Claimant

1905R
1905A
BANGALORE INTERNATIONAL MEDIATION, ARBITRATION AND

CONCILIATION CENTRE
IN THE PROCEEDING BETWEEN
WASH-O-MATICS PVT. LTD.

(CLAIMANT)
ALIABABWA ELECTRONICS
(RESPONDENT)
MEMORIAL for CLAIMANT
2019
The XII NLSTIAM (National Law School Trilegal International Arbitration Moot), 2019
[WRITTEN SUBMISSION ON BEHALF OF THE CLAIMANT]
TABLE OF CONTENTS
TABLE OF ABBREVIATIONS....................................................................4
TABLE OF AUTHORITIES……………………………………………….7
STATEMENT OF JURISDICTION………………………………………15
STATEMENT OF FACTS…………………………………………………16
ISSUES RAISED……………………………………………………………20
SUMMARY OF ARGUMENTS……………………………………………21
ARGUMENTS ADVANCED………………………………………………24
1. THAT THE TRIBUNAL DOES HAVE JURISDICTION TO DECIDE

THE PRESENT DISPUTE…………………………………………24
1.1 THE ARBITRAL TRIBUNAL HAS AUTHORITY TO RULE ON ITS
OWN JURISDICTION…………………………………………………24
1.2 THE ARBITRAL TRIBUNAL HAS POWERS TO ADAPT THE
CONTRACT…………………………………………………………….26
1.3 RESPONDENT HAS FAILED TO SHOW ANY OF THE ACCEPTED
CRITERIA FOR A STAY………………………………………………27
2. THAT THE TRIBUNAL SHOULD NOT GRANT THE INTERIM
MEASURE REQUESTED BY THE RESPONDENT……………….28
2.1 ARTICLE 26 OF THE UNICITRAL ARBITRATION RULES……28
3. THAT THE SMART CONTRACTS ARE BINDING ON BOTH THE
PARTIES……………………………………………………………32
3.1 THE CONTRACT IS VAILD AS PER CONTRACT LAW…………33
3.2 THE CONTRACT IS VAILD AS IT RESORTED TO FAIR
MEANS………………………………………………………………….36
3.3 THE RESPONDENT CANNOT CLAIM THAT THE SMART
CONTRACT IS VOID OR VOIDABLE DUE TO “MISTAKE OF
FACT OR LAW” ………………………………………………………38
4. THAT THE CLAIMANT IS ENTITLED TO THE PAYMENT OF USD
420,000………………………………………………………………38
Page | 2
4.1 CLAIMANT IS ENTITILED TO DAMAGES OF USD 100,000…38

4.1.1 Article 74 of CISG………………………………………38
4.1.2 Placing the injured party in the same economic position as he
would have been in if the contract had been performed…39
4.1.3 Requirement of Foreseeability …………………………40
4.2 CLAIMANT IS ENTITILED TO INTEREST………………………41
4.3 METHODS OF CALCULATING INTEREST…………………….41
4.4 PRINCIPLE OF GOOD FAITH FOLLOWED BY THE
CLAIMANT…………………………………………………………….42
4.5 COSTS OF ARBITRATION………………………………………….43
4.6 FORESEEABLE CONSEQUENCE OF BREACH OF CONTRACT….44
4.7 BREACH OF CONTRACT BY THE RESPONDENT……………….44
4.7.1 Substantial Deprivation………………………………….45
4.7.2 The Contractual Expectation…………………………….46
4.8 THE RESPONDENT WAS UNCOOPERATIVE………………….48
PRAYER……………………………………………………………………49
Page | 3
TABLE OF ABBREVIATIONS
CISG Convention on International Sale of Goods
UNIDROIT Institut international pour l'unification du droit privé

(International Institute for the Unification of Private Law)
UNCITRAL United Nations Commission on International Trade Law
Doc. Document
UN United Nations
Eng. Rep. English Reporter
App. Appellate Court
Arb. Arbitration
Assn. Association
ICC International Chamber of Commerce
ICCA International Council for Commercial Arbitration
ICSID International Centre for Settlement of Investment Disputes
Cl. Claimant
Page | 4
i.e. . id est (that is)
Int’l International
Art. / Arts. Article / Articles
§/§§ Section(s)
¶/¶¶ Paragraph(s)
& And
Ed. Edition
Arb. Arbitration
pg. Page
No. Number
Ltd. Limited
pt. Point
USD United States Dollar
Page | 5
Ex. Exhibit
Ord. Order
eg. Exempli gratia [for example]
SC Supreme Court
Id. Ibidem (the same)
v. Versus
Page | 6
INDEX OF AUTHORITIES
INTERNATIONAL CONVENTIONS & TREATIES
Convention on International Sale of Goods (CISG) 19, 37, 38,

41-47
Institut international pour l'unification du droit privé (International 31-34, 46

Institute for the Unification of Private Law) (UNIDROIT)
International Centre for Settlement of Investment Disputes 28

(ICSID)
International Chamber of Commerce (ICC) 23, 25, 27,

28, 47
International Council for Commercial Arbitration (ICCA) 24, 26, 29, 32
United Nations (UN) 37, 40, 43
United Nations Commission on International Trade Law 18, 21-26, 28-

(UNCITRAL) 30, 33, 40
Page | 7
BOOKS, ARTICLES & COMMENTARIES
Benjamin K. Leisinger, Fundamental Breach Considering Non- 46

Conformity of the Goods 98 (1st. ed. 2007).
Blackaby, Nigel Partasides, Constantine Redfern Hunter 21

International Arbitration 5th Ed. 2009 347
ChristerSöderlund, LisPendens, Res Judicata and the Issue of 23

Parallel Judicial Proceedings, (2005) Journal of International
Arbitration 22 (4), 301.
CISG, Art. 74. United Nations Convention on Contracts for the 37

International Sale of Goods, U.N. Doc. AICONF. .97/18, Annex 1
(1980)
CISG, Art. 75, 76. United Nations Convention on Contracts for the 40-41
(1980)

(1980)

(1980)
CISG, Articles. 49, 64, 72, 73. United Nations Convention on 38

Contracts for the International Sale of Goods, U.N. Doc. AICONF.
.97/18, Annex 1 (1980)
Commentary on the Draft Convention on the International Sale of 40

Goods, art. 58, [1976] VII Y.B. INT'L L. COwIN'N 96, 136, U.N.
Doe. AICN.9/116, annex. 11.
Commentary on tie Draft Convention on Contracts for the 37

International Sale of Goods, Prepared by the Secretariat, art. 70
n.2. U.N. Doc. A/CONF. .97/5 (1979)
Page | 8

n.2. U.N. Doc. A/CONF. .97/5 (1979) [hereinafter Commentary on
the Draft Convention],

n.2. U.N. Doc. A/CONF. .97/5 (1979)
DIENER, Keith William Recovering Attorneys’ Fees under CISG: 42

An Interpretation of Article 74 Nordic Journal of Commercial
Law, Issue 2008 #1
F. Enderlein and D. Maskow, International Sales Law, available at 44

www.heinonline.com
Farnsworth, Damages and Specific Relief, 27 Ami. J. Co.mp. L. 37

247 (1979).
FrédéricBachand, Does Article 8 of the Model Law Call for Full or 24

Prima Facie Review of the Arbitral Tribunal’s Jurisdiction?,
Arbitration International, vol. 22 (3), 463.
Handelsgericht St. Gallen HG.1999.82-HGK, 3 December 2002 47

DT Ltd. v. B. AG IHR 2003, 181
Inal, E. (2005). Developments in E-commerce Law and 31

Establishment of Contracts on the Internet. Vedat Bookshop.
J. Hoeoto, UNIFORM LAW FOR INTERNATIONAL SALES 40

UNDER THE 1980 UNITED NATIONS CONVENTION 29-34
(1982).
Page | 9
Jan Paulsson, Interference by National Courts, in Lawrence 23, 24

Newman & Richard Hill (eds.), The Leading Arbitrators' Guide to
International Arbitration (Juris Publishing, 2004) 107.
John Barceló, Who Decides the Arbitrators’ Jurisdiction? 25

Separability and Competence - Competence in a Transnational
Perspective, (2003) 36 Vanderbilt Journal of Transnational Law
1115.
Julián Bordacahar, The Rule of Law As Created by Arbitrators – 24

An Update on the Discussions At The Recent IBA Arbitration day
in Buenos Aires’, Kluwer Arbitration Blog, April 8 2018
KEILY, Troy How Does the Cookie Crumble? Legal Costs under 42
a Uniform Interpretation of the United Nations Convention on
Contracts for the International Sale of Goods" Nordic Journal of
Commercial Law of the University of Turku, Finland, Issue 2003 #
1
L. Graffi, ‘CsaeLaw on the Concept of “Fundamental Breach” in 43

the Vienna Sales Convention’, (2003), International Business
Law Journal
LOOKOFSKY, Joseph Understanding the CISG in the USA: A 43

compact guide to the 1980 United Nations Convention on Contract
for the international Sale of Goods Kluwer Law International, 4th
ed., Alphen aan den Rijn 2012
Maxwell, W. J., Bourreau, M. (2014). Technology Neutrality in 34

Internet, Telecoms and Data Protection Regulation. Computer and
Telecommunications Law Review. Forthcoming.
Page | 10
Peter TURNER, Reza MOHTASHAMI, A GUIDE TO THE LCIA 28

ARBITRATION RULES, Oxford, New York, 2009, p. 168, ¶¶
6.121 – 6.122
Schwab/Walter, KommentarzurSchiedsgerichtsbarkeit, (7th 25

edition, 2005).
Secretariat Commentary on 1978 Draft Art. 23 (draft counterpart 44
of CISG Art. 25), Comment 3
Srinivasan, Badrinath, Costs Allocation Under the Amended 47

Indian Arbitration Law: A Critique (April 15, 2017). Proceedings
of the Conference on Dispute Management in Infrastructure
Projects: New Challenges, May 19-20, 2017, VigyanBhawan, New
Delhi.
Surden, H. (2012). Computable Contracts. U.C. Davis Law 33

Review, 46, p. 656.
Szabo, Smart Contracts: Building Blocks for Digital Markets,1996 30
UNCITRAL REPORT 7; A/CN.9/246 - Report of the Working 24

Group on International Contract Practices on the Work of its
Seventh Session, (1984) XV UNCITRAL Yearbook.
UNCITRAL, 18th Session Comm. Analytical Commentary on Draft 22

Text of A Model Law on International Commercial Arbitration,
A/CN.9/264 Under Article 18, Paras. 3 And 10
UNCITRAL, 18th Session Comm. Analytical Commentary On 23

Draft Text Of A Model Law On International Commercial
Arbitration, A/CN.9/264
Werbach, K., Cornell, N. (2017). Contracts Ex Machina, Duke 32

Law Journal. 67, p.368.
Page | 11
ZELLER, Bruno Good Faith - The Scarlet Pimpernel of the CISG 42

May 2000, available at:
http://www.cisg.law.pace.edu/cisg/biblio/zeller2.html
CASES REFERRED
Blue v Ashley [2017] EWHC 1928 32
Cooper v Ateliers De La Motobecane, S.A 442 N.E.2d 1239 27, 28

(N.Y. 1982)
DeJohn v. The .TV Corp. Int’l, 245 F.Supp.2d 913 (C.D. Ill. 34
2003)
Drexel Burnham Lambert Inc. v Ruebsamen 139 A.D.2d 323 28

(N.Y. App. Div. 1988)
Forrest v. Verizon Communications Inc., 805 A.2d 1007 (D.C. 34

App. 2002)
ICC Arbitration Case No. 7585 of 1992 (Foamed board 47

machinery)
McCeary Tire & Rubber Co. v CEAT SpA, 501 F.2D (3rd Cir. 27
1974)
Mexico 30 November 1998 Compromex Arbitration 41

(DulcesLuisi v. Seoul International)
Mount Albert Borough Council case; Mount Albert Borough 22

Council v Australasian Temperance and General Assurance
Society [1938] AC 224 p. 240x
Phillips Petroleum Co. v Iran 21 IRAN-U.S. C.T.R., at 79 et seq. 43
Page | 12
Rudder v. Microsoft Corp, 1999 Carswell Ont 3195, ONSC 35
Tata Teleservices Ltd. v. GTL Infrastructure Ltd. 36

MANU/DE/0417/2016
Tribunal of International Commercial Arbitration at the Russian 47

Federation Arbitral Award, 10 February 2000, 340/1999
Zaltz v. Jdate, C.D. Cal. 2013 HTLD 449 35
OTHER AUTHORITIES
Austria 15 June 1994 Vienna 43

Arbitration proceeding SCH-4366
Born, (n12), P. 905. 27
Bundestag-Drucksachen of the 13th 25

Elected Parliament, matter 5274
Draft Convention on the International 39

Sale of Goods, art. 58, [19761 VII Y.B.
INT'L L. CoMM'N 89, 94, U.N. Doe.
AICN.9/I16, annex. I.
Indian Arbitration Act, 1996 22
Indian Contract Act, 1872 32
Lew, Mistelis, Kröll 604 29
Section 2(bk), Telecom Commercial 30

Communications Customer Preference
Regulations,
2018
Page | 13
Tribunal of International Commercial 47

Arbitration at the Russian Federation
Arbitral Award, 10 February 2000,
340/1999
UNCITRAL Model Law on Electronic 30

Transferable Records,2017, Section 7,
19
UNICITRAL Model Law on Electronic 30

Commerce, 1996, Tenn, Code Ann. §
47-50-119 (2018).
Yesilirmak, n 2, p. 180; Caron and 26
Caplan, n 5, p. 537.
Zivilgericht (Civil Court) Basel-Stadt, 45

Switzerland, 1 March 2002; No. p
1997/482;
Page | 14
STATEMENT OF JURISDICTION
Wash-o-matics Pvt. Ltd., the Claimant in the instant case has the honour to
submit this Memorial before the Arbitral Tribunal constituted under the
UNICITRAL Arbitration Rules, in pursuance of Article 18 of UNICITRAL
Arbitration Rules (2010) read with the Arbitration Clause of the Ricardian
Contract between Wash-o-matics Pvt. Ltd. of Pindia and Aliababwa Electronics
of Dhina.
Page | 15
STATEMENT OF FACTS
Kuku Parulkar as Nominated

Nominated
Presiding arbitrator Nastik Trivedi
Kartaj Singh as
Arbitrator. as Arbitrator.
1000 units of
CLAIMANT RESPONDENT
Washing machines
(Wash-O-Matics (Aliababwa
Pvt. Ltd.) Electronics)
Represented by Represented by
Kunal Jay. Madam Bussad.
Wash-o-matics Pvt. Ltd (“Wash-o-matics”), is a private limited company,

having its registered office located at New Pehli, represented through its
Director, Mr. Ramesh Gaitonde. Aliababwa Electronics (“Aliababwa”), the
Respondent, is a sole proprietorship business owned by Mr. Ali Ababwa.
Page | 16
January, 2018 Wash-o-matics launched Instawash, the USP of which was

that it had the ability to automatically communicate with the
servers of Washo-matics’ service department and initiate a
‘service request’ on behalf of the consumer whenever
service was due, a part needed replacement, or the warranty
was about to expire.
However, the most important distinguishing characteristic
of Wash-o-matics, as a company, was its capability to
provide genuine and authentic spare parts using blockchain
technology and smart contracts. The machine would not
accept spare parts which could not be verified as authentic
and genuine.
Patent granted to Instawash.

March, 2018
Mr. Gaitonde met Mr. Ali Ababwa at the Dhina Expo of

1 April, 2018
Innovative Technologies 2018.
7th April, 2018 The Respondent wrote an email to Mr. Gaitonde (Exhibit
C1) for importing 1000 machines after going through the
website of the Claimant and a Richardian Contract was
generated.
15th April, 2018 The Claimant sent an email to the Respondent accepting the
business proposal of the Respondent and giving instructions
for the completion of the contract.
30th May, 2018 The Respondent complied with all the requirements and a
shipment of 1000 machines was delivered to the
Respondent.
An email was sent from the Respondent to the Claimant

16th June, 2018
praising the company and the use of technology.
Page | 17
The servers of the Claimant received responses from the

Last week of
machines that the display of the machines was showing an
June, 2018
error. On remotely accessing the machines, the Claimant
came to know that the displays had not been calibrated to the
voltage requirements of Dhina, which led to short circuits.
Voltage fluctuations and short circuits were not covered
within the warranty provided by the Claimant.
2nd July, 2018 The Claimant shipped the calibrated displays to the
Respondent and the account of the Respondent was
automatically debited by USD 420,000.
Around 17th July, The shipment of spare parts got held up at customs in Dhina
2018 for 16 hours because a bug in the software failed to verify
the calibrated displays as genuine and instead flagged them
as counterfeits.
18th July, 2018 An amount of USD 420,000 was refunded to the account of
the Respondent because there was a refund provision in the
smart contract if the goods were not delivered within 15
days.
At about 4 p.m. that evening, the Respondent received the

shipment of the calibrated displays. The Claimant’s servers
received confirmation that the goods had reached the
Respondent and, accordingly, the Claimant sent an email the
very same day requesting the Respondent to use his
“Signature Keys” to authorize a debit of USD 420,000.
22nd July, 2018 The Claimant filed an application under Section 9 of the
Arbitration Act of Pindia before the Courts in Pindia praying
that the Respondent be restrained from using the calibrated
displays as the Respondent has neither responded to mails
Page | 18
or calls of the claimant and neither had used his “Signature

Keys” to authorize a debit of USD 420,000.
12th September, The Court ultimately decided the application in favour of the
2018 Claimant. The Respondent is restrained from selling, using
or, in any manner whatsoever, creating a third-party interest
in the calibrated displays supplied by the petitioner till the
completion of the arbitration proceedings.
Page | 19
ISSUES RAISED
1.
DOES THE TRIBUNAL HAVE JURISDICTION TO DECIDE THE
PRESENT DISPUTE OR IS THE PRESENT DISPUTE NON-
ARBITRABLE?
2.
SHOULD THE TRIBUNAL GRANT THE INTERIM MEASURE

REQUESTED BY THE RESPONDENT?
3.
ARE THE SMART CONTRACTS BINDING ON THE PARTIES?
4.
IS THE CLAIMANT ENTITLED TO THE PAYMENT OF USD 420,000?
Page | 20
SUMMARY OF ARGUMENTS
1. DOES THE TRIBUNAL HAVE JURISDICTION TO DECIDE THE

PRESENT DISPUTE OR IS THE PRESENT DISPUTE NON-
ARBITRABLE?
The Claimant submits that both the parties agreed that any dispute between
them would be referred to and finally determined by arbitration in
accordance with the UNCITRAL International Arbitration Rules. The
jurisdiction of the Tribunal must then stem from the Lex Loci Arbitri, which
in this case is the Pindian Arbitration Law. Furthermore, Pindia’s Arbitration
law is based on the UNCITRAL Model Law on International Arbitration
(hereinafter “UNCITRAL Model Law”).
The principle of kompetenz- kompetenz will be applied which gives the
Arbitral Tribunal to apply its own jurisdiction. As per this principle the
tribunal is empowered to hear disputes relating to its jurisdiction. Under
UNCITRAL rules, if any choice of law is not made by the parties in
arbitration agreement the arbitration tribunal shall apply the law determined
by the conflict of laws which it considers applicable. Hence, the tribunal has
jurisdiction over the matter at hand.
2. SHOULD THE TRIBUNAL GRANT THE INTERIM MEASURE

REQUESTED BY THE RESPONDENT?
The Respondent is not entitled to any interim measure. This is as per Article
26(3)(a) of the UNCITRAL Arbitration Rules, the interim measure can be
granted when the party requesting it can satisfy that: Harm not adequately
reparable by an award of damages is likely to result if the measure is not
ordered, and such 18 harm substantially outweighs the harm that is likely to
result to the party against whom the measure is directed if the measure is
granted.
Page | 21
If the second part of the paragraph is applied to the current situation, then it
would that granting of interim measure to the Respondent should be less
harmful to the Cl. as compared to the harm caused to the Respondent by not
granting it which is clearly not the case. Here, if the interim measure is
granted to the Respondent, the Respondent who is claiming that the Cl.
shipped the spare parts without them asking for it will never return the
amount of USD 420,000 to the Cl.
3. ARE THE SMART CONTRACTS BINDING ON THE PARTIES?
It is humbly submitted before the Arbitral Tribunal that the contract between
both the parties is valid as it fulfils all the essentials of a valid contract
according to the Pindian Contract Act. No contract relating to a transaction
shall be denied legal effect, validity, or enforceability solely because that
contract is executed through a smart contract. Also, the contract has resorted
to fair means. The basic principle of ‘contract’ is that when someone signs
the contract, signifying assent and acceptance they had an opportunity to
read and hence they should be bound to the agreement, regardless of
whether they actually read the contract and the Respondent was given
enough opportunity to read the contract. The Respondent has accepted and
conveyed his assent on numerous occasions.
4. IS THE CLAIMANT ENTITLED TO THE PAYMENT OF USD

420,000?
It is humbly submitted before the Arbitral Tribunal that the Claimant is

entitled to the amount of USD 420,000. Furthermore, the Claimant is also
entitled to interest on the amount of USD 420,000. Article 74 states the
general rule for measuring damages that the Claimant is entitled. The Cl. is
also entitled to interest as per Article 78 of CISG which states "If a party
fails to pay the price or any other sum that is in arrears, the other party is
entitled to interest on it, without prejudice to any claim for damages.”
Page | 22
According to the Article 25 of the CISG, a breach by one of the parties is

fundamental if:
“It results in such detriment to the other party as substantially to deprive

him of what he is entitled to expect under the contract, 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”.
As the Claimant had shipped the spare parts but the Respondent had not
made the payment for the same, the Claimant was deprived of what he was
entitled to under the contract. Even the payment to be made was reasonably
foreseeable to the Respondent. Thus, the breach by the Respondent was a
fundamental breach.
The Respondents are also responsible to pay the amount of costs of the
arbitration. These costs can also be joined with the foreseeable damages
under Article 74. The Respondent did not use the signature key to make the
payment even though they had received the spare parts. The principle of
Unjust Enrichment comes into picture here and hence the Respondent is
liable to pay the amount.
Page | 23
ARGUMENTS ADVANCED
1. THAT THE TRIBUNAL DOES HAVE JURISDICTION TO DECIDE

THE PRESENT DISPUTE
The Claimant humbly submits its contentions in a four-pronged manner.

Firstly, it contends that the Arbitral Tribunal has authority to rule on its own
jurisdiction. Secondly, that the Arbitral Tribunal has power to adopt the
contract. Thirdly, that the proceeding with the Arbitration will save time and
money. Fourthly, that the Respondent has failed to show any of the accepted
criteria for a stay.
As an initial matter, the Respondent does not dispute that in the present case,
the primary source of the Tribunal’s authority is that the smart contract
submits to arbitration any disputes or differences between the parties. The
Claimant and Respondent agreed that any dispute between the parties would
be referred to and finally determined by arbitration in accordance with the
UNCITRAL International Arbitration Rules. The jurisdiction of the
Tribunal must then stem from the lex loci arbitri, which in this case is the
Pindian Arbitration Law. Furthermore, Pindia’s arbitration law is based on
the UNCITRAL Model Law on International Arbitration (hereinafter
“UNCITRAL Model Law”).
1.1 The Arbitral Tribunal has authority to rule on its own jurisdiction
Article 18(1) of the UNCITRAL Model Law states that a “Tribunal may rule
on its own jurisdiction, including any objections with respect to . . . the
arbitration agreement1.” This language codifies the internationally accepted
doctrine of Kompetenz-Kompetenz, the applicability of which Respondent
does not challenge. The Tribunal is authorized to determine its own
jurisdictional competence by the doctrine of Kompetenz-Kompetenz. As per
1
Blackaby, Nigel Partasides, Constantine Redfern Hunter International Arbitration 5th Ed. 2009
347
Page | 24
this principle the tribunal is empowered to hear disputes relating to its

jurisdiction.2 Under UNCITRAL rules, if any choice of law is not made by
the parties in arbitration agreement the arbitration tribunal shall apply the
law determined by the conflict of laws which it considers applicable.3
Pindia’s amendment to the UNCITRAL Model Law reinforces the

conclusion that the Respondent’s lawsuit does not deprive this Tribunal of
jurisdiction to proceed with the arbitration. The amended law states that
“[p]rior to the constitution of the arbitral Tribunal, an application may be
made to the court to determine whether or not arbitration is admissible4”.
However, the law also allows parallel arbitration proceedings to proceed.
Pindia’s Arbitration law specifically provides that: Where an action or
application referred to in subsection 1 or 2 has been brought, arbitral
proceedings may nevertheless be commenced or continued, and an arbitral
award may be made, while the issue is pending before the court.5
Even in the absence of choice, the court has to impute an intention or

determine the proper law which the parties would have intended to govern
their dispute6. The expression “proper law of the contract” includes the legal
order governing the transaction according to the willingness of the parties
or, when the intention of the parties in this respect are non-existent or cannot
be derived from the surrounding circumstances to the legal order showing
the closest and most real connection with the transaction.
Article 18 (1) of the Model Law is silent on the law that should be applied
by the arbitral tribunal while ruling on objections to its jurisdiction.
Furthermore, the Model Law does not contain any generally applicable
conflict of laws rule concerning the arbitration agreement.7
2
Supra Note 1.
3
Art. 28 (2), UNCITRAL Rules,
4
Pindia Arb. Law Art. 8(2)
5
Pindia Arb. Law Art. 8(3)
6
Mount Albert Borough Council case; Mount Albert Borough Council v Australasian
Temperance and General Assurance Society [1938] AC 224 p. 240x
7
UNCITRAL, 18th Session Comm. Analytical Commentary on Draft Text of A Model Law on
International Commercial Arbitration, A/CN.9/264 Under Article 18, Paras. 3 And 10
Page | 25
The prevailing scholarly view also militates against staying the arbitration,
even at the risk of parallel proceedings. The “arbitrators owe their allegiance
to the parties . . . and are duty bound to examine their competence . . . without
casting sideways glances at court proceedings . . . .”8 The intent of
UNCITRAL Model Law Article 18(1) was to make it impossible to derail
arbitral proceedings simply by raising an objection to the “existence or
validity” of the arbitration agreement.9
The Arbitration Agreement (Clause 45)10 states that-
“Any disputes, controversy or claim arising out of or relating to this

contract, or the breach, termination or invalidity thereof shall be settled by
arbitration……………………………………………………………………………
……………………………………………shall be English.”
The present dispute should be heard before an Arbitral Tribunal as per

Clause 45 of the Contract.
1.2 The Arbitral Tribunal has powers to adapt the contract
This Arbitration Tribunal has power to adapt the contract; here it is

impertinent to also note that the Tribunal has the power to adapt the
Contract. This was laid down by the Swiss SC that an arbitral tribunal seated
in Switzerland would have both the jurisdiction and the power to fill gaps or
to adapt a contract, even in the absence of an express authorization from the
parties to do so.11
8
ChristerSöderlund, LisPendens, Res Judicata and the Issue of Parallel Judicial Proceedings,
(2005) Journal of International Arbitration 22 (4), 301.
9
Jan Paulsson, Interference by National Courts, in Lawrence Newman & Richard Hill (eds.),
The Leading Arbitrators' Guide to International Arbitration (Juris Publishing, 2004) 107.
10
Paragraph 16 of the Moot Proposition, pg. no. 5
11
Julián Bordacahar, The Rule of Law As Created by Arbitrators – An Update on the Discussions
At The Recent IBA Arbitration day in Buenos Aires’, Kluwer Arbitration Blog, April 8 2018
Page | 26
1.3 Respondent has failed to show any of the accepted criteria for a stay
The UNCITRAL Working Papers indicate “the principle underlying Article

18 that it was initially and primarily for the arbitral tribunal to decide on its
competence”, subject to ultimate court control.12 To avoid postponing its
own investigation, the Tribunal must have evidence that the objection is so
serious that it wishes to avoid the risk of wasting its and the parties’ efforts13.
“The better approach . . . is to provide that objections to the tribunal’s
jurisdiction should—as a matter of principle— be first presented to the
tribunal, and consequently to defer judicial review until after the arbitrators
have ruled on their own jurisdiction.14 Without a similar stringent check on
objections to jurisdiction in Pindia, the permissive language of Pindia Arb.
Law Article 8(3) would lose its purpose. Pindia’s exception to the
UNCITRAL Model Law is identical to the German statute, ZPO 1032(2). In
Germany, notwithstanding the allowance granted by ZPO 1032(2),
legislators still view the discretion allowed under 1032(3) as a means of
preventing stall tactics15. German scholarship reinforces that
interpretation16.
Parties reluctant to honour arbitration agreements should not have the

opportunity to neutralize these provisions merely by initiating a court
proceeding, regardless of the merits of the case, and make arbitral
proceedings permissive, rather than court proceedings. Refusing a stay is
thus critical to discouraging attempts to “effectively torpedo the arbitration
proceedings by bringing the claim in state courts”17
12
UNCITRAL REPORT 7; A/CN.9/246 - Report of the Working Group on International
Contract Practices on the Work of its Seventh Session, (1984) XV UNCITRAL Yearbook.
13
FrédéricBachand, Does Article 8 of the Model Law Call for Full or Prima Facie Review of
the Arbitral Tribunal’s Jurisdiction?, Arbitration International, vol. 22 (3), 463.
14
Jan Paulsson, Interference by National Courts, in Lawrence Newman & Richard Hill (eds.),
The Leading Arbitrators' Guide to International Arbitration (Juris Publishing, 2004) 107.
15
Bundestag-Drucksachen of the 13th Elected Parliament, matter 5274.
16
Schwab/Walter, KommentarzurSchiedsgerichtsbarkeit, (7th edition, 2005).
17
John Barceló, Who Decides the Arbitrators’ Jurisdiction? Separability and Competence -
Competence in a Transnational Perspective, (2003) 36 Vanderbilt Journal of Transnational Law
1115.
Page | 27
Respondent’s implicit challenge to the validity of the agreement to arbitrate

is actually a challenge to the formation of the contract, which speaks to the
merits of the case. Hence, the Tribunal has jurisdiction to hear the present
dispute.
2. THAT THE TRIBUNAL SHOULD NOT GRANT THE INTERIM

MEASURE REQUESTED BY THE RESPONDENT
The Claimant submits that the adoption by major arbitral institutions of rules
that favour applications for interim measures to arbitrators, instead of courts,
such as Article 28 of ICC Arbitration Rules, and Article 25.3 of the LCIA
Rules. The work of UNCITRAL, incorporated in the 2006 version of the
UNCITRAL Model Law on International Commercial Arbitration18 and
the 2010 version of the UNCITRAL Arbitration Rules (Article 26).
In this regard, Article 17H of the 2006 version of the Model Law provides
that:
“an interim measure issued by an arbitral tribunal shall be recognized as
binding and, unless otherwise provided by the arbitral tribunal, enforced
upon application to the competent court, irrespective of the country in which
it was issued.”
The interim measure sought by the Respondent pursuant to Article 26 of the

UNCITRAL Arbitration Rules is that “the smart contracts be suspended
during the pendency of this arbitration” as given under the case study.
2.1 Article 26 of UNCITRAL Arbitration Rules
Article 26 of UNCITRAL Arbitration Rules provide for interim measures.

Article 26(3) requires that the party requesting a measure satisfy the tribunal
that:
18
Article 17, UNCITRAL RULES, 2010
Page | 28
(a) Harm, not adequately reparable by damages will result if the measure is
not granted, and this harm ‘substantially outweighs’ the harm likely to
result to the party against whom the measure is directed; and
(b) There is a ‘reasonable possibility’ the requesting party will succeed on

the merits of the claim.19
Arbitrators need to be satisfied that the party applying for an interim measure
is likely to suffer harm if the measure is not granted. They do not need to be
satisfied that the harm will definitely occur, rather they need to be satisfied
that there is a risk that the harm is likely to occur. If the harm can be
adequately compensated for by an award of monetary damages (that is likely
to be honoured) it may not be appropriate to grant the interim measure. 20
Arbitrators should therefore determine whether a given harm can be
sufficiently and adequately compensated through damages on a case-by-case
basis. The test to be applied to determine the level of harm that justifies an
interim measure varies depending on the type of measure sought and the
circumstances of the case.21
This seemingly places a substantial onus on the party requesting the measure
– particularly where the party seeks an interim measure at an early stage of
proceedings (where it may be difficult to foresee even the structure of the
proceedings, let alone assess the merit or possibility of a party’s eventual
success).
The New York Convention may not have a clear provision concerning
interim or provisional measures, however, article II (3) has been interpreted
in many instances to state the opposite. In McCreary & Rubber v CEAT,
another case concerning an international arbitration, the claimant was
seeking the US federal district court to assert its claims in terms of a breach
19
UNCITRAL Rules art. 26. It should be pointed out that in relation to paragraph 2 (d),
paragraph 4 provides that the requirements in paragraphs 3(a) and (b) shall be applied only to
the extent the arbitral tribunal considers appropriate.
20
Yesilirmak, n 2, p. 180; Caron and Caplan, n 5, p. 537.
21
See e.g., Interlocutory Award in ICC Case No. 10596 in Albert Jan van den Berg (ed),
Yearbook Commercial Arbitration, vol. XXX (Kluwer Law International 2005)
Page | 29
of contract, and to further attach sums owed to the other party by a Pittsburgh
bank; while the parties had an arbitration agreement that provided for
arbitration seated in Belgium.22 The court held that the interim measure
requested i.e. attachment of sums, is denied on the basis of article II (3) of
the New York Convention. The court interpreted the article as to prohibit
national courts from ordering interim measures i.e. attachment of sums,
before the commencement of the arbitral proceedings. The approach taken
in this particular case contradicts the interpretation of most US courts,
academic commentaries and almost all other foreign courts.23
In another well-known case, Cooper v Ateliers de la Motobecane24, the New

York court of appeal took a similar approach in interpreting article II (3) of
the New York Convention. The court held that the New York Convention
precludes contracting states25 from granting an attachment i.e. interim
measure, in respect to a pending arbitration; the court also considered the
action itself, an attempt on part of the claimant to frustrate the arbitration.
Furthermore, the court stated in its decision that the policy of the New York
Convention will be preserved by limiting any pre-arbitral actions before
national courts, and that judicial intervention shall be restricted until the
arbitration in question ends with a final award.26 Such broad interpretation
of the New York Convention was further adopted and followed by other
judicial decisions in the US.27
Most institutional arbitration rules, including the ICSID Arbitration Rules,

have opted not to set forth specific criteria, but rather provide arbitrators
broad powers to decide when and what kind of interim relief to grant. An
example of this is Article 28 of the ICC Arbitration Rules, which provides
that “the arbitral tribunal may … order any interim or conservatory measure
it deems appropriate.”
22
McCeary Tire & Rubber Co. v CEAT SpA, 501 F.2D (3rd Cir. 1974).
23
Born, (n12), P. 905.
24
Cooper v Ateliers De La Motobecane, S.A 442 N.E.2d 1239 (N.Y. 1982).
25
States that had acceded to the New York Convention.
26
Cooper v Ateliers, (n 57).
27
See, e.g., Drexel Burnham Lambert Inc. v Ruebsamen 139 A.D.2d 323 (N.Y. App. Div. 1988).
Page | 30
The most significant exception to this approach is Article 26 of the 2010

version of UNCITRAL Arbitration Rules. UNCITRAL chose to provide
more precise guidance because of the general perception that the broad
authority to grant “any interim measures it deems necessary,” contained in
the 1976 version of the Rules, was leaving some tribunals uncertain about
the scope of their interim measures power, and thus leading them to decline
to exercise such power.
Practice under the LCIA rules mimics the position. As described by a leading
treatise:28
As to the meaning of the notion of ‘harm not adequately reparable by an

award of damages’29, it has been suggested that it should be understood in
the economic sense:
In this respect ‘irreparable’ must be understood in an economic, not a

literal, sense. It must take account of the fact that it may not always be
possible to compensate for actual losses suffered or sullied business
reputation through damages.30
Here, in the given case, if we consider irreparable harm as an economic loss,

then by that sense, the Respondent has not incurred any monetary loss. In
fact, it is the Claimant who is at the loss since he’s yet to receive the amount
of USD 420,000. This is the reason why Respondent is not entitled to any
interim relief.
The Respondent is not entitled to any interim relief because according to

Article 26(3)(a) of the UNCITRAL Arbitration Rules, the interim measure
can be granted when the party requesting it can satisfy that: Harm not
adequately reparable by an award of damages is likely to result if the
measure is not ordered, and such 18 harm substantially outweighs the harm
that is likely to result to the party against whom the measure is directed if
the measure is granted.
28
Peter TURNER, Reza MOHTASHAMI, A GUIDE TO THE LCIA ARBITRATION RULES,
Oxford, New York, 2009, p. 168, ¶¶ 6.121 – 6.122
29
UNCITRAL Model Law, art 17.A(1)(a).
30
Lew, Mistelis, Kröll 604
Page | 31
If the second part of the paragraph is applied to the current situation, then it
would mean that granting of interim measure to the Respondent should be
less harmful to the Claimant as compared to the harm caused to the
Respondent by not granting it which is clearly not the case. Here, if the
interim measure is granted to the Respondent, the Respondent who is
claiming that the Claimant shipped the spare parts without them asking for
it will never return the amount of USD 420,000 to the Claimant.
Hence, the Tribunal should not grant the interim measure requested by the
Respondent.
3. THAT THE SMART CONTRACTS ARE BINDING ON THE PARTIES
It is humbly submitted before the Arbitral Tribunal that the contract between
both the parties is valid in light of the continuing development of our economic
system and the changing ideas, concepts, and values that accompany it. The law
must be free to evolve at the same time. The rational way to allow this is by not
restricting the courts/tribunals with rigid definitions and tests which may envelop
only certain contingencies, but to give the courts/tribunals a broad and flexible
standard with which to work.
“Smart contract” means a functionality of intelligent and programmable code

which can execute pre-determined commands or business rules set to pre-check
regulatory compliance without further human intervention and suitable for DLT
system to create a digital agreement, with cryptographic certainty that the
agreement has been honoured in the ledgers, databases or accounts of all parties to
the agreement.31 Smart contracts exist in commerce. No contract relating to a
31
Section 2(bk), Telecom Commercial Communications Customer Preference Regulations,
2018, refer: www.main.trai.gov.in
Page | 32
transaction shall be denied legal effect, validity, or enforceability32 solely because

that contract is executed through a smart contract.33
According to the UN Convention on the Use of Electronic Communications, a

smart contract34 would be considered to be legally valid as these forms
electronically through computer code. Moreover, Article 12 disposes that contracts
formed as a result of automated messages are legally valid and enforceable under
the convention. Nevertheless, there is no legal provision that offers further
indication on liability in an automated contract and from whom remedies would
have to be given. Given the novelty of the technology, the question of the
enforceability of smart contract has not yet been examined by any court
globally. It however fulfils all the conditions of the contract law of the land. It
works efficiently with blockchain technology. Smart contracts are legally
enforceable as they introduce rights, duties, obligations and remedies to all the
parties to the contract and hence are legally enforceable as contracts. Just like
the online contracts, smart contracts are a new method of contract formation;
rather than being a new type of contract.35
3.1 The Contract is valid as per Contract law
As per the Pindian Contract law, there are seven requisites or essentials that
have to be fulfilled for a contract to be considered as a valid contract.
A person signifying to another his willingness to do anything with a view to

obtain the assent of that other to such act, he is said to make a proposal. In
the present case, an offer has been made by the respondent by going through
the Claimant’s website and entering the details of price, quantity and
delivery date of the machines.36 This therefore constitutes as a proposal
32
UNCITRAL Model Law on Electronic Transferable Records,2017, Section 7, 19
33
UNICITRAL Model Law on Electronic Commerce, 1996, Tenn, Code Ann. § 47-50-119
(2018).
35
Inal, E. (2005). Developments in E-commerce Law and Establishment of Contracts on the
Internet. Vedat Bookshop.
36
Para 7, NLSTIAM Moot Proposition, Pg. no. 3 of 22
Page | 33
which was presented for acceptance to the contract as it was sufficiently

definite and indicated the intention of the offeror37.
When the person to whom the proposal is made signifies his assent, the
proposal is said to be accepted. This said contract was concluded by the
acceptance of an offer by the Claimant through an email dated April 15,
2018 where the Claimant expressly agreed to Respondent’s terms38 that is
sufficient to show agreement.39
It is a further requirement of a contract that the offer, and the agreement

resulting from its acceptance must be intended to create legal rights and
obligations which are enforceable and not merely moral obligations40. The
Respondent completing and submitting the business enquiry form41 and the
Claimant accepting the business proposal of the Respondent and giving
instructions for the completion of contract42 shows an intention of creating
a legal relationship between both the parties. In short, the parties’ act of
sending their cryptographic private keys in order to commit their resources
to the smart contract is an indication of a declaration of intent.43
The parties had agreed for USD 1500 per machine as the consideration
which was to be automatically debited from the Respondent’s bank account
once he had signed in using his signature keys and a shipment of the
machines was delivered to Respondent on May 30, 201844. Thus, there was
a valid consideration45. Both parties in the present case are competent
parties.46 It is evident from Exhs. C1 and C4 that the offer to buy machines
was actually made by the Respondent which was accepted by the Claimant
and the Contract47 was to come into effect only once the Respondent would
37
UNIDROIT Principles on International Commercial Contracts, Article 2.2
38
Exhibit C4, NLSTIAM Moot Proposition, Pg. no. 10 of 22
39
40
Blue v Ashley [2017] EWHC 1928.
41
42
43
Werbach, K., Cornell, N. (2017). Contracts Ex Machina, Duke Law Journal. 67, p.368.
44
45
Section 2d, Indian Contract Act,9 of 1872
46
Indian Contract Act 1872, No. 9, Act of Imperial Legislative Council, 1872 (India).
47
Page | 34
enter his Signature Keys, thus, leaving the final decision of entering into the
contract on the Respondent. This makes it clear that there was free consent48
on the part of both the parties. The object in the present case is washing
machines and its spare parts which under no circumstance can be considered
as an unlawful object.49 A contract for sale of washing Machines has not
been expressly declared to be a void contract under the Pindian Contract
Act. Thus, the contract in the present case also satisfies the seventh essential
of a valid contract.
All the seven essentials of a valid contract are satisfied by the contract
entered into between the Claimant and the Respondent. Hence considering
the same the contract in question is deemed to be a contract under the
Contract laws. Under the contract law, there is no explicit prohibition on
expressing contractual terms via data50. This inference is in the same
direction with the technological neutrality51 principle, which is also one of
the guiding principles of UNCITRAL for its works.52 In the context of
contract formation, unless otherwise agreed by the parties, an offer and the
acceptance of an offer may be expressed by means of data messages. Where
a data message is used in the formation of a contract, that contract shall not
be denied validity or enforceability on the sole ground that a data message
was used for that purpose.53
During the course of negotiations, the respondent did not insist there should
be agreement on specific matters or in a specific form, therefore the contract
is concluded.54 No form is mandated for a particular contract to be valid.55
No specific language is required for a contract under the Pindian Contract
48
Section 14, Indian Contract Act, 1872
49
Section 23, Indian Contract Act, 9 of 1872
50
Surden, H. (2012). Computable Contracts. U.C. Davis Law Review, 46, p. 656.
51
Maxwell, W. J., Bourreau, M. (2014). Technology Neutrality in Internet, Telecoms and Data
Protection Regulation. Computer and Telecommunications Law Review. Forthcoming.
Available at: https://ssrn.com/abstract=2529680 (last visit: 23.3.2019).
52
Takahashi, K. (2017). United Nations Commission on International Trade Law (ed.).
Modernizing International Trade Law to Support Innovation and Sustainable Development:
Implications of Blockchain Technology for the UNCITRAL Works, p. 3.
53
Article 11, UNCITRAL Model Law on Electronic Commerce (2016)
54
55
Page | 35
Act, and therefore any language, including a programming language is

permissible.
3.2 The Contract is valid as it resorted to fair means
Under the classical theory, it is a conclusive presumption that the signing

party understood the terms. This result was based on the “duty to read”
doctrine, which was also developed out of the paradigm of individually
negotiated contracts. The basic principle of ‘contract’ is that when someone
signs the contract, signifying assent and acceptance they had an opportunity
to read and hence they should be bound to the agreement, regardless of
whether they actually read the contract.56
In L’Estrange v E. Graucob Ltd57, it has been affirmed that the clauses of a

written contract are binding on the signatories, even where a party is
unaware of the contract’s full contents.
The Respondent had been properly informed of any terms, rules, agreements
or policies that they had offered. Also, relevant documents, FAQs and
explanations relating to smart contracts under the tab marked “Legal” were
easily accessible to the Respondent on the Claimant’s website.58 As long as
the parties to the agreement had an opportunity to review the terms and click
that they consent, they had been given enough notice.59
The Respondent had been presented the agreement directly and

unambiguously and he had a reasonable opportunity to become aware, of the
existence of the terms of the agreement and he effectively signed the
agreement. Under these circumstances he should not be heard to complain
that he did not read, see, etc is bound to the terms of this contract. Failure to
read a contract is not a get out of jail free card.60 The fact that the Respondent
56
Forrest v. Verizon Communications Inc., 805 A.2d 1007 (D.C. App. 2002)
57
[1934] 2 KB 394
58
59
DeJohn v. The .TV Corp. Int’l, 245 F.Supp.2d 913 (C.D. Ill. 2003), Rudder v. Microsoft Corp,
1999 Carswell Ont 3195, ONSC
60
Supra Note 56
Page | 36
does not believe that he agreed to the terms, does not negate the
uncontroverted and overwhelming evidence demonstrating that Respondent
agreed to the terms of Contract.61
Moreover, all of the above rests on the assumption that the Respondent’s
claim that he wasn’t aware of the terms of the service and spare parts
agreements, is true. This assumption is easily rebuttable due to the
Respondent’s demonstrated understanding of the nuances of the Parent
Contract which included the ancillary agreements referred to. In fact, the
respondent, while marketing the claimant’s product in Dhina, seemed well
aware of the service and spare parts facility which formed part of the
product’s overall appeal in the market. (Exhibit C5) Also, the Claimant had
explained the whole process of creating an account on the website and
entering the login details and the location of Contract tab. He also mentioned
that the Respondent could correspond through the account by raising a tab
which clearly shows that he was given enough opportunity to read the
contract and get back to the Respondent in case of some doubts.62 Through
email dated 15, April 2018, the Claimant has expressly provided a helping
hand in case of any queries.63The parent contract clearly mentions the
parties consenting to entering the smart contracts.64
The Claimant, therefore, contends that the Respondent by stating that he is

unaware of the functioning of the smart contracts and that he is not tech
savvy65 is just trying to mislead the Tribunal. The Claimant did not use
unduly high-pressure tactics or deceptive language to induce the respondent
to click their assent and therefore the contract is enforceable. In the instant
case, everything had been done and there was no scope for any further
negotiations and therefore, it cannot be said that there was no concluded
contract. The principle applicable is that where you have proposal or
agreement made in writing expressed to be subject to a formal contract being
61
Zaltz v. Jdate,C.D. Cal. 2013 HTLD 449
62
Exh C4, NLSTIAM Moot Proposition, Pg. no. 10 of 22
63
Id.
64
Exh C6, NLSTIAM Moot Proposition, Pg. no. 12 of 22
65
Page | 37
prepared, it means what it says; it is subject to and is dependent upon a

formal contract being prepared. If the principle is applied to the facts in the
instant case, there is no room for any argument that the parties had not come
to a concluded contract.66
3.3 The respondent cannot claim that the smart contract is void or voidable
due to “mistake of fact or law”
Under Art 3.2.2 2(b) of UNDIROIT principles, given the circumstances, the
risk of mistake should’ve been borne by the Respondent and hence he can’t
avoid the contract. The risk is assumed by the party accepting the terms of a
standard for contract.
4. THE CLAIMANT IS ENTITLED TO THE PAYMENT OF USD

420,000.
It is humbly submitted before the Arbitral Tribunal that the Claimant is

entitled to the amount of USD 420,000. Furthermore, the Claimant is also
entitled to damages amounting to at least USD 100,000 and interest on the
amount of USD 420,000 along with the costs of arbitration.
4.1 Claimant is entitled to damages amounting to at least USD 100,000
4.1.1 Article 74 of CISG
Article 74 states the general rule for measuring damages. Damages for
breach of contract by one party consist of a sum equal to the loss,
including loss of profit, suffered by the other party as a consequence
of the breach. Such damages may not exceed the loss which the party
in breach foresaw or ought to have foreseen at the time of the
conclusion of the contract, in the light of the facts and matters of which
he then knew or ought to have known, as a possible consequence of
66
Tata Teleservices Ltd. v. GTL Infrastructure Ltd. MANU/DE/0417/2016
Page | 38
the breach of contract.67 This provision seeks to give the injured party
the "benefit of the bargain," as measured by expectation interests as
well as reliance expenditures.68
4.1.2 Placing the injured party in the same economic position as he

would have been in if the contract had been performed.
In addition, the Commentary to article 70 of CISG, an earlier version

of article 74, of the 1978 Draft Convention (hereinafter 1978
Commentary) states the rule's goal of "placing the injured party in the
same economic position he would have been in if the contract had
been performed.”69 The first sentence of article 74 does not specify
the time or place for measuring the loss suffered by the injured party.
This issue is likely to arise in international transactions, particularly
transactions involving goods which fluctuate significantly in price. A
footnote to the 1978 Commentary of article 70 offers one plausible
answer to the problem of measuring the loss suffered by the injured
party.
The footnote states that the place for measurement should be where
the seller delivered the goods, and adds that the point in time should
be an "appropriate [one] ... , such as the moment the goods were
67
CISG, Art. 74. United Nations Convention on Contracts for the International Sale of Goods,
U.N. Doc. AICONF. .97/18, Annex 1 (1980) [hereinafter Convention or CISG], reprinted in
United Nations Conference on Contracts for the International Sale of Goods, Official Records
at 178, U.N. Doc. A/CONF. .97/19, U.N. Sales No. E.81.1V.3 (1981); ABA, THE
CONVENTION FOR THE INTERNATIONAL SALE OF GOODS: A HANDBOOK OF
BASIC MATEPJALS 28-61 (1987); S. TREATY Doc. No. 9, 98th Cong., 1st Sess. 22-43
(1983); and 52 Fed. Reg. 6262 (1987). Final Act of the United Nations Conference on Contracts
for the International Sale of Goods, U.N. Doc. A/CONF. .97/18 (1980).
68
Farnsworth, Damages and Specific Relief, 27 Ami. J. Co.mp. L. 247 (1979).
69
Commentary on tie Draft Convention on Contracts for the International Sale of Goods,
Prepared by the Secretariat, art. 70 n.2. U.N. Doc. A/CONF. .97/5 (1979) [hereinafter
Commentary on the Draft Convention], reprinted in ABA, supra note 1. at 98-150.
Page | 39
delivered, or the moment the buyer learned the non-conformity would

not be remedied by the seller" under other articles of the Convention.70
4.1.3 Requirement of Foreseeability
Articles 75 and 76 provide two methods for measuring damages when

a party avoids a contract due to a fundamental breach of the contract
by the other party.71 Both provisions represent specific applications of
article 74 and should be read in conjunction with it. Article 74
establishes the rule for the measurement of damages "whenever and
to the extent that articles [75] and [76] are not applicable."72
The Respondent had entered into a Ricardian Contract which

contained the smart contracts for service, spare parts and warranty.
Once the Respondent had entered into the contract with the use of
“Signature Keys”, the Respondent had consented to the smart
contracts as well. Moreover, the Respondent had visited the website
of the Claimant and could have easily accessed all relevant
documents, FAQs and explanations relating to smart contracts. Hence,
The Respondent is liable to pay for the calibrated displays.73
70
71
CISG, Articles. 49, 64, 72, 73. United Nations Convention on Contracts for the International
Sale of Goods, U.N. Doc. AICONF. .97/18, Annex 1 (1980) [hereinafter Convention or CISG],
reprinted in United Nations Conference on Contracts for the International Sale of Goods,
Official Records at 178, U.N. Doc. A/CONF. .97/19, U.N. Sales No. E.81.1V.3 (1981); ABA,
THE CONVENTION FOR THE INTERNATIONAL SALE OF GOODS: A HANDBOOK OF
72
73
Paragraph 18 of the Moot Proposition
Page | 40
4.2 Claimant is entitled to interest
A party to a contract controlled by the Convention relies on article 78's rule

on interest at his own peril. The sweeping language of the provision states:
"If a party fails to pay the price or any other sum that is in arrears, the other
party is entitled to interest on it, without prejudice to any claim for damages
recoverable under article 74.”74
4.3 Methods of calculating interest
Because article 78 provides neither a method for calculating interest nor a

commentary for guidance, article 58 and its commentary will be a significant
source for determining acceptable ways to calculate interest under the
Convention. Article 58 of the 1976 UNCITRAL Working Group's Draft
Convention authorized interest awards, but only for the seller. It entitled the
seller to interest when "the breach of contract consisted of delay in the
payment of the price. .... ",75 Under the broader language of article 78, which
allows interest when a party does not pay the price "or any other sum that is
in arrears,"76 the interest market of the injured party's principal place of
business would normally be the most accurate reference point for determining
74
75
Draft Convention on the International Sale of Goods, art. 58, [19761 VII Y.B. INT'L L.
CoMM'N 89, 94, U.N. Doe. AICN.9/I16, annex. I.
76
Page | 41
the cost to the injured party of a delay in receiving funds. Likewise, the use
of the discount rate or the interest rate on commercial paper, whichever is
higher, in the injured party's country would be equally appropriate for
determining interest for an injured buyer or seller. The additional reference to
"any . . . sum . . . in arrears," however, intimates that parties may seek interest
in a broader spectrum of situations than under article 58 of the UNCITRAL
Working Group's Draft Convention (1976). The interpretation of article 78
will be affected by whether a court focuses on the language "sums in arrears,"
an approach which would probably limit interest to delays in paying
liquidated damages,”77 or considers its own traditions in awarding interest. If
courts interpret article 78 in the context of their own legal traditions, then
interest could conceivably be awarded under the Convention for liquidated as
well as non-liquidated damages, or for damages based on current price and
substitute transactions.78 In addition, the language of article 78 indicates that
any interest awards will not affect damages recoveries under article 74.79
4.4 Principle of Good faith followed by the Claimant
The principle of good faith is recognized as one of the general principles

governing the law of international commerce, a principle of interpretation of
CISG embodied in Article 7(1) CISG80, but also as a concept and principle
77
J. Hoeoto, UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980 UNITED
NATIONS CONVENTION 29-34 (1982).
78
CISG, Art. 75, 76. United Nations Convention on Contracts for the International Sale of
Goods, U.N. Doc. AICONF. .97/18, Annex 1 (1980) [hereinafter Convention or CISG],
reprinted in United Nations Conference on Contracts for the International Sale of Goods,
Official Records at 178, U.N. Doc. A/CONF. .97/19, U.N. Sales No. E.81.1V.3 (1981); ABA,
THE CONVENTION FOR THE INTERNATIONAL SALE OF GOODS: A HANDBOOK OF
80
Page | 42
contained in various provisions of the CISG81, as one of the general principles

underlying the Convention and applicable to parties’ conduct. Article 7(1) of
CISG mandates the promotion of observance of good faith in sales
transactions, which is achieved that they should exempt the disadvantaged
party from liability under Article 79 of CISG. The Claimant in this case, tried
to get in touch with the Respondent, for discussing the price and its
repercussions on the transaction.
4.5 Costs of Arbitration
It is humbly submitted before the Tribunal that the Respondents are

responsible to pay the amount of costs of the arbitration. These costs can also
be joined with the foreseeable damages under Article 74 as seen in the
previous issue as the conduct of the Respondent with not responding to the
Claimant and not using the signature access to make the payment even though
they had received the spare parts and the delay due to which the payment was
refunded was not the fault of the claimant.
The Respondent claims that the reimbursement of arbitration costs is a matter

of procedural law only and therefore not subject to the CISG or any
international instrument. The CISG has to be interpreted autonomously82.
Therefore, national classifications of reimbursement of arbitration costs
cannot be decisive83. Rather, the question of whether the CISG applies to the
reimbursement of arbitration costs must not depend on the classification of
the costs as procedural or substantive.84
81
Mexico 30 November 1998 Compromex Arbitration (DulcesLuisi v. Seoul International)
[http://cisgw3.law.pace.edu/cases/981130m1.html]
82
KEILY, Troy How Does the Cookie Crumble? Legal Costs under a Uniform Interpretation of
the United Nations Convention on Contracts for the International Sale of Goods" Nordic Journal
of Commercial Law of the University of Turku, Finland, Issue 2003 # 1
83
DIENER, Keith William Recovering Attorneys’ Fees under CISG: An Interpretation of Article
74 Nordic Journal of Commercial Law, Issue 2008 #1
84
ZELLER, Bruno Good Faith - The Scarlet Pimpernel of the CISG May 2000, available at:
http://www.cisg.law.pace.edu/cisg/biblio/zeller2.html
Page | 43
4.6 Foreseeable consequence of breach of contract
It is only necessary that the arbitration costs are a foreseeable consequence of

a breach of contract. Consequently, the CISG is applicable to the
reimbursement of arbitration costs. The conduct of the Respondent with not
responding to the Claimant and not using the signature access to make the
payment even though they had received the spare parts and the delay due to
which the payment was refunded was not the fault of the claimant. A loss is
every monetary disadvantage. Due to the inclusive – not exhaustive –
character of Art. 74 CISG, this definition incorporates every type of loss.
Since Claimant’s arbitration costs are a monetary disadvantage and therefore
a “loss”, Claimant’s arbitration costs are recoverable under Art. 74 CISG.
According to Phillips Petroleum Co. v Iran85, to evaluate monetary
compensation, calculation must consider only future variables, such as the
expected size of future capacity. The tribunal must apply past data solely to
estimate a reasonable rate of return applicable to the calculation of future
losses.
In case the Tribunal were to find that Claimant’s expenses did not fall under
the explicit wording of Art. 74 CISG, they nevertheless need to be allocated
to Respondent. Art. 74 CISG aims for full compensation of the parties 86. For
full compensation, Claimant needs to be reimbursed for its arbitration costs
under Art. 74 CISG87. To conclude, Claimant needs to be reimbursed for its
arbitration costs, be it according to the explicit wording or the purpose of Art.
74 CISG.
4.7 Breach of contract by the Respondent
85
21 IRAN-U.S. C.T.R., at 79 et seq.
86
Austria 15 June 1994 Vienna Arbitration proceeding SCH-4366 (Rolled metal sheets case)
[Cite as: http://cisgw3.law.pace.edu/cases/940615a3.html]
87
LOOKOFSKY, Joseph Understanding the CISG in the USA: A compact guide to the 1980
United Nations Convention on Contract for the international Sale of Goods Kluwer Law
International, 4th ed., Alphen aan den Rijn 2012
Page | 44
The Claimant had delivered calibrated displays, but the Respondent had not
paid for the same resulting in unjust enrichment. It means if a person has
gained benefit from other person and thereby causing loss to the other person,
then the person who has gained is required to reimburse the Claimant equal
to the amount of benefit received by the Respondent. The doctrine of
fundamental breach88 is chiefly predicated on the facts or assumption that a
party to a contract or contract of sale has committed a misnomer in the
contract that goes to the root of the contract, thereby knocking the bottom off
its commercial relevance. There is hardly any better legal doctrine which
anchors activities surrounding international sale of goods like the doctrine of
fundamental breach of contract. t is an important legal instrument that rears
its head up from time to time due to induced or sometimes supervening
commercial non-performance. According to the Article 25 of the CISG, a
breach by one of the parties is fundamental if-
“it results in such detriment to the other party as substantially to deprive him
of what he is entitled to expect under the contract, 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”.
4.7.1 Substantial Deprivation
In order for a breach to be fundamental under the CISG, it must cause

a ‘detriment’ to the aggrieved party. When considering such a
detriment, it is important to bear in mind that the preservation of the
contract and ensuring that both parties receive what was promised to
them under the contract are important incentives under the CISG. The
Secretariat’s Commentary on the 1978 Draft states that ‘the
determination whether the injury is substantial must be made in light
of the circumstances of each case, for example, the monetary value of
the contract, the monetary harm caused by the breach, or the extent to
L. Graffi, ‘CsaeLaw on the Concept of “Fundamental Breach” in the Vienna Sales

88
Convention’, (2003), International Business Law Journal
Page | 45
which the breach interferes with other activities of the injured

party.89 This is a criterion which looks to the harm suffered by the
injured party. However, when compensation for damages can serve as
a remedy for non-performance, this should be an indication of the fact
that there is no detriment within the meaning of the CISG. What
matters most in commercial relations are economic results and not the
formal fulfilment of obligations.90 To constitute a fundamental breach,
the detriment must be substantial. For instance, the Oberlandesgericht
(Appellate Court) in Frankfurt held that:
‘[a] breach of contract is fundamental when the purpose of the

contract is endangered so seriously that, for the concerned party to
the contract, the interest in the fulfilment of the contract ceases to exist
as a consequence of the breach of the contract (and the party in
breach of the contract was aware of this or should have been).’
And, according to the Zivilgericht (Civil Court) in Basel, what is

decisive is the importance of the interest which is affected by the
breached term of the contract.91 In other words, there will be a
fundamental breach of contract by the defaulting party if a party fails
to receive the essence of what he was entitled to expect according to
the contract. The focus is on the substantial deprivation of the
contractual expectation of the aggrieved party.
4.7.2 The Contractual Expectation
The concept of substantial deprivation is thus fused together with the

concept of contractual expectation, since a detriment can be
characterised as a fundamental breach only if the injured party has no
further interest in accepting the performance of the contract. The
89
Secretariat Commentary on 1978 Draft Art. 23 (draft counterpart of CISG Art. 25), Comment
3; available at: http://www.cisg.law.pace.edu
90
F. Enderlein and D. Maskow, International Sales Law, available at www.heinonline.com
91
Zivilgericht (Civil Court) Basel-Stadt, Switzerland, 1 March 2002; No. p 1997/482; available
at: http://cisgw3.law.pace.edu/cases
Page | 46
expectations of the aggrieved party are qualified by such phrases as

‘what he is entitled to expect under the contract’ in Article 25 CISG,
or ‘what it was entitled to expect under the contract’ under Article
7.3.1(2)(a) UNIDROIT Principles or Article 8:103(b) PECL. It must
be stressed that the expectations of the aggrieved party have to be
discernible from the contract. This element is quite evident in itself
and is also contained in the element of foreseeability. The subject of
intentional breach of the contract in the context of CISG it seems to
resort to art 25 of the CISG which has to do with the concept of
fundamental breach. Unlike other international instruments which
have made use of different factors for determining the fundamentality
of the breach, context of art 25 of CISG is very concise.
According to this article, breach of the contract is fundamental if it

results in such detriment to the other party as substantially to deprive
him of what he is entitled to expect under the contract. In fact, the
CISG has no provision on intentional or reckless breach.92 As a result,
to focus on the issue that whether breach committed intentionally or
recklessly is incompatible with the remedial system of the CISG that
under it fault is not a condition of contractual liability and in the
availability of either remedy is not important. Therefore recourse to
the approach in determining fundamental breach is not permissible.93
Nonetheless, some authors points out that any intention of breach in
breaching of the contract is also relevant under CISG art.49 (1) (a) and
25. The reason for this is not non-conformity itself, but the reason for
this is the loss of trust in the other party with non-conforming delivery
together.
Art. 74 CISG states that the breaching party must have foreseen the
loss incurred by the other party as a possible result of its breach, at the
92
Christian von Bar, Eric Clive and Others, Principles, Definitions and Model Rules of
European Private Law, Draft Common Frame of Reference (DCFR), Art.3:502, Note 12 (1st.
ed. 2009).
93
Benjamin K. Leisinger, Fundamental Breach Considering Non-Conformity of the Goods 98
(1st. ed. 2007).
Page | 47
time of the conclusion of the contract. Such foreseeable losses also

encompass arbitration costs94 According to Art. 74 CISG, the
breaching party must only have been able to foresee the rough extent
and type of the loss95 The Respondent should have foreseen that
Claimant would go for arbitration proceedings in case of a breach of
contract, in order to safeguard its contractual rights. Interim measures
offer effective protection of these rights.96 Claimant mitigated its
losses as obligated by Art. 77 CISG. A party that relies on a breach of
contract must mitigate its losses. It is necessary that a reasonable
businessperson in the same situation would have taken the same
actions97 The Respondent’s breach was not justified. He cannot justify
its breach with the wording of the terms of the Ricardian Smart
Contracts which was in relation to non-performance of the contract on
part of fault of the Claimant which as can be made out with the facts
of the case is not the situation here.
4.8 The Respondent was uncooperative
The conduct of the Respondent with not responding to the Claimant and not
using the signature access to make the payment even though they had received
the spare parts and the delay due to which the payment was refunded was not
the fault of the claimant. This conduct clearly shows that the Respondent was
uncooperative with the claimant.
Therefore, the Claimant is entitled to the payment of USD 420,000 along with
interest on it. The Claimant is also entitled to damages of USD 100,000 as
well as costs on Arbitration.
94
ICC Arbitration Case No. 7585 of 1992 (Foamed board machinery)
[http://cisgw3.law.pace.edu/cases/927585i1.html]
95
Handelsgericht St. Gallen HG.1999.82-HGK, 3 December 2002 DT Ltd. v. B. AG IHR 2003,
181
96
Srinivasan, Badrinath, Costs Allocation Under the Amended Indian Arbitration Law: A
Critique (April 15, 2017). Proceedings of the Conference on Dispute Management in
Infrastructure Projects: New Challenges, May 19-20, 2017, VigyanBhawan, New Delhi.
Available at SSRN: https://ssrn.com/abstract=2971999
97
Tribunal of International Commercial Arbitration at the Russian Federation Arbitral Award,
10 February 2000, 340/1999
Page | 48
PRAYER
In the light of the facts stated, issues raised, arguments advanced, and authorities
cited, the Claimant respectfully requests the Tribunal to adjudge and declare
that:
1. The Tribunal has jurisdiction to decide the present dispute.
2. The Tribunal shall not grant the interim measure requested by the
Respondent.
3. Smart Contracts are binding on both the parties.
4. The Claimant is entitled to the payment of USD 420,000 along with

interest on it.
5. The Claimant is entitled to damages amounting to at least USD 100,000

and arbitration costs.
Respectfully submitted,
COUNSELS FOR WASH-O-MATICS PVT. LTD.
Page | 49

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1905R

BANGALORE INTERNATIONAL MEDIATION, ARBITRATION AND

IN THE PROCEEDING BETWEEN

WASH-O-MATICS PVT. LTD.

MEMORIAL for CLAIMANT

1. THAT THE TRIBUNAL DOES HAVE JURISDICTION TO DECIDE

4.1 CLAIMANT IS ENTITILED TO DAMAGES OF USD 100,000…38

CISG Convention on International Sale of Goods

UNIDROIT Institut international pour l'unification du droit privé

UNCITRAL United Nations Commission on International Trade Law

Eng. Rep. English Reporter

App. Appellate Court

ICC International Chamber of Commerce

ICCA International Council for Commercial Arbitration

ICSID International Centre for Settlement of Investment Disputes

i.e. . id est (that is)

Art. / Arts. Article / Articles

USD United States Dollar

eg. Exempli gratia [for example]

Id. Ibidem (the same)

INTERNATIONAL CONVENTIONS & TREATIES

Convention on International Sale of Goods (CISG) 19, 37, 38,

Institut international pour l'unification du droit privé (International 31-34, 46

International Centre for Settlement of Investment Disputes 28

International Chamber of Commerce (ICC) 23, 25, 27,

International Council for Commercial Arbitration (ICCA) 24, 26, 29, 32

United Nations (UN) 37, 40, 43

United Nations Commission on International Trade Law 18, 21-26, 28-

BOOKS, ARTICLES & COMMENTARIES

Benjamin K. Leisinger, Fundamental Breach Considering Non- 46

Blackaby, Nigel Partasides, Constantine Redfern Hunter 21

ChristerSöderlund, LisPendens, Res Judicata and the Issue of 23

CISG, Art. 74. United Nations Convention on Contracts for the 37

CISG, Art. 78. United Nations Convention on Contracts for the 40

CISG, Art. 79. United Nations Convention on Contracts for the 39

CISG, Articles. 49, 64, 72, 73. United Nations Convention on 38

Commentary on the Draft Convention on the International Sale of 40

Commentary on tie Draft Convention on Contracts for the 37

Commentary on tie Draft Convention on Contracts for the 38

Commentary on tie Draft Convention on Contracts for the 38

DIENER, Keith William Recovering Attorneys’ Fees under CISG: 42

F. Enderlein and D. Maskow, International Sales Law, available at 44

Farnsworth, Damages and Specific Relief, 27 Ami. J. Co.mp. L. 37

FrédéricBachand, Does Article 8 of the Model Law Call for Full or 24

Handelsgericht St. Gallen HG.1999.82-HGK, 3 December 2002 47

Inal, E. (2005). Developments in E-commerce Law and 31

J. Hoeoto, UNIFORM LAW FOR INTERNATIONAL SALES 40

Jan Paulsson, Interference by National Courts, in Lawrence 23, 24

John Barceló, Who Decides the Arbitrators’ Jurisdiction? 25

Julián Bordacahar, The Rule of Law As Created by Arbitrators – 24

L. Graffi, ‘CsaeLaw on the Concept of “Fundamental Breach” in 43

LOOKOFSKY, Joseph Understanding the CISG in the USA: A 43

Maxwell, W. J., Bourreau, M. (2014). Technology Neutrality in 34

Peter TURNER, Reza MOHTASHAMI, A GUIDE TO THE LCIA 28

Schwab/Walter, KommentarzurSchiedsgerichtsbarkeit, (7th 25

Srinivasan, Badrinath, Costs Allocation Under the Amended 47

Surden, H. (2012). Computable Contracts. U.C. Davis Law 33

Szabo, Smart Contracts: Building Blocks for Digital Markets,1996 30

UNCITRAL REPORT 7; A/CN.9/246 - Report of the Working 24