Participant No.

18

Arbitral Proceedings Case No. PICCR / A18128

In the Matter of an Arbitration

Under the Rules of Arbitration of the
Philippine International Center for Conflict Resolution, Inc. (PICCR)

Between

PHAR LAP ALLEVAMENTO

Rue Frankel 1, Capital City, Mediterraneo
(Claimant)

Represented by Joseph Langweiler

(75 Court Street, Capital City Mediterraneo | Langweiler@lawyer.me)

And

BLACK BEAUTY EQUESTRIAN

2 Seabiscuit Drive, Oceanside, Equatoriana
(Respondent)

Represented by Julia Clara Fasttrack

(14 Capital Boulevard, Oceanside, Equatoriana | fasttrack@host.eq)

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x

FINAL AWARD
TABLE OF CONTENTS
 I. THE PARTIES AND THEIR LEGAL REPRESENTATION - - - - - - - - - - - - - - - - - - - - -
3

II. CONSTITUTION OF THE ARBITRAL TRIBUNAL - - - - - - - - - - - - - - - - - - - - - - - - - 4-8

III. COST OF THE ARBITRATION- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8

IV. ARBITRATION AGREEMENT & LAW GOVERNING THE CONTRACT - - - - - - - - - - - 9

V. APPLICABLE ARBITRATION LAW & ARBITRATION RULES - - - - - - - - - - - - - - - 9-

10

VI. SEAT OF ARBITRATION & PROCEDURAL MATTERS - - - - - - - - - - - - - - - - - - - 10-

12

VII. SUMMARY OF THE PROCEEDINGS & EVIDENTIARY HEARINGS - - - - - - - - - - 12-

15

VIII. SUMMARY OF ADMITTED FACTS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15-16

IX. SUMMARY OF PARTY CLAIMS & RELIEFS SOUGHT - - - - - - - - - - - - - - - - - - - 16-

18

X. ISSUES PRESENTED BY THE PARTIES - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 18

 XI. PARTY POSITIONS WITH RESPECT TO EACH ISSUE - - - - - - - - - - - - - - - - - - 18-21

XII. FINDINGS OF FACT AND REASONED HOLDINGS - - - - - - - - - - - - - - - - - - - - - 21-

24

XIII. FINAL AWARD - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 24-25

I. THE PARTIES AND THEIR LEGAL REPRESENTATION

1.1 The CLAIMANT is Phar Lap Allevamento (Phar Lap), a company registered

and located in Capital City, Mediterraneo, operating Mediterraneo’s oldest and

most renowned stud farm, covering all areas of the equestrian sport (hereinafter

referred to as “CLAIMANT”).

1.2 CLAIMANT’s Counsel on record is Joseph Langweiler with address at 75

Court Street, Capital City, Mediterraneo, telephone number (0) 146 9845, telefax

number (0) 146 9850, and email address Langweiler@lawyer.me.

1.3 The RESPONDENT is Black Beauty Equestrian (Black Beauty), with address

at 2 Seabiscuit Drive, Oceanside, Equatoriana, a company registered and

incorporated to the laws of Equatoriana. RESPONDENT Black Beauty is famous

for its broodmare lines that have resulted in a number of world champion show

jumpers and international dressage champions.

1.4 RESPONDENT’s Counsel of Record is Julia Clara Fasttrack with address at

14 Capital Boulevard, Oceanside, Equatoriana with telephone number (0) 214 77

32, telefax number (0) 214 77 33, and email address fasttrack@host.eq.
II. CONSTITUTION OF THE ARBITRAL TRIBUNAL

2.1 On 31 July 2018, CLAIMANT through counsel submitted a Request for

Arbitration (the “Request”) pursuant to Article 4 PICCR Arbitration Rules (the

“Rules”) to the Secretariat of the Philippine International Center for Conflict

Resolution (PICCR), paid the filing fee of PhP 25,000.00 to PICCR Secretariat in

accordance with Appendix 3, Article 1 of the Rules, and served a copy of the

Request and its attachments to the RESPONDENT by courier.

2.2 In the Request, CLAIMANT nominates Ms. Wantha Davis (“Ms. Davis”) with

address at 14 Churchill Downs, Capital City, Mediterraneo, as its arbitrator.

Subsequently, Ms. Davis declared to CLAIMANT her willingness as an arbitrator

and the absence of any connections which could affect her independence and

impartiality. Ms. Davis likewise provided her curriculum vitae.

2.3 On July 31, 2018, the PICCR acknowledged receipt of the Request and the

documents included therewith. The PICCR noted that CLAIMANT has

commenced the arbitration under the Rules pursuant to Clause 15 of the Frozen

Semen Sales Agreement dated 6 May 2017 (the “Agreement”) and that PICCR

will proceed to administer the arbitration under the Rules.

2.4 Pursuant to Article 4(6) of the Rules, the PICCR transmitted a copy of the

Request to RESPONDENT and pursuant to Article 5(1) of the Rules,

RESPONDENT was ordered to submit to the PICCR the Answer to the Request

for Arbitration (the “Answer”) within 30 days from the date on which Respondent

received the Request. The said Answer shall be submitted to the PICCR

Secretariat in the number of copies specified by Article 3 (Written Notifications or

Communications and Time Limits), Paragraph 1. Pursuant to Article 12(4) of the

Rules, RESPONDENT is likewise invited to designate the second co-arbitrator in

the Answer.

2.5 The PICCR noted the provision in the Agreement that the number of

arbitrators shall be three and that pursuant to Article 12(4) of the Rules,

CLAIMANT has designated Ms. Davis of 14 Churchill Downs, Capital City,

Mediterraneo as the first co-arbitrator in this case. The PICCR invited Ms. Davis

to complete a Statement of acceptance, availability, impartiality and

independence under Article 12(4) of the Rules.

2.6 For purposes of efficiency, the parties are encouraged to use email

communication whenever possible. Accordingly, the parties have to inform the

PICCR whether they agree to communicate with PICCR by email only in these

proceedings. On 2 August 2018, CLAIMANT through counsel replied and

confirmed that CLAIMANT agrees to communicate with PICCR by email only.

2.7 On 1 August 2018, the PICCR enclosed copies of Ms. Davis’s (i) Statement

of Acceptance, Availability, Impartiality and Independence and (ii) curriculum

vitae, for the parties reference.

2.8 On 24 August 2018, Julia Clara Fasttrack indicated her representation of the

RESPONDENT pursuant to power of attorney, submitted RESPONDENT’S

Answer to the Request and confirmed agreement to communicate with PICCR by

email only. Further, RESPONDENT nominated Dr. Francesca Dettorie (“Dr.

Dettorie”) of Circus Maximus Avenue 1, Derby, Equatoriana as its arbitrator.

Copies of Dr. Dettorie’s (i) Declaration of Acceptance and Statement of

Availability, Impartiality and Independence and (ii) curriculum vitae were

enclosed for the parties’ reference.

2.9 On 27 August 2018, the PICCR confirmed the designations of Ms. Davis and

Dr. Dettorie as co-arbitrators in this arbitration proceedings in accordance with

Article 9 of the Rules.

2.10 Pursuant to Article 12(5) of the Rules, PICCR shall proceed to appoint the

third arbitrator who will act as the chair in the arbitral tribunal. The parties were

given time to comment.

2.11 On 14 September 2018, Ms. Davis, Dr. Dettorie, in close cooperation with

the Parties, proposed the appointment of Prof. Calvin de Souza of Happy Valley

Road 79, 1011 Vindobona, Danubia as Presiding Arbitrator. His curriculum vitae
and Declaration of Acceptance and Statement of Availability, Impartiality and

Independence were likewise submitted.

2.12 Both parties have no objection to the appointment of Prof. Calvin.

2.13 On 18 September 2018, in accordance with Article 12(5) of the Rules,

PICCR hereby formally appoints Prof. Calvin de Souza as the third and presiding

arbitrator in this arbitration proceeding.

2.14 As thus constituted, the Tribunal is composed of the following

Tribunal Chair

Prof. Calvin de Souza

Happy Valley Road 79, 1011 Vindobona, Danubia
Email address: caldesouza@happyvallye.da

Tribunal Members

Wantha Davis
14 Churchill Downs, Capital City, Mediterraneo
Email address: wdavis@capitalcity.me

Dr. Francesca Dettorie

Circus Maximus Avenue 1, Derby, Equatoriana
Email address: Drdettorie@derby.eq

2.15 The PICCR Case Manager in charge of this case is Mr. Formula Wan,

PICCR Deputy Counsel with email address of arbitration@PICCR.org /

fwan@PICCR.org, telefax number +63 2 912 2000, and fax number +63 2 524

2171.
III. COST OF THE ARBITRATION

3.1 Pursuant to Article 38(2) of the Rules, the initial deposit for the fees and

expenses of the arbitral tribunal is PhP 1,345,222.80, which shall be shared

equally by the parties. Accordingly, in accordance with Article 40(1) of the Rules,

each party shall deposit with PICCR its share (i.e. PhP 672,611.40 per party) by

14 August 2018.

3.2 The initial deposit for PICCR’s Administrative Fees is PhP 561,720 which

shall be shared equally by each party. Accordingly, in accordance with Article

40(1) of the Rules, each party shall deposit with PICCR its share (i.e. PhP

280,860 per party) by 14 August 2018.

3.3 The amount of any advance on costs fixed by the PICCR pursuant to Article

38 (Advance to over the Costs of the Arbitration) of the Rules may be subject to

readjustment at any time during the arbitration.

IV. ARBITRATION AGREEMENT & LAW GOVERNING THE CONTRACT

4.1 Clause 15 of the FROZEN SEMEN SALES AGREEMENT between the

CLAIMANT and the RESPONDENT, provides as follows:

“Any dispute arising out of this contract, including the existence, validity,

interpretation, performance, breach or termination thereof shall be referred to

 and finally resolved by arbitration administered by the Philippine International

Center for Conflict Resolution (PICCR) under the PICCR Arbitration Rules in

force when the Request for Arbitration is submitted.

The seat of arbitration shall be Vindobona, Danubia.

The number of arbitrators shall be three. The arbitration proceedings shall be

conducted in English.”

4.2 Per Agreement of the Parties provided in Clause 14 of the Sales Agreement

“This Sales Agreement shall be governed by the law of Mediterraneo, including

the United Nations Convention on Contracts for the International Sale of Goods

(1980) (CISG).”

V. APPLICABLE ARBITRATION LAW & ARBITRATION RULES

5.1 The Parties did not expressly indicate in the Agreement the applicable

arbitration law. The Parties only indicated that the Sales Agreement shall be

governed by the law of Mediterraneo and the seat of arbitration shall be

Vindobona, Danubia.

5.2 The PICCR Arbitration rules in force when the Request of Arbitration is

submitted shall be applied as administered by the Philippine International Center

for Conflict Resolution.

 5.3 The arbitration shall likewise be conducted in accordance with the Procedural

Order No. 1 of 5 October 2018 and Procedural Order No. 2 of 2 November 2018,

both issued by the Arbitral Tribunal.

VI. SEAT OF ARBITRATION & PROCEDURAL MATTERS

6.1 Pursuant to Clause 15 of the Agreement executed on 6 May 2017, the seat

of arbitration is Vindobona, Danubia.

6.2 Danubia, the seat of arbitration, has adopted the UNCITRAL Model Law on

International Commercial Arbitration with the 2006 amendments.

6.3 The salient items in the Procedural Order No. 1 issued by the Arbitral

Tribunal on 5 October 2018 as agreed by the parties are as follows:

a. The conduct of the proceedings will be based on the newest version of the

Arbitration Rules of the PICCR which officially enter into force in April

2019;

b. The final decision on costs for a separate cost award is reserved;

c. According to Danubian Contract Law, which contains the alleged “four

corner rule” excluding all extraneous evidence narrowly, there is a high

likelihood that the arbitration agreement would not be interpreted as

authorizing a contract adaptation by the Arbitral Tribunal;

d. In case the Arbitral Tribunal should deny its jurisdiction to adapt the

contract, it should indicate that to the parties so that RESPONDENT would

 reconsider whether or not to maintain its objection to the jurisdiction of the

Arbitral Tribunal;

e. Such a reconsideration would be based on the condition that all costs

incurred for the jurisdiction phase is borne by CLAIMANT; and

f. Both parties should submit pleadings on the merits of the claim, including

the admissibility of the contested evidence.

6.4 In Procedural Order No. 1 of 5 October 2018, the Arbitral Tribunal required

the parties to address the issues on (a) jurisdiction and/or powers of the tribunal

under the arbitration agreement to adapt the contract, including the law

governing the arbitration agreement and its interpretation, (b) submission of

evidence by CLAIMANT from the other arbitration proceedings, and (c)

entitlement of the CLAIMANT to the payment of US$ 1,250,000 or any other

amount resulting from an adaption of the price under clause 12 of the contract or

under the CISG.

6.5 As to the Procedural Timetable, CLAIMANT’s Statement of Claim should be

submitted no later than 6 December 2018 and the RESPONDENT’s Statement of

Defense should be submitted no later than 24 January 2019. All submissions are

to be made in accordance with the PICCR Rules.

6.6 The Oral Hearing was scheduled for 1-3 April 2019 in Vindobona, Danubia.

On the last day of the hearing (i.e. 3 April 2019), the arbitral proceedings shall be

declared closed without need for a further declaration from the Arbitral Tribunal.
 6.7 Pursuant to Article 23 of the Rules, the time limit for the arbitral tribunal to

render an award is 5 April 2019.

6.8 On 2 November 2018, the Arbitral Tribunal issued Procedural Order No. 2

containing clarificatory questions and responses about the proceedings as well

as corrections and clarifications in its Procedural Order No. 1 and submissions of

CLAIMANT and RESPONDENT.

VII. SUMMARY OF THE PROCEEDINGS & EVIDENTIARY HEARINGS

7.1 On 20 September 2018, the Tribunal scheduled a telephone conference for

the Case Management Conference on 4 October 2018 to discuss further the

conduct of the proceedings. Subsequently, the Arbitral Tribunal issued

Procedural Order No. 1 of 5 October 2018.

7.2 On 2 October 2018, CLAIMANT informed the Tribunal with regard the alleged

inconsistencies in RESPONDENT’S Answer to the Request rejecting

“extraneous” evidence where it would be to its detriment but immediately

thereafter relying upon such evidence where it is in its favor in another arbitration

under the PICCR-Rules.

7.3 On 3 October 2018, RESPONDENT objected to the alleged malicious, false

and misleading allegation of contradictory behavior as well as to the announced

submission of materials from the other arbitration in violation of contractual and

statutory confidentiality obligations, pursuant to Article 22(3) of the Rules.

 7.4 As agreed, the Oral Hearing was scheduled for 1-3 April 2019 in Vindobona,

Danubia. On the last day of the hearing (i.e. 3 April 2019), the arbitral

proceedings shall be declared closed without need for a further declaration from

the Arbitral Tribunal.

7.5 CLAIMANT, as attached in the Request for Arbitration, presented the

following documentary evidences:

EXHIBIT DATE BRIEF DESCRIPTION OF THE DOCUMENT

NUMBER

C-1 21 Letter Inquiry re Nijinsky III addressed to Ms. Napravnik from

March Chris Antley sent through email by RESPONDENT to
2017 CLAIMANT

C-2 24 Email Letter Response from Julie Napravnik to Chris Antley

March containing terms & conditions
2017

C-3 28 Email Letter Response from Chris Antley to Julie Napravnik

March containing proposals for Price & Delivery Terms and Applicable
2017 Law & Dispute Resolution

C-4 31 Email Letter Response from Julie Napravnik to Chris Antley re

March costing, risks, jurisdiction and setting of personal meeting or
2017 over the phone

C-5 6 May Frozen Semen Sales Agreement between CLAIMANT and

2017 RESPONDENT

C-6 20 Dec News Article in Peak Business News announcing the

2017 Government of Equatoriana’s imposition of a tariff of 30 per
cent upon all agricultural goods from Mediterraneos

C-7 20 Jan Email Letter of Julie Napravnik to Mr. Shoemaker regarding the
2017 additional tariffs for shipment of 50 doses of semen of Nijinsky
III

C-8 15 June Witness Statement of Julie Napravnik

2018
 7.5 RESPONDENT, as attached in its Answer, presented the following

documentary evidences:

EXHIBIT DATE BRIEF DESCRIPTION OF THE DOCUMENT

NUMBER

R-1 10 April Email Letter of Chris Antley to Julie Napravnik regarding the
2017 first draft for the dispute resolution clause

R-2 11 April Email Letter of Julie Napravnik to Chris Antley regarding the
2017 proposed amendment to the dispute resolution clause

R-3 23 August Witness Statement of Julian Krone

2017

R-4 22 August Witness Statement of Greg Shoemaker

2017

VIII. SUMMARY OF ADMITTED FACTS

8.1 The identities, profiles and circumstances of the parties are admitted.

8.2. From March to April 2017, both parties engaged in negotiations for the

purchase and delivery of 100 doses of frozen semen of Nijinsky III, one of the

most successful racehorses in history.

8.3 On 6 May 2017, the CLAIMANT and RESPONDENT signed an Agreement

that consisted of three shipments of 100 doses of Nijinsky III’s frozen semen for

an agreed rate of USD 100,000 per insemination dose. The agreed and

scheduled shipment dates were complied with, however two months before the

last shipment of 50 doses, the Equatorian government announced a 30 per cent

 tariffs on animal semen from Mediterraneo in retaliation to a 25 per cent tariff

imposed by the President of Mediterraneo.

8.4 Generally, the contents of the Agreement is uncontested by any of the

parties.

8.2 The dispute arose from the negotiations regarding the price adjustment for

the frozen semen as a result of the tariff imposition.

8.3 During the telephone conference last 4 October 2018, the parties likewise

agreed on the following matters:

1. It is undisputed between the parties that Equatoriana, Mediterraneo and

Danubia are Contracting States of the CISG. The general contract law

Equitariana and Mediterraneo is a verbatim adoption of the UNIDROIT

Principles on International Commercial Contracts. Danubia, the seat of

arbitration, has adopted the UNCITRAL Model Law on International

Commercial Arbitration with the 2006 amendments.

2. There is consistent jurisprudence in Mediterraneo that in sales contracts

governed by the CISG, the latter also applies to the conclusion and interpretation

of the arbitration clause contained in such contracts.

8.4 The Arbitral Tribunal will consolidate its findings as to any other relevant facts

necessary to arrive at this Final Award together with its reasoned holdings.
IX. SUMMARY OF PARTY CLAIMS & RELIEFS SOUGHT

9.1 The following summarizes CLAIMANT’s claims and relief sought:

1. CLAIMANT argues that the law governing their arbitration agreement is

the law of Danubia, the seat of arbitration, not the law of Mediterraneo

which is the law governing the contract.

2. CLAIMANT claims to present evidences from other arbitration to prove the

inconsistent statements of RESPONDENT in its view with regard the

interpretation and application of the law of Danubia.

3. CLAIMANT seeks a total of USD $ 1,250,000 resulting from the 30 per cent price

surcharge on the last 50 doses of frozen semen due to the tariff imposition by the

government of Equatoriana. Finally, CLAIMANT claims that RESPONDENT

Black Beauty shall likewise bear the costs of the Arbitration.

9.2 The following summarizes RESPONDENT’s claims and relief sought:

1. RESPONDENT claims that the Arbitral Tribunal lacks jurisdiction

regarding this specific dispute because it asks for the adaptation of the

contract which is not allowed by law. RESPONDENT prays that

 CLAIMANT’S claim be dismissed as inadmissible for lack of jurisdiction

and powers;

2. RESPONDENT strongly objects to the admissibility of evidences and/or

materials from the other arbitration for breach of the confidentiality of arbitration

proceedings.

3. RESPONDENT claims that the increased remuneration has no basis on the

hardship clause nor under the CISG. RESPONDENT prays that CLAIMANT’S

claim for additional remuneration in the amount of USD $ 1,250,000 be rejected.

RESPONDENT prays that CLAIMANT shall pay the costs incurred in this

arbitration.

X. ISSUES PRESENTED BY THE PARTIES

10.1 The Arbitral Tribunal shall address and resolve the following issues in its
Award:

1. Whether the Arbitral Tribunal has jurisdiction and/or power to conduct

arbitration of this specific dispute.

2. Whether the law applicable to the arbitration agreement should be the law of
Mediterraneo or the Law of Danubia.

3. Whether CLAIMANT should be remunerated by RESPONDENT in the amount of

$1,250,000USD based on the hardship clause or under the CISG.

XI. PARTY POSITIONS WITH RESPECT TO EACH ISSUE

11.1 Summary of CLAIMANT’s position on the Issues

1. This Arbitral Tribunal has jurisdiction to hear this matter considering that

the CLAIMANT and RESPONDENT entered into an Agreement containing

an arbitration clause , the validity and performance of the Agreement is

uncontested, hence the Tribunal’s power to settle the dispute in question

is also uncontested. Further, CLAIMANT sustains that the law governing

the arbitration agreement must be the law of Mediterraneo as it is the law

governing the Agreement. When there is no express choice of the law

governing the arbitration agreement and both the law governing the seat

of arbitration and the law governing the contract differ, the latter should

also govern the arbitration agreement. CLAIMANT also argues that when

parties fail to decide the law applicable to an arbitration agreement, it is

the duty of the Tribunal to determine the applicable law. CLAIMANT puts

forward the principle of autonomy to the law governing the seat of

arbitration, the law governing the interpretation of the contract and also the

law governing the arbitration agreement. Under this principle, it is

established that the arbitration agreement is to be treated as an

agreement independent of the other terms of the contract. CLAIMANT

concludes that the law applicable to the substance of the Agreement is the

law of Mediterraneo, while the law applicable to the procedure of the

arbitration is both the law of Danubia and the PICCR Rules.

2. CLAIMANT intends to submit to evidence details of the Partial Award and

relevant submissions from the Other Arbitration to this Arbitration, arguing that

RESPONDENT’s stance in another arbitration is totally contrary to the position

argued by RESPONDENT in this arbitration, with regards to the respective

Tribunal’s authority to adapt the contract as a result of hardship.

3. Following the argument that the Law of Mediterraneo is applicable in the

arbitration agreement, the Danubian “Four Corner Rule” results are non-

applicable to this Tribunal and this Tribunal is not impeded to adapt the price paid

due to the tariff imposition. In concordance with the law of Mediterraneo and

CISG, the Tribunal has the powers to adapt the price, hence CLAIMANT is

entitled to the additional payment.

11.2 Summary of RESPONDENT’s position on the Issues

1. RESPONDENT sustains that the Arbitration Agreement is governed by the

Law of Danubia, and that under the Law of Danubia, the Tribunal does not

have the power to adapt the Sales Agreement. On this basis, the Tribuna;

is respectfully requested to reject CLAIMANT’s submissions in their

entirety.

2. RESPONDENT asserts that the admission of evidence from the Other Arbitration

would contravene and violate contractual, institutional and implied confidentiality

 obligations, and as sourced illegally, it should be deemed inadmissible by this

Tribunal. The allegation of contradictory behavior does not meet the admissibility

criteria of relevance and materiality due to the distinct contractual differences

between the two arbitration. RESPONDENT suggests that it would be prudent

and appropriate for the Tribuna; to refer to the internationally recognized IBA

Rules on the Taking of Evidence in International Arbitration, 2010, when

considering upon the admissibility of the evidence from the Other Arbitration.

3. RESPONDENT argues that CLAIMANT is not entitled to additional payment

under clause 12 of the Sales Agreement because of its narrow interpretation

under Article 8 CISG and even otherwise, the present circumstance does not fall

under hardship category as per substantive law of the Sales Agreement. Further,

CLAIMANT’s submission for the additional payment shall be rejected because

the parties have agreed to the exclusion of application of Article 79 (inclusion of

specific force majeure and hardship clause) of CISG.

XII. FINDINGS OF FACT AND REASONED HOLDINGS

12.1 The Arbitral Tribunal resolves to address and resolve the issues presented

by the parties for its consideration in the order these are provided in the

Procedural Order No. 1 of 5 October 2018.

Issue 1:
Does the tribunal have the jurisdiction / power under the arbitration agreement to

adapt the contract, which includes in particular the question of which law governs

the arbitration agreement and its interpretation.

12.2. In the absence of the law applicable to the arbitration agreement, the

Arbitral Tribunal should apply the law of the seat of the arbitration, hence the Law

of Danubia applies to the Arbitration Agreement. Moreover, while it was not

expressly stated in the Agreement, both parties impliedly agreed that should

there be an arbitration, it shall be governed by the law and jurisdiction of a

neutral country, that of Danubia. This is likewise the intent of the Creditors

Committee of the CLAIMANT. It just so happens that the one negotiating for

CLAIMANT, Ms. Napravnik assumed that the Danubian Arbitration Law is similar

to the Arbitration Law of Mediterraneo.

Issue 2:

Should CLAIMANT be entitled to submit evidence from other arbitration

proceedings on the basis of the assumption that this evidence had been obtained

either through a breach of a confidentiality agreement or through an illegal hack

of RESPONDENT’s Computer system.

12.3 This Tribunal adheres to the confidentiality of any arbitration proceedings,

and any evidence in other arbitration shall not be admissible in the instant

arbitration proceedings. Moreso, if the evidences and materials were obtained

from illegal hacking of RESPONDENT’s Computer System, the more that it is

inadmissible. The computer system of RESPONDENT does not have a stable

firewall to block hackers. Anyhow, the said evidences or arguments from the

other arbitration, since considered inadmissible by this Tribunal for this

arbitration, is not anymore for further discussion or consideration of this Tribunal

in resolving the issues in this arbitration case.

Issue 3:

Is CLAIMANT entitled to the payment of US$1,250,000 or any other amount

resulting from an adaptation of the price (i) under clause 12 of the contract or (ii)

under the CISG.

12.4 The implied agreement was applied in deciding the law governing the

arbitration agreement. The same shall apply in deciding the additional payment

claimed by the CLAIMANT. CLAIMANT delivered the remaining 50 doses of

frozen semen with the assurance of RESPONDENT’s representative to settle the

price adjustment after delivery. RESPONDENT’s representative Mr. Shoemaker

could not later on claim ignorance of the negotiation and that his words are not

the words of the company. Further, Mr. Shoemaker intentionally consulted his

lawyer wife and not the legal department so as not to make the decisions

binding. There is obviously bad faith on the part of the respondent. While

Danubian Law provides that the arbitration agreement shall be interpreted

narrowly, the real and true intent of both parties must be considered. Assuming

that Danubian Arbitration Law requires express authorization from the parties,

time is of the essence in the delivery of the remaining 50 doses of frozen semen,

CLAIMANT communicated the price adjustment and demanded for additional

 payment, and in turn, RESPONDENT’s representative demanded urgent delivery

and settlement of the price adjustment after delivery. Further, it was found out

that the reason for the urgency of delivery is to resell the doses of the frozen

semen to other breeders, which is an express violation of the Sales Agreement

between the parties.

12.5 Further, it is noteworthy that aside from the tariff rate increase affecting the

price of the 50 doses of Ninjinsky III’s frozen semen, there is an issue of resale of

the semen doses as breach of the Agreement to which RESPONDENT blatantly

refused to negotiate, address and resolve. If only RESPONDENT entertained

negotiations or even just a discussion of the price adjustment and breach of

agreement, CLAIMANT would have not filed this arbitration case, hence

CLAIMANT should be reimbursed for the arbitration costs by the

RESPONDENT.

XIII. FINAL AWARD

13.1 Wherefore, the Arbitral Tribunal decides and awards in full and final disposition of

this arbitration, as follows:

1. This Arbitral Tribunal has jurisdiction and power to hear and decide this

arbitration case. The applicable and governing law of the arbitration agreement is

the seat of arbitration, the Law of Danubia.

 2. This Arbitration Tribunal denies the submission of evidences and/or materials

from the other arbitration proceedings for being inadmissible as illegally obtained.

3. The CLAIMANT is entitled to additional payment of US$1,250,000 and to be

reimbursed for the cost of this arbitration.

Date: 5 April 2019

Seat of Arbitration: Vindobona, Danubia

THE ARBITRAL TRIBUNAL

Prof. Calvin de Souza

Presiding Arbitrator

Wantha Davis Dr. Francesca Dettorie

Co-Arbitrator Co-Arbitrator