Memorandum For Respondent: S H G L N W F W L Z

EIGHTEENTH ANNUAL
WILLEM C. VIS INTERNATIONAL COMMERCIAL ARBITRATION MOOT

APRIL 15TH 21ST 2011, VIENNA
MEMORANDUM FOR RESPONDENT
UNIVERSITY OF ST.GALLEN
CLAIMANT
RESPONDENT
MEDITERRANEO TRAWLER
EQUATORIANA
SUPPLY AS
FISHING LTD
c/o Horace Fasttrack
c/o Joseph Langweiler
75 Court Street
14 Capital Boulevard
Capitol City, Mediterraneo
Oceanside, Equatoriana
Tel. (0) 146-9845
Tel. (0) 214 77 32
Fax (0) 146-9850
Fax (0) 214 77 33
Fasttrack@lawyer.me
Langweiler@host.eq
SAMUEL HORNER GEORG LORENZ NADIA WALKER

FLORIAN WEGMANN LUZIUS ZUMSTEIN
University of St. Gallen

_____________________________________________________________________
TABLE OF CONTENTS
Table of Contents................................................................................................. ii
Table of Abbreviations........................................................................................ v
Index of Authorities .......................................................................................... vii
Statement of Facts ............................................................................................... 1
Summary of Argument ....................................................................................... 2
Argument ............................................................................................................. 3
I. The Tribunal does not have jurisdiction ..................................................... 3
A.
CONSTITUTION OF THIS TRIBUNAL VIOLATES THE CLAUSE ................. 3
1. The parties derogated from the Milan Rules ........................................... 4

2. Horace Z.s appointment violates the Clause .......................................... 6
3. The parties did not waive their right to object......................................... 6
B.
CONSTITUTION OF THIS TRIBUNAL VIOLATES THE MILAN RULES ....... 6
1. The Arbitral Council violated Art. 20(3) Milan Rules ............................ 7

2. The non-confirmation exceeded Arbitral Councils mandate ................. 8
3. The parties did not waive their right to object....................................... 10
C.
ANY AWARD RENDERED BY THIS TRIBUNAL WOULD NOT BE

RECOGNIZED AND ENFORCED .............................................................. 10
II. Interim measures should be granted and Claimant is liable for breach of
confidentiality ............................................................................................... 12
A.
CLAIMANT BREACHED CONFIDENTIALITY ........................................... 12
1. CLAIMANT has a duty of confidentiality ................................................ 12

(a)
The 2010 Milan Rules apply .............................................................................. 12
Memorandum for Respondent ii

_____________________________________________________________________
(b)
Pursuant to Art. 8(1) of the 2010 Milan Rules CLAIMANT has a duty of
confidentiality..................................................................................................... 13
(c)
CLAIMANT agreed to confidentiality by consenting to choose arbitration ........ 13
2. CLAIMANTs interview breached the duty of confidentiality................. 13

3. The breach was not justified .................................................................. 14
(a)
The exception of Art. 8(1) Milan Rules only refers to arbitral awards .............. 14
(b)
CLAIMANT was not protecting its rights ............................................................. 14
B.
INTERIM MEASURES SHOULD BE GRANTED .......................................... 15
1. The Tribunal has authority to order interim measures .......................... 15

2. The prerequisites to grant interim measures are fulfilled ...................... 15
3. The prerequisites do not have to be strictly fulfilled ............................. 16
C.
CLAIMANT IS LIABLE FOR BREACH OF CONFIDENTIALITY .................. 16
III. Claim for breach of contract should be dismissed .................................. 16

A.
NO BREACH OF CONTRACT OCCURRED ................................................. 17
1. The goods fulfilled all contractual requirements pursuant to Art. 35(1)

CISG ...................................................................................................... 17
(a)
The contract was formed on the basis of the sale confirmation ......................... 17
(b)
The contract did not include a size requirement ................................................ 18
2. The squid fulfilled all requirements of Art. 35(2) CISG ....................... 20
B.
(a)
The squid were fit for all ordinary purposes ...................................................... 21
(b)
The squid were fit for the particular purpose ..................................................... 21
(c)
CLAIMANT did not rely on RESPONDENTs skill and judgement ......................... 22
(d)
The squid possessed the qualities held out by the sample.................................. 22
CLAIMANT LOST ITS RIGHT TO RELY ON AN ALLEGED LACK OF

CONFORMITY ......................................................................................... 23
Memorandum for Respondent iii

_____________________________________________________________________
1. CLAIMANT did not examine the goods properly .................................... 23

(a)
The quantity examined was not sufficient.......................................................... 23
(b)
The examined samples were not representative ................................................. 24
(c)
The quality of examination was not sufficient ................................................... 24
2. CLAIMANT did not give proper notice about non-conformity ............... 25

(a)
Communication of 16 August 2008 was not in time .......................................... 25
(b)
Communication of 29 July 2008 was inadequate............................................... 27
(c)
RESPONDENT did not waive its right to object .................................................... 28
C.
AVOIDANCE OF THE CONTRACT WAS NOT POSSIBLE ............................ 29
1. The alleged breach of contract was not fundamental ............................ 29

(a)
CLAIMANT was not substantially deprived of the benefit of the contract ........... 29
(b)
The results were not foreseeable ........................................................................ 31
2. Other remedies would have been sufficient .......................................... 31

3. CLAIMANT failed to declare avoidance .................................................. 32
4. The alleged non-conformity only affected an easily separable part of the
goods ...................................................................................................... 32
D.
CLAIMANT IS NOT ENTITLED TO DAMAGES .......................................... 33
1. The prerequisites for damages are not fulfilled ..................................... 33

2. Mitigation of losses would have been possible ..................................... 33
(a)
The measures taken were not adequately executed ............................................ 34
(b)
Further measures would have been adequate ..................................................... 35
IV. Prayers for Relief ........................................................................................ 35
Memorandum for Respondent iv

_____________________________________________________________________
TABLE OF ABBREVIATIONS
Art.
Article
Amend.
Amendment
Cf.
Compare
Cir.
Circuit (U.S. Court of Appeals)
CISG
United Nations Convention on Contracts for the International

Sale of Goods, Vienna, 1980
Cl. Ex.
Claimants Exhibit
CLOUT
Case Law on UNCITRAL Texts
DIS
Deutsche Institution fr Schiedsgerichtsbarkeit (German

Institute for Arbitration)
Ed / Eds
Editor / Editors
ed.
edition
e.g.
exemplum gratia (for example)
Encycl.
Encyclopedia
et al.
et alia (and others)
etc.
et cetera (and so forth)
ETD
Estimated Time of Departure
et seq. / et seqq.
et sequens (and the following one) / et sequentia (and those that

follow)
grams
IBA
International Bar Association
ICC
International Chamber of Commerce
id.
idem (the same)
i.e.
id est (that is)
LCIA
London Court of International Arbitration
Lloyds Rep.
Lloyds Law Reports
Ltd
Limited
Mem. Cl.
Memorandum for Claimant
No.
Number
NYC
New York Convention
p. / pp.
page / pages
para. / paras.
paragraph / paragraphs
Memorandum for Respondent v

_____________________________________________________________________
proc. ord.
Procedural Order
prot.
protocol
Re. Ex.
Respondents Exhibit
Req. for Arb.
Request for Arbitration
Stat. of Def.
Statement of Defense
UN
United Nations
UNCITRAL
United Nations Commission on International Trade Law
UNIDROIT
International Institute for the Unification of Private Law
US
United States of America
v.
versus (against)
Vol.
Volume
WIPO
World Intellectual Property Organization
Memorandum for Respondent vi

_____________________________________________________________________
INDEX OF AUTHORITIES
Abbreviation
Citation
Cited in
TREATIES, COVENTIONS AND LAWS

CISG
Convention on Contracts for the International
passim
Sale of Goods, Vienna, 1980.

IBA Guidelines
IBA Guidelines on Conflicts of Interest in
21,28
International Arbitration, 2004.

DIS Rules
Rules of the German Institute of Arbitration.
12
ICC Rules
Rules of Arbitration of the International
11
Chamber of Commerce.
LCIA Rules
Arbitration Rules of the London Court of
11,12
International Arbitration.
Milan Rules
Arbitration Rules of the Milan Chamber of
passim
Arbitration.
New York Convention
Convention on the Recognition and
35,54
Enforcement of Foreign Arbitral Awards, New

York, 1958.
Swiss Rules
Arbitration Rules of the Swiss Chambers' Court
11,12
of Arbitration and Mediation.

UNCITRAL Model Law
UNCITRAL Model Law on International
1,4,39,54
Commercial Arbitration, 1985 with amendments

as adopted in 2006.
WIPO Rules
Arbitration Rules of the World Intellectual
47
Property Organization.
Memorandum for Respondent vii

_____________________________________________________________________
COMMENTARY
Achilles
WILHELM-ALBRECHT ACHILLES, Kommentar
94,101,
zum UN-Kaufrechtsbereinkommen (CISG),
102,115
Neuwied, 2000.
Bianca/Bonell/Author
CESARE MASSIMO BIANCA/MICHAEL JOACHIM
96
BONELL (Eds), Commentary on the International

Sales Law, The 1980 Vienna Sales Convention,
Milan, 1987.
Blackaby/Partasides
NIGEL BLACKABY /CONSTANTINE PARTASIDES
33
/ET AL., Redfern and Hunter on International

Arbitration, Oxford, 2009.
Born (2009)
GARY BORN, International Commercial

rd
Brown
3,35,54,56,
Arbitration, 3 ed., Austin, 2009.
60,61
ALEXIS BROWN, Presumption Meets Reality: An
47,60,61
Exploration of the Confidentiality Obligation in

International Commercial Arbitration, Browns
Published, 2001, 969-1025.
Carbonneau
THOMAS E. CARBONNEAU, The Exercise of
Contract Freedom in the Making of Arbitration

Agreements, Vanderbilt Journal of
Transnational Law, October 2003, 1189-1232.
Coker
DON COKER, Letters of Credit, Bills of Lading
70,71
& International Trade Finance -Documentation

Issues Important in Litigation, HG.org, 2010.
Found under:
< http://www.hg.org/article.asp?id=18850> (last
visited 30.12.2010).
Coppo
BENEDETTA COPPO , The 2010 Revision of the
26
Arbitration Rules of the Chamber of Arbitration
Memorandum for Respondent viii

_____________________________________________________________________
of Milan, Vindobona Journal of International
Commercial Law and Arbitration, Vol. 14,
2010, 283-296.
Derains/Schwartz
YVES DERAINS /ERIC A. SCHWARTZ , Guide to
29,33
the ICC Rules of Arbitration, The Hague, 2005.

Dessemontet
FRANOIS DESSEMONTET, Arbitration and
47
Confidentiality, The American Review of

International Arbitration, Vol. 7, 1996, 299-318.
DiMatteo et al.
LARRY DIMATTEO/ LUCIEN DHOOGE/STEPHANIE
66
GREENE/VIRGINIA MAURER/ MARISA

PAGNATTARO, The Interpretive Turn in
International Sales Law: An Analysis of Fifteen
Years of CISG Jurisprudence, Northwestern
Journal of International Law & Business,
Winter 2004, 299-440.
Enderlein/Maskow/
FRITZ ENDERLEIN/DIETRICH MASKOW/HEINZ
Strohbach
STROHBACH (Eds), Internationales Kaufrecht:
112
Kaufrechtskonventionen,
Verjhrungskonventionen,
Vertretungskonventionen,
Rechtsanwendungskonventionen, Berlin, 1991.
Enderlein/Maskow
FRITZ ENDERLEIN/DIETRICH MASKOW,
89
International Sales Law, New York, 1992.

Ferrari
FRANCO FERRARI, Fundamental Breach of
124
Contract Under the UN Sales Convention - 25

Years of Article 25 CISG, Journal of Law and
Commerce, Spring 2006, 489-508.
Fry/Greenberg
JASON FRY/SIMON GREENBERG, The Arbitral
29
Tribunal: Applications of Articles 7-12 of the

ICC Rules in Recent Cases, ICC International
Memorandum for Respondent ix

_____________________________________________________________________
Court of Arbitration Bulletin Vol. 20 No. 2,
2009, 12 et seqq.
Greenberg/Mange
SIMON GREENBERG/FLAVIA MANGE,
43
Institutional and Ad Hoc Perspectives on the

Temporal Conflict of Arbitral Rules, Journal of
International Arbitration, Vol. 27, 2010, 199 213.
Honsell/Author
HEINRICH HONSELL (Ed), Kommentar zum UN-
106,115,
Kaufrecht: bereinkommen der Vereinten
129,134,
Nationen ber Vertrge ber den Internationalen 141,144,
Huber/Mullis
Warenkauf (CISG), Berlin, 2010.
145
PETER HUBER/ALISTAIR MULLIS, The CISG,
66,137,143
Munich, 2007.
Hyland
RICHARD HYLAND, Conformity Of Goods To The
89
Contract Under The United Nations Sales

Convention And The Uniform Commercial Code
In: PETER SCHLECHTRIEM, Einheitliches Kaufrecht
und Nationales Obligationenrecht: Referate und
Diskussionen der Fachtagung Einheitliches
Kaufrecht, Freiburg i. Breisgau, 16./ 17. February
1987, 305-341.
Kaufmann-Kohler/Stucki
GABRIELLE KAUFMANN-KOHLER/BLAISE
61
STUCKI, International Arbitration in

Switzerland, Zurich, 2004.
Lew/Mistelis/Krll
JULIAN LEW/LOUKAS MISTELIS/STEFAN KRLL,
33
Comparative international commercial

arbitration, The Hague, 2003.
Lionnet/Lionnet
ANNETTE LIONNET/KLAUS LIONNET, Handbuch
45,47
der internationalen und nationalen

Schiedsgerichtsbarkeit, 3rd ed., Stuttgart, 2005.
Memorandum for Respondent x

_____________________________________________________________________
Lookofsky
JOSEPH LOOKOFSKY, Understanding the CISG,
84,85,87
3rd ed., Alphen aan den Rijn, 2008.

Magnus
ULRICH MAGNUS, The Remedy of Avoidance
132
of Contract Under CISG - General Remarks and

Special Cases, Journal of Law and Commerce,
06-2005, 423-436.
Moses
MARGARET MOSES, The principles and practice
8,22
of international commercial arbitration,

Cambridge, 2008.
Paulsson
JAN PAULSSON, quoted in: ALEXIS MOURRE,
22
Are unilateral appointments defensible? On Jan

Paulssons Moral Hazard in International
Arbitration, 05 October 2010.
Found under:
<http://kluwerarbitrationblog.com/blog/2010/10
/05/are-unilateral-appointments-defensible-onjan-paulsson%E2%80%99s-moral-hazard-ininternational-arbitration/> (last visited:
19.01.2011).
Poudret/Besson
JEAN-FRANOIS POUDRET/SBASTIEN BESSON,
1,5
Comparative Law of International Arbitration,

2nd ed., London, 2007.
Schlechtriem/Butler
PETER SCHLECHTRIEM/PETRA BUTLER, UN Law
124
on International Sale of Goods, Heidelberg,

2009.
Schlechtriem/Schwenzer/
PETER SCHLECHTRIEM/INGEBORG SCHWENZER
67,75,85,94,
Author
(Ed), Commentary on the UN Convention on
95,96,104,
rd
the International Sale of Goods (CISG), 3 ed.,
118,129,132
Oxford, 2010.
Memorandum for Respondent xi

_____________________________________________________________________
Schlechtriem
PETER SCHLECHTRIEM, Damages and
141
performance interest, Festschrift Apostolos

Georgiades, Athens, 2005.
Secretariat Commentary to
Secretariat Commentary on the 1978 Draft -
Art. 33
Guide to Article 35 CISG.
89,91
Found under:
<http://www.cisg.law.pace.edu/cisg/text/secom
m/newsecomm/secomm-35.html> (last visited
28.12.2010).
Shackelford,
ELISABETH SHACKELFORD, Party Autonomy and
43
regional Harmonization of Rules in

International Commercial Arbitration,
University of Pittsburgh Law Review, Vol. 67,
2006, 897-912.
Staudinger/Magnus
JULIUS VON STAUDINGER/ULRICH MAGNUS,
94,95,98,
Kommentar zum Brgerlichen Gesetzbuch
101,102
Wiener UN-Kaufrecht (CISG), Berlin, 2005.

Tann
PATRICK TANN, Die Berechnung der Rgefrist
96,98
im schweizerischen, deutschen und UNKaufrecht, St. Gallen, 1993.

UNCITRAL Digest
FRANCO FERRARI/HARRY FLECHTNER/ RONALD
87,112,
BRAND (Ed), The Draft UNCITRAL Digest and
118,137,
Beyond: Cases, Analysis and Unresolved Issues
145,147
in the U.N. Sales Convention, London, 2004.

Yesilirmak
ALI YESILIRMAK, Provisional Measures in
56
International Commercial Arbitration, The

Hague, 2005.
Zeller
BRUNO ZELLER, Damages under the Convention
145,150
on Contracts for the International Sale of Goods,

New York, 2005.
Memorandum for Respondent xii

_____________________________________________________________________
CASES
AUSTRALIA
CISG-online Case No. 218
Federal Court of Australia (South Australia
134
Registry), 28.4.1995.
AUSTRIA
Internationales Schiedsgericht der
118
Bundeskammer der gewerblichen Wirtschaft in

sterreich, 15.06.1994, SCH4318.
Oberster Gerichtshof, 6.2.1996, 10Ob518/95.
144
Oberster Gerichtshof, 27.8.1999, 1Ob223/99x.
106,108
Corporacion Trans-
Superior Court of Justice, 22.11.1999, 45
39
nacional v. STET
O.R.3d 183, CLOUT Case No. 391.
CANADA
FRANCE
E.T.P.M v. Gas del Estado
Cour de Cassation, Chambre Civile 1,
4.12.1990, 88-13336.
GERMANY
Landgericht Frankfurt am Main, 16.9.1991, 3/11 134

O 3/91.
Oberlandesgericht Dsseldorf, 14.01.1994, 17 U 147

146/93.
Bundesgerichtshof, VIII. Zivilsenat, 3.4.1996,
126,132
VIII ZR 51/95.
106
VIII 159/94.
Oberlandesgericht Stuttgart, 21.08.1995, 5 U
106
195/94.
Memorandum for Respondent xiii

_____________________________________________________________________
Bundesgerichtshof, VIII. Zivilsenat, 04.12.1996, 115

VIII ZR 306/95.
118,145
VIII 300/96.
Bundesgerichtshof, VIII. Zivilsenat, 25.11.1998, 118

VIII 259/97.
Landgericht Erfurt, 29.7.1998, 3 HKO 43/98.
115
Oberlandesgericht Oldenburg, 5.12.2000, 12 U
118
40/00.
Oberlandesgericht Oldenburg, 28.4.2000, 13 U
115
5/00.
Oberlandesgericht Kln, 14.10.2002, 16 U
134
77/01.
Oberlandesgericht Karlsruhe, 19.12.2002, 19 U
134
8/02.
84
VIII 67/04.
CISG-online Case No.
Oberlandesgericht Kln, 17.01.2007, 19 U
1581
11/07.
Oberlandesgericht Hamburg, 25.1.2008, 12 U
1681
39/00.
96
106
HUNGARY
Arbitration Court attached to the Hungarian
106
Chamber of Commerce and Industry, 5.12.1995,

VB/94131.
Memorandum for Respondent xiv

_____________________________________________________________________
ICC
ICC International Court of Arbitration, 1992,
147
ICC Case No. 7197.

ICC International Court of Arbitration,
137
23.8.1994, ICC Case No. 7660.

ICC International Court of Arbitration, 1997,
148
ICC Case No. 8786.

ICC International Court of Arbitration,
75
1.3.1995, ICC Case No. 7645.

NETHERLANDS
District Court Roermond, 19.12.1991, Fallini
101,106
Stefano v. Foodik.
Gerechtshof Arnhem, 17.6.1997, 96/449.
106,109
Netherlands Arbitration Institute, 15.10.2002,
85
Condensate crude oil mix ("Rijn Blend").

Rechtbank van Koophandel Kortrijk, 4.6.2004,
134
AR 21 36/2003.
SPAIN
Audiencia Provincial de Castellon,
1488
21.3.2006, Appeal No. 621/2005.
134
SWITZERLAND
Schweizerisches Bundesgericht, 28.10.1998,
106,107,
4C.179/1998.
126, 132
Handelsgericht des Kantons Zrich, 30.11.1998,
119,120
HG 930634.
Handelsgericht des Kantons St. Gallen,
150
3.12.2002, HG.1999.82-HGK.
Memorandum for Respondent xv

_____________________________________________________________________
UNITED KINGDOM
Offshore International v.
In: (1976) 2 Lloyds Rep. 402.
43
Bunge v. Kruse
In: (1979) 1 Lloyds Rep. 279.
43
Ali Shipping Corp. v.
In: (1998) 1 Lloyds Rep. 643.
45
In: (2008) 1 Lloyd's Rep. 616.
45
Banco Central
Shipyard Trogir
Emmott v. Michael Wilson
& Partners
UNITED STATES OF AMERICA
Encycl.Universalis v.
US Court of Appeals (2nd Cir.), 31.3.2005,
Encycl. Britannica
403 F.3d 85.
36,38
Memorandum for Respondent xvi

_____________________________________________________________________
STATEMENT OF FACTS
CLAIMANT, Mediterraneo Trawler Supply AS, is a company from Mediterraneo which sells
seafood as bait and for human consumption. RESPONDENT, Equatoriana Fishing Ltd, is a
company from Equatoriana which catches and sells squid of the species illex danubecus, both
as bait and for human consumption.
On 14 April 2008, RESPONDENT received an email from CLAIMANT requesting offers for the
sale of squid. In mid May, a representative of RESPONDENT visited CLAIMANT and submitted a
sample of its goods for sale. The sample was clearly marked illex danubecus 2007.
CLAIMANT found the squid in the sample to be adequate and on 29 May 2008 ordered 200
metric tons thereof, modifying its original request by demanding the squid to be certified fit
for human consumption. On the same day, RESPONDENT replied to the order of the squid and
added an arbitration clause, which was duly acknowledged by CLAIMANT. The sale
confirmation specified that the delivery would consist of both 2007 and 2008 catch. This was
necessary because the 2008 catch season had already begun and RESPONDENT was running
low on 2007 catch. It is general knowledge in the fishing industry and a law of nature that
squid caught as early in the season as May are smaller than those caught later.
The squid were delivered on 1 July 2008. CLAIMANT tested only five of 20000 cartons. All
five were of the 2007 catch and CLAIMANT did not inspect the 2008 catch at all. CLAIMANT
re-sold the squid to its customers without complaint.
Only on 29 July 2008 did CLAIMANT contact RESPONDENT by email to inform it about
complaints from some of its customers regarding the squid. The email did not specify the
nature of the problem. Therefore, RESPONDENT replied on 3 August 2008 and asked for
inspection by a certified testing agency to ascertain the source of the complaints. On 16
August 2008 CLAIMANT forwarded the report of the agency to RESPONDENT. The report
showed the squid to be in excellent condition and fit for human consumption. The size of both
the 2007 and 2008 catch was representative for the time of their catch as specified in the
contract. Although RESPONDENT had delivered squid exactly according to its sale
confirmation, CLAIMANT asserted that it was of no use. On 18 August 2008, RESPONDENT
informed CLAIMANT by email that it had complied with the contract and could not take
responsibility for any problems CLAIMANT encountered in re-selling the ordered squid.
On 20 May 2010, CLAIMANT submitted its request for arbitration to the Milan Chamber of
Arbitration (hereinafter the Milan Chamber). Only two days later, on 22 May 2010,
CLAIMANT committed a flagrant violation of the confidentiality duty contained in the Milan
Memorandum for RESPONDENT 1

_____________________________________________________________________
Rules by making the arbitral proceedings public in an interview with a reputable trade
magazine published in many countries. CLAIMANT damaged RESPONDENTs reputation
worldwide and this at a time before RESPONDENT had even received the request for
arbitration. Therefore, when RESPONDENT filed its statement of defense on 24 June 2010, it
contained a counter-claim for this serious breach of confidentiality.
On 15 July 2010, the party-selected arbitrators appointed Malcolm Y. as Chairman pursuant
to the arbitration clause (hereinafter the Clause). A partner at a foreign office of Malcolm
Y.s law firm had once consulted CLAIMANT. Both parties were aware of this and explicitly
waived their objections to his appointment. The Milan Chamber, however, disregarded the
party agreed appointment provision and the parties waiver. It appointed Horace Z. as
Chairman without any consultation of the parties or the co-arbitrators.
Consequently, when the final composition of the Tribunal was announced to the parties on 20
September 2010, RESPONDENT filed its objection to the jurisdiction of this Tribunal on 24
September 2010.
SUMMARY OF ARGUMENT
Jurisdiction of an arbitral tribunal can only be derived from the arbitration clause. This
Tribunal was constituted in violation of the Clause as its Chairman Horace Z. was appointed
by the Arbitral Council rather than by the co-arbitrators as provided in the Clause. This
Tribunal therefore has no jurisdiction. Moreover, CLAIMANT blatantly breached its duty of
confidentiality by disclosing the arbitral proceedings in an interview with a widely published
trade magazine. RESPONDENTs reputation suffered as a result.
CLAIMANTs demand for damages should be dismissed as no breach of contract occurred. The
size of the squid was never part of the contract. Subsequently, the alleged non-conformity
arising out of the size of the squid is of no relevance as RESPONDENT delivered squid which
was perfectly in accordance with the agreed upon specifications. Further, CLAIMANT failed to
properly examine the delivery. Its notification of the alleged lack was late by any standard,
and it therefore lost the right to rely on any potential non-conformity. RESPONDENT did not
waive its right to object to the late notice by asking for an expert examination.
In any event, CLAIMANT is not entitled to full damages as the alleged breach was not
fundamental and CLAIMANT failed to mitigate its losses. CLAIMANT could have resold the
squid for other purposes and in other markets. Even if these attempts would have been futile,
it could have easily separated the allegedly undersized squid and still resold the rest as bait.

_____________________________________________________________________
ARGUMENT
I.
1
THE TRIBUNAL DOES NOT HAVE JURISDICTION
The Tribunal is competent to rule on its own jurisdiction which includes finding no
jurisdiction. Arbitration is governed by the law at the seat of the arbitration
[Poudret/Besson, para. 112]. In this case, the seat of the arbitration is Danubia [Cl. Ex.
No. 4]. Danubian Arbitration Law (for ease of reference hereinafter Model Law)
codifies the doctrine of competence-competence in Art. 16(1), since Danubia has adopted
the UNCITRAL Model Law [Req. for Arb., para. 25].
The Tribunal in its current composition does not have jurisdiction because (A) this
composition is in violation of the arbitration clause (hereinafter the Clause) and (B) in
any event also in violation of the Milan Rules. (C) Further, any award rendered by this
Tribunal will not be enforceable, making any proceedings before this Tribunal futile.
A.
3
CONSTITUTION OF THIS TRIBUNAL VIOLATES THE CLAUSE
Jurisdiction of a tribunal can only be derived from the parties agreement to arbitrate
[Born, p. 197]. This means that the provisions of the arbitration clause govern, among
other things, the scope of the jurisdiction, the numbers of arbitrators, the appointment
process, procedural rules, language and seat of the arbitration.
This party autonomy is restricted only by mandatory provisions of the lex arbitri [Art.
19(1) Model Law]. Institutional rules do not have this power to restrict party autonomy.
Their applicability is derived only from the parties agreement. This means that parties
are free to make modifications to such rules which are binding on the institution.
Therefore, provisions in the arbitration clause regarding the appointment of arbitrators
take precedent over the rules provision [E.T.P.M. v. Gas del Estado]. The Milan
Chamber of Arbitration is familiar with this hierarchy, given that it is codified in Art.
832(2) of the Italian Code of Civil Procedure which expressly states that the arbitration
clause prevails over conflicting provisions of the chosen institutional rules.
This modification power, however, is unilateral. If an institution deems modifications

incompatible with its rules, it may refuse administration [Poudret/Besson, para. 96]. But
it cannot disregard the parties agreement and force its rules upon the parties. It can only
apply its rules hoping that the parties will waive any objections and thereby agree to the
institutions decision [Fouchard/Gaillard, para. 780].

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6
In the case under consideration, (1) the parties agreed on an appointment mechanism not
provided by the Milan Rules. (2) The appointment of Horace Z. by the Arbitral Council
was not pursuant to said mechanism. (3) As the parties did not waive their objections to
his appointment, the composition of this Tribunal is in violation of the Clause.
1.
The parties derogated from the Milan Rules
Choosing appropriate arbitrators is of the utmost importance in arbitration. The parties

therefore intended to appoint the panel without any interference from the Arbitral
Council and expressed this in the wording of the Clause.
Arbitration practitioners agree that selecting the arbitrators is a critical step in any
arbitration [Carbonneau, p. 1209]. The arbitrator is one-half of your case, as one
arbitrator said [Moses, p. 122]. This applies in particular to the appointment of the
chairman: Choosing the chair of the tribunal is far too important to delegate to anyone.
It is perhaps the most important decision in a case (emphasis added) [id., p. 125]. This
means that parties should strive to exert as much control over the appointment process as
possible. That is exactly what RESPONDENT did. It provided for the final appointment of
the panel by the parties and the co-arbitrators in the Clause.
The Clause contains the following appointment provision:

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 (emphasis added) [Cl. Ex. No. 4].
10 This provision is in no way a choice for an appointment option of the Milan Rules but
rather an appointment mechanism which modifies the Milan Rules. The wording is not
consistent with the appointment provisions of the Milan Rules, differs considerably from
the model clause and provides for the final appointment of the arbitrators without any
confirmation by the Arbitral Council.
11 CLAIMANT notes that most arbitral institutions reserve the right to exercise control over
the final composition of the tribunal [Mem. Cl., para. 34]. This is reflected in the use of
language for describing the appointment process by many institutions: Parties only
designate or nominate arbitrators, the actual appointment is done by the institution
[e.g. Art. 8 ICC Rules; Art. 7 LCIA Rules; Art. 7 Swiss Rules]. The Milan Rules do not
use such differentiated wording and use the term appoint even if it only means
nominate (e.g. Art. 14 Milan Rules). This inaccuracy in terminology raises the

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question of what wording is necessary in order to successfully derogate from the standard
appointment procedure of the Milan Rules, i.e. what wording is necessary to opt out of
the confirmation process.
12 Analysis of model clauses shows two different approaches of dealing with the limited
meaning of appoint in the sense of nominate/designate: Some institutions avoid
the problem by simply defining the numbers of arbitrators: The number of arbitrators
shall be ... (one or three) [Swiss Rules; identical: LCIA Rules; DIS Rules]. Other
institutions use the term appoint but clarify its meaning by adding [] arbitrators
appointed in accordance with the said Rules (emphasis added) [ICC Rules; also
2004/2010 Milan Rules]. This wording makes clear that appoint refers to the entire
appointment process which leads to the constitution of a tribunal and not just to the
question of who makes the final decision in this process (this is governed in the rules).
Thus, appoint in the sense used in the model clause (in connection with in accordance
with the Rules) is not the same as appoint without any further reference to the rules.
13 At the time of the conclusion of the arbitration agreement in 2008 [Cl. Ex. No. 4], the
2004 version of the Milan Rules was in force. To establish the parties intent at that time,
the Clause needs to be analyzed in the light of the 2004 model clause. The 2004 model
clause for international arbitration contains the following appointment provision:
All disputes arising out of this contract shall be settled by arbitration under the
Rules of the Chamber of National and International Arbitration of Milan. The
Arbitral Tribunal shall consist of a sole arbitrator/three arbitrators appointed
pursuant to those Rules (emphasis added) [2004 Milan Rules, p. 3].
14 This provision makes it clear that appoint is to be understood in the framework of the
appointment provision of the Milan Rules, which govern the process in detail. Pursuant
to those Rules cannot be interpreted to simply mean the incorporation of the Milan
Rules, as this is already done in the first sentence ([...] arbitration under the Rules [...]).
15 The Clause, however, does not contain the relativization pursuant to those Rules. It
only speaks of appoint [Cf. para. 9]. This appoint means that the decision made by
the parties or, in this case, the co-arbitrators is final and not subject to any review by
another authority (unless an arbitrator is challenged). The parties agreed that the Arbitral
Council would not interfere in the appointment of arbitrators. In its letter to the Milan
Chamber, dated 24 June 2010, RESPONDENT wrote Equatoriana Fishing Ltd appoints
Professor Arbitrator 2. This shows that RESPONDENT had the power to appoint its coarbitrator rather than simply make a nomination at the hands of the Chamber.

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16 Art. 14(4)(b) Milan Rules offers two choices for the appointment of the Chairman, either
by the Arbitral Council or by the co-arbitrators. CLAIMANT argues that the parties opted
for the second option [Mem. Cl., para. 22]. This is not the case. If it were, the Chairman
would still need to be confirmed by the Arbitral Council pursuant to Art. 18(4) Milan
Rules. However, the Clause provides for the final appointment without any confirmation.
Thus, the parties created an appointment mechanism independent from the Milan Rules.
2.
Horace Z.s appointment violates the Clause
17 As shown above, the Clause contains an appointment provision separate and independent
from the Milan Rules. This Tribunal was not constituted in accordance with this
provision because Chairman Horace Z. was not appointed by the co-arbitrators but by the
Arbitral Council [Prot. No. 9410/9]. This violation of the Clause is particularly grave
considering that the co-arbitrators never even nominated Chairman Z. Even confirmation
of a nominated Chairman would technically violate the Clause but this violation would
be irrelevant because it had no influence on the composition of the Tribunal.
3.
The parties did not waive their right to object
18 Parties may waive their objections to an improper constitution of a tribunal [Cf. para. 4].
In such cases, a tribunal does have jurisdiction even though its composition is in
violation of the arbitration clause. Art. 12 Milan Rules requires that objections be raised
in the first brief or at the first hearing following the offending event, otherwise they are
deemed waived. Although this is not alleged by CLAIMANT, RESPONDENT did not waive
its right. It objected to the jurisdiction of this Tribunal as soon as the final composition
was announced to the parties in the Procedural Order No. 1 on 20 September 2010
[Amend. to Stat. of Def., para. 8]. The amendment to the Statement of Defense
constituted the first brief after the improper constitution of the Tribunal and was filed
within four days. RESPONDENT therefore did not waive its right to object.
B.
CONSTITUTION OF THIS TRIBUNAL VIOLATES THE MILAN RULES
19 Even if the parties did not opt out of the confirmation provisions of the Milan Rules, this
Tribunal would still have no jurisdiction because its constitution was in violation of the
Milan Rules. The Arbitral Council interfered unduly in the constitution of this Tribunal
and deprived the co-arbitrators of their right to appoint a Chairman as expressed both in
the Clause and in Art. 14(4)(b) of the Milan Rules in several ways. (1) The co-arbitrators
were denied the chance to appoint a substitute arbitrator for Malcolm Y. and (2) the

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Arbitral Council exceeded its confirmation powers. (3) The parties did not waive their
right to object to this violation of the Milan Rules.
1.
The Arbitral Council violated Art. 20(3) Milan Rules
20 Art. 20(3) Milan Rules provides that if an arbitrator needs to be replaced, his substitute
shall be appointed by the same authority that appointed the original arbitrator. This
means that following the non-confirmation of Malcolm Y., the co-arbitrators had the
authority to appoint a different Chairman. CLAIMANT argues that the co-arbitrators used
their second opportunity to appoint Malcolm Y. a second time [Mem. Cl., para. 44]. This
argument cannot be followed. In their letter dated 13 August 2010, the co-arbitrators
simply submitted additional information to the Milan Chamber regarding Malcolm Y.
rather than appoint him a second time. They asked the Arbitral Council to revisit his nonconfirmation, taking into consideration the fact that Malcolm Y. has not derived any
income from Wise, Strong & Clever for the past three years.
21 This information has a considerable impact on the potential for a conflict of interest. The
cut-off period for prior services rendered to a party by an arbitrator under section 3.1 of
the orange list of the IBA Guidelines is three years. For example, after three years,
disclosure of any prior services is no longer required. Provision 3.4.2 of the orange list
even applies the three years limit to actual employment of an arbitrator by one of the
parties, i.e., after three years a former employee may serve as arbitrator without
disclosing the employment [p. 18, paras. 6-7]. This implies that after a period of three
years, income derived from a party is no longer considered to constitute a conflict of
interest. Therefore, the additional information provided in the letter [Cf. para. 20] was of
considerable importance to assess Malcolm Y.s statement of independence and the coarbitrators felt that before nominating a different Chairman, the Arbitral Council should
be given the opportunity to revise its decision.
22 The letter did not, however, amount to the appointment of a substitute. A failed attempt
to appoint a substitute leads to the Arbitral Council appointing a replacement [Art. 20(3)
Milan Rules]. Considering the importance of the Chairman [Cf. para. 8], simply reappointing the same person and hoping for a different result would be unreasonable, if
not irresponsible, for the co-arbitrators. In that case, they would very likely end up with a
Chairman they do not know and whose competence they cannot assess, a problem known
as ICC roulette [Moses, p. 125]. This passivity is all the more unreasonable given that

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arbitration institutions cannot always be trusted to excel at appointing competent
arbitrators [Paulsson].
23 CLAIMANT further argues that the co-arbitrators failed to appoint a different Chairman
within the time limit set by the Arbitral Council [Mem. Cl., para. 43]. While it is
technically correct that no new name was provided within the time limit, this failure by
the co-arbitrators should be considered in the light of the argument of the paragraph
above. The Arbitral Council only gave the co-arbitrators eleven days for a new
appointment [Prot. No. 9410/7]. During that time, the co-arbitrators had to receive Prot.
No. 9410/7 from the Milan Chamber, discuss the situation among themselves, approach
Malcolm Y. to inquire about his Statement of Independence, make a decision and relay
the crucial additional information regarding the three years since Malcolm Y.s last client
work for Wise, Strong & Clever back to the Milan Chamber. The Arbitral Council
should have extended the time limit after it refused to confirm Malcolm Y. for the second
time and offer the co-arbitrators a real second chance at appointing a Chairman. After all,
arbitration is chosen because it allows the parties to choose a procedure that is agreeable
to both of them rather than be subject to the inflexible rules of national courts. In this
case, no party tried to stall the procedures by insisting on an unfit arbitrator. The coarbitrators simply wanted to make sure that this Tribunal is chaired by the person they
both saw as most fit. The Arbitral Council should have paid respect to this desire rather
than interpreting the Milan Rules against the preferences of both parties.
24 Therefore, this Tribunal is asked to find that the Arbitral Council violated the Milan
Rules when it appointed Horace Z. without giving the co-arbitrators a second opportunity
to appoint a Chairman as provided by Art. 20(3) Milan Rules.
2.
The non-confirmation exceeded Arbitral Councils mandate
25 While Art. 18(4) Milan Rules grants the Arbitral Council discretion regarding the nonconfirmation of arbitrators, the Arbitral Council did not assess the situation adequately.
26 The reason behind the existence of Art. 18(4) Milan Rules is to ensure that arbitrators are
impartial and independent and that tribunals are capable of rendering enforceable awards
[Coppo, p. 290]. However, the Milan Chamber recognizes that parties should be able to
agree on the arbitrators best qualified to hear their case, as evidenced by the possibility of
the parties to waive objections arising from the incompatibility provisions of Art. 16
Milan Rules (arbitrators with links to the Arbitral Council) [id.]. Parties can therefore

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expect that the Arbitral Council will not prevent them from appointing arbitrators that
neither party objects to and that do not pose a risk to the impartiality of the tribunal.
27 In the case under consideration, the Arbitral Council acted in a way that was against the
spirit of party autonomy and its implementation in the Milan Rules.
28 First, the risk for a conflict of interest is very small. As shown in para. 20, Malcolm Y.s
relationship to Wise, Strong & Clever is very loose. He is still a partner and has an office
but he derives his income from being an arbitrator. [Letter from Ms. Arbitrator 1 to
Milan Chamber, dated 13 August 2010]. This means he is not dependent on any income
generated by the law firms work for CLAIMANT. Additionally, Wise, Strong & Clever
has 150 partners [Statement of Independence of Malcolm Y.]. Advisory work done by
any of those partners should not disqualify the rest of the law firm from serving as
arbitrators in cases involving one of these firms. The IBA Guidelines address this
problem in the explanation to General Standard 6: The growing size of law firms should
be taken into account as part of todays reality in international arbitration. [] [T]he
activities of the arbitrators firm should not automatically constitute a conflict of
interest. (emphasis added) [p. 15].
29 Second, the Arbitral Council did not respect the parties waiver regarding the alleged
conflict of interest. CLAIMANT notes that institutions should also take into consideration
their own interest when confirming arbitrators because their reputation could suffer in
cases of partial tribunals [Mem. Cl., para. 33]. This notion is very troubling. An
institution should certainly not put its own interests over those of the parties to have a
panel of qualified, jointly agreed upon arbitrators unless there is a considerable danger of
a partial tribunal. Numbers from the ICC support this argument. In 2008, the ICC Court
considered 1156 arbitrators, 168 of which made a disclosure in their Statement of
Independence. Only 24 of those were not confirmed, and only 3 of them without a party
requesting their non-confirmation [Fry/Greenberg, paras. 40 and 47]. The Court even
accepted the waiver of the parties when one party (a state) nominated one of its officers
as co-arbitrator [id., para. 44]. This shows that a renowned institution such as the ICC is
willing to accept the parties autonomy even in cases with an obvious potential for a
conflict of interest. This is especially important considering that the ICC exerts rather
more control over the constitution of tribunals under its rules than other institutions
[Derains/Schwartz, p. 115]. A constellation such as the one of Malcolm Y. and Wise,
Strong & Clevers services for CLAIMANT would certainly not constitute a grave enough
conflict of interest to warrant one of those rare non-confirmations [Cf. para. 20].

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30 It should also be noted that the Arbitral Councils action in this case is of much greater
harm to the Chambers reputation. Who will choose an institution if it is foreseeable that
it will respect neither the parties agreement nor their waivers and appoint arbitrators
against the parties wishes at the slightest sign of a conflict of interest?
31 The Arbitral Council exceeded its discretion, by not confirming Malcolm Y. despite the
almost non-existent risk of a potential conflict of interest, and disregarded the parties
waiver. This excessive intervention in the appointment process is not compatible with
party autonomy and amounted to depriving the parties and the co-arbitrators of their right
to nominate a Chairman pursuant to Art. 14(4)(b) Milan Rules.
3.
The parties did not waive their right to object
32 As laid out in para. 18, RESPONDENT properly objected to the jurisdiction of this
Tribunal.
C.
ANY AWARD RENDERED BY THIS
TRIBUNAL WOULD NOT BE RECOGNIZED
AND ENFORCED
33 The very purpose, or in the words of Derains and Schwartz, the raison dtre of
arbitration is to settle a dispute in the form of an award [p. 384]. An award can only
serve this purpose if it will be recognized and enforced and not be set aside. If it is
foreseeable that this will not be the case, further arbitral proceedings are a costly waste.
Furthermore, it is recognized that arbitrators have a duty to render an enforceable award
[Blackaby/Partasides, para. 9:10; Lew/Mistelis/Krll, para. 6:48].
34 CLAIMANT alleges that any award rendered by this Tribunal would be enforceable
because the constitution was strictly within the procedure chosen by the parties [Mem.
Cl., para. 49]. Its entire argument depends on the assumption that the parties simply
opted for the appointment option of Art. 14(4)(b), second sentence, in which case the
Arbitral Council does have confirmation power [id., para. 51]. As shown in para. 15,
this is not the case. Rather, the Clause provides for the final appointment of the panel by
the parties and their co-arbitrators. Therefore, this Tribunals constitution is in violation
of the Clause because the Chairman was appointed by the Arbitral Council.
35 Art. V(1)(d) NYC provides for the non-recognition of an award where the composition
of the arbitral authority or the arbitral procedure was not in accordance with the
agreement of the parties []. Some courts have held that even violations of time limits
included in the arbitration agreement are sufficient to trigger non-recognition [Born, p.

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2766]. Consequently, a violation of the agreement of the magnitude seen in this case will
result in the non-recognition of any award rendered by this Tribunal.
36 CLAIMANT notes the pro-enforcement bias of courts which makes fulfilling the
requirements for non-recognition difficult [Mem. Cl., para. 50]. As the US Court of
Appeals for the 2nd Circuit correctly noted, this bias does not, however, imply that courts
should disregard the parties agreement in favor of enforcing awards at any cost: While
we acknowledge that there is a strong public policy in favor of international arbitration,
we have never held that courts must overlook agreed-upon arbitral procedures in
deference to that policy [Encycl. Universalis v. Encycl. Britannica].
37 CLAIMANT further notes that the procedural violation of the agreement needs to result in
substantial prejudice to the complaining party [Mem. Cl., para. 50]. This argument
cannot be followed because it is impossible for a party to show that a properly
constituted tribunal would render a different award. In addition, this is a very dangerous
approach. It implies that the parties agreement is of secondary importance as long as a
reasonably correct award results. This amounts to a blatant disregard of the parties
agreement in the interest of efficient proceedings and is not at all compatible with party
autonomy and the consensual nature of arbitration.
38 The dynamics within the panel and thereby the award are influenced by the personality
of the chairman. Choosing him is therefore of fundamental importance [para. 8].
Disregard of the parties agreement regarding his choice are sufficient to result in nonrecognition of any award (The issue of how the third arbitrator was to be appointed is
more than a trivial matter of form [Encycl. Universalis v. Encycl. Britannica]).
39 The same applies for a setting aside pursuant to Art. 34(2)(a)(iv) Model Law. The
grounds for challenging an award under the Model Law are derived from Article V of the
New York Convention. Accordingly, authorities relating to Article V of the New York
Convention are applicable to the corresponding provisions in Articles 34 and 36 of the
Model Law [Corporacion Transnacional v. STET].
40 Thus, any award rendered by this Tribunal would be set aside or refused recognition.
These proceedings can serve no purpose and are a costly waste. The Tribunal is asked to
prevent this foreseeable outcome by finding that it has no jurisdiction.

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II.
INTERIM MEASURES SHOULD BE GRANTED AND CLAIMANT IS

LIABLE FOR BREACH OF CONFIDENTIALITY
A. CLAIMANT BREACHED CONFIDENTIALITY

41 In the case under consideration, (1) CLAIMANT has a duty of confidentiality and (2)
breached said duty by giving an interview to a trade newspaper.
1.
CLAIMANT has a duty of confidentiality
42 The parties agreed on the Milan Rules. Since (a) the 2010 version of the Milan Rules
apply, (b) CLAIMANTs duty of confidentiality arises out of Art. 8(1) Milan Rules. In any
event, (c) even if there were no explicit duty of confidentiality, there is still an implied
duty.
(a)
The 2010 Milan Rules apply
43 CLAIMANTs argument that the 2004 Milan Rules apply for the question of confidentiality
is incorrect [Cf. Mem. Cl., para. 63 et seq.]. Parties choosing institutional arbitration
should generally take into account the possibility of rule changes when drafting
arbitration clauses [Shackelford, p. 899]. The principle thereby is that the applicable
institutional rules are those in force at the time of arbitration [id., p. 905]. Unless the
arbitration clause provides for specific rules, a rebuttable presumption exists that the
parties intended to adopt the latest version of the relevant rules [Greenberg/Mange, p.
205; Offshore International v. Banco Central; Bunge v. Kruse]. If the parties do not
want to adopt the latest version, they must explicitly agree on that. This principle is
mentioned in both the 2004 and 2010 Milan Rules. Art. 39 of the 2010 Milan Rules
states that unless otherwise agreed by the parties, these Rules shall apply to arbitrations
commenced after the date on which the Rules entered into force (emphasis added). The
2004 Milan Rules mention in Art. 43(2) that the Arbitral Council may add to, amend
and replace these Rules and establish the date on which the new provisions shall enter
into force. Furthermore, Art. 43(3) of the 2004 Milan Rules states that unless otherwise
provided, the new provisions introduced pursuant to paragraph 2 shall apply to
proceedings commenced after the date on which the provisions have entered into force.
The parties had the option at the time of contracting to state explicitly that they want the
2004 version to apply to future disputes, but they have not made such an agreement.

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Instead, by choosing the Milan Rules in their arbitration clause, the parties included Art.
43(3) of the 2004 Milan Rules and thereby agreed that any new provisions should apply.
(b)
Pursuant to Art. 8(1) of the 2010 Milan Rules CLAIMANT has

a duty of confidentiality
44 Art. 8(1) Milan Rules contains a clear rule: The Chamber of Arbitration, the parties, the
Arbitral Tribunal and the expert witnesses shall keep the proceedings and the arbitral
award confidential, except in the case it has to be used to protect ones rights. Therefore,
CLAIMANT as a party has a duty of confidentiality.
(c)
CLAIMANT agreed to confidentiality by consenting to choose

arbitration
45 Even if there was no explicit duty of confidentiality arising out of Art. 8(1) Milan Rules,
CLAIMANT has an implied duty of confidentiality. It is a prevailing opinion that arbitral
proceedings are confidential [Lionnet/Lionnet, p. 453]. In the leading case of Ali
Shipping Corp. v. Shipyard Trogir, an English Court held that a duty of confidentiality is
implied in every arbitration agreement as an essential corollary of the privacy of
arbitration proceedings. The duty of confidentiality in arbitration arises out of the nature
of arbitration [Emmott v. Michael Wilson & Partners].
2.
CLAIMANTs interview breached the duty of confidentiality
46 Art. 8(1) Milan Rules clearly states that not only the arbitral award, but also the
proceedings shall be kept confidential. In the case, CLAIMANT gave an interview to a
trade newspaper, stating that RESPONDENT had knowingly delivered completely
inappropriate squid and that arbitral proceedings had been initiated [Re. Ex. No. 1]. This
is a twofold breach of confidentiality.
47 First, CLAIMANT revealed the fact of the existence of arbitral proceedings [id.]. But to
ensure the confidentiality of the proceedings, the existence of the proceedings as well as
the names of the parties must be protected [Lionnet/Lionnet, p. 456]. CLAIMANT states
that the existence of arbitral proceedings is generally not covered by the duty of
confidentiality [Mem. Cl., para. 73 et seq.], but parties particularly worried about
adverse publicity may wish for the very fact that they are arbitrating a dispute to remain
confidential [Brown, p. 1001 et seq.]. The mere fact that a dispute broke out and is now
pending before an arbitral tribunal may be viewed as a secret [Dessemontet, p. 3]. In this
case, a confidentiality duty on a disputes existence arises out of the wording of Art. 8(1)

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Milan Rules: the duty to keep the proceedings confidential also includes a duty to keep
the existence of proceedings confidential. The wording proceedings refers to the whole
proceedings including their existence. Otherwise, the Milan Rules would have a wording
such as the content of the proceedings. Furthermore, the Milan Rules treat the
confidentiality in just one article, which can not explicitly mention every single variant
which is covered by the duty of confidentiality. To interpret the scope of this duty, a
comparison to more detailed arbitration rules can be made. Looking at the WIPO Rules,
which cover confidentiality in four Articles, the confidentiality of the existence of the
proceedings is explicitly mentioned [WIPO Rules, Art. 73].
48 Second, CLAIMANT did not only reveal the sheer existence of arbitration, it also revealed
the content of the proceedings by stating that RESPONDENT had knowingly delivered
completely inappropriate squid. This statement breaches the duty of confidentiality stated
in Art. 8(1) Milan Rules.
49 Therefore, CLAIMANT breached its duty of confidentiality by revealing the names of the
parties as well as the existence and the content of the proceedings.
3.
The breach was not justified
50 CLAIMANT cannot rely on the exception of Art. 8(1) of the Milan Rules because (a) this
exception only refers to arbitral awards and (b) CLAIMANT was not protecting its rights.
(a) The exception of Art. 8(1) Milan Rules only refers to arbitral awards
51 Art. 8(1) Milan Rules states that the Chamber of Arbitration, the parties the Arbitral
Tribunal and the expert witnesses shall keep the proceedings and the arbitral award
confidential, except in the case it has to be used to protect ones rights. CLAIMANT
cannot rely on this exemption, because as the wording states, it only refers to arbitral
awards. If the proceedings were meant to be included in this exception, the wording
would be they had to be used. In the official German translation of the Milan Rules, it
is even explicitly stated that the exception only refers to arbitral awards.
(b) CLAIMANT was not protecting its rights
52 The exception of Art. 8(1) is only applicable in order to protect a right. Pursuant to the
wording, an interest of any other nature does not fall under this article. In the case,
CLAIMANT did not protect any rights by giving the interview, so it cannot rely on this
exception. It was in no urgent need to do so. Furthermore, even if it had to protect any
rights, giving an interview to a trade newspaper which is distributed in forty-five

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countries [Stat. of Def., para. 4] is no appropriate way to do so, because many more
people are informed than need be. This course of action would be disproportionate.
B.
INTERIM MEASURES SHOULD BE GRANTED
53 The Tribunal is asked to order an injunction against CLAIMANT to prevent further

breaches of confidentiality. (1) The Tribunal is competent hereto as it has authority to
order interim measures. (2) The general prerequisites to grant interim measures are
fulfilled. (3) Furthermore, even if the prerequisites were not strictly fulfilled, in cases of
breach of confidentiality they do not have to be.
1.
The Tribunal has authority to order interim measures
54 The question of whether the Tribunal has authority to order interim measures requires
consulting three sources: any applicable international arbitration convention, applicable
national law and the parties arbitration agreement including any relevant institutional
rules [Born, p. 1945]. Both the NYC [id., p. 1945 et seq.] and the Model Law [Art.
17(1)], which are applicable in this case, give the Tribunal authority to grant interim
measures. Art. 22(2) Milan Rules states that 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. The Tribunal is therefore
authorized to grant interim measures.
2.
The prerequisites to grant interim measures are fulfilled
55 For interim measures to be granted, they must be urgent, provisional, (anticipatory)

protective and not barred by mandatory provisions [Art. 22(2) Milan Rules]. In the case
under consideration all these prerequisites are fulfilled.
56 Urgency means that immediate or at least prompt action is necessary in order to prevent
serious or irreparable damage [Born, p. 1986], so that relief cannot be delayed until the
final determination of the parties case [Yesilirmak, p. 179]. If CLAIMANT gave another
interview, RESPONDENT would suffer substantial damage, as this would further harm its
reputation. CLAIMANT must be prevented from renewing false statements in the press.
This cannot wait until the Tribunal has rendered its award.
57 RESPONDENT asks the Tribunal to issue a provisional order for CLAIMANT to respect the
confidentiality of the arbitral proceedings as well as any eventual award [Stat. of Def.,
para. 8]. This requested order should apply until the final determination of the case.

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58 Since such an order aims to protect RESPONDENTs reputation, the requested interim
measure is of protective nature.
59 As no mandatory provisions bar the Tribunal to order interim measures [Cf. para. 54], all
prerequisites to grant interim measures required by Art. 22(2) Milan Rules are fulfilled.
3.
The prerequisites do not have to be strictly fulfilled
60 The aforementioned prerequisites do not need to be strictly fulfilled for the tribunal to
grant interim measures, and one should avoid mechanically applying standards [Born, p.
1993]. In cases of breach of confidentiality, an injunction against further disclosure is a
generally available remedy [Brown, p. 1016]. Because damages are seldom a satisfactory
remedy for breach of confidentiality, issuing provisional measures ordering compliance
with a confidentiality duty, particularly regarding the arbitral process itself, is appropriate
[Born, p. 2006]. It is generally acknowledged that forbidding public statements is a
suitable provisional measure in such cases [id, p. 1998].
C.
CLAIMANT IS LIABLE FOR BREACH OF CONFIDENTIALITY
61 In cases of breach of confidentiality monetary damages are a permissible remedy [Cf.

e.g. Born, p. 2007 or Kaufmann-Kohler/Stucki, p. 101]. For RESPONDENT to be awarded
damages, three requirements need to be fulfilled: A duty of confidentiality existed, a
breach of that duty was committed by CLAIMANT and this breach caused monetarily
quantifiable and compensable damages to RESPONDENT [Brown, p. 1016].
62 As shown in paras. 44-49, CLAIMANT has a duty of confidentiality and breached this
duty by giving an interview to Commercial Fishing Today. Before the interview was
given, RESPONDENT had an outstanding reputation in the fisheries trade throughout the
world [Proc. Ord. No.3, para. 13]. CLAIMANTs breach damaged RESPONDENTs
reputation and thereby caused a monetary loss. The magazines distribution in 45
countries makes the report particularly damaging. Since not all consequences of
CLAIMANTs breach of confidentiality can be clearly determined as of now [Stat. of Def.,
para. 9], the Tribunal should declare that CLAIMANT is liable for damages that will be
proven at a later date.
III.
CLAIM FOR BREACH OF CONTRACT SHOULD BE DISMISSED
63 CLAIMANT is not entitled to restitution of the purchase price and damages because (A) no
breach of contract occurred and (B) CLAIMANT has lost its right to rely on an alleged lack

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of conformity. Further, (C) avoidance of the contract was not possible and (D)
CLAIMANT is not entitled to damages.
A.
NO BREACH OF CONTRACT OCCURRED
64 RESPONDENT did not breach the contract as the goods (1) were in conformity with the
contractual requirements pursuant to Art. 35(1) CISG and (2) were in conformity with all
other requirements pursuant to Art. 35(2) CISG.
1.
The goods fulfilled all contractual requirements pursuant to

Art. 35(1) CISG
65 RESPONDENTs delivery of squid was conforming because (a) the contract was formed on
the basis of the sale confirmation, (b) it did not include a size requirement and (c) the
squid fulfilled the contractual requirements.
(a) The contract was formed on the basis of the sale confirmation
66 Contrary to CLAIMANTs reasoning, the contract was formed on the basis of the sale
confirmation [Cf. Cl. Ex. No. 4] and not on the foundation of the reply to the sale
confirmation [Cf. Cl. Ex. No.3; Re. Ex. No. 2]. For a contract under the CISG to be
concluded, a party must make a sufficiently definite offer which must be unconditionally
accepted by the other party [Huber/Mullis, p. 69]. Any reply which materially alters the
offer is purported to be a rejection of the offer and a new offer (or counter-offer) [Art.
19(1) CISG]. Art. 19(3) CISG lists the terms considered material, thereby creating a
presumption of a counter-offer [DiMatteo et al, p. 355]. This counter-offer must then be
accepted for the contract to be concluded. The performance of an act, e.g. the payment of
the purchase price, can also be an acceptance [Art. 18(3) CISG].
67 In this case, the sale confirmation included an arbitration clause, which is a material
change [Schlechtriem/Schwenzer/Schroeter, Art. 19 para. 14]. It must therefore be
considered a counter-offer in the sense of Art. 19(1) CISG. This is undisputed [Mem. Cl.,
para. 80]. CLAIMANT alleges that the reply to this first counter-offer [Cf. Re. Ex. No. 2]
was a further counter-offer, and that the contract was formed on this basis through
RESPONDENTs delivery of the goods. This reasoning is incorrect for several reasons.
68 First, the reply to the sales confirmation did not contain an arbitration clause. The
attachment simply consisted of the original order form, making no reference to the
arbitration clause. The wording of the accompanying email in no way indicates that the
contract should include such a clause. CLAIMANT only stated that it note[s] that you

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have included an arbitration clause [Re. Ex. No. 2]. Since CLAIMANT relies on the
arbitration clause, this so-called counter-offer cannot be the basis of the contract.
69 Second, the reply to the sale confirmation [Cf. Re. Ex. No. 2] cannot in fact have been a
(further) counter-offer, as CLAIMANT was the first party to perform an act under the
contract - by ordering the irrevocable letter of credit.
70 In commercial transactions involving a letter of credit and a bill of lading, the norm is
that the letter of credit is established before the seller has the goods loaded onto a ship
and thereby receives the bill of lading [Coker]. This is only reasonable since the loading
of the goods causes the seller expenses, so he will want assurance of getting paid before
making any expenditure. In this case, the fact that the letter of credit would be
established before the bill of lading is also shown by the parties agreement: the
estimated time of departure (ETD) of the goods was only to be announced once the letter
of credit had been received by RESPONDENT [Cl. Ex. No. 3 and 4].
71 Assuming that the reply to the sale confirmation was a counter-offer, CLAIMANTs
actions make little sense, as it did not wait for RESPONDENTs assent but instead
established an irrevocable letter of credit straight away. However, this would be highly
unreasonable for a party, as an irrevocable letter of credit cannot be revoked without the
unanimous agreement of the issuing bank, the confirming bank, and the beneficiary /
seller [Coker]. Any reasonable person would have waited for the acceptance of a
counter-offer before establishing a letter of credit. Consequently, CLAIMANT did in fact
not intend its email to be a counter-offer but an acceptance.
72 Even if the Tribunal should consider the reply to the sale confirmation a counter-offer,
this was never accepted by RESPONDENT. There was no further correspondence between
the parties until after the goods arrived [Proc. Ord. No. 3, para. 23], making an explicit
acceptance impossible. CLAIMANTs allegation that RESPONDENT implicitly accepted
through its delivery of the goods, as allowed by Art. 18(3) CISG, is again refuted by the
fact that CLAIMANT was the first party to perform an act under the contract. Therefore, it
was not RESPONDENT who accepted CLAIMANTs counter-offer by performing an act
under the contract, but rather CLAIMANT accepting RESPONDENTs sale confirmation.
73 For all these reasons, the sale confirmation must be the basis of the contract.
(b) The contract did not include a size requirement
74 CLAIMANT alleges that the contract included the requirement that the squid be in the size
range of 100/150g [Mem. Cl., paras. 82 et seqq.]. However, this position is incorrect.

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75 When determining the content of the parties agreement, the CISG allows a range of
possible sources of interpretation and does not follow the parol evidence rule used in
many common law jurisdictions [Schlechtriem/Schwenzer/Schmidt-Kessel, Art. 8 para.
33]. However, the primary source is still the written contract. It has been held that the
agreement of the parties has to be analyzed in first instance by interpreting the wording
of the contract itself [CISG-online Case No. 844]. Since the contract was concluded on
the basis of the sale confirmation, its content is primarily determined by this document.
76 The sale confirmation states clearly that the delivery would consist of squid from both
2007 and 2008 [Cl. Ex. No. 4]. It also lists several criteria regarding the quality of the
squid which were required under the contract. These had been introduced by CLAIMANT
on the original order form [Cl. Ex. No. 3] and simply repeated by RESPONDENT on the
sale confirmation [Cl. Ex. No. 4]. Said criteria are: as per sample, grade A, fit for
human consumption and iced on board and blast frozen immediately upon discharge
[id.]. No mention is made of the size of the squid.
77 Since the contract did not include an explicit reference to the size, the only possibility
could be that there had been an implicit agreement. CLAIMANT argues that as per
sample is synonymous with the requirement that the squid would fall in the size range
of 100/150g following an interpretation under Art. 8 CISG [Mem. Cl., paras. 82 et
seqq.]. It particularly relies on Art. 8(3) CISG which states that the parties statements
must be interpreted in the light of all relevant circumstances [id.]. Conveniently,
CLAIMANT only mentions the few facts which speak for the sample to encompass the size
of the squid, but fails to mention the circumstances which contradict such an
interpretation. In the following it will be shown why an objective interpretation of the
contract under Art. 8(2), (3) CISG did not include reference to the size.
78 First, if the size had really been as important a criterion as alleged, CLAIMANT would
surely have included this on the order form, instead of only mentioning it once in an
email. Considering that CLAIMANT described the squid down to the last detail on the
order form, (as per sample, grade A, fit for human consumption and iced on
board and blast frozen immediately upon discharge) a reasonable person in the sense of
Art. 8(2) CISG would have assumed that all the important aspects had been explicitly
named. Since size was not one of them, an objective interpretation of the written contract
does not reveal a size requirement.
79 Second, the term as per sample cannot be synonymous with a size requirement since
the sample squid shown to CLAIMANT were unsized, as evident from the cartons label

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[Stat. of Def., para. 12]. Furthermore, unsized squid are less expensive than sized squid
[id.]. CLAIMANT admits that it was looking to buy cheaper squid than usual [Req. for
Arb., para. 9 et seqq.]. Therefore, CLAIMANT or a reasonable party in its position could
not expect all the squid to be in the perfect size range. If it had really wanted this, it
should have ordered sized squid and paid the resulting price premium.
80 Third, the sample shown to CLAIMANT was labeled 2007 catch, and could therefore only
be representative of the squid from the 2007 catch. The contract included, however,
squid from both 2007 and 2008 [para. 76]. The requirement that the squid be as per
sample was therefore limited in its scope to the aspects which are not dependent on the
year of the catch. Independent criteria include, for example, freshness or quality of meat.
Dependent criteria are the date of catch and, more importantly, the size, since squid
caught early in the season are generally smaller [Stat. of Def., para. 13].
81 CLAIMANT, an experienced seller of bait, was well aware of the natural growth cycles of
squid [Proc. Ord. No. 3, para. 27]. The fishing season for squid of the species illex
danubecus is from April to September [Stat. of Def., para. 13]. CLAIMANTs order of
squid was placed early in the season at the end of May 2008, when the squid are still
small. It must therefore have known that, by agreeing to a partial delivery from the 2008
catch, it would receive squid outside of the 100/150g size range. CLAIMANT denies this
and states that the fact that some of the squid would be from 2008 did not allow the
conclusion that they would be undersized, since a small percentage of the 2008 squid
were in the size range of 100/150g [Mem. Cl., para. 89]. CLAIMANT thereby implies that
it could expect RESPONDENT to sort the squid and only deliver the ones in the range of
100/150g. However, such an expectation was unreasonable as this would in fact have
meant that RESPONDENT was selling sized squid an assumption which was clearly
refuted in para. 79.
82 The contract therefore did not include a size requirement. As it is undisputed that the
squid were in excellent condition [Cl. Ex. No. 8], they were in conformity with the
contractual requirements pursuant to Art. 35(1) CISG.
2.
The squid fulfilled all requirements of Art. 35(2) CISG
83 It is further claimed that RESPONDENT breached the contract by allegedly not meeting the
requirements found in Art. 35(2) CISG regarding the qualities of the goods. However, (a)
the squid were fit for all ordinary purposes, (b) the squid were fit for the particular

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purpose and, in any event, (c) CLAIMANT did not rely on RESPONDENTs skill and
judgement. Finally, (d) the squid possessed the qualities held out by the sample.
(a) The squid were fit for all ordinary purposes
84 Art. 35(2)(a) CISG states that the goods do not conform unless they are fit for the
ordinary purposes for which such goods are usually used. The spectrum of what is
considered ordinary use depends on the goods in the case of squid, human consumption
and use as bait come to mind. However, in international trade, resale must also be
considered an ordinary use [Lookofsky, p. 79; CISG-online Case No. 999].
85 The interpretation of when goods are fit for their ordinary purposes is disputed. While
common law countries primarily rely on the theory of merchantability, civil law
countries have preferred the criterion of average quality [Schlechtriem/Schwenzer/
Schwenzer, Art. 35 para. 13 et seqq.]. A third approach, which is considered to be more
in line with a uniform interpretation of the CISG, submits that the goods must be of
reasonable quality [Lookofsky, p. 81; CISG-online Case No. 740]. The reasonable
quality depends on the circumstances of the contract, i.e. the buyers justified
expectations [Schlechtriem/Schwenzer/Schwenzer, Art. 35 para. 15]. A court, following
the reasonable quality criterion, held that the price of the goods must also be considered
in determining if the goods were of a reasonable quality [CISG-online Case No. 740].
86 In this case, the low purchase price [Cf. para. 79] adjusted the expectations of a
reasonable person regarding the quality of the squid. Therefore, the standard for
measuring the fitness for the ordinary purpose is lowered. First, the squid were perfectly
fit for human consumption [Cl. Ex. No. 8]. Second, the squid were fit for use as bait.
While the size range of 100/150g gives its customers the best results [Cl. Ex. No. 2], it
is by no means a requirement. CLAIMANT admits that the squid were usable as bait, and
that the results were simply not as good as with sized squid [Cl. Ex. No. 10, paras. 5 and
12]. Third, the squid were of sufficient quality for resale, as shown by the expert report
[Cl. Ex. No. 8] and the fact that the trading house engaged by CLAIMANT sold a
considerable amount of the squid [Cl. Ex. No. 10, para. 15]. The squid were therefore fit
for all ordinary purposes and conforming to the requirements of Art. 35(2)(a) CISG.
(b) The squid were fit for the particular purpose
87 Art. 35(2)(b) requires that the goods be fit for any particular purpose expressly or
impliedly made known to the seller at the time of the conclusion of the contract. This
particular purpose must be communicated to the seller before the conclusion of the

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contract [UNCITRAL Digest, Art. 35 para. 10]. A buyers stated particular purpose will
often overlap with the ordinary purpose of such goods [Lookofsky, p. 81].
88 The particular purpose on which CLAIMANT relies is the resale of the squid as bait [Mem.
Cl., para. 100]. In this case, the particular purpose is identical to one of the ordinary
purposes of such goods. As shown in para. 86, the squid were fit for resale and use as
bait. Since the particular and the ordinary purpose overlap in this case, a fitness for one
must mean a fitness for the other. The goods were therefore fit for the particular purpose
communicated by CLAIMANT.
(c) CLAIMANT did not rely on RESPONDENTs skill and judgement
Even if the squid had not been fit for the particular purpose, RESPONDENT did not breach
the contract under Art. 35(2)(b) CISG as CLAIMANT did not rely on its skill and
judgement. Pursuant to Art. 35(2)(b) CISG, the fitness for the particular purpose is not a
requirement where the circumstances show that the buyer did not rely, or that it was
unreasonable for him to rely, on the seller's skill and judgment.
89 If the buyer makes specific provisions regarding the goods to be delivered, chooses the
manufacturing process, selects a particular brand or inspects the goods before the
purchase, there was no reliance [Hyland, p. 321 et seq.; Enderlein/Maskow, p. 146]. If
the buyer described the goods desired in terms of highly technical specifications [] it
may be held that the buyer had not relied on the seller's skill and judgement in making
the purchase [Secretariat Commentary to Art. 33].
90 CLAIMANT had specified the type and quality of squid it wanted exactly. It had demanded
that the squid be as per sample, grade A and fit for human consumption [Cl. Ex.
No. 3 and 4], leaving no responsibility with RESPONDENT to select squid for the
particular purpose. CLAIMANT had even selected the method of freezing by requiring that
the squid be iced on board and blast frozen immediately upon discharge [id.]. In other
words, CLAIMANT did not rely on RESPONDENTS skill and judgement, as RESPONDENT
had no discretion in choosing the squid. Consequently, the requirement of Art. 35(2)(b)
CISG last sentence is fulfilled, and the goods did not need to be fit for the particular
purpose.
(d) The squid possessed the qualities held out by the sample
91 The delivery did not breach Art. 35(2)(c) CISG, as the contract included the year of the
catch. In general, if a seller shows a sample to the buyer, the goods delivered then need
to possess the same qualities as the ones in the sample in order to be conforming [Art.

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35(2)(c) CISG]. However, Art. 35(2) first sentence CISG allows the parties to deviate
from that requirement: If they agree otherwise, the goods do not need to be conforming
to the sample. If the seller indicates that the sample [] is different from the goods to
be delivered in certain respects, he will not be held to those qualities of the sample
[Secretariat Commentary to Art. 33].
92 The parties had in fact made such an agreement [Cf. para. 80]. The inclusion of the year
of the catch in the contract limited the qualities of the sample to those independent of the
time of catch. Thus, partial delivery of 2008 squid did not breach Art. 35(2)(c) CISG.
B. CLAIMANT LOST ITS RIGHT TO RELY ON AN ALLEGED LACK OF CONFORMITY

93 Even if the goods had actually been non-conforming, CLAIMANT could no longer rely on
any alleged non-conformity since (1) it did not examine the goods properly and (2) it
failed to notify RESPONDENT.
1.
CLAIMANT did not examine the goods properly
94 CLAIMANT did not examine the goods properly. According to Art. 38 CISG the buyer
must examine the goods, or cause them to be examined, within as short a period as is
practicable in the circumstances. This provision contains two elements: The obligation
to properly examine the goods and the duty to notify the seller of any lack of conformity
within a short period [Schlechtriem/Schwenzer/Schwenzer, Art. 38, para. 4]. While
improper examination does not necessarily prevent timely notification, it makes it highly
unlikely. The buyer would not notice the lack of conformity without proper examination
and therefore fail to notify and lose the remedy [Achilles, Art. 38, para. 18;
Staudinger/Magnus, Art. 38, para. 12]. The required time period will be discussed later
in the context of Art. 39 CISG [para. 113]
95 A proper examination requires a sufficient and representative quantity and must be
sufficiently thorough [Staudinger/Magnus, Art. 38, para. 12; Schlechtriem/Schwenzer/
Schwenzer, Art. 38, para. 13]. CLAIMANTs examination was not proper as (a) the
quantity examined was not sufficient, (b) the examined samples were not representative
of the entire delivery and (c) the quality of examination was not sufficient.
(a) The quantity examined was not sufficient
96 CLAIMANTs spot checks were insufficient in this case. The buyer is allowed to examine
the delivery by random spot tests if large quantities of goods have been delivered
[Bianca/Bonell/Bianca, Art. 38, note 2.3]. These tests, however, are only a sufficient

_____________________________________________________________________
examination if the inspected number of goods is adequate. The number of goods required
depends on the influence of the test on the devaluation of the tested goods [Tann, p.
187; Schlechtriem/Schwenzer/Schwenzer, Art. 38, para. 14; CISG-online Case No.
1581]. In general, several percent of the delivered goods have to be examined [Tann, p.
56]. In cases where the tests substantially reduce the value of the tested goods, an
examination of 0.2 to 0.5 percent of the delivery is considered sufficient [id., p. 187].
97 In this case, CLAIMANT only inspected five out of 20000 delivered cartons [Cl. Ex. No.
10, para. 10], which is only 0.025 percent of the delivery. Even though only spot tests
were necessary, CLAIMANT failed to examine the required percentage of the delivery. An
examination of at least 40 cartons would have been necessary.
(b) The examined samples were not representative
98 CLAIMANT did not select squid from a sufficient number of different sources. The
examined goods have to be representative of the entire delivery for the examination to be
sufficient [Staudinger/ Magnus, Art. 38, para. 29]. The samples are representative if they
can be considered a reflection of the entire delivery and if the spot tests are made with
sufficient variance [Tann p. 176].
99 In this case, CLAIMANT inspected five cartons [Cl. Ex. No. 10, para. 10]. All tested
cartons were labeled illex danubecus 2007 [Proc. Ord. No. 3, para. 32]. The
circumstance that the parties agreed upon 2007 and 2008 catch squid [Cf. para. 76]
shows that they were aware that both squid from 2007 and 2008 catch would be
delivered. Even if CLAIMANT had not been aware of this fact, it should have noticed that
part of the delivery was from 2008 when unpacking the clearly labeled cartons from their
containers. Since the delivery consisted of both 2007 and 2008 catch squid, the examined
squid from the 2007 catch cannot be considered representative of the whole delivery.
100 Furthermore, the spot tests were not made with sufficient variance but covered only five
out of 20000 cartons, and just as importantly, only the first two out of twelve containers
[Cl. Ex. No. 10, para 10]. The selection of cartons from only the first two containers
cannot be considered random spot tests, as required.
(c) The quality of examination was not sufficient
101 The quality of CLAIMANTs examination was insufficient. The purpose of an examination
is to get a reliable impression of the condition of the delivered goods and to recognize
possible non-conformities [Achilles, Art. 38, para. 3]. This aim also affects the method
of examination as possible non-conformities have to be detectable by the applied method

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[id., para. 4]. In the case of frozen goods, defrosting is a necessary part of any inspection
[Proc. Ord. No. 3, para. 33; Staudinger/Magnus, Art. 38, para. 30]. Thereby an adequate
number of samples have to be defrosted for an examination [CISG-online Case No. 29].
102 In this case, therefore, only the five defrosted cartons could theoretically have been
properly examined [Cl. Ex. No. 10, para 10] as defrosting is a necessary part of any
inspection [Proc. Ord. No. 3, para. 33]. The other 15 selected and weighed cartons are
negligible for the question of proper examination. However, even the five defrosted
cartons were not properly inspected. Where the composition and the quality of goods are
important, technical inspection procedures are required [Achilles, Art. 38, para. 4;
Staudinger/Magnus, Art. 38, para. 31]. In this case, the composition and the quality of
the squid were of the essence as the delivered goods were required to be fit for human
consumption. The parameters of the inspection are defined by the entire array of qualities
the delivery needs to have, not just one. Therefore, the quality of squid was one of these
parameters as the squid were supposed to be fit for human consumption. Since
CLAIMANT, as a supplier of bait, did not have the instruments and expert knowledge to
conduct the technical tests itself, and as the quality of squid was not visible to the eye,
proper examination could only consist of testing by a professional laboratory. CLAIMANT,
however, inspected the five containers only visually [Cl. Ex. No. 10, para 10].
103 In conclusion, CLAIMANT failed to properly examine the goods.
2.
CLAIMANT did not give proper notice about non-conformity
104 CLAIMANT has lost its right to rely on an alleged lack of conformity of the goods as it did
not notify RESPONDENT properly [Art. 39(1) CISG]. The duty of notification contains two
elements: the content and the time of notification [Schlechtriem/Schwenzer/Schwenzer,
Art. 39, para. 6 and 15]. CLAIMANT has lost its right to rely on any non-conformity as (a)
the notification of 16 August 2008 was not in time, (b) its email of 29 July 2008 was not
adequate and (c) RESPONDENT did not waive its right to object.
(a) Communication of 16 August 2008 was not in time
105 According to Art. 39(1) CISG, the buyer must notify the seller about the nature of the
lack of conformity within a reasonable time after he has discovered or ought to have
discovered it. The definition of the term reasonable depends on several circumstances.
106 As a general benchmark for the overall duration of the deadline for examination and
notification, the noble month approach has been broadly accepted by courts [e.g. CISGonline Cases No. 144, 150 and 163]. It uses one month as a rough guideline for time of

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notification. The specific circumstances of the case thereby shorten or extend the period.
An obvious lack of conformity, which can be easily detected by due examination,
shortens time for notification substantially, as a blatant defect is easily noticeable [CISGonline Case No. 1681; Honsell/Magnus, Art. 39, para. 21]. Perishables and seasonal
goods have the same effect, even if the goods are frozen [CISG-online Cases No. 29, 485
and 413]. Finally, a party with expert knowledge is subject to a shorter period for notice
[Honsell/Magnus, Art. 39, para. 19; CISG-online Case No. 547].
107 In this case, several factors influence the period allowed for a timely notification. First,
the affected goods are perishables, as they cannot be stored indefinitely [Cf. Proc. Ord.
No. 3, para. 29]. The Swiss Federal Supreme Court decided that a period of 7 to 17 days
for notification in the case of frozen meat was adequate [CISG-online Case No. 413].
108 It is further undisputed that squid are seasonal goods since the fishing season is
relatively short [Req. for Arb., para. 8]. This shortens the time for notification as the
quality and the saleability deteriorate with every month. It is in both parties interest to
respect the seasonal character of the goods and therefore handle possible complaints
quickly, which means within 14 days [CISG-online Case No. 485].
109 Second, CLAIMANT has expert knowledge [Proc. Ord. No. 3, para. 26]. A professional
trader can be expected to check immediately whether the goods have all the desired
quality features, including the size, and to make appropriate notice of any nonconformity [CISG-online Case No. 547]. The term immediately must be understood as a
very short time period. CLAIMANT is a professional trader which deals with squid on a
daily basis. The time for notification is therefore further shortened.
110 Third, as simple defrosting and weighing would have shown the alleged size flaw, this
lack was obvious, thereby further shortening the time for notification.
111 Considering all these reasons, the appropriate time period for notification in this case was
five to ten days. CLAIMANT argues that the time for notification is extended by the time
taken for the examination by TGT Laboratories [Mem. Cl., para. 120]. This is incorrect
as the alleged deviation in size was easily noticeable. CLAIMANT should therefore have
detected this deviation during the first examination. In any event, the examination by the
laboratory took only ten days [Cl. Ex. No. 6 and 8], and the time for notification would
maximally be extended by this period. Assuming such circumstances, a total time for
notification of fifteen to twenty days would have been reasonable.
112 For determining when the period begins to run, not the time of actual detection of nonconformity is relevant but rather the time the buyer ought to have discovered a lack

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[Enderlein/Maskow/Strohbach, Art. 39, para. 4; UNCITRAL Digest, Art. 39, para. 18].
The time period for notification began to run when CLAIMANT first inspected the squid,
on 1 July 2008. Since the alleged lack of conformity was easily detectable through proper
examination [Cf. para. 110], CLAIMANT ought to have discovered it at that time.
113 Applying the five to ten day notification period established above [Cf. para. 111],
notification was due by 11 July 2008. Taking into account the laboratory examination,
notification should have been made at the very latest on 21 July 2008. The notice of the
alleged non-conformity of the goods, however, was sent on 16 August 2008 [Cl. Ex. No.
7 and 8]. RESPONDENT was therefore notified 46 days after the squid had been delivered,
which is almost one month after the latest notification date allowed. This notification
cannot be considered timely. Therefore, CLAIMANT has lost its right to rely on an alleged
non-conformity as it did not give proper notice.
(b) Communication of 29 July 2008 was inadequate
114 Although it is not argued by CLAIMANT, its email of 29 July 2008 was neither an
adequate nor a timely notice as the nature of a possible lack of conformity was not
specified and the email was not sent in time.
115 To be considered adequate, the buyer must notify the seller of the exact nature of the lack
of conformity [Honsell/Magnus, Art. 39, para. 6]. This is required to enable the seller to
initiate the steps necessary [Achilles, Art. 39, para. 3]. The lack itself thereby has to be
precisely stated in order to avoid misunderstandings and guarantee that the seller knows
exactly what the buyer means [CISG-online Case No. 260]. General complaints are
therefore not precise enough and the formulation has to be more precise than descriptions
such as different lacks of conformity or not or hardly useable [Honsell/Magnus, Art.
39, para. 10; CISG-online Case No. 683]. The seller referring to Art. 39 CISG is
required to mention at least key words indicating the deviation from the contractually
agreed type or quality [Achilles, Art. 39, para. 4]. Furthermore, the expert knowledge of
the buyer raises the standard of precision, as such a party is expected to be able to
describe the nature of a lack of conformity precisely [CISG-online Case No. 561].
116 CLAIMANTs email of 29 July 2008 is far from this standard. It only stated that two of its
customers complained that the squid was hardly useable as bait [Cl. Ex. No. 5]. This
gave no hint as to the nature of the lack of conformity. It only stated that there was,
apparently, a defect. As no keywords on the deviation from the contractual quality were
mentioned, the required minimum was not fulfilled. Finally, CLAIMANT has expert

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knowledge and would therefore have been able to describe the nature of the alleged lack
of conformity very precisely. As the alleged undersize of the squid was an obvious
defect, expert knowledge would not even have been necessary to describe it. A simple
sentence like squid are of too small size for use as bait would have been sufficient.
117 Furthermore, as shown above in para. 113, notification was to be made at the latest by 21
July 2008. Therefore, CLAIMANTs email of 29 July 2008 was neither precise enough to
be considered adequate nor timely in the sense of Art. 39(1) CISG.
(c) RESPONDENT did not waive its right to object
118 RESPONDENT did not waive its right to object to the fact that the notice of a possible nonconformity was not timely. CLAIMANT alleges that RESPONDENT waived its right to
object by agreeing to an expert examination [Mem. Cl., paras. 108 et seqq]. However, a
waiver is not yet apparent just because of the mere commencement of negotiations
regarding
the
notified
defect
[CISG-online
Cases
No.
353
and
618;
Schlechtriem/Schwenzer/Schwenzer, Art. 39 para. 33]. In fact, a seller only waives his

right if he misleads the buyer into thinking that the seller would not object to the
buyers notice [UNCITRAL Digest, Art. 39, para. 8]. In a German Federal Court
decision, the seller explicitly stated that he will take responsibility and duly handle the
present and future complaints if these prove to be justified [CISG-online Case No. 277].
The mere fact that the seller did not immediately reject the notice as late at the time it
was given is not sufficient evidence of waiver [CISG-online Case 120].
119 CLAIMANT relies primarily on the Lambskin coat case [CISG-online Case No. 415].
Proper reading of the case, however, shows that an agreement to an expert examination
alone does not equal an implicit waiver of the sellers right to object to an untimely
notice under Art. 39(1) CISG. The court states that the seller's mere checking on the
defects after the period of time for notification had expired cannot be regarded as an
implicit waiver of its rights. RESPONDENT only suggested the expert examination on 3
August 2008 [Cl. Ex. No. 6]. As the time period for giving notice had already expired at
that time [Cf. para. 113], RESPONDENT was not waiving its right.
120 The court goes on to conclude that the [Seller] did not forfeit its rights under the
principle of good faith by entering into subsequent negotiations with the [Buyer]
concerning the claimed lack of conformity. To the contrary, the very principle of good
faith commands that such negotiations as mere gesture of good will cannot be interpreted
as a waiver of one's own rights [CISG-online Case No. 415]. CLAIMANT failed to

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properly examine the goods, did not notify RESPONDENT of the alleged non-conformity in
time and failed to specify the nature of the alleged defect. In the light of these
shortcomings, a loss of RESPONDENTs rights simply through its asking for a specific
description of the defect, which should have been provided by CLAIMANT in the first
place, would not be compatible with the principle of good faith.
121 Furthermore, contrary to CLAIMANTs allegation, RESPONDENT does not show any
willingness to remedy a confirmed non-conformity [Mem. Cl., para. 110]. As shown
in para. 116, CLAIMANTs notice of 29 July 2008 failed to specify the nature of the lack
of conformity. Therefore, RESPONDENT invited CLAIMANT to provide additional
information: I am very surprised to hear that there were complaints about the illex we
sold you. Please have it inspected by a certified resting agency and keep us informed
[Cl. Ex. No. 6]. This statement makes no indication that RESPONDENT would take
remedial actions in the case of a confirmed lack of conformity and cannot be interpreted
as a waiver. Therefore, RESPONDENT did not waive its right to object to the fact that the
notice of a possible non-conformity was not timely.
C.
AVOIDANCE OF THE CONTRACT WAS NOT POSSIBLE
122 Although CLAIMANT does not argue the avoidance of the contract and its implications,
we ask the Tribunal to find that such avoidance was impossible under the given
circumstances. CLAIMANT cannot avoid the contract because (1) the alleged breach was
not fundamental and (2) other remedies would have been sufficient to protect
CLAIMANTs interests. In any event, (3) CLAIMANT lost the right to declare avoidance due
to its failure to notify RESPONDENT in accordance with Art. 26 CISG. Finally, (4) the
alleged non-conformity only affected an easily separable part of the goods.
1.
The alleged breach of contract was not fundamental
123 Art. 49(1)(a) CISG states that the buyer may declare avoidance of the contract if the
failure by the seller to perform any of his obligations amounts to a fundamental breach of
contract. In this case, any alleged breach by RESPONDENT was not fundamental in the
sense of Art. 25 CISG. (a) CLAIMANT was not substantially deprived of the benefit of the
contract and (b) the results of the breach were not foreseeable for RESPONDENT.
(a) CLAIMANT was not substantially deprived of the benefit of the contract
124 According to Art. 25 CISG, a breach of contract is fundamental if it results in such a
detriment to the other party as substantially to deprive it of what it is entitled to expect

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under the contract. The decisive factor is not necessarily the financial damage or loss, but
the significance of the breach for the aggrieved party [Schlechtriem/Butler, p. 97 et seq.].
The fundamental character of the breach [...] depends on the impairment of the justified
contractual expectations of the damaged party [Ferrari, p. 496].
125 In order for a potential breach to be fundamental, CLAIMANT would have to show that a
breach of contract had substantially impaired its justified expectations. Looking at the
contract and the relevant circumstances reveals the expectations which were justified.
CLAIMANT could not reasonably expect the squid to fall exclusively in the range of
100/150g, as this was not contractually agreed upon [Cf. para. 82]. Further, the price of
the goods as well as the contract indicated that the squid would be unsized [para. 79].
Especially the fact that CLAIMANT knew about quality inconsistencies of Danubian squid
[Req. for Arb., para. 10] shows that a rational party could not expect all of the squid to
fall into the perfect size range. This is also the reason why CLAIMANT had not usually
bought squid from Danubia in the past [id., paras. 9-11]. Since the catch from the
Oceanian Islands was below average, CLAIMANT had to be ready to compromise to cover
the demand of its clients. As a result, the justified contractual expectations do not cover
squid exclusively in the 100/150g size range. Rather, the expectations were limited to
delivery of squid which were fit for human consumption, sellable and usable as bait.
126 A potential breach of contract by RESPONDENT could not have caused CLAIMANT to be
substantially deprived of the benefit of the contract as its justified expectations were not
substantially impaired. First, over 45% of the squid was in the perfect size range for bait
[Cl. Ex. No. 8] which means that both the size and quality of meat of the squid were
perfect. Squid not matching perfectly the range of 100/150 grams are not automatically
unusable as bait [Cf. para. 86]. CLAIMANT just mentions that it is the range which gives
[their] customers the best results [Cl. Ex. No. 2]. Second, the squid could reasonably be
used for other purposes. This so called reasonable use test has been used by the highest
courts of several European countries. A breach is not considered fundamental if the
buyer can resell the goods in its ordinary course of business [e.g. CISG-online Case No.
135 and 413]. Since CLAIMANT also sells seafood for human consumption [Cl. Ex. No.
10, para. 2], when the size of the squid is irrelevant [id., para. 4], even the undersized
squid were sellable in its ordinary course of business.
127 Referring to the adapted expectations under the contract, the alleged difference in size
between the contract and the delivery do not substantially deprive CLAIMANT and
therefore an alleged breach of contract is not fundamental.

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(b) The results were not foreseeable
128 Even if the Tribunal should come to the conclusion that the delivery substantially
deprived CLAIMANT, this does not necessarily mean that it constituted a fundamental
breach. According to Art. 25 CISG, a breach of contract is not fundamental if the party
in breach did not foresee and a reasonable person of the same kind in the same
circumstances would not have foreseen such a result.
129 The question of foreseeability has to be interpreted with regard to Art. 8(2), (3) CISG
[Schlechtriem/Schwenzer/Schroeter, Art. 25 para. 36]. It has both a subjective and an
objective component [Honsell/Gsell, Art. 25 para. 22] meaning that both the party and a
hypothetical person in its position would not have foreseen the results of a breach.
130 In this case, the results of the breach were foreseeable neither for RESPONDENT nor for a
reasonable party in the same circumstances. RESPONDENT had delivered squid to
CLAIMANT, which sells fish products both as bait and for human consumption [Req. for
Arb., para. 2]. CLAIMANT states that the squid were hardly usable as bait [Cl. Ex. No.
5] and that the squid eventually had to be destroyed [Req. for Arb, para. 23]. In fact,
as proven by TGT Laboratories, more than 45% of the delivered squid were of perfect
size and quality to be used as bait, and the remainder was also usable as bait or for other
purposes [Cl. Ex. No. 8]. The wording used (hardly usable) is an exaggeration, but
implicates that the squid was still in fact usable. There was no reason either for
RESPONDENT or for a reasonable person of the same kind in the same circumstances to
foresee that the long liners would not be satisfied with the squid.
131 Even if RESPONDENT could have foreseen that the long liners would not be pleased with a
mix of 2007/2008 squid, it was definitely not foreseeable that CLAIMANT would have this
much trouble selling the squid (both to other long liners and on other markets) and that
they eventually had to be destroyed. The results of the breach were not foreseeable to
RESPONDENT, and the breach therefore not fundamental under Art. 25 CISG.
2.
Other remedies would have been sufficient
132 Even if there had been a breach of contract, CLAIMANT could not have avoided the
contract as other remedies would have been sufficiently strong to protect its interests.
The remedy of avoidance is only allowed under the CISG as a last resort [Magnus, p.
423], especially when the goods have already been delivered [Schlechtriem/Schwenzer/
Mller-Chen, Art. 49 para. 2]. A contract can only be avoided in exceptional
circumstances [CISG-online Case No. 413]. It has been held that the CISG has a

_____________________________________________________________________
tendency to limit avoidance of contract in favor of other possible remedies, in particular a
reduction of the purchase price or a claim for damages" [CISG-online Case No. 135].
133 In order to avoid the contract, CLAIMANT would have had to show that the circumstances
were exceptional and that the other remedies, such as a reduction of the purchase price or
damages, would not have been sufficient. In the case under consideration a reduction in
the purchase price would have been a suitable remedy. Almost half of the squid were
exactly as ordered, and the other half was also of excellent quality [Cl. Ex. No. 8],
despite allegedly being undersized. It would therefore have been reasonable to demand a
reduction in the purchase price for the 2008 squid or damages.
3.
CLAIMANT failed to declare avoidance
134 Under Art. 26 CISG, a party must notify the other party of its avoidance in order for this
avoidance to become effective. The requirements for a notice of avoidance are very strict
[Honsell/Gsell, Art. 26 para. 11]. Even if one were to allow an implicit notice of
avoidance, it must be unequivocally clear that the buyer no longer wants to uphold the
contract [CISG-online Cases No. 26 and 218]. While it was held sufficient notification if
the seller returns the goods and demands back the purchase price [CISG-online Cases
No. 709, 817, 945 and 1488] the simple returning of the goods is not sufficient behavior
by the buyer to show its intention to avoid the contract [Honsell/Gsell, Art. 26 para 13].
135 CLAIMANT never stated its intention to avoid the contract. It only notified RESPONDENT
that it would be holding the squid at RESPONDENTs disposal [Cl. Ex. No. 7]. This
notification is not sufficiently clear to show that CLAIMANT no longer plans to adhere to
the contract, since it only returns the squid without stating which remedy it wanted to
take. CLAIMANT therefore never properly declared avoidance.
4.
The alleged non-conformity only affected an easily separable

part of the goods
136 According to Art. 51 CISG, if only part of a contract is not in conformity, the buyer may
only avoid that part unless breach of that part causes a fundamental breach of the whole
contract. If the Tribunal should conclude that RESPONDENT fundamentally breached the
contract, we ask it to find that the circumstances only allowed a partial avoidance.
137 Predominant opinion states that Art. 51 CISG is only applicable if the goods delivered
consist of separate and separable items, such as 10 container loads of cocoa
[Huber/Mullis, p. 293]. An avoidance of the contract in its entirety is limited to the cases

_____________________________________________________________________
where the partial breach in itself causes the buyer to lose all benefits of the entire contract
[id, p. 295]. This is however a rare exception rather than the rule [UNCITRAL Digest,
Art. 51 para. 6; CISG-online Case No. 129].
138 In this case, the goods were packaged in cartons and labeled with the year of the catch
[Cl. Ex. No. 8]. They were separate and separable, so a partial avoidance was possible.
By CLAIMANTs own account, 45% of the squid were in perfect conformity to its
(exaggerated) expectations [id]. Since the cartons containing the squid are labeled and
the conforming squid were almost exclusively from the year 2007, it would have been
little trouble to avoid only the non-conforming part of the contract.
139 To avoid the entire contract, CLAIMANT would have to show that the partial breach
caused it to lose all the benefits of the contract. Such an assertion will be impossible to
make, as a large portion of the goods was in perfect conformity and therefore saleable.
D.
CLAIMANT IS NOT ENTITLED TO DAMAGES
140 CLAIMANT is not entitled to damages as (1) the prerequisites for damages are not
fulfilled. In any event, full damages cannot be granted as (2) CLAIMANT did not
reasonably mitigate its losses.
1.
The prerequisites for damages are not fulfilled
141 CLAIMANT is not entitled to claim damages as RESPONDENT did not breach any
contractual obligation. If the seller breaches a contractual obligation, the damaged party
is allowed to claim damages according to Art. 45(1)(b) CISG in connection with Art. 74
CISG [Honsell/Schnle/Th. Koller, Art. 74, para. 20]. In other words, without a breach
of a contractual obligation no claim for damages is possible [Schlechtriem, p. 3].
142 In this case, as shown above in paras. 65 et seqq., no breach of a contractual obligation
occurred. Therefore, CLAIMANT is not entitled to claim damages.
143 Even if CLAIMANT could claim damages, it would not be entitled to the full amount of
claimed damages, as it did not and could not avoid the contract. The CISG is based on
the assumption that one cannot claim the entire performance interest without avoiding the
contract" [Huber/Mullis, p. 282]. In this case CLAIMANT could not avoid the contract as
no fundamental breach occurred [Cf. paras. 127 and 131].
2.
Mitigation of losses would have been possible
144 Even if CLAIMANT were entitled to damages, it could not claim the full amount as
mitigation of losses would have been possible. The party relying on a breach of contract

_____________________________________________________________________
must take all possible measures to prevent the occurrence of damages or to mitigate their
extent [Art. 77 CISG]. If [it] fails [...], the party in breach may claim a reduction in the
damages in the amount by which the loss should have been mitigated [id.]. A party will
not be compensated for damages which it could reasonably have avoided
[Honsell/Magnus, Art. 77 para. 1]. The Austrian Supreme Court defines that a possible
measure is reasonable "if it could have been expected [...] from a reasonable person [...]
under the same circumstances [CISG-online Case No. 224]. In this case, the measures
taken by CLAIMANT cannot be considered reasonable under the circumstances as (a) they
were not adequately executed and (b) further measures would have been adequate.
(a) The measures taken were not adequately executed
145 The measures CLAIMANT took were not reasonable under the circumstances because they
were not adequately executed. Measures to mitigate losses are adequate if they help to
avoid unnecessary costs and expenses [Honsell/Magnus, Art. 77 para. 11; UNCITRAL
Digest, Art. 77, para. 6]. Expenditures which do not limit the loss cannot be reimbursed
[CISG-online Case No. 277; Zeller, p. 112]. The measures CLAIMANT took in this case
were not adequate for the following reasons.
146 First, the delivered squid were of excellent quality [Cl. Ex. No. 8]. However, the moving
of the product unduly increased the deterioration process [Proc. Ord. No. 3, para. 19].
CLAIMANT moved the squid at least twice during the storage period [Req. for Arb.,
para. 22]. It would have been possible to store it in one cool house during the whole
period and thereby prevent the squid from deteriorating quickly. The moving was
unnecessary and, instead of avoiding costs, caused further avoidable expenses.
147 Second, the storing costs could have been mitigated. CLAIMANT stored the squid for at
least eleven months [Req. for Arb., para. 22]. It is known that squid is harder to sell the
longer it has been since catch and individual countries may have limits on the time from
catch to sale at retail [Req. for Arb., para. 29]. Art. 77 CISG expects the aggrieved party
to act within reasonable time, depending on the specific market [UNCITRAL Digest, Art.
77, para. 7; CISG-online Case No. 119]. As squid are perishable and seasonal goods, it
would have been reasonable to destroy the squid earlier, and thus reduce storage costs, as
the chances to sell the squid were further reduced with every week [CISG-online Case
No. 36].
148 Third, CLAIMANT tried to sell the squid abroad. It claims that these attempts were
largely unsuccessful [Req. for Arb., para. 20]. However, this shows that the attempts

_____________________________________________________________________
were at least partially successful. With an offered discount, CLAIMANT would have been
able to resell more squid on the market outside of Mediterraneo [Cf. CISG-online Case
No. 749]. The higher the discount, the larger the amount of sold squid would have been.
149 Therefore, CLAIMANT is not entitled to the full amount of claimed damages as the taken
measures were not adequately executed.
(b) Further measures would have been adequate
150 An aggrieved party is only entitled to the full amount of claimed damages if it took all
reasonable measures to mitigate losses that can be expected by a reasonable business
person [Zeller, p. 114; CISG-online Case No. 727]. CLAIMANT is not entitled to the full
amount of claimed damages as the following further measure could have been expected.
151 All cartons were labeled illex danubecus 2007 or illex danubecus 2008 [Proc. Ord.
No. 3, para. 32]. It would have been reasonable and possible to sort out the 2007 catch
squid, especially as it was known that 94% of the 2007 catch squid were in the range of
100-150 grams [Cl. Ex. No. 8]. CLAIMANT may now argue that it was not possible to
resell any squid as its customers were not willing to take any chances. This is of no
relevance as CLAIMANT could have restored confidence by stating that it had found the
problem of the size (60% of squid from 2008 catch) and that it could guarantee sale of
squid in right size range (from 2007 catch). This leads to the conclusion that CLAIMANT
would have been able to resell all the 2007 catch squid. As approximately 40% of the
delivered squid were from 2007 catch [id.], this would have almost halved the losses.
152 Therefore, as further measures would have been reasonable under the circumstances,
CLAIMANT is not entitled to full amount of claimed damages.
IV.
PRAYERS FOR RELIEF
RESPONDENT respectfully requests the Tribunal to find that:

1. The Tribunal does not have jurisdiction in its present composition;
2. CLAIMANT breached its duty of confidentiality and RESPONDENTs claims for interim
measures and for damages should be granted;
3. The delivery of squid was conforming to the contractual requirements and no breach of
contract occurred;
4. CLAIMANT has lost its right to rely on an alleged lack of conformity; and
5. CLAIMANT is not entitled to damages.

Memorandum For Respondent: S H G L N W F W L Z

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Memorandum For Respondent: S H G L N W F W L Z

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EIGHTEENTH ANNUAL

WILLEM C. VIS INTERNATIONAL COMMERCIAL ARBITRATION MOOT

MEMORANDUM FOR RESPONDENT

c/o Horace Fasttrack

c/o Joseph Langweiler

Capitol City, Mediterraneo

Tel. (0) 146-9845

Tel. (0) 214 77 32

Fax (0) 146-9850

Fax (0) 214 77 33

SAMUEL HORNER GEORG LORENZ NADIA WALKER

University of St. Gallen

CONSTITUTION OF THIS TRIBUNAL VIOLATES THE CLAUSE ................. 3

1. The parties derogated from the Milan Rules ........................................... 4

CONSTITUTION OF THIS TRIBUNAL VIOLATES THE MILAN RULES ....... 6

1. The Arbitral Council violated Art. 20(3) Milan Rules ............................ 7

ANY AWARD RENDERED BY THIS TRIBUNAL WOULD NOT BE

CLAIMANT BREACHED CONFIDENTIALITY ........................................... 12

1. CLAIMANT has a duty of confidentiality ................................................ 12

The 2010 Milan Rules apply .............................................................................. 12

Memorandum for Respondent ii

University of St. Gallen

CLAIMANT agreed to confidentiality by consenting to choose arbitration ........ 13

2. CLAIMANTs interview breached the duty of confidentiality................. 13

CLAIMANT was not protecting its rights ............................................................. 14

INTERIM MEASURES SHOULD BE GRANTED .......................................... 15

1. The Tribunal has authority to order interim measures .......................... 15

CLAIMANT IS LIABLE FOR BREACH OF CONFIDENTIALITY .................. 16

III. Claim for breach of contract should be dismissed .................................. 16

NO BREACH OF CONTRACT OCCURRED ................................................. 17

1. The goods fulfilled all contractual requirements pursuant to Art. 35(1)

The contract did not include a size requirement ................................................ 18

2. The squid fulfilled all requirements of Art. 35(2) CISG ....................... 20

The squid were fit for all ordinary purposes ...................................................... 21

The squid were fit for the particular purpose ..................................................... 21

CLAIMANT did not rely on RESPONDENTs skill and judgement ......................... 22

The squid possessed the qualities held out by the sample.................................. 22

CLAIMANT LOST ITS RIGHT TO RELY ON AN ALLEGED LACK OF

Memorandum for Respondent iii

University of St. Gallen

1. CLAIMANT did not examine the goods properly .................................... 23

The quantity examined was not sufficient.......................................................... 23

The examined samples were not representative ................................................. 24

The quality of examination was not sufficient ................................................... 24

2. CLAIMANT did not give proper notice about non-conformity ............... 25

Communication of 16 August 2008 was not in time .......................................... 25

Communication of 29 July 2008 was inadequate............................................... 27

RESPONDENT did not waive its right to object .................................................... 28

AVOIDANCE OF THE CONTRACT WAS NOT POSSIBLE ............................ 29

1. The alleged breach of contract was not fundamental ............................ 29

The results were not foreseeable ........................................................................ 31

2. Other remedies would have been sufficient .......................................... 31

CLAIMANT IS NOT ENTITLED TO DAMAGES .......................................... 33

1. The prerequisites for damages are not fulfilled ..................................... 33

The measures taken were not adequately executed ............................................ 34

Further measures would have been adequate ..................................................... 35

IV. Prayers for Relief ........................................................................................ 35

Memorandum for Respondent iv

University of St. Gallen

Circuit (U.S. Court of Appeals)

United Nations Convention on Contracts for the International

Case Law on UNCITRAL Texts

Deutsche Institution fr Schiedsgerichtsbarkeit (German