AMERICAN ARBITRATION ASSOCIATION

AMERICAN ARBITRATION ASSOCIATION

Case No. Moot 6

Superb Paper, Plc
Claimant

v.

Essential Controls, S.A.
Respondent

PROCEDURAL ORDER NO. 1

This communication summarizes the results of the conference telephone call held yesterday, 1 October 1998, between counsel for Superb Paper, Plc, Essential Controls, S.A. and myself. The purpose of the telephone call was to decide on the procedure that would be followed in this arbitration.

I wish to begin by expressing my appreciation for the co-operation of counsel from both sides. We were able to settle a number of procedural questions with a minimum of controversy. This successful commencement of the arbitration will greatly assist the tribunal in fulfilling the mandate you have given us.

The arbitration will be conducted in two phases. These two phases depend in part on the extent to which the facts are already agreed or can easily be determined.

First phase of the arbitration: It appears that there are few open factual questions about the actions or lack of action of Superb or Controls throughout the period in question. To the extent that counsel find that there are remaining factual questions, there will be a limited period for determining them. The questions should be sent to the administrator of the arbitration, Professor Eric Bergsten, by October 23, 1998. The answers to the questions submitted will be distributed by Procedural Order No. 2 on or before November 2, 1998.

On the basis of the facts set out in the documents already submitted to the tribunal and those found in the limited period for further factual determination, the tribunal will receive arguments as to

Counsel have agreed that there would be no need to join Reliable Installation Co. in this arbitration if Controls does not qualify for exemption from damages under CISG Article 79(1) and (2)(a). Counsel have also agreed that the issue arises if Controls meets the criteria for exemption in those two provisions, since there would then be the question as to whether Reliable Installation Co. would be so exempt under CISG Article 79(2)(b). Counsel have agreed that making any determination about the conduct of Reliable would depend upon factual issues that are not yet clear, and that cannot be determined in the limited fact-finding procedures of the first phase of the arbitration. Therefore, the tribunal will hear arguments in the first phase of the arbitration as to

Schedule: Superb will submit its memorandum by 7 December 1998. Controls will submit its memorandum by 14 February1999. Oral argument will be scheduled to be held beginning on Saturday, 27 March 1999.

Second phase of the arbitration: Following the oral argument, the tribunal will render its conclusions on the questions raised in the first phase of the arbitration. Depending on its conclusions, further proceedings will take place. Those proceedings may include the question whether Reliable Installation Co. would be exempt from liability for damages under CISG Article 79(2)(b) and in regard to its contractual relationship with Controls. They may also include determination of the amount of damages suffered by the aggrieved party. Counsel are agreed that those issues will not be raised in the first phase of the arbitration.

(Signed)
President of the Tribunal

2 October 1998
Date