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black beauty first contacted phar lap
At that time, the Equatorianian Government imposed restrictions on the transportation of living animals due to severe problems with foot and mouth disease. As a reaction to that and driven by powerful interests in the Equatorianian racehorse breeding industry the ban on artificial insemination for racehorses had been temporarily lifted. Due to the special situation in Equatoriana, Black Beauty was particularly interested whether frozen semen of Nijinsky III was available. -
Phar lap offered 100 doses semen
the semen may not be re-sold to third parties without our express written consent. Furthermore, we would like to be informed about the use of every dose. The basic conditions would be as followed: Price: 99.500 USD per dose; to be picked up at our premises. -
black beauty object to the choice of law and insisted the DDP terms
black beauty want a long-term cooperation.
Price and delivery terms:
because PHAR LAP had greater experience in the shipment including the export-import documentation respondent insist DDP delivery terms. that could be changed for future contracts, in particular, if natural coverage is considered -
C. E 4 Pharlap only willing to accept delivery DDP
krn pake DDP, maka harga increase jd 1000usd per dose dari 900.
tapi CLAIMANT are not willing to take over risk associated, in particular not those associated with changes in costums regulation or import restrictions.
from the past experiences, unforeseeable additional helath and safety req make highly expensive test which made the cost incresed to 40%. hardship clause should be included to the contract. -
C. E 5 Sales agreement
was signed by John Ferguson (Phar lap) and julian krone (black beauty).
parties agreed on hardship and choice of law and arbitration clasue. but the finalization of the agreement took a lonf time as the main negotiators were injured in an accident in Danubia. -
first shipment
claimant sent the first shipent of 25 doeses -
second shipment
25 doses -
C. E 6 mediterraneo 25% tariffs
on november 2017, Ian bouckaert imposed 25% tariffs on argicultural products from equatoriana. he wanted to protect mediterranean agricultural sector, a 25% taiff had neither been part of any strategy papers released earlier by the new president nor of the election. -
C. E 6 Reaction from EQUATORRIANIAN government
equatorianian government is always a supporter of free trade. but its shockeeeeeeng when they imposed 30% tariffs including animal semen. and both parties were astonished to hear that frozen semen was listed. but generally, reacehorse breeding is categorized differently from pigs sheep or cattle. -
C. E 7 claimant insisted negotiations through email sent by julie napravnik
julie unusccessfully tried to call black beauty and left a message on respondent voice mail. claimant put the shipment presently on hold but can still authorize it until 21 january -
C. E 8 witness statement of Julie Napravnik II
-krn agreed on DDP, it had been clear that claimant should not bear all risk. but that DDP was meant to ensure better transportation terms and swifter delivery due to CLAIMANT experience in the shipment. that is also reflected in the contract.
-julie and shoemaker had a call on jan 21. shoemaker certain that a solution would be found through negotiation. shoemaker urged julie authorize the shipment. -
C. E 8 witness statement of Julie Napravnik III
lupa -
C. E 8 witness statement of Julie Napravnik
- art. 1-6 of the contract
- mr antley stated that it should prolly be the task of arbitrators to adapt the contract if the parties couldnt agree
- Julie suggested to clarify that issue and to include hardship clause to avoid any doubts.
- successors didnt include the refrence either in arbitration agreement or hardship clause. -the tariffs destroyed claimant profit margin -last 2 years is difficult for claimant -impossible for claimant to bear all 30%
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letter by langweiler advocate for phar lap allevamento
langweiler submit enclosed notice of arbitration pursuant to art. 4 HKIAC. registration fee has been paid by the CLAIMANT. seat of arbitration in Vindobona, Danubia. provide three arbitrators. pharlapp nominates ms wantha davis as arbitrator -
notice of arbitration (bagian substansi)
- claimant had a profit margin for 5% and now makes a loss of 25% due to the imposed tariffs. claimant affected by the tariffs is due to the changes in delivery terms. the purpose of such changes is to profit from claimant experience in the transportation of frozen semen. -the parties intention is evidenced by the fact that in the change of delivery terms, both parties included an adaptation clause to the contract.
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notice of arbitration (bagian substansi) II
-adaptation clause was supposed cover all risk including additional tariffs. it was not explicitly included when drafting because no one expected such measures.
-even if the arbitral tribunal concluded that it isnt covered by the adaptation clause, the price should be increased under CISG.