Professional Documents
Culture Documents
ST_08_A
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
TABLE OF CONTENTS
TO
HARM
OF
HUMAN
LIFE,
ENVIRONMENT
AND
(i)
Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
[3.1]. The non-compliance of the obligations undertaken and/or agreed among the parties led
to the performance to a state of utter physical and commercial impossibility......................... 11
[3.2]. Failure to impart and/or secure proper and necessary knowledge regarding the adverse
effects frustrated the purpose underlying the agreement reached between the parties ............ 12
[3.3]. The frustrating events ensued owing to deliberate acts coupled with negligent conduct
on the part of Unnat ................................................................................................................. 14
[4.1]. Unnat breached the responsibility owed to Baati and this breach of responsibility
entails reparations, to compensate Baati for all losses it incurred as a result of the wrongful
act ............................................................................................................................................. 16
[4.2]. Breach of agreement by Unnat will entail contractual damages as laid down under
various State laws, conventions and principles........................................................................ 18
[5.1]. Frustration of the terms of the SPA by Unnat leading to the death of 105 citizens of
Baati would come under the ambit of consequential damages for a breach of contract .......... 21
[5.2]. Negligence has occurred by Unnat hence attracting exemplary damages ..................... 22
PRAYER .................................................................................................................................. 25
(ii)
Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
LIST OF ABBREVIATIONS
1.
& - And
2.
3.
4.
Anr. - Another
5.
Art. - Article
6.
Co. Company
7.
Edn. - Edition
8.
Exp. - Express
9.
10.
Honble - Honorable
11.
12.
13.
QB - Queens Bench
14.
S. - Section
15.
SC - Supreme Court
16.
17.
18.
19.
20.
21.
22.
23.
vs. - Versus
24.
25.
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Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
INDEX OF AUTHORITIES
Judicial Precedents
Case Name
Page No.
Aetna Casualty & Sur. Co. vs. Day 487 So. 2d 830
21
18
Apotex Inc. vs. Global Drug Ltd. (1998) 83 C.P.R. (3d) 448
19
17
17
Black Clawson International Ltd. vs. Papierwerke WaldhofAschaffenburg AG [1981] 2 Lloyds Rep. 446
Boone vs. Eyre (1777) 1 Hy. Bl. 273n
C. Czarnikow Ltd. vs. Centrala Handlu Zagrancicznego Rolimpex
[1979] A.C. 351
Caparo Industries Plc vs. Dickman [1990] 2 A.C. 605
Denmark Production Ltd. vs. Boscobel Productions Ltd. [1969] 1
Q.B. 699
Donoghue vs. Stevenson [1932] A.C. 562
Duke of St. Albans vs. Shore (1789) 1 Hy.Bl. 27
Ellen vs. Topp (1851) 6 Ex. 424
Factory at Chorzow 1928 P.C.I.J. Reports, Series A, No. 17
Gabkovo-Nagyamaros Project (Hungary vs. Slovakia) 1997 I.C.J.
7
Hadley vs. Baxendale 9 Ex. 341, 156 Eng. Rep. 145
Hong Kong Fir Shipping Co Ltd vs. Kawasaki Kisen Kaisha Ltd.
[1962] 2 QB 26
Hutchings vs. Slemons 141 Tex. 448
In Re Comptoir Commercial Anversois and Power Sons & Co. [1920]
1 K.B. 868.
In Re Palm Harbor Homes, Inc. 129 S.W.3d 636
Joseph Constantine SS Co. vs. Imperial Smelting Corp Ltd. [1942]
A.C.154
15
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Written Submissions on behalf of the Applicants
19
18
14
14
14
23
15
23
14
14
16, 17, 18
17, 18
21, 22
14
13
13
13
15
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
Case Name
Page no.
13
14
17
15
13
6
19
23
18
14
18
14
17
14
Velasquez Rodriguez vs. Honduras Inter-Am. Ct. H.R., (ser. C), No.
7 (1989)
White vs. Unigard Mut. Ins. Co. 730 P.2d 1014
18
20
18
21
1. Carmel Shalev, Human Cloning and Human Rights: A Commentary, 6 Health &
Human Rights 137 (2002) ........................................................................................... 8
(v)
Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
2. Christine Jolls, Contracts As Bilateral Commitments: A New Perspective on Contract
Modification, 26 J. of Legal Studies 21 (1997) .......................................................... 12
3. Curtis J. Mahoney, Treaties as Contracts: Textualism, Contract Theory, and the
Interpretation of Treaties, 116 Yale L.J. 824 (2007) ................................................... 3
4. David M. Haug, The International Transfer of Technology: Lessons that East Europe
can learn from the failed Third-World experience, 5 Harv. J. of L. & Tech. 212
(1992) ............................................................................................................................ 1
5. Howard A. Kwon, Patent Protection and Technology Transfer in the Developing
World: The Thailand Experience, 28 George Washington J. of Intl L. & Eco. 238
(1995) ............................................................................................................................ 1
6. Noelle Lenoir, Are attitudes of Bioethics entering a new era?, 23 J. of Med. Ethics
69 (1997) ....................................................................................................................... 8
7. Roberto Andorno, Global Bioethics at UNESCO: In Defence of the Universal
Declaration on Bioethics and Human Rights, 33 J. of Medical Ethics 151................. 9
8. Seymour J. Rubin, International Code of Conduct on the Transfer of Technology, 73
American J. of Interl L. 519 (1979) .......................................................................... 3
9. United Nations: Conference on an International Code of Conduct of the Transfer of
Technology, 19 Interl Legal Materials 789 (1980) ................................................... 3
Books
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
8. Mohammed Bedjaoui, International Law: Achievements and Prospects (1st ed.
Martinus Nijhoff Publishers 1991) ............................................................................... 2
9. Qerim Qerimi, Development in International Law: A Policy-Oriented Inquiry (1st ed.
Martinus Nijhoff Publishers 2012) ............................................................................... 8
10. Stephen Tully, International Documents on Corporate Responsibility (Wolters
Kluwer Publisher 2011) ................................................................................................ 2
11. Yong Zhou, History of International Law: Foundations and Principles of
International Law (1st ed. North Holland Publishers 2008) ........................................ 6
12. Yusuf Kaliskan, The Development of International Investment Law: Lessons from the
OECD MAI Negotiations and Their Application to a Possible Multilateral Agreement
on Investment (Dissertation Publishers 2008) ............................................................... 3
International Instruments
1. Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States, U.N. Doc. A/5217 at 121 (1970).
2. Guidelines for Good Medical Practice released by the ICH, U.N. Doc. A/45/49
(1990).
3. International Declaration on Human Genetic Data, U.N. Doc. A/45/49 (Vol. I) (2001).
4. Responsibility of States for Internationally Wrongful Acts, U.N. Doc. A/RES/61/177
(2006).
5. UN Charter TS 993.
6. UNCTADs 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).
(vii)
Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
STATEMENT OF JURISDICTION
The Applicants have the honour to humbly submit before the Honble International Court of
Justice, the Memorandum for the Applicants 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.
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Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
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.
[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
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Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
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.
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
based on the observations were noted in full details and submitted to the Government of
Baati, which it shared with the Government of Unnat.
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Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
ISSUES PRESENTED
[A].
Whether the Democratic Republic of Unnat (through Unnat National Corporation) has
violated the following obligations; The basic principle of Article. 2 of the United Nations
Charter which reads as follows All Members, in order to ensure to all of them the rights
and benefits resulting from membership, shall fulfill in good faith the obligations assumed by
them in accordance with the present Charter. And that the violation of the basic principle of
Article. 2 of the United Nations Charter as a result of deliberate with holding of the
information on adverse of the nanoparticle which amounts to manifestation of mala -fide
intention; as a result of which Government of Baati could not acquire the patent before the
respective office?
[B].
had willfully concealed the information of harm to human life, environment and ecosystem
which were well within knowledge of the Government of Unnat and thereby violated the
international obligations and principles of Universal Declaration on Human Genome and
Human Rights, International Declaration on Human Genetic Data and Universal Declaration
on Bioethics and Human Rights?
[C].
responsible for frustrating all the terms and conditions of the Special Purpose Agreement
entered on 1st January 2014 between the Federal Republic of Baati and the Democratic
Republic of Unnat?
[D].
Whether the Democratic Republic of Unnat (Unnat National Corporation) shall repay
all the losses of money that Government of Baati incurred in planning, execution and
arrangements together with interests and, considering the state of disturbance and interruption
to the growth and development of trade and commerce to the Federal Republic of Baati being
a developing country; that the cost-computation will be a subject matter of special agreement
later to be concluded subsequent to the order of the Court?
[E]. Whether the Democratic Republic of Unnat (Unnat National Corporation) shall also pay
exemplary compensation for the loss of lives of 85 men and 20 women due to liver cancer
and who delayed their treatment with the hope that they shall be cured by this new drug Neti
and consequently could not get the same?
(xii)
Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
SUMMARY OF ARGUMENTS
Issue I : That Unnat has violated the basic principle as contained within Article 2 of the UN
Charter as a result of which the Govt. of Baati could not acquire the patent before the
respective office
It is humbly submitted before this Honble Court that the Democratic Republic of Unnat
(through the UNC) has failed in its duties and obligations conferred by the legally-binding
SPA in regards to a successful TOT. Unnat owed a high level of responsibility to Baati in
providing the technical know-how including knowledge in regards to the adverse effects of
the procedures and by not providing the same, amounts to a manifestation of mala fide
intention. by not providing the complete information in relation to the innovation and
manufacturing of the nanoparticle of Neti such as the adverse effects of the same, Unnat has
not only breached the principle of Good Faith contained within the UN Charter but has
violated the terms as contained within Article 1(f) of the SPA.
Issue II : That Unnat deliberately concealed information resulting in the violation of the
international obligations and principles of UDHGHR, IDHGD, UDBHR
It is contended before this Honble Court that the wilful concealment of the adverse effects of
the nanoparticles would constitute as a breach of international obligations and principles
under Universal Declaration on Human Genome and Human Rights, Universal Declaration
on Bioethics and Human Rights In the present case, the scientists were vulnerable to adverse
effects of carrying the procedure as there was a conspicuous disregard for their welfare which
increased the harm suffered by these individuals, the same which is attributable to the mala
fide concealment of knowledge in regards to the adverse effects of carrying the process out.
Issue III : That UNC is responsible for frustrating all the terms and conditions of the SPA
entered on 1st January 2014 between Baati and the Unnat
It is humbly submitted that a party to a contract is likely to be discharged off the obligations
underlying and liabilities undertaken on occurrence of circumstance(s), after its formation,
which renders the same physically and/or commercially impossible to be fulfilled or
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Competition, 2015
transforms the obligations to be performed into a radically different obligation from that
undertaken at the moment of entry into the contract. It is contended that the Honble Court
must and should consider that the obligation of transferring knowledge, available and
recognised, has not been complied with, as appears from the fact-circumstances itself.
Issue IV : That Unnat be obliged to repay all the loss of money Baati incurred in planning,
execution and arrangements
It is humbly submitted by the applicant that a bare perusal of the SPA will reveal that there
were certain considerations which each national corporation had to perform as part of the
twin-sharing formula of the Joint Venture. Despite the fact that Baati spent its resources and
technical know-how as per Article 1(c), the reciprocal part of the agreement by Unnat could
not be fulfilled by virtue of it frustrating the terms of the SPA. As a result, there exists a
situation wherein Baati has incurred certain costs and since, due to the breach by Unnat, the
objective of the agreement has also not come to fruition as highlighted in paragraph 1 of
Article 1, the state of Baati requests this honourable court to exercise its plenary powers
granted Article 36(2) read with Article 56 and to sanction reparation against Unnat, by way of
compensation to Baati for all the injuries that it has sustained due to the internationally
wrongful act and breach of State Responsibility owed by Unnat to Baati.
Issue V : That the Democratic Republic of Unnat (UNC) shall also pay exemplary
compensation for the loss of lives of 105 people.
The applicant humbly submits that when both the States of Unnat and Baati entered into an
SPA to produce the cancer medicine, they very well knew that the implications of the failure
of their venture would be just as great as the success from it. There was a duty of care owed
to the citizens of Baati by the State of Unnat as the SPA it entered into with Baati was for the
production of a medicine to eradicate liver cancer- a terminal disease which was afflicting
many people. It is common logic that any action any of the parties would take would have an
effect on millions of people affected by this disease, at the time of the agreement, as well as
in the future. The standard of duty of care in this situation was extremely high as many lives
were contingent on the complete transmission of knowledge, its proper application and then
successful production of a medicine without any adverse effects.
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Written Submissions on behalf of the Applicants
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
ARGUMENTS IN DETAIL
Issue 1 : 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 Honble Court that the Democratic Republic of Unnat
(through the UNC) has failed in its duties and obligations conferred by the legally-binding
SPA in regards to a successful TOT. [1.1] It is further contended that the Democratic
Republic of Unnat has violated the basic principle as contained within Article 2 of the UN
Charter as a result of deliberately withholding information which amounts to mala fide
intention.[1.2]
[1.1] UNNAT HAS FAILED IN ITS OBLIGATIONS WHICH HAS BEEN CONFERRED
UPON IT BY THE SPA
2. It is submitted before this Honble Court that there has not been a successful TOT on light
of no effective absorption or assimilation of technology in the host country.[1.1.1]
Furthermore, Unnat has failed in the completion of its duties as conferred upon it by the
international framework of TOT.[1.1.2] Lastly, it is submitted that Unnat has resorted to
unfair and dishonest practices which has manifested into the mala fide concealment of
technical know-how.[1.1.3]
[1.1.1] That there has not been a successful TOT on light of no effective absorption or
assimilation of technology in the host country
3. Transfer of Technology (hereafter referred to as ToT) is defined as "the transmission of
know-how to suit local conditions and the same requires a functional component and hence,
in order for there to be a true transfer of technology, there must be an effective absorption of
the transferred technology by the recipient/host country.1 Meaningful technology transfer
requires not only that the recipient acquire technology, but also that the recipient accumulate
the knowledge necessary to master the technology.2 The knowledge transferred should be
seen as encompassing both the technical knowledge on which the end product is based and
1
David M. Haug, The International Transfer of Technology: Lessons that East Europe can learn from the failed
Third-World experience, 5 Harv. J. of L. & Tech. 212 (1992).
2
Howard A. Kwon, Patent Protection and Technology Transfer in the Developing World: The Thailand
Experience, 28 George Washington J. of Intl L. & Eco. 238 (1995).
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
the knowledge to convert the relevant productive inputs into the finished item or service.3
Lastly, the WHO emphasized upon the functional aspect of the technology transferred, as
under Article 1.2 it concisely iterates that technology transfer embodies both the transfer of
documentation and the demonstrated ability of the receiving unit (RU) to effectively perform
the critical elements of the transferred technology, to the satisfaction of all parties and any
applicable regulatory bodies.4 Therefore, it can be conspicuously seen that the
implementation or the assimilation5 of the transferred technology is an essential requisite for
a successful TOT.
[1.1.2]. That Unnat has failed in the completion of its duties as conferred upon it by the
international framework of TOT
4. The World Health organization (WHO) further elaborated upon the responsibilities of the
SU (sending unit) by stating that they are to provide procedures which have been approved
and whose veracity has been tested, before the same can be transferred to the RU (receiving
unit).6 The SU additionally has the responsibility to disclose in a timely manner, the adverse
effects of a particular technology known to him in regards to the technology not meeting
particular health, safety and environmental requirements.7 The ILO has stressed upon the
safety and health aspects of the transfer of technology and calls for attention to be paid to
those susceptible by the SU.8 Lastly, the (OECD) has also stated that the element of safety is
paramount in cases of TOT and the same should only take place only upon a reasonable
assurance of the same.9
[1.1.3]. That Unnat has resorted to unfair and dishonest practices which has manifested into
the mala fide concealment of technical know-how.
5. An essential highlighted by the UNCTAD in the Code of Conduct on TOT was that when
negotiating and concluding a technology-transfer agreement, the parties should observe fair
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
and honest business practice and emphasizes that mutual benefits should accrue to both the
supplying party, as well as the recipient party.10 Article 5.1 of the same emphasizes that the
economic and social objectives of both the countries especially the technology acquiring
country be recognized and that the parties should observe fair and honest business practices.
The Code of Conduct additionally holds the supplying party liable in cases in which loss or
damage has been suffered to property or persons arising from the technology transferred,
provided that the same is used as specified in the agreement.11 Lastly, the Code of Conduct
may be regarded as writings under Article 38 of the ICJ Statute as many prominent
international legal scholars have participated in the negotiations on the Code of Conduct and
have submitted various legal papers in the negotiating process.12
[1.1.4]. The SPA should be viewed in light of the context, the object and purposes and the
circumstances of its conclusion.
6. It is submitted that the SPA should be viewed in light of the context, objects and purposes
of the same. Treaties should receive a fair and liberal interpretation, and to be kept with the
most scrupulous good faith.13 The Good Faith principle contained within Article 31(1) of the
VCLT prevents an excessively literal interpretation, instead requiring consideration of its
context and of other means interpretation.14 Additionally, according to Article 31 of the
VCLT, not only is the text of the treaty to be considered but also its context and the object
and the purpose of the treaty.15 Article 32 of the VCLT states that recourse may be taken to
supplementary means of interpretation such as the circumstances of the conclusion also. If an
interpretation is incompatible with the object and purpose, it may well be wrong.16 One has to
look at the treaty as a whole, plus all other relevant materials, assessing their respective
weight and value.17
Seymour J. Rubin, International Code of Conduct on the Transfer of Technology, 73 American J. of Interl L.
519 (1979).
11
United Nations: Conference on an International Code of Conduct of the Transfer of Technology, 19 Interl
Legal Materials 789 (1980).
12
Yusuf Kaliskan, The Development of International Investment Law: Lessons from the OECD MAI
Negotiations and Their Application to a Possible Multilateral Agreement on Investment 148 (Dissertation
Publishers 2008).
13
Curtis J. Mahoney, Treaties as Contracts: Textualism, Contract Theory, and the Interpretation of Treaties, 116
Yale L.J. 824, 834 (2007).
14
Enzo Cannizzaro, The Law of Treaties: Beyond the Vienna Convention 108 (1st ed. OUP 2011).
15
Anthony Aust Modern Treaty Law and Practice 234 (2d ed. Cambridge Publishing Co. 2007).
16
Kasikili/Sedudu Island (Botswana v. Namibia), 1999 I.C.J. 1045 (Dec. 13).
17
AUST, supra note 15, at 550.
10
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
7. Therefore, as a patent was required to be acquired for the fulfilment of the provisions of
the SPA and considering that the parties entered into the SPA for the sole purpose for the
innovation, production and manufacturing of life-saving drugs which could be achieved once
the patent was acquired, Unnat has acted mala fide by deliberately concealing information
which was to be supplied through UNNATI and has breached the provisions of the SPA.
Id.
A.M. Rabello, The UNIDROIT Principles of International Commercial Contracts and Israeli Contract
Law 15 (Kluwer Law International 1999).
20
Bruno Simma, The Charter of the United Nations 168 (3rd ed. OUP).
21
Moot Proposition 5.
22
Franz Cede & Lilly Sucharipa-Behrmann The United Nations: Law and Practice, 274 (Martinus Nijhoff
Publishers 2001).
19
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has also led to the violation of the provision as is contained with the SPA. Unnat has also
through the deliberate withholding of information led to the breach of the provisions of
Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations which obliges
the States to comply fully and in good faith with its international obligations and to live in
peace with other States and the same highlights the principle that States shall fulfil in good
faith the obligations assumed by them in accordance with the UN Charter. This declaration
stresses upon the principle of good faith and makes it clear that the member states are bound
to meet their obligations not only in a legalistic fashion.23
[1.2.1]. That the responsibility lies upon Unnat to provide the requisite technical knowledge
11. In the case at hand, Baati, a developing country did not possess the requisite technical
know-how as well as the funds which was required for the production, innovation and
manufacturing of Neti medicine so as to eradicate the detrimental effects of liver cancer
which posed as a major concern for Baati.24 In order to procure the requisite technical
knowledge, Baati entered into an SPA with Unnat which also included a transfer of
knowledge provision.
Due to Baati being completely dependent on Unnat to obtain the know-how, there exists a
high level of responsibility on Unnat to provide the requisite knowledge not only in regards
to the production of the Neti medicine but also in regards to the adverse effects of the same.
Furthermore, remittance for the transfer of knowledge can also be seen in within Article 1(c)
and Article 1(d) of the SPA which provides that 70% of the funds which would be required
for the development of the medicine would be provided by Baati and additionally, 60% of the
profits would be furnished to Unnat. Lastly, all information pertaining to adverse effects of
carrying lab processes was also shared with Unnat in addition to the Notes on Understanding
in relation to UNNATI, which were only reviewed by Unnat. Unnat made no efforts to rectify
the processes so as to curtail the adverse effects of carrying the laboratorial processes out.
To conclude, Unnat owed a high level of responsibility to Baati in providing the technical
know-how including knowledge in regards to the adverse effects of the procedures and by not
providing the same, amounts to a manifestation of mala fide intention.
23
24
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
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[1.2.2]. That the deliberate withholding of information is tantamount to a breach of the
Principle of Good Faith contained within Article 2(2) of the UN Charter
12. The principle of Good Faith is not only contained within Article 2(2) of the UN Charter
but is also found within various provisions of the Declaration on Principles of International
Law concerning Friendly Relations and Co-operation among States in accordance with the
Charter of the United Nations and the relation of both these countries is often studied and
shown as an example in the same.25 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.26 The principle of good faith requires the parties to a transaction to deal honestly
and fairly with each other, to represent their motives and purposes truthfully and to refrain
from taking unfair advantage that might result from a literal and unintentional interpretation
of the agreement between them.27
13. The ICJ has defined the principle of Good Faith in the Nuclear Tests Case28 as, [o]ne of
the basic principles governing the creation and performance of legal obligations.
Additionally, the ICJ in the case of Cameroon v. Nigeria: Equatorial Guinea intervening29,
observed that the principle of good faith is a well-established principle of international law
and further noted that the principle 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.30
14. Both the countries entered into the SPA for the sole purpose for the innovation,
production and manufacturing of life-saving drugs out of a plant named Neti.31 A step
towards the achievement of the same was acquiring patent rights in relation to the formulated
drug. As per Article 1(f) of the SPA between BNC and UNC32 the drug was to be first
patented as per the laws and regulations applicable to patenting the drug in the Govt. of Baati.
25
Moot Proposition 6.
SIMMA, supra note 20, at 168.
27
Yong Zhou, History of International Law: Foundations and Principles of International 107 (1st ed. North
Holland Publishers 2008).
28
Nuclear Tests Cases (Australia v. France; New Zealand v. France), 1974 I.C.J. 253 (Dec. 20).
29
Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea
intervening), 2002 I.C.J. 303 (June 11).
30
SIMMA, supra note 20, at 95.
31
Moot Proposition 8.
32
Moot Proposition Page 14.
26
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15. However, the BPO turned down the recognition of the patent which was upheld by the
HC of Baati citing Section 3(D) of Indian Patents Act. Reference can be drawn to the case of
Novartis AG v UOI33, in which the Supreme Court of India laid down the definition of
efficacy as the ability to produce a desired or intended result. Therefore, in the case of a
medicine that claims to cure a disease, the test of efficacy can only be therapeutic efficacy.
16. Additionally, Unnat had provided incomplete information which led to disastrous effects
in the production of Neti nanoparticles as the same did not exhibit any characteristics as
shown by the ordinary Neti leaves. Unnat was obliged to supply information in totality in
regards to the medicine however failed to do so. The resultant not only did not add to the
therapeutic efficacy of the drug but had severely adverse effects instead as out of the
documents supplied through UNNATI, in accordance with the SPA, none pertained to the
efficacy of the output and result as well as the adverse effects. Article 2.2 of the Guideline
for Good Medical Practice released by the ICH also lays down that before a trial is initiated,
foreseeable risks and inconveniences should be weighed against the anticipated benefit for
the individual trial subject and society and that the rights, and well-being of the trial subjects
are the most important considerations and should prevail over interests of science and society.
Lastly, Article 2.4 lays down that the available nonclinical and clinical information on an
investigational product should be adequate to support the proposed clinical trial.34
17. Therefore, by not providing the complete information in relation to the innovation and
manufacturing of the nanoparticle of Neti such as the adverse effects of the same, Unnat has
not only breached the principle of Good Faith contained within the UN Charter but has
violated Article 1(f) of the SPA. Furthermore, the circumstances under which the SPA was
formulated warrants for the comprehensive provision of complete information, however the
same was not provided amounting to huge losses suffered by Baati.
Issue II : Whether Unnat has deliberately concealed the information to harm to human life,
environment and ecosystem and hence violated the international obligations and principles of
UDHGHR, IDHGD, UDBHR?
18. It is contended before this Honble Court that the wilful concealment of the adverse
effects of the nanoparticles would constitute as a breach of international obligations and
33
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principles under Universal Declaration on Human Genome and Human Rights [2.1],
Universal Declaration on Bioethics and Human Rights [2.2] and the International Declaration
on Human Genetic Data [2.3]
19. UNESCO defines Declarations as another means of defining norms, which are not subject
to ratification and like recommendations, set forth universal principles to which the
community of States wished to attribute the greatest possible authority and to afford the
broadest possible support.35 In UN practice, a declaration is a formal and solemn instrument
suitable for rare occasions when principle of great and lasting importance are being
enunciated and is resorted to only cases where maximum compliance is expected.
20. In view of the greater solemnity and significance of a declaration, on behalf of the
organ adopting it, a strong expectation is present that Members of the international
community will abide by it. Consequently, in so far as the expectation is gradually justified
by State practice, a declaration may by custom become recognized as laying down Rules
binding upon States.36 Lastly, Judge Lauterpacht highlighted the significance of declarations
by stating that, while not bound to accept the declaration the state is bound to give due
consideration in good faith. If it decides to disregard it, it has to explain the reasons for its
decision.37
35
General
introduction
to
the
standard-setting
instruments
of
UNESCO,
UNESCO,
http://portal.unesco.org/en/ev.php-URL_ID=23772&URL_DO=DO_TOPIC&URL_SECTION=201.html (last
visited Aug. 3, 2015).
36
Qerim Qerimi, Development in International Law: A Policy-Oriented Inquiry 124 (1st ed. Martinus Nijhoff
Publishers 2012).
37
1995 I.C.J. 119 (June 11).
38
Declaration
on
Human
Rights
Defenders,
OHCHR,
http://www.ohchr.org/EN/Issues/SRHRDefenders/Pages/Declaration.aspx (last visited Aug. 3, 2015).
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humankind, but it also emphasizes on the need to fully respect human dignity, freedom and
human rights.39 The objective of the Declaration is to reaffirm and update the basic principles
of the human individuals dignity, of freedom of scientific research and of solidarity between
individuals and states and to apply these principles in the context of modern biomedical
sciences.40
23. Article 8 lays down that every individual shall have the right, according to international
and national law, to reparation for any damage sustained as a result of an intervention
affecting his genome while Article 19(a)(iii) states that in the framework of international
cooperation with developing countries, states should seek to encourage measures enabling
developing countries to benefit from achievements of scientific research so that their use in
favour of economic and social progress can be to the benefit of all.
24. By providing incomplete and inadequate knowledge, a clear violation of Article 8 can be
seen as the scientists embarked upon the research without knowing the adversities of the
research can be seen as damage has been suffered by the scientists involved in the research of
the nanoparticle and many complained of headache, giddiness etc.41 due to them not
disclosing the adverse effects of carrying out these processes and no reparation whatsoever
has been provided by Unnat. In addition, a noticeable breach of the provisions contained
within Article 19(a)(iii) has also occurred as through the mala fide intentions of Unnat and in
light of Baati being a developing country42, the economic and social progress of Baati has
been drastically curtailed.
39
Carmel Shalev, Human Cloning and Human Rights: A Commentary, 6 Health & Human Rights 137 (2002).
Noelle Lenoir, Are attitudes of Bioethics entering a new era?, 23 J. of Med. Ethics 69 (1997).
41
Moot Proposition 14.
42
Moot Proposition 1.
43
Howard Wolinsky, Bioethics for the World, NCBI, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1456905/
(last visited Aug. 3, 2015).
44
Bernice Elger, Ethical Issues of Human Genetic Databases: A Challenge to Classic Health Research Ethics 57
(OUP 2010).
40
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Direct contravention of Article 4, Article 8 and Article 17 which constitute a vital part of the
principles relating to bioethics45 of the same has occurred in the present case at hand.
[2.2.1]. That the Baatian Scientists were left vulnerable as they were ignorant of the adverse
effects of carrying out the laboratory procedures
26. Article 4 lays down the principle that the benefits arising out of the scientific knowledge,
medical practice etc. should be maximized in regards to patients, research participants and
other affected individuals, while any possible harm to such individuals should be minimized.
Article 8 states that human vulnerability should also be taken into account in the application
of the aforementioned processes. In the present case, the scientists were vulnerable to adverse
effects of carrying the procedure as there was a conspicuous disregard for their welfare which
increased the harm suffered by these individuals, the same which is attributable to the mala
fide concealment of knowledge in regards to the adverse effects of carrying the process out.
[2.2.2]. That severe damage has been caused to the environment, the biosphere and
biodiversity as a direct result of Unnats mala fide concealment
27. Article 17 of the UDBHR lays down the principle that due regard should be given the role
of human beings in the protection of the environment, the biosphere and biodiversity. Due to
the scientists being unaware of the dire effects of the laboratory procedure the by-products of
the same were kept for disposal in the nearby ground separately ear-marked for that
purpose.46 However, it was noticed by a scientist at a later stage that many small and
medium-size insects were lying dead on the ground, the grass in that area had also died, many
small plants and shrubs in the nearby location had started withering away and lastly some
leaves of big trees had become pale in colour. These types of destruction could have been
circumvented had knowledge in regards to the procedure been supplied in entirety and in the
absence of the same a direct violation of the principles embodied within Article 17 have been
violated.
[2.3] UNNAT HAS BREACHED THE PRINCIPLES AND OBLIGATIONS AS
CONTAINED WITHIN THE IDHGD
28. It is submitted that Unnat has wilfully concealed the information of harm to human life,
environment and ecosystem and in furtherance of the same has violated international
obligations and principles of the International Declaration on Human Genetic Data.
45
Roberto Andorno, Global Bioethics at UNESCO: In Defence of the Universal Declaration on Bioethics and
Human Rights, 33 J. of Medical Ethics 151.
46
Moot Proposition 14.
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29. Article 6(a) highlights the imperativeness that genetic data and proteomic data be
collected, processed used and stored on the basis of transparent and ethically acceptable
procedures. A clear violation of the same can be seen as the Baati scientists were unaware of
the adverse effects rising out of the production of Neti nanoparticles and the same would be
tantamount to mala fide intention on the part of Unnat. The process was not a transparent
procedure as knowledge in regards to the efficacy of the output and adverse effects were not
disclosed.47
Issue III: Whether Unnat (through UNC) is responsible for frustrating all the terms and
conditions of the SPA entered on 1st January 2014 between Baati and the Unnat?
30. It is humbly submitted that the Democratic Republic of Unnat is aptly contended to be
responsible for frustrating all the terms and conditions of the abovementioned Special
Purpose Agreement entered into between the contesting parties to the present suit in issue,
thereby disadvantaging your humble petitioner from the accruing benefits agreed therein
and/or maintaining the balance between the obligations arising out of it. [3.1] Appending
further, the ensuing circumstances further enables the petitioner herein to contest the said
issue on grounds as put forth and/or listed within the claims asserted herein. [3.2]
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intervening change within the construction of the contract, without any material change in the
subject-matter stands as another consideration.50 This scope of argument, when extended
further, entails the necessity of reaching the impression, in the light of the nature of the
contract and the relevant surrounding circumstances of its entry into force51, of the scope of
the obligation derived through literally interpreting the promises at the outset. Thus, grows
the attached incumbency, upon the courts consideration, of analysing the two circumstances,
pre and post frustration, and estimating the time, labour, money and materials in the backdrop
of the changing circumstances, thereby inducing the need for the comparison as to whether in
the light of the present circumstances, the performance of obligations, in a commercial sense,
underwent any adverse effect and that such effect was due to some radical or fundamental
change.52 It is submitted before the Ld. bench that a proper construction of the present issue
in hand in the light of the factual circumstances concerned, indisputably contemplates a basic
underlying objective in the form of an agreement for a joint collaboration with a sole purpose
to eradicate life-threatening disease of liver cancer through innovating, developing, producing
and manufacturing of a life-saving drug from the shrub of Neti53, which having been the
ultimate consideration for the collaboration or significantly the core subject matter have been,
due to default and/or non-compliance or failure to act according to the required reasonable as
well as expected standard in providing the necessary information about the adverse effects
that could be encountered during the development or manufacturing of the drug, deteriorated
to the effect of frustration54, thereby making the performance of the other party redundant,
and thus exposing them to massive losses.
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connected through it. This aspect finds itself reflected upon the liability so divided and
commitments owed towards specified courses of conduct56, thereby underlining the sole
objective of upholding the purpose in mind at the time an agreement was reached 57, which so
long maintained addresses parties welfare through convenient performances.58 However, such
commitments are infrequently relaxed on grounds that the purpose intended to have been
achieved stands frustrated on account of supervening circumstances rendering performances
burdensome on the part of either party,59 with the mitigating factors at extreme, thus making
the bargain detrimental to mutualism.60 The groundwork to this reasoning was employed in
Krell vs. Henry61, fondly remembered as the Coronation Case wherein, on a purposive
construction, the broader contractual objective was addressed and its frustration led to the
discharge of obligations arsing thereto. It is to the appraisal of this Honble Court that the
scope, nature and content of the Special Purpose Agreement endorses its bilateral nature
which signifies promises flowing from both sides62, which brings us to the judgment that the
same requires mutuality of obligations.63
33. The analysis of the issue in hand demands, from this Honble Court, an appreciation and
evaluation of the obligations clearly enumerated within the Special Purpose Agreement
which requires Unnat to transfer 70% of technical know-how of nanoscience, nanotechnology
and nanobiology available and recognized in their legal domain64 in the light of the facts that
Unnat shared all the knowledge of nanoscience that are available in their legal domain with
Baati65. It needs to be borne into mind that recognition is an action or fact of perceiving that
something is the same thing as one previously known.66 The use or employment of the term,
specifically with the intent of denoting obligations concerned with the prerequisites of the
transfer of technology, expressly signifies, as part of its performance, that the required
56
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process must be duly substantiated and verified with the necessary amount of knowledge and
consciousness about the effectiveness, end-results and adverse effects, after necessary
acknowledgement and consideration, of the technology so made to be transferred.
34. Upon perusal of the abovementioned, it is contended that the Honble Court must and
should consider that the obligation of transferring knowledge, available and recognised, has
not been complied with, as appears from the fact-circumstances itself.
Bank Line Ltd. v. Arthur Capel Ltd., [1919] 452 A.C. 435; Sudbrook Trading Estate Ltd. v. Eggleton, [1983]
497 1 A.C. 444.
68
C. Czarnikow Ltd. v. Centrala Handlu Zagrancicznego, [1979] A.C. 351 [Frustration is not self-induced
where the cause of the delay is the act of a third party for whom the defendant is not responsible nor merely
because one of the parties is an enterprise controlled by a State which has by some legislative or executive act
prevented performance of the contract or made it illegal].
69
Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd., [1962] 2 Q.B. 26 [This test is applicable
whether or not the event occurs as a result of the default of one of the parties to the contract, but the
consequences of the event are different in the two cases. Where the event occurs as a result of the default of one
party, the party in default cannot rely upon it as relieving himself of the performance of any further undertakings
on his part, and the innocent party, although entitled to, need not treat the event as relieving him of the further
performance of his own undertakings].
70
Edwin Peel, The Law of Contract 72 (13th Sweet & Maxwell 2012 London); Boone v. Eyre, (1777) 1 Hy. Bl.
273; Duke of St. Albans v. Shore, (1789) 1 Hy.Bl. 270; Ellen v. Topp, (1851) 4426 Ex. 424.
71
The Stork, [1955] 2 Q.B. 68; Leeds Shipping Co. Ltd. v. Soc Franaise Bunge, [1958] 1452 Lloyds Rep.
124; Pilbrow v. Peerless De Rougemont & Co., [1999] 3603 All E.R. 355.
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that may arise out of the frustrating event72 or even in circumstances where the alleged act is
not in itself a breach of the contract73 but just another factor leading to frustration.
36. Even though the effect of negligence is not well recognised as a ground for frustration,
deliberate omission to exercise reasonable care and skill resulting into loss and consequential
damages forms an important part of the transaction. The observation in Joseph Constantine
SS Co. vs. Imperial Smelting Corp Ltd.74 holds great relevance here wherein the assessment
so made indicates that incapacity deliberately induced could not be protected under a claim of
frustration.
37. That it is submitted before the Ld. Bench that on the grounds stated above the perception
is not far-fetched there have been utter non-compliance of the obligations undertaken wilfully
with a view to aggravate the already persisting problem that afflicts the Baatian community
and with several other ulterior motives which any civilised state under the paradigm of
peaceful co-existence and co-operative will not resort to. Such defaults, when taken into
account in nature, scope and effect would seek out to the conclusion that the circumstances
justify self-induced frustration which destroys the underlying objective of the Special
Purpose Agreement.
Issue IV : Whether Unnat shall repay all the losses of money that Baati incurred in planning,
execution and arrangements?
38. It is humbly submitted by the applicant that a bare perusal of the SPA will reveal that
there were certain considerations which each national corporation had to perform as part of
the twin-sharing formula of the Joint Venture. Despite the fact that Baati spent its resources
and technical know-how as per Article 1(c), the reciprocal part of the agreement by Unnat
could not be fulfilled by virtue of it frustrating the terms of the SPA. As a result, there exists
a situation wherein Baati has incurred certain costs and since, due to the breach by Unnat,
the objective of the agreement has also not come to fruition as highlighted in paragraph 1 of
Article 1, the state of Baati requests this honourable court to exercise its plenary powers
granted Article 36(2) read with Article 56 and to sanction reparation against Unnat, by way of
compensation to Baati for all the injuries that it has sustained due to the internationally
72
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wrongful act and breach of State Responsibility owed by Unnat to Baati. [4.1] 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. [4.2]
Factory at Chorzow (Merits), P.C.I.J. Order of the Court, (ser. A), No. 17 4 (July 14, 1928).
Supra note 47.
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of the loss by either putting things backs as they were or by compensating the loss suffered.
The reparation should in principle erase insofar as possible-because irreversible situations
do occur-the wrongful act and restore the state of affairs that existed prior to it.77
[4.1.2]. The Draft Articles on Responsibility of States for Internationally Wrongful Acts and
its implications in the case at hand
41. In the Draft Articles on Responsibility of States for Internationally Wrongful Acts78,
Article 31 states the 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 Honble Court that the obligation to make full reparation is
affirmed; even if this affirmation of the obligation to make full reparation is relatively
succinct79. Article 31 reflects the rule of adequacy of reparation as laid down in the Chorzow
case wherein it is stated that It is a principle of international law that the breach of an
engagement involves an obligation to make reparation in an adequate form. The court has in
Loayaza-Tamayo vs. Peru (Reparations and Costs) case, recognized 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 act 80. In Lusitania case81 held the remedy should be
commensurate with the loss, so that the injured party may be made whole. Furthermore, the
there is a fine line dividing restitution and compensation, and the Articles talk of restitution to
be prioritized over compensation82. However, in this case, the court will be confronted with
the dilemma that restitution would equate to compensating the parties for all the losses
incurred and the State of Baati, having a choice in opting for the mode of reparation83,
requests the court to grant sanction for reparation in the form of compensation to revert the
77
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situation to what it was before the wrong took place in pristinum. Article 36 of the
ARSIWA expresses the entitlement to compensation84.
42. 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 Court 85, regional
courts and tribunals86, and arbitral bodies87. It is also reflected in codification efforts88 and in
the most unambiguous and certain way, reflects the state practice of many countries and the
customary international law in this regard.
[4.2] BREACH OF AGREEMENT BY UNNAT WILL ENTAIL CONTRACTUAL
DAMAGES AS LAID DOWN UNDER VARIOUS STATE LAWS, CONVENTIONS AND
PRINCIPLES
[4.2.1]. Breach of Reliance Interest as a result of Frustration by Unnat.
43. The applicant humbly brings to the notice of the court that 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. This is a method of remedying the wrong that has been caused
to the aggrieved party and in contract law, there exists the concept of reliance interest
wherein, once the plaintiff has changed their position because of their reliance on the contract
with a defendant, the object is to put the plaintiff in as good a position as they were prior to
the promise and the State of Baati believes that it too, having allocated enormous amounts of
money to the Neti project, which never came to fruition as a result of the breach, is entitled to
damages based on reliance interest so that the effect produced is such that Baati is put back in
the position it was, had the SPA never been made. The leading case regarding reliance
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.
85
Gabkovo-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.
86
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).
87
See C.M.E. v. Czech Republic, Partial Award, 9 I.C.S.I.D. Rep. 113, 238-9 (2001); Amoco International
Finance Corp v. Iran, (Iran-United States Claims Tribunal), 15 Iran-U.S. C.T.R. (1987).
88
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.
84
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interest, followed in many countries is that of Anglia Television v. Reed89, in which the court
held that the defendant would have known that had the contract not been performed the
plaintiff would have incurred losses due to the hiring of actors, props etc. for the film,
expecting the plaintiff to perform his end of the contract. In the USA, in the Second
Restatement of Contract90, S. 351(3) states that A court may limit damages for foreseeable
loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in
reliance, or otherwise if it concludes that in the circumstances justice so requires in order to
avoid disproportionate compensation.
89
Anglia Television v. Reed, [1972] 1 Q.B. 60 (C.A.), Also enunciated in Apotex Inc. v. Global Drug Ltd.,
(1998) 83 C.P.R. (3d) 448 (Ont. Gen. Div) affd [2001] O.J. No. 3849 (C.A.) (QL); 9000567 Ontrario Ltd.
(c.o.b. M.G.W. & Associates) v. Welsby & Assoc. Taxation Inc., [2003] O.J. No. 591 (S.C.J) (Q.L.).
90
Available at http://www.lexinter.net/LOTWVers4/restatement_(second)_of_contracts.htm.
91
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.
(2) Such harm may be non-pecuniary and includes, for instance, physical suffering or emotional distress.
92
International
Sale
of
Goods
Convention
(2010),
https://www.uncitral.org/pdf/english/texts/sales/cisg/V1056997-CISG-e-book.pdf.
93
Indian Contract Act (1872), http://comtax.up.nic.in/Miscellaneous%20Act/the-indian-contract-act-1872.pdf.
94
Sapphire International Petroleums 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).
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obligations and that a fundamental principle of law is that contractual undertakings must be
respected: The rule pacta sunt servanda is the basis of every contractual relationship
examining the damages, which the plaintiff has a right to claim under the rules stated by him,
the arbitrator expressed his views in passage which should be another powerful contribution
to international case law.
"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 (Art. 1149, 11,50 of the French Civil
Code: Esmein-Radouant-Gabolde, op. cit., Vol. VII, N. 855; Lehmann, op. cit., para. 14, VI,
page 59). This rule is simply a direct deduction from the principle pacta sunt servanda, since
it 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.
Issue V: Whether The Democratic Republic of Unnat (Unnat National Corporation) shall also
pay exemplary compensation for the loss of lives of 105 people?
47. The applicant humbly submits that when both the States of Unnat and Baati entered into
an SPA to produce the cancer medicine, they very well knew that the implications of the
failure of their venture would be just as great as the success from it. This is true especially
since they knew that the lives of many cancer patients hinged on the successful production of
this medicine; and this would also include many cancer patients who had delayed their
regular cancer treatment with the belief that production of this medicine would give them a
better chance of fighting the odds, as is common among many people afflicted with terminal
diseases. Therefore, when this medicine could never be produced as a result of the frustration
of the agreement by Unnat, the loss of lives of these very people must be termed as
consequential damages due to this breach, attributable to Unnat which must also be held
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liable for the tort of negligence.[4.1] The applicant humbly submits that this very cause of
action emanating from the realm of contractual law, supplemented by Unnats tortious
liability for negligence must give way to a successful claim for exemplary damages, which
this august court has the power to give, in this case, as a means to supplement the regular
compensation as well as deter such grave violations in the future.[4.2]
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Competition, 2015
exempt the other contracting party from any loss that may arise from the second limb of the
Hadley case i.e. any consequential loss which the parties, before entering into a contract,
choose to specifically exclude from a claim for damages for a breach in the future. The
parties may choose to widen the ambit of this exclusion or narrow it; in most countries, the
statutory law will have such an effect that an exclusion clause will be able to exclude only so
much as law mandates100. With that having been said, it must be observed that the ICJ may
go through the SPA to determine the intent and obligations of the parties to one another101,
and upon a perusal of the SPA, the court will find that there is an absence of any provision of
such kind and it must be assumed that the parties never intended to exclude any form of
liability arising out of consequential damages, which ensures that Unnat can be held liable for
the death of 105 citizens, a liability which will fall squarely within the ambit of consequential
damages for breach of the SPA.
See for Example, In England and Wales, it does not exclude any loss which arises as a direct and natural
consequence of the breach of contract; as such, by itself, it excludes relatively little. In Australia the courts will
take this to mean indirect losses that arise under the second limb of Hadley v. Baxendale rather than direct
losses occurring under the first limb of Hadley v. Baxendale. Under the German law on damages it is basically
irrelevant if damage has occurred (directly) to the contractual object itself or (indirectly) to other legally
protected goods. The crucial issue is the general obligation for compensation for all adequately caused
consequences of the damaging event irrespective of the question whether the damages are direct or indirect.
Correspondingly, German law actually does not have a distinct differentiation between direct and indirect
damages or direct/indirect and consequential damages nor a legal definition of these terms. Dutch law does not
clearly define consequential loss; in each case the court will have to interpret the meaning of an exclusion of
consequential loss. In Sweden, Exclusion of consequential and indirect loss in a contract will generally exclude
loss that is not a direct and foreseeable consequence of the breach of contract; loss resulting from reduction or
loss of production or turnover, other loss resulting from the goods being unfit for use in the intended manner,
loss of profit resulting from a contract with a third party not being performed or not correctly performed, and
other similar loss, if such loss was difficult to foresee.
101
Article 3(b) of Special Agreement between Baati and Unnat, as in Annexure II.
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
submitted by the applicant that it was this very failure to perform the obligations conferred
upon it by the SPA, which consequently led to the death of 105 persons, would constitute
breach of duty of care and for this, the state of Baati, on the behalf of its citizens, brings an
action for exemplary damages for the tort of negligence.
50. Lord Atkins words in Donoghue vs. Stevenson102, laid the basis for the neighbor
principle in tort of negligence as it stands in various states, even today: You must take
reasonable care to avoid acts or omissions which you can reasonable foresee would be likely
to injure your neighbor. Who, then in law is my neighbor? The answer seems to be- persons
who are so closely and directly affected by my act that I ought reasonably to have them in
contemplation as being so affected when I am directing my mind to the acts or omissions
which are called in question. The state of Baati humbly submits that its citizens would be
construed as neighbors of state of Unnat. The state of Unnat has also satisfied and affirmed
all the conditions of the so-called tripartite (or threefold) test in Caparo Industries Plc vs.
Dickman103, which asks whether the harm was foreseeable, whether there was sufficient
proximity between the parties and whether the imposition of a duty of care would be fair, just
and reasonable. The case in England, which lay down the precise extent of causation and
remoteness of damage, was the Wagon Mound case104 wherein it was held that If some
limitation must be imposed upon the consequences, and some test there must be.why should
that test (reasonable foreseeability) be rejected which, since he is judged by what the
reasonable man ought to foreseeand a test (the direct; consequence) be substituted which
leads to nowhere but the never-ending and insoluble problems of causation.
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
decisions where damages more than the loss have been awarded in the past in International
Law. Exemplary damages are known to practically all common law countries, albeit with
variation. In the US, for instance, exemplary damages (punitive damages) take a prominent
position in the law of remedies. The most important field of application for these damage
awards in municipal law are cases of injury to the person or to personal reputation. In France,
exemplary damages are granted in the form of contractual fines.
52. The applicant would also like to bring the courts notice to the draft of the United Nations
Council on Trade and Development (UNCTAD) on "International Code of Conduct for the
Transfer of Technology." Chapter 5 of the code holds the know-how transferor responsible
for any defective products105.
53. There are early cases which may be taken as examples of exemplary damages in which
the award seems to have gone far beyond the mere compensation of non-material damage.106
In other cases, substantial damages were awarded as an expression of regret for the indignity
inflicted upon another State by mistreating one of its nationals107. In another case it was
explicitly held that the injury to the alien and more importantly, the failure to prosecute the
alleged perpetrators amounted to a severe offence against the State of nationality which was
awarded a substantial amount of damages for the indignity108.
dommage cause par la faillite and dommage indirect constituted three times as much as all
other items combined109. In the Rainbow Warrior case110, the Secretary General of the UN,
acting as a mediator, awarded substantial damages for grave violations of international law
committed by France. In this case too, the compensation awarded exceeded the value of the
material loss suffered by New Zealand, and hence it was in the nature of exemplary damages.
Article 5.4(xv) states that The supplying party shall be liable according to the appropriate applicable law
for the loss of, damage or injury to property or persons, arising from the technology transferred or the goods
produced by it, provided that the technology is used as specified in the agreement, or in absence of such
specification, in a technically correct manner.
106
Laura M.B. Janes et al Case (U.S.A. v. United Mexican States), award at 97, 98(General Claims Commission
1926), http://legal.un.org/riaa/cases/vol_IV/82-98.pdf.
107
Maal Case (Netherlands v. Venezuela), 10 R.I.A.A. 730, 732-733 (Netherlands-Venezuelan Commission,
1903).
108
Heirs of Jean Maninat Case (France v. Venezuela), award at 80, 31 VII (1905)
http://legal.un.org/riaa/cases/vol_X/55-83.pdf.
109
In the case of the Masonic, $5,000 a year was allowed for anticipated profits. In the arbitration of 1839
between Great Britain and Brazil, there was allowed, among other things, losses in port charges or in freight due
at the port of discharge, losses due to inability to fulfill charter parties, demurrage, wages, etc.
110
Rainbow Warrior (France v. New Zealand), 82 I.L.R. 500 (France-New Zealand Arbitration Tribunal 1990).
105
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Written Submissions on behalf of the Applicant
14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
PRAYER
Wherefore, it is prayed, in light of the issues raised, arguments advanced, and authorities
cited, that his Honble Court may be pleased to declare that =:
a.
The Democratic Republic of Unnat (through UNC) has violated the basic principle of
Article. 2 of the United Nations as a result of deliberate with holding of the information
on adverse of the nanoparticle which amounts to manifestation of mala -fide intention; as
a result of which Government of Baati could not acquire the patent.
b. The Democratic Republic of Unnat (through UNC) had willfully concealed the
information of harm to human life and environment; which were within the knowledge of
the Government of Unnat and violated various international obligations;
c. The Democratic Republic of Unnat (through Unnat National Corporation) is responsible
for frustrating all the terms and conditions of the SPA between the Federal Republic of
Baati and the Democratic Republic of Unnat;
d. The Democratic Republic of Unnat (UNC) shall repay all the losses of money that
Government of Baati incurred in planning, execution and arrangements together with
interests and, considering the interruption to the growth and development of trade and
commerce and Baati being a developing country; that the cost-computation will be a
subject matter of special agreement to be concluded post-order.
e. The Democratic Republic of Unnat (Unnat National Corporation) shall also pay
exemplary compensation for the loss of lives of 105 citizens due to liver cancer and who
delayed their treatment with the hope that they shall be cured by this new drug Neti and
consequently could not get the same.
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 Applicants)
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Written Submissions on behalf of the Applicant