RebeccaAllen Arbitration ArbitrationDispute ArbitrationDispute UnitedNaturalGasv.EasternEuropeEfficiency TableofContents 1.ArbitrationClause 2.OutlineofRules included:rulesapplied,improvementsthatcouldbemadetorules 3.Plaintiffsclaimforrelief servesnotice,summaryoffacts,claimsforrelief usedbyarbitrators 4.Defendantsresponse affirmsnoticewasgiven,counterarguments 5.

PerryDeposition 6.LopezDeposition 7.KensingtonDeposition

ARBITRATION CLAUSE 1. In the case of any dispute arising out of this agreement, arbitration administered by the International Chamber of Commerce in accordance with International Arbitration Rules will be the exclusive means of resolving such disagreement. The arbitration panel is to adhere to United States law. By signing this agreement, both parties consent to United States federal law as the law governing the dispute. The decision of the arbitration panel shall be binding. The judgment on the award rendered in any such arbitration will be entered by whichever court that has jurisdiction. 1.1: Service. The arbitration demand must be delivered either in person or by certified mail to the parties involved. It must include a clear statement of the dispute. A response must be served within the following three weeks. The response must respond to any issues raised in the initial demand and must also raise any counterclaims that will be relied upon. 1.2: Arbitrator. Following proper service and response the parties will have three (3) weeks to collaboratively select three (3) arbitrators from the International Chamber of Commerce. The selected arbitrators must have over ten (10) years of experience in the area of the dispute. If the parties cannot agree on a panel of arbitrators they must submit a petition to the International Chamber of Commerce to select a panel for them. At this time the selections of the International Chamber of Commerce will be binding. 1.3: Pre-hearing Procedure. 1.3(a): Conferences. The panel of arbitrators shall hold at least one (1)

meeting with the parties and their representation to establish arbitration schedule and the rules by which the arbitration shall be governed. 1.3(b): Discovery. Any discovery request shall be reviewed by the arbitrators and if necessary to the claims and defenses of the parties shall be approved. This includes expert reports, any necessary depositions, names and addresses of the witnesses, and anything else the parties deem necessary. 1.3(c): Motions. Any and all motions must be filed with the panel of arbitrators before the beginning of the arbitration. 1.4: Hearing 1.4(a): Location. The hearing will be held at a site deemed agreeable by the panel and the parties prior to the beginning of the arbitration. 1.4(b): Time. The hearing must not last beyond a three (3) month period. 1.4(c): Award. The arbitrators must submit their decision in written format no later than one (1) month after the conclusion of the hearing. The sole remedy allowed shall be actual damages. 1.5: Costs and Fees. Barring any contrary agreement by the parties and arbitrators, the cost of the location, arbitrators, and any other expenses shall be split evenly by the parties.

Outline The arbitration dispute involves a failure to deliver natural gas from Eastern European Efficiency to United Natural Gas. The facts, which are further expanded upon in the plaintiffs claim, are as follows: the parties entered into a contract for the sale of $2.2 million US worth of natural gas. Eastern European Efficiency failed to deliver and the parties signed an amended contract to deliver two weeks later. They failed to deliver again. At this point, United Natural Gas filed a suit in the 9th Circuit against Eastern European Efficiency. Eastern European Efficiency filed a response and the claim was then sent to arbitration, where it is to be decided by a panel of arbitrators from the International Chamber of Commerce. The arbitration clause signed by the parties states several actions that must occur before the beginning of arbitration. First, according to rule 1.1, an arbitration demand must be delivered to the parties involved and include a clear statement of the dispute. In this case, the plaintiff served notice when they filed a claim with the courts. Additionally, the defendants acknowledged service when they filed an answer in court. According to 1.2 the parties have three weeks to select from the International Chamber of Commerce three arbitrators. The rules of the International Chamber of Commerce will govern the dispute, therefore the arbitrators must be pre-selected by the organization. In terms of other processes that must occur, the parties must meet to establish the arbitration meeting times under rule 1.3. In the pre-arbitration meeting the parties can also decide on the location of the arbitration. Additionally, the arbitrators can review and approve any discovery requests and any and all motions. In this case, the parties each produced depositions that were completed prior to arbitration and those were used by the arbitrator. The Perry, Lopez, and Kensington depositions are all attached. As part of the initial claim required by 1.1 and by 1.3, each party has stated what they

want out of their deposition. The plaintiff is seeking damages for the lost profits and delivery of the goods, whereas the defendants want the contract nullified under the doctrine of impossibility. Because they are submitted prior to the hearing the arbitrator can know, entering the dispute, what the parties will be arguing for or against. Finally, under rule 1.4, the arbitrators will come to a decision for or against the plaintiff, which in this case would either grant them damages and delivery or deny them completely. The costs would then be split between the two parties under rule 1.5, unless the arbitrators included a decision that one party would pay for the entire arbitration. In terms of improvements that could be made to these rules, I would revise Rule 1.4 to be more structured in terms of what the actual arbitration process between the two parties would look like. Because this is an international dispute, I should have written the rules to allow the arbitrator to decide on a location if necessary, not relying on the ability of the parties involved to compromise. Additionally, while I intended the International Chamber of Commerce rules to govern the arbitration, I should have made it more clear as to the jurisdiction of the United States.

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Johnny Smith Bar #385189 Smith International Litigation 9TH CIRCUIT COURT

United Natural Gas, Plaintiff, vs. Eastern Europe Efficiency, Defendant

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Case No.: 9700185 PLAINTIFFS CLAIM FOR DELIVERY OF GOODS AND DAMAGES CLAIM SUBJECT TO ARBITRATION

Summary of the Facts 12 United Natural Gas and Eastern Europe Efficiency have 13 entered into contracts since February of 1999. United Natural Gas, a 14 Portland-based company, deals exclusively in natural gas purchases from 15 Eastern Europe. From there, they distribute natural gas throughout North and 16 South America. Eastern Europe Efficiency is a prominent Ukraine-based natural 17 gas refining and transporting business. 18 On November 2, 2013 defendant entered into a contract with 19 plaintiff for the sale of $2.2 million (US) worth of natural gas to be 20 delivered by February 2, 2014. Following the delivery of the natural gas, the 21 $2.2 million would be paid to the defendant and the delivery would be 22 distributed by plaintiff to the distributing purchases.

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On February 1, 2014 defendant informed plaintiff that due 24 to political unrest it would be unlikely that they would able to be complete 25 the agreement as signed. Because it was only a day away from the scheduled 26 delivery date the defendants had no choice but to renegotiate a delivery 27 agreement, allowing the defendants a two-week extension that they repeatedly 28 PLAINTIFFS CLAIM FOR DELIVERY OF GOODS AND DAMAGES CLAIM SUBJECT TO ARBITRATION - 1

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said they could fulfill. The parties both signed an amended contract with an extended delivery date of February 15th, 2014. Defendants failed to deliver the natural gas by February 25th. Additionally, the plaintiff repeatedly attempted to contact the defendant in order to determine that delivery was going to be completed and defendants failed to get in touch with plaintiff. Due to the failed delivery of the natural gas, United Natural Gas sustained $900,000 in lost profits and the loss of two distributing contracts. Argument I. The Plaintiff is entitled to delivery of the natural gas a. Due to the scarcity of natural gas and the existing contract with Eastern Europe Efficiency, plaintiffs should be able to complete the purchase of the $2.2 million worth of natural gas. II. The Plaintiff is entitled to damages in the amount of the lost profit and lost contract a. The plaintiff began suffering losses following the breach of the February 2nd, 2014 contract delivery date and should receive the amount in lost profits and lost contract damages in the amount of $862,000. i. The lost profits of $900,000 occurred when the defendant failed to deliver and several clients could not purchase in the amount of their order. ii. The three lost clients will cost United Natural Gas $862,000 in the next fiscal year. The clients left United Natural Gas exclusively because of the failed February 2014 delivery, otherwise satisfied with their experience as long-time customers of United Natural Gas PLAINTIFFS CLAIM FOR DELIVERY OF GOODS AND DAMAGES CLAIM SUBJECT TO ARBITRATION - 2

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Conclusion Due to the failure to deliver the contracted amount of natural gas the plaintiffs are entitled to delivery of the natural gas and damages stemming from the failure of delivery

Dated this 10th of March, 2014

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JOHNNY SMITH, # 385189

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Carol Andrews Bar # 3252291 Andrews Defense 9TH CIRCUIT COURT

United Natural Gas, Plaintiff, vs. Eastern Europe Efficiency, Defendant

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Case No.: 9700815 DEFENDANTS RESPONSE TO PLAINTIFFS CLAIM FOR DELIVERY OF GOODS AND DAMAGES UNDER UCC 2-615

Argument 12 I. 13 liable for the failed deliver of the natural gas 14 a. While it is unfortunate that plaintiff was unable to fulfill 15 their contractual distribution agreements, it was contractually 16 impossible for defendants to complete delivery of the natural gas 17 18 b. Impossibility states the general rule is that a thing may be 19 impossible to perform when it would not be practicable to 20 perform. A contractual obligation is impracticable "when it can 21 only be done at an excessive and unreasonable cost" 22 (Transatlantic Financing Corp. v. United States, 363 F.2d 312 by the amended delivery date of February 15th, 2014. The doctrine of impossibility protects defendants from being held

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[D.C. Cir. 1966]). As anyone who has been following the 24 continuing unrest in Ukraine would know, the distribution and 25 transfer of natural gas is one of many things that has become 26 impossible for perform in Ukraine. 27 28 DEFENDANTS RESPONSE TO PLAINTIFFS CLAIM FOR DELIVERY OF GOODS AND DAMAGES UNDER UCC 2-615 - 1

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c. Because the contract was impossible to perform it is clear that the defendant should not be held liable for the damages incurred, nor should they have to deliver the natural gas, assuming it was even possible now. Plaintiff willingly entered into an amended contract for a later delivery date, therefore defendant is not liable for the losses beginning on February 2nd, 2014 a. Even if the defendant were held even partially liable for the losses incurred by plaintiff, the plaintiff willingly entered into a contract extending the delivery date to February 15th, 2014. According to the deposition of Diane Perry, CEO of Vancouver Energy, plaintiff was going to lose their business even if the natural gas would have been delivered on February 15th. According to Perry, We knew that we would have to find our natural gas elsewhere beginning on February 3rd regardless of any later shipment. (Perry Dep. p. 2, 12-16). b. Additionally, one of the other three clients that plaintiff cites was planning on dropping United Natural Gas as their supplier at the end of February regardless. According to Kyle Lopez, CIO of Midwest Power, the plaintiffs contract performance had been less than satisfactory and they were planning on finding another supplier in February. According to Lopez, They were really unreliable and we are all sick of dealing with it. There are plenty of other suppliers we can turn to. (Lopez Dep. p. 1-2, 25). /// ///

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DEFENDANTS RESPONSE TO PLAINTIFFS CLAIM FOR DELIVERY OF GOODS AND DAMAGES UNDER UCC 2-615 - 2

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Conclusion The defendant should not be held liable for the losses incurred nor can they be forced to deliver the goods as they are unable to do so.

Dated this 10th of March, 2014

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Carol Andrews, #3252291

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Carol Andrews Bar # 3252291 Andrews Defense 9TH CIRCUIT COURT

United Natural Gas, Plaintiff, vs. Eastern Europe Efficiency, Defendant

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) Case No.: 9700185 ) ) Deposition of Diane Perry pursuant to ) FRCP 30 ) ) ) ) ) ) Deposition of Diane Perry

12 Deposition of Diane Perry, a witness in the above-entitled case, taken 13 before Saul Anderson, notary public located in Washington County, Oregon, 14 pursuant to Uniform Trial Court Rules. 15 Direct Examination by Ms. Andrews: 16 Q: Hello, Ms. Perry. Please state you name and occupation. 17 A: Diane Perry, CEO of Vancouver Energy. 18 Q: Thank you. Ms. Perry, you have had a contract for the purchase and 19 distribution of natural gas with United Natural Gas for the last 8 years, 20 correct? 21 A: Yes, we entered into a contract in 2006 and have continued doing business 22 together since then.

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Q: What is the nature of your distribution? 24 A: We distribute natural gas to municipalities and entities like hospitals 25 and local businesses. We operate on a structure where we are incredibly 26 reliant on the deliver of gas by our supplier, as our customers need 27 predictability and reliability more than anything. 28

Deposition of Diane Perry pursuant to FRCP 30

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Q: That makes sense. Before February 2014 how was your working relationship with United Natural Gas? A: Generally, fine. There have been a couple of hiccups in terms of late delivery, but never anything more than a few hours. Q: Tell us about what happened in February 2014. A: Well, they knew the nature of our business, specifically that it was part of our business model to operate without a lot of wiggle room in terms of time. They called us on February 1st and informed me that they would be unable to the deliver and that that they could now make us a sale on February 16th, 2014. This didnt work for me or our business model. Q: So you decided to drop them as your supplier? A: Yes, we had been pursued by other suppliers that had far better track records and this was the last straw. I informed United Natural Gas at this time that we would no longer be needing their services. We knew that we would have to find our natural gas elsewhere beginning on February 3rd regardless of any later shipment. Q: Even if the delivery had come through on February 15th you would not have retained your contract? A: No. The second they said no February 2nd delivery we were done.

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Dated this 10 of March, 2014

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Deposition of Diane Perry pursuant to FRCP 30

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Carol Andrews Bar # 3252291 Andrews Defense 9TH CIRCUIT COURT

United Natural Gas, Plaintiff, vs. Eastern Europe Efficiency, Defendant

) Case No.: 9700185 ) ) Deposition of Kyle Lopez pursuant to ) FRCP 30 ) ) ) ) ) ) Deposition of Kyle Lopez

Deposition of Kyle Lopez, a witness in the above-entitled case, taken before Saul Anderson, notary public located in Washington County, Oregon, pursuant to Uniform Trial Court Rules. Direct Examination by Ms. Andrews: Q: Hello Mr. Lopez. Could you please state your name and occupation? A: Kyle Lopez, CIO of Midwest Power. Q: Ok Mr. Lopez, why dont you tell us about the nature of Midwest Powers working relationship with United Natural Gas. A: I have been in contracts with United Natural Gas on and off since 2000. Q: Have you generally been satisfied with their work? A: No, I havent actually. There simply havent been any meaningful alternatives to their company. Q: Are there now? A: Yes, the market has expanded quite a bit. There are at least 3-4 that I have been talking to for the last six months or so. They were really

Deposition of Kyle Lopez pursuant to FRCP 30 - 1

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unreliable and we are all sick of dealing with it. There are plenty of other suppliers we can turn to. Q: So are you saying that you have planned to leave United Natural Gas? A: Yes, since about November of 2013. Q: Were they aware of this? A: Yes. I informed them of competitive pricing and they didnt give my threat to leave much credence. I ultimately left in February 2014. Q: Did their failure to deliver in February lead to that decision? A: No, I was leaving no matter what.

Dated this 10 of March, 2014

Carol Andrews, #3252291

Deposition of Kyle Lopez pursuant to FRCP 30 - 2

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Johnny Smith Bar #385189 Smith International Litigation 9TH CIRCUIT COURT

United Natural Gas, Plaintiff, vs. Eastern Europe Efficency, Defendant

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) Case No.: 9700185 ) ) Deposition of Andrew Kensington ) ) ) ) ) ) )

Deposition of Andrew Kensington, a witness in the above-entitled case, 12 taken before Saul Anderson, notary public located in Washington County, 13 Oregon, pursuant to Uniform Trial Court Rules. 14 Direct Examination by Mr. Smith: 15 Q: Hi Mr. Kensington. Please state your name and occupation. 16 A: Andrew Kensington, owner and CEO of International Energy. 17 Q: Mr. Kensington, what is it that International Energy does? 18 A: We are a distributer of natural gas that we receive from Eastern Europe, 19 mainly Ukraine and parts of Russia. 20 Q: What is your knowledge of United Natural Gas? 21 A: They are one of our direct competitors. 22 Q: In the last few months have you received your natural gas shipments with

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regularity? 24 A: Yes, although there is a lot of unrest in Ukraine we have been in 25 communication with the companies and beyond a little extra work there doesnt 26 seem to be many issues in the transfer of natural gas. 27 28

Deposition of Andrew Kensington - 1

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Q: So they havent had any trouble and you have received your normal shipments? A: Yes, and in talking to them I dont know how shipments are being that delayed. Q: Why do you say that? A: The companies state that they all have shipping clearance and there shouldnt be a delay in any company. Q: Are you familiar with Eastern European Efficiency? A: Yes, I am. I have worked with them before and they are incredibly unprofessional. Q: Why do you say that? A: Well, they were never on time when I ordered from them. Also, talking to my guys over there it sounds like they are just using the political issues to make excuses for not being ready for the shipment. Q: No further questions, thank you Mr. Kensington.

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Dated this 10 of March, 2014

JOHNNY SMITH, # 385189

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Deposition of Andrew Kensington - 2