07

Vietnam International Arbitration Center (VIAC)

MEMORANDUM FOR CLAIMANT

On behalf of Against

MA COMPANY LIMITED MM DUBAI MULTI COMMODITIES CENTRE

(DMCC)

Address: 126 Tran Van Tra Street, Ward 1, Address: 10 Olunbunmi Owa Street Lekki Phase I
Tay Ninh City, Tay Ninh Province, Vietnam Lekki, Eti-Osa, Lagos, Nigeria

CLAIMANT (MA CO., LTD) RESPONDENT (“DMCC”)

 TABLE OF CONTENTS

TABLE OF ABBREVIATIONS v

TABLE OF AUTHORITIES vii

TABLE OF CASES AND ARBITRATIONS x

STATEMENT OF FACTS 1

ARGUMENT 3

FIRST ISSUE: VIAC IS THE ONLY COURT OF ARBITRATION THAT HAS

JURISDICTION TO SETTLE THE DISPUTE 3

I. THE LAW OF VIETNAM IS APPLICABLE AS THE LAW GOVERNING AA 3

A. The law governing AA shall be determined to decide which Arbitration Center has the
jurisdiction to resolve the dispute. 3

B. The law of the seat, which is Vietnamese Law, shall be applied to govern AA 4

1. The doctrine of lex arbitri provides that the law of the seat shall be applied to
govern AA 4

2. Theory of “closest and most real connection” in SulAmérica case provided that
Vietnamese Law is applicable to be the law governing AA 5

II. CLAIMANT HAS THE RIGHT TO CHOOSE AN ARBITRATION CENTER

ACCORDING TO VIETNAMESE LAW 6

SECOND ISSUE: CONTRACT NO. 62654 IS GOVERNED BY CISG RATHER THAN

BY NIGERIA LAW 7

I. NO INTENTION TO EXCLUDE CISG WAS EXPRESSED BY PARTIES 7

A. There is no explicit exclusion of Parties from the application of CISG 7

B. No implication to opt out of the application of CISG was expressed by the Parties 8

1. Parties’ choice of rules shall not be interpreted as an indication of excluding CISG 8

a. Parties’ application ICC Rules does not pose any contradiction against the
application of CISG 8

2
 b. Agreement to conduct the purchase on Incoterms 2010 basis is not an implicit
exclusion of CISG 9

2. Even if there is any implication regarding the applicable law from the Parties, such
implication could be proven as not excluding the application of CISG 9

II. CISG SHALL BE APPLIED TO GOVERN THE CONTRACT AS VIETNAMESE

PRIVATE INTERNATIONAL LAW REFERS TO VIETNAMESE LAW AS A
CONTRACTING STATE 10

THIRD ISSUE: THE INSPECTION REPORT IS LEGALLY BINDING, THUS

DISCHARGING THE PAYMENT OBLIGATION OF CLAIMANT IN RESPECT OF
SHIPMENT 62654B 12

I. THE IR IS STILL BINDING TO BOTH PARTIES 12

A. Art 8.1 Contract expressed Parties’ acceptance towards the IR 12

B. RESPONDENT’s absence on Inspection Day shall not affect the binding characteristic
of the IR 12

1. RESPONDENT committed a serious violation against the principle of good faith by

their unresponsive manner 12

2. RESPONDENT’s absence on Inspection Date is an act of declining their obligation 14

II. A BINDING IR DISCHARGES THE CLAIMANT‘S PAYMENT OBLIGATIONS

FOR THE SHIPMENT 62654B 15

A. RESPONDENT’s delivery of non-conforming goods constitutes a non-performance

under Art. 7.1.1 PICC 15

1. A binding IR’s final result indicates the non-conformity of shipment 62654B 15

2. RESPONDENT’s failure to deliver conforming goods required by the Contract

constitutes a non-performance pursuant to Art. 7.1.1 PICC 15

B. CLAIMANT has the right to withhold its performance of payment obligations for
shipment 62654B 16

1. CLAIMANT is entitled to withhold its payment obligations regarding shipment

62654B due to RESPONDENT’s non-performance 16

3
 2. Vietnamese Law allows CLAIMANT to reject RESPONDENT’s delivery of non-
conforming goods 17

PRAYER FOR RELIEF 18

4
 TABLE OF ABBREVIATIONS
Abbreviation Explanation

¶ paragraph
¶¶ paragraphs
& and
AA Arbitration Agreement
Answer Answer to Request for Arbitration
Art. Article
CISG UN Convention on Contracts for the International Sale of Goods
CLOUT Case Law on UNCITRAL Texts
Co Company
ICC International Chambers of Commerce
ICC Court International Court of Arbitration of the International Chambers of
Commerce
IR Inspection Report
Ltd Limited
Mr. Mister
No. Number
p. page
pp. pages
PICC UNIDROIT Principles of International Commercial Contracts (2016)
PO1 Procedural Order No. 1
PO2 Procedural Order No. 2
Request Request for Arbitration
supra. See above
UN United Nations
UNCITRAL United Nations Commission on International Trade Law
UNIDROIT International Institute for the Unification of Private Law
v. versus (Latin); against
VIAC Vietnam International Arbitration Center

5
6
 TABLE OF AUTHORITIES

TREATIES, CONVENTIONS, STATUTES AND RULES

CITED AS CITATION PARAGRAPH(

S)
CISG UN Convention on Contracts for the International Sale ¶¶ 17-26, 28-37,
of Goods, opened for signature 11 April 1980, 1489 53, 55, 58, 69
UNTS 58 (entered into force 1 January 1988)

Incoterms International Chamber of Commerce, Incoterms 2010; ¶¶ 23, 25, 26

2010 International Rules for the Interpretation of Trade
Terms (published on January 1, 2011)

PICC UNIDROIT, Governing Council, Principles of ¶¶ 42, 46, 53, 54,

International Commercial Contracts, 95th sess, 18-20 58, 59, 61-63
May 2016

ICC Rules International Chamber of Commerce, Arbitration Rules ¶¶ 3, 9, 10, 23,

2017 (entered into force March 1, 2017) 24, 26

New York United Nations Convention on the Recognition and ¶ 10

Convention Enforcement of Foreign Arbitral Awards (New York,
10 June 1958)

7
ARTICLES & COMMENTARIES

CITED AS CITATION PARAGRAPH(

S)
Born Born G, ¶7
International commercial arbitration
(Second Edition, Kluwer Law International BV 2014)

CISG Digest UNCITRAL Digest of Case Law on the United Nations ¶¶ 18, 19, 23,
Convention on Contracts for the International Sale of 25, 28
Goods, 2016 edition

Charles, Luke Charles T. Kotuby Jr, Luke A. Sobota ¶ 47

General Principles of Law and International Due
Process
Oxford University Press, 2017
Croff Carlo Croff ¶ 27
The Applicable Law in an International Commercial
Arbitration: Is It Still a
Conflict of Laws Problem?
16 INT'L L. 613, 1982

CISG-AC CISG Advisory Council ¶ 20, 23

Opinion No. Opinion No. 16 Exclusion of the CISG under Article 6
16 (CISG Advisory Council 2013)

PICC Digest UNIDROIT International Institute for the Unification of ¶ 59

Private Law, UNIDROIT Principles of International
Commercial Contract, 2016

Redfern&Hun Nigel Blackaby, Constantine Partasides QC, Redfern ¶¶ 3, 4, 8

ter and Hunter on International Arbitration, 6th edition,

8
 Oxford University Press, 2015

Reymond Claude Reymond, ¶7

“Where is an Arbitral Award Made?” (1992) 108 LQR
1

9
 TABLE OF CASES AND ARBITRATIONS

CITED AS CITATION PARAGRAPH(S)

ICC Award No party names available ¶4
6719/1994 Partial Award of ICC Case No. 6719
1994

ICC Award No party names available ¶ 66

16816/2011 ICC International Court of Arbitration
2011

ICC Award No party names available ¶9

7154/1994 ICC Arbitral Award 1991-1995, p.555
1994

ICC Award No party names available ¶ 30

6653/1993 ICC Court of Arbitration – Paris
1993

ICC Award No party names available ¶ 30

9978/1999 ICC Court of Arbitration
1999

CLOUT case Ostroznik Savo (Vzerja Kuncev) e Eurotrafic s.r.l. vs. ¶ 21

651 La Faraona soc. coop. a r. l.
Tribunale di Padova
2005

CLOUT case No party names available ¶ 36

380 Tribunale di Pavia
2000

10
CLOUT case BP Oil International, Ltd. and BP Exploration & Oil, ¶ 28
575 Inc. v. Empresa Estatal Petroleos de Ecuador et al
Court of Appeals of the U.S.
2003

CLOUT case L.M. v. Grażyna S. ¶ 28

1307 Supreme Court of Poland
2008

CLOUT case Spoldzielnia Pracy “A” v. GmbH & Co. KG ¶ 64

1080 Supreme Court of Poland
2007

Colombia case No party names available ¶ 59

Centro de Arbitraje y Conciliación Mercantil de la
Cámara de Comercio de Bogotá
2019

SulAmérica Sulamerica Cia Nacional de Seguros SA and others ¶ 11

case v. Enesa Engenharia SA
English Court of Appeal
[2012] EWCA Civ 638

Case No. No party names available ¶ 65

576/2010 High Court of Cassation and Justice in Romania
2010

Case No. No party names available ¶ 33

11
97/2002 International Arbitration Court of the Chamber of
Commerce and Industry of the Russian Federation
2002

Case No. No party names available ¶ 30

406/1998 Tribunal of International Commercial Arbitration at
the Russian Federation Chamber of Commerce
2000

Case No. Tehran Parand Co v. S.A.P.I. S.p.a ¶ 30

177/14 Tribunale di Modena
2014

Case No. Interland Chemie BV v. Tessenderlo Chemi BV ¶ 30

160136 Rechtbank Breda
160136 / HA ZA 06-826
2008

Ecotune v. Case Ecotune Private Ltd. v. Cencosud S.A. ¶ 31

Cencosud Cámara Nacional de Apelaciones en lo Comercial de
Case Buenos Aires
2010

12
 STATEMENT OF FACTS

CLAIMANT, MA Co.,Ltd, a corporation registered under the laws of Vietnam. RESPONDENT,

MM Dubai Multi Commodities Center (DMCC), a company registered under the laws of the
United Arab Emirates (UAE).

January 18, 2017 CLAIMANT and RESPONDENT (“Parties”) entered into Contract
No. 62654 (“Contract”) for the sale of cashew nuts, divided into four
shipments: 62654A, 62654B, 62654C, and 62654D.

January 23-25, 2017 CLAIMANT paid USD 200,000 in advance, which accounts for 10%
of the Contract value.

March 05, 2018 CLAIMANT fulfilled its payment obligation regarding the 03
shipments 62654A, 62654C and 62654D arrived at Cat Lai Port, Ho
Chi Minh City, Vietnam (“destination port”) on February 27, 2018.

March 08, 2018 CLAIMANT paid USD 320,000 in advance by good faith, which
equals 66,67% of shipment 62654B’s total value.

March 18, 2018 Shipment 62654B arrived at the destination port.

March 21, 2018 CLAIMANT urgently requested RESPONDENT to send a

representative to attend an appraisal session conducted by V
Inspection Company yet no response was received from
RESPONDENT.

March 30 - April 02, V Inspection Company conducted an inspection according to a

2018 mutual agreement of parties in Contract.
Subsequently, CLAIMANT sent a report on poor quality of shipment
62654B issued by V Inspection Company to RESPONDENT,
notifying its refusal to take delivery and postponing its payment
obligation.

January 07, 2019 CLAIMANT’s lawyer, X & Lawyers Co., Ltd (“X Law”) requested

1
 RESPONDENT to return payment of the sum by January 22, 2019,
any failure of which would lead to arbitration before VIAC.

February 12, 2019 X Law informed RESPONDENT that CLAIMANT would be

commencing arbitration proceedings in respect of Contract before
VIAC.

March 25, 2019 CLAIMANT submitted a request for arbitration to VIAC and
nominated Mr. N as one of the arbitrators.

2
 ARGUMENT

FIRST ISSUE: VIAC IS THE ONLY COURT OF ARBITRATION THAT HAS

JURISDICTION TO SETTLE THE DISPUTE

1. The dispute arises over the jurisdiction of the Arbitral Tribunal, while the resolution to
which shall only be determined according to the law governing AA. By applying the
doctrine of lex arbitri and the theory of “closest and most real connection”, Vietnamese
Law is valid to govern the AA (I). And pursuant to Vietnamese Law, especially
Vietnamese Law on Commercial Arbitration 2010, if no mutual agreement could be
reached among Parties regarding the specific arbitration institution, the choice of which
shall be at the plaintiff’s request (II).
I. THE LAW OF VIETNAM IS APPLICABLE AS THE LAW GOVERNING AA
2. In order to resolve the dispute over the Arbitral Tribunal’s jurisdiction the law governing
AA shall be determined (A), which shall be the law of the seat when taking into account
the lex arbitri and the theory of “closest and most real connection” (B).
A. The law governing AA shall be determined to decide which Arbitration Center has
the jurisdiction to resolve the dispute
3. Jurisdiction of Arbitral Tribunal shall arise from the will of the parties involved and the
law governing AA1, yet in this case when there is a dispute over jurisdiction from
different wills of the Parties; it is essential to take into account the law governing AA to
settle such dispute. However, there is no specific choice of law stipulated by Contract to
govern AA, as the Parties merely expressed the choice of ICC Rules as procedural rules
[Exhibit C-01, p.25]. Furthermore, during the telephone conference on October 9, 2022,
Parties only reached a mutual agreement to “conduct the proceedings on the basis of ICC
Rules” [PO1, p.41] without any further detail relating to the law governing AA.
4. Despite the expression of procedural rules, it is still crucial to choose the law governing
AA since procedural rules only determine the “detailed rules of procedure, such as the
time for exchange of witness statement or the submission of pre-hearing briefs” 2 while the
law governing AA governs the AA’s validity, effect and interpretation and confers

1
Redfern& Hunter, ¶5.02, p.312.
2
Redfern& Hunter, ¶3.48, p.175.

3
 specific powers, including establishing the arbitral procedure, upon the Arbitral Tribunal. 3
The Tribunal often looks first for the law applicable to the arbitration clause as the
prerequisite to proceed with arbitration is the validity of an arbitration clause, which
indicates the Parties’ intention to resolve a dispute by arbitration. 4
5. Thus in this case, decision upon the choice of law governing AA is important to govern
the commencement of the arbitration and the arbitral tribunal’s jurisdiction.
B. The law of the seat, which is Vietnamese Law, shall be applied to govern AA
6. The law governing AA shall be determined as the law of the seat based on lex arbitri
(B.1) and the theory of “closest and most real connection” (B.2).
7. It is undisputed that the seat of arbitration is not merely a matter of geography. It is the
territorial link between the arbitration itself and the law of the place where it is legally
situated. The place of arbitration means that the arbitration is conducted within the
framework of the law of arbitration.5 The concept that arbitration is governed by the law
of where it takes place is well-established in both the theory and practice of international
arbitration.6
1. The doctrine of lex arbitri provides that the law of the seat shall be applied to
govern AA
8. The lex arbitri is the set of laws which each state lays down to govern the conduct of
arbitration within its territory.7 And if this law contains provisions that are mandatory as
far as arbitrations are concerned, those provisions must be obeyed, 8 which could be
interpreted that the law governing AA, with its power to establish the arbitration
procedure, should be in accordance with the lex arbitri to ensure the arbitration exercise.
9. In the ICC Award 7154/1994, the Tribunal held that the law of the seat of arbitration was
deemed to govern issues for which the Parties had failed to express their choice and which
were not dealt with in the ICC Rules. Consequently, in the absence of an express choice,
the arbitration clause was governed by the law of the seat.
10. Per contra, there is a strong line of authority for the application of the law of the seat of
arbitration, which complies with the New York Convention’s provision. As the Tribunal
3
Redfern& Hunter, ¶5.14, p.315.
4
ICC Award 6719/1994.
5
Reymond, at 3.
6
Born, pp 1530-1531.
7
Redfern& Hunter, ¶3.43, p.172.
8
Redfern& Hunter, ¶3.64, p.179.

4
 shall make every effort to conduct the arbitration, 9 Tribunal must take into account the
fact that any awards it renders may be set aside by the national courts where the award is
made according to Art. 5.1.a New York Convention. Therefore, the validity of AA has to
be determined under the law of Vietnam, where the award is made.
2. Theory of “closest and most real connection” in SulAmérica case provided
that Vietnamese Law is applicable to be the law governing AA
11. To determine the law applicable to govern AA in the absence of an explicit or implicit
choice of law among the Parties involved, the theory of “closest and most real
connection” was established as a general rule for international arbitration, adopted by the
three-stage inquiry of the UK Court of Appeal’s 2012 SulAmérica case decision: (i)
express or (ii) implied choice of law and if none (iii) closest and most real connection. In
this case, since the absence of any explicit or implicit expression regarding the law
governing AA, the first two stages of the inquiry are not applicable; hence, the law
governing AA shall be determined by the closet-connection test.
12. The closest-connection test could lead to the application of Vietnamese Law in this case
to determine the law governing AA by virtue of these four indicators
(i) Vietnam was deliberately chosen as the seat of the arbitration by clearly stating
that “Any dispute [...] shall be resolved by Arbitration in Vietnam” [Exhibit C-01,
p.25] in Contract .
(ii) Cat Lai Port in Ho Chi Minh City of Vietnam is the destination port for the
shipments within Contract [Exhibit C-01, p.23].
(iii) V Inspection Company, which was authorized to conduct Quality Inspection
for the shipments [Exhibit C-01, p.24], is registered under the laws of Vietnam
[Request ¶28].
(iv) X Joint Stock Bank, which was agreed to proceed all transactions between the
Parties [Request ¶28], is a Vietnamese bank.
Accordingly, Vietnamese Law is valid to be the law governing AA by virtue of the closet-
connection test.
13. In conclusion, the Tribunal should find that Vietnamese Law, specifically to this case -
Vietnam Commercial Arbitration Law 2010 shall be applied to govern the AA and ensure
the possibility of recognition and enforcement of the final award.
9
Art. 22 ICC Rules 2017.

5
II. CLAIMANT HAS THE RIGHT TO CHOOSE AN ARBITRATION CENTER
ACCORDING TO VIETNAMESE LAW
14. As stated above, the law governing AA is Vietnam Commercial Arbitration Law 2010.
Art. 43.5 of this law decides whether AA is defective or incapable of being performed and
the jurisdiction of the arbitral tribunal.
15. Specifically, this Art. provides that when an AA fails to identify a specific arbitration
institution and the Parties cannot reach such an agreement, consequently, the form of
arbitration institution to settle the dispute shall be selected at the CLAIMANT’s request.
Unless the Parties do not adhere to Art. 43.5, the AA might be considered null and void
according to Vietnam Commercial Arbitration Law 2010.
16. In this case, the Parties have neither appointed any arbitration institution [Exhibit C-01,
Art. 9] nor negotiated to choose a particular arbitration center [Answer ¶18]. Therefore,
pursuant to Art. 43.5, VIAC has jurisdiction over this dispute according to CLAIMANT’s
request for arbitration.

6
 SECOND ISSUE: CONTRACT NO. 62654 IS GOVERNED BY CISG RATHER THAN
BY NIGERIA LAW

17. The Tribunal should find that the Contract No. 62654 is governed by CISG because of
two reasons. First, the application of CISG has not been excluded by Parties’s intention
(I). Second, CISG shall be applied as the substantive law governing the Contract
according to Art. 1(1)(b) (II).
I. NO INTENTION TO EXCLUDE CISG WAS EXPRESSED BY PARTIES
18. It is true that under Art. 6 CISG, parties are permitted to exclude the application of CISG
in accordance with the principle of party autonomy, 10 and such intention could either be
explicit or implicit. However, in this case, Parties showed neither express exclusion (A)
nor implied exclusion from the application of CISG (B).
A. There is no explicit exclusion of Parties from the application of CISG
19. Even though excluding CISG is allowed for parties, such intention should be clearly
expressed by parties,11 particularly by the incorporation of standard contract terms
containing a clause expressly excluding CISG. 12 However, in this case, no clause that
explicitly excludes the application of CISG is incorporated in the Contract as well as in
the Parties’ other agreements.
20. Additionally, CISG-AC Opinion No. 16 states that a clear intent should also be inferred
from “the choice of the law of a non-Contracting State” or “the choice of an expressly
specified domestic statute […] that would otherwise be displaced by the CISG’s
application” agreed by the parties. 13 Even though neither UAE, RESPONDENT’s
location, nor Nigeria, RESPONDENT’s representative office [Exhibit C-01, p.23] is
Contracting State, the Parties did not express their agreement towards the choice of UAE
law or Nigeria law throughout their entire negotiation process.
21. According to CLOUT Case 651, when there was no express exclusion towards the
application of CISG, the Arbitral Tribunal could conclude that CISG is applicable to
govern the substantive dispute of the contract among parties and the Tribunal’s opinion

10
CISG Digest, ¶3, p.33.
11
CISG Digest, ¶2, p.33.
12
CISG Digest, ¶7, p.33.
13
CISG-AC Opinion No. 16, ¶2.

7
 could be based on CISG. Therefore, in this case, when Parties did not explicitly exclude
CISG with clear indicators, Contract No. 62654 could be governed by CISG.
B. No implication to opt out of the application of CISG was expressed by the Parties
22. Parties have reached certain agreement regarding their choice of rules; however, there is
no indication against applying CISG (B.1) and even if there is any implication related to
Parties’ choice of substantive law, CISG is still not excluded (B.2).
1. Parties’ choice of rules shall not be interpreted as an indication of excluding
CISG
23. The possibility of an implicit exclusion of CISG is admitted, as long as the Parties’ intent
to exclude its application is clear and real. 14 It is also stated in CISG-AC Opinion No. 16
that there is an intention towards non-exclusion where the facts do not support an
inference of clear intent to exclude, thus parties have to make their choice plain enough to
constitute an exclusion.15 However, besides the incorporation of sets of rules in the
Contract, particularly (a) ICC Rules and (b) Incoterms 2010 application, there is no other
indication of the Parties’ wills regarding the applicable law to the Contract.
a. Parties’ application ICC Rules does not pose any contradiction against the
application of CISG
24. It is undisputed that Parties have reached a mutual agreement of applying ICC Rules as
procedural rules to the dispute;16 however, ICC Rules as procedural rules only govern the
proceedings of the arbitration while applicable law shall govern the substantive matters of
the issues; thus these two systems of rules regulate two different matters regarding the
dispute. Particularly it is also stated in Art. 21 ICC Rules 2017 that the parties shall be
free to agree upon the applicable rules of law to the merits of the dispute, which poses no
restrictions upon any substantive law, as long as agreed by the parties, thus rendering no
contradiction between the incorporation of ICC Rules as procedural rules and the
application of CISG.
b. Agreement to conduct the purchase on Incoterms 2010 basis is not an implicit
exclusion of CISG
25. Furthermore, the Parties also agreed to conduct the purchase on the basis of CFR as per
Incoterms 2010 [Exhibit C-01, Art. 3], which governs the substantive matter of issues by
defining the responsibilities of Parties during the export transaction as “Seller delivers
14
CISG Digest, ¶9, p.34.
15
CISG-AC Opinion No. 16, ¶3.7.
16
supra ¶3.

8
 goods and risk passes to buyer when on board the vessel”. However, the incorporation of
Incoterms 2010 shall not amount itself to an implicit exclusion of CISG from Parties.17
26. Therefore, there is no sign of implicit exclusion from Parties towards the application of
CISG as law governing Contract, even when taking into account the possible indicators of
which: the agreement of applying ICC Rules and Incoterms 2010.
2. Even if there is any implication regarding the applicable law from the Parties,
such implication could be proven as not excluding the application of CISG
27. Choosing the seat of arbitration in Vietnam could be interpreted as the Parties’ implicit
intention to choose Vietnamese Law to govern the Contract. Since the Parties made no
express choice of law, but agreed that disputes shall be litigated in Vietnam [Request
¶28], it could be impliedly inferred that Parties intended the law of Vietnam to apply to
the substance of the dispute. Such inference could be drawn from the fact that there is a
necessary link between arbitration and the law of its seat by virtue of this theory’s
advantage of the uniformity and predictability in the results, according to Sauser-Hall - a
rapporteur of the Institute of International Law.18
28. However, Vietnam is a Contracting State of CISG, which indicates no sign of excluding
the application of CISG19 as only the Parties’ choice of Non-Contracting State’s law as
applicable law shall be recognised as an implied exclusion of CISG.20
29. In conclusion, neither explicit nor implicit exclusion of the application of CISG was
expressed from the wills of the Parties; therefore, Contract No. 62654 shall be governed
by CISG.
II. CISG SHALL BE APPLIED TO GOVERN THE CONTRACT AS VIETNAMESE
PRIVATE INTERNATIONAL LAW REFERS TO VIETNAMESE LAW AS A
CONTRACTING STATE
30. Since the Parties have not stultified the application of CISG, the Tribunal should find that
CISG is applicable pursuant to Art. 1(1)(b). This approach to define the substantive law
has been widely applied in international commercial arbitration practices. 21
31. One example is Ecotune vs. Cencosud case, in which the Court decided that CISG was
applicable even though India is not a Contracting State. Particularly, the Court at first

17
CISG Digest, ¶16, p.34.
18
Croff, p.625.
19
CLOUT case 575, CLOUT case 1307.
20
CISG Digest, ¶10, p.34.
21
ICC Award 6653/1993; ICC Award Case 9978/1999; Case No. 177/14; Case No. 406/1998; Case No. 160136.

9
 referred to Argentine private international law as the law of the place where delivery had
to take place, seeing that these rules of conflict led to the application of the law of
Argentina. Since Argentina is a Contracting State, CISG was applicable.
32. Specifically, Vietnamese private international rules are regulated by Art. 664.1 Vietnam
Civil Code: “The international agreements to which the Socialist Republic of Vietnam is a
signatory or Vietnamese Law shall apply to civil relations involving foreign elements”.
As a result, CISG is applicable in this case as the international sales law of Vietnam, and
the Tribunal should retain the applicability of the CISG pursuant to Art. 1(1)(b).
33. Another recommended precedent is Case No. 97/2002, the Tribunal referred to the
relevant conflict of rules of Russian law as the law of the forum, concluding that CISG
was applicable as part of the law where a Russian company had its place of business.
34. Therefore, as the cases stated above, the Tribunal should recognise that the applicability
of CISG depends on the rules of private international law of the forum and the place
where delivery had to take place which is Vietnam, despite the fact the countries where
RESPONDENT places its offices are not Contracting States.
35. Specifically, Vietnamese private international rules are regulated by Art. 664.1 of
Vietnam Civil Code: “The international agreements to which the Socialist Republic of
Vietnam is a signatory or Vietnamese Law shall apply to civil relations involving foreign
elements”. As a result, CISG is applicable in this case as the international sales law of
Vietnam, which is a Contracting State.
36. This approach has also been applied by CLOUT Case 380 between the Italian supplier
and the Greek company. The Tribunal concluded that CISG governed the substantive
issues as the Italian rules of conflict of laws led to the application of Italian law, and Italy
was a Contracting State according to Art. 1(1)(b) CISG.
37. In conclusion, as the Contract was silent on the substantive law and Parties have not
stultified the application of CISG, CISG shall be applied to govern the Contract according
to Art. 1(1)(b) CISG since the Vietnamese rules of conflict of laws lead to the application
of Vietnamese Law, and Vietnam is a Contracting State, even though neither Dubai nor
UAE is not a Contracting State to CISG.

10
 THIRD ISSUE: THE INSPECTION REPORT IS LEGALLY BINDING, THUS
DISCHARGING THE PAYMENT OBLIGATION OF CLAIMANT IN RESPECT OF
SHIPMENT 62654B

38. The Tribunal should uphold the legal validity of the IR released by V Inspection
Company (I); hence, CLAIMANT is entitled to the right to withhold performance on
account of RESPONDENT’s non-performance (II).
I. THE IR IS STILL BINDING TO BOTH PARTIES
39. The dispute over the legal validity of the IR arises from the absence of RESPONDENT’s
legal representative on Inspection Date. However, Parties’ indication to accept the IR was
indicated in Art. 8.1 Contract (A) and RESPONDENT’s failure to attend the Inspection
shall not render the IR non-binding on Parties (B).
A. Art 8.1 Contract expressed Parties’ acceptance towards the IR
40. Pursuant to Art. 8.1 Contract, “Third-party documents are acceptable”, which expresses
Parties’ consent to be bound by any third-party documents. And in this case, the IR is
undisputedly a third-party document and consequently binding on both Parties.
41. Furthermore, V Inspection Company has never entered into a Contract with either
CLAIMANT or RESPONDENT previously [PO2 ¶2] and this Company was authorized
by Parties to conduct both Final Quality and Weight and Re-inspection, which poses no
risk of uncertainty for Parties to accept the documents from V Inspection Company. Thus,
the IR is still legally binding on both Parties because of Parties’ consent to be bound.
B. RESPONDENT’s absence on Inspection Day shall not affect the binding
characteristic of the IR
42. The IR is still legally binding since RESPONDENT’s absence was based on their
violation of ‘good faith’ principle in international trade 22 (B.1) and this absence was also
their failure to perform their duty towards the conduct of Inspection (B.2).
1. RESPONDENT committed a serious violation against the principle of good
faith by their unresponsive manner
43. The vessel’s arrival date was March 18, 2018. On March 21, 2018, CLAIMANT urgently
announced the Inspection Date, which was March 30, 2018, to RESPONDENT via email
[Exhibit C-03], and CLAIMANT even tried to reach RESPONDENT through phone calls
when receiving no response or confirmation from RESPONDENT [Request ¶14, p.7].
22
Art. 1.4 PICC.

11
 However, despite CLAIMANT’s efforts to inform RESPONDENT of Inspection Date and
offer of an alternative date for RESPONDENT [Exhibit C-03], no response or
explanation of the absence of RESPONDENT’s legal representative on Inspection Day
was ever received.
44. It is undisputed that RESPONDENT was informed of the Inspection Date yet deliberately
neglected CLAIMANT’s announcement as well as CLAIMANT’s offer of an alternative
date since RESPONDENT admitted having received the letter from CLAIMANT on
March 21, 2018 [Answer ¶4, p.16]. However, only after the Inspection of Shipment
62654B on March 30, 2018, and after receiving the letter of IR from CLAIMANT did
RESPONDENT response to reject the results of the Report and ask CLAIMANT to take
the delivery [Answer ¶6, p.17].
45. It is stated in the Contract that if CLAIMANT fails to present the quality certificate within
15 working days after the vessel’s arrival date, RESPONDENT will consider that
CLAIMANT has accepted the shipped quality [Exhibit C-01, Art. 1.4, p.24]. And only
after exactly 15 days CLAIMANT succeeded in presenting the quality certificate under
the inspection of V Inspection Company, thus ensuring their rights to respond whether
they accept the shipped quality. However, due to RESPONDENT’s deliberate
unresponsiveness, the Inspection might be conducted later, rendering CLAIMANT unable
to exercise their rights to decide their acceptance towards the shipped quality.
46. Thus, the fulfillment of the condition “Final Quality and Weight is to be assessed […] at
the latest fifteen (15) working days starting from the vessel arrival date” [Exhibit C-01,
Art. 1.4] is prevented by RESPONDENT, which is contrary to the duty of good faith and
fair dealing. Pursuant to Art. 5.3.3(2) PICC, RESPONDENT may not rely on the non-
fulfillment of the condition, thus, in this case, the absence of RESPONDENT’s legal
representative falls upon RESPONDENT’s responsibility to act in good faith rather than
CLAIMANT’s responsibility.
47. Therefore, RESPONDENT failed to communicate faithfully with CLAIMANT to address
concerns arising from the shipment quality, which could further negatively affect
CLAIMANT’s rights and benefits and consequently poses a serious violation of “bona

12
 fide” – the principle of good faith in international arbitration by underperforming their
duty to act with fairness, reasonableness, and decency.23
2. RESPONDENT’s absence on Inspection Date is an act of declining their
obligation
48. According to the Art. 1.4 Contract, the Final Weight and Quality inspection should be
conducted by V Inspection Company, together with the attendance of Parties’ legal
representatives and the Contract, which could be interpreted as their attendance on the
Inspection Day is both their right and their obligation. While CLAIMANT successfully
performed their obligation of attending the Inspection and faithfully and urgently
announcing RESPONDENT, such duty was underperformed by RESPONDENT.
49. Particularly, Art. 8.3 Contract stipulated the condition of Force Majeure - when
RESPONDENT shall not be liable for delay or non-performance in whole or in part of his
contractual obligation - which are external and inevitable causes [Exhibit C-01, ¶8.3].
However, the reason stated by RESPONDENT of their unresponsiveness, and
consequently their absence in Inspection Day, was due to their internal problems [Answer
¶4, p17] and with no further detail or explanation, which was inadequate to be
categorized as any condition of Force Majeure stipulated in the Contract.
50. Additionally, the condition of Force Majeure is also stipulated in Art. 7.1.7.(1), which
allows RESPONDENT’s delay in responding to CLAIMANT’s request if
RESPONDENT provides adequate evidence as to why responding to CLAIMANT was
beyond their control, as having stated in their Answer [Answer ¶4, p17]. However, even
after the conduct of the Inspection, no further explanation of RESPONDENT’s inability
to attend the Inspection Day was provided. Therefore, there is no valid excuse for
RESPONDENT’s absence on Inspection Day.
51. Furthermore, there is no provision in the Contract indicating that the IR is invalid or not
legally binding on both Parties under the circumstances of Parties’ absence. Thus, in this
case, RESPONDENT’s failure to perform their obligation of attending the conduct of
Inspection would not render the IR non-binding on Parties.
52. Therefore, since RESPONDENT’s absence in the Inspection conducted by V Inspection
Company falls upon RESPONDENT’s responsibility and Parties have expressed their

23
Charles, Luke, p.88.

13
 acceptance towards the IR on April 2, 2018, the IR still has its legal validity and is
consequently still binding to both Parties.
II. A BINDING IR DISCHARGES THE CLAIMANT‘S PAYMENT OBLIGATIONS
FOR THE SHIPMENT 62654B
53. The Tribunal should find that an IR is binding and RESPONDENT has breached its
contractual obligations to CLAIMANT by delivering cashew nuts that do not conform to
the specifications agreed upon by the parties in the Contract and CISG’s provision by Art.
35 CISG, constituting non-performance in accordance with Art. 7.1.1 PICC (A).
Moreover, CLAIMANT is entitled the right to withhold its payment performance in
respect of shipment 62654B (B).
A. RESPONDENT’s delivery of non-conforming goods constitutes a non-performance
under Art. 7.1.1 PICC
54. The Tribunal should find that a binding IR justifies the non-conformity of shipment
62654B (A.1), which constitutes non-performance in accordance with Art. 7.1.1 PICC
(A.2).
1. A binding IR’s final result indicates the non-conformity of shipment 62654B
55. Pursuant to Art. 35(1) CISG, RESPONDENT must deliver goods that are of the
“quantity, quality, and description” required by the Parties’ contract.
56. However, according to the IR, shipment 62654B does not meet the requirement of
quantity of 160 metric tons as only 132.065 metric tons were delivered. Additionally, the
goods were packed in different packaging and labelling required by Art 2. Contract.
Moreover, the quality of more than a half of goods delivered deteriorated for 20 days.
57. Thus, it is apparent that the shipment 62654B lacks conformity because it does not
comply with the contractual specifications stated in Art. 1.2, Art. 1.3, Art 2 Contract, and
Art. 35 CISG.
2. RESPONDENT’s failure to deliver conforming goods required by the
Contract constitutes a non-performance pursuant to Art. 7.1.1 PICC
58. RESPONDENT’s failure to perform Art. 35(1) CISG and fulfill its obligations under the
Contract has constituted a non-performance in respect of Art. 7.1.1 PICC.
59. Art. 7.1.1 PICC defines “non-performance” as a failure by a party to perform any of its
obligations under the Contract, including defective or late performance. The first is that
“non-performance” is defined so as to include all forms of defective performance as well
as a complete failure to perform. The second feature is that for the purposes of the

14
 Principles the concept of “non-performance” includes both non-excused and excused non-
performance.24
60. The Tribunal should go through the contractual obligations of the Parties and the IR to
find that, despite the original agreement provided that RESPONDENT must deliver
cashew nuts in conformity with Art. 1 and Art 2. in the Contract, a different practice has
been established between the parties, according to which RESPONDENT had delivered
the defective goods.
61. Therefore, the Tribunal should find the defective performance of RESPONDENT
regarding shipment 62654B as non-performance, which is a solid foundation for
CLAIMANT to not pay shipment 62654B according to Art. 7.1.3 PICC.
B. CLAIMANT has the right to withhold its performance of payment obligations for
shipment 62654B
62. Pursuant to Art. 7.1.3 PICC, the Tribunal should approve that CLAIMANT is
undoubtedly given the right to withhold its performance by reason of RESPONDENT’s
non-performance (B.1). In addition, private international rules refer to Vietnamese Law,
which allows the buyer to reject non-conforming goods (B.2).
1. CLAIMANT is entitled to withhold its payment obligations regarding
shipment 62654B due to RESPONDENT’s non-performance
63. Pursuant to Art. 7.1.3 PICC, based on the concept of “exceptio non adimpleti
contractus”, where the parties are to perform consecutively, the party that is to perform
later may withhold its performance until the first party has performed.
64. In international trade reality, this general right of the buyer is widely recognised by some
courts. In CLOUT Case 1080, a Polish seller and a German buyer entered into a contract
to sell leather to manufacture military shoes for the German Army. The German Federal
Bureau for Technical Defense and Supply found that the goods did not conform to the
relevant specifications, and the buyer notified the seller about the non-conformity.
Meanwhile, the German Army returned all manufactured shoe pairs. The buyer sent a
declaration to avoid the contract, and the seller sued the buyer for paying the purchase
price. Eventually, the Court held, referring to the principle of good faith, that as a general
rule, a buyer had the right to withhold the price payment due to non-conformity until the
seller performed its obligations in conformity with the contract.

24
PICC Digest, p.227; Colombia case.

15
65. Another case confirming this right of the buyer is Case No. 576/2010 involving two
companies (A and B). Company A requested company B to pay money as provided under
the contract by arguing that since its performance had actually been provided, Company B
must make full. Company B requested the Court to dismiss Company A’s claim, as the
latter did not correctly perform its contractual obligations. Both the Court of First Instance
and Appellate Court dismissed Company A’s claim and found that Company A did not
prove the correct performance of its obligations and, in light of the so-called “exceptio
non adimpleti contractus”, Company B’s decision to suspend the payment of the price
was justified.
66. Moreover, ICC Award 16816/2011 provides that the Tribunal recognised the right to
suspend payment and to terminate the contract of RESPONDENT, because of
CLAIMANT’s non-performance.
67. In this case, CLAIMANT, a party to receive RESPONDENT’s performance of delivery,
is entitled to refrain from making the payment regarding shipment 62654B until
RESPONDENT can deliver goods in conformity with the contractual specifications.
68. Therefore, CLAIMANT has the right not to honor the payment obligations for shipment
62654B and demand the return of USD 320,000 due to the non-performance by
RESPONDENT.
2. Vietnamese Law allows CLAIMANT to reject RESPONDENT’s delivery of
non-conforming goods
69. As proven in the SECOND ISSUE, the substantive law governing the Contract No.
62654 is CISG and Vietnamese Law, according to Art 664(1) Vietnamese rules of private
international law. Particularly, in this case, Vietnam Commercial Law 2005 is applicable
to govern substantive issues.
70. Art. 39(2) Vietnam Commercial Law 2005 provides that the buyer may reject the goods in
the event of non-conformity. As shipment 62654B is non-conforming according to the IR,
CLAIMANT is allowed to refuse delivery of shipment 62654B and subsequently order
RESPONDENT to return USD 320.000 to CLAIMANT.
71. Concluding the THIRD ISSUE, the Tribunal should uphold the legal validity of the
Inspection Report, which indicates the non-conformity of shipment 62654B. Thereby,
CLAIMANT has the right to withhold its payment obligations regarding shipment
62654B and demand the return of USD 320,000.

16
 PRAYER FOR RELIEF
In light of the foregoing submissions, counsel for CLAIMANT respectfully requests the Tribunal
to:
1. Declare that the Arbitral Tribunal of VIAC has jurisdiction to hear the case;
2. Declare that Contract No. 62654 is governed by CISG;
3. Uphold the validity of an IR that RESPONDENT has delivered non-conforming goods;
thus declare that CLAIMANT is not obliged to pay for shipment 62654B;
4. Order RESPONDENT to pay back UDS 320,000 to CLAIMANT and bear all arbitration
costs, including the expenses for traveling, accommodation, and other relevant expenses
of the arbitrators.

Word-count: 5367 words.

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