THE BLUE ONE CASE

Summary of Facts
In 2010, Blue Inc. was approached by Hiromi Red to begin a business relationship. From 2011, Blue Inc.
and Red Corp. had a contractual relationship to deliver cases of Blue One. The price and quantity of theorders were renegotiated on a year-by-year basis. The order for the year 2020 was left unspecified by Red
Corp. but Blue Inc. reserved 100 cases for it. However, Red Corp. alleged that Blue Inc. was contractually
obligated to deliver 200 cases of Blue One despite the lack of a valid contract on the matter. Red Corp.
eventually agreed to purchase the 100 cases of Blue One and requested that they be delivered by air, andfor Blue Inc. to arrange the flight. When the wine was with the air carrier, lightning struck the storage
space with the wine and caused a fire which destroyed all 100 cases of Blue One.

ISSUE 1: BLUE INC. IS NOT LEGALLY OBLIGATED TO DELIVER 200 CASES OF BLUEONE TO RED CORP.
A. For the year 2020, there was no contract obligating the delivery for 200 cases of Blue one to Red
Corp.
1. Blue Inc. was only obligated to deliver 100 cases of Blue One per the Sales Contract signed on 26
September 2020 (“Sales Contract 2020”, Exhibit 6). The relevant rule is found in Article 2.1.1 of
the UNIDROIT Principles of International Commercial Contracts (“PICC”) which necessitates that
all contracts are concluded “either by the acceptance of an offer or by the conduct of the parties thatis sufficient to show agreement”, and Article 1.3 which states that a contract validly entered into isbinding upon its parties. The Sales Contract 2020 is a valid contract under Article 1.3 of the PICC,
duly signed by both parties (Exhibit 5). The Sales Contract 2020, which parties are bound by, thus
stipulates that Blue Inc. is only obligated to deliver 100 cases, contrary to Red Corp.’s claim.
B. Blue Inc. is not bound by prior agreements as contractual obligations are reviewed on a yearlybasis.
2. There is no subsisting obligation to deliver 200 cases of Blue One annually to Red Corp. since allcontracts regarding the sale of Blue One only bind parties for a period of one year.
3. The relevant rule is found in Article 1.1 of the PICC, which states that parties are free to enter into
a contract and determine its content. Under Comment 1, the freedom of contract acts as “a basic
principle” in the context of international trade. Blue Inc. and Red Corp. exercised the freedom not
to form a subsisting contract that obligated the continual delivery of 200 cases of Blue One eachyear. Both parties did not have an agreement for the continual purchase of 200 cases (Exhibit 3-1;
Exhibit 3-2) as written statements by Hiromi Red and Taro Blue state that “We did not prepare
anything particular like a contract for the continuous purchase of 200 cases of Blue One' annually”.
4. Blue Inc. and Red Corp. have no fixed agreement on the quantity of Blue One to be purchased peryear, as evinced by Exhibit 4. Misconstruing the terms of the current contract would compromiseboth parties’ intentions when they signed the agreement. Failing to uphold what the parties agreed

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to would be an unfair outcome and would undermine their freedom to contract, which is enshrined
under Article 1.1 of the PICC.

C. There are no implied terms in the agreement between Blue Inc. and Red Corp.
4. Even on the basis that there was a subsisting contract between Blue Inc. and Red Corp., this
supposed contract has no implied term obligating the delivery of 200 cases of Blue One.
5. The relevant rule is set out in Article 5.1.1 and Article 5.1.2 of the PICC. Article 5.1.1 states that
contractual obligations may be expressed or implied. Article 5.1.2 can only be invoked if the implied
terms fill gaps in the contract or are so obvious that the obligation ‘went without saying’, per theComment under the Article. This is such that implied obligations stem from the nature and purposeof the agreement, the practices established between the parties, good faith and reasonableness.
6. There is no implied term that Red Corp. can reasonably rely on. The handwritten memo by TaroBlue (“the Memo”, Exhibit 3-1) stipulates an indefinite duration of partnership while all contracts
are limited to the year it was formed (as explained in Paragraph 3). Extending the duration of thecontract contrary to the parties’ intentions would lead to commercial uncertaintyy. This uncertainty
is harmful in the present case, as agreed details to the quantity of Blue One are paramount to thebusiness relationship. Further, the Memo was not intended to act as a legal contract, as Blue Inc.
had no intention for the memo to be contractually binding (Exhibit 3-2). If anything, the Memowas meant to simply create business relations between Blue Inc. and Red Corp. to open up
subsequent negotiations to contract each year for the sale of Blue One.
7. Even if Red Corp. relies on past business agreements with Blue Inc., there will be no obligation forBlue Inc. to deliver 200 cases. This is because this implied obligation is not so obvious that it ‘goes
without saying’, given that Red Corp. had to make a new offer each year with a specific quantity ofBlue One in mind, and this quantity varies, as seen from the sales record in Exhibit 4.
D. Blue Inc. acted in good faith to comply with the practice to sell Blue One to Red Inc., and thispractice did not establish any obligation to deliver the quantity of 200 cases.
8. Any practice established between Blue Inc. and Red Corp. entails only the buying and selling ofBlue One, and not specifically the quantity of 200 cases. The relevant rule can be gleaned in Article
1.7 and Article 1.9 of the PICC. Article 1.7 states that each party “must act in accordance with goodfaith and fair dealing” while Article 1.9 (1) states that the parties are legally bound “by any practices
which they have established between themselves”. The practice established between Blue Inc. and
Red Corp involves only the buying and selling of Blue One yearly. Blue Inc. and Red Corp. havea standard course of dealing each year (see paragraph 3).
9. Blue Inc. acted in good faith and was in line with the spirit of fair dealing. In the email exchangedetailing the negotiations for the sale of Blue One in 2020 (Exhibit 5), Blue Inc. reserved 100 casesof Blue one for Red Corp. despite Red Corp. having placed a late order. This is analogous with theillustration under Article 1.9 for Comment 2, where A cannot object to a late notice from B when it
is an established practice between them such that it will be binding on A. As established above,prior dealings led Blue Inc. to reserve 100 cases of Blue One for Red Corp. in an exercise of goodfaith.

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ISSUE 2: BLUE INC. IS EXEMPT FROM LIABILITY FOR THE NON-PERFORMANCE IN
RELATION TO THE SALES CONTRACT 2020.
A. Red Corp. bore the risks of air delivery.
10. A term which states that Red Corp. is to bear the risks of air delivery should be supplied. Pursuant
to Article 4.8, where the parties to a contract have not agreed with respect to a term which isimportant for a determination of their rights and duties, a term which is appropriate in thecircumstances shall be supplied.
11. Red Corp. and Blue Inc. have not agreed with respect to the allocation of risks which might arise
during the delivery process, which is a term important for a determination of their rights and duties.
Prior to the modification of the mode of delivery, Clause 2 of the Sales Agreement (Exhibit 6)
allocated the delivery risks with reference to the Free On Board rule from INCOTERMS 2020. The
use of the Free On Board rule, however, is restricted to goods which are transported by ‘sea or
inland waterways’ (FOB Incoterms® 2020). This rule, hence, is not appropriate for air delivery. As
such, there exists a need to supply a term which clearly sets out the allocation of risks for air
delivery.
12. The term that should be supplied here would be one which states that Red Corp. bears the risks of
air delivery. Pursuant to Article 4.8, in determining what is an appropriate term, regard shall be had,among other factors, to the intention of the parties, the nature and purpose of the contract, goodfaith and fair dealing, and reasonableness.
13. The intention of the parties establishes such a term. The correspondence between the parties clearly
indicates that the parties intended for Red Corp. to bear the risks of air delivery. In its email to Blue
Inc. on 1 October 2020 (Exhibit 8), Red Corp. stated that it would ‘bear all costs and risks’. Blue
Inc. replied saying that it ‘understood’, and promptly arranged a flight. The intention of the parties,
therefore, clearly suggests that a term which states that Red Corp. bears all risks of air delivery
should be supplied.
14. The supplication of a term which states that Red Corp. is to bear the risks of air delivery is also
required by good faith and fair dealing. Red Corp. was the party which requested that the cases ofBlue One be delivered by air (Exhibit 8). Red Corp. is hence better-positioned to protect itself fromany risks of air delivery. That Red Corp. failed to procure an insurance policy which covers suchrisks is a negligent omission on Red Corp.’s part, for which Blue Inc. should not be held responsible.
15. Furthermore, the supplication of a term which states that Red is to bear the risks of air delivery
would be reasonable. It is within reason that the party which requests a modification to the contract
should bear any risks which might arise as a consequence of this modification.
16. Owing to the aforementioned reasons, a term which states that Red Corp. is to bear the risks of air
delivery should be supplied. Pursuant to Article 7.1.2, a party may not rely on the nonperformanceof the other party to the extent that such nonperformance was caused by an event for which the firstparty bears the risk. As such, Blue Inc. is exempt from any liability for its nonperformance.
B. Even if Red Corp. did not bear this risk, Blue Inc. would still be exempt from liability, because
Blue Inc.’s non-performance was excused by clause 10 of the Sales Agreement
17. Blue Inc.’s non-performance was excused, as per clause 10 of the sales agreement (the ‘force
majeure clause’).

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18. The force majeure clause stipulates that:
Neither party shall be responsible for any failure to fulfill its obligations
hereunder due to causes beyond its reasonable control, including without
limitation acts or omissions of government or military authority, acts of God,
shortages of materials, transportation delays, fires, floods, diseases, labor
disturbances, riots, or wars provided that it gives prompt notice to the other of
its invocation of this provision and makes diligent efforts to resume its
performance despite such force majeure. [emphasis added]
19. Blue’s failure to fulfil its obligation was attributable to a cause beyond its reasonable control. Bluewas unable to deliver the 100 cases of Blue One because they were destroyed in a fire. This wasclearly a cause beyond the reasonable control of Blue Inc., as the force majeure clause expressly
cites ‘fires’ as an example of such causes. The fact that the fire was caused by lightning which
emanated from the largest thundercloud in recorded history fortifies Blue Inc.'s position. Blue Inc.
could not have foreseen that such a large thundercloud would form and taken preventive measures
to protect the cases of Blue One against any harm the thundercloud could cause.
20. Blue Inc. gave prompt notice to Red Corp. of its invocation of the force majeure clause. Blue Inc.
informed Red Corp., through email, of the storm and the fire, as well as the destruction of the casesof Blue One, on 8 October, less than a day after the destruction occurred.
21. Blue Inc. also made diligent efforts to resume its performance despite the force majeure. From theway the force majeure clause is structured, it is clear that the duty it imposes on the non-performing
party to resume performance is a duty of best efforts. Pursuant to Article 5.1.4, a duty of best efforts
requires only that a party make such efforts as would be made by a reasonable person in the same
circumstances.
22. Blue Inc. offered, in its email to Red Corp. on 9 October 2020, to deliver 100 cases of second labelof five famous chateaux, which Blue Inc. had secured for its domestic customers, in place of the
100 cases of Blue One which had been destroyed. As the remaining cases of Blue One held by Bluehad been sold to other parties, Blue could not have delivered those to Red.
23. While five famous chateaux is not as prestigious as Blue One, it is nonetheless a highly valued winelabel. As per Exhibit 16, Red Inc. would have made the same profits had they purchased the secondlabel of five famous chateaux instead of Blue One. The alternative proposed by Blue was hence
entirely reasonable in the circumstances, and amounts to a diligent effort to resume its performance.
24. As Blue Inc.’s nonperformance was due to a cause beyond its reasonable control, and Blue Inc.
gave prompt notice to Red Corp. and made diligent efforts to resume performance, it is exempt fromliability under the force majeure clause of the Sales Agreement.

ISSUE 3: IN THE CASE THAT LIABILITY IS ESTABLISHED FOR NON-PERFORMANCE,THE DAMAGES PAYABLE BY BLUE INC. SHOULD BE REDUCED SIGNIFICANTLY.
A. Red Corp. failed to take reasonable steps to mitigate the harm resulting from Blue Inc.’s nonperformance.

425. Pursuant to Article 7.4.8, the non-performing party is not liable for harm suffered by the aggrievedparty to the extent that the harm could have been reduced by the latter party’s taking reasonable
steps.
26. Following the alleged breach, Blue Inc. offered to sell 100 cases of five famous chateaux in placeof Blue One, as per Exhibit 5. Red Corp., however, declined this offer.
27. Given that Red Corp., would have made the same profits from sales of five famous chateaux(Exhibit 16), Red Corp., should have accepted the offer, as it would have significantly reduced theharm resulting from Blue Inc.’s non-performance.
28. Therefore, the damages to be paid by Blue Inc. should be significantly reduced, as Red Corp. did
not act to mitigate the harm resulting from the alleged breach where it was perfectly reasonable tohave done so.
29. If liability is established for 200 cases, Blue Inc. should pay damages of 1,000 USD * 100 cases *12 bottles = 1,200,000 USD.
30. If liability is established for only 100 cases, Blue Inc. should pay damages of 1,000 USD * 100
cases * 12 bottles = 1,200,000 USD. However, this is subject to our next submission.
B. Red Corp. is liable for the destruction of the 100 cases of Blue One.
31. Pursuant to Article 7.4.5, where the harm of an aggrieved party is due to an event for which said
party bears the risk, the amount of damages would be reduced to the extent that that event
contributed to the harm.
32. If liability is established only for 100 cases, Red Corp.’s harm - its loss of profits from the 100 casesof Blue One, would be due to the cases being destroyed by a fire while at the airport. As per thecorrespondence between Red Corp. and Blue Inc. (Exhibit 8), the parties agreed that Red Corp.
would bear all risks of air delivery. As such, the amount of damages Red Corp. pays should be
reduced to the extent that the fire contributed to the harm.
33. Given the direct and obvious causal link between the fire and Red Corp.’s loss, the fire contributed
significantly to Red Corp.’s loss. The damages to be paid should be reduced significantly, by 80%90%. The appropriate amount of damages would hence be between 10% * 1,200,000 = 120,000
USD and 20% * 1,200,000 = 240,000 USD.

THE KANPAI CASE

Summary of Facts
An exclusive distributorship agreement for Kurenai Sake was entered into between Red Corp. and Blue
Inc. in November 2014 (the “Kurenai Agreement”). Under the Kurenai Agreement, Blue Inc. is to sella minimum quantity of 10,000 cases of Kurenai yearly. In 2018, under the instructions of Red Corp, Blue
Inc. shifted its manpower and resources away from the promotion of Kurenai to Kanpai. This resulted ina drop in sales for Kurenai.
Blue Inc. signed an exclusive distributorship agreement for Kanpai Beer produced by Yellow Corpo. (the5“Kanpai Agreement”) In 2018, Yellow Corp. transferred the Kanpai Agreement, along with its
obligations of producing and selling Kanpai to Blue Inc., to Red Corp. Under the Kanpai Agreement, BlueInc is to meet a minimum purchase requirement yearly, with excess for any period credited towards theminimum purchase requirement for the subsequent period. Both agreements also contain a clause forForce Majeure absolving liability from parties for causes beyond the reasonable control of a party.

ISSUE 1: RED CORP. IS NOT ENTITLED TO TERMINATE THE EXCLUSIVE
DISTRIBUTORSHIP AGREEMENTS FOR KURENAI OR KANPAI
A. Red Corp. violated Article 7.1.2 of the PICC when it interfered with Blue Inc.’s performance ofthe Kurenai Agreement.
34. Blue Inc. was not in breach of Article 16(4) of the Exclusive Distributorship Agreement as Blue Inc
did not fail to meet the minimum sales target, of 10,000 cases as specified in Article 9 of theagreement, for two consecutive years.
35. Red mandating that Blue focus its manpower and resources away from Kurenai is in violation of
Article 7.1.2 of the PICC which provides that
A party may not rely on the non- performance of the other party to the extent thatsuch non-performance was caused by the first party’s act or omission or byanother event for which the first party bears the risk. [emphasis added].
36. Given the unique target audience of Kurenai and it being sold exclusively to high-end customers, it
is clear that maintaining strong sales figures of Kurenai is no easy feat for Blue Inc. However,throughout their relationship under the agreement, Blue Inc has consistently maintained its sales ofKurenai above the minimum target under Article 9.
37. On the facts, Blue Inc was able to more than double the sales of Red Corp’s Kurenai sake while
maintaining the drink’s unique brand image as a special drink for special occasions. (Exhibit 4) Thisis owed to the strength of Blue Inc’s manpower and distributor network focusing heavily on thesales of Kurenai.
38. Consequent to Red Corp’s takeover for the production of Kanpai beer, which had poor sales figures,
Red Corp explicitly ordered Blue Inc to “put [Blue Inc’s] energy into “Kanpai” rather than
“Kurenai” at least until 2019” (Exhibit 13) in a bid to boost Kanpai’s sales.
39. The sales of Kurenai in 2019 was thus “below that in the fiscal year 2018 as manpower was
allocated to sales of Kanpai.” [emphasis added] (para. 32) Manpower was allocated to Kanpai’ssales under the instruction of Red Corp as they are the primary decision maker on matters pertaining
to distribution of its beverages. As Red Corp. administers both the Kurenai agreement and Kanpai
agreement, non-adherence with Red Corp’s instructions could put not one, but two, distributor
agreements at risk. Red Corp. made representations to Blue Inc. to shift its focus from Kurenai to
Kanpai, and Blue Inc. had no choice but to comply with the orders of Red Corp.
40. Red’s interference in the allocation of manpower and resources caused the shortfall in sales in 2019.
Considering Blue’s strong track record in selling Kurenai (Exhibit 10), had Red Corp not mandated
Blue Inc. to shift its attention away from Kurenai, sales of Kurenai would have stayed significantly
above the minimum of 10,000 cases

641. In accordance with Article 7.1.2, Blue’s non-performance of Article 9 of the Kurenai Agreement in2019 “loses the quality of non-performance” altogether. Therefore, Blue Inc had performed its
obligations under Article 9 of the Kurenai Agreement in 2019. Red Inc. has no grounds fortermination under Article 16(4) of the Kurenai Agreement as there was no failure to meet minimum
sales for two consecutive years.
B. Further or in the alternative, Red Corp’s inconsistent behaviour regarding the Kurenai
Agreement has violated Article 1.8 of the PICC.
42. Red Corp’s claim is inconsistent with their initial behaviour and is a violation of Article 1.8 of the
PICC which states that:
A party cannot act inconsistently with an understanding it has caused the otherparty to have and upon which that other party reasonably has acted in relianceto its detriment.
Red Corp caused Blue Inc to have an understanding that sales volumes need not be maintained
above the sales target of 10,000, as stipulated in Article 9. Therefore, Blue Inc. did not fail to meetthe minimum sales target for two consecutive years and Red Corp has no grounds for termination.
43. As explained above, Blue’s success or failure to sell Kurenai is inextricably tied to the amount of
manpower and resources it allocates to promoting the beverage. The common intention of theparties was to have Blue shift its focus onto Kanpai beer to boost its sales. Red Corp explicitly
instructed Blue Inc to “put your energy into “Kanpai” rather than “Kurenai”” (Exhibit 13) Given
the limited manpower and resources of Blue, it is mutually understood that Kurenai sake would notreceive the same focus from Blue than it did in previous years. It can also be inferred that bothparties were aware that the consequence would be that Kurenai’s sales could drop, possibly below
the required amount.
44. Blue Inc. relied on Red Corp’s representations. Manpower was allocated to boost Kanpai’s sales
under the instruction of Red Corp. For Red Corp. to then renege on the understanding caused is not
only harmful to commercial relations and in bad faith, but also a breach of Article 1.8 of the PICC.
45. Red Corp. is also aware of the shortfall of sales of Kurenai Sake in 2019, as per Article 12 of theAgreement. However, Red Corp did not instruct Blue Inc to alter its performance or improve thevolume of Kurenai sold. Red Corp. is aware that Blue Inc. has relied on the representations that they
have made. The circumstances here are similar to Illustration 2 furnished under Article 1.8 of the
UNIDROIT principles, which state that:2. B mistakenly understands that its contract with A can be performed in aparticular way. A is aware of this and stands by while B’s performance proceeds.
B and A meet regularly. B’s performance is discussed but no reference is madeby A to B’s mistake. A will be precluded from insisting that the performance
was not that which was required under the contract. [emphasis added]
That Red Corp did not instruct Blue Inc. to rectify its performance highlights their intention
for efforts to be temporarily shifted away from Kurenai and their understanding that sales ofKurenai would not meet the minimum set out in Article 9 of the distributor agreement.
46. Blue Inc had reasonably relied on Red Corp’s instructions and continued to shift its focus from
Kurenai to Kanpai. It is averred that Red Corp’s claim is inconsistent with its initial behaviour and7has caused detriment to Blue, who has relied on their statements and shifted focus away frompromoting Kurenai Sake to Kanpai Beer.
47. Therefore, Red Corp should not be allowed to act inconsistently with their representations and insist
that Blue Inc. had failed to meet their contractual obligations in 2019. The termination of theKurenai Agreement under Article 16(4) is in bad faith and has no grounds.
C. Blue Inc has not breached Clause 9 of the Kanpai Agreement on a minimum purchaserequirement.
48. Blue Inc has not breached Clause 9 of the Exclusive Distribution Agreement for Kanpai (Exhibit11) as they have met the minimum purchase requirement set out, by purchasing a total of 32,000
cases from 2017 to 2019.
49. Clause 9(a) of the Exclusive Distribution Agreement (Exhibit 11) states that:“purchases of Products in excess of the minimum requirements set forth for any
period shall be credited towards the minimum purchase requirements set forth
below for the subsequent period.” [emphasis added]
50. In light of an absence of definition for the term “subsequent period” within the Exclusive
Distribution Agreement, the term shall be interpreted “according to the common intention of theparties” (Article 4.1 of PICC). In applying Article 4.1, Article 4.3 lays out that regard shall be had
to all the circumstances, including “practices which the parties have established between
themselves” (Article 4.3(b)) and “the nature and purpose of the contract” (Article 4.3(b)).
55. In the Kurenai and Kanpai Agreements, Blue Inc is obligated to meet a minimum sales requirementfor Kurenai (Exhibit 9 Clause 9), and minimum purchase requirement for Kanpai (Exhibit 11
Clause 9) respectively. Moreover, only the Kanpai Agreement allows for accreditation of theminimum amount across years (Exhibit 11 Clause 9).
56. This supports the parties' intention for a simple minimum overall profit for Kanpai, while they weremore concerned with the consistency and image for Kurenai, leading to the difference inrequirements between them.
57. Referencing the purchase record of Kanpai (Exhibit 10) and the minimum purchase requirement(Exhibit 11 Clause 9), Blue Inc only failed to meet the required amount in 2020. Blue Inc purchased
3,000 excess cases in 2017, credited towards the minimum amount in 2018. Factoring in this excess,Blue exceeded their requirement once again, and purchased 1,000 cases in excess of their 2018
requirement. This is then credited towards the minimum amount in 2019, where Blue purchased theminimum required cases. There were no excess cases to credit beyond 2019.
58. Hence, the only year in which Blue Inc failed to meet the minimum purchase amount was in 2020.
Red Corp is only permitted to terminate the Kanpai Agreement if Blue Inc fails to meet theminimum annual purchase quantities agreed for two years (Clause 10(b)(iii)), which Blue Inc has
not as set out above. Thus, Red Corp is not entitled to terminate the exclusive distributorshipagreement for Kanpai.
D. Even if the intentions of the parties cannot assist in construing the ambiguous term “subsequent
period”, the term must be interpreted against Red Corp per Article 4.6 of the PICC.

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59. The ambiguous term “subsequent period” must be construed in Blue Inc’s favour to mean any
subsequent year from the year of surplus, following the contra proferentem rule (Article 4.6 of the
PICC), where Red Corp supplied the ambiguous term.
60. Article 4.6 of the PICC sets out that where the “contract terms supplied by one party are unclear, aninterpretation against that party is preferred.” As Yellow Corp supplied the terms of the Kanpai
Agreement, the contra proferentem rule then quite clearly states that interpretation of the term“subsequent period” must be done against them.
61. However, the dispute is between Red Corp and Blue Inc here, as Yellow Corp has assigned the
Kanpai Agreement to Red Corp. In determining if Red Corp should be considered as the party who
supplied the termst, Article 9.2.8 of the PICC states that in assignment of contracts, the assignee issubject to all the assignor’s “performance under the contract in respect of the obligation transferred”,
if the assignor asserts so.
62. The principle behind this rule is in maintaining the sanctity of the original contract. Where theassignor has been fully discharged, the assignee is entitled to the full benefit enjoyed by the assignor,
but also the full obligations of them. Otherwise, the assignee would be operating on terms wholly
inconsistent with the original contract, not agreed upon the formation of the contract.
63. According to the facts, Clause 2 of the Assignment of Contract between Yellow Corp and Red Corp
states that Red Corp will assume all of Yellow Corp’s “interest, rights, duties and obligations
remaining in the Contract”. This would be done “as if [Red Inc] were an original party therein”.
Assuming Red Corp to be an original party alongside Yellow Corp in the Exclusive Distributorship
Agreement with Blue Inc, they would hence be considered the supplier of the terms to the contract
in the way Yellow Corp was.
64. Given that Red Corp is taken to be the supplier of terms after the assignment of contract, the contra
proferentem rule applies to them in this case, and interpretation of “subsequent period” must be
done against Red Corp. Hence, Blue Inc’s interpretation to mean any subsequent years must be
accepted, and Blue Inc has not breached Clause 9 of the Exclusive Distributorship Agreement ascalculated above.
E. In any event, Blue Inc ultimately has not breached either Agreement due to exclusion clauses ineach Agreement.
65. Blue Inc has not breached either the Kurenai or Kanpai Agreements as their failure to meet therespective requirements is due to a force majeure event, which is covered as an exclusion clause ineach Agreement.
66. Article 7.1.6 (1) of the PICC allows for an exclusion clause to “exclude one party’s liability for nonperformance” when invoked.
67. The Exclusion Clause in Clause 17 of the Kanpai Agreement explicitly sets out that no party willbe “in breach of any provision” of the Agreement due to force majeure, including “pandemic;
epidemic”. It is thus clear that Blue Inc has not breached the Kanpai Agreement, and Red Corp
cannot terminate this Agreement.
68. The Exclusion Clause in Clause 18 of the Kurenai Agreement sets out that parties shall not be liable
for failures to perform due to “force majeure” acts “beyond the control of either party”. This
interpretation of force majeure is consistent with Article 7.1.7, where such events are “beyond its
control” and “could not reasonably be expected”.

969. Here, the sudden onset of the “novel coronavirus” qualifies as an unpredictable event outside of thecontrol of either party. Hence, it fits the criteria of a force majeure event.
70. Therefore, Blue Inc cannot be held liable for the alleged failure to perform the minimum sales
requirement in 2020. As exclusivity to sell Kurenai is the benefit of the contract to Blue Inc, toallow Blue Inc to bear the cost of non-exclusivity would be akin to holding Blue Inc liable for theforce majeure event. Thus, Red Inc is not entitled to terminate the Kurenai Agreement.

ISSUE 2: THE INTERIM MEASURES SOUGHT BY BLUE INC. SHOULD BE ACCEPTED.
71. Blue Inc. seeks interim measures in accordance with Article 26 of the UNCITRAL Arbitration rules
for Red Corp to (i) stop selling Kurenai sake and Kanpai beer to Green Corp and (ii) continue sellingboth products to Blue Inc in accordance with the exclusive distributorship agreements.
72. Per Article 26(2), the proposed interim measures maintain the status quo pending determination of
the dispute. These interim measures also prevent prejudice to the arbitral process as it prevents
premature actions from Red Corp. that operate on the assumption that the exclusive agreements canbe terminated and transferred to Green Corp.
73. Under Article 26(3) of the UNCITRAL Arbitration Rules, the following limbs shall be satisfied tojustify the interim measures:
a. Harm not adequately repairable by an award of damages is likely to result if the measure is
not ordered, and such harm substantially outweighs the harm that is likely to result to theparty against whom the measure is directed if the measure is granted; andb. There is a reasonable possibility that the requesting party will succeed on the merits of theclaim.
A. Requirement (a) of Article 26(3) is satisfied
74. Blue Inc is likely to suffer harm not adequately repairable by an award of damages if the interim
measures are not ordered and such harm substantially outweighs the harm that is likely to result toRed.
75. Blue Inc. has long been regarded as the “top company in the beverage industry in
Arbitria…[with]...ample experience as an exclusive distributor of imported alcoholic beverages”.
[emphasis added] (para. 28) To allow Green Corp to sell Kurenai and Kanpai would greatly harm
Blue Inc’s reputation as the leading exclusive distributor of alcoholic beverages in Arbitria to bothbuyers and sellers alike.
76. Blue Inc’s reputation was not built overnight, and it is precisely due to this reputation of being an
exclusive distributor for Yellow Corporation that convinced Red Corp. to allow Blue Inc. to
exclusively distribute Kurenai. It is not a stretch to say that this reputation has similarly played andwould have continued to play a part in Blue Inc landing other exclusive distributor agreements.
77. The harm to Red Corp does not outweigh the harm to Blue Inc. Red Corp stands to profit from thesales of Kanpai and Kurenai regardless of whether Blue Inc. or Green Corp sells it. The harm toBlue Inc’s reputation and potential business partnerships should the interim measures not be
imposed is disproportionate to the harm to Red Corp should the interim measures be imposed. As
such, Section 3(a) of Article 26 is made out.

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78. Even if Article 26 s(3)(a) is not satisfied, there is strong authority that suggests interim measuresintended to prevent the aggravation of parties’ disputes are subject to a lower standard. According
to Gary Born, International Commercial Arbitration (3rd Ed): Chapter 17: Provisional Relief inInternational Arbitration (Jan 2021) (“Born”), the standard is based more generally on thecommercial desirability of stopping parties from taking unilateral steps to improve their position(pg. 2674). On the facts, it is clear that Red Corp was taking unilateral steps to improve their position
by prematurely terminating the exclusive distributorship agreement and transferring it to Green
Corp. This benefits Red Corp while aggravating the damage to Blue Inc, even as the dispute isunresolved. Therefore, it is commercially desirable to suspend sales to Green Corp per (i) andcontinue with Blue Inc as the exclusive distributor per (ii).
B. Requirement (a) of Article 26(3) is satisfied
78. There is a reasonable possibility that Blue Inc. will succeed in the claims. Due to Red Corp’s
interference and inconsistent behaviour with the Kurenai Agreement, contractual ambiguity in the
Kanpai Agreement and the express exclusion clauses in both agreements, Blue Inc. has a prima
facie case that Red Corp has no legal basis for their termination. The claim brought forward by Blue
Inc. is in no way frivolous or arbitrary, and a reasonable possibility of success is present. Therefore,
Section 3(b) of Article 26 is made out.
C. Red Corp’s premature actions are in bad faith
79. Furthermore, Red Corp’s premature actions go against PICC Article 1.7 (Good faith and fairdealing) where each party must act in good faith and fair dealing. By entering into an agreementwith Green Corp, Red Corp is acting in bad faith by harming Blue Inc’s interests while
simultaneously seeking to arbitrate the matter.
80. The interim measures sought by Blue Inc. prevent prejudice to the arbitral process and maintain thestatus quo prior to a decision. If the interim measures are not ordered, Blue Inc. will suffer
irreversible damage to its reputation and business relations while Red Corp. will continue to profit
from the sales. Further, there is definitely a reasonable possibility that Blue Inc will succeed in its
claims. Therefore, the interim measures should be ordered by the arbitral tribunal.

ISSUE 3: THIS TRIBUNAL HAS THE JURISDICTION TO RULE OVER THE KANPAI CASE
A. Arbitration is the intended dispute resolution method.
81. The intention for Blue Inc and Red Corp to arbitrate the dispute is sufficient to prove that arbitration
will be the working dispute resolution mechanism, without more.
82. In order for a valid international arbitration agreement to be formed, a simple intention to resolve
conflicts by “arbitration” alone will suffice, even if important issues concerning items such as but
not limited to the seat of the arbitration or rules applicable to the arbitration are not defined (GaryBorn, International Commercial Arbitration (3rd Ed) (Jan 2021) at 820 - 821).
83. This principle is gleaned from multiple case authorities, such as Direct Response Prod., Inc. v.
Roderick, 2014 WL 12617910, at *3 (M.D. Fla.), where it was held that “the failure to designate anarbitration company or a particular forum also is not fatal to an arbitration provision”. In Green v.
U.S. Cash Advance Ill., 724 F.3d 787, 788 (7th Cir. 2013), it was similarly found that incorporation11

of institutional arbitration rules were “not integral to arbitration agreement”, that the parties
provided that disputes “shall be resolved by binding arbitration” was sufficient.
84. On the facts, Clause 15 of the Exclusive Distributorship Agreement states the applicable dispute
resolution is set out in the General Business Agreement between Yellow Corp and Blue Inc, whichis stated to be “finally settled by arbitration”. Admittedly, the Agreement leaves out essential terms
including the seat of the arbitration. However, the intention of the parties to utilise arbitration is
nonetheless evinced, which alone is sufficient for the arbitration agreement to be enforced.
85. The Exclusive Distributorship Agreement is assigned from Yellow Corp to Red Corp subsequently,
including Clause 4 of the Assignment of Contract (Exhibit 12) that “the covenants and conditions
contained in the Assignment shall apply to and bind the parties”. Hence, Red Corp is similarlybound to settle disputes with Blue Inc regarding the Exclusive Distributorship Agreement througharbitration.
86. Given that arbitration is the intended dispute resolution mechanism, the court will then attempt tofill the gaps for the undefined terms in the arbitration agreement.
B. The dispute was intended to be settled in Tokyo in accordance with the UNCITRAL Arbitration
Rules.
87. The arbitration is most applicable to be held in Tokyo in accordance with the UNCITRAL
Arbitration Rules.
88. In implying an obligation whereby there is a gap within the contract, Article 5.1.2 allows for implied
obligations from “practices established between the parties and usages”, referencing Article 1.9 that“parties are bound… by any practices which they have established between themselves”.
89. Applying the principle of established practices, Blue Inc and Red Corp have consistently used theexact same governing law and dispute resolution clause in clause 5 of the Assignment of Contract(exhibit 12) and Article 21 of the Exclusive Distributorship Agreement (exhibit 9), setting out that
arbitration is to be done in Tokyo under the UNCITRAL Arbitration Rules. From their repeatedusage of the same clause, Blue Inc and Red Corp have established a common practice between
themselves on the governing law and dispute resolution. Any other suggestions would be too
arbitrary and random.
90. Furthermore, as Red Corp has no objection to the current arbitral tribunal handling the case if it isrecognised that the Kanpai dispute may be resolved by arbitration, this tribunal is not barred by thelack of consent between parties, and this tribunal has jurisdiction to hear the Kanpai case.

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