AMERICAN ARBITRATION ASSOCIATION
Case No. Moot 6
Superb Paper, Plc
Essential Controls, S.A.
PROCEDURAL ORDER NO. 3
As was indicated in the communication covering Procedural Order No. 2, because so many questions had not been answered for various reasons in that Order, a further time for clarification was given. This Order contains the responses to those further requests.
It is the understanding of the Tribunal that the parties were in agreement that in order for CONTROLS to be exempt from damages caused by the failure to install the control system by the contract date, a failure that was caused by the failure of Reliable to do the installation by the contract date, CONTROLS would have to show both that it was personally exempt (Article 79(2)(a)) and that Reliable would be exempt (Article 79(2)(b)). Therefore, if CONTROLS cannot show that it is personally exempt, there is no need for the Tribunal to consider whether Reliable would be exempt.
On the other hand, if CONTROLS can show that it is personally exempt under Article 79(2)(a), the question arises whether Reliable is exempt. That in turn raises the question as to whether Reliable should be joined to this arbitration as a party, as requested by CONTROLS, or only be considered as a witness, as is the position of SUPERB.
The second phase of the arbitration, which will consider issues of damages and perhaps the exemption of Reliable, will take place at some time after 1 April 1999.
CONTROLS knew of all of the firms licensed in Mediterraneo, and knew them to be reputable and competent, but it had never had any business dealings with any of them.
The amount was an estimate. The estimate was based on the current list price, took into consideration that the list price included installation, that the control system was now located in Mediterraneo rather than in Equatoriana, and that the control system had taken on an element of being rejected or second-hand goods.