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Final Award

LIST OF ABBREVIATIONS AND OF DEFINED TERMS

[Respondent] or Respondent [Respondent]
[Claimant] or Claimant [Claimant]
[Redacted] [Redacted], the Surveyor mutually agreed by the Parties at the loading port
[Redacted] Analysis Report Report issued by [Redacted] on 15 June 2018
[Redacted] [Redacted], the Surveyor mutually agreed by the Parties at the destination port
[Redacted] Inspection Report Report issued by [Redacted] on 12 October 2018
CMC Case Management Conferences conducted as per Article 24 of the ICC Rules
Contract The contract entitled "22% Ni powder Sales Contract" concluded between Claimant and Respondent on 16 May 2018
Court International Court of Arbitration of the International Chamber of Commerce
Drill and Auger Method Sampling performed with a drill and an auger
EPP Expedited Procedure Provisions of the ICC Rules
Final Award This Final Award in ICC Case No. 24437/GR
Final invoice The invoice issued by Claimant on 10 April 2019
ICC International Chamber of Commerce
ICC Rules The Rules of Arbitration of the ICC in force as of 1 March 2017
Parties [Claimant] and [Respondent]
Party [Claimant] or [Respondent]
Product Nickel powder sold by Respondent to Claimant pursuant to the Contract
Provisional Invoice The invoice issued by Respondent on 7 June 2018
Scooping Method Sampling performed with a scoop
Secretariat The Secretariat of the Court
Sole Arbitrator The Sole Arbitrator appointed in this arbitration in accordance with Article 13(3) of the ICC Rules
Surveyor [Redacted] and [Redacted]
USA United States of America
WSMD/A Weighing Sampling Moisture Determination / Assaying

I. THE PARTIES

A. Claimant

1.

Claimant is [Claimant] ("[Claimant]" or "Claimant"), a Delaware limited liability company, having its principal place of business at [Redacted], United States of America ("USA").1

2.

Claimant is represented in this arbitration by:

Ms. [Person 1]
[Redacted]
France
Email: [Redacted]

B. Respondent

3.

Respondent is [Respondent] ("[Respondent]" or "Respondent"), a public limited liability company incorporated under the laws of Switzerland with its registered office at [Redacted], Switzerland.

4.

Respondent is represented in this arbitration by:
Mr. [Person 2]
[Respondent]
Email: [Redacted]

5.

Claimant and Respondent are hereinafter individually referred to as "Party", and collectively referred to as "Parties".

II. THE SOLE ARBITRATOR

6.

On 13 August 2019, the International Court of Arbitration (the "Court") of the International Chamber of Commerce (the "ICC"), appointed Mr. Yann Schneller as Sole Arbitrator (the "Sole Arbitrator") upon the French National Committee’s proposal, in accordance with Article 13(3) of the ICC Rules of Arbitration in force as from 1 March 2017 (the "ICC Rules").

7.

Mr. Yann Schneller’s contact details are as follows:

Yann Schneller
31, avenue Pierre ler de Serbie, Paris, 75782 Cedex 16, France
Email: [Redacted]
Tel.: [Redacted]

III. LEGAL FRAMEWORK OF THE ARBITRATION

A. Arbitration agreement

8.

The arbitration agreement relied upon by the Parties is set out in Article 17 of the 22% Ni powder Sales Contract 2018-07 Nickel [Claimant] dated 5 May 2018 (the "Contract"), which reads as follows:

"17) Arbitration and Applicable Law

The Parties hereby agree to settle all disputes amicably.
If settlement is not reached, the dispute in question shall be submitted to arbitration.
The place of jurisdiction and/or arbitration shall be Paris (France) and the laws of France.
The construction, validity and performance of this contract shall be construed in accordance with the laws of France. The arbitration will be according to the rules and regulations of I.C.C. (International Chamber of commerce) rules and regulations.
The losing Party will pay the arbitration fees.
It is understood that in the event of dispute or arbitration, the English language shall prevail and the award of ICC shall be final and binding on both Parties."

9.
The Parties’ submissions in the arbitration relate to the performance of the Contract. As a result, the dispute is within the scope of the Arbitration Agreement. This is undisputed between the Parties.

B. Seat (place) of arbitration

10.
Article 17 of the Contract provides that "[...] The place of jurisdiction and/or arbitration shall be Paris (France) [...]".
11.

In the course of the proceedings, the Parties reaffirmed that the seat of the arbitration was Paris, France.2 Therefore, the arbitration is seated in Paris, France.

C. Language of arbitration

12.
Article 17 of the Contract provides that "[...] in the event of dispute or arbitration, the English language shall prevail [...]."
13.
During the arbitration, the Parties reaffirmed their agreement to conduct the arbitration in English.3 Therefore, the arbitration was conducted in English.

D. Applicable law

14.
Article 17 of the Contract provides that "[...] The construction, validity and performance of this contract shall be construed in accordance with the laws of France. [...]"
15.

In their written submissions filed in the course of the arbitration, both Parties confirmed that the dispute was governed by French law.4 French law is therefore applicable to the merits of the case.

E. Arbitration rules

16.
Article 17 of the Contract provides that "[...] The arbitration will be according to the rules and regulations of I.C.C. (International Chamber of commerce) rules and regulations. [...]"
17.

Article 6(1) of the ICC Rules provides that "Where the parties have agreed to submit to arbitration under the Rules, they shall be deemed to have submitted ipso facto to the Rules in effect on the date of commencement of the arbitration The arbitration was commenced on 26 April 2019. Therefore, the arbitration is governed by the ICC Rules in force as from 1 March 2017.

18.

Furthermore, and pursuant to Article 30 and Appendix VI of the ICC Rules, the Expedited Procedure Provisions ("EPP") also apply to these proceedings.

IV. PROCEDURAL BACKGROUND

A. Request for Arbitration and Answer to the Request for Arbitration

19.

On 26 April 2019, Claimant filed a Request for Arbitration against Respondent before the Secretariat of the Court (the "Secretariat"). As the Contract relied upon by Claimant did not specify the number of arbitrators, Claimant proposed that the case be decided by a sole arbitrator.

20.
On 30 April 2019, the Secretariat acknowledged receipt of Claimant’s Request for Arbitration. The Secretariat informed Claimant that it would be notified when the payment of the filing fees would be received. The Secretariat also indicated that the case was filed under reference 24437/GR.
21.
On 3 June 2019, the Secretariat notified the Request for Arbitration to Respondent and informed it that the Answer to the Request for Arbitration should be submitted within 30 days from the receipt of such correspondence, unless Respondent applied for an extension of time. The Secretariat also informed Respondent that the EPP may apply and that pursuant to the ICC Rules, it would inform the Parties whether the EPP applied upon receipt of the Answer or upon expiry of the time limit for the Answer. The Secretariat eventually invited Respondent to comment on Claimant’s proposal to have the case decided by a sole arbitrator.
22.
On 28 June 2019, Respondent acknowledged receipt of the Request for Arbitration and requested a 45-day extension to submit its Answer. Respondent also confirmed that Paris, France, was the place of arbitration, that English was the language of the proceedings (but that it could also accept French), and that the dispute would be resolved by one arbitrator. Respondent proposed to appoint Prof. [Person 3] as sole arbitrator.
23.
On 2 July 2019, the Secretariat granted Respondent a preliminary extension until 5 August 2019 to submit its Answer and invited Claimant to comment on Respondent’s request for an additional 15-day extension by 9 July 2019. The Secretariat also indicated that the Arbitration Agreement did not provide for the number of arbitrators, that Respondent agreed with Claimant’s proposal to have one arbitrator and invited Claimant to comment on Respondent’s proposal to nominate Prof. [Person 3] as sole arbitrator by the same date.
24.
On 9 July 2019, Claimant opposed the additional 15-day extension requested by Respondent. Claimant indicated that it welcomed Respondent’s agreement to have one arbitrator but did not agree with Respondent’s proposal to appoint Prof. [Person 3] as sole arbitrator and instead proposed Ms. [Person 4] as sole arbitrator.
25.
On 10 July 2019, the Secretariat confirmed that it granted Respondent until 5 August 2019 to file its Answer and invited Respondent to comment on Claimant’s proposal to nominate Ms. [Person 4] as sole arbitrator by 15 July 2019. The Secretariat also informed the Parties that upon expiry of this deadline, and unless the Parties requested additional time to try to nominate the sole arbitrator jointly, the Court would proceed with the constitution of the arbitral tribunal.
26.
On 13 July 2019, Respondent indicated that it did not agree with Claimant’s proposal to nominate Ms. [Person 4] as sole arbitrator. Respondent also indicated that it wished the sole arbitrator to speak English and French, although it knew that the language of the arbitration was English.
27.
On 15 July 2019, the Secretariat indicated that unless the Parties requested additional time to try to nominate the sole arbitrator by 19 July 2019, it would invite the Court to take the necessary steps to appoint the sole arbitrator.
28.
On 17 July 2019, Claimant requested the Court to take the necessary steps to appoint the sole arbitrator. Claimant also requested the Court to appoint a Paris-based sole arbitrator.
29.

On 5 August 2019, Respondent submitted its Answer to the Secretariat accompanied by Exhibits A-1 to A-9.

B. Appointment of the Sole Arbitrator

30.
On 25 July 2019, the Secretariat informed the Parties that the Court had decided to take the necessary steps to appoint the sole arbitrator.
31.
On 8 August 2019, the Secretariat confirmed that the Court would appoint the sole arbitrator and, as the amount in dispute was still estimated at USD 136,055, confirmed that the EPP applied to the arbitration.
32.

On 13 August 2019, the Secretariat informed the Parties that on the same date, the Court had appointed Mr. Yann Schneller as Sole Arbitrator pursuant to Article 13(3) of the ICC Rules upon the proposal of the French National Committee. The Secretariat also transmitted to the Parties a copy of the statement of acceptance, availability, impartiality, and independence of Mr. Schneller, as well as his Curriculum Vitae. The Secretariat eventually informed the Parties that, as the provisional advance has been paid in full, the file was transmitted to the Sole Arbitrator.

C. Case Management Conference, Procedural Timetable, and rules of procedure

33.

On 14 August 2019, the Sole Arbitrator acknowledged receipt of the case file and proposed three dates (26, 27 and 28 August 2019) for a Case Management Conference ("CMC") to the Parties. The Sole Arbitrator also invited the Parties to try to reach an agreement as to the Procedural Timetable for the arbitration. The Sole Arbitrator finally sent a draft Procedural Order n°1 to the Parties setting out the rules of procedure for the arbitration and invited the Parties to provide their comments on this draft before the CMC.

34.

On the same day, Claimant agreed to hold the CMC by telephone conference and indicated that it would confirm its availability on the suggested dates in due course. Claimant also indicated that it was liaising with Respondent regarding the Procedural Timetable and Procedural Order n°1.

35.
On 16 August 2019, Respondent confirmed that it was in contact with Claimant, and that the Parties would confirm the date and time of the CMC by 19 August 2019.
36.
On 19 August 2019, the Parties confirmed their availability to hold the CMC on 26 August 2019 at 4 pm CET.
37.

On the same day, Claimant informed the Sole Arbitrator that the Parties were in discussions regarding the Procedural Timetable and the Procedural Order n°1 and that they aimed to revert to the Sole Arbitrator regarding the outcome of their discussions by 22 August 2019.

38.
On 20 August 2019, the Sole Arbitrator confirmed that the CMC would be held on 26 August 2019 at 4 pm CET and provided an agenda for the CMC.
39.

On 21 August 2019, the Parties informed the Sole Arbitrator that they agreed on the following Procedural Timetable:

  • Claimant’s Statement of Claim: 27 September 2019;
  • Respondent’s Statement of Defense: 29 October 2019;
  • Claimant’s Reply: 15 November 2019;
  • Respondent’s Rejoinder: 2 December 2019;
  • Potential hearing: week of the 16 December 2019.
40.

Later that day, the Sole Arbitrator acknowledged receipt of the Parties’ emails agreeing on the above Procedural Timetable and asked the Parties whether they would like to amend the Procedural Order n°1 and to provide him with the details of such amendments, if any, by 22 August 2019.

41.

On 22 August 2019, the Parties informed the Sole Arbitrator that they did not have any comments on the draft Procedural Order n°1.

42.
On 26 August 2019, ahead of the CMC, Claimant informed the Sole Arbitrator that the Parties disagreed over the payment of the fees of the jointly appointed surveyor (the "Surveyor"). Claimant indicated that it reserved its rights to claim reimbursement of a portion of the fees it paid to the Surveyor in its upcoming submissions. Additionally, Claimant informed the Sole Arbitrator that it would request interest on the principal sums claimed.
43.
On the same day, ahead of the CMC, the Sole Arbitrator indicated that the points raised by Claimant would be discussed during the CMC.
44.

On 26 August 2019, the Sole Arbitrator and the Parties held a CMC by telephone conference to discuss the organization of the proceedings. During the CMC, the Sole Arbitrator drew the Parties’ attention to the fact that Article 3(2) of appendix VI of the ICC Rules provides that "After the arbitral tribunal has been constituted, no party shall make new claims, unless it has been authorized to do so by the arbitral tribunal, which shall consider the nature of such new claims, the stage of the arbitration, any cost implications and any other relevant circumstances." The Sole Arbitrator accepted that the Parties introduced new claims relating to the Surveyors’ fees and to claim interest on the principal sums claimed given that the proceedings were at an early stage, and that these claims were sufficiently linked to the Parties’ principal claims. The Sole Arbitrator indicated, however, that he would be very reluctant to accept any new claim later in the proceedings.

45.

On the same day, the Sole Arbitrator issued the Procedural Order n°1 and the following Procedural Timetable:

Procedural step Parties/Sole Arbitrator Date
1 Statement of Claim Claimant 27 September 2019
2 Statement of Defense Respondent 29 October 2019
3 Questions to the Parties Sole Arbitrator 1 November 2019
4 CMC to decide on the next steps of the proceedings All 4 November 2019 (at 4 pm Paris Time)
5 Reply and responses of the Sole Arbitrator’s questions (if any) Claimant 15 November 2019
6 Rejoinder and responses to the Sole Arbitrator’s questions (if any) Respondent 2 December 2019
7 Hearing (if any) All 18 December 2019
46.

Pursuant to Article 4(1) of appendix VI of the ICC Rules, the time limit to render the Final Award ("Final Award") is six months from the date of the CMC. The time limit to render the Final Award is therefore 26 February 2019.

D. Statement of Claim, Statement of Defense, and questions of the Sole Arbitrator

47.
On 27 September 2019, Claimant submitted its Statement of Claim, along with the first Witness Statement of Mr. [Person 5] and the Expert Report of Mr. [Person 6].
48.

On 29 September 2019, Claimant submitted 31 factual exhibits (C-1 to 031) and 5 legal exhibits (CL-1 to CL-5).

49.
On 29 October 2019, Respondent submitted its Statement of Defense, along with the first Witness Statement of Mr. [Person 2].
50.

On 30 October 2019, Respondent submitted 33 factual exhibits (A-11 to A-43).

51.

On 1 November 2019, and according to the Procedural Timetable, the Sole Arbitrator sent the following questions to the Parties:

1. LOADING PORT

1.1. Sampling

[Redacted]’s inspection report of 1 June 2018 (A-37) indicates that the moisture content of Lot B was 44.32 %, but it does not indicate when the samples were taken. The [Redacted] letter of 20 June 2019 (C-3) indicates that "The moisture samples taken on 19 May 2018 resulted in a moisture content of 44.32 %". Could the Parties clarify whether the inspection report of 1 June 2018 provides the result of the 19 May 2018 samples assay?
The Claimant indicates that it received one of the 19 May 2018 samples in June 2018, that it sent it to a potential buyer who had it tested by an accredited lab (Mr. [Person 5]’s Witness Statement, § 36). Could the Parties, and particularly the Claimant, clarify the identity of the accredited lab, as it is not mentioned in Exhibit C-22? Has this lab issued an official certificate of analysis? If so, could the Parties, and particularly the Claimant, provide this document?
The Claimant adds that after it received the results from this lab, it sent emails to the Respondent "asking for explanation but received no response and no acknowledgement" (Mr. [Person 5]’s Witness Statement, § 37). Could the Parties, and particularly the Claimant, provide the emails sent to the Respondent?
The Respondent indicates that: "[t]he two previous analyses are documents between our supplier and us and concern pre-trade analyses by us of the batch with our supplier and with [Claimant]." (Mr. [Person 2]’s Witness Statement, §§ 282-283) Could the Parties, and particularly the Respondent, provide the documents mentioned in this quote?
The Respondent indicates that [Redacted]’ inspection report in Mexico was sent to the Claimant (Statement of Defense, §§ 562-563). The email submitted by the Respondent in the arbitration to support this allegation does not contain the attachment to the email (A-38). Could the Parties, and particularly the Respondent, provide this attachment?
1.2. Weighing
[Redacted]’ inspection summary report dated 13 June 2019 (A-19) indicates that the material was weighed on 12 June 2019. It also indicates that the material was packed in 4 containers and that the containers were sealed on the same day. Was the material weighed at the time of its arrival at Altamira on 18 May 2019 or within the next days? If so, could the Parties, and particularly the Respondent, provide the results of such weighing?
The Respondent indicates that the material was delivered by a supplier (Mr. [Person 2]’s Witness Statement, §§ 271-283). Was the weighing of the material specified in the supplier’s delivery documents? Could the Parties, and particularly the Respondent, provide such documents?
1.3. Drying
The Respondent indicates that the material had been dried in the port area by its supplier (Mr. [Person 2]’s Witness Statement, §§ 275-276). Could the Parties, and particularly the Respondent, provide further detail as to how the material was dried? Could the Parties, and particularly the Respondent, provide contemporary evidence of the drying and, more specifically, any exchange of emails with the supplier regarding the drying?
2. DESTINATION PORT
2.1. Weighing
[Redacted]’ inspection report dated 10 October 2018 (C-2) provides four different weights (page 2/5). Could the Parties clarify what these four figures correspond to?
2 October 2018 weighing
The Claimant indicates that the material was weighed on 2 August 2018 (Mr. [Person 5]’s Witness Statement indicates, § 42). Is the result of the 2 August 2018 weighing available? Could the Parties, and particularly the Claimant, provide it?
20 September 2018 weighing
[Redacted]’ inspection report dated 10 October 2018 (C-2, page 5/5) indicates that "[Redacted] was only asked to obtain individual bags weights and not use bill of lading weights on the llth of September." Could the Parties explain why was [Redacted] requested to weight the bags on 11 September 2018?
[Redacted]’ inspection report dated 10 October 2018 (C-2, page 5/5) also indicates that "[Claimant] could only accommodate the weighing of the individual bags on September the 20th 51 days after material arrived in the USA." The Claimant indicates that "[d]ue to the unavailability of [Redacted] personnel to conduct the final weighing of the super sacks at the time, [Redacted] returned to [Claimant]’s premises on 20 September with the necessary equipment to perform the re-weighing." (Mr. [Person 5]’s Witness Statement, § 52) [Redacted] and Mr. [Person 5]’s explanations seem contradictory. Could the Parties, and particularly the Claimant, clarify why the weighing did not occur earlier than 20 September 2018?
Weight discrepancy
[Redacted]’ inspection report dated 10 October 2018 (C-2) provides that the weight of the material at the loading port was 88.804 metric tons and that the weight of the material at the destination port on 20 September 2018 was 86.266 metric tons (C-2 and A-41). Could the Parties, and particularly the Claimant, clarify why the weight of the material at the loading port was 2.538 metric tons heavier than the weight of the material on 20 September 2018?
Material’s weight in the Claimant’s final invoice
The Claimant issued a final invoice on 10 April 2019 (C-26). This invoice mentions that the material’s weight was 88.804 metric tons. Could the Parties, and particularly the Claimant, explain why it mentioned the weight of the material at the loading port rather than the weight of the material on 20 September 2018 in its final invoice?
2.2. Sampling
[Redacted] provided the result of the 2 August 2018 sample assay in the form of a table in a response to a request from the Claimant (C-18). Could the Parties, and particularly the Claimant, clarify whether a certificate of analysis is available for this first assay and provide it?
3. CALCULATION OF THE METAL PRICE DIFFERENCE
The Claimant indicates that the recalculation of the Respondent’s provisional invoice in accordance with the quotation period provided for in the Contract results in a payment due by the Respondent to the Claimant of USD 71,197.85 (Mr. [Person 5]’s Witness Statement, § 63). I understand that the Respondent considers that the same recalculation results in a payment due to the Claimant of USD 32,113.48. Could the Parties explain how they have calculated the metal price difference and why they reach different results?
4. [Redacted] LETTER OF 20 JUNE 2019
Could the Parties provide the enclosures mentioned at the end of the [Redacted] letter of 20 June 2019 (C-3): the "Inspection Summary Report Mexico", the "Analyses Report Mexico", the "Activities Report", the "Certificate of Analyses" and the "Inspection Report"?
Could the Parties, and particularly the Respondent, provide a copy of its request to [Redacted] to which [Redacted] responded in its 20 June 2019 letter?
5. PAYMENTS TO [Redacted]
Could the Parties ask [Redacted] to provide all the invoices it has issued for the services it had rendered at loading and destination ports relating to the performance of the Contract?
Could the Parties also ask [Redacted] to confirm the payments received from the Parties for the services rendered at loading and destination ports relating to the performance of the Contract?

E. 4 November 2019 CMC

52.

On 4 November 2019, the Sole Arbitrator and the Parties held a CMC by telephone conference to decide on the next steps of the proceedings. During this CMC, the Sole Arbitrator and the Parties agreed on the following Revised Procedural Timetable, which was sent by the Sole Arbitrator to the Parties on the same day:

Procedural step Parties/Sole Arbitrator Date
1 Statement of Claim Claimant 27 September 2019
2 Statement of Defense Respondent 29 October 2019
3 Questions to the Parties Sole Arbitrator 1 November 2019
4 CMC to decide on the next steps of the proceedings All 4 November 2019 (at 4 pm Paris Time)
5 Reply and responses to the Sole Arbitrator’s questions Claimant 15 November 2019
6 Rejoinder and responses to the Sole Arbitrator’s questions Respondent 2 December 2019
7 CMC to decide on whether a hearing will take place All 3 December 2019 (at 2 pm Paris Time)
8 Hearing (if any) All 18 December 2019

F. Reply, Rejoinder, and Responses to the Sole Arbitrator’s questions

53.
On 15 November 2019, Claimant submitted its Reply, along with the second Witness Statement of Mr. [Person 5].
54.
On 16 November 2019, Claimant submitted its responses to the Sole Arbitrator’s questions of 1 November 2019.
55.
On 18 November 2019, Claimant submitted Annexes 1 to 6 to its Responses to the Sole Arbitrator’s questions of 1 November 2019.
56.
On the same day, Claimant submitted 34 factual exhibits (C-32 to C-65) and 2 legal exhibits (CL-6 and CL-7).
57.
On 26 November 2019, the Sole Arbitrator noted that, Claimant proposed in its Reply that the Parties should seek further clarifications from [Redacted] regarding the invoices issued by [Redacted] in relation to the performance of the Contract. The Sole Arbitrator invited the Parties to seek further clarifications from [Redacted] and to provide such clarifications by 2 December 2019.
58.
On 27 November 2019, the Sole Arbitrator indicated that he could not hold the 3 December 2019 CMC envisaged in the Revised Procedural Timetable and proposed to correspond with the Parties via email following Respondent’s submission of its Rejoinder to decide whether a hearing would be necessary.
59.
On 2 December 2019, Respondent submitted its Rejoinder, along with the second Witness Statement of Mr. [Person 2] and its answers to the Sole Arbitrator’s questions of 1 November 2019. Respondent indicated that there was an important exhibit, namely its supplier’s invoice that it wished to be used in the proceedings, but that given the confidential nature of some information contained in this invoice, specifically, the price of the material bought from its supplier, it did not want to disclose this document as such and therefore requested directions from the Sole Arbitrator in this regard.
60.
On the same day, Respondent submitted 30 factual exhibits (A-44 to A-68 and A-70 to A-74), which did not include its supplier’s invoice.
61.

On the same day, the Sole Arbitrator indicated that no document will be part of the case file if it has not been properly produced in the arbitration, allowing the other Party to examine its content. The Sole Arbitrator indicated that he understood that Respondent considered that the price of the material mentioned in its supplier’s invoice was confidential. The Sole Arbitrator added that if Respondent considered that such information was confidential and that it was not material to its case, Respondent could simply redact this information from in its supplier’s invoice and submit the redacted invoice in the proceedings along with the other exhibits filed with its Rejoinder.

62.
On 3 December 2019, Respondent filed a redacted version of its supplier’s invoice as exhibit A-69.

G. Comments on the exhibits filed by the Respondent with its Rejoinder and clarifications regarding [Redacted]’ invoices

63.
On 3 December 2019, the Parties requested a short extension of time to obtain further clarifications from [Redacted] regarding the invoices issued by [Redacted] in relation to the performance of the Contract. On the same day, the Sole Arbitrator granted the Parties until 9 December 2019 to provide such clarifications.
64.
On the same day, Claimant indicated that it reserved its rights to respond to the new evidence filed by Respondent with its Rejoinder.
65.

On the same day, Respondent opposed Claimant’s request, explaining that it filed new evidence in accordance with the Procedural Order n°1 and that the Revised Procedural Timetable did not provide for the exchange of further written submissions.

66.
On 4 December 2019, the Sole Arbitrator noted that exhibit A-69 had been transmitted to Claimant and was therefore included in the case file. The Sole Arbitrator indicated that it considered that some of the exhibits submitted by Respondent with its Rejoinder could be of some relevance for the outcome of the case, that the Revised Procedural Timetable provided for a potential hearing and that Claimant may therefore comment on any exhibits filed by Respondent with its Rejoinder during the hearing. He added that in any case, each Party shall have a reasonable opportunity to present its case in the arbitration and to rebut any evidence submitted by the other Party in the course of the proceedings. The Sole Arbitrator proposed the Parties to either confirm the hearing or to replace it with a last round of written submission which would be limited to comment on the exhibits submitted by the Respondent with its Rejoinder, without the possibility to submit any new document. The Sole Arbitrator indicated that given the time constraints of the proceedings, Claimant would have to file such submission by 11 December 2019, and Respondent would have to respond by 18 December 2019. The Sole Arbitrator invited the Parties to comment on these proposals by 5 December 2019 at 6 pm CET.
67.
On the same day, Claimant indicated that it had already made travel arrangements for the hearing but that in order to keep the costs of the arbitration down, it was willing to agree to the exchange of a last round of written submissions. Claimant added, however, that it could not file such submission before 13 December 2019 and suggested that Respondent could file its last submission by 20 December 2019.
68.
On 5 December 2019, Respondent indicated that the filing of a last round of final submissions was more appropriate than a hearing but that the scope of the exhibits to be commented should be defined clearly, that no new document should be allowed, and that the length of the submission shall be limited. On the same day, Respondent agreed on the Sole Arbitrator’s proposal that the last submissions shall be filed on 11 and 18 December 2019, respectively, and stated that it would not be able to work on its last submission after 18 December 2019.
69.
On 5 December 2019, the Sole Arbitrator confirmed that the potential hearing provided for in the Revised Procedural Timetable would not take place and, instead, that each Party would file a last submission. The Sole Arbitrator further noted the Parties’ constraints regarding the filing of their last submissions and, in order to allow the Parties to have enough time to prepare their last submissions, the Sole Arbitrator granted Claimant until 13 December and Respondent until 23 December to file their last submissions. The Sole Arbitrator further indicated that the Parties’ last submissions should be limited to comment on the exhibits filed by Respondent with its Rejoinder (Exhibits A-44 to A-74), that the Parties should not produce any new document with their last submissions, and that each Party’s last submission should not exceed 10 pages.
70.

The Sole Arbitrator subsequently sent the following Revised Procedural Timetable to the Parties:

Procedural step Parties/Sole Arbitrator Date
1 Statement of Claim Claimant 27 September 2019
2 Statement of Defense Respondent 29 October 2019
3 Questions to the Parties Sole Arbitrator 1 November 2019
4 CMC to decide on the next steps of the proceedings All 4 November 2019 (at 4 pm Paris Time)
5 Reply and responses to the Sole Arbitrator’s questions Claimant 15 November 2019
6 Rejoinder and responses to the Sole Arbitrator’s questions Respondent 2 December 2019
7 Claimant’s comments on the exhibits filed by the Respondent with its Rejoinder Claimant 13 December 2019
8 Respondent’s reply to the Claimant’s comments on the exhibits filed by the Respondent with its Rejoinder Respondent 23 December 2019
71.
On 11 December 2019, the Sole Arbitrator requested the Parties to indicate whether they intended to provide further clarifications regarding [Redacted]’ invoices and, if so, to let him know when such clarifications will be provided.
72.
On 12 December 2019, Claimant explained that the Parties have not obtained the necessary clarifications from [Redacted], that it was impossible to determine the existence or value of any outstanding payments due to [Redacted], and that it was impossible to determine with certainty which payments were made by Respondent to [Redacted] and under which invoices. Claimant concluded that the Parties’ claims for the reimbursement of the Surveyors’ fees were not ripe for adjudication and therefore requested that the determination of such claims be postponed. Claimant also requested leave to produce the final version of the Bill of Lading with its last submission to confirm that the place of delivery agreed by the Parties was Maple Heights, Ohio rather than Baltimore.
73.
On the same day, the Sole Arbitrator indicated that the claim regarding the Surveyors’ fees had been introduced by the Parties in the arbitration during the 26 August 2019 CMC, that the time limit for the arbitration was six months and, as a result, that the resolution of this dispute regarding the Surveyors’ fees could not be postponed. The Sole Arbitrator added that the Parties may agree that this claim be excluded from the scope of the arbitration in which case, he will indicate in the holding of the Final Award that this issue has not been resolved in this arbitration in order to allow the Parties to reintroduce the same claim at a later date in other proceedings or, alternatively, that the Parties may disagree to withdraw this claim from the arbitration and, as a result, that he would have to decide the issue. The Sole Arbitrator invited the Parties to liaise and try to agree on whether this claim should be withdrawn or decided in this arbitration, and to inform him of the outcome of their discussion by 16 December 2019.
74.
On 13 December 2019, Respondent indicated that it disapproved Claimant’s request to produce a new document at this stage of the proceedings, that the Bill of Lading had already been filed as Exhibit C-51, that it hoped that its rights to respond would not be affected and that it would comply with the decision of the Sole Arbitrator.
75.
On the same day, the Sole Arbitrator indicated that he understood that although the Respondent disagreed, in principle, with Claimant’s request to produce the final version of the Bill of Lading at this stage of the proceedings, Respondent did not object to the production of this document and that its main concern was to have an opportunity to comment on this document. The Sole Arbitrator therefore authorized Claimant to produce the final version of the Bill of Lading with its last submission which was due on the same day and authorized Respondent to comment on this document with its last submission on 23 December 2019.
76.
On 14 December 2019 at 2:25 am CET, Respondent requested that Claimant’s last submission be declared inadmissible as it was not filed by the deadline set in the Revised Procedural Timetable of 5 December 2019. Respondent’s correspondence forwarded an email sent by Claimant’s counsel of 13 December 2019 at 8:06 pm, which was not received by the Sole Arbitrator, explaining that due to technical reasons, Claimant would file its last submission on the morning of 14 December 2019.
77.
On 14 December 2019 at 6:44 am CET, Claimant submitted its comments on the exhibits filed by the Respondent with its Rejoinder and the final version of the Bill of Lading as exhibit C-66.
78.
On 14 December 2019 at 8:16 am CET, Claimant’s counsel explained why she had not been able to file Claimant’s submission earlier.
79.
On 14 December 2019 at 1:39 pm, Respondent requested to be authorized to file a new exhibit with its last submission to respond to exhibit C-66 filed by Claimant.
80.
On the same day, the Sole Arbitrator noted that Respondent was no longer requesting that Claimant’s last submission be declared inadmissible and that it was now requesting leave to file a new exhibit with its last submission to respond to Exhibit C-66. The Sole Arbitrator invited Respondent to indicate the nature of the document it wished to submit and to explain why it considers that this document was relevant to its case.
81.
On 15 December 2019, Respondent provided clarifications regarding the invoice of [Redacted] ("[Redacted]") and requested (ii) that the invoice of [Redacted] be at its expense, (iii) that the invoice of [Redacted] ("[Redacted]") be at Claimant’s expense, and (iii) that Claimant reimburse the payment of USD 3,600 made by Respondent to [Redacted].
82.
On 16 December 2019, Claimant opposed Respondent’s requests and submitted that considering the payments made by the Parties to [Redacted], Respondent should be ordered to reimburse Claimant the amount of USD 1,099.
83.
On the same day, Respondent indicated that it was in the process of clarifying the invoicing situation with [Redacted] and requested leave to produce confirmation from [Redacted] that it had received all payments due to it.
84.
On the same day, the Sole Arbitrator (i) noted that the Parties had not agreed to withdraw their claims regarding [Redacted]’ invoices from the arbitration and therefore, that he will decide the issue in the Final Award, (ii) invited Claimant to comment on Respondent’s requests to file further clarifications regarding the payment of [Redacted] by 17 December 2019, (iii) invited Respondent to indicate the nature of the document it wished to produce to respond to exhibit C-66 filed by Claimant with its last submission and to explain why it considered that this document was relevant to its case by 17 December 2019.
85.
On 17 December 2019, Respondent indicated that it wished to produce "[Redacted]’s position" to clarify the question of the port of destination.
86.
On the same day, the Sole Arbitrator indicated that it was still unclear to him what document Respondent was requesting to produce. The Sole Arbitrator invited Respondent to explain what evidence it wished to file and why it was relevant to its case by close of business on the same day.
87.
On the same day, Respondent indicated that it requested to produce a letter from the carrier, [Redacted], to clarify the difference between the different versions of the Bill of Lading produced by the Parties in the arbitration.
88.
On the same day, the Sole Arbitrator indicated that the [Redacted] letter seemed relevant to respond to Claimant’s position regarding the destination port and, as a result, that he was therefore inclined to admit it into the record, subject to any compelling objection which Claimant could raise by 18 December 2019.
89.
On the same day, Claimant indicated that it did not oppose Respondent’s request to seek further clarifications from [Redacted] under the conditions that i) it will be in copy of all correspondence between Respondent and [Redacted] and ii) that it will be allowed to comment on any new documents or information from [Redacted].
90.
On 18 December 2019, the Sole Arbitrator noted that (i) Respondent requested to produce the evidence that it had paid the USD 5,769.05 invoice of [Redacted], (ii) that Claimant did not object to the production of such evidence under the conditions mentioned in its email of the same day, (ii) that the Parties already had several months to substantiate their claims regarding the payment of [Redacted]’ invoices, and (iv) that it was not necessary to produce any correspondence with [Redacted] to demonstrate that the USD 5,769.05 invoice of [Redacted] had been paid. The Sole Arbitrator therefore only authorized Respondent to produce direct proof of the payment of the USD 5,769.05 invoice of [Redacted] by no later than 23 December 2019.
91.
On the same day, Claimant indicated that it did not oppose Respondent’s request to produce the [Redacted] letter, subject to the condition that Respondent also filed all correspondence exchanged with [Redacted] in order to obtain the issuance of this letter.
92.
On 19 December 2019, the Sole Arbitrator indicated that the Parties already had ample opportunity to comment on the destination port and that their respective positions in this regard was clear. The Sole Arbitrator also noted that Respondent requested to produce the [Redacted] letter to respond to Claimant’s last submission and to the production of the sea-way bill (Exhibit C-66), and that it was not necessary to produce the entire correspondence between the Respondent and [Redacted] resulting in the [Redacted] letter to assess the probative value of the [Redacted] letter and the merits of the Parties’ positions regarding the destination port. The Sole Arbitrator therefore authorized Respondent to file the [Redacted] letter with its last submission due on 23 December 2019 and further indicated that Respondent shall not produce any other document with this last submission. The Sole Arbitrator also indicated that after receiving Respondent’s last submission, he will reserve the possibility to ask the Parties further questions and invite the Parties to submit their Statements on Costs before closing the proceedings.
93.
On 23 December 2019, Respondent filed its reply to Claimant’s comments on the exhibits filed by the Respondent with its Rejoinder and two exhibits (A-75 and A-76).

H. Statements on Costs

94.
On 22 January 2020, the Parties submitted their Statements on Costs.
95.
On 24 January 2020, the Parties submitted their comments on the other Party’s Statement on Costs.

I. Closing of the proceedings and submission of the draft Final Award

96.

On 26 January 2020, in view of Article 27 of the ICC Rules, the Sole Arbitrator informed the Parties that he expected to submit the draft of the Final Award to the Court for scrutiny by 3 February 2020.

97.

On 31 January 2020, in view of Article 27 of the ICC Rules, the Sole Arbitrator declared the proceedings closed.

V. FACTUAL BACKGROUND

A. The Contract

98.

On 16 May 2018, Claimant (as the buyer) and Respondent (as the seller) entered into a sale and purchase Contract entitled "22% Ni powder" for the sale of nickel powder.5

99.

Article 4 of the Contract provided for the sale of 100 tons (plus or minus 10 %) of nickel powder (the "Product") at the seller’s option. The Contract contained, inter alia, the following provisions:

  • Article 2 provided that the Product had to contain 22% of nickel;
  • Articles 3 and 6 provided that the Product originated from and was to be shipped from the port of Altamira in Mexico;
  • Article 8 contained the specification of the Product;
  • Article 9-C) provided that the transaction was governed by the following incoterm "CIF Baltimore USA as incoterms ICC 2017";
  • Article 12-A) provided the inspection procedure to establish the Weighing Sampling Moisture Determination / Assaying ("WSMD/A") report at the loading port. The Product had to be sampled at the seller’s warehouse by the Surveyor mutually agreed by the Parties. The Surveyor had to weight the shipment, make the sampling during Product loading, determine the moisture of the Product and seal the containers with the Surveyor’s company seals. The WSMD/A had to be carried out in accordance with the LME rules and standard international practices. Article 12-A) provided additional steps and measures to be taken by the Surveyor to sample the Product at the loading port.
  • Article 13-A) provided that the seller had to issue a provisional invoice based on the WSMD/A report at the loading port and that the buyer had to pay 90% of the seller’s provisional invoice;
  • Article 12-B) provided the inspection procedure to establish the WSMD/A report at the destination port. The buyer had to communicate a copy of Annex 1 to the Surveyor. Immediately after breaking the seals of the container, the Surveyor had to carry out the WSMD/A in accordance with LME rules and standard international practices. Article 12-B) provided additional steps and measures to be taken by the Surveyor to sample the Product at the destination port.
  • Article 13-B) provided that the final invoice had to be based on the WSMD/A report at the destination port, and that the final payment had to be based on the final invoice. Article 13-B) further provided that if the seller did not receive the sample and/or the WSMD/A report at the destination port within thirty days from the official shipment date, the WSMD/A at the loading port would be binding upon the Parties and used for the final invoice.
  • Article 19 provided that "Changes to the terms and conditions of this contract must be in writing and agreed to in writing by all parties involved."6
100.
The Contract also contained in Article 17, the Arbitration Agreement on which this arbitration is based.7

B. Summary of the relevant facts at the loading port

101.

On 16 May 2018, the Parties agreed that [Redacted]8 would act as the mutually agreed Surveyor at the loading port.9

102.

On 18 May 2018, the Product arrived in the port of Altamira in Mexico in 90 big bags and was stored in 4 containers.10

103.

On 19 May 2018, a first series of samples of the Product were taken and assayed by [Redacted], resulting in a measured moisture content of 44,32%.11 In its Statement of Defense, Respondent indicates that the moisture content of the Product was too high and therefore, that it refused to buy it.12 One set of the 19 May 2018 samples was sent by [Redacted] to Claimant which had it analyzed by [Redacted] and resulted in a moisture content of 46,2%.13

104.

On 29 May 2018, according to Respondent, a second series of samples of the Product were taken and assayed by [Redacted], resulting in a moisture content of 32,18%.14 Respondent refused to take delivery of the Product as it considered that the moisture content was still too high.15

105.

On 12 June 2018, according to Respondent, a third series of samples of the Product were taken and assayed by [Redacted], resulting in a moisture content of 33,657 %.16 The sampling was performed by using a scoop to dig down approximately 20 inches below the top of the material in each big bag (the "Scooping Method").17 This time, Respondent accepted to purchase the Product.18 On the same day, the Product was weighed at 88,804 kilograms, packed in 4 containers and the containers were sealed.19

106.

On 15 June 2018, [Redacted] issued its analysis report of the 12 June 2018 samples showing a moisture content of 33,657 % ("[Redacted] Analysis Report").20 On the same day, Mr. [Person 7] (acting for Respondent) sent [Redacted] Analysis Report to Claimant.21

107.

Respondent subsequently sent the provisional invoice to Claimant indicating a moisture content of 33,657 % (the "Provisional Invoice").22 Although the Provisional Invoice is dated 7 June 2018 and the Parties have not provided the exact date at which it was sent by Respondent to Claimant, the Provisional Invoice was most likely issued and sent to Claimant between 15 and 18 June 2018.23

108.

On 18 June 2018, Respondent requested the payment of the Provisional Invoice.24

109.

In its written submissions, Claimant indicated that it paid Respondent’s Provisional Invoice by bank transfer on 19 June 2019.25 Although the date of the bank transfer was only mentioned in Mr. [Person 5]’s Witness Statement and no contemporary evidence of the bank transfer was provided, the existence, the amount and the date of the payment have not been disputed by Respondent in the arbitration.26

110.

On 19 June 2018, Respondent’s supplier issued an invoice for the payment of the Product by Respondent.27

111.

On 20 June 2018, the customs formalities regarding the Product were cleared.28

112.

On 24 June 2018, the containers containing the Product were loaded into the vessel which sailed to Cartagena, Colombia.29

113.

On 6 July 2018, the Product was transshipped and sailed to Baltimore, USA.30

C. Summary of the relevant facts at the destination port

114.

Between 29 June 2018 and 5 July 2018, Claimant corresponded with the carrier ([Redacted]) to organize the delivery of the Product from Baltimore to Claimant’s premises in [Redacted].31

115.

On 6 July 2018, Mr. [Person 5] (Claimant’s [legal representative]) informed Mr. [Person 7] that the containers should arrive at its facility on 17 July 2018, and that Claimant would notify [Person 8] to be present to sample and analyze the Product.32

116.

On the same day, Mr. [Person 7] indicated that the inspection at the destination port would be performed by [Redacted] as it had done the inspection at the loading port.33 [Redacted] subsequently acted as the Surveyor at the destination port.34

117.

On 14 July 2018, the vessel arrived in Baltimore, USA.35

118.

On 17 July 2018, the Product was at the customs in Baltimore.36

119.

On 19 July 2018, Mr. [Person 7] requested a quotation from [Redacted] to perform the inspection at the destination port.37

120.

On 20 July 2018, the Product was released by the customs.38

121.

On 23 July 2018, the Product left Baltimore.39

122.

On 24 July 2018, Mr. [Person 7] informed [Redacted] that its quotation was accepted, that the Product was "on the way from Baltimore to [Redacted]" and provided Claimant’s address.40

123.

On 27 July 2018, the Product arrived at [Redacted]’s railyard.41

124.

On 30 July 2018, Mr. [Person 9] (from [Redacted]) informed Mr. [Person 2] ([legal representative] of Respondent) that Claimant just informed him that "all of the containers are overweight to transit on the road."42

125.

On 31 July 2018, [Redacted] asked Claimant whether the Product could be sampled at the rail yard.43 On the same day, Mrs. [Person 10] (from Claimant) responded "We are not allowed to sample at the railyard. I already asked because that would be so much easier."44

126.

On 1 August 2018, [Redacted] and Claimant went to the railyard. The containers’ seals were checked and broken. From the four containers, 17 big bags were removed. The four containers were then each resealed with one seal. The 17 removed big bags were transported to Claimant’s facility on a flatbed truck on two trips. A [Redacted] inspector and a Claimant representative followed the truck for both trips.45 [Redacted] Inspection Report of 12 October 2018 ("[Redacted] Inspection Report") indicates that "Sampling was not done on the lst because the site closed for operation by the time the bags arrived on site"46 It adds that "The 17 bags overnighted in the warehouse not in containers at [Claimant] facility."47

127.

On 2 August 2018, [Redacted] sampled the Product using the Scooping Method. During the sampling, Mr. [Person 5] disagreed with the use of the Scooping method. The samples were taken, sealed and stored awaiting further instruction.48 The samples taken on 2 August 2018 were later assayed and revealed a moisture content of 46,87 %.49

128.

On the same day, Mr. [Person 5] indicated to Mr. [Person 2] that the use of the Scooping Method was not acceptable as it was not possible to obtain an accurate moisture content by taking samples only from the top of the bags.50

129.

On the same day, Mr. [Person 2] replied to Mr. [Person 5] indicating "I am ok with you sampling moisture must be made accordingly the state of the art I dont [sic] understand it is a grest [sic] US company wellknown [sic] for their good job".51

130.

On 3 August 2018, Mr. [Person 7] requested [Redacted] to perform the sampling "as per LME standard and regulation." Mr [Person 7] added that "To meet this standard and regulation the sampling of the material in big bags have to be done from the top to the bottom of big bags."52

131.

On 6 August 2018, [Redacted] proposed to sample the Product using a drill and auger (the "Drill and Auger Method"). On the same day, Mr. [Person 5] agreed to use the Drill and Auger Method to sample the Product.53

132.

On 7 August 2018, Mr. [Person 7] indicated "As previously infom [sic] we accept below sampling procedure [...] Could you please let us know when the sampling will be done and when we could expect analysis report of the requested elements."54

133.

On 15 and 16 August 2018, the Product was sampled with the Drill and Auger Method. These samples were later assayed by [Redacted], resulting in a moisture content of 48,26%.55 Claimant also sent a set of the 15-16 August samples to [Person 8], which had it assayed resulting in a moisture content of 46,11 %.56

134.

On 21 September 2018, [Redacted] verified the quantity and the weights of the bags.57

135.

On 4 October 2018, Respondent requested [Redacted] to clarify the difference between the assay of the 12 June 2018 samples resulting in a 33,657 % moisture content, and the assay of the 15 and 16 August 2018 samples resulting in a 48,26% moisture content.58

136.

On 8 October 2018, Mr. [Person 5] requested Mr. [Person 2] to provide the [Redacted] report, as [Redacted] informed him that the report was completed.59

137.

On 9 October 2018, Mr. [Person 7] indicated that Mr. [Person 2] "still did not get the final report" and that "the report is not acceptable" because (i) the inspection "was not done at the place of seal broken", (ii) the "weighing and sampling was not done at all at the beginner [sic] and the sampling was done only after week or even more after arrival", (iii) the "Weighing of the material was done only several weeks after delivery." Mr. [Person 7] therefore "suggested for a quick settlement as average 50/50 between load port report LOD and destination place report LOD [...]".60

138.

On 12 October 2018, [Redacted] issued its Inspection Report indicating that the moisture content of the 15 and 16 August 2018 samples was 48,26%.61

D. The Dispute

139.

As from 30 October 2018, Respondent indicated that the [Redacted] Inspection Report was not acceptable and that it was "going to invoice on the basis of the report at loading (Mexico)."62

140.

On 23 November 2018, Claimant indicated that "This report confirms the opposite of what you are claiming" and added that "Destination port was done correctly and not at the load port."63

141.

In the following weeks, the Parties tried to settle their dispute amicably. Respondent requested [Redacted] to send the set of the 12 June 2018 samples that it should have kept in reserve to an umpire to verify the moisture content of the Product at the loading port. However, such attempt failed as [Redacted] indicated that the samples had been discarded according to its detention period of 120 days.64

142.

On 30 January 2019, Respondent issued an invoice based on the 33,657% moisture content indicated in the [Redacted] Inspection Report and correcting the metal price of the cargo according to the quotation period provided for in the Contract. The invoice indicated a balance in favor of Claimant of USD 32.107,61.65

143.

On 10 April 2019, Claimant’s counsel sent a letter to Respondent attaching an invoice issued by Respondent based on the 48.26% moisture content indicated in [Redacted] Inspection Report, and indicating a balance in favor of Claimant of USD 136,055.83 (the "Final Invoice").66 The letter requested Respondent to pay the balance to Claimant and indicated that "Inasmuch as the agreement instructs the parties to settle all disputes amicably, please contact me immediately to settle the matter."67

144.
It is within this context that Claimant filed a Request for arbitration before the Secretariat on 26 April 2019, thereby initiating this arbitration.

VI. SUMMARY OF THE PARTIES' POSITIONS AND RELIEF SOUGHT

145.
The following provides an overview of the Parties’ respective claims and defenses. This summary has been prepared to provide context for the decision made by the Sole Arbitrator in this Final Award. It is not an exhaustive description of the arguments presented during this arbitration through the written submissions of the Parties. The fact that a particular submission is not expressly referenced below should not be taken as any indication that it has not been considered by the Sole Arbitrator. The Sole Arbitrator has taken each Party’s full argumentation into account in reaching his decision.

A. Claimant’s position

1. Respondent breached the Contract by manipulating the samples at the loading port

146.
Claimant submits that Respondent breached the Contract by manipulating the samples at the loading port, overcharging Claimant for the Product and refusing to reimburse Claimant for the sums charged in excess.
147.

Claimant submits that Respondent instructed [Redacted] to sample the Product at the loading port with the Scooping Method (drawing material only from the top of the bags), in breach of the LME rules and standard international practices provided for in the Contract.68

148.

Claimant submits that the manipulation of the samples at the loading port is confirmed by the three moisture content determinations performed on the samples taken on 2 August 2018 and on 16 August 2018 at the destination port, showing results ranging from 46 to 48 %, which is also consistent with the two moisture content determinations performed on the first samples taken on 19 May 2018 at the loading port, showing results ranging from 44 to 46%. Claimant concludes that the moisture content of 33,67 % resulting from the 12 June 2018 sample taken at the loading port and mentioned in the Provisional Invoice necessarily results from a manipulated sample.69

149.

In response to Respondent’s submission that the Product was dried at the loading port between 19 May 2018 and 12 June 2018, Claimant submits that Respondent’s submission is unproven, and that this submission is not plausible because: (i) there is no photograph of the drying, (ii) the spreading out and drying of material before assaying is not standard industry practice, (iii) the Product should have been repackaged after the drying, but the pictures of the bags upon arrival demonstrate that the bags were not new (iv) the spreading out of such a quantity of material would have occupied a large amount of space and resulted in storage costs, but there was no trace of such costs (v) there was no evidence of the weight of the material at arrival to confirm the drying.70

150.

Claimant concludes that Respondent’s Provisional Invoice of USD 418,805.68 is inflated, that the proper value of the Product based on the moisture content determination found at the destination port is USD 282,749.85 and therefore, requests that Respondent be ordered to reimburse Claimant the amount of USD 136,055.83.71

2. Claimant has not breached the Contract by manipulating the Product in its warehouse

151.

In response to Respondent’s submission that Claimant breached the Contract by manipulating the Product in its warehouse, Claimant submits, inter alia, that:

  • The Parties agreed that Respondent would handle the destination port inspection process with [Redacted] and therefore, Claimant has not failed to communicate Annex 1 of the Contract to [Redacted];72
  • Respondent agreed that the inspection would take place at Claimant’s warehouse rather than in Baltimore, USA, and therefore, that Claimant has not failed to sample the Product at the destination port;73
  • Decreasing the containers’ weight was made necessary only because Respondent and its transporter, [Redacted], failed to consider the road weight restrictions applicable in the USA;74
  • The Product had to be kept in Claimant’s warehouse only because: (i) Respondent provided inappropriate sampling instructions to [Redacted], (ii) Respondent refused that a new sampling be performed by [Person 8] although it was immediately available, and (iii) Respondent only agreed that a new sampling be performed by [Redacted], which was not feasible before 15 and 16 August 2018;75
  • The Product was kept dry and strictly quarantined while in Claimant’s warehouse, Respondent did not object to the Product being kept in Claimant’s warehouse and Respondent did not request that any precautionary measures be taken;76
  • The two moisture results from the first and second sampling at destination are almost identical, confirming that the Product was not altered while it was stored in Claimant’s warehouse;77
  • The weight difference between the loading port and the destination port was likely caused by the loss of material due to the breaking of several bags during unloading and weighing, as well as by tare weight issues;78
  • Claimant did not have an obligation to provide the samples and the report at the destination port within the 30-day deadline, only [Redacted] had such an obligation, and this deadline was extended as a result of the Parties’ agreement to conduct a second sampling in compliance with the Contract;79
  • [Redacted]’s reservations on its Inspection Report and on the certificate of analysis do not establish that the Product was manipulated but merely indicate the timeline of the inspection.80
152.

Claimant also submits that Mr. [Person 7]’s took several engagements on behalf of Respondent during the performance of the Contract, and that Mr. [Person 7]’s representations and undertakings towards Claimant are binding on Respondent.81

153.
Claimant concludes that it did not manipulate the Product while it was in its warehouse and that it has not breached the Contract.

3. Respondent has failed to pay its share of the Surveyors’ fees

154.

In its latest submission, Claimant submits that the Parties’ claim for the reimbursement of the Surveyors’ fees are not ripe for adjudication and therefore, that these claims should not be resolved in this arbitration.82

155.
In the alternative, Claimant submits that Respondent failed to pay its share of the Surveyors’ fees, that it paid a [Redacted] invoice of USD 5,797.87, and that Respondent should therefore be ordered to reimburse Claimant the amount of USD 2,898.93.83
156.

In the further alternative, Claimant submits that if Respondent provides irrefutable evidence that it paid USD 3,600 to [Redacted], Respondent should be ordered to reimburse Claimant the amount of USD 1,099.84

4. Claimant’s relief sought

157.

In its last written submission,85 Claimant’s relief sought reads as follows:

"For the reasons set out above, [Claimant] respectfully requests the Sole Arbitrator to render an award:

  1. Declaring that the non-conformity of the nickel powder with the representations made in Respondent’s provisional invoice, Respondent’s manipulation of the official samples, the resulting fraudulent overcharging of Claimant and Respondent’s refusal to reimburse Claimant for the sums charged in excess constitute breaches of the Sales Contract;
  2. Ordering Respondent to reimburse Claimant in the amount of 136,055.83 USD together with legal interest and late payment interest charged pursuant to Article L441-10 (ex. Article L441-6) of the French Commercial Code as of 17 April 2019;
  3. Declaring that the Parties ’ claim for the reimbursement of the surveyor fees paid will not be resolved in this arbitration, without prejudice to the Parties’ right to reintroduce the same claim once it is ripe for adjudication in a later proceeding;
  4. Ordering Respondent to reimburse to Claimant the full advance on costs paid by Claimant on behalf of both Parties together with interest, to pay the counsel fees and expenses, expert fees and expenses, and other costs incurred by Claimant in connection with the arbitration, including all internal costs;
  5. Ordering Respondent to pay post-award interest on all amounts awarded at such rate as the Sole Arbitrator considers appropriate; and
  6. Granting any further relief to Claimant that the Sole Arbitrator shall deem just and proper."
158.

By e-mail of 22 Janvier 2020, Claimant submitted that it incurred the following costs related to this arbitration: (i) USD 25,000 regarding the ICC advance on costs, (ii) EUR 17,250, GBP 4,680 and USD 9,471.45 regarding its legal and other costs incurred for the arbitration.

B. Respondent’s position

1. Respondent has not breached the Contract by manipulating the Product at the loading port

159.

Respondent submits that the Product was dried in the port of Altamira between 19 May 2018 and 12 June 2018, which explains why the moisture content of the 19 May 2018 samples is higher than the moisture content of the 12 June 2018 samples. Respondent submits that there is nothing wrong with letting a product dry and that it could even had let the Product dry longer and performed as much moisture content determination as necessary to achieve the desired result.86

160.

Respondent submits that the drying of the Product is confirmed by several evidence on the record:

  • [Redacted] Analysis Report of 15 June 2018;87
  • A screenshot of a conversation between Respondent and its supplier;88
  • Respondent’s supplier invoice dated 19 June 2018;89
  • The [Redacted] letter of 6 October 2018 confirming the techniques used to take the samples and to assay the material, and providing an excel sheet setting out the assay results;90
  • A written statement from Respondent’s supplier dated 4 November 2019;91
  • The [Redacted] letter of 20 June 2019 indicating that "the product was spread out and allowed to dry".92
161.

Respondent submits that the absence of manipulation of the Product at the loading port is also confirmed, inter alia, by the fact that Respondent and [Redacted] complied with the Contract provisions regarding the inspection procedure at the loading port,93 and by the fact that the Product was always under the carrier’s control in the port of Altamira.94

162.

Respondent also submits that Claimant cannot dispute the moisture content determination at the loading port because it did not provide any instruction to [Redacted] to sample the Product whereas it was invited to do so, and because Claimant received the [Redacted] inspection report and paid the Provisional Invoice without reservation.95

163.

Respondent further submits that it had not instructed [Redacted] to sample the Product according to the Scooping Method.96

164.
Respondent concludes that it has not manipulated the samples at the loading port, that it has not breached the Contract, and that the final price of the Contract shall therefore be based on the moisture content determination at the loading port.

2. Claimant breached the Contract by manipulating the Product in its warehouse

165.

Respondent submits that Claimant has done everything to recuperate the Product in its warehouse under its sole custody and control to add water in the Product and obtained the desired moisture content. Respondent submits, inter alia, that Claimant:97

  • Failed to communicate Annex 1 of the Contract to [Redacted] providing the sampling procedure to be complied with at the destination port;98
  • Prevented the sampling to be performed at the port of Baltimore, USA;99
  • Prevented the sampling to be performed immediately upon the opening of the containers at [Redacted]’s railyard;100
  • Failed to inform Respondent about the road weight restrictions applicable in the USA, resulting in 17 bags being taken out of the containers and stored in Claimant’s warehouse under Claimant’s sole custody and control between the evening of 1 August 2018 and the morning of 2 August 2018;101
  • Requested [Redacted] to change the sampling method on 2 August 2018, resulting in the Product being under Claimant’s sole custody and control for a second period between the evening of the 2 August 2018 and the morning of 15 August 2018.102
166.

Respondent submits that the manipulation of the Product by Claimant is confirmed by (i) the weight difference of the Product at the loading and at the destination port,103 (ii) by [Redacted]’s reservations on its Inspection Report and on the certificate of analysis,104 (iii) by the fact that the same supplier sold an another lot to Respondent (Lot A), and that the moisture content for Lot A was the same at the loading port and at the destination port,105 and (iv) by Claimant’s and [Redacted]’s comments on the visual aspect of the Product upon arrival.106

167.
Respondent submits that Claimant’s actions and omissions constitute breaches of Article 12-B) paragraph 2 of the Contract, providing for the inspection procedure to be complied with at the destination port.
168.

Respondent also submits that Claimant breached Articles 12-B) paragraph 3 of the Contract by failing to provide the samples and the inspection report at the destination port within 30 days of the official shipment date.107

169.

Respondent further submits that, contrary to Claimant’s submission, Mr. [Person 7]’s representations and undertakings towards Claimant are not binding on Respondent.108

170.
Respondent concludes that Claimant breached the Contract by manipulating the Product in its premises and that the final price of the Contract shall therefore be based on the moisture content determination at the loading port.

3. Claimant has failed to pay its share of the Surveyors’ fees

171.

Respondent submitted that Claimant failed to pay its share of the Surveyors’ fees and that Claimant should be ordered to reimburse Respondent the amount of USD 3,600, corresponding to the additional costs incurred by Respondent as a result of Claimant’s request to change the sampling method at the destination port.109

4. Respondent’s relief sought

172.

In its latest submission,110 Respondent requested the Sole Arbitrator to issue an award:

"Declaring that:

  • [Claimant] did not comply with the terms of the Contract signed between the parties,
  • Considering in particular Article 13-B) "Final Payment" of the contract signed between the parties which clearly indicates the inspection report to be taken into consideration.
  • Considering that the Claimant has not provided any evidence calling into question the Certificates of Analysis and the Inspection Report of [Redacted];
  • Considering, therefore, that there is nothing to prevent the Inspection Report of [Redacted] from applying,
  • Considering that the inspection report at the loading port, carried out by [Redacted] under the control of [Redacted], is fair and perfect,
  • Considering in particular that the contract is "CIF Baltimore" and that [Claimant] has not complied with its contractual obligations,
  • Considering that [Claimant] did not follow the contractual procedure mutually agreed and specified in ANNEX1, and a standard secure procedure at destination (for the operation concerning nickel powder),
  • Considering the strong suspicions of manipulating nickel powder by [Claimant], while [Claimant] had the nickel powder under its exclusive control, and before any inspection by [Redacted],
  • Considering that the weighing of [Redacted] revealed that a significant quantity of nickel powder had disappeared, without any credible explanation, from the Claimant.
  • Considering the inspection report of [Redacted] which takes into consideration the weighing carried out by [Redacted], and not the weighing carried out by [Redacted] itself; which implies that the inspection report of [Redacted] was not carried out using only the factual elements collected at destination in the United States as provided for in the contract.
  • Considering that [Claimant] itself considers, in its own invoicing, that the reference weighing is the weighing carried out by [Redacted] in its inspection report.
  • Taking into account the most explicit "reservations" expressed by [Redacted] concerning the results of analyses obtained at destinations,
  • Considering that all payments made by [Respondent] to [Redacted] ($5769.05) and to [Redacted] ($3600) are clear and justified,
  • Ordering the Claimant to consider the WSMD/A (Inspection Report) at loading port will be binding for the Parties and used for the final invoice.
  • Ordering the Claimant to accept the final invoice "N° 2018-07-nickel [Claimant] / 2018-07-B" issued by [Respondent].
  • Ordering the Claimant’s to reimburse Respondent for the Surveyor fees paid by Respondent in excess together with legal interest and late payment interest;
  • Ordering the Claimant to pay the full costs of the Arbitration, including the Sole Arbitrator fees, administrative costs of the ICC, counsel fees and expenses, expert fees and expenses, and other costs incurred in connection with the Arbitration, including all internal costs;
  • Ordering the Claimant to pay the damages related to the fact that [Claimant] is now in direct contact with our [Respondent]’s supplier and is therefore free to contact him directly to obtain supplies. [Respondent] will send the Court a flat-rate assessment of this damage.
  • Ordering the Claimant to pay for his abusive procedure and for the non-pecuniary damage sustained by the Respondent.
  • Granting any further relief to Respondent that the Sole Arbitrator shall deem just and proper."
173.
By e-mail of 22 January 2020, Respondent submitted that it incurred USD 107.440 regarding its counsel fees, expert fees, internal costs and other costs incurred for the arbitration.

VII. THE SOLE ARBITRATOR’S ANALYSIS

174.
The Parties submit two main claims in the arbitration. Claimant submits that Respondent breached the Contract by manipulating the samples at the loading port and Respondent submits that Claimant breached the Contract by manipulating the Product in its warehouse (A). Both Parties submit that the other Party failed to pay its share of the Surveyors’ fees (B). The Sole Arbitrator examines these claims successively below.
175.
The Sole Arbitrator then analyzes whether the Parties are entitled to damages (D), and whether interest shall be awarded (E). Finally, the Sole Arbitrator decides on the allocation of the costs of the arbitration between the Parties (Section VIII).

A. Have the samples or the Product been manipulated?

1. Preliminary remark

176.
The dispute between the Parties relates to the level of moisture of the Product sold by Respondent to Claimant. The last [Redacted] moisture content determination at the loading port indicates a moisture level of 33,657 %, whereas the last [Redacted] moisture content determination at the destination port indicates a moisture level of 48,26 %.111
177.
Claimant submits that Respondent has manipulated the samples at the loading port, and that the final price of the Contract should therefore be based on the moisture content measured at the destination port. Respondent submits that Claimant has manipulated the Product in its warehouse, and that the final price of the Contract should therefore be based on the moisture content measured at the loading port.
178.
The Sole Arbitrator notes that the Parties do not dispute the moisture content determinations as such. They dispute the process by which the moisture content determinations were obtained, each Party considering that the other Party has fraudulently obtained its desired moisture content.
179.

The Contract provides that the final price of the Product shall be determined on the basis of the moisture content determination at the destination port. Respondent had to assay the Product at the loading port, to issue a provisional invoice based on the moisture content at the loading port,112 and Claimant had to pay 90 % of the provisional invoice before shipment.113 Upon arrival of the Product at the destination port, Claimant had to assay the Product and to issue a final invoice based on the moisture content at the destination port.114 The final invoice then had to be settled against the payment made by Claimant of 90 % of the provisional invoice.115

180.
The Sole Arbitrator concurs, however, that if the Product has been manipulated at the destination port, the moisture content determination at the destination port shall be disregarded and the final price of the Product shall be based on the moisture content at the loading port. The Sole Arbitrator similarly concurs that if the samples have been manipulated at the loading port, the final price of the Product shall be based on the moisture content at the destination port, in accordance with the Contract.
181.
Indeed, under French law, which is the law applicable to the merits of the dispute, fraud corrupts everything (fraus omnia corrompit) and as a result, any advantage obtained by fraud is invalid. In the case at hand, if a moisture content determination has been obtained by fraud, it shall be considered as invalid and consequently, disregarded by the Sole Arbitrator to determine the final price of the Product.
182.
The Sole Arbitrator also concurs that if a Party has manipulated the samples or the Product, such manipulation would amount to a breach of the Contract. Indeed, if a Party manipulated the samples or the Product and invoiced the other Party on the basis of a moisture content determination obtained by fraud, such Party also fraudulently overcharged the other Party for the Product and therefore, breached the Contract.
183.
The Sole Arbitrator now turns to examine the Parties’ submissions to determine whether the final price of the Product should be based on the moisture content determination at the loading port, or on the moisture content determination at the destination port.

2. Have the samples been manipulated at the loading port?

184.
The Sole Arbitrator first notes that Claimant’s submission that Respondent manipulated the samples at the loading port is not supported by any direct evidence.
185.

Claimant submits that the manipulation of the samples at the loading port should be deducted from the moisture content determinations performed on the samples taken on the Product at different points in time, summarized in the table below that has been produced by Claimant with its Statement of Claim:116

 

 

  MEXICO RESULTS USA RESULTS
  [Redacted] - 19 May sample [Claimant] - 19 May sample ([Claimant] customer) [Redacted] - 12 June sample [Redacted] - 2 August scoop sample [Redacted] - 16 August auger sample

[Claimant] - 16 August auger sample

([Person 8])

Moisture content (LOD) 44.32% 46.2% 33.67% 46.87% 48,26%  46,11%
186.
Claimant explains that the first two moisture content determinations performed on the samples taken on 19 May 2018 in Mexico, and the last three moisture content determinations performed on the samples taken on 2 August and on 16 August 2018 in the USA are consistent, such determinations being within the range of less than 4% of moisture content difference. Claimant observes that the moisture content determination performed on the 12 June 2018 samples taken in Mexico is much lower than the other determinations, which can only be explained by a manipulation of the samples between 19 May 2018 and 12 June 2018.
187.

The Sole Arbitrator first notes that the first moisture content determination has been performed by [Redacted], the second by [Redacted] upon Claimant’s request,117 the third by [Redacted], the fourth and fifth by [Redacted] and the sixth by [Person 8] upon Claimant’s request.118

188.
The Sole Arbitrator also notes that Respondent has not disputed the results of the moisture content determinations. Particularly, Respondent has not disputed the results of the moisture content determinations performed by [Redacted] and by [Person 8] upon Claimant’s request.
189.
Therefore, the Sole Arbitrator considers that the moisture content determinations are a strong indication that the Product may have been manipulated at the loading port. Indeed, the Sole Arbitrator concurs that the determinations are generally consistent and that only the determination carried out on the 12 June 2018 sample differs significantly from the other determinations.
190.
The Parties have made several submissions in the arbitration to confirm or rebut the indication that the samples may have been manipulated between 19 May 2018 and 12 June 2018. The Sole Arbitrator therefore examines these submissions below.

a. Was the Product inappropriately sampled in Mexico?

191.
Claimant submits that Respondent instructed [Redacted] to use the Scooping Method to sample the Product at the loading port. Claimant also submits that the use of the Scooping Method was inappropriate, as Respondent should have instructed [Redacted] to sample the Product according to the Drill and Auger Method to comply with the LME rules and standard international practices provided for in the Contract.
192.

The Sole Arbitrator notes that [Redacted] indicates that [Redacted] was instructed to sample the Product with the Scooping Method.119 However, the Sole Arbitrator observes that there is no evidence on the record that Respondent instructed [Redacted] to use the Scooping Method to sample the Product.

193.
The Sole Arbitrator also notes that the use of different sampling methods does not explain the difference between the moisture content of the 12 June 2018 sample and the other moisture content determinations.
194.

Indeed, the moisture content determination performed on the 2 August 2018 sample taken with the Scooping Method and the moisture content determinations performed on the 16 August 2018 sample taken with the Drill and Auger Method led to comparable results. The moisture content determination performed on the 2 August 2018 sample revealed a 46,87 % moisture content,120 and the two moisture content determinations performed on the 16 August 2018 sample respectively revealed a 48,26% and a 46,11 % moisture content.121 Therefore, although the use of different sampling methods can provide different results, such difference is minor as it does not exceed a couple percentage points (in these cases, 1,39 %) of moisture content. Consequently, the use of different sampling methods does not indicate that the samples have been manipulated at the loading port.

b. Was the Product dried at the port of Altamira?

195.
Respondent submits that the Product was dried in the port of Altamira between 19 May 2018 and 12 June 2018, which explains why the two moisture determinations performed on the 19 May 2018 sample are higher than the moisture content determination performed on the 12 June 2018 sample.
196.
The Sole Arbitrator concurs with Respondent that the drying of the Product may explain the difference between the moisture content of the 19 May 2018 sample and the moisture content of the 12 June 2018 sample.
197.
The question is therefore whether it has been established that the Product had been dried in its entirety in the port of Altamira between 19 May 2018 and 12 June 2018. Indeed, if the Product was dried during this period, it is likely that the 12 June 2018 sample showing a 33,657 % moisture content was representative of the whole cargo’s moisture content. Conversely, if it is not established that the Product was dried, it may provide a further indication that the samples may have been manipulated at the loading port.
198.

Claimant submits that it is not plausible that the entirety of the Product was dried at the loading port as (i) there is no photograph of the drying process, (ii) the spreading out and drying of material before assaying is not standard industry practice, (iii) the Product should have been repackaged after the drying but the pictures of the bags upon arrival demonstrate that the bags were not new (iv) the spreading out of such a quantity of material would have occupied a large amount of space and generated storage costs, but there was no trace of such costs (v) there is no evidence of the weight of the material at arrival to confirm the drying.122

199.
The Sole Arbitrator concurs that if the material was dried in its entirety, it should be corroborated by contemporary evidence. Indeed, the Product was voluminous. It consisted of 88 tons of material stored in 90 big bags and shipped in three containers. Also, the drying would have occurred between 19 May 2018 and 12 June 2018. The spreading out and the drying of the entirety of the Product should have therefore occupied a large amount of space for more than three weeks. It is therefore unlikely, in the Sole Arbitrator’s opinion, that the drying of the Product would not be documented by contemporary evidence if it had effectively occurred. It should have been documented, notably, by photographs of the drying, by correspondence with Respondent regarding the drying, by additional storage costs, as well as by additional costs to spread the Product and to repackage it.
200.
In the course of the arbitration, Respondent referred to several documents and raised several arguments to confirm that the Product had been dried in the port of Altamira. These documents and arguments are examined below.
201.
Respondent referred to [Redacted] Analysis Report of 15 June 2018 (A-47). However, this document does not mention the drying of the Product. It only specifies the procedure applied to assay the samples, and the result of the moisture content determination. Therefore, it does not establish that the Product had been dried.
202.

Respondent referred to a screenshot of an alleged conversation with its supplier regarding the drying which is reproduced below:123

203.
The Sole Arbitrator notes, however, that this conversation does not provide any detail as to the extent of the drying and does not refer to any contemporary evidence of the drying. The Sole Arbitrator also notes that this conversation is undated and that its authors are unknown. The Sole Arbitrator therefore considers that this conversation does not establish that the Product was dried.
204.

Respondent referred to its supplier’s invoice dated 19 June 2018 (A-69). However, this invoice does not state that the Product had been dried. It merely reproduces the moisture content (i.e., 33,657 %) and the weight indicated in [Redacted] Analysis Report of 15 June 2018.124 Therefore, Respondent supplier’s invoice does not establish that the Product had been dried.

205.
Respondent referred to an email of [Redacted] dated 6 October 2018 specifying the method used to determine the moisture content of the 12 June 2018 samples, and providing an excel sheet setting out the results of this moisture content determination (A-34). However, neither the email nor its attachment indicate that the Product had been dried. Therefore, these documents do not establish that the Product had been dried.
206.

Respondent referred to a written statement from his supplier dated 4 November 2019 indicating that:

"We delivered 2 parcels of nickel to Altamira to be sold to [Respondent] after their control and quality acceptance.
The parcel B weighed at our warehouse was 91 mt.
At arrival at Altamira port, parcel was weighed at 104.200 KG.
Truck cross a 12 hours huge winding raining area during the transport to port losing it tarpaulin truck.
At arrival at Altamira I requested a sampling and moisture determination by [Redacted] to make an assessment of damage.
When [Respondent] received the first result of moisture content, [Respondent] refused to buy the parcel because of a too high level of moisture (44,32%).
We dried this parcel in Altamira port.
We did not make a photo report.
The Nickel was sampled another time and the new moisture result was too high for acceptation by [Respondent] (32,18%).
We tried a new short drying period and new sampling by [Redacted].
The result of moisture determination by [Redacted] was still too high (33.657%) but [Respondent] agreed to buy with a moisture content of 33.657%)

We invoiced [Respondent] based on [Redacted] Analysis report Number MXM18-0109 dated on June 15,2018.

MOISTURE CONTENT: 33.657%
Nickel, % 24.00
Copper, % 10,09
Silver, g/mt 17200
TOTAL MMT Ni: 14,139 TONS
TOTAL MMT Cu: 5,944 TONS
TOTAL MMT Ag: 1,013 TONS
90 BIG BAGS
NET WET WEIGHT MT 88.804 /
NET DRY WEIGHT MT 58.916"125

207.

The Sole Arbitrator notes that Respondent’s supplier states: "We dried this parcel in Altamira port" and that "this parcel seems to refer to the parcel B sold to Claimant. The Sole Arbitrator also notes that Respondent’s supplier provides the weight of the Product in its warehouse (91 tons) and the weight of the Product upon arrival in the port of Altamira (104,2 tons) which are higher than the weight found by [Redacted] after the alleged drying (88,804 tons).126 These indications suggest that the Product may have been dried in the port of Altamira.

208.
The Sole Arbitrator notes, however, that although Respondent’s supplier affirms that the Parcel was dried, he did not provide any contemporary evidence of the drying. Respondent’s supplier states: "We dried this parcel", suggesting that he was involved in the drying. Respondent’s supplier should have therefore be in the possession of contemporary evidence of the drying. However, no such evidence was provided.
209.
The Sole Arbitrator further notes that, although Respondent’s supplier provides the precise weight of the Product in its warehouse before transportation, as well as the precise weight of the Product upon arrival in the port of Altamira, these weights have not been corroborated by contemporary evidence. Respondent’s supplier statement is dated 4 November 2019 and the Product arrived in Altamira on 18 May 2018, almost 18 months earlier. It is not plausible, in the Sole Arbitrator’s opinion, that Respondent’s supplier may have such a precise memory of the weights of the Product unless it is corroborated by contemporary evidence. However, no such contemporary evidence has been provided. The Sole Arbitrator therefore concludes that Respondent’s supplier statement does not establish that the Product was dried.
210.

The Sole Arbitrator also notes that Respondent provided photographs of the drying of another mineral in Altamira.127 This suggest that the drying of mineral in Altamira would be normally subject to a photographic report. However, Respondent’s supplier indicates that no photograph of the drying of the Product had been taken128 and Respondent indicates that it did not request photographs of the drying.129 The absence of photographs of the drying and, more generally, of any contemporary evidence of the drying raises doubts as to whether the drying effectively occurred.

211.

Respondent referred to the [Redacted] letter of 20 June 2019 indicating that "The product was spread out and allowed to dry"130 The Sole Arbitrator first notes that this letter was prepared more than a year after the facts, since it is dated 20 June 2019 whereas the Product was in Altamira between 19 May 2018 and 12 June 2018. The Sole Arbitrator also notes that this letter was prepared by [Redacted], whereas the Product was allegedly dried in Mexico, and that [Redacted] and [Redacted] are two different legal entities.131 The Sole Arbitrator further notes that, although the letter indicates that "The product was spread out and allowed to dry", it does not expressly state that the entirety of the Product was dried, and it does not provide any detail about the drying. Furthermore, the letter does not attach nor refer to any contemporary evidence of the drying. The Sole Arbitrator therefore concludes that this letter does not establish that the Product was dried at the loading port.

212.

Respondent submits that the drying of the Product is confirmed by the fact that Respondent and [Redacted] complied with the Contract provisions regarding the inspection procedure at the destination port. The Sole Arbitrator observes that Article 12-A) of the Contract provides that the Surveyor had to perform the sampling during Product loading, to determine the moisture of the Product and to seal the containers with the Surveyor company seals.132 The Sole Arbitrator concurs that if [Redacted] took new samples during Product loading on 12 June 2018, this should, in principle, avoid the risk of manipulation.

213.

The Sole Arbitrator notes that the facts that new samples were taken on 12 June 2018 before Product loading is corroborated by several evidence on the record:

  • A statement from [Redacted] dated 1 June 2018 indicates that "A second sampling of lot b was carried out for the determination of humidity, prior to loading to containers";133
  • The transporter ([Redacted]) indicated in an email dated 13 June 2018 that on 12 June 2018: "[Redacted] Team performed the weighing and moisture sampling of the 90 bags while the containers were being stuffed; abt 90 kgs were obtained from the sampling procedure"; 134
  • [Redacted] photographic report dated 14 June 2018 shows the sampling and the loading of the big bags in the containers, suggesting that samples were taken before Product loading;135
  • [Redacted] letter of 20 June 2019 indicates that "Moisture samples were retaken on the 29th of May 2018 and again on the 12th of June 2018, which was the final day of loading and resulted in a final moisture of 33.67%."136
214.

The Sole Arbitrator observes, however, that the fact that new samples were taken on 12 June 2018 before Product loading is contradicted by other evidence on the record:

  • The statement from [Redacted] dated 1 June 2018 only refers to one "SAMPLE DISPATCH to [Redacted] Lab on May 22, 2018 for Preparation & Analysis", suggesting that no other sample nor dispatch occurred after 22 May 2018;137
  • The [Redacted] inspection summary report dated 13 June 2019138 provides a time log of the Product inspection at the loading port. The time log indicates that the sampling occurred on 19 May 2018. However, the time log does not mention any other sampling. It merely indicates that a second moisture determination occurred on 29 May 2018, and that a final moisture determination occurred on 13 June 2018;
  • The last page of the [Redacted]’s photographic report dated 14 June 2018139 indicates, right above the signature of the [Redacted]’s representative "Inspection carried out through June 12th, 2018." The word "through" suggests that the photographs may have been taken before 12 June 2018;
  • [Redacted]’s only invoiced Respondent for one sampling at the loading port.140
215.
These documents and indications raise some doubts as to whether new samples were effectively taken on 12 June 2018.
216.

The Sole Arbitrator further notes that in his Witness Statement n°1, Mr. [Person 2] indicates that: "We have no employees in Mexico, we are not represented there and we did not visit Mexico during the entire period in question."141 As a result, no representatives of Respondent have witnessed that [Redacted] took new samples on 12 June 2018 before Product loading, nor that the Product was dried in the port of Altamira.

217.
Consequently, the Sole Arbitrator considers that it has not been established that [Redacted] has taken new samples on 12 June 2018 during Product loading. Therefore, the Sole Arbitrator cannot rely on Respondent’s allegation that it complied with the Contract to infer that the Product was dried.
218.

Respondent also submits that the Product was under the control of the transporter ([Redacted]) in the port of Altamira, and that the inspection was carried out under the control of [Redacted] and [Redacted].142 However, this does not prove that the samples were not manipulated. The Sole Arbitrator notes, in this regard, that [Redacted] has not confirmed that the Product was dried. In any case, the Sole Arbitrator cannot rely on the assertion that the Product was under the control of [Redacted] or that the inspection was carried out under the control of [Redacted] and [Redacted] to conclude that the Product was dried and that the samples were not manipulated.

219.

Respondent also submits that Claimant cannot dispute the moisture content determination at the loading port, because it did not provide any instruction to [Redacted] to sample the Product whereas it was invited to do so, and because Claimant received the [Redacted] inspection report and paid the Provisional Invoice without reservation.143

220.
The Sole Arbitrator first notes that the Product was under Respondent’s responsibility at the loading port. Therefore, it was Respondent’s responsibility to ensure that no manipulation occurred at the loading port. The Sole Arbitrator further notes that Claimant’s submission is that the manipulation became apparent with the results of the moisture content determinations at the destination port. Therefore, Claimant had no reason to be wary about the moisture content determinations at the loading port.
221.
For the foregoing reasons, the Sole Arbitrator finds that it has not been established that the Product was dried in the port of Altamira between 19 May 2018 and 12 June 2018.
222.
The Sole Arbitrator further finds that the lack of evidence that the Product was dried at the loading port corroborates the allegation that the samples may have been manipulated at the loading port.

3. Has the Product been manipulated in Claimant’s warehouse?

223.
Respondent submits that the Product has been manipulated in Claimant’s warehouse which would explain why the moisture content determinations performed in the USA are higher than the moisture determination performed on the 12 June 2018 samples.
224.
The Sole Arbitrator first notes that Respondent’s submission that Claimant manipulated the Product is not supported by any direct evidence.
225.

Respondent submission mainly relies on the fact that the Product remained under Claimant’s sole custody and control between the evening of 1 August 2018 and the morning of 2 August 2018, and between the evening of 2 August 2018 and the morning of 15 August 2018 to conclude that Claimant added water in the Product. Respondent submits that it has the "firm conviction" that Claimant "did everything, through negligence and dishonesty", to "recover the nickel powder under its sole control", and that Claimant "took the opportunity to manipulate the product (by fraudulently altering the moisture content) in order to defraud [Respondent] and buy the nickel power at a much lower price."144

226.
In the absence of any direct evidence, the Sole Arbitrator examines below the arguments raised by the Parties to confirm or rebut the submission that Claimant manipulated the Product in its warehouse.

a. Is Respondent bound by Mr. [Person 7]’s representations and undertakings towards Claimant?

227.
Claimant relies on several statements of Mr. [Person 7] during the performance of the Contract to confirm that Respondent agreed to modify the Contract in several instances.
228.

Claimant submits that Mr. [Person 7]’s representations and undertakings are binding on Respondent under the French legal theory of apparent mandate. Claimant submits that Mr. [Person 7] handled all aspects of the transaction on behalf of Respondent, that he presented himself as Respondent’s representative and that he gave the impression that he was authorized to represent Respondent at all times.145

229.

Respondent submits that Mr. [Person 7] was only an intermediary, that his role was limited to facilitate the negotiation and the performance of the Contract, that he was not authorized to represent Respondent and that Mr. [Person 7]’s representations and undertakings towards Claimant are therefore not binding on Respondent.146

230.

The Sole Arbitrator notes that Article 1156 of the French Civil Code provides that: "An act performed by an agent without authority or beyond its powers shall not be binding on the principal, unless the third party has legitimately believed in the existence of the agent’s powers, in particular by reason of the principal’s conduct or statements."147 (Emphasis added)

231.
The question is therefore whether Mr. [Person 7] had the authority to represent Respondent and, if not, whether Respondent’s conduct or statements led Claimant to legitimately believe that Mr. [Person 7] had such authority.
232.
The Sole Arbitrator first notes that it has not been established that Mr. [Person 7] was not authorized to represent Respondent towards Claimant. Therefore, it cannot be excluded that Mr. [Person 7] had such authority.
233.

The Sole Arbitrator also notes that Mr. [Person 7] took several engagements on behalf of Respondent during the performance of the Contract.148 The Sole Arbitrator further notes that Respondent was in copy of several correspondence between Mr. [Person 7] and Claimant whereby Mr. [Person 7] took engagements towards Claimant on behalf of Respondent.149

234.
The Sole Arbitrator further notes that there is no evidence on the record that Respondent ever objected to any engagement taken by Mr. [Person 7] towards Claimant, nor that Respondent ever informed Claimant that it should not rely on the representations or undertakings given by Mr. [Person 7].
235.
The Sole Arbitrator therefore considers that, even if Mr. [Person 7] did not have the authority to represent Respondent, Respondent’s conduct led Claimant to legitimately believe that Mr. [Person 7] had such authority.
236.
For the foregoing reasons, the Sole Arbitrator finds that Mr. [Person 7]’s representations and undertakings towards Claimant are binding on Respondent.

b. Annex 1 of the Contract

237.

Respondent submits that Claimant failed to communicate to [Redacted] Annex 1 of the Contract providing the sampling procedure to be complied with at the destination port.150 Claimant submits that the Parties agreed that Respondent would handle the destination port inspection process with [Redacted] and therefore, that it has not failed to communicate Annex 1 of the Contract to [Redacted].151

238.

Article 12-B paragraph 2 of the Contract provides that:

"It is mandatory that [Claimant] communicates to [[Redacted]] copy of Annex 1 hereto."152

239.

Annex 1 of the Contract provides that:

"[Claimant] undertakes to mandatorily communicate to [[Redacted]] the order of execution for [[Redacted]’s] mission as stipulated in Annex 1 hereto."153

240.
It is undisputed that Claimant did not provide Annex 1 of the Contract to [Redacted]. The Sole Arbitrator therefore examines below whether the Contract has been modified and whether the obligation to provide Annex 1 to [Redacted] was passed to Respondent.
241.

The Sole Arbitrator notes that Article 19 of the Contract provides that: "Changes to the terms and conditions of this contract must be in writing and agreed to in writing by all parties involved."154 Therefore the Contract can only be modified (i) in writing and (ii) with the agreement of both Parties. The Sole Arbitrator therefore examines below whether these conditions are fulfilled.

242.

The Sole Arbitrator notes that on 6 July 2018, Mr. [Person 5] proposed to Mr. [Person 7] that [Person 8] acted as the mutually agreed Surveyor at the destination port.155 On the same day, Mr. [Person 7] indicated that the inspection at the destination port would be performed by [Redacted] as it had done the inspection at the loading port.156 Claimant did not oppose Mr. [Person 7]’s request and [Redacted] subsequently acted as the mutually agreed Surveyor at the destination port.

243.

The Sole Arbitrator also notes that on 19 July 2018, Mr. [Person 7] requested a quotation from [Redacted] to perform the inspection at the destination port, and that Mr. [Person 7] reproduced the terms of Annex 1 of the Contract in the body of his email.157

244.

The Sole Arbitrator further notes that Mr. [Person 7]’s subsequently exchanged several emails with [Redacted] to clarify the scope of [Redacted]’s services at the destination port, and that Mr. [Person 7] ultimately confirmed that [Redacted]’s quotation was accepted.158

245.

The Sole Arbitrator therefore finds from the evidence on the record that Mr. [Person 7] agreed to modify the Contract and to handle the inspection process with [Redacted]. The Sole Arbitrator also finds that such agreement has been made in writing by Mr. [Person 7] in his emails of 6 July 2018,159 19 July 2018,160 and 24 July 2018.161

246.
The Sole Arbitrator already found that Mr. [Person 7]’s representations and undertakings were binding upon Claimant.162 As a result, the Sole Arbitrator concludes that Responded agreed to modify the Contract and to handle the inspection process with [Redacted].
247.
For the reasons set out above, the Sole Arbitrator finds that Claimant has not breached the Contract by failing to provide Annex 1 to [Redacted]. For the same reasons, the Sole Arbitrator finds that the lack of communication of Annex 1 by Claimant to [Redacted] does not indicate that Claimant manipulated the Product at the destination port.

c. The lack of sampling at the port of Baltimore

248.

Respondent submits that Claimant breached the Contract by failing to sample the Product at the port of Baltimore, which also confirms that Claimant manipulated the Product in its warehouse.163

249.

The Sole Arbitrator first notes that Article 9-C) of the Contract provides that the transaction was governed by the following incoterm "CIF Baltimore USA as incoterms ICC 2017", and that Article 12-B) of the Contract provides for the final inspection "At destination port".164 Therefore, the Sole Arbitrator concurs that the Contract provides that the inspection should have been performed in the port of Baltimore.

250.
Claimant submits, however, that Respondent agreed to perform the inspection in Claimant’s warehouse in [Redacted] rather than in the port of Baltimore, and therefore, that Claimant has not failed to sample the Product at the destination port.165
251.
The Sole Arbitrator therefore examines below whether the Contract has been modified and whether Respondent agreed that the inspection be performed in Claimant’s warehouse.
252.
The Sole Arbitrator already noted that Article 19 of the Contract provides that the Contract can only be modified (i) in writing and (ii) with the agreement of both Parties. The Sole Arbitrator therefore examines below whether these conditions are fulfilled.
253.

The Sole Arbitrator notes that on 6 July 2018, Mr. [Person 5] informed Mr. [Person 7] that the containers should arrive at its facility on 17 July 2018 and that he would notify [Person 8] to be present to sample and analyze the Product.166 Mr. [Person 5] therefore proposed that the inspection be carried out in its facility in [Redacted] rather than in the port of Baltimore. The Sole Arbitrator considers that Mr. [Person 5]’s proposal may have been driven by practical considerations, such as avoiding moving Claimant’s personnel from [Redacted] to Baltimore for the inspection, and that Mr. [Person 5]’s request was therefore reasonable.

254.

The Sole Arbitrator also notes that Respondent did not object to Mr. [Person 5]’s proposal. On the same day, Mr. [Person 7] requested [Redacted] to perform the inspection and did not object to Mr. [Person 5]’s request.167 The Sole Arbitrator observes that Mr. [Person 2] was in copy of Mr. [Person 7]’s response to Mr. [Person 5], and that Mr. [Person 2] did not object to Mr. [Person 5]’s request either.

255.

The Sole Arbitrator further notes that on 19 July 2018, Mr. [Person 7] requested a quotation from [Redacted] to perform the inspection at the destination port.168 In its request, Mr. [Person 7] indicated that the "Port of Discharge" was "Baltimore, USA", and that the "Place of Destination" was "[Redacted] USA", which is where Claimant’s warehouse is located. Mr. [Person 7] further provided the identity and address of Claimant, as well as the "Instruction of the inspection at destination". The only "destination" indicated in Mr. [Person 7]’s email was Claimant’s address. Therefore, the evidence on the record establish that Mr. [Person 7] directed [Redacted] to perform the inspection in Claimant’s warehouse.

256.

The Sole Arbitrator finally notes that on 24 July 2018, Mr. [Person 7] informed [Redacted] that its quotation was accepted, that the Product was "on the way from Baltimore to [Redacted]" and, once again, provided Claimant’s address.169 Mr. [Person 7] was therefore aware that the Product had left Baltimore when it accepted [Redacted]’s quotation, and Mr. [Person 7] indicated to [Redacted] that it was retained at a time where it was too late to perform the inspection in the port of Baltimore.

257.

The Sole Arbitrator observes that Mr. [Person 2] was in copy of Mr. [Person 7]’s email to [Redacted] of 24 July 2018,170 and that Mr. [Person 2] did not object to Mr. [Person 7]’s request that the inspection be performed in Claimant’s warehouse.

258.

For the reasons set out above, the Sole Arbitrator finds that Mr. [Person 7] agreed to modify the Contract and to perform the inspection in Claimant’s warehouse. The Sole Arbitrator also finds that such agreement has been made in writing by Mr. [Person 7] in his emails of 6 July 2018,171 19 July 2018,172 and 24 July 2018.173

259.
The Sole Arbitrator already found that Mr. [Person 7]’s representations and undertakings were binding upon Respondent.174 As a result, the Sole Arbitrator concludes that Respondent agreed to modify the Contract and to perform the inspection in Claimant’s warehouse rather than in Baltimore.
260.
For the foregoing reasons, the Sole Arbitrator concludes that Respondent accepted that the inspection be performed in Claimant’s warehouse in [Redacted], and that Claimant has not breached the Contract by failing to inspect the Product in Baltimore. For the same reasons, the Sole Arbitrator finds that the lack of inspection in Baltimore does not suggest that Claimant manipulated the Product in its warehouse.

d. The lack of sampling at [Redacted]’s railyard

261.

Respondent submits that Claimant failed to perform the inspection immediately after the opening of the containers at [Redacted]’s railyard, which constitutes a breach of the Contract, and confirms that Claimant manipulated the Product in its warehouse.175

262.
The Sole Arbitrator has already found that Respondent agreed that the inspection be performed in Claimant’s warehouse.176 For the same reasons, the Sole Arbitrator concludes that Claimant has not breached the Contract by failing to inspect the Product at [Redacted]’s railyard.
263.

The Sole Arbitrator further notes that on 31 July 2018, Claimant informed [Redacted] that sampling was not allowed at the railyard,177 and that in its letter of 20 June 2019, [Redacted] indicated that "Due to safety concerns, lack of space and railyard rules sampling could not be performed upon initial opening of the containers at the railyard."178 Therefore, the fact that the Product was not sampled at the railyard was justified by the rules applicable at the railyard.

264.
The Sole Arbitrator further notes that Respondent has not established that the rules applicable at the railyard did not prevent the inspection of the Product.
265.
For these reasons, the Sole Arbitrator finds that the lack of inspection of the Product immediately after the opening of the containers at [Redacted]’s railyard does not suggest that the Product has been manipulated in Claimant’s warehouse.

e. The lightening of the containers

266.

Respondent submits that Claimant failed to inform Respondent and the carrier about the road weight restrictions applicable in the USA, resulting in 17 bags being taken out of the containers and stored in Claimant’s warehouse under Claimant’s sole custody and control between the evening of 1 August 2018 and the morning of 2 August 2018.179

267.
Respondent submits that the Contract provides that the Product had to be inspected immediately after container opening, and that Claimant’s omission amount to a breach of the Contract and confirms that Claimant manipulated the Product in its warehouse.180
268.
The Sole Arbitrator already found that Respondent accepted that the inspection be performed in Claimant’s warehouse, and that the Product had to be transported to Claimant’s warehouse by truck because the inspection was not allowed at the railyard.181
269.

The Sole Arbitrator further notes that [Redacted] Inspection Report indicates that the containers were lightened because they were "too heavy to transits [sic] on the road per USA Department of Transportation Laws".182 The Sole Arbitrator notes that Respondent has not established that the road weight restrictions applicable in the USA did not impose decreasing the weight of the containers. The Sole Arbitrator therefore finds that decreasing the weight of the containers was justified by the road weight restrictions applicable in the USA.

270.

The Sole Arbitrator also observes that Claimant proposed that the inspection be carried out in its facility on 6 July 2018, which Respondent accepted, and that, at this date, the Product was already on the vessel which just arrived in Cartagena, Colombia.183 Therefore, none of the Parties could anticipate that the Product would be transported on trucks when the Product was loaded on the containers at the loading port.

271.
For all these reasons, the Sole Arbitrator concludes that Claimant has not breached the Contract by failing to inform Respondent and the carrier about the road weight restrictions applicable in the USA, and that the decreasing of the weight of the containers at [Redacted]’s railyard does not suggest that the Product was manipulated in Claimant’s warehouse.

f. The Product has been under Claimant’s sole custody and control

272.
Respondent submits that the Product was under Claimant’s sole custody and control for two periods: (i) between the evening of 1 August 2018 and the morning of 2 August 2018, and (ii) between the evening of 2 August 2018 and the morning of 15 August 2018.
273.

Claimant does not dispute the fact that the Product was under its sole custody and control during these periods. Claimant submits, however, that the Product was "kept dry and quarantined",184 and that it was not manipulated.

274.
The Sole Arbitrator notes that Respondent has not provided any direct evidence of a manipulation of the Product during these periods. The Sole Arbitrator also notes that although Mr. [Person 5] states in his Witness Statements that the Product has not been manipulated in its warehouse, Claimant has not provided any other evidence that the Product has not been manipulated. The Sole Arbitrator therefore examines the facts during these two periods to determine whether there is any indication that the Product has been manipulated in Claimant’s warehouse.

(i) Between the evening of 1 August 2018 and the morning of 2 August 2018

275.

Respondent submits that Claimant could have moistened the Product very easily "with a simple jet of water, in less than 30 minutes".185 and that Claimant could have performed "moisture analyses to obtain the desired level".186

276.

The Sole Arbitrator notes that only 17 out of the 90 big bags were accessible to Claimant during the night of 1 to 2 August 2018. This is confirmed by [Redacted] Inspection Report which indicates that on 1 August 2018, at [Redacted]’s railyard, the containers’ seals were checked and broken, 17 big bags were removed from the four containers, the four containers were resealed, transported to Claimant’s warehouse, "stored under roof at [Claimant] facility", and the "Sampling was done on the 2nd after opening the containers".187 This is also confirmed by Respondent’s submissions in the arbitration indicating that "17 big bas remained unattended on [Claimant]’s premises",188 that "Nickel powder was initially partially (17 Big Bags) and entirely in a second phase, remaining 100% under the exclusive control of [Claimant] on [Claimant]’s premises"189 and also "Was there any manipulation (humidification) of the nickel powder during the night of August 1 to 2 on the 17 big bags???".190 Therefore, only 17 bags out of 90 were accessible to Claimant during the night, the other 73 bags being stored in the four sealed containers.

277.

The Sole Arbitrator also notes that the two moisture content determinations performed on the 19 May 2018 samples taken in Mexico revealed moisture contents of 44,32%191 and 46,2%,192 and that the moisture content determination performed on the 2 August 2018 sample taken in the USA revealed a moisture content of 46,87%)193 Therefore, the moisture content determination performed on the 19 May 2018 samples and the moisture content determination performed on the 2 August 2018 samples reveal comparable results.

278.

The Sole Arbitrator further notes that [Redacted] Inspection Report of 12 October 2018 indicates that on 2 August 2018, the sampling was performed on the 90 big bags, as "a clean plastic bag was used to compile the sample from all 90 super sacks."194 (Emphasis added)

279.
Within this context, the Sole Arbitrator considers that it is very unlikely that the Product may have been manipulated in Claimant’s warehouse during the night of 1 to 2 August 2018. Indeed, it does not seem plausible, in the Sole Arbitrator’s opinion, that Claimant could have added enough water in the 17 bags to obtain an average moisture content for the 90 big bags which could have been close to the moisture content determinations of the 19 May 2018 samples performed on the 90 bags.
280.
It is also unlikely because Claimant did not have access to 73 bags and therefore, contrary to Respondent’s submission, Claimant could not verify that the average moisture content of the entirety of the Product was closed to the moisture content determinations performed on the entirety of the Product on 19 May 2018.
281.
The Sole Arbitrator also notes that Claimant would have had to add so much water to the 17 big bags that it would have probably been noticed by [Redacted] on the next day and indicated in [Redacted] Inspection Report of 12 October 2018. However, there is no such indication in the [Redacted] Inspection Report.
282.
The Sole Arbitrator further notes that during the 2 August 2018 sampling, Claimant disagreed with the sampling method and requested to change the sampling method. The Sole Arbitrator is of the view that it would not have made sense to request to change the sampling method on 2 August 2018 if Claimant had manipulated the Product overnight to achieve the desired moisture result.
283.
For these reasons, the Sole Arbitrator concludes that it has not been established that Claimant manipulated the Product in its warehouse between the evening of 1 August 2018 and the morning of 2 August 2018.

(ii) Between the evening of 2 August 2018 and the morning of 15 August 2018

284.

Respondent submits that Claimant requested to change the sampling method on 2 August 2018 to have the Product under its sole custody and control for almost two more weeks, and that Respondent could have added water to the Product during this period which confirms that Claimant manipulated the Product in its warehouse.195

285.
The Sole Arbitrator notes that if Claimant intended to manipulate the Product after 2 August 2018, it would have had to prevent [Redacted] from sampling the Product on 2 August 2018. However, Claimant did not prevent [Redacted] to sample the Product on 2 August 2018, which makes it unlikely that Claimant manipulated the Product between 2 August 2018 and 15 August 2018.
286.

The Sole Arbitrator also notes that the moisture content determinations performed on the samples taken on 2 August 2018 and on 16 August 2018 in the USA are consistent. The moisture content determination performed on the 2 August 2018 sample revealed a 46,87 % moisture content,196 and the two moisture content determinations performed on the 16 August 2018 samples revealed moisture contents of 48,26 %197 and 46,11%.198 This further suggests that it is unlikely that the Product had been manipulated between 2 August 2018 and 15 August 2018.

287.

The Sole Arbitrator further notes from the evidence on the record that Respondent agreed to change the sampling method and that Respondent confirmed that only the Drill and Auger Method complied with the Contract:

- On 2 August 2018, Mr. [Person 5] indicated to Mr. [Person 2] that the use of the Scooping Method was not acceptable199 and on the same day, Mr. [Person 2] replied to Mr. [Person 5] indicating "I am ok with you sampling moisture must be made accordingly the state of the art I dont [sic] understand it is a grest [sic] US company wellknown [sic] for their goodjob";200

- On 3 August 2018, Mr. [Person 7] requested [Redacted] to perform the sampling "as per LME standard and regulation.", adding that "To meet this standard and regulation the sampling of the material in big bags have to be done from the top to the bottom of big bags.";201

- On 6 August 2018, [Redacted] proposed to sample the Product with the Drill and Auger Method,202 and on 7 August 2018, Mr. [Person 7] indicated "As previously infom [sic] we accept below sampling procedure".203

288.

The Sole Arbitrator finally notes that Claimant proposed that the new sampling be performed by [Person 8], which was immediately available, but that Respondent only agreed that the new sampling be performed by [Redacted], which was only available two weeks later, on 15 and 16 August 2018.204

289.
For the foregoing reasons, the Sole Arbitrator finds that there is no indication that Claimant manipulated the Product between the evening of 2 August 2018 and the morning of 15 August 2018, that Respondent agreed to the new sampling according to the Drill and Auger Method, and that the change of the sampling method does not suggest that Claimant manipulated the Product.

g. The weight differences

290.

Respondent submits that [Redacted] Inspection Report indicates that the weight of the Product at the loading port was 88.804 metric tons, and that the weight of the Product at the destination port was 86.266 metric tons.205 Respondent also submits that the Product was only weighted on 21 September 2018, 51 days after the Product arrived in Claimant’s warehouse. Respondent considers that this confirms that the Product was manipulated in Claimant’s warehouse.206

291.

Claimant submits that the weight difference was likely caused by the loss of material due to the breaking of several bags during unloading and weighing, as well as by tare weight issues.207

292.

The Sole Arbitrator first notes that the Parties agreed that Respondent would handle the inspection at the destination port,208 that [Redacted] did not weight the Product on 2 August 2018 or on 15 or 16 August 2018 and that Respondent only requested [Redacted] to weight the Product on 11 September 2018.209 Therefore, the fact that the re-weighing only occurred on 21 September 2018 does not suggest that the Product was manipulated in Claimant’s warehouse. It merely indicates that Respondent requested [Redacted] to weight the Product after some time.

293.

The Sole Arbitrator also notes that [Redacted] Inspection Report indicates that "Several bags were slightly damaged and 3 were so badly damages that the content was stored in a bin as per the photos supplied."210 [Redacted] further indicated on 14 November 2019 that "4 of the 90 bags during the day of weighing at the [Claimant] facility was found to be badly damaged and those 4 bags were kept in 2 metal bins."211 The Sole Arbitrator therefore considers plausible Claimant’s explanation that the weight difference may have been caused by the loss of material.

294.
The Sole Arbitrator also observes that, to increase the moisture content of the Product, Claimant would have had to add water into the Product. As a result, the overall weight of the Product would have increased and not decreased.
295.
For these reasons, the Sole Arbitrator finds that the weight difference of the Product at the loading port and at the destination port does not suggest that Claimant manipulated the Product in its warehouse.

h. [Redacted]’s reservations

296.

Respondent submits that [Redacted]’s reservations on its Inspection Report and on the certificate of analysis confirm that Claimant manipulated the Product in its warehouse.212

297.

Claimant submits that [Redacted]’s reservations merely indicate the timeline of the inspection, that [Redacted]’s reservations were obtained by Respondent through threats and pressure and therefore, that the reservations should not be given any credit.213

298.
The Sole Arbitrator notes that none of [Redacted]’s reservations indicate that the Product has been manipulated at the loading port.
299.

The Sole Arbitrator also notes that the evidence from the record shows that the reservations were only included by [Redacted] upon Respondent’s insistence.214

300.

The Sole Arbitrator further notes that Respondent requested [Redacted] to include the reservations only after Respondent received the moisture content determination at the destination port. Before that, Respondent never objected nor reserved its rights regarding the facts at the destination port, even though Respondent was kept informed about the facts at destination.215

301.
For these reasons, the Sole Arbitrator finds that [Redacted]’s reservations do not suggest that the Product had been manipulated at the destination port.

i. Lot A and Lot B

302.

Respondent submits that the manipulation of the Product is confirmed by the fact that Respondent’s supplier sold another Lot to Respondent (Lot A), and that the moisture content for Lot A is consistent at the loading port and at the destination port.216

303.

The Sole Arbitrator notes, however, that [Redacted] indicated on 1 June 2015 that the "Big bags were received in two lots a) Lot A 68 Big bags b) Lot B 90 big bags" and that "Due to high moisture content of Lot b, we were informed that this will be done to dry for a second sampling".217 [Redacted] therefore indicates that only Lot B was dried at the loading port, which suggests that Lot A was not dried at the loading port.

304.
The Sole Arbitrator already noted that the moisture content of the Product (Lot B) is consistent before the alleged drying at the loading port and at the destination port.218 The Sole Arbitrator therefore finds that Lot A does not provide any useful indication, as it may confirm that the Product has been manipulated in Claimant’s warehouse, as much as it may confirm that the Product has not been dried at the loading port.
305.
The Sole Arbitrator therefore finds that the moisture content of Lot A at the loading port and at the destination port does not suggest that Claimant manipulated the Product at the destination port.

j. The visual aspect of the Product upon arrival at the destination port

306.

Respondent submits that the manipulation of the Product in Claimant’s warehouse is confirmed by Claimant’s and [Redacted]’s comments on the visual aspect of the Product upon arrival, Claimant’s indicating that the Product was "free flowing and no clumping",219 and [Redacted] indicating that the "the area visible did not indicate water/moisture ingress."220

307.
The Sole Arbitrator notes, however, that a visual inspection has not scientific value, and that Claimant’s and [Redacted]’s indications do not mean that the moisture content of the Product upon arrival was 33,657 %, or that it was 48,26 %.
308.
The Sole Arbitrator also notes that the Parties have provided several moisture content determinations of the Product at the loading and at the destination port. The Sole Arbitrator shall therefore rely on those determinations rather than on the visual aspect of the Product to determine the moisture content to be used to determine the final price of the Product.
309.
The Sole Arbitrator therefore finds that the visual aspect of the Product upon arrival does not suggest that Claimant manipulated the Product in its warehouse.

k. The samples and the report at destination were not provided within 30 days from the official shipment date

310.

Respondent submits that Claimant breached the Contract by failing to provide the samples and the inspection report at the destination port within 30 days of the official shipment date.221

311.
Claimant submits that only [Redacted] had the obligation to provide the samples and the report at the destination port within the 30-day deadline and not Claimant, and that this deadline was extended as a result of the Parties’ agreement to conduct a second sampling in accordance with the Contract.222
312.

Article 13-B paragraph 3 of the Contract provides that:

"If Seller does not receive the sample requested as per clause 12-B) and/or the WSMD/A at destination report within thirty (30) calendar days from Official Shipment Date, the WSMD/A at loading port will be binding for the Parties and used for the final invoice."223

313.

The Sole Arbitrator first notes that the Contract provides that the samples and the WSMD/A report established by [Redacted] at the destination port had to be provided to the Parties by [Redacted] and not by Claimant. Regarding the samples, Article 12-B) of the Contract provides that the "Official samples and WSMD report shall be sent by the Surveyor within the same day of the sampling by express courier to the Parties." (Emphasis added). Regarding the assay report, Article 12-C-2) provides that: "The Surveyor laboratory shall provide the Parties the assaying report within seven (7) calendar days from the date of sample receipt by the Surveyor laboratory."224 (Emphasis added)

314.
As a result, Claimant did not have the obligation to provide the samples and the WSMD/A report at the destination port to Respondent.
315.

The Sole Arbitrator further notes that Claimant had no contractual relationship with [Redacted] for its services at the destination port. As mentioned above, Mr. [Person 7] accepted [Redacted]’s quotation.225 Furthermore, an email of Mr. [Person 11] (from Claimant) dated 2 August 2018 indicates that [Redacted]’s inspector stated that he "cannot sample bags in anyway other than his instruction, his boss made clear that [Claimant] is not the customer."226 (Emphasis added)

316.
Therefore, Claimant could not impose on [Redacted] to provide the samples and WSMD/A report at the destination port within the timeframe provided for in the Contract. Only Respondent could have imposed such an obligation on [Redacted].
317.
For the foregoing reasons, the Sole Arbitrator considers that Claimant has not breached Article 13-B paragraph 3 of the Contract.

4. Conclusion on the principal claims

318.
The Sole Arbitrator observed that the dispute between the Parties relates to the level of moisture of the Product sold by Respondent to Claimant. The moisture content determination performed on the 12 June 2018 samples taken at the loading port indicates a moisture content of 33,657 %, whereas the moisture content determination performed on the 16 August 2018 samples taken at the destination port indicates a moisture content of 48,26 %.227
319.
The Sole Arbitrator also observed that the two moisture content determinations performed on the 19 May 2018 samples taken at the loading port and the three moisture content determinations performed on the samples taken at the destination port on 2 August 2018 and on 16 August 2018 are consistent, which strongly suggests that the samples may have been manipulated between 19 May 2018 and 12 June 2018.228
320.
The Sole Arbitrator examined the documents produced and the arguments raised by Respondent in the arbitration and found that none of them establish that the Product had been dried in the Port of Altamira, nor that the Claimant had manipulated the Product at the destination port.
321.
Therefore, the evidence on the record indicate that the moisture level of the 12 June 2018 samples and of the 16 August 2018 samples is inconsistent because the samples were manipulated at the loading port. As a result, the Sole Arbitrator finds that Respondent breached the Contract by manipulating the samples at the loading port.
322.

The Sole Arbitrator further concludes that [Redacted] Inspection Report established at the destination port is reliable.229 Therefore, and pursuant to Article 13-B) of the Contract, the final price of the Contract shall be based on the moisture content of 48,26 % indicated in [Redacted] Inspection Report.

B. Damages

1. Regarding the Parties’ principal claim

323.
The Sole Arbitrator found that (i) Respondent breached the Contract by manipulating the samples at the loading port and that (ii) Claimant has not breached the Contract by manipulating the Product at the destination port. As a result, the Sole Arbitrator only examines Claimant’s request for damages below.
324.

Claimant submits that on 19 June 2019, it paid 90 % of the Provisional invoice corresponding to an amount of USD 418,805.68.230 Although the date of the bank transfer was only mentioned in the Witness Statement of Mr. [Person 5], and no contemporary evidence of the bank transfer was provided, the existence, the amount and the date of the payment of the Provisional Invoice by Claimant have not been disputed by Respondent in the arbitration.231

325.

On 10 April 2019, Claimant issued a Final Invoice of USD 282,749.85 based on the moisture content indicated on [Redacted] Inspection Report.232 Respondent refused to reimburse Claimant for the difference of USD 136,055.83 between the Provisional Invoice and the Final Invoice. Claimant therefore requests that Respondent be ordered to reimburse Claimant the amount of USD 136,055.83.233

326.
The Sole Arbitrator found that the final price of the Contract shall be based on the moisture content indicated on [Redacted] Inspection Report.234
327.
The Sole Arbitrator notes that Respondent has not disputed the calculation of the amount of USD 282,749.85 mentioned in Claimant’s Final Invoice based on the moisture content indicated on [Redacted] Inspection Report. The Sole Arbitrator also notes that Respondent has not disputed the calculation of the difference between the amount of USD 418,805.68 paid by Claimant pursuant to the Provisional Invoice and the amount of USD 282,749.85 indicated in Claimant’s Final Invoice. The Sole Arbitrator has verified Claimant’s calculations and finds them to be correct.
328.
For the foregoing reasons, the Sole Arbitrator orders Respondent to reimburse Claimant the amount of USD 136,055.83, corresponding to the balance of the Contract price.

2. Regarding Respondent’s other claims

329.

The Sole Arbitrator notes that in its Statement on Costs, Respondent made new claims, requesting damages for loss of profit for USD 116,007.66, USD 58,003.83 and USD 7,408, and for "breach of honor" for USD 3,000.235

330.
The Sole Arbitrator notes that Respondent has not requested the Sole Arbitrator’s authorization to introduce these claims in the proceedings, although the Sole Arbitrator indicated during the 26 August 2018 CMC that he would be very reluctant to accept any new claim later in the proceedings.236 These claims have been made at a late stage of the proceedings and have not been authorized by the Sole Arbitrator. As a result, these claims are not within the scope of this arbitration.
331.
The Sole Arbitrator further notes that in any case, these claims are unjustified and unsubstantiated. Therefore, these claims would have been dismissed.

C. The Surveyors’ fees