International Arbitration

Name of Student
Name of Instructor
Name of Institution
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OUTLINE 1. Part One: Questions i. Question 1 ii. Question 2 iii. Question 3 iv. Question 4 2. Part Two: Counsel’s Memorial i. Introduction ii. Statement of facts iii. Statement of purpose iv. Arguments v. Bibliography

International Arbitration
Part 1
Question 1: Importance of Severability in Arbitration
Severability is a term found in contract agreements that permits individuals or parties to leave out a component in an agreement which is perceived inappropriate or impossible to enforce. Severability is important since it will facilitate the other components to remain valid and hence to be enforced effectively. It is contained in arbitration law and it is a significant clause that defines the validity of any given contract. It is also referred to as saving phrase or clause in some literature. In this case, a contract will remain valid even after a portion of the contract is denounced later as invalid. This is a very important principle since it shows the motives of both parties when unenforceable clauses have been imposed on the contract. Provision of the said clause will be subjected to modifications in order to reflect the motives of the parties involved. As a result, the remaining clauses will proceed normally without any hindrances.
It is important to note that severability clause is very crucial in any arbitration procedure around the world. This is given the fact that the parties involved in the arbitration may encounter hurdles in the future that may compromise the fulfilment of some of the clauses in the arbitration agreement. The severability clause safeguards against such unforeseeable events.
If the severability clause was absent, it is noted that the entire contract may be regarded as invalid in the future if an incompetent clause is discovered. This is why the saving clause is important. Severability subjects the incompetent clause into scrutiny while the rest clauses are enforced as agreed between the two parties. This is an important clause since it allows the parties to insert a specific clause as far as consensus is concerned. This may happen when one of the parties is in need of an airtight arbitration concession. It may only target a particular paragraph of the contract and not the whole contract constituting the arbitration consensus.
If an entire agreement is said to be invalid or unenforceable together with the severability clause, none of the parties will abide by the terms and conditions of the contract. The clause is used to prevent this by safeguarding the integrity of the remaining contract. Therefore, a severability clause is a significant principle in any given contract.
Question 2: Selection of a Seat in Arbitration
Introduction
Legal systems involved in the arbitration procedure must be familiar with the clause “seat of the arbitration”. In this case, the jurisdiction of the system is legally bound into the arbitration. The seat will clarify which state will carry out the procedure. For example, the seat of arbitration may not be in the same state or country but the parties in dispute may decide depending on the arbitration where the seat will be. The decisions may be reached with reference to provisions of the contract or with the parties' subsequent agreement. Only a single seat of arbitration exists. As a result of this, interference which may emerge due to lack of arbitration law will be avoided. As such, the seat is established to effectively carry out the jurisdiction.
It is important to note that it is not every time that the parties involved in arbitration come from the same region. In contemporary global world, it is noted that parties in arbitrations may be drawn from different countries around the world. This is especially so given the fact that international trade has become common place today. As such, one may find that a trader in Australia needs to enter into a contract with a party in another part of the word. If conflicts were to arise in such a case, it is noted that an international arbitration system is called for. The two parties have to decide on the arbitration seat. Additionally, the parties have to agree where the arbitrations are to be carried out. The selected location should be appropriate for the two parties. It is also important to note that the site selected should not favour one party over the other.
Importance of the Seat of Arbitration
As far as arbitration procedures are concerned, the seat of arbitration is an important factor informing the adoption of laws concerned. At this juncture, the courts of law will establish or conduct the arbitration. The participating parties in a given country will exercise laws attributed to arbitration as per the state. Incoherent laws in a given state will lead to inconveniences on the part of the parties as well as expensive transactions and most important, the proceedings will be affected greatly.
Seat is very important in that it provides needed support as well as intervention measures as far as the arbitration proceeding is concerned. Autonomy of a given party is compromised by the administration of harsh conditions on the eligibility of arbitrators in question. Subsequently, the states or countries may have laws that are moderate in that they provide the parties with autonomy during the proceedings. In such a case, the courts cannot intervene and this increases the support given to the parties. For example, the interlocutory relief will be in abundance for parties in the said countries.
In the case of arbitral awarding, the intensity of awards may be disapproved or approved as per the seat of arbitration. This is so given that the courts involved in the seat of arbitration are the only ones with the mandate to welcome hearings of appeal attributed to arbitral awards.
The choice of seat will affect the arbitral award given that it will inform the enforcement and reciprocal arrangement among the parties involved. This is especially so if it has the same position in other states.
Lastly, seat of arbitration is important for issues related to infrastructure and convenience to allow proceedings to take place without any challenges. In places where the mentioned credentials are missing, the outcome of the arbitration will not be certain. Effective location of the seat of arbitration is paramount to avoid compromising the results.
In summary, it is noted that the seat of arbitration is usually decided upon a myriad of options. The operation of the local law should be put into consideration. This is together with the problems that may emerge in relation to the seat. This is important given that there may be need to solve more disputes that may occur during the proceedings. As such, the seat selected should be suitable to every party.
Question 3: An Unsuccessful Arbitration Case A statement is the plea made by a party in a case before the proceedings can take place. The person making the statement is referred to as a claimant. In such a case, the claimant outlines everything that he or she feels was unfair as far as their welfare is concerned. This is a very important document that pits the claimant against the respondent. Statements are supposed to be rational so as to facilitate backup. A claimant should therefore claim things that he or she can back up.
It is noted that it is not all every time that both parties are satisfied with the outcome of arbitration tribunals. There are those parties who feel that their enemy has been favoured and the award is unfair to them. It is not uncommon to find such parties contesting the award made by the arbitration tribunal.
For the matter to proceed to the arbitration stage, the parties in question should submit the evidence as well as witnesses if possible. An evidenced form is mandatory. As the case proceeds just like in a normal court, the parties are asked to submit rebuttal evidence. To support their claims, all parties are also asked to call and cross-examine witnesses.
Many cases are lost when proof is not submitted to support the allegations made. It is important to note that winning a case is not solely dependent on how hard or passionately the arguments are made. This author feels that claimants who give statements without proof should be disregarded even if they might be telling the truth. A claimant will only be favoured by an arbitrator if they present truth that is factual. In some cases, the evidence is disregarded merely because it was not “.....designed into (a) proof”.
In the case of Mr. Smith, the case is a bit complicated. This is given the fact that the statement submitted by Mr. Schmidt is not valid since he lacks the documents to win the case. This is true given that there was no signing of legal documents to give Mr. Smith credit to win the case. On his part, Mr. Jones did not enter into any agreement as far as the contract is concerned. For Mr. Smith to succeed there is need to provide evidence of the arbitration’s competence. As much as Mr. Schmidt complains about the suitability of goods, it is indeed true that there is no document stating that the parties in question were in agreement. Therefore, chances of Mr. Smith succeeding are very limited.
In summary, the two parties did not enter into contract legally as stated in the arbitration laws. If there was indeed a legal format involved here, Mr. Schmidt’s case cannot be nullified. Such matters should be treated with integrity and professionalism.
Question 4: Enforcement of Arbitration Award in Australia
Arbitral award is the result of a case during arbitration. It is mostly carried out by an arbitration tribunal. Arbitration is popular in the commercial world. It is always easier to arbitrate and enforce the results of arbitration than to take the matter into a court of law. Arbitration is not applicable under the common law. However, the law provides for an enforcement of the arbitration award. The enforcement of foreign award is recognized under the New York Convention on Awards Enforcement. In this case, awards must be carried out in convention states. This is to safe guard the rights of the claimant or respondent. In Australia, the following are some of the laws and clauses that recognise this award: i. All laws illustrated punish the defence for disregarding enforcement and rewards them for recognising the same. ii. Incapacity of the parties to meet the conditions in the agreement. This will define their strength and boundaries towards each other. iii. The party has responsibilities assigned to them under the arbitration agreement. In this case the award will be addressed to him as he understands the agreement.
The awards encompass activities and their future occurrence. Under the arbitration control act, this only applies to issues submitted by the parties and excludes issues that were not submitted.
Challenging an Arbitration Award in Australia
This is a mechanism that measures the plea made regarding a reconsideration of an arbitration award. The New York Convention permits the losing party to pursue further hearing if unsatisfied with initial outcomes. This happens under the following circumstances: i. The state in which the award was rewarded ii. The challenge may be made on the basis of the country under which proceeding laws were used to pass out the “attribution call”. This is because the country in question contains the primary jurisdiction as per the award iii. A challenge may also arise when the affected party perceives that there were irregularities during provision of the award. This also applies in a scenario where a jurisdiction was absent

Part 2: Counsel’s Memorial ON BEHALF OF: AGAINST: Honest Dealers, John Frost Ltd. Nathan Rd Millers Rd Hong Kong Melbourne

December 1, 2007

CLAIMANT RESPONDENT

Counsel: Paul Likeshone, Adria Jacobs, Greigon Millers, Patrick Evans, William Anderson.

1. RESPONDENT Cannot Subject CLAIMANT to Practice Elusive and reclaim payment from a third party. This is as per the law of international arbitration centre…………………………………………….. a) The Melbourne court Decisions are to be practiced under the law and as prescribed in the International Arbitration Centre. For my client to feel secure the prescribed statutory should not be applied to him
Broad interpretation of the statutory conditions needs to be examined. This is allowed by the International Centre of Arbitration b) Apparently, the proceedings of this arbitration are affecting my client both materially and emotionally. In this connection we do not see the need for the claimant to be here 2. RESPONDENT cannot claim that goods delivered were of poor quality whatsoever 3. Inconvenience made to be compensated 4. CLAIMANT would not be disadvantaged by consequences resulting from closure of the Hon Kong Premises 5. Relief requested for the CLAIMANT STATEMENT OF FACTS
On 1st December 2007: letter from CLAIMANT. The letter clearly requested the REPONDENT to familiarize themselves with the kind of goods available. On the same letter, Frost Ltd. requested Honest Dealers to act as trading agents.

On 10th December, RESPONDENT responds to the letter and agrees to engage with the CLAIMANT Company as agents. Surprisingly, the RESPONDENT requested to be supplied with diamonds first in the initial letter. This is before entering into contractual relationship.

On 15th of December 2007 a response letter was sent to the RESPONDENT. The letter stated the commission agreed upon with the CLAIMANT. This was from 10% to 25%.
Diamonds sold in parcels of 100’000.
Provisions of trade terms were also given on this letter.

On 20th December 2007 an email was sent to the CLAIMANT requesting for 10 cut diamonds. The RESPONDENT’s Company agreed to pay 20,000 per carat.

On 21st December 2007 Frost responds via mail and confirms to Mr. Chan that the order is in transit. As per the phone call made by Mr. Chan, the diamonds were verified as genuine by Mr. Delbon.

On 7th March, a phone call was made to the RESPONDENT and in response he wrote an email and confirms the last shipment to have arrived safely. Thereafter, requests for more diamonds were made to Frost Company due to a new market strategy. In the letter he requested for 20 diamonds weighing 30 carats each.
The total cost was 3,600,000.
On 10th March 2008 a response letter was sent to the RESPONDENT’s company confirming the alignment of the orders made. Commission was to be deducted from the sales made by Mr. Chan’s Company as per the letter.

On 20th March 2008, a letter was sent to the RESPONDENT’s company. In the letter is appears that it is true that the CLAIMANT had not received money for the last delivery. It was clear that REPONDENT was merging with another company in China and was informed that legal action will be taken if they fail to grant the request made.

On 20th April, CLAIMANT sent another letter to the RESPONDENT to inform him about the measures put in place. In the letter, RESPONDENT was acquiring new premises in China. This is after an attempt to sell the Hong Kong premises failed. CLAIMANT initiated the legal action before an international tribunal.

On 23rd April RESPONDENT writes to the CLAIMANT to inform him of the poor quality of the diamonds. Again, CLAIMANT is asked by the RESPONDENT to follow up on the diamonds unaccounted for from an unknown party in China. Hence the delayed payment is assumed not to be the RESPONDENT’s.

On 20th May, Ms. Francis (Secretary General of ACICA) writes to the RESPONDENT requesting for the case to be initiated and she is expected to respond in accordance to the rules of the arbitration.
On 30th May REPONDENT writes to the ACICA confirming possession of the new information and promises to act accordingly. Mr. H was chosen as an arbitrator for RESPONDENT. STATEMENT OF PURPOSE
CLAIMANT has organized this Memorandum in accordance with the Arbitral Tribunal’s Procedural Order No. 2 issued on 20th May 2008.
CLAIMANT with due respect submits: * 20 diamonds each weighing 30 carats delivered by John Frost Ltd to Honest Dealers (hereinafter referred to as RESPONDENT) did enter into a contractual relationship * Diamonds delivered to the respondent were genuine hence RESPONDENT should not use that as a reason to breach the contract * The diamonds’ delivery worth 3,600,000 was not paid to the CLAIMANT * RESPONDENT unethically avoids the payment and refers the CLAIMANT to China’s Company * RESPONDENT clearly breached the contractual relationship and CLAIMANT decides to act otherwise hence avoidance of payment declared breach of the contract * The request made on the CLAIMANT to follow up on the payments from another company not in contractual relationship to be disregarded. * The CLAIMANT in legal pursuit halts the selling of the diamonds to safeguard their interest * CLAIMANT in these proceedings shall exhibit legality towards his claim as far as the proof is concerned. The RESPONDENT shall be responded to as far as his assertions are concerned according to this claim ARGUMENTS 1. The diamonds delivered by the CLAIMANT were genuine and this is confirmed to Mr. Delbon by an arbitrator
As far as the Procedural Order No 2 is concerned, the CLAIMANT would like make some few points. But before I put the points into perspective I would like to point out that that the contractual relationship that was established between CLAIMANT and RESPONDENT will be translated as per the article 8 of the Arbitration Contract. In this article the conditions for the agreement are clearly stated for the two parties entering into any type of agreement.
Also to note, general principles of selling and purchasing have been entered into the relationship as per the contract’s provisions. The parties are therefore within the law of arbitration contest and the dispute should be resolved within the said article 8. The strength of the agreement should be observed since the article clearly defines the intentions of the individual entering into an agreement on the terms of trade and sell. The article describes the formalities involved in the contract including the transaction of goods involved and negotiations that took place with reference to the letters referred to above. 2. The Goods from CLAIMANT were of Good Quality, Quantity and Form
International trade requires a critical analysis and scrutiny of goods involved before any delivery. This is to make sure that goods delivered to customers around the world are of high quality. Mr. Delbon is the CLAIMANT’s verifier of goods. Again the RESPONDENT breached the contract by not responding to CLAIMANT’s worries about the last delivery. But after one month the RESPONDENT writes to state that the goods were of poor quality. The RESPONDENT submits that the diamonds did not meet the requirements as far as the market is concerned.
CLAIMANT thought that REPONDENT had a person to verify the quality of goods so as to respond early enough. Goods were said to be of high quality hence the parties entering into the relationship. According to article descriptions, delivery of goods should exhibit quality, quantity and good feature. Quality is an important aspect of the commodity in question. a) Diamonds are Produced under Supervision
In the letter dated 1st December 2007, CLAIMANT clearly informs the RESPONDENT that diamonds for sale are being inspected by Mr. Delbon. No complaints are made after the first delivery regarding the goods delivered. This is to confirm that the CLAIMANT here adhered to the conditions of the arbitration contract. The quality of the goods supplied to the RESPONDENT can be discerned from the letter dated 21st December. 3. The RESPONDENT’s Idea to Ask the CLAIMANT to Ask for Payment from Unknown Party is Unethical As per the orders such informalities makes payments complicated and prolonged leading to financial distress and loses. As such, transactions should be made by RESPONDENT as opposed to engaging the CLAIMANT with unknown party. In this case, such transactions should not be tolerated especially if the parties involved are from different countries or states like in this case. It will be illegitimated for the CLAIMANT to go ahead and demand for payment from the said third party in China. Investors will avoid the CLAIMANT if such illegitimate transactions are imposed. 4. Inconvenience made to be Compensated
The International Law of Arbitration provides that if any party inconveniences the other unreasonably they are to be held liable for the losses incurred. The losses incurred by the CLAIMANT have been clearly stated. The RESPONDENT shall therefore meet these costs as per the law. Making CLAIMANT insecure and forcing the subject in question to use unaccountable resources to safeguard the interest of the company is unfair and the deal needs to be nullified and compensation made. 5. CLAIMANT shall not be Disadvantaged by the Closure of the Diamond Premises
According to the law, the RESPONDENT is directly liable of the losses incurred by the CLAIMANT as a result of the closure. The New York Convention Article strictly prohibits a party from involving a third party in resolving the disputes. This is due to the fact that there are confidential issues that should not be disclosed to a third party. This is compromising the entire trade as far as diamond transportation is concerned. It is noted that diamond transportation is very delicate and requires confidentiality. This is for security reasons. Security lapses may compromise the trade leading to huge loses. As such, if the CLAIMANT was to encounter such losses the RESPONDENT shall be held responsible. I do not stipulate that this is going to happen but going with the arbitration principles this may happen as a result of a third party 6. CLAIMANT Shall Receive Relief
In the light of this submitted testimony, CLAIMANT with all due respect sincerely requests the arbitrational tribunal to: * Find that the diamonds delivered by the CLAIMANT to the RESPONDENT were of high quality, right quantity and form and complied with conditions of the contractual relationship * Find that the RESPONDENT fundamentally breached the contractual relationship by lawfully avoiding to respond to the CLAIMANT hence breaching the contract that was agreed on by the two parties * Dismiss REPONDENT’s request to the CLAIMANT to demand payments from a third party * To find that any inconveniences caused by the RESPONDENT shall be compensated accordingly * To find that CLAIMANT receive favour as per this case

Bibliography
Berger, John. “Re-examining the Arbitration Agreement: Applicable Law-Consensus or Confusion?” Montreal ICCA 23, (2006): 45-49.
Bockstiegel, Peter. “The Role of Arbitration within Today’s Challenges To the World Community and to International Law.” Arbitration International 165, (2006): 34-39.
Born, Gary B. International Commercial Arbitration and Forum Selection Agreement: Drafting and Enforcing. Cambridge: Cambridge University Press, 2010.
Born, Gary B. International Commercial Arbitration. Cambridge: Cambridge University Press, 2006.
Chatterjee, Henry. “The Reality of the Party Autonomy Ruling.” International Arbitration Journal 539, (2003): 65-78.
Collins, Harry. New York Convention Articles 1979. New York: Free Press, 2009.
Fry, Jason. Recognition and Enforcement of Foreign Arbitration Awards: A Global Commentary on the New York Convention. New York: Free Press, 2010.
Lew, Julian M., Mistelis, Loukas A., and Kroll, Stafan M. Comparative International Commerce Arbitration. Cambridge: Cambridge University Press, 2003.
Moses, Margaret. The Principle and Practice of International Commercial Arbitration. Cambridge: Cambridge University Press, 2008.
Redfern, Allan, and Hunter, Martin. Law and Practice and International Commercial Arbitration. London: Sweet & Maxwell, 1999.

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[ 1 ]. Margaret L. Moses, The Principle and Practice of International Commercial Arbitration (Cambridge: Cambridge University Press, 2008), 124.
[ 2 ]. Gary B. Born, International Commercial Arbitration (Cambridge: Cambridge University Press, 2006), 187.
[ 3 ]. Allan Redfern and Martin Hunter, Law and Practice and International Commercial Arbitration (London: Sweet & Maxwell, 1999), 112.
[ 4 ]. Julian M. Lew, Loukas A. Mistelis and Stafan M. Kroll, Comparative International Commerce Arbitration (Cambridge: Cambridge University Press, 2003), 3.
[ 5 ]. Born, International Commercial Arbitration, 74.
[ 6 ]. Gary B. Born, International Commercial Arbitration and Forum Selection Agreement: Drafting and Enforcing (Cambridge: Cambridge University Press, 2010), 23.
[ 7 ]. Jason Fry, Recognition and Enforcement of Foreign Arbitration Awards: A Global Commentary on the New York Convention (New York: Free Press, 2010), 78.
[ 8 ]. Born, International Commercial Arbitration and Forum, 123.
[ 9 ]. Lew et al., Comparative International Commerce, 77.
[ 10 ]. Ibid.
[ 11 ]. Moses, Principle and Practice of Arbitration, 17.
[ 12 ]. Ibid, 18.
[ 13 ]. Peter Bockstiegel, “The Role of Arbitration within Today’s Challenges To the World Community and to International Law,” Arbitration International 165, (2006): 34.
[ 14 ]. Ibid, 12
[ 15 ]. John Berger, “Re-examining the Arbitration Agreement: Applicable Law-Consensus or Confusion?,” Montreal ICCA 23, (2006): 45.
[ 16 ]. Henry Chatterjee, “The Reality of the Party Autonomy Ruling,” International Arbitration Journal 539, (2003): 65.
[ 17 ]. Harry Collins, New York Convention Articles 1979 (New York: Free Press, 2009), 234.