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WILLEM C.

VIS
INTERNATIONAL COMMERCIAL ARBITRATION MOOT 2007-08

MEMORANDUM FOR THE CLAIMANT

On behalf of: Against:

The Claimant The Respondent


Mediterraneo Wine Cooperative Equatoriana Super Markets S.A.
140 Vineyard Park 415 Central Business Center
Blue Hills, Mediterraneo Oceanside, Equatoriana

UNIVERSITY OF WASHINGTON
Seattle
Brianne Anderson Bradley Bowen Nicole Jabaily

Lavanga Wijekoon Alexander Wu


TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................................... i
TABLE OF ABBREVIATIONS ............................................................................................. iii
TABLE OF AUTHORITIES....................................................................................................v
STATEMENT OF FACTS ....................................................................................................... 1
SUMMARY OF THE ARGUMENT........................................................................................4
ARGUMENT ............................................................................................................................5
PART ONE: THE TRIBUNAL HAS JURISDICTION TO HEAR THIS DISPUTE..........5
I. THE TRIBUNAL SHOULD NOT STAY THE ARBITRAL PROCEEDINGS PENDING A DECISION BY
THE COMMERCIAL COURT. ....................................................................................................5
A. The Arbitral Agreement and the JAMS Rules Confer Exclusive Jurisdiction Upon
This Tribunal. ....................................................................................................................5
B. This Tribunal Has the Authority to Determine Its Own Jurisdictional Competence
and Should Go Forward with These Proceedings.............................................................6
C. This Tribunal Should Not Defer to the Commercial Court to Determine the Validity
of the Arbitral Agreement by Unnecessarily Staying These Proceedings.........................7
1. The Danubian Arbitration Law authorizes parallel proceedings in this Tribunal
and the Commercial Court.............................................................................................8
2. The Commercial Court will likely refer proceedings between Wine Cooperative
and Super Markets to this Tribunal...............................................................................8
3. By exercising its jurisdiction, this Tribunal can most effectively deal with parallel
proceedings by upholding the international policy consensus favoring arbitration.....9
II. SUPER MARKETS AND WINE COOPERATIVE CONCLUDED THE ARBITRAL AGREEMENT. 11
A. The Tribunal Should Apply the Doctrine of Separability and Consider the Arbitral
Agreement Separate from the Contract. .......................................................................... 11
B. Super Markets Did Not Revoke Its Offer To Arbitrate. ............................................. 12
C. This Tribunal Should Apply the CISG Rules of Contract Formation to Determine
Whether the Parties Concluded an Arbitral Agreement.................................................. 13
D. Wine Cooperative Accepted Super Markets’ Offer to Purchase and Thereby
Concluded the Arbitral Agreement.................................................................................. 13
E. Super Markets Could Not Revoke its Offer To Arbitrate Because Wine Cooperative
Timely Dispatched its Acceptance. ................................................................................. 13
III. THE TRIBUNAL SHOULD SANCTION SUPER MARKETS FOR VIOLATING JAMS ARTICLE
17.3. ...................................................................................................................................... 14
PART TWO: SUPER MARKETS IS IN BREACH OF THE CONTRACT BECAUSE
WINE COOPERATIVE CONCLUDED THE CONTRACT FOR CONFORMING
GOODS.................................................................................................................................... 15
I. WINE COOPERATIVE AND SUPER MARKETS CONCLUDED THE CONTRACT. ..................... 15
A. Super Markets’ Purchase Order Constitutes an Effective Offer to Wine Cooperative.
.......................................................................................................................................... 15
B. Super Markets’ Offer Was Irrevocable. ....................................................................... 16
1. Under CISG Article 16(1), Super Markets’ offer was irrevocable. ............................ 16
a. CISG Article 24 defines the term “reach” but does not define when an electronic
message will “reach.”.....................................................................................................................16

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University of Washington – Claimant’s Memorandum
b. Applying the CISG’s general principles to the gap in CISG Article 24, this Tribunal
should conclude that the email “reached” Wine Cooperative when it entered Mr. Cox’s
email inbox......................................................................................................................................17
c. Applying the applicable private international law to the gap in CISG Article 24, this
Tribunal should conclude that the email “reached” Wine Cooperative when it entered Mr.
Cox’s email inbox. .........................................................................................................................17
d. Because the alleged revocation did not “reach” Wine Cooperative until after dispatch
of acceptance, there was no revocation......................................................................................18
2. Under CISG Article 16(2)(a) and (b), Super Markets’ offer was irrevocable. .......... 19
a. Super Markets’ offer was irrevocable under CISG Article 16(2)(a). .............................19
b. Super Markets’ offer was irrevocable under Article 16(2)(b). ........................................20
3. Recent international developments indicate that Super Markets’ offer is
irrevocable. ................................................................................................................... 21
C. Wine Cooperative’s Acceptance of Super Markets’ Irrevocable Offer Concluded the
Contract............................................................................................................................22
II. BLUE HILLS 2005 IS FIT FOR ITS ORDINARY PURPOSE AND ANY PARTICULAR
PROMOTIONAL PURPOSE.......................................................................................................22
A. Blue Hills 2005 Satisfies the Ordinary Purposes of Consumption and Resale...........23
1. Blue Hills 2005 is safe to consume...........................................................................23
2. Blue Hills 2005 meets international standards for fitness for resale........................23
3. Under CISG Article 35, Blue Hills remains an outstanding choice for promotion. 24
4. Super Markets should have an opportunity to cure alleged defects........................24
B. Regardless of Whether Promotion Is a Particular Purpose, Blue Hills 2005 Is Fit for
Promotion. .......................................................................................................................25
1. Promotion is not a particular purpose but rather part of the ordinary purpose of
resale.............................................................................................................................25
2. Super Markets cannot meet its burden of proving that Blue Hills is not fit for
promotion.....................................................................................................................25
3. It is unreasonable for Super Markets to rely on the skill of Wine Cooperative with
regard to fitness for promotion. ...................................................................................26
4. Wine Cooperative made no “specific assurances” upon which Super Markets could
reasonably rely..............................................................................................................27
III. SUPER MARKETS BREACHED THE CONTRACT WHEN IT REFUSED TO
TAKE DELIVERY OF THE WINE ..................................................................................27
PART THREE: RELIEF........................................................................................................28
APPENDIX A..........................................................................................................................30

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University of Washington – Claimant’s Memorandum
TABLE OF ABBREVIATIONS
Assoc. Association
CISG United Nations Convention on Contracts for the International Sale of
Goods of 11 April 1980

cL Centiliters
Cl. Ex. Claimant’s Exhibit
Co. Company
Commercial Court Commercial Court of Vindobona, Danubia
Ct. Court
DEG Diethylene glycol
Dist. District
Danubian Arbitration UNCITRAL Model Law, including the amendment to Art. 8
Law

ed. / eds. Editor / Editors


Ed. Edition
e.g./e.g.s exemplum gratii [for example]
Electronic Commerce UNICTRAL Model Law on Electronic Commerce
Law

F.Supp. Federal Supplement [United States Federal District Court reporter]


g. Grams
Guide to Electronic Guide to Enactment of the UNCITRAL Model Law on Electronic
Commerce Law Commerce

ICC International Chamber of Commerce


ICC Rules Rules of Arbitration of the International Chamber of Commerce
id. idem [the same]
i.e. id est [that is]
JAMS Rules JAMS Arbitration Rules
kg. Kilogram
Ltd. Limited
mg. Milligram
mL. Milliliter
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University of Washington – Claimant’s Memorandum
No./Nos. Number / Numbers
NY Convention United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of 7 June 1959

p. Page
para./paras. Paragraph / Paragraphs
Pro. Order Procedural Order
Rep. Report
§ Section
Statement of Claim Request for Arbitration and Statement of Claim
Statement of Def. Statement of Defense
Super Markets Equatoriana Super Markets, S.A.
UK United Kingdom of Great Britain and Northern Ireland
UNCITRAL Model Law UNCITRAL Model Law on International Commercial Arbitration of
1985

UNIDROIT Principles UNIDROIT Principles of International Commercial Contracts of


1984

US$ United States Dollars


USA United States of America
v. versus [against]
Vol. Volume
Wine Cooperative Mediterraneo Wine Cooperative

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University of Washington – Claimant’s Memorandum
TABLE OF AUTHORITIES
Table of Publications

Chow, Daniel C.K. and INTERNATIONAL BUSINESS TRANSACTIONS, Aspen


Schoenbaum, Thomas Publishers, 2005
J. cited as: Chow

Enderlein, Fritz and INTERNATIONAL SALES LAW, New York: Oceana Publications,
Maskow, Dietrich 1992
cited as: Enderlein/Maskow

Fawcett, James (ed.) "Declining Jurisdiction in Private International Law", Report to the
XIVth Congress of the International Academy of Comparative Law,
Athens, 1994 (Oxford University Press, Oxford, 1995)
cited as: Fawcett

Felmegas, John (ed.) AN INTERNATIONAL APPROACH TO THE


INTERPRETATION OF THE UNITED NATIONS
CONVENTION FOR THE INTERNATIONAL SALE OF
GOODS (1980) AS UNIFORM SALES LAW, Cambridge:
Cambridge University Press, 2007
cited as: author in Felmegas

Folsom, Ralph H., Principles of International Business Transactions, Trade, and


Gordon, Michael W, Economic Relations, Thomson-West, 2005
and Spanogle, John A. cited as: Folsom

Henschel, René Franz THE CONFORMITY OF GOODS IN INTERNATIONAL


SALES: AN ANALYSIS OF ARTICLE 35 IN THE UNITED
NATIONS CONVENTION ON CONTRACTS FOR THE
INTERNATIONAL SALE OF GOODS (CISG), Copenhagen:
Forlaget Thompson, 2005
cited as: Henschel

Honnold, John UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE


1980 UNITED NATIONS CONVENTION, 3d ed. The Hague:
Kluwer Law International, 1999
cited as: Honnold

International Law Toronto Conference (2006) on International Commercial Arbitration:


Association Report Final Report on Lis Pendens and Arbitration, Professor Filip De Ly
(chair), available at: http://www.ila-
hq.org/pdf/Int%20Commercial%20Arbitration/Report%202006.pdf
cited as: International Law Association Report

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University of Washington – Claimant’s Memorandum
International Law Resolution 1/2006, International Law Association, 4-8 June 2006, available
Association Resolution at: http://www.ila-
hq.org/pdf/Int%20Commercial%20Arbitration/Resolution%201%2
02006%20Commercial%20ArbitrationEnglish.pdf
cited as: International Law Association Resolution

Lord, Richard (ed.) A TREATISE ON THE LAW OF CONTRACTS BY SAMUEL


WILLISTON, 4th ed. Thompson/West. 2001
cited as: Williston

Redfern, Alan and LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL


Hunter, Martin ARBITRATION: STUDENT EDITION, Sweet & Maxwell, 2003
cited as: Redfern & Hunter

Schlechtriem, Peter and COMMENTARY ON THE UN CONVENTION ON THE


Ingeborg Schwenzer INTERNATIONAL SALE OF GOODS (CISG), 2nd. ed. Oxford:
(eds.) Oxford University Press, 2005
cited as: author in Schlechtriem

United Nations UNCITRAL MODEL LAW ON ELECTRONIC COMMERCE


WITH GUIDE TO ENACTMENT 1996, New York: United
Nations Publication, 1999 at 56
cited as: Guide to Electronic Commerce Law

Viscasillas, Maria del The Formation of Contracts and the Principles of European Contract
Pilar Perales Law, 13 PACE INT'L REV. 371, 385 (2001)
cited as: Viscasillas

Weigand, Frank-Bernd, The UNCITRAL Model Law: New Draft Arbitration Acts in
(ed.) Germany and Sweden, Arbitration International Vol. 11, No. 4, p.
397, 1995
cited as: Weigand

Table of Cases

Argentina Alejandro Mayer v. Onda Hofferle Gmbh & Co., Camara Nacional
de Apelaciones en lo Comercial de Buenos Aires (2004)
cited as: Alejandro Mayer

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University of Washington – Claimant’s Memorandum
Canada Chateau des Charmes Wines Ltd. v. Sabate USA Inc., Sabate S.A.,
Ontario Superior Court of Justice (2005)
cited as: Chateau des Charmes Wines Ltd.

Morran v. Carbone, Ontario Superior Court of Justice [Commercial


List], 2005 CarswellOnt 459, 7 C.P.C. (6th) 360, (2005)
cited as: Morran

Gulf Canada Resources Ltd. v. Arochem International Ltd., British


Columbia Court of Appeal, 1992 CarswellBC 95, 66 B.C.L.R. (2d)
113, (1992)
cited as: Gulf Canada Resources

France Sacovini s.r.l. (Italy) v. 1. Société Les Fils de Henri Ramel s.a.r.l.; 2.
Société Bonfils Georges S.A.; 3. Société Preau et Compagnie S.A.,
Cour de Cassation (France) (1996)
cited as: Sacovini v. Société Les Fils de Henri Ramel

Germany Seller (Belgium) vs. Buyer (Germany), Bundesgerichtshof (2005)


cited as: Pork-Meat

New Zealand Mussels Case (Switzerland v. Germany), Appellate


Court Frankfurt No. 13 U 51/93 (1994)
cited as: Mussels Case

Hong Kong Pacific Crown Engineering Limited v. Hyundai Engineering and


Construction Company Limited, 3 HKC 659 (2003)
cited as: Pacific Crown Engineering

Netherlands Condensate Crude Oil Mix Case (Netherlands v. UK), Netherlands


Arbitration Institute, Case No. 2319 (2002)
cited as: Condensate Crude Oil

Spain L & M Internacional v. Granavi, Audencia Provinical de Grenada


(2000)
cited as: L & M International

Buyer (Portugal) vs. Seller (Spain) Audencia Provincial de Barcelona


(2004)
cited as: Audencia Provinical 2004

Switzerland Seller (Italy) v. Buyer (Switzerland), Handelsgericht des Kantons


Zürich (1998)
cited as: Handelsgericht

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University of Washington – Claimant’s Memorandum
United Kingdom Premium Nafta Products Limited v. Fili Shipping Company Limited,
[2007] UKHL 40
cited as: Premium Nafta

United States Geneva Pharmaceuticals Technology Corp. v. Barr Laboratories, Inc.,


et al., 201 F.Supp.2d 236 (S.D.N.Y., 2002)
cited as: Geneva Pharmaceuticals

MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D’Agostino,


144 F.3d 1384 (11th Cir. 1998)
cited as: MCC-Marble Ceramic Center, Inc

Menardi v. Petrigalla, 11 Ohio App.3d 9, 11, 11 OBR 21, 23, 462


N.E.2d 1246, 1249 (Ohio Ct. App., 1983)
cited as: Menardi

Prima Paint Corp v. Flood & Conklin Mfg. Co., 87 S.Ct. 1801 (1967)
cited as: Prima Paint

Sarhank Group v. Oracle Corp., 2002 WL 31268635 (S.D.N.Y. Oct


09, 2002)
cited as: Sarhank

Schmitz-Werke v. Rockland, 37 Fed. App. 687, 692-93 (4th Cir. 2002)


cited as: Schmitz-Werke

Table of Arbitral Awards

Arbitrator Mahmassani Libyan American Oil Company (LIAMCO) v. Government of the


Libyan Arab Republic (LIBYA), Award, 12 April 1977, in Yearbook
Commercial Arbitration, v. VI (1981), p. 89
cited as: Libyan American Oil

Arbitrator Dupuy Texaco Overseas Petroleum Co. & California Asiatic Oil Co. v. the
Government of the Libyan Arab Republic, Preliminary Award, 27
November 1975, 53 Int’l L. Rep. 389B409 (1979)
cited as: Texaco

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STATEMENT OF FACTS
1. Mediterraneo Wine Cooperative (“Wine Cooperative”), the seller in this case, participated in a trade
fair for the wine industry in the country of Oceania. Equatoriana Super Markets (“Super Markets”),
the buyer in this case, attended the trade fair in order to find a wine to promote in Equatoriana in
the fall of 2006 [Statement of Claim, para. 5].

2. Mr. Wolf of Super Markets expressed interest in the Blue Hills 2005 wine variety to Mr. Cox of
Wine Cooperative [Cl. Ex. No. 2]. After an exchange of letters between Mr. Wolf and Mr. Cox,
Super Markets offered to purchase 20,000 cases of wine from Wine Cooperative on 10 June 2006
for use in an upcoming promotion [Cl. Ex. Nos. 4, 5]. Super Markets required the wine to be
shipped in four separate shipments [Cl. Ex. No. 5, para. 2].

3. Super Markets submitted a purchase order (“Contract”) for 20,000 cases of wine [Cl. Ex. Nos. 4, 5].
In an accompanying letter, Mr. Wolf told Mr. Cox that the contract would close on 21 June 2006
[Cl. Ex. No. 4].

4. The Contract included agreement to arbitrate (“Arbitral Agreement”) [Cl. Ex. No. 5, para. 13]. The
Arbitral Agreement states:

Any dispute, controversy or claim arising out of or relating to this


contract, including the formation, interpretation, breach or
termination thereof, including whether the claims asserted are
arbitrable, will be referred to and finally determined by arbitration in
accordance with the JAMS International Arbitration Rules. The
tribunal will consist of three arbitrators. The place of arbitration will
be Vindobona, Danubia. The language to be used in the arbitral
proceedings will be English. Judgment upon the award rendered by
the arbitrators may be entered by any court having jurisdiction
thereof.

5. Mr. Cox signed the Contract, including the Arbitral Agreement, and dispatched the acceptance on
19 June 2006 [Cl. Ex. No. 8]. On the afternoon of 19 June 2006, after he had dispatched acceptance,
Mr. Cox received an email that purported to revoke the offer [Cl. Ex. No. 9].

6. The email entered Wine Cooperative’s server on 18 June 2006, and a service failure on that day
prevented the email from arriving in Mr. Cox’s email inbox until the afternoon of 19 June 2006
[Statement of Claim, para. 10]. The service failure was beyond Wine Cooperative’s capacity to repair,

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University of Washington – Claimant’s Memorandum
and Wine Cooperative called a service company to fix the problem [Pro. Order 2, para. 27]. Only after
the service failure was corrected did the revocation email enter Mr. Cox’s email inbox [Statement of
Claim, para. 10].

7. In the revocation email, Mr. Wolf expressed that Super Markets’ reason for withdrawing the offer to
purchase was because a newspaper in Equatoriana published an article describing an alleged scandal
about wine production in the Blue Hills region of Mediterraneo [Cl. Ex. No. 9]. Specifically, the
article reported anti-freeze had been used to sweeten wine in Mediterraneo [Id.].

8. In response to Mr. Wolf’s email, Mr. Cox acknowledged on 20 June 2006 that Blue Hills 2005 wine
had been sweetened with diethylene glycol and not anti-freeze, and he assured Mr. Wolf that the
trace amounts used were not toxic [Cl. Ex. Nos. 10, 13]. Mr. Cox had an expert substantiate the fact
that the sweetened wine was safe for consumption [Id.].

9. Wine Cooperative’s acceptance of the Contract and Arbitral Agreement reached Mr. Wolf on 21
June 2006, when Mr. Wolf received the signed document [Statement of Claim, para. 9].

10. Super Markets refused to take delivery of the Blue Hills 2005 wine [Cl. Ex. No. 11]. Wine
Cooperative subsequently offered to reduce its price [Cl. Ex. No. 15]. Super Markets reiterated that it
refused to purchase the Blue Hills 2005 wine [Cl. Ex. No. 16].

11. Super Markets contends that the parties never concluded the Contract, including the Arbitral
Agreement, because it revoked its offer on 18 June 2006 [Statement of Def., para. 7]. Further, Super
Markets alleges that it revoked the offer to purchase under CISG Article 16(1) and therefore
revoked the offer to arbitrate under the same law [Id.].

12. Wine Cooperative contends that Super Markets’ alleged revocation only pertained to the offer to
purchase wine from Wine Cooperative and not to the agreement to arbitrate. The alleged revocation
letter read: “We regretfully inform you that we are withdrawing the offer to purchase … made by us
on 10 June 2006.” [Cl. Ex. No. 9]. Subsequent correspondence between the parties confirmed that
the attempt to revoke only affected the offer to purchase [Cl. Ex. No. 11]. Mr. Wolf communicated
to Mr. Cox that, “[w]hat is of immediate importance is that our offer to purchase … has been
withdrawn.” [Id.].

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University of Washington – Claimant’s Memorandum
13. Wine Cooperative contends that Super Markets’ could not withdraw its offer, including the offer to
arbitrate, until after Mr. Cox had sufficient time to review it upon his return on 19 June 2006
[Statement of Claim, para. 23].

14. Super Markets commenced a proceeding in the Commercial Court of Vindobona, Danubia
(“Commercial Court”) [Fasttrack Letter, 10 July 2007]. It asked the Commercial Court to declare that
the Arbitral Agreement included in the Contract was never concluded [Id.].

15. The Commercial Court is unlikely to consider the issue before the summer of 2008 [Pro. Order 2,
para. 10].

16. All countries are signatories to the New York Convention [Statement of Claim, para. 18].

17. Mediterraneo and Equatoriana are parties to the CISG [Statement of Claim, para. 15].

18. Neither the Contract nor the Arbitral Agreement contained a choice of law clause [Statement of Claim,
para. 15; Cl. Ex. No. 5, para. 13].

19. Wine Cooperative and Super Markets agree that the CISG applies to the Contract [Statement of Claim,
para. 23; Statement of Def., para. 2]. Additionally, Super Markets applies the CISG to determine
whether the parties agreed to arbitrate [Statement of Def., paras. 6, 7].

20. Both Mediterraneo and Equatoriana have adopted the text of the Electronic Commerce Law
[Statement of Claim, para. 16].

21. Equatoriana follows common law contract formation rules [Pro. Order. 2, para. 7].

22. Mediterraneo follows contract formation rules similar to those in the CISG [Pro. Order. 2, para. 7].

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SUMMARY OF THE ARGUMENT
PART ONE: THIS ARBITRAL TRIBUNAL HAS JURISDICTION TO HEAR THIS

DISPUTE BECAUSE THE PARTIES CONCLUDED A VALID ARBITRAL

AGREEMENT.

23. This Tribunal may rule on its own jurisdiction under both the Danubian Arbitration Law and the
well-established doctrine of competence/competence. In exercising its jurisdictional authority, this
already-constituted arbitral Tribunal should not stay the arbitration proceedings and defer
adjudication of this dispute to the parallel proceeding in the Commercial Court as a matter of
doctrine, law, and policy.

24. Under the doctrine of separability, this Tribunal may decide whether a valid Arbitral Agreement was
concluded independent from the decision on contract formation. Because Super Markets did not
revoke its offer to arbitrate, the Arbitral Agreement concluded when Wine Cooperative accepted
Super Markets’ offer to arbitrate.

25. Super Markets and Wine Cooperative agreed to arbitrate under the JAMS Rules, one of which
prohibits either party from initiating a proceeding other than before this arbitral Tribunal. Super
Markets violated this rule when it commenced a judicial proceeding in the Commercial Court. This
Tribunal should sanction Super Markets by awarding Wine Cooperative all costs and fees that Wine
Cooperative will incur in the Commercial Court proceeding.

PART TWO: SUPER MARKETS BREACHED THE CONTRACT CONCLUDED

BETWEEN THE PARTIES.

26. Under CISG Article 14, Super Markets made an effective offer to Wine Cooperative for the
purchase of Blue Hills 2005 wine. According to CISG Articles 16(1) and 16(2), and recent
international trends, this offer was irrevocable. Under CISG Article 23, Wine Cooperative’s effective
acceptance of this irrevocable offer concluded the Contract.

27. Under CISG Article 35, the wine conformed to the Contract because it was both fit for the ordinary
purpose of consumption and resale and fit for any alleged particular purpose of promotion. Because

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Super Markets refuses to take delivery of the conforming goods in violation of CISG Article 53, this
Tribunal should find that Super Markets breached the Contract.

ARGUMENT

PART ONE: THE TRIBUNAL HAS JURISDICTION TO HEAR THIS DISPUTE


I. THE TRIBUNAL SHOULD NOT STAY THE ARBITRAL PROCEEDINGS PENDING A

DECISION BY THE COMMERCIAL COURT.

28. This Tribunal should not stay the arbitral proceedings. The valid Arbitral Agreement and the JAMS
Rules confer exclusive jurisdiction upon this Tribunal. Moreover, this Tribunal has the authority to
determine its own jurisdiction under the doctrine of competence/competence. Finally, when
determining the validity of the Arbitral Agreement, this Tribunal should not unnecessarily stay these
proceedings.

A. The Arbitral Agreement and the JAMS Rules Confer Exclusive Jurisdiction
Upon This Tribunal.
29. The Contract between Super Markets and Wine Cooperative contains an arbitral agreement [Cl. Ex.
No. 5, para. 13]. The Arbitral Agreement provides in part:

Any dispute, controversy or claim arising out of or relating to this


contract, including the formation, interpretation, breach or
termination thereof, including whether the claims asserted are
arbitrable, will be referred to and finally determined by arbitration in
accordance with the JAMS International Arbitration Rules. [Id.].

The Arbitral Agreement is broad in scope, and any dispute, including “whether the claims asserted
are arbitrable,” is a matter for this Tribunal. The parties thereby conferred exclusive jurisdiction
upon this Tribunal to determine claims relating to the formation and breach of both the Contract
and the Arbitral Agreement. To effectuate the intent of the parties to submit disputes to arbitration,
this Tribunal should exercise its jurisdiction to arbitrate and not stay its proceedings pending a
decision of the Commercial Court.

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University of Washington – Claimant’s Memorandum
30. Furthermore, the Arbitral Agreement provides that the JAMS Rules govern the arbitral process.
Under Article 17 of the JAMS Rules, this Tribunal has jurisdiction to consider the validity of the
Arbitral Agreement and the Contract. Article 17.1 states: “The Tribunal will have the power to
determine the existence or validity of a contract of which an arbitration clause forms a part…. A
decision by the Tribunal that the contract is null and void will not for that reason alone render
invalid the arbitration clause.” Moreover, under the JAMS Rules, the Tribunal’s jurisdiction over
these disputes is exclusive. Article 17.3 states: “By agreeing to arbitration under these Rules, the
parties will be treated as having agreed not to apply to any court or other judicial authority for any
relief regarding the Tribunal’s jurisdiction….” This Tribunal should effectuate the intent of the
parties by exercising jurisdiction according to the JAMS Rules.

31. Furthermore, by asserting jurisdiction and hearing the claims of the parties, this Tribunal gives the
proper weight to the intention of the parties. The intent of the parties to arbitrate is inherent in the
Arbitral Agreement. This Tribunal should give effect to this manifest intention.

B. This Tribunal Has the Authority to Determine Its Own Jurisdictional


Competence and Should Go Forward with These Proceedings.
32. This Tribunal is competent to determine its own jurisdiction under the doctrine of
competence/competence. Under this doctrine, an arbitral tribunal has the authority to investigate
and determine its own jurisdictional competence when authorized by a valid agreement [Redfern &
Hunter, § 5-32]. “The Kompetenz-Kompetenz [competence/competence] is nowadays expressly provided
for in many of those jurisdictions where international arbitration is frequently carried out.” [Weigand
404, referring to Swiss Law, Dutch Law, and ICC Rules]. This authority is “inherent” in the terms of
arbitral agreements [See Redfern & Hunter, § 5-33].

33. The principle that a tribunal has competence over its own competence is widely accepted. In Texaco
(Arbitral Award, 1975), in its preliminary award, the sole arbitrator noted: “It is for the Sole
Arbitrator, and for him alone, to render a decision on his own jurisdiction by virtue of a traditional
rule followed by international case law and unanimously recognized by the writings of legal
scholars.” [Texaco, para. 9]. Furthermore, in Libyan American Oil (Arbitral Award, 1977), the sole
arbitrator noted in his award that, “the Arbitral tribunal constituted in accordance with such clause
and procedure [the arbitral agreement] should have exclusive jurisdiction over the issue of the

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dispute. No other tribunal or authority, local or otherwise, has competence in the matter.” [Libyan
American Oil, 97].

34. In addition to the doctrine of competence/competence, Danubian Arbitration Law specifically


confers jurisdiction upon this Tribunal. Generally, a tribunal will look at the law of the seat of
arbitration (here Danubia) to determine arbitrability issues [Redfern & Hunter, §3-38]. Article 16(1) of
the Danubian Arbitration Law gives this Tribunal competence to rule on its own jurisdiction as a
matter of law: “The arbitral tribunal may rule on its own jurisdiction, including any objections with
respect to the existence or validity of the arbitration agreement….”

35. Moreover, Danubian Arbitration Law provides an effective remedy for either party once this
Tribunal has reached a decision regarding the validity of the Arbitral Agreement. Article 16(3) of the
Danubian Arbitration Law clarifies that this Tribunal’s decision regarding its own competence is
subject to court appeal:

The arbitral tribunal may rule on a plea… [that the tribunal lacks
jurisdiction] either as a preliminary question or in an award on the merits.
If the arbitral tribunal rules as a preliminary question that it has
jurisdiction, any party may request, within thirty days after having
received notice of that ruling, the court specified in article 6 to decide the
matter, which decision shall be subject to no appeal: while such a request
is pending, the arbitral tribunal may continue the arbitral proceedings and
make an award.

In this case, the phrase “the court specified in article 6” refers to the Commercial Court [Pro. Order 2,
para. 10]. As a result, this Tribunal’s decision regarding its competence to hear the claims of Super
Market and Wine Cooperative will be subject to an appeal to the Commercial Court and leaves
either party with effective recourse.

36. Therefore, this Tribunal should not stay these proceedings because it has jurisdiction consistent with
the doctrine of competence/competence, and Danubian statutory mandate.

C. This Tribunal Should Not Defer to the Commercial Court to Determine


the Validity of the Arbitral Agreement by Unnecessarily Staying These
Proceedings.
37. This Tribunal should not defer the issue of the validity of the Arbitral Agreement to the Commercial
Court for three reasons: (1) Danubian Arbitration Law expressly authorizes parallel proceedings in
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University of Washington – Claimant’s Memorandum
both this Tribunal and the Commercial Court; (2) in any event, the Commercial Court will likely
refer the issue of the validity of the Arbitral Agreement to this Tribunal; and (3) by exercising
jurisdiction, this Tribunal effectuates international consensus in favor of arbitration when faced with
parallel proceedings.

1. The Danubian Arbitration Law authorizes parallel proceedings in this Tribunal and the
Commercial Court.
38. The Danubian Arbitration Law allows parallel proceedings as a matter of law. Parallel proceedings
occur when parties commence the same action in more than one forum simultaneously. Article 8 of
the Danubian Arbitration Law states:

(1) A court before which an action is brought in a matter which is the


subject of an arbitration agreement shall, if a party so requests not
later than when submitting his first statement on the substance of the
dispute, refer the parties to arbitration unless it finds that the
agreement is null and void, inoperative or incapable of being
performed.

(2) Prior to the constitution of the arbitral tribunal, an application


may be made to the court to determine whether or not arbitration is
permissible.

(3) Where an action referred to in paragraph (1) or (2) of this article


has been brought, arbitral proceedings may nevertheless be
commenced or continued, and an award may be made, while the
issue is pending before the court.

Article 8 embodies the principle that courts will refer parties to arbitration, but courts are entitled to
a limited review regarding the existence and validity of an arbitral agreement. However, Article 8
permits such proceedings to be determined at the same time [parallel proceedings] by both courts
and arbitral tribunals. Consequently, this Tribunal has the authority to determine whether the
Arbitral Agreement is valid and should exercise this authority regardless of whether the issue is
before the Commercial Court.

2. The Commercial Court will likely refer proceedings between Wine Cooperative and Super
Markets to this Tribunal.
39. Countries that have adopted the UNCITRAL Model Law, like Danubia, generally refer proceedings
to arbitral tribunals without looking to the merits of the underlying arguments. Typically, courts
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University of Washington – Claimant’s Memorandum
determine whether or not a dispute arguably falls under the arbitral agreement without looking to the
merits. For example, Canadian law holds: “The validity of any given arbitration clause is within the
jurisdiction of the arbitrator and should be deferred to the arbitrator…. If it is arguable that the
dispute falls within the scope of the arbitration clause, the Court should refer the parties to
arbitration.” [Morran, para. 12 (Canada, 2005); See also Gulf Canada Resources, para. 44 (Canada, 1992)].
This standard establishes a presumption that courts will refer parties to arbitration consistent with
their arbitral agreements. Hong Kong law also prescribes this presumption to arbitrate: “The proper
test is therefore [whether there is] a prima facie or plainly arguable case that the parties were bound
by an arbitration clause. The onus being on the defendant to demonstrate that there is.” [Pacific
Crown Engineering, 663 (Hong Kong, 2003)].

40. Article 8 of the UNCITRAL Model Law, which Danubia has adopted with one amendment, is
nearly identical to the law cited in the aforementioned cases. The Commercial Court will likely
decide that there is a prima facie showing that the parties are bound by a valid arbitral agreement. At
the very least, the Commercial Court will find that the existence of a valid arbitral agreement is
arguable. In line with the reasoning of the Canadian and Hong Kong courts, the Commercial Court
will likely refer the parties back to arbitration for this Tribunal to make a determination about the
validity of the agreement. Therefore, this Tribunal should not stay the proceedings because the
Commercial Court will likely refer these proceedings back to this Tribunal.

3. By exercising its jurisdiction, this Tribunal can most effectively deal with parallel
proceedings by upholding the international policy consensus favoring arbitration.
41. When determining how to proceed in the context of parallel proceedings, this Tribunal should look
to the internationally recognized purposes of arbitration. Inherent in the UNCITRAL Model Law is
a policy favoring arbitration. By adopting the UNCITRAL Model Law, Danubia adopted a national
legislative policy favoring arbitration. This is consistent with the general international policy favoring
arbitration for valid arbitral agreements.

42. In 2006, the International Law Association authored a report on how tribunals can most effectively
deal with parallel proceedings under the doctrine of lis pendens [International Law Association Report].
Lis pendens is a “situation in which parallel proceedings, involving the same parties and the same
cause of action, are continuing in two different states at the same time.” [Fawcett, 27]. The
International Law Report seeks to “give guidance to arbitrators, when faced with an argument that
9
University of Washington – Claimant’s Memorandum
other proceedings dealing with the same matter are running in parallel and that the arbitral tribunal
should suspend or terminate the arbitration.” [International Law Association Report, para. 1.13]. The
Committee identified “widespread support within the arbitral community for the principle of
positive competence-competence and therefore concluded that generally the arbitral tribunal should
proceed to determine its own jurisdiction, notwithstanding that the issue of jurisdiction might be
being considered by a state court or other tribunal.” [International Law Association Report, para. 5.4]. As
a result, the International Law Association issued a final resolution that provides that “[a]n arbitral
tribunal that considers itself to be prima facie competent pursuant to the relevant arbitration
agreement should, consistent with the principle of competence-competence, proceed with the
arbitration… and determine its own jurisdiction….” [International Law Association Resolution, para. 1].
By exercising its jurisdiction, this Tribunal would be acting pursuant to consensus in the
international arbitral community. Furthermore, this Tribunal is prima facie competent to rule based on
an apparent agreement to arbitrate, the principle of competence/competence, and the application of
the Danubian Arbitration Law. Consequently, the Tribunal’s assertion of jurisdiction in this case
promotes the competence of international arbitral tribunals in general, and provides additional
support for arbitral jurisdiction in similar situations.

43. Beyond the international consensus in favor of arbitration in parallel proceedings, important policy
implications also compel this Tribunal not to stay the proceedings. The International Law
Association identified the following policies: a tribunal’s “case management” needs [Para. 6];
“prevent[ing] costly duplication of proceedings” [Id.]; and “protect[ing] a party from oppressive
tactics” [Id.]. Arbitration is widely considered “an expedient and inexpensive alternative to civil
litigation.” [Menardi (USA, 1983); see also Sarhank (USA, 2002)]. Here, it is likely that the process will
be less costly for the parties if this Tribunal makes an award with the opportunity to appeal the
decision to the Commercial Court. Staying these proceedings would be inefficient because it would
require ongoing and costly proceedings between multiple forums. Moreover, because the
Commercial Court will not even address the issue of the validity of the arbitration agreement until
the summer of 2008, a stay of this Tribunal’s proceedings would prevent a timely resolution to the
dispute.

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University of Washington – Claimant’s Memorandum
II. SUPER MARKETS AND WINE COOPERATIVE CONCLUDED THE ARBITRAL
AGREEMENT.
44. This Tribunal should apply the doctrine of separability, which permits the Tribunal to consider the
validity of the Arbitral Agreement independently from the Contract. The separability doctrine
requires a party challenging arbitral jurisdiction to show that the party independently challenged the
validity of the arbitral agreement. In the present case, Super Markets did not specifically revoke its
offer to arbitrate, but rather it attempted to revoke its offer to purchase wine. Even if Super Markets
did intend to revoke its offer to arbitrate, its revocation was ineffective under the rules of contract
formation in the CISG. Therefore, the parties concluded the Arbitral Agreement.

A. The Tribunal Should Apply the Doctrine of Separability and Consider the
Arbitral Agreement Separate from the Contract.
45. Under the doctrine of separability, a party must challenge the existence or validity of an arbitration
clause independent of the contract it is contained within. The widely-accepted doctrine of
separability states the principle that an “arbitration clause in a contract is considered separate from
the main contract of which it forms part.” [Redfern & Hunter, §3-31]. The overwhelming acceptance
of this doctrine is illustrated in the Prima Paint (USA, 1967) decision and more recently shown in the
Premium Nafta (UK, 2007) decision.

46. In Prima Paint, the parties entered into an agreement containing an arbitration clause, which read in
part: “Any controversy or claim arising out of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in the City of New York, in accordance with the rules then obtaining
of the American Arbitration Association.” [Prima Paint, 398]. One party alleged that the entire
contract, including the arbitration clause, was the product of fraud and therefore void [Id.]. The
United States Supreme Court disagreed, and held that the party must have alleged that it was
fraudulently induced to agree to the arbitration clause [Prima Paint, 406].

47. In Premium Nafta, the United Kingdom House of Lords confronted a similar issue. Fili Shipping
alleged that Premium Nafta bribed Fili Shipping’s agents to sign a number of contracts, all of which
contained the same arbitral clause. The clause stated in part, “[a]ny dispute arising under this
[agreement] shall be decided by the English courts to whose jurisdiction the parties hereby agree.
Notwithstanding the foregoing… either party may… elect to have any such dispute referred… to
arbitration in London.” [Premium Nafta, para. 3]. The House of Lords decided: “The arbitration
11
University of Washington – Claimant’s Memorandum
agreement must be treated as a ‘distinct agreement’ and can be void or voidable only on grounds
which relate directly to the arbitration agreement.” [Id., para. 17]. The party challenging the validity
of the arbitral agreement failed to show that its agent was bribed to enter into the arbitration
agreement, as opposed to the entire agreement. In his concurrence, Lord Hope of Craighead stated:
“The doctrine of separability requires direct impeachment of the arbitration agreement before it can
be set aside.” The doctrine requires an independent impeachment of the arbitral agreement.

48. The Danubian Arbitration Law and the JAMS Rules codify this requirement. Article 16(1) of the
Danubian Arbitration Law states in part: “[A]n arbitration clause which forms part of a contract
shall be treated as an agreement independent of the other terms of the contract.” [Emphasis added]. The
JAMS Rules also incorporate the doctrine of separability. Article 17.1 of the JAMS Rules states:
“[A]n arbitration clause will be treated as an agreement independent of the other terms of the
contract.” [Emphasis added]. Both Article 16(1) of the Danubian Arbitration Law and Article 17.1 of
the JAMS Rules require this Tribunal to consider the Arbitral Agreement independent of the
Contract. The Danubian Arbitration Law and the JAMS Rules, as well as Prima Paint and Premium
Nafta, direct this Tribunal to decide whether Super Markets specifically revoked its offer to arbitrate.

B. Super Markets Did Not Revoke Its Offer To Arbitrate.


49. Super Markets did not revoke its offer to arbitrate because Super Markets did not independently
impeach the Arbitral Agreement or directly revoke the offer to arbitrate [Cl. Ex. No. 9]. Instead,
Super Markets attempted to revoke its offer to purchase wine [Id.]. Mr. Wolf wrote, “[w]e regretfully
inform you that we are withdrawing the offer to purchase … made by us on 10 June 2006.” [Id., emphasis
added]. To avoid the Arbitration Agreement, the doctrine of separability requires Super Markets to
directly revoke its offer to arbitrate. An attempt to revoke the offer to purchase is irrelevant to the
revocation of the Arbitral Agreement. Super Markets’ intent is evidenced in subsequent
correspondence between the parties [See Cl. Ex. No. 11]. A letter from Mr. Wolf to Mr. Cox stated,
“[W]hat is of immediate importance is that our offer to purchase … has been withdrawn.” [Id., emphasis
added]. Therefore, the purported revocation pertains solely to the offer to purchase; it does not
include the Arbitral Agreement.

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University of Washington – Claimant’s Memorandum
C. This Tribunal Should Apply the CISG Rules of Contract Formation to
Determine Whether the Parties Concluded an Arbitral Agreement.
50. When the parties agree on the applicable law, this Tribunal should uphold party autonomy and apply
the parties’ choice of law [Redfern & Hunter, § 2-24]. In such cases, the Model Law, the New York
Convention, and the JAMS Rules all direct a tribunal to adhere to the rule of law chosen by the
parties [See Danubian Arbitration Law Art. 28(1); NY Convention Art. 5(1)(a); JAMS Art. 18.1]. In this
case, neither the Contract nor the Arbitral Agreement contained a choice of law clause [Statement of
Claim, para. 15; Cl. Ex. No. 5, para. 13]. However, both parties agree that the CISG applies to the
Contract [Statement of Claim para. 23; Statement of Def., para 2]. Super Markets additionally applies the
CISG to determine whether the parties agreed to arbitrate [Statement of Def., paras. 6, 7]. Specifically,
Super Markets alleges that it revoked the purchase order under CISG Article 16(1), and therefore
revoked the offer to arbitrate under the same law [Id.]. Wine Cooperative agrees that the Tribunal
should apply the CISG to determine whether the parties concluded the Arbitral Agreement.

D. Wine Cooperative Accepted Super Markets’ Offer to Purchase and


Thereby Concluded the Arbitral Agreement.
51. To determine when Wine Cooperative accepted Super Markets’ offer to purchase, this Tribunal
should apply the CISG [see supra, Section II-C]. Under CISG Article 18(2), “an offer becomes effective
at the moment the indication of assent reaches the offeror.” In this case, Wine Cooperative signed
and dispatched its acceptance of the offer to arbitrate on 19 June 2006 [Statement of Claim, para. 9].
Super Markets received the acceptance to arbitrate on 21 June 2006 [Id.]. Super Markets failed to
revoke its offer to arbitrate [See supra, Section II-B]. Under CISG Article 18(2), Wine Cooperative’s
acceptance became effective, and the Arbitral Agreement was concluded, on 21 June 2006 [See also
infra Part Two, Section I-C].

E. Super Markets Could Not Revoke its Offer To Arbitrate Because Wine
Cooperative Timely Dispatched its Acceptance.
52. CISG Article 16(1) states that an offeror’s revocation is only effective “if the revocation reaches the
offeree before he dispatches acceptance.” CISG Article 24 defines “reach” as reception at the
offeree’s place of business. However, the Tribunal should apply a more specific definition of receipt
in the context of exchanging emails. An email reaches an addressee when it enters the addressee’s
server in such a way that it can be retrieved, read, and understood by the addressee [Schlechtriem, 267].

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University of Washington – Claimant’s Memorandum
Because the email reached Wine Cooperative on 19 June 2006 after Mr. Cox dispatched Wine
Cooperative’s acceptance, there is no revocation under CISG Article 16(1) [See also infra Part Two,
Section I-B-1].

III. THE TRIBUNAL SHOULD SANCTION SUPER MARKETS FOR VIOLATING JAMS
ARTICLE 17.3.
53. The parties agreed to arbitrate using the JAMS Rules [Cl. Ex. No. 5, para. 13]. As a result, the parties
agreed not to seek jurisdictional relief in an alternative forum:

By agreeing to arbitration under these Rules, the parties will be


treated as having agreed not to apply to any court or other judicial
authority for any relief regarding the Tribunal’s jurisdiction, except
with the agreement in writing of all the parties to the arbitration or
the prior authorization of the Tribunal or following the latter’s ruling
on the objection to its jurisdiction.

[JAMS Art. 17.3]. Super Markets is currently seeking jurisdictional relief from the Commercial Court
thereby violating JAMS Article 17.3 [see Fasttrack Letter, 10 July 2007]. Consequently, this Tribunal
should conclude that Super Markets violated the terms of the Arbitral Agreement.

54. This Tribunal has discretion to impose various sanctions on Super Markets for violating Article 17.3.
Although the JAMS Rules do not specifically set the consequences for such a violation, Article 27.3
permits this Tribunal to reprimand a violating party. JAMS Article 30 permits this Tribunal to grant
any remedy or relief available under the applicable laws or the JAMS Rules.

55. Wine Cooperative requests this Tribunal to impose two sanctions on Super Markets for violating
JAMS Article 17.3. First, this Tribunal should direct Super Markets not to pursue the proceedings in
the Commercial Court. While Super Markets correctly points out that Article 8(2) of the Danubian
Arbitration Law permits parallel proceedings, Super Markets agreed to arbitrate under the JAMS
Rules. Therefore, Super Markets agreed not to pursue the parallel proceeding in the Commercial
Court by agreeing to JAMS Rule 17.3. JAMS Rue 17.3 is clear when it states that parties who agree
to arbitrate under the rules “will be treated as having agreed not to apply to any court or other judicial
authority for any relief regarding the Tribunal’s jurisdiction.” [JAMS Art. 17.3 emphasis added]. By
directing Super Markets not to pursue the proceeding in the Commercial Court, this Tribunal
adheres to the parties’ choice in the Arbitral Agreement. Second, this Tribunal should award Wine
Cooperative its costs and attorney’s fees incurred in the Commercial Court proceeding. By awarding
14
University of Washington – Claimant’s Memorandum
costs and attorney’s fees, this Tribunal discourages Super Markets from taking other steps to further
obstruct arbitration of this dispute.

PART TWO: SUPER MARKETS IS IN BREACH OF THE CONTRACT BECAUSE


WINE COOPERATIVE CONCLUDED THE CONTRACT FOR CONFORMING
GOODS.
I. WINE COOPERATIVE AND SUPER MARKETS CONCLUDED THE CONTRACT.
56. Super Markets’ purchase order for 20,000 cases of Blue Hills 2005 wine from Wine Cooperative
constitutes an offer that was irrevocable. Wine Cooperative accepted this irrevocable offer within
the period of irrevocability. The contract was concluded on 21 June 2006 when Wine Cooperative’s
acceptance reached Super Markets.

A. Super Markets’ Purchase Order Constitutes an Effective Offer to Wine


Cooperative.
57. Super Markets’ emailed purchase order constitutes an “offer” under CISG Article 14. Under CISG
Article 14 an “offer” must meet three requirements: it must (1) be a proposal for concluding a
contract, (2) indicate an intention to be bound in case of acceptance, and (3) be sufficiently definite
[Folsom 25; see also Honnold 133]. A proposal is “sufficiently definite” if it includes a description of the
goods, their quantity and their price [Id.; Chateau des Charmes Wines Ltd. (Canada, 2005)].

58. Super Markets’ purchase order satisfies all three Article 14 requirements. Super Markets addressed
the order specifically to Wine Cooperative: “Super Markets … offers to purchase from Mediterraneo
Wine Cooperative.” [Cl. Ex. No. 5]. Super Markets includes an arbitral clause in reference to “this
contract.” [Id.]. The order also contained the signature of Mr. Wolf, the Principal Wine Buyer of
Super Markets [Id.]. A reasonable person in the place of Wine Cooperative would interpret these
facts to indicate the following: that Super Markets’ purchase order was a proposal for concluding a
contract and that Super Markets intended to be bound in case Wine Cooperative accepted [See CISG
Art. 8(2)]. Furthermore, the purchase order was sufficiently definite because Super Markets
proposed to purchase 20,000 cases of Blue Hills 2005 wine for a total price of US$1,360,000 [Cl. Ex.
No. 5]. Thus, this Tribunal should find that Super Markets’ purchase order satisfies CISG Article 14
requirements for an offer.

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University of Washington – Claimant’s Memorandum
59. Under CISG Article 15(1), Super Markets’ offer was effective when the purchase order reached
Wine Cooperative. Super Markets does not dispute that the purchase order reached Wine
Cooperative [See generally Statement of Def.].

B. Super Markets’ Offer Was Irrevocable.


60. Super Markets claims that its 18 June 2006 email to Wine Cooperative constitutes a revocation of its
offer [See Cl. Ex. No. 9; Statement of Def., paras. 15-18]. Super Markets further claims that the
revocation was valid as the 10 June 2006 offer was revocable under CISG Art. 16(2) [Statement of
Def., paras. 15-18]. Despite Super Markets’ claims, there was no valid revocation because Super
Markets’ offer was irrevocable under both CISG Articles 16(1) and 16(2).

1. Under CISG Article 16(1), Super Markets’ offer was irrevocable.


61. Super Markets’ offer was not revocable because Super Markets’ alleged revocation did not reach
Wine Cooperative before Mr. Cox dispatched the acceptance. Under Article 16(1), an offeror must
satisfy the following condition to revoke an offer: revocation must reach offeree before offeree
dispatches acceptance [Vincze in Felemgas 86, emphasis added].

62. Super Markets did not satisfy this Article 16(1) condition. The revocation email entered Wine
Cooperative’s server on 18 June 2006, but due to an internal network failure, the email entered Mr.
Cox’s email inbox in the afternoon of 19 June 2006 [Statement of Claim para. 10]. Mr. Cox signed the
purchase order and dispatched it to Super Markets via ABC Courier Service on the morning of 19
June 2006 [Cl. Ex. No. 8; Cl. Ex. No. 5; Statement of Claim para. 9]. Thus, Mr. Cox dispatched
acceptance on the morning of 19 June 2006. The question whether Super Markets meets the Article
16(1) condition for revocation turns on when the revocation email “reached” Wine Cooperative.

a. CISG Article 24 defines the term “reach” but does not define when an
electronic message will “reach.”
63. Under CISG Article 24, the email “reached” Wine Cooperative when it entered Mr. Cox’s email
inbox, and not when it entered the server. CISG Article 24 defines when a declaration, including a
revocation, reaches an addressee. However, the CISG does not expressly define when a declaration
communicated through electronic means reaches an addressee [Schelchtriem, 267]. This creates a
“gap” in the CISG, which must be decided in accordance with the “general principles” of the CISG,
and in the absence of such principles, in accordance with the “applicable … private international

16
University of Washington – Claimant’s Memorandum
law” [Schlechtriem, 95-96; CISG Article 7(2)]. Under either the general principles of the CISG or the
applicable private international law, the revocation email “reached” Wine Cooperative when it
entered the email inbox, and not when it entered the server.

b. Applying the CISG’s general principles to the gap in CISG Article 24,
this Tribunal should conclude that the email “reached” Wine Cooperative
when it entered Mr. Cox’s email inbox.
64. Applying the CISG’s general principles of reasonableness and good faith to the gap in CISG Article
24, this Tribunal should conclude that the email “reached” Wine Cooperative when it entered Mr.
Cox’s email inbox [See Chow, 206-207, noting that “good faith” and “reasonableness” are prominent CISG
general principles]. It is reasonable that an addressee must be capable of taking notice of the
communication’s content [See Schlechtriem, 267]. Thus, an electronic message reaches an addressee if
it has entered the addressee’s server in such a way that the addressee can retrieve, read, and
understand it [Id.]. “If the server shuts down for certain periods … or if there is a breakdown, then
the message reaches the addressee only after the server is operating again, i.e. when the message can
be retrieved.” [Id., 268].

65. Even though Super Markets’ revocation email entered Wine Cooperative’s server on 18 June 2006, a
service failure on that day prevented the email from arriving in Mr. Cox’s email inbox until the
afternoon of 19 June 2006 [Statement of Claim, para. 10]. The service failure was beyond Wine
Cooperative’s capacity to repair, and Wine Cooperative called a service company to fix the problem
[Pro. Order. 2, para. 27]. After the failure was corrected, the revocation email entered Mr. Cox’s email
inbox [Statement of Claim, para. 10]. Mr. Cox was able to “retrieve, read, and understand” the email
only when it entered his inbox [See Schelchtriem, 267]. Thus, the revocation email reached Wine
Cooperative after the server was operational again in the afternoon of 19 June 2006 and the email
entered Mr. Cox’ inbox.

c. Applying the applicable private international law to the gap in CISG


Article 24, this Tribunal should conclude that the email “reached” Wine
Cooperative when it entered Mr. Cox’s email inbox.
66. If the Tribunal finds that the CISG’s general principles do not apply to the gap, then the applicable
private international law also demonstrates that the email “reached” Wine Cooperative when it
entered Mr. Cox’s email inbox. Because both Equatoriana and Mediterraneo have adopted the text
17
University of Washington – Claimant’s Memorandum
of the Electronic Commerce Law, this law functions as the applicable private international law [See
Statement of Claim, para. 16; see also Honnold, 119, noting that the parties may choose the “domestic law of the
seller’s country or of the buyer’s country” in the face of a CISG gap]. Wine Cooperative contends, and Super
Markets does not dispute, that the Electronic Commerce Law is a law applicable to the Contract [See
Statement of Claim, para. 16; see also Statement of Defense, paras. 2-5].

67. According to the concepts of “dispatch” and “receipt” under the Electronic Commerce Law, Super
Markets’ revocation email reached Wine Cooperative when it entered Mr. Cox’s inbox. Under the
Electronic Commerce Law, “dispatch” of a data message does not occur when that message is
“unavailable for processing” because that information system “does not function at all, or functions
improperly” [Guide to Electronic Commerce Law, para. 105]. This principle rests upon the premise that
the burden should not be on the addressee to maintain a constantly functioning information system
[Id.]. Under the Electronic Commerce Law, the revocation email was not even dispatched by Super
Markets, let alone received, until the server was functional in the afternoon of 19 June 2006.

68. Under the Electronic Commerce Law, if the addressee has not designated an information system,
“receipt” occurs when the data message enters an information system of the addressee [Art. 15(2)
Electronic Commerce Law]. The factual situation determines what constitutes an “information system,”
and may include an electronic mailbox [Guide to Electronic Commerce Law, para. 40]. Mr. Cox, the
addressee to the email, had not explicitly designated an information system to receive Super Markets’
communications. However, many communications between Wine Cooperative and Super Markets
occurred via email [see e.g.s, Cl. Ex. Nos. 4, 5, 6, 7, 9, 10, 11, 12]. Further, each party’s letterhead
displayed their individual email addresses [see e.g.s, Cl. Ex. Nos. 1, 2, 3, 4, 8, 10, 11, 12, 14, 15, 16]. Mr.
Cox could not take notice of the communication’s content until the revocation email from Super
Markets entered his email inbox. Under these circumstances, Mr. Cox’s electronic mailbox
constitutes the relevant information system. Receipt occurred when the revocation email reached
Mr. Cox’s email inbox in the afternoon of 19 June 2006.

d. Because the alleged revocation did not “reach” Wine Cooperative until
after dispatch of acceptance, there was no revocation.
69. If this Tribunal applies either the general principles of the CISG or the applicable private
international law to the meaning of “reach” in CISG Article 24, it will reach the same conclusion:
Super Markets’ revocation email “reached” Wine Cooperative not when the email entered the server,
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University of Washington – Claimant’s Memorandum
but when the email entered Mr. Cox’s email inbox. Thus, the revocation “reached” Wine
Cooperative in the afternoon of 19 June 2006, after Mr. Cox had dispatched his acceptance that
morning [See Statement of Claim, para. 10]. Under Article 16(1), Super Markets’ offer is not revocable
because it did not meet the condition that the “revocation must reach offeree before offeree
dispatches acceptance.” [See Vincze in Felemgas 86, emphasis added].

2. Under CISG Article 16(2)(a) and (b), Super Markets’ offer was irrevocable.
70. An offer is irrevocable if (1) the offeror states a fixed time of acceptance that indicates an intention
to be bound [CISG Art. 16(2)(a)], or (2) the offeree reasonably acted in reliance on the offer being
irrevocable [CISG Art. 16(2)(b)]. Super Markets’ offer is irrevocable under both 16(2)(a) and 16(2)(b).

a. Super Markets’ offer was irrevocable under CISG Article 16(2)(a).


71. Super Markets intended that Wine Cooperative accept the offer and close the Contract by 21 June
2006. Under Article 16(2)(a), when Super Markets fixed 21 June 2006 as a time for acceptance in its
offer, Super Markets made the offer irrevocable until that date.

72. Super Markets’ letter on 10 June 2006 and email on 11 June 2006 are both “relevant circumstances”
that show Super Markets’ intention to offer a fixed time for acceptance. CISG Article 8(3) provides:
“In determining the intent of a party or the understanding a reasonable person would have had, due
consideration is to be given to all relevant circumstances of the case.” [See also, Honnold, 110; MCC-
Marble Ceramic Center, Inc. (USA, 1998)]. Relevant circumstances include the “negotiations…usages
and any subsequent conduct of the parties” [Art. 8(3) CISG; see also Enderlein/Maskow 66-7]. The 10
June 2006 letter stated that Super Markets would turn to another quality wine “if the contract closing
were to be delayed beyond 21 June 2006.” [Cl. Ex. No. 4]. CISG Article 8(3) allows the “use of
additional material to explain the content of a written contract” [See Schmidt-Kessel in Schlechtriem, 125].
Similarly, Super Markets’ letter accompanying the purchase order explained the content of the
purchase order. The letter stated that Wine Cooperative’s quoted price was acceptable, instructed
Wine Cooperative to sign and return the purchase order, and fixed the date of 21 June 2006 for
contract closing [Cl. Ex. No. 4]. Furthermore, Super Markets reiterated a “narrow time frame” for
contract closing in Mr. Wolf’s 11 June 2006 email [Cl. Ex. No. 7]. The email demanded that “Mr.
Cox act on [the] purchase order immediately on his return, since [Super Markets is] operating under
a narrow timeframe for [its] wine promotion in September” [Id.]. Under CISG Article 8(3), both
Super Markets’ ultimatum for acceptance in the 10 June 2006 letter and the “narrow time frame”
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University of Washington – Claimant’s Memorandum
language in the 11 June 2006 email are relevant circumstances. These relevant circumstances compel
the Tribunal to conclude that Super Markets intended to fix a time for acceptance in its offer.

73. Super Markets’ indication of a fixed time for acceptance indicates that the offer is irrevocable. The
Comments to the UNIDROIT Principles serve as useful guidelines to interpret CISG Article
16(2)(a) [Vincze in Felemgas, 89]. The indication of a fixed time for acceptance may implicitly indicate
an irrevocable offer [Id. citing UNIDROIT commentary]. However, when interpreting the parties’ intent
concerning this question of revocability, this Tribunal should note the traditions of the parties’
respective legal systems [See Id., 89]. For example, an offeror from a common law country making
an offer to an offeree from a civil law country may be bound for the indicated period – even if it did
not intend its offer to have that effect [Schlechtriem, 212]. Super Markets, the offeror, is from
Equatoriana, a country that follows common law rules of offer, acceptance, and revocation [Pro.
Order 2, para. 7]. Although the record does not explicitly indicate that Mediterraneo is a civil law
country, Mediterraneo follows contract formation rules similar to those in the CISG [Id.]. The
Article 16(2)(a) exception in the CISG is an incorporation of “the civil law idea of irrevocability.”
[Vincze in Felemgas 85]. Thus, for purposes of an Article 16(2)(a) discussion, Mediterraneo is a civil
law country. Accordingly, Super Markets fixed 21 June 2006 as a time for acceptance in its offer,
and Super Markets made the offer irrevocable until that date.

b. Super Markets’ offer was irrevocable under Article 16(2)(b).


74. Wine Cooperative reasonably relied on the irrevocability of the offer because the offer was an urgent
order and Mr. Wolf’s response to Ms. Kringle’s email induced such reliance. An offer is irrevocable
if “it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has
acted in reliance on the offer” [Geneva Pharmaceuticals, noting in dicta that Art 16(2)(b) is a “modified version
of promissory estoppel” that does not require foreseeability or detriment].

75. Urgent orders create a “good reason to believe” that the offer is irrevocable [Vincze in Felemgas, 90].
In its offer, Super Markets states that it is under “intense time pressure” as the date of its wine
promotion has been advanced from October to September [Cl. Ex. No. 4]. Consequently, Super
Markets states that the contract closing cannot be delayed beyond 21 June 2006 [Id.]. In an email on
11 June 2006, Mr. Wolf reaffirms that Super Markets is “operating under a narrow time frame” and
asks that Mr. Cox act on Super Markets’ offer immediately upon his return to the office [Cl. Ex. No.

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University of Washington – Claimant’s Memorandum
7]. Thus, Super Markets made an urgent offer to Wine Cooperative. In light of this urgent purchase
order, it was reasonable for Wine Cooperative to rely on the irrevocability of that offer.

76. Super Markets’ conduct subsequent to its offer also establishes that Wine Cooperative reasonably
relied on the irrevocability of the offer. Ms. Kringle, in her 11 June 2006 email, notified Mr. Wolf
that Mr. Cox was absent from the office and that he would return on 19 June 2006 [Cl. Ex. No. 6].
In response, Mr. Wolf asked that Mr. Cox “act on the purchase order” upon Mr. Cox’s return [Cl.
Ex. No. 7]. Mr. Wolf’s representation implied that it was acceptable for Mr. Cox to accept after he
returned on 19 June 2006. Presumably, had Mr. Wolf objected to the idea that Mr. Cox would act
only after his return, Wine Cooperative would have taken other steps to further expedite the process
of accepting the offer. However, Mr. Wolf made no such objection. In light of Mr. Wolf’s response
to Ms. Kringle’s email, Wine Cooperative reasonably relied on the irrevocability period covering at
least the period in which Mr. Cox returned to the office and had an opportunity to “act on the
purchase order.” [see id.]. After inducing Wine Cooperative to rely on the irrevocability, Super
Markets cannot now “act in a contradictory manner” and argue for revocation [see Schlechtriem, 212].

77. Wine Cooperative acted in reliance on the irrevocability of Super Markets’ offer. Acts performed in
reliance of irrevocability include both positive acts, such as commencing production, and inaction,
such as not soliciting further offers [Schlechtriem, 212]. Wine Cooperative performed the positive act
of preparing the first of 20,000 cases for shipment to Super Markets [Cl. Ex. No. 10]. Wine
Cooperative was prepared to deliver these cases in accordance with the Contract [See id.; Cl. Ex. No.
12]. These 20,000 cases remain unsold [Statement of Claim, para. 14]. In reliance of irrevocability, Wine
Cooperative also did not solicit further offers for those 20,000 cases earmarked for sale to Super
Markets. Under CISG Article 16(2)(b), Wine Cooperative acted in reasonable reliance of the
irrevocability of Super Markets’ urgent order.

3. Recent international developments indicate that Super Markets’ offer is irrevocable.


78. The international trend toward strengthened irrevocability suggests that this Tribunal find that Super
Markets’ offer to Wine Cooperative is irrevocable. In spite of the presumption of revocability
[Vincze in Felemgas 88, referring to CISG Art. 16(1)], recent trends in national and international
practices strengthen the irrevocability of offers [Id.]. The Principles of European Contract Law
Article 2:202(3)(b) also state that the revocation of an offer is ineffective if it states a fixed period of
time for its acceptance [Viscasillas, 385]. Further, UNIDROIT Comments provide support for this
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University of Washington – Claimant’s Memorandum
principle by highlighting “the legitimate interest of the offeree” to shorten the time available for
revocation [Vincze in Felemgas, 87]. Vincze justifies this principle of strengthened irrevocability in
light of the following: the offeror unilaterally gives offeree the right to conclude the contract [Id.].
Unlike the offeree, the offeror has sufficient time before making an offer to weigh and assess the
situation, possible risks and consequences [Id.].

C. Wine Cooperative’s Acceptance of Super Markets’ Irrevocable Offer


Concluded the Contract.
79. The Contract between Wine Cooperative and Super Markets concluded when Wine Cooperative’s
acceptance of Super Markets’ offer reached Super Markets on 21 June 2006. Under CISG Article 23,
a contract is concluded when an acceptance of an offer becomes effective [Schlectriem, 263]. An
offeree’s statements or conduct indicating assent to an offer is an acceptance, and such an
acceptance is effective only when it reaches the offeror [CISG Arts. 18(1) and 18(2)]. An acceptance
reaches the addressee when it is delivered to the addressee’s place of business or mailing address
[CISG Art. 24]. Mr. Cox signed Super Markets’ purchase order and dispatched it to Super Markets
via ABC Courier Service on the morning of 19 June 2006 [Cl. Ex. Nos. 5, 8; Statement of Claim, para.
9]. Mr. Cox’s signature on the purchase order constitutes assent to Super Markets’ offer [Cl. Ex. No.
5]. The ABC tracking service indicates that Super Markets received the purchase order with Mr.
Cox’s signature on 21 June 2006 [Statement of Claim, para. 9]. Therefore, Wine Cooperative’s
acceptance reached Super Markets on 21 June 2006. Super Markets’ offer stated that it would
patronize other wine sellers “if the contract closing were to be delayed beyond 21 June 2006.” [Cl. Ex.
No. 4, emphasis added]. Because the acceptance reached Super Markets on 21 June 2006, the contract
concluded on 21 June 2006, and not beyond 21 June 2006. Thus, a contract exists between Wine
Cooperative and Super Markets.

II. BLUE HILLS 2005 IS FIT FOR ITS ORDINARY PURPOSE AND ANY PARTICULAR

PROMOTIONAL PURPOSE.

80. Blue Hills 2005 remains a high-quality wine that is fit for consumption and resale. The wine is not
adulterated in any way that should cause concern for consumers, merchants, or the public at large:
there is simply no risk of harm. Instead, the buyer is unusually sensitive. Although “promotion” is
not a particular purpose distinct from resale, the Blue Hills 2005 remains fit for the purpose of

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University of Washington – Claimant’s Memorandum
promotion. In light of Super Markets’ unreasonable sensitivity, this Tribunal should uphold the
Contract.

A. Blue Hills 2005 Satisfies the Ordinary Purposes of Consumption and


Resale.
81. Blue Hills 2005 is fit for its general purpose of consumption. Under CISG Article 35, the seller must
deliver goods that conform to the contract [CISG Art. 35(1)]. The Contract is for 20,000 cases of
Blue Hills 2005, and Wine Cooperative was prepared to provide this [Cl. Ex. No. 5].

1. Blue Hills 2005 is safe to consume.


82. Blue Hills 2005 does not contain anti-freeze; Blue Hills 2005 is sweetened with diethylene glycol, a
sweetener wholly distinct from anti-freeze and one one-thousandth as toxic [Cl. Ex. No. 13]. A
consumer must drink approximately 230 bottles of Blue Hills 2005 in order to experience any lethal
effects of the sweetener [Appendix A, attached to this Memorandum]. Moreover, while neither
Mediterraneo nor Equatoriana have specific regulations as to the use of diethylene glycol, both
countries permit an amount greater than the amount present in Blue Hills 2005 [Pro. Order 2,
para.11]. Consequently, Blue Hills 2005 satisfies both countries’ national standards, and this Tribunal
should find Blue Hills 2005 a safe product fit for the general purpose of consumption.

83. In contrast, a French court found that wine adulterated by a high quantity of sugar, affecting the
alcohol content of the wine, made it unfit for consumption [Sacovini (France, 1996)]. Unlike Sacovini,
the award-winning Blue Hills 2005 is imperceptibly sweetened. Super Markets has not alleged that
the alcohol content is unaltered.

2. Blue Hills 2005 meets international standards for fitness for resale.
84. Moreover, Blue Hills 2005 is fit for resale according to the reasonable quality, merchantability, and
average quality standards. Blue Hills 2005 meets the “reasonable quality” standard. In Condensate
Crude Oil (Netherlands, 2002), a Dutch court found that goods conform to their ordinary purpose of
resale if they meet a reasonable quality standard [para. 118]. Goods meet the reasonable quality
standard when it is reasonable for a buyer to expect a particular quality in light of the price and all
other relevant circumstances [Id.]. In Condensate Crude Oil, the arbitral tribunal found that the goods
did not meet the reasonable quality standard in light of the price of the goods and the buyer’s
expectation as supported by previous quality levels [Id. at para. 123]. Accordingly, the seller—not the

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University of Washington – Claimant’s Memorandum
buyer—was obliged to produce conforming goods [Id.]. Here, Blue Hills 2005 meets the reasonable
quality standard because it is the same product that Super Markets sampled at the fair.

85. Other tests of fitness for resale include the merchantability test and the average quality test, and Blue
Hills 2005 passes each of these tests. The merchantability test, employed by English courts, only
requires that the products are capable of resale [Schwenzer in Schlechtriem, 418]. The average quality test
requires that generic goods be of average quality [Id.]. Blue Hills 2005 is fit for consumption,
reasonably priced, award-winning, and capable of resale.

3. Under CISG Article 35, Blue Hills remains an outstanding choice for promotion.
86. CISG Article 35 requires that the goods be of the “quantity, quality, and description required by the
contract.” Super Markets wrongly contends that Blue Hills 2005 “no longer has the qualities
necessary to be an ‘outstanding choice for a promotion of quality wines.’” [CISG Art. 35(1); Cl. Ex.
No. 11]. The parties’ discussion of “quality wines” refers not to an official designation, but rather to
the characteristics of the product [Pro. Order 2, para. 23]. Blue Hills 2005 won a prize at the
international Durhan Wine Fair [Cl. Ex. No. 1], and Mr. Wolf was impressed by the wine when he
tasted it. The wine meets CISG Article 35 standards because it retains the quality required by the
Contract.

87. Any alleged defects are imperceptible and do not impair value or quality. In the Handelsgericht case
(Switzerland, 1998), the court held that a buyer was not entitled to claim a price reduction or any
other damages for a misprint in a catalogue. Although the seller could have been held responsible
for minor defects if they reduced the value of the goods, a single minor misprint that was not
immediately detectable did not render the book unreadable, nor did it impair the book’s value.
Similarly, the alleged defect in Blue Hills 2005 is not immediately detectable, nor does it impair the
value of the wine.

4. Super Markets should have an opportunity to cure alleged defects.


88. Even if the wine were unfit for resale, which it was not, Super Markets denied Wine Cooperative’s
right to cure any perceived defect. Under CISG Article 48, the seller may remedy any failure to
perform the obligations of the contract. When Super Markets indicated its intention to breach, Wine
Cooperative offered an “unusually good price” for the wine [Cl. Ex. No. 15]. Super Markets refused

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University of Washington – Claimant’s Memorandum
[Cl. Ex. No. 16]. Had Super Markets allowed Wine Cooperative an opportunity to cure, the wine
could have been sold at an even more reasonable price.

B. Regardless of Whether Promotion Is a Particular Purpose, Blue Hills 2005


Is Fit for Promotion.
89. Super Markets argues that it sought to use Blue Hills 2005 for the particular purpose of promotion
[Statement of Def., para. 19]. However, Super Markets cannot show that Blue Hills 2005 is unsuitable
for public promotion. Furthermore, it would have been unreasonable for Super Markets to rely on
Wine Cooperative’s skill and judgment with regard to whether Blue Hills 2005 would be successful
in promotion.

1. Promotion is not a particular purpose but rather part of the ordinary purpose of resale.
90. The “ordinary purposes” for food products are primarily resale and consumption [Schwenzer in
Schlectriem, 416, 417]; promotion is an ordinary purpose because it is simply large-scale resale. For
CISG Article 35(2)(b) to apply, the goods must be used for a purpose beyond the ordinary purposes.
[CISG Art. 35(2)(b); Henschel, 222]. Common particular purposes include fitness for a particular
climatic condition and the use of goods in a special production process [Henschel, 222-23]. The sale
of wine in promotion is a more ordinary purpose. Thus, although Super Markets did inform Wine
Cooperative of its intent to promote Blue Hills 2005, the promotion of the wine is only a
subcategory of resale.

2. Super Markets cannot meet its burden of proving that Blue Hills is not fit for promotion.
91. If this Tribunal finds promotion to be a particular purpose, Super Markets still has the burden of
proving that Blue Hills 2005 is unfit for that purpose, and Super Markets cannot meet this burden
[Henschel 238]. In Schmitz-Werke (USA, 2002), the buyer prevailed on a claim that fabric was unfit for
the purpose of transfer printing only after showing “shoddy” results when the fabric was properly
used for the purpose the seller had warranted, In Alejandro Mayer (Argentina, 2004) the buyer refused
to pay for its contracted coal and did not meet its burden of proving that the coal was unfit. The
buyer alleged lack of conformity for a specific use. However, the court found that according to the
very evidence offered by the buyer, the coal was amply usable for its intended purpose of barbecue
cooking. Accordingly, the court rejected the buyer’s allegations of non-conformity. In the case
before this Tribunal, Super Markets has offered no evidence that there would be a “commercial
catastrophe” if the promotion continued as planned [See Cl. Ex. No. 9]. Super Markets offers no
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University of Washington – Claimant’s Memorandum
information on the potential effects of the newspaper article on sales. Therefore, the projected
failure of the Blue Hills promotion is speculation.

92. The Pork-Meat case (Germany, 2005) can be distinguished on the grounds of the seller’s response. In
Pork-Meat, the pork at issue was allegedly contaminated with dioxin. The seller failed to produce the
requested certificate showing that the meat was free of dioxin. Unlike the Pork-Meat case, Wine
Cooperative readily produced evidence showing that anti-freeze was not used in the wine and that
the wine was safe to drink [See Cl. Ex. No. 13].

3. It is unreasonable for Super Markets to rely on the skill of Wine Cooperative with regard
to fitness for promotion.
93. Moreover, it would have been unreasonable for Super Markets to rely on Wine Cooperative’s skill
and judgment with regard to whether Blue Hills 2005 would be successful in promotion. According
to CISG Article 35(2)(b), the circumstances must show that the buyer reasonably relied on the
seller’s skill and judgment with regards to the fitness of a product for a particular purpose. Reliance
is reasonable if the seller is a specialist or expert in the manufacture or procurement of the goods for
the particular purpose intended by the buyer, or if the seller holds himself out as such [Schwenzer in
Schlectriem, 422]. In a 2004 case before the Audencia Provincial de Barcelona, the court rejected the
buyer’s claim that the goods – metallic covers for a sewage system – were unfit for a particular
purpose. The court relied on several factors in its decision: The fact that the seller had not been
informed of the specifications; the seller’s “certified high quality” standard did not imply that it
ought to have known the buyer’s specific needs; and the buyer, being a certified public works
contractor, should not have relied on the seller [Audencia Provincial (Spain, 2004)].

94. Mr. Cox and Wine Cooperative are not experts on the consumer preferences in Equatoriana, nor did
they hold themselves out as being experts on the promotion of wine. Wine Cooperative should not
bear the risks of the vicissitudes associated with the media in Equatoriana. Although Mr. Cox knew
that Blue Hills 2005 incorporated a sweetening agent [Pro. Order 2, para. 22], he had no reason to
know that the use of a sweetening agent would impede Super Markets’ planned promotion. Super
Markets should bear the risk for the sensitivity of its target consumers, and if Super Markets relied
on Wine Cooperative’s judgment, they did so unreasonably.

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University of Washington – Claimant’s Memorandum
95. The Mussels Case (Germany, 1994) and L. & M. International (Spain, 2000) indicate that sellers need not
be sensitive to foreign regulations, and this principle can be extended to foreign tastes. The
Bundesgerichtshof decided in the Mussels Case that public regulations in the seller’s, not buyer’s,
place of business control. Similarly, in L & M Internacional, the court found that, although goods
failed to meet the public regulations of the country to which they were being shipped, the failure to
meet the specific law requirements of the country in which they would be marketed did not
automatically mean that the goods should be deemed unfit for ordinary use according to Art.
35(2)(a). If compliance with specialized public law provisions of the buyer's country or the country
of use cannot be expected [Mussels Case, quoting Schwenzer], certainly conformity to the buyer
country’s public taste should be grounds for breach only if they are the same highly sensitive tastes
of the seller’s country.

4. Wine Cooperative made no “specific assurances” upon which Super Markets could
reasonably rely.
96. Super Markets may argue that Wine Cooperative gave “specific assurances” that Blue Hills 2005
would be successful in the promotion, but the assurances were only puffery. Puffery is the
expression of an exaggerated opinion rather than a misrepresentation in connection with the intent
to sell a good or service. Puffery does not create an express warranty because the seller should be
permitted some leeway in touting the quality of goods without becoming liable for a breach of
warranty [Williston § 52:49]. The statements that Super Markets would “do very well” with the wine,
and that the wine is an “exceptionally fine wine that will certainly satisfy” Super Markets’ customers
amounts to Wine Cooperative touting its goods [Cl. Ex. Nos. 1, 3]. Super Markets could not
reasonably rely on this puffery as specific assurances.

III. SUPER MARKETS BREACHED THE CONTRACT WHEN IT


REFUSED TO TAKE DELIVERY OF THE WINE
97. Super Markets breached the Contract when it refused to take delivery of wine that was fit for both
the ordinary purpose and the particular purpose. CISG Article 53 requires that the buyer pay the
contract price for the goods and take delivery of the goods. Taking delivery consists of a) doing all
acts that could be reasonably expected of the buyer in order to enable seller to make delivery; and b)
taking over the goods [CISG Art. 60]. The breach of the buyer’s obligation to pay for and take
delivery of the goods is a fundamental breach of contract [Hager in Schlechtriem, 619].

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University of Washington – Claimant’s Memorandum
98. Wine Cooperative performed its obligations under the Contract when it prepared conforming goods
and attempted to deliver the goods to Super Markets. However, Super Markets refused to honor the
Contract when it expressly stated that it would not take delivery of the wine [Cl. Ex. No. 11].
Therefore, this Tribunal should conclude that Super Markets breached the Contract.

PART THREE: RELIEF


99. For all of the above reasons, Claimant respectfully requests the Tribunal to find:

That the Tribunal has jurisdiction to consider the dispute between Wine Cooperative and Super
Markets;

That the offer made by Super Markets to purchase 20,000 cases of Blue Hills 2005 from Wine
Cooperative for US$1,360,000 was irrevocable under CISG Article 16;

That Wine Cooperative effectively accepted the irrevocable offer;

That Super Markets and Wine Cooperative concluded a contract to purchase 20,000 cases of Blue
Hills 2005 for US$1,360,000;

That Super Markets refused to take delivery of the wine in violation of CISG Article 53;

That Super Markets has not paid the purchase price of US$1,360,000.

100. Consequently, Wine Cooperative requests the Tribunal to order Super Markets:

To cease the parallel proceeding in the Commercial Court;

To pay Wine Cooperative the purchase price of US$1,360,000;

To pay storage costs of US$5,000;

To pay interest at the prevailing market rate in Mediterraneo on the said sum from the date of
breach to the date of payment.

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University of Washington – Claimant’s Memorandum
University of Washington School of Law, Seattle, Washington, USA, 6 December 2007.

_______________ ______________ _____________

Brianne Anderson Bradley Bowen Nicole Jabaily

_______________ ______________

Lavanga Wijekoon Alexander Wu

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University of Washington – Claimant’s Memorandum
APPENDIX A

0.15 g 150mg
Concentration of DEG in Blue Hills 2005: = [Cl. Ex. No. 13]
75cL(bottle) 750mL(bottle)
mL mL
Toxic Concentration of DEG in humans: 0.44 to 4.5 [Cl. Ex. No. 13]
kg (body ) kg (body )
g
Density of DEG: 1.197 [CRC Handbook of Chemistry and Physics, 88th Ed., 2007-2008]
mL
Toxic Concentration of DEG in humans in mg/kg:
0.44mL g 0.48 g 480mg 500mg
× 1.1197 = = ≈
kg (body ) mL kg (body ) kg (body ) kg (body )
4.5mL g 5 .0 g 5000mg
× 1.1197 = =
kg (body ) mL kg (body ) kg (body )
Assuming a 70kg (154 lbs.) individual and that the minimum of toxicity applies, the toxic
480mg
amount of DEG is: 70kg × = 34,000mg
kg (body )
bottle
Thus, a 70kg individual would have to drink 34,000mg × = 230 bottles to consume a
150mg
toxic amount of DEG.

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University of Washington – Claimant’s Memorandum