AT THE KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION ARBITRATION REGARDING THE STONE STATUE OF LORD VISHNU THE GOVERNMENT OF NEPAL

Transcription

1 THE 10 th LAWASIA INTERNATIONAL MOOT COMPETITION 2015 AT THE KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION 2015 ARBITRATION REGARDING THE STONE STATUE OF LORD VISHNU THE GOVERNMENT OF NEPAL Claimant v. THE AUSTRALIAN MUSEUM (SYDNEY) First Respondent THE NATIONAL MUSEUM (MALAYSIA) Second Respondent DR. JOHN THOMAS SMITH, JR. Third Respondent Respondents MEMORIAL FOR THE CLAIMANT

2 TABLE OF CONTENTS QUESTIONS PRESENTED... XI PLEADINGS... 1 I. THE PROCEDURAL LAW OF THE ARBITRATION IS THE LAW OF MALAYSIA AND THE SUBSTANTIVE LAW GOVERNING THE DISPUTE IS THE LAWS OF NEPAL... 1 A. THE LAWS OF MALAYSIA GOVERN THE PROCEDURES OF THIS ARBITRATION... 1 (a) Kuala Lumpur, Malaysia is the seat of arbitration... 1 (b) As Malaysia is the seat of arbitration, the laws of Malaysia shall govern the procedures of this arbitration... 3 B. THE LAWS OF NEPAL GOVERN THE SUBSTANTIVE MATTERS OF THIS ARBITRATION (a) The Appropriate Conflict Of Laws Principles Indicate The Laws Of Nepal To Be The Applicable Law... 3 i. Lex originis... 5 ii. In the alternative, the lex loci delicti rule also indicates the laws of Nepal to be applicable in the present dispute... 6 II. IF THERE IS A CONFLICT BETWEEN THE 1970 UNESCO CONVENTION AND NEPALESE LAW, THE FORMER WILL PREVAIL... 7 III. THE FIRST AND SECOND RESPONDENT IS LIABLE TO RETURN THE STATUE TO THE CLAIMANT UNDER THE LAWS OF NEPAL... 8 A. THE CLAIMANT HAS THE REQUISITE RIGHT TO OBTAIN CUSTODY OF THE STATUE UPON ITS DISCOVERY... 8 (a) The Statue is an Archaeological object... 9 (b) The Statue was found in Nepal (c) The Statue has no private owner C. THE CLAIMANT MAY DEMAND FOR THE RETURN OF THE STATUE BECAUSE IT IS AN INALIENABLE OBJECT (a) The Dean s transfer of the Statue to the Third Respondent is prohibited (b) Accordingly, the Third Respondent has no right to donate the Statue to the First Respondent i

3 IV. EVEN ASSUMING THAT AUSTRALIAN LAW IS THE APPLICABLE LAW, THE RESPONDENTS REMAIN LIABLE TO RETURN THE STATUE TO THE CLAIMANT A. THE CLAIMANT HAS THE REQUISITE PROPRIETARY TITLE TO PURSUE AN ACTION IN DETINUE AND CONVERSION (a) The Claimant s actual possession of the Statue is sufficient to bring an action under the tort of detinue and conversion (b) The Claimant Has Acquired Ownership Over The Statue Since Its Discovery i. The Claimant has exclusive rights to the Statue ii. The Statue is an object that is inalienable and the Claimant may facilitate recovery for its possession iii. The Claimant is empowered with the right to maintain the Statue (c) The Claimant has an immediate right to possession over the Statue (d) The Claimant s proprietary right over the statue is recognised under the Protection of Movable Cultural Heritage Act 1986 of Australia B. THE FIRST AND SECOND RESPONDENT ARE LIABLE UNDER THE TORT OF DETINUE C. THE FIRST AND SECOND RESPONDENT ARE LIABLE UNDER THE TORT OF CONVERSION (a) The Third Respondent s Donation And The First And Second Respondents Refusal To Return The Statue Is Inconsistent With The Claimant s Rights Over The Statue As It Excludes The Claimant s Use And Possession Of The Statue i. The Third Respondent s donation of the Statue ii. The First and Second Respondents refusal to return the Statue (b) The Respondent s interference with the Claimant s rights over the Statue was intentional D. THE CLAIMANT IS THUS ENTITLED TO THE RETURN OF THE STATUE AND MONETARY COMPENSATION FOR THE DAMAGE UPON THE STATUE AGAINST THE FIRST AND SECOND RESPONDENT (a) The Arbitral Tribunal Has A Duty To Render An Effective Award (b) Assuming That The Laws of Nepal Are Applicable, The Legal Merits Of This Dispute Warrants The Return Of The Statue To The Claimant ii

4 (c) In The Event That The Laws Of Australia Are Applicable, The First And Second Respondent Remain Liable i. The First and Second Respondent shall be liable to return the Statue under the tort of detinue ii. The Claimant will also be entitled to monetary compensation for the damage caused to the Statue under the tort of conversion (d) Remedies In Cultural Property Disputes Indicate A Preference To The Physical Return Of The Objects (e) The Arbitral Award Is Enforceable Against The Parties In This Dispute PRAYER FOR RELIEF iii

5 INDEX OF AUTHORITIES Institutional Rules Kuala Lumpur Regional Centre For Arbitration i-arbitration Rules... 2, 4 International Conventions And International Instruments 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property... 6, 9, 11, 27 Convention on the Recognition and Enforcement of Foreign Arbitral Awards Expert Committee on State Ownership of Cultural Property, Model Provisions on State Ownership of Undiscovered Cultural Objects, Explanatory Report with Model Provisions and Explanatory Guidelines... 8 Municipal Legislations Ancient Monument Preservation Act , 10, 11, 12, 17, 24 Malaysian Arbitration Act Nepal Gazette 1969, Volume 18, No , 12 Nepal Gazette 1992, Part 3, Section 42, No Nepal Treaty Act , 8 Salmond on Torts (10th ed.) The Muluki Ain (General Code) iv

6 Cases Decided In Malaysia Bank Bumiputra (M) Bhd & Anor v. Lorrain Esme Osman [1987] CLJ (Rep) Government of India v. Cairn Energy India Pty Ltd [2012] 3 MLRA , 3 Cases Decided In Australia Banks v Ferrari & Ors [2000] NSWSC Bunnings Group Limited v. CHEP Australia Limited [2011] NSWSC , 22, 23 Cook v. Saroukos & AGS Holdings Pty Ltd. [1989] NTSC Flowfill Packaging Machines v. Fytore [1993] Aust. Tort Reps Grant v. YYH Holdings Pty Ltd. [2012] NSWCA John Pfeiffer v. Rogerson [2000] HCA Lloyd v. Osborne [1899] NSW Law Rp Munday v. Australian Capital Territory [2000] FCA Penfolds Wine Pty v. Elliot (1946) 74 CLR , 21, 25 Rendell v. Associated Finance Pty Ltd [1957] Vic Rp Cook v. Saroukos & AGS Holdings Pty Ltd. [1989] NTSC 29, 97 FLR Flowfill Packaging Machines v Fytore (1993) Aust. Tort Reps Grant v YYH Holdings Pty Ltd. [2012] NSWCA Reglon Pty Limited v. Hill & Ors [2006] NSWSC , 19 v

7 Cases Decided In Other Jurisdictions Boma Manufacturing Ltd. v. CIBC,[1996] 3 S.C.R Arsanovia Ltd. and Others v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm)... 1 Autocephalous Greek-Orthodox Church v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278 (7th Cir. 1990) Boma Manufacturing Ltd. v. CIBC, [1996] 3 S.C.R C v. D [2007] EWCA Civ 1282 [2007] All ER Clayton v. Le Roy [1911] 2 K.B Cohen v. Roche [1927] 1 KB Cuff v. Broadlands Finance Ltd [1987] 2 NZLR Dubai Islamic Bank PJSC v. Paymentech Merchant Services Incorporated [2001] 1 All ER (Comm) Fouldes v. Willoughby [1841] 8 M & W General and Finance Facilities Ltd v. Cooks Cars (Romford) Ltd [1963] 2 All ER Government of the Islamic Republic of Iran v. Barakat Galleries Ltd. [2007] EWCA Civ , 17, 24 Kuwait Airways Corp. v. Iraqi Airways Co. (No 6) [2004] EWHC Mobil Investments Canada Inc. & Murphy Oil Corporation v. Canada, Decision of the Tribunal on the Place of Arbitration (2009), ICSID CASE NO. ARB(AF)/07/ vi

8 MukundaHari Nepal v Govinda Joshi et al. Case of Injunction. N.K.P. 2047, Number 2, Decision Number Raiffeisen Zentralbank Österreich AG v Five Star Trading LLC and Others [2001] EWCA CIV , 5 Shagang South-Asia (Hong Kong) Trading Co. Ltd v. Daewoo Logistics [2015] EWHC 194 (Comm)... 2 Shashoua & Ors v. Sharma [2009] EWHC 957 (Comm)... 2 Whiteley Ltd v. Hilt [1918] 2 KB Winkworth v. Christie, Manson & Woods Ltd. And Another [1980] 1 All ER Textbooks and Treatises Halsbury's Laws of England, 2nd ed., vol Clerk & Lindsell on Torts, 19th Ed., Sweet & Maxwell, Dhooswan Saymi, The Lotus and The Flame: An Account of Nepal Culture... 9 Gavin Flood, An Introduction to Hinduism (1996) Halsbury s Laws of England, vol Salmond on Torts (10th ed.) Simon Greenberg, International Commercial Arbitration: An Asia-Pacific Perspective... 4 Jean-François Poudret, Sébastien Besson, Comparative Law of International Arbitration... 1, 3 vii

9 Articles And Commentaries Derek Fincham, How Adopting the Lex Originis Rule Can Impede the Flow of Illicit Cultural Property... 6 Loukas Mistelis, Reality Test: Current State Of Affairs In Theory And Practice Relating To Lex Arbitri... 2 Albert Jan van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New York Convention, ICCA Congress Series, 1998 Paris Volume 9, Kluwer Law International , 24 Derek Fincham, How Adopting the Lex Originis Rule Can Impede the Flow of Illicit Cultural Property, John Henry Merryman, Two Ways of Thinking About Cultural Property, 80 AM. J. INT L L. 831, 831, (1986)... 6 Kowalski (2009), Restitution : Art Treasures and War (2002), Restitution of Works of Art pursuant to Private and Public International Law, Recueil des Cours 80-90, The Hague: Martinus Nijhoff, in L.V. Prott (ed.), Witnesses to History Raechel Anglin, The World Heritage List: Bridging the Cultural Property Nationalism- Internationalism Divide, 20 YALE J.L. & HUMAN 241, 242 (2008) Symeon Symeonides, A Choice-of-Law Rule for Conflicts Involving Stolen Cultural Property, The National Dailies of Nepal, Gorkhapatra Corporation... 9 viii

10 Zimmer, Robert, Myths and Symbols in Indian Art and Civilization, Princeton University Press John Henry Merryman, Two Ways of Thinking About Cultural Property, 80 AM. J. INT L L Other Authorities ix

11 STATEMENT OF JURISDICTION 1. To ensure an expeditious resolution of the dispute, the Parties have agreed in writing to submit this dispute to arbitration. 2. The Parties have also agreed to resolve their dispute in accordance with the Kuala Lumpur Regional Centre for Arbitration i-arbitration Rules ( i-arbitration Rules ) under the auspices of the Kuala Lumpur Regional Centre for Arbitration ( KLRCA ). 3. The Parties do not dispute the validity and enforceability of the arbitration agreement, and any award rendered by the tribunal is acknowledged to be final and binding upon the Parties as per Rule 12(7) of KLRCA i-arbitration Rules. x

12 QUESTIONS PRESENTED I. What are the laws governing the procedures of this arbitration. II. Whether the laws of Nepal are applicable to the merits of this dispute. III. Which body of law shall prevail in the event of a conflict between the laws of Nepal and the 1970 UNESCO Convention On The Means of Preventing and Prohibiting the Illicit Import, Export, and Transfer of Ownership. IV. Whether the Claimant has proprietary rights over the Statue to demand for its return. V. Whether the Third Respondent may donate the Statue to the First Respondent. VI. Whether the First and Second Respondent may retain possession of the Statue. xi

13 STATEMENT OF FACTS The Parties To This Arbitral Proceeding The Claimant, the Government of Nepal, is the executive body and the central government of Nepal, and represents the interests of the State, its people, and the Tribhuvan University in the arbitral proceedings. The Respondents involved in the series of transfers concerning the subject matter in dispute are the Australian Museum, Sydney ( First Respondent ), the National Museum of Malaysia ( Second Respondent ), and Dr. John Thomas Smith, Jr. ( Third Respondent ). The Series Of Transfers Involving The Subject Matter The subject matter in dispute is the stone statue of Lord Vishnu ( Statue ), who is a pivotal deity in Hinduism the most adhered to religion in the State of Nepal. The Claimant and all the Respondents ( Parties ) to the dispute have accepted the finding of experts that the Statue is an authentic, rare and valuable Nepalese cultural object at least 300 years of age, and worth $100,000. Prior to its transfers to the Respondents, the Statue was first discovered by Nepalese sheep herders within the current geographical borders of Nepal. It was subsequently handed over to local government officials. In 2010, the Statue was put on display in the Chhauni Museum in Nepal. Through an arrangement with the Tribhuvan University, the Statue was then displayed in the University on the terms that the Statue shall be returned to the Chhauni Museum upon its request, or when the University is no longer able to display the Statue. xii

14 Visit By The Third Respondent In 2014, the Third Respondent was invited by the Dean of the Central Department of Sociology/Anthropology at the Tribhuvan University in Nepal to present several lectures at the University. After his last lecture, the Statue was handed to him by the Dean as a token of gratitude for his services, notwithstanding there being no contract or agreement between the two as to any remuneration. The Transfer Of The Statue By The Third Respondent It is indicated as part of the facts that Nepalese Export Regulations prohibit the export of objects over 100 years old that are valued for cultural and religious reasons. Prior to this proceeding, the Third Respondent had submitted an affidavit stating that he did not believe that the export prohibitions applied to the Statue, as he assumed it to be an excellent replica. However, as a well-known anthropologist that has found many lost antiquities in the Asia- Pacific, it was later revealed that he was capable of verifying the authenticity of antiques, and had known of the authenticity of the Statue upon receipt, contrary to the affidavit provided. Although the Third Respondent maintains that he had declared the Statue to the customs in Nepal and Australia, there is currently no evidence of the validity of these assertions. Subsequently, the Statue was transferred out of Nepal by the Third Respondent without the required certifications from the Department of Archaeology in Kathmandu. xiii

15 The Loan Agreement Between The First And Second Respondent Following the Statue s importation into Australia, the Third Respondent donated the statue to the First Respondent, where it was then displayed in the Australian Museum, Sydney, on April A month later, the Statue was loaned to the Second Respondent as part of a renewable two-year loan agreement ( Loan Agreement ) between the two. Prior to the Loan Agreement, it is indicated that the First and Second Respondents either knew, or could have very easily been aware of the export prohibitions in Nepal. However, both Respondent museums did not seek for the relevant official documentation or export certifications pertaining to the legality of the Statue s transfer. Nepalese Intervention And Dispute Resolution After being informed that the Statue had been transferred out of Nepal, the Claimant had requested for the statue to be returned to Nepal. However, both the First and Second Respondent have refused the request, asserting that it was a gift from Tribhuvan University. Following the Respondents refusal, the Parties to the dispute have agreed to submit this dispute to binding arbitration in Kuala Lumpur, Malaysia to avoid expensive and time consuming litigation. Pursuant to that agreement, the dispute is to be held under the auspices of the KLRCA. xiv

16 SUMMARY OF PLEADINGS I. Malaysian law governs the procedural aspects of this arbitration and the arbitration agreement, because the seat of arbitration is in Kuala Lumpur, Malaysia. II. The laws of Nepal will govern the substantive aspects of this dispute as the relevant conflict of laws principles of the lex originis, and lex loci delicti indicate as such. III. If there is a conflict between international law and Nepalese law in the present, the former will prevail. IV. The First and Second Respondent is liable to return the Statue to the Claimant under the laws of Nepal given that the Claimant has a requisite right to the statue by virtue of the Ancient Monument Preservation Act V. Further, the Claimant may demand for the return of the Statue because it is an inalienable object. The Dean s transfer of the Statue to the Third Respondent is prohibited and accordingly, the Third Respondent had no right to donate the Statue to the First Respondent. VI. Even assuming that Australian law is the applicable law, the First and Second Respondent will remain liable to return the Statue to the Claimant. This is because the Claimant either has ownership, actual possession, or an immediate right to possession over the Statue at the time of its conversion and wrongful detention by the First and Second Respondent. xv

17 VII. The First and Second Respondent are liable under the tort of detinue since the Claimant has the requisite title to pursue such a claim. The Respondents unreasonable refusal to return the Statue following the Claimant s demand is sufficient to constitute the tort of detinue. VIII. The First Respondent and Second Respondent are also liable for the damages to the Statue under the tort of conversion, since the Statue was damaged after it had left Nepal under the Respondents possession. Further, the Respondents transfer and refusal to return the Statue are also intentional interferences with the Claimant s rights over the Statue. Nonetheless, the parties have agreed that the quantification of damages will be resolved in a separate proceeding after this arbitration has been concluded. IX. The legal merits of this dispute warrant the return of the Statue to the Claimant under the laws of Nepal. Alternatively, in the event that the laws of Australia are applicable, the First and Second Respondents remain liable to return the Statue. X. Further, remedies in cultural property disputes indicate a preference to the physical return of the objects. In which case, such a remedy is considered as an effective award that is enforceable against the parties in this dispute. xvi

18 PLEADINGS I. THE PROCEDURAL LAW OF THE ARBITRATION IS THE LAW OF MALAYSIA AND THE SUBSTANTIVE LAW GOVERNING THE DISPUTE IS THE LAWS OF NEPAL 1. In an international arbitration, multiple laws may govern different aspects of the arbitration. Generally, the laws governing the procedural aspects and the substantive merits of the dispute may be different Although the Claimant and the Respondents ( Parties ) have not expressly chosen an applicable law, they have agreed to use the KLRCA i-arbitration Rules ( i- Arbitration Rules ). A. THE LAWS OF MALAYSIA GOVERN THE PROCEDURES OF THIS ARBITRATION 3. The procedural aspects of an arbitral proceeding is regulated by the institutional rules chosen by the parties and the law of the seat of arbitration. 2 (a) Kuala Lumpur, Malaysia is the seat of arbitration 4. The importance of the seat of arbitration stems from the theory of the jurisdictional nature of arbitration 3, where an arbitration operates within the framework of a national legal order 1 Arsanovia Ltd. and Others v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm), para. 9; Kuwait Airways Corp. v. Iraqi Airways [2002] 2 AC 883, pg C v. D [2007] EWCA Civ 1282 [2007] All ER 61, para. 17; Government of India v. Cairn Energy India Pty Ltd [2012] 3 MLRA 1, pg. 3, para. 9(1). 1

19 and never in a vacuum. In Dubai Islamic Bank PJSC v. Paymentech Merchant Services Incorporated, it was held that where the parties have not designated a seat of arbitration, the arbitral panel must consider all significant factors in determining an appropriate seat of arbitration These factors include the proposed procedure, the centrality of the dispute, the subject matter in dispute, and the convenience of the parties. 5 In the present dispute, Malaysia is the most appropriate seat of arbitration for the following reasons: 5.1. Pursuant to Rule 6(1) of the i-arbitration rules, Malaysia shall be the seat of arbitration, given that there is no other appropriate seat Though the parties involved are from different States, the express choice of venue is a strong indication of the parties intention as to the seat of arbitration The subject matter is currently located in Kuala Lumpur, Malaysia. As such, it is expeditious and efficient to enforce the arbitral award within the jurisdiction of Malaysia, in accordance with Malaysian rules of procedures. 8 3 Loukas Mistelis, Reality Test: Current State Of Affairs In Theory And Practice Relating To Lex Arbitri, pg Dubai Islamic Bank PJSC v. Paymentech Merchant Services Incorporated [2001] 1 All ER (Comm) 514, para Ibid. 6 Kuala Lumpur Regional Centre For Arbitration i-arbitration Rules, Rule 6(1). 7 Shashoua & Ors v. Sharma [2009] EWHC 957 (Comm), para. 26; Shagang South-Asia (Hong Kong) Trading Co. Ltd v. Daewoo Logistics [2015] EWHC 194 (Comm), pg. 4, para

20 (b) As Malaysia is the seat of arbitration, the laws of Malaysia shall govern the procedures of this arbitration 6. It is trite that the laws of the seat of arbitration regulate the powers of an arbitral tribunal and supervise the arbitral award of an arbitral proceeding Since the seat of arbitration of the present proceedings is in Malaysia, the laws of Malaysia shall be the procedural law of this arbitration, and the determination of the applicable law (lex causae) shall primarily be governed by the 2005 Arbitration Act of Malaysia ( MAA 2005 ). 10 B. THE LAWS OF NEPAL GOVERN THE SUBSTANTIVE MATTERS OF THIS ARBITRATION (a) The Appropriate Conflict Of Laws Principles Indicate The Laws Of Nepal To Be The Applicable Law 8. S.30(4) of the MAA 2005 provides that where parties have failed to agree upon the applicable law, the arbitral tribunal shall apply the law determined by the conflict of laws rules. 8 Mobil Investments Canada Inc. & Murphy Oil Corporation v. Canada, Decision of the Tribunal on the Place of Arbitration (2009), ICSID CASE NO. ARB(AF)/07/4, para Government of India v. Cairn Energy India Pty Ltd [2012] 3 MLRA 1, pg. 6, para. 25; Jean-François Poudret, Sébastien Besson, Comparative Law of International Arbitration, pg MAA 2005, S.30(4). 3

21 9. Although the arbitral tribunal shall apply the conflict of law rules, this tribunal is not expressly restricted to only apply the existing principles under the laws of Malaysia In the present dispute, a rigid adherence to the conflict rules of the lex arbitri will not provide a satisfactory solution pertaining to the objective of identifying the most appropriate law. 12 This is because a mechanistic application of conflict rules, without regard to the consequences would conflict with the purpose for which they were conceived Thus, the arbitral tribunal is not bound by the conflict of laws principles of Malaysia due to the following reasons: S.30(4) MAA, in making reference to the conflict of laws rules, does not restrict the arbitral tribunal solely to the application of the conflict of laws principles in Malaysia There is currently no conflict of laws rules in Malaysia pertaining to cultural property disputes. Thus, it is likely that the lex fori would classify the Statue as a mere movable and thus would not accord to it the same protection as the Claimant s State. 11 Simon Greenberg, International Commercial Arbitration: An Asia-Pacific Perspective, pg. 104, KLRCA i-arbitration Rules, Article Raiffeisen Zentralbank Österreich AG v Five Star Trading LLC and Others [2001] EWCA CIV 68, para

22 11.3. As per the Raiffeisen Zentralbank case 14, conflict of laws rules may require redefinition or modification, or new categories may have to be recognised accompanied by new rules. Thus, the determination of the applicable law hinges not upon the application of rigid rules, but upon a search for appropriate principles to meet particular situations. 15 This is necessary to achieve the overall aim of choosing the most appropriate law under Article 35 of the i-arbitration Rules. 12. There are 2 appropriate conflict of law rules that may apply to govern the transfer of the Statue in the present dispute: i. Lex originis 13. With regard to the validity of a transfer of cultural property, the most appropriate principle governing cultural property disputes is the lex originis, i.e. the laws of the nation of origin The Claimant submits that the lex originis rule better appreciates the distinct nature of cultural objects. It gives primacy to the laws of the originating state as the jurisdiction with the most tangible connection to cultural properties discovered within its borders, and also 14 Raiffeisen Zentralbank Österreich AG v. Five Star Trading LLC and Others [2001] EWCA CIV 68, para Ibid., para Symeon Symeonides, A Choice-of-Law Rule for Conflicts Involving Stolen Cultural Property,

23 aids in enhancing the security and transparency of cross-border cultural property transfers This is consistent with provisions of the 1970 UNESCO Convention on the Means of Preventing and Prohibiting the Illicit Import, Export, and Transfer of Ownership ( 1970 UNESCO Convention ), which imposes State obligations on Member States to recognise the indefeasible right of every State Party to prohibit the export of, and protect cultural objects found within their nation In the present dispute, given that the Statue was discovered within the borders of Nepal, and bears archaeological significance to the State, it would amount to a cultural property 19 forming part of Nepalese cultural heritage. 20 Thus following the lex originis rule, Nepal is most closely connected to the Statue. Consequently, it shall have the benefit of applying its legal rules to the present dispute. 21 ii. In the alternative, the lex loci delicti rule also indicates the laws of Nepal to be applicable in the present dispute 17 Derek Fincham, How Adopting the Lex Originis Rule Can Impede the Flow of Illicit Cultural Property, UNESCO Convention, Art.5, Art.13(d) UNESCO Convention, Article 1(e); John Henry Merryman, Two Ways of Thinking About Cultural Property, 80 AM. J. INT L L. 831, 831, (1986) UNESCO Convention, Article 4(b). 21 Autocephalous Greek-Orthodox Church v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278 (7th Cir. 1990). ; Ibid., n

24 17. In the present case, the Third Respondent has committed a wrongful act with regard to the wrongful transfer of the Statue Thus, in applying the relevant conflict of laws rules, the proper law of the dispute would entail the application of the lex loci delicti, the laws of the jurisdiction where the alleged tort was committed Ergo, the laws applicable to the substantive matters of this dispute between the Parties will still remain to be the laws of Nepal. II. IF THERE IS A CONFLICT BETWEEN THE 1970 UNESCO CONVENTION AND NEPALESE LAW, THE FORMER WILL PREVAIL 20. S.9(1) of the Nepal Treaty Act provides:- In case of the provisions of a treaty, to which Nepal or Government of Nepal is a party upon its ratification accession, acceptance or approval by the Parliament, inconsistent with the provisions of prevailing laws, the inconsistent provision of the law shall be void for the purpose of that treaty, and the provisions of the treaty shall be enforceable as good as Nepalese laws Moot Problem, pg. 2, [3] Nepalese Intervention. 23 Bank Bumiputra (M) Bhd & Anor v. Lorrain Esme Osman [1987] CLJ (Rep) 472 at pg. 476; John Pfeiffer v. Rogerson [2000] HCA Nepal Treaty Act 1990, S.9(1). 7

25 21. Since Nepal s ratification of the 1970 UNESCO Convention, 25 it has implemented provisions of the Convention into its domestic legislation through the Ancient Monument Preservation Act 1996 ( AMPA ). 22. Thus, there are no issues of conflict or inconsistencies between both bodies of law. Nevertheless, in the event that there is ambiguity in the laws of Nepal in the present case, the Convention shall prevail by virtue of the 1990 Act. III. THE FIRST AND SECOND RESPONDENT IS LIABLE TO RETURN THE STATUE TO THE CLAIMANT UNDER THE LAWS OF NEPAL A. THE CLAIMANT HAS THE REQUISITE RIGHT TO OBTAIN CUSTODY OF THE STATUE UPON ITS DISCOVERY 23. Under the 1970 UNESCO Convention, the term State Ownership over cultural property emphasises the role of the state as a custodian of cultural property, without the aim of enriching the state Following the incorporation of the 1970 UNESCO Convention into Nepal s domestic laws 27, the means prescribed for the Claimant to obtain custody of cultural property under 25 Moot Problem, pg. 3, fn Expert Committee on State Ownership of Cultural Property, Model Provisions on State Ownership of Undiscovered Cultural Objects, Explanatory Report with Model Provisions and Explanatory Guidelines. 27 Nepal Treaty Act 1990, S.9(1). 8

26 the AMPA is to give effect to its right of ownership, in accordance to the standards of ownership under the 1970 UNESCO Convention. 25. Pursuant to Article 1 of the 1970 UNESCO Convention, the Claimant may designate any object to be of archaeological importance. 28 The Department of Archaeology will then obtain custody over any archaeological object found in Nepal, except those under private ownership The Claimant will now establish that it has the right to custody of the Statue since its discovery. (a) The Statue is an Archaeological object 27. The Claimant submits that the Statue is an archaeological object due to the following reeasons: The Statue is an inscribed idol sculpted in stone, in the image of Lord Vishnu; The Statue is a movable object which depicts the history of Nepal. The Statue depicts the historical accuracy of the beliefs held by the Nepalese people, with regard to Lord Vishnu and the national flag of Nepal UNESCO Convention, Article AMPA, S.17A. 30 AMPA, S.2(b). 31 Dhooswan Saymi, The Lotus and The Flame: An Account of Nepal Culture, pg. 10; The National Dailies of Nepal, Gorkhapatra Corporation. 9

27 27.3. Moreover, the Statue fulfils the age requirement for archaeological objects to be at least 100 years old, 32 given that it is estimated to be at least 300 years of age. 33 (b) The Statue was found in Nepal 28. Upon the discovery of the statue in 2010, it was placed on display at the National Museum of Nepal, before being moved to the Tribhuvan University in Kathmandu, Nepal It is not disputed by the Parties that the Statue was found within the current geographical borders of Nepal by sheep herders, before it was handed over to Nepalese governmental officials, 35 thus fulfilling the second element. (c) The Statue has no private owner 30. For an archaeological object to be privately owned, the owner of such an object is obligated to register it with the Department of Archaeology. 36 Failing which, the Department of Archaeology is authorised to obtain custody of the said object from a private owner Nepal Gazette 1969, Volume 18, No Moot Problem, pg. 2, fn Clarifications, pg. 2, [B], Question Further Clarifications, pg. 3, [C], Question AMPA, S.13(2). 37 AMPA, S.12(2B). 10

28 31. Herein, the facts have indicated that the statue has never been registered with the regulating bodies of Nepal, 38 nor has there been a competing claim by any private party over the Statue since its discovery. 32. In absence of any prior private owners, the Claimant has a right of custody over the Statue. C. THE CLAIMANT MAY DEMAND FOR THE RETURN OF THE STATUE BECAUSE IT IS AN INALIENABLE OBJECT 33. Under Article 13(d) of the 1970 UNESCO Convention, it is the Claimant s indefeasible right to classify and declare certain cultural properties as inalienable in accordance with its domestic laws. Such cultural properties will be prohibited from exports, and the Claimant may facilitate recovery of such property in accordance to the domestic laws of Nepal Further, the status of inalienability may be implemented through export restrictions over objects of a class. 40 Although the Statue is not specifically classified to be inalienable, 41 all national assets under the class of artistic, historical, or archaeological objects are prohibited from export under the AMPA. 42 (a) The Dean s transfer of the Statue to the Third Respondent is prohibited 38 Further Clarifications, pg. 2, [B], Question UNESCO Convention, Article 13(d). 40 Export and Import (Control) Act 1957, S.3(f) 41 Clarifications, pg. 3, [B], Question AMPA, S.13(1) 11

29 35. S.13 of the AMPA prohibits the transfer of objects prescribed by the Claimant through a notification published in the Nepal Gazette, even within Nepal. All transfer of such objects will require prior approval from the government Notwithstanding that the Tribhuvan University is an autonomous body capable of disposing movable property, 44 the Dean s transfer of the Statue to the Third Respondent is prohibited under S.13 of the AMPA for the following reasons: The Statue is a sculpted image of Lord Vishnu seated between goddesses Lakshmi and Garuda, 46 all of whom are Hindu deities. 47 Hence, it is an object prescribed in the Nepal Gazette of 1992 to be under the class of Idols of Gods and Goddesses, which are of archaeological importance In any event, the Statue is also classified as an artistic object under the Nepal Gazette of Further, the necessary approval for the transfer of the Statue was not requested or issued by the Department of Archaeology AMPA, S.13(1) 44 Tribhuvan University Act 1992, S.4(3). 45 Export and Import (Control) Act 1957, S.3(1)(f); AMPA, S.13(1). 46 Moot Problem, pg. 1, [1] Background. 47 Gavin Flood, An Introduction to Hinduism (1996), pg. 17; Zimmer, Robert, Myths and Symbols in Indian Art and Civilization, Princeton University Press, pg Nepal Gazette 1992, Part 3, Section 42, No Nepal Gazette 1969, Volume 18, No

30 36.4. The Dean s scope of authority over the Statue extends only to the 'care and protection of the Statue. 51 (b) Accordingly, the Third Respondent has no right to donate the Statue to the First Respondent 37. Pursuant to the General Code of Nepal, a person shall not donate or gift any property, other than a property which he or she can deal with at his or her own will, unless having obtained a deed of consent executed or witnessed by those who have right in such a property In the present dispute, the Statue was merely on display at the Tribhuvan University, on the terms that the statue is to be returned to the Chhauni Museum of Nepal, upon its request Hence, the Third Respondent s transfer of the Statue to the First Respondent is prohibited, because: The Dean has no right to gift the Statue without the permission of the institutions represented by the Claimant; 50 Moot Problem, pg. 2, [2] The Statue. 51 Clarifications, pg. 2, (B), Question The Muluki Ain (General Code), Part 3, Chapter-19, No. 1; MukundaHari Nepal v Govinda Joshi et al. Case of Injunction. N.K.P. 2047, Number 2, Decision Number 4071, pg Further Clarifications, pg. 1, [A], Question 1. 13

31 39.2. Thereby, the Third Respondent cannot donate the Statue to the First Respondent in the absence of such a right. 40. Consequently, the Claimant will be entitled to the Statue against the First and Second Respondent. IV. EVEN ASSUMING THAT AUSTRALIAN LAW IS THE APPLICABLE LAW, THE RESPONDENTS REMAIN LIABLE TO RETURN THE STATUE TO THE CLAIMANT 41. It is submitted that the First and Second Respondents will remain liable to the Claimant under both torts of conversion and detinue, which are independent of one another. 42. The tort of conversion is a single wrongful act, and the cause of action accrues at the date of the conversion. On the other hand, the tort of detinue is a continuing cause of action which accrues at the date of the wrongful refusal to deliver up the goods. 54 A. THE CLAIMANT HAS THE REQUISITE PROPRIETARY TITLE TO PURSUE AN ACTION IN DETINUE AND CONVERSION 43. It is first submitted that the Claimant has the requisite proprietary title to the statue, as the Claimant either had ownership, actual possession, or an immediate right to possession over 54 General and Finance Facilities Ltd v. Cooks Cars (Romford) Ltd [1963] 2 All ER 314, pg

32 the Statue at the time of its conversion and wrongful detention by the First and Second Respondent Further, the Claimant has not abandoned the Statue because the Claimant has indicated its willingness to assert superior title as an owner of the Statue based on the following submissions:- 56 (a) The Claimant s actual possession of the Statue is sufficient to bring an action under the tort of detinue and conversion Prior to the Third Respondent s possession of the Statue, the Statue was only on display in Tribhuvan University, upon the Chhauni Museum s permission. 58 These institutions are represented by the Claimant in this arbitration 59, thus, the Claimant had actual possession of the Statue prior to the Third Respondent s possession. (b) The Claimant Has Acquired Ownership Over The Statue Since Its Discovery 55 Reglon Pty Limited v. Hill & Ors [2006] NSWSC 1360, para. 27; Winkworth v. Christie, Manson & Woods Ltd. And Another [1980] 1 All ER 1121, pg Munday v. Australian Capital Territory [2000] FCA 653, para Reglon Pty Limited v. Hill & Ors [2006] NSWSC 1360, para. 27; Winkworth v. Christie, Manson & Woods Ltd and Another [1980] 1 All ER 1121, pg Further Clarifications, pg. 1, [A], Question Clarifications, pg. 4, [C], Question 1. 15

33 46. The Claimant s right to ownership based on its domestic laws of Nepal must have an effect equivalent to ownership under the applicable law of Australia. In Iran v. Barakat Gallery Ltd.:- In deciding whether Iran has ownership under Iranian law, it is important to bear in mind that it is not the label which foreign law gives to the legal relationship, but its substance, which is relevant. If the rights given by Iranian law are equivalent to ownership in English law, then English law would treat that as ownership for the purposes of the conflict of laws Further and generally, rights of ownership includes the following factors: Rights to exclusive enjoyment; Rights of alienation, and recovery of possession of the property from all other persons; Rights to maintenance, alteration, and destruction. i. The Claimant has exclusive rights to the Statue 48. In accordance with paragraphs 23 to 32 above, the Claimant is the only entity in Nepal that may obtain custody of archaeological objects upon its discovery under S.17 of the AMPA, and may confiscate such objects as a result of an illicit transfer under S.13 of the same act. 60 Government of the Islamic Republic of Iran v. Barakat Galleries Ltd. [2007] EWCA Civ 1374, para Ibid., para. 73; Halsbury s Laws of England, vol. 35, para

34 ii. The Statue is an object that is inalienable and the Claimant may facilitate recovery for its possession 49. As per paragraphs 34 to 36, the Statue is an object that is inalienable under the laws of Nepal, pursuant to the Claimant s rights to declare inalienability over objects of a certain class. iii. The Claimant is empowered with the right to maintain the Statue 50. The Claimant may conserve or cause to conserve the most rare types of arts or sculptures or monuments showing the importance of any specific time. 62 Thus the Claimant s exclusive right to conserve the Statue is further indication of a right of ownership. (c) The Claimant has an immediate right to possession over the Statue 51. Provisions of the laws conferring upon state authorities a right to cultural property upon discovery and seizure in the event of an illicit transfer are indicative of a State s right to immediate possession over antiquities Therefore, the Department of Archaeology of Nepal has a right to immediate possession of the Statue both under S.13(5) and S.17A of the AMPA because: All archaeological objects shall be under the custody of the Department of Archaeology of Nepal; 62 AMPA, S.16A. 63 Government of the Islamic Republic of Iran v. Barakat Galleries Ltd. [2007] EWCA Civ 1374, para

35 52.2. Objects exported in breach of S.13(1) of the AMPA may be liable to confiscation by the Claimant. 53. For the same reasons in paragraphs 23 to 32, and further in 33 to 36, these provisions are applicable to the Statue and will thus confer a right to immediate possession upon the Claimant. (d) The Claimant s proprietary right over the statue is recognised under the Protection of Movable Cultural Heritage Act 1986 of Australia. 54. Given that the 1970 UNESCO Convention grants across-the-board recognition of other States Parties export controls on cultural objects, thus the fulfilment of the following elements under S.14 of the Protection of Movable Cultural Heritage Act 1986 ( PMCHA ) will provide recognition for the Claimant s rights to demand for the return of its cultural object: The object is a protected object under the laws of the exporting state; The export of the object is prohibited under the laws of the exporting state. 55. In accordance to the aforementioned, the Claimant submits that the export of the Statue is prohibited under S.13(1) of the AMPA. Further, the Statue is protected as a cultural property that is archaeological in nature under S.17A of the AMPA. Hence, the Claimant s right to demand the return of the Statue will be equally recognised under the PMCHA. 18

36 56. Having established that the Claimant has the requisite proprietary rights over the statue, it is submitted that the Respondents are liable to the Claimant under the tort of detinue and the tort of conversion. B. THE FIRST AND SECOND RESPONDENT ARE LIABLE UNDER THE TORT OF DETINUE 57. Since the Claimant has the requisite title to pursue the tort of detinue, the Respondent s unreasonable refusal to return the Statue following the Claimant s demand is sufficient to constitute the tort of detinue Further, it is necessary in detinue that the demand for a return of goods and a refusal must take place prior to the commencement of proceedings. 65 The demand for the return of goods must be specific 66, and the indication of a place of delivery is sufficient. 67 This requirement is significant because it allows a defendant who is innocently holding the goods of another to return them and thereby avoid litigation Prior to the commencement of this arbitration, the Claimant had demanded for the Statue to be immediately returned to Nepal, wherein both the Australian Museum and the National 64 Grant v. YYH Holdings Pty Ltd. [2012] NSWCA 360, para Clayton v. Le Roy [1911] 2 K.B. 1031, pg Reglon Pty Ltd v. Hill & Others [2006], para Lloyd v. Osborne [1899] NSW Law Rp 24, pg Clayton v. LeRoy, [1911] 2 K.B. 1031, pg

37 Museum of Malaysia have refused to return the Statue 69. Therefore, both the First and Second Respondent are liable under the tort of detinue. C. THE FIRST AND SECOND RESPONDENT ARE LIABLE UNDER THE TORT OF CONVERSION 60. The tort of conversion is the dealing of another s property in a repugnant manner that constitutes an unjustifiable denial of another s right over the property. 70 The tort is one of strict liability and the defendant s innocence in handling or disposing of a chattel will not absolve him or her of liability Generally, the tort of conversion of goods consists of the following elements: The defendant s conduct was inconsistent with the rights of the owner or other persons entitled to possession of the property, so as to exclude him from the use and possession of the property The defendant s conduct was intentional; (a) The Third Respondent s Donation And The First And Second Respondents Refusal To Return The Statue Is Inconsistent With The 69 Moot Problem, pg. 2, [3] Nepalese Intervention. 70 Penfolds Wine Pty v. Elliot [1946] 74 CLR 204, pg. 229; Banks v Ferrari & Ors [2000] NSWSC 874, para. 57 and 58; Salmond on Torts (10th ed.), pg Boma Manufacturing Ltd. v. CIBC, [1996] 3 S.C.R. 727, para Kuwait Airways Corp. v. Iraqi Airways Co. (No 6) [2004] EWHC 2603, para. 220; Kuwait Airways Corp. v. Iraqi Airways Co. [2002] UKHL 19, para

38 Claimant s Rights Over The Statue As It Excludes The Claimant s Use And Possession Of The Statue 62. Although the mere asportation or possession of the Claimant s property in itself would not constitute the tort of conversion, conversion occurs when the Respondent s degree of user amounts to employing the goods as if they were one s (Respondent s) own. 73 i. The Third Respondent s donation of the Statue 63. Further, conversion may take the form of a disposal of the property with an intended transfer of an interest, followed by delivery The delivery of goods to a third party with the intent to pass ownership, or even possession, constitutes conversion. In Cook v. Saroukos & AGS Holdings Pty Ltd.:- Conversion here is proved. Either the first defendant used, or he gave possession to the second defendant to use, the goods without the plaintiff's authority The Claimant submits that Third Respondent s unauthorised donation of the Statue is a wrongful disposal of the Claimant s interest in the Statue, amounting to conversion upon the physical delivery of the Statue to the First Respondent Bunnings Group Limited v. CHEP Australia Limited [2011] NSWSC 342, para. 146; Flowfill Packaging Machines v. Fytore [1993] Aust. Tort Reps , para. 62 and Penfolds Wine v. Elliot (1946) 74 CLR 204; para Cook v. Saroukos & AGS Holdings Pty Ltd. [1989] NTSC 29, 97 FLR 33, para Penfolds Wine v. Elliot [1946] 74 CLR 204, para

39 ii. The First and Second Respondents refusal to return the Statue 66. An act of conversion may occur by the retaining of goods after a demand. The act of retention is one that is repugnant to the owner's right to possession expressed by the call for making available or return of the goods. 77 Furthermore, the fact that such a demand and a refusal have taken place generally constitutes evidence of an assertion of dominion, and is a method of establishing conversion by detention It is submitted that the Respondent s subsequent refusal to return the property after the Claimant s lawful demand 79 is a positive action that excludes the Claimant s right to possession 80. (b) The Respondent s interference with the Claimant s rights over the Statue was intentional 68. The tort (conversion) is one of strict liability and thus a mental element in knowing that a wrong is being committed is not required Bunnings Group Limited v. CHEP Australia Limited [2011] NSWSC 342, para Cuff v. Broadlands Finance Ltd [1987] 2 NZLR 343, 346 (CA), Kuwait Airways Corp v. Iraqi Airways Co (No. 4 and 5) [2002] UKHL 19, para Moot Problem, pg. 2, [2]. 80 Clayton v. Le Roy [1911] 2 KB 1031, pg ; Kuwait Airways Corp. v. Iraqi Airways Co. [2002] UKHL 19, para. 37; Bunnings Group Limited v. CHEP Australia Limited [2011] NSWSC 342, para Bunnings Group Limited v. CHEP Australia Limited [2011] NSWSC 342, para

40 69. Therefore, an intention by the Respondent to exercise dominion over the Statue inconsistent with the Claimant s rights, who is entitled to the use of it at all times and in all places, is sufficient to prove a tort of conversion. This is regardless of any mistaken belief held by the Respondent that a person other than the plaintiff is the true owner, or that his/her actions were lawful This is especially so when the effect of the Third Respondent exporting and subsequently donating the statue would deprive the Claimant of its ownership altogether, whether permanently or for a substantial time Also, the First and Second Respondents unconditional refusal to return the Statue upon the Claimant s request 84 is an intentional interference with the Claimant s rights over the Statue. 85 D. THE CLAIMANT IS THUS ENTITLED TO THE RETURN OF THE STATUE AND MONETARY COMPENSATION FOR THE DAMAGE UPON THE STATUE AGAINST THE FIRST AND SECOND RESPONDENT (a) The Arbitral Tribunal Has A Duty To Render An Effective Award 82 Fouldes v. Willoughby [1841] 8 M & W 540, para. 548; Rendell v. Associated Finance Pty Ltd [1957] Vic Rp 88, para Fouldes v. Willoughby [1841] 8 M & W 540, para. 549; Halsbury's Laws of England, 2nd ed., vol. 33, pg Moot Problem, pg. 2, [2] The Statue. 85 Bunnings Group Limited v. CHEP Australia Limited [2011] NSWSC 342, para. 121; Clerk & Lindsell on Torts, 19th Ed., Sweet & Maxwell, 2006, pg [17.26]. 23

41 72. In addition, it is the duty of this arbitral tribunal proceeding to provide a suitable and enforceable award in this proceeding The Claimant submits that no other remedies would be appropriate other than the return of the Statue to Nepal as this dispute does not pertain to the commercial or economic interests of the Claimant. 74. Rather, it is a patrimonial claim over the recognition of a State s right over cultural property forming part of its heritage. 87 (b) Assuming That The Laws of Nepal Are Applicable, The Legal Merits Of This Dispute Warrants The Return Of The Statue To The Claimant 75. Following the Respondents failure to comply with Nepalese laws, the First and Second Respondent have no right to retain possession of the Statue. Further, the Third Respondent s violation of Nepalese laws will warrant the confiscation of the Statue by the Claimant. 88 (c) In The Event That The Laws Of Australia Are Applicable, The First And Second Respondent Remain Liable 86 Albert Jan van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New York Convention, ICCA Congress Series, 1998 Paris Volume 9, Kluwer Law International 1999, para Government of the Islamic Republic of Iran v. Barakat Galleries Ltd. [2007] EWCA Civ 1374, para AMPA, S.13(5), S.17A. 24