The claimant, a Spanish company, and the respondents, Portuguese companies, entered into a memorandum of understanding specifying the interest each would take in a third company, X, whose shares they were intending to buy. After learning that the respondents had agreed to sell their interest to another company, the claimant initiated arbitration proceedings, claiming that they had breached the memorandum of understanding (MOU). The first issue to be decided by the arbitrator was that of the legal effect of the memorandum of understanding. The claimant contended that it was a valid and binding contract laying obligations on the parties. Reference is made to Articles 2.11 and 2.14 of the UNIDROIT Principles in the arbitrator's discussion of the claimant's position.

'[Claimant] considers that clause 4 of the MOU contains an express commitment to execute a "shareholders' agreement" which essentially obliges each of the parties to proceed in good faith for the completion of such an agreement and that the only matters subject to future negotiation were those comprising the Shareholders' Agreement. It would not be true that the financial leverage, the need for a Technology Agreement or the commitment in respect of the flotation of [Company X] remained open for discussion.

Nevertheless, according to [Claimant], the fact that one or more matters in the MOU were left to future discussion did not prevent the MOU from being perfected as a contract. In this aspect, Portuguese law does not differ very much from the international practice. In this respect, article 2.11 §2 and article 2.14 of the UNIDROIT principles set forth that the fact that the parties leave certain matters for future discussions or to the determination of a third party does not prevent the contract from being completed, its effectiveness not being even affected if the parties fail to reach an agreement on such matters or the third party fails to determine them.'