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14th Surana & Surana International Technology Moot Court and Judgment Writing

Competition, 2015

(i)

Written Submissions on behalf of the Respondents

TABLE OF CONTENTS

LIST OF ABBREVIATIONS ...................................................................................................iii

INDEX OF AUTHORITIES.....................................................................................................iv

STATEMENT OF JURISDICTION.......................................................................................viii

STATEMENT OF FACTS .......................................................................................................ix

ISSUES PRESENTED.............................................................................................................xii

SUMMARY OF ARGUMENTS ............................................................................................xiii

ARGUMENTS IN DETAIL ......................................................................................................1

ISSUE I : WHETHER OF UNNAT (THROUGH THE UNC) HAS VIOLATED THE

BASIC PRINCIPLE AS CONTAINED WITHIN ARTICLE 2 OF THE UN CHARTER

AS A RESULT OF WHICH THE BAATI COULD NOT ACQUIRE THE PATENT

BEFORE THE RESPECTIVE OFFICE? .............................................................................1

[1.1]. The Democratic Republic of Unnat has not violated the Basic Principle contained within

Article 2 of the UN Charter ......................................................................................................1

[1.2]. Both Baati and Unnat had presumed that the processes and methods for makingnanomaterial from Neti leaves would contain the same therapeutic value of Neti leaves .......3

[1.3]. The Patent for the process and product of Neti nanoparticles would not have been granted

by the BPO regardless of whether complete knowledge was provided by Unnat or not ...........5

ISSUE II : WHETHER THE REFUSAL OF THE BNC TO UNNAT’S SRA WOULD BE

CONSTRUED AS WILFUL CONCEALMENT OF INFORMATION AND WHETHER

THE SAME IS IN VIOLATION OF THE INTERNATIONAL OBLIGATIONS AND OF

PRINCIPLES OF THE UDHGHR, IDHGD, UDBHR? .....................................................5

[2.1]. Unnat was ready to undertake more research and assist Baati with the plan of Special and

Required Assistance as demanded by the circumstances which were unforeseeable ................6

[2.2]. The UDHGHR, IDHGD, UDBHR are non-binding in nature ........................................6

[2.3]. Effective flow of technology has occurred from Unnat to Baati .....................................8

[2.4]. Baati has violated the Basic Principle contained within Article 2 of the UN Charter as a

result of rejecting the plan for Special and Required Assistance.............................................10

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ISSUE III : WHETHER THE GOVERNEMENT OF UNNAT BE MADE

RESPONSIBLE FOR SITUATIONS NOT CONTEMPLATED WITHIN THE

AGREED TERMS AND CONDITIONS OF THE SPA AND TO THAT EFFECT FOR

LEGAL OBLIGATIONS NOT SEPCIFIED IN THE SPA? ............................................10

[3.1]. That what governs responsibilities under a contract is the intention to be bound by its

terms and conditions specified therein and construed accordingly ........................................11

[3.2]. That the terms and conditions specified within the agreement appears comprehensive in

its scope and self-sufficient in nature leaving no scope of extrinsic evidentiary analysis ......12

[3.3]. That the democratic republic of Unnat should not be levied with any liability which could

not have been averted through cooperation with Baati ...........................................................14

ISSUE IV : WHETHER THE GOVERNMENT OF UNNAT BE MADE RESPONSIBLE

FOR CIRCUMSTANCES BEYOND THEIR CONTROL AND NOT IN FORSEEABLE

CONTEMPLATION OF RISKS AND FOR RESULTING LOSSES? ...........................15

[4.1]. That impossibility of performance caused due to events supervening and to the effect

beyond the control of Unnat could not hold it responsible for non-performance ....................16

[4.2]. That the ensuing events and to that their consequences were never in foreseeable

contemplation of risks among the parties before or at the time of entering the contract .........17

[4.3]. That the resulting losses cannot be attributed to any default or neglect on the part of

Unnat and were independent ....................................................................................................18

ISSUE V : WHETHER THE GOVERNEMNT OF BAATI SHALL BE ORDERED TO

PAY FOR THE LOSSES INCURRED BY THE GOVERNEMNT OF UNNAT? ........19

[5.1]. Baati breached the responsibility owed by it to Unnat and this breach of a State

responsibility entails reparations against Baati, to compensate Unnat for all losses it incurred

as a result of the wrongful act ..................................................................................................20

[5.2]. The Breach of the agreement by Baati will entail contractual damages as laid down under

various State Laws, Conventions and Principles ....................................................................23

PRAYER ..................................................................................................................................25

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INDEX OF AUTHORITIES

Judicial Precedents

Case Name Page no.

Aetna Casualty & Sur. Co. vs. Day 487 So. 2d 830, 835 (Miss.

1986)

23

Application of the Convention on the Prevention and Punishment of

the Crime of Genocide (Bosnia and Herzegovina vs. Serbia and

Montenegro) 1996 I.C.J. 595 31

21

Armed Activities on the Territory of Congo (Democratic Republic

of the Congo vs. Uganda) 2005 I.C.J. 168

11

Arrest Warrant Case (Democratic Republic of the Congo vs.

Belgium) 2000 I.C.J 3

21

Bank Line Ltd. vs. Arthur Capel & Co. (1919) A.C. 435 17

Bank of Australasia vs. Palmer [1897] A.C. 540 12

BP Refinery (Westernport) Pty Ltd vs. Shire of Hastings (1977) 52

A.L.J.R. 20

14

British Sugar vs. Projects Limited (1997) 87 B.L.R. 42 22

Case Concerning Aerial Incident (Iran vs. United States) 1988

I.C.J. 161

21

CME vs. Czech Republic 9 I.C.S.I.D. Rep. 113, 238-9 (2001) 21

Doyle vs. Gordon 158 N.Y.S.2d 259 1

Evans vs. Roe (1872) L.R. 7 C.P. 138 12

Factory at Chorzow (Merits), P.C.I.J. Order of the Court, (ser. A), No. 17 ¶ 4

20, 21

Gabčíkovo-Nagyamaros Project (Hungary vs. Slovakia) 1997

I.C.J. 7

20, 21

Goss vs. Lord Nugent (1833) 5 B. & Ad. 58 11

Hadley vs. Baxendale 9 Ex. 341, 156 Eng. Rep. 145 (1854) 22, 23

Harris vs. Rickett (1859) 4 H. & N. 1 12

Henderson vs. Arthur [1907] 1 K.B. 10 12, 13

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Case Name Page No.

Reparation for Injuries Suffered in the Service of the United Nations

1949 I.C.J. 174

21

Saint Line vs. Richardsons Westgarth & Co. Ltd. [1940] 2 K.B. 49 22The Lusitania case 7 R.I.A.A. 32 (1923) 21

The Moorcock (1889) 14 P.D. 64 14

Velasquez Rodriguez vs. Honduras (Reparations and Costs) Inter-

Am. Ct. H.R., (ser. C), No. 7 (1989)

21

White vs. Unigard Mut. Ins. Co. 730 P.2d 1014, 1017 (Idaho 1986) 23

Essays, Articles and Journals

1. Brian Shephard, Norm Supercompliance and the Status of Soft Law, 62 Buff. L. Rev.

787 (2014) .....................................................................................................................7

2. George Schwazenberger, A Manual of International Law: Recognition, consent,

responsibility, self-defence and freedom of the seas, 4 Toronto L.J. 137 (1960) ....1,5

3. Marko Divac Öberg, The Legal Effects of Resolutions of the UN Security Council and

General Assembly in the Jurisprudence of the ICJ , 16 Eur. J. of Int’l L. 885 (2006). 7

4. Michael Kirby, Human Rights and Bioethics: The Universal Declaration of Human

Rights and Universal Declaration of Bioethics and Human Rights, 25 J. of Contemp.

Health L. & Pol’y 316 (2009) .....................................................................................8

5. Pedro Roffe, Transfer of Technology: UNCTAD's Draft International Code of Conduct ,

19 The Int’l Lawyer 693 (1985) ..................................................................................8

6. Roberto Andorno, Global Bioethics at UNESCO: In defence of the Universal

Declaration on Bioethics and Human Rights, 33 J. of Med. Ethics 151 (2007) .........7

7. United Nations: Conference on an International Code of Conduct on the Transfer of

Technology, 19 International Legal Materials 779 (1980).........................................9

8. Wallace Gray & A.P. Martinich, Good Faith Among Nations, 2 Int’l J. on World

Peace 34 (1987) ............................................................................................................1

Books

1. G. H. Treitel, Frustration and Force Majeure (Sweet & Maxwell 2004) .......... 16

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2. Ling Liu, The Doctrine of Frustration: An Overview of English Law 271 (1st ed. OUP)

......................................................................................................................................16

3. Bruno Simma, The Charter of the United Nations (3rd ed. OUP) .......................1,2,10

4.

Dr. B.L. Wadhwa, Law Relating to Intellectual Property (5th ed. Universal LawPublishing Co.) .............................................................................................................3

5. Felicity Callard, Mental illness, discrimination, and the law: Fighting for Social Justice

(1st ed. Wiley-Blackwell 2012) ....................................................................................7

6. Roberto Andorno, Principles of International Biolaw: Seeking common ground at the

intersection of Bioethics and Human Rights (1st ed. Bruylant 2013) ...........................8

7. Stephen Tully, International Documents on Corporate Responsibility (Edward Elgar

Publishing Ltd. 2005) ....................................................................................................9

8. Ndubuisi Ekekwe, Nanotechnology and Microelectronics: Global Diffusion,

Economics and Policy (Hershey New York 2011) .......................................................9

International Instruments

1. Declaration on Principles of International Law concerning Friendly Relations and Co-

operation among States, U.N. Doc. A/5217 at 121 (1970). 2. Guidelines for Good Medical Practice released by the ICH, U.N. Doc. A/45/49 (1990).

3. International Declaration on Human Genetic Data, U.N. Doc. A/45/49 (Vol. I) (2001).

4. Responsibility of States for Internationally Wrongful Acts, U.N. Doc. A/RES/61/177

(2006).

5. UN Charter TS 993.

6. UNCTAD’s International Code of Conduct for the Transfer of Technology, U.N. Doc.

A/43/49 (1988). 7. Universal Declaration on Bioethics and Human Rights, U.N. Doc. A/45/49 (Vol. I)

(2001).

8. Universal Declaration on the Human Genome and Human Rights, U.N. Doc.

A/RES/53/152 (1999).

9. Vienna Convention on Law of Treaty 1963, U.N. Doc. ST/SGB/1963/13.

10. WHO Guidelines on TOT in Pharmaceutical manufacturing, U.N. Doc. A/37/45 (Vol.

I) (2001).

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STATEMENT OF JURISDICTION

The Respondents have the honour to humbly submit before the Hon’ble International Court of

Justice, the Memorandum for the Respondents adjudging the questions contained in the Special

Agreement (signed in The Hague on the first day of April in the year Two Thousand Fifteen)

between The Federal Republic of Baati and its National Corporation (‘BNC’ owned by the

State) [Applicant] and The Democratic Republic of Unnat and its National Corporation (‘UNC’

owned by the State) [Respondent] Concerning the Differences between States in Interpretation

of Laws and Fulfillment of International Obligations Relating to the Protection of Bioethics,

Human Rights and Dignity from Conflicts that arose between Parties on Issues of Science andTechnology, Law and Economic Development and with Special References to nanoscience and

Other Issues, to the Court pursuant to Article 40(1) of the Statute of the Court by invoking the

provisions for contentious jurisdiction as laid down in Article 36 of the Statute of the Court.

The present Memorandum sets forth the Facts, Contentions and arguments in the present case.

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STATEMENT OF FACTS

[I]. FEDERAL R EPUBLIC OF BAATI AND ITS NEW POLICIES PERTAINING TOFDI

The Federal Republic of Baati is a developing country with a large population. Due attention

was given for international collaborations from outside, and this public-private-partnership

model retained the Governmental control on major policy-matters. The Government invited

suggestions from all stakeholders for preparing a comprehensive legal-policy framework

whereby it can lead to eradication of diseases. Suggestions were received of which one core

activity to be carried on by the Government was towards identification and development of a

life-saving drug for the disease of liver cancer which afflicts the people. Baati did not have the

resources to combine both the factors of funds and knowledge and hence internationalcollaborations were called for. The Federal Republic of Baati is a founding member of the

UNO, WIPO and WTO. NGO (named New Age Life) did a survey and found many people of

Baati afflicted with liver cancer, which it said had very high fatality rates; conceding that very

little, including the cure for this disease, had been properly researched. Baati constituted

Special Committee of Experts that made a plan of action.

[II]. DEMOCRATIC R EPUBLIC OF UNNAT AND ITS CLOSENESS WITHBAATI Unnat is an island with abundant biodiversity and a population of close to 40 million people.

The country has taken to all forms of bio-technology development especially in the field of

pharmacology in order to bring innovation in this field. Both the states have been using the sea-

routes for commerce. The relationship between the two states is notable. Unnat is a member of

United Nations Organization. The trade and development of the Democratic Republic of Unnat

is largely based on products that are developed from the rich flora and fauna. There was a desire

on part of Baati to use Unnats superior knowledge pertaining to biotechnology.

[III]. INKING OF THE SPECIAL PURPOSE AGREEMENT BETWEEN BAATI AND UNNAT IN

THE SEARCH FOR A CURE FOR LIVER CANCER U SING NETI LEAVES.

SPA was inked between two corporations of these countries (Baati National Corporation and

Unnat National Corporation) formed for the purpose of innovating, producing and

manufacturing a medicine using Neti leaves which grew on Unnat. There was folklore in Unnat

about Neti leaves in life-enhancing and disease-curing properties but no concrete research had

been done in the area of cancer-cure. Professor Mruti claimed this plant to have cancer-curing

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properties and that in his laboratory its effectivity of cure of liver cancer rises. Team of experts

was sent by Baati to Unnat to study these claims and it gave a positive report highlighting usage

of plants and herbs in modern medicines. However caution was alerted by few notable social

activists as they reported that proper clinical trials never had been done on this aspect of herbsand plants. Therefore an SPA was linked which was a joint venture between BNC and UNC

wherein the sole purpose was to eradicate liver cancer.

[IV]. COMMENCEMENT OF THE RESEARCH PROCESS.

BNC and UNC started the business transactions. The Government of Baati identified one of

army headquarters the proposed nanomaterial shall be researched. This report on the progress

of the Neti project was shared from time to time with the Government of Unnat who reviewed.

The Government of Unnat shared all the knowledge of nanoscience that are available in their

legal domain with the Government of Baati through a highly secured- document named

UNNATI. The Baati National Corporation appointed a Scientific Committee that could

understand and interpret the information. The highly secured document UNNATI had all

information regarding nanoscience as understood and recorded by the Democratic Republic of

Unnat through an expert committee of scientists who participated in the international

conferences representing the Government of Unnat. The document clearly mentioned that the

knowledge and information present contain all the processes and procedures for making the

nanomaterial. It included detailed study and step-by-step processes. It was presumed by both

the parties that the approaches, method and manner as given in the document UNNATI will

give the expected outcome.

[V]. PROBLEMS ENCOUNTERED IN MANUFACTURING.

All four steps of the formula were meticulously followed. The scientists could successfully

manufacture nanoparticles. The scientists who were working observed that many of their team-

members fell ill. It was reported to the Government of Baati and Unnat. This sudden illness

could not have happened except as a result of the laboratorial process. The Government of

Baati-appointed special task-force submitted that the scientists did indeed perform all the four

steps accurately. The results of the manufacturing process as expected and mentioned in the

UNNATI document were clearly observed under the nanomicroscope as explained in the

scientific document under Annexure IV. The scientists observed that upon treatment of rats

with nanoparticles, they died as a result of brain hemorrhage. The report based on the

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observations were noted in full details and submitted to the Government of Baati, which it

shared with the Government of Unnat.

[VI].DAMAGE TO ENVIRONMENT AND REJECTION OF PATENT CLAIM.The scientist monitoring ear-marked area observed a drastic change in that place. Many small

and medium-size insects, grass in that area had died. The scientist noticed that the waste-bags

were torn and leaking. When done again, the same situation occurred again. Meanwhile the

Government of Baati applied for the Patent before the Baati Patent Office for recognizing that

Neti nanoparticle is new process and invention eligible for patent. The Patent Office turned

down the recognition of patent for the nanoparticle of substance. The Government of Baati

subsequently appealed against the decision of the Patent Office in the High Court of Baati,

which upheld the decision of the Patent Office as correct and valid. The Baati National

Corporation through the Government appealed again the decision of the High Court in the

Supreme Court of Baati. The Supreme Court of Baati upheld HC decision.

[VII].ARISING OF DISPUTE BETWEEN BAATI AND UNNAT.

It was argued by Government of Baati that the Government of Unnat did not share the

knowledge of the adverse effects, presumed as a part of an obligation under the knowledge

transfer in the UNNATI document shared by the Government of Unnat. The Government of

Unnat claimed that they agreed to share only the knowledge which is there in the legal domain.

Government of Unnat, which expressed that theory of knowledge is best, expressed only within

the limitations and cannot be taken to express always its possible dangers. The Government of

Baati did not agree to the stand taken by this kind of fast-approach to research in the absence

of final and ultimate effects of the knowledge at all levels which is followed through a process

and phase-wise approach to research. A plan for Special and Required Assistance was made to

the Government of Baati which it refused as the plan required further funding from the

Government of Baati which they refused as the country had lots of economic losses. Both the

parties have decided to refer the matter to the International Court of Justice by invoking the

provisions contained in the SPA, which gave scope for this settlement of disputes.

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ISSUES PRESENTED

[A]. Whether the Government of Unnat has not violated any obligation; basic principle of

Article 2 of the United Nations Charter to act in good faith in the performance of obligations,and that the Special Purpose Agreement is entered by both the parties through democratic and

consensual method whereby all the information available in their legal domain in relation to

nanoparticle have been classified and its technology was transferred through UNNATI with

utmost bona-fide and, hence this presumption of violation of law stands without any legal basis

and be not allowed to raise before the court?

[B]. Whether the Government of Unnat was ready to undertake more research and assist theBaati National Corporation with the plan of Special and Required Assistance as demanded by

the circumstance and situation domestically and internationally that was not contemplated and

those of which was not agreed by the Federal Republic of Baati and, but consequently refused

and, hence this shall not be construed as willful concealment of information or male fide in the

transfer of technology?

[C]. Whether the Government of Unnat cannot accept responsibility for situations notcontemplated in the agreed terms and conditions of the Special Purpose Agreement and, hence

has not accepted any other legal obligations not specified in the Special Purpose Agreement?

[D]. Whether the Government of Unnat shall not be held responsible for circumstances that

are beyond their control and not in the foreseeable contemplation of risks and, hence they are

not responsible for the losses?

[E]. Whether the Government of Baati be ordered to pay for the losses incurred by the

Government of Unnat as they have transferred all the nano knowledge available in their legal

domain without accruing any benefit and, hence Government of Baati shall be ordered to pay

for the losses?

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Summary of Arguments

Issue I : That Unnat has not violated the basic principle as contained within Article 2 of the

UN Charter as a result of which the government of Baati could not acquire the patent before

the respective office

It is humbly submitted that the Unnat has not violated the basic principle as contained within

Article 2(2) of the UN Charter and acted in good faith in the performance of the obligations.

All the technical know-how which was available with Unnat had been transferred to Baati,

even though the SPA clearly mentioned a requirement for the transfer of only 70% of the same

and this highlights the Good faith with which Unnat has performed the obligations which itwas bound to perform in accordance with the SPA. It is further contended that no question

pertaining to the breach of the principle of Good Faith is maintainable in light of both the

countries premise upon which the assumption in relation to the efficacy of the nanomolecule

was based on was itself erroneous and Unnat cannot be held responsible for this oversight.

Issue II : That the refusal of the BNC to Unnat’s Special and Required Assistance would be

construed as wilful concealment of information and whether the same is in violation of the

international obligations and of principles of the UDHGHR, IDHGD, UDBHR

It is contended before this Hon’ble Court that Unnat was ready to undertake more research and

assist the BNC with a plan of Special and Required Assistance as demanded by the

circumstances which were not contemplated but the same was subsequently refused and the

same shall not be construed as wilful concealment of information or malafide TOT.

Declarations in principle only interpret or restate the law, in which case they have no legal

effect and do not contain binding determinations or have (dis)empowering effects. Lastly,effective TOT has flowed from Unnat to Baati.

Issue III : That the Government of Unnat should not be made responsible for situations not

contemplated within the agreed terms and conditions of the Special Purpose Agreement, and

to that effect for legal obligations, not specified within the SPA

An agreement generally being a cluster of bipartite negotiations penned formally, determinesthe legal obligations that parties to it shares on a settlement reached taking into consideration

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Arguments in Detail

Issue I : Whether The Democratic Republic of Unnat (through the UNC) has violated the

basic principle as contained within Article 2 of the UN Charter as a result of which the

government of Baati could not acquire the patent before the respective office?

1. It is humbly submitted before this Hon’ble Court that the Democratic Republic of Unnat

(through the UNC) has not violated the basic principle as contained within Article 2(2) of the

UN Charter and acted in good faith in the performance of the obligations.[1.1] The Federal

Republic of Baati (hereinafter referred to as “Baati) as well as the Democratic Republic of

Unnat (hereinafter referred to as “Unnat”) had erroneously presumed that the processes and

methods for making nanomaterial from Neti leaves would contain the same therapeutic value

of Neti leaves while contrary evidence was also available. [1.2] Lastly, The Patent for the

process and product of the Neti leaves Nanoparticles would not have been granted by the BPO

regardless of whether complete knowledge was provided by Unnat or not. [1.2]

[1.1] THE DEMOCRATIC REPUBLIC OF UNNAT HAS NOT VIOLATED THE

BASIC PRINCIPLE CONTAINED WITHIN ARTICLE 2 OF THE UN CHARTER

2. Article 2(2) lays down the obligation for all members of the UN to fulfil their obligations

under international law ‘in accordance with the UN Charter’.1 The principle of good faith is

binding principle of the UN charter 2 and is defined as standard of performance by nations in

their mutual relations.3 The ICJ has defined this principle in the Nuclear Tests Case4 as, “[o]ne

of the basic principles governing the creation and performance of legal obligations”. Another

Court interpretation of the meaning of good faith has been stated as “an intangible quality with

no technical meaning or statutory definition and it encompasses among other things, an honest

belief, the absence of malice and the absence of design to defraud or to seek an unconscionable

advantage”5 In the case of Cameroon vs. Nigeria: Equatorial Guinea intervening 6, observed

1 Bruno Simma, The Charter of the United Nations 168 (3rd ed. OUP).2 George Schwazenberger, A Manual of International Law: Recognition, consent, responsibility, self-defence and

freedom of the seas, 4 Toronto L.J. 137, 137-138 (1960).3 Wallace Gray & A.P. Martinich, Good Faith Among Nations, 2 Int’l J. on World Peace 34 (1987).4 Nuclear Tests Cases (Australia v. France; New Zealand v. France), 1974 I.C.J. 253 (Dec. 20). 5

Doyle v. Gordon, 158 N.Y.S.2d 259, 259-260 (Cal. 2013).6 Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guineaintervening), 2002 I.C.J. 303 (June 11).

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that the principle of good faith is a well-established principle of international law and that it is

"one of the basic principles governing the creation and performance of legal obligations”.

Hence, the more intensive the co-operation and the more comprehensive the objectives, the

more it is necessary that its legal constitution should also include obligations to co-operate ingood faith within the context of the aims and procedures agreed upon.7

3. All the technical know-how which was available with Unnat had been transferred to Baati

through UNNATI even though the SPA clearly mentioned a requirement for the transfer of

only 70% of the same and this highlights the Good faith with which Unnat has performed the

obligations which it was bound to perform in accordance with the SPA. Furthermore, as all

knowledge had been supplied through UNNATI, it would be inequitable and prejudiced to hold

Unnat to have breached the principle of Good Faith as they themselves had no information in

relation to the adverse effects of nanoparticle. Hence, the presumption of violation of law

stands without any legal basis and should not be allowed to be raised before this Hon’ble Court.

[1.2] BOTH BAATI AND UNNAT HAD ERRONEOUSLY PRESUMED THAT THE

PROCESSES AND METHODS FOR MAKING NANOMATERIAL FROM NETI LEAVES

WOULD CONTAIN THE SAME THERAPEUTIC VALUE OF NETI LEAVES

4. It is further contended before this Hon’ble Court that no question pertaining to the breach of

the principle of Good Faith is maintainable in light of both the countries premise upon which

the assumption in relation to the efficacy of the nanomolecule was based on was itself

erroneous and inaccurate and Unnat cannot be held responsible for this oversight.

5. Presently, both parties had inadvertently speculated on the notion that due to the therapeutic

nature of Neti leaves if the process as given in UNNATI would give the expected outcome. 8

This premise was based on the study conducted by Mruti, who claimed in his independent study

in his own laboratory that the juice from the leaves of Neti when compressed, its molecules

taken, then broken and reduced to infinitesimal sizes, then it has a higher rate of curing liver

cancer. This was partially supported by the WHO, which submitted a report which showed an

estimate of close to 80% of the population from Asian and African countries who use herbs as

a medicine in preventive health care.9 Furthermore, a team of experts comprising of Baati

scientists submitted a report with enthusiasm highlighting the possibilities of the same. Lastly,

7

SIMMA, supra note 1, at 95.8 Moot Proposition ¶ 13.9 Moot Proposition ¶ 9.

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Unnat’s bona fide transfer of technology did come to fruition as nanoparticles were

successfully extracted from the Neti leaves, however the characteristics possessed by the same

were contrary to that of the actual Neti leaves and subsequently to the expected efficacy of the

same.Therefore, in light of the error being committed by both the countries as well as Unnat

providing all the technical know-how through UNNATI, Unnat has met the requisite contained

in the principle of Good Faith and has also met the provisions as contained within the SPA.

[1.3] THE PATENT FOR THE PROCESS AND PRODUCT OF NETI NANOPARTICLES

WOULD NOT HAVE BEEN GRANTED BY THE BPO REGARDLESS OF WHETHER

COMPLETE KNOWLEDGE WAS PROVIDED BY UNNAT OR NOT

6. It is submitted before this Hon’ble Court that the patent for the process and product of the

Neti leaves Nanoparticles would not have been granted regardless of whether complete

knowledge was provided by Unnat or not. The element of novelty in the present case is absent

[1.2.1] and in addition to the same it does not involve an inventive step.[1.2.2]

7. In the case at hand, the Law of Baati is pari materia to that of the Indian Law.10 In furtherance

of the same, in accordance with the Indian Patent Act, 1970, for getting a patent there must be

an invention11 and that invention must be patentable12 that is, (a) it must be novel, (b) it must

involve an inventive step, (c) it must be capable of industrial application, (d) it must not fall

within the subject-matter specifically excluded or made subject to exception.

[ 1.3.1 ]. The process and product of the Neti Nanoparticles lacked novelty

8. Presently, the process and product of the medicine lacked novelty, without which patent

could not be granted regardless of whether complete knowledge had been provided or not.

9. An invention is said to be new if it has not been anticipated by publication in any document

or used in the country or elsewhere in the world before the date of filing of the patent

application i.e. the subject-matter has not fallen in public domain or does not form part of the

“state of the art”.13 The novelty requirement does not require absolute novelty, but rather that

10 Moot Clarifications, Page 1.11

Dr. B.L. Wadhwa, Law Relating to Intellectual Property 6 (5th ed. Universal Law Publishing Co.).12 Patents Act 1970 sec 1(j).13 Patents Act 1970, sec 1(l).

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a claimed invention not be found within the public knowledge.14 In an originality case the issue

is not who the first or prior inventor is, but who made the invention. Where one party discloses

a complete conception of an invention to a second party, who then through testing demonstrates

the effectiveness of the conceived invention for the contended purpose, the work performed bythe second party inures to the benefit of the original party. 15 The Supreme Court of India in

Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries16 held that it is essential for

the validity of the patent that it must be the inventor’s own discovery as opposed to a mere

verification of what was already known before the date of invention.

10. Presently, it was Mruti who first claimed in his study that the juice from leaves of Neti

when compressed, molecules taken, then broken and reduced to infinitesimal sizes, its

effectivity of cure of liver diseases especially liver cancer increases.17 Hence, patent could not

have been granted to Baati as it was Mruti who first brought attention to the therapeutic value

of Neti Nanoparticles through a presentation in one of the international forums and hence the

claim made by Baati for a grant of patent lacked the essential element of novelty.

[ 1.3.2 ]. The claim made by Baati did not involve an inventive step

11. It is submitted that the claim made by Baati did not have any involvement of an inventive

step as Mruti had already enunciated the use and advantages of Neti Nanoparticles and Baati

made no technical advancement to the same whatsoever and utilized knowledge that was

already available through Mruti’s study which was conducted in his laboratory and his

presentation which was contributed in an international forum.

12. Section 2(ja) of the Patents Act, 1970 defines inventive step which means a fixture of an

invention that involves technical advance as compared to the existing knowledge or having

economic significance or both and makes the invention not obvious to the person skilled in the

art. Inventive step is one essential ingredient of an invention and such step must exist for grant

of patent.18 The philosophy behind the doctrine of obviousness is that the public should not be

prevented from doing anything, which is merely an obvious extension or workshop variation

of what was already known at the prior date.19 The claim for a patent on an invention should

14 Moleculon Research Corp. v. CBS Inc., 793 F.2d 1261 (Fed. Cir. 1984). 15 Applegate v. Scherer, 332 F.2d 571 (C.C.P.A. 1964).16 (1979) 2 S.C.C. 511.17

Moot Proposition ¶ 8.18 Mariappan v. A.R. Safiullah, (2008) 5 C.T.C. 97. 19 PLG Research Ltd. v. Ardon International Ltd., 1995 F.S.R 116.

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not be based merely on an application of an old invention which would be no more than a

workshop improvement.20

13. [ARGUENDO] : Even if it is assumed that the product and process did not lack novelty

and involved an inventive step, the product and process patent would not be granted as thesame was in the nature of discovery rather than invention. Patent can only be provided for

invention and not discovery.21 A discovery adds to the amount of human knowledge, but it

does so merely by lifting the veil and disclosing something which earlier was unseen or dimly

seen. An invention also adds to human knowledge, but not merely by disclosing something

which was earlier present. An invention necessarily involves also the suggestion of an act to

be done and it must be an act which results in new product, new result or new combination for

producing an old product or result.22 In the present case, Mruti had already claimed that the

efficacy of Neti increased when compressed, its molecules taken, then broken and reduced to

infinitesimal sizes23 A similar process had been followed by Baati scientists as can be seen

through the information supplied through UNNATI and hence a patent would not have been

granted as both the product and process were in nature of a discovery rather than an invention.

Issue II : Whether the refusal of the BNC to Unnat’s Special and Required Assistance would

be construed as wilful concealment of information and whether the same is in violation of the

international obligations and principles of the UDHGHR, IDHGD, UDBHR?

14. It is contended before this Hon’ble Court that Unnat was ready to undertake more research

and assist the BNC with a plan of Special and Required Assistance as demanded by the

circumstances which were not contemplated but the same was subsequently refused and the

same shall not be construed as wilful concealment of information or malafide TOT.[2.1]

Additionally, it is submitted that the UDHGHR, IDHGD and the UDBHR are non-binding in

nature [2.2] and that Unnat has effectively transferred all technical know-how within their legal

domain without any malafide manifestation. [2.3] Lastly, Baati has breached the Principle of

Good Faith contained within Article 2 of the UN Charter as a result of rejecting the Special and

Required Assistance.

20 SCHWARZENBERGER, supra note 2.21 Imperial Chemical Industries Ltd. v. Controller General of Patents, Designs & Trade Marks, A.I.R. 1978 Cal.

77.22 Lallubhai Chakubhai v. Chimanlal Chunilal, A.I.R. 1936 Bom. 99.23 Supra note 17.

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[2.1] UNNAT WAS READY TO UNDERTAKE MORE RESEARCH AND ASSIST BAATI

WITH THE PLAN OF SPECIAL AND REQUIRED ASSISTANCE AS DEMANDED BY

THE CIRCUMSTANCES WHICH WERE UNFORSEEABLE

15. In the present case at hand, both the States entered into an SPA for the sole purpose for the

innovation, production and manufacturing of life-saving drugs of liver cancer out of small plant

by the name Neti which grows abundantly in Unnat.24 In view of Baati being a developing

country and considering that Baati had not yet reached an optimum level to combine and

develop the two decisive factors in requirement to achieve the aforementioned goals,

indigenously, Unnat sought to supplement them by providing the technical know-how to

produce Neti nanoparticles. Even though the obligation conferred upon Unnat by the provisions

of the SPA required them to only supply 70% of the technical know-how they supplied all the

knowledge of nanoscience available in their legal domain, highlighting there Good Faith.

16. However, as the premise upon which it was based upon was dismally flawed due to which

the desired end-product could not obtained. It was presumed by both the parties to the SPA that

the approaches, method and manner as given in UNNATI would give the expected outcome.25

In order to remedy the same an immediate plan for Special and required assistance was made

to the Government of Baati, however, the same was promptly rejected by the same.

17. Therefore, to conclude, no contention in regards to the malafide concealment of information

should be permitted to be raised by Baati as firstly, neither of the parties had foreseen such a

disastrous result corresponding to the production of Neti nanoparticles, secondly all the

technical knowledge present in Unnat’s legal domain was transferred to Baati and thirdly, Baati

out rightly rejected the plan of Special and Required Assistance, which was proposed by Unnat,

to undertake more research as demanded by the circumstance and situation domestically and

internationally which were not contemplated.

[2.2] THE UDHGHR, IDHGD AND THE UDBHR ARE NON-BINDING IN NATURE

18. The Universal Declaration on Human Genome and Human Rights, International

Declaration on Human Genetic Data and Universal Declaration on Bioethics and Human rights

24 Moot Proposition ¶ 8.25 Moot Proposition ¶ 13.

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are documents issued by UNESCO and like any declaration adopted by UN agencies these

UNESCO document makes up part of the so-called soft law instruments – that is instruments

which are weaker than conventions because they are not intended to oblige States to enact

enforceable rules inspired by the common standards but to merely encourage them to do so.26

Declarations in principle only interpret or restate the law, in which case they have no legal

effect and do not contain binding determinations or have (dis)empowering effects.27 The term

“declaration” is often deliberately chosen to indicate that the parties do not intend to create

binding obligations but merely want to declare certain aspirations.28 These declarations

therefore constitute of soft-law which themselves only consist of general norms or principles

and not rules.29 Obligations under soft-law have been characterised by Prosper Weil as being

“neither soft laws nor hard laws: they are simply not law at all”.30

19. Therefore, it can be quite clearly seen that the aforementioned definitions of Declarations

that they do not cast any legally-binding obligations on the parties involved. Being soft-laws

in nature no binding obligations are formed but rather they are in the nature of

recommendations which merely lay down principles or norms rather than binding-rules. In

view of the very nature of declarations and the purposes which it seeks to seeks to satisfy,

establish the non-committing and non-binding value of the same. Lastly, it can be quite

evidently and plainly seen that by virtue of the very nature leading to the formation of

“declarations”, the same does not legally bind Unnat to follow or to meet the expectations or

the principle enshrined within the same.

20. It is further submitted that the UDHGHR, IDGHD and the UDBHR adopted by the

UNESCO is non-binding in nature and does not confer upon any legally binding obligations in

regards to the States involved. The UDHGHR is a non-binding international instrument which

only seeks to lay down basic principles which are inherently concerned with the rights of

persons in relation to human genome research.31 The IDGHD is regarded as an extension of

the UDHGHR and also retains the non-binding nature as exhibited by the aforementioned

26 Roberto Andorno, Global Bioethics at UNESCO: In defence of the Universal Declaration on Bioethics and Human Rights, 33 J. of Med. Ethics 151 (2007).27 Marko Divac Öberg, The Legal Effects of Resolutions of the UN Security Council and General Assembly in the

Jurisprudence of the ICJ , 16 Eur. J. of Int’l L. 885 (2006).28 Definition of key terms used in the UN Treaty Collection, U.N.T.C.,https://treaties.un.org/Pages/overview.aspx?path=overview/definition/page1_en.xml (last visited Aug. 3, 2015).29 Alan E. Boyle, Some Reflections on the Relationship of Treaties and Soft Law, 4 The Int’l & Comp. L. Q 25(2000). 30

Brian Shephard, Norm Supercompliance and the Status of Soft Law, 62 Buff. L. Rev. 787 (2014).31 Felicity Callard, Mental illness, discrimination, and the law: Fighting for Social Justice 200 (1st ed. Wiley-Blackwell 2012).

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Declaration.32 As a non-binding instrument, the declaration must be incorporated by

UNESCO’s member states into their national laws, regulations or policies in order to take

effect. The IBC, which was responsible for preparing the aforementioned international

instrument itself recommended that this instrument be declaratory in nature (that is, non- binding).33 None of the provisions contained within the UDBHR are binding upon the member

states of the UN.34

21. Therefore, to summarize, all three Declarations do not cast any legally-binding obligations

on the parties involved and are merely recommendatory in nature. To raise claims alleging a

violation of provisions as contained within the aforementioned provisions would be grossly

prejudicial against Unnat especially since the very nature of Declarations and the reason they

are adopted is merely to declare certain aspirations which should be met.

[2.3] EFFECTIVE FLOW OF TECHNOLOGY HAS OCCURRED FROM UNNAT TO

BAATI

22. It is submitted before this Hon’ble Court that bona fide, effective and successful TOT

(transfer of technology) has taken place in the case at hand. The UNCTAD’s Code of Conduct

defines TOT as the systematic knowledge for the manufacture of a product, for an application

of a process or for the rendering of a service and highlights the principle of mutuality and also

of mutual confidence between the parties involved.35 The concept of ‘transfer’ implies that

technology must flow from one undertaking to another.36 On the basis of the plethora of

definitions abovementioned, it is contended that bona fide and effective TOT has taken place.

Unnat, through UNNATI supplied the technical know-how in totality which and as a result of

which, Baati was able to successfully produce Neti nanoparticles.37 The efficacy was unknown

to both the parties involved, by virtue of which Unnat was unable to furnish information in

those regards. The terms of the SPA are clear in relation to the amount of know-how to be

32 Roberto Andorno, Principles of International Biolaw: Seeking common ground at the intersection of Bioethicsand Human Rights 228 (1st ed. Bruylant 2013).33 Adele Langlois, The UNESCO Universal Declaration on Bioethics and Human Rights: Perspectives from Kenyaand South Africa, U.S.P.M.C., http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2226192/ (last visited Aug. 3,2015).34 Michael Kirby, Human Rights and Bioethics: The Universal Declaration of Human Rights and Universal

Declaration of Bioethics and Human Rights, 25 J. of Contemp. Health L. & Pol’y 316 (2009). 35 Pedro Roffe, Transfer of Technology: UNCTAD's Draft International Code of Conduct , 19 The Int’l Lawyer693 (1985).36

Guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union toTechnology Transfer Agreements, 3 Official Journal of European Union 354 (2014).37 Moot Proposition ¶ 16.

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transferred and the requisite laid down has also been met. Not only has flow of technical know-

how been achieved from Unnat to Baati, but also the SPA also is based upon mutuality and the

same has been entered into by both parties through a democratic and consensual process.

[2.3.1]. The Obligations conferred upon Unnat through the international framework of TOT

has been met

23. It is further submitted that the responsibilities and obligations, within the TOT framework

which are conferred upon Unnat, as a Supplying Unit (SU) towards Baati, the host, have been

diligently adhered to. Two prominent responsibilities can be seen in the form of the two basic

principles upon which UNCTAD’s Code of Conduct is based upon are firstly, that States

involved should employ all appropriate means of facilitating and regulating the transfer of

technology, in a manner consistent with their international obligations and taking into

consideration of the legitimate interests of the parties concerned and secondly, that mutual

benefits should accrue to the technology supplying and recipient parties in order to maintain

and increase the international flow of technology.38 Another pertinent responsibility is that of

the SU’s commitment that the relevant technical documentation and other data required from

the SU for a particular purpose defined in terms directly specified in the agreement will be

transferred in a timely manner and as correctly and completely for such purpose agreed upon.39

The responsibilities have been duly met by Unnat, as Unnat has facilitated not only the TOT

but has also aided Baati in conducting the further clinical trials and laboratory procedure by

providing complete procedural knowledge to produce nanoparticles from Neti and the same

was found to be comprehensive as nanoparticles of Neti leaves were successfully produced.

Furthermore, not only would both the parties have accrued mutual benefits upon the successful

completion of the SPA but additionally, all relevant know-how available in Unnat’s legal

domain has been furnished in a timely manner to serve the common purpose of both the parties.

Lastly, TOT is not solely the responsibility of the research group trying to get its results put

into practice. There is growing recognition that TOT now is both the SU’s and the hosts

responsibility40 and in view of the same that holding Unnat liable for deliberately concealing

38 United Nations: Conference on an International Code of Conduct on the Transfer of Technology , 19International Legal Materials 779 (1980).39

Stephen Tully, International Documents on Corporate Responsibility 596 (Edward Elgar Publishing Ltd. 2005).40 Ndubuisi Ekekwe, Nanotechnology and Microelectronics: Global Diffusion, Economics and Policy 330(Hershey New York 2011).

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the adverse effects of the nanoparticles would be extremely prejudicial especially since neither

of the parties knew or were aware of the efficacy of the same.

[2.4] BAATI HAS VIOLATED THE BASIC PRINCIPLE CONTAINED WITHINARTICLE 2 OF THE UN CHARTER AS A RESULT OF REJECTING THE PLAN FOR

SPECIAL AND REQUIRED ASSISTANCE

24. It is submitted that in view of Baati deliberately rejecting the plan for Special and Required

Assistance, the same constitutes as a breach of the principle of Good Faith as contained within

Article 2. Both Unnat and Baati being member of the UN are bound by the articles of the UN

Charter, by virtue of it being the constituent treaty of the UN. 41 In relation to the

aforementioned definitions and interpretations of the same, Baati had a noticeable duty and

obligation owed to Unnat, which was that of ensuring the production of Neti medicine,

especially in view of all TOT having occurred already. Baati’s action has prevented the

collaboration from reaching materialization and fruition. The sole purpose Unnat entered into

an SPA with Baati was for the development of the Neti drug to eradicate liver cancer. Baati has

malafidely jeopardized this collaboration by rejecting assistance offered by Unnat rendering

all technical know-how supplied and assistance provided by Unnat to be rendered superfluous

and redundant and in doing so has also breached the Principle of Good Faith as contained

within Article 2 of the UN Charter.

Issue III: Whether the Government of Unnat be made responsible for situations not

contemplated within the agreed terms and conditions of the Special Purpose Agreement, and

to that effect for legal obligations, not specified within the Special Purpose Agreement?

25. That it is humbly submitted before the Ld. Bench that liabilities arising out of a written

agreement must be weighed as against the scope and specifications set out by the agreement

reached between the parties mutually, thereby upholding the claims and contentions very aptly

put forth that in absence of any specifications to the required effect, the Democratic Republic

of Unnat shall not be held liable for situations beyond reasonable contemplation, not

commensurate with and out of the scope of performance as agreed by and among the

41 SIMMA, supra note 1, at 170.

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parties.[3.1]Appending further, the same being not part of the agreement could not impose any

further legal obligations other than what has been mutually agreed and composed which

enables the Respondents herein to seek an outright rejection of the allegations put forth.[3.2]

[3.1] THAT WHAT GOVERNS RESPONSIBILITIES UNDER A CONTRACT IS THE

INTENTION TO BE BOUND BY ITS TERMS AND CONDITIONS SPECIFIED THEREIN

AND CONSTRUED ACCORDINGLY

26. An agreement generally being a cluster of bipartite negotiations penned formally,

determines the legal obligations that parties to it shares on a settlement reached taking into

consideration the respect for their rights and duties arising consequently.42This in turn

establishes that statements of such effect can create legal obligations if they are made in clear

and specific terms43 and if their legal effect evaluated through their actual content as well as

the circumstances in which they were made44 points towards such consensus reached among

the parties which renders the arrangement legally binding in the course of the performance of

responsibilities undertaken thereto. Under these circumstances it must be considered that the

scope and effect of obligations under an agreement validly created owes its appropriate

determination to the exact terms of the contract45 evaluated through a comparative importance

given to such obligations. It should further be understood that bringing into the scope of such

determination, (in the context discussed above) issues which do not find their place within the

contractual terms and conditions either because of their scope being outside the purview of the

contractual objectives or they being omitted at the time the contract was embodied into

writing46, would be detrimental and would render the efforts underwent to make contractual

position more comprehensive and less ambiguous.

27. This scope of argument, when extended further, entails the necessity of reaching the

impression essentially embodies within it the parol evidence rule which clearly enunciates that

verbal evidence against an agreement reduced into writing is not allowed to be given47 in any

42 Case Concerning Armed Activities on the territory of Congo (Democratic Republic of the Congo v. Uganda),2005 I.C.J. 168 (December 19).43 Nuclear Tests Case (Australia v. France) (New Zealand v. France), 1974 I.C.J. 267.44 Id at 269-270.45 Parker v. South Eastern Ry., [1877] 421 2 C.P.D. 416.46 Heibut, Symons & Co. v. Buckleton, [1913] 50 A.C. 30. (Such collateral considerations, the sole effect of which

is to vary or add to the terms of the written contract, are therefore viewed with suspicion by the law. the terms ofthe contract should bore the animus contrahendi on the part of all the parties to the contract).47 Goss v. Lord Nugent, [1833] 5 B. & Ad. 58.

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form having an effect to contradict, vary, add to or subtract from the terms of a written contract,

or the terms in which the parties have deliberately agreed to record any part of their contract.48

The rule does not only exclude evidences in oral form but also has been extended to apply on

matters concerning extrinsic evidences in writing such as drafts,49

preliminary agreements50

and letters of negotiation51, having been justified on grounds of upholding written proof,52

effectuating the finality intended by the parties in recording their contract in written form53 and

eliminating “great inconvenience and troublesome litigation in many instances.”54

[3.2] THAT THE TERMS AND CONDITIONS SPECIFIED WITHIN THE AGREEMENT

APPEARS COMPREHENSIVE IN ITS SCOPE AND SELF-SUFFICIENT IN NATURE

LEAVING NO SCOPE OF EXTRINSIC EVIDENTIARY ANALYSIS

28. That as a part of the common usage, it’s generally seen that parties to an agreement intend,

in order to mitigate future inconveniences, to demonstrate all other aspect of their previously

reached consensus within a complete document by reducing into record all such terms

particularly. On such intention being established, the complete nature and independent

operation of the contract requires a careful perusal of what is already being agreed in the

express covenants relating to a particular subject matter rather than unnecessary implications

of the same.55 The simple test which follows the ascertainment of the same is that the

substantive and procedural facets encasing the fundamental obligations forming material part

of the contractual transaction must lie within specific stipulations of a certain nature contained

within a written document coupled with certainty in intention and unanimity in agreement.56

It is to be understood in the light of the facts that the Special Purpose Agreement being the sole

document governing the contractual relations in regard to the subject matter, the scope of other

arrangements among the parties indicating any intention to the contrary is negligible, thus

eliminating the possibility of any implications that could be drawn having any additional

48 Bank of Australasia v. Palmer, [1897] 545 A.C. 540.49 Miller v. Travers, [1832] 8 Bing. 244; Inglis v. Buttery, [1878] 3 App. Cas. 552; National Bank of Australasiav. Falkhingam & sons, [1902] A.C. 585.50 Evans v. Roe, [1872] 7 C.P. 138; Leggot v. Barrett, [1880] 309 15 Ch.D. 306; Henderson v. Arthur, [1907] 1K.B. 10.51 Mercantile Bank of Sydney v. Taylor, [1893] 321 A.C. 317.52 Pickering v. Dowson, (1813) 784 4 Taunt. 779.53Supra note 8.54

Mercantile Agency Co. Ltd. v. Flitwick Chalybeate Co., [1897] 14 T.L.R. 90.55 Matthew v. Blackmore, [1857] 772 1 H. & N. 762.56 Harris v. Rickett, [1859] 7 4 H. & N. 1.

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bearing upon the set of obligations57 other than what Unnat already accrues by virtue of the

terms and conditions of the agreement.

29. That with a view to denude the possibility of a collateral warranty from having legal

effect58

, to render inadmissible extrinsic evidence to prove terms other than those in the writtencontract and thus to restrict the subjective ambiguity of implied conditions which could not be

given a literal colour and an objective interpretation, the efficiency within an agreement of an

entire agreement clause is sought to put into effect. That the said clause runs in an agreement

to supersede all previous arrangements deliberated upon the subject matter in question and

acknowledges non-reliance upon representations or undertaking which do not find expressly

incorporated within the agreement. The provisions of the Special Purpose Agreement forming

part of clause (h) of Article 1 bars any inferential deviation in the form of change, amendment,

revision or modification which could portray an adverse effect upon the legal character of the

Special Purpose Agreement except those which are subsidiary to the agreement, therefore

seeking to maintain the sanctity of the terms and conditions agreed upon consensus by

diminishing influences of any secondary considerations other than what has been expressly

stated herein.

30. That it is also submitted that the obligations, procedures and operation asserted in relation

to the material terms which underlies the basic purpose of the agreement when stated in clear

and fault-free expressions comprehends the explicit framework of performance which form an

essential part of the agreement entered into. It is contended that the scope and nature of such

contractual resolution, uttered through the different parts embodying it, must be studied in

accordance with the statement of material terms present well within the document itself.

However, it is to be noticed that such perusal to locate the fundamentality in terms of the

relevant expressions, which underlay the arrangement between the parties, must be done in

total compliance with the effectual wording where the contract is not silent on such matter and

not in the light of extrinsic evidences suggesting it to be a collateral contract. It is to be

appreciated that no stretch of implication could possibly be adopted in derogation of the

fundamental elements of the contract or if such implication is unable to sustain or is

inconsistent with the tenor of the contract as a whole.59 Therefore, it is to the kind appreciation

of the Bench that upon the transfer of the knowledge in the form of the highly secured document

UNNATI containing all information regarding nanoscience, nanotechnology and

57

Henderson v. Arthur, [1907] 1 K.B. 10.58 Inntrepreneur Pub Co. Ltd. v. East Crown Ltd., [2000] 614 2 Lloyd’s Rep. 611. 59 London Export Co. Ltd. v. Jubilee Coffee Roasting Co. Ltd., [1958] 675 1 W.L.R. 661.

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nanobiomedicine as understood and recorded by the Democratic Republic of Unnat through an

expert committee of scientists, who participated in the international conferences representing

the Government of Unnat, the alleged concealment of knowledge on adverse effects does not

stand and therefore of implication of the same under the present circumstances would stand incomplete neglect to the express wording of the contract.60 It is to the kind perusal of the Bench

that the contract being laid upon a framework of bona fide presumption that the precise

application of the formula would provide the required result in appropriate conditions, it could

not be said that the same was in knowledge of Unnat or was materially ignored. 61 Therefore,

there being no knowledge or ignorance about the contentions present, holding Unnat

responsible for something done in good faith would absolutely cause a great travesty of justice.

Thus no additional burden of implicated obligations is levied upon Unnat on grounds that the

touchstone to determine the same is necessity rather than reasonableness.62 Thus is humbly

submitted that the Bench desist from making any implication of obligations since the agreement

in question is one very carefully drafted containing detailed terms agreed between them.63

[3.3] THAT THE DEMOCRATIC REPUBLIC OF UNNAT SHOULD NOT BE LEVIED

WITH ANY LIABILITY WHICH COULD NOT HAVE BEEN AVERTED THROUGH

COOPERATION WITH BAATI

31. A term in the agreement that the parties are willing to co-operate to ensure the performance

of their bargain, whether expressed or implied, forms important part of the Court’s

consideration.64 In this respect it is also incumbent upon the court to look into or determine the

degree of co-operation not on terms of reasonableness but by the construction of the terms

imposed mutually upon the parties by the agreement and in light of the surrounding

circumstances.65 The concurrence and participation among the parties to the subject matter in

question is a prerequisite or essential element of determining the scope and extent of the duty

to co-operate obviously under the circumstances when such duty seeks to uphold the ultimate

venture which the agreement proposes. Though it is an essential part of the process of drawing

implications in respect to what has been stated above that the same should be done keeping in

60 BP Refinery (Westernport) Pty Ltd v. Shire of Hastings, [1977] 26 52 A.L.J.R. 20, PC.61The Moorcock, (1889) 14 P.D. 64, 68.62 Liverpool City Council v. Irwin, [1977] 254 A.C. 239.63

Luxor (Eastbourne) Ltd. v. Cooper, [1941] 137 A.C. 108.64 Mackay v. Dick, (1881) 6 App. Cas. 251, 263.65 Id at 263.

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mind clarity and precision as the governing elements, however a little deviation from these

principles if serves the fulfilment of the subject matter agreed within the terms of the contract

or some holistic purpose which led the formation of the same, would not serve as contrary to

the incumbent principles of construction. It must be noted by the Ld. Court that Unnat, in orderto save the purpose undertaken by virtue of the agreement from frustrating tried to exhaust all

possible means by which the harm could be averted. This could be determined on grounds that

Unnat being ready to undertake more research and assist the Baati National Corporation with

the plan of Special and Required Assistance as demanded by the circumstance and situation,

which subsequently and without consideration was out-rightly rejected by Baati which led to

the situation being dragged to the court which prospectively would have been otherwise

averted.

32. Therefore, it is humbly submitted that on grounds of lack of co-operation from the side

Baati in upholding the basic principles underlying the Special Purpose Agreement, Unnat

should not be held responsible or burdened with any additional obligation.

Issue IV: Whether the Government of Unnat be made Responsible for Circumstances beyond

Their Control and Not in the Foreseeable Contemplation of Risks and, for Resulting Losses?

33. That it is humbly submitted before the Ld. Bench that liabilities in the course of a

contractual agreement accrues normally due to advertent neglect of rights and obligations

arising out of the same and resulting into its breach and subsequently, losses suffered by the

party so aggrieved. However, such neglect does not form part of the transaction when a party

to the contract, by virtue of the position given through the contractual obligations and by

exercise of its personal authority is unable to make any adverse impact upon the course of

performance of the agreement so reached and thus it is on such grounds it is contendedhereinafter the Democratic Republic of Unnat shall not be held liable for circumstances beyond

their reasonable control and not in any way within the foreseeable contemplation of risks. [4.1]

Appending further, the same being not a result of any breach, neglect or misconduct is unable

to hold liable Unnat for the losses suffered on justifiable grounds. [4.2]

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[4.1] THAT IMPOSSIBILITY OF PERFORMANCE CAUSED DUE TO EVENTS

SUPERVENING AND TO THE EFFECT BEYOND THE CONTROL OF UNNAT COULD

NOT HOLD IT RESPONSIBLE FOR NON-PERFORMANCE

34. When extraordinary or supervening events occur, without the default of either of the parties

and these events radically and significantly alter the nature of the contractual rights and

obligations of the parties,66 the contract may be automatically brought to an end by operation

of the doctrine of frustration67, which finds itself in place where in the course of performing

the contractual objectives, the unfolding events, occurring after the formation of the contract68

make such performances more onerous or even impossible.69 This is further accompanied by a

radical change in the obligations to be performed, a test which implies that there has to be a

break in identity between the contract as provided for and contemplated and its performance in

the new circumstances70which destroys the very nature and purpose intended to be given

sanctity at the time the contract was formed. Under this circumstance it’s submitted that the

Hon’ble Bench must relook at the principle originally adopted in Taylor vs. Caldwell 71 and

further reiterated in F.A. Tamplin SS. Co Ltd vs. Anglo-Mexican Petroleum Products Co Ltd 72

that the circumstances prevailing at the time the contract was entered into force and the ones at

the time the performance became impossible must be given due weight and that the court ought

to balance both in a bid to explain their bearing upon each other. It is essentially due to a drastic

change in the circumstances, though not contemplated beforehand but became very apparent

during the performance of a contract. It is further submitted that operation and effects of the

doctrine does not depend on the action, inaction or will of the parties to continue the contract.73

As stated above, it brings the contract automatically to an end notwithstanding the fact that

parties might continue to perform their contractual obligations. As a matter of fact it must be

noticed that, mere hardship or inconvenience will not amount to discharge by frustration74 but

there rather must be a change in the significance of the obligation that the thing undertaken

66 G.H. Treitel, Frustration and Force Majeure 505 (Sweet & Maxwell 1994).67 Ling Liu, The Doctrine of Frustration: An Overview of English Law 271 (1st ed. OUP).68 Amalgamated Investment & Property Co. Ltd. v. John Walker & Sons Ltd., [1977] 1 W.L.R. 164.69 Id.70 Edwinton Commercial Corporation and Global Tradeways Ltd. v. Tsavliris Russ (Worldwide Salvage andTowage) Ltd. “Sea Angel”, 2 Lloyd’s Rep. 517 (C.A. 2007).71 Taylor v. Caldwell, [1863] 3 B. & S. 826.72

F.A. Tamplin SS. Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd., [1916] 2 A.C. 397.73 Hirji Mulji v. Cheong Yue Steamship Co., [1926] A.C. 497.74 M. P. Furmston, Cheshire, Fifoot and Furmston’s Law of Contract 716 (Oxford 2012).

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would, if performed, be a different thing from that contracted for.75 However, the determination

of the doctrine in Edwinton Commercial Corporation vs. Tsavliris Russ76 led to the enunciation

of a ‘multi-factorial’ approach requiring consideration of terms of the contract, their context,

matrix of facts, parties’ reasonable expectations and especially their knowledge, assumptionsand contemplations regarding the particular risk.

35. Under the situation which have been given effect, it is put forth that the doctrine contended

runs independent of the conduct of the parties without any regard to their knowledge,

assumptions or contemplations therefore making it beyond what could be actively controlled

by and among the parties, and thus the occurrence of which could not be denoted as a

responsibility to one.

[4.2] THAT THE ENSUING EVENTS AND TO THAT THEIR CONSEQUENCES WERE

NEVER IN FORESEEABLE CONTEMPLATION OF RISKS AMONG THE PARTIES

BEFORE OR AT THE TIME OF ENTERING THE CONTRACT

36. That it is to be appreciated that a party to a contract is liable only to the extent of its duty

in regard to what was voluntarily assumed and mutually bestowed. One cannot be held

responsible for risks coming into being which were otherwise beyond the purview of the

agreement itself. It is submitted that a risk to be allocated within the reasonable contemplation

of the parties, the same must be a positive or negative implication 77 arising from a specific

clause or to that extent circumstances prevailing at the time the contract was entered into force.

It is further submitted that the fact-circumstances upon the issue in hand clearly enunciates that

under all circumstances taken into account to ensure the realisation of the purpose with which

Baati and Unnat formed the contractual relations, there always was conjoined a presumption

that the meticulous subscription to their respective obligations with due care, would result into

the fulfilment of the same. Therefore, the sudden change in results accompanied by its drastic

impacts were neither within what the parties contemplated nor within what they could

foresee78, therefore invocation of the doctrine is aptly justified and reflected upon the

circumstances so ensued.

75Davis Contractors Ltd. v. Fareham Urban District Council, [1956] U.K.H.L. 3.76 Edwinton Commercial Corporation and Global Tradeways Ltd. v. Tsavliris Russ (Worldwide Salvage and

Towage) Ltd. “Sea Angel”, 2 Lloyd’s Rep. 517 (C.A. 2007).77 Bank Line Ltd. v. Arthur Capel & Co., [1919] A.C. 435.78 Ewan McKendrick, Force Majeure and Frustration of Contract 35 (Informa Law 1995).

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[4.3] THAT THE RESULTING LOSSES CANNOT BE ATTRIBUTED TO ANY DEFAULT

OR NEGLECT ON THE PART OF UNNAT AND WERE INDEPENDENT

37. Compensation for losses incurred due to bad commercial bargains could not be attributed

or implied to be within the scope and extent upon which the doctrine of frustration runs. Theeconomic consequences of the frustration are that ''losses lie where they fall.''79 Advance

payments if already paid, shall not be reimbursed. This was attested in Lloyd Royal vs.

Stathatos80 where the Court of Appeal rejected the charterers’ claim for the return of hire paid

in advance. Though there has been a little deviation from this course, 81 it must be noted that

the general rule stands as what has been explained above and any deviation, which is rarely

seen cannot be looked upon to imply any changes upon the applicability of the doctrine in this

regard. Nevertheless, this is considered to be a very rare case in practice.

38. It is further submitted before the Hon’ble Court that the present fact-circumstances granted

the parties very limited or almost no allocation of risks accrued out of the agreement. That there

being a general practice that commercial contracts presupposes the happening of any future

event, to mitigate which certain mitigating circumstances are created so that the balance of

rights and obligations as among the parties remains stable. However, the peculiar characteristic

of the same being that it reduces the court’s subjectivity in determining the circumstances

which prevailed at the time of the entering into the contract and the intention of the parties. In

regard to this, the doctrine of frustration stands on a very relative plane. It must be taken into

regard that the wider is the scope of the contractual clauses the narrower becomes the function

of the doctrine.82 This being the situation in the present issue in hand, the narrowness in the

clauses upon risk allocation attributes the application of the doctrine.

39. That it should further be acknowledged that a contractual obligation, implying mutuality of

arrangement and seeking factors of co-operation denotes liability upon both the parties to

stabilise the situation with the required assistance needed to that effect. Under these

circumstances, it must be noted that in order to mitigate the differences that arose in the course

of such unforeseen and non-contemplated situations, the Democratic republic of Unnat sought

to assist Baati, keeping in view the holistic purpose of the arrangement, by way of a Special

79Occidental v. Skibs A/S Avanti, 1 Lloyd’s Rep. 293 (Q.B. 1976).80Lloyd Royal Belge SA v. Stathatos, 30 Great Britain Times Law Reports 70 (1917).81 Fibrosa Spolka v. Fairbairn, [1942] U.K.H.L. 4.82 Total Gas Marketing Ltd. v. Arco British Ltd., [1998] 2 Lloyd’s Rep. 209. [In a case of an elaborately drafted

contract a court may conclude, as a matter of interpretation, that the parties preferred the “certainty” of termination pursuant to one of the terms of the contract to the uncertainty of possible discharge under the doctrine offrustration].

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effect of the breach is nullified, the situation is restored to what it was before the breach took

place, and the other party is made whole again. Various international conventions, principles

and state laws, including the Baatian law are a testament to this state practice which forms a

part of Customary International Law as is under Article 38(1)(b) of the statute of the ICJ. [5.2]

[5.1] BAATI BREACHED THE RESPONSIBILITY OWED BY IT TO UNNAT AND THIS

BREACH OF STATE RESPONSIBILITY ENTAILS REPARATIONS AGAINST BAATI,

TO COMPENSATE UNNAT FOR ALL LOSSES IT INCURRED AS A RESULT OF THE

WRONGFUL ACT

[ 5.1.1 ]. The Chorzow Factory Case and the Principle of Reparation laid therein

42. It is a principle of international law that the breach of an engagement involves an obligation

to make reparation in an adequate form. Reparation therefore is the indispensable complement

of a failure to apply a convention and there is no necessity for this to be stated in the convention

itself. The Permanent Court of International Justice in the Chorzow Factory Case said in no

unambiguous terms: "The Court observes that it is a principle of international law, and even a

general conception of law, that any breach of an engagement involves an obligation to make

reparation”83. The ideal form of reparation, doubtless, is the restoration of the situation exactly

as it was before the injury. "The essential principle contained in the actual notion of an illegal

act-a principle which seems to be established by international practice and in particular by the

decisions of arbitral tribunals-is that reparation must, as far as possible, wipe out all the

consequences of the illegal act and reestablish the situation which would, in all probability,

have existed if that act had not been committed ."84

[ 5.1.2 ]. The Draft Articles on Responsibility of States for Internationally Wrongful Acts and

its implications in the case at hand

43. In the Draft Articles on Responsibility of States for Internationally Wrongful Acts85, Article

31 states the well-established principle relating to the obligation to make reparation for the

83 Factory at Chorzow (Merits), P.C.I.J. Order of the Court, (ser. A), No. 17 ¶ 4 (July 14, 1928).84 Supra note 47.85 The Draft Articles are a combination of codification and progressive development. The International Court ofJustice has already cited them for example, in Gabčíkovo-Nagyamaros Project (Hungary v. Slovakia), 1997 I.C.J.

7. On 12 December 2001, the United Nations General Assembly adopted resolution 56/83, which "commended[the articles] to the attention of Governments without prejudice to the question of their future adoption or otherappropriate action."[GA Res. 56/83, para. 3 (Dec. 12, 2001).].

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consequences of an internationally wrongful act. After reading the provision, it ought to be

brought to the notice of the honorable court that the obligation to make full reparation although

succinct, it has been affirmed86. The court has also recently recognized in Loayaza-Tamayo vs.

Peru (Reparations and Costs) case, that a state bears responsibility for an internationallywrongful act and is under an obligation to make full reparation for the injury caused by that

act87. The Umpire in the Lusitania case88 held “the remedy should be commensurate with the

loss, so that the injured party may be made whole”. The Respondents would like to bring to the

notice of the court that there is a fine line dividing restitution and compensation, and the court

will be confronted with the dilemma that compensation would be a more apt and equitable

remedy than restitution in this case, and the State of Unnat having a choice in opting for the

mode of reparation89, requests the court to grant sanction for reparation in the form of

compensation to place them in a situation that they would be in, had the contract been

performed. Article 36 of the ARSIWA expresses the entitlement to compensation90.

44. The principle of full reparation, adopted by the Permanent Court in the Chorzow Factory

case, has been affirmed and applied in the decisions of the International Court91, regional courts

and tribunals92, and arbitral bodies93. It is also reflected in codification efforts94 and in the most

unambiguous and certain way, reflects the