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L-1030-C
KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION
2013
JACK SMALL LTD
CLAIMANT
V.
TON SEN IMPORTS
RESPONDENT
MEMORIAL FOR CLAIMANT
2
TABLE OF CONTENTS
INDEX OF AUTHORITIES ...................................................................................... 6
STATEMENT OF JURISDICTION ........................................................................... 8
QUESTIONS PRESENTED...................................................................................... 9
STATEMENT OF FACTS ....................................................................................... 10
SUMMARY OF PLEADINGS ................................................................................. 11
CLAIMANT’S PLEADINGS .................................................................................. 14
I. THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE. 14
A. CLAIMANT AND RESPONDENT HAVE A VALID AND
ENFORCEABLE ARBITRATION AGREEMENT. ................................... 14
B. THE DISPUTE IS WITHIN THE SCOPE OF KLRCA’S ARBITRATION.
.................................................................................................................. 16
C. THE ARBITRATION IS TO BE CONDUCTED IN ACCORDANCE
WITH THE KLRCA RULES, WHICH INCORPORATE THE
MALAYSIAN ARBITRATION ACT. THE MALAYSIAN ARBITRATION
ACT AFFIRMS THAT THE TRIBUNAL SHOULD “DECIDE IN
ACCORDANCE WITH THE TERMS OF THE AGREEMENT”. ............. 16
D. THE TRIBUNAL IS FREE TO DETERMINE ITS OWN
JURISDICTION BY VIRTUE OF THE DOCTRINE OF KOMPETENZ
-KOMPETENZ BASED ON ARTICLE 16 OF THE UNCITRAL MODEL
LAW. ......................................................................................................... 16
II. THE KLRCA ARBITRATION RULES ARE VALID AND ENFORCEABLE
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IN THIS DISPUTE. .......................................................................................... 17
A. THE PARTIES HAVE EXECUTED THE AGREEMENT TO SETTLE
THE DISPUTES BY ARBITRATION IN ACCORDANCE TO THE KLRCA
RULES OF ARBITRATION. ..................................................................... 17
B. THE KLRCA RULES CAN BE USED TO SETTLE THE DISPUTE.... 17
C. THE KLRCA HAS THE JURISDICTION OF THE DISPUTE AND
ADOPTS THE KLRCA RULES AS THE FUNDAMENTAL RULES. ...... 18
III. SINGAPOREAN LAW SHOULD BE THE PROPER LAW TO APPLY IN
RESOLVING THIS DISPUTE. ........................................................................ 19
A. TWO PARTIES AGREED TO APPLY THE SINGAPOREAN LAW IN
RESOLVING THE DISPUTE. ................................................................... 19
B. THE TRIBUNAL SHOULD UPHOLD THE PARTIES’ CHOICE OF
LAW CLAUSE AS THE KLRCA RULES RECOGNIZES PARTY
AUTONOMY. ........................................................................................... 19
C. THE TRIBUNAL SHOULD RESPECT THE PARTIES’ CHOICE DUE
TO THE PRINCIPLE OF FREEDOM OF CONTRACT. ........................... 20
D. TERRITORIALITY PRINCIPLE AND NATIONALITY PRINCIPLE
REQUIRES TO APPLY SINGAPOREAN LAW. ....................................... 20
E. THE APPLICATION OF SINGAPORE LAW DOES NOT VIOLATE
ANY PUBLIC POLICY. ............................................................................ 20
IV. THE TRIBUNAL HAS THE AUTHORITY TO IMPOSE THE INJUNCTIVE
RELIEF SOUGHT BY CLAIMANT. ............................................................... 21
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A. ARTICLE 26 OF UNCITRAL RULES GIVE THE TRIBUNAL AN
AUTHORITY TO IMPOSE THE INJUNCTIVE RELIEF BY SAYING
“THE ARBITRAL TRIBUNAL MAY, AT THE REQUEST OF A PARTY,
GRANT INTERIM MEASURE: ................................................................ 21
B. SINCE THE TRIBUNAL DOES HAVE THE JURISDICTION OF THE
DISPUTE, THE AWARD OF THE TRIBUNAL IS BINDING AND
ENFORCEABLE. THERE IS NO WAY FOR ANY OTHER COURT TO
DISMISS THE ARBITRATION DECISION. ............................................ 21
V. THE USE OF REAL FUR BREACHES CITES AND ENDANGERED
SPECIES (IMPORT AND EXPORT) ACT. ...................................................... 22
A. THE USE OF REAL FUR BREACHES CITES. ................................... 22
B. IT ALSO BREACHES ARTICLE 4 OF ENDANGERED SPECIES
(IMPORT AND EXPORT) ACT................................................................. 24
VI. Using endangered animal fur disturbs the fur market .................................. 26
VII. The respondent’s use of real fur of endangered animal results in the claimant
suffering a loss in the fur market. ...................................................................... 26
A. The respondent has an intention or knowledge to import. .................... 26
B. The respondent gains unfair advantages from using real fur. ................ 28
C. The act of the respondent results in the claimant suffering a loss in fur
market........................................................................................................ 29
VIII. The conduct of mislabel and misleading advertising by the respondent results
in the claimant suffering a loss in the fur market. ..................................................... 31
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A. Mislabel and misleading advertisement constitute unfair competition .. 31
B. “No knowledge” cannot change the nature of misconducts of unfair
competition. ............................................................................................... 34
C. Misconducts by the respondent result in the claimant suffering a loss in
fur market. ................................................................................................. 35
D. The claimant can sue under private action ........................................... 36
CONCLUSION AND PRAYER OF RELIEF .......................................................... 38
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INDEX OF AUTHORITIES
Statutes, Rules, International Treaties and Covenants
ARBITRATION ACT 2005 (ACT 646)
AUSTRALIAN TRADE PRACTICES ACT
ENDANGERED SPECIES (IMPORT AND EXPORT) ACT
INTERNATIONAL ARBITRATION (AMENDMENT) ACT 2002 (CAP 143A)
KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION FAST TRACK
RULES 2ND EDITION 2012
THE CLAYTON ACT (US)
UN CONVENTION ON INTERNATIONAL TRADE IN ENDANGERED SPECIES
(CITES)
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW
ARBITRATION RULES 2010
Singapore Cases
Findlay v Couldwell and Beywood Motors (1976) 5WWR 340, Mikulus v Milo
European Cars Specialists Ltd (1993) CPR (3d)
Freely Pte Ltd v Ong Kaili and others [2010] 2 SLR 1065; [2010] SGHC 60, at [21]
Freely Pte Ltd v Ong Kaili and others [2010] 2 SLR 1065; [2010] SGHC 60, at [21]
Marcol Manufacturers Ltd v Commerce Commission [1991] 2 NZLR 502
Parkdale v. P.U.X.U. [(1982) 41 ALR 1], Global Sportsman v. Mirror [(1984) 55 ALR
25]
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Public Porsecutor v Kuah Kok Choon, [2000] 3 SLR(R) 752, [2000] SGHC 244
Taco Company of Australia Inc v. Taco Bell Pty Limited [1982] ATPR p 43, 752;
(1982) 42 ALR 177 at p 202
Deere & Co. v. MTD Prods., 860 F. Supp. 113
Australian Cases
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre
Ltd (1978) 140 CLR 216 at 228; 18 ALR 639
The U.S Cases
Associated General Contractors of California, Inc. v. California State Council of
Carpenters et al, 459 U.S. 519
Blue Shield of Virginia v McCready 457 U.S. 465
Brunswick Corp. v Pueblo Bowl-o-Mat, Inc., 429 U.S. 477
Hawaii v. Standard Oil Co., 405 U.S. 251
British Cases
Findlay v. Couldwell [(1976), 69 DLR (3d) 320]
Mikulas v. Milo European Cars Specialists Ltd. [(1993), 52 CPR (3d) 1 at 10, aff’d
(1995), 60 CPR (3d) 457 (BCCA)]
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STATEMENT OF JURISDICTION
Jack Small Ltd (“Claimant”) and Ton Sen Imports (“Respondent”) jointly submit the
present dispute to the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”) in
conformity with the KLRCA arbitration rules. All hearings and other proceedings
should be held in Singapore. In accordance with Article 1(2) of the Kuala Lumpur
Regional Centre for Arbitration Fast Track Rules (“the Rules”), each party shall
accept the award by the Arbitral Tribunal as final and binding and shall execute it in
good faith in its entirety.
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QUESTIONS PRESENTED
I. WHETHER THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT
DISPUTE?
II. WHETHER THE KLRCA ARBITRATION RULES ARE VALID AND
ENFORCEABLE IN THIS DISPUTE?
III. WHAT IS THE GOVERNING LAW TO APPLY IN RESOLVING THE
DISPUTE?
IV. WHETHER THE TRIBUNAL HAS THE AUTHORITY TO IMPOSE THE
FUTURE INJUNCTIVE RELIEF SOUGHT BY CLAIMANT, SPECIFICALLY,
WHETHER ARTICLE 26 OF THE KLRCA RULES PROVIDES THE AUTHORITY
OF AN INJUNCTION?
V. DOSE THE USE OF REAL FUR BREACH CITES AND ENDANGERED
SPECIES (IMPORT AND EXPORT) ACT?
VI. DOSE USING ENDANGERED ANIMAL FUR DISTURB THE FUR
MARKET?
VII. WHETHER THE RESPONDENT’S USE OF REAL FUR OF ENDANGERED
ANIMAL RESULTS IN THE CLAIMANT SUFFERING A LOSS IN THE FUR
MARKET?
VIII. WHETHER THE CONDUCT OF MISLABEL AND MISLEADING
ADVERTISING BY THE RESPONDENT RESULTS IN THE CLAIMANT
SUFFERING A LOSS IN THE FUR MARKET?
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STATEMENT OF FACTS
A. Jack Small (“The claimant”) and Ton Sen (“The Respondent”) are Singapore
stores, which sell both real fur and faux fur clothing. China Fur is the
Respondent’s supplier in China.
B. The Respondent imports and purchases clothing made from fur of the Asian
Golden Cat, which is an endangered animal listed on CITES and by the IUCN as
“Near Threaten.” Furthermore, the Respondent mix these real fur products into
faux fur ones and mislabel them. By using deceptive and misleading advertising,
namely that its fur products have “the touch, feel and smell of real
fur,” which, while true, is intentionally misleading as it was intended
to – and clearly conveys – the message that the fur is fake BUT, nevertheless
appears to be real.
C. To resolve the dispute amicably, two parties jointly submit the dispute to KLRCA
while not reaching an agreement on governing law. Based on the economic loss
caused by the Respondent, the Claimant has three requests:
a) gain damages from the Respondent to redress the loss;
b) issue and injunction which prohibit the Respondent from continuing carry, promote
and sell clothing containing the fur of any endangered species on the relevant CITES
protected list;
c) to establish a penalty of $500 (US) for each item of clothing
containing the fur of an “endangered species” it sells.
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SUMMARY OF PLEADINGS
I. THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE.
A. CLAIMANT AND RESPONDENT HAVE A VALID AND ENFORCEABLE
ARBITRATION AGREEMENT.
B. THE DISPUTE IS WITHIN THE SCOPE OF KLRCA’S ARBITRATION.
C THE ARBITRATION IS TO BE CONDUCTED IN ACCORDANCE WITH THE
KLRCA RULES, WHICH INCORPORATE THE MALAYSIAN ARBITRATION
ACT.
D. THE TRIBUNAL IS FREE TO DETERMINE ITS OWN JURISDICTION BY
VIRTUE OF THE DOCTRINE OF KOMPETENZ - KOMPETENZ BASED ON
ARTICLE 16 OF THE UNCITRAL MODEL LAW.
II. THE KLRCA ARBITRATION RULES ARE VALID AND ENFORCEABLE IN
THIS DISPUTE.
A. THE PARTIES HAVE EXECUTED THE AGREEMENT TO SETTLE THE
DISPUTES BY ARBITRATION IN ACCORDANCE TO THE KLRCA RULES OF
ARBITRATION.
B. THE KLRCA RULES CAN BE USED TO SETTLE THE DISPUTE.
C. THE KLRCA HAS THE JURISDICTION OF THE DISPUTE AND ADOPTS
THE KLRCA RULES AS THE FUNDAMENTAL RULES.
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III. SINGAPOREAN LAW SHOULD BE THE PROPER LAW TO APPLY IN
RESOLVING THIS DISPUTE.
A. TWO PARTIES AGREED TO APPLY THE SINGAPOREAN LAW IN
RESOLVING THE DISPUTE.
B. THE TRIBUNAL SHOULD UPHOLD THE PARTIES’ CHOICE OF LAW
CLAUSE AS THE KLRCA RULES RECOGNIZES PARTY AUTONOMY.
C. THE TRIBUNAL SHOULD RESPECT THE PARTIES’ CHOICE DUE TO THE
PRINCIPLE OF FREEDOM OF CONTRACT.
D. TERRITORIALITY PRINCIPLE AND NATIONALITY PRINCIPLE REQUIRES
TO APPLY SINGAPOREAN LAW.
E. THE APPLICATION OF SINGAPORE LAW DOES NOT VIOLATE ANY
PUBLIC POLICY.
IV. THE TRIBUNAL HAS THE AUTHORITY TO IMPOSE THE INJUNCTIVE
RELIEF SOUGHT BY CLAIMANT.
A. ARTICLE 26 OF UNCITRAL RULES GIVE THE TRIBUNAL AN AUTHORITY
TO IMPOSE THE INJUNCTIVE RELIEF BY SAYING “THE ARBITRAL
TRIBUNAL MAY, AT THE REQUEST OF A PARTY, GRANT INTERIM
MEASURE:
B. SINCE THE TRIBUNAL DOES HAVE THE JURISDICTION OF THE DISPUTE,
THE AWARD OF THE TRIBUNAL IS BINDING AND ENFORCEABLE. THERE
IS NO WAY FOR ANY OTHER COURT TO DISMISS THE ARBITRATION
DECISION.
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V. THE USE OF REAL FUR BREACHES CITES AND ENDANGERED SPECIES
(IMPORT AND EXPORT) ACT.
A. THE USE OF REAL FUR BREACHES CITES.
B. IT ALSO BREACHES ARTICLE 4 OF ESA.
VI. USING ENDANGERED ANIMAL FUR DISTURBS THE FUR MARKET.
VII. THE RESPONDENT’S USE OF REAL FUR OF ENDANGERED ANIMAL
RESULTS IN THE CLAIMANT SUFFERING A LOSS IN THE FUR MARKET.
A. THE RESPONDENT HAS AN INTENTION OR KNOWLEDGE TO IMPORT.
B. THE RESPONDENT GAINS UNFAIR ADVANTAGES FROM USING REAL
FUR.
C. THE ACT OF THE RESPONDENT RESULTS IN THE CLAIMANT
SUFFERING A LOSS IN FUR MARKET
VIII. THE CONDUCT OF MISLABEL AND MISLEADING ADVERTISING BY
THE RESPONDENT RESULTS IN THE CLAIMANT SUFFERING A LOSS IN
THE FUR MARKET.
A. MISLABEL AND MISLEADING ADVERTISEMENT CONSTITUTE UNFAIR
COMPETITION.
B. “NO KNOWLEDGE” CANNOT CHANGE THE NATURE OF
MISCONDUCTS OF UNFAIR COMPETITION.
C. MISCONDUCTS BY THE RESPONDENT RESULT IN THE CLAIMANT
SUFFERING A LOSS IN FUR MARKET.
D. THE CLAIMANT CAN SUE UNDER PRIVATE ACTION.
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CLAIMANT’S PLEADINGS
I. THE TRIBUNAL HAS JURISDICTION OVER THE PRESENT DISPUTE.
A. CLAIMANT and RESPONDENT have a valid and enforceable arbitration
agreement.
a) The Parties had an arbitration agreement:
In the given case, the 6th footnote states that the two parties jointly executed the
following agreement:
Any dispute, controversy or claim arising out of or relating to this contract, or the
breach or termination or invalidity thereof shall be settled by arbitration in accordance
to the rules for arbitration of the Kuala Lumpur Regional Centre for Arbitration.
Besides, the 3rd paragraph on page 4 also shows the parties have agreed to submit the
dispute to arbitration in order to save money and to avoid potentially harmful
publicity.
Thus, from the case we can know the two parties do have an arbitration agreement.
b) The arbitration agreement is valid and enforceable as it meets all requirements of
the International Arbitration Act (Amendment) 2012 of Singapore (“IAA”).
According to the IAA, an arbitration agreement is valid when:
(1) The parties validly agreed on arbitration;
By signing an arbitration agreement to settle the dispute, which has already been
proved above, the parties are considered to agree on arbitration and are precluded
from submitting their disputes to any court.
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(2) It is in writing;
It is reasonable to believe the arbitration agreement is in writing.
(3) The dispute between the parties is in respect of a defined legal relationship;
As is shown, the dispute is between the owners & operators of two Singapore
department stores. The two stores are in a relationship of competitors in a same
society and share the same market. In this case, the CLAIMANT is suiting for unfair
business practices, which is based on the competition relationship.
(4) The subject matter is capable of being settled by arbitration;
Most disputes today are considered arbitral, except for those that fall within defined
areas such as criminal law, family law, and patent law. Particularly, IAA provides that
any dispute(s) the parties have agreed to submit to the arbitration under arbitration
agreement is arbitral, unless it is contrary to the public policy to do so. And the
CLAIMANT is requesting for unfair business practice for personal profit. So this
matter is capable of being settled by arbitration.
(5) The agreement is not null and void, inoperable nor incapable of being performed.
The agreement is made to settle the dispute, which is valid and enforceable. In
addition, it is capable to be performed as it meets all the elements need for an
arbitration agreement.
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B. The dispute is within the scope of KLRCA’s arbitration.
Guide to KLRCA arbitration shows “The majority of disputes arise out of
construction, commodities, insurance, energy or any other kind of commercial dispute
can be resolved by arbitration under the KLRCA Arbitration Rules.”
This case is totally a commercial dispute which is requesting for unfair business
practices, so it is just within the scope of the arbitration. Though the parties are unable
to resolve this dispute amicably, this dispute can be settled by binding arbitration.
C. The arbitration is to be conducted in accordance with the KLRCA Rules, which
incorporate the Malaysian Arbitration Act. The Malaysian Arbitration Act affirms that
the tribunal should “decide in accordance with the terms of the agreement”.
According to the agreement, the CLAIMANT and RESPONDENT have agreed to
settle the dispute by submitting the case to KLRCA arbitration. So the tribunal should
respect the principals’ decision to have the jurisdiction.
D. The tribunal is free to determine its own jurisdiction by virtue of the doctrine of
Kompetenz -Kompetenz based on Article 16 of the UNCITRAL Model Law.
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II. THE KLRCA ARBITRATION RULES ARE VALID AND ENFORCEABLE IN
THIS DISPUTE.
A. The parties have executed the agreement to settle the disputes by arbitration in
accordance to the KLRCA rules of arbitration.
In the given case, the 6th footnote states that the two parties jointly executed the
following agreement:
Any dispute, controversy or claim arising out of or relating to this contract, or the
breach or termination or invalidity thereof shall be settled by arbitration in accordance
to the rules for arbitration of the Kuala Lumpur Regional Centre for Arbitration.
So we can see the two parties have reached an agreement to settle the disputes by
arbitration in accordance to the KLRCA rules of arbitration.
B. The KLRCA rules can be used to settle the dispute.
Guide to KLRCA arbitration shows “The majority of disputes arise out of
construction, commodities, insurance, energy or any other kind of commercial dispute
can be resolved by arbitration under the KLRCA Arbitration Rules.”
This case is totally a commercial dispute which is requesting for unfair business
practices, so it is within the scope of the usage of arbitration rules. Thus the dispute
can be resolved by arbitration under the KLRCA Arbitration Rules.
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C. The KLRCA has the jurisdiction of the dispute and adopts the KLRCA rules as the
fundamental rules.
As is shown in pleading I, the KLRCA has the jurisdiction of the dispute. It is
reasonable to use its fundamental rules to be the governing rules under its jurisdiction.
An appropriate rule is quite crucial in arbitration, for the rules are leading it more
effective as well as fair. KLRCA rules are the rules regularly used in KLRCA, so the
arbitrators are more accustomed to using the rule and coming to a binding decision.
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III. SINGAPOREAN LAW SHOULD BE THE PROPER LAW TO APPLY IN
RESOLVING THIS DISPUTE.
A. Two parties agreed to apply the Singaporean Law in resolving the dispute.
Though the Clarification E shows the parties have not come to an agreement to the
applicable law, it is just true in form to say so. The claimant’s requests and the
respondent’s contentions are both using Singaporean law to argue for their own
benefits, showing that in fact the parties have agreed to choose Singaporean law
applicable and binding.
B. The Tribunal should uphold the parties’ choice of law clause as the KLRCA Rules
recognizes party autonomy.
According to Article 35 of UNCITRAL rules,” The arbitral tribunal shall apply the
rules of law designated by the parties as applicable to the substance of the dispute.”
The article embodies the principle of “party autonomy”, giving the parties the
freedom to select the applicable law in the contract, for which most arbitral tribunals
display considerable respect. No law in this article is strictly forbidden used in
KLRCA arbitration tribunal, so as long as two parties choose Singaporean law as the
applicable law, the tribunal has no reason to reject.
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C. The tribunal should respect the parties’ choice due to the principle of freedom of
contract.
Existing law system and international principles stress on the principle of freedom of
contract. One thing of this principle is that the principals have their own right to
decide the content of contract, unless the content is contrary to mandatory law. There
is no compulsory law to say that Singaporean law cannot be used in this case, so it is
completely legal to have this agreement and it should be respected.
D. Territoriality principle and nationality principle requires to apply Singaporean law.
Both the CLAIMANT and RESPONDENT registered in Singapore and the trading
dispute occurs in Singapore. So based on the principles, it is reasonable to use
Singaporean law as binding because the two parties are more used to Singaporean law
and are usually regulated by it.
E. The application of Singapore law does not violate any public policy.
There is no universal definition and application of public policy. It can be understood
as fundamental principles of law that restricts agreement, which has the tendency to
be injurious against the public. The public policy of the forum state must also be
substantially violated by the contract in order to deny its application. As a general
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yardstick, when the choice of law purposefully evades the application of laws of the
forum or related countries, it constitutes a violation against public policy.
IV. THE TRIBUNAL HAS THE AUTHORITY TO IMPOSE THE INJUNCTIVE
RELIEF SOUGHT BY CLAIMANT.
A. Article 26 of UNCITRAL rules give the tribunal an authority to impose the
injunctive relief by saying “The arbitral tribunal may, at the request of a party, grant
interim measure:
a) Harm not adequately reparable by an award of damages is likely to result if the
measure is not ordered, and such harm substantially outweighs the harm that is likely
to result to the party against whom the measure is directed if the measure is granted;
and
b) There is a reasonable possibility that the requesting party will succeed on the merits
of the claim. The determination on this possibility shall not affect the discretion of the
arbitral tribunal in making any subsequent determination.
B. Since the tribunal does have the jurisdiction of the dispute, the award of the
tribunal is binding and enforceable. There is no way for any other court to dismiss the
arbitration decision.
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V. THE USE OF REAL FUR BREACHES CITES AND ENDANGERED SPECIES
(IMPORT AND EXPORT) ACT.
A. The use of real fur breaches CITES.
In the investigation conducted by the Enforcement Support Office of the CITES
Secretariat, fur of Asian Golden Cat was found in use in the respondent’s “faux” fur
products.
It is labeled as “catopuma temminckii” in the Appendix I of CITES. Thus it is an
endangered animal. Article II of CITES provides, “Appendix I shall include all
species threatened with extinction which are or may be affected by trade. Trade in
specimens of these species must be subject to particularly strict regulation in order not
to endanger further their survival and must only be authorized in exceptional
circumstances.” In Article III, it provides, “The import of any specimen of a species
included in Appendix I shall require the prior grant and presentation of an import
permit and either an export permit or a re-export certificate. An import permit shall
only be granted when the following conditions have been met:
(a) a Scientific Authority of the State of import has advised that the import will be for
purposes which are not detrimental to the survival of the species involved;
(b) a Scientific Authority of the State of import is satisfied that the proposed recipient
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of a living specimen is suitably equipped to house and care for it; and
(c) a Management Authority of the State of import is satisfied that the specimen is not
to be used for primarily commercial purposes.”
This identifies requirements where Asian Golden Cats can be imported to Singapore
as a signatory country. The first one is maintaining survival of specific species. The
second is to hold a permit. In the case, the respondent does not import Asian Golden
Cats in a way to maintain its survival. Instead, the using of real fur implies that the
cats were dead before their fur was taken. Its sales of fur products encourage the
killing of Asian Golden Cats. Thus the first requirement cannot be reached. Where the
second requirement is concerned, the case clearly states that the respondent does not
hold a permit. Furthermore, the act and purpose of the respondent does not meet the
three conditions presented above. Namely, it does not satisfy the conditions to hold a
permit because it is for primarily commercial purposes instead of keeping the species
alive.
The respondent asserts that China Fur assured that the fur in question was acquired
from animals that were raised domestically instead hunted in the wild. This cannot
satisfy exemption presented in Article VII of the Convention. This is because, first, it
may be deemed as specimen in Appendix II (Article IV). However, these species are
subject to strict regulation in order to avoid utilization incompatible with their
survival (Article II) and it requires the prior presentation of either an export permit or
a re-export certificate (Article IV); Second, if there is no permits and certificates, a
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certificate by that Management Authority shall be accepted in lieu of any of the
permits or certificates required (Article VII); third, there is no evidence that any such
representations were made by China Fur.
B. It also breaches Article 4 of Endangered Species (Import and Export) Act.
First of all, Asian Golden Cat is in the Kingdom of Animalia, Phylum of Chordata,
Class of Mammalia, Order of Carnivora, Family of Felidae, Genus of Pardofelis. It
falls within First Schedule as a scheduled animal of this Act (Section 2). The fur of
Asian Golden Cats is identified as scheduled animal part (Section 2) because it also
satisfies Second Schedule of this act. In S 4(1), it says “no person shall import, export,
re-export or introduce from the sea any scheduled species without a permit.” In S 4(2),
it says “no person shall have in his possession, under his control, sell, offer or expose
for sale, or display to the public any scheduled species which has been imported or
introduced from the sea in contravention of subsection (1).”
Since the respondent does not possess a permit, the respondent shall be guilty of
offence and shall be liable on conviction to a fine or to imprisonment under S 4(3) by
contravening SS 4(1) and 4(2). The act authorizes a permit exemption in Section 18.
However, there is no indication that the respondent enjoys exemption.
In Singapore, the Act was enacted to give effect to the provisions of the Convention
on International Trade in Endangered Species of Wild Fauna and Flora ("CITES"),
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which Singapore has ratified. The main purpose of CITES is to protect certain species
of wild fauna and flora against over-exploitation through international trade. A
deterrent sentence is ought to be imposed to reflect how seriously Singapore regards
its obligations under CITES (Public Porsecutor v Kuah Kok Choon, [2000] 3 SLR(R)
752, [2000] SGHC 244). The respondent shall be liable for criminal offence (ibid).
The fact that the imported goods are in format of fur instead of real animal makes the
respondent’s act even more serious. There can be deterrent sentence imposed upon
wrongdoer. It “reflects how seriously Singapore regards its obligations under CITES”.
The idea of CITES is to preserve and protect endangered animals. Moving them from
their habitat to a new environment may jeopardize their chance of survival. The transit
only can trigger a deterrent sentence (see Public Prosecutor v Kuah Kok Choon [2000]
SGHC 244). When a wrongdoer kills the endangered animal and uses its fur for
commercial purpose, the act itself is much more serious that deserves at least a
deterrent sentence. The imported animal fur is in format of fur instead of real animal
cannot serve as an excuse of breach of law.
Additionally, the claimant has brought the case to Public Prosecutor.
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VI. USING ENDANGERED ANIMAL FUR DISTURBS THE FUR MARKET
Fair market encourages economic freedom of participants in the relevant market but
the participants are under obligation of following competition law in its jurisdiction.
Using endangered animal is prohibited under Singapore law, the breach is a detriment
to the fair market and freedom of competition.
VII. THE RESPONDENT’S USE OF REAL FUR OF ENDANGERED ANIMAL
RESULTS IN THE CLAIMANT SUFFERING A LOSS IN THE FUR MARKET.
A. The respondent has an intention or knowledge to import.
Firstly, real fur has better quality in terms of touch, smell and feel. Furthermore, it is
easy for a fur importer to tell the difference between faux fur and real fur. The
difference is obvious. If you feel the difference by rolling the hairs between the finger
and thumb, you would feel smooth and soft in real fur and feels coarse in faux fur. If
you blow on the hairs so that they divide and look at the base, the real fur would often
made up of several layers of thin hairs that form a dense under-wool through which
the longer hairs stick out and the hairs remain attached to the leather (skin), while the
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faux fur is simpler in structure, individual hairs are often the same length and are even
in color. If you push a pin through the base where the fur is attached, the leather of
real fur would resists and the pin is hard to push through, while the pin goes easily
through the base of the faux fur. And if you carefully pull a few hairs from the fur and
hold them to a flame, the real fur would singes and smells like human hair while the
faux fur would melt and smell like burnt plastic and forms small plastic balls at the
ends that feel hard between the finger and thumb. An ordinary reasonable fur importer
would reasonably detect that the fur was made out from real fur.
Secondly, if the respondent do not intent to import real fur of endangered animal in a
way to gain unfair advantages in direct compete with the claimant, the respondent has
knowledge in importing real fur. This is because the price of fur imported is lower
than faux fur. A person responsible for entering into a contract with China Fur is ought
to have extensive knowledge of fur clothing. A reasonable fur importer would know
that the fur in question is somehow different to previous importing goods. The
respondent has knowledge of importing real fur.
Thirdly, the respondent claims that China Fur assured that the clothing was made from
the pelts of “Asian Cats”, who is not an endangered species. However, considering the
respondent’s antecedents and experience with fur left no doubt that he was knowingly
in importing real fur. When actual knowledge cannot be established because of words
from China Fur, willful blindness is treated as actual knowledge. And the identity of
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respondent as a fur supplier constitutes evidence, if not of actual knowledge then
certainly of "willful blindness" to the nature of the fur he was bringing into Singapore
(Public Porsecutor v Kuah Kok Choon, [2000] 3 SLR(R) 752, [2000] SGHC 244).
B. The respondent gains unfair advantages from using real fur.
There are two types of fur in the Singapore fur market - faux fur and real fur.
Singapore is a country that animal rights and animal welfare is highly recognized.
Both the claimant and the respondent are fur suppliers. Both of them sell real fur
products and faux fur products as some consumers prefer to protect animal rights.
Faux fur is ethical and cruelty-free. Dividing fur market into two sub-markets is a way
to respect the choice of consumers.
Still, fur suppliers try to make the best quality of faux fur in order to promote sale.
Different technic are used to improve the touch, feel and smell of faux fur in an
attempt to reduce harm to the animals and attracts consumers at the same time.
However, the respondent uses real fur in faux fur products. The respondent gains
unfair advantages by mixing real fur in faux fur products. Firstly, the quality of real
fur is overall better. Real fur feels smooth and soft and it can easily rolls between the
fingers but faux fur feels coarse. Real fur is much stronger than faux fur. Faux furs are
not able to keep snow from melting and re-freezing on the fiber filaments. Second, the
price of real fur of Asian Golden Cat in this case is lower than faux fur. This allowed
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the respondent to charge less for its real fur products which were in direct competition
with Jack Small’s synthetic fur products. Third, the faux fur products that the claimant
sells appear similar to some of the respondent’s real fur products. Under this fact,
consumers would not cast doubt on this real fur products mixing among other faux fur
products.
Using real fur in faux fur products is intended to mislead consumers who buy faux fur
as only choice. When a product’s overall touch, smell and feel is better than another
because advantages from origin instead of technics, this product would be better
choice for consumers.
The respondent gains unfair advantage from using real fur in faux fur products.
C. The act of the respondent results in the claimant suffering a loss in fur market
Singapore is a country of small size with small population. Its population is 74% of
that of Hong Kong and 25% of that of Beijing. Its size is 65% of the size of Hong
Kong and only 4% of the size of Beijing. The size and population determines that fur
market is in a small size and is susceptible to frequent turbulence. The size and
population of the country implies that there ought to be limited number of fur
operators where any act conducted by each one of them may possibly bring
turbulence to this market.
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The claimant has been operated for more than 70 years. Approximately 60% of its
total sales are fur (real and faux) products. These sales typically produce more than
90 % of its profits. The whole company relies largely on profits of fur products. It can
easily be affected by even small turbulence of fur market.
Competition in commercial law shall guarantee the economic freedom of participants
in the relevant market. Unfair competition happens when the gains of some
participants are conditional on the losses of others and the gains are made in ways
which are illegitimate or unjust. Namely, the actions of some competitors actively
harm the position of others with respect to their ability to compete on equal and fair
terms. Often, "equal terms" is defined as an "equal opportunity" or "equal chance" to
compete.
In this case, importing endangered species as material used in commercial selling is
an illegitimate act and using real fur in faux fur products is an unfair conduct which
puts the respondent in a position of having unfair advantages. In a small market like
Singapore, the claimant, whose business relies largely on fur products, would suffer a
loss as the real fur in the respondent’s faux products gains unfair advantages and
attracts more consumers.
In conclusion, importing and selling endangered species breaches both Singapore law
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and CITES. The breach is a detriment to fair market and freedom of competition.
Using real fur in the faux fur market leads to loss of the claimant.
VIII. THE CONDUCT OF MISLABEL AND MISLEADING ADVERTISING BY
THE RESPONDENT RESULTS IN THE CLAIMANT SUFFERING A LOSS IN
THE FUR MARKET.
The misconduct of mislabeling and using false or misleading advertisement is unfair
business practice identified in several jurisdictions. The intention or knowledge is
irrelevant when conducting these two acts. There is causation between misconduct
and the loss that the claimant suffers. Though misconduct is usually governed by
public sector, the claimant enjoys private action in this circumstance.
A. Mislabel and misleading advertisement constitute unfair competition
unfair competition is a term which may be applied generally to all dishonest or
fraudulent rivalry in trade and commerce, but is particularly applied in the courts of
equity (where it may be restrained by injunction) to the practice of endeavoring to
substitute one’s own goods or products in the markets for those of another, having an
established reputation and extensive sale, by means of imitating or counterfeiting the
name, title, size, shape, or distinctive peculiarities of the article, or the shape, color,
label, wrapper, or general appearance of the package, or other such simulations, the
imitation being carried far enough to mislead the general public or deceive an unwary
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purchaser. (BL.LAW DICT (2nd ED))
Consumer Protection (Fair Trading) Act also defines unfair business practice. When
this previous Bill was read a Second time, Mr. Raymond Lim Siang Keat of the
Minister of State for Trade and Industry said: Singapore has advocated the enactment
of a fair trading law. This is because while some particularly offensive practices like
cheating or intimidation are prohibited under our criminal laws, many errant sales
tactics, such as bait advertising, misrepresentation, and hard selling, are not clearly
covered by any of our existing laws (Freely Pte Ltd v Ong Kaili and others [2010] 2
SLR 1065; [2010] SGHC 60, at [21]). So even though the target of the Act was to
protect consumer, the relevant unfair business practices were defined in this Act. In
Art 4(a), it provides that when a supplier do or say anything, or omit to do or say
anything, if as a result a consumer might reasonably be deceived or misled, then it
constitutes unfair practice for a supplier. In Art 4(b), when a supplier makes a false
claim, it constitutes unfair practice for a supplier. Specific Unfair Practices were
provided in Second Schedule of this Act. The second provision reads: Representing
that goods or services are of a particular standard, quality, grade, style, model, origin
or method of manufacture if they are not.
Similar regulation is provided in Australian Trade Practices Act. Section 52 provides
that: ‘A corporation shall not, in trade or commerce, engage in conduct that is
misleading or deceptive or is likely to mislead or deceive’.
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The respondent’s fur products are labeled as “synthetic” where it is not. The real fur
was labeled as faux fur and put on sale among other faux fur products. It is a false
claim made by the supplier and a dishonest or fraudulent misconduct of the
respondent. Mislabeling can directly mislead consumers who want to buy faux fur by
looking at the label. It satisfies definition or description of unfair competition or
unfair business practice.
Along with mislabeling, the respondent promotes these products as the advertisement
goes – “having the touch, feel and smell of real fur”. In deciding whether the
advertisement “having the touch, feel and smell of real fur” is misleading or not, the
test has to be an objective one (Taco Company of Australia Inc v. Taco Bell Pty
Limited [1982] ATPR p 43, 752; (1982) 42 ALR 177 at p 202). These products were
put on faux fur market while it tries to mislead consumers who want to purchase real
fur. The respondent runs a Singapore department store. All the fur products are
presented in a same store while they have both real fur products and faux fur products.
Consumers have to turn the product inside out to find out whether it is real fur or faux
fur. The truth is some of the consumers would never look at the label inside the
product. However an easier and clearer way is to look at the advertisement right away.
“Having the touch, feel and smell of real fur” would lead consumers to think it a real
fur product. First of all, most of the consumers would not read the advertisement as
reading a bible. Most people would skim the advertisement without a second thought.
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All they see is “real fur”. Second, some would think even though the fur was taken
from dead animal, it would regain the natural touch, feel and smell of real fur after
processing by Ton Sen because it is a good fur supplier. So the fur is real in the eyes
of consumers. It is true that the advertisement may be interpreted otherwise. However,
it is misleading to most of consumers and may deceive them to buy. Thus the
advertisement constitutes unfair competition.
B. “No knowledge” cannot change the nature of misconducts of unfair competition.
The respondent claims that it had no knowledge that the fur was genuine and labels it
as “synthetic”. However, neither the nature of mislabeling nor misleading
advertisement can be changed under this assertion. An intention or knowledge to
mislead or deceive is not a necessary ingredient (Freely Pte Ltd v Ong Kaili and
others [2010] 2 SLR 1065; [2010] SGHC 60, at [21], Parkdale v. P.U.X.U. [(1982) 41
ALR 1], Global Sportsman v. Mirror [(1984) 55 ALR 25], Findlay v Couldwell and
Beywood Motors (1976) 5WWR 340, Mikulus v Milo European Cars Specialists Ltd
(1993) CPR (3d) 1, Marcol Manufacturers Ltd v Commerce Commission [1991] 2
NZLR 502). It is the same in other jurisdiction. It is clear that, in British Columbia, a
deceptive act or practice can occur notwithstanding the absence of an intention on the
part of a supplier to deceive or mislead a consumer (Findlay v. Couldwell [(1976), 69
DLR (3d) 320], Mikulas v. Milo European Cars Specialists Ltd. [(1993), 52 CPR (3d)
1 at 10, aff’d (1995), 60 CPR (3d) 457 (BCCA)]). Australia has the same rule
(Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre
35
Ltd (1978) 140 CLR 216 at 228; 18 ALR 639). The respondent’s assertion of “no
knowledge” cannot change the nature of their misconduct of unfair competition.
C. Misconducts by the respondent result in the claimant suffering a loss in fur
market.
Real fur was labeled as “synthetic” and went into direct compete with other faux fur
products. Real fur has natural advantages that high quality faux fur cannot match with.
Therefore, mislabeling can attracts more consumers to buy the faux fur products of
the respondent. In a small fur market like Singapore, the claimant, who relies his
profits on fur products, would suffer a loss because of mislabeling in the faux fur
market.
As said above, the misleading advertisement would lead most of consumers to think
the products as real fur products. An Internet poll posts like “would you wear faux fur
in Singapore” indicates that only 27.45% of the Internet user would say yes while
56.86% of them say no (www.msglitzy.com/2010/01/poll-fur-in-singapore/). This
implies that even though animal welfare is highly recognized in Singapore, there are
more consumers who want to purchase real fur. Among the people who are misled, the
27.45% misled consumers (who want to buy faux fur products) may turn away to
other store while the 56.86% misled consumers (who want to buy real fur products)
would be attracted by the respondent’s advertising. Because there are more people
favoring in real fur products, the seemingly increase in the number of “real fur”
products would attracts more consumers because there are more styles, color and
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design of fur products. Thus in the real fur market, the respondent again gains unfair
advantages by posting misleading advertisement. Because of market size, the claimant
would suffer a loss in the real fur market.
In conclusion, consumers who were not misled or looked at the label would prefer
buying faux products of the respondent because of the natural advantages of real fur.
Consumers who were misled by the misleading advertisement and did not look at the
label would prefer to go the respondent’s department store because there are more
choices for them and the respondent therefore gains more profit. The result is the
claimant’s sales of fur products have dropped 70%.
D. The claimant can sue under private action
Section 4 of the Clayton Act (US) provides: “Any person who shall be injured in his
business or property by reason of anything forbidden in the antitrust laws may sue
therefor in any district court of the United States in the district in which the defendant
resides or is found or has an agent, without respect to the amount in controversy, and
shall recover threefold the damages by him sustained, and the cost of suit, including a
reasonable attorney's fee.”
However, the Congress did not intend the antitrust laws to provide a remedy in
damages for all injuries that might conceivably be traced to an antitrust violation
(Hawaii v. Standard Oil Co., 405 U.S. 251). The Congress intended the Act to be
construed in the light of its common-law background (Associated General Contractors
37
of California, Inc. v. California State Council of Carpenters et al, 459 U.S. 519). In
determining whether the claimant here can bring a private action lies in the common
law and relevant factor such as plaintiff's harm, the alleged wrongdoing by the
defendants, the relationship between them, casual connection, improper motives and
nature of the plaintiff’s alleged injury (Associated General Contractors of California,
Inc. v. California State Council of Carpenters et al, 459 U.S. 519, Blue Shield of
Virginia v McCready 457 U.S. 465, Brunswick Corp. v Pueblo Bowl-o-Mat, Inc., 429
U.S. 477).
In the present case, the claimant and the respondent are competitor in Singapore fur
market who can be affected easily by any misconduct of their counterpart. The
respondent’s act of mislabeling and misleading advertisement is unfair business
practice recognized in Singapore law and law from other jurisdiction. The respondent
has an intention or knowledge to misplace real fur in faux fur in order to gain unfair
advantages. The causation between the act of respondent and the loss of the claimant
is direct and consequential. Therefore, the claimant shall have the right to bring
private action on common law ground.
In conclusion, the claimant is entitled to seek damages from the respondent’s
misconducts.
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CONCLUSION AND PRAYER OF RELIEF
Based on the above submissions, Claimant respectfully requests this Tribunal to
arbitrate and declare as follows on the Questions Presented :
I. The tribunal has jurisdiction over the present dispute.
II. The KLRCA arbitration rules are valid and enforceable in this dispute.
III. Singaporean law should be the proper law to apply in resolving this dispute.
IV. The tribunal has the authority to impose the injunctive relief sought by claimant.
V. The use of real fur breaches CITES and Endangered Species (Import and Export)
Act.
VI. Using endangered animal fur disturbs the fur market.
VII. The respondent’s use of real fur of endangered animal results in the claimant
suffering a loss in the fur market.
A. The respondent has an intention or knowledge to import.
B. The respondent gains unfair advantages from using real fur.
C. The act of the respondent results in the claimant suffering a loss in fur market
VIII. The conduct of mislabel and misleading advertising by the respondent results
in the claimant suffering a loss in the fur market.
A. Mislabel and misleading advertisement constitute unfair competition.