Argument
A. The Victorian Court has the Sole Authority
to Challenge the Arbitral Award Rendered by the German
Arbitral Tribunal in Consideration to the Merits of the
Case.
3. It is a known fact that for every cases being solved
and awarded by the German Arbitral Tribunal or any arbitration
committee for that matter, the Respondent or the loosing
party has also every right to seek remedy to the court
where an appeal can be submitted and have the result or
the award reheard in accordance to the merits of the case
as stated in Section 15 of the Arbitration Rules of the
German Maritime Arbitration Association. Although it can
be said that an arbitration proceeding provides a more
speedy settlement and resolutions of disputes as compared
to a regular court, it is also less costly as compared
to having a real dispute resolution conducted in the court.
4. It must be noted that an appeal is a court proceeding
wherein the loosing party is petitioning in a formal manner
to have an official decision rendered by any court altered
or change by looking upon the pertinent pieces of evidence.
If the loosing party thinks that there is a grave abuse
of discretion committed by the judge or an arbiter, it
is but necessary to file an appeal to a higher court.
This is to ensure that the rights of the loosing party
are not being abused or misrepresented.
5. Hence, it is in this regard that good faith is required
to among the CISG arbiters. The appeal made for purposes
of questioning relevant and applicable laws is granted
by the court and the constitution. For a more detailed
review of the records of the case and of the award actually
rendered, a writ of certiorari is issued by the Supreme
Court. This will strengthen the claims and the arguments
of the parties to the case as well as the decision of
the arbiter that handled the case. Moreover, a fair and
good standing among the arbiters is also being considered
during the certiorari proceeding. In this regard, the
case will pose as an example for the succeeding cases
in such a way that the practice of law which covers a
wide range of activities characteristics of the legal
profession, including the pursuit and defense of client’s
rights and interests before the courts will transgress
the sets of governing rules to limit the parameters and
tame the exercise of the profession. Hence, the Victorian
Court is granted by the Constitution to determine the
appeal of the herein Respondent concerning the award given
by the German Arbitral Tribunal.
B. The Respondent is Held Liable for Non-Conformity of
the Contract Stipulated under Article 35 Section 1 Due
to the Delivery of Diamonds Not Stipulated in the Contract.
6. Herein Respondent denied the accusation that there
is non-conformity to what has been stipulated under the
contract entered into between Schmitt GmbH, herein Claimant,
and Thompson Pty Ltd., the Respondent. The law on obligations
and contracts defined contract to be a meeting of the
minds of the parties to the contract whereby one binds
himself, with respect to the other to give something or
to render some services. Meaning to say, it is a juridical
convention manifested in legal form, by virtue of which,
one or more persons (or parties) bind themselves in favor
of another or others, or reciprocally, to the fulfillment
of a prestation to give, to do or not to do. In other
words, it is the agreement of two or more persons (or
parties) for the purpose of creating, modifying, or extinguishing
a juridical relation between them.
7. Pursuance to the case at bar, the Claimant submitted
evidence annexed as Exhibit 1. Exonerating the evidence,
it can be seen that as per the telephone conversation
made between the Claimant and the Respondent, there has
been a verbal contract existed wherein the Claimant would
purchase 500 uncut diamonds inspected at the factory of
the Respondent on the 14th of July 2002. In some of the
cases established by the court, it has been rendered that
even an oral contract is binding on the parties unless
form is essential for its validity and enforceability.
Hence, in the case at bar, it is apparent that there is
a perfected contract between the parties to the case.
The Respondent is then obliged to render the delivery
of the 500 uncut diamonds ordered by herein Claimant.
Clearly, the elements of a contract exist between the
two parties. There is consent, subject matter, and cause
or consideration. The Claimant consented on the delivery
of the 500 uncut diamonds from South Africa for a consideration
of a total amount of $US 140,000.00 as stated in Exhibit
2.
8. Under Article 35 Section 1, it is stated that the seller
has an obligation to deliver the goods ordered by the
buyer in such a quantity, description and quality stipulated
under the contract. Hence, the stages of a contract must
be fulfilled in relation to the product specified. Here,
the parties are progressing with their negotiation; they
have not yet arrived at any definite agreement, although
there may be having been a preliminary offer and bargaining.
But then again, it must be noted that the parties have
at long last came to a definite agreement, the elements
of definite subject matter and valid cause have been accepted
by mutual consent and the terms of the contract are performed,
and the contract may be said to gave been fully executed.
The law speaks of a meeting of minds between two persons.
The meeting of the minds really refers to two parties.
If at a time of supposed perfection, one of the parties
had already previously died, there can be no meeting of
the minds; hence, no contract. But it can be seen from
the case at bar that there is a perfection of the contract
upon delivery of the diamonds stated by the Claimant in
which the latter saw and inspected at the factory of the
Respondent.
9. Even if it is said that a contract is in existence
between the parties to the case, it does not necessarily
follows that a tort will be barred from being filed in
such a case that the completion of everything stipulated
in the contract has not been fulfilled. A case wherein
the Claimant can file for a recovery of the damages incurred
is granted. The same principle applies in the case at
bar. It is alleged that a tort has been committed by the
Respondent and that the Claimant is entitled to whatever
damages are there in order to protect the rights of the
same. But then again, the non-conformity of the Respondent
as stated by the Claimant can be rebutted by the fact
that the actual diamonds sent and delivered to them are
the same diamonds that have been inspected and saw by
the Claimant when the latter visited the factory of the
Respondent on the 14th of July 2002.
C. Conformity to the Stipulations of the Verbal
Contract between the Respondent and the Claimant
10. It cannot be denied that the Respondent in this case
is under the obligation to fulfill the juridical necessity
to the Claimant to give what has been ordered and to do
what has been obligated. The court has noted that a prestation
is an obligation. More specifically, it is the subject
matter of an obligation and may consist of giving a thing,
doing or not doing a certain act. To reiterate, the law
speaks of an obligation as a juridical necessity to comply
with a prestation. There is a juridical necessity, for
non-compliance can result in juridical or legal sanction.
Hence, there is an admission that whenever a person failed
to comply with what has been stipulated in the contract,
a recovery for damages can be filed before the right court.
Pertinent records of the case revealed that Schmitt GmbH
agreed to buy diamonds from Thompson Pty Ltd. The purchased
products were delivered to the buyer on the specified
time. However, problem arise when the Claimant complained
that the diamonds purchased with the Respondents are not
the diamonds they needed and because of this, they needed
to claim recovery of damages as a result of fact that
they cannot, in any way, use the diamonds; hence, the
cancellation of the contract.
11. Pursuant to Article 35 of CISG, the non-conformity
of the Respondent to what has been stipulated in the contract
can be avoided when the products delivered can still be
used by the Claimant. Meaning to say, if the products
delivered are of the same description, of the same value
and usage, claim to recover damages can be avoided. In
the case at bar, the diamonds are the ones that have been
ordered by the Claimant. The diamonds are not even a different
product purchased. Those are the same diamonds seen and
inspected at the factory. There is no basis for the Claimant
to say that the products delivered are different from
the ones ordered.
12. The diamonds that are being sold by the Thompsons
Pty Ltd are from South Africa. Meaning to say, Thompsons
Pty Ltd is not the ones producing the diamonds. They are
merely a reseller of the diamonds imported from South
Africa. With this, what Thompsons Pty Ltd is doing is
that they are importing diamonds. They make an order,
purchased it through payment and then resell it to other
people or companies that are in line with the diamond
business. Hence, it is true that all the diamonds that
are being sold by Thompsons Pty Ltd are coming from the
South Africa. Proof of purchases and records of transaction
will prove this claim. In this regard, it is undoubtedly
that the diamonds delivered to Schmitt GmbH. There is
no way that Thompsons Pty Ltd will deliver diamonds to
Schmitt GmbH that is not from South Africa because the
only major distributor or producer of Thompsons Pty Ltd
is in Africa. As stated in the conversation made between
the parties to the case, there is a clear showing that
the Respondent assured the Claimant that diamonds from
South Africa will be delivered. True to its word, Respondent
shipped and delivered what has been ordered by the Claimant.
13. The basis, however, of the claim of Schmitt GmbH that
the diamonds are not from South Africa is probably its
observation that the diamonds are from Sierra Leone. There
is a showing that the Respondent had informed the Claimant
that they are purchasing the diamonds in South Africa
but the products are being cleansed in Melbourne. The
final processing of the diamonds so as for it to appear
even more elegant and conducive for selling is the cleansing
of the stones conducted not in Africa but in Melbourne.
Hence, the diamonds that are purchased from South Africa
is being handled by a certain team in Melbourne and they
do the final process of cleaning the diamonds. This made
an effect to the diamonds. The labeling is done in Melbourne
but the actual diamonds are from South Africa. There might
have been confusion between Sierra Leone and South Africa.
Because the diamonds are cleansed, they presumed it came
from Sierra Leone.
D. Claimant’s Obtained Information on the Process
Done to the Diamonds
14. It is true that an obligation is being defined as
a juridical relation who enabled a person to demand something
that is stipulated in the contract from another person
for the complete observance and manifestation of a determinative
conduct and in case of a non-fulfillment of a contract
or a breach, may demand satisfaction from the assets of
the latter. It is important to consider that all obligations
arising from a contract are being regarded to have the
same force and effect of law between the contracting parties;
it does not mean that the contract would render the law
as inferior. The parties to the contract, in any way they
want, may establish and enter such stipulations, terms
and conditions and clauses as they may deem convenient
to both of them. However, law, public policy, morals,
public order and good customs must be taken into great
consideration. The contract entered into between Schmitt
GmbH and Thompsons Pty Ltd is a valid contract. But the
case of the Claimant cannot proceed from here. Under the
articles of arbitration particularly under Article 35
Section3, if the buyer knows of the real condition of
the products and still proceed with the sale, the seller
will not be held liable. Failure to establish the liability
of the seller will not entitle the buyer from any recovery
of damages.
15. Elucidating the article further, it can be seen that
the Claimant was already informed that the raw appearance
of the diamonds will be altered because it will be processed
in Melbourne for the purposes of cleansing, the physical
appearance and the quality much changed as well, which
actually happened in the case at bar. The Claimant is
aware that the diamonds to be delivered to them has undergone
a process already, although it is not yet cut. Because
of the existence of this requisite, the Claimant is not
entitled to recover any damages from the Respondent since
there is no liability on the part of the Respondent having
been able to inform the Claimant of the process being
done to the diamonds.
E. Claimant is Not Entitled for Recovery of Damages
16. It must be understood that the Claimant is asking
for a set-off claim against herein Respondent. The set-off
claim is a form of recovery of damages wherein the Claimant
is asking the Respondent to pay for whatever loss has
been incurred due to the failure of the full execution
and commencement of the contract. But then again, because
of the fact that the liability of the Respondent is not
fully established by reason of the non-completion and
non-fulfillment of the requisites or requirement needed
to establish the guilt of the respondent, the latter is
moving to have the case quashed and allow the Claimant
to pay, instead, to the loss of the Respondent by virtue
of the immature filing of the case. Under the articles
on the Rules of Arbitration Proceeding, the buyer needs
to inform the seller first of the non-conformity to the
stipulations in the contract. The buyer must inform first
the seller in order to grant a remedy or a repair to whatever
problem has occurred. But looking at the scenario of the
case, such right of the seller has been violated when
the buyer immediately filed a case against the Respondent
without giving an ample time to explain that would eventually
lead to the settlement of the problem without going through
arbitration proceeding.
F. Request for Relief
- With all the foregoing and the submission of the exhibits
containing the pieces of evidence, Respondent prays that
the latter be excused from any liability arising from
the alleged non-conformity to the stipulations made in
the contract.
- Respondent also prays that the Claimant’s argument that
they are entitled to a recovery of damages be set aside
and the set-off claim be quashed at the same time.
- Respondent is likewise praying for a relief of damages
that the latter experienced due to the filing of this
case.
Bibliography
Dimsey, M. (2006). International Sales Law. UK: Routledge. |
