50. Even if the Arbitral Tribunal finds not to follow Respondent's arguments of Issues 1-3 and decides that
(1) a valid arbitration agreement was concluded between Claimant and Respondent, constituting the Tribunal's jurisdiction, and that
(2) a valid sales contract was entered into by Claimant and Respondent, the Arbitral Tribunal may benevolently consider Respondent's arguments of the following Issues 4-7:

ISSUE 4: Claimant breached its obligation to cooperate in good faith:[79]

51. In brief:

In detail:

52. The governmental export licence system was a radical change of the basic assumptions on which the sales contract between Claimant and Respondent had been concluded: the export licence system allocated only 80 % of the export wheat needed by Respondent. At the time of contracting, none of the parties could foresee floods of the extent of April 1998 or the imposition of a governmental export prohibition followed by an export licence system.[80]
53. If such unforeseen circumstances occur, the contract as primary source of the parties' rights and duties has to be consulted for provisions regarding the new situation.[81] Many contracts contain clauses dealing with such a radical change of circumstances.[82] The incorporation of such clauses is an incidence of the parties' autonomy foreseen by Art. 6 CISG.
54. The present contract does not contain such a clause. Honnold states, "in extreme situations it may be appropriate to conclude that the contract did not contemplate performance under the radically changed circumstances that developed".[83] The decisions in the 1973 "Mississippi-floods-cases" express the same: with regard to allocation, any reasonable action on the seller's part sanctioned implicitly by the contract deserves support.[84]Contractual clauses dealing with radically changed circumstances are broadly recommended.[85]The fact that the parties ignored this recommendation shows that they had not considered the radical change of circumstances as probable. The parties' hypothetical will is decisive[86]: had the parties known the possibility of such a change, they would definitely have provided for a fair solution in compliance with good faith. They would not have agreed upon a regulation that one party (Respondent) has to bear all risks. Hereby it has to be concluded that the parties did not want their contract to remain totally unaffected by the occurrence of a radically new situation. Therefore the parties' will demands re-negotiation of the contract in order to adapt it to fundamentally changed circumstances. Consequently, the parties were obliged to cooperate in good faith towards the adaptation of the contract.[87]Therefore Claimant's contention that the contract must remain unchanged in any case cannot be accepted.[88]

55. Because of the governmental export licence system, Respondent was allowed to export only 80% of the requested amount of standard feed wheat.[89]According to Art. 9 (2) CISG[90], it is a usage in circumstances like in the present case that the exporter has the right to equally re-allocate the reduced amount of wheat among all affected contractual partners. This usage is evidenced by:

56. (1) PO 2, clarific. No. 11 states that "normally a buyer in such a case [governmental export reduction] would take the proffered 4,800 tons and claimed for the extra costs". PO 2, clarific. Nos. 27 and 42, give evidence that most of the other customers with firm contracts as of 17 April 1998 accepted the reduction and were delivered with 80% of the respective contract amounts.
57. (2) The existence of a usage of re-allocation is adopted in § 2-615 UCC - a provision elaborated for circumstances like the present ones.[91]The inclusion of this regulation in UCC and its generally unchanged adoption in the State-codes[92]evidence its broad acceptance among the persons and entities involved in commercial sales contracts.
58. Moreover, the similarity in intention between UCC and CISG is remarkable: both codifications aim at facilitating cross-border trade by offering a uniform body of regulations which is acceptable to contract parties from different legal backgrounds. In the case of the UCC "intra-state" trade and in the case of the CISG "inter-state" trade shall be furthered.[93]Moreover, there is remarkable similarity in many provisions between UCC and CISG.[94]
59. There is no usage in standard feed wheat trade to agree on regulations differing from the re-allocation solution as codified in §2-615 UCC. The USA is one of the world's biggest and therefore most important producers and traders of standard feed wheat.[95]The importance of the American production implies that many international contracts for the sale of standard feed wheat are quite probably entered into on the basis of the American contractual practice. American trade usages ought to be fruitful sources of information on the international contractual practice. Our research concerning the form contracts offered by the various American Grain and Feed Associations shows that the form contracts do not contain any provisions modifying § 2-615 UCC.[96]Therefore, UCC remains applicable. It is reasonable to assume that American traders frequently apply those form contracts in their national as well as international contracts.
60. (3) Additionally, the Danubian Ministry's basis for allocation of export permits is a further evidence for the existence of a trade usage of re-allocation: the Ministry has taken into account customers with firm contracts before a certain date as well as regular customers. In such extraordinary circumstances like the ones due the 1998 floods the Ministry has shown that it considers allocation of the wheat determined forexport to those relevant customers as just and normal. The Ministry´s application of this trade usage proves its existence.
61. Taking into account (1) the evidence of Procedural Order No. 2 referred to above, (2) the inclusion of the re-allocation-obligation in § 2-615 UCC and the similarity in intention between UCC and CISG, and (3) the Ministry's export licence system, it has to be concluded that reasonable and fair re-allocation to the affected customers (be they regular or not) is a usage widely known and regularly observed by standard feed wheat traders. Therefore, Claimant ought to have known this usage, even more so due to its long involvement in the present trade field.[97]There is no evidence in the record of an agreement between the parties to exclude or modify this trade usage.
62. On the contrary, Claimant rejected equal re-allocation and claimed that only customers with firm contracts as of 17 April 1998 should receive full delivery. In doing so, Claimant indicated that all the other customers with contracts concluded after 17 April 1998 - exclusively regular customers[98]- should merely obtain the remainder.[99]Claimant has contended that the allocation of the permitted wheat was at Respondent's discretion.[100]This argument should be rejected: arbitrary allocation would violate the trade usage of fair and reasonable re-allocation, i.e. (by virtue of Art. 9 (2) CISG) the sales contract.

63. On the basis of the trade usage of re-allocation, Claimant had the obligation to cooperate in a reasonable manner as far as necessary for the re-allocation. This obligation to cooperate is an aspect of the general good faith principle of CISG: all parties are obliged to act in good faith. [101]
64. In the present case, re-allocation primarily required the opening of a letter of credit which would allow partial shipments and remain open for a reasonable period of time (i.e. until the full contract amount could probably be delivered). It would have been an unreasonable burden for Respondent to re-allocate and deliver in parts, if a letter of credit was opened on the basis of the initial contract: had Respondent re-allocated as contractually obliged and delivered correctly, the issuing bank, nevertheless, would have had to deny any payment. Fulfilling all one's obligations and not receiving payment (i.e. the seller's main interest) is definitely contrary to the intention of a reasonable seller as well as to the object of the contract, the usage of re-allocation and CISG. Therefore, good faith obliged Claimant to cooperate by opening or by amending a letter of credit in order to meet the requirements of re-allocation. (The latter follows from the fact that the contract required an irrevocable letter of credit[102]: any amendment can only be effected with the consent of Claimant as the account party, the beneficiary and the issuing bank.[103])

65. At the time when the alleged contract might have been concluded (19 February 1998), such heavy floods and the consequent government measures were unforeseeable for the parties.[104]The non-occurrence of such a profound change of circumstances affecting Respondent's ability to perform was a basic assumption on which the parties concluded the sales contract.
66. The 80 %-reduction imposed by the Government[105]brought about a new situation in which Respondent was not longer able to perform to all its customers that the Ministry treated as relevant for the granting of export permits. Respondent was thus in the unpleasant situation wherein full performance to one customer (e.g. to Claimant) would lead to a breach of contract with another customer. Respondent immediately informed Claimant of the licence system and its consequences.[106]

67. All provisions of CISG are to be interpreted to promote the observance of good faith in international trade (Art. 7 (1) CISG). Moreover various provisions express the good faith principle.[107]CISG's intention is to create a fair dealing relationship.[108]In the present case, equal re-allocation to all affected customers corresponds to CISG's intention of fairness and avoidance of unjustified preference in international trade.[109] What good faith requires, is evidenced by §2-615 UCC (fair and reasonable allocation).[110]The prohibition of unjustified preference is also strongly supported by the strict frustration principles invoked in the course of the "1973 Mississippi floods cases"[111]: any reasonable action on the seller's part which is implicitly sanctioned by the contract deserves support.[112]All the customers that the Ministry had determined to be relevant for its licence system were "sitting in one boat". They were all equally affected by the governmental reduction. Therefore, no customer was entitled to claim full performance to the detriment of other customers without special justification. In the present circumstances, a claim for full performance would amount to an abuse of one's rights, given that it would be a conscious encroachment upon every other affected customers' entitlement (collusion). It was clear to Claimant that insisting on 100%-delivery would have this consequence.[113]To prefer Claimant without special justification would profoundly contradict CISG's notion of good faith and fair dealing. Claimant itself has acknowledged this notion of equal treatment of the affected customers: "we can understand that allocation would have to take place if the allotment you received from the Ministry was not enough to cover all of your contractual commitments."[114]Respondent was in exactly this situation: It did not receive an export quota sufficient to cover all its contractual commitments as of the time when the permits were issued.
68. Art. 48 CISG supports this view. It gives the seller a right to remedy any failure to perform, if the buyer can reasonably be required to cooperate. If CISG gives a seller such a right after having already breached an obligations, a fortiori the seller should have a right to his contractual partner's reasonable cooperation before he breaches an obligation.

69. Respondent had no possibility to reasonably overcome the difficult situation caused by the ministerial reduction: the contract called for FOB-performance in any Danubian port.[115] Also Respondent's other contracts called for performance in Danubia, which had to be clear to Claimant.[116]Claimant refused any adaptation of the contract with regard to the profoundly changed circumstances - without stating any reasons. Any wheat shipped from a Danubian port, however, was subject to the governmental export licence system. Even if Respondent had purchased the missing 20 % of wheat for its customers outside Danubia, the wheat would have become subject to the export licence system as soon as Respondent sought to perform by delivering FOB-Danubian port. The permits until August had already been allocated. Consequently, the "new wheat" (i.e. the purchased missing 20 %) could only be permitted for export in the second round of governmental licence allocation. Respondent would not have been allowed to export the additional 20 % before September 1998. Therefore, Claimant knew or, at least, had to know that Respondent was not able to overcome the governmental reduction.
70. In addition, full performance to one privileged customer would not only be contrary to CISG's promotion of good faith and fair dealing, but it would also mean a serious disadvantage for Respondent. It would have to face the justified criticism of all the other customers regarding the incomprehensible preference of Claimant. There was a high probability that Respondent's regular customers would be so disappointed by the unfair preference that they would decide to purchase their wheat from another seller in the future. This was even more likely given that Respondent's regular customers did not depend on Respondent's wheat. There were other suppliers from whom they also purchased their wheat.[117]Losing one's regular customers is definitely one of the most serious dangers for a businessperson's economic existence (especially in a trade field like the present one, where there is relatively little fluctuation of customers compared to other fields). Without adaptation to the radically changed circumstances, Respondent was likely to lose its regular customers and to jeopardize its economic existence.

71. A contractual partner is obliged to help to avoid such serious disadvantages as far as reasonably possible (right of debtor to claim adaptation or re-negotiation of contract[118], obligation to cooperate[119]). It has already been shown that Claimant's cooperation was necessary for the adaptation to the changed circumstances.[120]Claimant did not communicate to Respondent why it did not want to cooperate. Had Claimant had any special justification not to cooperate, it should have stated it. Respondent, however, had no indication of any serious interest on the part of Claimant justifying non-cooperation:

72. (1) The fact that Claimant entered into the contract before some of the other customers now affected cannot in itself justify a preference. The governmental licence system created a group of customers equally affected by the reduction. It did not indicate that any of the affected customers should be privileged.[121]
73. (2) Nothing indicated to Respondent that Claimant would not have been able to wait for the remaining 20% of wheat until September or October. Following Art. 25 CISG, the fundamental character of prompt delivery has to be stated expressly as an essential item during the negotiations or in the contract. The fundamental importance of prompt delivery can also be expressed by the determination of a specific date (e.g. 1 July 1998) or by using terms that are established in international trade such as "fixed delivery" or "definite delivery".[122]There were neither any such formulations in the contract itself nor any indications in the contractual circumstances, which would have given unequivocal evidence that Claimant's main interest in the contract was to receive the wheat exactly and exclusively in July 1998.
74. On the contrary, the agreed time of delivery itself (not a certain day, but the rather long period of one entire month) evidences that the actual date of delivery was not of fundamental importance to Claimant. The requirements of the letter of credit were a mere unilateral repetition of some terms of the contract by Claimant.[123]There is no evidence as to whether the parties had considered those terms fundamental, at the time of contracting. Furthermore, Claimant had given no signs that it would have needed the full amount for the fulfilment of any of its own urgent obligations to its customers.
75. Had the costs of the second shipment been an interest contradicting Respondent's demand for re-allocation, Claimant could very easily have communicated this interest to Respondent and could have demanded that Respondent bear the additional shipping costs.
76. (3) Even if the July-delivery had undoubtedly been a fundamental interest of Claimant, it could have notified Respondent hereof and could have demanded that Respondent deliver the remaining 20 % of wheat outside Danubia and bear the additional shipping costs. Such adaptation would have meant no loss to Claimant and far less cost to Respondent than the damages now being claimed.[124]
77. (4) Claimant has contended that modification of the contract would have impaired its material interests and that Claimant was, therefore, entitled to seek performance.[125]Claimant has given four reasons: (a) uncertainty of performance, (b) and (c) higher freight costs and additional risk as well as (d) loss of benefit:
78. (a) Uncertainty of performance: Respondent's fulfilment of the 18 contracts with Imports calling for direct shipment to Claimant evidence Respondent's reliability. Therefore, Claimant could trust that Respondent would undertake all reasonable steps to perform the modified contract.
79. (b) and (c) Higher freight costs and additional risks: it would have been easy to find a solution by way of re-negotiation. The number of shipments could have been limited and the additional freight costs could have been kept small by admitting places of delivery outside Danubia, e.g. in Equatoriana where the shipping costs to Mediterraneo are lower.[126]It could also have been agreed that Respondent would bear the additional shipping costs as well as the possible costs for an amendment of the letter of credit. Respondent was very likely to accept such proposals.[127]Claimant would only have had to communicate its interests and re-negotiation would have resulted in a solution satisfying both parties. Claimant, however, did not even try this solution. Instead, it simply rejected Respondent's first proposal.[128]
80. (d) Loss of benefit: Claimant has contented that it would loose its benefit from the bargain due to the rise of the world market price.[129]It has to be stated that Respondent never demanded a modification of the contract price, but always kept to the agreed $60 per ton. Therefore Claimant's preoccupation was unjustified.
81. From all this follows that there was no serious justification for Claimant's refusal to cooperate and for its demand to be preferred to the other affected customers. Thus, Claimant was obliged to contribute in good faith to the adaptation of the contract. Claimant, however, refused any adaptation to the changed circumstances as well as any re-negotiations. Instead Claimant demanded to receive preferred performance.[130] Claimant's contention that the allocation of the restricted amount of export wheat to its customers was at Respondent´s free discretion[131]and that Claimant should be preferred to other customers cannot be accepted.

87. Conclusion:

ISSUE 5: Respondent is exempted from the duty to pay damages according to Art. 79 CISG:[142]

88. In brief:

In detail:

89. The governmental reduction of Respondent's export allowance to 80% of its export needs constituted an impediment beyond Respondent's control. Respondent has no influence upon the Danubian government. It is not even a government-owned or government-controlled cooperation.[143]Pursuant to the above indicated trade usage of re-allocation and CISG's principle of good faith and fair dealing[144], Respondent was not entitled to privilege Claimant by a 100%-delivery to the disadvantage of the other customers. Respondent was not allowed to breach its obligations under its other contracts and CISG, just as it was not allowed to ignore the export licence system. Moreover, unjustified preference of customers by breaching contracts with regular customers might seriously have endangered Respondent's economic, i.e. social existence.[145]Thus, Claimant's contention that "full delivery was always available at the discretion of Dealers"[146]cannot be accepted.

90. The occurrence of this impediment had been unforeseeable for both parties at the time when the contract was allegedly concluded. Never before had there been floods and an export licence system comparable to 1998.[147] In addition, the export licence system was unavoidable for Respondent. There was no reason why recourse against the allocation should have been successful.[148]Finally, the impediment was insuperable, because full delivery to Claimant would have necessitated a breach of contract with other affected customers. A breach of contract without special justification could not reasonably be required of Respondent. This would drastically contradict CISG's aim to develop international trade on the basis of equality and mutual benefit and to provide for good faith and fair dealing in international trade.[149]
91. Respondent could not have avoided the breach of contract itself. It was not possible to purchase additional wheat in Danubia, because Respondent would have needed wheat cleared for export. No other Danubian exporter had excess export wheat since their permits were based on their respective need. There was no additional export wheat available for new contracts. Purchase of wheat abroad would not have overcome the impediment, either: all of Respondent's contracts with affected customers called for delivery in Danubia.[150] Thus any wheat imported to Danubia would be subject to the licence system. It could not have been exported from Danubia before the government issued the new export permits for September or October. Consequently, Respondent could not overcome the impediment.
92. Respondent repeatedly gave notice to Claimant of the impediment and its effect on Respondent's ability to perform (Art. 79 (4) CISG).[151]
93. Art. 79 CISG therefore exempts Respondent from the obligation to pay damages or interest thereon as there is no sum in arrears in the sense of Art. 78 CISG.

94. Conclusion:

ISSUE 6: Claimant breached its duty to mitigate damages:[152]

95. In brief:

96. By its communication of 21 May 1998 Respondent offered Claimant delivery of 4,800 tons and proposed to deliver the remaining amount of 1,200 tons by October 1998.[153]This proposal resulted from the fact that full delivery in July was obviously not "urgent" for Claimant: there were no indications that full delivery in July would have been of fundamental importance to Claimant.[154]It would have been Claimant's duty, at the time of entering into the contract, to clearly notify to Respondent that full delivery in July 1998 was its main interest in the contract.[155]
97. Pursuant to Art. 77 CISG, good faith obliged Claimant to take objectively reasonable measures to mitigate its loss and, consequently, bars Claimant from recovering damages that could reasonably have been avoided.[156] This duty to mitigate serves not only to keep the damage low, but also to avoid any damage.[157]
98. Claimant had all necessary information such as wheat prices, shipping costs, etc.[158]enabling it to calculate that the above described alternative course of action would have resulted in a smaller loss than the substitute purchase which was actually carried out.[159]
99. Following Schlechtriem, the aggrieved party is entitled to demand compensation for the costs of the necessary measures in so far as they are not out of proportion to the loss to be avoided.[160]Had Claimant cooperated in the period between 21 May 1998 and 15 June 1998, instead of the totally refusing partial shipment, Respondent would have had to bear the supplemental costs. Moreover, it had to be clear to Claimant that Respondent would prefer this solution to the substitute purchase since Respondent's expenses would have been remarkably lower.[161]This would have meant no greater costs for Claimant than performance of the initial contract[162]and would, consequently, have caused no loss whatsoever for Claimant.[163]
100. In addition, this reasonable alternative conduct would have led to even less effort for Claimant, because no re-negotiation with a new contractual partner would have been necessary.
101. It has already been shown that the time of delivery (July 1998) was not a fundamental interest for Claimant in the contract.[164]
102. Claimant, however, chose the less reasonable and for Respondent more disadvantageous substitute purchase of 6,000 tons. A reason for Claimant's not taking into account the obviously more reasonable alternative might have been that by this substitute purchase Claimant was able to save shipping costs (which it had to bear due to the FOB-term).[165]Under the contract, Claimant would have had to pay $144,000 for shipment from Danubia. The substitute purchase with shipment form Equatoriana allowed Claimant to pay only $132,000. Claimant thus saved the amount of $12,000.
103. Therefore a reasonable businessman in Claimant's position would have abided by the contract and taken the offered 4,800 tons in July 1998 and would have waited until October 1998 for the remainder. Consequently, Claimant's conduct is to be regarded as inconsistent with reasonable business conduct according to Art. 7 CISG and the explicit requirement of Art. 77 CISG.[166]

107. Conclusion:

ISSUE 7: Claimant did not calculate its damages correctly:[171]

108. In brief:

In detail:

109. Even if the Arbitral Tribunal rejects all the arguments of Issues 4-6, the claim for damages has to be reduced, because the real damage suffered by Claimant was lower than $90,000:
110. Art. 74 CISG requires that the amount of damages have to be calculated on the basis of the specific damage that Claimant suffered because of Respondent's breach of contract.[172]For the calculation of damages Claimant's real financial situation is to be compared with the hypothetical situation where there had been no breach of contract.[173]Furthermore, according to Schlechtriem, "the principle of concrete calculation justifies the taking into account of any advantages which the breach of contract brings for the promisee."[174]If the initial contract had been properly fulfilled, Claimant would have had to bear shipping costs of $24 per ton. For delivery of the contracted 6,000 tons the price would have amounted to the sum of $144,000. The shipping costs of the substitute purchase actually carried out ($22 per ton) were $2 per ton cheaper.[175]This means that the substitute purchase chosen to remedy Respondent's breach of contract brought about an advantage as to shipping costs of $12,000. This remarkable advantage due to the breach of contract has to be incorporated into the calculation of damages.[176]Claimant, however, has demanded $90,000.[177]Respondent cannot accept this calculation, as it is incomplete to Respondent's disadvantage.

111.Conclusion:

ISSUE 8: Claimant has to bear all costs:[178]

112. The parties have not agreed to diverge from the LCIA Rules as to costs. In accordance with Art. 28.4 LCIA Rules "costs should reflect the parties' relative success and failure in the award or arbitration". There are no particular circumstances in the sense of Art 28.4 LCIA Rules that this approach would be inappropriate. Therefore, Respondent claims costs that reflect its relative success in the award (Artt 28.1, 28.2 and 28.4). Furthermore, Respondent claims reimbursement of the costs of legal representation in this case (Art. 28.3 LCIA Rules), which we herewith request to award pursuant to Art. 28.4 LCIA Rules (relative success in the award). The precise amount will be shown in the schedule of costs, which will be submitted at the conclusion of this arbitral proceeding.

EPILOGUE:

In the present Memorandum we have shown that:

(1) Mr. Dean's witness statement should be excluded or, at least, deserves less than full weight and ambiguities therein should be construed against Claimant;

(2) The Tribunal's jurisdiction has not been established due to defects in the formation of the sales contract and arbitration agreement;

(3) Claimant is not entitled to enforce a sales contract against Respondent;

(even if the Arbitral Tribunal found that there was a valid arbitration agreement and a valid sales contract between Claimant and Respondent)

(4) Claimant breached its obligation to cooperate in good faith, that Respondent was entitled to avoid the contract (Art. 64 CISG), and that Claimant is barred from claiming damages and interest on damages (Art. 80 CISG);

(5) In the alternative, the occurrence of an unforeseeable, unavoidable and insuperable impediment beyond control exempts Respondent from damages (Art. 79 CISG) and, consequently, from interest on damages (Art. 78);

(6) In the alternative, Claimant breached its duty to mitigate damages (Art. 77 CISG) and is, therefore, barred from claiming the avoidable $90,000 and, consequently, from claiming interest on this amount (Art. 78 CISG);

(7) In the alternative, Claimant calculated the damages incorrectly to Respondent's disadvantage (Art. 74 CISG).

(8) Finally Respondent claims that the costs of arbitration as well as legal and other costs shall reflect Respondent´s relative success in the arbitration (Artt. 28.1 to 28.4 LCIA Rules)

Therefore Respondent respectfully asks the Tribunal to:

· exclude or, at least, give less than full weight to Mr. Dean´s written statement,

· find that no valid arbitration agreement was concluded between Claimant and Respondent and that therefore the Tribunal does not have jurisdiction,

· find that no valid contract was concluded between Claimant and Respondent,

· find that Claimant is not entitled to claim damages of $90,000,

· find that Claimant is not entitled to interest on damages,

· determine the costs of the arbitration as well as legal and other costs in accordance with the parties´ relative success and failure in the arbitration.

Respectfully submitted by the Counsel for Claimant, Salzburg University Team:

(Alexandra Frantsuzova)

(Isabelle Innerhofer)

(Stephanie Kathan)

(Roland Lohnert)

(Sabine Prenn)

(Erwin Schön)

(Ingo Steinwender)

Salzburg, 10 February 2000.

THANKS TO:

Stiftungs- und Förderungsgesellschaft der

1. Memorandum for Claimant, 2.1 et seq.

2. Memorandum for Claimant, 2.1 et seq.

3. Art 16 (1) MAL; e.g. Reisman/Craig/Park/Paulsson, Arbitration, at 508 et seq. and 664 et seq. (1997); Lew, Contemporay Problems, at 76 (1987); Berger, International Economic Arbitration, at 121 (1993).

4. Huleatt-James/Gould, Commercial Arbitration, at 68 (1996).

5. Huleatt-James/Gould, Commercial Arbitration, at 68 (1996).

6. The non-formation of a sales contract between Claimant and Respondent is discussed in Issue 3.

7. Redfern/Hunter, Arbitration, at 1-06 (1999).

8. Holtzmann/Neuhaus, UNCITRAL Model Law, at 198 (1989).

9. E.g. Redfern/Hunter, Arbitration, at 3-10 (1999).

10. Redfern/Hunter, Arbitration, at 3-10 (1999).

11. Holtzmann/Neuhaus, UNCITRAL Model Law, at 263 (1989).

12. 12 See Issue 3, C.

13. Berger, International Economic Arbitration, at 137 et seq. (1993).

14. 14 Memorandum for Claimant, 1.1.2.2

15. PO 1, paras. 3 and 4.

16. Official information from the LCIA-staff of 12 October 1999 to a personal inquiry of the Salzburg University Team; for further information please contact Casework Assistant Gemma Stone or Mr. Winstanley on +44 171 936 3530.

17. Art. 14.1 LCIA-Rules.

18. PO 1, para 4; PO 2, clarific. No. 34.

19. Cp. e.g. Reisman/Craig/Park/Paulsson, Arbitration, at 1187 et seq. (1997); Mustill/Boyd, Commercial Arbitration, at 299 et seq. (1989).

20. Derains/Schwartz, New ICC Rules, at 257 (1998).

21. 1 Baker/Davis, UNCITRAL Arbitration Rules, at 126 (1992).

22. Redfern/Hunter, Arbitration, at 6-79 (1999).

23. Ward, Evidentiary Rules, at 8, 9 (1996).

24. PO 2, clarific. No. 36.

25. Roth, False Testimony, at 22, 25 (1994).

26. Roth, False Testimony, at 1 (1994).

27. PO 2, clarific. No. 36.

28. Dore, UNCITRAL Framework, at 71 (1993).

29. Memorandum for Claimant, 1.2.1.1. to 1.2.1.3.

30. Redfern/Hunter, Arbitration, at 6-79 (1999).

31. Memorandum for Claimant, 1.2.1.2.

32. Defendant's Exhibit No. 2.

33. PO 2, clarific. No. 57.

34. Art. 4.6 UNIDROIT Principles.

35. Memorandum for Claimant, 2.2, 2.4 and 2.5.

36. Art. 14 (1) CISG.

37. Claimant's Exhibit No. 12; Defendant's Exhibit No. 1.

38. Magnus, UN-Kaufrecht, Art. 14, No. 13 (1994); Schlechtriem, Commentary, Art.14, No. 13 (1998).

39. PO 2, clarific. No. 36.

40. Claimant's Exhibit No. 12, para. 4.

41. Microsoft Office 2000 Thesaurus, (1999); see also Chambers English Thesaurus (1998): „quotation" - „charge, cost, estimate, figure, price, quote, rate, tender."

42. The conditional is the tense used in reported speech to describe events in the future from the point of view of the person being reported. The use of "would" in Mr. Dean's statement can also mean that Mr. Dean actually used the word "would" on 19 February 1998, hereby showing that the contract was not concluded yet, but needed subsequent acceptance: "would" in statements as well as in if-clauses is not changed in reported speech; see e.g. Thomson/Martinet, A Practical English Grammar, at 270-272 (1994).

43. Claimant's Exhibit No. 12, para. 4.

44. Claimant's Exhibit No. 12, para. 4.

45. Defendant's Exhibit No.1, para. 3.

46. Defendant's Exhibit No.1.

47. Defendant's Exhibit No. 3, para. 1, sentence 3.

48. Defendant's Exhibit No. 3, para. 2, sentence 3. "This - 1. Being just mentioned or present in time, space or thought." Soukhanov (ed.), Webster's II New Riverside University Dictionary (1988).

49. Schlechtriem, Commentary, Art. 14, No.4 (1998): „[...] if an indication of a necessary element is so ambiguous that it is not possible to clarify it by interpretation under Article 8, there is no offer capable of acceptance; [...]".

50. See Art. 8 CISG and Art. 4 UNIDROIT Principles: An objective analysis of what was actually said or could be reasonably inferred from what was said - as opposed to what was meant or understood - is decisive.

51. Claimant's Exhibit No. 12; Defendant's Exhibit No. 1.

52. See Redfern/Hunter, Arbitration, at 2-66 et seq. (1999): Tribunals may refer to them as an aid to the interpretation of contract terms and conditions or even as a standard to be observed.

53. Claimant's Exhibit No. 2.

54. Statement of Defence, para. 2.

55. Memorandum for Claimant, 2.4.

56. Art. 4.6 UNIDROIT Principles.

57. Note that the most definite statement comes from Mr. Stern (Defendant's Exhibit No. 1) "He said that they would take it.".

58. Defendant's Exhibit No. 2.

59. Memorandum for Claimant, 2.5.

60. Memorandum for Claimant, 2.5.1.

61. E.g. Schlechtriem, Commentary, Art. 7, Nos. 27 et seq. (1998).

62. E.g. Honsell, Kommentar, Art. 4, No. 6 (1996); Gstoehl, Gewährleistung, 39 ZfRV 1 (1998).

63. Art. 23 in connection with Artt. 14 and 18 CISG; see e.g. Honsell, Kommentar, Art. 18, No. 12 (1997).

64. Art. 23 in connection with Artt. 14 and 18 CISG; cp. National laws of Germany (Linder, Law, at §10.02[7] (1988)), Austria (Koziol/Welser, Grundriß I, at 109 (1996)) and the Common Law (Treitel, Law, at 249 et seq. (1991)).

65. Memorandum for Claimant, 2.6.

66. Memorandum for Claimant, 2.6.1.

67. PO 2, clarific. No. 3.

68. 10 ratification, acceptance, approval or accession instruments would had to have been deposited on or before 31 January 1997 for the CAISG to have entered into force on 1 February 1998. As of 5 January 2000, only 9 States had deposited their instruments (URL: http://www.unidroit.org/english/implement/i-83.htm (7 February 2000)).

69. Memorandum for Claimant, 2.6.2.

70. Claimant's Exhibit No. 12, para. 2.

71. 71 Artt. 12 and 13 (1) CAISG.

72. Defendant's Exhibit No. 2 , para. 2.

73. Art. 12 CAISG.

74. Defendant's Exhibit No. 3, para 2.

75. Cp. Art. 15 (8) CAISG: It would seem logical that the inference of ratification must be made or be susceptible to being made by the third party (awareness of the principal's ratifying conduct) and that it should not suffice if the ratifying conduct only emanates from the principal's allegedly actual agent or allegedly apparent subagent (Mr. Dean).

76. Memorandum for Claimant, 2.6.5.

77. PO 2, clarific. No. 32.

78. Claimant's Exhibit No. 12.

79. Memorandum for Claimant, 4 and 5.

80. PO 2, clarific. No. 44.

81. Lake/Nanda/Draetta, Breach, at 181 et seq. and 211 (1973 Mississipi floods).

82. Honnold, Uniform Law, Art. 79, Nos. 424 and 431 (1999); McKendrick, Force majeure, at 102, 207 et seq. (1991); Lake/Nanda/Draetta, Breach, at 185 (1992). See as to examples for excusable delays provisions: Kritzer, Int. Contract Manual, at 647 et seq. (1994).

83. Honnold, Uniform Law, Art. 79, No. 435.1 (1989).

84. Bridge, Sale of Goods, No. 8.25 (1999); Lake/Nanda/Draetta, Breach, at 211 (1992), citing numerous court decisions in nn. 111, 112 and 113.

85. Keil, Haftungsbefreiung, at 37 seq. (1993); Mc Kendrick, Force majeure, at 207 et seq. (1991).

86. Weber, Verletzungsfolgen, at 172 (1991).

87. The terms that needed adaptation (in the contract and, consequently, in the letter of credit) were the terms as to partial shipment, time of delivery and, possibly, place of delivery as well as allocation of shipping costs. Adaptation required from the parties their cooperation in good faith. Especially, the amendment of the irrevocable letter of credit was impossible without the cooperation of the beneficiary and the account party. Claimant, however, repeatedly refused any such cooperation in good faith, without showing good cause why it should not fulfil its obligation to cooperate (see Claimant's Exhibits Nos. 6 and 9).

88. Claimant's Exhibits Nos. 6 and 9; see as to Claimant's repeated refusal to cooperate in good faith No. 81, Request for Arbitration, paras. 6 et seq., and Statement of Case, paras. 5 et seq.

89. Statement of Defence, para. 9; PO 2, clarific. Nos. 19 et seq.

90. The record does not provide any information about a usage or practice in the sense of Art. 9 (1) CISG between Claimant and Respondent.

91. §2-615 UCC provides: "Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance:
(a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraph (b) and (c) is not in breach of his duty under a contract for sale if performance as agreed has been made impracticable