A1515-R

KUALA LUMPUR REGIONAL CENTRE FOR

ARBITRATION 2015

GOVERNMENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF NEPAL

V.

DR JOHN THOMAS SMITH JR.; THE AUSTRALIAN NATIONAL MUSEUM; AND THE NATIONAL MUSEUM OF MALAYSIA

MEMORIAL FOR THE RESPONDENT

1

CONTENTS

INDEX OF AUTHORITIES………………………………..……………..3

STATEMENT OF JURISDICTION………………………………………7

QUESTIONS PRESENTED……………………………..………………..8

STATEMENT OF FACTS……………………………..………………….9

SUMMARY OF PLEADINGS…………………………………………..12

PLEADINGS………………………………………...…………….……..14

A.THE UNESCO CONVENTION SHOULD BE CONSIDERED THE LEGAL AUTHORITY ON

ISSUES TO WHICH IT RELATES AND IS SUPERIOR TO ALL NATIONAL LEGISLATION….…..14

B.THE CLAIMED OBJECT SHOULD NOT BE RETURNED TO NEPAL……………………….…….15

B.1.The export was licit under Nepalese national legislation which domesticates the UNESCO

Convention…………………………………………………………………………….…………..15

B.2.The import was licit under Australian national legislation which domesticates the UNESCO

Convention…………………………………………………………………………….….……….17

C.THE CLAIMED OBJECT CAN BE RETAINED BY THE RESPONDENT……………….………….19

C.1.The Respondent can retain the claimed object under Article 4(e) UNESCO Convention..…..19

C.1.1.Choice of law………………………………………………………………..……..19

C.1.2.The claimed object has been validly gifted under the Australian Common Law …21

C.1.3.Further or in the alternative a valid gift can be established under Nepalese law ....25

C.1.4. Existence of the requisite consent as prescribed under Article 4(e) of the UNESCO

Convention……………………………………………………………………..……….26

2

D.THE CLAIMED OBJECT BETTER FULFILS THE PURPOSE OF THE UNESCO CONVENTION

WHEN EXHIBITED IN THE MUSEUMS THAN IN A LOBBY IN THE TRIBHUVAN

UNIVERSITY………………………………………………………………………...……………………29

E. IF THE CLAIMED OBJECT IS TO BE RETURNED TO NEPAL, THEN THE RESPONDENTS ARE

ENTITLED TO COMPENSATION……………………………………………………………………….31

CONCLUSION/PRAYER FOR RELIEF…………………………..……34

3

INDEX OF AUTHORITIES

A. Legislation

Legislation Pages on which the

Legislation appears

Ancient Monument Preservation Act 2013 (1956)

(Nepal)

2, 12, 15, 16, 18, 19, 26, 30, 32

Kuala Lumpur Regional Centre for Arbitration i-

Arbitration Rules

7

Nepal Treaty Act (1990) 14

Protection of Movable Cultural Heritage Act 1986

(Australia)

15, 17

Sale of Goods Act (1895) (Australia) 21

Statute of the International Court of Justice 21, 27

United Nations Educational, Scientific and Cultural

Organisation Convention Concerning the Protection of

the World Cultural and Natural Heritage 1972

(UNESCO Convention)

1, 2, 3, 8, 12, 13, 14, 15, 16, 17,

18, 19, 25, 26, 28, 29, 30, 31

Evidence Act 2031 25

4

B. Cases

Name of Case and Citation Pages on which the Case

appears

Autocephalous Greek-Orthodox Church of Cyprus v

Goldberg and Feldman Fine Arts Inc P1990] 108 ILR

488

20

Case concerning the Free Zones of Upper Savoy and the

District of Gex (P.C.I.J., Series A/B, No. 46; Annual

Digest, 1929-1930, Case No.6)

14

Case concerning the Temple of Preah Vihear (Cambodia

v Thailand) (Merits) 33 ILR 48. 27

Legione v Hateley (1983) 152 CLR 406. 24

Mercantile Bank of India, LD v Central Bank of India,

LD [1938] AC 287. 21

Newcrest Mining (WA) Ltd and Another v Commonwealth

of Australia and Another [1999] 2 LRC 70. 14

Waltons Stores (Interstate) Ltd v Mahier (1988) 164 CLR

387. 23, 24

Winkworth v Christie Manson and Woods Ltd [1980] Ch

496. 19

5

C. Books and Articles

Name of Book/Article Pages on which the

Book/Article appears

Bator, The International Trade in Art (University of

Chicago Press 1983). 30

Christa Roodt, ‘Restitution of Art and Cultural Objects

and its Limits’ (2013) Comparative and International Law

Journal of Southern Africa XL VI, 286-307.

30

Derek Fincham, ‘Towards a Rigorous Standard for the

Good Faith Acquisition of Antiquities’ (2009) Syracuse

Journal of International Law and Commerce, Vol.37,

Issue 1.

29

Edward M. Cottrell, ‘Keeping the Barbarians Outside the

Gate: Toward a Comprehensive International Agreement

Protecting Cultural Property’ (2009) Chicago Journal of

International Law, Vol.9

30

Elham Balavar, ‘The Doctrine of Nemo Dat Quod Non

Habet and Its Exceptions’ (2014) Journal of Applied

Environmental and Biological Sciences, 4(5)-7.

22

Pollock and Wright, An Essay on Possession in the

Common Law (Clarendon Press, Oxford 1888). 21

Ray Brown, The Law of Personal Property 193 (3rd edn.

1975). 29

6

Sharon Williams, ‘The International and National

Protection of Movable Cultural Property’ (1978). 29

Symeon C. Symeonides, ‘A Choice-of-Law Rule for

Conflicts Involving Stolen Cultural Property’ (2005)

Vanderbilt Journal of Transnational Law Vol.38:1177.

21

D. Other Sources

Name of Source Pages on which the Source

appears

Moot Problem 9, 10, 30, 32

First Round of Clarifications to the Moot Problem 9, 10, 30

Second Round of Clarifications to the Moot Problem 9, 10

Third Round of Clarifications to the Moot Problem 10, 32, 33

E. Websites

Websites Pages on which the Website

appears

http://tribhuvan-university.edu.np/tu-authorities/ 32

7

STATEMENT OF JURISDICTION

The parties to this dispute have agreed in writing to submit this dispute to binding arbitration

under the auspices of the Kuala Lumpur Regional Centre for Arbitration (KLRCA) i-

Arbitration Rules. This dispute shall therefore be settled by arbitration in accordance with these

rules, pursuant to Rule 1(1)(i)(a) of the KLRCA i-Arbitration Rules.

8

QUESTIONS PRESENTED

a) What laws or legal principles establish (a) Nepal’s right to demand the return of the

statue and/or (b) the National Museum’s right to retain it:

i) Australian law;

ii) Nepalese law; or

iii) International law and/or (UN) Conventions.

b) If there is a conflict between them, which law and/or Convention should be applied to

this dispute.

c) To what extent, if any, would the “final outcome” of this dispute be affected by the

determination as to which law should be applied, as amended from: will the ‘outcome’

of this legal dispute be governed by which law/convention is applied and, if so, how.

d) What is the effect on this dispute of the failure to comply with Nepalese law?

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STATEMENT OF FACTS

The proceedings concern a stone statue of Lord Vishnu seated between Goddesses Lakshmi

and Garuda. The statue, which is over 300 years old and worth over $100, 000,1 was discovered

by Nepalese sheep herders in 2010 in Nepal and was initially displayed at the Chhauni

Museum. It was later moved to the National University campus in Kathmandu where it was

displayed following an oral agreement between the Chhauni Museum and the University that

the statue would be returned upon the request of the Museum or if the University was unable

to properly display it.2 The statue was never registered in the Nepal Gazette.

There were no specific documents dealing with who had responsibility for the statue’s

safekeeping whilst it was on display at the University, however, it can be assumed that the

Dean’s responsibilities extended to the care and protection of the statue.3 In 2014, the Dean

gave the statue to Dr Smith as a gift ‘in gratitude’4 for his lectures at the University. Dr Smith

expected to receive a gift as he usually does when presenting lectures at other Asia-Pacific

Countries as it is customary in such countries, and often such a gift was a local artefact. Dr

Smith accepted the gift and assumed that it was a replica. Later, he submitted an affidavit

stating that he assumed that the statue must have been an excellent replica otherwise it would

not have been given to him,5 especially since he received no other gifts or compensation for

1 Moot Problem. 2 Second Round of Clarifications to the Moot Problem, Part 2, s.A. 3 First Round of Clarifications to the Moot Problem, Part 2, s.B. 4 First Round of Clarifications to the Moot Problem, Part 2, s.B. 5 See footnote 4 of the Moot Problem.

10

his services. Dr Smith returned to Australia, having informed both Nepalese and Australian

customs officials that he had the statue with him.6

Dr Smith later donated the statue to the Australian Museum, where an expert examined the

statue and discovered that it was authentic.7 Dr Smith received no economic benefit from the

statue and chose to donate it rather than sell it as he had done previously.8 Dr Smith told the

Museum Director that the statue was from Nepal and that it was given to him by ‘a high ranking

Nepalese government official’.9 The statue was displayed as part of an exhibit promoting

knowledge, understanding and enjoyment of diverse cultures.10

The Australian Museum signed a loan agreement with the National Museum in Kuala Lumpur

(Malaysia) for a 2 year renewable loan of the statue.11 The loan agreement between the

Australian and Malaysian museums did not require any payment, although the Malaysian

Museum covered the shipping costs. The statue was received without any official papers and

experts at the National Museum (Malaysia) verified that the statue was authentic. A Nepalese

tourist observed the statue prominently displayed at the National Museum (Malaysia) and

reported it to Nepalese officials upon her return to Nepal.

The Government of Nepal have requested the return of the statue, although they do not assert

that it was stolen.12 The Government of Nepal also seeks compensation for damage done to the

statue, however, this issue is not a concern in the present proceedings and shall be dealt with

6 Third Round of Clarifications to the Moot Problem, Part E, s.4. 7 First Round of Clarifications to the Moot Problem, Part 2, s.B. 8 Third Round of Clarifications to the Moot Problem, Part E, s.6. 9 Clarifications (3) p.3 , s.E3 10 Moot Problem, s.2. 11 Second Round of Clarifications to the Moot Problem, Part 2, s.B. 12 First Round of Clarifications to the Moot Problem, Part 2, s.B.

11

following the allocation of ownership of the statue. All parties have agreed to submit the

dispute to binding arbitration.

12

SUMMARY OF PLEADINGS

A. The instant dispute involves a request for the return of cultural property. As this is an

international issue, the starting point in resolving the dispute should be international law. The

international Treaty covering the issues of cultural property is the UNESCO Convention, which

all parties have ratified. It is, therefore, the Respondent’s position that the above Convention

and any national legislation which domesticates the Convention, should be the authority in

resolving this dispute.

B. The Respondent has no obligation to return the claimed object.

B.1. It is the position of the Respondents that due to the Nepalese Government’s own failure to

register the statue as required by their own national law13 and as obliged by the UNESCO

Convention14 to which they are a signed party, the export of the statue from Nepal was licit.

B.2. For the above reason, the import of the object is therefore licit under Australian legislation.

C. Further or in the alternative, the Respondent is entitled to keep the statue under Article 4(e) of

the Convention. The above provision of the Convention recognises cultural

property gifted with the consent of the competent authorities of the country of origin as

forming part of the cultural property of the recipient.

13 Section 13 Ancient Monument Preservation Act 2013 (1956). 14 Articles 1, 3 and 5(b).

13

C.1. The issue of gift-giving is not covered in the UNESCO Convention and as such, the issue

of choice of law arises. Given the material connection, it is the Respondent’s position that

Australian law is most appropriate.

C.1.1. The claimed object was gifted by the Dean: The Dean’s actions amount

to a representation which results in the understanding that the Dean had the

authority to give away the statue. The claimed object is therefore passed by way

of estoppel by representation.

C.1.2. However, if Nepalese law is deemed most appropriate then the statue is

still found to have been given as a valid gift.

C.2. The claimed object was given with the requisite consent. The Nepalese Government’s

failure to register the object amounted to a representation that they consent to the giving away

of the object.

D. The statue itself better fulfils the purpose of the UNESCO Convention, to which all parties are

bound, if it remains in the custody of the Respondents. The nature of the exhibit in which the

statue is displayed promotes the interchange of cultural property among nations and encourages

cultural education and understanding. 15 The Respondents all acted in good faith in the

acquisitions.

E. Should it be found that the statue is to be returned to the Claimant, the Respondents are entitled

to just compensation as they were not only innocent in completing the acquisition, but they

hold valid title by way of possession.

15 See the UNESCO Convention Preamble.

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PLEADINGS

A. The UNESCO Convention should be considered the legal

authority on issues to which it relates and is superior to

all national legislation.

A.1. It is accepted within the law of the Federal Democratic Republic of Nepal16 and the

Commonwealth of Australia,17 and it has been recognised within international case law as

early as the time of the International Court of Justice’s predecessor, 18 that national

legislation does not have jurisdiction over national borders and that international law should

govern matters of international nature.

A.2. It is, therefore, the Respondent’s position that the starting point for the resolution of

this dispute between the Government of Nepal and the Respondents should be the

Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and

Transfer of Ownership of Cultural Property 1970 (hereinafter ‘the UNESCO

Convention’ or ‘the Convention’) since it governs matters of international cultural

property trafficking and since it has been ratified by all three countries (Nepal,

Australia and Malaysia) involved in this case. The protection afforded by the

16 Section 9 Nepal Treaty Act, 2047 (1990). 17 Newcrest Mining (WA) Ltd and Another v Commonwealth of Australia and Another [1999] 2 LRC 70, 98. 18 Case concerning the Free Zones of Upper Savoy and the District of Gex (P.C.I.J., Series A/B, No. 46; Annual Digest, 1929–1930, Case No. 6) 167.

15

Convention is effective to the countries involved in this dispute through the national

legislation domesticating the Convention in the respective involved countries. It is

therefore necessary to follow the provisions of the national legislation of the countries

involved in the trafficking of this object to establish that the object can be retained by

the Respondent. The national legislation relevant to this dispute is the Ancient

Monument Preservation Act 1956 (as amended in 2013) (hereinafter ‘AMP Act’), for

the Federal Democratic Republic of Nepal, and the Protection of Movable Cultural

Heritage Act 1986 (hereinafter ‘PoMCH Act 1986’) for the Commonwealth of

Australia. It is the Respondent’s position that since the claimed object is simply on loan

to an institution located in the Federation of Malaysia, Malaysian national legislation,

at least on issues arising from the UNESCO Convention, is irrelevant.

B. The claimed item should not be returned to Nepal

B.1. The export was licit under Nepalese national legislation which domesticates the

UNESCO Convention

The AMP Act 2013 imposes an obligation on a possessor of a cultural object to register it.

Section 13(1) of the same Act prohibits the exportation of objects that fall under the categories

prescribed by the Government of Nepal in the absence of an export certificate. The above

section does in any way relate the existence of an object within the national inventory of Nepal

and the prohibition of the exportation of a cultural object from the territory of the country. It is

the position of the Respondent that the wording and purpose of the UNESCO Convention

mandates only for objects registered within national inventories to be protected under export

16

restrictions. It is therefore the Respondents’ position that since the above Nepalese legislation

has the function of domesticating the UNESCO Convention, and that since the Convention has

been ratified by the Government of Nepal, the above Act needs to be examined as to whether

it reflects the wording and purpose of the Convention. If not, the Act needs to be read in such

way as to serve the purpose of the Convention.

The UNESCO Convention is an international treaty with the purpose of mutual recognition of

nations’ cultural heritage and international cooperation for its protection. The First Article of

the Convention recognises a number of categories of cultural objects which are to be subjected

to designation by Party States as being of cultural importance to them. Article 3 of the

Convention prohibits the import, export and transfer of ownership of cultural property contrary

to the Convention’s provisions. Article 5(b) of the Convention imposes an obligation on Party

States to establish and keep up to date a list of important public and private cultural property

whose export would constitute an appreciable impoverishment of the national cultural heritage.

It seems clear from the above provisions (Articles 1, 3 and 5(b)) that the intention of the drafters

of the Convention was for the national inventory list to be maintained by Party States to

facilitate the tracking of cultural property and to enable subsequent recipients of cultural

property to be cautious in receiving it. It would in fact be illogical for an extremely onerous

obligation such as the imposition of an export prohibition on all cultural property of a country,

not to be supported and facilitated by an equally burdensome obligation on governments to

ensure that objects are enlisted. It is the Respondents’ position that the provisions of Nepal’s

national legislation are not harmonised with the Convention and that since the Convention has

been ratified by the Claimant country, the Nepalese Act must be read in such way to best reflect

the Convention’s purpose. For these reasons, it is the Respondents’ position that the AMP Act

17

2013 (1956) must be read in such way as to prohibit the exportation of objects that are enlisted

in Nepal’s national inventory.

Since the competent authorities of the Government of Nepal themselves, failed to enlist the

object in the national inventory when the object was under their possession, it is the

Respondents’ position that the exportation of the object was not illicit.

B.2. The import was licit under Australian national legislation which domesticates the

UNESCO Convention

Section 14 of the Protection of Movable Cultural Heritage Act (PCHA) 1986 (Australia)

regulates unlawful imports. Section 14(1) lists three requirements to be satisfied. Provided that

these requirements are satisfied, the concerned imported cultural is liable to be forfeited.

Section 14 of the PoMCH Act 1986 reads as follows:

(1) Where:

(a) a protected object of a foreign country has been exported from that

country;

(b) the export was prohibited by a law of that country relating

to cultural property; and

(c) the object is imported;

the object is liable to forfeiture.

The requirement under Section(1)(c), namely that the object was imported in Australia, is

factually supported and not contested by any of the Parties to this Arbitration; as such the

requirement under Section(1)(c) will also be considered to be fulfilled.

Section 14(1)(a) of the same Act, namely that a protected object of a foreign country has

been exported from that country can also be said to be established. The Act defines a ’ protected

18

object of a foreign country’ under Section 3 of the same Act as ‘an object forming part of the

movable cultural heritage of a foreign country’. All of the Countries of the Parties to this

Arbitration recognise, through their ratification of the UNESCO Convention, that cultural

property found within the national territory of a country forms part of the cultural property of

the country thereof. It is an undisputed fact of this case that the object has been found by herders

in a piece of land that forms part of the national territory of the Federal Democratic Republic

of Nepal. The fact that the claimed object has been exported is factually supported and it is

undisputed. It can therefore can be established that the claimed object forms part of the movable

cultural heritage of Nepal. In this way, Section 1(b) of the Act is established.

Section 14(1)(b) of the PoCH Act, namely that the export was prohibited by a law of that

country relating to cultural property, cannot be established. On this issue, the relevant

Nepalese legislation is the AMP Act. According to the analysis of the AMP Act in the light of

the UNESCO Convention as it has been submitted above, the exportation of a cultural object

is illegal when it has been designated as a protected cultural object by the government of Nepal

in the Nepalese Gazette. The claimed object was not designated as protected by the Nepalese

government. It therefore follows that the exportation of the item from Nepal was licit. For the

above reason, Section 14(1)(b) of the PoCH Act cannot be said to be satisfied.

It is the Respondent’s position that since one of the requirements of Section 14 of PoCH Act

has not been met, the import of the statue was licit and is therefore not liable to forfeiture.

19

C. The claimed item can be retained by the Respondent

C.1. The Respondent can retain the claimed object under Article 4(e) of the UNESCO

Convention 1970

Article 4(e) of the UNESCO Convention provides that “cultural property received as a

gift…with the consent of the competent authorities of the country of origin of such property”

belongs to the cultural heritage of the recipient. There are, however, no provisions under the

Convention, as to relevant legal principles regarding the passing of gifts, for that reason a

choice of law issue is to be addressed.

For the claimed object to form part of the cultural heritage of Australia as to enable the

Respondents to retain the object, the Respondents must show that (a) the item has been gifted,

and that (b) consent has been given by the Claimant as to the passing of the gift. The

Respondents contend that both of these elements are satisfied.

C.1.1. Choice of law

There is multiple jurisprudence, particularly in civilian law systems, in which a subsequent

transfer of some property may give a good faith possessor the opportunity to divest the owner

of legal title. For example, as acknowledged in Winkworth v Christie Manson and Woods Ltd,19

Italian Civil Code permits a good faith purchaser to acquire superior title immediately, if there

is indeed good faith and the documents which evidence the sale are capable of transferring title.

Whilst none of the countries involved in the Arbitration are civilian law countries, and whilst

it would, therefore, be inappropriate to suggest considering a choice of law which is unrelated

19 [1980] Ch 496.

20

to the countries involved, it is important to acknowledge the civilian law approach to

controversies such as this, particularly given the nature of good faith in all of the dealings by

the Respondents.

Ensuring the appropriate choice of law is of key importance. The parties to this Arbitration

have not agreed on the applicable law and there are no internationally agreed criteria regarding

choice of law conflicts. Therefore, this Arbitral Tribunal has full discretion to select the

appropriate law to consider. It is the position of the Respondents that Australian law is the most

appropriate law to use.

Whilst there are no set criteria, Autocephalous Greek-Orthodox Church of Cyprus v Goldberg

and Feldman Fine Arts Inc,20 an international law case, acknowledges a number of factors

which ought to be considered when selecting a choice of law, including: (a) the nationality of

the relevant actors, (b) the duration of the cultural object’s stay in each country, (c) whether

the object’s stay in a given country was intended to be permanent or temporary, (d) whether

the object passed officially through a country’s customs, (e) the current location of the object.

Given that the nationality of two of the four parties involved in this arbitration are Australian

(a), the object’s stay in Australia was intended to be permanent (c) and the fact that the claimed

object passed legitimately through both Nepalese and Australian customs (d) all find in favour

of using Australian national law. Whilst the duration of the object’s stay in each country (b)

finds in favour of Nepal, the current location of the object (e) finds in favour of Malaysian law.

Whilst Malaysia has acquired the right to possess the statue by having physical control of it,

20 P1990] 108 ILR 488.

21

the legal right to possession remains with Australia following the nature of the loan

agreement.21

The choice of law is a complex issue and one which a number of the most highly qualified

publicists have considered. Such publications ought to be considered pursuant to the Statute of

the International Court of Justice22 as they form a valuable part of international law. One

publication proposes that the relevant rule to be used in choice of law conflicts is that the law

of the state of origin should be used, unless the application of another law is more appropriate

to protect a party who dealt with the object in good faith after its removal from the origin state.23

Given the good faith nature of the dealings, which is discussed in more detail below, it is clear

that Australian law is most appropriate.

C.1.2. The claimed object has been validly gifted under the Australian Common

Law

Australian Common Law recognises the nemo dat quod non habet rule. Under the rule ‘no man

can give what he does not have’. The relevant Australian law is found in Division 2, s.21(1) of

the Sale of Goods Act (1895) of Australia:

Where goods are sold by a person who is not the owner thereof, and who does not sell them

under the authority or with the consent of the owner, the buyer acquires no better title to the

21 Pollock and Write, An Essay on Possession in the Common Law (Clarendon Press, Oxford, 1888), 27. 22 Article 38(1)(d) of Statute of the International Court of Justice 23 Symeon C. Symeonides, ‘A Choice-of-Law Rule for Conflicts Involving Stolen Cultural Property’, Vanderbilt Journal of Transnational Law Vol.38:1177.

22

goods than the seller had, unless the owner of the goods is by his conduct precluded from

denying the seller’s authority to sell.

Although, the Australian Common Law has limited the scope of the nemo dat quod non habet

rule by recognising a number of exceptions to the rule. Amongst others, one of these exceptions

is when an estoppel argument can defeat the rule. If an estoppel argument is raised, the original

owner is estopped from asserting that the acquisition was unauthorised24 and the innocent

recipient obtains good title against all.

It should be noted that most of the authorities on this particular doctrine refer to “innocent

purchasers” and a representation that the individual had the right to “sell the goods”. However,

it is the position of the Respondents that given the nature of an Arbitral Tribunal, there amounts

little difference between the notion of sale and the notion of a gift, and as such the doctrine

remains relevant.

In Grundt v Great Boulder Pty Gold Mines Ltd,25 Dixon J stated that “the law should not permit

an unjust departure by a party from an assumption of fact which he has caused another party to

adopt or accept for the purposes of their legal relations”.

Furthermore, under common law, as acknowledged by the Privy Council,26 title can pass by

way of estoppel even when the dispone of the property does not himself hold valid title. It

therefore follows from all the above and it is the position of the Respondent that, by proving

that the Claimant is estopped by their representation from denying that title has been passed to

24 Elham Balavar, ‘The Doctrine of Nemo Dat Quod Non Habet and Its Exceptions’, Journal of Applied Environmental and Biological Sciences, 4(5)-7, 2014. 25 (1937) 59 CLR 641. 26 Mercantile Bank of India, LD v Central Bank of India, LD. [1938] AC 287.

23

the Respondents, the Respondents establishes that the claimed object has been gifted to the

Respondents.

It is the position of the Respondents that:

(i) The Tribhuvan University Dean’s (the Dean) conduct amounted to a representation

that the Dean had title to the statue and the authority to give it away;

(ii) That the Respondents relied on the above representation and acted to his detriment

based on the above representation;

(iii) The Claimant is therefore estopped from denying that the acquisition was a valid

gift; and

(iv) The acquisition amounted to a valid gift and therefore the Respondents have

superior title to the claimed object.

The requirements for an estoppel to be found under Australian Common law are the following:

there must be a representation made by A; that representation must be relied on by B; the

conduct of A induced B to rely on the representation in such way that it would reasonable for

B to have relied upon it; A knew that B would or intended for B to rely on the representation;

B acted to his detriment; and A failed to act to avoid the detriment.27

It is the Respondents’ position that, where A is the University Dean as represented by the

Claimant and B is the Respondent:

27 Waltons Stores (Interstate) Ltd v Mahier (1988) 164 CLR 387 [34].

24

The Dean’s conduct28 amounted to a representation to the Respondents that he had the

requisite ownership of the claimed object in order to be able to gift it; Dr Smith trusted

the Dean and relied on the representation by the Dean, passing on the assurances to the

Australian Museum; the Dean knew that Dr Smith would rely on the representation,

given the nature of the gift; the Respondents acted on his detriment in receiving the

object since the display of the object in the Respondents’ premises would have incurred

benefits for the Respondents (such benefits are both financial and not, such as benefits

to the reputation of the Respondent Institutions); and the Dean failed to act to ensure

that Dr Smith did not operate under the reasonable assumption that the Dean had the

relevant title to give away the object.

It is the position of the Respondents, therefore, that the conduct by the Dean amounted to a

representation that he was entitled to give away the statue and that the Respondents relied on

and acted to his detriment based on the said representation. The aforementioned demonstrates

that the Respondents have acted in good faith when dealing with the claimed object. Having

established the above, it is the position of the Respondents that the Claimant is estopped from

asserting that the item has not and/or could not be gifted by the University Dean.

As a result, the acquisition amounts to a valid gift and the Claimant is estopped from denying

the validity of the acquisition.

28 Representations may include express representations, implied representations or mere silence q.v. Legione v Hateley (1983) 152 CLR 406 and; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

25

C.1.3. Further or in the alternative a valid gift can be established under Nepalese

law

Further or in the alternative, if the arbitrators are not satisfied by the applicability of Australian

law on this issue, a valid gift can also be established under the law of Nepal. The law of Nepal

recognises the existence and operation of estoppel under the Chapter 5, section 34 of the

Evidence Act 2031 which provides that:

“(1) When a person has, by writing, oral or conduct, acted or caused to act another

person to believe a thing to be true and to act upon such belief, such person shall

not be allowed, in any case, between him/herself and such person to deny the truth

of that thing. Provided that, this Section shall not be applicable in the point of law.

(2) Anything mentioned in Sub-section (1) shall also be applicable to such person

who receives/gets any kind of right from the persons mentioned in that Sub-section

in relation to the subject matter of the case.”

In this instance, the Respondents’ position is that the University Dean’s conduct lead the

Respondents to believe that the claimed object was capable of being gifted by him (the

University Dean) and caused the Respondents to act upon that belief by taking the claimed

object back to Australia. The operation of estoppel includes situations where a kind of right has

been transferred. In this instance the right to ownership of the claimed object has been

transferred by operation of the above section of the Evidence Act.

It is therefore the Respondents’ position that the claimed object is capable of being and has

indeed been gifted regardless of the applicable law. Effectively the first part of Article 4(e) of

the UNESCO Convention is satisfied. The second part of the above Article, namely that the

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claimed object has be gifted with the consent of the competent authorities of the country of

origin, will now be discussed.

C.1.4. Existence of the requisite consent as prescribed under Article 4(e) of the

UNESCO Convention

It is the Respondents’ position that:

(i) the Claimant’s conduct relating to the non-registration of the claimed object amounted

to a representation that the claimed object is not a protected object of the Federal

Democratic Republic of Nepal;

(ii) the Claimant is estopped through this representation from claiming that the object is a

protected cultural object belonging to the ‘People of Nepal’; and

(iii) therefore that the above representation amounts to the requisite consent as prescribed

under Article 4(e) of the UNESCO Convention as to establish that the claimed object forms

part of the cultural property of Australia and therefore can be retained.

(i) It is an unquestioned fact of the instant dispute that the claimed object was, after

being found by sheep herders, delivered to government officials who failed to

register the object in Nepal’s national inventory. It is the Respondents’ opinion

that the above fact amounted to a failure under the Claimant’s own legislation29

and the UNESCO Convention. It is also the Respondents’ position that the

29 Ancient Monument Preservation Act, 2013 (1956) Sections 13(2),(2A) and; (2B)

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above failure constituted an unequivocal representation by the Claimant that the

object was not regarded by the Government of Nepal itself as a protected

cultural object for the purposes of the Act.

The legal principle of estoppel by representation has been recognised as a

general principle of international law 30 on multiple occasions by the

International Court of Justice (‘ICJ’). In an illustrative case between Cambodia

and Thailand,31 the court recognised that a representation, either made expressly

or by way of silence, by a representative of a country estops a country’s claim

which is based on assertions contrary to that representation.

The case involved a dispute over whether a temple was under the territory of

either the Claimant or the Respondent country. The ICJ recognised that since a

(then) member of the executive of Thailand visited the disputed temple; since

that member of the executive was treated as a visitor upon his arrival; and since

that member of the executive viewed the decorative flags of France (Cambodia

was under French control at the time) which were placed around the temple and

did not protest to their presence, then the conduct of that member of the

executive will be treated as a recognition that the disputed temple formed part

of the territory of Cambodia. The court further found that the above recognition

by the Government of Thailand amounted to a representation on behalf of the

Government of Thailand that estopped the country’s claim that asserted the

30 A general principle recognised by the ICJ forms part of international law and is therefore best authority for cases of international nature see. Statute of the International Court of Justice, Article 38 31 Case concerning the Temple of Preah Vihear (Cambodia v Thailand) (Merits) 33 ILR 48

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opposite of that representation (namely that the disputed temple formed part of

the territory of the Kingdom of Thailand).

It is the Respondents’ position that if the above doctrine is to be applied in the instant

dispute, it would preclude the Claimant from asserting that the claimed object forms part

of Nepal’s cultural heritage. More specifically, the failure to register the object in the

national inventory of Nepal by the officials who retrieved the object, constituted, as

discussed above, a representation on behalf of the Government of Nepal that estops the

Claimant’s asserting the opposite of that representation.

(ii) It is therefore the Respondents’ opinion that the claimed object must not and cannot

be treated as a protected cultural object of Nepal and that the Claimant’s representation

estops the Claimant from asserting the opposite.

(iii) Furthermore, it is the position of the Respondents that the aforementioned

representation of the Nepalese Government (reinforced by the principle of estoppel as

established within the above international case) is to be regarded as the prescribed consent

which is required for an object to be gifted under Article 4(e) of the UNESCO Convention.

It is for the above reason that the Respondents submit that the claimed object was freely

and without any restrictions attached to it, gifted to the Respondents and should therefore

be regarded as cultural property belonging to the Respondents capable of being retained.

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D. The claimed object better fulfils the purpose of the

UNESCO Convention when exhibited in the Museums

than in a lobby in the Tribhuvan University.

Furthermore or in the alternative, it is the position of the Respondents, that the aims and

objectives of the UNESCO Convention are better achieved if the statue should remain with the

Respondents. To return the statue to Nepal would undermine the principles which each State

Party to the Convention is bound to promote.

Underlying every controversy regarding the transfer of cultural property are the competing

claims of two relative innocents, 32 making it “impossible for the law to mete out exact

justice”.33 The present case is no exception. There are wider implications to consider beyond

the rigour of strict law, and fortunately, given that all parties have agreed to binding Arbitration,

such implications can be considered. International collaboration 34 is a more appropriate

solution than repossession.

One of the intentions of the UNESCO Convention on the Means of Prohibiting and Preventing

the Illicit Import, Export and Transfer of Ownership of Cultural Property is to consider the

“interchange of cultural property among nations… for cultural and educational purposes [in

order to] enrich the cultural life of all peoples and inspire mutual respect… among nations”.35

The Respondents contend that the purposes of the UNESCO Convention, which all parties have

32 Derek Fincham, ‘Towards a Rigorous Standard for the Good Faith Acquisition of Antiquities’ (2009) Syracuse Journal of International Law and Commerce, Vol.37, Issue 1. 33 Ray Brown, The Law of Personal Property 193 (3rd edn. 1975). 34 Sharon Williams, ‘The International and National Protection of Movable Cultural Property’ (1978). 35 UNESCO Convention (Preamble, p.1).

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ratified, are more likely to be fulfilled if the claimed object is to be displayed in either the

Australian or Malaysian Museum, rather than in a lobby in Tribhuvan University.36

The Nepalese Government do not contend that the statue was stolen37 and there is no contention

of illicit black market trading, which is common with cultural property controversies.38 There

have been unconfirmed reports that Dr Smith has sold some antiquities to private collectors at

very high prices and given the steep escalation in the price of art,39 it can be presumed that Dr

Smith would have made a considerable profit by selling the statue. Nonetheless, Dr Smith

chose to donate the statue to an established museum, as opposed to selling it for his own gain.

It is the Respondents’ position that this evidences the good faith nature of the dealing.

Whilst the exact nature of the exhibit in the Malaysian Museum is unknown, the statue was

displayed in an exhibit promoting knowledge, understanding and enjoyment of diverse cultures

in the Australian Museum.40 This promotion of education and advancement of the interchange

of cultural property is an obligation which all State Parties to the UNESCO Convention are

bound to consider and encourage.

There are examples where individuals are already prioritising the interchange of cultural

property over their possible property rights over cultural property. The people of the Rai Coast

in Papua New Guinea opt to forego claims for return of their cultural material as they regard

such material as being more productive in circulation than when returned.41

36 First Round of Moot Clarifications. 37 First Round of Moot Clarifications. 38 Edward M. Cottrell, ‘Keeping the Barbarians Outside the Gate: Toward a Comprehensive International Agreement Protecting Cultural Property’, (2009) Chicago Journal of International Law, Vol.9. 39 Bator, The International Trade in Art (University of Chicago Press) 1983. 40 Moot Problem. 41 Christa Roodt, ‘Restitution of Art and Cultural Objects and its Limits’ (2013) Comparative and International Law Journal of Southern Africa XLVI, 286-307.

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It is the position of the Respondents that for all the above reasons, the claimed object

belongs to the Respondents and is not liable to forfeiture.

E. If the claimed object is to be returned to Nepal, then the

Respondents are entitled to compensation.

If it is decided that the statue should be returned to Nepal, then the Respondents submit that

they are entitled to compensation. The Respondents submit that the UNESCO Convention is

the primary authority for all issues in this case, as it has been ratified by all relevant parties.

Article 7(b)(ii) of the UNESCO Convention provides that:

States Parties to this Convention undertake “at the request of the State Party of origin

to take appropriate steps to recover and return any such cultural property…however,

that the requesting State shall pay just compensation to an innocent purchaser or to

a person who has valid title to that property”.

It is the Respondents’ position that, based on the above analysis, that the Respondents

hold valid title to the claimed object and that just compensation is owed by the Claimant if the

Arbitration is satisfied that the claimed object must be returned.

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The First Respondent’s (Dr Smith) good faith possession of title is supported, by the

fact that the First Respondent was aware of the Nepalese export prohibition,42 but he did not

believe it applied to the claimed object.43

The good faith possession of title of the Second Respondent, namely The Australian

Museum, is supported by its conduct as well. The Australian Museum has internal requirements

to ensure the licit exchange of cultural property. The Australian Museum’s Cultural Collections

Acquisition Policy 2014-2017 requires that “in cases where it is not clear that the vendor or

donor holds valid legal title, or where the Museum cannot be satisfied that an object was

originally collected both legally and ethically, the Museum will not proceed with the

acquisition of the item”. Museums Australia Inc. has a Code of Ethics to which the Australian

Museum is bound. The Code of Ethics states that a Museum should not acquire any object,

unless the governing body and responsible officer are satisfied that the museum can acquire a

valid tittle to the object, and in particularly, that it has not been acquired in, or exported from,

its country of origin, in violation of that country’s laws.

Dr Smith is not only well known internationally,44 had donated many antiquities to

Museums before,45 but also assured the Australian Museum’s Director that the statue was a gift

from a high ranking Nepalese official,46 which he is.47 Given the nature of a gift and the fact

that the exportation of the claimed item was legal48 as well as the fact that Dr Smith informed

42 Ancient Monument Preservation Act 2013 (1956). 43 Moot Problem. 44 Third Round of Clarifications to the Moot Problem, E10. 45 Moot Problem. 46 Third Round of Clarifications to the Moot Problem. 47 See the University website: http://tribhuvan-university.edu.np/tu-authorities/, the University is owned by the Government and the Chancellor of the University is the Prime Minister of Nepal. 48 See above regarding the failure of the Nepalese Government to register the statue.

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Nepalese customs of his possession of the statue,49 it is clear that the Australian Museum was

satisfied with the origin of the statue and acted wholly innocently in acquiring the statue.

One can assume that the Australian Museum would have passed on such information

to the Malaysian Museum upon negotiations regarding the loan agreement. Therefore, both

Museums were acting innocently.

(ii) The Respondents do therefore have valid title over the claimed object and are

entitled to compensation in exchange for the return of the claimed object.

49 Third Round of Clarifications to the Moot Problem, E4.

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CONCLUSION AND PRAYER FOR RELIEF

Therefore, in light of the relevant issues, arguments submitted and authorities cited, it is most

humbly and respectfully requested that this Arbitral Tribunal adjudges and declares that:

1. Both the export and the import of the claimed object were licit and so the Claimant

has no right to the forfeiture of the object.

2. The Respondents have the right to retain the object.

3. The object, therefore, ought to remain with the Respondents free from any

obligations attached to it.

4. If the object is to be returned, the Respondents shall receive reasonable

compensation.

Respectfully submitted,

Council for the Respondents.