b1402 Claimant Memorial

i

Team No. B1402

Before

The Arbitral Panel In Bangkok, Thailand

2014

ICSTW

(Claimant)

v.

Spear Shirts Inc.

(Respondent)

Memorandum on behalf of the Claimant

9th LAWASIA International Moot 2014

ii

TABLE OF CONTENTS

Index of Authorities..................................................................................................................iv

Statement of Jurisdiction..........................................................................................................vii

Questions Presented................................................................................................................viii

Statement of Facts.....................................................................................................................ix

Summary of Pleadings.............................................................................................................xii

Pleadings....................................................................................................................................1

1) THE MULTIPLE CLAIMANTS IN THE CURRENT ARBITRATION CAN BE JOINED IN A SINGLE

ARBITRATION........................................................................................................................1

i) The tribunal has competence to determine its own Jurisdiction..............................1

ii) A large number of claimants can be joined in a single arbitration under the

concept of Class Arbitration....................................................................................1

2) SPEAR SHIRTS INC. IS LIABLE FOR INJURIES AND DEATHS OF THE EMPLOYEES OF MAE SOT

CLOTHING LTD......................................................................................................................4

i) Substantive Law applicable to the Dispute..............................................................4

a. The Arbitration Tribunal shall determine the law based on the

Conflict of Law Rules................................................................4

b. Determination of Applicable Conflict of Law Rules.................4

c. Law governing the contract between Spear Shirts Inc and Mae

Sot is the Law of USA................................................................5

ii) Mae Sot was functioning in the capacity of an Agent of Spear Shirts Inc...............6

iii) Mae Sot was conducting its business negligently, wrongfully and in breach of

Statutory Duty..........................................................................................................7

a. Mae Sot was negligent in its conduct of business......................7


iii

b. Mae Sot was functioning in breach of its Statutory Duty..........8

iv) Spear Shirts is vicariously liable for the wrongful acts of Mae Sot.........................9

3) THE VICTIMS AND THEIR FAMILIES CAN RECOVER MONETARY DAMAGES FROM SPEAR

SHIRTS UNDER THE LAWS OF THAILAND.............................................................................10

i) It is humbly submitted that the victims and their families are entitled to recover

Monetary damages from Spear Shirts Inc under the Laws of Thailand.................10

PRAYER...................................................................................................................................xiv


iv

INDEX OF AUTHORITIES

DICTIONARY

BRYAN A. GARNER, BLACKS’ LAW DICTIONARY, 9th Ed. 2009.

STATUTES

KLRCA Rules, 2013

KLRCA UNCITRAL Rules, 2010

Occupational Safety, Health & Environment Act, B.E. 2554.

Factory Act B.E. 2535.

Conflict of Laws Act, BE 2481.

The Workmen Compensation Act, BE 2537

The Civil & Commercial Code of Thailand.

Federal Arbitration Act, 1925, codified at 9 U.S.C. § 1 et seq.

BOOKS REFERRED

DEBORAH HENSLER ETAL, THE ANNALS OF THE AMERICAN ACADEMY OF POLITICAL

AND SOCIAL SCIENCE (2009)

DICEY & MORRIS, CONFLICT OF LAWS 2006

GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION (NETHERLANDS,

KLUIVER LAW INTERNATIONAL: 2009).

J. LEW, APPLICABLE LAW IN INTERNATIONAL COMMERCIAL ARBITRATION (1978)

MANN, LEX FACIT ARBITRUM, (1986)

NIGEL BLACKABY, CONSTANTINE PARTASIDES WITH ALAN REDFURN AND MARTIN

HUNTER, REDFURN & HUTNER ON INTERNATIONAL ARBITRATION (5THED) (NEW YORK,

OXFORD UNIVERSITY PRESS 2009).


v

CASES

5 Kanitz v. Rogers Cable Inc. (Can. v. Can.), [2002] 58 O.R. (3d) 299, 21 B.L.R. (3d)

104................................................................................................................................16

Barbara Oil Company v. Kansas Gas Supply Corp. 250 kan 438, 827 P. 2d 24.........20

Bernett v. Hidalgo, 268 Mich, App 157, 706 NW 2d 869 (2005)................................21

Brown v. Shmitz, 237 Iowa 418 22 N. W 2d 340........................................................20

Coastal Plains Utilities, Inc. v. New Hanover County, 166 NC App 333 601 SE 2d

915................................................................................................................................23

Doe v. Nestle, SA 748 F. Supp 2d 1057 (CD cal. 2010)..............................................23

Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003)................................................15

Greenwald v. Kersh 265 Ga. App196, 593 SE 2d 381.................................................23

Hancock & Ors. v. Hancomatic Music Pty Ltd. & Twed Shire Council, (2007)

NSWCA 350................................................................................................................21

ICC Case No. 5460 of 1987.........................................................................................19

Keating v. Superior Court, 645 P.2d 1192 (Cal. 1982)................................................15

Kurtz v. Farrington, 104 Conn. 257, 132 A. 540, 48 ALR 259...................................20

Letson v. Century 21 New west reality, 285 Ill. App. 3d 221 Ill. Dec. 310.................20

Morale v. Cozy Brokerage, INC. 170 AD 2d 201, 565 NYS 2d 100 (1st Dept

1991).............................................................................................................................20

Nicholas M. Pace,Group and Aggregate Litigation in the United States, in 622.........14

Perkins v. Tex & New Orleans R R Co., 1475 So. 2d 648 (La. 1962)........................22

Roadwell v. Chanblee, 131 N.C. App. 473, 509 SE 2d 785 ( 1998)............................20

Rookard v. Mexicoach,l 680 F. 2d 1257 (9th Cir, 1982)..............................................20

SC Decision no 1447/2523...........................................................................................27

SC Decision no 1721/2513...........................................................................................27


vi

SC Decision no 1794/2517...........................................................................................27

SC Decision no 1921/2520...........................................................................................27

Stolt-Nielsen SA v. Animal Feeds International Corp, 130 S.Ct. 1758(2010)............15

Summers v. Tice, 199 P 2d. 1 (Cal. 1948)...................................................................22

The President and Fellows of Harvard College Against JSC Surgutneftegaz, 770

PLI/LIT. 127, 155 (2008).............................................................................................14

Valencia v. Bancolombia (Colom. v. Colom.), digest by Zuleta DIGEST for Institute

for Transnational Arbitration (ITA) (Arb. Trib. from the Bogotá Chamber of Comm.

2003).............................................................................................................................16

Vinewood Capital, LLC v. Shepperd Mullin Richter & Hampton,. LLP 735 F. Supp

2d 503...........................................................................................................................23

JOURNALS & ARTICLES

Imre S. Szalai, Aggregate Dispute Resolution: Class and Labor Arbitration,13 HARV.

NEGOT. L. REV. 399, (2008).

AMERICAN ARBITRATION ASSOCIATION, SUPPLEMENTARY RULES FOR

CLASS ARBITRATIONS

www.adr.org/sp.asp?id=21936;

JAMS THE RESOLUTION EXPERTS, JAMS CLASS ACTION PROCEDURES

(effective May 1, 2009)

http:// www.jamsadr.com/rules-class-action-procedures //.


vii

STATEMENT OF JURISDICTION

The parties have agreed to submit the dispute to this binding arbitration at Bangkok, Thailand

under the procedural rules of Kuala Lumpur Regional Centre of Arbitration.


viii

QUESTIONS PRESENTED

1. Whether a large number of claimants can be joined in a single arbitration?

2. Whether Spear Shirts can be held liable for injuries and deaths of Mae Sot Clothing’s

employees?

3. What types of monetary damages may the victims and their families recover if Spear

Shirts Inc. is obligated to reimburse them for their injuries and deaths?


ix

STATEMENT OF FACTS

1. Mae Sot Clothing Ltd(hereinafter Mae Sot), a textile manufacturing factory which is

located in or near Mae Sot (Thailand), a town on the border between Myanmar and

Thailand, employs around 38,000 Thai workers and more than 60,000 workers from

Myanmar. It mainly produces clothing which carries some of the world’s most

famous brands, including Spear Shirts.

2. Spear Shirts Inc is a wholesale textile company which has its principle place of

business in Los Angeles, California. Its clothing is sold throughout the United States

and much of the world.

3. Spear Shirt Inc and Mae Sot entered into a agreement (hereinafter referred to as

‘Purchase Order’) for the manufacture and supply of finished products which laid

down the terms and conditions of the agreement entered into between the parties. Mae

Sot was authorised by the Purchase Order to attach the logo of Spear Shirts Inc on the

products it produced and it is also authorised to sell any goods which are returned,

rejected or abandoned.

4. In furtherance of the relationship between the two companies Theodore (Snowy)

Snowden an assistant to Joe Baydon, Vice President in charge of purchasing at Spear

Shirts Inc visited the Mae Sot Factory while he was vacationing in Thailand.

5. After his visit Mr Snowden sent a text message to Mr Baydon wherein he described

the factory as a ‘Sweat Shop’ and went on to state that the factory worked its

employee’s to death and that the working conditions in the factory were not adequate

enough to ensure the safety of the workers. He also went on to state in this message

that several of the female workers in the factory looked to be very young and


x

appeared to be underage. However he was reassured by Paul Castro, the General

Manger of the factory that all the workers were above the legal age in Thailand.

6. On October 15, 2013, a fire raced through the Mae Sot. The factory building was

completely destroyed. The fire apparently started from an overheated textile machine

and quickly spread through the factory. The fire in the factory spread at a great pace

due to rolls of fabric and carts filled with partly finished shirts all over the floor. And

also blocked & cluttered stairways which added to the casualties.

7. Fifty employees – all women - lost their lives in the fire and more than 100 more were

seriously injured. All were from Myanmar – many were thought to be under the age

of 15, the minimum working age in Thailand.

8. After the accident the victims who were injured and the families of the victims who

perished in the fire (hereinafter ‘the victims’) along with assistance from the

International Collective in Support of Textile Workers (ICSTW), an Indian NGO

claimed compensation for the accident from Spear Shirts Inc for the same.

9. In order to avoid the delay and costs associated with formal litigation, the parties

namely Spear Shirts Inc and the victims have agreed to submit this dispute to binding

arbitration in Bangkok in accordance with the KLRCA Arbitration Rules.

10. The basis for the parties to submit to arbitration was the arbitration agreement entered

into between Spear Shirts Inc on one side and the ICSTW which acted as the

authorised representative of the victims and their families on the other side. The NGO

has been granted ‘full authority’ to represent the victims in the dispute and this has

been accepted by Spear Shirts Inc.

11. The parties via an independent auditor’s report determined prior to the beginning of

the arbitration proceedings that the condition of the Mae Sot Shirt Factory caused or

contributed to the injuries and fatalities cased by the fire and that Mae Sot Clothing


xi

Ltd has no assets including insurance and therefore it would not be able to satisfy

some or all of the victims claims. This report has been accepted by the counsel’s of

both the parties.

12. Hence the main purpose of the arbitration proceedings is to determine as to whether

Spear Shirts is legally responsible in whole or in part for the injuries and fatalities.


xii

SUMMARY OF PLEADINGS

1. THE MULTIPLE CLAIMANTS IN THE CURRENT ARBITRATION CAN

BE JOINED IN A SINGLE ARBITRATION

The Arbitral Tribunal has jurisdiction to hear this dispute because: (A) the Tribunal has

competence to determine its own jurisdiction as per the doctrine of Kompetenz-Kompetenz;

(B) a large number of claimants can be joined in a single arbitration as the arbitration at hand

is ‘class arbitration’.

It means a situation, when in an arbitration, a group of people who have the same or similar

type of claims, are represented by one person. The concept of class arbitration has been

approved in various arbitrations all over the world. And thus, similarly in the instant matter

all the victims belong to the same group and have similar claims, therefore it is a case of class

arbitration.

2. SPEAR SHIRTS INC CAN BE HELD LIABLE FOR THE INJURIES AND

DEATHS OF MAE SOT CLOTHING’S EMPLOYEE’S

[2.i] Substantive law applicable to the dispute is the law of USA

The liability of Spear Shirts Inc. arises out of the contract between Spear Shirts and Mae Sot.

In the contract they have expressly agreed that all the transactions between the parties will be

governed by the law of California, USA. Hence, it can be implied that parties intended that

contract between them is to be governed by the Laws of USA, Thus, it is humbly submitted

that Law applicable to the dispute at hand is the law of USA.


xiii

[2.ii] Spear Shirts Inc. is liable for the injuries and deaths of the workers of Mae Sot

garments.

Mae Sot clothing was manufacturing garments for Spear Shirts Inc. and used its intellectual

property for the purpose of manufacture as well as sale in certain circumstances. Hence, Mae

Sot was functioning in capacity of an agent of Spear Shirts Inc. It is an established Principal

of respondent superior that a principal is liable for wrongful acts of the agent. Mae Sot

Clothing’s conducted its business in a negligent manner which was the cause of injuries and

deaths of its employees. Thus, it is humbly submitted that Spear Shirts Inc. is liable for

injuries and deaths of the employees of Mae Sot Clothing’s.

3. THE VICTIMS AND THEIR FAMILIES CAN RECOVER MONETARY

DAMAGES FROM SPEAR SHIRTS INC UNDER THE LAW’S OF

THAILAND.

The victims are entitled to recover monetary damages under the Law’s of Thailand specified

to be applicable to Mae Sot Clothing under the Laws of Thailand for its negligent actions in

failing to maintain the safety of its employees, namely under the Workmen Compensation

Act of Thailand and the Civil & Commercial Code of Thailand.

The victims are entitled to Damages for Medical Expenses, Industrial Rehabilitation

Damages, Funeral Damages and Damages for Lost Wages under the Workmen Compensation

Act of Thailand and to Non Pecuniary Damages and Damages for Pecuniary Loss under the

Civil & Commercial Code of Thailand.

1

PLEADINGS

1. THE MULTIPLE CLAIMANTS IN THE CURRENT ARBITRATION CAN BE

JOINED IN A SINGLE ARBITRATION.

It is humbly submitted that the Arbitral Tribunal has jurisdiction to hear this dispute because:

(i) the Tribunal has competence to determine its own jurisdiction; (ii) a large number of

claimants can be joined in a single arbitration as the arbitration at hand is a ‘class arbitration’1

which is explicitly enumerated in the submission arbitration agreement entered into by the

parties to the dispute.

[1.i] THE TRIBUNAL HAS COMPETENCE TO DETERMINE ITS OWN JURISDICTION.

The Tribunal is authorised to determine its own jurisdictional competence by the doctrine of

Kompetenz-Kompetenz.2 As per this principle the tribunal is empowered to hear disputes

relating to its jurisdiction.

[1.ii] A LARGE NUMBER OF CLAIMANTS CAN BE JOINED IN A SINGLE ARBITRATION

UNDER THE CONCEPT OF CLASS ARBITRATIONS.

A class action involves civil suit commenced on behalf of large, but indeterminate, number of

similarly situated individuals represented by one or more plaintiffs.3

The United States Supreme Court first gave its implicit approval to the procedure in Green

Tree Financial Corp. v. Bazzle4 that various U.S.-based arbitral institutions promulgated their

specialized rules on class arbitration.5

1 The President and Fellows of Harvard College Against JSC Surgutneftegaz, 770 PLI/LIT. 127, 155 (2008).2 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION 855 VOL. I (1st Ed. 2010).; NIGEL BLACKABY &CONSTATNTINE PARTASIDES, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION 347 (5th ed. 2009); Article 23(1) KLRCA UNCITRAL Rules 2010.3 Monroe, Class Actions, 32B Am.Jur2d Federal Courts Pg. 1782 et seq.


2

The current position with regard to the validity of class arbitrations as such has been laid

down by the U.S Supreme Court in Stolt-Nielsen SA v. Animal Feeds International Corp6

wherein it made it clear that class arbitration under the Federal Arbitration Act7 is only

possible where the parties explicitly expressed it at the time they entered into the arbitration

agreement.8 The Supreme Court clearly took the view that class arbitration would be entirely

proper if the parties had demonstrated express consent to such procedures.9

In the current matter regarding the dispute at hand between Spear Shirts and the victims of

the accident at Mae Sot Clothing, all the claimants are similarly situated and it is clearly

visible that the parties have expressly agreed to representative or class arbitration in the

submission arbitration agreement which is evidenced by the formation of a committee

selected by both the parties whose members acted as the representatives of the of the victims

and by the statement signed by the members of the committee giving the International

Collective in Support of Textile Workers (ICSTW) ‘full authority’ to represent the victims in

the current dispute.10

Additionally the concept of Class Arbitrations has been held valid via application in

International Commercial Arbitrations outside the United States in Valencia v.

Bancolombia11, where a tribunal based in Bogotá, Colombia heard a class suit initiated by

4 See: Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003).5 AMERICAN ARBITRATION ASSOCIATION, SUPPLEMENTARY RULES FOR CLASS ARBITRATIONS (effective Oct. 8, 2003)www.adr.org/sp.asp?id=21936;JAMS THE RESOLUTION EXPERTS, JAMS CLASS ACTION PROCEDURES (effective May 1, 2009)http:// www.jamsadr.com/rules-class-action-procedures //.6 130 S.Ct. 1758(2010).7 Pub.L. 68–401, 43 Stat. 883, enacted February 12, 1925, codified at 9 U.S.C. § 1 et seq.8 INTERNATIONAL CLASS ARBITRATION, Lee Haber and Gregory A. Litthttp://www.skadden.com/sites/default/files/publications/Chapter%2030%20%20International%20Class%20Arbitration.pdf.9 See Stolt-Nielsen, 130 S. Ct. at 1768-69; Bazzle, 539 U.S. at 450 (plurality opinion).10 Further clarifications to the Moot Problem, Page 4.11 Valencia v. Bancolombia (Colom. v. Colom.), digest by Zuleta DIGEST for Institute for Transnational Arbitration (ITA) (Arb. Trib. from the Bogotá Chamber of Comm. 2003), http://www.kluwerarbitration.com.


3

shareholders following the merger of two financial entities. Primarily, the matter was then

sent to arbitration so that the tribunal could decide whether the plaintiffs met the threshold

requirements (twenty or more people who have suffered damages out of the same cause of

action) to proceed as a class.12 Class arbitrations have also arisen in Canada, ‘Kanitz v.

Rogers Cable Inc.13.’

In this case the court held that a type of class arbitration could be permitted under the

consolidation provisions contained in Section 20(1) of the Arbitration Act.14 In particular, the

court in regard with the Arbitration Act in concern stated that:

‘representative plaintiffs here may chose to seek arbitrations of their claims, an arbitrator

might well decide that those arbitrations could be dealt with together thereby saving time and

expense for all parties. Such possibilities serve to militate against the central assertion of the

plaintiffs that the arbitration clause operates so as to erect an economic wall barring

customers of the defendant from effectively seeking relief.15’

Therefore, it is humbly submitted that as in the dispute at hand before the honourable

arbitration tribunal, both the parties, namely Spear Shirts and the victims of the accident at

Mae Sot Clothing have explicitly consented to the application of class arbitration in the

matter at hand in the submission arbitration agreement by accepting the International

Collective in Support of Textile Workers (ICSTW) as the representative of the victims and

their families in the dispute16 the large number of claimants at hand can be joined in a single

arbitration in the current matter before the Arbitration Tribunal.

12 Id.13 5 Kanitz v. Rogers Cable Inc. (Can. v. Can.), [2002] 58 O.R. (3d) 299, 21 B.L.R. (3d) 104, digest by Alvarez DIGEST for Institute for Transnational Arbitration (ITA)Available at: http://www.kluwerarbitration.com.14 Id Para 54.15 Id Para 55.16 Further clarifications to the Moot Problem, Page 4.


4

2. SPEAR SHIRTS INC. IS LIABLE FOR INJURIES AND DEATHS OF

EMPLOYEES OF MAE SOT CLOTHING LTD.

[2.i.] SUBSTANTIVE LAW APPLICABLE TO THE DISPUTE

In order to determine rights and obligation of the parties, it is essential to determine the law

applicable to dispute. The parties have consented to the arbitration in accordance with the

KLRCA Rules of arbitration17. KLRCA UNCITRAL Rules18 provides that parties have

autonomy to determine the law which would be applicable to the substance of the dispute19,

failing such designation the arbitration tribunal shall determine the law which is more

appropriate.20

[2.i.a] The Arbitration Tribunal shall determine the law based on the conflict of law

rules.

KLRCA rules of arbitration are based on UNCITRAL model rules of arbitration21. Under

UNCITRAL rules, if any choice of law is not made by the parties in arbitration agreement the

arbitration tribunal shall apply the law determined by the conflict of laws which it considers

applicable.22

[2.i.b] Determination of Applicable conflict of law rules

Parties have submitted the dispute to a binding arbitration in Bangkok, Thailand.23 Thus, the

seat of arbitration is Thailand. For determination of applicable conflict of law rules, the

17 Refer Moot Problem Page 3. 18 Article 35, KLRCA Rules 2013.19 Article 35 (1), KLRCA Rules 2013.20 Id.21 KLRCA Arbitration Rules 2013.22 Article 28 (2), UNCITRAL Rules, 2010.23 Moot Problem Page 8.


5

principle of arbitral situs shall be applied. The law of arbitral situs is that the conflict of law

rules of the place where the seat lies shall be applied.24

Applying this concept, it is respectfully submitted that the conflict of laws rules of Thailand

shall be applied to determine the substantive law.

[2.i.c] Law governing the contract between Spear Shirts Inc. and Mae sot is the law of

USA.

Conflict of law rules of Thailand are enumerated under Conflict of Laws Act, BE 2481. With

regard to contractual relation that the act provides, the law governing the essential and effects

of a contract are to be determined by the Intention of the parties, either express or implied.25

Further under generally accepted principles of conflict of laws, the proper law governing the

contract is to be determined by undertaking a three-stage enquiry into (i) express choice,

(ii) implied choice and (iii) closest and most real connection. 26

Here, there exists a contract between Mae Sot and Spear Shirts Inc. i.e. Spear Shirts standard

purchase order.27 Both parties to the contract have expressly agreed to law of California, USA

being the governing law of their contractual relationship28. Hence, it can be inferred that

parties intended that their contractual rights and obligations are to be governed by the law of

USA.

Therefore, it is humbly submitted that for determination of rights and obligation arising out of

the contract, the applicable law is the law of United States of America.

24 J. LEW, APPLICABLE LAW IN INTERNATIONAL COMMERCIAL ARBITRATION 245-84(1978); MANN, LEX FACIT ARBITRUM, 2 Arb. Int’l 241, 248 (1986); ICC Case No. 5460 of 1987; GARY B. BORN, 532-533.25 Section 13 Conflict of Laws Act, BE 2481.26 See, DICEY AND MORRIS 32, 2006.27 Clarifications to the Moot Problem, Attachment #1.28 Clarifications to the Moot Problem, Attachment #1 Page 2.


6

The Liability of Spear Shirts in the instant dispute arise out of the contract between Spear

Shirts Inc. and Mae Sot Ltd. Hence, it is submitted that law governing the dispute is the law

of USA.

[2.ii] MAE SOT WAS FUNCTIONING IN CAPACITY OF AN AGENT OF SPEAR SHIRTS INC.

An Agency is a fiduciary relationship by which one party confides to another the

management of some business to be transacted in formers name or on his or her account and

by which such another assumes to do the business and render account of it.29

Agency Arises from the consent of the parties and usually as a result of a contract. Principle-

Agency relationship and the consent of the parties can either be express or implied.30 An

agency may be implied from word and conduct of the parties construes in the light of all the

facts and surrounding circumstances.31

An Implied agency is an actual agency created as a result of the oral or written agreement of

the parties, and the existence of which as a fact is proved by deductions or inferences from

the other facts and circumstance of the particular case including words and conduct of the

parties. 32 A party may be both an independent contractor and an agent of another.33

The question whether one is agent of the other is to be determined by the fact that one

represents and is acting for another. In the instant case, Mae Sot manufactures clothes for

Spear Shirts upon a specific order and for that purpose uses its labels, marks, custom designs

and prints and there is no indication on the cloth that it is being produced by Mae Sot. Hence,

29 Brown v. Shmitz, 237 Iowa 418 22 N. W 2d 340, Barbara Oil Company v. Kansas Gas Supply Corp. 250 kan 438, 827 P. 2d 2430 Rookard v. Mexicoach,l 680 F. 2d 1257 (9th Cir, 1982) Roadwell v. Chanblee, 131 N.C. App. 473, 509 SE 2d 785 ( 1998).31 Morale v. Cozy Brokerage, INC. 170 AD 2d 201, 565 NYS 2d 100 (1st Dept 1991).32 Kurtz v. Farrington, 104 Conn. 257, 132 A. 540, 48 ALR 25933 Letson v. Century 21 New west reality, 285 Ill. App. 3d 221 Ill. Dec. 310.


7

with regard to process of manufacture Mae Sot is under a fiduciary relation and represents

Spear shirts Inc.

Further Mae Sot is also authorised to sell the abandoned or returned garments with Spears

Shirts Label, Mark, Custom, and prints. Thus, in doing so it represents Spear Shirts Inc.

Further, for an agency relationship there should be control of the principal over the activities

of the agent.34 Here, Spear Shirts Inc. had adequate control over the activities of Mae Sot for

it to be regarded as an Agent. Spear Shirts made specific orders and garments not matching

such were returned to Mae Sot by its quality control inspectors. Further, it gave customs,

designs and prints for the garments. Spear Shirts also made suggestions regarding production

deadlines and quality control which were duly brought into force.

Thus, it is humbly submitted that Mae Sot was working in the capacity of an Agent of Spear

Shirts Inc.

[2.iii] MAE SOT LTD. WAS CONDUCTING ITS BUSINESS NEGLIGENTLY, WRONGFULLY

AND IN BREACH OF STATUTORY DUTY.

[2.iii.a] Mae Sot was negligent in its conduct of business.

Negligence is a failure to exercise standard of care that a reasonably prudent person would

have exercised in a similar situation.35

For negligence to be established there are four conditions to be established36:

i) It must be clear that there was a duty to act.37 ii) It must be proven that there was a

failure of the duty to act. iii) It must be prove that this failure was the proximate,

direct cause.38 iv) And it must be proven that harm was caused.

34 Bernett v. Hidalgo, 268 Mich, App 157, 706 NW 2d 869 (2005).35 Bryan A. Garner, Blacks’ Law Dictionary, 9th Ed 2009.36 Hancock & Ors. v. Hancomatic Music Pty Ltd & Twed Shire Council, (2007) NSWCA 350.


8

In the instant matter, the victims have suffered injury due to fire which broke out in the

factory. The cause of the fire was an overheated machine39. Further, there were some

overhead fire extinguishers which were not functional40 at the time of fire. In addition to this,

there were rolls of fabric and carts filled with partly finished shirts all over the floor41, which

caused the fire to spread quickly42.

Thus, it is humbly submitted that Mae Sot Ltd. owed a duty of care with regard to proper

functioning of machineries, functioning of the fire extinguishers and maintenance of the

factory. This duty was not performed by Mae Sot and such failure was the direct and

proximate cause of the injuries. Hence, Mae Sot was negligent in conduct of its business.

[2.iii.b] Mae sot was functioning in breach of its statutory duty.

Under Occupational Safety, Health and Environment Act of Thailand, an employer is

obligated to provide and keep an establishment and an employee in safe and hygienic

working conditions and environment including to support and promote an operation of the

employee preventing the employee from any harm on life, physique, mentality and health.43

In the instant facts, the conditions of factory were not safe as machinery was over heated,

proper maintenance was not taken care of and clothes were spread all over the floor. Further,

there were fire extinguishers in the factory which were not functional and thus, leaving the

factory vulnerable to fire.

Thus, it is submitted that Mae Sot has breached this statutory obligation owed by it to the

workers with regard to safe working condition of the workers.

37 Perkins v. Tex & New Orleans R R Co., 147 So. 2d 648 (La. 1962)38 Summers v. Tice, 199 P 2d. 1 (Cal. 1948).39 Refer Moot Problem Page 2. 40 Id.41 Supra note 40.42 Refer Moot Problem Page 3.43 Section 6, Occupational Safety, Health & Environment Act, B.E. 2554.


9

Also Mae Sot was bound to maintain its building in such a fashion that it must have

strong, steady, appropriate & sufficient area for business operation.44 However, as agreed by

the counsel of both the parties in the statement of facts that the aisles and stairs were blocked

and/or cluttered45, it proves that Mae Sot was functioning in breach of its statutory duty.

[2.iv] SPEAR SHIRTS IS VICARIOUSLY LIABLE FOR THE WRONGFUL ACTS OF MAE SOT.

In case of an agency relationship, the doctrine of respondent superior is applied and principal

is held liable for the wrongful acts of the agent. It is necessary that the agent is authorized to

do such wrongful act46. A principal is liable when it ratifies an originally unauthorized act

which is tortuous in nature. 47 Knowledge of the agents act is sufficient to prove ratification

by the principle. 48

In the instant facts, Mae Sot Ltd, The agent of Spear Shirts Inc. was conducting its business

negligently and wrongfully, Authorities of Spear Shirts Inc. had complete knowledge of the

functioning of Mae Sot Ltd. and they refrained from taking any action to bring negligent

activities of the Mae Sot, hence, their ratification for activities of Mae Sot can be imlied.

Thus, it is humbly submitted that Spear Shirts Inc. is vicariously liable for injuries and deaths

of the victims which was caused by wrongful and negligent acts of Mae Sot Ltd.

44 Clause 5, Factory Act B.E. 2535.45 Refer Moot Problem Page 4.46 Coastal Plains Utilities, Inc. v. New Hanover County, 166 NC App 333 601 SE 2d 915.47 Doe v. Nestle, SA 748 F. Supp 2d 1057 ( CD cal. 2010); Vinewood Capital, LLC v. Shepperd Mullin Richter & Hampton,. LLP 735 F. Supp 2d 503.48 Greenwald v. Kersh 265 Ga. App196, 593 SE 2d 381.


10

3. THE VICTIMS AND THEIR FAMILIES CAN RECOVER MONETARY

DAMAGES FROM SPEAR SHIRTS INC UNDER THE LAWS OF THAILAND.

It is humbly submitted that victims and their families are entitled to recover monetary

damages from Spear Shirts Inc under the several laws specified to be applicable to Mae Sot

Clothing under the Laws of Thailand for its negligent actions49, in failing to maintain the

safety of its employees in their working place.

[3.i]. IT IS HUMBLY SUBMITTED THAT VICTIMS AND THEIR FAMILIES ARE ENTITLED TO

RECOVER MONETARY DAMAGES FROM SPEAR SHIRTS INC UNDER THE LAWS OF

THAILAND.

Mae Sot is a clothing factory situated in Thailand and thus, is governed by the laws of

Thailand regulating the functioning of such factories. Therefore, the laws of Thailand

imposed various statutory duties on Mae Sot. Now, as has been presumed, the factory had

been operated in a grossly negligent50 manner, it has failed to fulfill several duties required to

be fulfilled under the Laws of Thailand.

As a result, the victims are entitled to recover monetary damages under the following laws of

Thailand:


The Civil & Commercial Code of Thailand.52

Occupational Safety, Health and Environment Act, B.E. 2554 (2011).53

The Factory Act B.E. 2535 (1992)54

49 Refer Moot Problem Page 4.50 Refer Moot Problem Page 4. 51 The Workmen Compensation Act, BE 253752 The Civil & Commercial Code of Thailand.53 Occupational Safety, Health and Environment Act, BE 2554 (2011)


11


The damages that the victims are entitled to recover under this act are as follows:

Damages for Medical Expenses55

This act lays down the duty of the employer to pay the medical expenses for any injuries or

sickness suffered by the employees due to any accident that occurs during the course of

employment.

Thus, in the instant case, the victims are entitled to receive damages for the medical expenses

incurred by them on account of injuries suffered by them in the fire.

Industrial Rehabilitation Damages56

The employees who are the victims of any accident that takes place during the course of

employment are entitled to receive industrial rehabilitation which arises due to any injury or

sickness suffered in such accident. And in the matter at hand more than 100 employees were

injured in the fire that was caused in the factory due to an overheated machine and thus, they

have the right for damages for the expenses incurred by them for industrial rehabilitation.

Funeral Damages57

The employer shall pay funeral expense to the families of the victims who have died as a

result of an accident at work place upon their proving that they incurred such expenses in the

arrangement of the funeral. The family shall be paid an amount equivalent to one hundred

times of the highest rate of the minimum daily wages under the Law on Labour Protection.

54 The Factory Act, BE 2535(1992)55 Article 13, The Workmen Compensation Act, BE 2537.56 Article 15, The Workmen Compensation Act, BE 2537.57 Article 16, The Workmen Compensation Act, BE 2537.


12

Here, in the instant case, fifty (50) employees died in the fire and thereby their families ought

to receive damages for such expenses under this provision of law.

Also, under this act the employer is liable to pay the funeral expenses of the person who has

no one to perform the funeral rights.58

Damagers for Lost Wages59

The act lays down that the employer is bound to pay damages to the parents, the husband or

wife, children or any dependants of an employee who has either suffered an injury or died

due to an accident at the workplace.

The amount paid to the aforementioned people would be equivalent to sixty percent of the

employee’s monthly wages for one year if the injury prevents him from working for a year or

sixty percent of his monthly wages for a period of ten years if the employee has lost an organ

as a result of the accident or for fifteen years if he suffers from disablement as a result of the

accident. In the case of the employee dying as a result of the accident the amount to be paid

would be equivalent to sixty percent of his monthly wages for a period of eight years.

Hence in the instant case the victims are entitled to recover damages for lost wages

accordingly.

The Civil and Commercial Code of Thailand

Non Pecuniary Damages60

In the case of injury to the body or health of another, or in the case of deprivation of liberty,

the injured person may claim compensation for the damage which is not pecuniary loss.

58 Article 17, The Workmen Compensation Act, BE 2537.59 Article 18 & 20, The Workmen Compensation Act, BE 2537.60 Section 446 , The Civil and Commercial Code of Thailand.


13

Damages for non pecuniary losses are explicitly provided under Section 446 of the TCCC61,

to be granted when such non pecuniary loss is accompanied with injury to body, health or

liberty.

In the current matter on top of the bodily injuries suffered by the victims as a result of the

accident, there was also additional non pecuniary loss suffered by them wherein they lost the

ability to carry out future work due to the deaths of fifty of the workers.62

Hence the victims are entitled to recover damages under this section. In similar instances

wherein loss of the ability to carry out work was claimed as a ground for damages under the

concept of non pecuniary loss, the Courts in Thailand have held that this claim is justified as

a ground for damages under this head.63

Damages for Pecuniary Loss64

Sections 444 and 445 of the Civil and Commercial Code of Thailand provide damages for

losses arising from tortuous act65 that is damages for loss of income, damages for loss of

labour, damages for the loss of the ability to work in the present and in the future, whether

temporary or permanent.

In the case of an injury to the body or health, the injured person is entitled to receive

reimbursement of his expenses and damages for total or partial disability to work, for the

present as well as for the future66 and in the case of causing death, or of causing injury to the

body or health of another, or in the case of deprivation of liberty, if the injured person was

bound by law to perform service in favour of a third person in his household or industry, the

61 Id.62 Refer Moot Problem Page 2.63 SC Decision no 1447/2523 ; SC Decision no 1921/2520 ; SC Decision no 1794/2517.64 Section 444 and Section 445, The Civil and Commercial Code of Thailand.65 SC Decision no 1721/2513.66 Section 444, The Civil and Commercial Code of Thailand.


14

person bound to make compensation shall compensate the third person for the loss of such

service. 67

As in the current dispute before the arbitration tribunal there has been loss of life of fifty

employees and more than hundred employees have been injured. Therefore, the victims of the

fire are entitled to recover damages under Section 444 and 445 of the Civil and Commercial

Code of Thailand.

Damages for Funeral Expenses and Medical Expenses68

In the cause of causing death, compensation shall include funeral and other necessary

expenses. If death did not ensue immediately, compensation shall include in particular

expenses for medical treatment and damages for the loss of earning on account of the

disability to work. If on account of the death any person has been deprived of his legal

support, he is entitled to compensation therefore.69

Here, in the instant case, fifty (50) employees died in the fire and thereby their families ought

to receive damages for such expenses under this provision of law and also in the instant case,

the victims are entitled to receive damages for the medical expenses incurred by them on

account of injuries suffered by them in the fire.

Occupational Safety, Health and Environment Act, B.E. 2554 (2011)

Damages for failure to maintain adequate safety standards70

‘An Employer is obligated to provide and keep an Establishment and an Employee in safe

and hygienic working conditions and environment including to support and promote an

67 Section 445, The Civil and Commercial Code of Thailand.68 Section 443, The Civil and Commercial Code of Thailand.69 Id70 Section 6 and Section 8, Occupational Safety, Health and Environment Act, BE 2554 (2011)


15

operation of the Employee preventing the Employee from any harm on life, physique,

mentality and health.’71

‘An Employer is required to administer, manage, and operate the occupational safety, health

and environment in conformity with the standards prescribed in the Ministerial Regulation.

An Employee is obligated to comply with criteria on occupational safety, health and

environment according to the standards prescribed in paragraph one.’72

As in the instant case Mae Sot failed to perform its obligation to maintain safe and hygienic

working conditions for its employees it is liable to pay damages to the victims for the

aforementioned failure to perform the same.

The Factory Act B.E. 2535 (1992)

Damages for failure to follow Ministerial Regulations73

As per Clause 5(4) of Ministerial Regulation No 2 clarifying The Factory Act B.E. 2535

(1992)74 a staircase must be secure and steady with the feature, size and quantity suitable for

the building and the operation. The steps must not be slippery, and have the same width

throughout the length of the staircase. In addition, a walkway, which is 1.50 meters or more

from ground level, must have a steady and appropriate handrail. The Minister of Industry,

where deems appropriate, shall announces in the Government Gazette other equipment

required for preventing danger or exception to the handrail requirement.

In the current matter Spear Shirts is liable for the harm caused by the fire as Mae Sot is an

agent of Spear Shirts. Hence the victims are entitled to recover damages under this specific

71 Section 6, Occupational Safety, Health and Environment Act, BE 2554 (2011)72 Section 8, Occupational Safety, Health and Environment Act, BE 2554 (2011)73 Section 444 and Section 445, The Civil and Commercial Code of Thailand.74 Published in the Government Gazette , Volume 109, Part 108, 16th October B.E. 2535 (1992) http://www.jetro.go.jp/thailand/e_activity/pdf/minreg2.pdf.


16

head as Mae Sot failed to follow the aforementioned regulation as the stairs in the Mae Sot

factory were blocked and/or cluttered75 and Spear Shirts Inc had prior knowledge of the same

as an employee of Spear Shirts had carried out an inspection of the Mae Sot factory and

called it a ‘Sweat Shop’ in a message to the Vice President of Spear Shirts Inc.76

Therefore, it is humbly submitted that in the instant case the victims are entitled to recover

damages under the aforementioned laws of Thailand from Mae Sot.

And Mae Sot being an agent of the Spear Shirts, as established above, its liabilities are to be

met by Spear Shirts. And hence, Spear Shirts is Liable to pay aforementioned damages to the

victims.

75 Refer Moot Problem Page 4.76 Refer Moot Problem Page 2.

xiv

PRAYER

The Claimant respectfully requests the Hon’ble Tribunal to hold and declare that:

1. The Arbitral Tribunal has jurisdiction to hear, and decide that a large number of

claimants can be joined in a single arbitration.

2. Spear Shirts Inc can be held liable for the injuries and deaths of Mae Sot Clothing’s

employees.

3. The victims and their families are entitled to recover various monetary damages under

the Workmen Compensation Act of Thailand and the Civil & Commercial Code of

Thailand.

The Counsels on behalf of the Claimant

b1402 Claimant Memorial

Documents

Transcript of b1402 Claimant Memorial