SUMMARY OF RED CORPORATION’S SUBMISSIONS

I.   Red Corporation (‘Red’) has not breached any obligation to supply Blue Incorporated(‘Blue’) with tungsten on a priority basis
II.   Red is not obligated to pay royalties to Blue for platinum refining
III.   Blue owes Red damages for breaching the Confidentiality Agreement
IV.   The Requirements Agreement between Red and Blue should be amended due to hardship

RARE METALS CASE
I.  

Red has not breached any obligation to supply Blue with tungsten on a priority basis

Red submits that:
A.  

B.  
C.  
D.  

Red is not obligated to supply Blue with tungsten under the priority supply agreement
executed on August 1, 2000 (‘Priority Agreement’) because it only applies to metals
produced directly by Red or Negoland Metals Corporation (‘Negoland Metals’); andTungsten was traded on an order and sale basis; orTo the extent the Priority Agreement applies to tungsten, Red can avoid it; andEven if the Priority Agreement applies to tungsten produced by Negoland Tungsten
Corporation (‘Negoland Tungsten’), Red did not breach any of its terms by supplying
Black Negoland (‘Black’).

A.   Red is not obligated to supply Blue with tungsten under the Priority Agreement because
it only applies to metals produced directly by Red or Negoland Metals
1.  

The Priority Agreement gives Blue the right to order and purchase the rare metals, such as
nickel and titanium, which are produced by Red or its affiliate, in precedence to purchasers
in countries other than Negoland [Ex 6].

2.  

The use of the word ‘affiliate’ in the singular shows the parties’ common intention that thePriority Agreement only applies to rare metals produced by Red and one of its affiliates[UNIDROIT Principles of International Commercial Contracts (‘UNIDROIT’) Art 4.1].
The ‘affiliate’ referred to is Negoland Metals because:
1

3.  

2.1   The Priority Agreement was concluded in the context of negotiations about theconstruction of a new refining plant for Negoland Metals [¶12];
2.2   The scope of the Priority Agreement narrowed during the course of negotiations.
Blue and Red initially discussed a broad priority supply arrangement for metals soldby Red, but Blue ultimately requested Red ‘promise to sell [Blue] rare metals
produced by Negoland Metals on a priority basis’ [¶12]. From that point on(including in the email negotiations that followed), the Priority Agreement was
confined to rare metals produced by Red or its affiliate (singular). In contrast, Red
and Blue continued to discuss the ‘rare metals’ definition in person and by email [Ex5].
This interpretation is consistent with the parties’ subsequent conduct [UNIDROIT Art
4.3(c)]]. For the first three years of the Priority Agreement, only nickel and titanium were
supplied on a priority basis [¶14]. Although Negoland Materials produced platinum during
this time, Red and Blue only began to trade platinum when Negoland Materials wasabsorbed into Negoland Metals. This was because platinum became one of the rare metals
produced by Red or its affiliate, Negoland Metals [¶14].

4.  

Platinum was supplied on a priority basis under the Priority Agreement because:

5.  

4.1   From 2003, Red filled all of Blue's orders for nickel, titanium and platinum without
incident [¶16]; and4.2   Red continued to supply Blue with platinum (as well as nickel and titanium) during
the rare metals shortage in 2004, despite other companies being willing to pay ahigher premium for those metals [¶15].
A reasonable person of the same kind as the parties (sophisticated commercial entities)[UNIDROIT Art 4.1(2)] would not conclude the parties’ common intention was to include
any rare metal produced by Red or any of its affiliates. This interpretation would be too
broad. It would allow Blue to claim a right to priority of supply of any rare metals everproduced by the Red group of companies, in exchange for the construction of one nickel
and titanium refinery in 2002.

B.   Tungsten was traded on an order and sale basis
6.  

The tungsten produced by Negoland Tungsten was not traded under the Priority
Agreement. There was ‘clear consensus’ between the parties to establish a new company tohandle tungsten-related business [¶18].

7.  

The Priority Agreement was not varied to include Negoland Tungsten because:
7.1   The new agreement was concluded in the context of negotiations between Red andBlue in February 2014 about the construction of a new refining plant [¶19]; and7.2   Blue wanted to create a new joint venture, while Red raised the possibility ofconcluding ‘a similar deal’ for the construction of the tungsten plant. This indicates anew, distinct arrangement, not an amended Priority Agreement [¶19].
2

8.  

The tungsten supply in September and October 2015 was on an order and sale basis [¶19;
Ex 9]. There was no new agreement or conduct that showed priority supply of tungsten toBlue [UNIDROIT Art 3.1.2; Art 2.1.1] because:
8.1   Although Red offered ‘a similar deal’ for priority supply, Blue did not accept [¶19];
8.2   Blue sought a long-term interest in the tungsten business, rather than the samepriority of supply arrangement existing under the Priority Agreement [¶¶18-19]. The
parties agreed on a licence fee arrangement and ongoing royalties in exchange forBlue’s technological assistance [¶19].
8.3   No written document was exchanged regarding a priority supply deal for tungsten.
The parties have a longstanding practice of putting agreements into writing [Ex 6; Ex
7; Ex 17; Ex 20];

C.   To the extent that the Priority Agreement applies to tungsten, Red can avoid it
9.  

If the Priority Agreement includes all rare metals produced by Red and all its affiliates,
Blue led Red to form it through a fraudulent representation [UNIDROIT Art 3.2.5].
9.1   Blue made the fraudulent representation by amending the final version of the Priority
Agreement terms without disclosing this to Red, contrary to reasonable commercial
standards of fair dealing and good faith [UNIDROIT Art 1.7(2); UNIDROIT Art
1.9(2)]. The parties’ practice was to use tracked changes to communicate
modifications to drafts of the Priority Agreement [Ex 5].
9.2   Blue’s failure to notify Red of the change was significant, even if the change
appeared minor. Red was unlikely to notice the change because the final document
was sent by post and received after the email communication [Ex 5; ¶13]. Red andBlue negotiated the terms of the Priority Agreement by email. Red reasonably
assumed the version received by post reflected the email exchange. Red did not
expect new terms in the Priority Agreement. Red read and signed the document on
August 1, 2000. This was 14 days after the email containing the agreed terms [Ex 5],
so it is reasonable that Red did not notice the change. Blue fraudulently induced Red
to believe the Priority Agreement was effectively formed on the parties’ agreed
terms, subject only to the formality of signature.
9.3   Blue intended to mislead Red. Blue sought a generous priority arrangement knowing
Red was prepared to agree only to a limited priority arrangement. Red rejected Blue’s
request for supply of rare metals ‘in precedence to other prospective purchasers’ [Ex5], and proposed a more confined agreement for supply to Blue ‘in precedence toother prospective purchasers in other countries than Negoland’; Blue accepted thislimitation. Blue changed the subject of the Priority Agreement to ‘rare metals, suchas Nickel and Titanium’ without notifying Red, to still secure a generous priority
arrangement. Blue led Red to conclude the Priority Agreement knowing this gaveBlue an advantage to Red’s detriment [Ex 6; UNIDROIT Commentary Art 3.2.5].

3

10.   If Blue’s conduct is not fraud, Red can still avoid the Priority Agreement for mistake.
10.1   Red believed that the Priority Agreement comprised the terms Blue agreed to on July29, 2000 [UNIDROIT Art 3.2.1; Art 3.2.2; Ex 5; Ex 8].
10.2   Blue unilaterally amended the terms to ‘rare metals, such as nickel and titanium.’
Neither Red, nor a reasonable person in this situation, would have agreed to thisextended definition [UNIDROIT Art 3.2.2(1)]. This is a fundamental element of theagreement.
10.3   Blue’s representation caused Red’s mistake. Blue led Red to believe it accepted theterms of the draft Priority Agreement sent by Red on July 19, 2000 [Ex 5;
UNIDROIT Art 3.2.2(1)]. Blue knew or ought to have known of Red’s mistake[UNIDROIT Art 3.2.2(1)(a)]. This is not simply a case of Red drawing the ‘wrong
conclusion’ [Stefan Vogenauer and Jan Kleinheisterkamp, Commentary on the
UNIDROIT Principles of International Commercial Contracts (OUP, 2nd ed, 2015)(‘Vogenauer’) 482]. Blue acted contrary to reasonable commercial standards offair dealing because it did not consult Red about the change [UNIDROIT Art 1.7].
10.4   There is no assumption of risk for this kind of mistake in the Priority Agreement[Vogenauer, 487]. Red should not bear this risk because Blue caused the mistaken
assumption.
10.5   Red notified Blue it could not supply Blue with tungsten on November 10, 2015[¶12]. The mistake became apparent in subsequent communications between Red andBlue [Ex 10]. Red then provided notice of avoidance, including reasons [UNIDROIT
Art 3.2.11; Art 3.2.12; Ex 10].
11.   To the extent that the Priority Agreement includes tungsten, Red can avoid it for grossdisparity. An interpretation including tungsten would be fundamentally contrary toreasonable commercial standards of fair dealing that underpin the UNIDROIT principles[UNIDROIT Art 3.2.7(2)].
11.1   This interpretation is uncommercial and unreasonably broad. It would oblige Red tosupply Blue with tungsten and any other rare metals it produces in the future onpriority. This is uncommercial because Blue would obtain an unjustifiable advantage.
This places an onerous obligation on Red and was not in the parties’ contemplation
when the Priority Agreement formed [UNIDROIT Art 3.2.7(1)].
11.2   Blue has taken unfair advantage of Red’s ignorance to the effect of the changed terms
in the formation of this agreement [UNIDROIT Art 3.2.7(1)(a)].
11.3   A broad reading is contrary to the original nature and purpose of the Priority
Agreement. The purpose was for Red to provide priority of supply of nickel andtitanium to Blue directly in exchange for Blue’s construction of the refinery at a
reduced price [UNIDROIT Art 3.2.7(1)(b)]. The entity producing Tungsten,
Negoland Tungsten, did not exist when the Priority Agreement formed, on August 1,
2000. Tungsten was only discovered in 2014.

4

D.   Even if the Priority Agreement applies to tungsten produced by Negoland Tungsten,
Red did not breach any of its terms by supplying Black
12.   Even if the Priority Agreement includes tungsten, Blue only has priority over supplies topurchasers ‘in countries other than Negoland’ [¶12; Ex 6]. The parties’ common intention
is clear on this point, both in the Priority Agreement’s express words and the precontractual negotiations [UNIDROIT Art 4.1.1; UNIDROIT Art 4.3(a)]. Red explicitly
stated it could not touch rare metals ‘earmarked for sales within Negoland’, and Blueagreed to priority ‘except what [Red] need[s] for domestic sales’ [¶12].
13.   The Priority Agreement does not restrict how Red earmarks its product for sale.
14.   Black is incorporated in Negoland and is a ‘purchaser in Negoland’ for the purposes of thePriority Agreement. Red’s sales to Black form part of its domestic allocation.
15.   The Priority Agreement is only concerned with the purchaser’s location. The purchaser’s
reason for buying the product is irrelevant. It would be onerous and uncommercial toimpose an obligation on Red to monitor the subsequent use of its product.
16.   Red did not breach an obligation to Blue by selling to Black.

II.  

Red is not obligated to pay royalties to Blue for platinum refining

Red Submits that:
A.   The License Agreement between Red and Blue, signed on February 28, 2014 (‘License
Agreement’) only extends to technology Blue owns. Green, and not Blue, owned thetechnology Red used to refine platinum;B.   There was no license agreement between Red and Blue for the use of the refining
technology owned by Blue for refining Red’s platinum; andC.   Any patent infringement claims should be brought against Green.

A.   The License Agreement only extends to technology Blue owns. Green, and not Blue,
owned the technology Red used to refine platinum
17.   Under the License Agreement, Blue ‘[O]wns certain refining technology of rare metals,’the ‘Licensed Technology’[Ex 7].
17.1   The parties’ common intention is that the scope of the License Agreement is tolicence technology owned by Blue [UNIDROIT Art 4.1.3]. The ordinary meaning of
the language demonstrates this intention.
18.   Red has not breached the License Agreement as Red used Green’s technology, not Blue’s.
19.   Green owned the technology because the laws of Negoland permit a person to license
technology that is patent pending [¶25]. The right to license is a right of ownership, which

5operates to the exclusion of others. Green’s ownership rights were confirmed when its
patent application was approved.
20.   In any event, Red acted in good faith [UNIDROIT Art 1.7] by clarifying with Green thesimilarity and status of their technology. This was the most that could reasonably be
expected of Red.
B.   There was no license agreement between Red and Blue for the use of the refining
technology owned by Blue for refining Red’s platinum
21.   The parties did not modify the License Agreement to include to include platinum.
21.1   The License Agreement expressly restricts use of the Licensed Technology totungsten refining [Ex 7, § 1.1].
21.2   The parties did not modify the License Agreement because they did not comply withthe merger clause in section 7.10 [UNIDROIT Art 2.1.18; Ex 7, § 7.10]
22.   The parties did not form a separate agreement for the use of the Licensed Technology for
platinum.
22.1   The conduct of the parties is not sufficient to show agreement [UNIDROIT Art
2.1.1]. The relevant conduct is the November 2015 discussion between Orange andRuby and the December 10, 2015 email exchange (‘the Platinum Discussions’) [¶24].
22.2   Further, Blue did not offer to form a new licensing Agreement [UNIDROIT Art.
2.1.2].
22.3   If the Platinum Discussions are construed as an offer, there is no evidence Red
accepted [UNIDROIT Art 2.1.6(3)]. Blue did not make a statement that silence
amounts to acceptance [UNIDROIT Commentary Art 2.1.6(1)].
23.   Neither Ruby nor Orange had authority to bind the parties to any modified or new License
Agreement [UNIDROIT Art 2.2.5].
24.   The parties’ common intention following the Platinum Discussions was to revise theLicense Agreement later. They did not intend to form a new agreement [UNIDROIT Art
4.1.1].
C.   Any patent infringement claims should be brought against Green
25.   If Green’s patent was wrongfully granted, and Green’s technology is shown to be identicalto Blue’s technology, Blue should pursue a remedy against Green.
26.   It is wrong to pursue Red for remedies because:
26.1   It was lawful for Red to purchase a license from Green, pending the decision
regarding the patent; and26.2   Red’s Agreement with Blue did not prevent it from entering into license
arrangements with third parties.
26.3   Red is not the right defendant; Blue should instead pursue Green.
6

FISHERIES CASE
III.  

Blue owes Red damages for breaching the Confidentiality Agreement

Red submits that:
A.   Information concerning the Negoland government’s handling of fishing activities affecting
fish stocks in the coastal waters of Negoland (‘Information’) is ‘Confidential Information’under the Confidentiality Agreement between Red and Blue, signed on March 15, 2016(‘Confidentiality Agreement’)[Ex 20];
B.   Blue has not performed its obligations under the Confidentiality Agreement; andC.   Red is entitled to damages for Blue’s non-performance.

A.   The Information is ‘Confidential Information’ under the Confidentiality Agreement
27.   The Confidentiality Agreement protects information that is ‘confidential, proprietary, or
secret’ if it is clearly labelled as confidential or should reasonably be considered
confidential given its nature or ‘the circumstances surrounding its disclosure’ by Red toBlue [Ex 20, § 1(1)].
28.   The Information is ‘confidential… or secret’, and was private before Blue’s breach.
28.1   The parties’ common intention was that information concerning fishing activity along
the Arbitrian and Negolian coasts be be ‘confidential or secret’ if not in the publicdomain [UNIDROIT Art 4.1(1)]. This is shown by:a)   Their pre-contractual discussion of a need to protect private ‘data concerning
fish stocks’ [UNIDROIT Art 4.3(a); ¶33];b)   The Confidentiality Agreement’s opening paragraph [UNIDROIT Art 4.4];c)   The Confidentiality Agreement’s nature and purpose, to facilitate the fishstock project by enabling safe exchange of information [UNIDROIT Art
4.3(d); Vogenauer, 591]; andd)   The parties’ post-contractual exchange of a ‘variety of information’ related
to fishing activities [UNIDROIT Art 4.3(c)].
28.2   The Information fits this description because it was private and concerned fishingactivities affecting fish stocks [¶35].
28.3   ‘Confidential…or secret’ should not be read to exclude the Information merely
because it concerns Negoland’s alleged breach of international law [UNIDROIT Arts
1.7, 1.4, 3.3.1; Vogenauer, 220-2, 559; ¶35].
29.   The Information should ‘reasonably be considered to be confidential’ given:29.1   Its highly sensitive nature, as shown by the significant impact on Red’s businesscaused by Blue’s disclosure of the Information [¶35]; and7

29.2   The circumstances surrounding its disclosure to Blue. Red mistakenly transferring it
to Blue, together with other confidential information, parts of which were labelled‘For Ministry Internal Use Only’ [¶35].
B.   Blue has not performed its obligations under the Confidentiality Agreement30.   Blue has not performed section 2(1)(i) [Ex 20]. Blue is required not to ‘disclose ordisseminate’ the Information. The obligation is expressed in verb form, requiring a positive
act resulting in disclosure or dissemination of the Information [UNIDROIT Art 4.4;
Vogenauer, 588]. The positive act of Blue’s employee opening the email attachment caused
the disclosure [¶¶34, 35].
31.   Additionally, Blue has not performed its duty of best efforts under section 2(1)(iv)[UNIDROIT Art 5.1.4; Ex 20]. This requires Blue to use the same degree of care to ‘avoid[the Information’s] disclosure, publication or dissemination’ as it would ‘its own
confidential information of similar importance’. However, this can be ‘no less than areasonable degree of care’ [Ex 20, § 2(1)(iv)].
31.1   Blue acknowledged ‘unauthorized use or disclosure of’ the Confidential Information‘would cause [Red] irreparable harm and significant injury’ [Ex 20, § 5(1)].
31.2   Blue’s use of standard anti-virus software and systems allowed emails to be opened
from unauthenticated addresses. Informal reminders to employees were unreasonable
and insufficient [¶34].
32.   Blue cannot rely on section 2(2)(ii) [Ex 20]. This excuses non-performance of section 2(1)occurring ‘through no fault’ of Blue. The parties intended the phrase ‘through no fault’have its ordinary meaning [UNIDROIT Arts 4.1(1), 4.5; Vogenauer, 588, 602].
32.1   Blue is at fault for disclosing the Information, because Blue’s IT systems should have
prevented the opening of attachments from unauthenticated addresses [Ex 20,§ 2(1)(i)]; and32.2   Blue is at fault for failure to exercise the degree of care required [Ex 20, § 2(1)(iv)].
33.   Blue cannot rely on section 2(3) because its disclosure of the Information was not ‘requiredby law’. While the Convention on Fish Stocks requires contracting states to publicly
disclose breaches, it does not bind Blue, which is private commercial entities [UNIDROIT
Art 1.4; ¶35]. Even if the disclosure was required by law, Blue has not complied with thesection 2(3) notice requirements [Ex 20, § 2(3); UNIDROIT Art 1.10].
C.   Red is entitled to damages for Blue’s non-performance
34.   Blue’s non-performance gives Red a right to damages [UNIDROIT Art 7.4.1].
35.   Blue’s non-performance caused Red’s loss of US$10 million. But for the Information’s
disclosure, it is reasonably certain that third parties would not have boycotted Red’s marine
products or denied it essential fishing supplies, [UNIDROIT Arts 7.4.2(1), 7.4.3(1);Vogenauer, 983, 986, 989; ¶35].
8

36.   This type of harm was foreseen by Blue at the time of forming the Confidentiality
Agreement [UNIDROIT Art 7.4.4]. Blue acknowledged the disclosure of Confidential
Information would cause ‘irreparable harm and significant injury’ to Red [Ex 20, § 5(1)]. A
reasonable person in Blue’s position would also have foreseen the harm, which flows
naturally from the Information’s disclosure [UNIDROIT Art 7.4.4; Vogenauer, 994-5; Ex
20, § 5(1)].

IV.  

The Requirements Agreement between Red and Blue should be amended due tohardshipRed submits that:
A.   Red has suffered hardship;B.  

Because of Red’s hardship, the agreement between Red and Blue, signed on September 10,
2012 [Ex 17] (‘Requirements Agreement’) should be amended to a maximum of 1200
tonnes (‘t’) of Super Red Mix per year.

A.   Red has suffered hardship37.   The Requirements Agreement is a long-term contract [UNIDROIT Art 1.11].
38.   Within the first five years, three unanticipated events fundamentally altered the equilibriumof the Requirements Agreement. This has caused Red hardship [UNIDROIT Art 6.2.1].
39.   Blue’s leaking of the Information caused Red hardship.
39.1   Blue’s leak caused some suppliers to refuse to sell Red the ingredients required forSuper Red Mix. Red can now only access half the amount of required ingredients,
while cost of production has doubled. This fundamentally alters the equilibrium of
the Requirements Agreement [UNIDROIT Art 6.2.2; Vogenauer, 816].
39.2   The Information leak occurred after the parties formed the Requirements Agreementin 2012 [UNIDROIT Art 6.2.2(a)].
39.3   When the Requirements Agreement was formed, Red could not reasonably haveforeseen the risk of a sophisticated virus-infected email affecting the supply ofmaterials necessary to produce Super Red Mix [UNIDROIT Art 6.2.2(b)].
39.4   The Information leak was beyond Red’s control [UNIDROIT Art 6.2.2(c)]. A third
party sent the virus, and Blue’s employee caused the virus to enter Blue’s system.
This caused the leak of Information.
39.5   Red did not assume the risk of the leak [UNIDROIT Art 6.2.2(d)]. The Requirements
Agreement does not assume the release of the Information either implicitly or
explicitly. Each party was responsible for any leaks of the other party’s information.
40.   Global warming caused Red hardship.
9

40.1   Global warming fundamentally altered the equilibrium of the Requirements
Agreement [UNIDROIT Art 6.2.2]. The change in ocean currents halved the supplyof fish, and therefore production of Super Red Mix [Ex 21].
40.2   In a leading case on UNIDROIT Art. 6.2.2, [Centro de Arbitraje de Mexico (‘CAM’)
30.11.2006] the Arbitral Tribunal held the occurrence of El Nino did not satisfy thehardship requirement. The respondent had extensive experience in the agricultural
sector and El Nino, a common and well-known climate fluctuation, could not be
considered unforeseeable.
40.3   In this case, ocean currents are a natural condition of farming in the ocean. However,unlike in the case of CAM, it is unforeseeable that an ocean current pattern that has
been historically stable, will be impacted by global warming in a sudden andunprecedented way.
40.4   The impact of global warming became clear only after the Requirements Agreement
formed [UNIDROIT 6.2.2(a); Ex 21]. Red conducted a study in August 2012 andconfirmed there was ‘plenty of supply of Negoland fish’ [¶32].
40.5   Red could not have foreseen the impact global warming would have on the ocean
current that suddenly reduced Negoland’s fish stocks [UNIDROIT Art 6.2.2(b)].
Between 2006 and 2012, the supply of ingredients required for Red Mix had neverdropped sharply. There was no indication in the Requirements Agreement that theparties had considered the risk of global warming, or the environmental changes that
could impact Red’s fish supply for Super Red Mix.
40.6   Red did not assume the risk of global warming impacting fish stocks [UNIDROIT
Art 6.2.2(d); ¶32]. The ocean currents’ impact on fish stocks was beyond Red’s
control [UNIDROIT Art 6.2.2(c)].
41.   Significant decrease in the Nego-Lira’s value caused Red hardship.
41.1   The Nego-Lira’s decrease in value from January 2016 increased import costs forSuper Red Mix ingredients. This fundamentally altered the equilibrium of theRequirements Agreement [UNIDROIT Art 6.2.2].
41.2   Red could not reasonably have foreseen the decrease in value of the Nego-Lira[UNIDROIT Art 6.2.2(b)]. The devaluation to 1.4 Nego-Lira per 1 Abu-Dollar in a
six-month period came after 15 years of parity. This occurred so quickly Red could
not use the usual commercial strategies to manage this currency risk.
41.3   Although Red is a state-owned corporation, currency rates are beyond its control[UNIDROIT Art 6.2.2(c)].
41.4   Red did not assume the risk of such significant devaluation [UNIDROIT Art
6.2.2(d)]. When the Requirements Agreement formed, the currency had been stablefor 12 years, and there was no suggestion this would drastically change.
42.   Because of these three events, Red’s production capacity halved while production costs
doubled. Experts agree the current situation will not improve in the near future [Ex 21(7)].
Red will continue to face severe losses unless Blue agrees to amend the long-term contract.
10

B.   Because of Red’s hardship, the Requirements Agreement should be amended to a
maximum of 1200t of Super Red Mix per year
43.   Red has complied with the terms of the Requirements Agreement while waiting torenegotiate with Blue [UNIDROIT Art 6.2.3(1)].
43.1   Red requested renegotiation without delay on September 15, 2016 following theInformation’s leak in April 2016, currency devaluation in January 2016, and ocean
currents change in ‘Summer 2016’, and gave clear reasons [UNIDROIT Art 6.2.3(1)].
43.2   Red has not withheld performance [UNIDROIT Art 6.2.3(2)]. Blue consented to all
supply adjustments [¶37].
43.3   Blue rejected numerous attempts to renegotiate. This is commercially unreasonable
and breaches the principle of good faith and fair dealing [UNIDROIT Art 1.7].
43.4   Red can reasonably refer this issue to the arbitral panel, because no renegotiation has
occurred [UNIDROIT Art 6.2.3(3)].
44.   To restore equilibrium, the Requirements Agreement must be amended. It should be
amended to reflect the current status quo [UNIDROIT Art 6.2.3(4)(b)].
44.1   The price of Super Red Mix from January 1, 2017 should be 2.5 Nego-Lira, with nodiscount. This price is consistent with Red’s other customers since Red’s hardship.
The loss caused by the increased cost of production of Super Red Mix is a loss thatshould be fairly distributed between Red and Blue.
44.2   The maximum purchase amount for Blue should be 1200t per year while stocks
remain at current levels. At this level, Blue would retain priority over Red’s otherpurchasers. This upholds the parties’ common intention in forming the Requirements
Agreement [Ex 21].
44.3   Red’s requests are reasonable, because they do not restore Red’s full loss
[UNIDROIT Art 6.2.3(4)(b) Commentary 7].
45.   Alternatively, the Requirements Agreement should be terminated immediately [UNIDROIT
Art 6.2.3(4)(a)].

V.  

Sources Cited

Arbitral Award of 30 November 2006 (Mexico City), Centro de Arbitraje de Mexico(CAM), Unilex 1149
Stefan Vogenauer (Ed.), Commentary on the UNIDROIT Principles of International
Commercial Contracts (PICC) (OUP, 2nd ed, 2015)
UNIDROIT Principles of International Commercial Contracts 201611