I A T, B, R P

Team Code: 1929RI
IN THE A RBITRAL T RIBUNAL , B ENGALURU , R EPUBLIC OF P INDIA
IN THE CASE CONCERNING CALIBRATED DISPLAYS OF INSTAWASHWASHING MACHINE
WASH-O-MATICS PVT. LTD

(CLAIMANT)
Versus
ALIABABWA ELECTRONICS
(RESPONDENT)
MEMORANDUM for RESPONDENT
2019
II
TABLE OF CONTENTS
Table of Contents .......................................................................................................................... II
Table of Abbreviations ................................................................................................................. IV
Index of Authorities ..................................................................................................................... VI
Statement of Jurisdiction .......................................................................................................... XIII
Statement of Facts..................................................................................................................... XIV
Issues Raised ............................................................................................................................ XVII
Summary of Arguments ......................................................................................................... XVIII
Arguments Advanced ..................................................................................................................... 1
ISSUE-I: The Tribunal does not have jurisdiction to decide the present matter as the
present matter is non-arbitrable. ............................................................................................. 1
I. The dispute falls within the domain of Intellectual Property Rights................................ 1
A. The dispute relates to genuineness of patented products. ............................................. 2
(i) The matter is in public interest.................................................................................. 2
(ii) Right in rem arises out of patent infringement. ........................................................ 3
B. The consequences arising are civil and criminal in nature. .......................................... 3
C. The Respondent has a right to submit the dispute to the courts. .................................. 4
II. The plea as to lack of jurisdiction was made in time. ...................................................... 4
ISSUE-II: The tribunal should grant the interim measure requested by the Respondent. 5
I. The Tribunal is competent to grant interim measure to the Respondent despite the
challenge to jurisdiction of this tribunal by the Respondent. .................................................. 6
II. Interim measure requested is in conformity with UNCITRAL Arbitration Rules. .......... 6
A. The interim measure sought is in compliance with Article 26 of the UNCITRAL
Arbitration Rules.................................................................................................................. 7
(i)The interim measure falls under Article 26(2)(c) and meets all the criteria under that.
.......................................................................................................................................... 7
(ii) It meets the criteria under Article 26(3)(a) ............................................................... 8
~ Memorandum on behalf of the Respondent ~

III
(iii) It meets the criteria under Article 26(3)(b). .............................................................. 8

B. The interim measure will be binding on both parties. .................................................. 9
III. Interim measure requested is in compliance with the Arbitration Act of Pindia ....... 10
A. The relief granted by the arbitral tribunal will be sufficient....................................... 10
B. Interim measure sought is in compliance with section 17 of the Arbitration and
Conciliation Act. ................................................................................................................ 11
C. The interim measure ordered will be enforceable. ..................................................... 11
D. The interim measure sought is in relation to the matter in respect of which the final
award may be made. .......................................................................................................... 12
Issue 3: The Smart Contracts are not binding on the parties. ............................................ 13
I. The ‘smart contracts’ are not contracts. ......................................................................... 13
A. Smart contracts are a mere technology. ....................................................................... 13
B. There can be no intention to make the ‘smart contracts’ legally enforceable. ........... 14
II. Alternatively, the ‘smart contracts’ still do not bind the Respondent. ........................... 15
A. The ‘smart contracts’ were standard terms. ................................................................. 15
B. The Claimant did not validly incorporate the ‘smart contracts’.................................... 16
(i) The Claimant had a duty to affix or transmit the text of the ‘smart contracts’. ...... 16
(ii) The Respondent had no duty to actively access and familiarize with the text of the
‘smart contracts’. ............................................................................................................ 17
(iii) Generally accepted principles of international commercial law reiterate the same.18
C. The ‘smart contracts’ were surprising standard terms. ............................................... 18
ISSUE 4: The Claimant is not entitled to the payment of USD 420,000. ........................... 19
I. There is no obligation to pay. ......................................................................................... 20
A. Commodum Ex Injuria Sua Nemo Habere Debet applies. ........................................... 20
(i) The Claimant had an obligation to meet the voltage requirements of Dhina ......... 21
(ii) The Claimant cannot take advantage of his own wrong. ........................................ 22
II. Even if the ‘smart contracts’ were binding there was no obligation to pay. .................. 23
Prayer ........................................................................................................................................... 24

IV
TABLE OF ABBREVIATIONS
AIR All India Reporter

Anr. Another
Arb. Arbitration
Art. Article
BGH Bundesgerichtshof
Bom LR Bombay Law Reporter
CISG Convention on Contracts for International Sale of Goods
Cir. Circuit
Cl. Clause
Co. Company
Del. Delhi
Ed. Edition
EWCA England and Wales Court of Appeals
ICC International Chamber of Commerce
i.e. That is
Id. Ibid
Inc. Incorporated
Int’nl International
J. Journal
Ltd. Limited
No. Number
NWU Northwestern University
Ors. Others
p. Page
PCA Permanent Court of Arbitration
PECL Principles of European Contract Law
Rev. Review

V
SCC Stockholm Chamber of Commerce

SCC Supreme Court Cases
Supp. Supplement
U.K. United Kingdom
UN United Nations Organization
UNCITRAL United Nations Commission on International Trade Law
UNIDROIT International Institute for the Unification of Private Law
UPICC Another
US United States
USD United States Dollar
¶ Paragraph
§ Section

VI
INDEX OF AUTHORITIES
Statutes
Arbitration and Conciliation Act, 1996 .......................................................................... 2, 7, 11, 12
Patents Act, 1970 ............................................................................................................................ 3
Principles of European Contract Law. .................................................................................... 18, 23
UNCITRAL Arbitration Rules (2010) ................................................................................ 6, 7, 8, 9
UNCITRAL Model Law on International Commercial Arbitration, 1985 ............................... 5, 11
UNIDROIT Principles of International Commercial Contracts, 2016. ................ 16, 18, 19, 21, 22
Convention on the Recognition & Enforcement of Foreign Arbitral Awards, 1958. ............. 16, 18
UNCITRAL Model Law on Electronic Signatures, 2001…….....................................................19
UNCITRAL Model Law on Electronic Commerce, 1996 ............................................................ 22
Other Authorities
Allison E. Butler, “A Practical Guide to the CISG: Negotiations Through Litigations,” Aspen
Publishers (2007 Supplement 2). .............................................................................................. 22
Black’s Law Dictionary (9th ed. 2009), available at Westlaw BLACKS. .................................... 23
Blockchain and Beyond: Smart Contracts, Tsui S.Ng.,
https://www.americanbar.org/groups/business_law/publications/blt/2017/09/09_ng/. ............ 14
Final Report on Intellectual Property Disputes & Arbitration, 9 ICC International Court of
Arbitration Bulletin, 1998,
http://library.iccwbo.org/content/dr/COMMISSION_REPORTS/CR_0013.htm?l1=Awards&l2
=................................................................................................................................................... 2
Final Report on Intellectual Property Disputes & Arbitration, 9 ICC International Court of
Arbitration Bulletin, 1998,
http://library.iccwbo.org/content/dr/COMMISSION_REPORTS/CR_0013.htm?l1=Awards&l2
=, ................................................................................................................................................ 8
Huntley, The Scope of Article 17: Interim Measures Under the UNCITRAL Model Law, 740
PLI/Lit. 1181, 69 (2005). .......................................................................................................... 12
Paech, ‘The Governance of Blockchain Financial Networks’, 1082. ........................................... 14
Prince Saprai, Balfour v. Balfour And The Separation Of Contract And Promise, p.72. ............. 14

VII
SiegEiselen, CISG-AC Opinion No. 13 Inclusion of Standard Terms,Adopted by the CISG

Advisory Council following its 17th meeting, in Villanova, Pennsylvania, USA, on 20 January
2013, http://www.cisg.law.pace.edu/cisg/CISG-AC-op13.html. .............................................. 17
German Cases
Broadcasters case, Appellate Court Celle, http://cisgw3.law.pace.edu/cases/090724g1.html
(2009); ....................................................................................................................................... 16
Case no. 10 O 74/04, District Court (Landgericht) Neubrandenburg (2005). ........................ 17, 18
Case no. 15 U 88/03, Mobile car phones case, Appellate Court Dsseldorf
http://cisgw3.law.pace.edu/cases/040421g3.html (2004). ........................................................ 19
Case no. BGH VII ZR 60/01, German Federal Supreme Court (BGH) (2001). ........................... 17
Gerechtshof's Hertogenbosch, http://www.unilex.info/case.cfm?id=959 (2006). ........................ 18
Machinery case, Supreme Court, http://cisgw3.law.pace.edu/cases/011031g1.html (2001)........ 16
Pitted sour cherries case, District Court Neubrandenburg,
http://cisgw3.law.pace.edu/cases/050803g1.html (2005) ......................................................... 16
Trade usage Case, Appellate Court Köln, http://cisgw3.law.pace.edu/cases/051221g1.html
(2005) ........................................................................................................................................ 16
Italian Cases
SDP v. DPF,Paris Court of Appeal, Rev. Arb. (1989), p.280 ............................................... 4
Takap B.V. v. EUROPLAY S.r.l, http://cisgw3.law.pace.edu/cases/071121i3.html (2007) ....... 16
Argentine Cases
Nea Commerce S.A. vs. SKY Argentina SCA, Argentina. Court of Appeal of Buenos Aires.,
http://www.unilex.info/case.cfm?pid=2&do=case&ID=1586 (2009). ..................................... 16
Blogs
ArthadKurlekar, A False Start: Uncertainty in the Determination of Arbitrability in India, Kluwer
Arbitration Blog( June 16, 2016 9:26AM)
http://arbitrationblog.kluwerarbitration.com/2016/06/16/a-false-start-uncertainty-in-the-
determination-of-arbitrability-in-india/..........…………………………………………………….2
Interim Relief in Arbitral Proceedings, Nishit Desai Associates, (June 2018, 10:00AM) page
no.4,

VIII
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Interim_Reliefs
_in_Arbitral_Proceedings.pdfl .................................................................................................. 10
Nick Szabo, Smart Contracts: Building Blocks for Digital Markets(1996);Ibrahim Mohamed
Nour Shehata, ‘Arbitration of Smart Contracts Part 1 – Introduction to Smart Contracts’,
Kluwer Arbitration Blog, August 23 2018,
http://arbitrationblog.kluwerarbitration.com/2018/08/23/arbitration-smart-contracts-part-1/. . 14
Books
International Arbitration in a Changing World, ICCA Congress Series, 6 (Kluwer Law
International 1994) p. 103, ¶ 7. ................................................................................................... 6
Sebastien Besson, Comparative Law of International Arbitration, (2nd ed. 2007) Schulthess,
Zurich, p.99 ................................................................................................................................. 2
Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration, (2nd
Ed. 1991) p. 70 ............................................................................................................................ 2
Ali Yesilirmak, Provisional Measures in International Commercial Arbitration v (2005), p.25 ... 7
Anna Carboni, Gordon Humphreys, et al., 'Chapter 1: Mediation as a Resolution Method in IP
Disputes', in Sophia Bonne , Théophile Margellos , et al., Mediation: Creating Value in
International Intellectual Property Disputes, (Kluwer Law International , 2018) p. 172 ........... 3
B. Born, International Commercial Arbitration, (2nd ed. Kluwer Law International 2014)............ 9
Böckstiegel, Public Policy and Arbitrability, in P. Sanders (ed.), Comparative Arbitration
Practice and Public Policy in Arbitration, 177 (ICCA Congress Series No. 3 1987) ................. 4
Daniel Girsberger,NathalieVoser, International Arbitration in Switzerland, (2nd ed. 2012)
Schulthess, Zurich/Basel/Geneva 2012 ....................................................................................... 1
E. Gaillard, Arbitrage Commercial International, Droit international privé français 3 (1991)
Fasc. 586–8–2, ¶ 139, 144 ........................................................................................................... 6
F.R. Mendez, “L'arbitrage international et mesures conservatoires”, Revue de l'arbitrage (3rd ed.
1985) p. 53, ¶ 1. ........................................................................................................................... 6
Gary B. Born , International Commercial Arbitration (Second Edition), 2nd ed. (Kluwer Law
International 2014), p.306 ........................................................................................................... 1
Gary B. Born, International Arbitration: Cases and Materials (Kluwer Law International, The
Hague 2011), p.117. .................................................................................................................... 1

IX
Halsbury’s Laws of England, (2nd ed. 1909) § 682....................................................................... 14

Hanotiau, L’arbitrabilité, 296 Recueil des Cours 29 (2002) .......................................................... 4
Indu Malhotra and O.P Malhotra, 'The Law & Practice of Arbitration and Conciliation' (3rd ed.
2006)........................................................................................................................................ 2, 8
J Beatson, A Burrows and J Cartwright, Anson's Law of Contract, (Oxford University Press, 29th
ed. 2010) p. 71. .......................................................................................................................... 14
Jean-François Poudret,Comparative Law of International Arbitration,(2007) p. 145 .................... 6
Joseph Chitty, Chitty on Contracts, Sweet & Maxwell, (28th ed. 1999) ....................................... 20
Kaulartz & Heckmann, Smart Contracts – Anwendung der Blockchain-Technologie, p.622 ..... 18
Klaus Peter Berger, International Economic Arbitration, Studies in Transnational Economic
Law, Deventer, Boston, 1993, p. 477 .......................................................................................... 2
Mark Knoepler, Peter Schweizer, International Commercial Arbitration in Contemporary World,
(2003) p. 223 ............................................................................................................................... 6
Markus Kaulartz, Herausforderungenbei der Gestaltung von Smart Contracts, p.204. ............... 18
MatejaDurovic, Andre Janssen, The Formation of Smart Contracts and Beyond: Shaking the
Fundamentals of Contract Law? “Smart Contracts and Blockchain Technology: Role of
Contract Law”, (Cambridge University Press 2019). ............................................................... 15
Micheal Jünemann& Kast, RechtsfragenbeimEinsatz der Blockchain, p.533.............................. 18
Ulrich Magnus, Festschrift, H. Kritzer, Incorporation of Standard Terms, (3rd ed. 2007) ........... 19
Indian Cases
A. Ayyasamy v. A. Paramasivam&Ors., Civil Appeal Nos. 8245-8246 of 2016........................... 3
Arun Kapur v. Vikram Kapur and Ors. 2002 (61) DRJ 495 ........................................................... 7
Arvind Constructions v. Kalinga Mining Corporation and ors. (2007) 6 SCC 798 ....................... 9
Best Sellers Retail v. Aditya Birla, (2012) 6 S.C.C. 792 ................................................................ 9
Booz Allen Hamilton v. SBI Home Finance (2011) 5 SCC 532. ................................................... 2
Dorab Cawasji Warden v. Coomi Sorab Warden and Ors, (1990) 2 S.C.C. 117 ........................... 9
Emaar MGF Land Limited vs. Aftab Singh, Review Petition (C) Nos. 2629-2630 OF 2018 in
Civil Appeal No.S.23512-23513 OF 2017. ................................................................................. 4
Intertole ICS (Cecons) O & M Company v. NHAI (2013) ILR 2 Delhi 1018. ............................ 11
Janta Dal v. H.S Chowdhary, (1993) AIR SC 893. ……………………………………………..3
Kingfisher Airlines Limited v. Prithvi Malhotra Instructor , 7 Bom CR 738 (2013)……………..4

X
Kishoresinh v. Maruti Corporation, (2009) 11 S.C.C. 229. ............................................................ 9

Kusheshwar Prasad Singh v. State Of Bihar &Ors, AIR 2007 SC 467 ........................................ 22
Mr. Abhijit Bhikaseth Auti vs State Of Maharashtra &Anr. (2008) BomHC. ............................. 12
Mrutunjay Pani & Anr. v. Narmada Bala Sasmal & Anr., AIR 1961 SC 1353............................ 22
U.S. Cases
Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1108 (9th Cir. 2009) ...................................................... 14
Alexander v. Fidelity & Casualty Co., 232 MIss. 629, 100 So. 2d 347 (1958). ........................... 23
Astivenca Astilleros de Venezuela, C.A. v. Oceanlink Offshore III AS,
http://historico.tsj.gob.ve/decisiones/scon/noviembre/1067-31110-2010-09-0573.HTML
(2009). ......................................................................................................................................... 5
Diematic Mfg. Corp. v. Packaging Indus. Inc., 381 F.Supp. 1057 (S.D.N.Y. 1974). .................... 3
Hanes Corp. v. Millard, 531 F.2d 585 (D.C. Cir. 1976) ................................................................. 3
Helm v. Speith, 298 Ky. 225, 82 S.W. 2d 635 (1944) .................................................................. 23
Rossi v. Douglas, 203 Md. 190, 100 A. 2d 3 (1953) .................................................................... 23
Tire & Rubber Co. v. Jefferson Chem. Co., 182 U.S.P.Q. 70 (2d Cir. 1974) ................................ 3
Wilko v. Swan, 346 U.S. 427 (1953) .............................................................................................. 4
Zip Mfg. Co. v. Pep Mfg. Co., 44 F.2d 184, 186 (D. Del. 1930). .................................................. 3
U.K. Cases
Balfour v Balfour (1919) 2 KB 571. ............................................................................................. 14
Cammell Laird and Co Ltd v. Manganese Bronze and Brass Co. Ltd. (1934) AC 402. .............. 22
Fluor Ltd v Shanghai Zhenhua Heavy Industries Ltd, (2016) EWHC 2062. ............................... 22
Gardiner v. Gray 1 (1815) 4 Camp. 144; 171 E.R.46. .................................................................. 21
Jones v Padavatton, 2 All ER 616,621 621 (1969) ....................................................................... 14
Kastner v. Jazon , EWCA Civ 1599 (2004) .................................................................................. 11
Lipkin Gorman v. Karpnale Ltd., (1991) 2 A.C. 548, 549, 578 ................................................... 20
Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL 2 ................................................... 14
Rosser v. Leeman , 9 Q.B, 371 (1846)............................................................................................ 3
Woolwich Equitable B.S. v. I.R.C. (1993) A.C. 669. ................................................................... 20

XI
Journals
Alexander Savelyev, Contract law 2.0: ‘Smart’ contracts as the beginning of the end of classic
contract law, 2 J. of Information & Communications Technology Law, 116, 117 .................. 15
Dana Renee Bucy, Comment, How to Best Protect Party Rights: The Future of Interim Relief in
International Commercial Arbitration Under the Amended UNCITRAL Model Law, 25 Am.
U. Int’l L. Rev. 579 (2010).......................................................................................................... 8
Foster &Elsberg, Two New Initiatives for Provisional Remedies in International Arbitration:
Article 17 of the UNCITRAL Model Law on International Commercial Arbitrationand Article
37 of the AAA/ICDR International Dispute Resolution Principles, 3(5) Transnat’l Disp. Mgt
(2006). ....................................................................................................................................... 11
Gregory Klass, Intent to Contract, 95 Va. L. Rev. 1437 (2009) .................................................. 14
Ingeborg Schwenzer, Specific Performance and Damages According to the 1994 UNIDROIT
Principles of International Commercial Contracts, European Journal of Law Reform, 1 (3). p.
289, ............................................................................................................................................ 22
Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter
2004) 299-440, 346-349, ¶ 9. ................................................................................................... 17
Mark T. Carroll, Restatement of the Law of Restitution, Quasi-Contracts and Constructive
Trusts, American Law Institute J., 1937, p. 91. ¶ 1 .................................................................. 20
Mourre, Arbitration and Criminal Law: Reflections on the Duties of the Arbitrator, 22 Arb. Int’l
95 (2006) ..................................................................................................................................... 4
Rfazadeh, Arbitrability Under the New York Convention: The Lex Fori Revisited, 17 Arb. Int’l
73 (2001) ..................................................................................................................................... 4
Robert Whitman, Incorporation by Reference in Commercial Contracts, 21Maryland Law
Review, 46 (1961) ..................................................................................................................... 23
Sai Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective, in Lawrence G.S.
Boo and Gary B. Born (eds), 14 Asian Int’l. Arb. J. (2018) ....................................................... 4
Scott L. Cummings & Ingrid V. Eagly, After Public Interest Law, NWU L. Rev. 1251, 1251-
1259, 2075-2077(2006) ............................................................................................................... 3
Commentaries
D. Caron, L. Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules: A Commentary 548
(2006), p.66. ............................................................................................................................. 11

XII
H. Holtzmann& J. Neuhaus, A Guide to the UNCITRAL Model Law on International

Commercial Arbitration: Legislative History and Commentary 530 (1989) ...................... 11, 12
Munich Commentary on the German Civil Code, (4th ed. 2006) Art. 14, ¶ 30 ........................... 17
Schmidt-Kessel, Schlechtriem/Schwenzer Commentary, Art. 8, ¶ 60 ......................................... 19
Schramm, Geisinger &Pinsolle, in H. Kronke et al. (eds.), Recognition and Enforcement of
Foreign Arbitral Awards: A Global Commentary on the New York Convention Art. II, 68
(2010) .......................................................................................................................................... 4
Staudinger/Magnus, BGB 2005, Art. 14 para. 40 et seq............................................................... 18
The UNCITRAL Arbitration Rules: A Commentary 53 (Philip Alston & Vaughan Lowe eds.,
2006)............................................................................................................................................ 8
Ulrich Schroeter , Schlechtriem/Schwenzer Commentary,Art. 14, ¶ 62-64 ................................. 19
UNIDROIT Principles of International Commercial Contracts, Comments to Article 5.1.6. ...... 21
Russian Cases
Clout case no. 148, Moscow City Court (1995),
http://www.uncitral.org/clout/clout/data/rus/clout_case_148_leg-1349.html........................…….5
Arbitral Awards
Fresh-Life International B.V. v. Cobana Fruchtring GmbH & Co.,
http://cisgw3.law.pace.edu/cases/090225n1.html (2009). ...................................................................... 16
Indiabulls Financial Services v. Jubilee Plots, OMP Nos 452-453/2009.................................................... 12
PCA Case No. 2009-23(2011) , Chevron Corporation and Anr. v. Republic of Ecuador (2011), p.3.......... 9
Sri. Krishna v. Anand (2009) 3 Arb LR 447 (Del) ..................................................................................... 12

XIII
STATEMENT OF JURISDICTION
Aliababwa Electronics, the Respondent, has the honor to submit the presentdisputes and its
memorandum before this ad-hoc Arbitral Tribunal,pursuant to its obligations under Clause 45 of
the Contract between the parties under theUNCITRAL Model Law on International Commercial
Arbitration, and governed by the UNIDROIT Principles of International Commercial Contracts,
(2016), principles of lex mercatoria and goodfaith in contractual relations. The seat of the
arbitration is Pindia. However, the Respondentrespectfully submits that the Tribunal does not
have the jurisdiction to decide the disputes beforeit, without having an adverse effect on its
jurisdiction to award the interim measure sought by the Respondent under the UNCITRAL
Arbitration Rules (2010) to prevent any prejudice to the interest of the Respondent.

XIV
STATEMENT OF FACTS
The Parties
1. The Claimant, Wash-o-matics Pvt. Ltd., is a private limited company, having its registered
office located at New Pehli, represented through its Director, Mr. Ramesh Gaitonde. The
Respondent, Aliababwa Electronics, is a sole proprietorship business owned by Mr. Ali
Ababwa.
The Background
1. In January 2018, Wash-o-matics launched Instawash, a new brand of washing machines. It

had the ability to automatically communicate with the servers of Wash-o-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. Further, Wash-o-
matics, as a company, had the 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. The Claimant applied to patent
Instawashwhich was granted in March 2018.
2. The Respondent regularly attends the Dhina Expo of Innovative Technologies. The
Respondent met Mr. Gaitonde at one of the stalls at the Expo.The Claimant pitched the
product Instawash to the Respondent and tried to explain blockchain and smart contracts to
the Respondent. The Respondent categorically told the Claimant that he did not understand
anything about blockchain and smart contracts and would ask his friends before he commits
to any order.
The Contract
1. A week later, the Respondent wrote an email to Mr. Gaitonde for importing 1000 machines
after going through the website of the Claimant. The email sent by the Respondent was
marked as a “Business Query” by the mailbox filter of the Claimant and an automated
response was sent to the Respondent. Subsequently, the Respondent completed and
submitted the business enquiry form.

XV
2. On 15 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. These
steps included creating a “Signature Key” which is a 6-digit signature code and linking the
Respondent’s bank account to the app. Subsequently, the Respondent complied with all the
requirements and a shipment of 1000 machines was delivered to the Respondent on 30 May
2018.
The Events
1. In the last week of June 2018, the servers of the Claimant received responses from the
machines that the display of the machines was showing an error. 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. On 2 July 2018, the Claimant shipped the calibrated displays to the Respondent
and the account of the Respondent was automatically debited by USD 420,000.
2. The shipment of spare parts got held up at customs in Dhina for 16 hours because a bug in
the software failed to verify the calibrated displays as genuine and instead flagged them as
counterfeits. Kulian Basange, the Head of IT of the Claimant, traced the entire blockchain
and sent it to Dhina customs after which the goods were released.
3. The calibrated displays were supposed to reach the Respondent within 15 days of shipment.
This clause was contained in a “smart contract” within the parent contract. The contract was
programmed to automatically debit money from the Respondent’s bank account on the date
of sending the shipment of spare parts. However, there was a refund provision if the goods
were not delivered within 15 days. Therefore, at 12:01 a.m. on 18 July 2018, an amount of
USD 420,000 was refunded to the account of the Respondent.
4. At about 4 p.m. on the same day, 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. The
Respondent was unable to reply to this email or authorize any payment as the Respondent
had suffered a cardiac arrest and was hospitalized. As a result, the Respondent had his phone
switched off most of the time and did not even see the automatic debit of USD 420,000. The

XVI
Respondent was in and out of hospitals till the end of September on account of related
medical complications.
The Interim Order
1. On 22 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. The Claimant obtained the restraining order before the Respondent could
reply to the email of the Claimant dated 18 July 2018.
The Arbitration Proceedings
1. In light of the dispute, the Claimant initiated arbitration proceedings on 10th October 2018.

XVII
ISSUES RAISED
THE FOLLOWING ISSUES HAVE BEEN RAISED FOR CONSIDERATION BEFORE THE
HONORABLE TRIBUNAL IN THE PRESENT ORAL HEARING:
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?

XVIII
SUMMARY OF ARGUMENTS
ISSUE 1: THE TRIBUNAL DOES NOT HAVE THE JURISDICTION TO DECIDE ON THE PRESENT
MATTER AS THE MATTER IS NON-ARBITRABLE.
The Respondent contends that the present dispute is non-arbitrable as it falls within the domain
of Intellectual Property Rights by virtue of Instawash being a patented product. Since the dispute
relates to genuineness of a duly patented product, it gives rise to a right in rem, which is not
arbitrable as per the settled principles of law. The matter is of public interest because the interest
of the buyers of Instawash is involved, who are not able to use the product because it cannot
function without calibrated displays. Furthermore, it gives rise to certain criminal liabilities
which can only be adjudicated upon by a court. Should the Tribunal seek to accept the
jurisdiction on the matter before it, it would be transgressing powers conferred upon it by the
Arbitration Act of Pindia, which is the law of the seat. Furthermore, the plea as to the lack of
jurisdiction was made in time as the same was submitted within the response to notice of
arbitration as stipulated by the principles laid down in the UNCITRAL Model Law on
International Commercial Arbitration.
ISSUE 2: THE TRIBUNAL SHOULD GRANT THE INTERIM MEASURE REQUESTED BY THE
RESPONDENT.
The Respondent has sought interim measure from the Tribunal under Article 26 of UNCITRAL
Arbitration Rules, and the same should be granted by the Tribunal in the present dispute due to
multiple reasons. Firstly, in the event of the interim measure not being granted, the ‘smart
contracts’ would continue to place orders that would result in monetary as well as reputational
harm to the Respondent, thus causing prejudice to the interest of the Respondent during the
arbitral proceedings. UNCITRAL Rules envisage the prevention of any harm to the interest of
the parties during the proceedings, and the same shall be compromised if the interim measure
would be denied. Secondly, the interim measure sought meets the criteria laid down under
Article 26 of the UNCITRAL Rules. Thirdly, the prerequisites for an interim measure under
Arbitration Act of Pindia have been duly met in the instant request by the Respondent.
XIX
ISSUE 3: THE ‘SMART CONTRACTS’ ARE NOT BINDING.
The Respondent submits that the smart contracts are not binding on the parties. Firstly, smart
contracts are not legal contracts, they are mere technology that can be used for enforcing
conditions of a contract. Secondly, the parties had no intention to form legal relations with regard
to the smart contracts. Alternatively, even if the smart contracts are legal contracts, they have not
been incorporated validly into the parent contract that was concluded between the parties. This is
because the Claimant did not affix the smart contracts to the parent contract, nor was a text of the
smart contracts transmitted to the Respondent. Further, the language of the smart contracts i.e.
the language in which the codes were written was not a language the Respondent understood.
ISSUE 4:THE CLAIMANT IS NOT ENTITLED TO A PAYMENT OF USD 420,000.
The Respondent submits that the Claimant is not entitled to USD 420,000 for the displays
supplied according to a non-binding smart contract. The principle of unjust enrichment does not
apply. The Respondent submits that the Claimant had a duty to deliver goods that were calibrated
to the voltage requirements in Dhina in the first place. The Claimant cannot be permitted to take
advantage of his own wrong. The calibrated displays sent subsequent to the error in the machines
should be treated as a cure that the Respondent was entitled to. Further, the Respondent submits
that the price determined by the Claimant was unilateral and invalid and therefore even if the
smart contracts are binding the Respondent is not bound by the price for the displays mentioned
in the schedule attached to the Parent Contract.

1
ARGUMENTS ADVANCED
ISSUE-I: THE TRIBUNAL DOES NOT HAVE JURISDICTION TO DECIDE THE PRESENT MATTER AS
THE PRESENT MATTER IS NON-ARBITRABLE.
The jurisdiction of this honorable Tribunal has been challenged by the Respondent on the
grounds that the matter relates to authenticity of calibrated displays which are part of a patented
product and within the domain of Intellectual Property Rights.1 The seat of arbitration is assumed
to be Pindia.2 The law of the seat of the Arbitral Tribunal, that is, the lex arbitri, governs the
arbitration,3 the Respondent will base its argument on the laws of Pindia which will include,
UNCITRAL Model Law on International Commercial Arbitration (hereinafter Model Law),
Arbitration Act of Pindia which is parimateria with Arbitration and Conciliation Act, 1996 of
India4 (hereinafter Arbitration and Conciliation Act) and the contract law of Pindia which is a
verbatim adoption of the UNIDROIT Principles on International Commercial Contracts
(hereinafter UNIDROIT). This in no way can be construed as Respondent’s acceptance of this
Tribunal’s jurisdiction. The Respondent submits that in accordance with Article 16 of the Model
Law which establishes the internationally recognized principle of Kompetenz-Kompetenz 5 .
Therefore, the tribunal has the power to rule on its own jurisdiction and the Respondent submits
that it should rule that it does not have the jurisdiction to hear the present dispute for the
following reasons: [I] the issue falls within the ambit of intellectual Property Rights making it
non-arbitrable; [II] the plea as to lack of jurisdiction was made in time.
I. THE DISPUTE FALLS WITHIN THE DOMAIN OF INTELLECTUAL PROPERTY RIGHTS.

The present dispute relates to the genuineness of the calibrated displays that have been supplied
by the Claimants. The Respondent shall prove that the current dispute falls within the ambit of
Intellectual Property Rights by showing that (A) the dispute relates to genuineness of the
1
Notice of Arbitration, Moot Problem, p.4-5, ¶ 15.
2
Notice of Arbitration, Moot Problem, p.5, ¶16.
3
Gary B. Born, International Commercial Arbitration , 2nd ed. (Kluwer Law Int’nl 2014), p.306
4
Clarification No. 58.
5
Daniel Girsberger, Nathalie Voser, International Arbitration in Switzerland, (2nd ed. 2012) Schulthess,
Zurich/Basel/Geneva 2012; Gary B. Born, International Arbitration: Cases and Materials (Kluwer Law International,
The Hague 2011), p.117.

2
patented products; (B) the consequence arising are civil and criminal in nature and (C) the
Respondent has right to submit the dispute to the courts.
A. The dispute relates to genuineness of patented products.

In the present matter, the dispute relates to the genuineness of the calibrated displays6 that are
patented goods.7 The Respondent submits that the present matter is non-arbitrable as it deals with
a right in rem. The principle that determines whether or not a dispute is arbitrable is the nature of
the claims involved.8 Simply put, if the claim is in the nature of a right in rem, such claims are
not arbitrable under the Arbitration and Conciliation Act, 1996.9 However, where the claim is
characterized as a right in personam, such a claim may be arbitrable.10 Furthermore, matters
relating to patents are usually considered non-arbitrable in general as questions of infringement
of patents raise special considerations because an arbitration award is a decision in personam,
only binding the parties actually involved in the arbitration, whereas intellectual property rights
can bind the whole world. 11 Since, the Arbitration Act of Pindia is pari materia with the
Arbitration and Conciliation Act, 199612 it is submitted that the present matter is not arbitrable as
(i) the matter is in public interest; and (ii) right in rem arises out of patent infringement.
(i) The matter is in public interest.

The present dispute concerns all those customers who have purchased Instawash and are not able
to use it as the calibrated display has stopped working13 and the dispute is regarding the spare
parts that are the replacement of the said calibrated display.14 Public interest can be defined as
the public or a class of the community having pecuniary interest or some interest in a matter by
6
7
8
Arthad Kurlekar, A False Start: Uncertainty in the Determination of Arbitrability in India, Kluwer Arbitration
Blog( June 16, 2016 9:26AM) http://arbitrationblog.kluwerarbitration.com/2016/06/16/a-false-start-uncertainty-in-
the-determination-of-arbitrability-in-india/; Jean-Francois Poudret, Sebastien Besson, Comparative Law of
International Arbitration, (2nd ed. 2007) Schulthess, Zurich, p.99.
9
Booz Allen Hamilton v. SBI Home Finance (2011) 5 SCC 532; Alan Redfern and Martin Hunter, Law and Practice
of International Commercial Arbitration, (2nd Ed. 1991) p. 70; Klaus Peter Berger, International Economic
Arbitration, Studies in Transnational Economic Law, Deventer, Boston, 1993, p. 477.
10
Id.
11
Supra at 8; Indu Malhotra and O.P Malhotra, 'The Law & Practice of Arbitration and Conciliation' (3rd ed. 2006);
Final Report on Intellectual Property Disputes & Arbitration, 9 ICC International Court of Arbitration Bulletin,
1998, http://library.iccwbo.org/content/dr/COMMISSION_REPORTS/CR_0013.htm?l1=Awards&l2=, ¶ 2.13.
12
Supra at 4.
13
Notice of Arbitration, Moot Problem, p. 4, ¶ 10.
14
Supra at 1.

3
which their legal rights or liabilities are affected.15 The outcome of the present dispute will affect
the rights available to the customers who purchased Instawash and so the present dispute can be
said to hold public interest and deal with a right in rem.
(ii) Right in rem arises out of patent infringement.

It has been held by courts that in cases of patent infringement, a right in rem arises and the same
cannot be arbitrated upon. The same was reiterated in an Indian ruling wherein it was
categorically held that the determination of the status of a patent, its validity or invalidity, its
infringement or non-infringement, is a matter which is unsuitable to the procedure of
arbitration16 as there are competent judicial authorities already existing to decide on the merits of
the said matter. In the case at hand, the dispute arises as to the genuineness of patented
products17 if it is found that the goods were not genuine, then the case will become that of patent
infringement and cannot be arbitrated upon 18 as that right is reserved by the competent
authorities that are considered to be courts.19
B. The consequences arising are civil and criminal in nature.

In the present matter, the Claimants have signed an undertaking specifying that if the products
are found to not be genuine then they will face all civil and criminal charges that shall be made
out against them.20 Further, the Indian Patents Act, 1970 is pari materia with the patent laws of
Pindia21 and it reserves the right to issue remedies that are civil in nature and Chapter XII of the
the Indian Penal Code, 1860 which is also pari materia to the laws of Pindia22 reserves the right
to issue remedies of criminal nature when there is counterfeiting involved. Therefore, it is seen
that there exist other specific legislations that govern the subject matter of the dispute, which
15
Janta Dal v. H.S Chowdhary, (1993) AIR SC 893; Scott L. Cummings & Ingrid V. Eagly, After Public Interest
Law, NWU L. Rev. 1251, 1251-1259, 2075-2077(2006).
16
Supra at 8, A. Ayyasamy v. A. Paramasivam & Ors., Civil Appeal Nos. 8245-8246 of 2016; Zip Mfg. Co. v. Pep
Mfg. Co., 44 F.2d 184, 186 (D. Del. 1930).
17
Supra at 5.
18
Hanes Corp. v. Millard, 531 F.2d 585 (D.C. Cir. 1976); Tire & Rubber Co. v. Jefferson Chem. Co., 182 U.S.P.Q.
70 (2d Cir. 1974); Diematic Mfg. Corp. v. Packaging Indus. Inc., 381 F. Supp. 1057 (S.D.N.Y. 1974).
19
Anna Carboni, Gordon Humphreys, et al., 'Chapter 1: Mediation as a Resolution Method in IP Disputes', in
Sophia Bonne , Théophile Margellos , et al., Mediation: Creating Value in International Intellectual Property
Disputes, (Kluwer Law International , 2018) p. 172; Patents Act, 1970; Keir v. Leeman, 9 Q.B, 371 (1846).
20
Supra at 5.
21
Supra at 4.
22
Id.

4
express the explicit intent of the legislature to bar these matters from being arbitrated upon.23 The
parties should submit the issue to the courts which will govern the proceedings by these
legislations24 and provide a judgment that will be in the interest of justice, equity and good faith.
C. The Respondent has a right to submit the dispute to the courts.

The arbitration clause that has been entered into by both the parties does not take away the right
of either party to exercise its right arising for legislation.25 Further, the Respondent reserves its
right for judicial review of the final award as it has not waived the same. It is a well settled
principle of law that criminal or civil rights of a party will be adjudicated upon by a court as they
are incapable of being resolved by arbitration26 and in the present matter the parties have not
waived their right to exercise their legislative rights arising from the dispute in a court of law.
So, the Respondents can present the dispute before the courts as the rights and liabilities involved
and civil or criminal in nature. Therefore, the arbitration Clause does not take away either party's
right to dispute matters before the courts of Pindia and neither party have waived their right to
bring matters before the courts of Pindia.27
II. THE PLEA AS TO LACK OF JURISDICTION WAS MADE IN TIME.

In the present case, the Respondent submitted that the Tribunal does not have the jurisdiction to
decide the dispute in its statement of defense.28 Although arbitrators have authority to rule on
their jurisdiction under the UNCITRAL Model Law as well as under the internationally
23
Sai Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective, in Lawrence G.S. Boo and Gary B.
Born (eds), 14 Asian Int’l. Arb. J. (2018); Kingfisher Airlines Limited v. Prithvi Malhotra Instructor , 7 Bom CR
738 (2013); SDP v. DPF, Paris Court of Appeal, Rev. Arb. (1989), p.280.
24
Wilko v. Swan, 346 U.S. 427 (1953); Rfazadeh, Arbitrability Under the New York Convention: The Lex Fori
Revisited, 17 Arb. Int’l 73 (2001); Böckstiegel, Public Policy and Arbitrability, in P. Sanders (ed.), Comparative
Arbitration Practice and Public Policy in Arbitration, 177 (ICCA Congress Series No. 3 1987);
Hanotiau, L’arbitrabilité, 296 Recueil des Cours 29 (2002); Mourre, Arbitration and Criminal Law: Reflections on
the Duties of the Arbitrator, 22 Arb. Int’l 95 (2006); Schramm, Geisinger & Pinsolle, in H. Kronke et al.
(eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York
Convention Art. II, 68 (2010).
25
26
Supra at 15.
27
Emaar MGF Land Limited vs. Aftab Singh, Review Petition (C) Nos. 2629-2630 OF 2018 in Civil Appeal
No.S.23512-23513 OF 2017.
28
Response to the Notice of Arbitration, Moot Problem, p. 15, ¶ 6.

5
recognised principle of Kompetenz-Kompetenz, they cannot do it on their own initiative.29 If a

party to the arbitral proceedings raises the question of jurisdiction of the arbitrator in the dispute
in question, the arbitrator would do well in disposing of the same as a preliminary issue so that it
may not be necessary to go into the entire gamut of arbitration proceedings.30 A plea that the
arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the
statement of defense.31 Further, a party is not precluded from raising such a plea by the fact that
he has appointed, or participated in the appointment of, an arbitrator.32 In the present case, the
Respondent submitted that the Tribunal does not have the jurisdiction to decide the dispute in its
statement of defense itself33 and so is in compliance with the Model Law. The fact that the
Respondent has appointed an arbitrator does not stop it from raising the issue of lack of
jurisdiction on the part of this Tribunal.
ISSUE-II: THE TRIBUNAL SHOULD GRANT THE INTERIM MEASURE REQUESTED BY THE
RESPONDENT.
The Respondent has sought an interim measure from this Tribunal pursuant to Article 26 of the
UNCITRAL Arbitration Rules.34 The same is sought to prevent the harm that would be caused to
the Respondent in the event of the ‘smart contracts’ continuing placing orders, which would lead
to monetary losses and reputational harm to the Respondent.35 In the light of the same, it is
submitted that (I) the Tribunal is competent to grant the measure sought despite the challenge to
its jurisdiction by the Respondent, (II) the interim measure requested is in conformity with the
UNCITRAL Arbitration Rules and (III) interim measure sought is within the ambit of
Arbitration Act of Pindia.
29
Clout case no. 148, Moscow City Court (1995), http://www.uncitral.org/clout/clout/data/rus/clout_case_148_leg-
1349.html; AstivencaAstilleros de Venezuela, C.A. v. Oceanlink Offshore III AS,
http://historico.tsj.gob.ve/decisiones/scon/noviembre/1067-31110-2010-09-0573.HTML (2009).
30
Supra at 15.
31
UNCITRAL Model Law, Article 16(2).
32
Id.
33
Supra at 27.
34
Moot Problem, p.20.
35
Id.

6
I. THE TRIBUNAL IS COMPETENT TO GRANT INTERIM MEASURE TO THE RESPONDENT DESPITE

THE CHALLENGE TO JURISDICTION OF THIS TRIBUNAL BY THE RESPONDENT.
In the present matter, the Respondent challenges the jurisdiction of the tribunal in order to hear
the issue with regards to the matter of the washing machine as it is a patented product and falls
within the domain of Intellectual Property Rights, the same is not arbitrable as it involves right in
rem. The function of interim measure is not connected with the resolution of the dispute, but is
either (a) to stabilize the private law relations between the parties (e.g., injunctions to continue or
stop a construction, to stop the unlawful competition, etc.) or (b) to prepare and assure the
execution of the award (e.g., an order to the respondent to present a bank guarantee in favour of
the claimant or attachment of property of the respondent).36
Therefore, the genuine interim measures of protection represent another kind of relief quite
different from the relief consisting in the resolution of the dispute.37 For this reason the power of
the arbitral tribunal to order such measures is not an exercise of its power to decide the dispute
given by the arbitration agreement, which does not include the power to order interim measures
of protection. 38 Therefore, the fact that the Respondent challenges the jurisdiction of this
arbitration tribunal does not deprive the Tribunal of its power to provide interim measures of
protection.
II. INTERIM MEASURE REQUESTED IS IN CONFORMITY WITH UNCITRAL ARBITRATION

RULES.
The Respondents requested an interim measure from the tribunal under Article 26 of the
UNCITRAL Arbitration Rules (hereinafter UNCITRAL Rules)39 and the Respondent submits
that the interim measure should be granted by the arbitral tribunal as (A) the interim measure
36
E. Gaillard, Arbitrage Commercial International, Droit international privé français 3 (1991) Fasc. 586–8–2, ¶
139, 144; Mark Knoepler, Peter Schweizer, International Commercial Arbitration in Contemporary World, (2003) p.
223; F.R. Mendez, “L'arbitrage international et mesures conservatoires”, Revue de l'arbitrage (3rd ed. 1985) p. 53, ¶
1.
37
Zhivko Stalev, 'Interim Measures of Protection in the Context of Arbitration', in Albert Jan van den Berg (ed),
International Arbitration in a Changing World, ICCA Congress Series, 6 (Kluwer Law International 1994) p. 103, ¶
7.
38
Jean-François Poudret, Comparative Law of International Arbitration,(2007) p. 145; F.R. Mendez, “L'arbitrage
international et mesures conservatoires”, Revue de l'arbitrage (3rd ed. 1985) p. 53, ¶ 2.
39
Moot Problem, p.20.

7
sought is in compliance with Article 26 of the UNCITRAL Arbitration Rules and (B) it will be
binding on both the parties.
A. The interim measure sought is in compliance with Article 26 of the UNCITRAL

Arbitration Rules.
The Respondents requested the Tribunal for an interim measure 40 as the tribunal has been
constituted and since the arbitration proceedings are taking place in Pindia,41 the parties cannot
request interim measures before Pindian courts after the constitution of the arbitral tribunal.42
The interim measure sought is under Article 26 of the UNCITRAL Rules and according to
Article 26(1), the arbitral tribunal has the power to grant interim measures, at the request of a
party.43 The Respondent is well within its rights to request for the present interim measure as it is
a party to the present arbitration and has not waived any rights to seek interim measures from the
Arbitral Tribunal. Further, the interim measure sought by the Respondents, as per the legal
requirement, 44 is temporary in nature as they seek to suspend the ‘smart contracts’ till the
pendency of the arbitration proceedings only.45 Therefore, the interim measure sought by the
Respondents should be granted as, (i) it falls under Article 26(2)(c) and meets all the criteria
under it. Furthermore, it meets the requirements under (ii) Article 26(3)(a) and (iii) Article
26(3)(b) of the UNCITRAL Rules.
(i) The interim measure falls under Article 26(2)(c) and meets all the criteria under
that.
The interim measure requested by the Respondents falls under article 26(2)(c) of the
UNCITRAL Rules as the interim measure seeks to temporarily suspend the ‘smart contracts’ and
by doing so the washing machines will place no further orders for any spare parts as the
blockchain technology will no longer be functional due to the suspension of the ‘smart
contracts’. This way, the washing machines along with the displays in question will be preserved
and since they are the subject matter of the present dispute, 46 there is a possibility of a
subsequent award arising with regards to the washing machine and it becomes all the more
40
Id.
41
42
Arbitration and Conciliation Act, 1996, § 9.
43
UNCITRAL Arbitration Rules (2010), Article XXVI(I).
44
Ali Yesilirmak, Provisional Measures in International Commercial Arbitration v (2005), p.25.
45
Supra at 1.
46
Notice of Arbitration, Moot Problem, p. 4-5, ¶ 15; ArunKapurv.VikramKapur and Ors. 2002 (61) DRJ 495.

8
important to preserve the same.47 Therefore, the interim measure should be granted as it falls
under Article 26(2)(c) of the UNCITRAL Rules.
(ii) It meets the criteria under Article 26(3)(a)

The interim measure requested by the Respondent is under Article 26(2)(c) of the UNCITRAL
Rules and must satisfy the criteria laid down under Article 26(3)(a)48 which is that harm not
adequately repairable by an award of damages is likely to result if the measure is not ordered,
and such harm substantially outweighs the harm that is likely to result to the party against whom
the measure is directed if the measure is granted.49 In the present matter, the ‘smart contracts’
must be suspended or else it would keep placing new orders for different spare parts which will
result in great hardship to the Respondents, including but not limited to, damage to the goodwill
of the Respondent, multiple pending legal suits and auto-debit of payment of such spare parts
that are ordered from the account of the Respondent.50 These situations will cause severe harm to
the Respondents, which cannot be repaired by a simple order for damages.51
However, the Respondent recognizes that damage will be caused to the Claimants as well due to
the suspension of ‘smart contracts’ which will result in non-placement of orders which will
ultimately result in monetary loss for the Claimants. Therefore, the Respondent submits that the
harm caused to the Respondent will be much greater than the harm caused to the Claimant due to
the grant of this interim measure as the harm caused to the Claimant can easily be repaired by an
award for damages but the Respondents will suffer a much greater harm in the form of damage
to their goodwill and multiplicity of suits, which cannot be repaired by a simple award for
damages. Therefore, the interim measure sought meets the criteria under Article 26(3)(a) and
thus, the interim measure should be granted.
(iii) It meets the criteria under Article 26(3)(b).

The interim measure sought by the Respondent is under Article 26(2)(c) of the UNCITRAL
Rules and thus, it must satisfy the criteria laid down under Article 26(3)(b).52 In the present
47
Final Report on Intellectual Property Disputes & Arbitration, 9 ICC International Court of Arbitration Bulletin,
1998, http://library.iccwbo.org/content/dr/COMMISSION_REPORTS/CR_0013.htm?l1=Awards&l2=, ¶ 3.
48
UNCITRAL Arbitration Rules (2010), Article XXVI(III)(a).
49
Supra at 14; The UNCITRAL Arbitration Rules: A Commentary 53 (Philip Alston & Vaughan Lowe eds., 2006).
50
Supra at 1.
51
Dana Renee Bucy, Comment, How to Best Protect Party Rights: The Future of Interim Relief in International
Commercial Arbitration Under the Amended UNCITRAL Model Law, 25 Am. U. Int’l L. Rev. 579 (2010).
52
UNCITRAL Arbitration Rules (2010), Article 26(3)(a).

9
matter, there is a reasonable possibility that the interim measure requested by the Respondents
will be granted simply on the merits of the claim meaning that the Respondent should have a
Prima facie case for the interim measure sought. 53 The Respondent submits that the ‘smart
contracts’ that have been sought to be temporarily suspended have never been read or consented
to by the Respondent54 and are not binding on them.55 Further, the ‘smart contracts’ place orders
for spare parts on their own and the same has resulted in the present dispute. However, the
Respondent has never agreed to any contract for the shipment of spare parts and if the ‘smart
contracts’ are not suspended during the pendency of the arbitration the same will lead to a
multiplicity of suits as the ‘smart contracts’ can be expected to continue placing orders for other
spare parts and the same will be unfair to the Respondent as they cannot use the same due to the
restraining order against them that has been taken by the Claimant. 56 Therefore, there is a
reasonable possibility that the interim measure sought by the Respondents will succeed on the
merits of the claim57 and so it meets the criteria under Article 26(3)(b) and denial of the grant of
such interim relief would lead to injustice to the Respondent or that the resultant award would be
rendered unenforceable if such relief is not granted.58
B. The interim measure will be binding on both parties.

In the present matter, the application for interim measure is made under Article 26 of the
UNCITRAL Rules.59 Article 26 of the UNCITRAL Rules permits a tribunal, at the request of a
party, to take interim measures which are established in the form of an order or award in respect
of the subject-matter of the parties’ dispute.60 Article 32(1) of the UNCITRAL Rules permits a
tribunal to make an award in the form of a final, partial or interim award61 and Article 32(2) of
the UNCITRAL Rules provides that any award is final and binding on the parties, with the
parties undertaking to carry out such award without delay.62 Since, the present application has
53
Dorab Cawasji Warden v. Coomi Sorab Warden and Ors, (1990) 2 S.C.C. 117; Best Sellers Retail v. Aditya Birla,
(2012) 6 S.C.C. 792; Kishoresinh v. Maruti Corporation, (2009) 11 S.C.C. 229.
54
Supra at 1.
55
Id.
56
Supra at 7.
57
Gary B. Born, International Commercial Arbitration, (2ndedn. Kluwer Law International 2014) p.2424.
58
Arvind Constructions v. Kalinga Mining Corporation and ors. (2007) 6 SCC 798
59
Moot Problem, p.20.
60
PCA Case No. 2009-23(2011) , Chevron Corporation and Anr. v. Republic of Ecuador (2011), p.3.
61
UNCITRAL Arbitration Rules, 2010, Article 32(1).
62
UNCITRAL Arbitration Rules, 2010, Article 32(2).

10
been made under Article 26 of the UNCITRAL Rules, the result will be in the form of an award
or order. However, the present matter being urgent in nature due to the continuation of orders
placed by the ‘smart contracts’ should be in the form of an award as to bind both parties and
make them carry it out without delay.63
III. INTERIM MEASURE REQUESTED IS IN COMPLIANCE WITH THE ARBITRATION ACT OF

PINDIA
The interim measure sought by the Respondent should be granted by the arbitration tribunal as
under section 9 of the Arbitration Act of Pindia, which is pari materia to the Arbitration and
Conciliation Act, 1996 of India (hereinafter Arbitration and Conciliation Act) the parties
cannot seek interim measures before any courts of Pindia if the arbitration tribunal has been
constituted. Therefore, if the arbitral tribunal finds that the interim measure cannot be granted
under the UNCITRAL Rules, then the interim measure sought by the Respondent should be
granted by the arbitration tribunal under the Arbitration and Conciliation Act as (A) the relief
granted by the arbitral tribunal will be sufficient and (B) interim measure sought is in compliance
with Section 17 of the Arbitration and Conciliation Act. Furthermore, (C) the interim measure
ordered will be enforceable. Lastly, (D) the interim measure sought is in relation to the matter in
the respect of which the final award may be made.
A. The relief granted by the arbitral tribunal will be sufficient.

The Respondent requests for an interim measure to be granted by the arbitral tribunal64 and the
same should be granted as the interim measure sought is sufficient if granted. It is submitted that
an interim measure will be granted by the court if it is proved that the interim measure sought, if
granted by the tribunal will be insufficient relief for the party.65 Therefore, in the present matter
the interim relief should be granted by the tribunal itself as the relief for the suspension of the
‘smart contracts’ is sufficient for the Respondent. Therefore, the Respondent is not required to
63
Id.
64
Supra at 1.
65
Interim Relief in Arbitral Proceedings, Nishith Desai Associates, (June 2018, 10:00AM) p.4,
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Interim_Reliefs_in_Arbitral_Proceedi
ngs.pdfl.

11
approach Pindian Courts to seek the same, as the same would inter alia cause unnecessary
delay.66
B. Interim measure sought is in compliance with section 17 of the Arbitration and

Conciliation Act.
In the present matter, the interim measure sought by the Respondent should be granted as the
same is in regards to the preservation of the subject matter of the arbitration. The power of an
arbitral tribunal to grant interim measures is dealt with in Section 17 of the Arbitration and
Conciliation Act, the arbitral tribunal has the power to grant interim measures for the
preservation of any property or thing which is the subject matter of the dispute in arbitration.67
Further, there has been no agreement between the parties in regards to interim measures and so
the Respondent has not waived its right to seek interim measures and thus, holds a right to seek
interim measure before the arbitral tribunal.68 The interim measure in the present matter is one of
protection as it will guarantee that the goodwill of the Respondent is not tarnished and a
multiplicity of suits does not lie against the Respondent simply due to the ‘smart contracts’ being
in use and placing further orders for spare parts during the pendency of the present arbitration.
Therefore, the Respondents have established a prima facie case in their favor69 and comply with
the requisite criteria under section 17 of the Arbitration and Conciliation Act. Thus, given that
the interim measure relates to the preservation of the subject matter of the arbitration, it should
be granted by the arbitral tribunal.70
C. The interim measure ordered will be enforceable.

The interim measure requested by the Respondent, if granted by the tribunal will be enforceable
under the Pindian law. An order or award of the tribunal would be enforceable like an order of
the court in case of interim reliefs granted by arbitral tribunals.71Further, any person failing to
66
D. Caron, L. Caplan & M. Pellonpää, The UNCITRAL Arbitration Rules: A Commentary 548 (2006), p.66.
67
Supra at 8.
68
UNCITRAL Model Law, Article 17(1); Foster &Elsberg, Two New Initiatives for Provisional Remedies in
International Arbitration: Article 17 of the UNCITRAL Model Law on International Commercial Arbitration and
Article 37 of the AAA/ICDR International Dispute Resolution Principles, 3(5) Transnat’l Disp. Mgt (2006).
69
Intertole ICS (Cecons) O & M Company v. NHAI (2013) ILR 2 Delhi 1018.
70
UNCITRAL Arbitration Rules (2010), Article 26; Kastner v. Jazon , EWCA Civ 1599 (2004);H. Holtzmann& J.
Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and
Commentary 530 (1989).
71

12
comply with the order of the arbitral tribunal under Section 17 would be deemed to be “making
any other default” or “guilty of any contempt to the arbitral tribunal during the conduct of the
proceedings”72 therefore, the Claimant would have to comply with the interim measure ordered
by the tribunal because a failure to do so would regarded as contempt of court. Further, The Act
states that an interim measure will be enforceable under the Code of Civil Procedure.73 There are
three pillars on which a determination of grant of interim relief is contingent upon- whether the
plaintiff has a prima facie case? Whether the plaintiff would suffer irreparable injury if
injunction is not granted? Whether the balance of convenience is in plaintiff‘s favor?74 All of
these have been answered in favor of the Respondent by way of previously presented arguments
and thus, the interim measure requested by the Respondents, if granted, shall be enforceable in
Pindia and will be binding on the Claimants.
D. The interim measure sought is in relation to the matter in respect of which the final
award may be made.
The interim measure requested by the Respondent is in relation to the ‘smart contracts’ which are
requested to be suspended during the pendency of this arbitration as if the same remain
functional, they will cause harm to the Respondent that is greater than the harm that will be
caused to the Claimants if the interim measure is granted and the same is in the interest of natural
justice. In the present arbitration, the final award that shall be made will be in relation to the
‘smart contracts’ as the present dispute arises out of the ‘smart contract’.75 Therefore, the interim
measure requested is in relation to the matter in respect of which the final award may be made. It
is a well settled position of law that interim relief can only be granted in aid of the final relief76.
72
Sri. Krishna v. Anand (2009) 3 Arb LR 447 (Del); Indiabulls Financial Services v. Jubilee Plots, OMP Nos 452-
453/2009.
73
74
Supra at 18.
75
Response to Notice of Arbitration, Moot Problem, p. 16, ¶7.
76
Mr. Abhijit Bhikaseth Auti vs State Of Maharashtra &Anr. (2008) BomHC; H. Holtzmann & J. Neuhaus, A Guide
to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary 530-
33 (1989); Huntley, The Scope of Article 17: Interim Measures Under the UNCITRAL Model Law, 740 PLI/Lit.
1181, 69 (2005).

13
ISSUE 3: THE SMART CONTRACTS ARE NOT BINDING ON THE PARTIES.

The Claimant and the Respondent entered into an agreement for the sale of 1000 Instawash
machines. The parent contract concluded between the parties contained a clause that stated that
the Parties hereby consent to entering into three ‘smart contracts’ namely a service agreement, an
agreement for spare parts and a renewal of warranty agreement.77 The Claimant asserts that the
clause validly incorporated by reference three ‘smart contracts.’78
The Respondent contends that the ‘smart contracts’ allegedly incorporated by reference into the
parent contract are not binding: (I) the Respondent challenges the binding nature of the ‘smart
contracts’ on the ground that they are not legal contracts and, (II) the Respondent contends that
even if the ‘smart contracts’ are legal contracts, they have not been validly incorporated in the
instant matter.
I. THE ‘SMART CONTRACTS’ ARE NOT CONTRACTS.

The Claimant has asserted that the ‘smart contracts’ mentioned in Clause 27 of the parent
contract concluded between the parties are legally binding upon the Respondent. The three
agreements, allegedly incorporated by reference, are smart contracts that work on blockchain
technology. The Claimant asserted they were entered into when the Respondent accepted the
parent contract. The Respondent contends that the ‘smart contracts’ are not binding on the
Respondent primarily because smart contracts are not legal contracts and therefore the issue of
whether or not they have been validly concluded in the instant case does not arise at all. The
Respondent contends that (A) smart contract is a mere technology and alternatively, (B) if the
smart contracts are indeed agreements then there can be no intention on part of the Claimant to
make the ‘smart contracts’ legally enforceable.
A. Smart contracts are a mere technology.

The Claimant provides spare parts using blockchain technology and smart contracts.79 Further,
the three agreements, which have allegedly been entered into by the Respondent, are smart
contracts that use blockchain technology. 80 Nick Szabo defined a smart contract as a
‘computerized transaction protocol that executes the terms of a contract. The general objectives
77
Exhibit C6, Moot Problem, p.12.
78
Notice of Arbitration, Moot Problem, p.6, ¶ 18.
79
80

14
of smart contract design are to satisfy common contractual conditions (such as: payment terms,
liens, confidentiality, and enforcement etc.), minimize exceptions both malicious and accidental,
and minimize the need for trusted intermediaries like banks or other kind of agents.’ 81 The
modern definition of smart contracts describes it as a computer code that is created to
automatically execute contractual duties upon the occurrence of a trigger event.82 This computer
code consists of a series of if-then functions. Once a condition is met, the smart contract will take
the next step necessary to execute the contract. Thus, the term “smart contracts” refers to
computer transaction protocols that execute the terms of a contract automatically based on a set
of conditions.83 The Respondent contends that the ‘smart contracts’ are not legal contracts. They
are computer codes that execute actions after getting triggered by reports sent by the Instawash
machines to the servers of the Claimant. Therefore, the Respondent submits that the ‘smart
contracts’ are not binding on the parties.
B. There can be no intention to make the ‘smart contracts’ legally enforceable.

The Claimant had often said that “My smart contracts don’t need any lawyers and I certainly
don’t intend to pay for their flashy suits!”84 The Respondent contends that the Claimant had no
intention to make the ‘smart contracts’ legally enforceable in the first place. According to the
doctrine of intention to create legal relations, an agreement is not legally enforceable unless the
parties intended for it to be legally binding.85 A contract is an agreement intended to be legally
enforceable.86 The test of an intention to create legal relations is an objective one87 and intention
has to be deduced from the true inference an ordinary man and woman, speaking or writing thus
in such circumstances, would have intended to create a legally binding agreement. 88 The
81
Nick Szabo, Smart Contracts: Building Blocks for Digital Markets(1996);Ibrahim Mohamed Nour Shehata,
‘Arbitration of Smart Contracts Part 1 – Introduction to Smart Contracts’, Kluwer Arbitration Blog, August 23
2018, http://arbitrationblog.kluwerarbitration.com/2018/08/23/arbitration-smart-contracts-part-1/.
82
Paech, ‘The Governance of Blockchain Financial Networks’, 1082.
83
Blockchain and Beyond: Smart Contracts, Tsui S. Ng.,
https://www.americanbar.org/groups/business_law/publications/blt/2017/09/09_ng/.
84
85
Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL 2, Prince Saprai, Balfour v. Balfour And The
Separation Of Contract And Promise, p.72.
86
Halsbury’s Laws of England, (2nd ed. 1909) § 682 ; Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1108 (9th Cir. 2009);
Balfour v Balfour (1919) 2 KB 571.
87
J Beatson, A Burrows and J Cartwright, Anson's Law of Contract, (Oxford University Press, 29th ed. 2010) p. 75.
88
Jones v Padavatton, 2 All ER 616,621 621 (1969); Gregory Klass, Intent to Contract, 95 Va. L. Rev. 1437 (2009);
J Beatson, A Burrows and J Cartwright, Anson's Law of Contract, (Oxford University Press, 29th ed. 2010) p. 71.

15
Respondent contends that, firstly, in cases of smart contracts there can be no intention of creating
legal relations.89 This is because by concluding a smart contract, the parties have the intention to
use electronic agents to enforce the agreed upon terms and condition and therefore there is no
true intent to create legal relations. 90 Therefore, the Respondent submits that the ‘smart
contracts’ cannot be legally enforced and therefore are not binding on the parties. Further, from
the words of the Claimant it is clear that the ‘smart contracts’ were never intended to be legally
enforceable and therefore there was never an intention to create legal relations. The Respondent,
therefore, submits that the ‘smart contracts’ do not fulfill the essentials of a contract.
II. ALTERNATIVELY, THE ‘SMART CONTRACTS’ STILL DO NOT BIND THE RESPONDENT.
The Claimant erroneously argues that the parent contract that was concluded between the parties
contained a clause that validly incorporated by reference three ‘smart contracts.’ 91 The
Respondent contends that even if the ‘smart contracts’ were legal contracts they were not validly
incorporated by reference into the parent contract and therefore are not binding. Firstly, (A) the
‘smart contracts’ are standard terms. Secondly, (B) the Claimant violated the principle of good
faith. Thirdly, (C) the ‘smart contracts’ are surprising standard terms and not valid.
A. The ‘smart contracts’ were standard terms.

The details that were negotiated upon were the price, quantity and delivery date. The allegedly
binding ‘smart contracts’ were known only to the Claimant who had drafted them before the
conclusion of the parent contract. Further, the same ‘smart contracts’ would repeatedly be used
for the 1000 sold Instawash machines. Pursuant to Article 2.1.19 of the UNIDROIT Principles,
standard terms are provisions which are prepared in advance for general and repeated use by one
party and which are actually used without negotiation with the other party. The Respondent
contends that there was no negotiation between the parties with regards to agreements for spare
parts, servicing and warranty of the Instawash machines. The Respondent therefore submits that
the ‘smart contracts’ are standard terms.
89
Alexander Savelyev, Contract law 2.0: ‘Smart’ contracts as the beginning of the end of classic contract law, 2 J.
of Information & Communications Technology Law, 116, 117.
90
MatejaDurovic, Andre Janssen, The Formation of Smart Contracts and Beyond: Shaking the Fundamentals of
Contract Law? “Smart Contracts and Blockchain Technology: Role of Contract Law”, (Cambridge University Press
2019).
91

16
B. The Claimant did not validly incorporate the ‘smart contracts’.

It has been held that standard terms can be invalidated on the ground that they are in violation of
the principle of good faith.92 The general principle of good faith requires the parties to cooperate
with each other and to exchange information relevant for the performance of their respective
obligations. 93 This principle is enshrined in Article 1.7 of the UNIDROIT Principles as a
mandatory rule that cannot be excluded or limited by the parties.94 The Respondent submits that
the Claimant violated the principle of good faith by failing to provide the Respondent with the
text of the ‘smart contracts’ and thereby depriving the Respondent of a reasonable opportunity to
take notice of the standard terms and familiarize with the same. It is, therefore, contended that (i)
the Claimant had a duty to affix or transmit the text of the ‘smart contracts’, (ii) the Respondent
had no duty to actively access and familiarize with the text of the ‘smart contracts’ and (iii) the
same has been reiterated by the generally accepted principles of international commercial law.
(i) The Claimant had a duty to affix or transmit the text of the ‘smart contracts’.
The Respondent submits that the Claimant apart from referring to the ‘smart contracts’ in clause
27 of the parent contract did not provide the Respondent with any other information regarding
the same. Clause 27 of the parent contract merely referred to the three ‘smart contracts’ with no
expansion of the sub clauses anywhere later in the parent contract.95 It has been held that in light
of the general principle of good faith, "it is not sufficient for the applicability of general terms
and conditions to refer to the general terms and conditions in the offer to conclude a contract,
without providing the text of the general terms and conditions preceding or during the closing of
the agreement."96The party that receives the standard terms must have the reasonable opportunity
92
Nea Commerce S.A. vs. SKY Argentina SCA, Argentina. Court of Appeal of Buenos Aires.,
http://www.unilex.info/case.cfm?pid=2&do=case&ID=1586 (2009).
93
Broadcasters case, Appellate Court Celle, http://cisgw3.law.pace.edu/cases/090724g1.html (2009); Takap B.V. v.
EUROPLAY S.r.l, http://cisgw3.law.pace.edu/cases/071121i3.html (2007); Trade usage Case, Appellate Court
Köln, http://cisgw3.law.pace.edu/cases/051221g1.html (2005);Pitted sour cherries case, District Court
Neubrandenburg, http://cisgw3.law.pace.edu/cases/050803g1.html (2005); Machinery case, Supreme Court,
http://cisgw3.law.pace.edu/cases/011031g1.html (2001).
94
UNIDROIT Principles of International Commercial Contracts, Article 1.7.
95
96
Fresh-Life International B.V. v. CobanaFruchtring GmbH & Co., http://cisgw3.law.pace.edu/cases/090225n1.html
(2009).

17
to gain knowledge of these. 97 Not giving the recipient of an offer a reasonable chance of
considering the standard conditions prevents from the conditions from becoming a part of the
offer.98 A party is deemed to have had a reasonable opportunity to take notice of the standard
terms where, in electronic communications, the terms are made available to and retrievable
electronically by that party and are accessible to that party at the time of negotiating the
contract.99
The Respondent contends that the Respondent was not given a reasonable opportunity to take
notice of the ‘smart contracts.’ The Claimant did not affix the ‘smart contracts’ to the parent
contract and neither did the Claimant transmit the text of the ‘smart contracts’ to the Respondent.
In order to consider the ‘smart contracts’ validly incorporated into a contract, the Respondent
should have been aware of such terms. 100 Therefore, the ‘smart conditions’ could have only
become part of the offer if they were attached to the parent contract or were otherwise placed at
the disposal of the offeree.101
(ii) The Respondent had no duty to actively access and familiarize with the text of the
‘smart contracts’.
The Respondent submits that both the parties belonged to two different sovereign states and that
the transactions undertaken by them were by way of an international contract. Consequently, the
Respondent cannot be expected to know the particular terms and conditions of the Claimant with
regards to the service agreement, warranty agreement or agreement for the spare parts.102 For the
Claimant, it does not constitute any difficulty to attach them to the offer. Therefore, requiring the
Claimant to make their general terms and conditions available to the Respondent would promote
good faith and uniformity.103 If the Respondent, on the other hand, had to inquire about the terms
and conditions of the ‘smart contracts’, this would often lead to delay in the formation of the
97
Staudinger & Magnus, Bürgerliches Gesetzbuch, Art. 14 CISG (2005) ¶ 41; Munich Commentary on the German
Civil Code, (4th ed. 2006) Art. 14, ¶ 30; Case no. 10 O 74/04, District Court (Landgericht) Neubrandenburg (2005).
98
Case no. BGH VII ZR 60/01, German Federal Supreme Court (BGH) (2001).
99
Sieg Eiselen, CISG-AC Opinion No. 13 Inclusion of Standard Terms, Adopted by the CISG Advisory Council
following its 17th meeting, in Villanova, Pennsylvania, USA, on 20 January 2013,
http://www.cisg.law.pace.edu/cisg/CISG-AC-op13.html.
100
Takap B.V. v. EUROPLAY S.r.l, http://cisgw3.law.pace.edu/cases/071121i3.html (2007).
101
Case no. BGH VII ZR 60/01, German Federal Supreme Court (BGH) (2001).
102
Case no. BGH VII ZR 60/01, German Federal Supreme Court (BGH) (2001); Larry A. DiMatteo et al., 34
Northwestern Journal of International Law & Business (Winter 2004) 299-440, 346-349, ¶ 9.
103
Case no. BGH VII ZR 60/01, German Federal Supreme Court (BGH) (2001); Larry A. DiMatteo et al., 34
Northwestern Journal of International Law & Business (Winter 2004) 299-440, 346-349, ¶ 21.

18
contract, which would be unnecessary and unwelcome to both parties. It would further be a
violation of the principle of good faith to burden the Respondent to familiarize itself with clauses
which were not even sent to it and with the risks and disadvantages of standard business terms
stemming from the other side, of which it was not aware. 104 This is so because it is easily
possible for the user of such terms to attach the standard business terms, which are usually
drafted favourably for him, to the offer.105 It would contravene good faith in international trade
as well as the parties’ duty to cooperate, to expect the Respondent to inquire about standard
conditions and to hold the Respondent liable in case such an inquiry was not made.
(iii) Generally accepted principles of international commercial law reiterate the same.
In this regard, the tribunal may also consider the Principles of European Contract Law when
constructing the general principle of law i.e. good faith. Pursuant to Article 2.104 of the
Principles of European Contract Law, standard terms cannot be invoked against a party which
did not know them if the party invoking them did not take reasonable steps to bring them to the
other party’s attention before or when the contract was concluded.106 Further it states that terms
are not brought appropriately to a party’s attention by a mere reference to them in a contract
document, even if that party signs the document. 107 It has been held this rule promotes the
observance of good faith in international trade108 which has been held to be the standard of good
faith under UNIDROIT Principles109, as well as the general obligation on the parties to cooperate
and provide information.110
C. The ‘smart contracts’ were surprising standard terms.

The standard terms of the Claimant, namely the three ‘smart contracts’ were in the form of
computer codes and therefore were written in a computer language. Coding language can be
considered the language of the smart contracts.111The Claimant was aware that the Respondent
did not understand blockchain technology and smart contracts. Subsequently, the Respondent
104
Case no. 10 O 74/04, District Court (Landgericht) Neubrandenburg (2005).
105
Id.
106
PECL, Article 2.104.
107
PECL, Article 2.104.
108
Gerechtshof's Hertogenbosch, http://www.unilex.info/case.cfm?id=959 (2006).
109
UNIDROIT Principles of International Commercial Contracts, Article 1.7.
110
Staudinger/Magnus, BGB 2005, Art. 14 para. 40 et seq.
111
Micheal Jünemann& Kast, Rechtsfragenbeim Einsatz der Blockchain, p.533; Kaulartz & Heckmann, Smart
Contracts – Anwendung der Blockchain-Technologie, p.622; Markus Kaulartz, Herausforderungenbei der
Gestaltung von Smart Contracts, p.204.

19
submits that it did not know the language used to write the computer codes of the three
agreements mentioned in Clause 27. As such, it was the duty of the Claimant to provide the
Respondent with the text of the ‘smart contracts’ in a language that the Respondent understands.
Pursuant to Article 2.1.20 of the UNIDROIT Principles, no term contained in standard terms
which is of such a character that the other party could not reasonably have expected it, is
effective unless it has been expressly accepted by that party. 112 The language in which the
standard terms have been drafted is also important while determining whether the standard terms
are surprising or not. Further, the test for the same is a subjective one where regard is given to
the professional skill and experience of persons of the same kind as the adhering party.
Standard terms that are in a different language will not be accessible to the other party at the time
of contracting if it is not in a language that it could reasonably be expected to understand such as
the language of the contract, the language of the negotiations or the language used by the other
party in communications between the parties.113 If the standard terms are not in a language that
the other party could reasonably be expected to understand, the standard terms must be
disregarded.114
The Respondent submits that it is necessary that the standard terms must be in a language that
the recipient, here the Respondent, could reasonably be expected to understand. 115 Smart
contracts and blockchain technology are new to Dhina, moreover, the Respondent himself is not
so technologically aware. The Claimant was aware of the same and could have reasonably
foreseen that the Respondent would not have been able to understand the computer codes that
comprised the ‘smart contracts.’ The Respondent, therefore, submits that the ‘smart contracts’
are surprising terms and therefore cannot bind the parties.
ISSUE 4: THE CLAIMANT IS NOT ENTITLED TO THE PAYMENT OF USD 420,000.

In the last week of June 2018, the displays of the Instawash machines were showing an error.
The Claimant contends that this was because of the differing voltage requirements of Dhina.
112
UNIDROIT Principles of International Commercial Contracts, Article 2.1.20.
113
Ulrich Magnus, Festschrift, H. Kritzer, Incorporation of Standard Terms, (3rd ed. 2007) p.337.
114
Ulrich Schroeter , Schlechtriem/Schwenzer Commentary, Art. 14, ¶ 62-64.
115
Ulrich Magnus, Festschrift, H. Kritzer, Incorporation of Standard Terms, (3rd ed. 2007) p.320, 321; Schmidt-
Kessel, Schlechtriem/Schwenzer Commentary, Art. 8, ¶ 60; Ulrich Schroeter, Schlechtriem/Schwenzer
Commentary, Art. 14, ¶ 61; Case no. 15 U 88/03, Mobile car phones case, Appellate Court Dsseldorf
http://cisgw3.law.pace.edu/cases/040421g3.html (2004).

20
Consequently, the Claimant shipped the calibrated displays and there was an automatic debit of
USD 420,000 from the Respondent’s account. However, since there was a delay in the delivery
of the spare parts, the debit was refunded at 12:01 a.m. on 18 July 2018. Thereafter the goods
were delivered at 4 p.m. The Claimant, therefore, claims entitlement to USD 420,000 for the
spare parts delivered. The Respondent denies this claim and contends that first and foremost (I)
there was no obligation on part of the Respondent to pay for the calibrated displays delivered.
Alternatively, (II) even if there does exist an obligation to pay; the Respondent contends that
there has not been a valid price determination for the same.
I. THERE IS NO OBLIGATION TO PAY.

The Claimant delivered the calibrated displays in accordance with the ‘smart contract’ that is
mentioned in Clause 27 of the parent contract namely the Agreement for Spare Parts.116 The
Respondent has already established that the ‘smart contracts’ are not binding on the parties. As
such there is no legal obligation for the Respondent to make a payment of USD 420,000. Further,
the Respondent contends that the principle of unjust enrichment does not apply in the instant
case. The principle of unjust enrichment applies where a person who has been unjustly enriched
at the expense of another is required to make restitution to the other.117The Respondent submits
that for a valid claim of unjust enrichment the retention of enrichment must be ‘unjust.’118 The
Respondent submits that (A) the retention of the calibrated displays will not be unjust as the
Claimant’s claim of USD 420,000 will be hit by the principle of 'Commodum ex injuria sua
nemo habere debet'.
A. Commodum Ex Injuria Sua Nemo Habere Debet applies.

The displays that reported error did so because they were not calibrated to the voltage
requirements of Dhina.119 The Respondent contends that (i) it was the Claimant’s obligation to
send machines that were already calibrated to the buyer’s country’s voltage requirements.
Subsequently, (ii) the Respondent contends that the Claimant cannot take advantage of his own
wrong.
116
117
Mark T. Carroll, Restatement of the Law of Restitution, Quasi-Contracts and Constructive Trusts, American Law
Institute J., 1937, p. 91. ¶ 1; Joseph Chitty, Chitty on Contracts, Sweet & Maxwell, (28th ed. 1999) ¶ 29, p.1466;
Lipkin Gorman v. Karpnale Ltd., (1991) 2 A.C. 548, 549, 578; Woolwich Equitable B.S. v. I.R.C. (1993) A.C. 669.
118
Joseph Chitty, Chitty on Contracts, Sweet & Maxwell, (28th ed. 1999) ¶ 30-016, p. 1470.
119

21
(i) The Claimant had an obligation to meet the voltage requirements of Dhina
The displays of the Instawash machines were not calibrated for the voltage requirements of
Dhina. This led to short circuits. Consequently, the servers of the Claimant received responses
from the machines that the displays of the machines had stopped working and the Claimant
delivered 1000 calibrated displays. The Claimant was aware that the machines were to be sold to
consumers in Dhina as such it was reasonably foreseeable that the machines would have to be
made in accordance with the voltage requirements of Dhina. The failure to meet the voltage
requirements rendered the washing machines not fit for use within a mere fortnight of being
installed. The Respondent submits that the Claimant had come to promote Instawash at the
Dhina Expo of Innovative Technologies 2018,120 therefore, the Respondent expected that any
product sold would be calibrated with the voltage requirements of Dhina. Further, this
expectation can also be justified by the fact that the Claimant was aware that the Respondent
intended to sell the products within Dhina itself.121
Pursuant to Article 5.1.6 of the UNIDROIT Principles the contract a party is bound to render a
performance of a quality that is reasonable and not less than average in the circumstances.122
Whether the performance is average or not depends on the circumstances of the case.123 Further,
pursuant to 5.1.1 of the UNIDROIT Principle, contractual obligations of the parties may be
implied.124 According to Article 5.1.2 of the UNIDROIT Principles, the implied obligations stem
from the nature and purpose of the contract, usages, good faith and fair dealing, and
reasonableness.125 It has been held that there is an implied warranty of merchantable quality in
contracts for sale of goods.126 The buyer has a right to expect a saleable article answering the
description in the contract.127 The condition that goods are of merchantable quality requires that
they should be in such an actual state that a buyer fully acquainted with the facts and, therefore,
knowing what hidden defects exist and not being limited to their apparent condition would buy
them without abatement of the price obtainable for such goods if in reasonably sound order and
120
121
122
123
UNIDROIT Principles of International Commercial Contracts, Comments to Article 5.1.6.
124
125
126
Gardiner v. Gray 1 (1815) 4 Camp. 144; 171 E.R.46.
127
Id.

22
condition without special terms.128 Further, if the defect in goods sold which renders them unfit
for their purpose is due to a characteristic which it lay within the sphere of expertise of the seller
to detect and avoid, the responsibility for their unfitness lies with the seller.129
The Respondent contends that the Respondent would not have been willing to buy the Instawash
machines without abatement knowing that their displays had not been calibrated to the voltage
requirements of Dhina. The Respondent further contends that calibrating the spare parts to the
voltage requirements of Dhina law was well within the sphere of the Claimant’s expertise to
detect and avoid. The Respondent submits that the Claimant had an obligation pursuant to the
parent contract itself to meet the voltage requirements of Dhina.
(ii) The Claimant cannot take advantage of his own wrong.

The Claimant failed to provide washing machines that were calibrated with the voltage
requirements of Dhina. This was despite being aware that Instawash would be sold in Dhina.130
Where an obligation is cast on a party and he commits a breach of such obligation, he cannot be
permitted to take advantage of such situation.131 This is based on the Latin maxim 'Commodum
ex injuria sua nemo habere debet' (No party can take undue advantage of his own wrong).132 The
Respondent contends that the Claimant cannot be entitled to USD 420,000 as he breached the
obligation to provide washing machines that were in compliance with the voltage requirements
of Dhina. Contracts in commercial trade are usually reciprocal.133 The seller and the buyer have
reciprocal obligations towards concluding sales contracts.134 For reciprocal contracts, the right to
performance of the creditor of the monetary obligation is only justified if he or she has already
fully performed his or her own obligation to deliver goods or to do some work.135 Pursuant to
Article 7.2.3 of UNIDROIT Principles, the right to performance includes in appropriate cases the
right to require repair, replacement, or other cure of defective performance. 136 As such, the
128
Fluor Ltd v Shanghai Zhenhua Heavy Industries Ltd, (2016) EWHC 2062.
129
Cammell Laird and Co Ltd v. Manganese Bronze and Brass Co. Ltd. (1934) AC 402.
130
131
Mrutunjay Pani & Anr. v. Narmada Bala Sasmal & Anr., AIR 1961 SC 1353.
132
Kusheshwar Prasad Singh v. State Of Bihar & Ors, AIR 2007 SC 467.
133
Ingeborg Schwenzer, Specific Performance and Damages According to the 1994 UNIDROIT Principles of
International Commercial Contracts, European Journal of Law Reform, 1 (3). p. 289, ¶ 7.
134
Allison E. Butler, “A Practical Guide to the CISG: Negotiations Through Litigations,” Aspen Publishers (2007
Supplement 2).
135
Ingeborg Schwenzer, Specific Performance and Damages According to the 1994 UNIDROIT Principles of
International Commercial Contracts, European Journal of Law Reform, 1 (3). p. 289, ¶ 6.
136

23
Claimant cannot ask for performance of monetary obligations from the Respondent when the
Claimant has not fully performed his own obligations.
II. EVEN IF THE ‘SMART CONTRACTS’ WERE BINDING THERE WAS NO OBLIGATION TO PAY.
The Respondent contends that even if the ‘smart contracts’ were binding the Respondent is still
under no obligation to pay the Claimant USD 420,000, because the price determined is not valid.
The Respondent contends that assuming but not conceding that the ‘smart contracts’ were indeed
binding, even then, the Claimant is not entitled to USD 420,000 because the price determination
was not valid. The Respondent had intended to negotiate on the price of the spare parts to profit
from the sale of the same.137 However, the Claimant unilaterally determined the price of the
spare parts by attaching a price list for the spare parts as a schedule to the parent contract.138 A
schedule is “a written list or inventory; especially, a statement that is attached to a document and
that gives a detailed showing of the matters referred to in the document”.139 The Respondent
contends that such a determination is not valid. Pursuant to Article 2:104 of PECL, terms which
have not been individually negotiated may be invoked against a party who did not know of them
only if the party invoking them took reasonable steps to bring them to the other party's attention
before or when the contract was concluded.140 The Respondent contends that merely attaching
the price list is not sufficient to bind the parties to the same. There needs to be a clear
identification of the purpose for which such reference is being made.141 The schedule attached
could have been merely to provide the Respondent with a price breakdown of the Instawash
machines. The Respondent therefore submits that it cannot be bound by the unilaterally
determined prices of the spare parts.
137
Response to Notice of Arbitration, Moot Problem, p. 16, ¶ 11.
138
139
Black’s Law Dictionary (9th ed. 2009), available at Westlaw BLACKS.
140
PECL, Article 2:104.
141
Robert Whitman, Incorporation by Reference in Commercial Contracts, 21Maryland Law Review, 46 (1961);
Helm v. Speith, 298 Ky. 225, 82 S.W. 2d 635 (1944); Rossi v. Douglas, 203 Md. 190, 100 A. 2d 3 (1953);
Alexander v. Fidelity & Casualty Co., 232 MIss. 629, 100 So. 2d 347 (1958).

24
PRAYER
In light of the above submissions, the Respondent, respectfully request the Tribunal:
1. To find and hold that the Arbitral Tribunal does not have jurisdiction to hear the present
dispute.
2. To find and hold that the Tribunal can grant the interim measure requested by the
Respondent.
3. To find and hold that the smart contracts are not binding on the Parties.
4. To find and hold that the Claimant is not entitled to the payment of USD 420,000.
Based on these findings, the Respondent requests the Tribunal:
1. To order the Claimant to suspend the smart contracts.
And pass such other order or orders as the Honorable Tribunal may deem fit in the interest of
justice, equity and good conscience.
All of which is humbly prayed.
Date: 17thMarch, 2019 Sd/-
Place: Bengaluru, Republic of Pindia Counsels for the Respondent

I A T, B, R P

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

I A T, B, R P

Uploaded by

Copyright:

Available Formats

Team Code: 1929RI

IN THE A RBITRAL T RIBUNAL , B ENGALURU , R EPUBLIC OF P INDIA

IN THE CASE CONCERNING CALIBRATED DISPLAYS OF INSTAWASHWASHING MACHINE

WASH-O-MATICS PVT. LTD

MEMORANDUM for RESPONDENT

Table of Contents .......................................................................................................................... II

Table of Abbreviations ................................................................................................................. IV

Index of Authorities ..................................................................................................................... VI

Statement of Jurisdiction .......................................................................................................... XIII

Statement of Facts..................................................................................................................... XIV

Issues Raised ............................................................................................................................ XVII

Summary of Arguments ......................................................................................................... XVIII

Arguments Advanced ..................................................................................................................... 1

~ Memorandum on behalf of the Respondent ~

(iii) It meets the criteria under Article 26(3)(b). .............................................................. 8

~ Memorandum on behalf of the Respondent ~

AIR All India Reporter

~ Memorandum on behalf of the Respondent ~

SCC Stockholm Chamber of Commerce

~ Memorandum on behalf of the Respondent ~

~ Memorandum on behalf of the Respondent ~

SiegEiselen, CISG-AC Opinion No. 13 Inclusion of Standard Terms,Adopted by the CISG

~ Memorandum on behalf of the Respondent ~

~ Memorandum on behalf of the Respondent ~

Halsbury’s Laws of England, (2nd ed. 1909) § 682....................................................................... 14

~ Memorandum on behalf of the Respondent ~

Kishoresinh v. Maruti Corporation, (2009) 11 S.C.C. 229. ............................................................ 9

~ Memorandum on behalf of the Respondent ~

~ Memorandum on behalf of the Respondent ~

H. Holtzmann& J. Neuhaus, A Guide to the UNCITRAL Model Law on International

~ Memorandum on behalf of the Respondent ~

~ Memorandum on behalf of the Respondent ~

1. In January 2018, Wash-o-matics launched Instawash, a new brand of washing machines. It

~ Memorandum on behalf of the Respondent ~

~ Memorandum on behalf of the Respondent ~

The Interim Order

The Arbitration Proceedings

~ Memorandum on behalf of the Respondent ~

HONORABLE TRIBUNAL IN THE PRESENT ORAL HEARING:

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

~ Memorandum on behalf of the Respondent ~

ISSUE 3: THE ‘SMART CONTRACTS’ ARE NOT BINDING.

ISSUE 4:THE CLAIMANT IS NOT ENTITLED TO A PAYMENT OF USD 420,000.

~ Memorandum on behalf of the Respondent ~

I. THE DISPUTE FALLS WITHIN THE DOMAIN OF INTELLECTUAL PROPERTY RIGHTS.

~ Memorandum on behalf of the Respondent ~

A. The dispute relates to genuineness of patented products.

(i) The matter is in public interest.

~ Memorandum on behalf of the Respondent ~

(ii) Right in rem arises out of patent infringement.

B. The consequences arising are civil and criminal in nature.

~ Memorandum on behalf of the Respondent ~

C. The Respondent has a right to submit the dispute to the courts.

II. THE PLEA AS TO LACK OF JURISDICTION WAS MADE IN TIME.

~ Memorandum on behalf of the Respondent ~

recognised principle of Kompetenz-Kompetenz, they cannot do it on their own initiative.29 If a

~ Memorandum on behalf of the Respondent ~

I. THE TRIBUNAL IS COMPETENT TO GRANT INTERIM MEASURE TO THE RESPONDENT DESPITE

II. INTERIM MEASURE REQUESTED IS IN CONFORMITY WITH UNCITRAL ARBITRATION

~ Memorandum on behalf of the Respondent ~