Royal University of Law and Economics English Language Based Bachelor of Law BEFORE ARTIBATION OF MILAN MILAN CHAMBER

OF ARBITRATION FILING DETAILS Arbitrator No: 9410 File to: Arbitration of Milan Date of document: 9 December 2010 CLASSIFICATION Classification of the documents Suggest by the party: CONFIDENTIAL

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

Party Filing: The Lawyers for Claimant Original Language: ENGLISH

Mediterraneo Trawler Supply AS hereafter Trawler CLAIMANT v. Equatoriana Fishing Ltd. hereafter Fishing RESPONDENT

TRAWLERS MOTION TO REIMBURSE COST OF DAMAGES FROM FISHING FOR BREACH OF CONTRACT

Filed by: The Claimants Co-Lawyers: CHHORN Songmeng SAN Kiri

Distribution to: The Arbitral Tribunal: Arbitrator 1 Arbitrator 2 Horace Y The Respondents Co-Lawyers: LIM Muni Odom LY Vongseng

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)

Royal University of Law and Economics English Language Based Bachelor of Law

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

Trawler, through his Co-lawyers, hereby request the arbitral tribunal to order Fishing to reimburse for the damages caused by a breach of contract. First, the breach resulted from Fishing failed to deliver goods in conformity with the contract descriptions, which were clearly stated in the purchase order that squid has to meet quality as per sample and fit for human consumption. Yet Fishing delivered squid only fit for human consumption but not as sample that required the size of squid has to range between 100-150 grams. Second, the lack of inspection to entire containers after squid were delivered did not cause Trawler lost his right to complaint afterward on the ground that large amount of squids were sold to long-line fishing vessels upon urgent requirements in fishing season and Trawler has noticed to Fishing about non-conformity shortly after discovered the squids were not in the right size. I. FACTS
1. On April 14, 2008, Trawler wrote to several suppliers that he needed to purchase

squids to resale to long-liner fishing fleet to use as bait. Later on April 18, 2008, Fishing replied that he would send Mr. Weeg, sale representative, to present a sample of squid. After Mr. Weeg visited on May 17, 2008, Trawler was satisfied with the sample as the size of squid was in the range between 100-150 grams. So, on May 29, 2008, Trawler sent to Fishing a written purchase order via e-mail. The purchase order specifically called for 200 metric tons and set condition in standard terms quality as per sample, which was exclusively described the size of squid, and fit for human consumption.
2. On July 1, 2008, the squids were delivered in 12 containers. Meanwhile, Trawler

inspected sample 20 cartons randomly selected from the two containers arrived first. Among the 20 cartons there were 5 cartons defrosted to inspect and other 15 cartons were weighted the required 10 kg per carton. There was no way for Trawler to have known at the time that Fishing could not fill the order. In a short time, Trawler sold large amount of squid to five long-line fishing vessels upon urgent requirements during fishing season. Those long-liners defrosted the squid and unfortunately discovered that a large proportion of it were too small to function properly as bait. There were two of long-liner returned to port immediately to return the squid to Trawler and other three remained at the sea due to they have other sufficient squids. The long-liners were unable to reimburse new squids from Trawler quickly since they stayed far away from the port.

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)

Royal University of Law and Economics English Language Based Bachelor of Law

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

3. Until 29 of July, Trawler received the squids from long-liners with complaint that

squids were unable to use as bait and requested Trawler to resupply new squids. When Trawler discovered about the problem, he had quickly noticed to Fishing. At the time Trawler inspected the entire containers and as result TGT Laboratories reported that the squids were 60% undersize and fit for human consumption. Thought the 40% of squids were useable as bait but the other long-liners denied purchasing those squids from Trawler. The squids were stored in Trawlers storage room wait for Fishing to take back, but Fishing denied all the times that squid was conform to the contract. Eventually, the squids were destroyed because the store room was too full and need to maintenance. II. APPLICABLE LAW
4. Article 35 of United Nations Convention on Contract for the International Sale of

Goods (CISG) state: (1) The seller must deliver goods which are of the , quality and description required by the contract (2) , the goods do not conform with the contract unless they: (a) are fit for purposes for ordinary be used; (b) are fit for purposes expressly or imply made know to the seller exceptbuyer did not rely, orunreasonable for him to rely on the sellers skill and judgment; (c) possesses qualityheld out as sample
5. Article 36 of CISG state:

(1) (2)

The seller is liablefor any lack of conformity at the time when the risk The seller is also liablefor any lack of conformitydue to breach of any of

passed through to buyer, even thoughbecome apparent only after that time. his obligations includingordinary purposesor qualities or characteristics.
6. Article 38(1) of CISG state:

The buyer must examine the goods or cause them to be examined, within a short period is practicable in the circumstances.
7. Article 39(1) of CISG state:

The buyer lost the right to rely on a lack of conformity of the goods if he does not give a notice to seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)

Royal University of Law and Economics English Language Based Bachelor of Law III. ARGUMENT

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

8. The goods delivered by Fishing failed to conform pursuant to the requirement of Article

35(1) on the ground that Fishing did not respect to quality and description stated clearly in the contract that squid has to as per sample and fit for human consumption .
9. Since Fishing has contacted to Trawler to present sample of squid, he knew that squid had

to range in size 100-150 grams in order to appropriate use as bait and fundamental desire for Trawler to form the contract. Accordingly, on May 17, 2008, Fishing sent Mr. Weeg to present sample with the right size. At that time Trawler and several customers were satisfied with the sample presented after inspection the squid which has an average of 130 grams. Later Trawler sent a purchase order to Fishing and specified that squid shall have a quality as the sample. Indeed, Trawler believed that Fishing knew very well about the sample that was exclusively means the squid has to have size between 100-150 grams.
10.Moreover, the e-mail sent along with purchase order has described the size of squid with

the range of 100-150 grams was important and give customers the best result. This e-mail noted to Fishing about extra information to avoid delivery squid different from the sample presented. On the same day Fishing confirmed the purchase order that squid shall have the quality as per sample without mentioned the size of squid at all. So Trawler has acknowledged that Fishing understand quite well. If not he should have confirmed to Trawler about the sample not just replied As per sample already received. This silent means that Fishing was familiar in the size of squid with regard to the sample mentioned in the contract.
11.A further reason Fishing had aware that the squid shall be used for only human

consumption due to the first e-mail sent to Fishing had informed that squid shall be used as bait. The size of squid to be used for human is different from using for fish since human needs small squid and fish interests in large squid. This contrary caused the squid that Fishing had delivered undersize become useless and Trawler was unable to resale those squids to long-line fishing to use as bait while the size of squid was unsatisfied.
12.Beyond this Fishing did not deliver goods conformity to ordinary used in purposes made

known to seller and quality in sample pursuant to Article 35(2) on the ground that longline fishing vessels did not satisfied with the squid that delivered by Fishing.

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)

Royal University of Law and Economics English Language Based Bachelor of Law

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

13.Trawler could not resale the squid to fishing vessels as expected because the squid was

not in range 100-150 grams. In fact, after 5 fishing vessels returned squid to Trawler, the other fishing vessels refused to purchase any of the squid remaining bought from Fishing. This action could be implied that most fishing vessels did not satisfy with size of squid and the squid could not ordinary be used. The term ordinary use must be answered by reference to what a reasonable person in the same trade as the Fishing and Trawler would think in the same circumstance and fit for the purpose for resale. Despite Fishing has been sold the squid to several Trawlers competitors for a while without receiving complaint, it could not be considered the squid was ordinary used. In order to be ordinary use the squid must be practical acceptable from most of long-line fishing vessels in Trawler.
14. In addition, Fishing had been well informed about purpose of using squid as bait and the

fishing vessel would not accept any undersize squid. Indeed, Trawler relied on Fishing that the squid would be in the right size since he had seen sample inspected on the two containers first arrived was in excellent quality. The inspection did not take to other ten containers later arrived because he trusted the first sample inspection and realized that Fishing would not delivered different goods stated in contract. The first business deal is the time to build trust to each other, if one dishonest, it would loss a lot of benefit in the future as well as its reputation. Most interestingly Fishing has been in the business exporting squid, he knows which squid was appropriate use for human and bait.
15. Fishing did not explain the label that was marked on the sample carton 2007, which

apparently unsize or catch in the season that squid was large size. The Fishing was silent on the seasons that squid could be catch in large size and small size. If amount of squid in contract exceed the amount that Fishing could supply in the right size, he should have informed to Trawler that he could not supply upon contract, and informed to Trawler about undersize squid to make sure that Trawler could take the squid or not.
16. The information in the sale confirmation replied to Trawler via e-mail that squid shall be

caught in 2007 and 2008 did not make known to Trawler that the squid would be under range 100-150 grams. It was not possible for Trawler to foreseen that in the early seasons in Fishing country squid still young and small. Hence, Fishing could not claim that the size of squid shall be small had been informed to Trawler because Fishing did not provide explanation on the note to Trawler and this caused meaningless.

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)

Royal University of Law and Economics English Language Based Bachelor of Law

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

17. Trawler also satisfied its obligations under Articles 38 and 39 to examine the goods and

notified Fishing of any non-conformity within a reasonable time since large amount of squids were sold to long line fishing vessels immediately without inspection for the reason that inspection would break the package and the squid could not resale.
18. As Nils Korre the purchasing manager of Trawler said Trawler inspected sample 5

cartons out of 20 cartons randomly selected from the two containers was excellent in quality and weighted. Then the remaining 15 cartons just weight to make sure it has the same 10 kg. Trawler did not take the entire inspection on the 12 containers because inspection on each carton would break the cartons and could not be used to resale to customers due to the package was broken and the quality of squid could be reduced from outside environment.
19. Furthermore, the amount of squid was too large to take inspection in short period of time

when Trawler was under pressure to transfer those squids to customers as quickly as possible since the fishing season is short. Due to the fact, large amount of squids were moved to five long-line fishing vessels within a week. It was unreasonable that Trawler reject order from customers just to inspect the squids since he trusted Fishing. If Trawler moved the squid to TGT Laboratories for inspection at the time squid arrived, it would not possible to resale those squid on time to customers since requirement was very urgent in the season.
20. Trawler immediately noticed to Fishing about the squid unusable as bait after he had

received complaint from five long-line fishing vessels. Those vessels caught little fish than expected because the squids were too small. Then they quickly returned to port to reimburse new squid. The time to transport squid to Trawler could take weeks as they were at sea far away from port in order to catch large fish. For this reason, Trawler noticed the non-conformity of squid to Fishing would not exceed the reasonable time because the squid was in hand of long-liner fishing vessels and it could not report to Trawler until they arrived at port.
21. Fishing shall liable for damages pursuant to Article 36 for breaching obligation

required by the contract that quality of squid shall be as sample in range 100-150 grams. Otherwise squid has to be ordinary used which able to resale to long-line fishing vessels.

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)

Royal University of Law and Economics English Language Based Bachelor of Law IV. RELIEF REQUESTED

Commercial Law & Legal Research and Writing Professor Joshua Rosensweig

22. FOR ALL OF THE ABOVE REASONS, Mediterraneo Trawler Supply AS kindly

requests the arbitral tribunal to order Equatoriana Fishing Ltd to reimburse Mediterraneo Trawler Supply AS the purchase price of the squid in the amount of USD 320,000 less USD 23,000 for the squid retained by its customers for a net amount of USD 297,000; to pay damages in the amount of USD 119,250 for the loss of profit on the unsold squid; to pay damages of USD 44,750 for the extra expenses of storing the squid; to pay damages of USD 12,450 for the expenses incurred in attempting to sell the squid for Fishings account; to pay damages of USD 6,000 for the expenses incurred in disposing of the squid; For a total of USD 479,450; to pay interest on the said sums; and to pay the costs of arbitration.

Respectfully submitted,

CHHORN Songmeng

SAN Kiri

Co-Lawyers for Mediterraneo Trawler Supply AS Signed in Phnom Penh, Kingdom of Cambodia on this 9th day of December, 2010

Submitted on July 20, 2011 (Chhorn Songmeng & San Kiri)