Beruflich Dokumente
Kultur Dokumente
-RESPONDENT-
-CLAIMANT-
ISHITASINGH|JEEZANRIYAZ|RITIKTENGURIA| TANYAAGRAWAL|VAGMITASINGH
BHOPAL | INDIA
TABLE OF CONTENTS
Arguments ............................................................................................................................... 11
(B) The Tribunal Should Find That Claimant Properly Fulfilled The Mediation
Requirement…………………………14
(ii) In Any Event, Claimant Properly Fulfilled The Mediation Prerequisite .................... 10
II. The Ethical Business Practices Clause Was Ex-Facie Unenforceable For Want Of
Certainity In Terms .................................................................................................................. 19
III. Whether The Damages Imposed On Icb By The Supreme Court Of Cowlandia Qualify As
A Transferable Liability ..........................................................................................................21
A. Tc Even Though Was Not A Party To The Proceedings Before The Supreme Court Is Liable
21
B. Tc Was A Party To The Contatual Arrangement Between Icb & Its Customers And /Or
Downstream Contractors..........................................................................................................21
Arb. Arbitration
Art. Article
Cir. Circuit
Co. Company
Corp. Corporation
CSR Corporate SocialResponsibility
ed. editor
eds. editors
Ex. Exhibit
Ltd. Limited
LP Limited Partnership
Ms. Miss
Mr. Mister
No. Number(s)
p./pp. page/pages
¶/¶¶ paragraph/paragraphs
Resp. RESPONDENT
UN United Nations
UNCITRAL UnitedNationsCommissiononInternationalTradeLaw
UNIDROIT InternationalInstitutefortheUnificationofPrivateLaw
v. Versus
Vol. Volume
INDEX OF LEGAL TEXTS
Arbitration 1985
Contracts 2010
1) GarikapatiVeeraya v. N. Subbiah Choudhry, 1957 - SCI, 10 Judge Bench, 1957 AIR 540, 1957
SCR 488…………………………………………………………………….
2) Shri Lal Mahal Ltd vs ProgettoGrano Spa on 3 July, 2014, SCI, 3 judge Bench, (2014) 2 SCC
433C.A. Nos.2562 of 2006 etc………………………………………….
3) Subhash Aggarwal Agencies vs Bhilwara Synthetics And Others on 13 December, 1994, SCI,
Single Judge Bench 1995 AIR 947, 1995 SCC (1) 371 …………………………..
4) I.T.I. Ltd. vs Siemens Public Communications ... on 20 May, 2002, SCI, Division Bench AIR
2002 SC 2308, 2002 (4) ALD 47 SC, 2002 (2) ARBLR 246 SC ……………………
5) Fuerst Day Lawson Ltd vs Jindal Exports Ltd on 8 July, 2011, SCI, Division
Bench(2011) 8 SCC 333……………………………………………………………………….
6) Bharat Aluminium Co vs Kaiser Aluminium Technical ... on 6 September, 2012, SCI, 5 judge
bench …………………………………………………………………………...
7) Sumitomo Heavy Industries Ltd. v. ONGC Ltd, 1998,SCI, Division Bench, (1998) 1 SCC
305…………………………………………………………………………………
8) Union of India v. Uttar Pradesh State Bridge Corporation Ltd, Division Bench 2015, SCI,(2015)
2 SCC 52.………………………………………………………………….
9) Associate Builders vs Delhi Development Authority on 25 November, 2015, Division
Bench(2015) 3 SCC 49…………………………………………………………………
10) Channel Tunnel Gr. v. Balfour Beatty (1993), 152 N.R. 177 (HL) – UK…………….
11) Visa International Ltd vs Continental Resources (Usa)Ltd on 2 December, Single Bench 2008
SCI ………………………………………………………………………………
12) In Demerara Distilleries Private Limited v Demerara Distillers Limited, 2015, Single Bench SCI
(2015) 13 SCC 610………………………………………………………..
13) Wah v. Grant Thornton International Ltd [2012] EWHC 3198 (Ch)UK…………
14) Bombay High Court Mr. Rajiv Vyas vs JohnwinManavalan on 8 September, 2010, Arbitration
petition no. 222 of 2008…………………………………………………
15) Cable and Wireless v. IBM UK [2002] EWHC 2059 (Comm)………………………
16) Holloway v. Chancery Mead Ltd., [2007] EWHC 2495 (TCC)…………………….
17) Ravindra Kumar Verma v. M/s BPTP Ltd &Anr( delhi HC ) (2015) 147 DRJ 175….
18) Swiss Timing Limited v Commonwealth Games (SCI)(2014) 6 SCC 677…………..
19) HeeralalAgarwalla and Co. v. JoakimNahapiet and Co. Ltd. (Calcutta HC),Single Bench, AIR
1927 Cal 647, 103 Ind Cas 648……………………………………….
20) Openwork Ltd v Forte, EWCA Civ 783, [2018] All ER (D) 97.
21) Upper Hunter Country District Council v Australian Chilling and Freezing Co Ltd (1968) 118
CLR 429.
22) BHP Petroleum (Timor Sea) Pty Ltd v Minister for Resources (1994) 49 FCR 155.
23) Country District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 436.
24) International Fina Services AG v Katrina Shipping Ltd (The Fina Samco) [1995] 2 Lloyd’s Rep
344 at 350.
25) Bahadur Singh vs Fuleshwar Singh AIR 1969 Pat 114
26) DhanrajamalGobindram vs ShamjiKalidas And Co AIR 1961 SC 1285
27) The New Bank of India Ltd. vs Union Of India And Ors., 1979 49 CompCas 226 Delhi, ILR
1977 Delhi 672
28) Evans & Sons Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078.
STATEMENT OF FACTS
1) The parties to this arbitration are Ivory Costa BrewBakesLtd. (hereinafter “Claimants or ICB”)
and Torchwood & Co. (hereinafter“Respondents or TC”, collectively “the Parties”).
2) Claimant is the leading fair trade, organic coffee company in the Republic of Cowlandia. They
market their own products which mostly comprises of coffee. Sold at Ivory BrewCafes, their
products are priced higher than usual owing to the fact that their brand synonymous with
ethically produced consumer products.Claimant has a long standing contract with TC, a supply
chain management company which is responsible for, and has borne the risks of supplying the
labour as well as physical capital for running the said plantations and production centres.
3) All the employment contracts are entered into between the respondent and the employees and are
negotiable only between these two parties. In control of the end to end supply chain production
process the respondent has choice of locations of manufacturing and packaging, and shipping
centers as well as identifying appropriate plantations to source ingredients from, TC has had
significant independence. Further, the respondent cannot bind the claimant to its contracts with
the upstream buyers and assumes responsibility of their acts which might affect the claimant.
The contract between the parties is exhaustive in nature and thus there is no scope for any
negotiation. However, none of the respondent’s policies can be in violation of its representations
made to the claimant.
4) On the other hand, the respondent has no say in the representations made by the claimant to the
downstream contractors or customers and so it assumes no risk arising from such representations.
5) On 6th March 2018 a leading news blog published a story about the deplorable conditions of the
workers in coffee plantations from where the claimant sourced its ingredients. A consumer and
labor rights organization named People’s Front against Capitalismfiled a petition in court against
ICB. The court thus set up set up its own Inquiry Committee, headed by the Chairman of the
Food Council of Cowlandia, Prof. BautamGhatia. It found that:
Women in districts suffered from complications with their reproductive health after taking
recourse to medical and surgical interventions to stop their menstrual cycles.
Women working in coffee plantations were paid lump sum bonuses for opting to get Intra-
Uterine Contraceptive Devices fitted and an even higher bonus for getting hysterectomies.
Monthly bonuses were givenfor taking hormone pills that suppress/eliminate menses.
“The intention of the ICB was that the second arbitration was in the nature of an appeal andthat
the second award would take precedence over the first award. It is therefore amply clear that if
approach was made to the ICC arbitrator, then the first arbitration award would not be binding on
the parties nor there would be any existence of the same after the LCIA made an award. Thus, it
cannot be said that the proceeding before the ICC arbitrator was an independent proceeding nor
it could be said that it was merely a second arbitration in London, U.K.” Also, in light of the
precedents and there being no express prohibition under the Arbitration Act, two tier dispute
resolution vide arbitration is permissible under the Arbitration Act.
CLAIMANT entire fulfilled the requirement for mediation by agreeing to mediate at the very
first place in good faith. As a preliminary matter, the Tribunal has the authority to determine its
own jurisdiction pursuant to kompetenz-kompetenz. Core to the CLAIMANT’s contentions are
first, that it fulfilled the representation made by them; secondly, CLAIMANT participated in
mediation in good faith and RESPONDENT should be estopped from denying so. Alternatively,
the pre-mediation requirements were not a condition precedent to jurisdiction of the Tribunal and
the RESPONDENT waived the right to challenge CLAIMANT’s representation.
Clause 6 of the contract between ICB and TC cannot be held to be invalid on account of
uncertainty because it is in fact very certain. The terms in the present case are capable of being
made certain and thus cannot be used as a ground to revoke the clause of the contract.
1
Indian Contracts Act, 1872
(ii) If the Parties are unable to settle their dispute through mediation, they shall refer their
dispute to arbitration.
(iii) If any party is in disagreement with such an award, then the aggrieved party would have a
right to appeal to a second arbitration in London in accordance with the Rules of
Arbitration & Conciliation of the Lostdon Court of International Arbitration (LCIA).
9) The Report of the Working Group on International Contract Practices on the Work of its Third
Session.2 Also refer the Handbook of arbitration Practice3:
“Fundamental and ancient feature of commodity trade arbitration is the two-tiersystem whereby
the first arbitration is held speedily and relatively informally and results in the issuance of an
award” Since challenge of an award ought to be subject to scrutiny before a court. If this
contention is accepted, then it could be argued that TC entered into a contract with ICB, in full
consciousness and aware of the fact, this could amount to TC playing a fraud on ICB and could
have serious long-term implications and ramifications for international commercial contracts.
10) We may, however, note that it has been brought to our notice that there are several decisions
rendered by the Bombay High Court that have accepted the two-tier arbitration system.4 There
are several decisions of the Delhi High Court that have taken the view that since the A&C Act
2
5 New York, 16-26 February, 1982, A.CN.9/216 (23rd March 1982)
C.A. Nos.2562 of 2006 etc.
3
Published by Sweet and Maxwell in conjunction with The Chartered Institute of
Arbitrators, (para 3-35) at p.276 and para 3-106 at p.290.
4
Dedhia Investments Pvt. Ltd. v. JRD Securities Pvt. Ltd., [2002] 104 (4) Bom L.R. 932,
Amin Merchant v. Bipin M. Gandhi, 2005 (Suppl.) Arb. LR 337, Dhansukh K. Sethia v.
Rajendra Capital Services Ltd., 2008 (1) Arb. LR 368 (Bombay), Dowell Leasing & Finance
Ltd. v. Radheshyam B. Khandelwal, 2008 (1) Bom C.R. 768, ANS Pvt. Ltd. v. Jayesh R.
Ajmera, 2014 SCC Online Bom 1825 and Ankit Bimal Deorah v. Microsec Capital Ltd., 2015
SCC Online Bom 4538
11) In a long line of decisions rendered by various courts in the country which have accepted the
validity of a two-tier arbitration and stated that a two-tier arbitration procedure is not per se
invalid. In Subhash Aggarwal Agencies v. Bhilwara Synthetics Ltd.,5the decision of an appellate
Tribunal constituted under the Delhi Hindustan Mercantile Association Rules and Regulations
stated that two- tier arbitration is applicable in India.
B. PARTY AUTONOMY
12) One of the most important aspects of multi- tiered arbitration clauses is ‘party autonomy’. It
gives the parties the freedom to choose the forum and the procedure to be followed according to
their own convenience. This principle guides international commercial arbitrators in determining
the correct choice of the law applicable to an international commercial contract. Party autonomy
is virtually the backbone of arbitrations.
13) In Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc.6, this Court dealt
with party autonomy from the point of view of the contracting parties and its importance in
commercial contracts. In paragraph 5 of the Report,it was observed: “Party autonomy being the
brooding and guiding spirit in arbitration, the parties are free to agree on application of three
different laws governing their entire contract which was further explained by this Court in
Sumitomo Heavy Industries Ltd. v. ONGC Ltd.7Therefore it can be stated that ICB was free to
appeal before LCIA in accordance with the principles of Party autonomy and cannot be held as a
bar to prevent from appealing.
14) In Union of India v. Uttar Pradesh State Bridge Corporation Ltd.8this Court accepted the view9
that the A&C Act has many foundational pillars.
(i) “First and paramount principle of the first pillar is "fair, speedy and inexpensive trial by an
5
Subhash Aggarwal Agencies v. Bhilwara Synthetics Ltd(1995) 1 SCC 371 decided under the Indian Arbitration Act,
1940
6
Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc(2016) 4 SCC126, Hon'ble Judges/Coram:
Anil R. Dave, Kurian Joseph and Amitava Roy,
JJ.
7
Sumitomo Heavy Industries Ltd. v. ONGC Ltd (1998) 1 SCC 305
C.A. Nos.2562 of 2006 etc.
8
Union of India v. Uttar Pradesh State Bridge Corporation Ltd(2015) 2 SCC 52
9
O.P. Malhotra on the Law and Practice of Arbitration and Conciliation" (3rd Edn. Revised)
by Ms. Indu Malhotra, Senior Advocate)
C.A. Nos.2562 of 2006 etc.
(ii) the second principle which is recognised in the Act is the party autonomy in the choice of
procedure.
15) Hence it clearly states that ICB was free to do what they wanted to do with respect of an appeal
and the contentions of TC with regards to the
“In the case before us, being a contract executed between the two parties, the court cannot adopt
an approach for interpreting a statute. The terms of the contract will have to be understood in the
way the parties wanted and intended them to be. In that context, particularly in agreements of
arbitration, where party autonomy is the grund norm.
17) Mustill and Boyd11identify four classes of provision regarded by the courts as contrary to public
policy. They are:
(ii) Terms which purport to exclude or restrict the supervisory jurisdiction of the Court;
(iii) Terms which require the arbitrator to conduct the reference in an unacceptable manner; and
(iv) Terms which purport to empower the arbitrator to carry put procedures or exercise powers
which lie exclusively within the jurisdiction of the courts.
18) In the present case none of the clauses of the agreement between the parties fall under any of the
situations which attributes to the fact that such an appeal made by ICB was in no way contrary to
the public policy and thus TC should not be given a favourable benefit of their own frivolous
claim.
19) In our country, the case law on the subject has recently been exhaustively discussed and stated in
Amicable Society v. Bolland (Fauntleroy’s Case(1830) 4 Bligh. (N.S.) 194; 2 Dow. & Cl. 1
10
11
The Law and Practice of Commercial Arbitration in England, London, Butterworths 1982
pp. 245-246
justice or morality, or
if it is patently illegal.
20) It is essential in tiered dispute resolution clauses to ascertain whether the preconditions are
mandatory, whether a procedure has been provided for amicable resolution of disputes and
whether the preconditions provide an unambiguous solution for the breaching party.
21) In the case of Channel Tunnel Group v. Balfour Beatty Construction Ltd. 13, the Court made an
important observation. In this case an arbitration clause was entered into a construction contract.
This arbitration clause provided for a two- tier dispute settlement mechanism. The first tier
provided for the dispute to be referred in writing to a panel of three experts, who would give
their decision within a period of ninety days, thereafter is the either of the parties were
dissatisfied with the award, they could refer the matter to arbitration under the rules of
Conciliation and Arbitration of the ICC by three arbitrators in Brussels.
22) The principle of ‘party autonomy’ is greatly recognized in a driving force in the international
arbitration. Party autonomy in arbitrational proceedings acts as one of the key distinguishing
features of the arbitration agreements. It gives the parties the freedom to choose the forum and
the procedure to be followed according to their own convenience. This principle guides
international commercial arbitrators in determining the correct choice of the law applicable to an
international commercial contract.
I. (B) THE TRIBUNAL SHOULD FIND THAT CLAIMANT PROPERLY FULFILLED
THE MEDIATION REQUIREMENT
23) CLAIMANT entire fulfilled the requirement for mediation by agreeing to mediate at the very
first place in good faith. As a preliminary matter, the Tribunal has the authority to determine its
own jurisdiction pursuant to kompetenz-kompetenz. Core to the CLAIMANT’s contentions are
12
Associate Builders v. Delhi Development Authority (2015) 3 SCC 49 C.A. Nos.2562 of 2006 etc.
13
Channel Tunnel Group v. Balfour Beatty Construction Ltd. (1993), 152 N.R. 177 (HL)
25) In Visa International Limited v Continental Resources (USA) Limited14– a case where the clause
provided amicable settlement before reference to arbitration – the Supreme Court referred to
letters exchanged between parties and inferred that attempts were made for amicable settlement
with no result, leaving no option but to invoke arbitration.
26) Pursuant to clause 24(1), the parties met at Hotel Pointless Luxury on 23rdOctober, 2018 to
mediate their dispute. Since neither party was willing to make any compromises, the hostility had
escalated to an extent where talks broke down irreparably. Therefore, there was no need to
mediate if both the parties were not in a position to reach a middle ground and it attributes the
fact that the said issue is unenforceable to mediate for lack of sufficient uncertainty.
27) In Cable and Wireless v. IBM UK15, the Court examined an agreement which stated that the
parties would attempt to settle the dispute by arbitration, only after failing to settle the dispute by
negotiating in good faith. Coleman J differentiated between an agreement to negotiate an
agreement to follow a particular dispute resolution procedure. An agreement to negotiation was
unenforceable as it is uncertain. On the Contrary, an agreement which contained an identifiable
procedure would be enforceable.
28) Therefore, the procedure followed by ICB in invoking the jurisdiction of arbitration was prima
14
VISA International Ltd. v. Continental Resources (USA) Ltd.ARBITRATION PETITION NO.16 OF 2007 - 02
December 2008 - Supreme Court of India
15
Cable and Wireless v. IBM UK[2002] EWHC 2495 (TCC)
29) In Wah v. Grant Thornton International Ltd.16, which laid down a three-prong test to assess the
enforceability of a condition precedent to arbitration. The Court, in this case considered an
agreement which stated that disputes would be referred to a panel containing three members
before arbitration.
First, the provision has to prescribe an unequivocal commitment to commence the alternate
procedure, which must be sufficiently certain from the terms of the Agreement.
Second, the provision must indicate what steps each party is required in order to initiate the
alternate process.
Third, the provision must clearly allow the court to determine the respective minimum
obligations of the parties to participate in the process, as well as when and how the process is
exhausted or terminated.
30) These provisions must be drafted in such a way that they do not require any further agreement.
Thus, Courts have largely stressed on the need for certainty before a multi-tier arbitration clause
can be enforced, however there are exceptions to this rule as well.
31) Demerara Distilleries Private Limited v Demerara Distillers Limited 17the Supreme Court had,
while dealing with an application seeking appointment of an arbitrator, rejected the plea that
invocation of arbitration was premature. Under the agreed mechanism, the parties had decided
that the differences would be resolved first by mutual discussions, followed by mediation, and
only if mediation failed would they arbitrate. The court inferred from the correspondence
between the parties that any attempt at that stage to resolve disputes by mutual discussions and
mediation would be an empty formality and proceeded to appoint an arbitrator. So, therefore in
this case in order to reach a middle ground it was important to break down the pre-arbitral
procedure and take a step forward and appoint the arbitrator in accordance with the principles of
Party autonomy.
16
Wah v. Grant Thornton International Ltd 2012 EWHC 3198 (Ch)
i. 17
Demerara Distilleries Pvt. Ltd. v. Demerara Distilleries Ltd (Arbitration Case (Civil) No. 11 of 2013) Decided
On, 24 November 2014 - Supreme Court of India
34) In Holloway v. Chancery Mead Ltd.19, the Court had to consider whether a provision in a
building contract that the parties shall seek to resolve a dispute through conciliation by the
NHBC (Clause 24.1) and a further provision that the making of a determination by an NHBC
investigator (Clause 24.6) were conditions precedent or not to the commencement of an
arbitration. The Court held that they were not and the matter was apt to be referred to arbitration.
The Court laid a three-prong test for such agreements to be enforceable and held:
First, that the process must be sufficiently certain in that there should not be the need for an
agreement at any stage before matters can proceed.
Secondly, the administrative processes for selecting a party to resolve the dispute and pay that
person should also be defined.
18
Rajiv Vyas v. JohnwinManavalan ARBITRATION APPLICATION NO. 162 OF 2009
19
Holloway v. Chancery Mead Ltd [2007] EWHC 2495 (TCC)
35) Therefore, there was no obligation on the part of ICB to refer the dispute to Arbitration but they
still agreed to mediate and didn’t violate the terms stipulated in the agreement.
36) The court in the case of Ravindra Kumar Verma v. M/s BPTP Ltd &Anr20 held that the
agreement does not bar the parties from commencing arbitration proceedings as the same can
result in serious and grave prejudice to a party who is seeking to invoke arbitration because the
time consumed in conciliation proceedings before commencing arbitration is not exempted from
limitation.
37) Pre-Arbitration clauses suffer from uncertainty. As the parties might disagree as to when the
dispute arose; when the negotiations failed; or when the limitation period for commencement of
arbitration proceedings began and so on.
38) A similar view was taken by the Supreme Court in Swiss Timing Limited v Commonwealth
Games21 2010 Organising Committee. So in the present case it can be agreed that ICB was of the
intention to mediate but due to the hostilities and differences it was not possible to solve it
through mediation (It is just that the problem was so big and intense) and therefore instead of
unnecessarily wasting time, ICB believed that it is best to invoke the jurisdiction of Arbitration
in accordance with the rules of LCIA.
39) Another such case in which it was held that there was no provision in Indian law which
prevented the parties from agreeing to appeal against an arbitral award is, HeeralalAgarwalla
and Co. v. JoakimNahapiet and Co. Ltd.22 Since the dispute has already arisen it is difficult to
bring the parties together and amicably resolve the dispute.
40) The report of the working group of UNCITRAL in 2015, allows for a two-tier or multitier
dispute resolution or arbitration proceedings, wherein parties are at liberty to challenge the
arbitral award at the first instance and then go for appeal, if they are not satisfied with the
20
Ravindra Kumar Verma v. M/s BPTP Ltd &Anr(2015) 147 DRJ 175
21
Swiss Timing Limited v Commonwealth Games (2014) 6 SCC 677
22
HeeralalAgarwalla and Co. v. JoakimNahapiet and Co. Ltd. AIR 1927 Cal 647, 103 Ind Cas 648
41) The arbitration laws of India derive its origins from the English laws, wherein though not
26
explicitly mentioned, two-tier arbitration clauses were allowed in commercial disputes
Therefore, though allowing two-tier arbitrations in India is a welcome step for the arbitration
regime in India and is aimed at encouraging investors to follow Indian laws while settling the
disputes.
42) In German Bundesgerichtshof27, the court clarified that the issue of (non) compliance with multi-
tiered arbitration clauses is a matter of admissibility and not a matter of Jurisdiction.
Consequently, arbitral tribunals have jurisdiction to decide on this matter. Also, since the issue of
(non) compliance with the multi-tiered arbitration clause pertains to the admissibility of the
claims, the arbitral tribunal’s decision in that respect does not form part of the grounds to set
aside awards and cannot be attacked either once the final award is rendered.
43) The Paris Court of appeal, based on previous case law, decided to similar circumstances and in
line with German Bundesgerichtshof case, that the issue of (non) compliance with a multi- tiered
arbitration clause is not a matter of jurisdiction but a matter of the admissibility of the claims.
Since the dispute has already arisen it is difficult to bring the parties together and amicably
23
Gregory Travaini, Multi-Tiered Dispute Resolution clauses, a friendly Miranda warning, Kluwer Arbitrtion Blog,
available at: http://kluwerarbitrationblog.com/2014/09/30/multi-tiered-dispute-resolution-clauses-a-friendly-
miranda-warning/, last seen on 5/02/2017.
24
Shaun Lee, Case Update: Compliance with Multi-Tier Clauses must be adhered to strictly, Singapore
International Centre Arbitration Blog, available
at:https://singaporeinternationalarbitration.com/2013/10/21/%ef%bb%bfcase-update- compliance-with-multi-tier-
clauses-must-be-adhered-to-strictly/, last seen on 3/02/2017.
25
Darius Chan, Enforceability of Multi-Tiered Dispute Resolution Mechanisms- The Singapore Judiciary’s
Promotion of Consensus as a Cultural Value, Kluwer Arbitration Blog,
http://kluwerarbitrationblog.com/2013/01/08/ enforceability-of-multi-tiered-dispute-resolution-mechanisms-the-
singapore-judiciarys-promotion-of-consensus-as-a-
26
Watford v. Miles, 1 All ER 453, 471 (1992, House of Lords).
27
German Bundesgerichtshof case
II. THE ETHICAL BUSINESS PRACTICES CLAUSE WAS ENFORCEABLE FOR WANT
OF CERTAINTY IN TERMS OF PERFORMANCE OBLIGATIONS ARISING
THEREFROM.
44) Ethical standards are meant to “avoid activities […] that do harm to people or the
environment”28. A reasonable person would have understood that the practices adopted by TC do
not uphold any ethical standards and in light of this policy the term “highest ethical standards”
prohibits such practices and constitutes a contractual obligation on TC not to use such practices.
45) In the case of Openwork Ltd v Forte29 the Court of Appeal considered the extent to which it
could give effect to a contractual term in circumstances where the detailed provisions were
incomplete. The case emphasizes the court’s reluctance to find that a contractual term is void for
uncertainty. The mere fact that a term is uncertain cannot be a ground for TC to hold the entire
clause unenforceable. Analyzing the policy perspective, the Courts will not wholly invalidate a
contract simply because one or more contractual terms in the document are uncertain or are
capable of producing more than one result when applied.30
46) Moreover, provided that an uncertain contractual term is not entirely devoid of meaning, the
Courts will ascribe it the meaning they believe to be reflective of the term upon its proper
construction.31 Hence, it is clear that once the contract has been signed, TC cannot interpret the
terms for its own benefit let alone in a way which would invalidate the entire clause.
47) Construction of uncertain contractual terms is a commercial exercise. That is, uncertain language
is to be interpreted broadly and fairly as opposed to narrowly and pedantically. The aim is to give
28
Oxford English Dictionary
29
Openwork Ltd v ForteEWCA Civ 783, [2018] All ER (D) 97.
30
Upper Hunter Country District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429.
31
BHP Petroleum (Timor Sea) Pty Ltd v Minister for Resources (1994) 49 FCR 155.
49) Commercial documents are sometimes expressed in language which does not have a clear
meaning. This was seen in DhanrajamalGobindram vs ShamjiKalidas And Co.35 The mere fact
that it is difficult to interpret a commercial contract is not fatal, nor is difficulty synonymous
with ambiguity so long as to any definite meaning can be extracted. Hence, the terms of the
commercial contract between TC and ICB under Clause 6 are capable of being made certain. The
term ‘notwithstanding’ has a very clear meaning ‘without being affected by something’, thus
conveying that clause 6(2) of the contract between TC and ICB supersedes clause 6(1) of the
same.
III. WHETHER THE DAMAGES IMPOSED ON ICB BY THE SUPREME COURT OF
COWLANDIA QUALIFY AS A TRANSFERABLE LIABILITY
50) The term transferable liability here means that the liability which was imposed by the court on
ICB on account of adopting unfair trade practices, be transferred to TC owing to the contract that
was signed between TC and ICB.
A. TC EVEN THOUGH WAS NOT A PARTY TO THE PROCEEDINGS BEFORE THE
SUPREME COURT IS LIABLE.
51) The Supreme Court of Cowlandia found that ICB had been charging high premium from its
customers for a long period of time based on the representation of its fair-trade practices. To the
32
Country District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 436.
33
International Fina Services AG v Katrina Shipping Ltd (The Fina Samco) [1995] 2 Lloyd’s Rep 344 at 350.
34
Bahadur Singh vs Fuleshwar Singh AIR 1969 Pat 114
35
DhanrajamalGobindram vs ShamjiKalidas And Co AIR 1961 SC 1285
36
NLIU Arbitration Pool Selection Problem Para 9
37
NLIU Arbitration Pool Selection Problem Para 3
38
Privity of Contracts: Contracts for the Benefit of Third Parties, Law Commission, LC242.
39
Aherns Lawyers, Contracts Collateral & Inconsistent.
40
The New Bank Of India Ltd. v. Union Of India And Ors.,1979 49 CompCas 226 Delhi, ILR 1977 Delhi 672.
41
Evans & Sons Ltd v. Andrea Merzario Ltd [1976] 1 WLR 1078.
42
Property and Casualty Insurance Concepts Simplified by Christopher J. Boggs
43
Indian Contracts Act 1872
IN LIGHT OF THE SUBMISSIONS MADE ABOVE, CLAIMANT REQUESTS THE ARBITRAL TRIBUNAL
TO HOLD THAT:
JURISDICTION.
II. THE ETHICAL BUSINESS PRACTICES CLAUSE WAS EX-FACIE ENFORCEABLE FOR WANT
III. THE DAMAGES IMPOSED ON ICB BY THE SUPREME COURT OF COWLANDIA WERE A
TRANSFERABLE LIABILITY.
Respectfully submitted,
TANYA AGRAWAL|VAGMITASINGH