- •30 March – 5 april
- •Table of contents
- •Index of Authorities......................................................................................................... I
- •Index of Cases & Awards............................................................................................... V
- •I. The nature of the relationship between dr. Mercado and the presiding arbitrator gives rise to a conflict of interest and dr. Elisabeth mercado is to be dismissed from this arbitration
- •VII. Claimant is under no obligation to restitute full damages under article 74 cisg on the strength of dispositive construction of this article.
- •Index of authorities, cases and awards
- •Abbreviations
- •Statement of facts
- •Summary of arguments
- •Arguments
- •I. The nature of the relationship between dr. Mercado and the presiding arbitrator gives rise to a conflict of interest and dr. Elisabeth mercado is to be dismissed from this arbitration
- •II. It is legally possible to remove Dr. Mercado from the present arbitration.
- •III. If claimant does not agree to remove dr. Mercado we are, indeed, forced to challenge the presiding arbitrator.
- •IV. The respondent did not breach the contract fundamentally
- •V. Respondent should be excused from liability under the article 79 due to impossibility to overcome and foresee the impediment
- •VI. Respondent should be excused from liability under the article 79 (2)
- •VII. Claimant is under no obligation to restitute full damages under article 74 cisg on the strength of dispositive construction of this article.
Summary of arguments
Concerning the procedural issue of the case presented it should be noted that the body of evidences to be disclosed in the Arguments clearly demonstrates that the nature of the relationship between Dr.Mercado and the Presiding Arbitrator goes far beyond the limits of “professional” one and gives rise to a conflict of interest and constitutes all the grounds necessary in order to dismiss Dr.Mercado from this arbitration or, if the Claimant insists on preserving her status in the arbitration, to challenge Professor Presiding Arbitrator.
In particular, the fact that Professor Presiding Arbitrator and Dr. Mercado teach at the same university, i.e. social institution named as such in the Orange List of IBA Guidelines, constitutes a conflict of interest that gives rise to a justifiable doubt in the compliance with the principle of impartiality in this arbitration. Additionally, the Presiding Arbitrator and Dr. Mercado’s encounters in previous arbitrations constitutes a conflict of interest that gives rise to a justifiable doubt mentioned. The final circumstance to rise justifiable doubt on whether the bias exists or not is the relationship between Dr. Mercado and the Presiding Arbitrator’s wife and children.
The existence of the bias specified below makes it legally possible to remove Dr. Mercado from the present arbitration.
We believe that despite of the lack of the Tribunal’s expressed authority, there are sufficiently enough reasons, supported by international commercial arbitration practice, to claim there is an implied authority to perform such sort of action as challenging Claimant’s counsel (legal representative) – Dr. Elisabeth Mercado. Herewith, it has to stressed that, for a number of reasons, challenging Dr. Mercado does not seem to be an alternative of challenging an arbiter.
Our point on the liability matters of the case is that the Respondent did not “breach the Contract fundamentally”, as Claimant says attempting to imply on the Respondent the liability for the impediments that we are not responsible for. Particularly, late delivery cannot be considered as a fundamental breach of contract according to the Article 25 CISG and commentary to it.
We believe the Respondent should be exempted from liability under the article 79 of CISG by virtue of impossibility to foresee and overcome the impediment which was the reason of why the late delivery and installation of master control system occurred since it was beyond the Respondent’s control. Furthermore, the Respondent should be exempted from liability due to good faith conduct.
In accordance with CISG provisions, the Respondent, in order to be exempted from liability under Art. 79(2) because the “third party” with regard to the Respondent should be also exempted from liability under Art. 79(1) because of failure to perform its obligation due to the impediment occurred beyond its control. Specialty Devices, as a participant of the supply chain, could not overcome the consequences of impediment occurred and there are no sufficient grounds to allege that D-28 chips might have been supplied before fire occurred.
Moreover, it should be noted, that, as far as we are concerned, the Claimant is under no obligation to restitute full damages under article 74 CISG on the strength of dispositive construction of this article.
In our understanding of the disputes around the damages to be reimbursed the Respondent is under no obligation to restitute full damages under article 74 CISG on the strength of dispositive construction of this article. General damages of USD 448 000 are not coming under repayment as normal compensatory damage. Besides, by virtue of the reasons shown below, we do not think the Respondent does not have to cover damages caused by standard yacht broker commission of 15% for rental cost of M/S Pasifica Star, and USD 50 000 for yacht broker success fee which Claimant paid on top of the commission because they are unreasonable incidental damages.
That is why the Respondent should be excused from liability under the article 79 (2) of CISG.