(BLUE) ISSUE 1: ARBITRATION PROCEDURE

Summary of Facts
Under Cl 11 of the System Development Agreement, Cl 12.6 of the Site Development Agreement, andCl. 12.6 of the Master Delivery Agreement, parties agreed to resolve their dispute by arbitration in
Japan, before 3 arbitrators, governed by the UNCITRAL Arbitration Rules (2013 version).
At the time of contracting, neither party contemplated that the evidentiary hearing should be held
entirely online. Indeed at such time, the default rule was that oral hearings should be held in person,
subject to a Procedural Order issued by the Tribunal, and the consent of both parties.
During the scheduling of witnesses, Red insists that the examination of all witnesses should be
conducted online. Blue has refused.

(1) Tribunal has no authority to make the decision that examination of witnesses be conducted
online, without the prior consent of both parties
A. An online evidentiary hearing would be beyond the scope of the Arbitration Clause in the
MDTA
1. An online hearing would be contrary to the parties’ intentions in contracting for arbitration in
Japan. At the time of contracting, both parties intended that any oral evidentiary hearing would be
conducted in person.
2. The default rule of both international arbitration as well as most common-law jurisdictions aroundthe world is that oral evidence must be taken in person rather than via contemporaneous methodsof communications. (For example, Art 8(1) of the IBA Rules on the Taking of Evidence inInternational Arbitration states that “each witness shall appear in person”)
3. The parties intentionally contracted to hold the arbitration in Japan to ensure neutrality andfairness in the proceedings. This would prejudice Blue as part of the decision on the choice of theseat of arbitration are the mandatory provisions of the Japanese Arbitration Law. For instance,
due to the contested nature of the factual matters at issue, Blue would have in this circumstance,
filed an application under Art 35 of the Law to have the evidence taken by the Japanese judicial
system, in such manner prescribed by the Japanese Code of Civil Procedure.
B. Tribunal is under a duty to provide Blue with a “reasonable opportunity” to present its case2

4. Unless Blue so waives their right to examine and cross-examine witnesses in person, the Tribunal
may not order the evidence to be taken over videoconference.
5. An evidential hearing held online would derogate from Blue’s right to request an “oral” hearing
under Art 32(1) of the Japanese Arbitration Law. The relevant Article states, “where a party
makes an application for holding oral hearings...tribunal shall hold such oral hearings at an
appropriate stage of the arbitral proceedings”. Learned authors have articulated that “oral” within
the meaning of mandatory provisions in the seat of arbitration, must mean in-person as opposed
to over video-conference. The principle of orality and the principle of immediacy means thatparties are entitled to an oral, in-person hearing as opposed to one conducted overvideoconference. (Stefan Lindskog, Skiljeförfarande: En kommentar (Eng.: Arbitration: A
Commentary) 653 (2d ed., Norstedts Juridik 2012); Joachim Münch, Münchner Kommentar zur
ZPO § 1047, ¶ 9 (2017); Hans-Joachim Musielak & Wolfgang Voit, ZPO, § 1047, ¶ 2 (2019).
6. As such, in light of the importation of the principle of orality and immediacy within the
mandatory provisions of the Japanese Arbitration Law, the Tribunal has no authority to grant theorder sought by Red.
C. Blue would be prejudiced by the risk of witness coaching
7. Blue would be denied their “reasonable opportunity” to present their case. Videoconferencing
raises the spectre of witness coaching. If a witness is coached, Blue loses their ability torigorously test the evidence submitted by Red. The recent decision of ​United States v Shabazz ​52
MJ 588 at 585, in which part of a criminal conviction had to be set aside due to a witness being
coached over video-conference, is a salutary reminder to all tribunals that the spectre of witness
coaching is far from fanciful.
8. Given that a number of Red’s witnesses are employees of Red itself, there is a strong temptation
for witness coaching, or the tailoring of the evidence to suit the parties’ needs rather thanrecitation of the truth. This would only be amplified over video conference, as the parties may not
be isolated within a witness booth. Moreover, presence in court has been observed by both theEnglish courts (England and Wales Practice Direction 32) and Rule 43 of the US Federal Code on
Civil Procedure, that a witness’ presence in court is in and of itself, a potent factor in influencing
the witness to tell the truth.
9. As such, should the Tribunal rule on the procedural issue without the consent of Blue tovideoconferencing, the Tribunal will be acting ​ultra vires. ​Blue may challenge the enforcement of
the award under Art V of the New York Convention in order to vindicate its rights.
Appropriate safeguards for the use of videoconferencing evidence
10. Given the outstanding risks of COVID-19, Blue is amenable to the use of videoconferencing
evidence, provided that relevant safeguards are first put into place to ensure that the proceedings3are not prejudiced against either party.
11. It is submitted that due to the complexity of the issue, the Tribunal should issue a Procedural
Order in respect of the protocol in such a manner proposed. For ease of reference, the site fromwhich witnesses will give evidence is the “​remote site”, ​and the party proposing
videoconferencing is referred to as the “​VCF party”.
(2) Below are the specific conditions that need to be met in the examination of witnesses using
Zoom
Pertaining to the remote site
12. The remote site should provide the following:a. Computer and conferencing equipment that meets the recommended system requirements as set
out by Zoom Corporation (Zoom Corporation, ​System Requirements for Windows, macOS andLinux. (​ 2020))
b. Multiple video cameras that are controllable from the local site, and by the Tribunal themselves.
This is for the Tribunal to satisfy themselves as to the appropriateness of the seating arrangement
prescribed by the Tribunal, as well as any other considerations that may arise for the Tribunal’s
consideration pertaining to matters at the remote sitec. Appropriate and qualified staff to help resolve any technical issues that may arise with respect tothe equipment at the remote site
d. Appropriate security measures at the remote site to prevent unwanted intrusion into confidential
proceedings at the remote sitee. Costs of obtaining the remote site should be borne by the VCF party, as per Practice Direction 32
Annex 3 of the England and Wales Rules of Civil Procedure Practice Directions.
Pertaining to documents, exhibits, and other documentary evidence
a. Sharing of documentary evidence should be shared using Zoom’s “​screen share” ​feature.
b. All relevant documents and other object evidence should be provided to the Tribunal and allparties in the form prescribed under P12-P14 of the International Chamber of Commerce
Operating Standards for Using IT in International Arbitration (“​ICC Standards”​), and by suchtime as the Tribunal deems fit.
c. A secondary camera should be on hand at the remote site for live video to be taken of the relevant
object evidence as necessary for the courts to determine its veracity.
Pertaining to IT-related disruptions
a. The tribunal shall not allow IT-related difficulty to disrupt proceedings, insofar as it is possible.
The tribunal may incorporate G11 and V4 of the ICC Standards, which in effect imposes a duty4

of cooperation and good faith on the parties to attempt to resolve the issue, and allows for flexible
compromises to be made in response to the exigencies of the situation
Pertaining to the conduct of the hearinga. To ensure the safety of the evidence, this Tribunal is urged to adopt the rules under V2 of the ICC
Standards, which include ​inter alia, ​for the Tribunal to make the relevant directions as to thepersons to be within the room at the time that the witness gives his evidence. This is on all fours
with the requirement set out by other judicial authorities including ​inter alia the Ontario Courts ofJustice, and the Singapore Supreme Court.
b. To preserve some semblance of the human dynamics of the situation, the Tribunal should issue
such Direction or Order to the effect that the witnesses are to look directly towards the relevant
camera while speaking. This is for counsel or the Court to determine the character of the witness.
This is recommended in both the Singapore State Courts, as well as by international arbitrators(David Roney, “Cross-Examination in International Arbitration”, in ​Take the Witness:
Cross-Examination in International Arbitration. ​(2nd ed, 2019) KluwerArbitration)(BLUE) ISSUE 2: TRANSPORTATION CASE

Summary of Facts
In this case, the Claimant is Blue and the Respondent is Red. Under a Master Delivery and Transport
Agreement dated February 14, 2009 (“Master Delivery Agreement”) (Exhibit 4), Red agreed, ​inter alia,
to carry goods between Arbitria and Negoland for reward. The “carriage by air” was within themeaning of the Montreal Convention.
On July 16, 2019, both parties voluntarily agreed to a variation of the Master Delivery Agreement
regarding the following Consignment of goods, namely 50,000 units of Abu Propolis (“AP”) and Abu
Watch (“AW”). Under a contract evidenced by Red’s Air Waybill issued on September 24, 2019, Bluewas named as Consignor and Blue Negoland named as Recipient. Under the Memorandum, Red
voluntarily undertook to, ​inter alia, (i) package; (ii) procure cushioning materials and (iii) pay special
attention to the smooth transportation of said products (Exhibit 9) for the valuable consideration of
50,000 Nego-Lira.
Upon inspection of the goods on September 27, 2019 at [30], Blue discovered that 40,000 bottles of AP
were damaged upon delivery. Blue gave written notice regarding the damage to the Consignment
immediately on the same day. Subsequently, on October 12, 2019 at [33], it was established that 5,000
units of AW were damaged during the Delivery. The damage was caused by:a) Red’s breach of its contractual obligations to supply cushioning materials;b) Red’s reckless use of substitute cushioning materials known by its agents to be inadequate; andc) The violent shaking of Red’s aircraft during carriage
Blue seeks relief in the form of damages, based on the value of the products on September 27, 2019 at[30], amounting to:a) 6 million Nego-Lira regarding the AP, at 150 Nego-Lira per bottle;b) 250,000 Nego-Lira regarding the repairs to 5,000 units of AW; and5c) Loss of profit from subsequent price Reductions of AW subsequent to September 27, 2019 at[30], amounting to 1,500,000 Nego-Lira.
(1) There is a breach of Red's contractual obligation in relation to the damage to the goods “Abu
Propolis” and “Abu Watch”.
A. Red is in default of its obligation of “international carriage” within the meaning of Art 1.1 of theMontreal Convention
1. Red should be liable for the damage sustained to Blue’s cargo, given that the event causing thedamage, ​viz, t​ he shaking of the aircraft, took place during the carriage of the goods at [31]. The
Montreal Convention governs this transaction, as both Negoland and Arbitria are signatories ofthe Montreal Convention and Airway Bill incorporates the Montreal Convention at [35]. The Art
18.1 of the Montreal Convention imposes strict liability on carriers for damage to cargo, so longas the event causing the damage to cargo was sustained during the carriage of the cargo. Art 1.1.
of the Convention applies its scope to “all carriage of … cargo performed by aircraft for reward”
between signatories of said Convention. The proximate cause of the damage to the cargo was the“violent vibra[tion]” of the cargo in the aircraft.
(2) The amount of damages Red shall pay is 7,750,000 Abu dollars to Blue.
B. Red is liable for consequential losses emerging from the changes in price to AP and AW.
B(1) The relevant law
2. Per Art 7.4.1 of the PICC, aggrieved parties to a contract can recover the expectation loss
resulting from the breach, subject to proving that their damage was both foreseeable ​and certain.
(Art 7.4.3.; John Gotanda, ​Recovering Lost Profits in International Disputes,​ 36 Geo. J. Int'l L.
61). With respect to foreseeability, the appropriate test is a subjective-objective test: what areasonable person in the performing party’s shoes at the time of the conclusion of the contract
could have reasonably foreseen as the consequence of non- performance in the ordinary course ofthings. Regard must be had to “the particular circumstances of the contract, such as theinformation supplied by the parties” (Official Comment to Art 7.4.4. of the PICC).
3. With respect to certainty, Blue must establish that it was “likely” that the consequential loss
would flow from their breach. Both requirements operate in tandem – as explained in the Official
Comment, “it must have been foreseeable that harm will with certainty (is likely to) flow fromsuch a breach”. If Blue cannot establish the amount of damage with sufficient certainty, Art
7.4.3(2) confers the tribunal the discretion to set the amount, as well as determine the appropriate
recovery for loss of chances of profit, with respect to the probability of its occurrence.
B(2)​ ​Red’s exclusion of all consequential losses is ineffective
4. Insofar as any clauses within the Master Delivery Agreement, the Memorandum, or the contractevidenced by the Air Waybill purports to relieve Red of its liabilities, consequential or otherwise,6

it is in breach of Art 26 the Montreal Conventions, which state that “​any provision tending torelieve the carrier of liability or to fix a lower limit than that which is laid down in thisConvention shall be null and void”.
5. Furthermore, any exemption clause will be ​ineffective under Art 7.1.6 of the PICC where ​it is“grossly unfair” to one of the parties. In determining gross unfairness, reference must be taken tointer alia, t​ he legitimate expectations of the parties, and the purpose of the transaction.
6. Both contracting parties were aware that the purpose of the Consignment was for sale at BlueStore Negoland’s 10th Anniversary Sale. As such, it would be grossly unfair for Red to rely on an
exemption clause that allows them to deny recovery in respect of lost profits, from the goods
rendered unsalable by the gross negligence of Red or its agents.
B(3) The consequential losses from damage to AP was foreseeable and certain
7. It was reasonably foreseeable that the price of AP would increase over time. At the time of thecontract variation, July 16, 2019, Blue had not set a fixed price for the sale of the AP yet. Red
was aware that Blue reserved the right to hike the price based on prevailing market conditions at
the time, and yet insisted on no provision to cover this eventuality.
8. As such, Red voluntarily took on the risk that its liabilities under the variation might increase as aresult of Blue’s pricing decisions, and accepted this risk for the reward of 50,000 Nego-Lira.
B(4) The consequential losses from damage to AW were foreseeable and certain
9. It was foreseeable at the time of contracting that if there were delays to the sale of AW, there wasa high chance that a competitor would emerge, reducing the price of AW thereby occasioning
consequential loss. Negoland was a hub for electronic goods, being home to several leadingindustries in technology. It was entirely foreseeable that a leading technology company residingin Negoland would launch another product to compete with AW.
10. Secondly, as seen from the Negotown Smart City initiative at [3], wearable electronics are a
growth industry in countries which seek greater integration of IT in their cities. It is therefore
even more foreseeable that companies in Negoland would follow the trend and develop wearable
technology products to compete with AW.
11. Parties were aware that the goods were meant for sale — this was the very purpose of their entire
course of dealing. If the goods were rendered unsalable during the carriage by air, consequential
losses would be occasioned by failure to sell these goods.
C. The limitation of liability is ineffective as the consignor had made a special declaration ofinterest in delivery and paid the requisite supplemental sums thereunder.
12. Under the Terms and Conditions on the Reverse Face of the Defendant’s Air Waybill dated
September 24, 2019, as well as Art 22.3 of the Montreal Convention, limitations on Red’s
liability are ineffective as long as Blue has made a special declaration of interest in delivery, as
well as paid the prerequisite supplementary sum in consideration. Blue as Consignor did makesuch declaration and payment on July 16, 2019, as evidenced by the contemporaneous record of
the July 16 meeting. Blue requested, ​inter alia, t​ hat the special featured products, AP and AW be7smoothly transported and paid the sum of 50,000 Nego-Lira in consideration of this request.
(Exhibit 5; Exhibit 6)
13. The 50,000 Nego-Lira was paid by Blue as valuable consideration for Red to assume an increased
risk for the transportation of the signature products. It would have been vastly disproportionate topay 50,000 Nego-Lira for mere packaging materials and labour, especially as Blue’s own
employees estimate the cost of packaging material at 2,000 Abu dollars. The only reasonableconclusion that the parties could possibly have intended is that the 50,000 Nego-Lira was the
supplementary sum envisaged to be the consideration for Red taking on the additional risk ofcarrying low-weight but high-value items.
D. The complaint on the damage to the Abu Propolis was made to Red in timely fashion
14. The notice that 40,000 bottles of AP had been damaged is sufficient to bring the entire claim
within the time bar prescribed under the Montreal Convention. Blue made a written
representation dated September 27, 2019 to the Carrier, one day after receipt of the Consignment,that 40,000 bottles of Abu Propolis were damaged and unsalable (at [31]). A purposiveinterpretation of Art 31(2) of the Montreal Convention suggests that “damage” for the purposes ofrecovery does not oblige the Consignor to delineate the entire extent of the damage, but merelythat part or all of the Consignment has been lost within the meaning of Art 18(1).
15. The purpose of Art 31(2) is to (1) enable the Carrier to ascertain how the damage was incurred bypreserving all relevant evidence, including the necessary AWBs and flight documentation; and (2)to assess its liability or make provision in its accounts, if necessary, to claim on their insurers(​Fothergill v Monarch Airlines ​[1981] AC 251 at 272).
16. Therefore, upon an appropriate construction, the rule should be that the parties need not inform
Red of the entire extent of the damage to the Consignment, but only that damage has occurred.
This gives sufficient notice for the parties to preserve the relevant documents and make thenecessary preparations and inquiries required in civil proceedings. As to the spectre of liability for
an indeterminate time, it is submitted that time requirements for the Statement of Claim under Art
20 of the UNCITRAL Arbitration Rules are themselves an effective time bar. If the damage was
not pleaded, it is unrecoverable.
(BLUE) ISSUE 3: INFORMATION CASE

Summary of Facts
Blue was commissioned by Red:
(1) To develop a website for Red Travel under the Site Development Agreement (Exhibit 8); and(2) To complete renewal works for Red’s customer management system and database under the
System Development Agreement (Exhibit 7)

8

The Information Case is two-fold:(a) In October 2019 at [36], Arbitria’s Personal Information Protection Commission (“PIPC”)
imposed a fine on Red Travel’s website (Exhibit 13) for allegedly breaching the General Data
Protection Act (“GDPA”). Red claims that Blue is liable for the fine as Blue was tasked tocreate the website under the Site Development Agreement (Exhibit 8).
(b) On January 15, 2019 at [22], Red discovered bugs in their customer management system;
promptly fixed by Blue the subsequent day (Exhibit 14). Red also made requests for Blue to
conduct checks on system bugs while Blue’s staff were overstretched. On January 26, 2019,50,000 of Red’s customers had their personal information leaked. Blue swiftly dispatched staff
to rectify the unprecedented bug and advised Red to temporarily suspend their system. As aresult of third-party hacking, Red paid solatium to affected customers amounting to 5,000,000
Nego-Lira and a fine of 1,500,000 Abu dollars paid to the PIPC.
Red is seeking 500,000 Nego-Lira in compensation for Issue (a) and 6,500,000 Nego-Lira for Issue (b).
(1) Blue is not legally liable to pay Red compensation
A. Blue has fulfilled its contractual obligations
1. Blue is not liable for the losses suffered by Red under the Site Development Agreement (Exhibit8) (“the Contract”). Per Cl 12.1 of the Contract, all conditions therein are governed by the rules of
the PICC.
2. Neither party intended for Blue to be contractually liable for potential breaches of internationallaw. Art 4.1(1) of the PICC states that a contract must be interpreted in light of the common
intention of both parties. Even if Red had meant for Blue to be contractually liable for suchbreaches of the GDPA, there was no such contractual provision in any part of the contract.
3. Moreover, at the time of contracting, Blue was unaware of any such intentions. Per Art 5.1.1, any
contractual obligations between both parties must be either expressed or implied. As there are nosuch provisions in the Contract, Blue’s liability for Red’s losses in the present case does not exist.
B. Further or in the alternative, Blue’s design of the Red Travel website is GDPA compliant
4. The Red Travel website does not contravene the GDPA. Per Art 7.2 of the GDPA, a “request forconsent shall be presented in a manner which is ​clearly distinguishable from the other matters.”
Referring to the facts, it is clear that the Red Travel website:(1) Requires customers to ​click on a statement stipulating "I have read and agreed to theterms and conditions" after scrolling through the terms and conditions at [37]. No
contract is made otherwise(2) Obtains consent for the use of data when customers ​click on a button on their website
saying, “I enter into transactions with Red upon consenting to Red's policy on the use of9

personal information” at [37].
5. There are thus ​two distinct features to establish consent for (1) data use and (2) the acceptance ofRed’s terms and agreement; the website design complies with GDPA requirements.
C. The GDPA should not be enforced on the Red Travel website
6. The GDPA should not be enforced on Red Travel. Per Art 3.1 of the GDPA, the regulation
applies to entities that:(1) Process personal data in the context of the activities of an establishment of a controller ora processor in Arbitria (“Establishment Criterion”); where(2) Such processing activities (“Targeting Criterion”) mean that the entity:a. Provides goods and services to data subjects; orb. Monitors of the behavior of data subjects within Arbitria.
7. The ​Guidelines 3/2018 on the territorial scope of the GDPR (Article 3) (“Guidelines”) are
instructive on the meaning behind Art 3.1. First, an “establishment” refers to “a natural or legal
person, public authority, Adopted agency or other body” (Page 6, Guidelines) conducting the“real exercise of activities through stable arrangements” (Recital 22, GDPA) in Arbitria, where“the presence of one single employee or agent ... may be sufficient to constitute a stablearrangement” (Page 6, Guidelines). Second, the test for the Targeting Criterion is whether anentity “intentionally, rather than inadvertently or incidentally, target individuals” (Page 15,
Guidelines) in Arbitria.
8. Red Travel does not meet the two criteria. The Establishment Criterion fails because Red Travel
has no “stable arrangement” in Arbitria. The website server and, by extension, any employees, arelocated in Negoland at [15]). Red Travel also does not “intentionally … target individuals” in
Arbitria per the Targeting Criterion. Red Travel’s website is written in English and located withinBlue Global Mall (“BGM”) to attract international travellers (at [23]) rather than individuals
specifically residing in Arbitria. The GDPA in the Guidelines (Page 15) specifically excludes a
factual scenario whereby “the processing relates to a service that is only offered to individuals
outside [Arbitria] but the service is not withdrawn when such individuals enter [Arbitria]”. This isanalogous to the present case, where Red Travel’s service is offered to the world but is notwithdrawn for Arbitria’s residents who voluntarily access the website. Thus, it should not be
subject to the GDPA.
9. Moreover, the Arbitria Supreme Court recently affirmed that the GDPA will not apply whereresidents of Arbitria voluntarily access websites operated by foreign businesses at [41]. This
voluntariness can be established in the present case, as customers entering Red Travel throughBGM encounter the message: “From now, you will be redirected to Red's website” at [23].
10. Consequently, Red’s claim must be dismissed. Blue is not contractually liable for Red’s losses
nor did Blue fail to design the website according to GDPA guidelines. Furthermore, there is nolegal basis for the GDPA to be enforced on the Red Travel website.
10(2) Blue is not contractually liable to pay 6,500,000 Nego-Lira in damages to Red
A. Blue was not negligent in building the system under the System Development Agreement(“SDA”)
11. Blue is not liable to indemnify Red under the SDA’s warranty (Exhibit 7). In Cl 6.2, Blue had not
warranted “error free” operations of the Computer System service not arising from its negligence.
Negligence must be “interpreted in the light of the whole contract or statement in which they
appear” (Art 4.4 of the PICC). Hence, reading Cl 4.4 with Cl 6.2 evinces that Blue would be
negligent if they do not provide services “in a proper and workmanlike manner”.
12. Pursuant to Art 5.1.4, Comment 1 of the PICC, Cl 4.4 does not guarantee that Blue will build asystem that achieves the specific result of hacking prevention, but only promises a duty of best
efforts. Pursuant to Art 5.1.4(2), Blue is bound only to such efforts as would be made by areasonable workman in Blue’s circumstances. Such a workman cannot guarantee building an
impenetrable system due to the fast-evolving nature of attempted hacking. Hence, Blue fulfilled
their duty to deliver a system “in a proper and workmanlike manner” because the system meets
industry-standard security levels by guarding against two unauthorised breaches on January 21
and 23 (Exhibit 14). Blue is bound to guard against hacking to the best efforts of a proper
workman, but not to ensure that ​zero b​ ugs penetrate the system, especially since Red’s website is
widely-used and likely a target of hacking. An unprecedented bug such as that on January 26
might still slip through industry-standard security.
13. Thus, the hacking incident is beyond Blue’s liability under the warranty. The interpretation of“error free” operations must be construed according to the “meaning commonly given to terms
and expressions in the trade concerned” pursuant to Art 4.3, sub-paragraph (e) of the PICC.
Contracting parties in Blue’s position, equipped with the same technical knowledge, would
reasonably understand that the system bug is an “error” that Cl 6.2 covers, as Internet systems are
susceptible to periodic glitching.
B. Even if Blue’s warranty against providing “error free” operations is ambiguous, Blue cannot beliable for the hacking incident to avoid indeterminate liability.
14. Should the warranty against “error free” operations in Cl 6.2 of the SDA be deemed ambiguous,
the tribunal must not rule that the hacking incident is an error outside the warranty. To impose
liability for the hacking incident when Blue had expressly contracted against “error free”
operations would contravene contractual good faith as per Art 1.8 of the PICC. Red, in expressing
no objection to Cl 6.2 and concluding the contract, brought Blue to a reasonable understandingthat they did not warrant “error free” operations in entering the contract. Hence, Red’s claim fordamages against Blue for the hacking incident is inconsistent behaviour considering their priorassent to Cl 6.2. Blue suffers detriment by way of the present lawsuit because Blue had done allthat a reasonable person would do in the circumstances.

1115. Moreover, good faith is important in “light of the special conditions of international trade” at
PICC Art 1.7, Comment 3. To allow Red’s claim for damages would cast doubt on the binding
nature of warranty clauses in international business contracts and obstruct actual performance.
The tribunal’s interpretation should promote the economic success of international trade, which
was intended through Cl 6.2 to prevent an onerous duty of assuring “error free” operations.
C. Blue was not negligent in responding to Red’s request for bug fixes and the hacking incident.
16. Blue fulfilled their duty of best efforts in system repair. Blue promptly rectified system bugs a
day after Red made their first request on January 15, 2019 (Exhibit 14). As for the two
unauthorised system access attempts on January 21 and 23, Blue’s response was aligned with theanticipated lead time to troubleshoot the unprecedented bug before making fixes. Since a third
hacking attempt materialised just three days after the second unsuccessful attempt, the short leadtime constrained Blue from making the appropriate fix.
17. For Red to expect immediate rectification of the bug is an "unreasonable burden" within themeaning of Art 7.2.2(b) of the PICC. Repairs made by a proper workman must account for the
fast-evolving nature of Internet bugs which might slip through a system considered robust byindustry-standards. It is an unreasonable burden for a workman to devise an immediate solution toan unprecedented bug which requires more time and effort to troubleshoot. Even with intensive
checks, the bug could only be discovered in four days (Exhibit 14), all the more with normal
checks by a reasonable workman, notwithstanding the time it would take to fix the unprecedented
bug. Moreover, Blue maintained their professionalism to perform in a “proper and workmanlike
manner” despite staff resources being spread thin.
18. Blue fulfilled their duty of best efforts on the day of hacking on January 26, 2019 (Exhibit 14) byimmediately dispatching staff members to Red. Blue managed to limit Red’s damages to only
50,000 customers by advising Red to suspend the system (Exhibit 14). This number is a trifling
fraction of Red’s estimated 200,000 annual users of Red Travel (at [23]) and many moreinternational customers on Red’s larger database. Blue’s rapid and effective intervention
prevented the whole database from being compromised, averting the large-scale crisis of sites
such as eBay whose 145 million user base was hacked entirely in 2014 (CNBC, ​Hackers raid
eBay in historic breach, access 145M records.​ (2014)), or the Japanese pension system hacking
where 1.25 million individuals’ personal data was leaked in 2015 (The Japan Times, ​1.25 million
affected by Japan Pension Service hack.​ (2015)).
19. In any event, Red should not conflate Blue’s obligation to respond to bug fixes in a timely
manner with the harm that materialised from the hacking incident. No correlation exists between
the delay in fixing the bugs and the third-party hacking that transpired. As per Art 7.4.4 of the
PICC, damages are awarded where harm is a “direct consequence of non-performance as well as
certain”. Even if Blue were liable for a delayed response to Red’s requests for bug fixes, thedamages Blue should pay must be nominal because consequential losses from the hacking did notarise purely from Blue’s delayed performance but from a third-party breach.
D. Red’s statement of reliance is non-binding because it was made outside the contract.
1220. Red’s statement of reliance on Blue to prevent hacking at [21] is not a term of the contract under
Cl 13 which stipulates that the SDA supersedes all other understandings. The clause must be
given effect under the principle of ​pacta sunt servanda ​at Art 1.3, Comment 1 of the PICC. Red’s
company representative, Crane, requested Blue’s representative, Ruby, to “pay special attention
to hacking prevention and strict data management”. However, ​Red cannot unilaterally modify thecontract to include hacking prevention as a term under Art 1.3, Comment 2 of the PICC after the
SDA’s conclusion without Blue's consent. Moreover, Blue has not acted in such manner to induce
Red's reasonable reliance – Blue simply assured Red that they will pay attention to hacking
prevention, reiterating their duty of best effort as set out in Cl 4.4.
21. Should the non-binding nature of Red’s expression of reliance be contentious, the tribunal must
establish the understanding of reasonable persons as per Art 4.3 of the PICC. The intention
behind Red’s representation of reliance at [21] is read as fostering corporate partnership, giventhat the statement was made ​after c​ oncluding the contract. A system developer in Blue’s position
would not understand that Red intends for Blue to prevent ​all i​ nstances of hacking. Blue simply
reiterated their promise to “do [their] best” to pay attention to hacking as a professional gesture.
E. In the alternative, if Blue were liable for damages flowing from the hacking incident, they should
be drastically reduced because Red failed to mitigate their own losses.
22. Ultimately, Red as system owner should have limited its damages as soon as they suspectedhacking. Pursuant to Art 7.4.7 of the PICC, damages payable are reduced to the extent that “harmis due in part to an act or omission of the aggrieved party”. Since ownership rights of the R-CMS
was transferred to Red under Cl 5 of the SDA, Red had final say over system management whereBlue was unable to rectify the bugs immediately. Interpreting the license ownership with thegeneral context in Art 4.5 indicates that Red has final say over emergency decisions pertaining to
the system even if Blue is the system developer.
23. It would be unjust to hold Blue wholly liable for damages flowing from the hacking incident
when Red contributed to harm by failing to conduct damage control. Red, as system owner, wasalive to the risk of hacking due to repeated unauthorised attempts. Where Red knew their website
had high customer traffic and was the target of persistent hacking, Red should have taken
additional precautions to mitigate a foreseeable materialised hacking event, beyond simply
contacting Blue’s company representative. If not for Blue’s suggestion to suspend the system on
January 26, 2019 (Exhibit 14), much more than 50,000 customers would be impacted. As the
database owner with sole responsibility over customer privacy, Red is largely liable for damages
arising from these failures. Hence, damages payable by Blue should be significantly reduced.

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