International Arbitration

S‌‍‍‌‌‍‌‌‌‌‌‍‍‍‌‌‌‌‍ection 1:

Fill in the blank – you must answer all of these (30 points) Fact pattern for Section 1 (Questions 1-6): Telemachus Pty Ltd (Telemachus), an Australian company that sells solar panels, entered into a contract with Icarus SpA (Icarus) a French company that sells anything that comes close to the sun. The governing law of the contract was Australian law. Although the parties do not expect they will enter into a dispute because they are both sophisticated parties with a desire to work together, they decide to include a dispute resolution clause in their contract. The clause provided: Any dispute, controversy, difference or claim arising out of or relating to this contract, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non- contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong China International Arbitration Centrino (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The law of this arbitration clause shall be Hong Kong law. The seat of arbitration shall be Singapore. The number of arbitrators shall be one

(1). The arbitration proceedings shall be conducted in English. For a year, there were no issues. The parties sold and purchased solar panels with joy. However, an issue arose when the parts for Telemachus’ solar panels, which were predominately made in Australia but for the metal frame, which was made in China. Due to global supply chain issues and the increase to the price of petrol, Telemachus could no longer source metal frames at a price that would allow them to turn a profit.They therefore requested a change to the pricing scheme within the contract. Icarus would not budge. Telemachus filed a Notice of Arbitration at HKIAC. Questions (worth 5 points each): 1. Are there any concerns about the validity of this arbitration clause?

 2. If this is a pathological clause, how do you propose to fix it?

3. Which law applies in relation to whether the clause is valid or pathological?

4. Telemachus alleges a breach of the contractual term requiring re-negotiation of the price annually. Which law is applicable to this claim? 5. Icarus requests some documents relating to the management decisions that were made regarding the pricing clause. Telemachus claims privilege over them. Which laws likely govern privilege? 6. Telemachus wins a judgment for declaratory relief. Icarus is unable to pay after making a number of risky investments. Telemachus decides to enforce the award in Indonesia. Which law(s) should apply to the enforcement action?

II: Short form questions (each worth 15 points, length ~2 paras/half a page each)

1. A Chinese investor interested in investing in a wind-farm in Tasmania approaches you to request how to best structure her investment to make use of investment treaty protections. The investor indicates that she has affiliate companies in Japan and Korea. How would you advise her to structure her investment to best use the treaty protections available? Are there any exceptions to the treaty provisions she should be aware of, such as restrictions on where ISDS is available or substantive exclusions like environmental or health public decisions, in making her decision?

 2. Your client has just approached you regarding a possible investment dispute. Your client is an investor in solar energy in Spain, has been since 2007. However, your client’s business survived while many of its competitors felt their investments did not. Your client invested due to incentives provided by the Kingdom of Spain’s regulatory body. Your client argues that changes in law in 2011 meant that her investment was effectively taken. You‌‍‍‌‌‍‌‌‌‌‌‍‍‍‌‌‌‌‍r company was able to re-build its investment, and recover from this issue, by pivoting to other industries like scissor manufacturing. Your client notes that it has been a long time but the scissor industry is not working so she would like to try to assert her rights regarding her solar energy investments. What do you advise regarding her rights to bring a dispute?

Section III: Long Form Question – there is no where to hide as you must answer this question (40 points, ~1-2 pages) On 15 June 2022, Carmy ‘Bear’ Berzatto (Bear), an American restauranteur headquartered in Chicago, IL, entered into a contract with Koala “Not a Bear” Pty Ltd (Koala), an Australian company based in Newcastle, NSW. Bear inherited a restaurant from his brother who unfortunately racked up debt to a loan shark, Uncle Jimmy. To help with his finances, he decided to sell the rights to the IP of his award-winning sandwich and restaurant, made in Chicago, to Koala, so Koala could start a restaurant just like Bear. In the contract, the dispute resolution clause stated: “Any dispute, controversy or claim arising out of, relating to or in connection with this contract, including any question regarding its existence, validity or termination, shall be resolved by arbitration in accordance with the ACICA Arbitration Rules. The Seat of arbitration shall be Melbourne, Australia. The language of the arbitration shall be English. The number of arbitrators shall be one”. The contract was governed by the law of Victoria. In August 2022, Koala tried to make the Bear’s sandwich, having completed all of the fit out for the restaurant etc, and discovered that the ingredients for the sauce were not available in Australia! Koala would have to import them from Bear, at great cost comparatively to the revenue of the restaurant. Koala was upset and asked Bear to help a mammal out. Bear could not because Bear’s finances were already stretched by his Uncle Jimmy’s demands. Koala delivers a Notice of Arbitration to Bear under Art 5 of the ACICA Arbitration Rules (2016) (ACICA Rules) claiming breach of contract on 25 August 2022 even though no clause in the contract covers the acquisition of ingredients. Koala argues this was agreed orally in a discussion held between Bear and Koala’s CEOs on 15 June 2022 moments after the contract was signed. In any event,Koala argues Bear’s obligation to assist with the acquisition of ingredients is an implied term in the contract. Bear replies 30 days later by email, copying in the ACICA Secretariat, with the Answer to the Notice of Arbitration under Article 6 of the ACICA Rules. Bear (Respondent) argues that the wrong rules apply, it should be the 2021 rules. And, in any event the Arbitrator has no jurisdiction. The parties have also exchanged correspondence regarding possible arbitrators. They have each suggested three, and each rejected the other party’s suggestions. The parties request that ACICA make the appointment. ACICA appoints Frederica Von Mushroom, a Dutch arbitrator who is based in Jakarta. She takes on the file and sets up the first Procedural Meeting. That meeting sets out the timetable for the arbitration, including a one day hearing on jurisdiction in November 2022. During the procedural hearing, Bear argues that he does not have the money to have this outlandish argument as he’s already stretched. You represent Bear. Explain your arguments regarding jurisdiction and provide examples of ways Bear could best manage this arbitration, financially and in terms of procedure, up to this point and going forward. Answer Sheet of [Fill in name] Section 1: 1. [Answer] 2. [Answer] 3. [Answer] 4. [Answer] 5. [Answer] 6. [Answer] Section 2: 1. [Question 1-3] [~2 paras/half a page] 2. [Question 1-3] [~2 paras/half a page] Section 3: [~1-‌‍‍‌‌‍‌‌‌‌‌‍‍‍‌‌‌‌‍2 pages] Well done, you’re finished!

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