N HE Atter F N Rbitration Onducted Efore HE Rbitral Ribunal Hamesburg

MEMORANDUM for RESPONDENT
Himachal Pradesh National Law University, Shimla
APCAM’S INTERNATIONAL
METAVERSE ARBITRATION MOOT, 2023
24th – 26th November 2023
IN THE MATTER OF A N ARBITRATION CONDUCTED BEFORE THE A RBITRAL TRIBUNAL,

THAMESBURG
BETWEEN:
EstateX LLC
789 VR Avenue, Cyberspace City,

CA 9513, Stotia **CLAIMANT
AND
1. MetaTerrain Pvt. Ltd.

15/5 Seafloor Plaza, Merfolk City,
Celestia
2. Oorbus Ltd.
123 Tech Avenue, Verdantis Valley,
CA 95101, Lumina **RESPONDENTS
Abhishek Bisht | Avnee Katoch | Saumya Rajpal | Shauryaa Singh | Vihaan Acharya
I
TABLE OF CONTENTS
TABLE OF ABBREVIATIONS ................................................................................................................. III

INDEX OF AUTHORITIES ........................................................................................................................ V
INDEX OF CASES .................................................................................................................................... VIII
STATEMENT OF FACTS ....................................................................................................................... XIV
SUMMARY OF ARGUMENTS .............................................................................................................. XVI
PLEADINGS ..................................................................................................................................................... 1
ISSUE 1: WHETHER THE CLAIMANT’S ARBITRATION REQUEST IS PREMATURE IN
NATURE? ...................................................................................................................................................... 1
1.1 The clause is not ambiguous and is in public interest .................................................................... 1
1.2 The tribunal does not have jurisdiction to try and settle the dispute .......................................... 4
1.3 The Cl has breached the pre-arbitration negotiation clause ......................................................... 7
ISSUE 2: WHETHER THE CL IS ENTITLED TO DAMAGES TO THE EXTENT OF USD
2.4 MILLION? ............................................................................................................................................... 8
2.1 The claim is unjustified on grounds of the Doctrine of Clean Hands ........................................ 9
2.2 The Claim of USD 2.4 million should be denied on grounds of Abuse of Rights .................10
2.3 The CL is not justified in demanding USD 2.4 million as compensation on account of Loss
of Business Opportunities ......................................................................................................................11
ISSUE 3: WHETHER A VALID CONTRACT HAS BEEN FORMED UNDER THE
PROVISIONS OF CISG? .........................................................................................................................16
3.1 ESTATEX LLC has failed to fulfil its obligations as a buyer. ...................................................16
3.2 No valid contract has been formed under the provisions of CISG. .........................................18
3.3 The essentials of a valid smart contract have not been fulfilled.................................................20
ISSUE 4: WHETHER Res NO. 2 i.e., OORBUS LTD., A PARTY TO THE PRESENT
ARBITRATION PROCEEDINGS? .......................................................................................................22
4.1 The Tribunal does not have the Jurisdiction to join Res No.2 to the arbitration proceedings.
....................................................................................................................................................................22
4.2 Forcing Res No. 2 to join the proceedings would endanger the recognition and enforcement
of the award. .............................................................................................................................................25
4.3 Res No.2 is not covered under the Group of Companies Doctrine. ........................................26
PRAYER ...................................................................................................... Error! Bookmark not defined.
II
TABLE OF ABBREVIATIONS
ABBREVIATIONS MEANING
% Percent
& And
¶ Paragraph
APCAM Asia Pacific Centre for Arbitration and
Mediation
APCAM Rules Arbitration Rules of the Asia-Pacific Centre
For Arbitration And Mediation
Art. Article
CISG United Nations Convention on Contracts for
the International Sale of Goods, 1980
Cl Claimant
Doc. Document
Ed. Edition
Exh. Exhibit
Hon’ble Honourable
i.e. That is
ICC International Chamber of Commerce
ICCA International Council for Commercial
Arbitration
ICJ International Court of Justice
ICSID International Centre for Settlement of
Investment Disputes
Int’l International
Ltd. Limited
NFT Non-Fungible Tokens
No. Number
III
NoA Notice of Arbitration

NY New York
Ors. Others
PCA Permanent Court of Arbitration
PCIJ Permanent Court of International Justice
pg. Page
PO Procedural Order
Pvt. Private
Res Respondent
RNoA Reply to Notice of Arbitration
ToU Terms of Use
UK United Kingdom
UNCITRAL United Nation Commission on International
Trade Law
UNCTAD United Nations Conference on Trade and
Development
US United States
v. Versus
w.r.t. With respect to
IV
INDEX OF AUTHORITIES
REFERENCE CITATION
O’CONNOR Jack O’Connor, The Enforceability of Agreements to Negotiate in Good
Faith, UNIVERSITY OF TASMANIA LAW REVIEW (2010).
ISLAM Yuman Islam ET. AL., Solving the Legal Conundrum Around Pre-
arbitration Procedures in India, RMLNLU ARBITRATION LAW BLOG.
TAN Weiyi Tan, Singapore: Multi-Tiered Dispute Resolution Clauses, BAKER
MCKENZIE.
JOLLES Alexander Jolles, 'Consequences of Multi-tier Arbitration Clauses: Issues
of Enforcement, SWEET & MAXWELL LIMITED (2006).
KULKARNI Ritvik M. Kulkarni, Discussing the Validity of Pre-conditions for
Invocation of Arbitration Proceedings, INDIAN ARBITRATION
BLOG.
MUKHERJEE Sampurna Mukherjee, Whether Contractual Preconditions to Arbitration
should be regarded as ‘Impediments’ to an Arbitral Tribunal’s Jurisdiction,
THE AMERICAN REVIEW OF INTERNATIONAL ARBITRATION
(2022).
BORN 1. 1 GARY B. BORN, INTERNATIONAL ARBITRATION AND
FORUM SELECTION AGREEMENTS: DRAFTING AND
ENFORCING 37 (The Netherlands, Kluwer Law International
BV, 2010).
2. 1 GARY B. BORN, INTERNATIONAL COMMERCIAL
ARBITRATION (Wolters Kluwer Law & Business 2021).
3. GARY B. BORN, INTERNATIONAL COMMERCIAL
ARBITRATION, (Kluwer Law International 2014).
MEHTA & Aditya Mehta and Swagata Ghosh, Good Faith or Bad Faith – Analysing
GHOSH the Enforceability of PreArbitral Negotiation Clauses, 27 NLSBLR, (2021).
V
PARK WW. Park, Non Signatories and International Contract: An Arbitrator’s

Dilemma, Oxford University Press (2009).
STRONG S.I. Strong, Research in International Commercial Arbitration: Special
Skills, Special Sources, 20 ARIA (2009).
YUKSEL Ceren Deniz Yuksel, Group of Companies Doctrine in Arbitration, Ozay
(2022).
FIEBINGER & RUDOLF FIEBINGER AND CHRISTOPH HAUSER, AN
HAUSER ARBITRATOR'S VIEW: CAN PARTY AUTONOMY HINDER
PROCEDURAL EFFICIENCY? (ASA Special Series no. 44).
STONE RICHARD STONE, THE MODERN LAW OF CONTRACT
(Routledge 2013).
WAINCYMER JAN WAINCYMER, PROCEDURE AND POLICY IN
INTERNATIONAL ARBITRATION (Kluwer Law International 2012).
ALESSI Dario Alessi, Enforcing Arbitrator’s Obligations: Rethinking International
Commercial Arbitrators’ Liability, 31 Journal of International Arbitration
(2014); JAN WAINCYMER, PROCEDURE AND POLICY IN
INTERNATIONAL ARBITRATION (Kluwer Law International 2012).
LEBOULANGER Philippe Leboulanger, Multi-contract Arbitration, 13 Journal of
International Arbitration (1996); GARY B. BORN, INTERNATIONAL
COMMERCIAL ARBITRATION, (Kluwer Law International 2014).
ZUBERBÜHLER, 2 ZUBERBÜHLER, MÜLLER & HABEGGER, EDS., SWISS RULES
MÜLLER & OF INTERNATIONAL ARBITRATION (Schulthess, 2013).
HABEGGER
GOTANDA John Y. Gotanda, An Efficient Method for Determining Jurisdiction in
International Arbitrations, 40 COLUMBIA JOURNAL OF
TRANSNATIONAL LAW (2001).
ZUBERBUEHLER, Tobias Zuberbuehler, Klaus Muller and Philipp Habegger, Swiss Rules of
MULLER & International Arbitration: Commentary, KLUWER LAW
HABEGGER INTERNATIONAL (2005).
MODEL LAW United Nations Convention on the use of Electrical Communications in
International Contracts (New York)
VI
CHOI Dongdoo Choi, Joinder in international commercial arbitration, 35

ARBITRATION INTERNATIONAL OXFORD UNIVERSITY PRESS
(2019).
BERG Albert Jan Ven Den Berg, The New York Arbitration Convention of 1958.
Towards a Uniform Judicial Interpretation, T.M.C. Asser Institute, 1981.
GIRSBERGER DANIEL GIRSBERGER ET.AL., INTERNATIONAL
ARBITRATION: COMPARATIVE AND SWISS PERSPECTIVES
(Nomos 2016).
CRAWFORD Crawford, J., Brownlie’s Principles of Public International Law, 8th ed.,
2012, pg. 701.
DOBBS D. Dobbs, The Handbook on the Law of Remedies (1993).
CHITTY CHITTY ON CONTRACTs 1 1672 (A.G. Guest ed., 25th ed. 1983).
D. LEVI & B. Stuart D. Levi & Alex B. Lipton, An Introduction to Smart Contracts and Their
LIPTON Potential and Inherent Limitations, 1 HARVARD LAW SCHOOL FORUM
ON CORPORATE GOVERNANCE AND FINANCIAL
REGULATION (2018).
SZABO Nick Szabo, Smart Contracts: Building Blocks for Digital Markets, ALAMUT
BASTION OF PEACE AND INFORMATION (1996).
BICK Jonathan Bick, Are 'Smart Contracts' Smart Enough?, 3 N.J.L.J. (2017).
CFI TEAM CFI Team, Smart Contract, 3 CORPORATE FINANCE INSTITUTE
(2022).
VALIHURA Kate Valihura, How to Create a Smart Contract in 2022: A Complete Tutorial,
LIGHT IT GLOBAL BLOGS (2022).
GUNZBERG Jodie Gunzberg, The Smart Contract Platform Sector Explained, COINDESK
(2021).
SETHI Palak Sethi, Understanding the Developing Technology of Smart Contracts and its
Legal Positionin India - Will it Replace a Traditional Contract?, 11.1 NULJ 21
[2021].
ERN XU Seah Ern Xu, Emerging from the Rabbit Hole: The Future of the Legal Industry,
4.1 RSRR 1 (2018).
VII
INDEX OF CASES
Australia
Common Law Division Hooper Bailie Associated Ltd v. Natcon Group

Pty Ltd., [1992] 28 NSWLR 194.
Court of Appeal GR Securities Pty Ltd. v. Baulkham Hills
Private Hospital Pty Ltd., (1986) 40 NSWLR.
High Court of Australia March v. E. & M.H. Stramare Pty. Ltd., (1991)
171 C.L.R. 506.
New South Wales Court of Appeal United Group Rail Services Ltd v. Rail
Corporation, New South Wales (2009)
NSWCA 177.
Supreme Court of Victoria WTE Co-Generation and Visy Energy Pty Ltd
v. RCR Energy Pty Ltd and RCR Tomlinson
Ltd, [2013] VSC 314.
Canada
Court of Appeal Ontario Patel v. Kanbay International Inc., 2008 ONCA

867
Federal Court SD Myers Incorporated v Canada, Order, 2004
FC 38, (2004) 244 FTR 161, IIC 252 (2004).
India
Calcutta High Court Pravudayal Agarwala v. Ram Kumar Agarwala

AIR 1956 Cal 41.
Bombay High Court Essar Procurement Service Ltd. v. Paramount
Constructions 2016 SCC Online Bom 9697.
Bombay High Court Quick Heal Technologies Limited v. NCS
Computech Private Limited & ors, (2009) 2
SCC 55.
Bombay High Court Mahanagar Gas Ltd. Mumbai v. Babulal
Uttamchand & Co., Mumbai (2012) 4 Mh.L.J
344.
Bombay High Court Maharashtra State Electricity Board v. Sterlite
Industries (India) Ltd. 2000 SCC Online Bom
89.
VIII
Bombay High Court Essar Procurement Service Ltd. v. Paramount

Constructions 2016 SCC Online Bom 9697.
Delhi High Court Haldiram Mfg. Co. (P) Ltd. v. DLF
Commercial Complexes Ltd. 2012 SCC OnLine
Del 2139.
Kerela High Court State of Kerala v. K. Bhaskaran AIR 1985 Ker
49.
Kerela High Court Nirman Sindia v. Indal Electromelts Ltd. 1999
SCC OnLine Ker 149.
Rajasthan High Court M/s Simpark Infrastructure Pvt. Ltd. v. Jaipur
Municipal Corporation, 2013 (3) RLW 2133
(Raj).
Supreme Court of India Visa International Ltd v. Continental Resources
(USA) Ltd., (2009) 2 SCC 55.
Supreme Court of India HUDA v. Orchid Infrastructure Developers (P)
Ltd., (2017) 4 SCC 243.
Supreme Court of India Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya,
(2003) 5 SCC 531.
Supreme Court of India Murlidhar Chiranjilal v. Harishchandra

Dwarkadas & Anr., AIR 1962 SC 366.
Supreme Court of India Reckitt Benckiser (India) Private Limited v.
Reynders Label Printing India Private Limited
& Anr, Petition for Arbitration (Civil) No. 65
of 2016.
Supreme Court of India Rajiv. Kumar Jindal v. BCI Staff Colony
Residential Welfare Assn., 2023 SCC OnLine
SC 507.
Supreme Court of India Valji Khimji and Co. v. Official Liquidator of
Hindustan Nitro Product (Gujarat) Ltd., (2008)
9 SCC 299.
Supreme Court of India Jagdish Chander v. Ramesh Chander, (2007) 5
SCC 719.
Supreme Court of India Sardar Mohar Singh v. Mangilal (1997) 9 SCC
217.
Supreme Court of India McDermott International Inc. Burn Standard
Ltd. and Ors. (2006) 11 SCC 181.
Supreme Court of India Bharat Coking Coke Ltd. v. L.K. Ahuja (2004)
5 SCC 109.
Supreme Court of India U.P. Avas Evam Vikas Parishad v. Om
Prakash Sharma, (2013) 5 SCC 182.
IX
Supreme Court of India Arvind Kumar v. S.D.O., 2002 SCC OnLine

BoR (UP) 38.
Supreme Court of India Karsandas H. Thacker v. M/s. The Saran
Engineering Co. Limited AIR 1965 SC 1981.
Indonesia
Arbitral Tribunal in Jakarta Patuha Power Ltd (Bermuda) v PT (Persero)

Perusahaan Listruik Negara (Award, 4 May
1999).
International Centre for Settlement of Investment Disputes

The Biwater Award Biwater Gauff (Tanzania) Limited v. United
Republic of Tanzania, ICSID Case No.
ARB/05/22.
Niko Resources v. Bangladesh Petroleum Niko Resources (Bangladesh) Ltd. v.
Exploration & Production Company Ltd. Bangladesh Oil Gas and Mineral Corporation
(Petrobangla), Bangladesh Petroleum.
Exploration and Production Company Limited
(Bapex), ICSID Case No. ARB/10/18.
International Chamber of Commerce
Arbitration Court of the International Chamber Arbitral award No. 11849.

of Commerce, 2003
International Court of Justice Cases

U.K. v. Norway (The Fisheries case) U.K. v. Norway 1951 I.C.J. 116, 142 (Dec. 18).
Permanent Court of Arbitration
Guyana v. Suriname Guyana and Suriname, 30 R.I.A.A. 1 (Perm. Ct.

Arb. 2007).
Singapore
Court of Appeal of the Republic of Singapore International Research Corp PLC v. Lufthansa
Systems Asia Pacific Pte Ltd and another [2013]
SGCA 55.
X
Court of Appeal of the Republic of Singapore HSBC Institutional Trust Services (Singapore)
Ltd (trustee of Starhill Global Real Estate
Investment Trust) v. Toshin Development
Singapore Pte Ltd [2012] SGCA 48.
Court of Appeal of the Republic of Singapore Quoine Pte Ltd v. B2C2 Ltd. [2020] SGCA (1)
02.
UNCITRAL Cases
CLOUT case No. 142 Award of the Tribunal of International

Commercial Arbitration, Russian Federation.
CLOUT case No. 631 Downs Investments Pty Ltd.v. Perwaja
Steel SDN BHD.
CLOUT No. 934 Tribunal cantonal du Valais, Switzerland, 27
April 2007
United Kingdom
Chancery Division of the High Court in Stephens v Averay [1988] 1 Ch 449 (Ch D) 453.
England.
Court of Appeal Alexander v. Cambridge Credit Corp. (1987) 9
N.S.W.L.R. 310.
Court of Appeal Fortress Value Recovery Fund LLP and others
v Blue Skye Special Opportunities Fund LP (A
Firm) and others [2012] EWHC 1486 (Comm).
Court of Appeal Burgundy Global Exploration Corp v
Transocean Offshore International Ventures
Ltd [2014] SGCA 24.
Court of Appeal (Chancery Division) in Durkirk Colliery Co. v. Lever (1878), 9 Ch. D.
England 20.
Court of Appeal of England and Wales Blackpool and Fylde Aero Club Ltd v
Blackpool Borough Council [1990] UKHL 13.
Court of Appeal of England and Wales Re Polemis and Furness, Withy & Co Ltd
[1921] 3 KB 560.
Court of King's Bench (K.B.) Vertue v. Bird, [1677] 84 Eng. Rep. 1000.
England & Wales High Court (Chancery Tang v. Grant Thornton International Ltd
division) [2012] EWHC 3198 (Ch).
English contract law Victoria Laundry (Windsor) Ltd v Newman
Industries Ltd. [1949] 2 KB 528.
English and Wales Court of Appeal (Civil Galoo Ltd. v. Bright Grahame Murray, 14
Division) T.L.R. 25 (C.A. 1994).
XI
Exchequer Court, England Hadley & Anor v. Baxendale & Ors., [1854]
EWHC Exch J70.
High Court Leeds City Council v. Barclays Bank plc, [2021]
EWHC (Comm) 363 [57] (Eng.).
High Court of Justice Queens Bench Division Cable & Wireless v. IBM, [2002] EWHC 2059.
Commercial Court
High Court of Justice of England and Wales Prime Mineral Exports Private Limited v.
Emirates Trading Agency LLC, [2016] EWHC
2104.
High Court of Justice of England and Wales NWA and FSY v. NVF, RWX and KLB,
[2021] EWHC 2666 (Comm).
High Court of Justice of England and Wales Smith v. Martin [1925] 1 KB 745.
High Court of Justice Business and Property Ohpen Operations UK Ltd. v. Invesco Fund
Courts of England and Wales Technology and Managers Ltd, 2019 EWHC 2246 (TCC).
Construction Court
High Court of Justice of England and Wales Emirates Trading Agency LLC v. Prime
Mineral Exports (P) Ltd [2014] EWHC 2104
(Comm).
Privy Council Attorney General of the Virgin Islands v.
Global Water Associates Ltd (British Virgin
Islands) [2020] UKPC 18.
Privy Council Wagon Mound or Overseas TankShip (U.K.)
LTD. v. Mort’s Dock and Engineering Co. Ltd.
Privy Council Overseas Tankship (UK) Ltd v. Morts Dock &
Engineering Co. [1961] AC 388.
Queen's Bench Division of the High Court of Ratcliffe v. Evans [1892] 2 QB 524, 528
England and Wales
Queen's Bench Division of the High Court of Bodley v. Reynolds, 115 Eng. Rep. 1066 (Q.B.
England and Wales 1846).
Supreme Court of United Kingdom Dallah Real estate and Tourism Holding
Company v. the Ministry of Religious Affairs,
Government of Pakistan, [2010] UKSC 46.
The Court (Fifth Chamber) Marcandi Ltd v. Revenue and Customs
Commissioners, [2018] 4 WLR 128.
United Kingdom House of Lords C Czarnikow Ltd v Koufos [1967] UKHL 4
United Kingdom House of Lords South Australia Asset Management Corp v.
York Montague Ltd. [1997] 27 EG 125 1
A.C.191 HL.
XII
United Kingdom House of Lords Transfield Shipping Inc v. Mercator Shipping

Inc [2008] UKHL 48.
United Kingdom House of Lords Liesbosch Dredger v. S.S. Edison [1933] AC
449.
United Kingdom House of Lords Hillas & Co. v. Arcos Ltd., (1932) 147 LT 503.
United Kingdom House of Lords Stroms Bruks Aktie Bolag and Others v. J. & P.
Hutchison [1905] UKHL 844.
United States of America
Alabama Court of Civil Appeals, United States Colby Furniture Company, Inc. v. Belinda J.
of America Overton 299 So. 3d 259 (Ala. Civ. App. 2019).
Supreme Court of United States of America BG Group PLC v. Republic of Argentina, 572
U.S. 25 (2014).
United States Court of Appeals, First Circuit HIM Portland LLC v. DeVito Builders Inc.,
317 F 3d 41, 42 (1st Cir, 2003).
United States Court of Appeals, Eleventh Kemiron Atlantic, Inc. v. Aguakem
Circuit International Inc, 290 F.3d 1287 (11th Cir.
2002).
United States Court of Appeals, Seventh Circuit DeValk Lincoln Mercury, Inc. v. Ford Motor
Co. 811 F.2d 326.
XIII
STATEMENT OF FACTS
INTRODUCTION
1. The CLAIMANT, EstateX LLC, founded in 2010 and led by CEO Ms. Olivia Hughes, is a
prominent real estate company. It has recently expanded its operations into the Metaverse.
2. The Res (1), MetaTerrain Pvt. Ltd., established in 2020 by computer scientist Ms. Yoza Ila,
operates in the Metaverse with its platform 'MetaTerrain,' a blockchain-based virtual world for
trading virtual land parcels as non-fungible tokens (NFTs).
3. The Res (2), Oorbus Ltd., a multinational conglomerate, invested $50 million in MetaTerrain to
diversify into the Metaverse.
BACKGROUND
4. The Metaverse is a digital realm where blockchain technology enables the ownership and trade of
digital assets, giving rise to a digital economy.
5. Subsequently, the global stage was set in Stotia for a consequential event, ‘The MetaVerse For
Tomorrow’ conference. During this, a visionary proposition of introducing a virtual land parcel
auction embedded within the MetaTerrain Platform was unveiled, which would empower users to
procure properties within the immersive virtual world of MetaTerrain.
6. Intrigued by the concept, EstateX CEO Ms. Hughes adeptly pursued a collaboration opportunity,
leveraging a strategic and consistent approach through email exchanges to establish a foundation
for further discussions and potential benefits for her company.
7. Guided by trust, Mr. Das shared ambitious infrastructure plans for the western MetaTerrain
Platform. Unbeknownst to him, Ms. Hughes later used these insights strategically in their bidding
endeavors. Subsequently, Ms Hughes came out to be the highest bidder during the auction.
AUCTION
8. The auction used blockchain smart contracts, with bidding exclusively in TerraTokens, the
platform's native cryptocurrency. Participants converted their currencies into TerraTokens.
XIV
9. TerraTokens facilitated purchases of assets on the MetaTerrain platform, including virtual land
parcels NFTs and digital assets. The platform had its Terms of Use.
10. When initiating a smart contract transaction, users set a gas limit and price. The gas limit represents
the maximum amount they're willing to spend. If the transaction's gas usage surpasses the specified
limit, it fails. Detailed information on the auction process was shared with all auction attendees.
11. EstateX set a 50,000 gas unit limit for the smart contract (47RZ*K) on land parcel #2332.
Unexpected network congestion and increased demand caused the gas price to rise to 55,000 units.
EstateX's miscalculation and lack of margin in gas units resulted in the incomplete execution of
the designated smart contract.
DISPUTE
12. The Smart Contract 47RZ*K upon which the Clrelies explicitly mandates that property allocation
is contingent upon successful execution. The Res s' records indicate that the smart contract failed
to execute and allocate the property to the Claimant.
13. Mr. Turner contacted Mr. Kumar, who explained that due to a blockchain network overload, land
parcel #2332 was mistakenly assigned to the second-highest bidder, Crimson Constructions. A
refund was promised within ten days.
14. EstateX communicated its decision to retain ownership of land parcel #2332. Discussions
between Ms. Hughes and Ms. Ila failed to reach an agreement.
15. Mr. Robert Drew invoked the arbitration clause on July 01, 2023, due to the Res s' failure to
resolve the issue. EstateX suffered a loss of 300,000 TerraTokens.
XV
SUMMARY OF ARGUMENTS
ISSUE 1: WHETHER THE ARBITRATION REQUEST IS PREMATURE IN NATURE?
It is humbly submitted that the arbitration request of Cl is premature in nature as it was filed before
engaging in good faith negotiation which was a pre-condition before filing the matter before the
tribunal. The use of word ‘shall’ in Clause XX indicated that it was mandatory in nature and parties
were required to resolve the disputes amicably which was not followed by the Cl before filing the
present dispute. Furthermore, Res No. 2 cannot be made party to the present proceeding as it was not
party to the present arbitration agreement. A non-signatory or third-party could not be subjected to
arbitration without their prior consent. Moreover, Cl has breached the pre-arbitration negotiation
clause by not engaging in pre-arbitration proceedings.
ISSUE 2: WHETHER THE CLAIMANT IS ENTITLED TO DAMAGES TO THE EXTENT OF USD 2.4
MILLION ?
It is humbly submitted that Cl’s claim to USD 2.4 million as compensation for lost business
opportunities is untenable in the eyes of law given that the alleged claims cannot be credited to the
defendant in absence of a logically established causation and the presence of the fact that each person
bears his or her own accidental damages. Since the Cl not only exceeded the requisite gas limits as
already explicitly mentioned in the ToU but also bypassed the mandatory pre arbitral proceedings as
stipulated which allows the Res to refuse any additional compensation other than USD 1.5 million
because it is violative of the Doctrine of Clean Hands and amounts to an Abuse of Rights. Furthermore,
for demanding damages of any sort, the Cl demand could not have been reasonably foreseen and did
not result from the direct acts of the Res, thereby making the claim remote and baseless.
ISSUE 3: WHETHER A VALID CONTRACT HAS BEEN FORMED AND CONCLUDED

UNDER THE CISG?
It is humbly submitted that no valid contract has been formed between both the parties because of
various reasons. The buyer's failure to maintain a sufficient 'gas' balance in their account constitutes a
fundamental breach of contract. The Cl argues that the responsibility for setting the gas limit lies with
the Res, and failure to do so justifies contract avoidance. Additionally, the Cl contends that the
XVI
disputed contract has not been validly formed under CISG due to the absence of acceptance from the
Res The highest bid alone does not establish a contract, and the Cl emphasizes the lack of formal
acceptance. Lastly, the Cl argues that the essentials of a valid smart contract are not fulfilled, citing the
absence of acceptance and the necessity for clear, legally binding terms. The Cl concludes that no valid
smart contract exists, absolving the Res of any liability for breach.
ISSUE 4: WHETHER RES NO. 2, I.E. OORBUS LTD. A PARTY TO THE PRESENT
ARBITRATION PROCEEDING?
Res No. 2 i.e Oorbus Ltd., should not be included in the arbitral proceedings since the Tribunal lacks
jurisdiction over them. For the Tribunal to issue a conclusive and enforceable award, it must have the
appropriate jurisdiction. Res No. 2 is not a party to the Arbitration Agreement, meaning the Tribunal
lacks the authority to include them. Additionally, even if the Tribunal determines it has jurisdiction
over Oorbus Ltd., joining them would not be in the best interests of the Proceedings. Furthermore,
Res No. 2 is not covered under the Group of Companies doctrine as Res No. 2 was not involved in
the execution of the contract, and Res No. 1 was functioning independently of Res No. 2. And there
must be an obvious mutual intention of all the parties to be bound by the arbitration clause, which
was absent in the present case.
XVII
PLEADINGS
ISSUE 1: WHETHER THE CLAIMANT’S ARBITRATION REQUEST IS PREMATURE

IN NATURE?
1. It is humbly submitted before this Hon’ble Tribunal that the Cl’s arbitration request is premature in
nature as firstly, Clause XX is not ambiguous in nature and is in public interest since it involves good
faith negotiations with a genuine attempt to resolve the dispute [1.1], secondly, the tribunal does not
have jurisdiction to try and settle the dispute as non-compliance with the pre-arbitral procedure leads
to exclusion of jurisdiction of the arbitral tribunal [1.2] and thirdly, the Cl has breached the pre-
arbitration negotiation clause by not coming together to amicably resolve the dispute [1.3].
1.1 The clause is not ambiguous and is in public interest

2. The phrase ‘good faith’ or ‘friendly’ or ‘amicable’ implies honesty and the observance of reasonable
commercial standards of fair dealing.1 Parties engaging in good faith negotiations must have an honest,
genuine and realistic assessment of their rights and obligations. An agreement to negotiate in good
faith is a promise to negotiate genuinely with a view to resolve claims to entitlement by reference to a
known body of rights and obligations, in a manner that respects each party’s contractual rights and
gives due allowance for honest and genuinely held views about those pre-existing rights.2
3. When the parties to a contract agree to any special mode for resolution of the disputes arising out of
the agreement, they are bound to comply with the mode prescribed under the agreement. The party
cannot jump into the second step without exhausting the first step provided for the resolution of
dispute.3
4. The object of such a clause is to avoid time-consuming and expensive arbitration. Therefore, such a
clause is in public interest.4 Such clauses are enforceable and are not vague or incomplete; a mere
difficulty in proving breach in some cases should not be confused with the suggestion that the clause
lacks certainty. There is a difference between an agreement to agree, and an agreement to hold
negotiations in good faith, and the latter is only an agreement by a party to conduct itself in a particular
manner, and it should be enforceable.
1 Emirates Trading Agency LLC v. Prime Mineral Exports (P) Ltd [2014] EWHC 2104 (Comm).
2 United Group Rail Services Ltd v. Rail Corporation, New South Wales (2009) NSWCA 177.
3 Nirman Sindia v. Indal Electromelts Ltd. 1999 SCC OnLine Ker 149.
4 Id.
1
5. The Res humbly contends that with respect to those who assert to the contrary, a promise to negotiate
(that is to treat and discuss) genuinely and in good faith with a view to resolving claims to entitlement
by reference to a known body of rights and obligations, in a manner that respects the respective
contractual rights of the parties, giving due allowance for honest and genuinely held views about those
pre-existing rights is not vague, illusory or uncertain.5
6. Enforcement of such a good faith agreement to negotiate as part of a dispute resolution clause is
considered to be in public interest because parties to a commercial transaction expect the courts to
enforce obligations which they have freely undertaken and because the object of the agreement is to
avoid what might otherwise be an expensive and time-consuming arbitration.6
7. The obligation to undertake genuine and good-faith negotiations does not require any step to advance
the other party's interests. The process is a self-interested one of negotiation. There is, however, a
constraint on the negotiation, though this constraint is not one to advance the interest of the other
party.7
8. Rather, it is a (voluntarily assumed) requirement to take self-interested steps in negotiation by reference
to the genuine and honest conception of the pre-existing bargain, including the rights and obligations
therefrom and of the facts said to comprise the controversy. Within that constraint of those genuinely
and honestly held beliefs as to the bargain, the required behavior is genuine and good faith negotiations
with a view to settlement or compromise.8
9. If the pre-conditions are defined with sufficient clarity and specificity, then they should be construed
as mandatory in nature.9 In contrast, they cannot be mandatorily enforced if they are vague and general
in nature.
10. Where the parties have clearly contracted for a specific set of dispute resolution procedures as
preconditions for arbitration, those preconditions must be fulfilled. Hence where a specific procedure
has been prescribed as a condition precedent to arbitration or litigation, then absent any question of
waiver, it must be shown to have been complied with.10 In the present case Clause XX defined detailed
5 Supra note 3.
6 Supra note 2.
7 Jack O’Connor, The Enforceability of Agreements to Negotiate in Good Faith, UNIVERSITY OF TASMANIA LAW REVIEW
(2010).
8 Yuman Islam ET. AL., Solving the Legal Conundrum Around Pre-arbitration Procedures in India, RMLNLU ARBITRATION
LAW BLOG (Nov. 05, 2023, 9:29 PM), https://rmlnluseal.home.blog/2023/06/21/solving-the-legal-conundrum-

around-pre-arbitration-procedures-in-india/
9 International Research Corp PLC v. Lufthansa Systems Asia Pacific Pte Ltd and another [2013] SGCA 55.
10 DeValk Lincoln Mercury, Inc. v. Ford Motor Co. 811 F.2d 326.
2
procedure i.e. how both the parties will engage in good faith negotiations before referring the matter
to the arbitration.11
11. ‘Negotiate in good faith’ clauses should be upheld as even though the fact that one party may not want
to negotiate in good faith (for whatever reason) will lead to a breakdown in negotiations, no harm is
done because the dispute can still be resolved in some other way. That said, if one party breaks the
terms of a ‘negotiate in good faith’ clause and this is later discovered, there might be legal
consequences, depending on the terms of the clause in question. For instance, the party which has
been prejudiced could have a right to avoid the consequences of the other party’s breach.12
1.1.1 The mandatory language of the clause is used to refer to the Dispute Resolution Clause
12. The use of the words ‘shall’ and ‘must’ instead of ‘may’ demonstrates the mandatory nature of the
Dispute Resolution clause.13 Use of the word ‘shall’ used in the arbitration agreement which is
mandatory in nature. No, such mutual discussion was held to reach an amicable solution. The Cl
cannot be allowed to rely on the said clause for invoking arbitration proceedings and at the same time
ignore the course of action of `mutual discussion' contrived in the said clause.14 No, such mutual
discussion was held to reach an amicable solution.
13. It is humbly submitted that the use of the word “shall” in the clause indicated that it was mandatory
and parties are obligated to follow the same, unlike the use of terms such as “may”.15 In such cases
where terms like ‘shall’ is used, pre-arbitral dispute resolution clauses are consistent with a mandatory
obligation and are “hedged with conditionality.”
14. The requirement makes commercial sense in as much as it is better for parties to avoid expensive and
time-consuming arbitration through friendly discussion. Commercial men expect the court to enforce
obligations which they have freely undertaken. In the present case the language of Clause XX uses the
word ‘shall’ which clearly states the mandatory nature of solving the dispute through engaging in good
faith negotiations.
1.1.2 The procedural details of the clause need not be overly structured
15. Additionally, even though the specific process in the contract may not have specified a detailed process
at the time of entering into the contract, such clauses are still considered enforceable to give effect to
11 Moot Proposition, Page 10 Clause XX.

12 HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v. Toshin
Development Singapore Pte Ltd [2012] SGCA 48.
13 Cable & Wireless v. IBM, [2002] EWHC 2059.
14 Haldiram Mfg. Co. (P) Ltd. v. DLF Commercial Complexes Ltd. 2012 SCC OnLine Del 2139.
15 Prime Mineral Exports Private Limited v. Emirates Trading Agency LLC, [2016] EWHC 2104.
3
the parties' choice.16 The Court does not need to see a set of rules set out in advance by which the
agreement, if any, between the parties may in fact be achieved. The process need not be overly
structured.
16. However, the process from which consent might come must be sufficiently certain to be enforceable.17
The Dispute Resolution clause enforcement is not cooperation and consent but participation in the
process. If the terms of the clause were sufficiently certain for its promise to be given legal recognition,
that would be enough to prove the mandatory nature of the clause.18
17. Therefore, since the parties have agreed on a binding & clear multi-tiered dispute resolution system
and the steps are accurately set out without any doubt regarding the intention of the parties, 19 the
Tribunal must not accept the invocation of the arbitration clause without compliance with the pre-
arbitral steps. The Tribunal needs to follow the terms and conditions mentioned by the parties in their
contract.20
1.2 The tribunal does not have jurisdiction to try and settle the dispute
18. It is humbly submitted before this Hon’ble Tribunal that failure to comply with mandatory pre-
arbitration procedural requirements is arguably a jurisdictional defect that can prevent a party from
validly initiating arbitral proceedings.21 The jurisdiction of an arbitral tribunal is established in the
parties’ agreement to arbitrate.22 In arbitration, the agreement to arbitrate is the only source from
which the arbitral tribunal may derive its jurisdiction.
19. “Where an agreement is subject to a condition precedent, there is, before the occurrence of the condition, no duty on either
party to render the principal performance under the agreement. A dispute resolution clause, which may be multi-tiered in
nature, should be construed like any other commercial agreement.23 Therefore, until the condition precedent to the
commencement of arbitration is fulfilled, neither party to the arbitration agreement is obliged to participate in the
arbitration. In the same vein, an arbitral tribunal would not have jurisdiction before the condition precedent is fulfilled”.24
16 Weiyi Tan, Singapore: Multi-Tiered Dispute Resolution Clauses, BAKER MCKENZIE (Nov. 05, 2023, 9:29 PM),
https://www.globalarbitrationnews.com/2015/01/29/multi-tiered-dispute-resolution-clauses-20150129/.
17 WTE Co-Generation and Visy Energy Pty Ltd v. RCR Energy Pty Ltd and RCR Tomlinson Ltd, [2013] VSC 314.
18 Hooper Bailie Associated Ltd v. Natcon Group Pty Ltd., [1992] 28 NSWLR 194.
19 Alexander Jolles, 'Consequences of Multi-tier Arbitration Clauses: Issues of Enforcement, SWEET & MAXWELL LIMITED
(2006).
20 HSBC Institutional Trust Services Ltd. v. Toshin Development Ltd, [2012] SGCA.
21 Ritvik M. Kulkarni, Discussing the Validity of Pre-conditions for Invocation of Arbitration Proceedings, INDIAN ARBITRATION
BLOG (Nov. 05, 2023, 9:29 PM), https://indianarbitrationlaw.com/2022/12/13/discussing-the-validity-of-pre-

conditions-for-invocation-of-arbitration-proceedings/.
22 Jagdish Chander v. Ramesh Chander, (2007) 5 SCC 719.
23 NWA and FSY v. NVF, RWX & KLB, [2021] EWHC 2666 (Comm).
24 Smith v. Martin [1925] 1 KB 745.
4
20. Moreover, pre-arbitral steps in multi-tiered clauses constitute jurisdictional conditions precedent to
arbitration, even without express reference to the condition precedent.25 Arbitral preconditions are
impediments to the jurisdiction of the arbitral tribunal and impose a mandate or an obligation26 on the
parties to fulfill the precondition first, at least substantially,27 if not completely and fully, and then
proceed to arbitration if required.
21. According to the principle of Verba ita sunt intelligenda ut res magis valeat quam pereat, the contract should
be interpreted so that it is valid rather than ineffective, where absolute clarity is ‘unattainable’28 and
the objective theory of contract is generally not concerned with the subjective expectations of parties,
and that the court should always aim to protect the reasonable expectations of parties by looking at
the terms of the agreement.29
22. The Res humbly submits that where there is a contractual precondition of endeavoring to reach an
amicable settlement within a specific period and in good faith, & only if none was reached would the
matter be submitted to the exclusive jurisdiction Arbitration Tribunal.30 As a matter of principle, if
contractual preconditions to arbitration are deemed to be jurisdictional in nature, non-compliance
should and would be a complete impediment to the tribunal’s jurisdiction because arbitrators cannot
decide cases if they do not have jurisdiction and a challenge to jurisdiction may prompt judicial
intervention.31
23. An agreement to negotiate in good faith is a promise to negotiate genuinely with a view to resolve
claims of entitlement by reference to a known body of rights and obligations, in a manner that respects
each party’s contractual rights and gives due allowance for honest and genuinely held views about
those pre-existing rights. There is an obligation on the parties to cooperate in order to achieve
contractual objectives. The yardstick of such negotiations is, therefore, honest, and genuine
negotiation within the framework of fidelity to the bargain.
24. Where a contract contains a valid machinery for resolving potential disputes between the parties, it
will usually be necessary for the parties to follow that machinery and the court will not permit an
action to be brought in breach of such agreements.32 Also, it may not be sufficient for the parties to
25 Kemiron Atlantic, Inc. v. Aguakem International Inc, 290 F.3d 1287 (11th Cir. 2002).
26 M/s Simpark Infrastructure Pvt. Ltd. v. Jaipur Municipal Corporation, 2013 (3) RLW 2133 (Raj).
27 Visa International Ltd v. Continental Resources (USA) Ltd., (2009) 2 SCC 55 ¶ 26, 41.
28 Hillas & Co. v. Arcos Ltd., (1932) 147 LT 503 at 514.
29 GR Securities Pty Ltd. v. Baulkham Hills Private Hospital Pty Ltd., (1986) 40 NSWLR 631 at 634.
30 BG Group PLC v. Republic of Argentina, 572 U.S. 25 (2014).
31 Sampurna Mukherjee, Whether Contractual Preconditions to Arbitration should be regarded as ‘Impediments’ to an Arbitral Tribunal’s
Jurisdiction, THE AMERICAN REVIEW OF INTERNATIONAL ARBITRATION (2022).

32 Ohpen Operations UK Ltd. v. Invesco Fund Managers Ltd, 2019 EWHC 2246 (TCC).
5
take part in discussions merely for the purpose of complying with the pre-arbitral step. Courts would
normally ascertain whether such discussions or negotiations were entered into between the parties
with the objective of settling such disputes.
25. It is submitted that the England and Wales High Court has laid down certain principles as guiding
factors to ensure the enforceability of good faith negotiations according to which the agreement must
create an enforceable obligation requiring the parties to engage in alternative dispute resolution and
that such an obligation must be clearly expressed to be a condition precedent to arbitration or court
proceedings.33
26. In the present case also use of the word ‘shall’ created a binding obligation on the Cl to engage in
good faith negotiations which was not done by the Cl Moreover, the smart contract specifically
contained Clause XX which talked about the pre-arbitral proceedings, therefore both conditions were
fulfilled.
1.2.1 The tribunal does not have jurisdiction to try Oorbus Ltd. as a party to the proceedings
27. Determining whether a non-signatory can be joined to arbitration proceedings is not a question of
extending an arbitration agreement to third parties. Instead, it is determined whether the non-signatory
falls within the scope of the arbitration agreement and thus, can be said to be included in the
agreement.34 Whether a non-signatory falls within the scope of an arbitration agreement is determined
in accordance with the applicable law.
28. A person who is not a party to the arbitration agreement, cannot be roped into the arbitration
proceedings.35 A non-signatory or third-party could be subjected to arbitration without their prior
consent, but this would only be in exceptional cases. The court will examine these exceptions from
the touchstone of direct relationship to the party signatory to the arbitration agreement, direct
commonality of the subject-matter, and the agreement between the parties being a composite
transaction.
29. The transaction should be of a composite nature where the performance of the mother agreement
may not be feasible without aid, execution, and performance of the supplementary or ancillary
agreements, for achieving the common object and collectively having bearing on the dispute.36
33 Tang v. Grant Thornton International Ltd [2012] EWHC 3198 (Ch).

34 1 GARY B. BORN, INTERNATIONAL ARBITRATION AND FORUM SELECTION AGREEMENTS:
DRAFTING AND ENFORCING 37 (The Netherlands, Kluwer Law International BV, 2010).
35 Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya, (2003) 5 SCC 531.
36 Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc., (2013) 1 SCC 641.
6
30. It is humbly submitted that the application of an arbitration clause can only be extended to parties
directly involved in the conclusion of a contract who, at the time of contracting, knew the existence
and scope of the agreement.37 Also, it is Cl’s duty to prove that Res No. 2 is a party to the arbitration
agreement. Res No. 2 does not have any connection with the process of negotiations, it was neither a
party to the agreement nor had it given its assent to the arbitration agreement.38
1.3 The Cl has breached the pre-arbitration negotiation clause

31. It is humbly submitted that any user of the MetaTerrain platform and its various tools was subject to
its Terms of Use. The Terms of Use document was to be mandatorily read and understood by any
user before using the tools and the site. The ToU clearly enunciated the provision in the form of
Clause XX regarding the process to be followed in case of any dispute.39
32. Thus, prior to the initiation of arbitration, a tiered dispute resolution clause has been included in the
form of the performance of good-faith negotiations between the parties. Such negotiations are to be
mandatorily performed before initiating arbitration. Until such pre-arbitration negotiation is
completed and duly complied with, no reference to arbitration proceedings can be made by either
party to the contract.40
33. Moreover, the correspondence exchanged between the parties cannot be deemed as good-faith
negotiations,41 as the exchange was done merely with the intention to bring the factum of the dispute
to the awareness of both parties. There was no intention to solve the dispute via the said
correspondence. Furthermore, the Cl’s contention to deem the said correspondence as pre-arbitration
negotiations is unacceptable as such correspondence would be reduced to being adhered to as a mere
‘formality’.
34. Ergo, usually the process to be followed by the parties, for compliance with such pre-arbitral steps,
must be clearly determined and incorporated in the agreement. Clause XX of the ToU clearly defines
the process in the following words: “The parties shall come together and try to amicably resolve the disputes.”
35. The above-mentioned text can be reasonably interpreted by any prudent man as requiring the parties
to expressly decide to conduct negotiations and in furtherance of the same meet, in whatever
reasonable manner, to discuss with a clear intention to resolve the dispute and only in case of failure
37 Dallah Real estate and Tourism Holding Company v. the Ministry of Religious Affairs, Government of Pakistan, [2010]
UKSC 46.
38 Reckitt Benckiser (India) Private Limited v. Reynders Label Printing India Private Limited & Anr, Petition for
Arbitration (Civil) No. 65 of 2016.

39 Moot Proposition, Page 10 Clause XX.
40 HIM Portland LLC v. DeVito Builders Inc., 317 F 3d 41, 42 (1st Cir, 2003).
41 Quick Heal Technologies Limited v. NCS Computech Private Limited & ors, (2009) 2 SCC 55.
7
in pre-arbitral process parties can refer the matter to arbitration, which makes the clause a mandatory
obligation & a condition precedent.42
36. In Visa International Ltd v. Continental Resources (USA) Ltd,43 it was held in order to see whether the
negotiation clause has been fulfilled or not, the Court would see whether the discussions were entered
into by the parties with the objective to settle such disputes. If such discussions were entered into
merely to comply with the pre-arbitral step, it would mean the parties have lacked to demonstrate
genuine good faith and thus there shall be an absence of a genuine desire to settle the dispute.44
37. It is submitted that, in the present case, the correspondence exchanged between the parties from 8th
November 2022 to 7th July 2023 cannot be deemed as pre-arbitral negotiations as firstly, they were not
in the manner prescribed under the clause and secondly, they were done with the intention to settle the
dispute. Therefore, it is humbly submitted that the arbitration request is liable to be dismissed due to
it being premature by reason of breach of the pre-arbitration negotiation clause.
2) WHETHER THE CL IS ENTITLED TO DAMAGES TO THE EXTENT OF USD 2.4

MILLION?
38. The Cl is not justified in seeking USD 2.4 million as compensation on grounds that the same the Cl
on account of their wrongful acts cannot seek compensation in accordance with the Doctrine of Clean
Hands whereunder a party who seeks equitable relief must have acted fairly and without any
wrongdoing in the matter.[2.1] Secondly, the additional claim of USD 0.9 million is unviable on the
basis of the Doctrine of Abuse of Rights which asserts that legal rights should not be exercised in a manner
that goes against the principles of good faith or leads to unjust harm to others. [2.2] Thirdly, the Cl’s
claim to demand USD 2.4 million on grounds of loss of business opportunities is untenable in the
eyes of the law given that the cause is too remote and the loss alleged does not arise reasonably from
the acts of the Res. [2.3]
42 Kemiron Atlantic Inc. v. Aguakem International Inc., [2002] 290 F 3d 1287.

43 Visa International Ltd v. Continental Resources (USA) Ltd, (2009) 2 SCC 55.
44 Aditya Mehta and Swagata Ghosh, Good Faith or Bad Faith – Analysing the Enforceability of PreArbitral Negotiation
Clauses, 27 NLSBLR, (2021).
8
2.1 The claim is unjustified on grounds of the Doctrine of Clean Hands

39. The ‘unclean hands’ or alternatively the ‘dirty hands’ or ‘clean hands’ doctrine is based on the maxim
of equity which states that one “who comes into equity must come with clean hands” and provides that a court will
not lend its aid if a party’s cause of action is based on an unlawful act.45
40. The purpose of the doctrine is to prevent a party from obtaining relief when that party’s own wrongful
conduct has made it such that granting the relief would be against equity and good conscience.46 The
doctrine is widely acceptable in international public policy47 and requires a nexus to be established
between the relief forming the objection and past actions which may be characterized as unclean
hands.48
41. An equitable relief can be denied to a Court on the basis of the applicant’s ‘iniquity’.49 Courts in Guyana
v. Suriname relied on three elements to ascertain whether a claim for damages will constitute an act of
unclean hands-
(a) the breach must concern a continuing violation;
(b) the remedy sought must be ‘protection against the continuance of that violation in the
future’, not damages for past violations and;
(c) there must be a relationship of reciprocity between the obligations considered50
42. The object of an auction is to secure the optimum realizable value of the property by giving
opportunity to the potential buyers facing competitive bids either in open or closed format. The terms
‘auction’ and ‘bid’ are interrelated as both give the idea of selling the product to the public.51
43. Public auction also ensures fairness in the actions of the public authorities or the sales officers who
should act fairly and objectively. Likewise, in the instant case the auction of the three virtual lands of
auction were free from any sort of bias, favouritism, nepotism, or beset with suspicious features of
underbidding detrimental to the legitimate interest of the Cl.52 A detailed note of the auction process
45 Crawford, J., Brownlie’s Principles of Public International Law, 8th ed., 2012, pg. 701.
46 Colby Furniture Company, Inc. v. Belinda J. Overton 299 So. 3d 259 (Ala. Civ. App. 2019).
47 Niko Resources (Bangladesh) Ltd. v. Bangladesh Oil Gas and Mineral Corporation (Petrobangla), Bangladesh Petroleum
Exploration and Production Company Limited (Bapex), ICSID Case No. ARB/10/18 ( ¶ 476).
48 Niko Resources (Bangladesh) Ltd. v. Bangladesh Oil Gas and Mineral Corporation (Petrobangla), Bangladesh Petroleum
Exploration and Production Company Limited (Bapex), ICSID Case No. ARB/10/18 (¶ 483).
49 Stephens v. Averay [1988] 1 Ch 449 (Ch D) 453.
50 Arbitral Tribunal Constituted Pursuant to Article 287, and in Accordance with Annex VII, of the United Nations
Convention on the Law of the Sea in the Matter of an Arbitration between Guyana and Suriname, 30 R.I.A.A. 1, ¶ 481
(Perm. Ct. Arb. 2007).
51 Rajiv. Kumar Jindal v. BCI Staff Colony Residential Welfare Assn., 2023 SCC OnLine SC 507.
52 Lakshmanasami Gounder v. CIT, (1992) 1 SCC 91.
9
was provided to all auction attendees via a mail whereunder a gas limit of 50,000 was explicitly laid as
an unequivocal requirement for the auction to be conducted.53
44. Furthermore, an auction cannot be called into question unless there is a justification to set it aside on
grounds of some alleged fraud.54 Since, there was no such ill faith on behalf of the Res and the sale of
impugned virtual Plot to Crimson Construction did not arise from the Res’ act, the auction cannot be
called into question.
45. In the instant case, the Cl not only failed to engage in mandatory pre-arbitration negotiations despite
various requests made by the Res,55 but also on account of miscalculations and lack of margin in gas
units, 50,000 gas limit set by themselves on their account fell short of the 55,000 gas units required
for the said transaction which clearly establishes an underlying ill will on their part to exhort money
from the Res. Hence, the Cl is not entitled to Claim USD 2.4 million as compensation for lost business
opportunity due to severe mistake committed on their part thereby violating the Clean Hands doctrine.
2.2 The Claim of USD 2.4 million should be denied on grounds of Abuse of Rights
46. The Abuse of Rights doctrine is an internationally recognized principle of international law56 that
requires parties to observe good faith in the exercise of their rights and has been recognized by the
ICJ.57 The Doctrine has the power to override the substantive law proper in the international arbitral
process58 and has been invoked in a number of cases to deny the claimants the lost profit if the Court
can ascertain that the reliefs claimed are inconsistent with the duty of good faith.
47. The US Court has laid various factors that are used to determine whether an action violates the abuse
of rights doctrine and includes:
(a) the predominant motive for the action is to cause harm;

(b) the action is totally unreasonable given the lack of any legitimate interest in the exercise
of the right and its exercise harms another;
(c) the right is exercised for the purpose other than that for which it exists59
53 Res Exhibit R-6, pg. 40.

54 Valji Khimji and Co. v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd., (2008) 9 SCC 299.
56 General Principles of Law as Applied by International Courts and Tribunals (1953).
57 U.K. v. Norway 1951 I.C.J. 116, 142.
58 Patuha Power Ltd (Bermuda) v PT (Persero) Perusahaan Listruik Negara (Award, 4 May 1999) (¶ 324).
59 Karaha Bodas Company LLC (Cayman Islands) v. Perusahaa Pertambangan Minyak Dan Bumi Negara and PT. PLN
Persero (Indonesia), Final Award, Dec. 18, 2000 (¶ 306).
10
48. The award of USD 2.4 million would permit the Cl to reap pure profit by reference to hypothetical
future initiatives in pursuit of an agreement which would act as an instrument of oppression “like
stepping on the shoulders of a drowning man”60 which would go against the principle of inequity and cause
substantial loss to the Res despite the Cl having agreed to Res No. 1 not bearing any responsibility for
any interaction with the application/application/code/Site/Tool in case of a negligently executed
smart contract in express words and actions.61
49. Thus, the calculation of profits and damages by the Hon’ble Tribunal must not in any way impoverish
the Res and is necessary to prevent the claimant's undoubtedly legitimate rights from being extended
beyond tolerable norms, on the ground that it would the compensation of USD 2.4 million is
untenable in the eyes of law.62
2.3 The CL is not justified in demanding USD 2.4 million as compensation on account of
Loss of Business Opportunities
50. In international arbitration, as under national laws, the burden of proof usually lies with the party
making an assertion,63 in both common and civil law jurisdictions. Further, any profit accrued as a
consequence of the claimant’s mitigating steps must be credited to the defendant if causation is
established. The onus is on the defendant to prove both the existence and the amount of profit.64 It
must be noted that claims for loss of business opportunities and loss of profits are usually not granted
simultaneously, since they are considered as principally the same.65
51. Damages for breach of contract in civil and common law jurisdictions have a common source from
the Roman law principle of casum sentit dominus i.e., each person bears his or her own accidental
damages.66 Additionally, a claimant may be precluded from recovering damages for loss that he could
have avoided through appropriate measures67 The purpose of this principle is to preclude wastefulness
60 Id ¶343.
61 Cl Exhibit C-1, Clause XIII pg. 15.
62 Himpurna California Energy Ltd. (Bermuda) v. Republic of Indonesia, Final Award (¶ 93).
63 Blackaby, Partasides and others, op. cit. note 10, (¶ 6.84); G Born, International Commercial Arbitration (2nd ed.,
Wolters Kluwer, 2014), 2313–14.

64 Thai Airways International Public Co Ltd v. KI Holdings Co Ltd [2015] EWHC 1250 (Comm).
65 Mahanagar Gas Ltd. Mumbai v. Babulal Uttamchand & Co., Mumbai (2012) 4 Mh.L.J 344.
66 D. Dobbs, The Handbook on the Law of Remedies (1993).
67 Durkirk Colliery Co. v. Lever (1878), 9 Ch. D. 20.
11
68
on the part of the claimant at the expense of the respondent which extends to the claimant not
needing to “do anything other than in the ordinary course of business”.69
52. Since damages on account of lost business opportunities is a special damage,70 it cannot be claimed in
contract suits, “unless such damages were within the contemplation of both parties at the time of the contract”71 which
was not stipulated in the ToU, thereby making it a requirement for the Cl to specifically plead and
prove that profits were lost.72 Compensation for loss of enjoyment of money can also be claimed by
a party who was entitled to the use of a certain sum of money under a contract or award73
53. In general, common-law jurisdictions limit the recovery of damages to losses that were within the
contemplation of the parties when the contract was made or were foreseeable as a probable result of
the breach. An Indian Court74 relying on Maharashtra State Electricity Board v. Sterlite Industries (India)
Ltd.75 held that if a party has not suffered any loss, even if the defaulting party commits a breach, in
the absence of proof of loss, the opposite party cannot be awarded the claim of loss of profit. Hence,
Cl’s claim of USD 2.4 million cannot be justified in light of actual damage or loss.76
54. In McDermott Case77, the Court established that "In the assessment of damages, the Court must consider only
strict legal obligations, and not the expectations, however reasonable, of one contractor that the other will do something
that he has assumed no legal obligation to do." Additionally, the impugned amount does not match the
relevant standard of proof is too remote speculative and remote.78
55. In order to obtain lost profits, the Cl was supposed to demonstrate and establish a causal connection
between the Res 's breach and the claimant's loss of future revenues79 which has not been done so
which calls the claim of USD 2.4 million into question. The Cl allegation cannot be acceded to since
the compensation of USD 2.4 million did not arise out of the acts of the Res as so claimed.
68 Vertue v. Bird, [1677] 84 Eng. Rep. 1000.

69 Dunkirk Colliery Co. v. Lever (1878) 9 Ch. D. (¶ 20, 25).
70 Murlidhar Chiranjilal v. Harishchandra Dwarkadas & Anr., AIR 1962 SC 366.
71 Stroms Bruks Aktie Bolag and Others v. J. & P. Hutchison [1905] UKHL 844.
72 Ratcliffe v. Evans [1892] 2 QB 524, 528; Bodley v. Reynolds, 115 Eng. Rep. 1066 (Q.B. 1846).
73 Sardar Mohar Singh v. Mangilal (1997) 9 SCC 217.
74 Ajay Singh v. Suneel Darshan 2015 SCC Online Bom 1412.
75 Maharashtra State Electricity Board v. Sterlite Industries (India) Ltd. 2000 SCC Online Bom 89.
76 Essar Procurement Service Ltd. v. Paramount Constructions 2016 SCC Online Bom 9697.
77 McDermott International Inc. Burn Standard Ltd. and Ors. (2006) 11 SCC 181.
78 SD Myers Incorporated v Canada, Order, 2004 FC 38
79 Galoo Ltd. v. Bright Grahame Murray, 14 T.L.R. 25 (C.A. 1994); Alexander v. Cambridge Credit Corp. (1987) 9
N.S.W.L.R. 310, (Para 350-51); March v. E. & M.H. Stramare Pty. Ltd., (1991) 171 C.L.R. 506.
12
2.3.1 The compensation demanded is remote
56. The losses arising from a breach of contract must arise directly from the acts of the other party which
is generally referred to as the test of ‘remoteness of damage’. A party can be made liable “only for natural
and proximate consequences of a breach or those consequences which were in the parties’ contemplation at the time of
contract… the party guilty of breach of contract is liable only for reasonably foreseeable losses - those that a normally
prudent person, standing in his place possessing his information when contracting, would have had reason to foresee as
probable consequences of future breach”. 80
57. Additionally, Indian Courts have refrained from granting compensation for any remote and indirect
loss or damage sustained by reason of breach.81 Loss of profits, which is not a direct consequence of
the breach of the contract, would not attract damages except where the injured party has intimated
the defendant of the same or if such loss of profits is contemplated by the parties.82
58. Hence, to ensure a factual link between the wrongful acts and the damage in question, as opposed to
any issue as to remoteness or indirect loss given that in cases “Where the loss is far removed in causal sequence
from the act complained of, it is not competent for this tribunal to seek to unravel a tangled network of causes and effects,
or follow, through a baffling labyrinth of confused thought, numerous disconnected and collateral chains”83 so as to
establish the damages suffered.
59. The question of determining the remoteness of damage is a factual question and one that could have
been reasonably contemplated by the parties as a serious possibility should a breach occur 84. The test
was first established in the landmark case of Hadley v. Baxendale85 and was crystallized furthermore in
Victoria Laundry (Windsor) Ltd v. Newman Industries Ltd, Czarnikow Ltd v. Koufos (The Heron II)86 and
South Australia Asset Management Corp v. York Montague Ltd. BHL87 submit that it is important to first
examine the rules in greater detail.
80 State of Kerala v. K. Bhaskaran AIR 1985 Ker 49 (¶ 12).

81 Karsandas H. Thacker v. The Saran Engineering Co. Ltd., AIR 1965 SC 1981; Shwetadri Speciality Papers Pvt. Ltd. v.
National Research Development Corp., 2019 SCC Online Del 9345.
82 Bharat Coking Coke Ltd. v. L.K. Ahuja (2004) 5 SCC 109.
83 Administrative Decision II, R.I.A.A. vii, p. 23 (1923).
84 Attorney General of the Virgin Islands v. Global Water Associates Ltd (British Virgin Islands) [2020] UKPC 18.
85 Hadley & Anor v. Baxendale & Ors., [1854] EWHC Exch J70.
86 Victoria Laundry (Windsor) Ltd v. Newman Industries Ltd. [1949] 2 KB 528.
87 C Czarnikow Ltd v. Koufos [1967] UKHL 4.
13
60. Since the contractual relations between the Cl and the Res did not encapsulate any duty in respect of
the kind of loss which the Cl has suffered,88 the claims of the Cl are not justified in the eyes of the law
to demand compensation of USD 2.4 million.
61. The test for checking the remoteness of damage was enunciated in Hadley v. Baxendale89 which stated
that where two parties have made a contract, which one of them has broken the damages which the
other party ought to receive in respect of such a breach of contract should be such as may be-
(a) Fairly and reasonably be considered as either arising naturally, i.e., as per the usual course
of things from the breach of contract itself (‘first limb’);
(b) Reasonably supposed to be in contemplation of both parties at the time they made the
contract as the probable result of breach of it (‘second limb’).
62. Hadley's test was reformulated and described by the Court as holding the defendant is liable only “for
loss which it was the intention of the parties that he should bear i.e. loss for which he has ‘assumed responsibility’, or
which falls within the scope of his duty”. The concept has been held to be identical to identifying the scope
of an implied assumption of responsibility by the defendant in the contract.90
63. Arbitral Tribunals have emphasized that there must exist a factual link between the wrongful acts and
the damage in question, as opposed to any issue as to remoteness or indirect loss which the Cl has
failed to establish in the present matter.91 Hence, the compensation of USD 2.4 million cannot be
granted on the ground that the cause alleged for the loss of business opportunity is too remote for the
Hon’ble Tribunal to grant such a claim.92
2.3.2 The compensation claimed does not pass the test of Reasonable Foreseeability
64. The Law cannot always take responsibility for all the consequences of a wrongful act because it is
infinite of the law to judge the causes of causes, or consequences of consequences. In the varied web
of affairs, the law must abstract some consequences as relevant, not perhaps on grounds of pure logic
but simply for practical reasons.93 The concept of 'reasonable foreseeability' is concerned with how
88 South Australia Asset Management Corp v. York Montague Ltd [1997] 27 EG 125 1 A.C. 191 HL.
89 Hadley & Anor v. Baxendale & Ors., [1854] EWHC Exch J70 (¶ 354-355).
90 Transfield Shipping Inc v. Mercator Shipping Inc [2008] UKHL 48.
91 Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania, ICSID Case No. ARB/05/22 (¶786).
92 Burgundy Global Exploration Corp v. Transocean Offshore International Ventures Ltd [2014] SGCA 24.
93 Liesbosch Dredger v. S.S. Edison [1933] AC 449.
14
much knowledge about risks it is reasonable to attribute to people. Compensation is due only for
harm, including future harm that is established with a reasonable degree of certainty.94
65. In common law countries, foreseeability is evaluated in light of the special knowledge that the Res
possessed (actual knowledge), as well as any knowledge the Res should have possessed (imputed
knowledge).95 The Wagon Mound case96 made redundant the Polemis test97 for foreseeability and laid
down that the Court cannot hold someone liable for all consequences of their actions. Liability must
be based on the damages, not on the act since it would not be fair to hold liability for unforeseeable
damages unless any foreseeable damage resulted from the same.
66. In case of a breach of contract, the aggrieved party is only entitled to recover such part of the loss
actually resulting as was at the time of the contract reasonably foreseeable as liable to result from the
breach. Reasonable foreseeability can be determined by knowledge possessed by the parties at the time
of entering into the contract or, by the party who later commits the breach. The “knowledge ‘possessed’
is of two kinds: one imputed, the other actual. Everyone, as a reasonable person, is taken to know the ‘ordinary course
of things’ and consequently, what loss is liable to result from a breach of contract in that ordinary course”.98
67. Since the Cl were supposed to be held responsible for all their activities in the Account99, the Cl cannot
hold the Res responsible for any loss of business opportunities. Hence, the acts of the Res in no
manner result in the damages so claimed by the Cl While the Res has agreed to pay USD 1.5 million
to the Cl, the additional USD 0.9 million as compensation for the alleged loss of business opportunities
is untenable in the eyes of law on grounds that the sale of the Virtual Plot #2332 to Crimson
Construction was not because of the acts of the Res Hence, the claim of USD 2.4 million is baseless
following the principle of Reasonable Foreseeability and Remoteness of Damages claimed.
94 UNIDROIT art. 7.4.3(1).

95 CHITTY ON CONTRACTs 1 1672 (A.G. Guest ed., 25th ed. 1983).
96Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co. [1961] AC 388.
97Re Polemis and Furness, Withy & Co Ltd [1921] 3 KB 560.
98 Victoria Laundry (Windsor) Ltd v. Newman Industries Ltd. [1949] 2 KB 528; Pravudayal Agarwala v. Ram Kumar
Agarwala AIR 1956 Cal 41.

99 Cl Exhibit Cl-1, Clause XII, pg 15.
15
ISSUE 3: WHETHER A VALID CONTRACT HAS BEEN FORMED UNDER THE

PROVISIONS OF CISG?
68. It is humbly submitted before the Hon’ble Tribunal that A valid contract has not been formed under
the provisions of CISG because, firstly, EstateX LLC has failed to fulfill its obligations as a buyer. [3.1]
secondly, no valid contract has been formed under the provisions of CISG [3.2] and thirdly, the essentials
of a valid smart contract have not been fulfilled. [3.3]
3.1 ESTATEX LLC has failed to fulfil its obligations as a buyer.

69. It is submitted that the Convention clearly states the provision regarding the obligations of the buyer
and actions preparatory to payment of the price, which are specified in the contract or in applicable
laws and regulations. Art. 54 (1)100 states that: “The buyer's obligation to pay the price includes taking such steps
and complying with such formalities as may be required under the contract or any laws and regulations to enable payment
to be made.”
70. Thus, the Buyer is duty bound to take such steps as stated and comply with all requisite formalities
that may be required as per the contract or by laws and regulations that would enable successful
completion by payment. In the present case, such steps include successful bidding and keeping a
sufficient amount of ‘gas’ in the account which was not taken care of by the Cl.
71. Successful execution includes placing bids by allowing smart contracts to utilize the bidder’s
TerraTokens for the bid. The buyer is under an obligation to place a successful bid via smart contract
for smooth execution. The failure to establish a successful credit is considered as a failure of the buyer
to meet its obligation to pay the price of the goods101 in the meaning of Art. 54,102 which states that
the buyer’s obligation to pay the price includes taking such steps and complying with such formalities
as may be required under the contract or any laws and regulations to enable payment to be made103.
72. Pursuant to Art. 64104, it has also been determined that the seller could declare the contract avoided
if the buyer failed to perform any of its obligations that amounted to a fundamental breach of the
contract, which is the same that has happened in this particular dispute. The court has applied the
definition of ‘fundamental breach’105 as defined in Art. 25,106 which reads as: “A breach of contract
100 CISG 1980, Art. 54 (1).

101 CLOUT case No. 631.
102 CISG 1980, Art. 54.
103 Arbitral award No. 11849, ICC (2003).
104 CISG 1980, Art. 64.
105 CLOUT case No. 142.
106 CISG 1980, Art. 25.
16
committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive
him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person
of the same kind in the same circumstances would not have foreseen such a result.” Here, the insufficient amount
of ‘gas’ in the Cl’s account amounts to a fundamental breach which has deprived the Res to continue
with the contract.
73. It is humbly submitted that, as notified vide mail dated 20th October 2022,107 the participation process
included the interested bidders making successful bids and advised them to place a sufficient amount
of gas in their respective accounts for the smooth execution of contracts. Execution of the bid
transaction, a condition requiring adequate gas, was an essential step to enable the payment to be
made. It must be noted that nowhere in the whole process, MetaTerrain has mentioned or prescribed
any particular amount of ‘gas’ that must be put in one’s account.
74. Hence, the responsibility for setting the gas limit for the smart contract lay with EstateX, to whom
the same was already notified before the auction and was reasonably expected to be acted upon, given
the large scale of the auction. In order to take delivery of the good, the buyer is legally obliged to do
all the acts which could reasonably be expected of him in order to enable the seller to make delivery.
75. A successful bid under MetaTerrain’s pre-auction guidelines was reasonably expected from the buyer
for him to receive successful bidding towards the end of 5 minutes of the auction. In case of an
unsuccessful bid by the failure of the buyer to perform any of his obligations under the contract,
MetaTerrain is free to declare the contract as avoided.
76. Furthermore, it was held in Quoine Pte Ltd v. B2C2 Ltd.,108 that the contract in respect of each concluded
trade is made directly between the buyer and the seller and must be strictly followed on the terms
agreed between both of them. The users of the Platform were also contractually bound with the seller
under the terms and conditions of the agreement governing the use of the Platform, i.e. the
Agreement. The agreement, therefore, is prima facie the document both parties must strictly adhere
to.
77. Furthermore, The ToU clearly prescribes that MetaTerrain would incur a limited liability in case of
loss by act of the participant or any third party. Clause XIII109 of the ToU mentions the Limitations
of Liability and states: “MetaTerrain will not be liable for any loss or damage to you or any third party arising from
107 Res Exhibit- R-6, pg. 40.

108 Quoine Pte Ltd v. B2C2 Ltd. [2020] SGCA (1) 02.
109 Cl Exhibit C-1, Clause XIII, pg. 15.
17
your inability or failure for any reason to comply with any of the foregoing obligations or for any reason whatsoever, except
fraud on our part.” invitation
78. A user is bound to keep in mind all possible risks and damages that might be reasonably expected to
take place, and the user is expected not to exclusively rely in any way on the correct or secure
functionality or performance of the Tools and Site, as per Clause IX of ToU of MetaTerrain.110
79. Therefore, it is because of the Cl’s fault that the contract cannot be administered. Insufficient caution
taken by the Claimant, despite repeated advice by the Res, resulted in the failure of the contract.
3.2 No valid contract has been formed under the provisions of CISG.
80. The present contract in dispute, i.e., 47RZ*K, has not been validly formed and hence does not put any
liability on Res No. 1. This is contended because the essentials of a valid contract under CISG have
not been fulfilled in the present contract. For being a valid contract in a case of an auction, there are
3 steps- invitation to offer, offer & acceptance, mentioned in articles 14, 15, and 18 respectively.
81. In the case of an auction, the auctioneer releases the notification of auction which is considered the
invitation to offer which has been defined in Art. 14 (2)111 which states, “A proposal other than one
addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary
is clearly indicated by the person making the proposal.” Here, the email dated October 20 2022112 clearly invites
people to take part in the auction of certain land parcels including the disputed plot #2332, and hence
the step has been completed.
82. The Convention on the use of Electrical Communications in International Contracts clarifies that a
proposal to conclude a contract made through electronic means and not addressed to specific parties
amounts to an invitation to deal, rather than an offer whose acceptance binds the offering party113.
83. Once an invitation to offer has been formulated and bid it is only when the seller makes an offer to
contract by delivering the goods and the buyer accepts this offer by performing, can a valid contract
be said to have been formed114.
84. It is stated in the Art. 15 (1),115 “An offer becomes effective when it reaches the offeree.” Here, the Cl, along
with many others offered various prices for the said plot #2332 and the Cl emerged as the highest
110 Cl Exhibit C-1, Clause IX, pg. 14.

111 CISG 1980, Art. 14 (2).
113 Art. 11 United Nation Convention on the use of Electrical Communications in International Contracts
114 CLOUT No. 934 [Tribunal cantonal du Valais, Switzerland, 27 April 2007].
115 CISG 1980, Art. 15 (1).
18
bidder with a total of 300,000 Terratokens.116 This step can be seen as an offer by the Cl and it stands
completed as per the circumstances of the present case.
85. Acceptance has been defined in the CISG in the Art. 18117 as
18(1) A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or
inactivity does not in itself amount to acceptance.
(2) An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance
is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed,
within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the
means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances
indicate otherwise.
Here, it has been clearly stated that in case the offeror doesn’t receive an assent/indication of assent
within the fixed time (10 days in the present case), it is concluded that Acceptance to that particular
contract has not been given and the contract has not been administered.
86. Here, the final step, i.e., acceptance, is the key component, because of which the contract could not
be administered. It is argued that there was no acceptance from the side of the Res as to the offer by
the Cl and hence the contract is not completed. Because of the absence of acceptance, the contract
between the Cl and the Res stands null. The mode of acceptance was communicated to the Cl by the
Res via an email dated October 20, 2022118 which stated, “Land Parcel Transfer: The winning bidder
will receive the respective token representing the land parcel for which they were the successful bidder.” Here, it must
be noted that no such acceptance has been received by the Cl.119
87. Moreover, the Cl cannot be granted the contract as the insufficient amount of gas in its account is its
own fault and in case any formalities & other necessary regulations are not undertaken by the bidder,
then the auctioneer is not bound to execute the contract in its name.120
3.2.1 Highest Bid does not necessarily imply conclusion of the Contract.
88. The Cl’s argument is based on the fact that it was the highest bidder in the auction which is flawed as
it is not necessary that the highest bidder in an auction has the right to get the contract executed.121
116 ¶ 10, Moot Prop, pg. 10.

117 CISG 1980, Art. 18.
119 Cl Exhibit C-2, pg. 17.
120 Marcandi Ltd v. Revenue and Customs Commissioners, [2018] 4 WLR 128.
121 Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] UKHL 13.
19
As long as an order/notification regarding the final acceptance of the bid has been passed by the
competent authority, the highest bidder acquires no vested right to have the contract concluded in its
favour.122
89. If no formal acceptance is given by the auctioneer to the bidder, the highest bidder cannot presume
the contract to be concluded and then sue the auctioneer for breach of contract as no contract has
been formed in the first place between the parties.123 In the present case, the acceptance of the bid
had to be shown by the Res by reflecting the same info. on the website dashboard of the account of
the Cl but the same did not happen.124
90. Deduction of amount from the Cl’s account cannot amount to a valid contract as the highest bidder
would acquire right, title or interest in the property only after the confirmation of sale, and till then he
would not acquire any interest in the property merely on his depositing the amount of highest bid
offered by him in the auction sale.125 The mere fact that the amount was deducted from the Cl’s
account does not imply that the Contract was properly concluded.
91. Hence, no Acceptance of the bid has taken place by the Res which has led to the non-completion of
the contract and hence no liability whatsoever lies on the Res for the fulfillment of the same. No valid
contract has been formed between the Cl and the Res under the provisions of CISG.
3.3 The essentials of a valid smart contract have not been fulfilled
92. A smart contract is a set of computer codes which automatically executes all or part of an agreement
and is stored in a blockchain-based platform.126 It refers to a set of promises, specified in digital form,
including protocols within which the parties perform on these promises.127
93. In the present dispute, no contract has been formed between the Cl & the Res as the essentials of a
smart contract have not been fulfilled. First of all, for a smart contract to be enforceable, it must
follow basic contract law requirements: The contract must have an Offer, Acceptance, and
Consideration to be legally enforceable.
a) Offer: One or both parties offer the terms of the agreement.
b) Acceptance: Both parties accept the terms.
122 U.P. Avas Evam Vikas Parishad v. Om Prakash Sharma, (2013) 5 SCC 182.
123 HUDA v. Orchid Infrastructure Developers (P) Ltd., (2017) 4 SCC 243.
124 Cl Exhibit C-2, pg. 17.
125 Arvind Kumar v. S.D.O., 2002 SCC OnLine BoR (UP) 38.
126 Stuart D. Levi & Alex B. Lipton, An Introduction to Smart Contracts and Their Potential and Inherent Limitations, 1 HARVARD
LAW SCHOOL FORUM ON CORPORATE GOVERNANCE AND FINANCIAL REGULATION (2018).

127 Nick Szabo, Smart Contracts: Building Blocks for Digital Markets, ALAMUT BASTION OF PEACE AND
INFORMATION (1996).
20
c) Consideration: There is an exchange of something of value.128

In the present case, Acceptance is missing, which makes the contract non-enforceable.
94. Moreover, the terms of the smart contract must be clear and legally binding.129 The law binds the
contract-makers to draft the contract as clear and unambiguous as it can be, and the same applies to
a smart contract, which is automatically generated to contain all the required information in a proper
legal format.130 The present contract follows the same as the details of the contract have not been
questioned yet.
95. Furthermore, it must be taken care of that the smart contract & its content is checked & verified by
the parties.131 In many cases, digital signatures are used to verify the same, but in most cases, no
signature is required, and the contract is automatically generated.132 In such cases, like the present case,
it must be ensured that both parties are aware and consented to the said agreement/contract.133
96. In a smart contract, even though the whole process is automated and involves no human intervention
to ensure transparency and to remove any human mistakes, fraud, etc., the parties must be adequately
involved in the process of contract formation so that all the requisite practices and interests of both
the parties are secured.134 In the present case, it is clear from the facts that because of insufficient gas,
plot #2332 was not transferred to the Cl but was transferred to Crimson Constructions, and a valid
contract was formed during the same. It clearly shows that the Res did not want to enter into the
contract for the transfer of plot #2332 with the Cl, as the same land had already been sold.
97. Hence, from the current facts & circumstances, it is clear that no valid smart contract has been formed
under CISG between both parties and hence, Res No. 1 cannot be held liable for the breach of the
same.
128 Jonathan Bick, Are 'Smart Contracts' Smart Enough?, 3 N.J.L.J. (2017).
129 CFI Team, Smart Contract, 3 CORPORATE FINANCE INSTITUTE (2022).
130 Kate Valihura, How to Create a Smart Contract in 2022: A Complete Tutorial, LIGHT IT GLOBAL BLOGS (2022).
131 Jodie Gunzberg, The Smart Contract Platform Sector Explained, COINDESK (2021).
132 Nick Szabo, Smart Contracts: Building Blocks for Digital Markets, 3 CDROM (1996).
133 Palak Sethi, Understanding the Developing Technology of Smart Contracts and its Legal Position in India - Will it Replace a Traditional
Contract?, 11.1 NULJ 21 [2021].

134 Seah Ern Xu, Emerging from the Rabbit Hole: The Future of the Legal Industry, 4.1 RSRR 1 (2018).
21
ISSUE 4: WHETHER Res NO. 2 i.e., OORBUS LTD., A PARTY TO THE PRESENT
ARBITRATION PROCEEDINGS?
98. Cl submits that Firstly, The Tribunal does not have the jurisdiction to join Res No. 2, [4.1] and even
if it did, it is not in the legitimate interests of the proceedings to join Res No.2 to the Arbitration
Proceeding. [4.2] Secondly, Res No. 2 is not covered by the Group of Companies Doctrine. [4.3]
4.1 The Tribunal does not have the Jurisdiction to join Res No.2 to the arbitration
proceedings.
99. The tribunal does not have the jurisdiction to resolve disputes, including Oorbus Ltd., since Res No.
2 is not a party to the arbitration agreement. An arbitral tribunal needs to have jurisdiction to render
a final, binding, and enforceable award.135 In order to join Res No. 2, the tribunal would have to
establish proper jurisdiction to do so.
100. The parties have agreed that the proceedings shall be governed by the APCAM Arbitration rules.
Pursuant to Rule 9 (2) of the APCAM Rules, “The parties may agree on the applicable law to be applied by the
arbitral tribunal in the resolution of the dispute.” It has been generally viewed that the seat of the arbitration
has the closest connection with the arbitration.136 The parties have agreed that the seat of the
arbitration shall be Thamesburg. Therefore, the procedural matters, including the power of the
tribunal, are governed by the Thamesburg Arbitration law, which is a verbatim adoption of the
UNCITRAL Model Law on International Commercial Arbitration (the Model Law), and the APCAM
Rules.
101. The jurisdiction of an arbitral tribunal is established in the parties’ agreement to arbitrate.137 In
arbitration, the agreement to arbitrate is the only source from which the arbitral tribunal may derive
its jurisdiction.138 Jurisdiction of the tribunal is fundamental as awards rendered without proper
jurisdiction has no legitimacy.139 The arbitral tribunal’s jurisdiction is limited to issues between the
parties to an arbitration agreement.140
135 Albert Jan Ven Den Berg, The New York Arbitration Convention of 1958. Towards a Uniform Judicial Interpretation,
T.M.C. ASSER INSTITUTTE, 1981.
136GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, (Kluwer Law International 2014).
137Jagdish Chander v. Ramesh Chander & Ors (2007) 5 SCC 719.
138 DANIEL GIRSBERGER ET.AL., INTERNATIONAL ARBITRATION: COMPARATIVE AND SWISS
PERSPECTIVES (Nomos 2016).

139 John Y. Gotanda, An Efficient Method for Determining Jurisdiction in International Arbitrations, 40 COLUMBIA JOURNAL
OF TRANSNATIONAL LAW (2001).

140 Supra Note 117.
22
102. The Tribunal lacks jurisdiction to join Res No. 2 in the proceedings because the parties’ subscription
to the APCAM does not, in itself, grant the Tribunal jurisdiction to join non-signatories to the
proceedings. Furthermore, the arbitration agreement cannot be extended to cover Res No. 2, and
forcing Res No. 2 to join proceedings would endanger the enforcement of the award. The subscription
to the APCAM rules is not an expression of consent to the joinder of non-signatory third persons.
103. According to Rule 17 of the APCAM rules, “The arbitral tribunal may, at the request of any party, allow one
or more third persons to be joined in the arbitration as a party provided such person is a party to the arbitration
agreement, unless the arbitral tribunal finds, after giving all parties, including the person or persons to be joined, the
opportunity to be heard, that joinder should not be permitted because of prejudice to any of those parties.” These
provisions grant an arbitral tribunal power to join third parties but do not establish its jurisdiction to
do so.141
104. The jurisdiction of the arbitral tribunal stems only from the consent of the parties to submit their
dispute to binding and final adjudication.142 A subscription to institutional arbitration rules does not
in itself constitute consent to the joinder of third parties, and a departure from this principle would
require express language from the provision under consideration.143
105. The parties cannot be viewed as having consented to arbitrate generally or with the entire world. The
tribunal should find the parties’ subscription to the APCAM rules does not grant it jurisdiction to join
non-signatories to the proceedings. Instead, the provision allocates an arbitral tribunal procedural
power to join third parties to the proceedings where the jurisdiction has already been established.
106. Determining whether a non-signatory can be joined to arbitration proceedings is not a question of
extending an arbitration agreement to third parties. Instead, it is determined whether the non-
signatories fall within the scope of the arbitration agreement and, thus, can be said to be included in
the agreement.144 Whether a non-signatory falls within the scope of an arbitration agreement is
determined in accordance with the applicable law.145 As shown, the law applicable to interpreting the
scope of the arbitration agreement in UNCITRAL Model Law.
141 Tobias Zuberbuehler, Klaus Muller and Philipp Habegger, Swiss Rules of International Arbitration: Commentary, KLUWER
LAW INTERNATIONAL (2005).
142 Dongdoo Choi, Joinder in international commercial arbitration, 35 ARBITRATION INTERNATIONAL OXFORD
UNIVERSITY PRESS (2019).

143 Supra Note 99.
144 Supra Note 99.
145 2 ZUBERBÜHLER, MÜLLER & HABEGGER, EDS., SWISS RULES OF INTERNATIONAL ARBITRATION
(Schulthess, 2013).
23
107. Pursuant to Art. 7 UNCITRAL Model Law, an arbitration agreement is formed between parties
concerning certain disputes between them in respect of a defined legal relationship. Furthermore,
according to Art. 7(3), an arbitration agreement may be concluded orally, by conduct, or by other
means. “Conduct or other means” is used to form an arbitration agreement referring to, for instance,
interrelated contractual obligations and relations.146
108. Where the signatory parties to an arbitration agreement and a party are not involved in the same
commercial transaction with interrelated obligation or performance, even an identical dispute
resolution clause does not extend the scope of the arbitration agreement.147 There is no prior
agreement constituting an arbitration agreement between CL and Res No. 2.
109. Res No.1 and Res No. 2 are not interrelated. An arbitration agreement cannot be extended to third
parties when there are no interrelated contractual obligations between the signatory parties and the
third parties.148
110. In Dallah's case149, it was held that “the effects of an arbitration agreement clause may extended to parties that
did not actually sign the main contract but that were directly involved in the negotiation and performance of the contract.”
This means that the application of an arbitration clause can only be extended to parties directly
involved in the conclusion of a contract who, at the time of contracting, knew the existence and scope
of the agreement. It has been recognized to include considerations, such as the common intention of
the parties in the established commercial relationship.
111. In this case, the only parties involved in the conclusion and performance of the contract were Cl and
Res No. 1. Subsequently, the only parties whose intent was to resolve disputes arising from the
agreement were Cl and Res No. 1. Furthermore, Res No. 2 was not involved in the conclusion of the
said contract, nor positively knew its scope and the discussions leading up to that.
112. Applying the reasoning in the case of Fortress Value Recovery Fund,150 an extension of the arbitration
agreement to third parties associated with the arbitration agreement is not legally tenable. Therefore,
both parties explicitly did not intend to bind the same company to the arbitration agreement.
146 Supra Note 117.

147 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, (Kluwer Law International 2014); Patel v.
Kanbay International Inc., 2008 ONCA 867.
148 Philippe Leboulanger, Multi-contract Arbitration, 13 Journal of International Arbitration (1996); GARY B. BORN,
INTERNATIONAL COMMERCIAL ARBITRATION, (Kluwer Law International 2014).

149 Supra Note 37.
150 Fortress Value Recovery Fund LLP and others v. Blue Skye Special Opportunities Fund LP (A Firm) and others [2012]
EWHC 1486 (Comm).
24
4.2 Forcing Res No. 2 to join the proceedings would endanger the recognition and
enforcement of the award.
113. An arbitral tribunal has a duty to render an enforceable award.151 This means that the tribunal should
not do anything of a procedural nature that would leave the award vulnerable to a legitimate
challenge.152 Therefore, in the case at hand, the Tribunal must render an enforceable award.
114. Forcing Res No. 2 to join the Proceedings would potentially render the award unenforceable.
Pursuant to Art. v. (1) (d) of the NY Convention, “recognition and enforcement of the award may be refused if
the arbitral procedure was not in accordance with the agreement of the parties”. Should a tribunal wrongly join a
third party, over which it holds no jurisdiction, to the arbitral proceedings, the final award may be
refused recognition under Art. V(1)(d) of the NY Convention.153
115. If a court compels a party to arbitrate despite its not having consented to arbitration, the legitimacy
of both the arbitration and any resulting award is compromised. This follows from the fundamental
principle that commercial arbitration is consent-based and that a party cannot be bound by an
agreement to arbitrate or by the resulting award unless it consents to be so bound.
116. As shown above, the Tribunal does not have jurisdiction over Oorbus Ltd., and thus, cannot join it
to the proceedings. Therefore, should Res No. 2 be joined, the Tribunal could not render an
enforceable award.
117. Pursuant to Art. 17(1) of the APCAM rules. “The arbitral tribunal, in exercising its discretion, shall conduct
the proceedings so as to avoid unnecessary delay and expense and to provide a fair and efficient process for resolving the
parties’ dispute.”
118. This requirement to contribute to the efficient conduct of the proceedings extends beyond parties in
the proceedings and binds arbitral tribunals.154 International arbitration is generally perceived as
speedy and efficient.155 Furthermore, the tribunal shall make every effort to contribute to the efficient
conduct of the proceedings and avoid unnecessary costs and delays. Naturally, whenever the duration
of proceedings is prolonged and further complexified, their costs also rise.156
151 Dario Alessi, Enforcing Arbitrator’s Obligations: Rethinking International Commercial Arbitrators’ Liability, 31 Journal of
International Arbitration (2014); JAN WAINCYMER, PROCEDURE AND POLICY IN INTERNATIONAL
ARBITRATION (Kluwer Law International 2012).
152 JAN WAINCYMER, PROCEDURE AND POLICY IN INTERNATIONAL ARBITRATION (Kluwer Law
International 2012).
153 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, (Kluwer Law International 2014).
154 RUDOLF FIEBINGER AND CHRISTOPH HAUSER, AN ARBITRATORS VIEW: CAN PARTY AUTONOMY
HINDER PROCEDURAL EFFICIENCY? (ASA Special Series no. 44).

155 Supra Note 123.
156 Supra Note 124.
25
4.3 Res No.2 is not covered under the Group of Companies Doctrine.
119. The two parties to the contract are expressly named. The contracting parties are named MetaTerrain
Pvt Ltd. and Estate X Ltd. In constructing the contract, the tribunal must give effect to the express
written terms of the agreement, which is usually strong evidence of the intention of the parties.157
120. In any case, it is submitted that Res No. 2 cannot fall under the Group of Companies doctrine. The
entity must control and participate in the negotiation, performance, conclusion, or termination of the
contract to be covered under the Group of Companies doctrine.158 Furthermore, all parties must
intend for any other entity to be included in the arbitration agreement at the time of executing the
contract.159 It is submitted that, firstly, Res No. 2 was not involved in the execution of the contract and
that Res No. 1 was functioning independently of Res No. 2,[4.3.1] and secondly, mutual Intention of
the parties to arbitrate is absent in the present case. [4.3.2]
4.3.1 Res No. 2 was not involved in the execution of the contract, and Res No. 1 was
functioning independently of Res No. 2.
121. The investment amount provided by Res No. 1 to Res No. 2 was not for this particular project.
Instead, it was given to help Res No. 1 gain a foothold in the real estate sector and was only a measure
from a business perspective. Furthermore, Res No.2 was not copied to any of the communication
emails exchanged by the Cl during the grievance with respect to plot #2332. Every communication
was solely done with Res No. 1.
122. All professional and executive decisions regarding the negotiation, signing, and performance of the
contract were taken by the legal and technological team of the Res No. 1 company only. Therefore,
Res No. 1 was not involved in the execution of the contract, as can be indicated by their absence in
the contractual and negotiation process.
4.3.2 Mutual Intention of the parties to arbitrate is absent in the present case.
123. Officially, there must be an obvious mutual intention of all the parties to be bound by the arbitration
clause. The intention must be bidirectional which means non-signatories and signatories both have to
have the intention together at the time of the conclusion of the contract.160
124. The legal framework for normal commercial arbitration (whether statute, treaty, or institutional rules)
continues to require some assent to arbitrate, whether expressed, implied, or incorporated by reference
157 RICHARD STONE, THE MODERN LAW OF CONTRACT (Routledge 2013).

158 1 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION (Wolters Kluwer Law & Business 2021).
159 Leeds City Council v. Barclays Bank plc, [2021] EWHC (Comm) 363 [57] (Eng.).
160 Ceren Deniz Yuksel, Group of Companies Doctrine in Arbitration, Ozay (2022).
26
to other documents or transactions.161 According to Strong, “the existence of a binding arbitration agreement
is a necessary precondition to arbitration.”162
125. UNCTAD asserts the requirement of consent as indispensable “arbitration must be founded on the
agreement of the parties. Not only does this mean that they must have consented to arbitrate the
dispute that has arisen between them, it also means that the authority of the arbitral tribunal is limited
to that which the parties have agreed.
126. It is inescapable then that consent is a fundamental requirement for engaging in the process of
arbitration. Without consent, the legitimacy of the arbitration process becomes questionable and
compromised.
127. Res No. 2 is not a party to the contract and did not implicitly or expressly consent to an arbitration
agreement at any time. Therefore, based on the principle of consent, Oorbus Ltd. cannot be
legitimately compelled to arbitrate and the Tribunal has no jurisdiction because of the absence of this
fundamental requirement for arbitration.
128. Applying the reasoning in the case of Fortress Value Recovery Fund163, an extension of the arbitration
agreement to third parties associated with the arbitration agreement is not legally tenable. Therefore,
both parties explicitly did not intend to bind the same company to the arbitration agreement. The Cl
cannot make Res No.2 bound by the arbitration agreement because they do not qualify as third-party
beneficiaries. Thus, Res No. 2 is not jointly liable to be joined to the arbitral proceedings.
161 WW. Park, Non Signatories and International Contract: An Arbitrator’s Dilemma, Oxford University Press (2009).
162 S.I. Strong, Research in International Commercial Arbitration: Special Skills, Special Sources, 20 ARIA (2009).
163 Supra Note 148.
27
REQUEST FOR RELIEF
The Respondent requests this Tribunal, on the basis of a prior and foregoing written submission to:
DECLARE that:
1. The CLAIMANT’S arbitration request is premature in nature.
ADJUDGE that:
1. The parties shall engage in good faith negotiations as per the agreed-upon clause.
2. The CLAIMANT’S inflated valuation of damages, and all related alleged claims must be
rejected.
3. No valid contract is formed under CISG.
4. RESPONDENT No. 2, i.e., Oorbus Ltd., is not a party to the arbitration proceedings.
28

N HE Atter F N Rbitration Onducted Efore HE Rbitral Ribunal Hamesburg

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MEMORANDUM for RESPONDENT

Himachal Pradesh National Law University, Shimla

METAVERSE ARBITRATION MOOT, 2023

24th – 26th November 2023

MEMORANDUM for RESPONDENT

IN THE MATTER OF A N ARBITRATION CONDUCTED BEFORE THE A RBITRAL TRIBUNAL,

789 VR Avenue, Cyberspace City,

1. MetaTerrain Pvt. Ltd.

TABLE OF ABBREVIATIONS ................................................................................................................. III

NoA Notice of Arbitration

PARK WW. Park, Non Signatories and International Contract: An Arbitrator’s

CHOI Dongdoo Choi, Joinder in international commercial arbitration, 35

Common Law Division Hooper Bailie Associated Ltd v. Natcon Group

Court of Appeal Ontario Patel v. Kanbay International Inc., 2008 ONCA

Calcutta High Court Pravudayal Agarwala v. Ram Kumar Agarwala

Bombay High Court Essar Procurement Service Ltd. v. Paramount

Supreme Court of India Murlidhar Chiranjilal v. Harishchandra

Supreme Court of India Arvind Kumar v. S.D.O., 2002 SCC OnLine

Arbitral Tribunal in Jakarta Patuha Power Ltd (Bermuda) v PT (Persero)

International Centre for Settlement of Investment Disputes

International Chamber of Commerce

Arbitration Court of the International Chamber Arbitral award No. 11849.

International Court of Justice Cases

Permanent Court of Arbitration

Guyana v. Suriname Guyana and Suriname, 30 R.I.A.A. 1 (Perm. Ct.

CLOUT case No. 142 Award of the Tribunal of International

United Kingdom House of Lords Transfield Shipping Inc v. Mercator Shipping

United States of America

ISSUE 1: WHETHER THE ARBITRATION REQUEST IS PREMATURE IN NATURE?

ISSUE 3: WHETHER A VALID CONTRACT HAS BEEN FORMED AND CONCLUDED

ISSUE 1: WHETHER THE CLAIMANT’S ARBITRATION REQUEST IS PREMATURE

1.1 The clause is not ambiguous and is in public interest

LAW BLOG (Nov. 05, 2023, 9:29 PM), https://rmlnluseal.home.blog/2023/06/21/solving-the-legal-conundrum-

11 Moot Proposition, Page 10 Clause XX.

BLOG (Nov. 05, 2023, 9:29 PM), https://indianarbitrationlaw.com/2022/12/13/discussing-the-validity-of-pre-

Jurisdiction, THE AMERICAN REVIEW OF INTERNATIONAL ARBITRATION (2022).

33 Tang v. Grant Thornton International Ltd [2012] EWHC 3198 (Ch).

1.3 The Cl has breached the pre-arbitration negotiation clause

Arbitration (Civil) No. 65 of 2016.

2) WHETHER THE CL IS ENTITLED TO DAMAGES TO THE EXTENT OF USD 2.4

42 Kemiron Atlantic Inc. v. Aguakem International Inc., [2002] 290 F 3d 1287.

Clauses, 27 NLSBLR, (2021).

2.1 The claim is unjustified on grounds of the Doctrine of Clean Hands

(a) the predominant motive for the action is to cause harm;

53 Res Exhibit R-6, pg. 40.

Persero (Indonesia), Final Award, Dec. 18, 2000 (¶ 306).

Wolters Kluwer, 2014), 2313–14.

68 Vertue v. Bird, [1677] 84 Eng. Rep. 1000.

2.3.1 The compensation demanded is remote

80 State of Kerala v. K. Bhaskaran AIR 1985 Ker 49 (¶ 12).

94 UNIDROIT art. 7.4.3(1).

Agarwala AIR 1956 Cal 41.

ISSUE 3: WHETHER A VALID CONTRACT HAS BEEN FORMED UNDER THE

3.1 ESTATEX LLC has failed to fulfil its obligations as a buyer.

100 CISG 1980, Art. 54 (1).

107 Res Exhibit- R-6, pg. 40.

110 Cl Exhibit C-1, Clause IX, pg. 14.

116 ¶ 10, Moot Prop, pg. 10.