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TEAM CODE:

ST_08_D

14TH SURANA AND SURANA INTERNATIONAL TECHNOLOGY LAW MOOT


COURT COMPETITION, 2015.
BEFORE
THE HONBLE INTERNATIONAL COURT OF JUSTICE
AT THE PEACE PALACE
THE HAGUE, NETHERLANDS

CASE BROUGHT BEFORE THIS AUGUST COURT THROUGH ARTICLE 40(1)


FOR ADJUDGEMENT OF VARIOUS ISSUES AS LAID DOWN IN THE
MEMORANDUM INVOKING PROVISIONS OF CONTENTIOUS JURISDICTION
OF THIS COURT AS LAID DOWN IN ARTICLE 36 OF THE ICJ STATUTE;
BETWEEN
THE FEDERAL REPUBLIC OF BAATI AND ITS NATIONAL CORPORATION
(BNC OWNED BY THE STATE)
[APPLICANT]
vs.
THE DEMOCRATIC REPUBLIC OF UNNAT AND ITS NATIONAL
CORPORATION
(UNC OWNED BY THE STATE)
[RESPONDENT]

MEMORIAL FILED ON BEHALF OF DEMOCRATIC REPUBLIC OF UNNAT

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
TABLE OF CONTENTS

LIST OF ABBREVIATIONS ...................................................................................................iii


INDEX OF AUTHORITIES..................................................................................................... iv
STATEMENT OF JURISDICTION....................................................................................... viii
STATEMENT OF FACTS ....................................................................................................... ix
ISSUES PRESENTED............................................................................................................. xii
SUMMARY OF ARGUMENTS ............................................................................................ xiii
ARGUMENTS IN DETAIL ...................................................................................................... 1

ISSUE I : WHETHER OF UNNAT (THROUGH THE UNC) HAS VIOLATED THE


BASIC PRINCIPLE AS CONTAINED WITHIN ARTICLE 2 OF THE UN CHARTER
AS A RESULT OF WHICH THE BAATI COULD NOT ACQUIRE THE PATENT
BEFORE THE RESPECTIVE OFFICE? ............................................................................. 1

[1.1]. The Democratic Republic of Unnat has not violated the Basic Principle contained within
Article 2 of the UN Charter ...................................................................................................... 1
[1.2]. Both Baati and Unnat had presumed that the processes and methods for making
nanomaterial from Neti leaves would contain the same therapeutic value of Neti leaves ....... 3
[1.3]. The Patent for the process and product of Neti nanoparticles would not have been granted
by the BPO regardless of whether complete knowledge was provided by Unnat or not........... 5
ISSUE II : WHETHER THE REFUSAL OF THE BNC TO UNNATS SRA WOULD BE
CONSTRUED AS WILFUL CONCEALMENT OF INFORMATION AND WHETHER
THE SAME IS IN VIOLATION OF THE INTERNATIONAL OBLIGATIONS AND OF
PRINCIPLES OF THE UDHGHR, IDHGD, UDBHR? ..................................................... 5

[2.1]. Unnat was ready to undertake more research and assist Baati with the plan of Special and
Required Assistance as demanded by the circumstances which were unforeseeable ................ 6
[2.2]. The UDHGHR, IDHGD, UDBHR are non-binding in nature ........................................ 6
[2.3]. Effective flow of technology has occurred from Unnat to Baati ..................................... 8
[2.4]. Baati has violated the Basic Principle contained within Article 2 of the UN Charter as a
result of rejecting the plan for Special and Required Assistance............................................. 10
(i)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015

ISSUE III : WHETHER THE GOVERNEMENT OF UNNAT BE MADE


RESPONSIBLE FOR SITUATIONS NOT CONTEMPLATED WITHIN THE
AGREED TERMS AND CONDITIONS OF THE SPA AND TO THAT EFFECT FOR
LEGAL OBLIGATIONS NOT SEPCIFIED IN THE SPA? ............................................ 10

[3.1]. That what governs responsibilities under a contract is the intention to be bound by its
terms and conditions specified therein and construed accordingly ........................................ 11
[3.2]. That the terms and conditions specified within the agreement appears comprehensive in
its scope and self-sufficient in nature leaving no scope of extrinsic evidentiary analysis ...... 12
[3.3]. That the democratic republic of Unnat should not be levied with any liability which could
not have been averted through cooperation with Baati ........................................................... 14

ISSUE IV : WHETHER THE GOVERNMENT OF UNNAT BE MADE RESPONSIBLE


FOR CIRCUMSTANCES BEYOND THEIR CONTROL AND NOT IN FORSEEABLE
CONTEMPLATION OF RISKS AND FOR RESULTING LOSSES? ........................... 15

[4.1]. That impossibility of performance caused due to events supervening and to the effect
beyond the control of Unnat could not hold it responsible for non-performance .................... 16
[4.2]. That the ensuing events and to that their consequences were never in foreseeable
contemplation of risks among the parties before or at the time of entering the contract ......... 17
[4.3]. That the resulting losses cannot be attributed to any default or neglect on the part of
Unnat and were independent .................................................................................................... 18

ISSUE V : WHETHER THE GOVERNEMNT OF BAATI SHALL BE ORDERED TO


PAY FOR THE LOSSES INCURRED BY THE GOVERNEMNT OF UNNAT? ........ 19
[5.1]. Baati breached the responsibility owed by it to Unnat and this breach of a State
responsibility entails reparations against Baati, to compensate Unnat for all losses it incurred
as a result of the wrongful act .................................................................................................. 20
[5.2]. The Breach of the agreement by Baati will entail contractual damages as laid down under
various State Laws, Conventions and Principles .................................................................... 23
PRAYER .................................................................................................................................. 25

(ii)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
LIST OF ABBREVIATIONS

1.

& - And

2.

A.C. - Law Reports Appeal Cases

3.

AIR - All India Reporter

4.

Anr. - Another

5.

Art. - Article

6.

Co. Company

7.

Edn. - Edition

8.

Exp. - Express

9.

GATTS - General Agreement on Tariffs and Trade

10.

Honble - Honorable

11.

I.C.H - International Conference on Harmonization of Technical Requirements for


Registration of Pharmaceuticals for Human use

12.

IDHGD - International Declaration on Human Genetic Data

13.

QB - Queens Bench

14.

S. - Section

15.

SC - Supreme Court

16.

TOT - Transfer of Technology

17.

TRIPS - The Agreement on Trade-Related Aspects of Intellectual Property Rights

18.

U.N. United Nations

19.

UDBHR - Universal Declaration on Bioethics and Human Rights

20.

UDHGHR - Universal Declaration on the Human Genome and Human Rights

21.

UNCTAD - United Nations Conference on Trade and Development

22.

UOI - Union of India

23.

vs. - Versus

24.

WIPO - World Intellectual Property Organization

25.

WTO - World Trade Organization

(iii)
Written Submissions on behalf of the Respondents

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, 835 (Miss.

23

1986)
Application of the Convention on the Prevention and Punishment of

21

the Crime of Genocide (Bosnia and Herzegovina vs. Serbia and


Montenegro) 1996 I.C.J. 595 31
Armed Activities on the Territory of Congo (Democratic Republic

11

of the Congo vs. Uganda) 2005 I.C.J. 168


Arrest Warrant Case (Democratic Republic of the Congo vs.

21

Belgium) 2000 I.C.J 3


Bank Line Ltd. vs. Arthur Capel & Co. (1919) A.C. 435

17

Bank of Australasia vs. Palmer [1897] A.C. 540

12

BP Refinery (Westernport) Pty Ltd vs. Shire of Hastings (1977) 52

14

A.L.J.R. 20
British Sugar vs. Projects Limited (1997) 87 B.L.R. 42

22

Case Concerning Aerial Incident (Iran vs. United States) 1988

21

I.C.J. 161
CME vs. Czech Republic 9 I.C.S.I.D. Rep. 113, 238-9 (2001)

21

Doyle vs. Gordon 158 N.Y.S.2d 259

Evans vs. Roe (1872) L.R. 7 C.P. 138

12

Factory at Chorzow (Merits), P.C.I.J. Order of the Court, (ser. A),

20, 21

No. 17 4
Gabkovo-Nagyamaros Project (Hungary vs. Slovakia) 1997

20, 21

I.C.J. 7
Goss vs. Lord Nugent (1833) 5 B. & Ad. 58
Hadley vs. Baxendale 9 Ex. 341, 156 Eng. Rep. 145 (1854)
Harris vs. Rickett (1859) 4 H. & N. 1
Henderson vs. Arthur [1907] 1 K.B. 10

(iv)
Written Submissions on behalf of the Respondents

11
22, 23
12
12, 13

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
Case Name

Page No.

Imperial Chemical Industries Ltd. vs. Controller General of

Patents, Designs & Trade Marks A.I.R. 1978 Cal. 77


Inglis vs. Buttery (1878) 3 App. Cas. 552

12

Inntrepreneur Pub Co Ltd. vs. East Crown Ltd [2000] 2 Lloyds

13

Rep. 611
Lallubhai Chakubhai vs. Chimanlal Chunilal A.I.R. 1936 Bom. 99

Land and Maritime Boundary between Cameroon and Nigeria

(Cameroon vs. Nigeria: Equatorial Guinea intervening) 2002


I.C.J. 303
Leggot vs. Barrett (1880) 15 Ch.D. 306

12

Liverpool City Council vs. Irwin (1977) A.C. 239

14

London Export Corp. Ltd. vs. Jubilee Coffee Roasting Co. Ltd.

13

[1958] 1 W.L.R. 661


Luxor (Eastbourne) Ltd vs. Cooper [1941] A.C. 108

14

Mackay vs. Dick (1881) 6 App. Cas. 251

14

Mariappan vs. A.R. Safiullah (2008) 5 C.T.C. 97

Matthew vs. Blackmore (1857) 1 H. & N. 762

12

Mercantile Agency Co. Ltd. vs. Flitwick Chalybeate Co. (1897) 14

12

T.L.R. 90
Mercantile Bank of Sydney vs. Taylor [1893] A.C. 317

12

Miller vs. Travers (1832) 8 Bing. 244

12

Moleculon Research Corp. vs. CBS Inc.793 F.2d 1261 (Fed. Cir.

13

1984)
Nuclear Tests Cases (Australia v. France; New Zealand v. France)

1, 11

1974 I.C.J. 253


Papamichalopoulos and others vs. Greece App. No. 14556/89, Eur.

21

Ct. H.R. Series A No 330-B (1995)


Parker vs. South Eastern Ry. (1877) 2 C.P.D. 416

11

Pickering vs. Dowson (1813) 4 Taunt. 779

12

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Written Submissions on behalf of the Respondents

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Case Name

Page No.

Reparation for Injuries Suffered in the Service of the United Nations

21

1949 I.C.J. 174


Saint Line vs. Richardsons Westgarth & Co. Ltd. [1940] 2 K.B. 49

22

The Lusitania case 7 R.I.A.A. 32 (1923)

21

The Moorcock (1889) 14 P.D. 64

14

Velasquez Rodriguez vs. Honduras (Reparations and Costs) Inter-

21

Am. Ct. H.R., (ser. C), No. 7 (1989)


White vs. Unigard Mut. Ins. Co. 730 P.2d 1014, 1017 (Idaho 1986)

23

Essays, Articles and Journals

1. Brian Shephard, Norm Supercompliance and the Status of Soft Law, 62 Buff. L. Rev.
787 (2014) ..................................................................................................................... 7
2. George Schwazenberger, A Manual of International Law: Recognition, consent,
responsibility, self-defence and freedom of the seas, 4 Toronto L.J. 137 (1960) .... 1,5
3. Marko Divac berg, The Legal Effects of Resolutions of the UN Security Council and
General Assembly in the Jurisprudence of the ICJ, 16 Eur. J. of Intl L. 885 (2006). 7
4. Michael Kirby, Human Rights and Bioethics: The Universal Declaration of Human
Rights and Universal Declaration of Bioethics and Human Rights, 25 J. of Contemp.
Health L. & Poly 316 (2009) ..................................................................................... 8
5. Pedro Roffe, Transfer of Technology: UNCTAD's Draft International Code of Conduct,
19 The Intl Lawyer 693 (1985) .................................................................................. 8
6. Roberto Andorno, Global Bioethics at UNESCO: In defence of the Universal
Declaration on Bioethics and Human Rights, 33 J. of Med. Ethics 151 (2007) ......... 7
7. United Nations: Conference on an International Code of Conduct on the Transfer of
Technology, 19 International Legal Materials 779 (1980)......................................... 9
8. Wallace Gray & A.P. Martinich, Good Faith Among Nations, 2 Intl J. on World
Peace 34 (1987) ............................................................................................................ 1
Books

1. G. H. Treitel, Frustration and Force Majeure (Sweet & Maxwell 2004) .......... 16

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2. Ling Liu, The Doctrine of Frustration: An Overview of English Law 271 (1st ed. OUP)
...................................................................................................................................... 16
3. Bruno Simma, The Charter of the United Nations (3rd ed. OUP) ....................... 1,2,10
4. Dr. B.L. Wadhwa, Law Relating to Intellectual Property (5th ed. Universal Law
Publishing Co.) ............................................................................................................. 3
5. Felicity Callard, Mental illness, discrimination, and the law: Fighting for Social Justice
(1st ed. Wiley-Blackwell 2012) .................................................................................... 7
6. Roberto Andorno, Principles of International Biolaw: Seeking common ground at the
intersection of Bioethics and Human Rights (1st ed. Bruylant 2013) ........................... 8
7. Stephen Tully, International Documents on Corporate Responsibility (Edward Elgar
Publishing Ltd. 2005) .................................................................................................... 9
8. Ndubuisi Ekekwe, Nanotechnology and Microelectronics: Global Diffusion,
Economics and Policy (Hershey New York 2011) ....................................................... 9

International Instruments

1. Declaration on Principles of International Law concerning Friendly Relations and 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 Respondents

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Competition, 2015
STATEMENT OF JURISDICTION

The Respondents have the honour to humbly submit before the Honble International Court of
Justice, the Memorandum for the Respondents adjudging the questions contained in the Special
Agreement (signed in The Hague on the first day of April in the year Two Thousand Fifteen)
between The Federal Republic of Baati and its National Corporation (BNC owned by the
State) [Applicant] and The Democratic Republic of Unnat and its National Corporation (UNC
owned by the State) [Respondent] Concerning the Differences between States in Interpretation
of Laws and Fulfillment of International Obligations Relating to the Protection of Bioethics,
Human Rights and Dignity from Conflicts that arose between Parties on Issues of Science and
Technology, Law and Economic Development and with Special References to nanoscience and
Other Issues, to the Court pursuant to Article 40(1) of the Statute of the Court by invoking the
provisions for contentious jurisdiction as laid down in Article 36 of the Statute of the Court.

The present Memorandum sets forth the Facts, Contentions and arguments in the present case.

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STATEMENT OF FACTS

[I]. FEDERAL REPUBLIC OF BAATI AND ITS NEW POLICIES PERTAINING TO FDI
The Federal Republic of Baati is a developing country with a large population. Due attention
was given for international collaborations from outside, and this public-private-partnership
model retained the Governmental control on major policy-matters. The Government invited
suggestions from all stakeholders for preparing a comprehensive legal-policy framework
whereby it can lead to eradication of diseases. Suggestions were received of which one core
activity to be carried on by the Government was towards identification and development of a
life-saving drug for the disease of liver cancer which afflicts the people. Baati did not have the
resources to combine both the factors of funds and knowledge and hence international
collaborations were called for. The Federal Republic of Baati is a founding member of the
UNO, WIPO and WTO. NGO (named New Age Life) did a survey and found many people of
Baati afflicted with liver cancer, which it said had very high fatality rates; conceding that very
little, including the cure for this disease, had been properly researched. Baati constituted
Special Committee of Experts that made a plan of action.

[II]. DEMOCRATIC REPUBLIC OF UNNAT AND ITS CLOSENESS WITH BAATI


Unnat is an island with abundant biodiversity and a population of close to 40 million people.
The country has taken to all forms of bio-technology development especially in the field of
pharmacology in order to bring innovation in this field. Both the states have been using the searoutes for commerce. The relationship between the two states is notable. Unnat is a member of
United Nations Organization. The trade and development of the Democratic Republic of Unnat
is largely based on products that are developed from the rich flora and fauna. There was a desire
on part of Baati to use Unnats superior knowledge pertaining to biotechnology.

[III]. INKING OF THE SPECIAL PURPOSE AGREEMENT BETWEEN BAATI AND UNNAT IN
THE SEARCH FOR A CURE FOR LIVER CANCER USING NETI LEAVES .

SPA was inked between two corporations of these countries (Baati National Corporation and
Unnat National Corporation) formed for the purpose of innovating, producing and
manufacturing a medicine using Neti leaves which grew on Unnat. There was folklore in Unnat
about Neti leaves in life-enhancing and disease-curing properties but no concrete research had
been done in the area of cancer-cure. Professor Mruti claimed this plant to have cancer-curing
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Written Submissions on behalf of the Respondents

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Competition, 2015
properties and that in his laboratory its effectivity of cure of liver cancer rises. Team of experts
was sent by Baati to Unnat to study these claims and it gave a positive report highlighting usage
of plants and herbs in modern medicines. However caution was alerted by few notable social
activists as they reported that proper clinical trials never had been done on this aspect of herbs
and plants. Therefore an SPA was linked which was a joint venture between BNC and UNC
wherein the sole purpose was to eradicate liver cancer.

[IV]. C OMMENCEMENT OF THE RESEARCH PROCESS .


BNC and UNC started the business transactions. The Government of Baati identified one of
army headquarters the proposed nanomaterial shall be researched. This report on the progress
of the Neti project was shared from time to time with the Government of Unnat who reviewed.
The Government of Unnat shared all the knowledge of nanoscience that are available in their
legal domain with the Government of Baati through a highly secured- document named
UNNATI. The Baati National Corporation appointed a Scientific Committee that could
understand and interpret the information. The highly secured document UNNATI had all
information regarding nanoscience as understood and recorded by the Democratic Republic of
Unnat through an expert committee of scientists who participated in the international
conferences representing the Government of Unnat. The document clearly mentioned that the
knowledge and information present contain all the processes and procedures for making the
nanomaterial. It included detailed study and step-by-step processes. It was presumed by both
the parties that the approaches, method and manner as given in the document UNNATI will
give the expected outcome.

[V]. PROBLEMS ENCOUNTERED IN MANUFACTURING.


All four steps of the formula were meticulously followed. The scientists could successfully
manufacture nanoparticles. The scientists who were working observed that many of their teammembers fell ill. It was reported to the Government of Baati and Unnat. This sudden illness
could not have happened except as a result of the laboratorial process. The Government of
Baati-appointed special task-force submitted that the scientists did indeed perform all the four
steps accurately. The results of the manufacturing process as expected and mentioned in the
UNNATI document were clearly observed under the nanomicroscope as explained in the
scientific document under Annexure IV. The scientists observed that upon treatment of rats
with nanoparticles, they died as a result of brain hemorrhage. The report based on the
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observations were noted in full details and submitted to the Government of Baati, which it
shared with the Government of Unnat.

[VI].DAMAGE TO ENVIRONMENT AND REJECTION OF PATENT CLAIM .


The scientist monitoring ear-marked area observed a drastic change in that place. Many small
and medium-size insects, grass in that area had died. The scientist noticed that the waste-bags
were torn and leaking. When done again, the same situation occurred again. Meanwhile the
Government of Baati applied for the Patent before the Baati Patent Office for recognizing that
Neti nanoparticle is new process and invention eligible for patent. The Patent Office turned
down the recognition of patent for the nanoparticle of substance. The Government of Baati
subsequently appealed against the decision of the Patent Office in the High Court of Baati,
which upheld the decision of the Patent Office as correct and valid. The Baati National
Corporation through the Government appealed again the decision of the High Court in the
Supreme Court of Baati. The Supreme Court of Baati upheld HC decision.

[VII].ARISING OF DISPUTE BETWEEN BAATI AND UNNAT.


It was argued by Government of Baati that the Government of Unnat did not share the
knowledge of the adverse effects, presumed as a part of an obligation under the knowledge
transfer in the UNNATI document shared by the Government of Unnat. The Government of
Unnat claimed that they agreed to share only the knowledge which is there in the legal domain.
Government of Unnat, which expressed that theory of knowledge is best, expressed only within
the limitations and cannot be taken to express always its possible dangers. The Government of
Baati did not agree to the stand taken by this kind of fast-approach to research in the absence
of final and ultimate effects of the knowledge at all levels which is followed through a process
and phase-wise approach to research. A plan for Special and Required Assistance was made to
the Government of Baati which it refused as the plan required further funding from the
Government of Baati which they refused as the country had lots of economic losses. Both the
parties have decided to refer the matter to the International Court of Justice by invoking the
provisions contained in the SPA, which gave scope for this settlement of disputes.

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ISSUES PRESENTED

[A].

Whether the Government of Unnat has not violated any obligation; basic principle of

Article 2 of the United Nations Charter to act in good faith in the performance of obligations,
and that the Special Purpose Agreement is entered by both the parties through democratic and
consensual method whereby all the information available in their legal domain in relation to
nanoparticle have been classified and its technology was transferred through UNNATI with
utmost bona-fide and, hence this presumption of violation of law stands without any legal basis
and be not allowed to raise before the court?

[B].

Whether the Government of Unnat was ready to undertake more research and assist the

Baati National Corporation with the plan of Special and Required Assistance as demanded by
the circumstance and situation domestically and internationally that was not contemplated and
those of which was not agreed by the Federal Republic of Baati and, but consequently refused
and, hence this shall not be construed as willful concealment of information or male fide in the
transfer of technology?

[C].

Whether the Government of Unnat cannot accept responsibility for situations not

contemplated in the agreed terms and conditions of the Special Purpose Agreement and, hence
has not accepted any other legal obligations not specified in the Special Purpose Agreement?

[D].

Whether the Government of Unnat shall not be held responsible for circumstances that

are beyond their control and not in the foreseeable contemplation of risks and, hence they are
not responsible for the losses?

[E].

Whether the Government of Baati be ordered to pay for the losses incurred by the

Government of Unnat as they have transferred all the nano knowledge available in their legal
domain without accruing any benefit and, hence Government of Baati shall be ordered to pay
for the losses?

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Competition, 2015
Summary of Arguments

Issue I : That Unnat has not violated the basic principle as contained within Article 2 of the
UN Charter as a result of which the government of Baati could not acquire the patent before
the respective office

It is humbly submitted that the Unnat has not violated the basic principle as contained within
Article 2(2) of the UN Charter and acted in good faith in the performance of the obligations.
All the technical know-how which was available with Unnat had been transferred to Baati,
even though the SPA clearly mentioned a requirement for the transfer of only 70% of the same
and this highlights the Good faith with which Unnat has performed the obligations which it
was bound to perform in accordance with the SPA. It is further contended that no question
pertaining to the breach of the principle of Good Faith is maintainable in light of both the
countries premise upon which the assumption in relation to the efficacy of the nanomolecule
was based on was itself erroneous and Unnat cannot be held responsible for this oversight.
Issue II : That the refusal of the BNC to Unnats Special and Required Assistance would be
construed as wilful concealment of information and whether the same is in violation of the
international obligations and of principles of the UDHGHR, IDHGD, UDBHR
It is contended before this Honble Court that Unnat was ready to undertake more research and
assist the BNC with a plan of Special and Required Assistance as demanded by the
circumstances which were not contemplated but the same was subsequently refused and the
same shall not be construed as wilful concealment of information or malafide TOT.
Declarations in principle only interpret or restate the law, in which case they have no legal
effect and do not contain binding determinations or have (dis)empowering effects. Lastly,
effective TOT has flowed from Unnat to Baati.

Issue III : That the Government of Unnat should not be made responsible for situations not
contemplated within the agreed terms and conditions of the Special Purpose Agreement, and
to that effect for legal obligations, not specified within the SPA

An agreement generally being a cluster of bipartite negotiations penned formally, determines


the legal obligations that parties to it shares on a settlement reached taking into consideration
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the respect for their rights and duties arising consequently. That it is submitted that the
obligations, procedures and operation asserted in relation to the material terms which underlies
the basic purpose of the agreement when stated in clear and fault-free expressions comprehends
the explicit framework of performance which form an essential part of the agreement entered
into. No additional burden of implicated obligations is levied upon Unnat on grounds that the
touchstone to determine the same is necessity rather than reasonableness.

Issue IV : That the Government of Unnat should not be made Responsible for Circumstances
beyond Their Control and Not in the Foreseeable Contemplation of Risks and, for Resulting
Losses?

Neglect does not form part of the transaction when a party to the contract, by virtue of the
position given through the contractual obligations and by exercise of its personal authority is
unable to make any adverse impact upon the course of performance of the agreement so
reached. When extraordinary or supervening events occur, without the default of either of the
parties and these events radically and significantly alter the nature of the contractual rights and
obligations of the parties. It is submitted that it is to be appreciated that a party to a contract is
liable only to the extent of its duty in regard to what was voluntarily assumed and mutually
bestowed. One cannot be held responsible for risks coming into being which were otherwise
beyond the purview of the agreement itself.

Issue V : That the Government of Baati shall be ordered to pay for the losses incurred by the
Government of Unnat
The respondent would also like to bring the notice of this court, that as a result of the state of
Baati defaulting upon its obligations emanating from the SPA, the medicine never came to
frution and hence the benefits which were due to Unnat, never came to be. The respondent
additionally, brings to the notice of the court that Unnat has fulfilled its part of the promise and
even offered the SRA to ensure that the Neti project is completed in spite of impediments,
however Baati has refused to accept the same, thereby the lack of funding effectively frustrating
the contract and judicial propriety demands that Baati has to pay for the loss of profits caused
to Unnat as a result of non-fulfilment of the contractual obligations.

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Arguments in Detail

Issue I : Whether The Democratic Republic of Unnat (through the UNC) has violated the
basic principle as contained within Article 2 of the UN Charter as a result of which the
government of Baati could not acquire the patent before the respective office?

1. It is humbly submitted before this Honble Court that the Democratic Republic of Unnat
(through the UNC) has not violated the basic principle as contained within Article 2(2) of the
UN Charter and acted in good faith in the performance of the obligations.[1.1] The Federal
Republic of Baati (hereinafter referred to as Baati) as well as the Democratic Republic of
Unnat (hereinafter referred to as Unnat) had erroneously presumed that the processes and
methods for making nanomaterial from Neti leaves would contain the same therapeutic value
of Neti leaves while contrary evidence was also available. [1.2] Lastly, The Patent for the
process and product of the Neti leaves Nanoparticles would not have been granted by the BPO
regardless of whether complete knowledge was provided by Unnat or not. [1.2]

[1.1] THE DEMOCRATIC REPUBLIC OF UNNAT HAS NOT VIOLATED THE


BASIC PRINCIPLE CONTAINED WITHIN ARTICLE 2 OF THE UN CHARTER

2. Article 2(2) lays down the obligation for all members of the UN to fulfil their obligations
under international law in accordance with the UN Charter.1 The principle of good faith is
binding principle of the UN charter2 and is defined as standard of performance by nations in
their mutual relations.3 The ICJ has defined this principle in the Nuclear Tests Case4 as, [o]ne
of the basic principles governing the creation and performance of legal obligations. Another
Court interpretation of the meaning of good faith has been stated as an intangible quality with
no technical meaning or statutory definition and it encompasses among other things, an honest
belief, the absence of malice and the absence of design to defraud or to seek an unconscionable
advantage5 In the case of Cameroon vs. Nigeria: Equatorial Guinea intervening6, observed
1

Bruno Simma, The Charter of the United Nations 168 (3rd ed. OUP).
George Schwazenberger, A Manual of International Law: Recognition, consent, responsibility, self-defence and
freedom of the seas, 4 Toronto L.J. 137, 137-138 (1960).
3
Wallace Gray & A.P. Martinich, Good Faith Among Nations, 2 Intl J. on World Peace 34 (1987).
4
Nuclear Tests Cases (Australia v. France; New Zealand v. France), 1974 I.C.J. 253 (Dec. 20).
5
Doyle v. Gordon, 158 N.Y.S.2d 259, 259-260 (Cal. 2013).
6
Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea
intervening), 2002 I.C.J. 303 (June 11).
2

(1)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
that the principle of good faith is a well-established principle of international law and that it is
"one of the basic principles governing the creation and performance of legal obligations.
Hence, the more intensive the co-operation and the more comprehensive the objectives, the
more it is necessary that its legal constitution should also include obligations to co-operate in
good faith within the context of the aims and procedures agreed upon.7
3. All the technical know-how which was available with Unnat had been transferred to Baati
through UNNATI even though the SPA clearly mentioned a requirement for the transfer of
only 70% of the same and this highlights the Good faith with which Unnat has performed the
obligations which it was bound to perform in accordance with the SPA. Furthermore, as all
knowledge had been supplied through UNNATI, it would be inequitable and prejudiced to hold
Unnat to have breached the principle of Good Faith as they themselves had no information in
relation to the adverse effects of nanoparticle. Hence, the presumption of violation of law
stands without any legal basis and should not be allowed to be raised before this Honble Court.

[1.2] BOTH BAATI AND UNNAT HAD ERRONEOUSLY PRESUMED THAT THE
PROCESSES AND METHODS FOR MAKING NANOMATERIAL FROM NETI LEAVES
WOULD CONTAIN THE SAME THERAPEUTIC VALUE OF NETI LEAVES
4. It is further contended before this Honble Court that no question pertaining to the breach of
the principle of Good Faith is maintainable in light of both the countries premise upon which
the assumption in relation to the efficacy of the nanomolecule was based on was itself
erroneous and inaccurate and Unnat cannot be held responsible for this oversight.
5. Presently, both parties had inadvertently speculated on the notion that due to the therapeutic
nature of Neti leaves if the process as given in UNNATI would give the expected outcome.8
This premise was based on the study conducted by Mruti, who claimed in his independent study
in his own laboratory that the juice from the leaves of Neti when compressed, its molecules
taken, then broken and reduced to infinitesimal sizes, then it has a higher rate of curing liver
cancer. This was partially supported by the WHO, which submitted a report which showed an
estimate of close to 80% of the population from Asian and African countries who use herbs as
a medicine in preventive health care.9 Furthermore, a team of experts comprising of Baati
scientists submitted a report with enthusiasm highlighting the possibilities of the same. Lastly,
7

SIMMA, supra note 1, at 95.


Moot Proposition 13.
9
Moot Proposition 9.
8

(2)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
Unnats bona fide transfer of technology did come to fruition as nanoparticles were
successfully extracted from the Neti leaves, however the characteristics possessed by the same
were contrary to that of the actual Neti leaves and subsequently to the expected efficacy of the
same.
Therefore, in light of the error being committed by both the countries as well as Unnat
providing all the technical know-how through UNNATI, Unnat has met the requisite contained
in the principle of Good Faith and has also met the provisions as contained within the SPA.

[1.3] THE PATENT FOR THE PROCESS AND PRODUCT OF NETI NANOPARTICLES
WOULD NOT HAVE BEEN GRANTED BY THE BPO REGARDLESS OF WHETHER
COMPLETE KNOWLEDGE WAS PROVIDED BY UNNAT OR NOT
6. It is submitted before this Honble Court that the patent for the process and product of the
Neti leaves Nanoparticles would not have been granted regardless of whether complete
knowledge was provided by Unnat or not. The element of novelty in the present case is absent
[1.2.1] and in addition to the same it does not involve an inventive step.[1.2.2]
7. In the case at hand, the Law of Baati is pari materia to that of the Indian Law.10 In furtherance
of the same, in accordance with the Indian Patent Act, 1970, for getting a patent there must be
an invention11 and that invention must be patentable12 that is, (a) it must be novel, (b) it must
involve an inventive step, (c) it must be capable of industrial application, (d) it must not fall
within the subject-matter specifically excluded or made subject to exception.

[1.3.1]. The process and product of the Neti Nanoparticles lacked novelty

8. Presently, the process and product of the medicine lacked novelty, without which patent
could not be granted regardless of whether complete knowledge had been provided or not.
9. An invention is said to be new if it has not been anticipated by publication in any document
or used in the country or elsewhere in the world before the date of filing of the patent
application i.e. the subject-matter has not fallen in public domain or does not form part of the
state of the art.13 The novelty requirement does not require absolute novelty, but rather that

10

Moot Clarifications, Page 1.


Dr. B.L. Wadhwa, Law Relating to Intellectual Property 6 (5th ed. Universal Law Publishing Co.).
12
Patents Act 1970 sec 1(j).
13
Patents Act 1970, sec 1(l).
11

(3)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
a claimed invention not be found within the public knowledge.14 In an originality case the issue
is not who the first or prior inventor is, but who made the invention. Where one party discloses
a complete conception of an invention to a second party, who then through testing demonstrates
the effectiveness of the conceived invention for the contended purpose, the work performed by
the second party inures to the benefit of the original party. 15 The Supreme Court of India in
Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries16 held that it is essential for
the validity of the patent that it must be the inventors own discovery as opposed to a mere
verification of what was already known before the date of invention.
10. Presently, it was Mruti who first claimed in his study that the juice from leaves of Neti
when compressed, molecules taken, then broken and reduced to infinitesimal sizes, its
effectivity of cure of liver diseases especially liver cancer increases.17 Hence, patent could not
have been granted to Baati as it was Mruti who first brought attention to the therapeutic value
of Neti Nanoparticles through a presentation in one of the international forums and hence the
claim made by Baati for a grant of patent lacked the essential element of novelty.

[1.3.2]. The claim made by Baati did not involve an inventive step

11. It is submitted that the claim made by Baati did not have any involvement of an inventive
step as Mruti had already enunciated the use and advantages of Neti Nanoparticles and Baati
made no technical advancement to the same whatsoever and utilized knowledge that was
already available through Mrutis study which was conducted in his laboratory and his
presentation which was contributed in an international forum.
12. Section 2(ja) of the Patents Act, 1970 defines inventive step which means a fixture of an
invention that involves technical advance as compared to the existing knowledge or having
economic significance or both and makes the invention not obvious to the person skilled in the
art. Inventive step is one essential ingredient of an invention and such step must exist for grant
of patent.18 The philosophy behind the doctrine of obviousness is that the public should not be
prevented from doing anything, which is merely an obvious extension or workshop variation
of what was already known at the prior date.19 The claim for a patent on an invention should

14

Moleculon Research Corp. v. CBS Inc., 793 F.2d 1261 (Fed. Cir. 1984).
Applegate v. Scherer, 332 F.2d 571 (C.C.P.A. 1964).
16
(1979) 2 S.C.C. 511.
17
Moot Proposition 8.
18
Mariappan v. A.R. Safiullah, (2008) 5 C.T.C. 97.
19
PLG Research Ltd. v. Ardon International Ltd., 1995 F.S.R 116.
15

(4)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
not be based merely on an application of an old invention which would be no more than a
workshop improvement.20
13. [ARGUENDO] : Even if it is assumed that the product and process did not lack novelty
and involved an inventive step, the product and process patent would not be granted as the
same was in the nature of discovery rather than invention. Patent can only be provided for
invention and not discovery.21 A discovery adds to the amount of human knowledge, but it
does so merely by lifting the veil and disclosing something which earlier was unseen or dimly
seen. An invention also adds to human knowledge, but not merely by disclosing something
which was earlier present. An invention necessarily involves also the suggestion of an act to
be done and it must be an act which results in new product, new result or new combination for
producing an old product or result.22 In the present case, Mruti had already claimed that the
efficacy of Neti increased when compressed, its molecules taken, then broken and reduced to
infinitesimal sizes23 A similar process had been followed by Baati scientists as can be seen
through the information supplied through UNNATI and hence a patent would not have been
granted as both the product and process were in nature of a discovery rather than an invention.

Issue II : Whether the refusal of the BNC to Unnats Special and Required Assistance would
be construed as wilful concealment of information and whether the same is in violation of the
international obligations and principles of the UDHGHR, IDHGD, UDBHR?

14. It is contended before this Honble Court that Unnat was ready to undertake more research
and assist the BNC with a plan of Special and Required Assistance as demanded by the
circumstances which were not contemplated but the same was subsequently refused and the
same shall not be construed as wilful concealment of information or malafide TOT.[2.1]
Additionally, it is submitted that the UDHGHR, IDHGD and the UDBHR are non-binding in
nature [2.2] and that Unnat has effectively transferred all technical know-how within their legal
domain without any malafide manifestation. [2.3] Lastly, Baati has breached the Principle of
Good Faith contained within Article 2 of the UN Charter as a result of rejecting the Special and
Required Assistance.

20

SCHWARZENBERGER, supra note 2.


Imperial Chemical Industries Ltd. v. Controller General of Patents, Designs & Trade Marks, A.I.R. 1978 Cal.
77.
22
Lallubhai Chakubhai v. Chimanlal Chunilal, A.I.R. 1936 Bom. 99.
23
Supra note 17.
21

(5)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015

[2.1] UNNAT WAS READY TO UNDERTAKE MORE RESEARCH AND ASSIST BAATI
WITH THE PLAN OF SPECIAL AND REQUIRED ASSISTANCE AS DEMANDED BY
THE CIRCUMSTANCES WHICH WERE UNFORSEEABLE

15. In the present case at hand, both the States entered into an SPA for the sole purpose for the
innovation, production and manufacturing of life-saving drugs of liver cancer out of small plant
by the name Neti which grows abundantly in Unnat.24 In view of Baati being a developing
country and considering that Baati had not yet reached an optimum level to combine and
develop the two decisive factors in requirement to achieve the aforementioned goals,
indigenously, Unnat sought to supplement them by providing the technical know-how to
produce Neti nanoparticles. Even though the obligation conferred upon Unnat by the provisions
of the SPA required them to only supply 70% of the technical know-how they supplied all the
knowledge of nanoscience available in their legal domain, highlighting there Good Faith.
16. However, as the premise upon which it was based upon was dismally flawed due to which
the desired end-product could not obtained. It was presumed by both the parties to the SPA that
the approaches, method and manner as given in UNNATI would give the expected outcome.25
In order to remedy the same an immediate plan for Special and required assistance was made
to the Government of Baati, however, the same was promptly rejected by the same.
17. Therefore, to conclude, no contention in regards to the malafide concealment of information
should be permitted to be raised by Baati as firstly, neither of the parties had foreseen such a
disastrous result corresponding to the production of Neti nanoparticles, secondly all the
technical knowledge present in Unnats legal domain was transferred to Baati and thirdly, Baati
out rightly rejected the plan of Special and Required Assistance, which was proposed by Unnat,
to undertake more research as demanded by the circumstance and situation domestically and
internationally which were not contemplated.

[2.2] THE UDHGHR, IDHGD AND THE UDBHR ARE NON-BINDING IN NATURE

18. The Universal Declaration on Human Genome and Human Rights, International
Declaration on Human Genetic Data and Universal Declaration on Bioethics and Human rights

24
25

Moot Proposition 8.
Moot Proposition 13.

(6)
Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
are documents issued by UNESCO and like any declaration adopted by UN agencies these
UNESCO document makes up part of the so-called soft law instruments that is instruments
which are weaker than conventions because they are not intended to oblige States to enact
enforceable rules inspired by the common standards but to merely encourage them to do so.26
Declarations in principle only interpret or restate the law, in which case they have no legal
effect and do not contain binding determinations or have (dis)empowering effects. 27 The term
declaration is often deliberately chosen to indicate that the parties do not intend to create
binding obligations but merely want to declare certain aspirations.28 These declarations
therefore constitute of soft-law which themselves only consist of general norms or principles
and not rules.29 Obligations under soft-law have been characterised by Prosper Weil as being
neither soft laws nor hard laws: they are simply not law at all.30
19. Therefore, it can be quite clearly seen that the aforementioned definitions of Declarations
that they do not cast any legally-binding obligations on the parties involved. Being soft-laws
in nature no binding obligations are formed but rather they are in the nature of
recommendations which merely lay down principles or norms rather than binding-rules. In
view of the very nature of declarations and the purposes which it seeks to seeks to satisfy,
establish the non-committing and non-binding value of the same. Lastly, it can be quite
evidently and plainly seen that by virtue of the very nature leading to the formation of
declarations, the same does not legally bind Unnat to follow or to meet the expectations or
the principle enshrined within the same.
20. It is further submitted that the UDHGHR, IDGHD and the UDBHR adopted by the
UNESCO is non-binding in nature and does not confer upon any legally binding obligations in
regards to the States involved. The UDHGHR is a non-binding international instrument which
only seeks to lay down basic principles which are inherently concerned with the rights of
persons in relation to human genome research.31 The IDGHD is regarded as an extension of
the UDHGHR and also retains the non-binding nature as exhibited by the aforementioned

26

Roberto Andorno, Global Bioethics at UNESCO: In defence of the Universal Declaration on Bioethics and
Human Rights, 33 J. of Med. Ethics 151 (2007).
27
Marko Divac berg, The Legal Effects of Resolutions of the UN Security Council and General Assembly in the
Jurisprudence of the ICJ, 16 Eur. J. of Intl L. 885 (2006).
28
Definition
of
key
terms
used
in
the
UN
Treaty
Collection,
U.N.T.C.,
https://treaties.un.org/Pages/overview.aspx?path=overview/definition/page1_en.xml (last visited Aug. 3, 2015).
29
Alan E. Boyle, Some Reflections on the Relationship of Treaties and Soft Law, 4 The Intl & Comp. L. Q 25
(2000).
30
Brian Shephard, Norm Supercompliance and the Status of Soft Law, 62 Buff. L. Rev. 787 (2014).
31
Felicity Callard, Mental illness, discrimination, and the law: Fighting for Social Justice 200 (1st ed. WileyBlackwell 2012).

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Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
Declaration.32 As a non-binding instrument, the declaration must be incorporated by
UNESCOs member states into their national laws, regulations or policies in order to take
effect. The IBC, which was responsible for preparing the aforementioned international
instrument itself recommended that this instrument be declaratory in nature (that is, nonbinding).33 None of the provisions contained within the UDBHR are binding upon the member
states of the UN.34
21. Therefore, to summarize, all three Declarations do not cast any legally-binding obligations
on the parties involved and are merely recommendatory in nature. To raise claims alleging a
violation of provisions as contained within the aforementioned provisions would be grossly
prejudicial against Unnat especially since the very nature of Declarations and the reason they
are adopted is merely to declare certain aspirations which should be met.

[2.3] EFFECTIVE FLOW OF TECHNOLOGY HAS OCCURRED FROM UNNAT TO


BAATI
22. It is submitted before this Honble Court that bona fide, effective and successful TOT
(transfer of technology) has taken place in the case at hand. The UNCTADs Code of Conduct
defines TOT as the systematic knowledge for the manufacture of a product, for an application
of a process or for the rendering of a service and highlights the principle of mutuality and also
of mutual confidence between the parties involved.35 The concept of transfer implies that
technology must flow from one undertaking to another.36 On the basis of the plethora of
definitions abovementioned, it is contended that bona fide and effective TOT has taken place.
Unnat, through UNNATI supplied the technical know-how in totality which and as a result of
which, Baati was able to successfully produce Neti nanoparticles.37 The efficacy was unknown
to both the parties involved, by virtue of which Unnat was unable to furnish information in
those regards. The terms of the SPA are clear in relation to the amount of know-how to be
32

Roberto Andorno, Principles of International Biolaw: Seeking common ground at the intersection of Bioethics
and Human Rights 228 (1st ed. Bruylant 2013).
33
Adele Langlois, The UNESCO Universal Declaration on Bioethics and Human Rights: Perspectives from Kenya
and South Africa, U.S.P.M.C., http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2226192/ (last visited Aug. 3,
2015).
34
Michael Kirby, Human Rights and Bioethics: The Universal Declaration of Human Rights and Universal
Declaration of Bioethics and Human Rights, 25 J. of Contemp. Health L. & Poly 316 (2009).
35
Pedro Roffe, Transfer of Technology: UNCTAD's Draft International Code of Conduct, 19 The Intl Lawyer
693 (1985).
36
Guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union to
Technology Transfer Agreements, 3 Official Journal of European Union 354 (2014).
37
Moot Proposition 16.

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Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
transferred and the requisite laid down has also been met. Not only has flow of technical knowhow been achieved from Unnat to Baati, but also the SPA also is based upon mutuality and the
same has been entered into by both parties through a democratic and consensual process.

[2.3.1]. The Obligations conferred upon Unnat through the international framework of TOT
has been met

23. It is further submitted that the responsibilities and obligations, within the TOT framework
which are conferred upon Unnat, as a Supplying Unit (SU) towards Baati, the host, have been
diligently adhered to. Two prominent responsibilities can be seen in the form of the two basic
principles upon which UNCTADs Code of Conduct is based upon are firstly, that States
involved should employ all appropriate means of facilitating and regulating the transfer of
technology, in a manner consistent with their international obligations and taking into
consideration of the legitimate interests of the parties concerned and secondly, that mutual
benefits should accrue to the technology supplying and recipient parties in order to maintain
and increase the international flow of technology.38 Another pertinent responsibility is that of
the SUs commitment that the relevant technical documentation and other data required from
the SU for a particular purpose defined in terms directly specified in the agreement will be
transferred in a timely manner and as correctly and completely for such purpose agreed upon.39
The responsibilities have been duly met by Unnat, as Unnat has facilitated not only the TOT
but has also aided Baati in conducting the further clinical trials and laboratory procedure by
providing complete procedural knowledge to produce nanoparticles from Neti and the same
was found to be comprehensive as nanoparticles of Neti leaves were successfully produced.
Furthermore, not only would both the parties have accrued mutual benefits upon the successful
completion of the SPA but additionally, all relevant know-how available in Unnats legal
domain has been furnished in a timely manner to serve the common purpose of both the parties.
Lastly, TOT is not solely the responsibility of the research group trying to get its results put
into practice. There is growing recognition that TOT now is both the SUs and the hosts
responsibility40 and in view of the same that holding Unnat liable for deliberately concealing

38

United Nations: Conference on an International Code of Conduct on the Transfer of Technology, 19


International Legal Materials 779 (1980).
39
Stephen Tully, International Documents on Corporate Responsibility 596 (Edward Elgar Publishing Ltd. 2005).
40
Ndubuisi Ekekwe, Nanotechnology and Microelectronics: Global Diffusion, Economics and Policy 330
(Hershey New York 2011).

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Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
the adverse effects of the nanoparticles would be extremely prejudicial especially since neither
of the parties knew or were aware of the efficacy of the same.

[2.4] BAATI HAS VIOLATED THE BASIC PRINCIPLE CONTAINED WITHIN


ARTICLE 2 OF THE UN CHARTER AS A RESULT OF REJECTING THE PLAN FOR
SPECIAL AND REQUIRED ASSISTANCE

24. It is submitted that in view of Baati deliberately rejecting the plan for Special and Required
Assistance, the same constitutes as a breach of the principle of Good Faith as contained within
Article 2. Both Unnat and Baati being member of the UN are bound by the articles of the UN
Charter, by virtue of it being the constituent treaty of the UN. 41 In relation to the
aforementioned definitions and interpretations of the same, Baati had a noticeable duty and
obligation owed to Unnat, which was that of ensuring the production of Neti medicine,
especially in view of all TOT having occurred already. Baatis action has prevented the
collaboration from reaching materialization and fruition. The sole purpose Unnat entered into
an SPA with Baati was for the development of the Neti drug to eradicate liver cancer. Baati has
malafidely jeopardized this collaboration by rejecting assistance offered by Unnat rendering
all technical know-how supplied and assistance provided by Unnat to be rendered superfluous
and redundant and in doing so has also breached the Principle of Good Faith as contained
within Article 2 of the UN Charter.

Issue III: Whether the Government of Unnat be made responsible for situations not
contemplated within the agreed terms and conditions of the Special Purpose Agreement, and
to that effect for legal obligations, not specified within the Special Purpose Agreement?

25. That it is humbly submitted before the Ld. Bench that liabilities arising out of a written
agreement must be weighed as against the scope and specifications set out by the agreement
reached between the parties mutually, thereby upholding the claims and contentions very aptly
put forth that in absence of any specifications to the required effect, the Democratic Republic
of Unnat shall not be held liable for situations beyond reasonable contemplation, not
commensurate with and out of the scope of performance as agreed by and among the

41

SIMMA, supra note 1, at 170.

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14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
parties.[3.1]Appending further, the same being not part of the agreement could not impose any
further legal obligations other than what has been mutually agreed and composed which
enables the Respondents herein to seek an outright rejection of the allegations put forth.[3.2]

[3.1] THAT WHAT GOVERNS RESPONSIBILITIES UNDER A CONTRACT IS THE


INTENTION TO BE BOUND BY ITS TERMS AND CONDITIONS SPECIFIED THEREIN
AND CONSTRUED ACCORDINGLY

26. An agreement generally being a cluster of bipartite negotiations penned formally,


determines the legal obligations that parties to it shares on a settlement reached taking into
consideration the respect for their rights and duties arising consequently. 42This in turn
establishes that statements of such effect can create legal obligations if they are made in clear
and specific terms43 and if their legal effect evaluated through their actual content as well as
the circumstances in which they were made44 points towards such consensus reached among
the parties which renders the arrangement legally binding in the course of the performance of
responsibilities undertaken thereto. Under these circumstances it must be considered that the
scope and effect of obligations under an agreement validly created owes its appropriate
determination to the exact terms of the contract45 evaluated through a comparative importance
given to such obligations. It should further be understood that bringing into the scope of such
determination, (in the context discussed above) issues which do not find their place within the
contractual terms and conditions either because of their scope being outside the purview of the
contractual objectives or they being omitted at the time the contract was embodied into
writing46, would be detrimental and would render the efforts underwent to make contractual
position more comprehensive and less ambiguous.
27. This scope of argument, when extended further, entails the necessity of reaching the
impression essentially embodies within it the parol evidence rule which clearly enunciates that
verbal evidence against an agreement reduced into writing is not allowed to be given 47 in any

42

Case Concerning Armed Activities on the territory of Congo (Democratic Republic of the Congo v. Uganda),
2005 I.C.J. 168 (December 19).
43
Nuclear Tests Case (Australia v. France) (New Zealand v. France), 1974 I.C.J. 267.
44
Id at 269-270.
45
Parker v. South Eastern Ry., [1877] 421 2 C.P.D. 416.
46
Heibut, Symons & Co. v. Buckleton, [1913] 50 A.C. 30. (Such collateral considerations, the sole effect of which
is to vary or add to the terms of the written contract, are therefore viewed with suspicion by the law. the terms of
the contract should bore the animus contrahendi on the part of all the parties to the contract).
47
Goss v. Lord Nugent, [1833] 5 B. & Ad. 58.

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14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
form having an effect to contradict, vary, add to or subtract from the terms of a written contract,
or the terms in which the parties have deliberately agreed to record any part of their contract.48
The rule does not only exclude evidences in oral form but also has been extended to apply on
matters concerning extrinsic evidences in writing such as drafts,49 preliminary agreements50
and letters of negotiation51, having been justified on grounds of upholding written proof,52
effectuating the finality intended by the parties in recording their contract in written form53 and
eliminating great inconvenience and troublesome litigation in many instances.54

[3.2] THAT THE TERMS AND CONDITIONS SPECIFIED WITHIN THE AGREEMENT
APPEARS COMPREHENSIVE IN ITS SCOPE AND SELF-SUFFICIENT IN NATURE
LEAVING NO SCOPE OF EXTRINSIC EVIDENTIARY ANALYSIS
28. That as a part of the common usage, its generally seen that parties to an agreement intend,
in order to mitigate future inconveniences, to demonstrate all other aspect of their previously
reached consensus within a complete document by reducing into record all such terms
particularly. On such intention being established, the complete nature and independent
operation of the contract requires a careful perusal of what is already being agreed in the
express covenants relating to a particular subject matter rather than unnecessary implications
of the same.55 The simple test which follows the ascertainment of the same is that the
substantive and procedural facets encasing the fundamental obligations forming material part
of the contractual transaction must lie within specific stipulations of a certain nature contained
within a written document coupled with certainty in intention and unanimity in agreement.56
It is to be understood in the light of the facts that the Special Purpose Agreement being the sole
document governing the contractual relations in regard to the subject matter, the scope of other
arrangements among the parties indicating any intention to the contrary is negligible, thus
eliminating the possibility of any implications that could be drawn having any additional

48

Bank of Australasia v. Palmer, [1897] 545 A.C. 540.


Miller v. Travers, [1832] 8 Bing. 244; Inglis v. Buttery, [1878] 3 App. Cas. 552; National Bank of Australasia
v. Falkhingam & sons, [1902] A.C. 585.
50
Evans v. Roe, [1872] 7 C.P. 138; Leggot v. Barrett, [1880] 309 15 Ch.D. 306; Henderson v. Arthur, [1907] 1
K.B. 10.
51
Mercantile Bank of Sydney v. Taylor, [1893] 321 A.C. 317.
52
Pickering v. Dowson, (1813) 784 4 Taunt. 779.
53
Supra note 8.
54
Mercantile Agency Co. Ltd. v. Flitwick Chalybeate Co., [1897] 14 T.L.R. 90.
55
Matthew v. Blackmore, [1857] 772 1 H. & N. 762.
56
Harris v. Rickett, [1859] 7 4 H. & N. 1.
49

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bearing upon the set of obligations57 other than what Unnat already accrues by virtue of the
terms and conditions of the agreement.
29. That with a view to denude the possibility of a collateral warranty from having legal
effect58, to render inadmissible extrinsic evidence to prove terms other than those in the written
contract and thus to restrict the subjective ambiguity of implied conditions which could not be
given a literal colour and an objective interpretation, the efficiency within an agreement of an
entire agreement clause is sought to put into effect. That the said clause runs in an agreement
to supersede all previous arrangements deliberated upon the subject matter in question and
acknowledges non-reliance upon representations or undertaking which do not find expressly
incorporated within the agreement. The provisions of the Special Purpose Agreement forming
part of clause (h) of Article 1 bars any inferential deviation in the form of change, amendment,
revision or modification which could portray an adverse effect upon the legal character of the
Special Purpose Agreement except those which are subsidiary to the agreement, therefore
seeking to maintain the sanctity of the terms and conditions agreed upon consensus by
diminishing influences of any secondary considerations other than what has been expressly
stated herein.
30. That it is also submitted that the obligations, procedures and operation asserted in relation
to the material terms which underlies the basic purpose of the agreement when stated in clear
and fault-free expressions comprehends the explicit framework of performance which form an
essential part of the agreement entered into. It is contended that the scope and nature of such
contractual resolution, uttered through the different parts embodying it, must be studied in
accordance with the statement of material terms present well within the document itself.
However, it is to be noticed that such perusal to locate the fundamentality in terms of the
relevant expressions, which underlay the arrangement between the parties, must be done in
total compliance with the effectual wording where the contract is not silent on such matter and
not in the light of extrinsic evidences suggesting it to be a collateral contract. It is to be
appreciated that no stretch of implication could possibly be adopted in derogation of the
fundamental elements of the contract or if such implication is unable to sustain or is
inconsistent with the tenor of the contract as a whole.59 Therefore, it is to the kind appreciation
of the Bench that upon the transfer of the knowledge in the form of the highly secured document
UNNATI containing all

information

regarding

nanoscience,

57

nanotechnology and

Henderson v. Arthur, [1907] 1 K.B. 10.


Inntrepreneur Pub Co. Ltd. v. East Crown Ltd., [2000] 614 2 Lloyds Rep. 611.
59
London Export Co. Ltd. v. Jubilee Coffee Roasting Co. Ltd., [1958] 675 1 W.L.R. 661.
58

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nanobiomedicine as understood and recorded by the Democratic Republic of Unnat through an
expert committee of scientists, who participated in the international conferences representing
the Government of Unnat, the alleged concealment of knowledge on adverse effects does not
stand and therefore of implication of the same under the present circumstances would stand in
complete neglect to the express wording of the contract.60 It is to the kind perusal of the Bench
that the contract being laid upon a framework of bona fide presumption that the precise
application of the formula would provide the required result in appropriate conditions, it could
not be said that the same was in knowledge of Unnat or was materially ignored. 61 Therefore,
there being no knowledge or ignorance about the contentions present, holding Unnat
responsible for something done in good faith would absolutely cause a great travesty of justice.
Thus no additional burden of implicated obligations is levied upon Unnat on grounds that the
touchstone to determine the same is necessity rather than reasonableness. 62 Thus is humbly
submitted that the Bench desist from making any implication of obligations since the agreement
in question is one very carefully drafted containing detailed terms agreed between them.63

[3.3] THAT THE DEMOCRATIC REPUBLIC OF UNNAT SHOULD NOT BE LEVIED


WITH ANY LIABILITY WHICH COULD NOT HAVE BEEN AVERTED THROUGH
COOPERATION WITH BAATI

31. A term in the agreement that the parties are willing to co-operate to ensure the performance
of their bargain, whether expressed or implied, forms important part of the Courts
consideration.64 In this respect it is also incumbent upon the court to look into or determine the
degree of co-operation not on terms of reasonableness but by the construction of the terms
imposed mutually upon the parties by the agreement and in light of the surrounding
circumstances.65 The concurrence and participation among the parties to the subject matter in
question is a prerequisite or essential element of determining the scope and extent of the duty
to co-operate obviously under the circumstances when such duty seeks to uphold the ultimate
venture which the agreement proposes. Though it is an essential part of the process of drawing
implications in respect to what has been stated above that the same should be done keeping in

60

BP Refinery (Westernport) Pty Ltd v. Shire of Hastings, [1977] 26 52 A.L.J.R. 20, PC.
The Moorcock, (1889) 14 P.D. 64, 68.
62
Liverpool City Council v. Irwin, [1977] 254 A.C. 239.
63
Luxor (Eastbourne) Ltd. v. Cooper, [1941] 137 A.C. 108.
64
Mackay v. Dick, (1881) 6 App. Cas. 251, 263.
65
Id at 263.
61

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mind clarity and precision as the governing elements, however a little deviation from these
principles if serves the fulfilment of the subject matter agreed within the terms of the contract
or some holistic purpose which led the formation of the same, would not serve as contrary to
the incumbent principles of construction. It must be noted by the Ld. Court that Unnat, in order
to save the purpose undertaken by virtue of the agreement from frustrating tried to exhaust all
possible means by which the harm could be averted. This could be determined on grounds that
Unnat being ready to undertake more research and assist the Baati National Corporation with
the plan of Special and Required Assistance as demanded by the circumstance and situation,
which subsequently and without consideration was out-rightly rejected by Baati which led to
the situation being dragged to the court which prospectively would have been otherwise
averted.
32. Therefore, it is humbly submitted that on grounds of lack of co-operation from the side
Baati in upholding the basic principles underlying the Special Purpose Agreement, Unnat
should not be held responsible or burdened with any additional obligation.

Issue IV: Whether the Government of Unnat be made Responsible for Circumstances beyond
Their Control and Not in the Foreseeable Contemplation of Risks and, for Resulting Losses?

33. That it is humbly submitted before the Ld. Bench that liabilities in the course of a
contractual agreement accrues normally due to advertent neglect of rights and obligations
arising out of the same and resulting into its breach and subsequently, losses suffered by the
party so aggrieved. However, such neglect does not form part of the transaction when a party
to the contract, by virtue of the position given through the contractual obligations and by
exercise of its personal authority is unable to make any adverse impact upon the course of
performance of the agreement so reached and thus it is on such grounds it is contended
hereinafter the Democratic Republic of Unnat shall not be held liable for circumstances beyond
their reasonable control and not in any way within the foreseeable contemplation of risks. [4.1]
Appending further, the same being not a result of any breach, neglect or misconduct is unable
to hold liable Unnat for the losses suffered on justifiable grounds. [4.2]

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[4.1] THAT IMPOSSIBILITY OF PERFORMANCE CAUSED DUE TO EVENTS
SUPERVENING AND TO THE EFFECT BEYOND THE CONTROL OF UNNAT COULD
NOT HOLD IT RESPONSIBLE FOR NON-PERFORMANCE

34. When extraordinary or supervening events occur, without the default of either of the parties
and these events radically and significantly alter the nature of the contractual rights and
obligations of the parties,66 the contract may be automatically brought to an end by operation
of the doctrine of frustration67, which finds itself in place where in the course of performing
the contractual objectives, the unfolding events, occurring after the formation of the contract68
make such performances more onerous or even impossible.69 This is further accompanied by a
radical change in the obligations to be performed, a test which implies that there has to be a
break in identity between the contract as provided for and contemplated and its performance in
the new circumstances70which destroys the very nature and purpose intended to be given
sanctity at the time the contract was formed. Under this circumstance its submitted that the
Honble Bench must relook at the principle originally adopted in Taylor vs. Caldwell71 and
further reiterated in F.A. Tamplin SS. Co Ltd vs. Anglo-Mexican Petroleum Products Co Ltd72
that the circumstances prevailing at the time the contract was entered into force and the ones at
the time the performance became impossible must be given due weight and that the court ought
to balance both in a bid to explain their bearing upon each other. It is essentially due to a drastic
change in the circumstances, though not contemplated beforehand but became very apparent
during the performance of a contract. It is further submitted that operation and effects of the
doctrine does not depend on the action, inaction or will of the parties to continue the contract.73
As stated above, it brings the contract automatically to an end notwithstanding the fact that
parties might continue to perform their contractual obligations. As a matter of fact it must be
noticed that, mere hardship or inconvenience will not amount to discharge by frustration74but
there rather must be a change in the significance of the obligation that the thing undertaken

66

G.H. Treitel, Frustration and Force Majeure 505 (Sweet & Maxwell 1994).
Ling Liu, The Doctrine of Frustration: An Overview of English Law 271 (1st ed. OUP).
68
Amalgamated Investment & Property Co. Ltd. v. John Walker & Sons Ltd., [1977] 1 W.L.R. 164.
69
Id.
70
Edwinton Commercial Corporation and Global Tradeways Ltd. v. Tsavliris Russ (Worldwide Salvage and
Towage) Ltd. Sea Angel, 2 Lloyds Rep. 517 (C.A. 2007).
71
Taylor v. Caldwell, [1863] 3 B. & S. 826.
72
F.A. Tamplin SS. Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd., [1916] 2 A.C. 397.
73
Hirji Mulji v. Cheong Yue Steamship Co., [1926] A.C. 497.
74
M. P. Furmston, Cheshire, Fifoot and Furmstons Law of Contract 716 (Oxford 2012).
67

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would, if performed, be a different thing from that contracted for.75 However, the determination
of the doctrine in Edwinton Commercial Corporation vs. Tsavliris Russ76 led to the enunciation
of a multi-factorial approach requiring consideration of terms of the contract, their context,
matrix of facts, parties reasonable expectations and especially their knowledge, assumptions
and contemplations regarding the particular risk.
35. Under the situation which have been given effect, it is put forth that the doctrine contended
runs independent of the conduct of the parties without any regard to their knowledge,
assumptions or contemplations therefore making it beyond what could be actively controlled
by and among the parties, and thus the occurrence of which could not be denoted as a
responsibility to one.

[4.2] THAT THE ENSUING EVENTS AND TO THAT THEIR CONSEQUENCES WERE
NEVER IN FORESEEABLE CONTEMPLATION OF RISKS AMONG THE PARTIES
BEFORE OR AT THE TIME OF ENTERING THE CONTRACT
36. That it is to be appreciated that a party to a contract is liable only to the extent of its duty
in regard to what was voluntarily assumed and mutually bestowed. One cannot be held
responsible for risks coming into being which were otherwise beyond the purview of the
agreement itself. It is submitted that a risk to be allocated within the reasonable contemplation
of the parties, the same must be a positive or negative implication 77 arising from a specific
clause or to that extent circumstances prevailing at the time the contract was entered into force.
It is further submitted that the fact-circumstances upon the issue in hand clearly enunciates that
under all circumstances taken into account to ensure the realisation of the purpose with which
Baati and Unnat formed the contractual relations, there always was conjoined a presumption
that the meticulous subscription to their respective obligations with due care, would result into
the fulfilment of the same. Therefore, the sudden change in results accompanied by its drastic
impacts were neither within what the parties contemplated nor within what they could
foresee78, therefore invocation of the doctrine is aptly justified and reflected upon the
circumstances so ensued.

75

Davis Contractors Ltd. v. Fareham Urban District Council, [1956] U.K.H.L. 3.


Edwinton Commercial Corporation and Global Tradeways Ltd. v. Tsavliris Russ (Worldwide Salvage and
Towage) Ltd. Sea Angel, 2 Lloyds Rep. 517 (C.A. 2007).
77
Bank Line Ltd. v. Arthur Capel & Co., [1919] A.C. 435.
78
Ewan McKendrick, Force Majeure and Frustration of Contract 35 (Informa Law 1995).
76

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[4.3] THAT THE RESULTING LOSSES CANNOT BE ATTRIBUTED TO ANY DEFAULT
OR NEGLECT ON THE PART OF UNNAT AND WERE INDEPENDENT
37. Compensation for losses incurred due to bad commercial bargains could not be attributed
or implied to be within the scope and extent upon which the doctrine of frustration runs. The
economic consequences of the frustration are that ''losses lie where they fall.''79 Advance
payments if already paid, shall not be reimbursed. This was attested in Lloyd Royal vs.
Stathatos80 where the Court of Appeal rejected the charterers claim for the return of hire paid
in advance. Though there has been a little deviation from this course,81 it must be noted that
the general rule stands as what has been explained above and any deviation, which is rarely
seen cannot be looked upon to imply any changes upon the applicability of the doctrine in this
regard. Nevertheless, this is considered to be a very rare case in practice.
38. It is further submitted before the Honble Court that the present fact-circumstances granted
the parties very limited or almost no allocation of risks accrued out of the agreement. That there
being a general practice that commercial contracts presupposes the happening of any future
event, to mitigate which certain mitigating circumstances are created so that the balance of
rights and obligations as among the parties remains stable. However, the peculiar characteristic
of the same being that it reduces the courts subjectivity in determining the circumstances
which prevailed at the time of the entering into the contract and the intention of the parties. In
regard to this, the doctrine of frustration stands on a very relative plane. It must be taken into
regard that the wider is the scope of the contractual clauses the narrower becomes the function
of the doctrine.82 This being the situation in the present issue in hand, the narrowness in the
clauses upon risk allocation attributes the application of the doctrine.
39. That it should further be acknowledged that a contractual obligation, implying mutuality of
arrangement and seeking factors of co-operation denotes liability upon both the parties to
stabilise the situation with the required assistance needed to that effect. Under these
circumstances, it must be noted that in order to mitigate the differences that arose in the course
of such unforeseen and non-contemplated situations, the Democratic republic of Unnat sought
to assist Baati, keeping in view the holistic purpose of the arrangement, by way of a Special

Occidental v. Skibs A/S Avanti, 1 Lloyds Rep. 293 (Q.B. 1976).


Lloyd Royal Belge SA v. Stathatos, 30 Great Britain Times Law Reports 70 (1917).
81
Fibrosa Spolka v. Fairbairn, [1942] U.K.H.L. 4.
82
Total Gas Marketing Ltd. v. Arco British Ltd., [1998] 2 Lloyds Rep. 209. [In a case of an elaborately drafted
contract a court may conclude, as a matter of interpretation, that the parties preferred the certainty of termination
pursuant to one of the terms of the contract to the uncertainty of possible discharge under the doctrine of
frustration].
79
80

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and Required Assistance Plan, but the same being refused by Baati made situation adverse for
both the parties especially Unnat, since in exchange of the know-how and technical assistance
it received nothing in return.
40. It is further submitted that Baati itself was in breach of the Special Purpose Agreement
wherein it was decided that all aspects of the commercial venture shall be done only by a
democratic and consensual method of decision making processing all its aspects at every stage
of the process between the parties since the circumstances enumerated therein justifies that on
several such aspects, the move of Baati was without any prior intimation of Unnat. Since the
project was more of a joint venture agreed between the parties, the presence of Unnat in the
development of the project was reduced to a bare minimum. There were mere reviews upon
the project that were sought with no actual presence or participation being realised. Thus, the
situation enumerated forms enough justification to claim that the change in the result of the
venture spearheaded towards production of drug to combat life-threatening liver cancer was
solely and under autonomous supervision of Baati and no liability upon Unnat for any of their
default, negligence or misconduct could be levied.

Issue V : Whether The Government of Baati shall be ordered to pay for the losses incurred by
the Government of Unnat?

41. It is humbly submitted by the respondent that as is evident from Article 1(c) of the SPA,
the state of Unnat had provided both technical know-how and funds as part of the twin sharing
formula to the tune of 70% and 30% respectively. The respondent would also like to bring the
notice of this court to Article 1(d), according to which, for this contribution of technical knowhow and funds to the Neti-project, there were to be profits for the state of Unnat to the tune of
60% upon successful production of the liver-cancer medicine. However, as a result of the state
of Baati defaulting upon its obligations emanating from the SPA, the medicine never came to
fruition and hence the benefits which were due to Unnat, never came to be. Consequently, there
exists a situation wherein Unnat has incurred large losses and the state of Unnat requests this
honourable court to exercise its plenary powers granted under Article to sanction reparation
against Baati, by way of compensation to Unnat for all the injuries that it has sustained due to
the wrongful act and breach of State Responsibility [5.1]. The contract laws of most countries,
both civil and common law countries, lay down the proposition that all losses attributable to
the party that breached the contract must be paid to the other contracting party such that the
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effect of the breach is nullified, the situation is restored to what it was before the breach took
place, and the other party is made whole again. Various international conventions, principles
and state laws, including the Baatian law are a testament to this state practice which forms a
part of Customary International Law as is under Article 38(1)(b) of the statute of the ICJ. [5.2]

[5.1] BAATI BREACHED THE RESPONSIBILITY OWED BY IT TO UNNAT AND THIS


BREACH OF STATE RESPONSIBILITY ENTAILS REPARATIONS AGAINST BAATI,
TO COMPENSATE UNNAT FOR ALL LOSSES IT INCURRED AS A RESULT OF THE
WRONGFUL ACT
[5.1.1]. The Chorzow Factory Case and the Principle of Reparation laid therein

42. It is a principle of international law that the breach of an engagement involves an obligation
to make reparation in an adequate form. Reparation therefore is the indispensable complement
of a failure to apply a convention and there is no necessity for this to be stated in the convention
itself. The Permanent Court of International Justice in the Chorzow Factory Case said in no
unambiguous terms: "The Court observes that it is a principle of international law, and even a
general conception of law, that any breach of an engagement involves an obligation to make
reparation83. The ideal form of reparation, doubtless, is the restoration of the situation exactly
as it was before the injury. "The essential principle contained in the actual notion of an illegal
act-a principle which seems to be established by international practice and in particular by the
decisions of arbitral tribunals-is that reparation must, as far as possible, wipe out all the
consequences of the illegal act and reestablish the situation which would, in all probability,
have existed if that act had not been committed."84

[5.1.2]. The Draft Articles on Responsibility of States for Internationally Wrongful Acts and
its implications in the case at hand
43. In the Draft Articles on Responsibility of States for Internationally Wrongful Acts85, Article
31 states the well-established principle relating to the obligation to make reparation for the

83

Factory at Chorzow (Merits), P.C.I.J. Order of the Court, (ser. A), No. 17 4 (July 14, 1928).
Supra note 47.
85
The Draft Articles are a combination of codification and progressive development. The International Court of
Justice has already cited them for example, in Gabkovo-Nagyamaros Project (Hungary v. Slovakia), 1997 I.C.J.
7. On 12 December 2001, the United Nations General Assembly adopted resolution 56/83, which "commended
[the articles] to the attention of Governments without prejudice to the question of their future adoption or other
appropriate action."[GA Res. 56/83, para. 3 (Dec. 12, 2001).].
84

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consequences of an internationally wrongful act. After reading the provision, it ought to be
brought to the notice of the honorable court that the obligation to make full reparation although
succinct, it has been affirmed86. The court has also recently recognized in Loayaza-Tamayo vs.
Peru (Reparations and Costs) case, that a state bears responsibility for an internationally
wrongful act and is under an obligation to make full reparation for the injury caused by that
act87. The Umpire in the Lusitania case88 held the remedy should be commensurate with the
loss, so that the injured party may be made whole. The Respondents would like to bring to the
notice of the court that there is a fine line dividing restitution and compensation, and the court
will be confronted with the dilemma that compensation would be a more apt and equitable
remedy than restitution in this case, and the State of Unnat having a choice in opting for the
mode of reparation89, requests the court to grant sanction for reparation in the form of
compensation to place them in a situation that they would be in, had the contract been
performed. Article 36 of the ARSIWA expresses the entitlement to compensation90.
44. The principle of full reparation, adopted by the Permanent Court in the Chorzow Factory
case, has been affirmed and applied in the decisions of the International Court91, regional courts
and tribunals92, and arbitral bodies93. It is also reflected in codification efforts94 and in the most
unambiguous and certain way, reflects the state practice of many countries and the customary
international law in this regard.

86

The ICJ affirmed the obligation to make full reparation (citing article 31) in Application of the Convention on
the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro),
1996 I.C.J. 595 31 (July 11). Also affirmed in Arrest Warrant Case (Democratic Republic of the Congo v.
Belgium), 2000 I.C.J. 3, 31-32 (April 11).
87
Loayaza-Tamayo v. Peru, Reparations and Costs, Order of the Court Inter-Am. Ct. H.R., (ser. C), No. 42 20
(Apr. 15, 1998).
88
The Lusitania case, 7 R.I.A.A. 32, 39 (1923).
89
Article 43(2)(b) of the ILC Articles. Also, Iran for instance, chose compensation as a form of reparation in the
Case Concerning Aerial Incident (Iran v. United States), 1988 I.C.J. 161 (July 3).
90
1. The State responsible for an internationally wrongful act is under an obligation to compensate for the damage
caused thereby, insofar as such damage is not made good by restitution.
2. The compensation shall cover any financially assessable damage including loss of profits insofar as it is
established.
91
See 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.
92
See Papamichalopoulos and others v. Greece, App. No. 14556/89, Eur. Ct. H.R. Series A No 330-B (1995);
Velasquez Rodriguez v. Honduras, (Reparations and Costs), Judgment, Inter-Am. Ct. H.R., (ser. C), No. 7 (1989).
93
See C.M.E. v. Czech Republic, Partial Award, 9 I.C.S.I.D. Rep. 113, 238-9 (2001); Amoco International
Finance Co. v. Iran, (Iran-United States Claims Tribunal), 15 Iran-U.S. C.T.R. 161 (1987).
94
Codification efforts are described in FV Garcia Amador, First Report on International Responsibility, ILC
Yearbook 1956, Vol II, 174, 177-178,221-226; and in R Ago, First Report on State Responsibility, ILC Yearbook
1969, Vol II 125.

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[5.2]. BREACH OF AGREEMENT BY BAATI WILL ENTAIL CONTRACTUAL


DAMAGES AS LAID DOWN UNDER VARIOUS STATE LAWS, CONVENTIONS AND
PRINCIPLES

[5.2.1]. Breach of Expectation Interest due to frustration of SPA by Baati

45. The respondent humbly brings to the notice of the court that Unnat has fulfilled its part of
the promise and even offered the SRA to ensure that the Neti project is completed in spite of
impediments, however Baati has refused to accept the same, thereby the lack of funding
effectively frustrating the contract and judicial propriety demands that Baati has to pay for the
loss of profits caused to Unnat as a result of non-fulfilment of the contractual obligations. It is
an indisputable principle of law in almost all the legal systems across the world that if there is
a breach of contract, then the breaching party will be forced to pay damages to the party that
has incurred losses as a direct result of that breach including consequential damages. Unnat is
well within its rights to claim for the damages relating to its expectation interest, which was
laid down by Lord Atkinson in Wertheim vs. Chicoutimi Pulp Company95 which is well
embedded in both civil and common law countries, where it was stated that it is the general
intention of the law that, in giving damages for breach of contract, the party complaining
should, so far as it can be done by money, be placed in the same position as would have been
if the contract had been performed.
46. The general rule under Common Law countries for the recovery of damages following
breach of contract was set down in the landmark English case of Hadley vs. Baxendale96:
Recoverable damages are those either (i) arising naturally or directly from the breach of
contract (direct loss), or (ii) within the contemplation of the parties at the time they made the
contract (indirect or consequential loss). The English courts have repeatedly made it clear
that an exclusion of indirect or consequential loss does not exclude loss of profit that arises
directly and naturally from the breach, that is loss of profits that a reasonable businessperson
would expect to flow from such a breach in the usual course of events 97. The respondent

95

Wertheim v. Chicoutimi Pulp Company, [1911] A.C. 301 (P.C.).


Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Rep. 145 (1854).
97
Saint Line v. Richardsons Westgarth & Co. Ltd., [1940] 2 K.B. 49; British Sugar v. Projects Limited, (1997)
87 B.L.R. 42.
96

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submits that the lost profits in the present case would come under the first limb of the Hadley
vs. Baxendale rule.
47. [In arguendo]:- Even if the Loss of Profits were to be construed as Consequential :-The
respondent would like to bring to the knowledge of the court that that the English case of
Hadley vs. Baxendale has been recognized in American jurisprudence as the definitive source
for determining when consequential damages may be recovered for breach of contract. 98 The
Restatement (Second) of Contracts provides that consequential damages may be recovered if
they were "a probable result of the breach when the contract was made ... as a result of special
circumstances, beyond the ordinary course of events, that the party in breach had reason to
know."99 But courts freely interchange these expressions with the statement that consequential
damages may be recovered if they were a "foreseeable" result of breach 100. With respect to
economic loss, U.C.C. 2-715(2)(a) permits recovery of consequential damages for "any loss
resulting from general or particular requirements and needs of which the seller at the time of
contracting had reason to know."101

[5.2.2]. State Practice regarding Compensation for Contractual Damages

48. The Respondent will also cite a few relevant Articles from the UNIDROIT Principles of
Commercial Contracts of 2010102, since the agreement between BNC and UNC was a
commercial venture and this document is an embodiment of general international principles of
contract law and will guide the court in determining the International Law in this regard. Also,
in the International Sale of Good Convention103, to which many countries are parties, Article
74 resonates the same principles.

98

The decision is cited with approval by the highest courts of 43 states.


Restatement (Second) of Contracts 351(1), (2)(b) (1979).
100
White v. Unigard Mut. Ins. Co., 730 P.2d 1014, 1017 (Idaho 1986); Aetna Casualty & Sur. Co. v. Day, 487
So. 2d 830, 835 (Miss. 1986).
101
31. U.C.C. 2-715(2)(a) provides; Consequential damages resulting from the seller's breach include any loss
resulting from general or particular requirements and needs of which the seller at the time of contracting had
reason to know and which could not reasonably be prevented by cover or otherwise.
102
ARTICLE 7.4.1 (Right to damages): Any non-performance gives the aggrieved party a right to damages either
exclusively or in conjunction with any other remedies except where the non-performance is excused under these
Principles.
ARTICLE 7.4.2 (Full compensation) :(1) The aggrieved party is entitled to full compensation for harm sustained
as a result of the non-performance. Such harm includes both any loss which it suffered and any gain of which it
was deprived, taking into account any gain to the aggrieved party resulting from its avoidance of cost or harm.
103
International Sale of Good Convention (2010) United Nations Conference on Trade and Development,
https://www.uncitral.org/pdf/english/texts/sales/cisg/V1056997-CISG-e-book.pdf.
99

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Written Submissions on behalf of the Respondents

14th Surana & Surana International Technology Moot Court and Judgment Writing
Competition, 2015
49. The Respondent would also attract the attention of the court to the Indian Contract Act104,
wherein s.73 and s.75 state very clearly that the party who suffers by the breach is entitled to
receive compensation for any loss or damage and that a person who rightfully rescinds a
contract is entitled to consideration for any damage which he has sustained through the nonfulfillment of the contract.
50. The Respondent would also cite the Sapphire-NIOC Arbitration case105 to guide the court
towards the proper application of the law. Examining the question of damages, which the
plaintiff has a right to claim under the rules stated by him, the arbitrator expressed his views in
a passage, which should be another powerful contribution to international case law.
`"According to the generally held view, the object of damages is to place the party to whom
they are awarded in the same pecuniary position that they would have been in if the contract
had been performed in the manner provided for by the parties at the time of its conclusion.
That should be the natural consequence of the breach. This rule is simply a direct deduction
from the principle of pacta sunt servanda since its only effect is to substitute a pecuniary
obligation for the obligation, which was promised but not performed. It is therefore normal
that the creditor is thereby given complete compensation. This compensation includes the loss
suffered (damnum emergens), for example the expenses incurred in performing the contract,
and the profit lost (lucrum cessans), for example the net profit which the contract would have
obtained. The award of compensation for the lost profit or the loss of a possible benefit has
been frequently allowed by international arbitral tribunals.

104

Indian Contract Act, [1872] http://comtax.up.nic.in/Miscellaneous%20Act/the-indian-contract-act-1872.pdf.


Sapphire International Petroleum Ltd. of Toronto and National Iranian Oil Company Arbitral Claim (Canada
v. Iran), 35 I.L.R. 182 (Federal Tribunal of Swiss Supreme Court 1963).
105

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Written Submissions on behalf of the Respondents

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 Government of Unnat has not violated any obligation and that all the information
available in their legal domain in relation to nanoparticle was transferred through
UNNATI with utmost bona-fide leading to a successful ToT and, hence this presumption of
violation of law stands without any legal basis and cannot stand;

b. The Government of Unnat was ready to undertake more research and assist the Baati
National Corporation with the plan of SRA as demanded by the circumstance that was not
contemplated and those of which was not agreed by the Federal Republic of Baati and, but
consequently refused and, hence this shall not be construed as willful concealment of
information and that the Government of Baati has breached the principle of Good Faith as
contained within Article 2 of the UN Charter as a result of deliberately rejecting the plan
for SRA as a result of which the joint venture could not reach fruition.
c. The Government of Unnat cant accept liability for situations not contemplated in the SPA
and, hence has not accepted any other legal obligations not specified in the SPA and that
Baati has frustrated the terms of the agreement;
d. The Government of Unnat shall not be held liable for losses arising due to circumstances
that are beyond their control and not in the foreseeable contemplation of risks;
e. As the Government of Unnat have transferred all the nano knowledge available in their
legal domain without accruing any benefit and incurring losses, Government of Baati shall
be ordered to pay for the losses.

And Pass any other Order, Direction, or Relief that it may deem fit in the Best Interests
of Justice, Fairness, Equity and Good Conscience.

For this Act of Kindness, the Appellant Shall Duty Bound Forever Pray.

Sd/.
(Counsel for the Respondents)
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Written Submissions on behalf of the Respondents