Answer the following questions. Every question requires you to answer in a certain way which is indicated there.
You answer must be based on Model Law, Arbitration Act, 1974 of Australia as amended, NY Convention, UNCITRAL Rules, ACICA Rules, and relevant IBA Guidelines.
If different laws say differently on a point then you may answer on any one but indicate which law or rules you are using to answer that question.
Give Short Answers (1-3 sentences maximum with reference to the relevant law) to the following Questions
Smart Publication Company against The New Zealand Machine and Tools Company
(Note: Students can answer these questions on behalf of either the Claimant (NMTC) or the Respondent (SPC). But students must answer/argue all three questions on behalf of one side only. Students cannot choose different sides for different issues. Student may also decide the case like an arbitrator but in this case as an arbitrator you need to consider/raise arguments from both sides and then give decision like an arbitrator.
1 May 2015
Re: Purchase of printing machines from NMTC to SPC.
Dear Mr. Booker
After two months of discussion, I am glad that we have finally reached the stage where I am able to send you our contract for the purchase of printing machines. As we have agreed, all these machines will cost you AUD$5 million in total, inclusive of delivery, installation, testing and repairing. SPC will have to pay NMPC AUD$1 million immediately and the remainder of the monies owing will be paid in half yearly installments from now until the end of 2019.
As you have suggested that we use arbitration to resolve any disputes arising out of this contract we are ready to accept that. I should tell you that generally, we agree to arbitrate in Auckland and to use NZ Arbitration Rules. We are also willing to arbitrate in Sydney in accordance with the ACICA Rules. I read that now Australia also has a new Arbitration Centre in Perth so would it be too inconvenient for you to use the Perth Arbitration rules instead?
I wish you all the best for your business.
(by e-mail, 2 May 2015)
I hope you don’t mind if I call you Danny instead of Daan as your name is difficult for me to write and pronounce.
I am very happy that we have finally entered into a business relationship and I do hope it is a long term one. As I told you during our discussion I will contact you again in relation to conducting future business. Don’t worry about payments as I will transfer these into NMTC’s bank account as per our agreed schedule.
I am happy that you agreed to arbitration in Sydney. It is correct that Perth now has an Arbitration Centre. I can understand that you are familiar with Perth Rules but ACICA rules are also satisfactory. You will not be disappointed with the ACICA rules. You should try new things in life!
(By e-mail, 14 February 2017)
You may recall that we discussed SPC buying NMTC’s and BPWM’s one-stop fully automatic printing machine last time but I could not buy it at that time. Now my business is roaring and I want to expand it. In this regard I am writing to you to see if the machine is now available in the market and how much it will cost me. I hope you will give me a discount, as I am your old friend.
I want this new machine to produce at least 30 books per hour. Your old machine is not working as per my expectation. Although your mechanics have repaired it twice, it has started heating up again which is slowing down my production.
Exhibit – 4
(By e-mail, 15 February 2017)
It is so nice to hear from you after a long time.
We have launched our one-stop automatic machine and I am happy to tell you that it is in high demand.
While I cannot be absolutely definitive about this, I am optimistic that this machine will perform up to your expectations.
The machine will certainly cost you more but being my old business partner I will give you a discount. It will cost you AUD$7 million although our usual market price is AUD$8 million. Our price again includes delivery, installation, testing and repairing. You just have to pay NMTC AUD$2 million immediately and the remaining monies in half yearly installments to be fully paid by the end of 2019.
This time I hope you will agree to use the Perth Arbitration rules in Sydney for arbitrating any dispute which may arise out of this contract.
(e-mail, 20 February 2017)
As we spoke on the phone yesterday, I confirm that SPC will buy the new machine and price is agreeable to me.
I can see that you are still interested in using the Perth Arbitration Rules in Sydney should the need for arbitration arise. But I recommend instead that we agree to apply the same rules i.e. ACICA Rules. I have heard the new ACICA rules are equal if not better than the Perth Arbitration rules.
(E-mail, 14 January 2018)
I am writing this letter in great pain and frustration. Your new machine is very slow and it is producing only 15-20 books. After the first repairs were carried out by your mechanic it only produced between 20-25 books for a period of one month after these repairs. Now it is slowing down again. Your old machine has started heating up again therefore I have to shut down the old machine every now and then. I paid so much money for a quality machine but I am sorry to say that both machines are useless. So I am not going to pay any money now, until you fix these machines. But your mechanic informed me that both the old and the new machine cannot be repaired; therefore, I am going to terminate both the contracts and no further monies will be paid to you.
Instructions to Students
Students can answer these questions on behalf of either the Claimant (NMTC) or the Respondent (SPC). But students must answer/argue all questions on behalf of one side only. Students cannot choose different sides for different issues. Students may also decide the case like an arbitrator but in this case as an arbitrator students need to consider/raise arguments from both sides and then give decision like an arbitrator.
Word Limit : 2000 words (maximum) not including cover page, bibliography, footnotes, endnotes.
You may note that for this exercise there is no one answer. Every answer will be considered as a persuasive answer as long it is based on given facts and relevant law. You are required to demonstrate your understanding of law and its application on the given facts to reach your conclusion. These facts are hypothetical and you should take it as established facts.