Case Record - Selections for International Commercial Arbitration Moots, 2017 Moot Court Association National Law Institute University, Bhopal
Mojo Pojo, Esq. Advocate at the Court 75 Arb Street Capitol City, Antaria Tel. (0) 146-9845 Telefax (0) 146-9850 Email:
[email protected] 02 June 2017 JAMS 280 Park Avenue West Bldg., 28th Floor New York, NY 10017 United States of America Subject: Request for Arbitration Dear Sirs: I represent Antaria International Inc., which, pursuant to Article 2 of the JAMS International Arbitration Rules, hereby submits its arbitral claim against Raconian Defence Technologies Ltd. in four copies. I enclose a copy of my power of attorney to represent Antaria International Inc. in this arbitration. A copy of the arbitral claim has been sent to the respondent. A copy of the receipt from the courier service is attached. The total claimed is US$ 1,680,000. The filing fee of US$3,000, i.e. US$1,500 per party, will be transferred to your account upon receipt of your invoice indicating the bank account to which it should be transferred. The parties have appointed Mr. Duke Nukem as arbitrator in this dispute. His curriculum vitae is attached. The place of arbitration is Bhojpal, Madhu Pradan which I understand to be acceptable under Article 15 of your International Arbitration Rules. Sincerely yours, (Signed) Mojo Pojo Encl: Power of Attorney Arbitral Claim Duke Nukem curriculum vitae Receipt from courier service
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JAMS Antaria International Inc. Claimant v. Raconian Defence Technologies Ltd. Respondent Request for Arbitration and Statement of Claim I.
Parties
1.
Antaria International Inc. is incorporated under the laws of the country of Antaria. Antaria International Inc. (hereafter “AI”) has legal personality and can bring legal actions in its own name. It has its principal office at 322 Boulevard Road, Capital City, Antaria. The telephone number is (0) 425-1930 and the fax number is (0) 425-1937. The general e-mail address is
[email protected]. It is represented in this arbitration by Mojo Pojo, 75 Arb Street, Capitol City, Antaria, Tel. (0) 146-9845, Telefax (0) 146-9850, Email:
[email protected].
2.
AI is an Antarian multinational conglomerate company that produces a variety of commercial and consumer products, engineering services and aerospace systems for a wide variety of customers, from private consumers to major corporations and governments. AI’s primary product in the aerospace and defence markets is the AI Optra™ which is a ballistic composite material used for soft and hard armor, manufactured using AI proprietary technology.
3.
Raconian Defence Technologies Ltd. is a company where the Government of Raconia is the majority shareholder and is incorporated under the laws of Raconia. It has its principal office at 245 Under Water Park, Oceanside, Raconia. The telephone number is (0) 555-7356. The telefax is (0) 555-7359 and the general e-mail address is
[email protected].
4.
Raconian Defence Technologies Ltd. (hereafter “RDT”) is primary supplier of defence equipment to the Government of Raconia. Raconia being a developing nation, undertakes 90% of all procurements through RDT, either through import of finished products or raw materials. RDT undertakes manufacture of various items such as ballistic vests and other ballistic gear using materials imported from abroad. There is no production of essential raw materials in India, therefore RDT imports most of the raw materials from various suppliers and the Government of Raconia subsidises the procurement of the same. II.
5.
Facts
AI has been supplying AI Optra™ to RDT since 2007 on an ad-hoc basis. In April, 2016 owing to increase in demand in Raconia due to recent civil unrest, Mr. Fitzgerald Udeshwar, the Chief Executive Officer of RDT required a large order supply of AI Optra™ within a small timeframe which was promptly accepted by RDT. (Claimant’s Exhibit No. 1-2) Accordingly, after finalizing the typical discounts available to RDT, Mr. Udeshwar sent an order for 4000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ at a price of US$ 420.00 per roll of material. The rolls were to be shipped from Capital City CFR to Oceanside Port in two (2) equal shipments on or prior to the 10th of the months of December, 2016 and January, 2017. The
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total contract price was US$ 1,680,000. Payment for each installment was due 30 days after shipment. (Claimant’s Exhibit No. 3) 6.
Subsequently, on December 8, 2016 the first shipment was despatched from Capital City and arrived at Oceanside Port on December 10, 2016. As per the terms of the contract, RDT was required to complete port and customs formalities. On December 15, 2016, AI received communication from RDT seeking assistance in customs clearance due to unprecedented requirements. According to RDT, due to the civil unrest, import of specified materials required a procedural clearance signed by the manager of the exporting firm. Mr. Udeshwar highlighted the importance of this requirement, otherwise the goods would be rendered useless for the purposes of RDT if continuing in the possession of Raconian Customs. (Claimant’s Exhibit No. 4).
7.
AI promptly sent the contact details of Mr. Antony Martyr, the authorised representative of AI in Raconia who would be happy to do the needful. (Claimant’s Exhibit No. 5) However, on December 25, 2016 AI was informed by RDT that the customs officials would not accept the clearance from an authorised person and would only accept the same signed off in the presence of the manager of the exporter’s business. Further, since the goods have been lying unclaimed for fifteen (15) days, and the goods being specified for clearance formalities, would now stand confiscated by the Raconian authorities. In these circumstances, RDT would not be able to claim the goods until legal proceedings in the matter could be resolved. Accordingly, owing to the urgency of the requirements of RDT and the fact that RDT would require the materials immediately, RDT has already placed an order with a competitor and would avoid the present contract due to circumstances due to failure of AI to complete procedural formalities. (Claimant’s Exhibit No. 6)
8.
Immediately, AI responded to the avoidance of contract by stating that the Claimant was not informed in advance of the requirements of Raconian customs, and the responsibility to clear the goods was the buyer’s alone in light of paragraph 13 (c) of the contract between the parties. In any case, the goods were now the property of RDT, and payment for the same and the remaining shipment needs to be made. However, in the meantime without prejudice to the seller’s rights in this regard, RDT is obligated to assist AI in returning the goods to origin, since the Raconian Customs authority will deal with the importer of the goods and not the foreign exporter. (Claimant’s Exhibit No. 7). RDT, however responded only by stating that the avoidance of the contract was valid and RDT has no responsibility under law to assist AI in clearance of the goods. Further, RDT states that clearance of the goods would require RDT to pay customs duties, which they are no more obligated to pay since the contract has been legally avoided. Therefore, AI can be free to claim the goods from customs as owner of the goods. (Claimant’s Exhibit No. 8)
9.
AI would, thereafter in communication with the Raconian Customs authorities, request for the release of the goods that have been confiscated by them multiple times (Claimant’s Exhibit No. 9-10). However, the Customs authorities would not respond to any such communication. In May 14, 2017, RDT forwarded a communication from the Customs department stating that the unclaimed confiscated goods would now stand to be disposed of / sold / destroyed in accordance with Raconian law owing to no claim by the importer-on-record and storage costs of US$ 5,000 is liable to be paid by the importer-on-record. As per RDT, this amount is liable to be paid by AI for breach of contract and the same is recoverable from AI. (Claimant Exhibit No. 11)
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10.
An amount of 2000 rolls of AI Optra™ remains unsold in addition to the 2000 rolls that belong to RDT that were confiscated by the Customs Authorities. III.
Arbitration clause, applicable law
11.
The contract has no choice of law clause. Both Antaria and Raconia are parties to the United Nations Convention on Contracts for the International Sale of Goods (“CISG”).
12.
The arbitration clause is found in paragraph 15 of the contract. It provides as follows: “Any dispute, controversy or claim arising out of or relating to this contract, including the formation, interpretation, breach or termination thereof, including whether the claims asserted are arbitrable, will be referred to and finally determined by arbitration in accordance with the JAMS International Arbitration Rules, subject to application of the Expedited Procedure. The tribunal will consist of a sole arbitrator as specified under Schedule I of this contract. The seat of the arbitration will be Bhojpal, Madhu Pradan. The language to be used in the arbitral proceedings will be English. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.”
13.
The parties have already opted for Expedited Procedure under Article 22 of the JAMS International Arbitration Rules as per the terms of the arbitration clause, and the same should be applied in this case.
14.
Madhu Pradan has adopted the 1985 text of the UNCITRAL Model Law on International Commercial Arbitration without amendment. Antaria, Raconia and Madhu Pradan are all party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (“New York Convention”). IV.
Legal Conclusions
15.
A tribunal formed in accordance with the Expedited Procedure of the JAMS International Arbitration Rules would have jurisdiction over the dispute.
16.
RDT has contracted with AI to purchase 4000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ at a price of US$ 420.00 per roll of material for a total contract price of US$ 1,680,000.
17.
Storage costs of US$ 5000 is not liable to be paid by AI since as per contract, the same is the responsibility of RDT.
18.
RDT has refused to take delivery of the goods and perform its duties as a buyer and has avoided the contract without any legal basis, contrary to CISG, Article 53. V.
19.
Appointment of Arbitrator
The parties have designated the following individual as the sole arbitrator: Mr. Duke Nukem 14 Advocate Way Bhojpal, Madhu Pradan
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Tel: (0) 614-1570 Fax: (0) 614-1571 Email:
[email protected] VI.
Relief
20.
AI requests the Tribunal to find: that the Tribunal has jurisdiction to consider the dispute between AI and RDT; that contract between AI and RDT cannot be avoided by RDT on the basis of lack of participation of AI during the clearance formalities; that RDT has refused to take delivery of the goods in violation of CISG, Article 53; that RDT has refused to complete Customs formalities which it is obligated to do under the contract and; that RDT has not paid the purchase price of US$ 1,680,000.
21.
Consequently, AI requests the Tribunal to order RDT: to pay AI the purchase price of US$ 1,680,000; to clear the goods from Raconian Customs and return the same to AI, who is an unpaid seller in this case; to pay interest at the prevailing market rate in Antaria on the said sum from the date of breach to the date of payment; to pay all costs of arbitration, including costs incurred by the parties.
(Signed) Counsel
June 02 2017
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Claimant’s Exhibit No. 1 RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia April 21, 2016 Mr. Prash Jory Head – Strategic Business Unit ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria Dear Mr. Jory: In terms of our long-standing business relationship I would like to place a request for AI Optra™ material. As you are aware, Raconia has been under civil unrest in various parts of the country owing to the recent municipal elections. In this regard, the Government of Raconia has placed large orders for manufacture of ballistic garments. Therefore, in furtherance of the same we would require 4000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™. We understand from our continuing relationship that such large orders are required on a prior order of a minimum of 10 months, however we would appreciate if you could half the shipment by the beginning of December, 2016 and the remaining shipment by January, 2017. Post your acceptance, please send a formal contract for our signature as per our continuing agreed price list. Sincerely, (Signed) F. Udeshwar Chief Executive Officer
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Claimant’s Exhibit No. 2 ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria April 23, 2016 Mr. Fitzgerald Udeshwar Chief Executive Officer RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia Dear Mr. Udeshwar: Thank you for your mail requesting the latest shipment of our proprietary AI Optra™ material. It would be possible for us to supply 4000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ material by December 10, 2016 at the earliest. Further, the balance shipment will be despatched on January 10, 2017, as per your request. Please find attached to this mail, the contract as per our standard terms of business. The total contract price is US$ 1,680,000. Payment is to be made within 30 days of despatch of the goods. Sincerely, (Signed) Prash Jory Head – Strategic Business Unit
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Claimant’s Exhibit No. 3 Contract (Excerpts) ANTARIA INTERNATIONAL INC. (“AI” or “Seller”) agrees to sell and RACONIAN DEFENCE TECHNOLOGIES LTD. (“RDT” or “Buyer”) agrees to buy 4000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ material (“Goods”) at $420 per roll plus CFR charges. 1.
Price is $1,680,000 CFR Capital City to Oceanside Port.
2.
Shipment to be in two equal installments of 2000 rolls each. The first shipment to be made on or before December 10, 2016 with subsequent shipment one month interval on or before January 10, 2017.
3.
Payment is to be made in installments by transfer to the account Antaria International Inc., account number 00123456789 in the Antaria Commercial Bank, Capital City Branch. Payment is due 30 days after notification by Antaria International Inc. of delivery to the port for shipment.
*** 13.
Obligations of the Buyer … (c) The Buyer is responsible for all procedural formalities in the port of import including but not limited to clearance of the Goods. …
14.
Obligations of the Seller … (b) The Seller shall reasonably assist the Buyer in regard to any procedural requirements that may arise during the delivery of the Goods. …
15.
Arbitration. “Any dispute, controversy or claim arising out of or relating to this contract, including the formation, interpretation, breach or termination thereof, including whether the claims asserted are arbitrable, will be referred to and finally determined by arbitration in accordance with the JAMS International Arbitration Rules, subject to application of the Expedited Procedure. The tribunal will consist of a sole arbitrator as specified under Schedule I of this contract. The seat of the arbitration will be Bhojpal, Madhu Pradan. The language to be used in the arbitral proceedings will be English. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.”
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Schedule I Duke Nukem 14 Advocate Way Bhojpal, Madhu Pradan Tel: (0) 614-1570 Fax: (0) 614-1571
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Email:
[email protected] ***
(Signed) Prash Jory Head – Strategic Business Unit ANTARIA INTERNATIONAL INC. Date: May 20, 2016
(Signed) Fitzgerald Udeshwar Chief Executive Officer RACONIAN DEFENCE TECHNOLOGIES LTD. Date: May 20, 2016
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Claimant’s Exhibit No. 4 RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia December 15, 2016 Mr. Prash Jory Head – Strategic Business Unit ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria Dear Mr. Jory: As you are aware that the goods supplied by your company in pursuance of contract dated May 20, 2016 has arrived on Oceanside port on December 10, 2016. We have filed Bill of Entry No. OCN-011022-111 dated December 11, 2016 with the Raconian Customs Authorities for payment of customs duty and clearance of the goods for home consumption. However, we received the following communication from the Customs Authorities on December 13, 2016: “Please refer to Bill of Entry No. OCN-011-022-111 dated December 11, 2016 filed by your good company containing goods of description “2000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ material” from port of export Capital City, Antaria. In accordance with Notification No. 14/2016-Customs dated November 20, 2016 importers of Scheduled Goods are required to file Exporter Certificate signed by manager of foreign exporter entity with Raconian Customs along with Bill of Entry due to the sensitive nature of the goods. Be advised that if Exporter’s Certificate is not filed within 15 days of import, the goods shall be treated in accordance with the customs law of Raconia.” We would kindly require you to the do the needful and send across a signed and stamped copy of the Exporter Certificate (Notification No. 14/2016-Customs dated November 20, 2016 containing Exporter Certificate attached to this mail) by the authorised signatory, so that the requisite formalities may be completed at the earliest. Please bear in mind the urgency of the matter, since the goods are required to be cleared from customs to be of any use to RDT. Looking forward to a prompt response. Sincerely, (Signed) F. Udeshwar Chief Executive Officer
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Encl. Copy of Notification No. 14/2016-Customs dated November 20, 2016 containing Exporter Certificate
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Claimant’s Exhibit No. 5 ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria December 17, 2016 Mr. Fitzgerald Udeshwar Chief Executive Officer RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia Dear Mr. Udeshwar: Kindly refer to your mail dated December 15, 2016. We have appointed Mr. Antony Martyr as our authorised representative to assist you in this matter (authorization letter enclosed). He has filed the completed Exporter Certificate with Raconian Customs yesterday (copy of filed Exporter Certificate enclosed). He would be happy to assist you in any other manner if so required in relation to the shipment. Please find below his contact coordinates: ANTONY MARTYR Consultant 233 Clownfish Lane, Nemo Way Oceanside Raconia Tel. (0) 133-6767 Telefax (0) 133-4832 Email:
[email protected] Kindly do let us know if there are any other requirements from our end. Sincerely, (Signed) Prash Jory Head – Strategic Business Unit Copy To. Antony Martyr Encl. Authorisation Letter – Antony Martyr Filed Exporter Certificate dated December 16, 2016
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Claimant’s Exhibit No. 6 RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia December 25, 2016 Mr. Prash Jory Head – Strategic Business Unit ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria Dear Mr. Jory: Please refer to our contract dated May 20, 2016 and Bill of Entry No. OCN-011-022-111 dated December 11, 2016 with the Raconian Customs Authorities for payment of customs duty and clearance of the goods for home consumption. We have received the following communication from the Customs authorities today: “Refer to Bill of Entry No. OCN-011-022-111 dated December 11, 2016 filed by your good company containing goods of description “2000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ material” from port of export Capital City, Antaria. In accordance with Notification No. 14/2016-Customs dated November 20, 2016 you have filed Exporter Certificate signed by one Antony Martyr, authorised representative of the merchant exporter. However, Mr. Martyr is not a manager of the business of the merchant exporter and accordingly the Exporter Certificate is rejected due to procedural irregularities. Further, since the goods are in the nature of Scheduled Goods, the same are liable to be confiscated forthwith in terms of Notification No. 14/2016-Customs dated November 20, 2016, after 15 days of import. Accordingly, the same have been confiscated and is now the property of the Government of Raconia.” Please note that due to the fact that you refused to have the manager of your business sign the Exporter Certificate, the Certificate has been rejected. In these circumstances, the goods are now the property of the Government of Raconia, pending appeal to be filed by the importer on record. You are aware of the urgency of RDT’s requirements in this case, and we cannot wait for legal proceedings to be initiated and goods be cleared. Accordingly, we would opt to avoid the contract owing to failure on your part to complete the requisite formalities as required by the Customs authorities in Raconia. We have already placed a similar order on another party who has promised to deliver goods as soon as possible, however of substantially inferior grade due to the immediacy of the requirement. Sincerely, (Signed)
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F. Udeshwar Chief Executive Officer
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Claimant’s Exhibit No. 7 ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria December 27, 2016 Mr. Fitzgerald Udeshwar Chief Executive Officer RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia Dear Mr. Udeshwar: At the outset, we would like to state that the responsibility for completion of Customs formalities was yours alone as per the contract under paragraph 13 (c). Therefore, AI can in no way be held liable for the same, and resultantly the avoidance of the contract by RDT is illegal under the law for the time being in force. Further, assuming and not conceding the above, the transfer of title in goods has already taken place, and the goods are now the property of RDT, even at the time of the avoidance of the contract. Accordingly, the payment for the shipment cannot be withheld. Further, without prejudice to the above, we would further like to reiterate that since the Bill of Entry has been filed by RDT as the importer on record, only RDT can clear the goods for Customs. Therefore, in case RDT are abandoning their goods, they should forthwith clear the goods and allow AI to claim the goods as an unpaid seller. We would assure you of our best cooperation at all times owing to our long standing relationship. Sincerely, (Signed) Prash Jory Head – Strategic Business Unit
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Claimant’s Exhibit No. 8 RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia January 13, 2017 Mr. Prash Jory Head – Strategic Business Unit ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria Dear Mr. Jory: We are unable to agree with your assertions as per mail dated December 27, 2016. The avoidance of the contract is legally valid since you as a seller have not performed your obligations under the contract. Accordingly, we are unable to make payment for the goods for the same. Further, the transfer of title in goods has not happened yet as the goods are yet to be cleared from Customs. Therefore, owing to the avoidance of the contract by RDT, RDT is under no obligation to complete customs formalities in this case. In any case, any clearance of the goods would require RDT to make payment of customs duties, which RDT is no longer legally obliged to pay since the contract has been legally avoided. Accordingly, AI is free to claim the goods from the customs authorities. Sincerely, (Signed) F. Udeshwar Chief Executive Officer
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Claimant’s Exhibit No. 9 ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria January 20, 2017 The Controller Raconia Customs Department Port Fishy, Oceanside Raconia Dear Sir: Sub: Bill of Entry No. Bill of Entry No. OCN-011-022-111 dated December 11, 2016 Kindly refer to the captioned Bill of Entry. The undersigned in the manager of the business of Antaria International Inc. (“AI”), the foreign exporter of the goods imported in the subject Bill of Entry. Accordingly, please allow the re-export of the goods to origin, since the importer-on-record for the said Bill of Entry has refused to take delivery of the goods. (Copies of communication from importer is attached and annexed to this letter). Accordingly, as the unpaid seller, AI is the rightful owner of the goods, once the importer has abandoned the same. Therefore, we would request you to kindly allow us to reclaim the goods as an unpaid seller. We have attached remedied Exporter Certificate signed by the undersigned as required by you. Sincerely, (Signed) Prash Jory Head – Strategic Business Unit Encl: Communications dated December 25, 2016 and January 13, 2017 Amended Exporter Certificate signed by Prash Jory, manager of AI’s business
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Claimant’s Exhibit No. 10 ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria March 15, 2017 The Controller Raconia Customs Department Port Fishy, Oceanside Raconia Dear Sir: Sub:
(1) Bill of Entry No. Bill of Entry No. OCN-011-022-111 dated December 11, 2016 (2) Letter dated January 20, 2017
Please refer to the captioned Bill of Entry and captioned letter. We would reiterate that you should allow us to re-export the goods to origin, since the importer-on-record for the said Bill of Entry has refused to take delivery of the goods. We would, in any case, advise you that the goods in question are highly sensitive to the defence sector, and under no circumstances should the goods be subject to deterioration and disposal while under your care. Legal consequences may follow. Sincerely, (Signed) Prash Jory Head – Strategic Business Unit
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Claimant’s Exhibit No. 11 RACONIAN DEFENCE TECHNOLOGIES LTD. 245 Under Water Park Oceanside Raconia May 14, 2017 Mr. Prash Jory Head – Strategic Business Unit ANTARIA INTERNATIONAL INC. 322 Boulevard Road, Capital City, Antaria Dear Mr. Jory: Please refer to avoided contract dated May 20, 2016 and Bill of Entry No. OCN-011-022-111 dated December 11, 2016. We have received the following communication from the Customs authorities today: “Refer to Bill of Entry No. OCN-011-022-111 dated December 11, 2016 filed by your good company containing goods of description “2000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ material” from port of export Capital City, Antaria. In accordance with Notification No. 14/2016-Customs dated November 20, 2016 any scheduled goods confiscated by the Customs authorities is liable to be disposed of / auctioned / destroyed after six months from the date of import. Accordingly, you have been notified that the said goods shall be disposed of in accordance with law. Kindly pay US$ 5000 as storage fees to Customs warehouse for the period of storage in Customs warehouse.” Please note that this US$ 5000 is recoverable from AI, since the contract has been avoided by RDT. Accordingly, RDT shall make payment to the statutory authorities and require payment of storage fees for your goods in Customs warehouse. Sincerely, (Signed) F. Udeshwar Chief Executive Officer
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June 05, 2017 Mojo Pojo, Esq. Advocate at the Court 75 Arb Street Capitol City, Antaria Tel. (0) 146-9845 Telefax (0) 146-9850 Email:
[email protected] Re: Antaria International Inc. v. Raconian Defence Technologies Ltd. JAMS International Arbitration Case No. 9876543210 Dear Mr. Pojo, We hereby acknowledge receipt of your letter of June 02, 2017 enclosing the requisite number of copies of a Request for Arbitration with proof of service upon the Respondent, Raconian Defence Technologies Ltd. Our invoice is enclosed for the filing fee of US$ 3000. The payment may be wired to JAMS c/o Bank of America, Orange, California, USA, A/c No. 7609999. We further note the appointment of Mr. Duke Nukem as the sole arbitrator. JAMS will also notify the Respondent of the filing of the Request for Arbitration. Sincerely, Royji Amukhib Case Manager Encl. Invoice for filing fee of US$ 3000
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June 05, 2017 Raconian Defence Technologies Ltd. 245 Under Water Park Oceanside, Raconia Tel: (0) 555-7356 Fax: (0) 555-7359 Email:
[email protected] Re: Antaria International Inc. v. Raconian Defence Technologies Ltd. JAMS International Arbitration Case No. 9876543210 Dear Sir, You are hereby informed that JAMS has received the enclosed Request for Arbitration and Statement of Claim (“Request”) dated June 02, 2017. The Request names Raconian Defence Technologies Ltd. as party – Respondent. In accordance with Article 5.1 of the JAMS International Arbitration Rules, the Respondent has 30 days to deliver to the Claimant a Statement of Defense. We have been informed that the sole arbitrator has already been appointed by the parties in this case. The Claimant’s address is set forth in the Request. All correspondence should be copied to JAMS to the attention of: Royji Amukhib Case Manager JAMS 280 Park Avenue, West Bldg., 28th Floor New York, NY 10017 Sincerely, Royji Amukhib Case Manager
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APPOINTMENT OF ARBITRATOR June 05, 2017 Mr. Duke Nukem 14 Advocate Way Bhojpal, Madhu Pradan Re: Antaria International Inc. v. Raconian Defence Technologies Ltd. JAMS International Arbitration Case No. 9876543210 Dear Mr. Nukem, You are hereby informed that you have been appointed to serve as sole arbitrator by both the parties in the above referenced matter. Please note that this arbitration will be conducted in accordance with JAMS International Arbitration Rules and Procedures. JAMS has attached a full service list for this matter for your review. I would appreciate it if you could please provide me with any written disclosures you deem necessary at your earliest convenience so that I may distribute that information to the parties. Thank you very much and if you have any questions please do not hesitate to contact me directly at 212-607-8998. Sincerely, Royji Amukhib Case Manager Copy to: Mojo Pojo Raconian Defence Technologies Ltd.
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Mr. Duke Nukem 14 Advocate Way Bhojpal, Madhu Pradan June 16, 2017 Mr. Royji Amukhib Case Manager JAMS 280 Park Ave., West Bldg., 28th Floor New York, NY 10017 Re: Antaria International Inc. v. Raconian Defence Technologies Ltd., JAMS International Arbitration Case No. 9876543210 Dear Mr. Amukhib: In accordance with Article 8.6 of the JAMS International Arbitration Rules (“Rules”), I acknowledge receipt of JAMS’ letter of June 05, 2017, and hereby accept appointment as arbitrator in the captioned arbitration. My address appears above. I can be reached at telephone number (0) 614-1570, fax number (0) 6141571 and email:
[email protected]. I have reviewed the Service List enclosed with your letter and have nothing to disclose. In accordance with Article 9 of the Rules, I confirm my independence and impartiality. Sincerely, Mr. Duke Nukem
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Elena Sparrow, Adv. 146 Court Street Oceanside, Raconia Tel. (0) 125-5585 Telefax (0) 125-5586 Email:
[email protected] June 20, 2017 Mr. Royji Amukhib Case Manager JAMS 280 Park Ave., West Bldg., 28th Floor New York, NY 10017 Re: Antaria International Inc. v. Raconian Defence Technologies Ltd., JAMS International Arbitration Case No. 9876543210 Dear Sirs: Your letter of June 05, 2017 with enclosures, and particularly the Request for Arbitration and Statement of Claim (“Request”) by ANTARIA INTERNATIONAL INC. against my client, RACONIAN DEFENCE TECHNOLOGIES LTD., has been referred to me by ANTARIA INTERNATIONAL INC. I should like to inform you that we will contest the applicability of Expedited Procedure under Article 22 of JAMS International Arbitration Rules since the appointment of arbitrator has already taken place and there is no provision under the said Rules to opt for Expedited Procedures post appointment of arbitrator. I would also like to acknowledge the appointment of Mr. Duke Nukem as arbitrator in the captioned dispute on behalf of the Respondent. Sincerely yours, (Signed) Elena Sparrow Encl: Power of Attorney Statement of Defense
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JAMS Antaria International Inc. Claimant v. Raconian Defence Technologies Ltd. Respondent JAMS International Arbitration Case No. 9876543210 Statement of Defense and Counter-claim I. 1.
Facts
Raconian Defence Technologies Ltd. (Respondent) does not contest the basic narrative set forth in the Statement of Claim and Request for Arbitration (Request). However, it will bring to the attention of the tribunal several elements in the correspondence between the two parties set forth in Claimant’s Exhibits that have not been pointed out by the claimant, Antaria International Inc. (Claimant) along with oral evidence of Mr. Antony Martyr which would show that Claimant was aware of the procedure required for clearance of goods in Raconia and therefore Claimant should be held at a higher standard of care than that has been set forth in the Request. Further, the Claimant cannot unilaterally apply for application of Expedited Procedure under Article 22 of the JAMS International Arbitration Rules (Rules), especially post appointment of arbitrator and they do not apply in this case. Lastly, the Respondent has correctly repudiated the contract between the Claimant and itself after failure of the Claimant to responsibly act within the statutory timeframe. II.
Applicable Laws of Procedure
2.
Claimant has unilaterally claimed that the Expedited Procedure under the Rules shall be applied in this case. However, procedurally the expedited rules can only be applied prior to appointment of the arbitrator. In this case, the arbitration clause itself provides for the appointment of the arbitrator and therefore the appointment of arbitrator had been complete even before they have indicated the application of the Expedited Procedures.
3.
Further, the Respondent at no point of time has indicated that it is agreeable for Expedited Procedure of arbitration under the Rules can apply. Specifically because in this case the Respondent wishes to rely on oral evidence of Mr. Antony Martyr, which will show that the Claimant has in the past filed Exporter Certificate signed by the manager of their business, and in this case, allowing Mr. Martyr to sign is gross negligence on their part.
4.
In any case, the oral evidence of Mr. Martyr should be considered in light of the peculiar facts and circumstances of this case, even if Expedited Procedures of arbitration are applied, since it brings to light relevant prior conduct of the Claimant, relevant to the circumstances of this case. III.
Respondent has correctly avoided the Contract
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5.
At the outset, it is important to mention that the Claimant has been exporting to Raconia for a while now. However, recently they have exported similar materials to private defence contractors in the recent past as well and is well aware of the requirements under Notification No. 14/2016-Customs dated November 20, 2016 (Customs Notification). In this regard, a reputed national newspaper in Raconia has identified that the Claimant shall be dealing with private defence contractors in Raconia in supplying ballistic materials. (Respondent Exhibit No. 1) Here, it is important to note that all ballistic materials are covered under the Customs Notification, therefore to export to Raconia, the Claimant will be required to comply with Exporter Certificate compliance. Further, oral evidence from Mr. Antony Martyr will demonstrate that the Claimant has exported ballistic materials to other contractors post November 20, 2016 and was well aware of Exporter Certificate compliance. Accordingly, the negligence in allowing a person who is merely an authorized signatory to sign the Exporter Certificate is attributable to the Claimant in light of these facts.
6.
Further, the Claimant has very conveniently not attached the Customs Notification to the Request, however the same has been provided to the Claimant vide mail dated December 15, 2016 (as per Claimant Exhibit No. 4). The Customs Notification is very clear as to who is liable to sign the Exporter Certificate, and the Claimant was aware of the same from December 15, 2016 at least. (Respondent Exhibit No. 2) Therefore, thereafter assigning Mr. Martyr to sign and file the Exporter Certificate at that stage was gross negligence on part of the Claimant and accordingly the contract was rightly avoided by the Respondent. IV.
Claimant has acted unreasonably can caused Fundamental Breach of the Contract
7. In any case, the contract itself under paragraph 14 (b) of the contract between the parties mandates the Respondent to “reasonably assist the Buyer in regard to any procedural requirements that may arise during the delivery of the Goods.”. In this case, not only has the Claimant not reasonably assisted the Respondent, their negligence has caused confiscation of the goods. Accordingly, the contract has been rightfully avoided. Accordingly, the omission of the Claimant has caused fundamental breach of the contract under Article 25 of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and can accordingly be avoided as per provisions of Article 49 (1) (a) of the CISG. V.
Respondent can recover storage costs payable to Raconian Customs authorities from the Claimant
8. Further, the Respondent being the importer-on-record for the Raconian Customs authorities is liable to pay storage of the goods under the contract to the Customs authorities. In this regard, this storage cost is payable due to storage of the goods in customs warehouse since the goods had been abandoned by the Respondent. Since these costs are reasonably associated to the negligence caused by the Claimant in not completing procedural formalities, the same is liable to be paid by the Claimant. VI. 9.
Legal Conclusions
The Tribunal should not apply the Expedited Procedures under the Rules post appointment of arbitrator.
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10.
Oral testimony of Mr. Antony Martyr should be allowed to be recorded by the Tribunal as relevant to the facts and circumstances of the present case.
11.
Respondent had contracted with Claimant to purchase 4000 rolls of 45.8 kg roll weight, of 63 inches minimum width AI Optra™ at a price of US$ 420.00 per roll of material for a total contract price of US$ 1,680,000, which was rightly avoided by the Respondent due to fundamental breach of the contract.
12.
Storage costs of US$ 5000 is to be recovered from the Claimant. VII.
13.
Appointment of Arbitrator
The parties have already designated the following individual as the sole arbitrator under the contract: Mr. Duke Nukem 14 Advocate Way Bhojpal, Madhu Pradan Tel: (0) 614-1570 Fax: (0) 614-1571 Email:
[email protected] VIII.
14.
Relief
Respondent requests the Tribunal to: find that the Expedited Procedures under the Rules does not apply; find that oral testimony of Mr. Antony Martyr should be allowed to be recorded; find that the Claimant has fundamentally breached the contract under Article 25 of CISG; order that storage costs of US$ 5000 payable to Raconian Customs authorities is to be recovered from the Claimant. order that all costs of arbitration, including costs incurred by the parties is liable to be paid by the Claimant.
(Signed) Counsel
June 20, 2017
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Respondent’s Exhibit No. 1: Excerpt from the Raconia Times dated November 12, 2016
Billion Dollar Conglomerate Expands Presence in Raconia
Oceanside. November 12, 2016. Within a few weeks after the Government allowed private players in the defence sector in Raconia, Antaria International Inc. has entered into several strategic partnerships with Oceanside Defence Inc. and Raconnaisance (Pvt.) Ltd., the two largest private players in the burgeoning market. Raconia is fast emerging as an economic powerhouse and is on the way to modernise its defence forces to give it the necessary strategic confidence. Antaria International is already supplying its products to the largest defence equipment manufacturer in Raconia, Raconian Defence Technologies Ltd. Prash Jory, the Head of Strategic Business at Antaria International was buoyant about the future of partnerships in Raconia and believes that the market can only expand post liberalization. Jory said, “We are really excited with the scopes of supply with these two new companies. We hope that this will kickstart the defence technology boom in Raconia, which has already swept the Americas and Europe. We believe that our partnerships in Raconia will stand us in good stead in the long term. In fact, I can’t wait to ship to our new customers very very soon!” In the next ten years, the defence industry in Raconia is anticipated to generate a business opportunity of over $70 billion. Thanks to the Prime Minister’s vision and initiative, the Raconian private sector shall have a level playing field for a larger play in this technologically challenging but very lucrative industry.
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Respondent’s Exhibit No. 2 GOVERNMENT OF RACONIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) NOTIFICATION No. 14 /2016-Customs Raconia, the 20th November, 2016 G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, the Government of Raconia being satisfied that it is necessary in the public interest so to do, hereby passes the following orders, namely:All importers are directed that for the goods specified in Column (2) of Table No. 14/2016/1 below, the additional procedure specified in Column (3) in the said Table needs to be followed for Bills of Entries filed from the date the of this Notification: TABLE NO. 14/2016/1 Sl. No. … 42.
…
Description of Goods Conditions ………. ……… Ballistic Materials under Chapter 59 of the Exporter Certificate from foreign Harmonized System of Nomenclature exporter needs to be filed along with import documents, duly signed and sealed by the manager of the business of the foreign exporter. ……… ……… (Signed) Under Secretary to the Government of Raconia
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JAMS Antaria International Inc. Claimant v. Raconian Defence Technologies Ltd. Respondent JAMS International Arbitration Case No. 9876543210 Procedural Order No. 1 1.
This arbitration is between Antaria International Inc. as claimant and Raconian Defence Technologies Ltd. as respondent. They shall be referred to in this Procedural Order as Claimant and Respondent.
2.
On September 1, 2017 the tribunal conferred by means of a conference call as to the procedure that should be followed in the arbitration. Both parties agreed that the questions relating to application of Expedited Procedure under the JAMS International Arbitration Rules should be posted along with questions relating to substance of the dispute.
3.
Normally, any argument on determination of procedural law should be argued before arguments on the merits. This is particularly the case where, as in this dispute, there is a request oral testimony of one Mr. Antony Martyr be recorded. This question is subject to applicability of Expedited Procedure under the JAMS International Arbitration Rules.
4.
Therefore, in a case like the present where one witness may be anticipated, combining arguments on the merits with jurisdictional arguments could be expected to be inefficient. Ms. Sparrow for the Respondent has agreed to this procedure, subject to positive assertions being made first in order of priority.
5.
As noted above, it is expected that the question of recording of evidence in case Mr. Martyr’s testimony may be considered, however such question is without prejudice to the other procedural questions required to be answered pursuant to submission of the parties.
6.
In accordance with the Rules for the Arbitration Pool Selections 2017 as published by the Moot Court Association, National Law Institute University, Bhopal (“MCA”) questions may be submitted to the Convenor, MCA preferably by e-mail at
[email protected], by midnight Saturday, September 30, 2017. The target date for the answers to be distributed to all parties is Monday, October 02, 2017.
7.
It was agreed that the memoranda should be prepared by Claimant and Respondent for submission by e-mail by Thursday, October 12, 2017.
8.
The memoranda should discuss the following issues. In regard to jurisdiction of the Tribunal: Whether the Expedited Procedures under Article 22 of the JAMS International Arbitration Rules are applicable in the facts and circumstances arising out of the claim ; Whether the testimony of Mr. Antony Martyr should be recorded in this case;
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In regard to the substance of the dispute: Whether the Respondent has legally avoided the contract; and Whether storage costs are recoverable from the Claimant pursuant to demand raised by the Raconian Customs Authorities. 9.
The memoranda should not discuss the remedies claimed by the Claimant for the alleged breach of the contract of sale. There should also be no discussion of the allocation of the costs of arbitration. Those issues will be considered at a later stage of the arbitration, if necessary.
10.
Oral arguments will be scheduled on October 14 - 15, 2017 in Bhojpal. The Schedule will be notified independently by the MCA.
(Signed) Sole Arbitrator of the Tribunal
September 5, 2017
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