THE PROBLEM

normal. In the present case, however, RESPONDENT insisted on fixing a maximum price at a
time when relevant factors for determining a price, in particular the costs incurred for the
production per blade could only be estimated. Consequently, the parties agreed on a price
formula which fulfilled three objectives. First, it ensured that RESPONDENT – in the absence
of unforeseen extraordinary circumstances – would not have to pay more than US$ 13,125
per blade. Second, it ensured that below that price CLAIMANT would at least cover its costs
and make some profit. Third, it contained an incentive for CLAIMANT to keep the costs as low
as possible, as its profit would increase with the decreasing of the costs. A comparable
provision had already been used by the parties during their earlier co-operations when both
were still subsidiaries of Engineering International SA.
22. To attain the second objective of the price calculation, it is necessary that the actual costs are
reimbursed as they are incurred. Thus, if such costs are to be converted into US$ the current
rate must be applied. By contrast RESPONDENT, trying to take advantage of the obvious
calculation mistake in the first invoice, has based its determination of the price on the wrong
and not tenable assumption that the Parties had agreed on a fixed exchange rate of US$ 1=
EQD 2.01. Such a fixed exchange rate was, however, only agreed for the clamps where the
influence of the exchange rate was limited due to the much lower amount. It does not apply
for the fan blades. CLAIMANT is paying all its employees in Equatorianian Denars (EQD) and
would not have agreed to be burdened with the full exchange rate risk for the full contract.
Thus, the fixed exchange rate is limited to the items covered by the addendum. In the
meantime, the US$ has fallen in comparison to the Equatorian Denar and the present
exchange rate is US$ 1 = EQD 1.79.
23. Articles 53, 54 CISG entitle the seller, ie the CLAIMANT, to the full purchase price. The buyer
has to bear any costs associated with payment of the purchase price. This includes any costs
associated with administrative regulations. Therefore, the RESPONDENT has to bear the levy
charged by the Financial Investigation Unit for investigating the purchase price payment for
money laundering.
Statement of Relief sought:
On the basis of the above CLAIMANT requests the Arbitral Tribunal to:
1. order RESPONDENT to pay the still outstanding purchase price in the amount of
US$ 2.285.240 and the bank charge in the amount of US$ 102,192.80.
2. order RESPONDENT to bear the costs of the arbitration.
Horace Fasttrack
Enclosures: Claimant’s Exhibits C 1 – C 8
© Association for the Organisation and Promotion of the Willem C. Vis International Commercial Arbitration Moot 7
Prof. Dr. Stefan Kröll