22ND INTERCOLLEGIATE NEGOTIATION COMPETITIONNATIONAL UNIVERSITY
OF SINGAPOREBLUE INC.

ROUND A MEMORANDUMENGLISH 1

Moon Case
SUMMARY OF FACTSRed Incorporation (“Red”) and Blue Inc. (“Blue”) contracted for Avrio to collect lunar materials inaccordance with the Memorandum of Understanding for Lunar Exploration Project (Exhibit 5).
However, due to the passing of the Negoland Space Resources Act (“NSRA”) (Exhibit 11) on May
1, 2023 (Paragraph 17), transfer of materials to Red has been deemed illegal. Nevertheless, thespace resources were collected by Avrio on May 3, 2023. On Avrio’s return to Earth on May 20,
2023 (Paragraph 19), the Order concerning handling of data pertaining to the Moon (“the Order”)(Exhibit 13) came into force in Arbitria at the same time. On Red’s request of the transfer of thelunar materials, Blue subsequently refused to comply, pursuant to both the NSRA and the Order .
Upon agreement of Red to proceed (paragraph 21) with the settlement procedures under the
Agreement for Cost-Sharing for the Lunar Probe Project (Exhibit 6), Blue calculated the total costsof the project to be US$400 million and invoiced Red for half of the costs and an agreed
adjustment of US$10 million, amounting to US$160 million total. After Blue came to an agreement
to sell all the materials extracted to Black and the Government of Arbitria, Blue has offered toreduce Red’s payment obligation to US$110 million. In response, Red filed a motion before the
Arbitral Tribunal to enjoin Blue from selling any of the material or data extracted from Area β.
SUMMARY OF ARGUMENTS
Blue submits that the contractual obligation to transfer the data and space resources to Red isnegated because, 1) the contract has been frustrated by illegality pursuant to the NSRA ; 2) itwould cause hardship to transfer the data. Should Blue be held to this obligation, the distribution ofmaterials should be negotiated between both parties. If Blue has the obligation to deliver, Redcannot delay payment as the time of performance has been specified in the agreement.
Furthermore, Red cannot anticipatorily withhold payment. If Blue does not have the obligation todeliver, Red will be obliged to pay either US$160 million or US$110 million as Blue has offered acure equal to the proceeds of the sale of the materials. Red’s claim for interim measures cannot
succeed as the likely harm suffered by Blue if the enjoinment is granted is greater than the likely
harm suffered by Red if the enjoinment is not granted.
ISSUE 1: BLUE IS NOT LEGALLY OBLIGED TO DELIVER HALF THE MATERIAL
DISCOVERED IN AREA β AND THE FULL COPY OF THE DATAA.
Blue is exempt from delivering half of the materials as due to illegality, pursuant to Ex
11: Negoland Space Resources Act.
1.
Blue is exempt from delivering half of the materials and data to Red as the Negoland Space
Resources Act renders private ownership of space resources illegal.
2.
Pursuant to Art 5 of the Negoland Space Resources Act (NSRA), all ownership of spaceresources mined by persons with the permission of the state “shall belong to the state” unless the statetransfers this ownership. The materials gathered from Area β on qualify as “space resources”, definedby Art 2 as “water, minerals and other natural resources that exist in outer space, including the Moonand other celestial bodies. Art 5 further provides that the Act would apply to the materials of Area β
mined on May 3 2023, which were “mined or newly possessed after the date of entry [of the Act] into
force”, May 1 2023. As such, given that the materials found in Area β falls squarely within the ambitof the Negoland Space Resources Act, Blue is necessarily exempt from delivering them to Red as it
would contravene this law.
3.

Even if Red argues that Blue would not contravene the Negoland Space Resources Act if Red
1

simply acts as an intermediary to surrender the materials to the Negoland government, the purpose ofBlue and Red’s agreement was for each party to gain ownership of the mined space materials. The
intention to contract with Red, and not the Negoland Government is stated in Cl 2.1 of Ex 6, “2.1. All
materials collected from the lunar surface or subsurface and brought back to Earth shall be divided
equally between Red and Blue.”4.
Thus, as it stands, it is impossible for Red to retain ownership over these materials. In thesecircumstances, it is not reasonable to enforce Blue’s obligation to deliver the materials and data underthe ‘Agreement’ (Ex 6).
B. Blue cannot transfer a copy of the data due to hardship, pursuant to Ex 13: “Orderconcerning handling of data pertaining to the Moon” and Arbitrian Government negotiations
5.
It is submitted that transferring a copy of data under the liability clause imposed by the
Arbitrian Government is onerous and Blue invokes hardship to be exempt from delivering a copy ofthe data. Pursuant to Ex 13, “data pertaining to the condition of the Moon shall not be transferred toany person unless [...] the permission of the state has been obtained in advance”, rendering transfer ofdata to Red illegal.
6.
In accordance with Red’s request, Blue acted in good faith by applying for permission totransfer data on four occasions in May, in immediate follow-up to the passing of the ‘Order’ (Ex 13),
as well as in June, July and November. However, in response, the Arbitrian government imposed an
onerous condition that 'ʻBlue guarantees to the Government of Arbitria that Red will never use thedata in a manner that is contrary to the national security of Arbitria” and should the Arbitrian
government determine such a case, Blue would be liable to a fine of US$1,000,000.
7.
Blue taking on additional liability to supervise Red’s use of data to protect Arbitria’s national
security, as a private company has qualified Blue to terminate the contract under hardship. Art 6.2.2 of
PICC defines hardship to have occurred “where the occurrence of events fundamentally alters theequilibrium of the contract because the cost of a party’s performance has increased, and (a) the eventsoccur or become known to to the disadvantaged party after the conclusion of the contract; (b) the
events could not reasonably have been taken into account by the disadvantaged party at the time of theconclusion of the contract; (c) the events are beyond the control of the disadvantaged party; and (d)the risk of the events was not assumed by the disadvantaged party”.
8.
The additional liability has increased the cost of Blue transferring the materials and data withthe potential penalty of US$1,000,000. Blue has fulfilled (a) and and (b), as the ‘Order’ (Ex 13) was
passed on May 20 2023 with no prior discussion. The law was thus known to Blue after theconclusion of the ‘Agreement’, and could not reasonably have been taken into account by Blue at thetime. Given that Blue is under the jurisdiction of the Arbitrian Government and has attempted
negotiations to no avail, the onerous liability was also beyond the control of Blue, fulfilling (c).
Further, in no part of the ‘Agreement’ (Ex 6) did Blue assume the risks of liability for Red’s use of thedata, fulfilling (d).
9.
Thus, in light of hardship in transferring a copy of the data pursuant to Ex 13, it is notreasonable for the Tribunal to compel Blue to do so.
Blue cannot be compelled to perform its transfer obligations on grounds of illegality.
10.
Given that the Agreement on Distribution of Lunar Data and Materials contravenes the Art 5of the Negoland Space Resources Act, it is a contract which “infringes a mandatory rule” (Art3.3.1(1), PICC). Thus, it is submitted that Blue should be allowed to terminate this contract.
11.
The NSRA “does not expressly prescribe the effects of an infringement upon [the‘Agreement’]”, entitling Red and Blue to “exercise such remedies under the contract as in thecircumstances are reasonable” (Art 3.3.1(2), PICC). Art 3.3.1(2) is worded “sufficiently [broadly] topermit a maximum of flexibility” (PICC at 128–129), allowing the exercise of “any remedies that theparties may want to exercise” (Vogenauer, 560), including “the right to treat the contract as being of
no effect” (PICC, 129). Further, “[in] determining what is reasonable, regard is to be had in particular
to (a) the purpose of the rule which has been infringed …” (Art 3.3.1(3)(a), PICC).

2

12.
It is submitted that the reasonable step to take is to void the ‘Agreement On Distribution of
Lunar Data and Materials’ (Ex 6) as it is tainted by illegality. The ‘Agreement’ directly contravenes
the purpose of the NSRA, which is “the philosophy that it is inappropriate to use space and spaceresources for the benefit of only a limited few” (Facts at [17]). Transferring the materials and data to
Red would constitute vesting private ownership to one large company, which is diametrically opposedto this philosophy and unenforceable. There is minimal likelihood that the Negoland Government
would grant ownership to Red despite negotiations, as evinced by the article published by Negoland’s
most trusted science journal which has stated that “the value of space resources would not be known[...] when the Negoland government does not conduct its own research [...] and it is highly unlikely
the government would transfer ownership of space resources of such an uncertain value to privatecompanies (Facts at [22])”.
13.
Furthermore, it is submitted that Red had taken on the risk for this legal development, withregards to factor (e) whether one or both parties knew or ought to have known of the infringement, tobe taken into account to determine a reasonable remedy under Art 3.3.1 of the PICC. [17] of the Factsstates that the Government of Negoland had been discussing the bill since early 2022, and it was
expected to come into effect around summer 2023. Given that the discussions were public knowledge
in Red’s domestic sphere, it can be reasonably expected of Red to have taken account of this law andassumed risk for the barring of private ownership of space resources.
14.
With regard to factor (g) under Art 3.3.1 of the PICC, “reasonable expectations of bothparties”, in response to the enactment of the NSRA, Blue has acted in good faith by offering to deliver
the profits from the sale of the materials in lieu of transferring the materials and data as addressed inissue 2, thus offering a measure of remuneration to honour the intention of mutual benefit between
Blue and Red when contracting the ‘Agreement’.
15.
Terminating the contract is also in accordance with prescribed effects of hardship under Cl (4)of Article 6.2.3 of the PICC, which states the courts may “terminate the contract at a date and on
terms to be fixed”.
16.
Thus, Blue should be granted the right to terminate the ‘Agreement’ given that the
distribution of both materials and data is unenforceable.
If Blue is obliged to hand over half of the substance, the arbitral tribunal should submit thedivision of materials for negotiation between Blue and Red.
17.
Given that Blue and Red have not entered discussion on the division of materials, both parties
should submit this matter for negotiation to reach an amicable resolution, pursuant to Cl 8.2 of Ex 6:“Agreement on Distribution of Lunar Materials”.
18.
Cl 8.2 states “All disputes in connection with this Agreement or the execution thereof shall besettled in a friendly manner through negotiations. In case no settlement can be reached, the case maythen be submitted for arbitration in Japan to arbitration in accordance with the UNCITRAL.”
19.
Prior to negotiation, the resources may be stored by Blue in a location “mutually decided [byboth parties]” pursuant to Cl 3.2 of Ex 6. Following negotiation, the parties may then sever ownership.
20.
Should the tribunal see fit to divide and determine the half of materials to be allocated to eachparty, the tribunal should allocate resources “based on weight, volume, and/or value as determined by
the Parties” in accordance with Cl 2.2 of Ex 6. Blue submits that the “rock weighing 10kg” (Facts at[19]) should be allocated to Blue, and the remaining space resources of “seven rocks weighing about
1kg each, ten rocks weighing about 100g each and a regolith weighing about 2kg” allocated to Red.
21.
This division is an equitable 50/50 weight distribution split and corresponds to the respective
interests of Blue and Red. Blue’s interest is to research the possibility of materials in space tocontemplate future trips to the Moon, as per Art 1 Para 2ii of the Lunar MOU (Ex 5) and thus shouldbe allocated the 10kg rock, deemed to be “most notable for research purposes” (Facts at [19]). Red’s
interest is in the manufacture of semiconductors from the materials gathered, pursuant to Art 1 Para 2iof Ex 5, and hence would equally benefit from the remaining rocks, which indisputably contain aconsiderable amount of titanium (Facts at [15]) and the lunar regolith “expected to contain rare
metals such as gold, silver, and platinum, and rare-earth elements.” (Facts at [10]).
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22.
Thus, this matter should be submitted for negotiation between Blue and Red. However, if thisTribunal sees it fit to divide the resources to the parties, Blue submits that it should be awarded the“rock weighing 10kg” for its utility. Blue submits that Red cannot delay in making payment for 2
reasons.
ISSUE 2: EVEN IF BLUE WAS OBLIGED TO TRANSFER HALF THE MATERIAL, RED
CANNOT REFUSE TO PAY BLUE UNTIL SAID OBLIGATION IS FULFILLED. RED
MUST PAY BLUE US$110 MILLION IF BLUE DID NOT HAVE SUCH AN OBLIGATION.
A. Even if Blue was obliged to transfer half the materials, Red cannot refuse to make payment
until Blue fulfils said obligation.
23.
Firstly, Blue submits that it is clear in the phrasing of the Agreement for Cost Sharing for the
Lunar Project (“CSA”) at Cl 3.1 that the parties shall calculate the total amount of incurred costs andin Cl 3.3 if that cost exceed a party’s share it should be invoiced to the other party. Cl 3.1 states that
this process should begin upon the completion of all “project activities”. The “Project” as defined in
the Cost-Sharing agreement ends with the materials being brought back to earth. This definition is
identical to the one in the Agreement on Distribution of Lunar Data and Materials (“DA”), where theobligation to distribute materials is found. Therefore, Blue submits the parties intended for the costs
and requisite invoicing to be done immediately upon the materials and the probe to earth, regardlessof the progress of the distribution to earth.
24.
Secondly, Blue submits that Red cannot delay in making payment as this payment plan does
not fall under the categories established under the PICC with regards to withholding performance.
PICC Art 7.1.3 establishes two categories where a party may withhold performance:(a) where the parties are to perform simultaneously, either party may withhold performance until
the other party tenders its performance; and(b) where the parties are to perform consecutively, the party that is to perform later may withholdits performance until the first party has performed.
25.
The Official Comment on Art 7.1.3 emphasises that Art 7.1.3 is to be read together with Art
6.1.4. Art 6.1.4 elaborates on the order of performance stating that if “performances of the parties canbe rendered simultaneously, the parties are bound to render them simultaneously”. However, an
exception to this rule is provided in the Official Comment on Art 6.1.4, which states where “theperformance of only one party’s obligation requires a period of time … that party is bound to renderits performance first.” [emphasis added] . Therefore Red is bound to render its payment obligation as
per the time period set in the Cl 3.4 of the CSA in Ex 7. Cl 3.4 states that an invoiced party shall makethe payment within “one month from the date of receiving the invoice”. As such, Red is obligated torender its performance before Blue and PICC Art 7.1.3 (1) is inapplicable.
26.
Furthermore, Blue submits that Red is unable to anticipatorily withhold its obligation. This isbecause as per Art 7.1.2, Red caused Blue’s non-performance through its own behaviour and is hencebarred from withholding performance. As stated in Issue 1, Blue’s inability to perform the delivery of
the space materials and data stems from the Negoland Space Resources Act as enacted by Red’s
government. On the facts, Red bore responsibility to obtain permits from their own government whileBlue did the same, furthermore Red was aware of the bill before it was passed and hence assumed therisk of it coming into force. Per Art 7.1.2, Red may not rely on the non-performance of Blue shouldthat non-performance be caused by “another event for which [Red bore] the risk”. Therefore Red isunable to claim withholding performance for anticipatory breach of a consecutive performance andthere is no reason as to why Red should refuse to make payment until Blue fulfils its alleged
obligation.
B. Given that Blue does not have such an obligation, Red should pay Blue US$160 million or
US$110 million if Blue’s sale of material is successful27.
It is submitted that Red should pay Blue $160 million. Alternatively, upon the successful
completion of the sale of material, Blue should receive $110 million from Red. These figures are4made of 2 parts.
(a) Half of the total cost of the project subtracted by the amount Red has borne, “half the net
costs”. This amounts to $150 million or, upon the successful completion of the sale ofmaterial, $100 million; and(b) The $10 million payment agreed on at the May 7 meeting, the “compensation payment”.
28.
Red is obligated to pay “half the net costs” as set out by the CSA. Cl 3.2 is clear that the “total
costs [should be split] equally” and should “one Party’s actual incurred costs exceed their share of thetotal aggregated costs, the overpaying Party shall invoice the other Party for the difference.” Blue has
paid US$350 million of the total US$400 million cost of the project. Therefore as per Cl 3.2 of the
Cost-sharing agreement, Red has to pay Blue US$150 million in order for the cost borne by the parties
to be split equally.
29.
As mentioned in Issue 1, Blue is unable to pass the materials over to Red. However, upon the
successful sale of half the material, Blue would be in a better position than it would have been had all
obligations under the contracts been discharged. Blue submits that as a matter of equity and fairness,
the appropriate measure in the circumstance is to deduct the profits from the sale from the amountRed owes to Blue. This ensures that Blue’s position is as such as if the contract were fulfilled. This is
supported in Art 3.3.2 of the PICC, “where there has been performance under a contract infringing amandatory rule under Art 3.3.1, restitution may be granted where this would be reasonable in thecircumstances”. In determining what is reasonable, Art 3.3.2 refers to the criteria set out in Art
3.3.1(3) which is applicable in this case for reasons set out above in Issue 1 at [8-9]. Therefore, upon
the successful sale of half the materials, Blue would Set-off the profit from the sale of half thematerials, $50 million USD, as a form of restitution to Red.
30.
With regards to the compensation payment, the figure of $10 million USD was suggested by
Red and agreed by Blue, in Ex 9, as such they would be obligated to pay it. Thus, as per PICC Art
7.2.1, Red is obliged to make payment and if it does not do so, Blue “may require payment”. The
Official Comment on Art 7.2.1 elaborates that there is a generally accepted principle that “payment ofmoney which is due under a contractual obligation can always be demanded and … enforced by legal
action”. Therefore, Red is obliged to pay Blue “half the net costs”, which amounts to $160 million
USD or $110 million USD upon the successful completion of the sale to black.
ISSUE 3: RED’S PETITION FOR INTERIM MEASURES SHOULD BE DISMISSED AND
BLUE IS ALLOWED TO SELL THE MATERIALS AND DATA.
31.
Red’s petition for interim measures rests on UNCITRAL Arbitration Rules Art 26. Art 26
elaborates that the requesting party would have to prove two elements, Art 26 3(a) and 3(b), to thearbitral tribunal in addition to the 4 valid grounds for an interim measure being granted. Blue submits
that interim measures should not be imposed as the requirements 3 (a) and 3 (b) are not fulfilled.
(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; and(b) There is a reasonable possibility that the requesting party will succeed on the merits of theclaim. The determination on this possibility shall not affect the discretion of the arbitral
tribunal in making any subsequent determination.
32.
Given that the wording of Art 26 is identical to Art 17 and 17A of the UNCITRAL Model
Law, it is submitted that authorities on this provision of the UNCITRAL Model Law should beconsidered favourably in the circumstances. Red’s claim does not pass the first element 3(a), for two
reasons:(a) Firstly, as explained in Issue 1 at [1-5], Red will be unable to gain possession of the materials
or the data even in the unlikely event of Blue is obligated to pass them to Red as Red would
have to immediately “deliver them” to the Negoland government as per the Space Resources
5

Act of Negoland. Therefore the harm suffered by Red should this claim be dismissed is not
the loss of possession of the materials. Furthermore, should this motion be dismissed, Red
would not be in a worse of position because of the restitution Blue would give to Red as
discussed in Issue 2 at [8].
(b) Secondly, as stated in Ex 13-1, the President of Blue has acknowledged that non-cooperation
with the Government of Arbitria’s request for the remaining half of the materials and copy ofdata would make it “difficult to obtain future support for space development from theGovernment of Arbitria” and that there is an “aspect of competition” in the space industry.
The interim measure would deprive Blue of invaluable time for research and development togain competitive advantage in the industry and reap the expected benefits of the exploratory
venture. Blue has committed since 2010 to making the “space business one of its future corebusinesses, and with abundant financial resources has been developing its own rockets,
launching positioning satellites, communication satellites, and observation satellites, andconducting research and development to realize space travel”. Therefore the impact of
granting the interim measures will lead to substantial harm to Blue. Red on the other hand is
focused on manufacturing and its sole interest in space lies in “extracting materials from theMoon”. As such the harm the harm the Blue will incur if the interim measures are granted
substantially outweighs any harm that would happen to Red if the measures are not granted.
33.
Further, Red’s claim does not pass the second element 3 (b) as it is unlikely that its underlying
claim has a “reasonable possibility” to succeed on the merits of the claim. The UNCITRALSecretariat made clear that “reasonable possibility” of success refers to the underlying claim and notinterim measure (UN GAOR Working Group II (Arbitration), 43rd Sess, at [6], UN Doc
A/CN.9/WG.II/WP.141 (2006)). Red must show that its claim is “more than plausible” (SCC PracticeNote 2015–2016 at 13–14 (Case No. EA 2016/095)) but it is unlikely to succeed due to the reasons set
out in Issue 1. Furthermore, it is on Red to show ‘a reasonable chance’ that Blue breached theDistribution of Lunar Data and Materials. For reasons made out in Issue 1, Blue’s defence iscompelling.
CONCLUSION: BLUE SHOULD BE EXEMPT FROM ITS TRANSFER OBLIGATIONS.
SHOULD THE TRIBUNAL FIND OTHERWISE, THE ALLOCATION OF SPACERESOURCES SHOULD BE NEGOTIATED. IN ANY CIRCUMSTANCE, RED CANNOTWITHHOLD PAYMENT. EVEN IF BLUE DID HAVE THE OBLIGATION TO DELIVER,
RED WILL HAVE TO PAY US$110 MILLION. RED’S APPLICATION FOR INTERIM
MEASURES MUST FAIL AS THE LIKELY HARM TO BLUE IF THE APPLICATION
SUCCEEDS EXCEEDS THAT OF RED’S IF IT FAILS.

SATELLITE CASE
SUMMARY OF FACTS
Blue undertook launching Red’s satellite (Red Star). There was a slight delay in the launch as
Blue’s staff was unable to participate in launch operations. Nevertheless, the eventual launch still
took place within the agreed launch window. Amidst pre-launch inspections, an abnormality was
identified, investigated and repaired by Blue. Reliable space forecasts were checked by Blue before
its decision to proceed. Unfortunately, Blue’s rocket encountered a strong geomagnetic storm,
which resulted in the loss of both Blue’s rocket and Red Star.
SUMMARY OF ARGUMENTS
The unpaid balance of $75 million should be paid to Blue, as it has performed all of the contractual
obligations required to effect payment from Red under the SLA. Blue is not obliged to pay any
damages to Red, as there was no willful misconduct or gross negligence on its part. Additionally,

6the occurrence of a force majeure event precludes Red from claiming any damages from the launch
failure. Bob Orange should be removed as arbitrator as his comments and failure to disclose his
conflict of interest evinced prejudgement and partiality.
ISSUE 1: RED IS LEGALLY OBLIGED TO PAY US$75 MILLION TO BLUE.
1.
Red is obliged to pay the remaining US$75 million to Blue in accordance with Cl 3.1 of theSatellite Launch Agreement in Ex 14 (“SLA”), as Blue has performed its obligations under the SLA
to effect the full US$150 million payment by Red. The phrase “upon successful orbital insertion” in
Cl 3.1 of the SLA should be interpreted as “upon Blue’s performance of its contractual obligation”.
Blue’s contractual obligation under the SLA is to conduct a launch of Red Star within the launch
window stated in Cl 2.1 of the SLA (“Launch Window”) and in accordance with the information
present in Attachment A of the same agreement. Even though Red Star has vanished due to thegeomagnetic storm, Blue has performed its obligation under the SLA reasonably in the context of thegeomagnetic storm, and hence, Red is obligated to pay Blue the full amount under Cl 3.1 of the SLA.
Blue does not have a duty to achieve a specific result under Cl 3.1 of the SLA
2.
Blue submits that the “Final Payment” under Cl 3.1 of the SLA is due as Blue is under noobligation to achieve a specific result of launching Red Star into a certain Geostationary Transfer
Orbit (“GTO”). Although the payment schedule states that the payment is “due upon successful
orbital insertion”, there is insufficient essential information (such as orbital parameters) to support thereading that the obligation imposed was one involving the specific result of launching Red Star into acertain GTO. Furthermore, the contractual price, as well as the degree of risk involved in the launch
support this. The factors which aid in determining whether such an obligation exists are: a) the way inwhich the obligation is expressed in the contract; b) the contractual price and other terms of thecontract; c) the degree of risk normally involved in achieving the expected result; d) the ability of theother party to influence the performance of the obligation) (PICC, Art 5.1.5).
3.
Firstly, no specified result was indicated in the SLA. Read together with SLA’s Cl 1.1, thedefinition of “successful” in Cl 3.1 of the SLA would be “in accordance with the specifications as
outlined in Attachment A”. Cl 1 of Attachment B of the SLA (“the Performance Guarantee”)
similarly leads to a deduction of the “specified Geostationary Transfer Orbit” in Attachment A.
However, Attachment A does not contain any information regarding such an orbit into which Red
Star should have been inserted. Moreover, SLA Cl 9.2 excludes the relevance of any information
outside of the SLA in interpreting Blue’s contractual obligations. Hence, the absence of any
information specifying an orbit in the entirety of the SLA indicates that Blue did not have a duty toachieve the specific result of inserting Red Star into any certain GTO.
4.
Secondly, while an “unusually high price” for performance may indicate a duty to achieve a
specific result (Official PICC Commentary, Comment 3, Art 5.1.5), the SLA’s contractual price of
US$150 million was not unusually high, relative to the high costs of satellite launches. Considering
Negoland and Arbitria’s annual allocation of US$400 million to rocket and launch vehicle
developments respectively (Ex 1 and 2), US$150 million is a justified cost.
5.
Thirdly, the high degree of risk in Blue’s launch of the satellite, in a small launch window
indicates that Blue had no duty to achieve a specific result. Comment 4 of Art 5.1.5 in the Official
PICC Commentary states that where performance involves a “high degree of risk”, both parties
should not “expect to guarantee a result”. Considering the extreme conditions which a rocket andsatellite are put through in space, the risks of satellite launches are inherently high.
6.
Given that there is a lack of key information relating to any GTO in the entirety of the SLA,
and taking the other factors above into account, the SLA should not be interpreted to have imposed an
obligation on Blue to achieve the specific result of launching Red Star into a certain GTO. Hence, the7phrase “due upon successful orbital insertion” should not be interpreted literally. A different
interpretation of this phrase based on information actually present in the SLA should be taken instead.
Blue has reasonably performed its obligations to effect payment under Cl 3.1 of the SLA
7.
Blue submits that the phrase “due upon successful orbital insertion” should be interpreted as“due upon Blue’s performance of its contractual obligation”. Blue’s contractual obligation, as set out
in [1] of the Satellite Case above, is derived from unequivocal portions of clauses and information
present in the SLA (Cl 1.1, 2.1 and Attachment A of the SLA). Taking into account the unexpectedencounter with the strong geomagnetic storm, Blue has since performed this obligation reasonably,
and thus the balance under Cl 3.1 of the SLA is due from Red.
8.
Where the quality of Blue’s performance of this obligation was not stated in the SLA, therequired quality is one that is “not less than average in the circumstances” and “reasonable” (PICC,
Art 5.1.6). The standard of “average” is determined according to circumstances such as information
available on the market at the time of performance (Official PICC Commentary, Comment 1, Art
5.1.6), while the standard of “reasonableness” is intended to exclude “insufficient standards” where aperformance may be average but unsatisfactory in a certain market (Official PICC Commentary,
Comment 2, Art 5.1.6).
9.
Firstly, the quality of Blue’s performance was “not less than average” given the level oftechnology available at the time of performance. It was undisputed by Red that there was “noavailable technology or countermeasure that [could] protect the launch vehicle systems” from thegeomagnetic storm encountered (Ex 15). There is hence no shortfall in market standards in thisencounter with the G4 geomagnetic storm, and thus the quality of Blue’s performance was “not lessthan average”.
10.
Secondly, the quality of Blue’s performance was reasonable as it was not one that was
unsatisfactory in the market. Considering the intention of including the term “reasonable” as stated inComment 2 of Art 5.1.6 of the Official PICC Commentary, the relevant question is whether Blue’s
performance was unsatisfactory in the market. The standard of Blue’s performance in light of theencounter with the geomagnetic storm could not be said to be unsatisfactory as Blue had checked“reliable space forecasts” and had addressed the anomaly detected in accordance with its inspection
rules (Facts at [29]). Furthermore, as established earlier, the state of technology available at the timeof launch was one which could not withstand such a storm. To find otherwise that the result was
unsatisfactory would be unreasonable.
11.
The insurmountable geomagnetic storm encounter, Blue’s reasonable standard of
performance, Blue’s adherence to the Launch Window, and the absence of any facts that indicate a
deviation from the information present in Attachment A of the SLA altogether show that Blue has
successfully performed its obligations under the SLA. Therefore, Red should similarly perform its
obligation under the SLA and pay the remaining sum due under Cl 3.1 of the agreement.
12.
In conclusion, the phrase “due upon successful orbital insertion” under Cl 3.1 of the SLA
should be interpreted to mean “due upon Blue’s performance of its contractual obligations”. Blue has
performed its contractual obligations under the SLA by conducting a launch of reasonable quality
within the Launch Window, and in accordance with the information present in Attachment A.
Therefore, the tribunal should find that Red is obligated to counter-perform by paying Blue US$75
million, the remainder due under Cl 3.1 of the SLA.
ISSUE 2: BLUE IS NOT LEGALLY OBLIGED TO PAY US$150 MILLION TO RED.
A. Red must bear the cost of damage to Red Star, as Blue had demonstrated neither willful
misconduct nor gross negligence in performing its obligations.
13.
Blue is not required to pay any damages to Red under Cl 4.3 of the SLA (“Cross-Waiver”),
as there was no willful misconduct or gross negligence on the part of Blue in relation to (a) the
encounter with the G4 geomagnetic storm, and (b) the management of the sensor anomaly detected in
the rocket guidance system.
8

Blue did not demonstrate willful misconduct
14.
Blue had no willful misconduct as it did not omit or commit any acts which were intended tocause the failure of the launch, intentionally or otherwise. In the absence of a definition of willful
misconduct in the SLA or the PICC, Blue proposes that the definition in GNSS v Tenex [2007] (SCC)(“GNSS”) be used as a guideline. GNSS defines wilful misconduct as a “conscious decision”, that was“calculated” and “deliberate” ([151]). From this definition, the element of intention can be deduced to
be an essential ingredient in the finding of wilful misconduct. Although the governing law in GNSS
was the CISG, this should not preclude the tribunal from applying the definition to the present matter.
The CISG was the main international instrument the Working Group referenced in formulating the
PICC (Brodermann, 5). Furthermore, both Negoland and Arbitria are parties to the CISG (Facts at[5]). Red and Blue are therefore bound by the CISG as well, and Blue proposes that the definition of
willful misconduct in GNSS be relied upon for the present matter.
15.
Blue did not intend to cause launch failure. In encountering the geomagnetic storm, Blue hadchecked reliable space forecasts prior to launch (Facts at [29]), and proceeded only upon knowledgeof there being no forecast of geomagnetic conditions which would have made the launch impossible(Ex 15). Similarly, in the management of the sensor anomaly, Blue had prepared for the launch inaccordance with the established protocols. When an abnormality was found during pre-launchinspections, Blue inspected and repaired the anomaly in accordance with Blue’s inspection rules(Facts at [29]). Finally, despite the 10th January launch delay, this incident is irrelevant as it did notcause the launch failure. Instead, Blue had taken clear steps to mitigate the risk of launch failurecaused by its employees’ drunkenness by rescheduling the launch to a later date (Facts at [28]).
Contrary to the claim of willful misconduct, Blue never had the intention to cause launch failure andhad in fact, taken steps consistent with an intention to ensure a successful satellite launch.
Blue did not demonstrate gross negligence, and in any case did not cause the loss of Red Star.
(i) Blue was not negligent, and did not cause the loss of Red Star16.
For a claim in negligence to succeed, Blue proposes that two elements are required. Firstly,
there must be (a) a clear and reasonable link between the negligent act and the actual consequence;and (b) the harm suffered must be reasonably foreseeable. These elements are derived from the
UNIDROIT principles which establish the significance of causation for compensation (PICC, Art
7.4.2), and foreseeability in establishing liability for harm (PICC, Art 7.4.4). Blue submits that for thegeomagnetic storm, sensor anomaly and drinking incident, neither element (a) nor (b) is present.
17.
Firstly, there was no clear link between Blue’s decision to proceed with the awareness of a
possible G1 geomagnetic storm occurrence (Ex 16) and the consequences of a G4 storm. The effects
of a G1 storm are very different from that of a G4 storm, and the G4 storm was not considered whenBlue took the forecast into account. Accordingly, it was not reasonably foreseeable that Red Star
would be lost when Blue chose to proceed. Giving weight to the small possibility of a G4 storm
occurring would be impractical, and Red chose to assume this inherent risk when launching Red Star.
18.
There was no clear link with the sensor anomaly, the facts do not show that the anomalies
themselves led to launch failure, especially since the rocket still reached above the atmosphere (Facts
at [29]). Furthermore, Blue could not have foreseen that fixing it would have caused the satellite loss,
as it had inspected and repaired the anomaly in accordance with Blue's rules (Facts at [29]).
19.
Lastly, there was no clear link in the drinking incident. First, Red agreed to reschedule thelaunch to the day of the G4 storm (Facts at [28]); Moreover, no employees were drunk on the actual
launch, so any drunkenness is unrelated to Red Star’s loss. Moreover, it was not foreseeable thatBlue’s positive steps in giving “strict warnings” would have damaged Red Star. (Facts at [28]).
(ii) Blue was not grossly negligent
20.
Blue cannot be deemed grossly negligent if negligence cannot even be established, but grossnegligence is discussed for completeness. As it follows, gross negligence has a higher threshold andshould involve a “clear and serious breach of the standard of care required”. This aligns with: (a) the9civil law definition in International Transport Law, which is the unusually grave violation of a duty ofcare expected (Damar, p277); and (b) the common law definition, which imposes a higher degree of
breach than that of mere negligence (Damar, p274). As the present matter concerns the transportationof Red’s satellite into space, this definition should be applicable.
21.
In the Geomagnetic Storm incident, Blue’s actions could not have amounted to a clear andserious breach of standards. Blue acted with an appropriate standard by checking reliable space
forecasts, and the G4 storm was not predicted by the Space Weather Service (Facts at [29]). There
was no clear breach of standards in proceeding with possible G1 conditions, as G1 geomagnetic
storms only have minor impacts on satellite operations. The National Oceanic and Atmospheric
Administration states that G1 storms are a common occurrence, with an average of 154 events every
year (NOAA Space Weather Scales). Blue’s decision not to delay the entire launch due to a possibilityof such a frequent and minor event was thus reasonable and commercially sound.
22.
Furthermore, Blue had also not acted with a clear and serious breach of an appropriate
standard upon discovery of the anomaly in the guidance system. Blue had adhered to “establishedprotocols” during pre-launch preparations (Ex 15). Blue conducted investigations and repairs incompliance with Blue’s inspection rules (Facts at [29]). The facts do not indicate that the repair workrequired more than one personnel. The issue with a single sensor (Facts at [29]) could very well have
only necessitated the attention and work of one person. Any additional measures on Blue’s part would
be disproportionate and excessive.
23.
Finally, there was no serious breach of appropriate standards in Blue’s handling of its
employees' drinking. Blue opting to give “strict warnings” (Facts at [29]) does not constitute a clear
and serious breach of standards. Blue has responded to past incidents, and even took the additionalsafety measure of rescheduling launches if its employees were excessively drinking (Facts at [28],[29]). Such measures taken by Blue were clearly sufficient and appropriate, as no launch failures weredirectly caused by any drunkenness of Blue employees based on the Facts.
24.
It is clear that there was no willful misconduct or gross negligence on Blue’s part in relation
to the aforementioned events. Hence, Blue should be allowed to rely on the Cross-Waiver and is not
obliged to pay any damages to Red.
B. Blue’s non-performance is excused as per the Force Majeure claim.
25.
Blue is not obliged to pay any damages to Red as the geomagnetic storm constitutes a force
majeure event. The requirements of a Force Majeure event are outlined in Cl 6.1 of the SLA, where
either party is not held liable for non-performance caused by events that were (a) beyond its
reasonable control and (b) unforeseeable circumstances. The requirements set out in Art 6 of the SLA
should supersede those in Art 7.1.7 of the PICC. Crucially, Art 1.5 of the PICC provides for the
implied exclusion of the PICC within a contract, especially where parties agree upon contract terms
that are inconsistent with the PICC provisions (Official PICC Commentary, Comment 2, Art 1.5).
26.
Even if Art 7.1.7 is taken as the authority for Force Majeure events, the result is the same
since the requirements are that Blue’s non-performance was caused by an impediment beyond its
control, and Blue could not reasonably either: (a) be expected to have taken the impediment into
account at the time of contract conclusion; (b) have avoided the impediment; (c) have overcome theimpediment; or (d) have avoided or overcome the consequences of the impediment.
The G4 geomagnetic storm was an uncontrollable impediment
27.
The G4 geomagnetic storm was an impediment that was beyond Blue’s reasonable control.
Firstly, Blue’s sphere of control is one within which it is objectively possible to ensure performanceof the contract, by exercising appropriate control (Schlechtriem, 814). Generally, acts of God, natural
catastrophes, or disasters that impair performance are accepted to be outside of the obligor’s sphere ofcontrol (Brunner, 206). Likewise, it is impossible for Blue to have any control over a natural,geomagnetic storm. The first requirement is fulfilled.
The G4 geomagnetic storm was also an unforeseeable impediment

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28.
Upholding contractual risk allocations, both Art 6 of the SLA and Cl 4(b) of the Performance
Guarantee recognise “natural disasters” and “Acts of God” as “unforeseeable circumstances”. This
allows for geomagnetic storms to fall squarely within the definition of an unforeseeable impediment.
29.
Furthermore, the G4 storm was not reasonably foreseeable at the time of contract conclusion.
Under 4.1(2) of the PICC, “unforeseeable circumstances” under Art 6 of the SLA is to be interpreted
objectively, from the perspective of “reasonable persons of the same kind as the parties”. Blue istherefore held to the standard of a business with experience in the satellite launching field, who mustbe certain that it has the ability to perform the promised obligation (ICC No. 12112/2009).
30.
Fundamentally, Blue was certain that it could perform its obligations, because the likelihoodof a G4 storm occurring was virtually negligible (Ex 15), and therefore unforeseeable. Since natural
disasters are rare but not impossible, both the severity and the degree of likelihood of the G4 storm
occurring are relevant in assessing whether it was an unforeseeable impediment (Brunner, 158-159).
The greater the severity, and the lower the likelihood, the more unforeseeable the impediment is. At
the time of contract conclusion, the likelihood of a very severe geomagnetic storm occurring was low.
Under the SLA, Blue has had a 95% launch success rate in the last 20 missions, with 50 successful
missions overall (Ex 14, Attachment A). It is therefore unlikely that either party would havereasonably foreseen a G4 storm impairing performance. Furthermore, the severity of the impediment
was great; a G4 storm was on the higher end of the G1-5 scale, and of “unprecedented scale andduration” (Ex 15). Hence, it was not reasonably foreseeable to both parties that a geomagnetic stormof such a magnitude would have resulted in the loss of the satellite when the contract was concluded.
31.
Since the geomagnetic storm constitutes a force majeure event under Cl 6.1 of the SLA, Blueis not obliged to pay to Red any damages. Together with the absence of willful misconduct and grossnegligence, Blue is not legally obliged to pay US$150 million to Red.
ISSUE 3: BOB ORANGE SHOULD BE REMOVED AS ARBITRATOR.
A. Orange’s comments evinces prejudgement and partiality, and should be removed from hisrole as arbitrator.
32.
Orange should be removed from his position as an arbitrator, in accordance with UNCITRAL
Arbitration Rules Art 12(1) and 12(2). Blue submits that Orange’s comments, which were made after
his appointment and on the potential harm of a G1 storm and its impact on a force majeure claim,
give rise to justifiable doubts as to his impartiality (the “Comment”).
Time Scope of Orange’s Prejudiced Comments
33.
Preliminarily, Art 12(2) of the UNCITRAL Arbitration Rules states that arbitrators may bechallenged “only for reasons of which [parties] become aware [of] after the appointment was made”.
Even if Orange’s lecture was scheduled prior to his appointment as arbitrator, his Comment was madeafter his appointment and during the arbitral proceedings, fulfilling the Art 12(2) requirement. Even if
the comment was a “general”, unscripted one that could not have been disclosed earlier, the very factthat the comment was spontaneous further demonstrates Orange’s predisposition towards Red’s case.
Justifiable Doubts as to Orange’s Impartiality
34.
An arbitrator may be challenged if there are “justifiable doubts as to the arbitrator’s
impartiality and independence” under Art 12(1) of the UNCITRAL Arbitration Rules. The objective
criterion of “justifiable doubts” requires a fair-minded and informed person to reach the conclusionthat the Arbitrator is likely influenced by factors other than the merits of the case as presented(UNCITRAL Digest, 66). Specifically, previous courts permitted a challenge when an arbitrator
published an article expressing his opinion on the disputed arbitration issue (UNCITRAL Digest, 66).
35.
Further guidance on the standard of “impartiality” may be found in the 2014 International Bar
Association (IBA) Guidelines on Conflicts of Interest in International Arbitration (the “IBA
Guidelines”), viewed by renowned publicists as a “widely recognised benchmark for disclosure
thoroughness” (Ortolani, 211) and endorsed by the Art 77 of the UNCITRAL Code for Arbitrators.
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The IBA Guidelines set out an “Orange List”: a non-exhaustive list of specific situations which,depending on the factual matrix of the case, may result in doubts as to the arbitrator’s impartiality(IBA Guidelines, Cl 3). Under Cl 3.5.2, one such situation is where “the arbitrator has publicly
advocated a position on the case, whether in a published paper, or speech, or otherwise”.
36.
Orange’s speech aligns with situations outlined by both the UNCITRAL Digest and IBA
Guidelines, as he articulated that it “should be difficult to accept a claim of force majeure if one knewthat a magnetic storm was likely to occur”, because a “G1-level magnetic storm….[has] the potential
to lead to a serious accident”. Though allegedly a “general comment”, “all participants at theconference could easily make the assumption that the Red Star accident [gave] rise to this statement”.
Hence, Orange had advocated for Red’s position through his speech and made a clear stance against
Blue’s submissions on the Force Majeure clause.
37.
The IBA Guidelines indicate that situations under the Orange List depend on the case’s
factual matrix; cases should therefore be referred to. Governed by the UNCITRAL Arbitration Rules,
National Grid PLC v The Republic of Argentina [2006] (LCIA) (“National Grid”) offers guidance. In
National Grid, the challenged arbitrator made a general comment on the “major change in the
expectations of investment”, which was central to the dispute at hand. In obiter, the tribunal held thata reasonable third person would gain the impression that the arbitrator had already taken a firm view
on issues which were key to the final result of the arbitration (National Grid, 92); the challenge wasonly dismissed because the comment was made during a cross-examination (National Grid, 93).
38.
Distinguishing National Grid from the facts, Orange’s Comments were made in a lecture,
where he freely expressed his clear views on the legal issue of Blue’s Force Majeure claim. Yet inparallel with National Grid, Orange’s Comments were central to Blue and Red’s dispute. Hence, theobiter in National Grid should be followed, as a reasonable third person could see that Orange would
practically be unable to approach the arbitration with an open mind. Given the significance of theForce Majeure question, Orange should be removed from his position for his lack of impartiality.
B. Orange failed to disclose his conflict of interest, further demonstrating his lack of
impartiality.
39.
Under Art 11 of UNCITRAL Arbitration Rules, an arbitrator has an obligation to “disclose
any circumstances likely to give rise to justifiable doubts as to his or her impartiality”. Suchdisclosure is required from the time of appointment and throughout the arbitral proceedings(UNCITRAL, Art 11).
40.
Orange’s failure to disclose a conflict of interest is a significant factor in establishing a breachof the obligation to be independent and impartial. While "[n]on-disclosure cannot by itself make anarbitrator partial or lacking independence” (IBA Guidelines, Art 5), this failure to disclose may betaken as a factor in deciding whether there was apparent bias (IBA Guidelines, Art 4.1). The tribunal
should therefore remove Orange from his position as arbitrator, as his failure to disclose a conflict ofinterest exacerbates his partiality.
CONCLUSION: RED IS OBLIGED TO PAY US$75 MILLION TO BLUE, BLUE IS NOTOBLIGED TO PAY US$150 MILLION TO RED, AND BOB ORANGE SHOULD BEREMOVED FROM HIS POSITION AS ARBITRATOR.

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