[3] CLAIMANT had no intent to defraud RESPONDENT

136. Conduct is only fraudulent if “it is intended to lead the other party into error [Off Comm., p.107]”.

137. In the instant case, there was no intention on the part of CLAIMANT to make RESPONDENT rely
on its allegedly fraudulent conduct in order to induce the latter to enter into the contract. No other
bidders participating in the tender offered drones with better technology than the Kestrel Eye
2010 [PO2, p.45, ¶ 14]. Thus, any allegedly fraudulent representations on the part of CLAIMANT as
to the quality or features of its Kestrel Eye 2010 would not have had the effect of wrongfully
presenting their offer as a more attractive one than others.

138. More significantly, in light of RESPONDENT’s aim to collect geological and geophysical data [Cl.
Ex. C1, p.9], and the fact that the Hawk Eye 2020 was not available for sale at the time of contract
conclusion, CLAIMANT held the genuine belief that Kestrel Eye 2010 constituted a “state-of-the-
art” drone for RESPONDENT in terms of the Call for Tender. RESPONDENT selected CLAIMANT’s
bid after likely examination of the product and its comparison with other products existing in the
market. RESPONDENT’s conduct clearly indicated that it found Kestrel Eye 2010 to be a state-of-
the-art drone suitable for its purpose. Thus, it cannot be said that RESPONDENT was lead into any
error, and no fraudulent intent can be attributed to CLAIMANT.

[4] CLAIMANT gained no advantage to RESPONDENT’s detriment

139. Under Art. 3.2.5 ICCA, intentional conduct amounts to fraud if it allows the party committing
fraud to gain an advantage to the detriment of the other party [Off Comm., p.107]. CLAIMANT gained
no “advantage to the detriment of the other party” [ICCA, Art. 3.2.5] by leading RESPONDENT
into “error”. An analysis of the available information regarding the cost of the drones, the value at
which the 4 drones were to be sold along with the 2-year maintenance service package, and the
value for the 6 drones and the 4-year maintenance service package that was ultimately agreed
between the parties, reveals that the entire additional gain to CLAIMANT under the present
arrangement was a mere 1.8 million EUR [PO2, p.47, ¶ 27]. The gain does not even amount to 5%
of the total contract value of over 44 million EUR and, thus, cannot be reasonably considered as
a gain sufficient to prove fraudulent conduct.

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 MEMORANDUM FOR CLAIMANT [ARGUMENTS]

140. Moreover, no detriment was caused to RESPONDENT by any conduct of CLAIMANT. Kestrel Eye
2010 is specifically engineered for surveillance purposes and possesses various qualities (such as
flight stability, compact size, etc.). This makes it appropriate for RESPONDENT’s requirements of
collecting geological and geophysical data in the difficult terrain of Northern Equatoriana [PO2,
pp.44-45, ¶ 9; Cl. Ex. C4, p.15]. Furthermore, given that the area is not well-developed and lacks
infrastructure [Notice, p.5, ¶¶ 4-5], RESPONDENT would need to incur extra expenditure to operate
Hawk Eye since the landing strips would have been farther away from the area of usage [PO2, p.45,
¶ 16]. However, RESPONDENT aimed to make use of the revenue collected by way of exploration
of northern part of Equatoriana to fund such infrastructural development in the first place. Thus,
the monetary constraints and the fact that the airfield could only be developed at a considerable
distance from the area of usage [PO2, p.45, ¶ 16] makes the Hawk Eye 2020 a more expensive
option for RESPONDENT [Cl. Ex. C3, p.14, ¶ 9]. Hence, usage of Kestrel Eye 2010 would cause no
detriment to RESPONDENT.

141. Also, no other bidders, including Aerial Systems plc, participating in the tender process had offered
to RESPONDENT technology like Hawk Eye 2020 [PO2, p.45, ¶14]. RESPONDENT made a conscious
choice to employ CLAIMANT to provide it with Kestrel Eye 2010, despite the fact that it could have
reasonably known that drones similar to Hawk Eye 2020 already existed in the market. As such, it
can be reasonably assumed that CLAIMANT’s bid constituted one of the two most attractive bids
[Cl. Ex. C1, p.9] received by RESPONDENT and the decision to conclude the contract was an
informed decision following long negotiations between the two parties. Given the facts of the case,
it cannot be said that the contract was to the detriment of RESPONDENT.

142. Therefore, it cannot be said that CLAIMANT gained an advantage to the detriment of RESPONDENT
under the contract, as required by Art. 3.2.5 ICCA.

143. Hence, RESPONDENT cannot rely on Art. 3.2.5 ICCA to avoid the contract as no case of
misrepresentation is made out thereunder.

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MEMORANDUM FOR CLAIMANT [RELIEF SOUGHT]

RELIEF SOUGHT

In light of the arguments presented in this memorandum, CLAIMANT respectfully requests the
tribunal to declare

I. That the Arbitral Tribunal has jurisdiction over this dispute;

II. That the proceedings will not be stayed, or bifurcated;
III. That the PSA is governed by the CISG; and
IV. That RESPONDENT cannot rely upon Article 3.2.5 of the ICCA to avoid the contract.

CLAIMANT reserves the right to amend the relief sought as may be required.

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MEMORANDUM FOR CLAIMANT [CERTIFICATE OF INDEPENDENCE]

CERTIFICATE OF INDEPENDENCE

It is hereby confirmed that this memorandum was not prepared by anyone other than the people
who have signed their names below:

Jessica Kaur Srishti Kaushal

Hrishabh Khatwani Jotsaroop Singh

Rohan Gajendra Pratap Singh Srajan Yadav

As submitted respectfully on behalf of CLAIMANT, Drone Eye plc. on December 8, 2022, by the
abovementioned.

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