10TH LAW ASIA INTERNATIONAL MOOT COURT, 2015
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1 10TH LAW ASIA INTERNATIONAL MOOT COURT, 2015 A1504-C KUALA LAMPUR ARBITRATION REGIONAL CENTRE MEMORANDUM FOR NEPALESE GOVERNMENT ON BEHALF OF NEPALESE GOVERNMENT AGAINST AUSTRALIAN NATIONAL MUSEUM THE NATIONAL MUSEUM, MALAYSIA DR. JOHN THOMAS SMITH JR. CLAIMANT RESPONDENTS
2 TABLE OF CONTENTS LIST OF ABBREVIATIONS INDEX OF AUTHORITIES STATEMENT OF JURISDICTION QUESTIONS PRESENTED STATEMENT OF FACTS SUMMARY OF PLEADINGS VI VII XI XII XIII XV PLEADINGS I. THE ARBITRATION TRIBUNAL HAS AUTHORITY TO ADJUDICATE THIS DISPUTE PERTAINING TO CULTURAL PROPERTY A. The lex arbitri is the Nepalese law i. Institutional rules should be considered to determine seat of arbitration ii. The Law of the Seat of Arbitration should govern the Lex Arbitri.. 2 iii. The Arbitration Agreement will not be governed by the Law of the Place of Arbitration B. This dispute is arbitrable under the Nepalese Arbitration Act i. The Arbitrability of the dispute must be decided in accordance with the law of the seat Nepal ii. The Arbitrability of the dispute is not barred under Nepalese Law...4 iii. Disputes pertaining to cultural property are arbitrable internationally ii
3 II. THE TRIBUNAL SHOULD DETERMINE THE NEPALESE RULE OF LAW AS PROPER LAW TO THIS DISPUTE A. Nepalese Rule of law is the appropriate law applicable to the substance of this dispute B. The lex arbitri also provides Nepalese law as the law applicable to the substance of this dispute III. THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTE UNDER NEPALESE LAW....9 A. The Statue was under the custody and ownership of Nepalese government...9 B. The statue was transferred without the consent of Nepal's Government.9 C. The Export of the Statue was an Illicit Export i. No special certificate from Department of Archaeology was issued ii. Dr. Smith s Good faith defence is not valid...11 IV. THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTE UNDER INTERNATIONAL LAW A. UNESCO Convention 1970 prohibits illicit export B. UNESCO Convention 1970 prohibits illicit import.. 13 C. The Respondent no. 2 has no right to retain the Statue under UNESCO Convention D. Provisions of UNIDROIT CONVENTION, 1995 are applicable on Respondents No. 1 and i. Preservation of Cultural Property is a Custom under International Law...14 iii
4 ii. The state practice of Australia and Malaysia are in conformity with the UNIDROIT Convention...15 a) Australian State practice provides for return of cultural property...16 b) Malaysian State practice also provides for return of stolen cultural property.16 V. THE AUSTRALIAN LAW ALSO ESTABLISHES THE CLAIMANT S RIGHT TO DEMAND THE RETURN OF THE STATUE A. Australian Law prohibits import of cultural property without export certificate...17 B. Due diligence was not performed by Respondent Museums while accepting the donation...18 i. Museums failed to check the validity of title. 18 ii. Museums disregarded the relevant laws 19 C. Australian Museum did not have the Capacity to loan the statue to Malaysian Museum.. 20 VI. MALAYSIAN MUSEUM IS BOUND TO RETURN THE STATUE TO NEPAL...21 A. The statue was imported illegally.. 21 B. The statue should be returned back to Nepal i. Malaysian Museum is in wrongful possession of the Statue. 22 ii. The loan Agreement is void iii. Under UNESCO Convention iv. Under UNIDROIT Convention, c) Malaysian Museum is not Entitled to any Compensation iv
5 VIII. ARGUENDO: THE RESPONDENT SHOULD RETURN THE STATUE VOLUNTARILY AS A GESTURE OF GOOD WILL Prayer for Relief v
6 LIST OF ABBREVIATIONS Paragraph AMP Act Art Cl. i.e. KLRCA Ancient Monument Preservation Act, 2013 (1956 A.D.) Article Clause That is Kuala Lampur Regional Center for Arbitraton MAA 2005 Malaysian Arbitration Act 2005 (No 646 of 2005) MNH 2005 Malaysian National Heritage Act, 2005 Moot Problem pg. 10 th LawAsia International Moot Problem2015 Page PMCH 1986 Protection of Movable Cultural Heritage Act, 1986 S. Section UNESCO Convention 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (UNESCO, 1970) UNIDROIT Convention 1995 Convention on Stolen and Illicitly Export Cultural Objects (UNIDROIT, 1995) University Central Department of Sociology/Anthopology at Tribhuvan University VCLT 1969 Vienna Convention on the Law of Treaties 1969 vi
7 INDEX OF AUTHORITIES CASES 1. Autocephalous Greek- Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts Inc Bonython v. Commonwealth of Australia, [1951] AC 201, 219 (Privy Council on appeal from Australia) Colombia v. Peru, [1950] I.C.J Rep Hamlyn & Co. v. Talisker Distillery, [1894] A.C. 202, 208 (House of Lords) Ivanhoe Fin Inc. V. Highland Banc Corp 2004 WL Lesotho Highlands Development Authority v. Impregilo Spa, [2006] 1 A.C. 221 (House of Lords Libya v. Malta 1985 I.C.J. Rep Rights of Nationals of the United States in Morocco case, ICJ Rep. 1952, 176, at Société Procédés de préfabrication pour le béton v. Libye, 1998 Rev. arb Vita Foods Products Inc. v. Unus Shipping Co. Ltd., [1939] A.C. 277, 299 (P.C.) Winkworth v. Christie, Manson & Woods Ltd., [1980] Ch. 496, [1980] 1 All E.R Y.K. Fung Securities Sdn Bhd v. James Cape (Far East) Ltd, 3 [1997] 2 MLJ vii
8 CONVENTIONS 1. Convention for the Protection of Cultural Property in the Event of Armed Conflict ( The Hague Convention First Protocol,1954, and Second Protocol, 1999) 2. Convention for the Safeguarding of the Intangible Cultural Heritage (UNESCO, 2003) 3. Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington, 1973) 4. Convention on Biological Diversity (UN, 1992) 5. Convention on Stolen and Illicitly Exported Cultural Objects (UNIDROIT, 1995) 6. Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (UNESCO, 1970) 7. Convention on the Protection of the Underwater Cultural Heritage (UNESCO,2001) 8. Statute of the International Court of Justice 9. Vienna Convention on the Law of Treaties 1969 STATUTES 1. Ancient Monument Preservation Act, 2013 (1956 A.D.) 2. Malaysian Arbitration Act 2005 (No 646 of 2005) 3. Malaysian National Heritage Act, Protection of Movable Cultural Heritage Act, The Muluki Ain (General Code) Act No. 67 of Tribhuvan University Act 2049 (1992) viii
9 REPORTS 1. I.C.J. Rep at I.C.J Reports, 1951, pp. 116, 131 and 138; 18 ILR, p I.C.J. Rep I.C.J Rep. 1952, RULES 1. Kuala Lumpur Regional Centre for Arbitration i-arbitration Rules KLRCA i- Arbitration Rules BOOKS 1. Gary B. Born, International Commercial Arbitration, Vol. I (3rd ed., The Hague, Kluwer Law International, 2009) Malcolm N. Shaw, International Law, Cambridge University Press (2008)..15 ARTICLES 1. Christa Roodt, Cultural heritage jurisprudence and strategies for retention and recovery (Centre for Foreign and Comparative Law, volume 35(2), 2002)... 2,7 2. Derek Fincham, How Adopting the Lex Originis Rule Can Impede the Flow of IllicitCultural Property (Columbia Journal of Law and the Arts, Vol. 32, p. 111, 2008) Mas-Colell, Should Cultural Goods Be Treated Differently?, 23 Journal of Cultural Economics, 87 at (1999) Patricia Youngblood Reyhan, A Chaotic Palette: Conflict of Laws in Litigation Between Original Owners and Good-Faith Purchasers of Stolen Art, 50 DU.K.e L.J. 955, 962 (2001) Symeon Symeonides, A Choice-of-Law Rule for Conflicts Involving Stolen Cultural Property, 38 Vand. J. Transnat l L (2005)...14 ix
10 MISCELLANEOUS 1. Australia returns pricy Qing dynasty statue to China available at ( (retrieved on 12 April, 2015) 2. Commission Regulation 752/93 of 30 March 1993 laying down provisions for the implementation of Council Regulation 3911/92 on the export of cultural goods, as amended by Commission Regulation (EC) 1526/98 of 16 July 1998, OJ L 201/47 and Commission Regulation (EC) 656/2004 of 7 April, 2004, OJ L104/50 (Corrigendum, OJ L 203, , p.14 (656/2004) 3. Customs (Prohibited Imports) Regulations available at (Australian Customs and Border Protection Service), (retrieved on 12 April, 2015) 4. (Australian Customs and Border Protection Service) (retrieved on 12 April, 2015) 5. (retrieved on 12 April, 2015) 6. Precious artifacts returned to Peru and Jordan available at (retrieved on 12 April, 2015) 7. Regulation 116/2009 on the export of cultural goods of 18 December 2008 (Council Regulation 3911/92 of 9 December 1992 on the export of cultural goods, OJ L 395/1 (Corrigendum OJ L267/30, 19/10/1996), as amended by Council Regulation 2469/96 of 16 December 1996 OJ L 335/9, Council Regulation 974/2001 of 14 May 2001 OJ L 137/10 and Council Regulation 806/2003 of 14 April 2003 OJ L 122/1. Council Regulation (EC) No 116/2009 of 18 December 2008 on the export of cultural goods (codified version)). x
11 STATEMENT OF JURISDICTION The Nepalese Government ( The Claimant ) and the Australian National Museum ( The Respondent No. 1), the National Museum Malaysia ( The Respondent No. 2), and Dr. John Thomas Smith, Jr. ( The Respondent No. 3), have jointly submitted the present dispute to the Kuala Lumpur Regional Centre for Arbitration ( KLRCA ), Malaysia, according to the KLRCA i-arbitration Rules ( KLRCA Rules ). The validity and enforceability of the arbitration agreement has not been disputed by the parties. All the parties shall accept the judgment of the Tribunal as final and binding and execute it in good faith in its entirety. xi
12 QUESTIONS PRESENTED I. WHETHER THE ARBITRATION HAS AUTHORITY TO ADJUDUCATE THIS DISPUTE PERTAINING TO CULTURAL PROPERTY? II. WHETHER THE NEPALESE LAW GOVERNS THE SUBSTANCE OF THIS DISPUTE? III. WHETHER THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUE UNDER NEPALESE LAW? IV. WHETHER THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTE UNDER INTERNATIONAL LAW? V. WHETHER THE AUSTRALIAN LAW ALSO ESTABLISHES THE CLAIMANT S RIGHT TO DEMAND THE RETURN OF THE STATUE? VI. WHETHER THE MALAYSIAN MUSEUM IS BOUND TO RETURN THE STATUE TO NEPAL? VII. WHETHER THE RESPONDENT COULD RETURN STATUE VOLUNTARILY AS A GESTURE OF GOOD WILL? xii
13 STATEMENT OF FACTS THE PURPOSE OF VISIT Dr. John Thomas Smith, Jr. a.k.a. Queensland Smith (hereinafter referred as The Respondent no. 3 ) is a well known Australian anthropologist, was invited by the Dean of the Central Department of Sociology/Anthropology at Tribhuvan University (hereinafter referred as The University ) in Nepal to present several lectures at the University. There was no contract - written or oral - merely an invitation and an acceptance between the Dean and Dr. Smith. Dr. Smith also expected to receive a gift as he generally does when presenting lectures at other Asia-Pacific countries as is quite customary in such countries. THE STATUE The stone statue of Lord Vishnu seated between goddesses Lakshmi and Garuda (hereinafter referred as The Statue ) which is at least 300 years old and worth well over $100,000 is the subject matter of this arbitration. It was reportedly discovered by Nepalese sheep herders, in 2010, who turned it over to local government officials. There is no documentation indicating how it found its way to the local museum/gallery. It was initially on display at the National Museum (hereinafter referred as Chhauni Museum) but was moved to the National University campus in Kathmandu in The Chauni Museum and the Tribhuvan University agreed orally that it was merely "on display" and it would be returned if the Museum wanted it back or the University was unable to properly display it. THE GIFT AND THE EXPORT After Dr. Smith s last lecture, a dinner was held in his honour. During the dinner, he was presented with the Statue by the Dean even though the Dean did not have the authority to give away something that belonged to People of Nepal or any third party. Dr. Smith maintains that since it was a gift from the National University without any xiii
14 conditions or qualifications he assumed he could take it home with him. However, Dr. Smith was capable of verifying the authenticity of antiques, and could have realized the statue was authentic when he received it in from the Dean. THE EXHIBITION Dr. Smith subsequently donated the statue to the Australian National Museum (hereinafter referred as The Respondent no. 1 ), Sydney. An "expert" on the staff examined its authenticity before deciding to put it on display as part of an exhibit promoting knowledge, understanding and enjoyment of diverse cultures. It is currently on loan from the Respondent no. 1 to the National Museum in Kuala Lumpur, Malaysia (hereinafter referred as The Respondent no. 2 ) for two years - renewably by agreement of both parties. The Australian National Museum and/or the National Museum of Malaysia didn t seek any official documentation i.e., export certification, re the statue. THE DIPUTE The Respondent no. 2 even after knowing the Nepalese export regulations, which require issuance of a special certificate from the Department of Archeology in Kathmandu to take the Statue out of Nepal, deliberately violated the Nepalese export prohibition law. THE CLAIMS The Government of Nepal, (hereinafter referred as The Claimant ) representing the interests of the country, Tribhuvan University and its people, has demanded that the Statue be immediately returned to Nepal asserting that the statue has always belonged to "the People of Nepal and should be returned immediately. Both the Respondent Museums have refused to return the statue, asserting that it was a gift from the University to Dr. Smith who then donated it to the Australia Museum. The Claimant will be pursuing damages against the National Museum (Malaysia) at another proceeding. xiv
15 SUMMARY OF PLEADINGS I. THE ARBITRATION TRIBUNAL HAS AUTHORITY TO ADJUDICATE THIS DISPUTE PERTAINING TO CULTURAL PROPERTY The seat of arbitration can be determined by KLRCA institutional rules and the lex arbitri shall be governed by the law of the seat of arbitration i.e., Nepal. Since the lex arbitri is the Nepalese law and such law provides for arbitrability of the present matter, this arbitral tribunal has the authority to rule on this dispute pertaining to cultural property. II. THE TRIBUNAL SHOULD DETERMINE THE NEPALESE LAW AS PROPER LAW TO THIS DISPUTE In the absence of any express or implied intention of the parties, the applicable law is that law which has the closest and most real connection to the dispute. Nepalese Law is having the closest and most real connection to the dispute after applying lex originis doctrine which is best suited test for cultural property disputes and is also consistent with international practice. III. THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTE UNDER NEPALESE LAW The Claimant has the right to demand the return of the Statue under Nepalese law as the Statue was under the custody and ownership of the government of Nepal, it was transferred without government of Nepal s consent. Further, it was exported illicitly as no export certificate was granted to Dr. Smith. xv
16 IV. WHETHER THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTE UNDER INTERNATIONAL LAW? The Claimant reserves the right to demand return of the Statue under International law because it was illicit export and illicit import under UNESCO Convention Further, the Respondent no. 2 has no right to retain the Statue under UNESCO Convention Also, provisions related to Return of Cultural Property of UNIDROIT Convention 1995 are applicable on Respondent No. 1 and 2. V. WHETHER THE AUSTRALIAN LAW ALSO ESTABLISHES THE CLAIMANT S RIGHT TO DEMAND THE RETURN OF THE STATUE? The Australian law also establishes the Claimant s right to demand the return of the statue because import of the Statue was illicit under Australian law. Further, due diligence was not performed by the Respondent no. 1 and 2 while accepting the donation. VI. WHETHER THE MALAYSIAN MUSEUM IS BOUND TO RETURN THE STATUE TO NEPAL? In the instant case the Statue is under wrongful possession of the Respondent No. 2 which is protected under Napelese laws and should be returned under UNESCO Convention and UNIDROIT Convention. Further, the loan agreement between the Respondent No. 1 and 2 is void and the Malaysian museum is not entitled to any compensation. xvi
17 VII. ARGUENDO: EVEN IF THE TRIBUNAL FINDS THE RESPONDENT ARE NOT BOUND TO RETURN THE STATUE, THE RESPONDENT SHOULD RETURN THE STATUE VOLUNTARILY AS A GESTURE OF GOOD WILL It is an international practice that when no legal means are available, parties enter into negotiations to return objects unlawfully exported from the country of origin after acknowledging the ownership of the source country. Therefore, the respondents should make a voluntarily return of the Statue as a gesture of good-will. xvii
18 I. THE ARBITRATION TRIBUNAL HAS AUTHORITY TO ADJUDICATE THIS DISPUTE PERTAINING TO CULTURAL PROPERTY 1. The Arbitration tribunal has the authority to adjudicate this dispute pertaining to cultural property since,(a) the lexarbitri is the Nepalese law, and (B) Such law provides for Arbitrability of the present matter. A. The lexarbitri is the Nepalese law 2. In order to determine the law governing the arbitration,(i)institutional rules should be considered to determine seat of arbitration. (ii)furthermore, the lexarbitri shall be governed by the law of the seat of arbitration and(iii)not the place of arbitration. i. Institutional rules should be considered to determine seat of arbitration 3. All the parties to the present case have agreed to submit this dispute to the binding arbitration under the auspices of the KLRCA. 1 It is an established practice under the arbitration law that in order to determine the law governing the arbitration agreement the institutional rules should be considered 2 and KLRCA i- Arbitration rules provide 3 Nepal as the most appropriate seat after having regard to the circumstances of this dispute. 1 Moot problem 9 2 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, Vol. I (3rd ed., The Hague, Kluwer Law International, 2009), P.1679 [hereinafter Gary Born I ]. 3 KLRCA i- Arbitration Rules 2013, Rule 6. 1
19 4. Nepal is the most appropriate seat because the statue was discovered within Nepal, it was initially put on display at National Chhauni Museum, Nepal, it was under care and protection of Tribhuvan University, and most importantly it always belonged to the people of Nepal It is submitted that cultural property, unlike most commercial goods, has emotional and cultural connections to their countries of origin. 5 The subject matter of this dispute being a cultural property of Nepal 6, and its transfer via gift to Dr. Smith also happened in Nepal, giving rise to cause of action, Nepal is the most appropriate seat having closest and most real connection to this dispute. ii. The Law of the Seat of Arbitration should govern the Lex Arbitri 6. In the present case, the parties have agreed to arbitrate their dispute pursuant to the rules prescribed under the KLRCA i-arbitration Rules. 7 It is a fundamental principle of the rule of conflict of laws that intention is the general test to determine the applicable law. 8 In the absence of an express choice-of-law provision regarding the arbitration agreement, the arbitration clause must be interpreted as per the law of the seat of the Arbitral Tribunal In light of the above, it is contended that the law governing the arbitration agreement must, by the same reasoning, be the laws of Nepal. 4 Clarification 1, Page 2 5 Christa Roodt,, Cultural Heritage Jurisprudence And Strategies For Retention And Recovery (Centre for Foreign and Comparative Law, volume 35(2), 2002) 6 Ancient Monuments Preservation Act, 2013(1956), Sec 2(b). [hereinafter referred as AMP Act ] 7 Id. 1 8 Vita Foods Products Inc. v. Unus Shipping Co. Ltd., [1939] A.C. 277, 299 (P.C.). 9 Supra 3; Hamlyn & Co. v. Talisker Distillery, [1894] A.C. 202, 208 (House of Lords) 2
20 iii. The Arbitration Agreement will not be governed by the Law of the Place of Arbitration. 8. The arbitral seat is the juridical seat of the arbitration, and therefore, the arbitral seat is not necessarily the place where the hearings of the arbitration proceedings are held. 10 Rather, it is the place, in the absence of any agreement, which is more appropriate and could act as the legal place of the arbitration. 11 Since the concept of the arbitral seat is a legal construct, not a geographic or physical location, the law applicable to the arbitration is unaffected even if arbitral proceedings are physically conducted in places other than the seat of arbitration for any reason By providing that the arbitration shall be held in Malaysia, the only plausible inference is that the parties agreed for Malaysia is it to be the place of arbitration and not the seat of arbitration. Therefore, although the place of arbitration, by virtue of the arbitration agreement would be Malaysia, it is argued that the seat of the arbitration continues to be that of Nepal. B. This dispute is arbitrable under the Nepalese Arbitration Act The law of the seat of arbitration, i.e., of Nepal, (i) is the determining factor regarding questions of Arbitrability, and (ii) the arbitrability of the present matter is not barred by 10 Lesotho Highlands Development Authority v. Impregilo Spa, [2006] 1 A.C. 221 (House of Lords). 11 Id. 12 Judgment of 28 October 1997, SociétéProcédés de préfabrication pour le bétonv. Libye, 1998 Rev. arb. 399 (Paris Courd appel). 13 Arbitration Act, 2055 (1999) 3
21 Nepalese law. Furthermore, (iii)matters pertaining to cultural property disputes are arbitrable internationally. Therefore, the present matter is arbitrable before the Tribunal. i. The Arbitrability of the dispute must be decided in accordance with the law of the seat Nepal. 11. It is internationally accepted principle that the law of the seat of arbitration must be applied for the determination of the arbitrability of the subject matter of the dispute. 14 This is in furtherance of this proposition that the claimant argue that the Nepalese Arbitration Act, 1999, is applicable to the present dispute. ii. The Arbitrability of the dispute is not barred under Nepalese Law. 12. As a general rule, party s capacity to enter into arbitration is governed by the personal law of the party 15 and the Claimant is not barred 16 under the governing law. Further, the Arbitration Act, 1999,does not bar any dispute which is agreed to be settled by any valid arbitration agreement As the parties entered into a valid post dispute arbitration agreement for the settlement of this matter, they have mutually consented to refer their cultural property dispute to arbitration. Hence, they intended and choose this matter to be arbitrable under Nepalese law. 14 ICC Case No (1990), XVII Y.B. Comm. Arb. 153, 158 (1992). 15 Dispute Settlement, United Nations Conference on Trade and Development, 5.2 The Arbitration Agreement 16 Arbitration Act, 1999, s 1(b). 17 Id, s 3. 4
22 iii. Disputes pertaining to cultural property are arbitrable internationally. 14. It is submitted that many States pursue their cultural property claims through arbitration. 18 It is not uncommon indeed, that a State be directly involved in restitution of cultural property proceedings, dealing with violations of export regulations. 19 Arbitration has been accepted internationally in cultural property disputes. 20 Therefore, it is submitted that the present matter dealing with cultural property of Nepal is arbitrable. 18 Lawrence Kaye, Disputes Relating To The Ownership And Status Of Cultural Property, In Resolution Methods Forart-Relateddisputes 47 (1999), At Isabelle F. Gazzini,Cultural Property Disputes: The Role Of Arbitration In Resolving Non-Contractual Disputes (2004). At Elizabeth Varner, Arbitrating Cultural Property Disputes, Cardozo J. Of Conflict Resolution [Vol.13:477] 5
23 II.THE TRIBUNAL SHOULD DETERMINE THE NEPALESE RULE OF LAWAS THE PROPER LAW TO THIS DISPUTE 15. The tribunal should determine the Nepalese law as the proper law to this dispute since, (A) the Nepalese Law is the appropriate law, and (B) the lex arbitri also provides it to be the substantive law for this dispute. A. Nepalese law is the appropriate law applicable to the substance of this dispute 16. The KLRCA Rules provides that failing any designation by the parties, the tribunal shall apply the appropriate law to the substance of this dispute It is an established international practice that in the absence of express or implied intention of the parties, the applicable law is that with the closest and most real connection to the dispute. 22 The same should be determined here after considering the circumstances of this case, and several other connecting factors. 18. In the present matter, there is no contractual agreement and the dispute involves cultural property. Thus, the best suited test would be to apply lex originis 23 doctrine. This method is consistent with international practice 24 and the tribunal should adopt this approach. 19. In cases of illicit export of cultural property, the lex originis rule should be considered to ascertain the closest and most real connection and determine the proper law KLRCA Rules, 2013, Article Bonython v. Commonwealth of Australia, [1951] AC 201, 219 (Privy Council on appeal from Australia); Y.K. Fung Securities SdnBhdv. James Cape (Far East) Ltd, 3 [1997] 2 MLJ 621; Gary B. Born, International Commercial Arbitration, (Kluwer Law International, 2009) ( International Commercial Arbitration ), at p Belden Premaraj, The choices of law: better safe than sorry The Malaysian Arbitration Perspective available at (retrieved on 14 April, 2015) 24 Ivanhoe Fin Inc. V. Highland Banc Corp 2004 WL ; Iran v Berend [2007] EWHC 132 (QB) (01 February 2007); Winkworth v. Christie, Manson & Woods Ltd., [1980] Ch. 496,[1980] 1 All E.R
24 20. In the case of cultural property, lex originis is the law of the country where such cultural property originated or the country having the right to such property. 26 Cultural property, unlike most commercial goods, has emotional and cultural connections to their countries of origins Reliance must also be placed upon Resolution IV Article 2 of the Institut de Droit International at Basle in 1991, to the effect that the transfer of ownership of works of art belonging to the cultural heritage of the country of origin shall be governed by the law of that country. 28 Further, as per the Resolution, the "country of origin" of a work of art means the country with which the property concerned is most closely linked from the cultural point of view In the present case, the Statue is a cultural property of Nepal, 30 which was transported out of the Country without taking prior approval of the Nepal Government. Therefore, Nepal is the country most closely connected to this dispute after applying the closest and most real connection test. Thus it is clear that the law governing the substantive aspects of the dispute is the Nepal domestic law. 25 Derek Fincham, HowAdopting the Lex Originis Rule Can Impede the Flow of Illicit Cultural Property (Columbia Journal of Law and the Arts, Vol. 32, p. 111, 2008) 26 Mas-Colell, Should Cultural Goods Be Treated Differently?, (23 Journal of Cultural Economics, 87 at (1999)) 27 Christa Roodt,, Cultural heritage jurisprudence and strategies for retention and recovery (Centre for Foreign and Comparative Law, volume 35(2), 2002) 28 Institut de Droit International, Basle 1991, Resolution IV Article Id.Article 1 (1) (b). 30 AMP Act, Sec 2 (c). 7
25 B. The lexarbitri also provides Nepalese law as the law applicable to the substance of this dispute. 23. As it has already been established that the Nepalese law is the lex arbitri, when resorting to the mandatory provisions of the Nepalese Arbitration Act, it is expressly provided that whenever the substantive law is not agreed in the arbitration agreement itself, Nepalese law will be the law applicable to the substance of the dispute. 31 Hence it can be clearly determined that the proper law to this dispute is Nepalese law and, the Australian and the Malaysian law are fortuitously connected to this dispute. 31 Arbitration Act, 2055 (1999), Sec 18. 8
26 III. THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTE UNDER NEPALESE LAW 24. The Claimant has,(a)the right to demand the return of the Statue under Nepalese law as the Statue belonged to the government of Nepal, (B)it was transferred without government of Nepal s consent, and (C)it was exported illicitly. A. The Statue was under the ownership and custody of Government of Nepal. 25. The University is a government entity under the domestic law of Nepal. 32 Every archaeological object which is not under the private ownership is considered to be under the custody of the Nepal government. 33 Hence, it is humbly submitted before this tribunal that the statue was not only under the custody of the Nepal Government, but was also in its ownership. B. The statue was transferred without the consent of Nepal's Government. 26. The AMP Act, 1956, places a restriction on transfer or transaction of an archaeological object without the prior approval of the Government. 34 The statue belonged to the people of Nepal and was therefore inalienable. Transfer of ownership requires official authorization 35 and the same was not provided by the Claimant in the present matter. Therefore, the transfer of the Statue to Dr. Smith was invalid. 32 Tribhuvan University Act 2049 (1992), Sec 7, 8, 10, 16, 17, 18, 24, 33A. 33 AMP Act, 2013 ( 1956 A.D.), Sec 17A (1). 34 id.sec 13 (1). 35 Marie Cornu and Marc-André Renold, New Developments in the Restitution of Cultural Property: Alternative Means of Dispute Resolution, International Journal of Cultural Property (2010) 17:
27 C. The Export of the Statue was an Illicit Export 27. The Statue was illicitly exported because: (i) No Special Certificate from Department of Archaeology was requested or issued; (ii) Dr. Smith's Good faith defence is not valid. i. No Special Certificate from Department of Archaeology was issued 28. Under Nepalese domestic law 36 and export regulations 37, it is compulsory to get a Special Certificate for exporting the Statue. 38 It is a punishable offence to remove the Statue outside the territory of Nepal without Nepalese government s approval. 39 The same was neither requested by the Respondent no.3, while taking the Statue outside Nepal, nor was it issued by the Department of Archaeology. 29. Under the "AMP Act, 1956, no person is permitted to export the Statue from Nepal without the prior approval of the Nepal Government. 40 Although, the Statue was given to the Respondent no. 3 as a gift but he was not allowed to move it out of Nepal before getting approval of the Nepalese Government. 41 The Respondent no.3 being an expert and aware of the Nepalese law moved the Statue out of Nepalese territory without permission of the government. 36 Id.Sec 13(1). 37 Moot problem 5 38 Id. 28, Sec 2(b). 39 Id, Sec 12(c). 40 AMP Act, 2013 (1956 A.D.), Sec Id. 10
28 ii. Dr. Smith s Good faith defence is not valid. 30. The Respondent no. 3 has taken the defence of good faith by stating that he believed that the gift was a replica of the Statue and therefore, the same is not covered under export prohibition. 42 It is humbly submitted here that the definition of Archaeological Object 43 under Nepalese law includes, a statue and even "replica" of any movable object. Moreover, as admitted by Respondent no. 3 himself, he was aware of the export regulations of Nepal Further the Statue was given as an honorarium for the Respondent no. 3 s services. 45 In the absence of any prior agreement, the Respondent no. 3 is mistaken in assuming it to be remuneration. Thus, his good faith defense is not valid. 42 Moot problem 5 & 8 43 AMP Act, 2013 ( 1956 A.D.), Sec 2(b). 44 Moot problem 5 45 Moot problem 3 11
29 IV. THE CLAIMANT HAS THE RIGHT TO DEMAND THE RETURN OF THE STATUTEUNDER INTERNATIONAL LAW 35. The Claimant reserves the right to demand return of the Statue under International law because: (A) it was illicit export under UNESCO Convention 1970; (B) it was illicit import in Australia and Malaysia under UNESCO Convention 1970; (C) the Respondent no. 2 has no right to retain the Statue under UNESCO Convention 1970; (D) Provisions of UNIDROIT CONVENTION1995, related to Return of Cultural Property, are applicable on Respondents No. 1 and 2 A. UNESCO Convention 1970 prohibits illicit export 36. Export certificates form a practice nowadays, which is widely accepted both at international, 46 European Union level and by various International Conventions. 47 The same is incorporated in Article 6(b) of the 1970 UNESCO Convention which provides that the export of cultural property from their territory should not be permitted unless accompanied by an export certificate which authorizes the export.thus, the export of the Statue by 46 In 2005 UNESCO and the World Customs Organization have introduced such certificates. CLT- 2005/WS/5. See also the Object ID initiated in 1993 by the Getty Information Institute and endorsed by UNESCO in its 30th General Conference in Regulation 116/2009 on the export of cultural goods of 18 December 2008 (Council Regulation 3911/92 of 9 December 1992 on the export of cultural goods, OJ L 395/1 (Corrigendum OJ L267/30, 19/10/1996), as amended by Council Regulation 2469/96 of 16 December 1996 OJ L 335/9, Council Regulation 974/2001 of 14 May 2001 OJ L 137/10 and Council Regulation 806/2003 of 14 April 2003 OJ L 122/1. Council Regulation (EC) No 116/2009 of 18 December 2008 on the export of cultural goods (codified version)). See also Commission Regulation 752/93 of 30 March 1993 laying down provisions for the implementation of Council Regulation 3911/92 on the export of cultural goods, as amended by Commission Regulation (EC) 1526/98 of 16 July 1998, OJ L 201/47 and Commission Regulation (EC) 656/2004 of 7 April, 2004, OJ L104/50 (Corrigendum, OJ L 203, , p.14 (656/2004) 12
30 Respondent No. 3 in absence of the Special Certificate is violative of the UNESCO convention. 48 B. UNESCO Convention 1970 prohibits illicit import 37. The Respondent no. 1 and 2 being State entities, of Parties to the Convention, are under a legal duty to prohibit the import of the Statue, stolen from the Claimant. They are also under a legal obligation to take appropriate steps to recover and return the statue 49 in furtherance of International co- operation constituted under UNESCO Convention. 50 C. The Respondent No. 2 has no right to retain the Statue under UNESCO Convention The Respondent no. 2 has no right to retain the Statue under UNESCO Convention 1970 because the Respondent no. 1 has no valid title to transfer it to Respondent no. 3.The doctrine of "Nemo dat quod non habet" states that no one can give a better title than he himself possesses. 51 Mr. Smith's title of the Statue became defective as soon he took it outside the territory of Nepal, without the Special Certificate. 52 Since he had a defective title 53 to the Statue, he was not competent to donate the same to the Australian Museum. 54 The Respondent no. 2 is in wrongful possession of the Statue as the Statue was 48 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, Article 11, 1970 (hereinafter UNESCO Convention ) 49 UNSESCO Convention 1970, Article 7(b) (i)&(ii). 50id., Article EDWIN PEEL, TREITEL ON THE LAW OF CONTRACT,(Thomson Sweet & Maxwell, 2011) 52 Moot Problem 5 53 BRYAN A. GARNER, BLACK S LAW DICTIONARY, (9 th Ed. West Publishing Co., 2009 ) 54 K. C. T. SUTTON, THE LAW OF SALE OF GOODS IN AUSTRALIA AND NEW ZEALAND, (the Law Book Co. Ltd Pp. xlviii, 405); Gamers Motor Centre (Newcastle) Proprietary Limited -v- Natwest Wholesale Australia Proprietary Limited; (1987) 163 CLR
31 illegally exported and the first transfer itself was not valid. 55. Thus, by accepting the Statue in donation, Respondent No. 1 has violated the obligations imposed by the UNESCO Convention. 56 Moreover, the Respondent no. 2 can t resort to its national law as a justification for its failure to perform a treaty. 57 Therefore, the Claimant is entitled to have the Statue returned to Nepal, under UNESCO Convention. 58 D. Provisions of UNIDROIT CONVENTION, 1995 are applicable on Respondents No. 1 and Nepal has already ratified the UNIDROIT Convention 1995 via endorsement of the Kathmandu Declaration in The same is also applicable on the states of Australia and Malaysia because; (i) Preservation of Cultural Property is a Custom under International Law (ii) The state practice of Australia and Malaysia are in conformity with the UNIDROIT Convention. i. Preservation of Cultural Property is a Custom under International Law 40. Reflecting the general principles of International law, Article indicates the process of generation, namely that a rule set forth in a treaty becomes binding on third States as a customary rule of international law. International Court noted in the Continental Shelf case 61, that 'actual practice and opinion juris of states' primarily forms the substance of customary international law. 62 The various Conventions and Treaties 63 on Preservation of 55 id. 45, Article Preamble, id. 57 the Vienna Convention on the Law of Treaties, 1969 (hereinafter VCLT), Article Symeon Symeonides, A Choice-of-Law Rule for Conflicts Involving Stolen Cultural Property, (38 Vand. J. Transnat l L (2005)) 59 Kathmandu Declaration, Adopted at the Symposium on the Illicit Traffic in Cultural Property, 30 Aug VCLT, Germany v Denmark and the Netherlands [1969] I.C.J 1 (also known as The North Sea Continental Shelf cases) 62 Libya v. Malta 1985 I.C.J. Rep
32 Cultural Property have a global membership and have been ratified and incorporated into the domestic legislations by countries all over the world. Thus 'protection and return of Cultural Property' can be termed a Custom 64 as emphasized by the ICJ, 65 in the Anglo-Norwegian Fisheries case 66 and Asylum Case 67. ii. The state practice of Australia and Malaysia are in conformity with the UNIDROIT Convention. 41. The Respondent No. 2 and 3 are not parties to the UNIDROIT Convention 1995, but they have promulgated the essence of the same in their domestic legislations 68, while ratifying the UNESCO and Hague Conventions 69. They have recognized the customary rule of Preservation and Return of Cultural Property in their state practice. 70 The UNIDROIT Convention merely supplements the 1970 UNESCO Convention, as has been also mentioned in the former's Preamble Convention for the Protection of Cultural Property in the Event of Armed Conflict ( The Hague Convention First Protocol,1954, and Second Protocol, 1999); Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (UNESCO, 1970); Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington, 1973); Convention on Biological Diversity (UN, 1992); Convention on Stolen and Illicitly Exported Cultural Objects (UNIDROIT, 1995); Convention on the Protection of the Underwater Cultural Heritage (UNESCO,2001); Convention for the Safeguarding of the Intangible Cultural Heritage (UNESCO, 2003) 64 MALCOLM N. SHAW, INTERNATIONAL LAW, (Cambridge University Press (2008) Page 82) 65 The Statute of the International Court of Justice, 1945, Article 38(1)(b). 66 I.C.J Reports, 1951, pp. 116, 131 and 138; 18 ILR, p I.C.J. Rep at The Protection of Movable Cultural Heritage Act, 1986 (Australia) and the National Heritage Act, 2005 (Malaysia) 69 Convention on the Means of Prohibiting the Illicit Import, Export and Transfer of Cultural Property 1970 and the Convention for the Protection of Cultural Property in the Event of Armed Conflict with Regulations for the Execution of the Convention Asylum case, op. cit., 276 7; Rights of Nationals of the United States in Morocco case, I.C.J Rep. 1952, 176, at Preamble, UNIDROIT Convention 15
33 a) Australian State practice provides for return of cultural property 42. The repatriation of the Cultural Property of Egypt 72, Peru, Jordan 73 and China 74 on recent occasions is a further evidence of the opinion juris of Australia which is in compliance with the global norm of repatriation of Cultural Property. Thus, Customary International Law mandates that UNIDROIT Convention 1995 be also applicable on Australia. b) Malaysian State practice also provides for return of stolen cultural property` 43. Malaysia is not only the signatory of the UNESCO Convention 75 but it has also ratified the same in its domestic laws via the National Heritage Act, Further, it has also adopted various other International conventions 77 and Declarations 78 that provide forthe return of a foreign heritage in cases of stolen or illicit import. 44. It is humbly put forth, that the Respondent No. 2is bound to return the stolen statue. 79 However, by retaining the Statue, it has violated both the International as well as its domestic laws. 80 Hence, the Claimant is entitled to claim the return of the Statue removed from its territory in contravention of its export regulations (retrieved on 12 April, 2015) 73 Precious artifacts returned to Peru and Jordan Wednesday 28 September 2011) (retrieved on 13 April, 2015) 74 Australia returns pricy Qing dynasty statue to China ( on 12 April, 2015) 75 Moot Problem 9 76 Part VI, export of antiquities and historical objects, The National Heritage Act, Supra ASEAN Declaration on Cultural Heritage, Article Id. Article 3 (1). 80 Id,Article 5(3). 81 UNIDROIT CONVENTION, Article 1(b). 16
34 V. THE AUSTRALIAN LAW ALSO ESTABLISHES THE CLAIMANT S RIGHT TO DEMAND THE RETURN OF THE STATUE 45. The Australian law also establishes the Claimant s right to demand the return of the statue because: (A) import of the Statue was illicit under Australian law; (B) further, Due-diligence was not performed by the Respondent no. 1 and 2 while accepting the donation. (C) Australian Museum did not have the Capacity to loan the statue to Malaysian Museum A. Australian Law prohibits import of cultural property without export certificate 46. Australian Law mandates that the government must respect the export restrictions and sovereignty of Nepal by prohibiting the import of a protected object of a foreign country, if such export is prohibited by the law of Nepal. 82 Further where a person imports such an object, despite being aware of such restrictions, he becomes liable to be fined and punished and the artifact is also liable to be forfeited. 83 The Australian Law is in perfect conformity with the UNIDROIT Convention The Respondent no. 3 has committed an offence by intentionally importing cultural property of Nepal to Australia, without prior approval of the Nepal Government and has violated 82 Protection of Movable Cultural Heritage Act, 1986, Section (Australian Customs and Border Protection Service), Customs (Prohibited Imports) Regulations (retrieved on 12 April, 2015) 84 UNIDROIT CONVENTION 1995, Article 5. 17
35 theimport Restriction of Australia and hence the statue is liable to be forfeited and returned to Nepal as warranted by the Australian Act. 85 B. Due diligence was not performed by Respondent Museums while accepting the donation. 48. Both Australian Museum 86 and Malaysian Museum 87 are members of the ICOM and follow the Code of Ethics laid down by the latter. 88 Code of ethics, when endorsed by substantial practice; often reach a degree of moral constraint equal to that of law. 89 Further, the Preamble 90 to the UNESCO Convention provides that all museums should ensure that their collections are built up in accordance with universally recognized moral principles. However, it can be safely concluded that the Museums have violated their duties because : (i) Museums failed to check the validity of title and (ii)museums disregarded the relevant laws i. Museums failed to check the validity of title 49. The Code of Ethics, requires that, a museum should not acquire, whether by purchase, gift, bequest or exchange, any object, unless the governing body and responsible officer is satisfied that the museum can acquire a valid title to the specimen or object in question and that in particular it has not been acquired in, or exported from, its country of origin and/or any 85 Protection of Movable Cultural Heritage Act, (retrieved on 13 April, 2015) 87 (retrieved on 10 April, 2015) 88 (retrieved on 12 April, 2015) 89 Autocephalous Greek- Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts Inc. 917 F.2d 278 (1990) 90 Preamble to UNSESCO Convention, available at (retrieved on 12 August, 2015) 18
36 intermediate country in which it may have been legally owned, in violation of that country's laws. 91 The legality of ownership of a cultural object should be beyond any reasonable doubt. 51. Further Principle 2.3 mandates that every effort must be made before acquisition to ensure that any object or specimen offered has not been illegally obtained or exported from the country of origin or any intermediate country in which it might have been owned legally. 52. Since the Statue was imported in contravention of the, Protection of Movable Cultural Heritage Act, 92 the Import Prohibition 93 and the International Conventions 94, it can be safely concluded that both Museums accepted the donation without enquiring about the title to the Statue. Clearly, the Museums have violated the Code of Ethics laid down by the ICOM. 95 They have also violated Principle , which states that the Members of the museum should not support the illicit traffic or market in natural or cultural property, directly or indirectly. ii. Museums disregarded the relevant laws 53. The ICOM Code of Ethics 97 requires that every member of the museum profession should incorporate, respect and be conversant with the relevant international, national and local legislations. The ICOM Code provides for the return of cultural objects to their countries or peoples of origin on grounds of applicable national legislation the ICOM Code of Ethics for Museums, 2004, Principle 2.2 and Principle 3.4 of the Code of Ethics, Protection of Movable Cultural Heritage Act, 1986, Section (Australian Customs and Border Protection Service), (retrieved on 12 April, 2015) 94 UNESCO & UNIDROIT Conventions 95 The ICOM Code of Ethics for Museums (2004), Principle The ICOM Code of Ethics For Museums, Id, Principle 8.1 Familiarity with Relevant Legislation. 98 Id, Principle 6.2 Return of Cultural Property. 19
37 54. But by accepting the donation of the Statue from John Smith, Australian Museum has shown utter disregard for its own Code of Ethics, domestic legislation, and International Conventions. C. Australian Museum did not have the Capacity to loan the statue to Malaysian Museum 55. According to the UNESCO Convention, 99 Australia undertook to take the necessary measures, consistent with national legislation, to prevent museums and similar institutions within their territories from acquiring the Statue originating in Nepal, which has been illegally exported. 100 Australia is also under an obligation, whenever possible, to inform the Claimant of an offer of the Statue illegally removed from Nepal To this effect Australia has failed to prevent Australian Museum from acquiring the Statue and returning the same to Nepal. 99 UNESCO Convention, Article Id. 101 Id. 20
38 VI. THEMALAYSIAN MUSEUM IS BOUND TO RETURN THE STATUE TO NEPAL 56. In the instant case the Statue under consideration is designated and protected as a cultural property by the Laws of Nepal, which is a party to the UNESCO Convention, so the Statue should be considered as a foreign heritage item for the purposes of National Heritage Act, Malaysian Museum is bound to return the statue back to Nepal as A) it was imported illegally B) The statue should be returned back to Nepal and hence, C) Malaysian Museum is not entitled to any compensation. A. The statue was imported illegally 57. The Act mandates that a person who intends to import any foreign heritage item shall notify the Commissioner with the documents certifying that such foreign heritage item was lawfully transported out of a foreign country. 103 In the present matter, no certificate was issued by the Nepal Government to Mr. Smith, permitting the transport of the statue outside its territory. Subsequently, the National Museum, Malaysian failed to perform the due diligence while accepting the donation of the same as mandated by the Malaysian Law as well as the Relevant International Conventions. 58. In the absence of such Special Certificate from the Nepal Government, there exists no possibility that the National Museum of Malaysia would have submitted such a certificate to the commissioner. Hence, Malaysia has failed to comply with the requirements of the National Heritage Act, Malaysian National Heritage Act, 2005, Section 2 (1). 103 Id, Section 84 (1). 21
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