Discussion 1 answer
Discussion Problem 1:
An Australian construction company, A Co, wishes to tender for a major building project in a developing country (D Co) that is run by a military dictatorship favorably disposed towards international business. The tender is organized by the Ministry of Planning. A Co needs to undertake an expensive feasibility study to be in a position to tender. It enters into negotiations with Ministry officials both in Australia and in D Co to gain assistance in conducting the study and includes an ICC arbitration clause in a final letter headed “Conditions of tendering.” A Ministry official agrees orally with these terms and then writes to A Co saying “I confirm commencement of the feasibility study as per our discussions.
A Co hears a rumor that it will lose the tender to a company owned by an ex-general and believes the tender process will not be bona fide. It commences court proceedings to gain a declaration that the tender must be conducted in a fully open and objective manner. The tender is conducted before the matter comes to court. The tender is won by the ex-general’s company. A Co then commences an arbitration seeking damages for breach of tender obligations and misleading conduct, including breach of Australia’s s52 of the Trade Practices Act. It claims punitive damages and damages for lost reputation, interest and costs.
The Ministry responds to the Notice of Arbitration alleging the following:
1. there is no agreement to arbitrate
2. if there was, it was not in writing
3. the wrong Ministry was involved as the Attorney General is the only one who can agree to binding dispute settlement
4. A Co representatives were the ones who misrepresented their company’s ability to do the work
5. the Ministry discussed the feasibility under the mistaken belief that A Co had the requisite expertise
6. A Co repudiated the arbitration agreement by commencing court action
7. there is no entitlement to damages interest
An Australian construction company, A Co, wishes to tender for a major building project in a developing country (D Co) that is run by a military dictatorship favorably disposed towards international business. The tender is organized by the Ministry of Planning. A Co needs to undertake an expensive feasibility study to be in a position to tender. It enters into negotiations with Ministry officials both in Australia and in D Co to gain assistance in conducting the study and includes an ICC arbitration clause in a final letter headed “Conditions of tendering.” A Ministry official agrees orally with these terms and then writes to A Co saying “I confirm commencement of the feasibility study as per our discussions.
A Co hears a rumor that it will lose the tender to a company owned by an ex-general and believes the tender process will not be bona fide. It commences court proceedings to gain a declaration that the tender must be conducted in a fully open and objective manner. The tender is conducted before the matter comes to court. The tender is won by the ex-general’s company. A Co then commences an arbitration seeking damages for breach of tender obligations and misleading conduct, including breach of Australia’s s52 of the Trade Practices Act. It claims punitive damages and damages for lost reputation, interest and costs.
The Ministry responds to the Notice of Arbitration alleging the following:
1. there is no agreement to arbitrate
2. if there was, it was not in writing
3. the wrong Ministry was involved as the Attorney General is the only one who can agree to binding dispute settlement
4. A Co representatives were the ones who misrepresented their company’s ability to do the work
5. the Ministry discussed the feasibility under the mistaken belief that A Co had the requisite expertise
6. A Co repudiated the arbitration agreement by commencing court action
7. there is no entitlement to damages interest