Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas - Law Assignment Help

Assignment Task

STAGE 1
Document No. 1
President of the Western Construction Institute
84 Embassy Drive
FountainhallScotland
15 Mar 2021
Mr B A Lance
12 Bloomsdale Street
London
United Kingdom
Dear Mr B A Lance
Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas
Road and Bridge Construction, Vilnius, Lithuania
I have been approached on 8 Mar 2021 by Maastricht Precast to appoint an arbitrator in their dispute in connection with precast plant. I have been provided with a notice of arbitration from Maastricht Precast Ltd of Antwerp
dated 15 Feb 2021.
The purchase order contains an arbitration clause, and the chamber has
been named as the appointing body.
If you consider you meet the necessary criteria and can confirm you have no
conflict of interest in this matter, I will issue the necessary appointment.
I look forward to hearing from you within the next seven days.
Yours sincerely
Moire McAllister (Ms)
President
Cc:
Maastricht Precast Ltd
Lukas Road and Bridge Construction
Document No. 2
B A Lance, Mech Eng, CE
12 Bloomsdale Street, London, United Kingdom
_____________________________________________________________
22 Mar 2021
President of the Western Construction Institute
84 Embassy Drive
FountainhallScotland
Dear President
Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas Road and Bridge Construction, Vilnius, Lithuania
Thank you for your letter of 15 Mar 2021 inviting me to act as arbitrator in the above matter.
Firstly, I can confirm that I have no conflict of interest of which I am aware with either of these parties.
Second, as a mechanical engineer I fully appreciate manufacturing plant as well as its operation. I have over the years been involved in many arbitrations either as expert or as arbitrator under the UNCITRAL rules and jurisdictions involving the model law. Therefore, I consider I have the appropriate experience required.
I look forward to receiving your appointment, but if you have any other queries please do not hesitate to contact me.
Yours sincerely
Brian Archibold Lance, Mech Eng, CE
Document No. 3
President of the Western Construction Institute
84 Embassy Drive
FountainhallScotland
26 Mar 2021
Mr B A Lance
12 Bloomsdale Street
London
United Kingdom
Dear Mr Lance
Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas Road and Bridge Construction, Vilnius, Lithuania
Thank you for your letter dated 22 Mar 2021 and for confirmation in compliance with the arbitration clause.
Accordingly, I hereby appoint you as arbitrator in the above matter.
I would appreciate confirmation of when the matter has concluded.
Yours sincerely
Moire McAllister (Ms)
President
Document No. 4
B A Lance, Mech Eng, CE
12 Bloomsdale Street, London, United Kingdom
___________________________________________________________
29 Mar 2021
Chief Executive
Maastricht Precast Ltd of Antwerp
853 Van BreestraatAntwerp, Belgium.
And
Managing Director
Lukas Road and Bridge Construction
128 Commercial Street
Vilnius
Lithuania
Dear Sirs
Re: Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas Road and Bridge Construction, Vilnius Lithuania
I have been appointed by the President of the Western Construction Institute on 26 Mar 2021 to act as arbitrator in the above dispute between the parties. I accepted the appointment on the same day.
I can confirm that I am willing to act as I have the experience, qualifications, and availability to act in this matter. Accordingly, I enclose my terms of appointment for the parties’ agreement, signature and returnand advise the parties that my day rate is €1,000/day.
I would appreciate it if the Claimant can provide a copy of the notice of arbitration together with brief summaries of the parties’ respective positions so that I might have a better understanding of the matters in dispute prior to any preliminary meeting.
In order to progress this matter, I hereby direct that a preliminary meeting will be held by Zoom conference call on 12 April 2021 at 10AM. I would appreciate it if the Claimant makes the necessary arrangements.
If this date is inconvenient, please let me know within the next 5 days.
Yours sincerely
B A Lance, Arbitrator
Document No. 5
B A Lance, Mech Eng, CE
12 Bloomsdale Street, London, United Kingdom
_____________________________________________________________
13 Apr 2021
Chief Executive
Maastricht Precast Ltd
853 Van BreestraatAntwerp
Belgium
And
Managing Director
Lukas Road and Bridge Construction
128 Commercial Street
Vilnius
Lithuania
Dear Sirs
Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas Road and Bridge Construction, Vilnius, Lithuania
Order for Directions No 1
By consent, following the Preliminary Meeting on 12 Apr 2021, via Zoom conference call, attended by Mr Andrew Hamilton for the Claimant and Ms Janet Georgiadis for the Respondent I hereby direct that:
1. The parties agreed my appointment and my terms of engagement.
2. The parties shall each pay the deposit of €10,000 on account of my fees by transfer to my bank account within the next 14 days.
3. The law of the contract is to be the law of England and Wales.
4. The Belgium Arbitration Act 2010 applies, but the parties agree that each party may apply the UNCITRAL Model Law as if it were the applicable arbitral law. The arbitration will be conducted under the UNCITRAL rules 2010.
5. The seat of the arbitration shall be Antwerp, Belgium.
Note: Candidates are not expected to know the intricacies of the Belgium Arbitration Law and may apply the UNCITRAL Model Law as if it were the applicable arbitral law.
6. The Claimant shall submit a statement of claim together with all documents relied upon within 21 days of this order.
7. The Respondent shall submit its defence and counterclaim, if any, together with all documents relied upon within 21 days of receipt of the statement of case
8. The Claimant shall submit a reply and defence to counterclaim if any within 14 days of receipt of the defence.
9. The Respondent shall submit a reply to the defence to counterclaim, if any, within 14 days of receipt.
10.Each party shall submit a maximum of two witness statements at the hearing.
11.Neither party has requested leave for expert witnesses.
12.Either party may apply for specific disclosure of documents, including e-data, which they consider are relevant to the issues in dispute within seven days of receipt of a party’s submission.
13.A three-day hearing to be held at my offices on 16 Aug 2021, commencing at 9:30AM. All requisite covid protocols will be observed at that hearing, details of which will be circulated separately.
Signed by B A Lance, Mech Eng, CE
Arbitrator
Document No. 6
In the Matter of an Arbitration
Between
Maastricht Precast Ltd of Antwerp, Belgium
and
Lukas Road and Bridge Construction, Vilnius, Lithuania

Statement of Claim
1. The Claimant is a company registered in Belgium with its operating headquarters in Brussels, and its manufacturing plant being in Antwerp. It specialises in the production of precast concrete structural components which it supplies to its domestic and international markets. By investing
in reliable modern plant, it is able to maintain its cutting-edge technology and market share.
2. The Respondent is a company registered in Lithuania and operates from the city of Vilnius. It specialises in the production of automated controls and concrete casting plants.
3. The Claimant was tendering for some new bridge contracts and associated tunnelling which required large precast beams and shields with minimal tolerances. Due to the production rates required it approached the Respondent to design and construct some new plant that would ensure high output with good standards of quality control over the production of repetitive units. The Respondent confirmed it could both meet the development and delivery times of the new plant as well as provide the Claimant with overall control of quality. The Respondent duly a tender for the works.
4. Based on the information and assurances given by the Respondent, the Claimant tendered for the works for Jingle International (hereafter Jingle) and was successful.
5. The Claimant issued the Respondent a purchase order on 3 February 2020 for the new plant in the sum of €2,000,000 for delivery by 21 April 2020 at the Claimant’s factory in Antwerp with installation due to be completed three weeks later.
6. The order allowed for stage payments of 20%, 60% and 20%. The first payment was after design approval, the second on completion of installation and the last payment falling due after the plant had run for one month at full output. All as set out in the order.
7. At no time did the Respondent advise the Claimant that there were any problems with the manufacture or design of the plant or indeed delivery.
8. The Respondent delivered the plant on 5 May 2020 some two weeks late. This delayed the Claimant’s works and the consequential delivery to Jingle of several major components. However, the Claimant had no choice but to accept delivery.
9. The delay in delivery had a knock-on effect on the installation of the plant and the subsequent production and delivery of the Claimant’s precast units to Jingle, who threatened the Claimant with disruption and delay costs amounting to €500,000. This was even before the Claimant commenced production.
10.Having installed the plant on 16 May 2020, it became obvious that the various sections of the manufacturing plant did not properly align with one another. The Claimant requested that the Respondent remanufacture the connecting conveyor belts and chutes as quickly as possible so the plant could be commissioned. The Respondent visited site and acknowledged the manufacturing discrepancies and supplied alternative versions of these components on 27 May 2020. The delay from the original delivery date of 21 April to that point is a total of 5 weeks 2 days.
11.On 28 May 2020 the Claimant instructed the Respondent to complete the installation of the newly supplied parts and commission the plant as soon as possible. Two days later on 30 May 2020, the Respondent notified the Claimant that their specialist engineer would not be available until 16 June 2020 due to problems with another installation in Estonia.
12.The Claimant, faced with threats of further delay cost from Jingle, decided on 2 June 2020 to use the partially completed installation without authorisation from the Respondent, noting that, ‘we have to mitigate our losses’. Unsurprisingly, the plant manager observed that the output was barely 75% of the design performance required.
13.The Claimant notified the Respondent of the sub-optimal performance of the plant, but the Respondent denied responsibility as the commissioning had been carried out by the Claimant in breach of existing warranties and/or guarantees.
14.The Claimant states that as a result of the Respondent’s failure to manufacture, supply and install the plant as agreed, it has not been able to provide the required precast units to Jingle by the agreed delivery dates. The Claimant state that the Respondent’s failure to perform its obligation under the plant supply contract compelled it to use its old and slower existing plant to manufacture precast units in an attempt to minimise the impact of the delay on production and supply of the components for the Jingle project. Jingle continues to levy delay damages for the slow deliveries.
15.The Claimant states that the Respondent’s failure to deliver the plant as agreed and on time has had a knock-on negative impact on other commitments originally scheduled to be met by the old and slower existing plant. They have incurred additional costs by running 24-hour shifts to mitigate the losses.
16.Accordingly, the Claimant claims the Respondent is liable for the costs comprising of:
16.1. The damages levied by the Claimant’s customer for the initial delay of two weeks at €150,000 per week. That is €300,000.
16.2. The delays caused to the production by the poorly manufactured components of a further two weeks at €150,000 per week for the customer (Jingle) damages and €100,000 per week for the diversion of existing plant to produce the components (precast unit) that is €500,000.
16.3. The additional costs of labour working additional shifts at overtime rates of €5000 per week for the current period of 10 weeks. That is €50,000.
16.4. The additional costs of production due to the new plant failing to meet the production rates, calculated at 25% of the contract value of €2 million, namely €500,000.
16.5. The additional management costs in running the plant for the shift work at €1000 per week for the current period of 10 weeks. That is €10,000
17.The Claimant therefore seeks an award for the costs involved from the Respondent plus interest at 10% on such basis and for such times as the arbitrator considers appropriate.
18.In addition, the Claimant seeks reimbursement of all its costs in the arbitration and asked the arbitrator to find that the Respondent is liable for all such costs plus all the costs of the arbitration.
Maastricht Precast Ltd,
Antwerp
3 May 2021
Document No. 7

Statement of Defence and Counterclaim
1. The Respondent claims that the Claimant has not paid any of the invoices submitted for the plant, save for the first stage payment, and denies that it has not complied with the performance specification. As such it is not liable to the Claimant in any event.
2. It is the Respondent’s case that the Claimant issued very prescriptive requirements for the design and output of the plant and approved all drawings and design criteria before the Respondent commenced manufacture.
3. The Respondent submits that the Claimant is not a naive customer but an acknowledged expert in the field and thus was fully aware of the abilities of the plant.
4. The Respondent admits it did have some manufacturing difficulties and failed to meet the delivery date. This was mainly due to a 10-day strike at the Klaipeda docks, which was totally outside of its control. Respondent submits that it should not be penalised for this period.
5. In respect of the allegations regarding the connecting elements of the plant, the Respondent says that whilst it admits it attended site and remanufactured new components, the main cause was the misalignment of the installation which added a further 7° on the orientation of the components. It says this was due to the inaccuracies in the Claimant’s installation of the supporting steelwork and foundations for the new plant. Accordingly, it considers it should be reimbursed for its site visit, plus the new components which it includes in its counterclaim.

Counterclaim
1. The Respondent repeats its defence herein and claims the costs incurred as a result of the Claimant’s failure to pay; the Claimant’s failure to properly install the plant; cost of replacement parts and the the cost of the Respondents designers and managers in resolving the Claimant’s problems.
1.1. Payment of contract sum of €2 million.
1.2. Additional cost of finance due to non-payment of debt €1.6 million at 10% for 10 weeks up to date of defence and continuing.
1.3. Cost of Respondents visit, including flights, hotels, and overtime €5,000.
1.4. Cost of replacement components €50,000.
1.5. Cost of Respondents designers and managers resolving Claimant issues €10,000.
2. Accordingly, the Respondent claims a total of €2,100,000.
Lukas Road and Bridge Construction
24 May 2021
Document No. 8

Reply to Defence and Defence to Counterclaim
1. The Claimant admits that it only paid the first instalment. This is because the installation has never been completed by the Respondent: it has not finally commissioned the plant and the plant has not yet been able to run at full capacity. As such entitlement to the second and third payments has not been triggered.
2. The Claimant admits that it approved the drawings provided by the Respondent, which also included the steelwork requirements and foundation layouts required. The Claimant submits that it provided the steelwork and the foundation including holding down bolts to the dimensions on the Respondent’s drawings. Therefore, it contends it cannot be liable for any alleged divergences at all.
3. On the allegation that the Claimant is not naïve, the Claimant confirms it is in the top two manufacturers in the world of precast concrete, but denies it is an expert in manufacturing plant as alleged.
4. The Claimant avers that if the Respondent had notified the Claimant of its manufacturing difficulties and subsequent compliance with delivery dates and indeed the alleged strike, it could have notified is customer under the terms of the head contract and possibly obtained relief from
the damages provision. However, the lack of notice precluded the Claimant from this relief as the head contract required such notices as a condition precedent to the relief.
5. Consequently, the Claimant’s submits that the Respondent must, as a matter of law, be liable for all costs incurred due to its lack of performance and/or, in the alternative, lack of notice.
6. In respect of the counterclaim, the Claimant denies that the Respondent is entitled to the remaining 80% of the contract value for the reasons given above.
7. The Claimant submits that the Respondent is not entitled to any financing costs as claimed and, further or in the alternative, this is a special damage which the Respondent failed to notify the Claimant about thus is not recoverable.
8. As to the Respondent’s visits and related costs, liability is denied as the matter was purely down to Respondent as was the replacement components and the designers and management time.

Maastricht Precast Ltd of Antwerp
7 June 2021
Document No. 9
Reply to Defence to Counterclaim
1. The Respondent reiterates its own defence and totally and utterly denies the accusations made by the Claimant in its defence to the counterclaim.
2. In particular, the Respondent says that anybody in business would be aware that financing costs would be incurred as a result of late payment of a debt and that 10% is a recognisable rate for interest on the outstanding amount.
3. The Respondent states it is entitled to interest on all the sums claimed at a rate the arbitrator considers fair and reasonable. Lukas Road and Bridge Construction
14 June 2021
Document No. 10
B A Lance Mech Eng, CE
12 Bloomsdale Street, London, United Kingdom
_____________________________________________________________
24 July 2021
Chief Executive
Maastricht Precast Ltd of Antwerp
853 Van BreestraatAntwerp, Belgium.
And
Managing Director
Lukas Road and Bridge Construction
128 Commercial Street
Vilnius, Lithuania.
Dear sirs
Re: Arbitration between Maastricht Precast Ltd of Antwerp, Belgium and Lukas Road and Bridge Construction, Vilnius, Lithuania
Following email exchanges between the parties regarding the disclosure of the head contract and the claim advanced by Jingle, the Respondent has asked that I issue directions requiring disclosure of these documents.
The Claimant says that to disclose these documents would be a breach of confidentiality as they are extremely commercially sensitive and, in any event, required the consent of its customer, which hitherto it has denied. Therefore, the Claimant is unable to comply with the Respondent’s request and/or any direction that I may be minded to make.
The Respondent stated that unless I make such direction it will make application to the court. In response to this, the Claimant has undertaken to provide a further witness from its customer who should be available for the hearing. The Respondent still requires disclosure.
I direct that the Claimant provides the original copies of the requested information at the time of the hearing, so they may be examined. In addition, the Claimant can adduce a further witness from its customer.
Yours faithfully
B A Lance
Arbitrator
Document No. 11
Salient Conditions of Purchase Order to Lukas Road and Bridge Construction, Vilnius, Lithuania
1. This order is given for the design, manufacture, and installation of a T21 Precast automated concrete delivery system at works in Antwerp.
2. The drawings shall be approved in principle by Maastricht Precast Ltd, but this will not relieve the supplier of any liability or for having installation complete by 12 May 2020.
3. Maastricht Precast Ltd will construct the foundations in accordance with the supplier’s drawings and provide the structural steelwork as detailed thereon.
4. The supplier warrants that the plant will perform to the outputs detailed in the performance specification.
5. The purchaser upon receipt of application from the supplier shall pay 20% of the purchase price upon design completion, 60% on installation and commissioning and 20% after the plant has run for one month at full output.
6. In the event of any controversy, claim or dispute arising under, out of or from this agreement, such matters shall be submitted for a final resolution of an arbitrator to be agreed between the parties, or failing such agreement, either party may within 10 days apply to the President of the Western Construction Institute, Scotland, for the appointment of the arbitrator. The arbitrator shall be experienced in mechanical plant installation and operation, as well as ADR processes.
7. Any changes to buyers’ requirements will be by mutual agreement.

Additional Instruction.
The document provided did not include the evidence provided during hearing which is termed as Stage 2. Please write the award using just the information provided.
As part of the award, I would like to see each party’s contention and what both parties have agreed on.
I would also like to see how each claim and counterclaim is analysed before awarding or rejecting it.
Let’s assume that during the hearing, the Respondent asked the Arbitrator to apply “ex aequo et bono” with regards say Stament of Claim Paragraph 11. Please include this in the Award.

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