I am a junior lawyer at a Norwegian company, VERITAS-ENTERPRISES, (VE), sited in Oslo.

VE desires to close a deal with a Turkish company named FERIT to develop a 15 MW power plant near Ankara (Turkey).

The supplier of the electric motors of the power plant is to be a subsidiary of FERIT, named BASIL, with its main offices located in Cape Town, South Africa.

The price payable by FERIT to VE for the power plant is 245 million Euro.

The parties are to enter into two contracts:

1.- For the construction of the power plant and is between VE and FERIT.

• In this contract, the parties shall agree to pay monthly installments as the works develop.
• The payments by FERIT to VE are secured by a first bank guarantee issued by ARAB BANKING CORPORATION, located in Dubai, for a total maximum amount of 85 million Euro.
• Such guarantee is payable upon demand of VE once FERIT fails to pay at least two monthly installments.

2.- BASIL will supply the electric motors to VE and the agreement is between VE and BASIL.

• The price for the motors is 18 million Euro, payable by VE in equal shares during a 8 month period.
• There is not bank guarantee here, as VE does not want to provide such guarantee.
• Instead, VE will accept to grant a pledge in favor of BASIL on the amounts payable by FERIT to VE up to the maximum amount to 20 million Euro (principal, plus a 2 million excess for coverage of potential interests).

I am to furnish an opinion on the following:

? What would be the most suitable jurisdictional clause for the two contracts?

• Is arbitration possible and more beneficial taking into account the facts of the case?
• If affirmative, what clause do I recommend?