ON SUBMISSION TO THE INTERNATIONAL ARBITRATION COURT OF ATHENS

CASE CONCERNING SUPREME MANUFACTURING, LTD.

(APPLICANT)
VS
PETERSON POWER BACKUP GENERATOR CO.
(RESPONDENT)

MEMORIAL OF RESPONDENT

1
 TABLE OF CONTENTS

List of
Abbreviations…………………………………………………………………………………………. 4

List of Sources/Authorities………………………………………………………………………...….. 5

Statement of Jurisdiction……………………………………….……………………………………… 6

Statement of Relevant Facts……………………………………………………………………………. 7

Questions presented……………………………………………………………………………………… 8

Summary of Arguments ……………………………………………………………………………….. 9-10

Arguments……………………………………………………………………………………………..11-16

1)Whether there is a breach of contract by Peterson……………………………………… 11-12

1.1. Peterson has no liability to Supreme………………………………………………… 11
1.2. Peterson has not breached the contract …………………………………………… 11-12

2) Whether Peterson is liable to pay Supreme $100000 due for the model 100 KVA unit with
interest………………………………………………………………………………………. 13-14
2.1. Obligation of the Supreme as seller …………………………………………….. 13
2
 2.2.Peterson is not legally bound to pay the due to Supreme………………………….. 13-14

3) Whether Peterson is liable to pay Supreme $100000 in damages to purchase the remaining
five models…………………………………………………………………………………14-15
3.1.Peterson don’t need to pay for the damages of other models……………………….. 14
3.2.Peterson is not liable for the remaining five models ………………....………………15

4) Whether Peterson is bound to pay the arbitration cost including lawyer's fee……………16
4.1. Peterson don’t need to bear arbitration cost with others……………………………16

Prayer…………………………………………………………………………………………17

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 LIST OF ABBREVIATION

Art Article
UNCISG United Nations Convention on Contracts for the International
Sale of Goods
Peterson PETERSON Power Backup Generator Co.

Supreme SUPREME Manufacturing Ltd.

UNICITRAL United Nations Commission of International Trade Law

ROAA Rules of the American Arbitration

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 LIST OF SOURCES AND AUTHORITIES

1.United Nations Convention On Contracts

For the Internal Sale of Goods, Art29,35(2a),(2b),
…………………………………………………………………………………... 11

2. United Nations Convention On Contracts

For the Internal Sale of Goods, Art36,part3(24)…………………………..
………………………………………..………………… 12
3. United Nations Convention On Contracts
For the Internal Sale of Goods, part3(26)………………….………….…………………………… 13
4. United Nations Convention On Contracts
For the Internal Sale of Goods, Art35(1),58(3)
………………………………………………………………………..……………….. ………….14

5. United Nations Commission of International Trade Law,art18………………………..…………….14

6.Rules of the American Arbitration,art28(1)…………………………………………………………………………………….14

7. United Nations Convention On Contracts

For the Internal Sale of Goods,
Art74,75……………………………………………………………………….……………………… 15

Cases:
1. Rheinland Versicherungen v. S.r.l. Atlarex and Allianz Subalpina,
http://cisgw3.law.pace.edu/cases/000712i3.html...................................................................................14

2. T. SA v. R. Établissement, http://cisgw3.law.pace.edu/cases/981130s1.html....................................15

5
 STATEMENT OF JURISDICTION

Supreme Manufacturing LTD. has the right and jurisdiction to file the suit before the international
arbitration court because in article 1 of United Nations Convention on contracts for the international sale
of goods there exist the matter of contracting states, so for the contract there has a deal and has the right
to sue. Art 1 says that, (1) This Convention applies to contracts of sale of goods between parties whose
places of business are in different States: (a) when the States are Contracting States; or(b) when the rules
of private international law lead to the application of the law of a Contracting State.(2) The fact that the
parties have their places of business in different States is to be disregarded whenever this fact does not
appear either from the contract or from any dealings between, or from information disclosed by, the
parties at any time before or at the conclusion of the contract.(3) Neither the nationality of the parties nor
the civil or commercial character of the parties or of the contract is to be taken into consideration in
determining the application of this Convention. Art 4 says that,” This Convention governs only the
formation of the contract of sale and the rights and obligations of the seller and the buyer arising from
such a contract. In particular, except as otherwise expressly provided in this Convention, it is not
concerned with: (a) the validity of the contract or of any of its provisions or of any usage; (b) the effect
which the contract may have on the property in the goods sold. So the jurisdiction exist in here 1

1
United Nations Convention on Contracts for the Sale of Goods,art1,4

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 STATEMENT OF RELEVANT FACTS

Supreme Manufacturing Ltd (Monsantanean) and Peterson Backup Power Generator Co. (Atlantanean)
Concluded 23 contracts together. In a contract of Model 100KVA Backup Power Generator Unit on 2015
Peterson gave mail to Supreme after getting their product that those were not working properly and the
alternator system did not function properly, so they requested to repair that. Supreme replied that sending
their Alternators would be so expensive, so told them to replace the Alternator system. Then Peterson did
not pay the due of that contract and had been in contract with Northeast Manufactures Inc. Peterson gave
reply to Supreme to cancel the contract, opposite reply to supreme of their mail to get their mail to get
their due. Peterson repaired that with extra money, so they cancelled the contract and Supreme claimed it
as breach of contract and filed a suit.

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 QUESTION PRESENTED

1)Whether there is a breach of contract by Peterson?

2) Whether Peterson is liable to pay Supreme $100000 due for the model 100 KVA unit
with interest?

3) Whether Peterson is liable to pay Supreme $100000 in damages to purchase the

remaining five models?

4) Whether Peterson is bound to pay the arbitration cost including lawyer's fee?

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 SUMMARY OF ARGUMENTS

Issue 1:
There is no breach of contract by Peterson because a contract can be modified by the parties. And the
seller has also liability to give the proper and accurate product. According to art 36 of UNCISG “The
seller is liable in accordance with the contract and this Convention for any lack of conformity which
exists at the time when the risk passes to the buyer, even though the lack of conformity becomes apparent
only after that time. (2) The seller is also liable for any lack of conformity which occurs after the time
indicated in the preceding paragraph and which is due to a breach of any of his obligations, including a
breach of any guarantee that for a period of time the goods will remain fit for their ordinary purpose or for
some particular purpose or will retain specified qualities or characteristics. But Supreme delivered the
product with lack of conformity that means their delivered product didn`t work properly. There exist a
matter in explanatory note by the UNCITRAL secretariat an the UNCIG that seller has also some
obligations for delivering the accurate product which they`ve promised to deliver. But Supreme failed to
do their obligations that`s why Peterson cancelled the contract because Supreme didn`t fulfill their
obligations, so that is not any breach of contract of Peterson.

Issue 2:
Peterson is not liable to pay Supreme $100000 due for the model 100 KVA unit with interest.
The seller that means the Supreme ha liability to maintain the proper quality and quantity of the
product but they didn`t maintain this obligation. The delivered model 100KVA unit was not
working properly the model 100KVA Backup Power Generator unit was defective. PETERSON
inspected the unit promptly after it was delivered to the construction site where it was to be
installed. As soon as PETERSON had determined that the unit was defective it notified
SUPREME about the defect. SUPREME refused to repair the unit after PETERSON repeatedly
required it to do so. The unrepaired unit could not be used by PETERSON to fulfill its
contractual obligations to CONSTRUCTION. PETERSON was being pressed by
CONSTRUCTION to install the first of six functioning Power Backup Generator units promptly
so that CONSTRUCTION could continue with the construction of the residential complex.
Therefore, PETERSON was within its rights to cancel the contract with SUPREME and to
purchase replacement units from another supplier. Supreme failed to fulfill it`s obligations to
Peterson so Peterson is not liable to pay 100000 due for the model 100KVA unit with interest.

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Issue 3:
Peterson is not liable to pay Supreme 100000 in damages to purchase the remaining five models. Art
58(3) of UNCISG says that “The buyer is not bound to pay the price until he has had an opportunity to
examine the goods, unless the procedures for delivery or payment agreed upon by the parties are
inconsistent with his having such an opportunity.” So Peterson has the right to examine by their
examining and determining Peterson is able to cancel the contract so they are not liable to pay Supreme
100000 in damages to purchase the remaining five models. Peterson was not satisfied with first are that`s
why they didn`t purchase the other remaining five modls and here exist no liability.

Issue 4:
Peterson is not bound to pay the arbitration cost including lawyer`s fee because the case has arisen for the
lacking of obligation of supreme. They didn`t deliver the proper product that can be said as a breach of
contract. It is not breach of contract but Peterson is bound to get the damages of defective products. So
Peterson is not bound to give the due that`s why to pay the arbitration cost including lawyer`s fee is not
bound at all for Peterson.

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 ARGUMENTS

1.Whether there is a breach of contract by Peterson.

There is no breach of contract by Peterson.

1.1.Peterson has no liability to Supreme

Peterson is not liable in here because in the contract of the state there exist some rules. From those there is
a rule that is any party can modify the contract with agreement.
Art 29(A) says that,” (1) A contract may be modified or terminated by the mere agreement of the parties.
(2) A contract in writing which contains a provision requiring any modification or termination by
agreement to be in writing may not be otherwise modified or terminated by agreement. However, a party
may be precluded by his conduct from asserting such a provision to the extent that the other party has
relied on that conduct.” According to this rule Peterson has the right to terminate and modify the contract
and Peterson did the same thing.
Art 35(1),(2a) says that,” (1) The seller must deliver goods which are of the quantity, quality and
description required by the contract and which are contained or packaged in the manner required by the
contract. (2) Except where the parties have agreed otherwise, the goods do not conform with the contract
unless they: (a) are fit for the purposes for which goods of the same description.
Supreme didn’t fulfill this obligation properly , they didn’t deliver the proper product that’s why Peterson
fill up the damage by not giving the due. Not only this articles of UNCISG describe about the proper
quality of the delivering product but also the 35(2c) say about it, that is possess the qualities of goods
which the seller has held out to the buyer as a sample or model; So the convention say more about it to
concern the parties properly.
So Peterson has not breached the contract and has no liability to Supreme.

1.2.Peterson has not breached the contract

Peterson didn’t breach the contract because they had only fill up their damages. Supreme was not concern
about their task to give a accurate product according to their sample or description for this Peterson can
say that Supreme had the lacking on their obligations.2

2
UNCISG,art29,35(2a),(2b),(2c)

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Art36 of UNCISG says that,” (1) The seller is liable in accordance with the contract and this Convention
for any lack of conformity which exists at the time when the risk passes to the buyer, even though the lack
of conformity becomes apparent only after that time. (2) The seller is also liable for any lack of
conformity which occurs after the time indicated in the preceding paragraph and which is due to a breach
of any of his obligations, including a breach of any guarantee that for a period of time the goods will
remain fit for their ordinary purpose or for some particular purpose or will retain specified qualities or
characteristics.” Here also said about qualities of product which was not in the product of Supreme which
was delivered to Peterson. Peterson just tried to fill up their damages and Supreme had also lacking of
their obligation according to UNCISG.
Part 3(24) of UNCISG says that,” The Convention provides a number of rules that implement the seller’s
obligations in respect of the quality of the goods. In general, the seller must deliver goods that are of the
quantity, quality and description required by the contract and that are contained or packaged in the
manner required by the contract. One set of rules of particular importance in international sales of goods
involves the seller’s obligation to deliver goods that are free from any right or claim of a third party,
including rights based on industrial property or other intellectual property.”
Peterson didn’t breach the contract because Supreme didn’t follow the obligations of UNCISG properly
that’s why Peterson just canceled the contract and fill up their damages from the due which can be
claimed as their right.3

3
UNCISG,art36,Part3(24)

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2.Whether Peterson is liable to pay Supreme 100000 due for the model 100KVA unit with interest

Peterson is not liable to pay Supreme 100000 due for the model 100KVA unit with interest.

2.1.Obligation of the Supreme as seller

Besides the Peterson the Supreme has also some obligations. The general obligations of the seller are to
deliver the goods, hand over any documents relating to them and transfer the property in the goods, as
required by the contract and this Convention. The Convention provides supplementary rules for use in the
absence of contractual agreement as to when, where and how the seller must perform these obligations.
The Convention provides a number of rules that implement the seller’s obligations in respect of the
quality of the goods. In general, the seller must deliver goods that are of the quantity, quality and
description required by the contract and that are contained or packaged in the manner required by the
contract. One set of rules of particular importance in international sales of goods involves the seller’s
obligation to deliver goods that are free from any right or claim of a third party, including rights based on
industrial property or other intellectual property. In connection with the seller’s obligations in regard to
the quality of the goods, the Convention contains provisions on the buyer’s obligation to inspect the
goods. He must give notice of any lack of conformity with the contract within a reasonable time after he
has discovered it or ought to have discovered it, and at the latest two years from the date on which the
goods were actually handed over to the buyer, unless this time limit is inconsistent with a contractual
period of guarantee. These are also according to the UNCISG, for the Supreme to maintain but they didn’t
maintain that properly and was not concern about their task for the contract. Because Supreme was not
concern about their obligation as seller so Peterson is not liable to pay Supreme 100000 due for the model
100KVA unit with interest. Peterson has the right to get their loss because the Supreme as a seller was not
concern about their obligation so Peterson is not liable to pay the due to Supreme.

2.2.Peterson is not legally bound to pay the due to Supreme

The liability is not legally binding by UNCISG because Part 3(26) says that,” The general obligations of
the buyer are to pay the price for the goods and take delivery of them as required by the contract and the -
Convention. The Convention provides supplementary rules for use in the absence of contractual
agreement as to how the price is to be determined and where and when the buyer should perform his
obligations to pay the price.”
By this art we can see that the buyer has the right to determine the product and also can determine the
price after getting the product ,so Peterson has the right to determine the product. After getting the
product, Peterson found that was defective that’s why they repair the product with their due, here
Peterson has the right to determine and get the damages of product. 4

According to 35(1) of UNCISG,” The seller must deliver goods which are of the quantity, quality

4
UNCISG,part3(26)

13
and description required by the contract and which are contained or packaged in the manner required by
the contract.”
Under this art Supreme failed to fulfill their obligation and so Peterson is not liable to pay Supreme
100000 due for the model 100KVA unit with interest.

3.Whether Peterson is liable to pay Supreme 100000 in damages to purchase the remaining five
models

Peterson is not liable to pay Supreme 100000 in damages to purchase the remaining five models.

3.1. Peterson don’t need to pay for the damages of other models
Art 58(3) of UNCISG says that,” The buyer is not bound to pay the price until he has had an opportunity
to examine the goods, unless the procedures for delivery or payment agreed upon by the parties are
inconsistent with his having such an opportunity.”
Here said that if a buyer after getting the product from buyer then the buyer thinks that product is not
appropriate and inconsistent with desire and according to contract then the buyer after examining that
product, not bound to pay the price.
Art 18 of UNICITRAL says that, “ The parties shall be treated with equality and each party shall be given
a full opportunity of presenting his case.”5
Art 28(1) of ROAA says that, “The tribunal shall apply the substantive law(s) or rules of law designated
by the parties as applicable to the dispute. Failing such a designation by the parties, the tribunal shall
apply such law(s) or rules of law as it determines to be appropriate.” 6
This types of damages are not exist in the substantive law so the opponent cannot force Peterson to give
this damage.
So Peterson has the full right present their own arguments and court is bound to determine and examine
that.
In the case of “Rheinland Versicherungen v. S.r.l. Atlarex and Allianz Subalpina”7 here the buyer filed
the sue for not conformity in the seller’s product for the lack of evidence the case went against themselves
but in this matter they have enough evidence against Supreme that is also about the lack of conformity in
their products so Peterson is not bound to pay.

5
UNICITRAL,art18
6
ROAA,art28(1)
7
 Rheinland Versicherungen v. S.r.l. Atlarex and Allianz Subalpina,
http://cisgw3.law.pace.edu/cases/000712i3.html

14
Like this when Peterson got the product defective after that Peterson has the same right to get the
fulfillment of damages because they were also not satisfied with the product then there is no reason to say
it a legally bound for Peterson to pay Supreme 100000 in damages to purchase the remaining five models.

3.2.Peterson is not liable for the remaining five models

Peterson is not liable because they got the defective product ,for the defect they had the right to get the
fulfillment of damage . When Peterson said to Supreme to repair the product they had reject their request. 8
In the case named, “T. SA v. R. Établissement”9 the buyer gave notice to seller at a proper time that
theirs product has defect after that the seller reject that notice then court granted that and provided the
remedy to seller as like it the Peterson gave the notice to Supreme about their defects of products but they
didn’t do anything so Peterson don’t need to pay for that and they are not liable.

For the rejection, Peterson had start the contract with another company because they could not get the
right with them.
Art 74 says that,” Damages for breach of contract by one party consist of a sum equal to the loss,
including loss of profit, suffered by the other party as a consequence of the breach. Such damages may
not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the
conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have
known, as a possible consequence of the breach of contract.”
This art says about the damages which was their right but they did not get that. That’s why Peterson
didn’t give the due and canceled the contract because this types of situation can be created again.

Art 75 says that,” If the contract is avoided and if, in a reasonable manner and within a reasonable time
after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party
claiming damages may recover the difference between the contract price and the price in the substitute
transaction as well as any further damages recoverable under article 74.”

Here Peterson has the reasonable reason to avoid the contract that’s why Peterson has the legally reason
to avoid the contract and it is also recoverable according to the convention that’s why they didn’t give the
due to recover it and to not take any further risk in the contract they canceled the contract.
So it can clearly said that Peterson is not liable to pay Supreme 100000 in damages to purchase the
remaining five models.10

4.Whether Peterson is bound to pay the arbitration cost including lawyer’s fee

8
UNCISG,art35(1),58(3)
9
T. SA v. R. Établissement, http://cisgw3.law.pace.edu/cases/981130s1.html
10
UNCISG,art74,75

15
Peterson is not bound to pay the arbitration cost including lawyer’s fee.

4.1.Peterson don’t need to bear arbitration cost with others

Peterson has not breached the contract , the fault and lack of obligation can see to the Supreme so
Peterson don’t need to bear the arbitration cost and other cost like the lawyer’s fee . Supreme should bear
their own case with their own cost because the liability goes under their own. Supreme didn’t the recover
the damage and was not concern with the contract so the lack of obligation is going under Supreme and
the matter of arbitration cost with lawyer’s fee should bear by the Supreme because it is their own matter.
Peterson don’t need to bear the arbitration cost and also not bound to give the lawyer’s fee.

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 PRAYER

In the light of the arguments advanced and authorities cited, the respondent most humbly and respectfully
request this Honorable court to adjudge and declare that:
1.There is no breach of contract by Peterson
2.Peterson is not liable to pay Supreme 100000 due for the model 100 KVA unit with interest
3.Peterson is not liable to pay Supreme 100000 in damages to purchase the remaining five models
4.Peterson is not bound to pay the arbitration cost including lawyer’s fee.

On behalf of the respondent, for this kind consideration, the Agents shall every pray
All of which respectfully submitted.

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