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ＥＬＥＶＥＮＴＨ ＡＮＮＵＡＬ

WILLEM C. VIS

INTERNATIONAL

COMMERCIAL ARBITRATION MOOT

APRIL 2004

ＭEMORANDUM FOR RESPONDENT

Yuki Fukuyama

Machiko Arichika

Miyuki Zushi

Sakie Takahashi

Mika Migawa

MEIJI GAKUIN UNIVERSITY FACULTY OF LAW

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MEIJIGAKUIN UNIVERSITY FACULTY OF LAW

TEAM MEMBERS:

YUKI FUKUYAMA MACHICHO ARICHIKA SAKIE TAKAHASHI MIKA MIGAWA MIYUKI ZUSHI

ELEVENTH ANNUAL WILLEM C. VIS

INTERNATIONAL COMMERCIAL ARBITRATION MOOT

2003-2004

INSTITUTE OF INTERNATIONAL COMMERCIAL LAW PACE UNIVERSITY SCHOOL OF LAW

WHITE PLAINS, NEW YORK U.S.

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TABLE OF CONTENTS

TABLE OF AUTHORITIES……………………………………………………………………i INDEX OF CASES……………………………………………………………………………..ii INDEX OF ARBITRAL AWARDS……………………………………………………………iii Argument…………………………………………………………….…………………1

1. Parties………………………………………………………….……………………1 2. Statement of

Facts…………………………………………………………….……………………2

3. Issues…………………………………………………………………………………5

4. Conformity with the contract under article 35 CISG…………………………………………………………………………………..5

4.1. The Model 14 packaging machines production rates were

equivalent with their price…………………………………………………..6 4.2. Equapack did not inform Medi-Machines that they expected to use

the machines to pack salt before the conclusion of the contract……….6 4.2.1. The Model 14 packaging machines were fit for the particular

purpose- packaging over a wide range of products- made known to Medi-Machines(35(2) (b) CISG)……………………………………………..7

4.2.2. The six Model 14 packaging machines were fit for the purposes

for which goods of the same description would ordinarily be used (article 35(2) (a) CISG)……………………………………………………..9

4.2.3. The six Model 14 packaging machines were of the quality

required by the contract (article 35(1) CISG)……………………………..9 4.3. The suggestions (the Model 14 or 16 packaging machines) by

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Medi-Machines for Equapack’s request were correct……………………9 5. The condition of the Model 14 packaging machines does notconstitute a

fundamental breach…………………………………………………………10 5.1. Even if the Tribunal holds that a breach was committed, it was not

fundamental. ………………………………………………………………………………….11

5.2. Non-Foreseeability of the consequences of the breach………………..11

6. The letter of 19 October 2002 does not constitute a declaration of avoidance of the contract………………………………………………………………..12

6.1. Equapack does not have a right to avoid the contract under CISG. …………………………………………………………………………………12

6.1.1. Equapack does not have a right to avoid of contract under Article 49(1)(a) CISG……………………………………………………… 13.

6.1.2. Even if Equapack once had a right to avoid the contract,

according to Article 49(2)(b)(ⅱ)CISG………………………………..…. 13

6.1.3. Equapack lost the right to avoid the contract under Article 82 CISG…………………………………………………………………………...14 6.2. Even if Equapack had a right to avoid the contract, Equapack did not declare to avoid the contract under article 26 CISG……………14 6.2.1. Form and content of the declaration……………………………16 6.2.2. The letter of 19 October 2002 does not meet form and content of the declaration, nor the telephone of 18 October 2002………………16

7.Claimant should post security costs………….………………………………….17

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7.1.In this case, there are not clear declaration of the amount of the security costs. Why not determined the amount of the security cost? ………………………………………………………………………………….18 7.2. There are in circumstances needed to post security cost…………18 7.3. The report about Claimant’s financial problem is not rumor…………………………………………………………………………19 7.4. The execution and New York convention………………………….20 7.5. Whether to post security cost would raise injustice in this Tribunal or not? ……………………………………..…………………………………21 7.6. Therefore, the Tribunal should request to Claimant that has financial difficulties to post security cost………………………………22

8.Claimant should not disclose about relating this Tribunal, The Tribunal must

proceed confidentiality…………………………………………………………….22

8.1. From the Arbitration beginning both of the parties have obligation to keep confidential about existence and relating information of the arbitration tribunal. ………………………………22

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8.2. Claimant could not disclose the information about the tribunal no matter how it insignificant things………………………………………23 8.2.1.The Confidential Obligation is general rule in arbitration tribunal………………………………………………………………………23

8.2.2. The cases relevant confidential obligation……………………..23 8.3. There is explicit rule in SIAC Rules which these parties consent to depend on under the contract…………………………………………26.

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8.4. Consider the force of the obligation of confidentiality in the contract both of parties should obey this rule…………………………27 8.5. What implications to this tribunal for disclosure…………………27

8.6. Therefore the Tribunal should order to Claimant not to disclose anything about this tribunal………………………………………………27

9. Conclusion………………………………………..………………………………28

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TABLE OF AUTHORITIES

Honnold, John ; Union law for International Sales under the 1980 United nation Convention, 3rd

ed.,Deventer 1999

[cited as :Honnold]

Herber/Czerwenka ; Internationales Kaufrecht-kommentar zun Ubereinkommen der

Vereinten Nationen vom 11.April 1980 uber Vertrage uber den internationalen warekauf,

Schlechtriem- Schlechtriem; Commentary on the UN-Convention on the International Sale of

Goods(CISG), 2nd ed.(in translation ),Oxford 1998

[cited as : Schlechtriem(1998)-Reviser]

Schlechtriem; Einheitliches UK-Kaufrecht: Das Ubereinkommen der Vereinten Nationen vom

11.April 1980 uber Vertrage uber den internationalen Warenkauf JZ 1988

Bianca,Cesare; commentary on the International sales Law-The 1980 Vienna sales

Convention,mialn 1987

Bonell,Micheal; [cited as :Bianca/Bonell-Reviser]

Staundinger,Jochen/ Magnus,Ulrich; Kommentar zum Burgerlichen gesetzburg mit

einfuhrungsgesetz und Nebengesetzen ‒Winer UK-kaufrecht (CISG),13th ed.,Berlin 1994

[cited as:Staudinger-Magnus]

Enderlin,Fritz/ Maskow, Dietrich/Stargardt,monika; Kommeentar.Konvention der Vereingten

Nationen uber Veertrage uber den internationalen Warenkauf; Kovention uber die Verjahrung

beim internationalen warekauf, Protokoll zur Anderung der convention uber die Verjahrung

beim internationalen Warekauf, Protokoll zur Anderung der convention uber die Verjahrung

beim internationalen Warenkauf, Berlin (Ost)1985 [cited as : Enderlin/ Maskow/Stargardt]

Enderlin,Fritz/ Maskow, Dietrich/Stargardt,monika; nternationales kaufrecht

Kaufrechtskonvention, Verjahrungkonvention,Rechtsanwedungskonvention,Berlin 1991

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Leser/Schlechtriem, Peter (ed.): Commentary on the un convention on the international sale

of goods (CISG) [cited as: leser in Schlechtriem]

Huber/Schlechtriem, Peter (ed.): Commentary on the un convention on the international sale

of goods (CISG)

Huber,Ulrich; Der UNCITRAL-Entwurf eines Ubereinkommens uber internationale

Warenkaufvertrage,rabels Z 43 (1979),at 413-526, [cited as: Huber, Rabels Z]

Redfen,Allan/Hunter, Martin : Law and practice of International Commercial Arbitration (2nd

ed) Sweet & Maxwell, London (19991)

Mustill /Boyd : The law and practice of Commercial Arbitration in England (2nd.. ed.

1-1-1989zz).303-404 )

Julian D. M. Lew, “Expert Report of Dr.Julian D. M. Lew in Esso / BHP v.Plowman”

OLG Frankfurt, RIW (1991)

INDEX OF CASES

(UNITED KINGDOM) 1991

DOLLING-BAKER V MERRET AND ANOTHER,

2 ALL ER 890

1993

HASSNEH INSURANCE CO OF ISRAEL AND OTHERS V. STEUARTJ MEW

2 LLOYD'S REP 243

1995 INSURANCE CO V. LLOYD’S SYNDICATE 1 LLOYD’S REP 272 1995 (AUSTRALIA) ESSO AUSTRASLIA RESOURCE LTD. AND OTHERS V. THE

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HONORABLE SIDNEY JAMES PLOWMAN (THE MINISTER FOR ENERGY AND MINERALS) AND OTHERS ARBITRATION INTERNATIONAL, VOL.11 NO.3

INDEX OF ARBITRAL AWARDS

(GERMANY)

DATE: 14.10.2002

NUMBER: 16 U 77/01

COURT: OBERLANDESGERICHT KÖLN

PARTIES: UNKNOWN

DATE: 25.06.1997

NUMBER: VIII ZR 300/96

COURT: BUNDESGERICHTSHOF

PARTIES: UNKNOWN

DATE: 20.04.1994

NUMBER: 13 U 51/93

COURT: OBERLANDESGERICHT FRANKFURT AM MAIN

PARTIES: UNKNOWN

DATE: 14.10.1992

NUMBER: 1 C 216/92

COURT: AMTSGERICHT ZWEIBRÜ CKEN

PARTIES: UNKNOWN

DATE: 17.09.1991

COUNTRY: GERMANY

NUMBER: 5U 164/90

COURT: OBERLANDESGERICHT FRANKFURT AM MAIN

PARTIES: UNKNOWN

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（AUSTRIA） 27,07,2003 OGH 2 OB 48 /02

http//: cisgw3.law.pace.edu/cases/030227a3.html

(ITALY) 13,12,2001 TRIBUNALEDIBUSTOARSIZIO

"NONE NAME OF PARTIES & INFORMATION"

(GERMANY) 24,03,1999 BUNDESGERICHTSHOF

VLLL ZR 121/98

http//:cisgw3.law.pace.edu/cases/990324g1.html

・ OLG frankfurt am Main [UNILEX,E.1994-2] ・ BGE Switzerland [UNILEX,E.1998-18.1] ・ OLG frankfurt am Main [UNILEX,E.1994-10] (Australia) Federal Court,south Australia District Adelaide, [UNILEX,E.1995-15.1.1] BGH NJW 1982, 2730, 2732 on the corresponding position under ULIS

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SINGAPORE INTERNATIONAL ARBITRATION CENTER

1. Parties MOOT CASE No. 11

LEGAL POSITION ON BEHALF OF EQUAPACK, INC. 345 COMMERCIAL AVE., OCEANSIDE EQUATORIANA (CLAIMANT) AGAINST MEDI-MACHINES, S.A. 415 INDUSTRIAL PLACE CAPITOL CITY MEDITERRANEO (RESPONDENT)

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2 . Statement of FACTS 2002 24 June Equapack’s works manager, Mr.Donald Swan, wrote Medi-Machiens to

inquire into the possibility of packaging several new machines to be used to pack dry commodities into retail packages of 500 grams up to 1 kilogram.

3 July Mr. Stefan Drake, a salesman for Medi-Machines, answered with an offer of six Model 14 auger-feeder dry commodity packaging machines.

12 July Mr. Swan accepted the offer for Equapack. The contract was concluded. 23 July Mr. Swan telephoned Mr. Drake to inquire into the delivery status of

the machines, not to inform Medi-Machines that Equapack intended to use the machines to pack salt.

During this telephone conversation, Mr. Swan spoke rather casually about other matters, was not asking Mr. Drake or Medi-Machines to do anything and made only one statement that mentioned salt.

24 July Mr. Drake answered the inquiry of the delivery status by fax in which he said that the machines were packed and ready for ocean shipment but would be picked up by the shipping company and loaded in a container the following Monday.

2 August Payment was made by means of a letter of credit, Equapack’s account was debited.

21 August The six machines were duly delivered. 30 August They were installed and placed in service.

During September Two of the machines were used for packaging all products other than salt.

Four of the machines were also used for packaging salt. The machines were slower than had been Equapack’s experience with similar machines. But Equapack laid it lie.

By the end of September The machines used for packaging salt were showing

serious signs of corrosion and could only be used with coarser products.

Since there was concern that the foods itself might become Contaminated, it was decided that they should no longer be used.

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(More than 17 days) Equapack do nothing for this matter. 18 October Mr. Swan telephoned Mr. Drake to inform him the corrosion and told

that the machines had been used for packaging some kind of products including salt.

Mr. Swan told Mr. Swan that the machines were not designed to pack salt. Mr. Swan remained Mr. Drake that he told him in the telephone call of the 23 July 2002 that the machines were going to be used for packaging of the salt, to which Mr. Drake replied that he could not remember such a statement.

19 October Mr. Swan offered the machines back to Medi-Machines in his letter. 27 October Mr. Drake offered a substantial concession on the purchase of his

Model 17packaging machines as solution. 2003 10 February Mr. Langweiler, representing Claimant, demands that the dispute

between Equapack and Medi-Machines will be submitted to arbitration.

24 February Mr. Ang yong Tong acknowledges receipt of claimants notice. 5 March The letter from Joseph Langweiler, counselor of Claimant to Mr. Ang.

Made a notice of completion of transfer administrative cost. And he appointed a arbitrator, Mr.(Arbitrator 1). Pursuant to article 8.1.SIAC Arbitration Rules.

26 March The letter from Horace Fasttrack, counselor of Respondent. He require the name and contact information of the arbitrator he intend to appoint.

27 March A letter from Mr. Arbitrator 1 to Mr. Ang Yong Tong, Resister of SIAC. He declare of his independence and impartiality toward the

Arbitration Tribunal. 17 April The letter from Mr. Horace, counselor of Respondent to Fastttrack to

Mr. Ang Yong. Tong Registrar of SIAC. There is noted the person to preside arbitrator are no circumstances likely to give rise to justifiable doubts as to his impartiality or independence.

18 June The two parties to this arbitration, throught their counsel and Professor (presiding Arbitrator) have a conference call in order to

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settle on the procedure that would be followed in the commencement of the arbitration.

20 June Professor (Presiding Arbitrator) issued Procedural Order No.1. He declares the Tribunal authorized him.

6 August Mr. Eur. Ing. Franz van Heath-Robinson, expert engineer appointed by submit the report of the test of the Model 14 auger-feeder machines.

1 September In the letter of Mr. Horace Fasttrack, counselor of Repondent request to post the security for costs to the tribunal. And it is widely reported by Equatoriana financial press about that Claimant has cash-flow problem. He also request to Claimant provide their financial situation to the tribunal.

9 September In the letter of Joseph Langweiler, counselor of Claimant declared Equapack will be purchased by Equatoriana Investors one of the largest financial firms. And due diligence is currently in process.

17 September In the letter of Mr. Horace Fasttrack, Counselor of Respondent concern to Claimant expect to inform Equatoriana Investors about the arbitration. He states there is no doubt that Claimant would be in violation of SIAC Rule 34. and he claimed Claimant refrain from divulging any aspect of the current arbitration, including its very existence.

24 September In the letter of Mr. Joseph Langweiler, Counselor of Claimant made insistence that the necessity of divulge. The courts of Equatoriana have held in a number of cases that the party being purchased must divulge all matters that materially affect either its financial or its business situation. And the Obligation to confidential toward the arbitration is not an absolute obligation.

3 October Singapore International Arbitration Center provide Procedural Order

No. 2. they signify the issues for discuss. And require the submission of memoranda. This memorandum comply with these orders.

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3. Issues. ・ Were the Model 14 packaging machines in conformity with the contract? ・ Did the condition of the Model 14 Machines constitute fundamental

breach and did the letter of 19 October 2002 from Mr. Swan to Mr. Drake constitute a declaration of avoidance of the contract?

・ Should the Tribunal order Claimant, Inc. to post security for costs? ・ Is Claimant obligated to refrain from divulging the existence of the

arbitration and all details in connection with it in the due diligence currently being conducted by Equatoriana Investors?

・ If so, is the Tribunal authorized to order it to do so? ・ What consequences might follow upon the existence of such an order if

Claimant were to violate the order? 4.. Conformity with the contract under article 35 CISG 1. The seller must deliver goods which are of the quantity, quality, and

description required by the contract (article 35(1) CISG). The goods must be fit for the purposes for which goods of the same description would ordinarily be used (article 35(2) (a) CISG) and for any particular purposes expressly or impliedly made known to the seller at the time of the conclusion of the contract (article 35 (2) (b) CISG).

2. The six Model 14 packaging machines were fit for the purposes for which

goods of the same description would ordinarily be used(article 35(2) (a) CISG)

3. The Model 14 packaging machines were fit for the particular purpose-

packaging over wide range of products- made known to Medi-Machines (35(2) (b) CISG)

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4. The six Model 14 packaging machines were of the quality required by the

contract (article 35(1) CISG) 5. Therefore the six Model 14 packaging machines were in conformity with

the contract under Article 35 CISG. 4.1. The Model 14 packaging machines production rates were equivalent with their price. 6. For Equapack price and prompt delivery would be essential elements of

their purchasing decision. (Claimant’s Exhibit No.1) Therefore Medi-Machines offered the Model 14 packaging machines which meet Equapack’s need for prompt delivery and desire for as good a price as possible. In addition Medi-Machines informed Equapack that Auger feeders are slower than are multi-head weighers. Therefore industrial average is neither here nor there.

4.2. Equapack did not inform Medi-Machines that they expected to use the machines to pack salt before the conclusion of the contract. 7. The contract was concluded on 12 July 2002. Medi-Machines offered the

six Model 14 packaging machines on 3 July 2002 because Mr. Drake, a salesman for Medi-Machines stated “I could offer you six of our Model 14 auger-feeder packaging machines.” in his letter of 3 July 2002. (Claimant’s Exhibit No.2) Equapack accepted the offer by Medi-Machines on 12 July 2002 because Mr. Swan, Works Manager of Equapack stated “The contract for which we anticipated the need of additional equipment has been signed. (omission) I am therefore authorized to order from you six Model 14 dry stuff packaging machines.” in his letter of 12 July 2002. (Claimant’s Exhibit No.3)

8. Equapack did not indicate that they needed packaging machines that

would be used for packaging salt. Having failed to make this special

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purpose clear to Medi-Machines prior to the conclusion of the contract, Medi-Machines was not obligated to deliver machines that were appropriate for packaging salt and consequently is not responsible for the corrosion that occurred.

9. Even after the conclusion of the contract for the sale of the Model 14

machines and prior to their delivery and use, Equapack did not inform Medi-Machines that the machines would be used for packaging salt. Mr. Swan was not attempting to inform Mr. Drake or Medi-Machines that the machines would be used for packaging salt when he telephoned on 23 July 2002. What he told Mr. Drake was not sufficient to convey that information. Even if it had been clear that Equapack intend to use the machines to pack salt, it was too late to affect Medi-Machines’ responsibility. The contract was concluded, the specific machines to be shipped to Equapack had been selected and those machines had been packed for export shipment.

4.2.1. The Model 14 packaging machines were fit for the particular purpose- packaging over a wide range of products- made known to Medi-Machines (35(2) (b) CISG) 10. It was after the conclusion of the contract that Equapack stated they

would use the machines to pack salt. So the particular purpose made known to the Medi-Machines at the time of the conclusion of the contract was packaging over a wide range of products, both fine goods, such as ground coffee or flour, and coarser goods such as beans or rice, not packaging salt. (See Claimant’s Exhibit No.1)

11. The Model 14 packaging machines could be used to pack both fine

products and coarser items. (Claimant’s Exhibit No. 2) therefore the Model 14 packaging machines were fit for the particular purpose under Article 35(2)(b) CISG

12. Even if Equapack insisted they stated about packaging salt before the

machines was shipped, the way to inform was inadequate. Mr. David Swan, Works Manager of Equapack, telephoned Mr. Stefan Drake, a salesman for Medi-Machines, on 23 July 2002 to inquire into the

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delivery status of the Model 14 machines that Equapack was purchasing. He was not calling to inform Medi-Machines that Equapack intended to use the machines to pack salt. During the conversation Mr. Swan spoke rather casually about other matters, but Mr. Drake did not pay particular attention to those elements of the conversation and had no reason to do so since Mr. Swan was not asking Mr. Drake or Medi-machines to do anything. And Mr. Swan made only one statement that mentioned salt. He said “ It’s a good thing we are getting such a versatile machines from you. A2Z wants us to get going on packaging their stuff. They have everything in mind from large beans to salt to fine powder and we are going to have do it all. Some of this is stuff we’ve never handled before, but I am sure we’ll do fine with your machines to help us.” That is not language that was sufficient to alert Mr. Drake or Medi-Machines that the Model 14 machines being delivered to Equapack would be used to pack salt.

13. Even if Equapack had relied on Medi-Machines’ skills and judgment,

Medi-Machines offered the Model 14 packaging machines without the information which Equapack would pack salt from the beginning. So this Medi-Machines’ skills and judgment had no concern with packaging salt.

14. As appears from Claimant’s Exhibit No.1 to 3, no mention was made that

Equapack expected to use the machines to pack salt even occasionally. Equapack had to mention salt in his letter of 24 June 2002 at the first stage. If Equapack had not had any experience with packaging salt in the past, they had to mention it all the more.

15. It is well known that salt is highly corrosive. Any equipment that is

expected to be in contact with it must be made of material that is corrosive-resistant. Medi-Machines’ Model 17, which is designed to pack salt, uses grade 316 stainless steel. That is the industry standard.

16. Furthermore all of Medi-Machines’ literature and their website make it

clear that machines built to pack salt, as is their Model 17, use a high-grade stainless steel. (Claimant’s Exhibit No.7) Equapack lacked

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their attention. 4.2.2. The six Model 14 packaging machines were fit for the purposes for which goods of the same description would ordinarily be used (article 35(2) (a) CISG) 17. The industry standard differ from the common sense. Salt is a very

special item to handle. (Claimant’s Exhibit No.7) Therefore even if salt was included into dry (fine and coarse) bulk commodities in the common sense, salt was an exception in the industry standard.

18. Medi-Machines stated that since salt was such a special product, they did

not and could not assume that a customer intended to pack it unless they were told so specifically. Equapack had not done so when ordering Medi-Machines’ machines.

19. The Model 14 packaging machines could pack dry bulk commodities (in

industry standard). (Claimant’s Exhibit No.2) Therefore the six Model 14 packaging machines were fit for the purpose for which goods of the same description would ordinarily be used under Article 35(2)(a) CISG.

4.2.3. The six Model 14 packaging machines were of the quality required by the contract (article 35(1) CISG) 20. At conclusion of contract Equapack needed six machines which could be

expected to be used over a wide range of products. And for Equapack essential elements of their purchasing decision were Price and Prompt delivery. (Claimant’s Exhibit No. 1) So Midi-machines offered Equapack six of the Model 14 auger-feeder packaging machines.

And Medi-Machines deliver goods which are of the quantity, quality and description required by the contract under Article 35(1) CISG.

4.3. The suggestions (the Model 14 or 16 packaging machines) by Medi-Machines for Equapack’s request were correct.

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21. Both the Model 14 and 16 auger-feeder packaging machines satisfied the Equapack’s requirement that the machines could be used over a wide range of products. (Claimant’s Exhibit No.2)

22. Compared with the prompt delivery of the Model 14 packaging machines,

there would be a two-month delay before Medi-Machines would be able to ship the Model 16 packaging machines because of great demand for them. And the Model 14 packaging machines’ special price US$65,000 per machine was much cheaper than the Model 16 packaging machines’ price US$75,000 per machine. That is to say the condition of the Model 14 packaging machines was more close essential elements of their purchasing decision price and prompt delivery.

23. As the Model 14 packaging machines were previous Model of the Model

16 packaging machines, Medi-Machines introduced the Model 16 also. Therefore this two suggestion were correct and conscientious.

5. The condition of the Model 14 packaging machines does not constitute a fundamental breach. 24. Medi-Machines did not breach its obligation under Article 35 CISG.

Medi-Machines offered the Model 14 packaging machines, which satisfied Equapack’s needs, both best price and prompt delivery. Furthermore Medi-Machines delivered the Model 14 packaging machines without any error.

25. If Equapack had used the Model 14 packaging machines properly,

without packaging salt, the machines must work properly. 26. Therefore Medi-Machines did not breach of the contract at all. Therefore

the condition of the Model 14 packaging machines does not constitute a fundamental breach.

5.1. Even if the Tribunal holds that a breach was committed, it was not

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fundamental. 27. Art. 49(1)(a) CISG provides that the Claimant is entitled to avoid the

contract only if the Respondent’s breach was fundamental. The Medi-Machines submits that the breach was not fundamental because the condition required by CISG were not met, i.e. the breach did not result in a detriment to the Equapack so as substantially to deprive it of what it was entitled to expect under the contract, as required by Article 25 CISG. (‘ […] The breach is fundamental when the contractual interests of the injured party have been impaired substantially in an objective sense.’ (original in German), Staudinger, op. cit. n.33, 216; Similar also Schlechtriem in Schlechtriem, op. cit. n.25, 175; Enderlein et al., op. cit. n.54, 101; Herver & Czerwenka, op. cit. n.33, 130; Honold, op. cit. n.50,

28. Even if the speed of the Model 14 machines was a breach, it was not fundamental.

Medi-Machines have not frustrated the purpose of the contract. Equapack ought to have performed the purpose of the contract- packaging over a wide range of product- unless they did not use the machines to pack salt against Medi-Machines’ literature and industry standard. Therefore Equapack’s mistake caused Frustration of the purpose of the contract- packaging over wide range of product-.

Since Equapack broke the machines by his mistake, they cannot practice the remedy-oriented approach properly.

The nature of the contractual obligation- the speed of the machines in industry average - is not important for Equapack to execute the contract with A2Z. Practically, Equapack did not mention about the speed of machines at all at the conclusion of contract.

Therefore, the conditions required by Art. 25 CISG for the existence of the fundamental breach were not fulfilled, and consequently, the Claimant was not entitled to avoid the contract pursuant to Article 49(1)(a) CISG.

5.2. Non-Foreseeability of the consequences of the breach. 29. A breach of contract committed by one of the parties is fundamental

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unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result. (Art. 25 CISG)

30. Even if the condition of the Model 14 packaging machines resulted in

such detriment to Equapack, Midi-Machines and a reasonable person did not know that Equapack expected to use the machines to pack salt, so they could not foreseen these result. (See 4.2.)

31. Therefore the condition of the Model 14 packaging machines does not

constitute a fundamental breach under Article 25 CISG. 6. The letter of 19 October 2002 does not constitute a declaration of avoidance of the contract. 32. Equapack does not have a right to avoid the contract under Article

49(1)(a), 49(2)(b)(ⅰ) and 82 CISG. Even if Equapack had a right to avoid the contract, the letter of 19 October 2002 does not constitute a declaration of avoidance of the contract because of not meeting form and contents of declaration.

6.1. Equapack does not have a right to avoid the contract under CISG. 33. First, according to Article 49(1)(a) CISG, Equapack does not have a right

to avoid the contract because Medi-Machines did not do ‘fundamental’ breach of contract within the meaning of Article 25 CISG.

34. Second, even if Equapack once had a right to avoid the contract,

Equapack lost that right as it did not declare avoidance within a reasonable time according to Article 49(2)(b)(ⅱ)CISG.

35. Finally, Equapack lost a right to avoid the contract under Article 82

CISG. 6.1.1. Equapack does not have a right to avoid of contract under Article

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49(1)(a) CISG. 36. According to Article 49(1)(a) CISG, the buyer has a right to avoid the

contract only if the seller’s breach of contract is ‘fundamental’ within the meaning of Article 25 CISG. Medi-Machines delivered six of the Model 14 packaging machines in conformity with the contract under Article 35 CISG (See memorandum, argument 4). Therefore Medi-Machines has not failed to perform his obligations and has not done ‘ fundamental’ breach of contract(See memorandum, argument 5).(UNILEX; 20.04.1994, Germany, 13 U 51/93, Oberlandesgericht Frankfurt am Main court)

37. Therefore Equapack does not have a right to avoid the contract under Article 49(1)(a)CISG.

6.1.2. Even if Equapack once had a right to avoid the contract, Equapack lost that right as it did not declare avoidance within a reasonable time according to Article 49(2)(b)(ⅱ)CISG. 38. In view of the severe effect which a declaration of avoidance has on the

other party, there is need to specify the period within which it should be made. The principle is that the buyer must declare the contract avoided within a reasonable time after he knew or ought to have known of the breach of the contract(Article 49(2)(b)(ⅰ))(This concerns German law, as to which see the German edition of this work), even if the seller is aware of the defect. (Honnold, Art49, para308.1; Staudinger/ Magnus, Art49,para39.) That must be understood as precluding the giving notice after the expiration of that period. (This is clear from their wording, see also Schlechtriem, Einheitliches UK-Kaufrecht, pp 70 and 77. Also in ULIS Arts 26(3) and 30(3) (‘ the contract cannot be avoided’ ), 32(1), 39(1), 43, 62(2), 66(2), cf. Dolle/ Huber, Arts 26,27 EKG, paras 42 et seq. The buyer would have to declare the contract avoided as soon as possible in order to preclude the loss of that remedy under Article 49(2)(b)(ⅰ) following the expiration of a reasonable time. (Huber, Art49, para52)

39. As stated in the Statement of Case, para.8, the signs of serious corrosion

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were evident by the end of September. And it was decided that the machines should no longer be used. Since then Equapack did not do nothing for resolution of the matter for more than 17days. This is too long and not reasonable time. Furthermore at the point in time when the machines were slower for most products than had been Equapack’s previous experience with similar machines, Equapack had to consult Medi-Machines about the matter.

40. Furthermore since the letter of 19 October 2002 does not constitute a

declaration of avoidance of the contract, the declaration of contract avoided was the Claimant’s Notice of arbitration dated 10 February 2003. Therefore Equapack did not declare the contract avoided within a reasonable tome under Article 49(2)(b)(ⅰ ). (UNILEX; 17.09.1991, Germany, 5 U 164/90, Oberlandesgericht Frankfurt am Main court)

6.1.3. Equapack lost the right to avoid the contract under Article 82 CISG. 41. If it is impossible for him to make restitution of the goods, the buyer loses

the right to avoid the contract (Article 82 CISG). 42. In the machines, there is corrosion that is sufficient to cause the product

to block and cause outages when Equapack tries to package any products (Claimant Exhibit No. 6) because Equapack used the machines to pack salt. Equapack cannot make restitution of the machines, therefore Equapack loses the right to avoid the contract under Article 82 CISG. ( UNLEX; 25.06.1997, Germany, VIII ZR 300/96, Bundesgerichtshof court, )

6.2. Even if Equapack had a right to avoid the contract, Equapack did not declare to avoid the contract under article 26 CISG. 43. Under article 26 CISG, if the buyer wishes to avoid the contract he must

make a declaration to that effect and a declaration of avoidance of the contract is effective only if made by notice to the party.

44. The declaration must be made to the other party to the contract; domestic

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rules governing a person’s power to give or accept such a declaration on behalf of another person are applicable. (Bianca/ Bonell/ Date-Bah, Art 26, note 3.2; Herber/ Czerwenka, Art 26, note 2.) Indirect notices, e.g. announcements to the press, are ineffective. (So also Bianca/ Bonell/ Date-Bah, Art 26, note 3.3.) Even if a breach is fundamental, it never leads ‘ ipso facto’ to avoidance of the contract. The principle is implemented in the Convention without exception. (This concerns German law, as to which see the German edition of this work.) Even in clear case (e.g. where performance is objectively impossible, or an expressly-agreed fixed date for delivery has passed) the buyer must make a declaration. (This concerns German law, as to which see the German edition of this work.)

6.2.1. Form and content of the declaration. 45. The buyer must it clear that he is no longer prepared to perform the

contract because of the seller’s breach of contract. (Contradictory, LG Frankfurt, RIW 1991, 952, 953: the declaration of avoidance was insufficient but there was a refusal to perform. Only one of those propositions can be correct. ; Leser, Art 26, para 10; Wrong LG Frankfurt, RIW 1991, 952, 953.) The decisive issue is whether it has been made clear to the seller that he can no longer count on performance by the buyer. (Correct OLG Frankfurt, RIW 1991, 950, 951) If the buyer returns the goods with a notice of defects or declares that ‘ the goods are at the seller’s disposal’ it is not wholly clear what his wishes are: avoidance of the contract or delivery of substitute goods. (UNILEX;14.10.2002, Germany, 16 U 77/01, Oberlandesgericht Köln court) In such a case, avoidance of the contract should be assumed only if delivery of conforming substitute goods is impossible or it is clear that the buyer is not interested in delivery of such a goods.

6.2.2. The letter of 19 October 2002 does not meet form and content of the declaration, nor the telephone of 18 October 2002. 46. Equapack did not declare the avoidance of the contract by neither oral

nor written notice.

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47. On 18 October 2002 Mr. Swan telephoned Mr. Drake to tell that

Equapack could not use the machines and that Medi-Machines should arrange to take them back. (Procedural Order No.3 para.36) This reference has no application to a declaration of avoidance of the contract because this reference has no mention deserving of the contract avoided.

48. The letter of 19 October 2002 does not meet form and content of the

declaration. Equapack declared that ‘ If you want the machines, they are yours and we would appreciate it if you would arrange to have something done with them.’ (Claimant’s Exhibit No.6) This declaration is applicable to the declaration that ‘ the goods are at the seller’s disposal’ Therefore it was not wholly clear what his wishes were avoidance of the contract or delivery of substitute goods. (UNILEX; 25.06.1997, Germany, VIII ZR 300/96, Bundesgerichtshof court) In addition, there were no other phrase of the contract avoided in his letter of 19 October 2002 (Claimant’s Exhibit No. 6)

49. Therefore Equapack did not clear that they were no longer prepared to

perform the contract. (UNILEX; 14.10.1992, Germany, 1 C 216/92, Amtsgericht Zweibrücken court) Therefore the letter of 19 October 2002 does not meet form and content of the declaration and does not constitute a declaration of the avoidance of contract.

50. No matter though Equapack declared that ‘ we will have to purchase

replacement machines from some other source’, that is not decision and it cannot be denied that the declaration means the possibility of substitute goods from Medi-Machines.

51. Therefore from the letter of 19 October 2002 (and the telephone

conversation), Medi-Machines concluded that Equapack wished delivery of substitute goods. Additionally Medi-Machines informed a substantial concession on the purchase of our Model 17 packaging machines as a solution in his letter of 27 October 2002.(Claimant’s Exhibit No.7) despite they have no responsibility for what went wrong

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7. Claimant should post security costs. 52. The Claimant should post security costs. 53. Because Claimant has financial problem in Equatoriana, Claimant has

sought additional financing from several banks.(Procedural Order No.2 page36) If this Tribunal gives the award for Respondent, Claimant will be forced to pay to Respondent. But Claimant has such cash- flow problem. There is a doubt that Claimant could not pay the amount. Therefore, Respondent request to the tribunal to order security cost to Claimant.

54. Security Cost is widely admitted rule in Arbitration Tribunal. When a

Tribunal gives awards for one party, the other party has to pay the amount of the request by the tribunal. But the party that requested to payment by the tribunal has not enough money for payment, that forcing will be fail.

55. Singapore International Arbitration Act, art. 12(1)(a) specifically

authorizes an arbitral tribunal to order security cost. Because of that, the Tribunal is authorized to order to post security cost.

56. Even, if Claimant declares rich Equatoriana Investors will purchase

them, but it is on both sides. The target date for completion of the sale of Equapack, Inc. to Equatoriana Investors is 12 May 2004. of course, something may arise in the due diligence that would lead to a delay in the sale or even for Equatoriana Investors to decide not to proceed with the purchase. (Procedural Order No.3 article no.42.)The possibility of Claimant could get financial resources are not enough to believe Claimant could get financial resources by the time the tribunal issued final award.

57. SIAC Rules Article 27.3 provides a tribunal has authority to order to post

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security cost. 58. UNCITRAL Articles, WIPO Rules Article, and AAA rules Article also

provide that. Intend of the Security cost are said by some authority.

7.1. In this case, there is not clear declaration of the amount of the security costs. Why not determined the amount of the security cost?

59. Ordered security cost is just protecting the execution. For guarantee the

payment and prove the property. Because of that the amount of security cost would be obviously.

60. Under SIAC Rules do not stipulate implicit amount for deposit cost. Also,

many arbitration rule does not have particular amount of the cost. Especially UNCITRAL model rule for arbitration tribunal does not have provision of cost of arbitration.

61. The amount of the security cost is ambiguous but the arbitration tribunal

would act without any bad faith or vexatious under the justice. the requested amount is adequacy. And the required amount US$20,000 is just ambiguous in particularity but generally propriety amounts compared with the Claimant’s large-scale business.

62. The ambiguously does not deserve to reason that Claimant should not

post security cost. The request to post security cost stick out for assurance the payment of compensation when Claimant would be unsuccessful.

7.2 There are in circumstances needed to post security cost. 63. Claimant in financial problem. It is widely reported. It deserves the

circumstances needed to post security cost. If the tribunal make award for Respondent, the execution would not exercising.

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7.3.The report about Claimant’s financial problem is not rumor. 64. According to Procedural Order No 2 page 36, Counselor of Respondent

found the fact that there is widely reported in the financial press in Equatoriana that Equapack, Inc. has a cash-flow problem and has been delinquent in paying its trade creditors. There are also reports that Equapack, Inc. has sought additional financing from several banks, but that it has not as yet been successful. This information must attribute to believe. The only way to know whether the newspaper reports are accurate when they report creditors and that it has sought additional bank financing would be if Equapack, Inc. were willing to furnish the information requested by Mr. Frasttrack in his letter of 1 Septemer 2003. The newspapers referred to are reputable. (Procedural Order No.3. article no.43)

65. Opposing of that, there is any evidence that Claimant does not have

financial problem in the Arbitration Procedure. For certificate that Claimant does not have financial difficulties, If Claimant want to do so, they have obligation to provide to the Tribunal and Respondent about their financial situation. The period of time within which they are paying their trade creditors during the past three months and whether that period is longer, shorter or the same as one year ago, their cash flow for the past three months, whether they have been seeking additional bank financing during the past three months and the results of their efforts.(Procedural Order No2. page 37)

66. If Claimant carry good business time rather than does not have any financial difficulty, they can provide information of their pecuniary situation. Claimant observed on the request to provide their financial information to the Tribunal and Respondent would deserve harass (Procedural Order No.2 page 38) They do not understand their situation be raised by themselves.

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67. Even if, Claimant claim to the tribunal to request to Respondent to post

security cost, Respondent cannot make agreement the request. In this case, Claimant suffered from own failure to use the Model 14 machines. From the first beginning, Respondent should not be caught up in the tribunal. Claimant should own some responsibility toward this litigation. Claimant is doubted their competence for execution. From this point of view, the Tribunal should order to Claimant to post security cost.

7.4. The execution and New York convention. 68. If in this Tribunal reach the conclusion for Respondent. Respondent

demand the expenses and compensation for Respondent to Claimant. It is adequate requirement to grants to execution for the amount. Order to payment of the expenses and compensation will make it possible to execution in Equatoriana. Equatoriana and Danubia join in the New York Convention. These countries must accept precedence of the judgment by the Arbitration Tribunal.

69. New York convention is for give authority to arbitration tribunal.

Arbitration tribunal has a problem of the conflict of other country’s law. The award made by arbitration tribunal would not admit that party’s own country under the domestic law. A country incorporating the New York convention must obey the arbitration award, and protect the execution.

70. The award given by the Tribunal would proceed to own domestic low of

the parties. The financial execution would ordered in their country because they

incorporate New York convention. The award will enforce to them, but in the case Claimant have to pay the amount of the compensation and all cost of the tribunal without post security cost, they could not pay that

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amount if the consolidation with Equatoriana investors miscarried. Domestic Law of

71. When this Arbitration Tribunal make award for Respondent, the execution will execute in Equatoriana under the New York convention. But if there are any properties could executable of Claimant. The execution would be fail. For avoid such situation, Claimant should post security costs.

7.5. Whether to post security cost would raise injustice in this Tribunal or

not? 72. No. Rather a veto of Claimant to post security cost rise injustice in this

Tribunal. Claimant have financial problem. Because of that the execution be apprehensive it impossible. When the final award be given, the most important in this tribunal, which party given the right to acquire compensation by this Tribunal, both of parties suffered from some detriment each other, the tribunal should consider the financial execution will be accomplishment without fail. Respondent does not have any financial difficulty; they can pay the amount of compensation. But Claimant seems to have they are in financial difficulty in actual. The impossibility of execution toward Claimant will be the partiality.

73. As the party of litigates this Tribunal, Claimant own the obligation to

post security cost. They have to post security cost instead of they have no difficulty or hesitancy in paying the amount of the compensation and relating cost of the Tribunal and provide the information of Claimant’s financial situation.

74. Also, there is any relation between post security cost and judgment by

the Tribunal. To post security cost in this case, it will not be injustice of the Tribunal. To post security cost rule is for indemnification to the parties. Originally the rule determined for both of parties, not for one party. And this Tribunal is for judge the claim of Claimant. And there is any relation

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between post security cost and that judgment. 7.6. Therefore, the Tribunal should request to Claimant that has financial

difficulties to post security for costs. 8. Claimant should not disclose about relating this Tribunal, The Tribunal

must proceed confidentiality.

75. Claimant must not divulge anything about the Arbitration Tribunal to Equatoriana Investors.

76. At the first the tribunal should find there are no agreement of the parties

about the confidential obligation before beginning discuss whether the divulging would be adapt or not.

77. Claimant has to prove reason to disclose the information to third party

for agreement, Still Claimant did not pay attention to confidential obligation in the arbitration tribunal when the letter of 9 September 2003. Claimant should take such obligation into consideration for Respondent and the Tribunal. Claimant commit such defect consideration, The Tribunal should not admit the exception of Confidential Obligation.

8.1 From the Arbitration beginning both of the parties have obligation to

keep confidential about existence and relating information of the arbitration tribunal.

78. This tribunal has authorized to order to confidentiality obligation to both of the parties. Confidentiality is under compulsion by SIAC Rules. Claimant should not disclose the existence of the arbitration and all its details. Claimant might disclose about the troubles they had suffered and their intention to go an arbitration tribunal before beginning the tribunal. But they should not disclose they litigate to the tribunal.

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Confidentiality Obligation is generally applied in arbitration tribunal, the party that intends to litigate, they should not disclose the existence of arbitration, even the time they do not have any obligation to the tribunal before that had started.

8.2 Claimant could not disclose the information about the tribunal no matter how it insignificant things.

8.2.1.The Confidential Obligation is general rule in arbitration tribunal.

79. They knew there is a fundamental rule that the party or arbitrator must not divulge anything about Arbitratin Tribunal. Aribitration Tribunal would perform with private governing. Basically it makes much of the parties agreement. If Claimants had intend of that divulge to the Equatoriana Invesotors, they should appeal this tribunal for consent of the divulging. Claimant did not to do so that. It deserves the breach of the SIAC Rule Article 34.6. 80. Confidential Obligation is the fundamental rule on the arbitral tribunal.

The existence of this obligation would be proved by many arbitration rules. To signify that rule is general rule, other arbitral rules have the article that prohibit disclosing the information or award of relevant arbitral tribunal. Most of them if a party intend to disclose the information of arbitration; they must make agreement with the other party. ICC Article 15.4, London Court of International Arbitration Article 10.4, AAA; Drafting Dispute Resolution Clause: Practical Guide, and UNCITRAL Rule require the agreement to disclose the procedure of arbitration or existence, hearing or the award.

81. The parties have good faith toward the arbitral tribunal take place with

confidentiality. Because of most of authority admit the existence of the confidential obligation to tribunal, arbitrator, and the parties.

8.2.2. The cases relevant confidential obligation.

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82. Private Arbitration is advantageous when compared with the State legal system. (Redfern & Hunter, supra note 1, p345.) Confidentiality is still considered by many to be an important, and some would say even "core", feature of international commercial arbitration, even if some exception adopted recently. The proceedings of an arbitration tribunal should be confidential as well as all documents created for the purpose of arbitration. (Mustill &Boyd, The law and practice of Commercial Arbitration in England(2d. ed.1-1-1989zz).303-404.) The Arbitration is a private process constituted by the parties and the arbitral tribunal; and is usually conducted behind closed doors under the recording of a camera. (Rdfern & Hunter, spra note 1, p.345.) Arbitration laid the foundation of the party’s agreement, the parties determine on the way of arbitration procedure. and as thus the parties determine the arbitrational procedure to be followed. Included in this realm of free choose is the parties’ preference for confidentiality or not. (Julian D. M. Lew, “Expert Report of Dr. Julian D. M. Lew in Esso/ BHP v. Plowman)”, Arbitration International, Vol.11, No.3 (1995), p.283.) The Chief Justice Colman.J. noticed if every arbitral contract has implicit agreement is correct at the least, in principle; the requirement to private tribunal will cover the document made for hearing of the tribunal. (Hassneh Insurance Co of Israel and Others v. Steuart J mew, (1993) 2 Lloyd’s Rep 243.) The Chief Justice Mason.C.J. Also noticed, judging from history of arbitral tribunal, particularity in the private tribunal inherent subject-matter of the agreement of the conflict remit to arbitral tribunal rather than includes tacit agreement. An obligation not to disclose may arise from an express contractual provision. If the parties wished to secure the confidentiality of the materials prepared for or used in the arbitration and of the transcripts and notes of evidence given, they could insert a provision to that effect in their arbitration agreement. such a provision would bind the parties and the arbitrator

... (Esso Australia Resources Ltd. And Others v. The Honourable Sidney James Plowman (The Minister for Energy and Minerals) and Others Arbitration International, Vol.11, No.3 (1995))

83. The Confidentiality Obligation is for protect the parties from jeopardize.

Like other tribunal, if that information divulge, it would make lose the

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parties faith. For protect privacy of the parties, Confidentiality Obligation is very important.

84. Even if the Tribunal hard to find the legal authorities confidential

obligation. The Tribunal should think what is private arbitration. The private arbitration is the core of the arbitration tribunal. Because the company who apprehensive their privacy toward the public apply arbitration. Private arbitration is the meanings of the self-government tribunal for parties are to make agreement. No confidentiality, no private arbitration.

85. There is cases admit the exception of confidential obligation following

cases signify the condition the disclosure be adopted. Compared with these cases, Claimant does not have any reason to provide information relevant this Tribunal. Nevertheless the confidentiality obligation, disclosure or inspection are needed for fair judgment, the tribunal should consider that. (Dolling-Baker v. Merrett and Another,(1991):2 All ER 890), The parties may disclose the award and relevant document of arbitration tribunal under the circumstances that the disclosure is required to establish or to protect legal right toward third party. (Hassneh Insurance Co of Israel and Others v. Steart J Mew,(1993):2 Lloyd's rep 243) Neverthless the confidentiality obligaiton, disclosure or inspection are needed for fair judgement, the tribunal should consider about that(Hassneh Insurance Co of Israel and Others v. Steart J Mew,(1993):2 Lloyd's rep 243) 24. According to these adopted exception of confidential obligation, that obligation deal with 3 issues. First, where there is a duty to the public to disclose. Second, the requirement of to protect the party’s legal right. The obligation hindrance to justice of the tribunal. Concerning first issue, if the party is political or administration, there are requirement to access to the tribunal by public. But here, both of the parties are company and they choice the private arbitration, therefore the access right will dismiss. Second issue, to protect right of parties, without disclosure a party lost their legal right they could not be opposed to the other party. But here, the disclosure is nothing to do with the violation of the legal right of Claimant. Third, without disclosure, the tribunal will lost the fairness. There is no reason

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the tribunal lost the fairness without disclosure. The disputable issues are concerning about only 2 parties, i.e. Claimant and Respondent. Equatoriana Investors does not have any relation to concerned contract. Therefore, the Tribunal should not concede to disclose about the Arbitration Tribunal.

86. Also, the cases concede the exception of disclosure imply there are the

fundamental rule of confidentiality of the arbitration tribunal. The concept of private arbitration derives simply from the fact that the parties have agreed to submit to arbitration particular disputes arising between them and only between them. (Hassneh Insurance Co Of Israel And Others v. Steuart J Mew. Queen’s Bench Division (Commercial Court)1993, 2 Lloyd’s Rep 243)

8.3. There is explicit rule in SIAC Rules which these parties consent to depend on under the contract.

87. SIAC Rules give the rule of Confidentiality Obligation.

SIAC Rules Article 34.5 provide in the case of that the party can not to a third party about the relating tribunal without the prior written consent of the other party or the parties.

88. SIAC Rules have implicitly manifestation about Confidentiality

Obligation. And the parties consent to depend on SIAC Rules. Therefore Confidentiality Obligation should be obey. There is a consequence violating the order to refrain from divulging the arbitration.

89. Necessity of the consent for every conduct relevant to the tribunal, especially confidentially toward the tribunal, is to impartial to both of the parties. One party could disclose for their advantage, the tribunal make it exception contrary SIAC Rules, the tribunal would be partial. The party’s fundamental right to have access to justice, this tribunal should not leave the disclosure.

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8.4. Consider the force of the obligation of confidentiality in the contract both

of parties should obey this rule.

90. Under this contract, both of parties never determine when it causes

dispute. But when Claimant litigated, both of parties consent with they have arbitration tribunal and apply SIAC Rules. It means the passage relating this contract would be applied SIAC Rules.

8.5. What implications to this tribunal for disclosure.

91. Equatoriana Invesotors is the third party under this Tribunal. They are outsider and they do not have any legal obligation. If they divulge this information to the other company or people, the Tribunal private autonomy does not authorized to regulate that. There are risks that divulging operate on Respondent’s business.

92. The disclosure is against the estimable arbitration tribunal. All

participants have faith to the tribunal. Confidentiality Obligation is widely applied in arbitral tribunal. Actually there are some exception the party can disclose the arbitration under the circumstance that without disclosure the tribunal cannot keep justice, or the party hard to keep their disadvantageous situation. Even if so, it needs agreement toward the other party. Claimant violated fundamental obligation of keep confidentiality about the arbitration tribunal. Therefore Claimant does not have the right to bring complaint against Respondent.

8.6. Therefore the Tribunal should order to Claimant not to disclose

anything about this tribunal.

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8. Conclusion 93. As supported by the facts and arguments presented in this Memorandum,

Respondent requests that this Tribunal decide as follows: ・ Model 14 packaging machines were conformity with the contract. ・ There is any fundamental breach, and Claimant cannot avoid the

contract. ・ The letter of 19 October 2002 from Mr. Swan to Mr. Drake does not

constitute a declaration of avoidance of the contract. ・ The Tribunal has authority to order Claimant to post security cost. ・ Claimant should not divulge anything about this Tribunal. 94. The arguments developed in this Memorandum are commended to this

Tribunal. The Tribunal will be expected to rule on these issues in accordance with the law. Claimant respectfully requests that it receive an award in its favor.

For Midi-Machines,S.A. (signed)___________________________________ ATTORNEYS MEIJI GAKUIN UNIVERSITY Tokyo, Japan

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