MEMORANDUM FOR CLAIMANT

Transcription

1 TWENTY-FIRST ANNUAL WILLEM C. VIS INTERNATIONAL COMMERCIAL ARBITRATION MOOT MEMORANDUM FOR CLAIMANT MASARYK UNIVERSITY On behalf of: CLAIMANT Innovative Cancer Treatment Ltd 46 Commerce Road Capital City Mediterraneo Against: RESPONDENT Hope Hospital 1-3 Hospital Road Oceanside Equatoriana Boris BARABÁŠ Klára BAŽANTOVÁ František HALFAR Jan HLUBUČEK Martin HOSTINSKÝ Lukáš KUDLÁČ Iveta ROHOVÁ

2 TABLE OF CONTENT LIST OF ABBREVIATIONS... v INDEX OF AUTHORITIES...vii BOOKS...vii ARTICLES...x INDEX OF CASES AND AWARDS... xvi INDEX OF STATUTES, RULES AND TREATIES...xix SUMMARY OF FACTS... 1 SUMMARY OF ARGUMENTS... 3 A. ARGUMENTS WITH REGARDS TO THE PROCEDURE... 5 I. THE TRIBUNAL HAS JURISDICTION OVER CLAIMS ARISING OUT OF BOTH FSA AND SLA PARTIES INCLUDED A VALID ARBITRATION CLAUSE INTO FSA PARTIES agreed to submit their disputes arising out of FSA to the Tribunal Unenforceability of review mechanism has no impact on PARTIES consent to arbitrate... 7 a. RESPONDENT was not legally obliged to include review mechanism into FSA... 7 b. RESPONDENT is not deprived of its protection against manifestly erroneous awards In addition, CLAIMANT s choice between arbitration and court proceedings does not affect the validity of arbitration clause in FSA... 8 a. CLAIMANT had the right to choose between arbitration and litigation... 8 b. Even if the CLAIMANT s choice was not effective, the arbitration clause would remain intact ARBITRATION CLAUSE IN FSA COVERS ALSO CLAIMS ARISING OUT OF SLA II. THE TRIBUNAL SHALL HEAR THE CLAIMS ARISING OUT OF BOTH FSA AND SLA IN A SINGLE SET OF PROCEEDINGS REQUIREMENTS UNDER ART. 10(1) CEPANI RULES DO NOT HAVE TO BE FULFILLED TO ALLOW JOINDER IN THE PRESENT CASE THE TRIBUNAL SHOULD JOIN THE CLAIMS ARISING OUT OF FSA AND SLA IN A SINGLE ARBITRATION The claims arising out of FSA and SLA are factually related The claims arising out of FSA and SLA are legally related Single arbitration is in compliance with the principle of procedural economy B. ARGUMENTS WITH REGARDS TO THE MERITS ii

3 I. PARTIES AGREED ON THE INCLUSION OF CLAIMANT S 2011 STANDARD TERMS INTO SLA THE 2011 STANDARD TERMS WERE INCLUDED INTO SLA BY VIRTUE OF THE REFERENCE THEREIN CLAIMANT referred to the 2011 Standard Terms in its offer RESPONDENT accepted the inclusion of the 2011 Standard Terms without requiring CLAIMANT to make them available IN ANY EVENT, CLAIMANT MADE THE 2011 STANDARD TERMS AVAILABLE TO RESPONDENT CLAIMANT made the 2011 Standard Terms available to RESPONDENT by publishing them on its website Publication of the Mediterranean version of the 2011 Standard Terms was sufficient to make them available II. THE CHOICE-OF-LAW CLAUSE CONTAINED IN THE 2011 STANDARD TERMS ENTAILS THE APPLICATION OF THE CISG THE TRIBUNAL SHOULD APPLY THE LAW CHOSEN BY PARTIES THE REFERENCE TO THE "LAW OF MEDITARRANEO" ENTAILS THE APPLICATION OF THE CISG The CISG forms a part of the law of Mediterraneo By choosing the law of Mediterraneo PARTIES did not exclude the CISG a. The wording of the choice-of-law clause does not exclude the CISG b. There are no other circumstances which may lead to the exclusion of the CISG III. THE CISG GOVERNS THE CLAIM UNDER SLA SLA IS A SALES CONTRACT IN THE SENSE OF THE CISG The goods delivered under SLA, i.e. magnets and equipment including software are goods under the CISG The fact that CLAIMANT retains intellectual property rights has no impact on the nature of SLA as a sales contract DATA PROVIDED BY RESPONDENT ARE NOT SUBSTANTIAL PART OF MATERIALS NECESSARY FOR THE PRODUCTION OF THE GOODS DELIVERED Data provided by RESPONDENT cannot be considered materials necessary for the production of the active scanning technology In any event, the data are not a substantial part of the materials necessary for the production of the active scanning technology THE PREPONDERANT PART OF CLAIMANT S OBLIGATIONS DID NOT CONSIST IN THE SUPPLY OF LABOR OR OTHER SERVICES iii

4 3.1. The development of the software cannot be regarded as a service or labor under Art. 3(2) CISG a. There was no obligation under SLA regarding the original development of software b. The subsequent development of the software is a part of the obligation to deliver, not a supply of services or labor under Art. 3(2) CISG Value of the goods delivered pursuant to SLA significantly exceeds the value of services provided by CLAIMANT REQUEST FOR RELIEF iv

5 LIST OF ABBREVIATIONS 2000 Standard Terms 2011 Standard Terms ARA Art. CE CEPANI Circular CLAIMANT CLAIMANT s Standard Terms and Conditions for Sale of November 2000 CLAIMANT s Standard Terms and Conditions for Sale of July 2011 Answer to Request for Arbitration Article CLAIMANT s Exhibit Belgian Centre for Arbitration and Mediation Circular No. 265 issued by the Auditor General of Equatoriana Innovative Cancer Treatment Ltd. Contracting State Contracting state of the CISG FSA Framework and Sales Agreement concluded on 13 January 2008 ICC p./pp. para./paras. PARTIES International Chamber of Commerce Paris page/pages paragraph/paragraphs CLAIMANT and RESPONDENT PO 1 Procedural Order No. 1 PO 2 Procedural Order No. 2 RA RE RESPONDENT RFCCI Request for Arbitration Respondent s Exhibit Hope Hospital Russian Federation Chamber of Commerce and Industry SLA Sale and Licensing Agreement concluded on 20 July 2011 ToR Terms of Reference v

6 Tribunal The CEPANI Arbitral Tribunal, sitting in Vindobona, consisting of Mr. Presiding Arbitrator, Dr. Arbitrator One and Prof. Bianca Tintin vi

7 INDEX OF AUTHORITIES BOOKS Cited as Source Cited in Berger Klaus Peter Berger. International Economic Arbitration Kluwer Law and Taxation Publishers, Deventer, Bonell Joachim M. Bonell. An International Restatement of Contract Law: The UNIDROIT Principles of International Commercial Contracts 86 Transnational Publishers, Inc., Ardsley, 2005 Born Gary B. Born. International Commercial Arbitration 6, 10, 13, 16, 19 Kluwer Law International, Austin, 2009 Czerwenka Beate Czerwenka. Rechtsanwendungsprobleme im Internationalen Kaufrecht Duncker & Humblot, Berlin, Ferrari Franco Ferrari, Harry Flechtner, Ronald A. Brand. The Draft UNCITRAL Digest and Beyond: Cases, Analysis and Unresolved Issues in the U.N. Sales Convention 61, 100 Sellier. European Law Publishers, Munich, 2004 Fouchard/Gaillard/Goldman Emmanuel Gaillard, John Savage. Fouchard Gaillard Goldman on International Commercial Arbitration 5, 6, 11, 13, 23, 27 Kluwer Law International, Hague, 1999 vii

8 Hill/Chong Jonathan Hill, Adeline Chong. International Commercial Disputes. Commercial Conflict of Laws in English Courts Hart Publishing, Oxford, Huber/Mullis Peter Huber, Alastair Mullis. The CISG: A New Textbook for Students and Practitioners Sellier European Law Publishers, Munich, , 86 Lew Julian D. M. Lew, Loukas A. Mistelis, Stefan Kröll. Comparative International Commercial Arbitration Kluwer Law International, Hague, Lookofsky/Hertz Joseph Lookofsky, Ketilbjørn Hertz. Transnational Litigation and Commercial Arbitration. An Analysis of American, European, and International Law DJØF Publishing, Copenhagen, , 19, 20 Moses Margaret L. Moses. The Principles and Practice of International Commercial Arbitration Cambridge University Press, New York, , 6 Poudret/Besson Jean-Francois Poudret, Sébastien Besson. Comparative Law of International Arbitration Sweet and Maxwell, London, , 6, 16, 19, 20, 23, 74 Redfern/Hunter Nigel Blackaby, Constantine Partasides, Allan Redfern, Martin J. H. Hunter. International Commercial Arbitration Oxford University Press, Oxford, , 5, 8, 13 viii

9 Rubino-Sammartano Mauro Rubino-Sammartano. International Arbitration Law and Practice 26 Kluwer Law International, Hague, 2001 Russell David St John Sutton, Judith Gill, Matthew Gearing. Russell on Arbitration Sweet & Maxwell, London, Sheppard Audley Sheppard. English Arbitration Act 1996 (Chapter 23), 1996 Arbitration Law in England, Wales and Northern Ireland English Arbitration Act 1996 (Chapter 23), 1996 Arbitration Law in England, Wales and Northern Ireland in: Loukas A. Mistelis et al. Concise International Arbitration Kluwer Law International, Alphen aan den Rijn, Schlechtriem/Schwenzer Peter Schlechtriem, Ingeborg Schwenzer. Commentary on the UN Convention on the International Sale of Goods (CISG) Oxford University Press, Oxford, , 57, 66, 69, 74, 77, 81, 90, 103, 110, 112 ix

10 ARTICLES Cited as Source Cited in CISG-AC Opinion No. 4 CISG Advisory Council. Opinion No. 4, Contracts for the Sale of Goods to Be Manufactured or Produced and Mixed Contracts (Article 3 CISG) Adopted 24 October 2004, available at: 103, 104, 110, 112 CISG-AC Opinion No. 13 CISG Advisory Council. Opinion No. 13, Inclusion of Standard Terms under the CISG Adopted 20 January 2013, available at: G-AC-op13.html 60, 66, 69 Cox Trevor Cox. Chaos Versus Uniformity: The Divergent Views of Software in the International Community Vindobona Journal of International Commercial Law and Arbitration, Vol. 4, 2000, pp , 91, 95 Diedrich Frank Diedrich. Maintaining Uniformity in International Uniform Law Via Autonomous Interpretation: Software Contracts and the CISG Pace International L. Rev., Vol. 8, 1996, pp Eiselen Sieg Eiselen. The Requirements for the Inclusion of Standard Terms in International Sales Contract Potchefstroom Electronic Law Journal, Vol. 14, No. 1, 2011, pp , 66 x

11 Endler/Daub Maximilian Endler, Jan Daub. Internationale Softwareueberlassungsvertraege und UN-Kaufrecht 90 Computer und Recht, 1993 Explanatory Note UNCITRAL Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as amended in Fentiman Richard Fentiman. Universal jurisdiction agreements in Europe Cambridge Law Journal, Vol. 72, No. 1, 2013, pp Foster David Foster. Asymmetric Arbitration Agreements: Are they Worth the Risk? The European, Middle Eastern and African Arbitration Review 2014, available at: ections/202/chapters/2271/asymmetricarbitration-agreements-worth-risk/ 16 Green/Saidov Sarah Green, Djakhongir Saidov. Software as Goods Journal of Business Law, March 2007, pp Greenberg/Feris/ Albanesi Simon Greenberg, José Ricardo Feris, Christian Albanesi. Consolidation, Joinder, Cross-Claims, Multiparty and Multicontract Arbitrations: Recent ICC Experience Dossier of the ICC Institute of World Business Law: Multiparty Arbitration, 2010, pp Hanotiau Bernard Hanotiau. Problems Raised by Complex Arbitrations Involving Multiple Contracts-Parties-Issues. An Analysis Journal of International Arbitration, Vol. 18, No.3, 2001, pp , 41 xi

12 Huber Peter Huber. Standard Terms under the CISG Vindobona Journal of International Commercial Law & Arbitration, Vol. 13, 2009, pp Lautenschlager Felix Lautenschlager. Current Problems Regarding the Interpretation of Statements and Party Conduct under the CISG - The Reasonable Third Person, Language Problems and Standard Terms and Conditions Vindobona Journal of International Commercial Law & Arbitration, Vol. 11, No. 2, 2007, pp , 57, 60, 66 Leboulanger Philippe Leboulanger. Multicontract Arbitration Journal of International Arbitration, Vol. 13, No. 43, , 36, 41 Meyer Olaf Meyer. Constructive Interpretation Applying the CISG in the 21st Century André Janssen, Olaf Meyer. CISG Methodology Sellier, Munich, 2009, pp Meulemeester Multi- Contract Dirk De Meulemeester. Multicontract Arbitration Under The CEPANI Arbitration Rules (Article 10) Published 23 October 2013, available at: 23/multicontract-arbitration-under-the-cepaniarbitration-rules-article-10/ 32 Meulemeester New Rules Dirk De Meulemeester. Multicontract Arbitration Under The CEPANI Arbitration Rules (Article 10) Published 23 October 2013, available at: 23/multicontract-arbitration-under-the-cepaniarbitration-rules-article-10/ 32 xii

13 Mourre Alexis Mourre. Application of the Vienna International Sales Convention in Arbitration ICC International Court of Arbitration Court Bulletin, Vol. 17, 2006, pp Murray John Murray. Essay on the Formation of Contracts and Related Matters Under the United Nations Convention on Contracts for the International Sale of Goods Journal of Law and Commerce, Vol. 8, 1988, pp Pavić/Djordjević Vladimir Pavić, Milena Djordjević. Application of the CISG before the Foreign Trade Court of Arbitration at the Serbian Chamber of Commerce - Looking back at the latest 100 cases Journal of Law and Commerce, Vol. 28, No. 1, 2009, pp , 77, 80, 82, 84 Platte Martin Platte. When Should an Arbitrator Join Cases? Arbitration International, Vol. 18, No. 1, 2002, pp Proton Therapy World Market Report Secretariat Commentary Art. 3 MEDraysintell. Proton Therapy World Market to nearly triple by 2018 Published 11 September 2013, available at: Text of Secretariat Commentary on article 3 of the 1978 Draft. Published 29 August 2006, available at: /secomm-03.html xiii

14 Schaefer Jan K. Schaefer. New Solutions for Interim Measures of Protection in International Commercial Arbitration: English, German and Hong Kong Law Compared Electronic Journal of Comparative Law, Vol. 2.2, August 1998, available at: 26 Schmidt-Ahrendts Nils Schmidt-Ahrendts. CISG and Arbitration Belgrade Law Review, No. 3, 2011, pp , 77, 80, 82, 84 Schroeter Ulrich G. Schroeter. Vienna Sales Convention: Applicability to Mixed Contracts and Interaction with the 1968 Brussels Convention Vindobona Journal of International Commercial Law and Arbitration, Vol. 5, 2001, pp Van Houtte Vera van Houtte. Consent to Arbitration through Agreement to Printed Contracts: The Continental Experience Arbitration International, Vol. 16, No. 1, 2000, pp Várady Tibor Várady. On the Option of a Contractual Extension of Judicial Review of Arbitral Awards or: What is actually Pro-Arbitration? Zbornik Pravnog fakulteta u Zagrebu, Vol. 56, 2006, pp , 11 Whitesell/Silva Romero Anne Marie Whitesell, Eduardo Silva Romero. Multiparty and Multicontract Arbitration: Recent ICC Experience Complex Arbitrations: ICC International Commercial Arbitration Bulletin Special Supplement, Vol. 14, 2003, pp xiv

15 Zell Jeremy L. Zell. What To Do When Parties Cannot Get The Full Arbitral Process That They Agreed published 8 November 2013, available at: 08/what-to-do-when-parties-cannot-get-the-fullarbitral-process-that-they-agreed/ 11 xv

16 INDEX OF CASES AND AWARDS Cited as Source Cited in Austria Propane case Software case Tantalum Powder case France Bomar Oil case Decorated Glass Panels case Vulcanization Machinery case Germany Machinery case Mobile Car Phones case Shoes case Oberster Gerichtshof (Supreme Court), 6 February 1996, Case No. 10 Ob 518/95 Oberster Gerichtshof (Supreme Court), 21 June 2005, Case No. 5 Ob 45/05m Oberlandesgericht Innsbruck (Appellate Court), 1 February 2005, Case No. 1 R 253/04x Cour de Cassation (Cassation Court), 9 November 1993, Case No Cour d'appel de Paris (Appellate Court), 14 June 2001, Case No. RG 1998/38724 Tribunal Commercial de Nivelles (District Court), 19 September 1995, Case No. R.G. 1707/93 Bundesgerichtshof (Federal Supreme Court), 31 October 2001, Case No. VIII ZR 60/01 Oberlandesgericht Düsseldorf (Appellate Court), 21 April 2004, Case No. 15 U 88/03. Oberlandesgericht Frankfurt (Appellate Court), 17 September 1991, Case No. 5 U 164/90 54, , 57, , 66 54, Tomato Puree case Window Production Plant case Hanseatisches Oberlandesgericht Hamburg (Higher Regional Court), 14 May 1999, CLOUT case no. 457 Oberlandesgericht München (Appellate Court), 3 December 1999, No. 23 U 4446/ xvi

17 ICC Battery Machinery case ICC Arbitration Case No August 1994 Magnesium case ICC Case No Uganda case ICC Case No Netherlands Movable Room Units case Switzerland Art Books case Sliding Doors case Tribunal of ICA of RFCCI Hof Arnhem (Appellate Court), 27 April 1999, Case No. 97/700 Handelsgericht des Kantons Zurich (Commercial Court), 10 February Case No. HG Gerichtskommission Oberrheintal (Judicial Commission), 30 June 1995, Case no. OKZ /2002 case Tribunal of International Commercial Arbitration of Russian Federation Chamber of Commerce and Industry Case No. 135/ June United Kingdom Pittalis case Queen's Bench Division (Commercial Court), 1986, Case No. QB 868, Pittalis v. Sherefettin 16 Three Shipping case Mauritius Bank case Queen s Bench Division (Commercial Court), 2004, Case No. ER (D) 152, Three Shipping Ltd v. Harebell Shipping Ltd. Queen's Bench Division (Commercial Court), 2013, Case No.QB 1328, Mauritius Commercial Bank Limited v Hestia Holdings Limited & Another xvii

18 United States of America LaPine case Vienna Court of Arbitration Rolled Metal Sheets Case United States District Court, N.D. California, 11 December 1995, Case No. 909 F.Supp. 697, LaPine Technology Corp. v. Kyocera Corp. Case No. SCH June xviii

19 INDEX OF STATUTES, RULES AND TREATIES Cited as Source Cited in CEPANI Rules CEPANI Rules NL CEPANI Rules on Arbitration (in force as from 1 January 2013) CEPANI Rules on Arbitration (in force as from 1 January 2013), the Dutch version 1, 3, 7, 30, 31, 32, 34, 35, 41, 49, CISG United Nations Convention on Contracts for the International Sales of Goods, Vienna (11 April 1980) passim Danubia Arbitration Act UNCITRAL Model Law on International Commercial Arbitration with the 2006 amendments 10, 13, 74 ICC Rules Rules of Arbitration of the International Chamber of Commerce (in force as from 1 January 2012) 32 NYC Convention on the Recognition and Enforcement of Foreign Arbitral Awards (10 June 1958) 6, 13 UNIDROIT Principles UNIDROIT Principles on International Commercial Contracts (2010) 86 xix

20 SUMMARY OF FACTS CLAIMANT RESPONDENT Innovative Cancer Treatment Ltd, the seller, is one of the few manufacturers world-wide of particle therapy equipment having its place of business in Mediterraneo. Hope Hospital, the buyer, is a general hospital and the national centre for cancer research and treatment in Equatoriana. 13 January 2008 PARTIES concluded FSA providing for purchase of a proton therapy facility consisting of one proton accelerator and two treatment rooms using a passive-beam scattering technique. At that time PARTIES also discussed the idea of adding a third treatment room using an active scanning technology which was already largely developed by CLAIMANT. Also for this reason FSA laid down the framework for the PARTIES future cooperation in operating the facility and stated that it shall govern all future contracts between PARTIES. 15 April 2010 CLAIMANT delivered the facility under FSA. May 2011 June-July 2011 RESPONDENT approached CLAIMANT with regard to an additional third treatment room using the active scanning technology. At that moment the development of technology required only clinical trials and fine-tuning of the software. During the negotiations on the purchase of the third treatment room, CLAIMANT repeatedly informed RESPONDENT about the overhaul of its standard terms which were to be applicable to the sales contract (SLA). Despite certain delays with the English translation of the 2011 Standard Terms, RESPONDENT never indicated any protest against their inclusion into SLA. 20 July 2011 PARTIES entered into SLA for the purchase of the additional third treatment room using active scanning technology. Under SLA CLAIMANT was also obliged to develop the necessary software and to provide the staff-training. PARTIES agreed on a discount on the price to reflect RESPONDENT s obligation to provide medical data necessary for finalizing 1

21 the development of the software. SLA included an explicit incorporation clause regarding the 2011 Standard Terms. 30 July 2011 One of RESPONDENT s negotiators checked the correct English version of 2011 Standard Terms on CLAIMANT s website. Again, RESPONDENT did not object in any way. 13 January 2012 Third room using the active scanning technology became available. Subsequently, CLAIMANT started to conduct the necessary trials and to fine-tune the software using the data provided by RESPONDENT. 15 August 2012 RESPONDENT notified CLAIMANT that it would pay neither the final installment under FSA nor the remaining amount under SLA due to a purported inoperability of the proton therapy facility. 6 June 2013 CLAIMANT submitted the Request for Arbitration to CEPANI in accordance with the arbitration clause in Art. 23 FSA. The clause is applicable also to SLA by virtue of Art. 45 FSA which extends its applicability to all future contracts between PARTIES. 10 June 2013 CLAIMANT s Request for Arbitration was received by CEPANI. 5 July 2013 RESPONDENT submitted its Answer to Request for Arbitration. 5 August 2013 The Tribunal was appointed. 2 October 2013 Terms of Reference were agreed and signed by the counsels of PARTIES and the arbitrators. 4 October 2013 Procedural Order No 1 was distributed to PARTIES. 31 October 2013 Procedural Order No 2 was distributed to PARTIES. 2

22 SUMMARY OF ARGUMENTS A. I. THE TRIBUNAL HAS JURISDICTION TO DEAL WITH CLAIMS ARISING OUT OF BOTH FSA AND SLA During their negotiations about FSA, PARTIES devoted considerable attention to the arbitration clause which calls for the arbitration before CEPANI under CEPANI Rules. The clause was verbatim adopted into FSA and indicates PARTIES clear intent to have their disputes resolved in arbitration. Court review of an award, which is not enforceable under Danubia Arbitration Act, does not form an essential part of the arbitration clause and thus has no effect on PARTIES consent to arbitrate. CLAIMANT s right to choose between arbitration and court proceedings does not constitute an obstacle to arbitral proceedings, as the consent to arbitrate is the sole decisive factor for the Tribunal to assume its jurisdiction. Furthermore, the arbitration clause in FSA was effectively incorporated into SLA by reference. Therefore, the Tribunal has jurisdiction to decide on claims arising out of both FSA and SLA, based on the sole arbitration clause. A. II. THE CLAIMS ARISING OUT OF BOTH FSA AND SLA SHALL BE HEARD IN A SINGLE SET OF PROCEEDIINGS When PARTIES concluded FSA, they also intended to provide a legal framework for their future business cooperation regarding the proton therapy facility, particularly for the SLA. As there are two different contracts and only one arbitration clause in one of them which covers claims arising out of both FSA and SLA, no specific requirements for joinder of the claims are laid down under CEPANI Rules. The Tribunal is therefore competent to rule on a single arbitration and is respectfully requested to join the claims in a single set of proceedings given that the claims arising out of FSA and SLA are factually and legally interconnected. B. I. PARTIES AGREED ON THE INCLUSION OF THE 2011 STANDARD TERMS INTO SLA During the negotiations on SLA CLAIMANT repeatedly informed RESPONDENT about the application of its new 2011 Standard Terms to SLA and referred to their text available on its website. RESPONDENT signed SLA including the incorporation clause and never objected to the content of the 2011 Standard Terms. Thus, the 2011 Standard Terms were incorporated into SLA by virtue of the reference therein or, in any event, by publishing them on CLAIMANT s website. 3

23 B. II. THE TRIBUNAL SHOULD APPLY THE CISG TO SLA AS PARTIES CHOSE LAW OF A CONTRACTING STATE AND DID NOT EXCLUDE THE CISG Tribunal should apply the law chosen by PARTIES to the dispute arising out of SLA. PARTIES chose the law of Mediterraneo, which is the Contracting State to the CISG. PARTIES did not exclude the application of the CISG as the choice-of-law clause refers to the law of Mediterraneo in its entirety and neither the wording of the choice-of-law clause nor any other circumstances of the case indicate to the contrary. B. III. THE CISG IS APPLICABLE TO THE CLAIM UNDER SLA The scope of delivery under SLA includes the magnets, the equipment (i.e. computers, steering devices and monitors) and software necessary to use a magnet guided a modeled proton beam. Neither the fact that software is a part of the goods delivered nor the fact that CLAIMANT retains its intellectual property rights have any impact on the nature of SLA as a sales contract under CISG. Furthermore, Art. 3 CISG does not hinder the applicability of the CISG. Firstly, the data supplied by RESPONDENT do not represent a substantial part of the materials necessary for the production of the goods delivered. Secondly, the services provided by CLAIMANT (installation, testing and fine-tuning based on the data) do not constitute a preponderant part of its obligations. 4

24 A. ARGUMENTS WITH REGARDS TO THE PROCEDURE 1. On 13 January 2008, PARTIES concluded FSA for the purchase of a proton therapy facility [RA, p. 5, para. 4; CE 2, p. 12]. Art. 23 FSA includes a clause referring to arbitration under CEPANI Rules. In addition, Art. 45 FSA stipulates that "the provisions of this agreement also govern all further and future contracts where such contracts do not contain a specific provision to the contrary." In 2011 PARTIES concluded SLA for the purchase of an additional treatment room using active scanning technology [CE 6, p. 18]. This contract did not contain any provision regarding the arbitration. In 2012, disputes arose regarding both the passive proton therapy facility and active scanning technology [RA, p. 6, para. 15; CE 7, p. 21]. 2. CLAIMANT respectfully asks the Tribunal to assume its jurisdiction over disputes arising out of both FSA and SLA [I.] and to hear both of these claims in a single set of proceedings [II.]. I. THE TRIBUNAL HAS JURISDICTION OVER CLAIMS ARISING OUT OF BOTH FSA AND SLA 3. There is a dispute between PARTIES concerning the jurisdiction of the Tribunal as RESPONDENT contests the validity of the arbitration clause contained in FSA and its applicability to the disputes arising from SLA [ARA, p. 32, paras. 6-9, 11]. The Tribunal has the competence to rule on its own jurisdiction, including any objections with respect to the validity of the arbitration clause [Art. 16(1) Danubia Arbitration Act; Art. 7(3) CEPANI Rules]. 4. It is a valid arbitration agreement which is the cornerstone of any arbitration proceedings [Redfern/Hunter, p. 84]. Therefore, CLAIMANT will demonstrate that PARTIES have validly agreed to submit any dispute arising from or in connection with FSA to the present Tribunal [1.]. Additionally, the arbitration clause in FSA covers also claims arising out of SLA, as SLA does not provide any agreement to the contrary [2.]. 1. PARTIES INCLUDED A VALID ARBITRATION CLAUSE INTO FSA 5. It is the PARTIES consent to arbitrate that grants the Tribunal competence to decide the dispute [Poudret/Besson, p. 120; Moses, p. 17; Redfern/Hunter, p. 18]. Given the consent to arbitrate exists, non-essential elements of the arbitration clause have no influence on it [Fouchard/Gaillard/Goldman, para. 485; Várady, p. 475]. In the present case, PARTIES clearly declared their consent to arbitrate in Art. 23 para. 3 FSA [1.1.]. Neither the unenforceability of 5

25 the review mechanism [1.2.], nor CLAIMANT s right to choose between arbitration and court proceedings [1.3.] have any impact on PARTIES consent to arbitrate PARTIES agreed to submit their disputes arising out of FSA to the Tribunal 6. An arbitration clause is an agreement between the parties to submit all or certain disputes arising from a defined legal relationship to arbitration [Art. 7(1) Danubia Arbitration Act; Art. II(1) NYC]. Therefore, the arbitration clause is valid if two conditions are met: the consent of parties [Born, p. 200; Moses, p. 18] and the determination of the legal relationship [Poudret/Besson, p. 124; Born, p. 255]. The parties consent on arbitration is presumed if they enter into a contract containing an arbitration clause [Uganda case; Fouchard/Gaillard/Goldman, pp ]. 7. Art. 23 para. 3 FSA stipulates that disputes between PARTIES arising from FSA shall become subject to arbitration under CEPANI Rules before CEPANI. Pursuant to Art.23 para. 4 FSA, an award rendered by the Tribunal shall be final and binding upon PARTIES [CE 2, p. 11]. During the negotiations on FSA, the competent representatives of PARTIES devoted considerable attention to dispute resolution, including the content of the arbitration clause [CE 3, p.14; ARA, pp , para. 5].The clause was later adopted verbatim into Art. 23 FSA [CE 2, p. 11] and was signed by authorized representatives of PARTIES on 13 January 2008 [CE 2, p. 12]. Both the wording of Art. 23 FSA and prior negotiations between PARTIES demonstrate their clear consent to submit the disputes arising out of FSA to arbitration. 8. Moreover, RESPONDENT itself expressly admitted it had agreed to arbitration. One of the reasons why RESPONDENT agreed to arbitration was the possibility to choose its own arbitrator with a specific professional background [ARA, p. 33, para. 14]. The dispute at hand concerns proton therapy facility, i.e. sophisticated technical device that can be found only in a few modern cancer treatment institutions worldwide [Proton Therapy World Market Report]. Consequently, only a limited number of persons with the necessary expertise can comprehend the complexity of proton therapy facility, including the functioning of the imaging software. It is only in arbitration where PARTIES may nominate such persons to decide the dispute at hand [Redfern/Hunter, p. 260]. This is the essential reason why RESPONDENT agreed to arbitration. 9. To conclude, the wording of Art. 23 FSA, as well as PARTIES negotiations regarding the arbitration clause, indicate their consent to submit the disputes arising out of FSA to the 6

26 Tribunal. Additionally, RESPONDENT itself admitted that it agreed to arbitration since it offers the possibility to choose an expert on proton therapy as an arbitrator Unenforceability of review mechanism has no impact on PARTIES consent to arbitrate 10. Upon RESPONDENT s proposal, PARTIES agreed on court review of awards which are "obviously wrong in fact or in law" in Art. 23 para. 4 FSA [CE 2, p. 11; ARA, p. 31, para. 5]. Art. 34 Danubia Arbitration Act limits recourse against awards in international arbitral proceedings to setting aside; court review for an error in fact or in law is not permitted [Born, p. 2638]. As this provision cannot be amended by PARTIES agreement [Born, p. 2562; Explanatory Note UNCITRAL, para. 44], the review of awards that PARTIES agreed on is not enforceable under lex arbitri. 11. Nevertheless, the review mechanism is to be regarded as non-essential part of the arbitration clause where the specific circumstances of the case call for it [Fouchard/Gaillard/Goldman, p. 262, 269; Várady, p. 474; Zell; LaPine case]. In the situation at hand, the Tribunal shall disregard the review mechanism clause, as it is severable and as such does not affect PARTIES consent to arbitrate. CLAIMANT will demonstrate this conclusion on the following. RESPONDENT was not legally obliged to include the review of manifestly erroneous awards into FSA [a.]. Although it insisted on the review mechanism, arbitration before CEPANI does not deprive RESPONDENT of its protection against such awards [b.]. a. RESPONDENT was not legally obliged to include review mechanism into FSA 12. The reason why RESPONDENT wanted to include review mechanism into Art. 23 FSA was the fact that it felt bound by Art. 45 of Circular [ARA, p. 31, para. 5; PO 2, p. 58, para. 9]. Circular is an internal administrative guideline requiring that government entities "must not forego the right of review of manifestly erroneous decisions of courts or tribunals" [RE 1, p. 36]. However, RESPONDENT is not a governmental entity, thus it is not legally bound by Circular [PO 2, p. 58, para. 9]. As a result, Circular did not prevent RESPONDENT from concluding the arbitration clause without the review mechanism. 7

27 b. RESPONDENT is not deprived of its protection against manifestly erroneous awards 13. Although RESPONDENT felt obliged to follow Circular and thus insisted on the possibility of review of manifestly erroneous decision, arbitration before CEPANI does not deprive it of such possibility. As stated above, Art. 34 Danubia Arbitration Act does not allow setting aside an award for an error in fact or in law, i.e. révision au fond. However, Art. 34 still enables to set aside award which suffers from manifest errors amounting to breach of fundamental legal principles [Fouchard/Gaillard/Goldman, p. 995; Redfern/Hunter, p. 613]. Additionally, Art. V NYC laying down the grounds for refusal of the recognition and enforcement of awards provides for a similar protection [Born, p. 2552]. 14. To conclude, RESPONDENT was neither obliged to include the review mechanism into FSA nor was it deprived of the protection against manifestly erroneous awards. Therefore, the provision setting forth the court review is not an essential part of the arbitration clause and thus its unenforceability does not affect PARTIES consent to arbitrate In addition, CLAIMANT s choice between arbitration and court proceedings does not affect the validity of arbitration clause in FSA 15. Art. 23 para. 6 FSA provides CLAIMANT with the possibility to choose between arbitration and court proceedings as regards all claims relating to payments [CE 2, p. 12]. Contrary to RESPONDENT s assertion [ARA, p. 32, para. 9], this choice has no influence on the validity of arbitration clause and Tribunal s jurisdiction. CLAIMANT had the right to choose and decided to commence arbitration [a.], and even if CLAIMANT had no such right, it has no impact on the validity of arbitration clause as such [b.]. a. CLAIMANT had the right to choose between arbitration and litigation 16. The fact that the choice between arbitration and litigation was given exclusively to CLAIMANT does not invalidate the provision of Art. 23 para. 6 FSA. Although asymmetrical clauses seem to give the possibility of exercising a right only to one party to a contract, they are still the outcome of the parties agreement. Thus, the effectiveness of such clauses rests on the contractual basis [Three Shipping case; Lookofsky/Hertz, p. 818]. Moreover, the substantive validity of asymmetrical clauses giving only one party the option to either arbitrate or litigate is supported by both case 8

28 law and literature [Pittalis case; Three Shipping case; Mauritius Bank case; Born, p. 733; Poudret/Besson, p. 4; Foster; Fentiman; Russell, p. 38]. 17. In the present case, the provision of Art. 23 para. 6 is a result of PARTIES mutual agreement as they concluded FSA without any objections. Furthermore, CLAIMANT acquired the right to choose between arbitration and court proceedings in return for the possibility of RESPONDENT to pay the purchase price in installments [CE 3, p. 14]. Art. 23 para. 6 FSA should be read in the light of other provisions of FSA and prior negotiations of PARTIES. Hence, Art. 23 para. 6 cannot be considered as asymmetrical. 18. As a result, CLAIMANT had the right to choose between arbitration and litigation as the provision of Art. 23 para. 6 FSA is the outcome of PARTIES autonomy. In addition, the CLAIMANT s right was included into FSA in exchange for RESPONDENT s right to pay in installments. Thus, Art. 23 para. 6 FSA is not asymmetrical. b. Even if the CLAIMANT s choice was not effective, the arbitration clause would remain intact 19. In case the Tribunal considers the asymmetrical clause in Art. 23 para. 6 FSA inoperable, this has no effect on the PARTIES consent to arbitrate expressed in Art. 23 para. 3 FSA [Born, p. 734]. The consent to arbitrate should be the sole decisive factor for the Tribunal to assume its jurisdiction [Lookofsky/Hertz, p. 823; Poudret/Besson, p. 121]. The arbitration clause in Art. 23 para. 3 FSA is autonomous of the other contractual provisions, and thus it is in no way affected by the potential inoperability of the other provisions of the FSA [Hill/Chong, p. 783; Lookofsky/Hertz, p. 824; Poudret/Besson; p. 133, Sheppard, p. 732]. 20. In the case at hand, the arbitration clause and the clause giving CLAIMANT the right to choose between arbitration and court litigation are contained in two separate paragraphs of Art. 23 FSA, while the latter begins with wording "in addition". Thus, both literal and logical interpretation of Art. 23 FSA lead to the conclusion that the two clauses are mutually independent. As a result, the inoperability of Art. 23 para. 6 FSA bears no impact on the consent to arbitrate incorporated into Art. 23 para. 3 FSA. Should the Tribunal have any doubt as to legal effects of Art. 23 para. 6 FSA, it remains to be bound solely by the arbitration clause in Art. 23 para. 3 FSA as an expression of the PARTIES autonomy and their consent to arbitrate [Lookofsky/Hertz, p. 823; Poudret/Besson, p. 7]. 9

29 21. To conclude, the Tribunal should assume its jurisdiction on the basis of the arbitration clause contained in Art. 23 para. 3 FSA, irrespective of CLAIMANT s right to choose between arbitration and court proceedings incorporated in Art. 23 para. 6 FSA. 22. To sum up, PARTIES clearly declared their consent to arbitrate in Art. 23 para. 3 FSA. Neither the unenforceability of the review mechanism, nor the CLAIMANT s right to choose between arbitration and court proceedings have any impact on PARTIES consent to arbitrate. As a consequence, PARTIES have validly agreed to submit any dispute arising from or in connection with FSA to the present Tribunal. 2. ARBITRATION CLAUSE IN FSA COVERS ALSO CLAIMS ARISING OUT OF SLA 23. An arbitration clause contained in a separate and preexisting document to which the parties contract refers constitutes a valid arbitration agreement [Art. 7(6) Danubia Arbitration Act; Poudret/Besson, p. 170; Fouchard/Gaillard/Goldman, p. 271; Berger, pp ]. A general reference to such a document, provided that the parties know its content, is sufficient for the effective incorporation of the arbitration clause [Poudret/Besson, p. 170; Van Houtte, p. 6]. 24. FSA as of 13 January 2008 was deemed to create a framework for future cooperation between PARTIES regarding the proton therapy facility [RA, p. 5, para. 4]. Accordingly, Art. 45 FSA explicitly states that its provisions shall also govern "all future contracts between parties in relation to the proton therapy facility where such contracts do not contain a specific provision to the contrary" [CE 2, p. 12]. FSA contains a valid arbitration clause establishing the competence of the Tribunal to decide on claims arising out of FSA. Given that FSA provides the framework for PARTIES long-term business relationship, PARTIES must have been aware of such clause [Bomar Oil case]. 25. On 20 July 2011, PARTIES concluded SLA. Its preamble stipulates that the general relationship between PARTIES shall be governed by FSA [CE 6, p. 18]. Art. 23 SLA includes provisions on interim measures and the PARTIES right to choose between arbitration and court proceedings [CE 6, p. 19]. The wording of Art. 23 SLA clearly demonstrates that its sole purpose was to amend the dispute resolution clause already included in Art. 23 FSA. Thus, and contrary to RESPONDENT s view [ARA, p. 32, para. 11], Art. 23 SLA does not constitute "a specific provision to the contrary" in the sense of Art. 45 FSA. 26. First, Art. 23 para. 1 SLA embodies the PARTIES agreement to invest national courts of Mediterraneo or Equatoriana with the jurisdiction to rule on interim and provisional measures 10

30 [CE 6, p. 19] to support arbitration proceedings. Such provision is fully compatible with the arbitration clause [Art. 9 Danubia Arbitration Act; Rubino-Sammartano, p. 629; Schaefer, p. 3]. Thus, PARTIES would not include such provision, if they did not intend to submit their dispute to arbitration. 27. Second, the words "in addition" in the opening of Art. 23 para. 2 SLA [CE 6, p. 19] indicate that PARTIES wished to submit disputes arising out of SLA to arbitration, and court proceedings were only to play a complementary role thereto. The clause offering either of PARTIES the choice between arbitration and court proceedings does not deprive CLAIMANT of commencing arbitration [Tomato Puree case]. The sole decisive factor for the Tribunal is that there is a valid arbitration clause, whether or not in combination with another dispute resolution mechanism [Fouchard/Gaillard/Goldman, p ]. Thus, both the wording and the purpose of Art. 23 para. 2 SLA indicate that PARTIES intended to resolve their disputes arising out of SLA primarily in arbitration. 28. To sum up, PARTIES effectively incorporated the arbitration clause from FSA into SLA by reference, which establishes the Tribunal s jurisdiction to decide on the claim arising out of SLA. Both the interim measures clause and PARTIES right to choose between arbitration and court proceedings in Art. 23 SLA are complementary to the arbitration clause in Art. 23 FSA and do not, by any means, constitute a waiver of the agreement to arbitrate. 29. In conclusion, PARTIES included a valid arbitration clause into FSA and this clause covers also disputes arising out of SLA. Thus, the Tribunal is competent to deal with claims arising out of both FSA and SLA. II. THE TRIBUNAL SHALL HEAR THE CLAIMS ARISING OUT OF BOTH FSA AND SLA IN A SINGLE SET OF PROCEEDINGS 30. The Tribunal has jurisdiction to decide upon the disputes arising out of both FSA and SLA. Furthermore, it is solely the Tribunal which is competent to rule on a joinder of claims arising out of multiple contracts [Art. 12(1) CEPANI Rules]. Under CEPANI Rules, claims may be heard in a single set of arbitration proceedings if these claims arise from or are in connection with various contracts. In situations where various arbitration agreements exist, additional conditions laid down in Art. 10 CEPANI Rules are required to decide on a joinder. CLAIMANT will prove that the additional conditions set forth in Art. 10 CEPANI Rules do not need to be fulfilled to 11

31 allow single arbitration in the present case, as there is only one arbitration clause which covers disputes arising from both FSA and SLA [1.]. The Tribunal is requested to decide that the claims arising out of FSA and SLA shall be heard in a single arbitration as the circumstances of the case call for the joinder [2.]. 1. REQUIREMENTS UNDER ART. 10(1) CEPANI RULES DO NOT HAVE TO BE FULFILLED TO ALLOW JOINDER IN THE PRESENT CASE 31. Art. 10(1) CEPANI Rules provides that: "Claims arising out of various contracts or in connection with same may be made in a single arbitration. This is the case when the said claims are made pursuant to various arbitration agreements: a) if the parties have agreed to have recourse to arbitration under CEPANI Rules and b) if the parties to the arbitration have agreed to have their claims decided within a single set of proceedings." 32. As a crucial precondition for joinder of claims in a single set of proceedings, the presence of various contracts is necessary. Where the claims are subject to various arbitration agreements, specific requirements are set forth [CEPANI Rules NL]. To the contrary, if there is a sole arbitration agreement which covers all contracts, no further conditions are prescribed under CEPANI Rules. Concurrently, no express requirement that each and every contract must contain an arbitration clause to allow the joinder can be derived from Art. 10(1) CEPANI Rules. This principle is reflected, inter alia, by the provision on multiple-contract arbitration in Art. 9 ICC Rules, which were the source of inspiration for CEPANI Rules [Meulemeester New Rules]. If joinder of claims is allowed where two arbitration clauses exist while only one refers to CEPANI Rules [Meulemeester Multi-contract], it is even more desirable where one arbitration clause covers claims arising out of two related contracts. 33. The claims arising out of FSA and SLA are both covered by the sole arbitration clause in FSA. Since the claims are not subject to various arbitration agreements, no other requirements need to be fulfilled to allow joinder in the case at hand. Thus, mere presence of one arbitration clause applicable to both FSA and SLA does not create an obstacle for joinder of the claims in a single arbitration [Platte, p. 73; Leboulanger pp ]. 34. To sum up, the Tribunal may decide on the joinder of claims arising out of FSA and SLA, as CEPANI Rules call for no other requirements where only one arbitration clause is present. 12

32 2. THE TRIBUNAL SHOULD JOIN THE CLAIMS ARISING OUT OF FSA AND SLA IN A SINGLE ARBITRATION 35. In the present case where there are two various contracts and only one arbitration clause which covers both of the contracts, it is up to the Tribunal s discretion to join the claims in a single arbitration. As there are no other requirements set out in Art. 10(1) CEPANI Rules, the Tribunal shall take into account particularly the close connection among the contracts where one cannot exist without the other [Hanotiau, p. 311]. CLAIMANT will show that the claims arising out of FSA and SLA are factually [2.1.] and legally related [2.2.] and thus can be joined in one arbitration proceedings. Additionally, the joinder of the claims in single arbitration is in compliance with the principle of procedural economy [2.3.] The claims arising out of FSA and SLA are factually related 36. Both claims relate to the proton therapy facility as a single business transaction. Moreover, they are linked to the problems with the alleged malfunctioning of the two types of software for a cancer treatment within this proton therapy facility. This very fact, i.e. the reference to a single business transaction, should be the important criterion for the Tribunal s consideration on joining them into a single set of proceedings [Whitesell/Silva Romero]. The link between the framework agreement and the successive agreements, such as in the present case, is per se sufficient to have a single set of proceedings [Leboulanger, p. 81]. 37. The claim stemming from FSA concerns the payment of last installment of the purchase price for the proton therapy facility. It originates in increased costs in energy related to the proton therapy facility caused by the alleged malfunctioning of the imaging software [ARA, p. 35, para. 24]. 38. The claim arising from SLA deals with the payment of the purchase price for the calibration software [CE 7, p. 21]. The calibration software enables RESPONDENT to use the active scanning technology, which enhances the whole cancer treatment process [RA, p. 5, para. 9]. According to RESPONDENT, this software did not work properly which lead to RESPONDENT s refusal to pay the purchase price [CE 7, p. 21]. 39. The imaging software is necessary for both active and passive proton therapy [RA, pp. 3-4, para. 3]. This software is therefore a precondition for functioning of the entire proton therapy facility. It is thus crucial to resolve the dispute regarding both claims in a single arbitration. 40. To conclude, both claims are sufficiently factually related to be heard in a single arbitration. 13

33 2.2. The claims arising out of FSA and SLA are legally related 41. Joinder of claims in a multiple-contract arbitration requires both contracts to be interconnected [Art. 10(1) CEPANI Rules; Hanotiau, p. 183]. In this regard, the Tribunal should examine whether there is a single business relationship between the parties and whether the same "contractual instruments" are used [Leboulanger, pp ]. Legal relation between the contracts, the compatibility of dispute resolution mechanisms therein and signature of PARTIES in both contracts are sufficient grounds for the Tribunal to hear both claims in single arbitration [Greenberg/Feris/Albanesi]. The texts of FSA and SLA, their purpose, as well as PARTIES prior negotiations of FSA and SLA give rise to a conclusion that legal relation between FSA and SLA is established. 42. Firstly, Art. 45 FSA provides that it "shall govern all further and future contracts ( ) in relation to the proton therapy facility" [CE 2, p. 12]. In addition, the preamble of SLA sets forth that general relationship between PARTIES is governed by FSA [CE 6, p. 18]. In consequence, it is clear that FSA and SLA are legally related. 43. Secondly, the negotiations regarding the construction of the proton therapy facility between PARTIES serve as the proof of the close connection between FSA and SLA. On 13 January 2008, when FSA was concluded, PARTIES intended to create "framework for further cooperation" [CE 2, p. 10]. Hence, FSA is the legal framework for the cooperation of PARTIES concerning the construction and running the proton therapy facility. Moreover, PARTIES expected future cooperation in extending the proton therapy facility already during the negotiations of FSA [RA, p. 5, para. 4]. This became reality when PARTIES agreed to add the third treatment room by SLA, which was intensively discussed already during the negotiations of FSA in 2007 and 2008 [RA, p. 5, para. 9]. 44. In the case at hand, PARTIES concluded FSA as a framework for further cooperation on construction of the proton therapy facility. Both FSA and SLA refer in fact to the same transaction and SLA exists within the framework given by FSA. There is also one single arbitration clause referring both claims to CEPANI arbitration before CEPANI. Hence, there is no obstacle to hold that both claims are enough legally connected to be heard in a single arbitration. 45. To conclude, the texts of FSA and SLA, as well as the negotiations between PARTIES indicate that the claims arising from FSA and SLA are legally connected. 14