memorial for respondent -...
TRANSCRIPT
8th LAWASIA International Moot 2013 L2020-R
At Kuala Lumpur Regional Centre for Arbitration
MEMORIAL
FOR
RESPONDENT
Claimant
Jack Small Ltd.
Respondent
Tan Sen Imports
2
ⅠTable of Contents
ⅠTABLE OF CONTENTS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ⅡABBREVIATIONS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ⅲ INDEX OF AUTHORITIES .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Ⅳ STATEMENT OF JURISDICTION ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Ⅴ QUESTIONS PRESENTED ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Ⅵ STATEMENT OF FACTS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1. THE PARTIES ................................................................................................................... 10
2. THE PROBLEM WHICH OCCURRED BETWEEN THE PARTIES ............................................. 10
3. THE ASIAN GOLDEN CAT ................................................................................................ 10
4. AGREEMENT ON THE ARBITRATION ................................................................................. 10
Ⅶ SUMMARY OF PLEADINGS ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Ⅷ PLEADINGS OF RESPONDENT ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.THE SCOPE OF ARBITRATION AGREEMENT INCLUDES NOT ONLY DAMAGES BUT ALSO
PERMANENT INJUNCTION AND PENALTY BECAUSE THESE ORDERS ARE RELATING TO
THIS DISPUTE. ................................................................................................................. 14
2.RESPONDENT IS NOT LIABLE IN NEGLIGENCE AND NO RESPONSIBILITY TO COMPENSATE
THE DAMAGE TO CLAIMANT. ........................................................................................... 15
2.1. The applicable law to the substantive issue should be the law of Singapore. ............ 15
2.2 The Respondent did not owe the ‘duty of care’ to the Claimant. .................................. 17
2.3. Respondent did not breaches the duty of care owed to Claimant ............................... 22
2.4. Respondent did not cause damages suffered by Claimant. ......................................... 22
3.PERMANENT INJUNCTION AND PENALTY IS UNNECESSARY AND INAPPROPRIATE. ............. 25
3
3.1Even if the Tribunal decides that the award of permanent injunction with penalty is
within the scope of arbitral agreement between the parties, it is of no use to settle
the dispute between the parties. ................................................................................... 25
3.2The Tribunal should reject the permanent injunction and penalty under the general
principles guiding the order of permanent injunction established in England Law. 26
4.PRAYER FOR RELIEF ........................................................................................................... 28
4
ⅡAbbreviations
LIST OF ABBREVIATIONS
Art.
CITES
ESA
Article
Convention on International Trade in Endangered
Species
Endangered Species (Import and Export) Act (Singapore)
Fast Track Rules
ICC
Inc.
KLRCA
Ltd
MAA
p.
Para. / ¶
%
UNCITRAL Model Law
Kuala Lumpur Regional Centre for Arbitration Fast Track
Rules
International Chamber of Commerce
Incorporation
Kuala Lumpur Regional Centre for Arbitration
Limited company
Malaysia Arbitration Act 2005
Page
Paragraph/ paragraphs
Percentage
UNCITRAL Model Law on International Commercial
Arbitration of 1985
5
Ⅲ Index of Authorities
1. RULES AND LAWS
Abbreviation
Citation
Fast Track Rules
MAA
UNCITRAL Model Law
CITES
ESA
Para No.
7(p.15)
50(p.26)
4(p.14)
50(p.26)
SCHORALY WORKS
Author
Book/ Article
Para. No.
Belden Premaraj The Choices of Law – Better Safe Than Sorry, The
Malaysian Arbitration Perspective. P.27
8
Mohamed Ramjohn Beginning Equity and Trusts, Routledge, 2013,
UK.p.238
48
Kevin Y.L. Tan The Singapore Legal System,Singapore University
Press, 1999, Singapore.p.181-182
9,47
2. INDEX OF CASES
(i) CASES
Citation Para. No.
6
The United Kingdom
[Caparo Industries pic v. Dickman]
House of Loads, 8 February 1992. 2AC 605
12
[Day v. Brownrigg]
Court of Appeal, 11 December 1878. 10 Ch. D 294
48,49
[Donoghue v. Stevenson]
House of Loads, 26 May 1932. AC 562
10
[Haley v. London Electricity]
House of Loads, 28 July 1964. AC 778
13
[Hedley Byrne & Co Ltd v. Heller & Partner Ltd]
House of Loads, 28 May 1963. AC 465
23
[Hubbard v. Vosper]
Court of Appeal, 19 November 1971. 2 Q.B. 84
48
[Jaggard v. Sawyer]
Court of Appeal, 18 July 1994. 2 All ER 189
48
[Lamb v. Camden London borough council]
Court of Appeal, 1981 QB 625
38
[Muirhead v. Industrial Tank Specialities]
House of Lords, 1986 3 All ER 705
21,27
[Overseas Tankship (UK) Ltd v. Morts Dock and Engineering Co Ltd]
Privy Council, 18 January 1961. AC 388
40
[Roe v. Minister of Health]
Court of Appeal, 8 April 1954. 2 QB 66
13
7
[Spartan Steel and Alloys Ltd. v. Martin& Contractors Ltd.]
Court of appeal if England and Wales, 22 June 1972. QB 27
14,20
[Sutradhar v. Natural Environment Research Council]
House of Loads, 5 July 2006. UKHL 33
27
[Wright v. Lodge & Shepherd]
Court of appeal, 27 July 1992. 4 All ER 299
35
Malaysia
[YK Fung Securities v. James Cape Ltd. (CA) [1997] 4 CLJ 300]
Court of Appeal, Malaysia, 17 March 1997 4 CLJ 300
8
8
Ⅳ Statement of Jurisdiction
Tan Sen Imports, as Respondent, admits the arbitration under the authority of the Kuala
Lumpur Regional Arbitration Center with Jack Small Ltd as Claimant, according to the
agreement between Claimant and Respondent. There is no dispute on the validity and
enforceability of the provision of the agreement. However, Respondent would like to
argue that the issued concerning injunction and penalty raised by Claimant are not within
the scope of the arbitration agreement between the parties.
9
Ⅴ Questions Presented
1. Whether does the scope of arbitration agreement include discussion about permanent
injunction and penalty?
2. Whether could duty about Respondent’s unlawful act be recognized under the law of torts?
3. Whether does arbitral tribunal have authority to award the permanent injunction with
penalty on the basis of Respondent’s real fur products including endanger species?
4. Whether is the compliant which demands the permanent injunction with penalty accepted?
10
Ⅵ Statement of Facts
1. The parties The parties to this dispute are Jack small Ltd, as Claimant, which has been operated by
the small family, and Tan Sen Imports, as Respondent, which imports clothing and other
products primarily from India and China. Both parties sell fur clothing in Singapore.
Those furs are not only real fur but also faux fur. Respondent purchased its products
from China Fur Import & Export Company, which has its headquarters in Tianjin,
Peoples Republic of China. China Fur has no relationship with Tan Sen other than as its
supplier of the fur products involved in this problem.
2. The problem which occurred between the parties Because some of the customers of Claimant told that Respondent sold a higher quality
product at a lower price, Claimant suspected that Respondent might sell the real fur
products despite that those are labeled as faux fur products. Therefore, Claimant filed the
complaints to the investigators of the Enforcement Support Office of the CIETS
Secretariat. Then, it examined a number of faux fur products purchased at the Chinese
Emporium run by Respondent. It proved that the fur products were made from real fur
which includes the fur of Asian Golden Cat. In fact, Respondent advertised those
products, which is labeled as faux fur, as “having the touch, feel and smell of real fur”.
3. The Asian Golden Cat One of the reasons why Asian Golden Cat is threatened is the hunting for its fur and it is
listed on CITES and the IUCN as “Near Threatened”.
4. Agreement on the arbitration The parties agreed to submit the dispute to binding arbitration when they were unable to
resolve this dispute amicably. The agreement was jointly executed, and the Claimant
submitted the request for arbitration to the KLRCA in accordance with the agreement.
11
The validity and enforceability of the provisions of the agreement are not disputed.
12
Ⅶ Summary of Pleadings
1. In this case, both parties agreed to resolve the disputes of compensation for damages
already occurred. However, Claimant requests Tribunal to award damages, permanent
injunction and penalty. Latter two orders are based on the possibility of Respondent’s
future conducts. So, these orders are out of scope of the arbitral agreement. Because of
that, the Tribunal has no authority to award them, so the permanent injunction and
penalty should not be considered and awarded.
2. Tribunal should conclude that there is no responsibility for compensation for the damage
to Claimant because Respondent did not intend to injury Claimant. Moreover
Respondent is not liable for the loss to Claimant in the tort of Negligence. The reasons
are as follows.
3. Firstly Respondent is not owed the duty of care to Claimant. Because Claimant is not
foreseeable and the relationship between both parties is not proximate, therefore the duty
of care does not exist. Furthermore the kind of harm is “economic loss”. Generally, the
duty of care to economic loss does not exist without contractual relationship. If the duty
of care to economic loss is imposed, the size of claim and the number of potential
plaintiff is unpredictable. There is the danger of too extensive liability. Therefore
tribunal should not impose the duty of care on Respondent. Also, Respondent did not
breach the duty of care.
3. Secondly the damages were not caused as a result of breach of the duty. Namely, the
requirements of causation and remoteness do not exist. Tribunal should consider the
possibility that the loss would have occurred but for the negligent act. Furthermore the
acts of third party break the chain of causation because many consumers intervene
between the Respondent’s act and the loss to Claimant. Even if Tribunal concludes that
13
the act of customer does not break the chain of causation, Respondent is not liable for the
loss to Claimant because Respondent’s negligent conduct is too remote from the
damages to Claimant. Therefore tribunal should conclude that Respondent is not liable
for the loss to claimant in the tort of Negligence.
4. In addition Respondent believes that permanent injunction and penalty is unnecessary in
this case even if Tribunal decides that they do not exceed the scope of arbitration
agreement. Respondent did not know that the products contained the fur of endangered
species. If Respondent had known it and sold them, Respondent would have suffered
destructive impact of its business. So, Respondent would have reasonably stopped
selling such products because of fear of the impact. Naturally, Respondent will never sell
them in the future. Therefore, the Tribunal need not award permanent injunction.
5. Moreover, according to the general principle of permanent injunction settled in English
law, “Defendant’s conduct must be a violation of a legal right”. ESA does not concern
the relationship of private parties. So, Claimant cannot establish the legal right to support
the request for the permanent injunction and penalty under ESA. Therefore, pursuant to
the principle, the request for injunction should be dismissed.
14
Ⅷ Pleadings of Respondent
1.The scope of arbitration agreement includes not only damages but also permanent injunction and penalty because these orders are relating to this dispute.
1. In this case, Respondent purchased the fur products from China Fur at cheap price.
Respondent ordered the products made from the pelts of “Asian Cats” [Clarifications p.1
A-2]. Thus, Respondent was able to sell “a higher quality product at the lower price” to
the customers [Further Clarifications p.1 B-4]. Claimant alleged that, because of that,
more consumers bought the fault ‘faux-fur –products’ served by Respondent than the
faux fur products served by Claimant. Also, Claimant alleged to became aware that
Claimant was losing the customers to Respondent [Further Clarifications p.1 B-4] and
total sales of Claimant have dropped 40%; sales of fur products have dropped 70%
[Clarifications p.2 B-8].
2. After the issue became apparent that the parties would not be able to resolve this matter
amicably, the parties mutually agreed to resolve it by arbitration in order to save time
and money, and to avoid potentially harmful impact of publicity [Problem p.3 ¶3]. To
effectuate their verbal agreement, they borrowed an arbitration clause from a contract
that Claimant uses in some of its other contracts. It is undisputed that both parties
intended the phrase "arising out of... this contract," to mean “arising out of or relating to
this dispute” [Clarifications p.4 H-1].
3. Considering the situation of the present case, “this dispute” means whether Claimant
may seek damages from Respondent in order to compensate the lost sales of its faux fur
products caused by Respondent’s unfair business practices. So, both parties only
intended to resolve the dispute as to the damage already occurred, i.e. the lost sales of
Claimant’s faux fur products. Therefore, “this dispute” does not include the issues that
15
might occur in the future. The Tribunal only has to deal with the issue “arising out of or
relating to this dispute” according to the arbitration agreement between the parties.
4. In this case, Claimant requests the Tribunal to issue two orders [Problem p.3 ¶5]. First is
permanent injunction so as to prohibiting Respondent from continuing to carry, promote,
and/or sell clothing containing the fur of any endangered species. Second is the penalty
of $500 for each item of clothing containing the fur of an “endangered species,” which
Respondent sells in Singapore. These claims are based on the possibility of Respondent’s
future conducts. However, in the arbitration agreement between the parties, “this dispute”
covers only the issue of damages already caused. Therefore, the issue of ordering both
permanent injunction and penalty exceeds the scope of the arbitration agreement
between the parties.
5. In conclusion, the Tribunal has no authority to award the order out of scope of arbitration
agreement between the parties. Therefore, under these circumstances, Respondent
believes that the Tribunal should consider not the permanent injunction but only the
damages.
2.Respondent is not liable in Negligence and no responsibility to compensate the damage to Claimant.
2.1. The applicable law to the substantive issue should be the law of Singapore.
6. In this case, the law of Singapore should be the law of the substance of the dispute,
according to the conflict of law rules of Malaysia. Also, the tribunal shall refer to the
principle and the cases based on the English common law.
16
2.1.1. The tribunal shall determine the applicable law to the substantive issue
according to the conflict of law rules
7. According to the Fast Track Rules Art.6 (1), the tribunal shall apply the law determined
by the conflict of law rules, in case the parties to the disputes have not designated the
applicable law to the substantive issue. In this dispute, there is no agreement on the
applicable law to the substantive issue. Therefore the tribunal shall apply the conflict of
law rules to determine it.
2.1.2The conflict of law rules of Malaysia leading to application of the law of Singapore
8. The conflict of law rules in Malaysia, which is the law of the seat of the arbitration,
provides that the applicable law to the substantive issue is to be the one with which “has
the closest and most real connection with the transaction.” [Belden Premaraj, p.27]. In
the present issue, the place of business of both parties is Singapore, and the place where
the issue happened is also in Singapore. Therefore, the tribunal should apply the law of
Singapore to the substantive issue.
9. Also, Law of Singapore is very similar to England law; there is “continuous reception of
English common law in practice” [Kevin Y.L.Tan, p.238]. Thus, Tribunal shall refer to
the principles and the cases based on the English Common law.
10. Thus Respondent argues that Respondent is not liable in the Singapore law of tort for
damage suffered by Claimant. Respondent did not intend to injure Claimant by selling real
fur products. The issue is whether Respondent was liable in the tort of Negligence for the
damages suffered by Claimant. If Respondent failed to take the care that a reasonably
prudent person would exercise in like circumstances, Respondent is liable for the damages
to Claimant. It shall be noted that: “acts or omissions which any moral code would
17
censure cannot in a practical world be treated so as to give a right to every person injured
by them to demand relief” [Donoghue v. Stevenson].
2.2 The Respondent did not owe the ‘duty of care’ to the Claimant.
11. The actions based on Negligence have historically to be based on been analyzed in the
four requirements: duty, breach, causation, and damages. Claimant has to prove the
existence of these requirements.
12. The first element is the duty of care. A duty of care may now be imposed if three
requirements are satisfied： foreseeability (2.1.1); proximity (2.1.2); justice and
reasonableness (2.1.3). Tribunal should comply with these requirements [Caparo
Industries pic v. Dickman].
2.2.1. Foreseeability
13. In order to prove the existence of “foreseeability”, it should be required that Respondent
has foreseen that both the claimant as an individual or a member of a class (1) and injury
of the kind that actually occurred (2) [ex. Haley v. London Electricity; Roe v. Minister of
Health].
14. Furthermore, many cases concerning economic loss have been reluctant to give rise to a
duty of care [ex. Spartan Steel v. Martin]. This is because the misfeasor’s burden is too
heavy, if it has to compensate the damages for economic loss. In this case, the damage
suffered by claim was loss of profit which cannot recoverable under Negligence (3).
15. As to (1), the requirement means the duty owed to a person, or category of persons, and
18
not a human beings in general. Damages due to Negligence generally can recoverable
despite no relationship between parties. However, it is likely that economic loss, such as
loss of profit, cannot recoverable. The reason why is it is contract that is the means by
which loss of profit was compensated. In this case, Claimant argues that Claimant can
recover loss of profit from Respondent although there is no contractual relationship
between parties. So, Respondent could not foresee the claimant as people to whom
Respondent owed the duty of care.
16. As to (2), the requirement is satisfied if the duty must also relate to a particular kind of
harm which the defendant could reasonably foresee arising from their actions, rather than
the possibility of causing any kind of harm whatsoever.
17. As mentioned above, the parties had no contractual relationship. Moreover, Claimant is
one of whom in the same line of business. So, it is very difficult for Respondent to foresee
a particular kind of harm which Respondent might cause.
18. As to (3), the damages suffered by Claimant was economic loss by drop in fur products
sales. Thus even if Claimant is foreseeable, Tribunal should not admit that Respondent
owes duty to the Claimant in respect of economic loss.
19. Respondent believes that the damages suffered by Claimant cannot recoverable because
the damages are loss of profit, that is to say pure economic loss. In principle, only three
kinds of harm which can be recoverable under Negligence: injury to person; damage to
property; economic loss. However some of economic loss, such as purely economic loss,
cannot recoverable. This is because that the duty of care to economic loss creates the
danger of too extensive liability. The size of claim and the number of potential plaintiff is
19
unpredictable. If Tribunal have concluded that Respondent is liable for economic loss, this
might create a number of potential plaintiff is unpredictable. Because of the loss of sales,
Claimant might stop trading with client companies such as Respondent.
20. And the case of Spartan Steel v. Martin (1972) illustrates that the distinction between pure
economic loss and other kinds of loss can be a very fine one. In this case, the defendants’
negligence caused all three of the types of loss. However, the defendant was liable to
compensate two sorts of loss but not the third. “The remaining loss was pecuniary loss
unrelated to any physical damage and thus irrecoverable”[Spartan Steel v Martin].
21. The Court of Appeal in England affirmed Spartan Steel in Muirhead v. Industrial Tank
Specialties Ltd.: “The claimant could recover only for the loss of his property. […] Only
that economic loss directly consequent on physical damage could be recovered in tort.
[…]The defendant owed no duty to protect the claimant against financial loss whether that
loss be wasted expenditure or loss of profit”.
22. In this case, Respondent’s negligent act never caused the loss of property. Claimant
suffered from lost sale of its faux fur products. Also, the kind of loss in issue is not
“consequential economic loss,” which arises directly from some physical damage or
injury, but only “pure economic loss”. The loss of property of Claimant was not occurred.
23. Nevertheless, there are an exception to rules concerning pure economic loss. If
Respondent’s negligent statement within “special relationship” causes the pure economic
loss to Claimant, Respondent might be liable for the pure economic loss suffered by
Claimant. If Claimant could reasonably rely on the skill and care of Respondent in making
the statement, that statement is deemed to be “made within a relationship”. This
20
relationship is called “special relationship” [Hedley Byrne & Co Ltd v Heller & Partner
Ltd].
24. However, in this case, the relationship between Claimant and Respondent was completely
different from the above-mentioned “special relationship”. Also, Respondent’s
mislabeling is not a statement. Claimant never depended on the skill and care of the
Respondent.
25. Thus the damages suffered by Claimant cannot recoverable as general rule. Therefore,
Tribunal should hold that Respondent did not owe the responsibility to Claimant in
respect of pure economic loss.
2.2.2. Proximity
26. Respondent owed Claimant a duty of care if there was proximity between both parties.
Proximity is another way of expressing foreseeablity test. Claimant is foreseeable if the
relationship between both parties.
27. Proximity does not mean that the Respondent and Claimant have to know each other, but
Respondent could not reasonably be expected to foresee that his or her actions could cause
damage to Claimant [Muirhead v Industrial Tank Specialities]. In addition, proximity
means “a measure of control over and responsibility for the potentially dangerous
situation” [Sutradhar v. Natural Environment Research Council].
28. In this case, the requirement of foreseeability and proximity were not satisfied. The
reasons are two as follows.
29. Firstly, there are a lot of shops selling fur products in Singapore. Tourism in Singapore is
21
a major industry and about 10 million people visit Singapore every year. There are many
departments and shopping malls in Singapore, such as The Heeren, Aeon Orchard,
Takashimaya S.C, Paragon and ISETAN Scotts on Orchard Road. These departments and
shops sell broad range of clothing regardless of the season for the people living in
Singapore and the tourists form various countries. Not only summer wear but also winter
clothing such as sweaters or leather jackets are sold in various shops. It is thought that
there are a lot of shops selling fur products in Singapore. In such situation, Respondent’s
mislabeling only has very weak impact on the sales of each shop selling fur products.
Therefore, the Tribunal should conclude that the relationship closeness or directness
between Respondent’s act and the loss to Claimant is insufficiently proximate.
30. Secondly, it is difficult to foresee that Respondent won the customers to Claimant because
many consumers intervene between both parties. The loss to Claimant was occurred only
if the consumers, who were going to buy fur products from Claimant, not from other
shops, changed their minds. As mentioned in the first reason above, there are many shops
selling fur products and many consumers intervene between both parties. It was not sure
from which shop consumers intend to buy fur products. Therefore Respondent could not
foresee that the very customers of Claimant might change because of mislabeling and
bought the fur products from Respondent. Considering such intervention of consumers,
the closeness or directness between Respondent’s act and the loss to Claimant is
insufficiently proximate for justifying the existence of the duty of care between them.
31. Therefore, the relationship between Claimant and Respondent was insufficiently
proximate for a duty of care to be imposed on Respondent and the Tribunal should
conclude that the requirements of foreseeability and proximity are not satisfied.
22
2.2.3 Justice and reasonableness
32. If cases meet the requirements of foreseeability and proximity, justice and reasonableness
is considered. In this case, the requirements of foreseeability and proximity are not
satisfied. Thus Tribunal need not consider this requirement.
2.3. Respondent did not breaches the duty of care owed to Claimant
33. The second element required to prove negligence is that a duty of care has been breached.
However, as mentioned above, Respondent did not owe the duty of care to Claimant.
Therefore, the second element is not satisfied.
2.4. Respondent did not cause damages suffered by Claimant.
34. The third element is the existence of causation and remoteness. Tribunal should determine
whether Respondent’s conduct did in fact cause the damages to Claimant (1.3.1), whether
the act of third parties breaks the chain of causation (1.3.2), and whether the defendant
ought to be held responsible for the full extent of the claimant’s damages (1.3.3).
2.4.1 Respondent’s conduct did not in fact cause Claimant’s damage.
35. The basic test for establishing causation is the ‘But-For Test’. Tribunal will hold the
defendant liable only if the accident would not have occurred but for the defendant’s
negligence [Wright v. Lodge].
36. In this case, as mentioned before, there are a lot of competitive shops selling fur products
and the demand for fur goods market is not constant. Many other shops might deprive
customers of Claimant or the demand for market might fall because of decrease of tourists.
Tribunal should consider the possibility that the loss would have occurred but for the
23
negligent act.
2.4.2. The act of customers breaks the chain of causation.
37. The act of consumer breaks the chain of causation even though Tribunal admit that
Respondent’s conduct did in fact cause the loss to Claimant. In this case, Respondent’s
Negligence did not result in the harm to Claimant immediately. The combination of
Respondent’s negligent act with subsequent act by many customers causes that loss of
Claimant. If the damage requires the combination of the defendant’s negligent act with a
subsequent act by a third party, the act of third party may break the chain of causation and
Respondent’s negligence may not be responsible in law for the damage occurred.
38. What is called a novus actus interventions is a new intervening act sufficient to relieve the
defendant liability. The act of third party which is not foreseeable and not likely
constitutes a novus actus interventions and may break the chain of causation. “the
tortfeasor was only liable for that damages which a reasonable man in the position of
tortfeasor would have foreseen if he had thought about it, which, in turn, was only damage
resulting from behavior which, viewed objectively, was likely to occur” [Lamb v Camden
London borough council ]. The continuity of liability is not imposed merely because the
original negligence makes damage by the third party foreseeable, but where the
defendant’s negligence makes it very likely that the third party will cause damage to the
claimant.
39. In this case, there are many other shops selling fur products and mislabeling have largely
equal impact on the all shops selling fur products. In such condition, the combination of
Respondent’s negligent act with subsequent act by many customers causes that loss of
24
Claimant. It is not sure that mislabeling makes customer stop buying the fur products from
Claimant. Furthermore, Respondent’s mislabeling does not make it very likely that
customer will cause damage to the claimant. Tribunal should conclude that the acts of
customers break the chain of causation.
2.4.3. The Respondent’s negligent conduct is too remote from the damage to Claimant.
40. Even if Tribunal concludes that the act of customer does not break the chain of causation,
Respondent is not liable for the loss to Claimant because Respondent’s negligent conduct
is too remote from the damages to Claimant. The requirement is that, in order for the
damages to be recoverable, damages must be of a type which is foreseeable in all the
circumstances. [Overseas Tankship (UK) Ltd. v Morts Dock and Engineering Co Ltd. ]
41. In this case, as mentioned above, a lot of consumers intervene between the Respondent’s
act and the loss to Claimant. Mislabeling might lead customers to buy the fur products
from Respondent. However, it does not means that Respondent deprived the customers of
Claimant by mislabeling, from Claimant. This is because a large number of fur products
are imported to Singapore as a collective center of world trade and there are an
unspecified large number of potential consumers including tourists. So, it is impossible for
Respondent to specify the customers who intend to buy fur products from Claimant.
Therefore, it is difficult for Respondent to foresee the consequence that some customers
purchase the fur products of Respondent instead of Claimant.
42. Furthermore, as mentioned above, the kind of loss to Claimant is “economic loss”. It must
be considered whether Respondent is liable under Negligence for the damages suffered by
25
Claimant. So, Tribunal should determine that the damages cannot be recoverable because
Respondent is not too heavy.
43. Therefore, Tribunal should not conclude that Respondent is responsible for the loss to
Claimant because Respondent did not foresee who would suffer the loss in issue. If the
Tribunal were to conclude that Respondent was liable for the loss to Claimant,
Respondent would be liable for the loss to all shops selling fur products in Singapore. This
conclusion would never be justified. This is too extensive liability.
44. Therefore, Tribunal should conclude that Respondent is not liable in the tort of
Negligence for the damages to Claimant.
3.Permanent injunction and penalty is unnecessary and inappropriate. 3.1Even if the Tribunal decides that the award of permanent injunction with
penalty is within the scope of arbitral agreement between the parties, it is of
no use to settle the dispute between the parties.
45. Respondent believes that neither the award of permanent injunction nor the award of
penalty is necessary to prevent the above mentioned future conducts of Respondent.
46. In the present case, it was clear that Respondent did not know that the products they sold
contained the fur of endangered species. If Respondent had known it, Respondent would
never have offered such products. For, Respondent would have feared the damage to his
own reputation when this fact had disclosed to the public. The adverse impact on
reputation might never be recoverable. So, it is too absurd for Respondent to sell the fur
goods containing the fur of endangered species intentionally. Therefore, it is impossible to
think that Respondent keep on selling the products made from the fur of any endangered
species. That is why the award of permanent injunction is of no use at all.
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3.2The Tribunal should reject the permanent injunction and penalty under the
general principles guiding the order of permanent injunction established in
England Law.
47. In the procedural issues in ¶ 6 of this Memorandum, the law of Singapore is very similar
to English law; there is “continuous reception of English common law in practice” [Kevin
Y.L. Tan, 238]. So, the rules in English law are to be referred as persuasive authority in
this case.
48. English law has established three general principles of permanent injunction [Mohamed
Ramjohn, p.181-182]. Firstly, Defendant’s conduct must be a violation of a legal right
[Day v. Browrigg]. Secondly, an injunction is granted at the court’s discretion based on
equitable and settled legal principles [Hubbard v. Vosper]. Thirdly, the money would not
properly compensate the claimant [Jaggard v. Sawyer]. Each principle was made from
different judicial precedents. When one of these is not applicable, the permanent
injunction should be dismissed.
49. In accordance with the first principle, in the present case, the permanent injunction cannot
be issued in this arbitration because there is no legal right of Claimant to seek for
permanent injunction. In Day v. Brownrigg, which is judged in the Court of Appeal in
England, Plaintiffs’ house has been called “Ashford Lodge” for sixty years. Defendant’s
house had recently altered the name of his house to that of the Plaintiffs' house. And the
house had been called “Ashford Ville” for forty years. Plaintiff alleged that this act of
Defendant had caused them great inconvenience and annoyance, and had materially
diminished the value of their property. Plaintiff claimed an injunction to restrain the
Defendant from continuing to use the name of their house. The court decided that calling
Defendant’s house by the name of Plaintiffs’ house was not a violation of legal right. And
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the application was dismissed. So, this case shows one of the general principles about
permanent injunction: “Claimant must establish a right recognized either at law or in
equity. In other words, defendant’s conduct must be a violation of a ”legal right.”
50. In this case, Claimant requests the Tribunal to award the order prohibiting Respondent
from continuing to carry, promote and/or sell the clothing containing the fur of any
endangered species [Problem p.4 ¶1]. Furthermore, the claim of permanent injunction is
limited in the range of endangered animals. Thus, to claim the permanent injunction,
Claimant seemingly asserts his right based on ESA. However, Singapore established this
act to give effect to CITES. Under the act, only the government may seek to enforce it.
CITES Art.4 of ESA prohibits that any person imports, exports, sells and advertises the
products made of any endangered animals. If some people violate Art.4, they will receive
only administrative punishment, which is “a fine not exceeding $50,000 for each such
scheduled species (but not to exceed in the aggregate $500,000) or to imprisonment for a
term not exceeding 2 years or to both” under Art.4 ESA. However, this act does not
confer private right of action for the violations of this act. So, Private entities cannot claim
their rights based on ESA [Problem p.4 ¶3]. In other words, in this case, Claimant can
request neither permanent injunction nor penalty, though Respondent’s conduct
constitutes the violation of ESA. So, it cannot be said that Respondent’s conduct must be
a violation of a “legal right’. Therefore, Pursuant to the first principle, it is reasonable to
conclude that permanent injunction cannot be approved.
51. Considering the circumstances mentioned above, Tribunal should not award permanent
injunction against Respondent.
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4.Prayer for Relief
For the reasons stated above, Respondent respectfully requests that:
(1)Tribunal should find that Respondent is not liable for Claimant in Torts.
(2)Tribunal should not award the Permanent Injunction and Penalty.