Madame/ Mister presiding arbitrator, members of the

tribunal.

Good Afternoon,

My Name is Mahendra Danny Setyoko

Today, I will Represent my client as Claimant

“never Idealize others. They will never live up to your

expectation”, a reflection of of my Client’s 150 years of
hard work through generations serving the royal family,
conglomerates and celebrities gets obliterated by the
action from respondents.

Members of the tribunal,

In the next 14 minutes I will adress procedural and merits
issue, each divided into 7 minutes.

The two main submussions are, first on the jprocedural

issue, Second Respondent is bound by the arbitration
agreement. Second on the merits issue, There is a breach
of contract made by First Respondent, thus it also liable
to pay the damages.

In the end, I will spare the last minute for my rebuttle

For the procedural issue,

Firstly, article 27 HKIAC that is the choice of arbitration

rule provides that quote” the tribunal have the power to
allow an additional party to be joined to the arbitration
provided that, prima facie, the additional party is bound
by an arbitration agreement under these rules giving rise
to the arbitration.”

Arbitration agreement is contractual in nature, however,

it doesn’t mean that the obligation only follows the one
who sign the arbitration agreement. This notion is
supported by Option II of article 7 UNCITRAL Model law
that has been adopted by Danubia, which is the seat of
this arbitration, this provision provides that an arbitration
agreement doesn’t need to be contractual. This implies
that consent is the main foundation of an arbitration.

Second Respondent’s conduct was an expression of

impled consent to be bound by the arbitration
agreement.

Second respondent intentionally participated in the

performance of the contract by producing and carrying
the goods, and implicitly consented to the arbitration
agreement.
Second Respondent acts as a mediator between My
client and First Respondent, showing significance in the
conclusion of the contract. If there is no Direction from
Second Respondent, there will be no contract of sale
between my client and First Respondent.
Furthermore,Second Respondent was directly involved in
the performance of the sale contract, not only as the
original manufacturer of the Dinner jackets but also by
agreeing to undertake the reproduction of the dinner
jackets when it got destroyed.
Members of the tribunal,
May I direct you to page 11, claimants exhibit number 4,
Inside this notice of the incident, Mr Ferry Baiynd shows
the complete reliance of performance to Second
Respondent, quote “ we are, as a sign of good faith
willing to coordinate with TKH in order to reproduce the
goods exatly for you”.
From this series of facts, a reasonable observer would
interpret that Second Respondent is the one who have
bigger significance in the contract rather than First
Respondent.
It is important to note that Second Respondent had been
involved in the sale of the dinner jackets from its
beginning. In fact, Second Respondent was directly and
significantly involved in the contract, and this
involvement was undertaken in full knowledge of the
arbitration agreement. Obviously, Second Respondent
Viewed itself as being engaged in a commercial
relationship with Claimant framed by the contract of sale
that contains the arbitration agreement. Thus, Second
Respondent must be considered to be bound by the
agreement to arbitrate
Societe V 2000 against Societe Project
XJ 220 ITD, (1996)
Court declined jurisdiction to hear a
suit brought by the French purchaser
of a car from an English company,
where the purchaser was also suing
the French distributor. There was an
arbitration agreement in the
purchase agreement between the
English company and the purchaser,
but the French distributor was not a
signatory. However, both before and
after signing the contract the
purchaser had dealt with the French
distributor as intermediary in the
transaction. The Court held that the
effects of the arbitration clause
extend to parties directly involved in
the performance of the contract,
provided that the actions and
surrounding circumstances raise the
presumption that they were aware of
the existence and scope of the
arbitration clause.
Similarities: Second Respondent is a
non-signatory
Second respondent was also the
intermediary in the transaction
Second respondent was also directly
involved in the performance of the
contract of sale.
Difference: non-signatory in this case
is the one who apply for joinder
Significance: the indication of implied
consent to be bound by the
arbitration is from the significant
involvement of the non-signatory in
the contract, provided that nthey
were aware of the existence and
scope of the arbitration clause.
Moving on the merits issue,

Opposing council claims that the Lost-In-Hole provision is

not a valid waiver of article 79, and also if it is applicable
then the condition precedent is not fulfilled thus it is
exempted from article 79 CISG.

Firstly, Article 6 CISG provides that the parties in the

contract may not apply a part or all of the provision in
CISG. Moreover, Article 11 of CISG provides that “a
contract of sale need not be concluded in or evidenced
by writing and is not subject to any other requirement as
to form. It may be proved by any means”

By that, the agreed intention of the parties is the

essential consideration of this issue.

My client requires that if First Respondent is going to ship

and carry the goods themself, then they are required to
agree on the Lost-In-Hole provision. This is a form of offer
pursuant to article 14 CISG.

This requirement is offered to First Respondent due to

the need of flawless transaction as my Client’s reputation
is on the stake.

First Respondent then agree to the the Lost-In-Hole

provision by signing the contract and this shows
acceptance pursuant to article 18 CISG.

The Lost-In-Hole itself contains the phrase “irres pective

of cause and negligence”. A reasonable third party would
understand the meaning of that phrase also includes
unavoidable impediment that is being exemption in
article 79 CISG. By this, there are agreed intention of the
parties to waive article 79 CISG. Thus, the Lost-In-Hole
provision is a valid waiver of article 79 CISG.

Moving on,

The condition precedent is fulfilled and thus, Lost-In-Hole

provision applies.

The nature of The LIH Provision is about allocation of risk

from the seller to the buyer. Article 67 regulates contract
of sales that involve carriage, in which is the present
case.

Yes, there is no particular place that First Respondent

bound to deliver thus, making the passing of risk to my
client is when the seller hand over the goods to the first
carrier.

However, article 67 paragraph 2 states “nevertheless, the

risk does not pass to the buyer until the goods are clearly
identified to the contract, whether by markings of the
goods, by shipping documents, by notice given to the
byuer or otherwise.” Meaning that the risk passes the
moment the seller send the buyer a notice of the
consignment which specified the goods. [Secretariat
Commentary; Guide to CISG Article 67].

In this present case, there is no notice of consigment

given by First Respondent to my client, therefore the risk
has not pass to my client and is still on first respondent.

This means that, the condition precedent of the LIH

provision that state “..while in the wellbore, in transport,
or in the care of TKE..” has been fulfilled, as the risk is still
on first respondent. This implies that the goods are still in
the wellbore, in transport, or in the care of First
Respondent. Thus First Respondent is liable to pay for the
damages.

Alternatively,

Even if LIH Provision do not apply, First Respondent

cannot be exempted from liability under article 79 CISG.

First Respondent obliged to deliver the goods to claimant

but failed to do so by the incident that happens to the
vessel that carries the goods. Therefore, it can be
considered that First Respondent is a non-performance
party.

To be exempted from liaility, respondent must prove all

elements in article 79 CISG. Including the existence of
impediment beyond his control, the unforeseeability of
the impediment at the time of conclusion of the contract.

In this case, Respondent failed to make a reasonable

effort to avoid or overcome the impediment.

Respondent have been given the geographical and

weather report before the RORO Vessel departed.

Moreover, in the accident report, it shows that

alternative route is possible, however time inefficient and
the anticipation posibbility rate is 65%, a relatively high
possibility to overcome the impediment.
Thus, this means that Respondent did not reasonably
overcome the impediment with all its power.

This argument is supported by the rejected insurance

claim that is alleged by Respondent to BJSP that states
“they found that it was human error which caused the
incident which could foresee the explosion of the
volcano”.

By that, Respondent does not exempted from article 79

meaning that it is liable to pay for the damages.

From those two arguments, My client respecfully request

the tribunal to find that:

First, Second respondent is bound by the arbitration

agreement contained in the contract of sale;

Second, The Lost-In-Hole provision inside the contract

binds first respondent and is liable to pay for the
damages.

Alternatively,there is a breach of contract by respondent

and thus not exempted from its liability under article 79
CISG