EIGHTEENTH ANNUAL

WILLEM C. VIS INTERNATIONAL COMMERCIAL ARBITRATION MOOT

MEMORANDUM FOR RESPONDENT

On Behalf of: Against:

Fishing Ltd. Trawler Supply, AS

30 Seaview Terrace 1 Harbour View Street
Oceanside Capital City
Equatoriana Mediterraneo

Tel. (0)
927‐8515 Tel. (0) 148-2010

Telefax (0) 927‐8516 Telefax (0)148-2011
enquiries@fish.eq. office@trawler.me

RESPONDENT CLAIMANT
















CENTER FOR TRANSNATIONAL LEGAL STUDIES

CAMILA CRAVETTO · JAMES HART· EILEEN RHEIN ·

ANA CONOVER · RONNIE ANG

II
TABLE OF CONTENTS

Index of Abbreviations...........................................................................................................................VI

Deutsches
Institution
für
Schiedsgerichtsbarkeit
(German
Institution
of
Arbitration) ........ VI


Index of Authorities................................................................................................................................IX


Index of Awards................................................................................................................................... XIX


Summary of Arguments........................................................................................................................... 1


PROCEDURAL ISSUES ......................................................................................................................... 2


I. The arbitral tribunal lacks of jurisdiction.......................................................................................... 2


A.) Aribitration Rules 2004 and not Arbitration Rules 2010 shall be applied to the case............ 3

B) The situation disclosed by Mr. Y is waivable by the parties ...................................................... 3

1.)
Under
UNMICA
the
independence
and
impartiality
of
the
arbitrators
can
be
waived

the
parties............................................................................................................................................................4

2)
Under
the
IBA
Guidelines...............................................................................................................................5

i.)
Relevance
of
the
IBA
Guidelines .............................................................................................................................5

ii.)
The
relationship
between
Mr.
Y
and
Mr.
Z
shall
be
subsumed
under
the
orange
list
of
the

IBA
Guidelines ...............................................................................................................................................................5

iii.)
Otherwise
the
relationship
between
Mr.
Y
and
Mr.
Z
shall
be
subsumed
under
the
waivable

Red
List
of
the
IBA
Guidelines ................................................................................................................................6

C) The agreement of the parties upon Mr. Y as president of the Arbitral Tribunal should
prevail over his non- confirmation by the Arbitration Council .............................................. 7

1.)
The
appointment
of
arbitrators
has
a
contractual
nature..............................................................7

2)
The
Arbitral
Council
has
disregarded
the
common
intention
of
the
parties
to
waive
Mr.

Y’s
conflict
of
interest .....................................................................................................................................8

D) Any Award rendered By The Tribunal Runs The Risk of Non-Enforceability ....................... 8


II. RESPONDENT’S Demand that The Tribual Issues an Order to Respect Confidentiality Must
Be Granted .............................................................................................................................................. 10

A.) CLAIMANT Breached The Duty of Confidentiality Related to The Existence of The
Arbitration.................................................................................................................................. 10

1.)
CLAIMANT
was
bound
by
the
duty
of
confidentiality
at
the
time
of
the
interview.......... 10

2.)
CLAIMANT
breached
its
duty
to
confidentiality
set
forth
in
the
2010
Rules...................... 11

i.)
The
2004
Rules
are
not
applicable
to
the
present
dispute....................................................................... 11

ii.)
There
is
an
implied
duty
to
confidentiality
in
arbitral
proceedings
that
CLAIMANT
failed
to

comply
with................................................................................................................................................................. 11

iii.)
The
duty
of
confidentiality
arises
from
the
2010
Rules.......................................................................... 12

a.)
The
confidentiality
obligation
extends
to
the
mere
existence
of
the
arbitration ................... 12


III
 b.)
The
duty
of
confidentiality
is
explicitly
provided
for
by
the
applicable
arbitration
rules . 12

iv.)
The
disclosure
of
the
existence
of
the
arbitration
cannot
be
excused
as
it
was
not
a

legitimate
protection
of
CLAIMANT’s
rights
under
the
exception
of
Art.
8
of
the
2010
Rules13

3.)
An
order
of
confidentiality
respects
the
will
of
the
parties ........................................................ 14

4.)
Disclosure
imposes
a
harm
upon
RESPONDENT’s
reputation
in
the
fishing
market...... 14

B.) The tribunal is authorized to order CLAIMANT to refrain from divulging the existence of
the arbitration ............................................................................................................................ 14

1.)
The
arbitration
agreement
between
the
parties
allow
the
Tribunal
to
order

confidentiality................................................................................................................................................. 15

2.)
The
Arbitral
Tribunal
can
issue
an
order
for
confidentiality
as
an
interim
measure...... 15

i.)
An
order
for
confidentiality
is
an
interim
measure..................................................................................... 15

ii.)
CLAIMANT’s
Confidentiality
is
necessary
“in
respect
of
the
subject
matter
of
the
dispute” ... 16

3.)
An
order
for
confidentiality
will
be
entirely
enforceable ............................................................ 16


44.
 SUBSTANTIVE ISSUES ................................................................................................................ 16


III. RESPONDENT Did Not Breach The Contract ....................................................................... 16

A) Article 35 does not apply because there was an express and implied agreement................... 16

B) Squid delivered by RESPONDENT was of the quality and description required by the
contract and in compliance with Article 35(1) ........................................................................ 17

C.) Squid provided by RESPONDENT were fit for purposes which squid of the same
description would ordinarily be used....................................................................................... 19

D.) CLAIMANT did not make known to RESPONDENT its particular use of fishing bait for
long-liners and therefore could not have relied on RESPONDENT..................................... 21

1.)
CLAIMANT
did
not
expressly
or
impliedly
make
known
to
RESPONDENT
any
particular

purpose
of
purchasing
squid.................................................................................................................... 21

2.)
Any
alleged
particular
purpose
was
not
crystal
clear
or
recognisable
to
REPONDENT 23

3.)
RESPONDENT
owed
CLAIMANT
no
duty
of
good
faith
to
inform
CLAIMANT
of
the

Supplied
Squid’s
unsuitability
as
fishing
bait ................................................................................... 24

4.)
It
was
unreasonable
for
CLAIMANT
to
rely
on
RESPONDENT’s
skill
and
judgment. ...... 24

i.)
CLAIMANT
did
not
rely
on
RESPONDENT’s
skill
and
judgement.......................................................... 25

ii)
It
was
unreasonable
for
CLAIMANT
to
rely
on
RESPONDENT’s
skill
and
judgement.................. 25

E.) ‘Fit for Human Consumption’ is a contractual description which RESPONDENT
conformed to............................................................................................................................... 25

F.) RESPONDENT was not required to deliver squid which conform to the sample provided 26

1.)
Displacement
due
to
new
agreement
between
RESPONDENT
and
CLAIMANT ................ 26

2.)
Displacement
due
to
different
contractual
description
from
the
sample............................. 27

G.) Consequently, CLAIMANT is Not Entitled to Avoid the Contract .......................................... 27


IV.) Claimant failed to properly notify the Respondent of non-conformity of the squid and
therefore looses its right to rely on the non-conformity...................................................................... 27

IV
 A.) CLAIMANT failed to discharge its duty to conduct a reasonable examination under Art. 3828

1.)
Art.
38(3)
does
not
apply ........................................................................................................................... 28

i.)
No
redispatch
occurred
after
delivery
of
the
squid
to
Claimant............................................................ 29

ii.)
Claimant
had
a
reasonable
opportunity
to
examine
the
goods
between
delivery
and
resale. 29

2.)
Therefore,
Art.
38(1)
applies
and
the
examination
carried
out
by
CLAIMANT
on
delivery

was
unreasonable ......................................................................................................................................... 30

B.) Notice given by CLAIMANT to RESPONDENT failed to comply with Art. 39 ........................... 31

2.)
Accordingly,
time
begins
to
run
under
Art.
39
from
the
moment
of
the
expiration
of

the
period
for
examination
on
delivery............................................................................................... 32

3.)
CLAIMANT
failed
to
give
notice
within
a
reasonable
time ............................................................. 33

i.)
The
objectively
assessed
‘reasonable
period’
under
Art.
39(1)
excludes
CLAIMANT’S
notice
of

16
August
2008.......................................................................................................................................................... 33

(ii)
The
subjectively
assessed
‘reasonable
period’
under
Art.
39(1)
excludes
CLAIMANT’S
notice

of
16
August
2008..................................................................................................................................................... 34

4.)
CLAIMANT’s
‘alternative’
Argument..................................................................................................... 34


Request for Relief ................................................................................................................................... 34


Certificate ............................................................................................................................................. XIX


V
Index of Abbreviations

¶ / ¶¶ Paragraph / Paragraphs

% Percentage

Art. Article(s)

BFTB Bulgarian Foreign Trade Bank

c.f. Confer [compare]

CAM Chamber of Arbitration of Milan

CISG United Nations Convention on Contracts for the International

Sale of Goods

Cl. Claimant

Co. Corporation

Clar. Clarification

CLOUT Case Law on UNCITRAL Texts

Ct. Court

DIFC Dubai International Financial Centre

DIS Deutsches Institution für Schiedsgerichtsbarkeit (German

Institution of Arbitration)

ed(s) editor(s)

e.g. exemplum gratia [for example]

Ex. Ex.

Explan. Explanatory

f. / ff. following page / following pages

GmbH Gesellschaft mit beschränkter Haftung [limited]

HKIAC Hong Kong International Arbitration Center

KLRCA Kuala Lumpu Regional Centre for Arbitration

IBA International Bar Association

VI
IBA Guidelines IBA Guidelines on Conflicts of Interest in International
Arbitration

ICC International Chamber of Commerce

Id. Idem

Inc. Incorporated

INS Immigration and Naturalization Service

Int. International

LLP Limited Liability Partnership

Ltd. Limited

Memo. Memorandum

Mr. Mister

New York Convention Convention on the Recognition and Enforcement of Foreign

Arbitral Awards

N Marginal number

No(s). Number(s)

OGH Oberster Gerichtshof [Supreme Court of Austria]

OLG Oberlandesgericht [Court of Appeal, Germany]

Ord. Order

p. page(s)

Proc. Procedural

Prot. Protocol

Re. Respondent

Req. Request

S.A. Société Anonyme (Corporation)

S.r.l. Società a responsabilità limitata (Private Limited Company)

Sect. Section

Sep September

VII
SIAC Singapore International Arbitration Centre

St. Statement

Subpara. Subparagraph

the Case Eighteenth Annual Willem C. Vis International Commercial

Arbitration Moot case document.

the Rules Rules of the Chamber of Arbitration of Milan

UN United Nations

UNCITRAL United Nations Commission on International Trade Law

UNMICA United Nations UNMICA on International Commercial

Arbitration (with amendments as adopted in 2006)

U.S. United States of America

Vol. Volume

vs. Versus

VIII
Index of Authorities

BIANCA, C M Bianca-Bonell Commentary on the International Sales

LawGiuffrè, Milan (1987)
Cited as: BIANCA

BORN, GARY B. International Commercial Arbitration

Kluwer Law International 2009
Cited as: BORN

CISG ADVISORY CISG-AC Opinion no 2

COUNCIL Examination of the Goods and Notice of Non-Conformity:
Articles 38 and 39
7 June 2004
Rapporteur: Professor Eric E. Bergsten, Emeritus, Pace
University School of Law, NY
Cited as: CISG ADVISORY COUNCIL

ENDERLEIN, FRITZ International Sale of Goods: Dubrovnik Lectures, Oceana

(1996) Petar Sarcevic & Paul Volken eds
Oceana Publications
Cited As: ENDERLEIN

GAILLARD, EMMANUEL / Fouchard Gaillard Goldman on International Commercial

SAVAGE, JHON Arbitration
Kluwer Law International 1999
Cited as: GAILLARD

GILL, JUDITH The IBA Conflicts Guidelines – Who is using them and how?
E- news archive of ibanet.org
Cited as: GILL

HONNOLD, JOHN Uniform Law for International Sales Under the 1980 United
Nations Convention, 3d ed., Kluwer Law International (1999)
HONNOLD, JOHN Uniform
101 Law for International Sales Under the 1980 United
Nations
Cited as:Convention,
HONNOLDIX 3d ed., Kluwer Law International (1999)
1999
101
Cited as: HONNOLD 1999
HUBER, PETER Some Introductory Remarks on the CISG, Internationales
Handelsrecht (6/2006) 228-238
Cited as : HUBER

INTERNATIONAL LAW Confidentiality in International Commercial Arbitration, The

ASSOCIATION Hague Conference (2010).
Cited as: INT. LAW ASSOCIATION


LEW / MISTELLIS / KRÖLL Comparative International Commercial Arbitration, Kluwer,
2003.
Cited as: LEW & MISTELIS


LIGETI / KATALIN Confidentiality of awards in international commercial
arbitration, LL.M. Thesis, Central European University,
Budapest, 2010.
Cited as: LIGETI


LOOKOFSKY, JOSEPH The 1980 United Nations Convention on Contracts
for the International Sale of Goods: Article 38 Examination of
Goods, International Encyclopaedia of Laws - Contracts,
Suppl. 29 (December 2000) pp1-192
Cited as: LOOKOFSKY

NAGY, IMRE Conformity of Goods under the Vienna Convention on

Contracts for the International Sale of Goods
Balazs and Hollow Law Firm,, Budapest 2007
Available at:
<http://www.consulegis.com/fileadmin/.../Dr_T_M_Award-
Dr_Imre_Nagy.pdf>.
Cited as: NAGY

ORLANDI, GIOVANUCCI , Ethics for International Arbitrators

CHIARA 67
UMKC
L.
Rev.
93,
(*109)/
Lexis
Cited as: ORLANDI

RAJOO / SUNDRA Privacy and Confidentiality in Arbitration, 2003.

X
Available at http://sundrarajoo.com/wp-
content/uploads/2009/09/privacy_1_.pdf
REDFERN / HUNTER Law and Practice of International Commercial Arbitration, 4th
Edition, Thompson, London.
Cited as: HUNTER


REDFERN, ALAN Law and Practice of International Commercial Arbitration, 4th
HUNTER, MARTIN edition
Sweet & Maxwell, London 2004
Cited as: HUNTER

RENNA, GIOVANNINI / The Italian Experience of Arbitration and the arbitration rules
RENNA, TERESA / RENNA, of the Chamber of Arbitration of Milan: A pararell view
VALENTINA (2010).
Cited as: GIOVANNINI


SCHLECHTRIEM, PETER Commentary on the UN Convention on the International Sale
of Goods (CISG)
Oxford University Press, 1998
Cited as: SCHLECHTRIEM

SCHLECHTRIEM, PETER Galston & Smit ed., International Sales: The United Nations
Convention on Contracts for the International Sale of Goods,
Matthew Bender (1984)
Cited As: SCHLECHTRIEM 1984

SCHLECHTRIEM, PETER The Seller’s Obligations Under the United Nations Convention
on Contracts for the International Sale of Goods
Manz, Vienna: 1986
Available at:
<http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html>.
Cited as: SCHLECHTRIEM, 1986

SCHLECHTRIEM, PETER 50 Years of the Bundesgerichtshof (Federal Supreme Court of

Germany): A Celebration Anthology from the Academic
Community.
SCHLECHTRIEM, PETER <http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem3.html>
50 Years of the Bundesgerichtshof (Federal Supreme Court of
Cited as: SCHLECHTRIEM-50
Germany): XI
A Celebration YEARS OFfrom
Anthology THE the Academic
Bundesgerichtshof
Community.
SCHWENZER, I ‘The Noble Month (Articles 38, 39 CISG); The Story Behind
the Scenery’
European Journal of Law Reform, Vol. VII, no. 3/4, pp 353-
366
Eleven International Publishing 2006
Cited as: SCHWENZER

SECRETARIAT Text of Secretariat Commentary on article 33 of the 1978

COMMENTARY Draft, draft counterpart of CISG article 35
Cited as: SECRETARIAT COMMENTARY

UNCITRAL DIGEST 2008 UNCITRAL Digest of case law on the United Nations
Convention on the International Sale of Goods
http://www.cisg.law.pace.edu/cisg/text/digest-art-39.html
Cited as: UNCITRAL DIGEST

UNCITRAL DIGEST OF UNCITRAL Digest of Case Law on the United Nations

CASE LAW Convention on the International Sale of Goods

available at: http://www.cisg.law.pace.edu/cisg/text/digest-art-

35.html
Cited as: UNCITRAL Digest Art. 35

ZEIGEL, S. JACOB Report to the Uniform Law Conference of Canada on

Convention on Contracts for the International Sale of Goods
(1981).
available at:
<http://www/cisg.law.pace.edu/cisg/text/ziegel35.html>
cited as: ZIEGEL

ZELLER, BRUNO Four Corners: The Methodology for Interpretation and

Application of the UN Convention on Contracts for the
International Sale of Goods (May 2003)
Cited as : ZELLER

XII
XIII
Index of Cases

Australia

HIGH COURT Esso Australia Res. Ltd. v. Plowman

(1995) 128 A.L.R 391, 183 C.L.R. 10 (Austl.).
Cited as: Esso. v. Plowman

Austria

OBERSTER GERICHTSHOF OGH, 14 January 2002, CISG-online 643

Cited as: COOLING SYSTEM CASE

Denmark

SØ OG Sø og Handelsretten, 31 January 2002

HANDELSRETTEN Dr. S. Sergueev Handelsagentur vs. DAT SCHAUB A/S

http://cisgw3.law.pace.edu/cases/020131d1.html

Cited as: DR.S.SERGUEEV

ENGLAND

ENGLISH COURT OF Ali Shipping Corporation v “Shipyard Trogir”( 19th

APPEAL (CIVIL DIVISION) December 1997), APP.L.R. 12/19, All ER (D) 128.
Cited as: Ali v Shipyard


ROYAL COURTS OF John Foster Emmott v Michael Wilson & Partners Ltd [2008]
JUSTICE EWCA Civ 184; WLR (D) 82. 

Cited as: Emmott v. Michael Wilson & Partners




XIV
HOUSE OF LORDS Liverpool City Council v. Irwin (A.P.) and another (A.P.),
HL/PO/JU/4/3/1289, [1977] AC 239

Cited as: Liverpool City Council v Irwin

HOUSE OF LORDS Lister v Romford Ice and Cold Storage Co Ltd, [1956] AC
555.
Cited as: Lister v Romford Ice


HIGH COURT Hassneh Insurance Co of Israel & Ors v Steuart J Mew
[1993] 2 Lloyd’s Rep 243 .
Cited as: Hassneh Insurance Co of Israel v Mew


ENGLISH COURT OF Dolling-Baker v Merrett [1991] 2 All ER 890, [1990] 1 WLR
APPEAL 1205 at 1213, CA
Cited as: Dolling Baker v Merrett & Another



France

COUR DE CASSATION Aita v. Ojjeh, Judgment of 18 February 1986, reprinted in

1986 Revue de l’arbitage 583
Cited as: Aita v. Ojjeh



COUR DE CASSATION Cour de Cassation, 26 May 1999, Schreiber v. Thermo

Dynamique, http://cisgw3.law.pace.edu/cases/990526f1.html
Cited as: SCHREIBER

COUR D’APPEL DE PARIS Cour d’Appel de Paris, 11 February 1988

Gas del Estado v. Ecofisa et ETPM
In : Revue de l’ arbitrage – 1989, p. 880, 683
Cited as: Gas del Estado v. Ecofisa

COUR DE CASSATION Cour de Cassation, 13 April 1972

Consorts Ury v. Galèries Lafayette

XV
 in: Revue de l’arbitrage – 1975 p. 235
Cited as: Ury v. Galèries Lafayette

TRIBUNAL DE GRAND Tribunal de Grand Instance de Paris, 28 March 1985

INSTANCE DE PARIS Raffineries de pétrole d'Homs et de Banias v. Chambre de
Commerce Internationale
in: Revue de l’arbitrage – 1985, 141, 1st decision
Cited as: Raffineries de pétrole v. Chambre de Commerce
International

Germany

BUNDESGERICHTSHOF Bundesgerichtshof [German Supreme Court], 8 March 1995

CLOUT No. 123, VIII ZR 159/94
Cited as: New Zealand Mussels

LANDGERICHT Landgericht [District Court], 15 September 1994

Case No: 52 S 247/94
CISG-online 399
Cited as: Shoes

OLG KOBLENZ Appellate Court Koblenz, 18 November 1999,

http://cisgw3.law.pace.edu/cases/991118g1.html

Cited as: FIBREGLASS CASE

OLG KÖLN Appellate Court Köln , 22 February 1994,

http://cisgw3.law.pace.edu/cases/940222g1.html
Cited as: RARE HARDWOOD CASE

OLG SAARBRÜCKEN Appellate Court Saarbrücken, 3 June 1998,

http://cisgw3.law.pace.edu/cases/980603g1.html
Cited as: FLOWERS CASE

XVI
LG MÜNCHEN Landgericht (District Court) München, 27 February 2002.
(District Court)
<http://cisgw3.law.pace.edu/cases/020227g1.html>

[cited: München Globes]

Netherlands

CCI AWARD NO. 2319/2002 Netherlands Arbitration Institute, 15 October 2002

CLOUT No. 720
Cited as: Condensate Crude Oil

RB ROERMOND Rb Roermond, 19 December 1991

Fallini Stefano vs. Foodik
http://cisgw3.law.pace.edu/cases/911219n1.html
Cited as: FALLINI STEFANO VS. FOODIK

Switzerland

OG DES KANTONS LUZERN OG des Kantons Luzern, 8 January 1997

http://cisgw3.law.pace.edu/cases/970108s1.html
Cites as: BLOOD INFUSION CASE

United States of America

COURT OF APPEAL, Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica

SECOND CIRCUIT Inc., 31 March 2005

No. 04-0288-cv, Lexis 5157

Cited as: Encyclopaedia Universalis S.A. v. Encyclopaedia
Britannica

COURT OF APPEAL, Baravati v. Josephthal, Lyon & Ross, Inc., 1 July 1994

XVII
SEVEN CIRCUIT No. 93-3647 Lexis 16587
Cited as: Baravati v. Josephthal

CALIFORNIA NORTHERN TIG Insurance Company v. Lloyd's Syndicate Number 1861

DISTRICT COURT et al, Case No. 3:2006cv00047, January 6, 2006.
Cited as: Insurance Co. v. Lloyd’s Syndicate

SOUTHERN DISTRICT OF
Global Reinsurance Corporation of America v. Argonaut

NEW YORK. DISTRICT Insurance Company, 2009 WL 928014 (S.D.N.Y. 2009).

COURT Cited as: Global Reins. Corp. v. Argonaut Ins. Co


XVIII
Index of Awards

ICC

ICC INT`L COURT OF August 1999, 9083, CISG-online 706

ARBITRATION
Cited as: BOOKS CASE

XIX
Summary of Arguments

1. I. The Arbitral Tribunal has no authority to proceed with arbitration. RESPONDENT

affirm first of all that the Arbitration Rules of 2004 should be applied, therefore the non
confirmation of arbitrators by the Secretariat should depend upon a statement of independence
with “considerable qualifications” [Art. 19.4, Rules 2004] (A). Secondly the eventual conflict
of interest of the presiding arbitrator has been waived by the parties. (B) In fact under the
UNMICA the requirements of independence and impartiality can be waived by the parties (1),
the IBA Guidelines are have substantial authority on the CAM (2)(i), under the IBA
Guidelines the relationship between Mr. Y and Mr. Z shall be subsumed under the Orange
List (ii) or alternatively shall be subsumed under the waivable Red List, which requirements
to waive the conflict of interest at steak where met (iii). Thirdly the parties agreement should
prevail on the authority of the Arbitral Council (C) as the appointment of arbitrators has a
contractual nature (1), and the institution organizing the arbitration cannot disregard the
common intention of the parties (2). Finally as the arbitration agreement was not respected by
the CAM any award that the tribunal might make could be set aside in the courts of Danubia
under article 34(2(a)(iv) of the UNMICA or it could be refused enforcement under article
V.1.d of the New York Convention (D).

2. II. CLAIMANT breached its duty of confidentiality. CLAIMANT breached its duty of
confidentiality set forth in Art. 8 of the 2010 Rules firstly, because the arbitration proceedings
had commenced when it disclosed the existence of the arbitration and therefore the parties to
the arbitration were bound by a duty of confidentiality. Secondly, confidentiality covers the
information concerning the existence of the arbitration proceeding. Furthermore, it was not
reasonably necessary for CLAIMANT to disclose its entry into arbitration against
RESPONDENT to save its damaged reputation as a right to goodwill. Moreover, disclosure
imposes a harm upon RESPONDENT’s reputation in the fishing market. Finally, the Tribunal
is authorized to order claimant to refrain from divulging the existence of the arbitration and
such an order would be fully enforceable.

3. III. RESPONDENT did not breach its obligation under Article 35 CISG. RESPONDENT
satisfied article 35(1) by delivering squid, which conformed to the express descriptions in the
contract. The contract was for “Grade A”, “fit for human consumption” [Cl. Ex. No. 4] and
“unsized” squid [St. of Defense ¶12], which RESPODENT dutifully performed by delivering
squid which conformed to all the express descriptions in the contract.

1
4. Moreover, article 35(2) does not apply to the present dispute because firstly there is already
an express or implied agreement formed between RESPONDENT and CLAIMANT. Even if
the tribunal does not find such an agreement, article 35(2) is still inapplicable because
CLAIMANT did not communicate its particular purpose to RESPONDNET in a crystal-clear
and recognizable manner. The term ‘best results’ [Cl. Ex. No. 2] is too wide and vague,
hence RESPONDENT would not have known what was meant or intended by ‘best results’.

5. RESPODENT was also not obliged to deliver squid that conform to the initial sample
presented to CLAIMANT. Firstly, the obligation is displaced by a new contractual agreement
between RESPONDENT and CLAIMANT when CLAIMANT agreed to purchase 2007/2008
batch of squid [Cl. Ex. No. 4] as opposed to the initial 2007 squid as represented by the
sample [St. of Defense ¶12]. Secondly, 2007/2008 squid [Cl. Ex. No. 4] is a different
contractual description from 2007 squid sample [St. of Defense ¶12], thus displacing
RESPONDENT’s obligation to deliver goods conforming to initial sample held out to buyer.

6. IV. CLAIMANT failed to properly notify the Respondent of non-conformity of the squid
and therefore looses its right to rely on the non-conformity. RESPONDENT rejects
CLAIMANT’S contention that Art. 38(3) applied to the instant case and argues instead that Art.
38(1) imposed a duty on CLAIMANT to undertake a reasonable examination on delivery. Had
such an examination been conducted, the defective nature of the squid would have been
discovered. Since time begins to run under Art. 39 from the moment when CLAIMANT ought
to have discovered the non-conformity, the notice given on 16th August was not given within
a reasonable time. Accordingly, CLAIMANT looses its right to claim for the nonconformity.

PROCEDURAL ISSUES

I. The arbitral tribunal lacks of jurisdiction

As requested in the Amendment to the Statement of Defense [Amendment to St. of Defense,

24 September] RESPONDENT contests the jurisdiction of the arbitral tribunal as it has not
been constituted in accordance with the arbitration agreement. In fact the two party- appointed
arbitrator appointed twice Mr. Malcom Y as the President of the tribunal and the Arbitral
Council refused twice to confirm him notwithstanding the fact that both parties waived their
right to object to his appointment. RESPONDENT affirm first of all that the Arbitration Rules
of 2004 should be applied, therefore the non confirmation of arbitrators by the Secretariat
should depend upon a statement of independence with “considerable qualifications” [Art.

2
 19.4, Rules 2004] (A). Secondly the eventual conflict of interest of the presiding arbitrator has
been waived by the parties. (B) In fact under the UNMICA the requirements of independence
and impartiality can be waived by the parties (1), the IBA Guidelines are have substantial
authority on the CAM (2)(i), under the IBA Guidelines the relationship between Mr. Y and
Mr. Z shall be subsumed under the Orange List (ii) or alternatively shall be subsumed under
the waivable Red List, which requirements to waive the conflict of interest at steak where met
(iii). Thirdly the parties agreement should prevail on the authority of the Arbitral Council (C)
as the appointment of arbitrators has a contractual nature (1), and the institution organizing
the arbitration cannot disregard the common intention of the parties (2). Finally as the
arbitration agreement was not respected by the CAM any award that the tribunal might make
could be set aside in the courts of Danubia under article 34(2(a)(iv) of the UNMICA or it
could be refused enforcement under article V.1.d of the New York Convention (D).

A.) Aribitration Rules 2004 and not Arbitration Rules 2010 shall be applied to the case

Art. 39.2 of the 2010 Rules provides that: “Unless otherwise agreed by the parties, these
Rules shall apply to arbitrations commenced after the date on which the Rules entered into
force” and the arbitral proceedings commence on the date on which a request for that dispute
to be referred to arbitration is received by the RESPONDENT [CAM Arbitration Rules Art.
21].The present arbitration commenced after the date in which the 2010 Rules entered into
force [Art. 39.1 of the Rules; Prot. No. 9410/1, p. 22]. Nevertheless, when concluding the
contract in 2008 [Cl. Ex. No. 4] the parties could not have agreed on the 2010 Rules as these
did not exist at this point in time.

In the interpretation of the relevant procedural provisions, specifically Article 39.2 of the
2010 Rules, regard is to be had to the observance of good faith [CAM Arbitration Rules Art.
2A (1)]. As the arbitral agreement was agreed on May 2008 [Cl. Ex. No. 4] when the Rules
applicable were those of the 2004 edition, CLAIMANT and RESPONDENT contracted in
good faith in such manner they could not have been unaware that the statement contained in
the arbitral agreement to resort to the Rules referred to the 2004 edition, as it dealt with the
applicable procedural rules for arbitration at the time the arbitral agreement was concluded
between the Parties. Moreover, as a matter of legal certainty, it would have been unreasonable
for the parties to subject themselves to a future set of rules of unknown content.

B) The situation disclosed by Mr. Y is waivable by the parties

7. An eventual conflict of interest of the presiding arbitrator has been waived by the parties. (C)
In fact under the UNMICA the requirements of independence and impartiality can be waived

3
 by the parties (1)(i), under the IBA Guidelines the relationship between Mr. Y and Mr. Z shall
be subsumed under the Orange List (ii) or alternatively shall be subsumed under the waivable
Red List, which requirements to waive the conflict of interest at steak where met (iii).

1.) Under UNMICA the independence and impartiality of the arbitrators can be waived the
parties

8. Under the UNMICA challenges related to impartiality or independence have to be raised in

the time limits provided in the institutional arbitration rules chosen in the parties agreement,
or failing institutional rules within 15 days from the awareness of the facts that are may rise
justifiable doubts as to the parties independence and impartiality [Art. 13(2) UNMICA].
When a party is aware of non compliance with a provision “from which the parties may
derogate” of the UNMICA and yet he carries on the arbitration without raising any objections
in the time limit provided “shall be deemed to have waived his right to object” [Art. 4
UNMICA]. So if one party fails to challenge the arbitrators on independence and impartiality within
the time limit given by the arbitral institution the objection is considered to be waived with the
consequence of a preclusion to the possibility to seek annulment of the award on this ground [BORN
p. 2614]. Under the Rules of the CAM the mechanism to challenge an arbitrator for lack of
independence and impartiality foresee that each party have 10 days after receiving the
statement of defense to file a reasoned challenge on which the Arbitral Tribunal decide with
the consequence of a confirmation or not confirmation of the arbitrators [Art. 20 the Rules].
Since the parties, having being noticed all the circumstances that may be ground for challenge
the arbitrators, have failed to rise the arbitrators independence and impartiality issue through
the institutional mechanism they should be considered to have waived their right to claim the
annulment as well as resist enforcement of the award on this ground so that any attack to the
award would be barred. [BORN p. 1557 /HUNTER ¶ 4- 76].
9. If the arbitrators’ independence and impartiality is susceptible to be waived trough a failure to
raise an objection in the time limits (see supra) a fortiori the parties are able to waive
arbitrators’ independence and impartiality with an expression of will. In the case both
CLAIMANT and RESPONDENT explicitly waived their right to object to Mr. Y’s statement
of independence [Langweiler
 to
 Chamber
 of
 Arbitration,
 26
 July
 2010]. In particular
RESPONDENT, by waiving his right to object to Mr. Y’s appointment not only have declared
that he had no doubts about Mr. Y’s independence and impartiality given his well known
reputation but also indirectly reaffirmed his will to have him as presiding arbitrator in the
proceeding.

4
2) Under the IBA Guidelines

10. Under the IBA Guidelines, which are followed by the CAM (i), the relationship between Mr.
Y and Mr. Z shall be subsumed under the Orange List (ii) or alternatively shall be subsumed
under the waivable Red List, which requirements to waive the conflict of interest at steak
where met (iii).

i.) Relevance of the IBA Guidelines

Art. 18 and 19 of the Rules set out requirements of independence and impartiality for any
appointed arbitrators. These provisions require a statement of independence by any arbitrator
appointed by the parties or by the co- arbitrators. However the Rules do not have any
provision regarding the possibility of the parties to waive the requirements of independence
and impartiality of arbitrators.

The IBA Guidelines apply in decision about impartiality and independence of arbitrators. In
the communications sent by the Secretariat to the appointed arbitrators the CAM requires
arbitrators to consider the IBA Guidelines to file their St. of Defense [Prot. No. 9410/3, Prot.
No. 9410/5 & Prot. No.9410/8]. Moreover notwithstanding the fact that the CAM declare the
IBA Guidelines not formally binding on the Arbitral Tribunal decision over the confirmation
of Mr. Y [Prot. No. 9410/5], the CAM in practice expressly rely upon the Guidelines in
administering international arbitration [GILL p. 65]. Also CLAIMANT agree upon the
authority of the IBA Guidelines on the arbitrations held by the CAM [Memorandum for
Claimant, Charles University of Prague, p.4].

ii.) The relationship between Mr. Y and Mr. Z shall be subsumed under the orange list of the
IBA Guidelines

The relationship between Mr. Malcolm Y and Mr. Samuel Z shall be subsumed under the
Orange List of the IBA Guidelines. According to Art. 3.2.1 it is included in the orange list the
situation where the arbitrator’s law firm renders services to one of the parties “without
creating a significant commercial relationship and without the involvement of the arbitrator”.
In the case, according to Mr. Y’s Statement of Independence Mr. Z is only advising
CLAIMANT on the matter of this arbitral dispute but he does not represent him in the arbitral
proceeding [Encl.
 Mr.
 Y
 to
 Chamber
 of
 Arbitration,
 19
 July
 2010]. In fact CLAIMANT’s
counsel in the dispute is Horace
 Fasttrack,
 a
 lawyer
 from
 Capital
 City.
 Given
 that
 the
 firm

Wise,
 Strong
 &
 Clever
 is
 only
 giving
 legal
 advice
 and
 that
 it
 is
 not
 assisting
 CLAIMANT
 in

other
disputes,
circumstance
that
otherwise
it
would
be
disclosed
by
Mr.
Y,
it
is
possible
to

affirm
 the
 arbitrator’s
 law
 firm
 renders
 services
 to
 the
 CLAIMANT
 without
 a
 significant


5
 commercial
relationship
between
CLAIMANT
and
the
law
firm.
Moreover
as
Mr.
Y
have
had

no
 previous
 contact
 with
 Mr.
 Z
 on
 the
 case
 and
 he
 knew
 nothing
 about
 it
 before
 his

appointment
[Encl.
Mr.
Y
to
Chamber
of
Arbitration,
19
July
2010],
it
is
possible
to
infer
that

there
 is
 not
 an
 involvement
 of
 Mr.
 Y
 in
 the
 services
 rendered
 by
 his
 law
 firm
 to
 the

CLAIMANT.
 Therefore
 the
 relationship
 between
 Mr.
 Y
 and
 Mr.
 Z
 shall
 be
 subsumed
 under

the
Orange
List
according
with
Art.
3.2.1.
of
the
IBA
Guidelines.


iii.) Otherwise the relationship between Mr. Y and Mr. Z shall be subsumed under the waivable
Red List of the IBA Guidelines

Alternatively to point ii) RESPONDENT states that the relationship between Mr. Y and Mr.
Z, if not subsumable under the Orange List, may be subsumed under the waivable Red List, as
RESPONDENT have previously affirmed [Langweiler to Chamber of Arbitration, 26 July
2010]. The waivable Red List contains the situation where an arbitrator is a lawyer in the
same law firm as the counsel of one of the parties [Art 2.3.3, IBA Guidelines]. In fact Mr. Y
is a partner in the Danubian office of the firm Wise, Strong & Clever and Mr. Z is a partner in
the Capital City’s office of the same law firm. Although Mr. Z is not counsel but a mere legal
advisor of CLAIMANT it is possible to regard their relationship as fitting the provision of
Art. 2.3.3. A contrario it is possible to affirm that contrary to CLAIMANT allegation
[Memorandum for Claimant, Charles University of Prague, p.4] the relationship between Mr.
Y and Mr. Z is not subsumable under the non- waivable Red List as it is not possible to infer
that Mr. Z has a “significant financial interest in the outcome of the case” [Art 1.3, IBA
Guidelines]. First of all Mr. Y and Mr. Z are partner of two different office in the firm Wise,
Strong & Clever, secondly Mr. Z is merely advising CLAIMANT, finally a law firm like
Wise. Strong & Clever, with 150 employees in 6 different office around the world have not a
significant financial interest in the outcome of the arbitration at stake.

The IBA Guidelines require that the situations of conflict of interest included in the waivable
Red List are waivable by the parties when two conditions are met. The parties, the other
arbitrators and the arbitral institution need to have “full knowledge” of the eventual conflict of
interest and all parties have to expressly agree on the appointment of the arbitrator in spite of
the possible conflict of interest [General Standard I(4)(c)(i)(ii), IBA Guidelines]. In the case
both requirements have been fulfilled as Mr. Y, in the Statement of Independence [Encl. Mr.
Y to Chamber of Arbitration, 19 July 2010] , informed all the interested subjects about the
possible conflict of interest and CLAIMANT and RESPONDENT have explicitly agreed on
the appointment of Mr. Y as the presiding arbitrator [Langweiler to Chamber of Arbitration,
26 July 2010]. Thirdly the agreement of the parties expressed in the waiver of Mr. Y’s

6
 eventual conflict of interest should prevail on the authority of the Arbitral Council (D) as the
appointment of arbitrators has a contractual nature (1)

C) The agreement of the parties upon Mr. Y as president of the Arbitral Tribunal should
prevail over his non- confirmation by the Arbitration Council

11. Since the appointment of arbitrators has a contractual nature, in waiving the conflict of
interest relating to Mr. Y appointment the parties have expressed a new common will that
should be respected as well as the original arbitration agreement. In fact the appointment of
arbitrator has a contractual nature (1) and the agreement of the parties upon the appointment
of Mr. Y as presiding arbitrator cannot be disregarded by the Arbitral Council (2).

1.) The appointment of arbitrators has a contractual nature

The parties freedom of choice is the only substantive rule governing the appointment if
arbitrators [GAILLARD/SAVAGE p. 453]. This is one of the core principles of the arbitral
proceeding. First of all according to the UNMICA the parties are “free to determine the
number of arbitrators” [Art. 10.2 UNMICA] and they are “free to agree on a procedure of
appointing the arbitrator or arbitrators” [Art. 11.2 UNMICA]. Moreover under the New York
convention an award may be refused recognition or enforcement if it is found that “the
composition of the arbitral authority (…) was not in accordance with the agreement of the
parties, or , failing such agreement, was not in accordance with the law of the country where
the arbitration tool place” [Art V(1)(d)]. Therefore in any international arbitration the parties
are free to agree upon the appointment of arbitrators or to decide for a mechanism to appoint
them. The appointment of arbitrators has an “exclusively contractual nature” and this
principle have often been highlighted by National Courts. For instance in Ury v. Galery
Lafayette case the Cour de Cassation held that the appointment of each arbitrator (…) results
from the common intention of the parties” [GILLARD/SAVAGE p.461]. Moreover as judge
Posner have affirmed “Short of authorizing trial by battle or ordeal or, more doubtfully, by a
panel of three monkeys, parties can stipulate to whatever procedures they want to govern the
arbitration of their disputes; parties are as free to specify idiosyncratic terms of arbitration as
they are to specify any other terms in their contract” [Baravati v. Josephthal]. In accordance
with the contractual basis of international arbitration national courts, when facing problems
concerning the constitution of the arbitral tribunal, will not disregard the common intention of
the parties: if they have to appoint an arbitrator they will try to take into considerations the
will or the wishes of the parties and in a recourse to set aside the award they will not set aside
an award when made in accordance with the parties agreement [GILLARD/SAVAGE p.462].

7
 In the arbitration close contained in the contract between CLAIMANT and RESPONDENT it
is submitted that “All disputes arising out of or related to this contract shall be settled by
arbitration under the Rules of the Chamber of Arbitration of Milan (the Rules), by three
arbitrators. Each party shall appoint one arbitrator and the two arbitrators shall appoint the
presiding arbitrator.” [Cl. Ex. No. 4]. In the arbitration clause hereto the parties express the
common intention to have three arbitrators and choose a specific method to appoint them,
they also deicide to submit themselves to the Rules of the CAM.

2) The Arbitral Council has disregarded the common intention of the parties to waive Mr.
Y’s conflict of interest

12. Given
 that
 the
 parties
 are
 free
 to
 consider
 an
 arbitrator
 able
 to
 adjudicate
 the
 dispute

despite
the
circumstances
that
could
give
an
appearance
of
bias
(ORLANDI
¶
109),
the

non
 confirmation
 by
 the
 Arbitral
 Council
 of
 the
 chairman
 appointed
 by
 co‐
 arbitrators

violate
 the
 agreement
 of
 the
 parties.
 Notwithstanding
 the
 fact
 that
 the
 parties
 in
 the

arbitration
clause
submitted
themselves
to
the
Rules
of
the
CAM
[Claimant’s Exhibit No.
4], the waiver of apparent bias of Mr. Y constitute a new form of agreement of the parties. If
on one hand the Arbitral Council decides on the arbitrators’ confirmation when they file a
statement of independence, with “considerable qualifications” disclosing facts or
circumstances about their impartiality and independence [Art 19.4 CAM Rules], on the other
hand “The purpose of disclosure is to allow the parties to judge whether or not they agree
with the evaluation of the arbitrator and, if they so wish, to explore the situation further”.
[IBA Guidelines, Explanatory note to (3)(b)]. Any doubt about arbitrators independence and
impartiality may be healed by the parties’ will. The parties have, directly or indirectly,
expressed the intention to have Mr. Y as president of the arbitral tribunal three times: when
the co- arbitrators firstly appointed him [Ms.
Arbitrator
1
to
Chamber
of
Arbitration,
15
July

2010], when both parties waived their right to object to his appointment [Langweiler to
Chamber of Arbitration, 26 July 2010] and when the co- arbitrators re- appointed Mr. Y
affirming his competence, impartiality and independence [Ms.
 Arbitrator
 1
 to
 Chamber
 of

Arbitration
and
both
parties,
13
August
2010]. Therefore with the non confirmation of Mr. Y
the CAM have violated the parties’ agreement.

D) Any Award rendered By The Tribunal Runs The Risk of Non-Enforceability

13. Under the UNICAM [Art. 34(a)(iv)] and the New York Convention [Art.V(1)(d)] a ground to
set aside the award and to refuse or defer the recognition or enforcement of the award is when
the composition of the arbitral tribunal (arbitral authority in the New York Convention) or the

8
 arbitral procedure was not in accordance with the agreement of the parties. In the case the
composition of the arbitral tribunal was not in accordance with the parties agreement first of
all as the presiding arbitrator has been appointed by the Arbitral Council instead of being
appointed by the co- arbitrators in accordance with the arbitral agreement [Cl. Ex. No. 4].
Secondly because the subsequent agreement if the parties about the confirmation of Mr. Y as
chairman of the Arbitral Tribunal was disregarded by the Arbitral Council. In a similar case
the Court of Appeal of New York held that the award could not be enforced as the Arbitral
Tribunal was improperly composed. In the case as the arbitration agreement required the
parties to disagree upon the appointment of the presiding arbitrator before asking the
Tribunal to appoint one and this requirement was not met the award could not be enforced
(Encyclopaedia Universalis v. Encyclopaedia Britannica). In another case the Paris Court of
Appeals held the award not enforceable because the ICC did not correctly reconstructed the
true intention of the parties. In particular the arbitration agreement affirmed that each party
would appoint an arbitrator, and that the two chosen arbitrators would jointly appoint a third
one. The arbitration had to be governed by the ICC Rules. Since the ICC Court of Arbitration
appointed all three arbitrators despite the defendant objections, according to Art. V(1)(d) of
the New York Convention the constitution of the arbitral tribunal was held to be irregular
(Gas del Estado v. Ecofisa). In the case the Arbitral Tribunal of the CAM have disregarded
the agreement of the parties on the appointment of the presiding arbitrator in the constitution
of the arbitral tribunal, therefore the arbitral tribunal does not have jurisdiction and any award
that it may make will be set aside in the courts of Danubia and will be refused enforcement
elsewhere.

14. To
 conclude
 with
 RESPONDENT
 kindly
 requests
 the
 tribunal
 to
 apply
 the
 Arbitration

Rules
of
2004
(A),
to
reckon
that
the
relationship
between
Mr.
Y
and
Mr.
Z,
disclosed
by

the
 former,
 can
 be
 expressly
 waived
 by
 the
 parties,
 according
 to
 UNMICA
 (1)
 and

according
with
the
IBA
Guidelines
(2)(B),
to
recognize
that
the
non
–
confirmation
of
Mr.

Y
 by
 the
 Arbitral
 Tribunal,
 given
 the
 contractual
 nature
 of
 the
 appointment
 of
 the

arbitrators
 (1),
 have
 disregarded
 the
 agreement
 of
 the
 parties
 expressed
 through
 his

appointment
and
through
the
explicit
waiver
of
any
objection
on
his
appointment
(2)(C).

Therefore
 the
 composition
 of
 the
 Arbitral
 Tribunal
 was
 not
 in
 accordance
 with
 the

parties’
 agreement
 and
 any
 award
 could
 be
 set
 aside
 and
 refused
 enforcement,
 for
 all

these
reasons
RESPONDENT
kindly
requests
the
tribunal
to
dismiss
the
arbitration
for

lack
of
jurisdiction.


9
II. RESPONDENT’S Demand that The Tribual Issues an Order to Respect Confidentiality
Must Be Granted


15. RESPONDENT’s demand to respect confidentiality in the arbitration is ungrounded [St. of

defense ¶8], as: First, an order of confidentiality does not respect the will of the Parties (A)
and second, the Tribunal is unauthorized to order CLAIMANT to refrain from divulging
information related to the arbitration (B). In any event, CLAIMANT is not liable for damages
related to the confidentiality of the proceedings (C).

A.) CLAIMANT Breached The Duty of Confidentiality Related to The Existence of The
Arbitration

16. CLAIMANT was bound by the duty of confidentiality at the time of the interview (1.) and
breached its duty to confidentiality set forth in the 2010 Rules (2.). Moreover, an order of
confidentiality respects the will of the parties (3.) the same way that disclosure imposes a
harm upon RESPONDENT’s reputation (4.).

1.) CLAIMANT was bound by the duty of confidentiality at the time of the interview

17. CLAIMANT sustains that as the interview was given before the request was received by
RESPONDENT the arbitration had not commenced and therefore the rights and duties
contained in the 2010 Rules on confidentiality had not arisen [Cl. Memo. ¶114].

18. There is no need to resort to the complimentary usage of UNCITRAL 1976 Rules cited by
CLAIMANT [Cl. Memo. ¶113] as the Revised 2010 UNCITRAL Arbitration Rules state in
Art. 3.2 that “the Arbitral proceedings shall be deemed to commence on the date on which the
notice of arbitration is received by the respondent”. Likewise, RESPONDENT does not
contest that the UNMICA to which Danubia is a signatory state [Req. for Arbitration, ¶25]
and is the lex arbitri to the arbitration states in its Art. 21 that “the arbitral proceedings[…]
commence on the date on which a request for that dispute to be referred to arbitration is
received by the Respondent.”

19. However, Art. 3b of the UNMICA explicitly provides that written communications are
deemed to have been received on the day they are so delivered. The Request for Arbitration
was sent to the Chamber on 20 May 2010, the interview at issue was given on 22 May 2010
and RESPONDENT received the request for arbitration on 25 May 2010 [St. of Defense ¶4].
Therefore, as the interview at issue was given after the Request for Arbitration was sent to the
Chamber which by means of the Secretariat is later on transmitted to the RESPONDENT, the
fact that Fishing physically received the request for arbitration after the interview was given is

10
 irrelevant as the arbitral proceedings had started on 20 May 2010 and CLAIMANT was
bound by the duty of confidentiality at the time of the interview.

2.) CLAIMANT breached its duty to confidentiality set forth in the 2010 Rules

The 2004 Rules are not applicable to the dispute (i). However, even in the event the 2004
Rules were found applicable, they contain an implied duty to confidentiality to arbitrations
that CLAIMANT failed to comply with (ii). As the applicable rules to this dispute are those of
the 2010 edition (iii) the disclosure of the existence of the arbitration cannot be excused as it
was not a legitimate protection of CLAIMANT’s rights under the exception of Art. 8.

i.) The 2004 Rules are not applicable to the present dispute

CLAIMANT alleges there is no duty of confidentiality under Art. 8 of the 2004 Rules [Cl.
Memo ¶115]; nonetheless, it provides no argument at all on why this set of Rules is even
applicable to the dispute. Art. 39.2 of the 2010 Rules is clear on the fact that “these Rules
apply to arbitrations commenced after the date on which the Rules entered into force” which
in accordance to Art. 39.1 is 1 January 2010. As the arbitration process started on May 2010,
it is clear that the 2004 are not applicable to this dispute. This interpretation is also compatible
with the well established principle in international law of lex posterior derogat priori.

ii.) There is an implied duty to confidentiality in arbitral proceedings that CLAIMANT failed to
comply with
20. Article 8 (1) of the 2004 Rules on confidentiality provides that “the Chamber of Arbitration,
the Arbitral Tribunal and the expert witnesses shall keep all information relating to the
proceedings confidential.” If this Tribunal found the 2004 Rules applicable to the dispute, it is
RESPONDENT’s position that these Rules implicitly provide what the 2010 Rules state in an
explicit fashion: There is an obligation upon the parties to keep arbitrations confidential.
21. It is reasonable to believe there is an obligation to keep arbitrations confidential under Art 8
of the 2004 Rules. Confidentiality has been acknowledged as one of the main reasons why
many parties choose to arbitrate [Aita v. Ojjeh; Esso v. Plowman; Global
 Reins.
 Corp.
 v.

Argonaut
 Ins.
 Co.] and courts have acknowledged a duty of confidentiality as implied in
arbitrations. Hence, except where parties have otherwise agreed, it is now generally accepted
that arbitrations are confidential [Emmott
v.
Michael
Wilson
&
Partners ¶ 105; Aita v. Ojjeh; Ali
v Shipyard; Liverpool City Council v Irwin; Lister v Romford Ice; Hassneh Insurance Co of
Israel v Mew; Dolling Baker v Merrett & Another]. Although there have been cases that deny
an implied confidentiality obligation to arbitrations, their contexts were different to those of

11
 the case at hand. E.g., in the case of Esso v Plowman cited by CLAIMANT [Cl. Memo ¶127]
there was an exception of public interest to confidentiality that is not applicable to this
arbitration.
22. The duty of confidentiality is recognized as an essential corollary to privacy and shall be
implied as a term in the arbitration agreements [RAJOO]. Several arbitration rules specifically
provide that all that takes place at arbitration is confidential [Arbitration Rules of the Kuala
Lumpur Regional Centre for Arbitration, Rule 9; the International Chamber of Commerce
(ICC) Rules, Art 20(7), Appendix 1, Art 6; the American Arbitration Association
International Arbitration Rules, Art 34; the London Court of Arbitration Rules, Art 30; the
China International Economic and Trade Arbitration Commission Arbitration Rules 1995, Art
37; the World Intellectual Property Organization (WIPO) Rules, Art 52, 73, 74, 75; the
Malaysian Institute of Arbitrators Rules (2000 Edn), Rule 35; the Pertubuhan Akitek
Malaysia (PAM) Arbitration Handbook (1994 Edn), Rule 14] and national statutes also
recognize this implied duty of confidentiality (New Zeland, England, France). Therefore, all
information regarding the existence of an arbitration is to be implicitly treated as strictly
confidential.

iii.) The duty of confidentiality arises from the 2010 Rules

23. The confidentiality obligation extends to the mere existence of the arbitration (a) and is
explicitly provided for by the applicable arbitration rules (b).

a.) The confidentiality obligation extends to the mere existence of the arbitration

24. The plaintiff asserts that the scope of the confidentiality duty under the 2010 Rules is not clear
as the term ‘proceedings’ does not cover the existence of the arbitration [Cl. Memo ¶117 &
118]. Contrary to CLAIMANT’s assertion, the first aspect conceivably covered by the
obligation of confidentiality is the existence of the arbitration [INT LAW ASSOCIATION 12;
LEW & MISTELIS ¶¶1-26] as the fact that disputes will not become of public domain is one
of the main advantages of the arbitration over proceedings in court, which are almost always
public.

25. Hence, confidentiality extends to the existence of the arbitration and is compatible with the
aims of the 2010 amendment to make the arbitration process effective and compatible with
the modern trend that establish compulsory confidentiality obligations upon the parties to
arbitration.

b.) The duty of confidentiality is explicitly provided for by the applicable arbitration rules

12
26. CLAIMANT contends that if an arbitration institution intends to establish strict rules on
confidentiality it does so in a clear and explicit fashion [Cl. Memo ¶122]. Nonetheless,
arbitration rules that specify confidentiality obligations for the existence of the arbitration are
rare exceptions [e.g., Scottish Arbitration Rules, Rule 26(4)(a) and (b) which includes “the
dispute” and “the arbitral proceedings” in the definition of “confidential information”, the
WIPO Rules, Article 73(a), which forbid the unilateral disclosure by a party of any
“information concerning the existence of an arbitration”, the HKIAC Rules, Article 39(1) and
the SIAC Rules, Article 34(3)], the great majority – as the CAM Rules- impose
confidentiality from other more general provisions, such as those imposing confidentiality as
to the “conduct of arbitral proceedings” (DIS Rules, Article 43(1)), “all matters relating to
the arbitration proceedings” (KLRCA Rules, Rule 9), “all matters relating to the
proceedings” (SIAC Rules, Rule (34(1)), or “all information relating to the arbitral
proceedings” (Arbitration Law of the , Section 14).

27. At any case, if the parties designated that the arbitration will be governed by the CAM Rules,
the confidentiality provisions in these institutional rules shall apply to the dispute. The 2010
Rules are clear on this matter and establish a confidentiality obligation upon the parties
irrespectively on whether or not subjects to arbitration are public or private companies.

28. Moreover, as far as the procedural rules of the CAM in its 2010 edition chosen by the parties
are concerned, the institution has clearly stated that they apply only if consistent with the
Rules (Art. 2.1). Under former Art. 2, it was granted greater respect vis-à- vis the will of the
parties [GIOVANNINI 308]. Now the rules do not allow the parties to waive themselves of
acting in accordance with the explicit confidentiality obligation set forth upon them in Art. 8
of the Rules.

iv.) The disclosure of the existence of the arbitration cannot be excused as it was not a
legitimate protection of CLAIMANT’s rights under the exception of Art. 8 of the 2010 Rules

29. The disclosure of the existence of the arbitration is not excused as it is not a legitimate
protection of CLAIMANT’s rights under the exception of Art. 8 of the Rules – protection of
rights, specifically the right to goodwill. The unilateral disclosure of the existence of the
arbitration is a breach of CLAIMANT’s duty of confidentiality. Courts have resorted to a
narrow interpretation of the legitimate protection of one’s rights as a waiver of confidentiality
obligations [Dolling- Baker v. Merrett; Insurance Co. v. Lloyd’s Syndicate].

30. Hence, the disclosure of commencing the arbitrational proceedings was not a necessary
activity to protect CLAIMANT’s goodwill.

13
31. In words of CLAIMANT “disclosure is deemed to be ‘reasonably necessary’ where the
disclosure is absolutely indispensable to raise the claim or present a defense” [Cl. Memo
¶132]. The plaintiff asserts that as a result of the breach of contract,it has suffered a loss of
reputation [Cl. Memo ¶126]. However, there is no evidence on this regard and disclosure
cannot be rendered as ‘absolutely indispensable’ as it is a fact that CLAIMANT has had an
excellent reputation in the fishing market [The Case, Clar. No.13].

3.) An order of confidentiality respects the will of the parties

32. In choosing the CAM Rules which, unlike many other arbitral rules, include an explicit
provision for confidentiality, the parties made clear that confidentiality was of the utmost
importance to them. To interpret it otherwise would undermine the value of the 2010 Rules’
confidentiality requirement.

33. Claimant’s non-disclosure also serves other goals of arbitration. There could be a threat of
unnecessary litigation if the Tribunal refused to order confidentiality, as RESPONDENT
could seek damages or an injunction against CLAIMANT’s disclosure, which would increase
the cost and time of the arbitration. Therefore, an order of confidentiality respects the will of
the parties.

4.) Disclosure imposes a harm upon RESPONDENT’s reputation in the fishing market

34. Even the disclosure of the involvement of one party in arbitration can cause harm [LIGETI 7].
The rumor of legal disputes may decrease public confidence in companies which can
negatively affect the value of their shares and the interview at issue is most likely to result
in

monetary
 loss
 to
 Fishing
 [St.
 of
 defense
 ¶9]. Besides, parties opt for arbitration so as to
protect their business reputation and to avoid media attention and negative publicity as that
given by CLAIMANT as a result of the interview [LIGETI 7].

35. The disclosure of the existence of the arbitration is likely to create distrust and a general
chilling of RESPONDENT’s future business prospects. Hence, in order to prevent probable
irremediable reputational and economic harm to RESPONDENT, the Tribunal should order
CLAIMANT to keep the arbitration confidential.

B.) The tribunal is authorized to order CLAIMANT to refrain from divulging the existence
of the arbitration
36. The Tribunal is authorized to make an order of confidentiality. Confidentiality arises from the
arbitration agreement, and hence all decisions regarding confidentiality are within the domain
of the Tribunal (1.). Even if the Tribunal found it has not an inherent power to order

14
 confidentiality, it may do so in according to its power to order interim measures under Art. 17
UNMICA and Art. 22.2 & 23.1 of the Rules (2.). Lastly, an order of confidentiality is fully
enforceable in national jurisdictions (3.).

1.) The arbitration agreement between the parties allow the Tribunal to order
confidentiality

37. The parties selected the CAM rules in the arbitration agreement for dispute settlement [Cl. Ex.
No. 4] that expressly provide for confidentiality. The sole existence of Art. 8 of the Rules
providing that the parties shall keep the arbitration confidential presupposes the Tribunal’s
power to rule on issues of confidentiality. The rule would not have been enacted if arbitrators
were not empowered by the Rules to issue orders for confidentiality. Therefore, it is clear that
the Tribunal is empowered to rule on such matter.

2.) The Arbitral Tribunal can issue an order for confidentiality as an interim measure

38. Under Art. 22.2 of the Rules “The Arbitral Tribunal may issue all urgent and provisional
measures of protection, also of anticipatory nature, that are not barred by mandatory
provisions applicable to the proceedings.” As the CAM Rules are silent on what constitutes an
urgent and provisional measure, the Tribunal should look to Art. 17 of the UNMICA enacted
by Danubia [St. of Defense ¶22]that allows it to “order any party to take…interim measures of
protection that the arbitral tribunal may consider necessary in respect of the subject matter of
the dispute.” By means of Art. 22.2 of the Rules and Art. 17 of the UNMICA the Tribunal is
authorized to order confidentiality as such an order is an interim measure of protection (i.) and
is necessary in respect of the subject matter of the dispute (ii.).

i.) An order for confidentiality is an interim measure

39. The Model Law does not contain an exhaustive list nor it enumerates what should be
considered as an interim measure. An earlier draft of Art. 17 of the UNMICA limited interim
measures to those “for the conservation of the good forming the subject matter of the dispute”
and was rejected and replaced with the more general “interim measures of
protection”[HUNTER 341]. In accordance with the drafter’s intention towards a broad
interpretation of this provision, Art. 17 of the UNMICA shall be read to include orders for
confidentiality.

40. As for the CAM Rules, Art. 22.2 allow the Tribunal to “issue all urgent and provisional
measures of protections” to guarantee the fulfillment of the parties’ obligations -inter alia,
with respect to confidentiality.- Moreover, Art. 23.1 of the Rules specify that “the Arbitral

15
 Tribunal shall give its decisions by way of orders.” A joint reading of these provisions
empowers the Tribunal to issue provisional measures as for confidentiality by way of an
order.

ii.) CLAIMANT’s Confidentiality is necessary “in respect of the subject matter of the dispute”

41. If CLAIMANT were to continue not to respect the confidentiality of the arbitration,
RESPONDENT’s reputation in the fishing market is likely to suffer as a result of
CLAIMANT’s unproven allegations [St. of Defense ¶9]. The resulting harm to
RESPONDENT’s reputation could lead to a loss of clients and allows this Tribunal to issue
an order for confidentiality.

3.) An order for confidentiality will be entirely enforceable

42. The Tribunal has the adequate procedural mechanisms to enforce an order for confidentiality.
If court enforcement is necessary, RESPONDENT can rely on the courts of Danubia as it has
adopted the UNMICA with the 2006 amendments [Req. for Arbitration ¶25] and therefore has
domestic law on this matter. Moreover, RESPONDENT may persuade the courts of another
country to assist with enforcement. At any case, if enforcement in national jurisdictions is not
available, the only party affected would be RESPONDENT; RESPONDENT accepts this risk.

43. Finally, a confidentiality order by the Tribunal will not affect recognition and enforcement of
the final award. As all pertinent States are signatories of the New York Convention [Req. for
arbitration ¶25], non- recognition could only be sought in accordance to Art. V of the
Convention. No relevant subsections of this Article warrant non- recognition. Thus, an order
for confidentiality would not affect the enforceability of the final award and the Tribunal
should therefore order for confidentiality in the present arbitration.

44. SUBSTANTIVE ISSUES

III. RESPONDENT Did Not Breach The Contract

It is RESPONDENT’s position that it has not breached the contract for the below following
reasons and hence should neither have to reimburse the purchase price nor to pay damages.

A) Article 35 does not apply because there was an express and implied agreement

45. Article 35 stresses the absolute priority of parties’ will in accordance with the attitude of free
trade as it is up to the parties to determine their obligations. Accordingly, the criterions of
Article 35 are to be applied only in the absence of an express or implied agreement [NAGY 13].
In the case at hand, there were both express and implied agreements as to the quantity, quality
16
 and description required. The contract contained the express provision that the goods
provided were to be “Grade A”, “iced on board,” “fit for human consumption,” and ilex
danubecus from the 2007/2008 batch [Cl’s Ex. Nos. 3 &4]. Furthermore, there was an implied
provision that the squid was to be unsized as per the sample provided [St. of Defense ¶25].
Therefore, Article 35 has no application.

B) Squid delivered by RESPONDENT was of the quality and description required by the
contract and in compliance with Article 35(1)

46. However, should the tribunal hold that there were no express or implied contractual
provisions regarding these terms, Article 35 applies and the content of the seller's obligations
must be properly interpreted through the contract. The Vienna convention does not determine
an express provision imposing on the seller a duty to deliver goods of an average quality and
thus a minimum of contractual indications about the quality of the goods must be provided
[NAGY 13-14]. Here, these minimum indications were provided in the contract and the squid
delivered was in accordance with these contractual conditions. RESPONDENT thereby complied
with its obligations under CISG Art. 35(1).

47. In the case at hand, ‘quality’ did not refer to size, but rather, meant that the squid be “Grade
A”, “iced on board” and “fit for human consumption” [Procedural Order No.3 ¶71-72].
CLAIMANT itself stated these requirements in its order to RESPONDENT dated 29 May 2008 and
these requirements were confirmed by RESPONDENT [Cl’s Ex. Nos. 3 & 4]. CLAIMANT was
aware of the contents of the sales confirmation as shown by the message from Mr. Korre
dated 29 May 2008 [Respondent’s Exhibit No. 2].

48. There was no contractual promise that the squid would weigh 100-150 grams [Cl’s Ex. Nos. 3
& 4]. CLAIMANT’s unilateral statement that it was pleased that the sample size fell within the
100/150 gram range cannot amount to a contractual warranty [Cl’s Ex. No. 2]. The fact that
the sample squid provided was of a particular size was therefore irrelevant. Existing case law
holds that such representations will not form part of the contract unless the representor
intended them to have contractual effect [ZEIGEL]. As RESPONDENT knowingly provided
unsized squid in the sample, it clearly did not intend to represent that the squid in the contract
would be sized [Stmt of Defense ¶25]. The fact that the sample squid was of the size required
by CLAIMANT was merely coincidental.

49. Therefore, the contract was for the supply of unsized squid from the 2007/2008 batch in
conformity with the sample provided by the RESPONDENT [Stmt of Defense ¶25] on the 17
May 2008 [St of Cl. ¶5] and referred to in the contract [Cl. Exhibits Nos. 2 and 3]. Inclusion

17
 of the term that the squid be “as per sample” did not indicate that a specific size of squid was
required. Sized squid is sized mechanically or by sight, while unsized squid is the run of the
catch. The squid provided by sample was labelled “2007 catch” and thus the fact that it was
unsized was made clear to CLAIMANT [Stmt of Defense ¶25].

50. Moreover, the price is an indicative factor to estimate what level of quality the buyer could
reasonably expect from the goods [NAGY 14]. Unsized squid are less expensive than sized
squid [Stmt of Defense ¶25]. As an experienced buyer of squid, CLAIMANT was or should have
been aware of this distinction and could not reasonably have expected to receive sized squid
for the price given. Rather, the price for the squid provided in the contract was indicative of
unsized squid; a level of quality which the seller complied with [Stmt of Defense ¶26].

51. Lastly, squid caught earlier in the season are still young and tend to be small, while they are
older and larger later on. The sample provided to CLAIMANT was for mid-June to mid-August
as indicated by the weight of the individual squid [Stmt of Defense ¶25]. Again, as an
experienced seller of squid, CLAIMANT “knew the seasons for harvesting the different species
of squid and that the squid grew larger as the season progressed” [Procedural Order No.3
¶72]. Thus, when ordering squid of the 2007/2008 catch in May 2008, CLAIMANT should have
recognized that the 2008 squid would be from early in the season and therefore of a smaller
size. As the contract also contained no promise as to what proportions would be from the
2007 or 2008 batches [Cl’s Ex. Nos. 3 & 4], CLAIMANT cannot now complain that 60% of the
squid received was from the 2008 batch [Stmt of Claim ¶6]. If CLAIMANT was not satisfied
with receiving 2007/2008 catch, the time to say so was on receipt of the sales confirmation.

52. RESPONDENT delivered squid in conformity with the contract by providing unsized squid from
the 2007/2008 batch that was “Grade A”, “iced on board” and “fit for human consumption”.
RESPONDENT therefore complied with Article 35(1) because the squid delivered were of the
description and quality specified in the contract [Procedural Order No.3 ¶71-72; Cl’s Ex. No.
9].

53. Furthermore, squid provided by Respondent conformed to the purpose and general description
of the contract. The ICC points out that the seller is obliged to deliver goods which generally
conform to the purpose and description of the contract’s subject [NAGY 14]. Therefore, in the
case at hand, RESPONDENT was obligated to deliver goods which at least conformed to the
purpose and description of the contract’s subject.

54. However, a buyer generally can expect the quality necessary for a particular purpose only if it
is expressly described in the contract [SCHLECHTRIEM, 1986]. In this case, CLAIMANT did not

18
 describe its particular purpose of re-sale to long-liners as bait in the contract. The fact that it
was CLAIMANT that made an offer to purchase without reference to this purpose only further
emphasizes its absence [Cl’s Ex. No 3]. Indeed, if any purpose was to be gleaned from the
description made by the buyer on its request of the goods it was that the squid was to be sold
both for bait and human consumption particularly as CLAIMANT both made this a specific
request in its order for purchase and is in the business of selling fish products for consumption
and bait purposes [Stmt of Claim ¶4].

55. Since no particular purpose was expressly described in the contract, the squid was not
required to be “within the range of 100-150 grams” required for the particular purpose of
resale to long-liners as bait [St. of Cl. ¶5]. Therefore, in delivering 60% of the squid of a size
other than 100g RESPONDENT did not breach any contractual duty and complied with its
obligations under Art. 35(1).

C.) Squid provided by RESPONDENT were fit for purposes which squid of the same
description would ordinarily be used

56. In case the tribunal should hold that the quality of the squid is not described in the contract,
there was conformity under Art. 35(2)(a) because the squid were fit for purposes which squid
of the same description would ordinarily be used. Illex danubecus is ordinarily used for the
purposes of bait and human consumption [St. of Claim¶4, St of Defense ¶24]. This is the case
in both Equatoriana and Mediterraneo as well as within the CLAIMANT and RESPONDENT
companies [Ibid]. While squid for bait for long liners must be of a particular size, it need not
be for human consumption [Cl. Ex. No. 10 ¶18]. CLAIMANT did not indicate its requirement
for sized squid and thus, the squid provided by RESPONDENT consisted of a variety of sizes all
of which was sufficient for one or both of these ordinary purposes. The squid was therefore fit
for ordinary use under Article 35(2)(a).

57. Moreover, the obligation under Article 35(2)(a) covers a buyer who has purchased the goods
for resale rather than use. For goods to be fit for ordinary purposes, they must be honestly
resalable in the ordinary course of business [SECRETARIAT COMMENTARY ¶5]. The test is
whether a reasonable buyer, knowing of the defects, would have bought the goods without an
abatement on the price [ZIEGEL, ART 35 at para 3]. In this case, CLAIMANT sold the squid
provided by RESPONDENT both to long-liners as bait [St. of Claim ¶6] and through Reliable
Trading House for human consumption [Cl. Ex. No. 10 ¶20]. It is thus inferable that a
reasonable buyer, knowing of the alleged defects in the size of the squid, would have bought

19
 the goods without an abatement in price and that the goods were therefore honestly resalable
in the ordinary course of business.

58. A further delineation for when goods are fit for ordinary use is when they possess the
characteristics normally required from goods as described by the contract and are free from
the defects normally not expectable in such goods [NAGY 14]. Here, the contract was for squid
from the 2007/2008 catch [Cl’s Ex. No. 9]. Squid that is the run of the catch is unsized. This is
because sized squid must be sized by hand or mechanically [St. of Defense ¶25]. Thus, the
normal characteristic for squid from the catch of any year would be that it is unsized. As the
squid provided by RESPONDENT possessed this characteristic, the goods were fit for ordinary
use and RESPONDENT was in conformity with Article 35(2)(a).

59. Lastly, the fitness of goods for ordinary use must be evaluated according to the standards of
the seller’s place of business [SCHLECHTRIEM 1984, 6-21; NAGY 14]. Naming the place
where the buyer intends to use the goods, is not sufficient per se to show that the buyer
requires a different type of good [SCHLECHTRIEM 1984, 6-21]. RESPONDENT was a seller of
squid for both bait and human consumption purposes domestically in Equatoriana and abroad
[St. Of Defense ¶24]. It is therefore inferable that the standard of ordinary use of squid in
Equatoriana is both for bait and human consumption purposes. The fact that the buyer
intended to use the goods in Mediterraneo, not Equatoriana, is immaterial. Therefore, a claim
that squid supplied in Mediterraneo would ordinarily be used as fishing bait of a specific
weight is irrelevant and the RESPONDENT provision of unsized squid that is fit for either bait or
human consumption purposes is in compliance with its obligation under Article 35(2)(a).

60. In terms of merchantability, the Netherlands Arbitration Institute in the Condensate Crude Oil
Mix case indicated that an “open- textured” position should be used as opposed to a strict
application of either the average quality test or the merchantability test. In that case, the
absence of alternative buyers willing to pay the contract price for the traded products
indicated that the goods were not merchantable judged by any of the available interpretations.
In the case at hand CLAIMANT was able to resell some of the squid both for bait and
consumption purposes [St. of Claim ¶6, Cl. Ex. No. 10 ¶20]. The fact that CLAIMANT was
unable to sell the remainder of the squid because the market for human consumption in
Mediterraneo was saturated [Cl. Ex. No. 10 ¶20] cannot be taken as an indication that the
goods were not of a merchantable quality. As squid is only fit for human consumption for a
finite time, [Procedural Order No. 3 ¶3] it is reasonable to assume that squid of a
merchantable quality may find no buyers even when offered at a heavy discount where
potential buyers have already satisfied their demand for squid from other suppliers and will

20
 not require new stock before the merchantable squid becomes unfit for consumption. Hence
the squid purchased by CLAIMANT has to be judged as merchantable.

D.) CLAIMANT did not make known to RESPONDENT its particular use of fishing bait for
long-liners and therefore could not have relied on RESPONDENT

61. Claimant did not expressly or impliedly make known to the seller its particular purpose at the
time of the conclusion of the contract and any alleged communicated purpose was not crystal
clear or recognizable to respondent. Because of this, only the ordinary uses for illex
danubecus as bait and human consumption are relevant (1.) and RESPONDENT owed
CLAIMANT no duty of good faith to inform CLAIMANT of the Supplied Squid’s
unsuitability as fishing bait (2.); CLAIMANT did not, and could not reasonably have relied on
respondent’s skill and judgment in providing goods suitable for its particular purpose.
Respondent was therefore in compliance with Article 35 (3.).

1.) CLAIMANT did not expressly or impliedly make known to RESPONDENT any particular
purpose of purchasing squid.

62. Article 35(2)(b) of the CISG states that the goods supplied may be fit for any particular
purpose expressly or impliedly made known to the seller at the time of the conclusion of the
contract [NEW ZEALAND MUSSEL CASE]. This criterion is intended in the cases where the
buyer merely displays the intention to use the goods for a particular aim. This exception is in
accordance with the common view that only when the purpose for which the buyer intends to
use the goods is apparent to the seller may the buyer generally rely on the seller's skill and
judgment in order to have goods fit for such a purpose [NAGY 15-16]. As a result, a buyer
generally can expect the quality necessary for a particular purpose only if it is expressly
described in the contract [SCHLECHTRIEM, 1986].

63. In this case, no particular purpose was expressly described in the contract. The contract was
for the supply of unsized illex danubecus from the 2007/2008 batch in conformity with the
sample provided [St. of Defense ¶26]. The description, initially advanced by CLAIMANT in its
order to RESPONDENT, also required that the goods be Grade A, Iced on Board, and fit for
human consumption. It made no mention of CLAIMANT’s alleged particular purpose of resale
as bait to long-liners [Cl’s Ex. No. 3] and therefore CLAIMANT did not expressly make known
its particular purpose in accordance with Article 35(2)(b).

64. The contract also contained no implied reference to the CLAIMANT’s particular purpose. At the
time the contract was concluded, CLAIMANT merely displayed an intention to use the goods
for a particular aim when it stated that it was pleased with the size of the sample squid as it
21
 fell almost exclusively in the range that gives its customers “the best results.” It did not
mention who its customers were or what results it expected its customers to achieve [Cl’s Ex.
No. 2]. These unclear statements cannot amount to an implied reference that CLAIMANT’s

particular purpose for purchasing the squid was for resale as bait to long-liners. Likewise, the
fact that CLAIMANT stated at the outset its interest in purchasing squid for resale to long-liners
as bait [Cl’s Ex. No. 1] is also insufficient to amount to an implied statement of CLAIMANT’s

particular purpose because firstly, it was not made at the time the contract was concluded and
secondly, it was a mere display of intention that could easily change, not a clear indication of
CLAIMANT’s particular purpose.

65. Not only was there “nothing in [the parties’] dealings that provided that the squid would be
used solely for bait,” but CLAIMANT actually further required that the squid had to be fit for
human consumption [Cl.’s Ex. No. 9]. This fact provides further evidence to negate the claim
that a particular purpose was impliedly made known to the seller at the time the contract was
concluded. Squid for bait does not need to be fit for human consumption, yet CLAIMANT

requested that the squid provided would be so. Since CLAIMANT did not communicate the
motive for this requirement [Cl.’s Ex. No. 3, St. of Defense ¶26], and was indeed a seller of
squid for both bait and human consumption purposes [St. of Claim ¶4], it is unreasonable for
CLAIMANT to infer that the particular purpose for which it intended to use the goods was made
apparent to RESPONDENT. Indeed, the contrary impression was communicated, that CLAIMANT
intended to sell at least some of the squid for human consumption as opposed to for the
particular purpose of bait.

66. The fact that this request was a health regulation in CLAIMANT’s country is irrelevant. Sellers
cannot be held responsible for knowing the legal requirements in their buyers’ nations, or for
nonconformity of the goods therein [NAGY 15]. While Equatoriana has a similar legal
requirement, the law in both nations only comes into play when the goods are stored in the
same facility [Procedural Order No. 3 ¶71]. CLAIMANT neither made RESPONDENT aware of
the motive behind the request, nor that it intended to store the squid provided with squid to be
sold for human consumption [St. of Defense ¶26 ]. RESPONDENT had also received no
knowledge of the legal requirements of the buyer's country from its previous dealings in
Mediterraneo since CLAIMANT’s competitor had stored squid and other bait in a warehouse
that was separate from the warehouse where it stored fish products to be sold for human
consumption [Procedural Order No. 3 ¶71]. CLAIMANT’s actions at the time the contract was
concluded were therefore insufficient to amount to an implied reference to CLAIMANT’s

particular purpose of resale to long-liners as bait.

22
67. While Article 35(2)(b) does not require that the good’s standards be specified in the contract,
the particular purpose must still be mentioned in the buyer’s order in such a way as to create
an “understanding” [Article (2) and 8(3)] that the goods will possess standards enabling the
buyer to carry out that particular purpose [HONNOLD 1999 at §226; SCHLECHTRIEM 1984
at 6-18]. In this case, neither the contract itself, nor CLAIMANT’s behaviour created any such
understanding. As a result, CLAIMANT did not expressly or impliedly make known its
particular purpose in accordance with Article 35(2)(b) and only the ordinary purpose of
Article 35(2)(a), which RESPONDENT already complied with, is relevant.

2.) Any alleged particular purpose was not crystal clear or recognisable to REPONDENT

68. Art. 35(2)(b) of the CISG states that the goods supplied must not only be fit for any particular
purpose expressly or impliedly made known to the seller at the time of the conclusion of the
contract [DIGEST Art.35, 35(2)(b) ¶10], and the purpose communicated must be “crystal
clear and recognisable” to the seller [München Globes].

69. In this case the purpose CLAIMANT communicated to RESPONDENT was not crystal clear
and recognisable. The enquiry mail sent by CLAIMANT only indicated interest in purchasing
squid to be used as squid for long-liner fleet [Cl. Ex. No. 1] which will give them the ‘best
results’ [Cl. Ex. No. 2]. The description ‘best’ is too vague and wide a standard, it cannot
definitively tell the RESPONDENT what kind of results the CLAIMANT expects its long-
liner customers to attain. The present situation can be contrasted with München Globes case
where the buyer made known ‘crystal clear’ to the seller that the purchased Globes are the
office’s ‘permanent furniture’, and not merely an advertising exhibit. The court held that to a
reasonable person ‘permanent furniture’ is an item which should last for years as opposed to
an advertising campaign exhibit that only lasts a few months.

70. Here however RESPONDENT does not know how many tonnes of fish must be caught with
the squid before the results can be considered ‘best’. Unlike ‘permanence’ and ‘furniture’ (see
München Globes) which will imply years of usage to a reasonable person, ‘best’ is an
inappropriate standard for the harvesting of natural produce since harvest varies from year to
year and it is impossible to decide when the ‘best’ harvest is. Given such an vague description
like ‘best’, a reasonable person would not have known what is meant by supplying squid bait
that gives the ‘best results’ [Cl. Ex. No. 2]. As such CLAIMANT did not communicate its
particular purpose to RESPONDENT because the description of ‘best results’[Cl. Ex. No. 2]
is too wide and vague to be ‘crystal clear and recognisable’ to RESPONDENT [München
Globes].

23
3.) RESPONDENT owed CLAIMANT no duty of good faith to inform CLAIMANT of the
Supplied Squid’s unsuitability as fishing bait

71. Because no particular purpose was communicated at the time the contract was concluded,
RESPONDENT owed no duty of good faith under CISG Art 7(1) to inform CLAIMANT of the size
discrepancy between the optimal size range of bait for long-liners of 100 to 150 g and the
2007/2008 catch agreed upon in the contract [SECRETARIAT COMMENTARY at 93 § 9;
ENDERLEIN at 156]. Moreover, this failure to inform does not constitute continued reliance
on RESPONDENT’S judgment.

72. Art. 7(1) CISG actually grants the good faith principle a rather limited role as one of several
guidelines that can be used when interpreting the Convention. The good faith principle is
therefore not established as a supreme rule towering over the ordinary provisions of the CISG,
but has a rather limited function [HUBER]. Therefore, RESPONDENT’s alleged lack of good
faith cannot negate its compliance with ordinary uses under Article 35(2)(a), nor can it extend
liability to RESPONDENT under Article 35(2)(b) when CLAIMANT already failed to expressly or
impliedly communicate its particular purpose thereby rendering the Article inapplicable to the
case at hand. If anyone is in breach of good faith, it is CLAIMANT who now seeks to claim ex-
post facto that a particular purpose was implied when the contract was concluded, though it
had ample opportunity to do so expressly when drafting the offer to purchase, and assenting to
the contract.

73. CISG Art.7(1), “embodies a strong preference for enforcing obligations and representations
customarily relied upon by others in the industry" [ZELLER]. Here, this includes the term
‘catch’ which customarily refers to unsized squid in the industry [St of Defense ¶26]. That
interpretation should thus be implied here to indicate both that the contract was for unsized
squid, and that CLAIMANT was aware of this fact when concluding the contract.

74. Therefore, RESPONDENT’s failure to inform CLAIMANT about the shortfall and discrepancy
of squid size could not have resulted in any continued reliance on RESPONDENT’s judgment.
As such, CLAIMANT cannot escape liability under the contract after expressly agreeing to
purchasing squid from the 2007 and 2008 catches [Cl. Ex. No.4].

4.) It was unreasonable for CLAIMANT to rely on RESPONDENT’s skill and judgment.

75. Even if the buyer’s particular purpose was communicated to the seller, no liability can be
found if the buyer did not rely on the seller’s judgement and skill; or that such reliance was
unreasonable [SECRETARIAT COMMENTARY ¶26; LOOKOFSKY at 93, HANNOLD at
§ 226, SCHLECHTRIEM 1986 at 67; ENDERLEIN at 157].

24
i.) CLAIMANT did not rely on RESPONDENT’s skill and judgement

76. There is no reliance if the buyer insists on the specification of the goods required
[ENDERLEIN/MASKOW at 145]. If the buyer did not rely on the seller’s judgement, then it
is irrelevant whether the seller did give judgement or not [ENDERLEIN 157]. In this case
CLAIMANT gave a precise specification of the squid it required when the mail
accompanying the purchase order indicated that the 100/150 grams range is “particularly
important” because that would give the CLAIMANT’s customers the “best results” [Cl. Ex.
No. 2]. In addition, CLAIMANT had specific requirements for the squid to be purchased,
requiring it to be “Grade A”, “iced on board” and “fit for human consumption”. The totality
of these precise descriptions meant that CLAIMANT already knew the specific type of squid
it intended to purchase, without needing to rely on RESPONDENT’s skill and judgement,
hence it is immaterial whether RESPONDENT gave judgement or not.

ii) It was unreasonable for CLAIMANT to rely on RESPONDENT’s skill and judgement

77. Even if there was reliance, CLAIMANT’s reliance on RESPONDENT was unreasonable. The
crux of Article 35(2)(b) is the buyer’s reliance on the seller to select and furnish a commodity
that will satisfy a stated purpose [HANNOLD at § 226], not the seller’s expertise. Unlike the
example given by Hannold where a less informed buyer relies on the seller to supply an
appropriate steel drill, in this case there was no disparity in expertise between CLAIMANT
and RESPONDENT because both are “experienced firm[s] in the fish trade” [Proc. Ord. No.
3 ¶26 and ¶27]. RESPONDENT’s expertise is immaterial because the CLAIMANT already
knew the optimal size range of squid for long-liner fishing without consulting or relying on
RESPONDENT [Request for Arbitration ¶14]. Moreover, CLAIMANT also knew that
Danubia squid are not consistently of the desired size, which further indicates CLAIMANT’s
expertise regarding squid from Danubia [Request for Arbitration ¶14]. As such it is
unreasonable for the CLAIMANT to rely on RESPONDENT if there is no asymmetry in
expertise between CLAIMANT and RESPONDENT.

E.) ‘Fit for Human Consumption’ is a contractual description which RESPONDENT

conformed to

78. Statutory requirements are relevant only if they are present in both the buyer’s and seller’s
countries [NEW ZEALAND MUSSELS, SCHLECHTRIEM-50 YEARS OF THE
Bundesgerichtshof], hence compliance with the statutory requirements would have been
implied into the contract even if there was no express agreement.

25
79. In this case both Meditarraneo and Equatoriana require all fish products stored in the same
location to be certified fit for human consumption [Request for Arbitration ¶15]. Moreover, it
is a common health regulation applicable in many countries [Request for Arbitration ¶15],
therefore the human consumption requirement would have been implied into the contract and
RESPONDENT need not inform the RESPONDENT in goodwill.

80. By specifically requesting for squid fit for human consumption in its purchase order [Cl. Ex.
No. 3], it would appear to a reasonable seller [CISG Art. 8] that the buyer is placing emphasis
on the human consumption requirement although it is already a common international
requirement [Request for Arbitration ¶15]. Such precise description indicates that
CLAIMANT’s specific request for squid fit for human consumption is not merely a gesture of
goodwill, but a precise contractual requirement which RESPONDENT duly conformed to.
Moreover there are other precise description like “Grade A” and “iced on board” in
CLAIMANT’s purchase order [Cl. Ex. No. 4]. Taken together these precise descriptions are
express contractual terms instead of mere “goodwill” information [Cl. Memo ¶45].

F.) RESPONDENT was not required to deliver squid which conform to the sample provided

81. The obligation to deliver goods conforming to the sample or model is presumptive and may
be displaced if the parties had (1.) agreed otherwise or (2.) if there is a different description in
the contract.

1.) Displacement due to new agreement between RESPONDENT and CLAIMANT

82. The District Court of Berlin has indicated [SHOES] that the goods must conform to a model
only if there is an express agreement in the contract that the goods will do so. Moreover, the
seller is not obliged to deliver squid conforming to the initial sample if there is another
agreement between the buyer and seller [ZIEGAL, Art. 35 ¶1 and DIGEST Art.35, 35(2)(c)
¶11].

83. Here, the obligation is displaced because CLAIMANT eventually accepted the purchase of
2007/2008 squid in the purchase order confirmation [Cl. Ex. No. 4]. Even if the agreement
was initially for 2007 squid as represented by RESPONDENT during the sales pitch [St. of
Defense ¶10], it was subsequently replaced by the final agreement which saw CLAIMANT
purchasing 2007/2008 squid harvest instead [Cl. Ex. No. 4].

84. CLAIMANT as an experienced firm in the fish trade [Proc. Ord. No. 3 ¶27] should have
known that it was purchasing ungraded squid which varies according to the time of harvest
[St. of Defense ¶12], hence CLAIMANT would have known that the 2008 catch will differ

26
 from the 2007 catch. Contrary to CLAIMANT’s argument that addition of the 2007/2008
catch clause “[did] not change anything” [Cl. Memo ¶53], RESPONDENT submits that
CLAIMANT’s eventual acceptance of the 2007/2008 squid [Cl. Ex. No. 4] results in a new
agreement which displaces the obligation of RESPONDENT to deliver squid from the 2007
catch only.

2.) Displacement due to different contractual description from the sample

85. The obligation to deliver goods conforming to the sample will not be implied into the contract
if there are different descriptions in the contract from the sample [ENDERLEIN 157].

86. In this case the sample provided by RESPONDENT was from a carton marked “illex
danubecus 2007” [St. of Defense ¶10]. In contrast, the eventual purchase confirmation stated
“2007/2008 catch” [Cl. Ex. No. 4]. CLAIMANT is an experienced firm in the fish trade who
knows that squid size vary according to the harvest season [Proc. Ord. No. 3 ¶27], hence
CLAIMANT should know that 2008 squid is distinctly different from the 2007 catch.
“2007/2008 catch” [Cl. Ex. No. 4] is therefore a different contractual description from “illex
danubecus 2007” [St. of Defense ¶10]. In this respect RESPONDENT’s obligation is to
deliver squid from both the “2007/2008 catch”, and not only the 2007 squid sample which
differs from the final contract description.

G.) Consequently, CLAIMANT is Not Entitled to Avoid the Contract

87. Because RESPONDENT complied with its obligations under Art. 35 to deliver squid of the
quality and description required by the contract and are fit for the purposes, CLAIMANT may
not claim damages as per Art. 45(1)(b). In the alternative, any losses suffered by CLAIMANT

were not foreseeable as per Art. 74 because CLAIMANT did not make known to RESPONDENT
its particular purpose of supplying Squid to be used as fishing bait by long-liners [CLAIMANT’s
Exhibit No. 1]. Therefore RESPONDENT could not have foreseen the losses that would be
suffered by CLAIMANT if RESPONDENT could not deliver the correctly sized Squid to its
customers

IV.) Claimant failed to properly notify the Respondent of non-conformity of the squid and
therefore looses its right to rely on the non-conformity

88. CLAIMANT argues it complied with its obligation under Art. 39(1) to give notice to
RESPONDENT of the non-conformity and accordingly retains the right to claim for the
defective squid. CLAIMANT states it was under no obligation to examine the squid on delivery
since Art. 38(3) applied, allowing it to defer examination to the long-liners (¶87 CL’S MEM.).

27
 Therefore, it ought to have discovered the non-conformity, and indeed did, after the report by
TGT. (¶64 CL’S MEM.). Under Art. 39, time begins to run from this point and, as a result, the
notice given on 16th August 2008 was within a reasonable time and sufficiently specific (¶64,
67, 84 CL’S MEM.).

89. RESPONDENT rejects CLAIMANT’S contention that Art. 38(3) applied. Rather, RESPONDENT
argues that Art. 38(1) imposed a duty on CLAIMANT to undertake a reasonable examination of
the squid on delivery and, had such an examination taken place, the defect would have been
discovered (A). Since time begins to run under Art. 39 from the moment when CLAIMANT
ought to have discovered the non-conformity, the notice given on 16th August was not given
within a reasonable time (B). Accordingly, CLAIMANT looses its right to claim for the
nonconformity.

A.) CLAIMANT failed to discharge its duty to conduct a reasonable examination under Art. 38

90. Art. 38 imposes upon the buyer an obligation to examine goods, that examination being
‘reasonable’ (LOOKOFSKY ¶187) and within as short a period as practicable. CLAIMANT argues
it had no obligation to examine the goods prior to August 12th 2008 “because Art. 38(3) CISG
applied and the examination was deferred until the goods were delivered to the long-liners”
(¶87 CL’S MEM.). RESPONDENT rejects this; a proper survey of the relevant authorities
discloses a more restrictive interpretation of Art. 38(3) than CLAIMANT identifies, which
prevents it from applying here. (1). Therefore, Art. 38(1) must apply in the standard manner.
CLAIMANT contends in the event that Art. 38(1) applies it complied with the duty to examine
the goods by examining the sample cartons of the squid on delivery (¶88 CL’S MEM.).
RESPONDENT thoroughly rejects this contention; the examination was unreasonable on any
reading of CISG case law and academic material (2).

1.) Art. 38(3) does not apply

91. CLAIMANT correctly identifies the conditions for the application of Art. 38(3); the transaction
must be a redispatch, the buyer must not have a reasonable opportunity for examination prior
to the redispatch and the seller must have known of the possibility of this redispatch at the
conclusion of the contract (ART. 38(3); CL’S MEM. ¶90). However, CLAIMANT incorrectly
asserts that these conditions were met. In cases of redispatch for resale, a qualifying
redispatch only occurs where the buyer acts simply as an intermediary, which was not the
case in relation to the squid (i). Furthermore, CLAIMANT had ample opportunity to examine
the goods before redispatch (ii).

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i.) No redispatch occurred after delivery of the squid to Claimant

92. “Redispatch occurs when the buyer, after having received the goods, sends them off to
another destination” (BIANCA, p300). Whilst it is not disputed that resale can fall into this
definition, in order to do so the buyer must act either as a pure intermediary or the goods must
be delivered directly to the ultimate customer (FRENCH DOORS CASE). Clearly the latter of these
two cannot apply to the present case since the squid was delivered to CLAIMANT. With regard
to the former, it has been held that in order to qualify as an ‘intermediary’ the buyer must
have known in advance whether and where the goods would be resold, and that the buyer
cannot be an intermediary where the goods are not dispatched in their entirety (BLOOD
INFUSION CASE). CLAIMANT failed to dispatch the squid in its entirety (CL’S EX. 10, ¶
 11).
Thus, the resale of some of the squid to long-liners cannot properly be considered to come
within the ambit of Art. 38(3). Indeed, CLAIMANT itself admits its business in this area is
concerned with a gradual supply for customers throughout the year, rather than an immediate
redispatch (CL’S REQUEST FOR ARBITRATION,
¶
8).

ii.) Claimant had a reasonable opportunity to examine the goods between delivery and resale

93. When considering whether the buyer had a reasonable opportunity to examine the goods a
variety of circumstances should be considered (CL’S MEM. ¶95). The most important factor,
and indeed the one treated first in CLAIMANT’S memorandum (CL’S MEM. ¶95), is the length
of time between delivery and redispatch (BIANCA, p300). CLAIMANT contends it had no
opportunity to examine the goods “since it was under time pressure knowing that the goods
were to be redispatched” (CL’S MEM. ¶96). RESPONDENT rejects this. Whilst CL’S EX. 10
states CLAIMANT was “under pressure to move some of the squid to one of our customers”, to
reason from such a specific statement, relating to one customer and a small proportion of
squid, to a general statement regarding time pressure is illogical. Indeed, it is contradicted by
the facts of the case, since some of the squid remained in storage (CL’S EX. 10, ¶11), and
CLAIMANT’S own admitted business plan (CL’S REQUEST FOR ARBITRATION, ¶8). In BLOOD
INFUSION CASE the court proffered (¶4(D)) that ten days would provide a reasonable
opportunity for examination of a large quantity of arterial and venous blood infusion devices.
The squid was delivered on 1 July 2008 and a proportion sold over the next week, giving
CLAIMANT six or seven working days for inspection. Sine examining infusion devices is
considerably more complex than the procedure required for squid, CLAIMANT comfortably
had a reasonable opportunity to examine the squid (also see FIBREGLASS CASE, establishing a
period of one week, and SCHREIBER).

29
94. CLAIMANT also asserts a lack of reasonable opportunity on the grounds that examination
would require breaking the pallets and ‘protective’ wrapping on which they were delivered
(CL’S MEM. ¶ 97-98). Such an argument suffers from two flaws. Firstly, CLAIMANT offers no
evidence that the wrapping of the pallets was a protective measure. Indeed, no mention of
wrapping or its protective qualities is made in any of the documentation. It is a specious
argument. Secondly, even if this wrapping was a protective measure, it is far from clear that
requiring the buyer to undertake a random examination would be unreasonable. In FRENCH
DOORS CASE the fact that doors had been delivered wrapped in plastic on pallets and that the
buyer intended to deliver the doors to its customers in this manner did not exclude a
reasonable opportunity for examination. Indeed, it was incumbent on the buyer to undertake
at least random sampling of the doors (¶III(1)(b)(1)). Just as the court expected the doors to
be repacked, it is reasonable to expect CLAIMANT to rewrap the pallets. Similarly, the court in
BLOOD INFUSION CASE stated a buyer “must also take samples even if the examined goods are
destroyed in this process or cannot be used afterwards” (¶
4(c)).

95. Therefore, CLAIMANT cannot rely on Art. 38(3) to escape its duty to undertake a reasonable
examination of the squid. A correct legal construction of the term ‘redispatch’ reveals no
redispatch within the meaning of Art. 38(3) actually occurred. Furthermore, CLAIMANT
retained a reasonable opportunity to examine the goods.

2.) Therefore, Art. 38(1) applies and the examination carried out by CLAIMANT on delivery
was unreasonable

96. Since Art. 38(3) cannot apply, CLAIMANT is subject to the ordinary duty to carry out an
examination of the goods under Art. 38(1). Art. 38(1) requires inspection within as ‘short a
period as practicable’ and one which is reasonable in the circumstances (LOOKOFSKY, ¶187).
CLAIMANT argues ‘in the alternative’ that should Art. 38(3) not apply, the examination carried
out on delivery would be sufficient to meet its obligations under Art. 38(1) (CL’S MEM. ¶103).
RESPONDENT does not dispute that the examination on delivery was carried out within as short
a period as practicable, however, the contention that this examination was reasonable is
erroneous.

97. RESPONDENT agrees with CLAIMANT that a reasonable examination under Art. 38(1) would
not require the buyer to examine every carton of squid (CL’S MEM. ¶105; DR.S.SERGUEEV).
CLAIMANT quotes SCHLECHTRIEM (P. 306) as authority: “Where large quantities have been
delivered, the buyer is not required to examine all the goods” (CL’S MEM. ¶105). The key
here, however, is that the buyer is required to undertake some form of examination, even

30
 where this would require goods to be defrosted resulting in those goods being of little or no
value (FALLINI STEFANO; BLOOD INFUSION CASE). The question thus becomes what level of
defrosting is required in order for the examination to be reasonable within the meaning of Art.
38(1).

98. CLAIMANT contends “only a test of representative sample of goods must be carried out for
adequate examination of the goods” and goes on to quote SCHLECHTRIEM (P. 307): “Where the
examination of goods entails the destruction of the substance of the goods, buyer has the
obligation to examine only few samples per thousand items of the goods”. RESPONDENT
accepts these authorities (BLOOD INFUSION CASE). However, RESPONDENT rejects CLAIMANT’S
assertion that it did in fact undertake representative test sampling. It is erroneous on two
grounds. Firstly, CLAIMANT’S contention that examination of five cartons from the 3400
contained in the first two containers satisfies Schlechtriem’s requirement of a “few samples
per thousand items” is simply incorrect. Assuming that the cartons are considered the items
(CL’S MEM. ¶104), the minimum possible definition of “few”, more than one (OXFORD
ENGLISH DICTIONARY), would require examination of 6.5 cartons, not five (3400 cartons in
first two containers, thus examining ‘more than one’ carton per each thousand requires
examination of 6.5 cartons).

99. Secondly, Schlectriem’s requirement applies to a few tests per thousand of the entire delivery,
not merely the first two containers. Examining five cartons out of 20,000 (CL’S MEM. ¶104)
simply cannot be considered examination of a few goods per thousand. Thus, it is illogical to
claim that the examination was representative. CLAIMANT asserts it “did not have any reason
to examine the squid in containers delivered later that day” (CL’S MEM. ¶103). However, this
is untrue. The cartons examined in the first two containers were labelled “ilex danubecus
2007” whereas some of the cartons in the subsequent containers were labelled “ilex
danubecus 2008” (PROC. OR. NO. 3, Q.32). In DR.S.SERGUEEV the court held that differing
dates of catch on boxes of frozen mackerel ought to have caused the buyer to make further
inquiry. Likewise, the differing dates on cartons delivered to CLAIMANT ought to have caused
it to test some of the samples. CLAIMANT also contends it need not have examined further
containers since it would require the breaking of pallets. However, the specious nature of this
argument has already been exposed (¶ 94).

B.) Notice given by CLAIMANT to RESPONDENT failed to comply with Art. 39

100. Under Art. 39(1) the “buyer loses the right to rely on a lack of conformity…if he does not
give notice to the seller…within a reasonable time after he has discovered it or ought to have

31
 discovered it.” CLAIMANT maintains that it ought to have discovered, and indeed did
discover, the non-conformity after examination by the long-liners and the subsequent TGT
report and that the notice it provided four days later was within a reasonable time and
sufficiently specific (CL’S MEM. ¶67). RESPONDENT contends that had CLAIMANT fulfilled its
duty under Art. 38(1) it would have discovered the non-conformity. Ergo CLAIMANT ought to
have discovered the non-conformity immediately after delivery (1). Accordingly, time begins
to run under Art. 39 from the moment of the expiration of the period for examination on
delivery (2) and, on this measure, CLAIMANT failed to give notice within a reasonable time
(3).

1.) CLAIMANT ought to have discovered the non-conformity on delivery

101. It has already been demonstrated that Art. 38(3) cannot apply to allow CLAIMANT to escape its
ordinary duty under Art. 38(1) to conduct a reasonable examination on delivery (¶ 91). It has
also been shown that the examination in fact conducted on delivery was unreasonable (¶ 96).
Had CLAIMANT tested a reasonable and representative sample, including the 2008 cartons, it
would have discovered the non-conformity. Since approximately 87% of the 2008 batch was
under 100g (CL’S EX. 8) it is reasonable to assume that random sampling of ‘a few of every
thousand cartons’ (SCHLECHTRIEM P. 307) would have revealed this non-conformity.
CLAIMANT argues it could not have discovered the non-conformity prior to 12 August since
examination on delivery did not discover the defect (CL’S MEM. ¶ 69). However, this is
irrelevant since the size and source of the sampling rendered the examination unreasonable (¶
96). Hence, CLAIMANT ought to have discovered non-conformity on delivery.

2.) Accordingly, time begins to run under Art. 39 from the moment of the expiration of the
period for examination on delivery

102. Under Art. 39(1) “The time for such notice starts to run as soon as the lack of conformity is
discoverable…[and whether] a lack of conformity is discoverable depends in particular on the
specific requirements for the examination” (RARE HARDWOOD CASE). CLAIMANT appears to
agree with this approach (CL’S MEM. ¶ 63). The lack of conformity becomes discoverable at
the end of the period for reasonable examination (CISG ADVISORY COUNCIL), and so it is from
this point at which CLAIMANT’S notice must be calculated. It has already been demonstrated a
reasonable examination would have rendered the non-conformity discoverable (¶ 101) and
that CLAIMANT had ample opportunity to conduct such an examination before it began
reselling the squid (¶ 93). Thus, time under Art. 39(1) begins to run from the moment
CLAIMANT began reselling the squid. Since the documentation discloses no definitive date for

32
 this, “Within the next week” (CL’S EX. 10, ¶
11), it seems reasonable to take the end of that
working week i.e. 11 July 2008, at which time begins to run.

3.) CLAIMANT failed to give notice within a reasonable time

103. CLAIMANT argues ‘reasonable time’ under Art. 39(1) ought to be divided into its objective and
subjective components and that objectively the case law discloses agreement on a period of
one month, a conclusion not disturbed by the subjective components (CL’S MEM. ¶ 71, 72,
77). RESPONDENT agrees with that ‘reasonable’ time comprises both objective and subjective
requirements, however, it is submitted that the distillation of a period of one month from the
case law is incorrect (i) and that the subjective circumstances of the case justify a shorter
notice period (ii).

i.) The objectively assessed ‘reasonable period’ under Art. 39(1) excludes CLAIMANT’S notice of
16 August 2008

104. In arguing for the adoption of the ‘noble month approach’, CLAIMANT asserts that it is “a
generally adopted standard among the courts” (CL’S MEM. ¶73). This is a specious and
outdated argument. It is correct that the ‘noble month’ has become an established concept in
the supreme courts of Germany and Switzerland. However, “the decisions of the respective
supreme courts are yet to be unanimously followed by the lower courts” (SCHWENZER P.360).
Furthermore, the Austrian Supreme Court has recently adopted a 14 day time period for
examination and notice (COOLING SYSTEM CASE), which was endorsed by the ICC International
Court of Arbitration (BOOKS CASE) In addition, United States jurisprudence indicates that the
Anglo-American approach may well be to adopt an even stricter ‘reasonable period’
(SCHWENZER P.363). With such broad disagreement, the CISG ADVISORY COUNCIL concluded
“No fixed period, whether 14 days, one month or otherwise, should be considered as
reasonable in the abstract....” Thus, from an objective viewpoint, the most that can be said is
that the case law discloses a varied approach, the majority of cases falling between the 14 day
and one month time period. Applying this standard to CLAIMANT’S conduct, the notice of 16
August was not given within a reasonable period. From the point at which they ought to have
discovered the defect (11 July) to the point at which notice was given (16 August) 36 days
elapsed. This clearly surpasses the objective standard and even the ‘noble month’ argued for
by CLAIMANT.

33
(ii) The subjectively assessed ‘reasonable period’ under Art. 39(1) excludes CLAIMANT’S notice
of 16 August 2008

105. CLAIMANT argues that the objective ‘noble month approach’ need not be reduced in the light
of the subjective circumstances, despite the fact that the majority of the case law relating to
perishable goods establishes a significantly reduced time period for notice (CL’S MEM. ¶77;
FLOWERS CASE) CLAIMANT seeks to distinguish the present case from the ordinary perishable
goods authorities on the grounds that: the squid is durable; it was intended to serve a different
purpose to the other perishable cases, that is, not for human consumption; and the squid
remained in a usable state (CL’S MEM. ¶78, 79, 80). RESPONDENT objects to the latter two
distinguishing factors. Whilst the squid may not have been for human consumption, it was to
be used a bait to catch fish which would presumably be consumed by humans (CL’S REQUEST
FOR ARBITRATION,
 ¶7). Thus, the case law concerning perishable goods for human
consumption, cannot be distinguished. Furthermore, the squid may have remained in excellent
condition, but it was not usable; the majority was too small to be used as bait (CL’S EX. 8) and
the market for human consumption was saturated (CL’S REQUEST FOR ARBITRATION,
¶20). In
such circumstances a reduction of the objective period (14-30days) to 3-4 days would seem
appropriate (as in DR.S.SERGUEEV). CLAIMANT’S 36 days, judged against this standard, is clear
unreasonable. Indeed, even if a shorter time frame is not adopted, CLAIMANT’S notice is still
unreasonable on the objective standard (¶ 1).

4.) CLAIMANT’s ‘alternative’ Argument

106. CLAIMANT makes an ‘in the alternative’ argument to the effect that if it ought to have
discovered non-conformity prior to the date it in fact did, Art 39(1) is still satisfied because
“the purpose of the notice has been met” (CL’S MEM. ¶ 83). CLAIMANT offers no authority for
this contention and the UNCITRAL DIGEST suggests that no court has this fact relevant to Art.
39(1) (¶ 21). It has also been stated that whilst the motivating factor behind Art. 39 is to
prevent prejudice to the seller, “proof of actual prejudice to the seller is not required” (ZIEGAL
ART. 39 ¶2).

Request for Relief

In the light of the above submissions, Counsel for RESPONDENT respectfully requests the
Arbitral Tribunal to find that:
• It has no jurisdiction over dispute between it and Claimant

• In the alternative, Respondent did not fail to deliver squid as required by the contract,
and hence met its obligations under CISG, Art. 35

34
• Respondent is under no obligation to reimburse Claimant the purchase price of the
squid

• In any case, Claimant failed to properly notify the Respondent of non-conformity of

the squid and therefore lost its right to rely on the non-conformity.

• In case that the Arbitral Tribunal assumes jurisdiction, CLAIMANT breached its duty
of confidentiality set forth in Art. 8 of the 2010 Rules.
• .

35
Certificate

We hereby confirm that this Memorandum was written only by the persons whose names are
listed below and who signed this certificate.

(signed) (signed) (signed) _

Ronnie Ang Camila Cravetto James Hart

(signed) (signed)

Eileen Rhein Ana Conover

CTLS, January 19, 2011

XIX