Upload
dangnhu
View
226
Download
0
Embed Size (px)
Citation preview
TEAM CODE:
14TH SURANA AND SURANA INTERNATIONAL TECHNOLOGY LAW MOOT COURT COMPETITION, 2015.
BEFORE
THE HON’BLE INTERNATIONAL COURT OF JUSTICE
AT THE PEACE PALACE
THE HAGUE, NETHERLANDS
CASE BROUGHT BEFORE THIS AUGUST COURT THROUGH ARTICLE 40(1)
FOR ADJUDGEMENT OF VARIOUS ISSUES AS LAID DOWN IN THE
MEMORANDUM INVOKING PROVISIONS OF CONTENTIOUS JURISDICTION
OF THIS COURT AS LAID DOWN IN ARTICLE 36 OF THE ICJ STATUTE;
BETWEEN
THE FEDERAL REPUBLIC OF BAATI AND ITS NATIONAL CORPORATION
(‘BNC’ OWNED BY THE STATE)
[APPLICANT]
vs.
THE DEMOCRATIC REPUBLIC OF UNNAT AND ITS NATIONAL
CORPORATION
(‘UNC’ OWNED BY THE STATE)
[RESPONDENT]
MEMORIAL FILED ON BEHALF OF DEMOCRATIC REPUBLIC OF UNNAT
ST_08_D
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 making
nanomaterial 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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(ii) Written Submissions on behalf of the Respondents
[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
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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(iii) Written Submissions on behalf of the Respondents
[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
LIST OF ABBREVIATIONS
1. & - And
2. A.C. - Law Reports Appeal Cases
3. AIR - All India Reporter
4. Anr. - Another
5. Art. - Article
6. Co. – Company
7. Edn. - Edition
8. Exp. - Express
9. GATTS - General Agreement on Tariffs and Trade
10. Hon’ble - Honorable
11. I.C.H - International Conference on Harmonization of Technical Requirements for
Registration of Pharmaceuticals for Human use
12. IDHGD - International Declaration on Human Genetic Data
13. QB - Queen’s Bench
14. S. - Section
15. SC - Supreme Court
16. TOT - Transfer of Technology
17. TRIPS - The Agreement on Trade-Related Aspects of Intellectual Property Rights
18. U.N. – United Nations
19. UDBHR - Universal Declaration on Bioethics and Human Rights
20. UDHGHR - Universal Declaration on the Human Genome and Human Rights
21. UNCTAD - United Nations Conference on Trade and Development
22. UOI - Union of India
23. vs. - Versus
24. WIPO - World Intellectual Property Organization
25. WTO - World Trade Organization
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(iv) Written Submissions on behalf of the Respondents
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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(v) Written Submissions on behalf of the Respondents
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
Case Name Page No.
Imperial Chemical Industries Ltd. vs. Controller General of
Patents, Designs & Trade Marks A.I.R. 1978 Cal. 77
5
Inglis vs. Buttery (1878) 3 App. Cas. 552 12
Inntrepreneur Pub Co Ltd. vs. East Crown Ltd [2000] 2 Lloyd’s
Rep. 611
13
Lallubhai Chakubhai vs. Chimanlal Chunilal A.I.R. 1936 Bom.
99
5
Land and Maritime Boundary between Cameroon and Nigeria
(Cameroon vs. Nigeria: Equatorial Guinea intervening) 2002
I.C.J. 303
1
Leggot vs. Barrett (1880) 15 Ch.D. 306 12
Liverpool City Council vs. Irwin (1977) A.C. 239 14
London Export Corp. Ltd. vs. Jubilee Coffee Roasting Co. Ltd.
[1958] 1 W.L.R. 661
13
Luxor (Eastbourne) Ltd vs. Cooper [1941] A.C. 108 14
Mackay vs. Dick (1881) 6 App. Cas. 251 14
Mariappan vs. A.R. Safiullah (2008) 5 C.T.C. 97 4
Matthew vs. Blackmore (1857) 1 H. & N. 762 12
Mercantile Agency Co. Ltd. vs. Flitwick Chalybeate Co. (1897) 14
T.L.R. 90
12
Mercantile Bank of Sydney vs. Taylor [1893] A.C. 317 12
Miller vs. Travers (1832) 8 Bing. 244 12
Moleculon Research Corp. vs. CBS Inc.793 F.2d 1261 (Fed. Cir.
1984)
13
Nuclear Tests Cases (Australia v. France; New Zealand v.
France) 1974 I.C.J. 253
1, 11
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(vi) Written Submissions on behalf of the Respondents
Papamichalopoulos and others vs. Greece App. No. 14556/89,
Eur. Ct. H.R. Series A No 330-B (1995)
21
Parker vs. South Eastern Ry. (1877) 2 C.P.D. 416 11
Pickering vs. Dowson (1813) 4 Taunt. 779 12
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 22
The 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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(vii) Written Submissions on behalf of the Respondents
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
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 Law
Publishing 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(viii) Written Submissions on behalf of the Respondents
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).
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 and Technology, 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(ix) Written Submissions on behalf of the Respondents
STATEMENT OF FACTS
[I]. FEDERAL REPUBLIC OF BAATI AND ITS NEW POLICIES PERTAINING TO FDI
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 international
collaborations 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 REPUBLIC OF UNNAT AND ITS CLOSENESS WITH BAATI
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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(x) Written Submissions on behalf of the Respondents
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 USING 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 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 herbs and 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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(xi) Written Submissions on behalf of the Respondents
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 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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(xii) Written Submissions on behalf of the Respondents
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.
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
the Baati 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?
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(xiii) Written Submissions on behalf of the Respondents
[C]. Whether the Government of Unnat cannot accept responsibility for situations not
contemplated 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?
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 it was 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(xiv) Written Submissions on behalf of the Respondents
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, 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. That it is 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. No additional burden of implicated obligations is levied upon Unnat
on grounds that the touchstone to determine the same is necessity rather than reasonableness.
Issue IV : That the Government of Unnat should not be made Responsible for Circumstances
beyond Their Control and Not in the Foreseeable Contemplation of Risks and, for Resulting
Losses?
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. When extraordinary or supervening events occur, without the default of either of the
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(xv) Written Submissions on behalf of the Respondents
parties and these events radically and significantly alter the nature of the contractual rights
and obligations of the parties. It is submitted 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.
Issue V : That the Government of Baati shall be ordered to pay for the losses incurred by the
Government of Unnat
The respondent would also like to bring the notice of this court, that as a result of the state of
Baati defaulting upon its obligations emanating from the SPA, the medicine never came to
frution and hence the benefits which were due to Unnat, never came to be. The respondent
additionally, brings to the notice of the court that Unnat has fulfilled its part of the promise
and even offered the SRA to ensure that the Neti project is completed in spite of
impediments, however Baati has refused to accept the same, thereby the lack of funding
effectively frustrating the contract and judicial propriety demands that Baati has to pay for the
loss of profits caused to Unnat as a result of non-fulfilment of the contractual obligations.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(1) Written Submissions on behalf of the Respondents
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 charter2 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
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).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(2) Written Submissions on behalf of the Respondents
intervening6, observed 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 in good 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
6 Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea intervening), 2002 I.C.J. 303 (June 11). 7 SIMMA, supra note 1, at 95. 8 Moot Proposition ¶ 13.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(3) Written Submissions on behalf of the Respondents
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, 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
9 Moot Proposition ¶ 9. 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).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(4) Written Submissions on behalf of the Respondents
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 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 by the 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.
13 Patents Act 1970, sec 1(l). 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(5) Written Submissions on behalf of the Respondents
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 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 the
same 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?
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. 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(6) Written Submissions on behalf of the Respondents
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.
[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 24 Moot Proposition ¶ 8. 25 Moot Proposition ¶ 13.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(7) Written Submissions on behalf of the Respondents
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 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 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).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(8) Written Submissions on behalf of the Respondents
“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
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
31 Felicity Callard, Mental illness, discrimination, and the law: Fighting for Social Justice 200 (1st ed. Wiley-Blackwell 2012). 32 Roberto Andorno, Principles of International Biolaw: Seeking common ground at the intersection of Bioethics and Human Rights 228 (1st ed. Bruylant 2013). 33 Adele Langlois, The UNESCO Universal Declaration on Bioethics and Human Rights: Perspectives from Kenya and 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).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(9) Written Submissions on behalf of the Respondents
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 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
35 Pedro Roffe, Transfer of Technology: UNCTAD's Draft International Code of Conduct, 19 The Int’l Lawyer 693 (1985). 36 Guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union to Technology Transfer Agreements, 3 Official Journal of European Union 354 (2014). 37 Moot Proposition ¶ 16. 38 United Nations: Conference on an International Code of Conduct on the Transfer of Technology, 19 International Legal Materials 779 (1980).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(10) Written Submissions on behalf of the Respondents
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
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 WITHIN
ARTICLE 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
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). 41 SIMMA, supra note 1, at 170.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(11) Written Submissions on behalf of the Respondents
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
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
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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(12) Written Submissions on behalf of the Respondents
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 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
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 of the 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. 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 Australasia v. 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] 1 K.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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(13) Written Submissions on behalf of the Respondents
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
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
written contract 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
55 Matthew v. Blackmore, [1857] 772 1 H. & N. 762. 56 Harris v. Rickett, [1859] 7 4 H. & N. 1. 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(14) Written Submissions on behalf of the Respondents
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 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 in complete 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
59 London Export Co. Ltd. v. Jubilee Coffee Roasting Co. Ltd., [1958] 675 1 W.L.R. 661. 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(15) Written Submissions on behalf of the Respondents
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 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 order to 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.
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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(16) Written Submissions on behalf of the Respondents
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 contended
hereinafter 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]
[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
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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(17) Written Submissions on behalf of the Respondents
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.
Caldwell71 and further reiterated in F.A. Tamplin SS. Co Ltd vs. Anglo-Mexican Petroleum
Products Co Ltd72 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 frustration74but there rather must be a change in the significance
of the obligation that the thing undertaken 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, assumptions and 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.
70 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). 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). 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).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(18) Written Submissions on behalf of the Respondents
[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 implication77 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.
[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. The
economic 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.
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). 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.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(19) Written Submissions on behalf of the Respondents
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 and Required Assistance Plan, but the same being refused by Baati made situation
adverse for both the parties especially Unnat, since in exchange of the know-how and
technical assistance it received nothing in return.
40. It is further submitted that Baati itself was in breach of the Special Purpose Agreement
wherein it was decided that all aspects of the commercial venture shall be done only by a
democratic and consensual method of decision making processing all its aspects at every
stage of the process between the parties since the circumstances enumerated therein justifies
that on several such aspects, the move of Baati was without any prior intimation of Unnat.
Since the project was more of a joint venture agreed between the parties, the presence of
Unnat in the development of the project was reduced to a bare minimum. There were mere
reviews upon the project that were sought with no actual presence or participation being
realised. Thus, the situation enumerated forms enough justification to claim that the change in
the result of the venture spearheaded towards production of drug to combat life-threatening
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 of frustration].
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(20) Written Submissions on behalf of the Respondents
liver cancer was solely and under autonomous supervision of Baati and no liability upon
Unnat for any of their default, negligence or misconduct could be levied.
Issue V : Whether The Government of Baati shall be ordered to pay for the losses incurred by
the Government of Unnat?
41. It is humbly submitted by the respondent that as is evident from Article 1(c) of the SPA,
the state of Unnat had provided both technical know-how and funds as part of the twin
sharing formula to the tune of 70% and 30% respectively. The respondent would also like to
bring the notice of this court to Article 1(d), according to which, for this contribution of
technical know-how and funds to the Neti-project, there were to be profits for the state of
Unnat to the tune of 60% upon successful production of the liver-cancer medicine. However,
as a result of the state of Baati defaulting upon its obligations emanating from the SPA, the
medicine never came to fruition and hence the benefits which were due to Unnat, never came
to be. Consequently, there exists a situation wherein Unnat has incurred large losses and the
state of Unnat requests this honourable court to exercise its plenary powers granted under
Article to sanction reparation against Baati, by way of compensation to Unnat for all the
injuries that it has sustained due to the wrongful act and breach of State Responsibility [5.1].
The contract laws of most countries, both civil and common law countries, lay down the
proposition that all losses attributable to the party that breached the contract must be paid to
the other contracting party such that the 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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(21) Written Submissions on behalf of the Respondents
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 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
internationally wrongful 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
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 of Justice 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 other appropriate action."[GA Res. 56/83, para. 3 (Dec. 12, 2001).]. 86 The ICJ affirmed the obligation to make full reparation (citing article 31) in Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), 1996 I.C.J. 595 31 (July 11). Also affirmed in Arrest Warrant Case (Democratic Republic of the Congo v. Belgium), 2000 I.C.J. 3, 31-32 (April 11). 87 Loayaza-Tamayo v. Peru, Reparations and Costs, Order of the Court Inter-Am. Ct. H.R., (ser. C), No. 42 20 (Apr. 15, 1998). 88 The Lusitania case, 7 R.I.A.A. 32, 39 (1923).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(22) Written Submissions on behalf of 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 state practice of many countries and the
customary international law in this regard.
[5.2]. BREACH OF AGREEMENT BY BAATI WILL ENTAIL CONTRACTUAL
DAMAGES AS LAID DOWN UNDER VARIOUS STATE LAWS, CONVENTIONS AND
PRINCIPLES
[5.2.1]. Breach of Expectation Interest due to frustration of SPA by Baati
45. The respondent humbly brings to the notice of the court that Unnat has fulfilled its part of
the promise and even offered the SRA to ensure that the Neti project is completed in spite of
89 Article 43(2)(b) of the ILC Articles. Also, Iran for instance, chose compensation as a form of reparation in the Case Concerning Aerial Incident (Iran v. United States), 1988 I.C.J. 161 (July 3). 90 “1. The State responsible for an internationally wrongful act is under an obligation to compensate for the damage caused thereby, insofar as such damage is not made good by restitution. 2. The compensation shall cover any financially assessable damage including loss of profits insofar as it is established.” 91 See Gabčíkovo-Nagyamaros Project (Hungary v. Slovakia), 1997 I.C.J. 7; Armed Activities on the Territory of Congo, 2005 I.C.J. 168. In respect of international organisations, Reparation for Injuries Suffered in the Service of the United Nations, Advisory Opinion, 1949 I.C.J. 174, 181. 92 See Papamichalopoulos and others v. Greece, App. No. 14556/89, Eur. Ct. H.R. Series A No 330-B (1995); Velasquez Rodriguez v. Honduras, (Reparations and Costs), Judgment, Inter-Am. Ct. H.R., (ser. C), No. 7 (1989). 93 See C.M.E. v. Czech Republic, Partial Award, 9 I.C.S.I.D. Rep. 113, 238-9 (2001); Amoco International Finance Co. v. Iran, (Iran-United States Claims Tribunal), 15 Iran-U.S. C.T.R. 161 (1987). 94 Codification efforts are described in FV Garcia Amador, First Report on International Responsibility, ILC Yearbook 1956, Vol II, 174, 177-178,221-226; and in R Ago, First Report on State Responsibility, ILC Yearbook 1969, Vol II 125.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(23) Written Submissions on behalf of the Respondents
impediments, however Baati has refused to accept the same, thereby the lack of funding
effectively frustrating the contract and judicial propriety demands that Baati has to pay for the
loss of profits caused to Unnat as a result of non-fulfilment of the contractual obligations. It is
an indisputable principle of law in almost all the legal systems across the world that if there is
a breach of contract, then the breaching party will be forced to pay damages to the party that
has incurred losses as a direct result of that breach including consequential damages. Unnat is
well within its rights to claim for the damages relating to its expectation interest, which was
laid down by Lord Atkinson in Wertheim vs. Chicoutimi Pulp Company95 which is well
embedded in both civil and common law countries, where it was stated that “it is the general
intention of the law that, in giving damages for breach of contract, the party complaining
should, so far as it can be done by money, be placed in the same position as would have been
if the contract had been performed.”
46. The general ‘rule’ under Common Law countries for the recovery of damages following
breach of contract was set down in the landmark English case of Hadley vs. Baxendale96:
Recoverable damages are those either (i) arising naturally or directly from the breach of
contract (‘direct loss’), or (ii) within the contemplation of the parties at the time they made
the contract (‘indirect’ or ‘consequential loss’). The English courts have repeatedly made it
clear that an exclusion of ‘indirect or consequential loss’ does not exclude ‘loss of profit’ that
arises directly and naturally from the breach, that is loss of profits that a reasonable
businessperson would expect to flow from such a breach in the usual course of events97. The
respondent submits that the lost profits in the present case would come under the first limb of
the Hadley vs. Baxendale rule.
47. [In arguendo]:- Even if the Loss of Profits were to be construed as Consequential :-The
respondent would like to bring to the knowledge of the court that that the English case of
Hadley vs. Baxendale has been recognized in American jurisprudence as the definitive source
for determining when consequential damages may be recovered for breach of contract.98 The
Restatement (Second) of Contracts provides that consequential damages may be recovered if
they were "a probable result of the breach when the contract was made ... as a result of
special circumstances, beyond the ordinary course of events, that the party in breach had
95 Wertheim v. Chicoutimi Pulp Company, [1911] A.C. 301 (P.C.). 96 Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Rep. 145 (1854). 97 Saint Line v. Richardsons Westgarth & Co. Ltd., [1940] 2 K.B. 49; British Sugar v. Projects Limited, (1997) 87 B.L.R. 42. 98 The decision is cited with approval by the highest courts of 43 states.
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(24) Written Submissions on behalf of the Respondents
reason to know."99 But courts freely interchange these expressions with the statement that
consequential damages may be recovered if they were a "foreseeable" result of breach100.
With respect to economic loss, U.C.C. § 2-715(2)(a) permits recovery of consequential
damages for "any loss resulting from general or particular requirements and needs of which
the seller at the time of contracting had reason to know."101
[5.2.2]. State Practice regarding Compensation for Contractual Damages
48. The Respondent will also cite a few relevant Articles from the UNIDROIT Principles of
Commercial Contracts of 2010102, since the agreement between BNC and UNC was a
commercial venture and this document is an embodiment of general international principles
of contract law and will guide the court in determining the International Law in this regard.
Also, in the International Sale of Good Convention103, to which many countries are parties,
Article 74 resonates the same principles.
49. The Respondent would also attract the attention of the court to the Indian Contract Act104,
wherein s.73 and s.75 state very clearly that the party who suffers by the breach is entitled to
receive compensation for any loss or damage and that a person who rightfully rescinds a
contract is entitled to consideration for any damage which he has sustained through the non-
fulfillment of the contract.
50. The Respondent would also cite the Sapphire-NIOC Arbitration case105 to guide the
court towards the proper application of the law.�Examining the question of damages, which
the plaintiff has a right to claim under the rules stated by him, the arbitrator expressed his
views in a passage, which should be another powerful contribution to international case law. 99 Restatement (Second) of Contracts §§ 351(1), (2)(b) (1979). 100 White v. Unigard Mut. Ins. Co., 730 P.2d 1014, 1017 (Idaho 1986); Aetna Casualty & Sur. Co. v. Day, 487 So. 2d 830, 835 (Miss. 1986). 101 31. U.C.C. § 2-715(2)(a) provides; “Consequential damages resulting from the seller's breach include any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise”. 102 ARTICLE 7.4.1 (Right to damages): Any non-performance gives the aggrieved party a right to damages either exclusively or in conjunction with any other remedies except where the non-performance is excused under these Principles. ARTICLE 7.4.2 (Full compensation) :(1) The aggrieved party is entitled to full compensation for harm sustained as a result of the non-performance. Such harm includes both any loss which it suffered and any gain of which it was deprived, taking into account any gain to the aggrieved party resulting from its avoidance of cost or harm.” 103 International Sale of Good Convention (2010) United Nations Conference on Trade and Development, https://www.uncitral.org/pdf/english/texts/sales/cisg/V1056997-CISG-e-book.pdf. 104 Indian Contract Act, [1872] http://comtax.up.nic.in/Miscellaneous%20Act/the-indian-contract-act-1872.pdf. 105 Sapphire International Petroleum Ltd. of Toronto and National Iranian Oil Company Arbitral Claim (Canada v. Iran), 35 I.L.R. 182 (Federal Tribunal of Swiss Supreme Court 1963).
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(25) Written Submissions on behalf of the Respondents
`"According to the generally held view, the object of damages is to place the party to whom
they are awarded in the same pecuniary position that they would have been in if the contract
had been performed in the manner provided for by the parties at the time of its conclusion.
That should be the natural consequence of the breach. This rule is simply a direct deduction
from the principle of pacta sunt servanda since its only effect is to substitute a pecuniary
obligation for the obligation, which was promised but not performed. It is therefore normal
that the creditor is thereby given complete compensation. This compensation includes the
loss suffered (damnum emergens), for example the expenses incurred in performing the
contract, and the profit lost (lucrum cessans), for example the net profit which the contract
would have obtained. The award of compensation for the lost profit or the loss of a possible
benefit has been frequently allowed by international arbitral tribunals.”
PRAYER
Wherefore, it is prayed, in light of the issues raised, arguments advanced, and authorities
cited, that his Hon’ble Court may be pleased to declare that:
a. The Government of Unnat has not violated any obligation and that all the information
available in their legal domain in relation to nanoparticle was transferred through
UNNATI with utmost bona-fide leading to a successful ToT and, hence this presumption
of violation of law stands without any legal basis and cannot stand;
b. The Government of Unnat was ready to undertake more research and assist the Baati
National Corporation with the plan of SRA as demanded by the circumstance 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
14th Surana & Surana International Technology Moot Court and Judgment Writing Competition, 2015
(26) Written Submissions on behalf of the Respondents
concealment of information and that the Government of Baati has breached the principle
of Good Faith as contained within Article 2 of the UN Charter as a result of deliberately
rejecting the plan for SRA as a result of which the joint venture could not reach fruition.
c. The Government of Unnat can’t accept liability for situations not contemplated in the
SPA and, hence has not accepted any other legal obligations not specified in the SPA and
that Baati has frustrated the terms of the agreement; �
d. The Government of Unnat shall not be held liable for losses arising due to circumstances
that are beyond their control and not in the foreseeable contemplation of risks; �
e. As the Government of Unnat have transferred all the nano knowledge available in their
legal domain without accruing any benefit and incurring losses, Government of Baati
shall be ordered to pay for the losses. �
And Pass any other Order, Direction, or Relief that it may deem fit in the Best Interests
of Justice, Fairness, Equity and Good Conscience.
For this Act of Kindness, the Appellant Shall Duty Bound Forever Pray.
Sd/.
(Counsel for the Respondents)