IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

PAREXEL INTERNATIONAL (IRL) ) LIMITED, ) ) Plaintiff , )

) v. ) C.A. No. N19C
- 07
- 103 ) PRW CCLD XYNOMIC PHARMACEUTICALS, ) INC., ) ) Defendant. )

Submitted: May 26 , 2021 Decided: July 21 , 2021

DECISION AFTER TRIAL
A. Thompson Bayliss, Esquire, April M. Kirby, Esquire, A BRAMS & B AYLISS LLP, Wilmington, Delaware ; Kurt S. Kusiak, Esquire, F ITCH L AW P ARTNERS LLP, B oston, Massachusetts ; Martin F. Mahoney, II, Esquire, Parexel International, Newton, Massachusetts

. Attorneys for Plaintiff Parexel International (IRL) Limited

. Lisa Zwally Brown, Esquire, Samuel L. Mou l trie, Esquire, G REENBERG T RAURIG , LLP, Wilmington, Delaware

. Attorneys for Defendant Xynomic Pharmaceuticals, Inc.

WALLACE, J
.- 1

- I. FACTUAL AND PROCEDURAL BACKGROUND
This is a breach

- of

- contract action through which Plaintiff Parexel
International (IRL) Limited seeks damages from Defendant Xynomic
Ph armaceuticals, Inc

. , for the latter’s failure to pay numerous outstanding invoices

. 1
In the s pring of 2018, Xynomic engaged Parexel to launch and conduct global
clinic al trial s in support of Xynomic’s development of Abexinostat, a cancer treating biopharm aceutical product

. 2 Parexel and Xynomic memorialized their contractual relationship in a Master Service s Agreement (“MSA”). 3 The MSA governed the parties’ performance of specific services through the execution of work orders. 4
In July 2018, the parties executed their first w ork o rder , Work Order for Project
No. 240681 ( “Work Order 1”) , and in December 2018, the parties executed a second , Work Order for Project No. 241812 (“Work Order 2”)

. 5
On July 12, 2019, following Xynomic’s defaul t on numerous invo ices,
Parexel brought suit against Xynomic. 6

1 Am. Compl. ¶¶ 97

- 112, Oct. 31, 2019 (D.I. 15).

2 Id. ¶ 6.

3 Id.

4 Id . ¶ 7.

5 Id . ¶¶ 13, 71.

6 Compl. ¶¶ 80

- 82, July 12, 2019 (D.I. 1).- 2

-

Soon after, Parexel and Xynomic both filed Motions for Summary Judgment. 7 Parexel sought summary judgment on Counts I ( Breach of Work Order 1) and II ( Breach of Work Order 2 ) of its A mended C omplaint , contendin g there were no factual issues in dispute. 8 Xynomic sought summary judgment on both of Parexel’s claims, arguing the Court lacked subject matter jurisdiction over this suit

. 9
In September 2020, the Court denied Xynomic’s subject matter jurisdiction
chall enge as moot, and denied Parexel’s summary judgment motion as to Count I ( Breach of Work Order 1), finding that Parexel had , as the record then stood , “not met its burden in showing that it performed or was ready to perform its obligations
under the MSA an d the First Work Order before Xynomic allegedly breached.” 10 As to Count II (Breach of Work Order 2) , however , the Court found no dispute of
material fact existed and granted Parexel’s motion. 11 Consequently, the only issue remaining here is Count I (Breac h of Work Order 1) of Parexel’s Amended Complaint.

7 Parexel’s Mot. for Partial Summ. J., Dec. 23, 2019 (D.I. 21); Xynomic’s Mot. f or Summ. J., Jan. 24, 2020 (D.I. 24).

8 Parexel’s Mot. for Partial Summ. J. at 12.

9 Xynomic’s Mot. for Summ. J. at 7.

10 Parexel Int’l (IRL) Ltd

. v. Xynomic Pharms., Inc. , 2020 WL 5202083, at *7 (Del. Super. Ct. Sept. 1, 2020).

11 Id.- 3

- II. THE TRIAL
The Court conducted a three

- day bench trial . And the case was deemed fully
submitted for decision after the parties submitted their post

- trial briefing. 12 During trial, the Court heard f rom and considered the testimony of the following witnesses:
Francesco Paronelli Joseph Scott Vineeta Prasad Wentao Jason Wu Erin Williams Sophia Paspal Brad ley McClellan Yinglin Mark Xu Ronald Kraus The parties also submitted an extensive numb er of exhibits, most of which were admitted without objection and are cited herein by their designations as joint
exhibits. 13
III. FINDINGS OF FACT It is difficult at times in the trial of certain actions to fully and cleanly segregate findings of fact from conclusions of law. To the extent any one of the Court’s findings of fact here might be more appropriately viewed as a conclusion of law, that finding of fact may be considered the Court’s conclusion of law on that point. 14

12 D.I. 76.

13 Joint Trial Ex s . List, Jan. 26, 2021 (D.I. 64).

14 See Facchina Constr. Litigs. , 2020 WL 6363678, at *2 n.12 (Del. Super. Ct. Oct. 29, 2020) (collecting authority).- 4

-

A. T HE P ARTIES AND THE D R UG R OLL O UT . Parexel is an Irish corporation with its headquarters in Billerica , Massachusetts. Parexel is a clinical research organization provid ing its clients with “clinical research, drug development, medical communications, data management, [and] mar ket access planning” services. 15 Xynomic is a Delaware corporation with its headquarters in Shanghai,
China. 16 Xynomic is in the business of “ develop[ing] , manufactur [ing] , and
market ing biopharmaceutical oncolog y products.” 17
Relevant here , Xynomic was i n the process of rolling out its “most critical project”

— Abexinostat , a cancer treating drug. 18 During this time, Xynomic had been conducting the clinical trial phase of its roll out and was seeking a c linical

r esearch o rganization to assist with phase thr ee of its clinical trial

. 19
B. T HE MSA , W ORK O RDER 1 , AND THE S UBSEQUENT B REAKDOWN OF THE P ARTIES ’ R ELATIONSHIP . In April 2018, the parties executed the MSA through which Parexel was to

15 Am. Compl. ¶ 1.

16 Id. ¶ 2; About Us , X YNOMIC P HARMA , http://xynomicpharma.com/ en/506

- 11/ (last visited July 20 , 2021).

17 Am. Compl. ¶ 2.

18 Trial Tr., Jan. 27, 2021 AM (Xu), at 120 (D.I. 74).

19 Id . at 121

- 22, 197.- 5

-

provide clinical research services for Abexinostat ’s phase three cl inical trials

. 20
The MSA structured the parties’ arrangement i n subsequently executed work orders , which outlined details and terms of services to be perform ed

. 21
The MSA required Xynomic to pay for three things : (1) Parexel’s s ervice fees; (2) Parexel’ s out

- of

- pocket expenses; and, (3) any other payments Parexel and
its affiliates would make to third parties in connection with services under the work
orders (“ p ass
- t hrough fees ”)

. 22 The MSA also prescribed invoicing procedures : (1) the undisputed p ortions of any invoice for services performed under the MSA and any work order were due thirty (30) days from receipt ; (2) any disputed invoiced
items had to be raised, with notice to Parexel in writing and with specificity, within

ten (10) business days of the invoice date; (3) any invoiced items that were not disputed by Xynomic within ten (10) business days of the in voice date were deemed approved; and, (4) interest was to be paid on any unpaid invoice at the rate of one percent (1%) until such invoice is paid in full. 23

20 Pretrial Stip. Order ¶ 20, Jan. 7, 2021 (D.I. 60) (hereinafter “PSO”); Joint Exhibit ( hereinafter “JX”)

- 252 (M SA).

21 PSO ¶ 22; JX

- 252 (MSA § 2.1).

22 PSO ¶ 24; JX

- 252 (MSA § 4.1).

23 JX

- 252 (MSA § 4.2).- 6

-

In July 2018, t he parties executed Work Order 1 for services related to
Abexinostat ’s clinical research studies

. 24 The official name of the study was “Protocol XYN602: A Randomized, Phase 3, Double

- b l ind Placebo

- controlled Study of Pazo panib With or Without Abexinostat in Patients with Locally Advanced or Metastatic Renal Cell Carcinoma.” 25 This study was expected to take place over
a five

- year period ending in October 2023. 26
Exhibit A of Work Order 1 outlined the scope and specificati ons of the services Parexel was to perform under Work Order 1

. 27 Of significance to Xynomic, Exhibit A laid out the “three most important parameters” of the scope of
Work Order 1 : 28 (1) The nine countries to be inclu ded in the study: China, Czech Republic, Fra nce, Italy, South Korea, Poland, Spain, the United Kingdom, and the United States

. (2) The number of test sites in each country, totaling seventy

- five : twenty in China, three in Czech Republic, six in France , nine in Italy, five in South Korea, seven in Polan d, five in Spain, five in the the U nited Kingdom , and fifteen in the U nited S tates

.

24 PSO ¶ 24; JX

- 15 (Work Order 1) (effective Sept. 3, 2018).

25 JX

- 15 (Work Order 1).

26 JX

- 15 (Work Order 1, Ex. C) (estim ated timeline spanning from Apr

. 2018 to Oct. 2023).

27 JX

- 15 (Work Order 1, Ex. A).

28 Trial Tr., Jan. 27, 2021 AM (Xu), at 128. These parameters were highly important to Xynomic because the “ultimate end points that would allow the drugs to be approv ed or disapproved by agencies, in cluding [the] FDA, are the number of patients.” Id.- 7

-

(3) The number of patients enrolled

— 534 screened patients and 413 patients enrolled in the study. 29
Exhibit B of Work Order 1 set out the t asks and r esponsibilities to be

un dertaken by each party

. 30 And Exhibit C set forth estimated timelines for the services Parexel was to provide under Work Order 1. 31 Work Order 1 prov ided for $41,279,270 of payments to Parexel throughout
the five

- year course of the study. 32 Together, the MSA and Work Order 1 provided
for three types of payments: (1) M ilestone P ayments

— which were only due upon Parexel’s completion of the identified achievements in Exhibit G of Work Order 1 ; (2) M onthly P ayments

— which amounted to sixty

- three monthly payments of $1 87,498 from August 2018 to October 20 2 3 , and were due regardless of whethe r work was actually done ; and, (3) P ass
- t hrough and I nvestigator F ees

— which Xynomic was to make in the form of two advance payments of $1 million upon the execution of Work Order 1

. 33

29 JX

- 15 (Work Order 1, Ex. A).

30 JX

- 15 (Work Order 1, Ex. B).

31 JX

- 15 (Work Order 1, Ex. C).

32 JX

- 15 (Work Order 1 at 1).

33 JX

- 252 (MSA § 4.1); JX

- 15 (Work Order 1, Ex. G).- 8

-

Shortly after the execution of Work Order 1, the parties’ relationship began to
deteriorate. Most notably, Xynomic became increasingly dissatisfied with Parexel’s performance in China. 34 Related to the studies to be conducted in China, Xynomic
criti cized : the communication between Parexel’s global team and its local team in
China ; Parexel’s lack of effort regarding patient recruitment ; mistakes made in key
documents ; and the Clinical Research Assistant hired by Parexel. 35 In late August 2018, Xynomi c and Pare xel representatives met to discuss the issues regarding the China study. 36 The parties were unable to re s olve the issues raised , leading to Xynomic’s eventual termination of Parexel’s services in China on April 16, 2019. 37 From October 31, 2018, to June 18 , 2019, Parexel sent Xynomic twenty

- five
invoices for services rendered , milestone s accompli sh ed, and p ass
- t hrough fees

34 Xynomic Post

- Tri al Br. at 11, Mar. 10, 2021 (D.I. 69). Xynomic now criticizes Parexel’s performance outside of China as well. See, e.g., id. at 13

- 19 (identifying the issues including: Parexel’s failure to conduct Site Initiation Visits; errors and inconsistencies made in the Informed Consent Form given to trial participants; Parexel’s inability to record data according to regulatory requirements; failure to properly submit regulatory reports and application s; failure to initiate Sites and enroll patients in the United Kin gdom, Italy, France, and Czech Republic; and failure to adhere to Exhibit C’s expected timeline).

35 Trial Tr., Jan. 26, 2021 (Wu), at 218

- 20, 230 (D.I. 74).

36 JX

- 255 (XYN

- 602 F2F Meetin g Presentation).

37 JX

- 274 (Ap r. 16, 2019 e

- mail terminating Pare xel’s services in China). Even still , the parties executed a change order to Work Order 1 to reflect additional responsibilities taken on by Parexel just the day before Xynomic’s termination notice. JX

- 111 (Form of Change Order).- 9

-

incurred and expected under Work Order 1

. 38 Xynomic did not object to any of the amounts reflected in any of the i nvoices with in ten (10) days of the invoice date

. 39 Between March and May 2019, Xynomic and Parexel attempted to implement new payment plans for the full payment of Xynomic’s outstanding balance, but Xynomic
fail ed to meet the payment schedule s it proposed

. 40 Followin g these defaults, Parexel informed Xynomic that it would continue its supp ort related to patient safety for current active sites and patients , but that it would not initiate any additional
sites. 41

38 PSO ¶¶ 31

- 84. This does not include two invoices for advance s toward pass

- through fees pursuant to Exhibit G of Work Order 1. Parexel Post

- Trial Br. at 8, Mar. 10, 2021 (D.I. 70).

39 PSO ¶¶ 33

- 84.

40 PSO ¶ 109; JX

- 106 (E

- mail from Y. Mark Xu (“Xu”), Chairman, Chief Exec. Offi cer, & President, Xynomic Pharms., In c., to Joe Scott (“Scott”) , Senior Vice President of Fin. , Parexel Int’l (IRL) Ltd., Re: Xynomic Pharmaceuticals

- Discussion on Outstanding Payments (Mar. 12, 2019) ); JX

- 117 (E

- mail from Xu, to Scott , Re: Proposed pla n to pay off outstanding invoices (Ap r. 6, 2019) ); JX

- 119 (E

- mail from Xu, to Scott , Re: Proposed plan to pay off outstanding invoices), (Apr. 10, 2019) ); JX

- 121 ( Xu and Scott planning via e

- mail a time to discuss a proposed payment plan).

41 JX

- 137 (E

- m ail from Ron Kraus (“Kraus”) , Corp. V ice President, Parexel Int’l (IRL) Ltd., to Xu , Re: Follow up (Apr. 18, 2019) ) (“As we agreed, PAREXEL will begin a slow down process regarding services on the project due to the impact of the substantial overdue amount and to mitigate PAREXEL’s further financial risk. With immediate effect we plan to continue our support related to patient safety for the current actives [ sic ] s ites and patients but will no longer initiate additional sites or continue with the pending pr otocol amendment submissions.”) ; JX

- 137 (E

- mail from Xu, to Kraus, and Scott , Re: Follow up (Apr. 22, 2019) ) (“I will advise my project team regarding the slowdow n of activities.”).- 10

-

In May 2019, Xynomic made two $500,000 payments to Parex el . The parties agreed this $1,000,000 would be applied to Xynomic’s oldest outstanding invoices. 42 Also in May 2019, after Xynomic continued to miss its scheduled payments, Parexel informed Xynomic that it would not initiate any new sites until Xynomic b ecame current on its outstanding balanc e. 43 On May 24, 2019, Parexel sent Xynomic a
Notice of Material Breach of the MSA and Work Order 1. 44 MSA Section 5.2 required Xynomic to cure its material breach within thirty (30) days from receipt of
that notice. 45 Xynomic didn’t. Instead, Xynomic continued to make empty promises of payment. 46

42 JX

- 179 (E

- mail from Xu, to Scott , Re: Xynomic SOA as of 6

- 3

- 2019 (June 10, 2019)) ; Trial Tr., Jan. 26, 2021 (McClellan), at 49

- 50.

43 JX

- 147 (E

- mail from Kraus, to Xu, Re: Follow

- up (PAREXEL) (May 4, 2019)) (“We remain very concern ed with the outstanding balance due to PAREXEL and are disappointed by Xynomic’s failure to ma ke the $2.5M payment by April 30 th that you agreed to last month. We have been involved in discussions regarding the substantial past due amounts for months now a nd this is not the first instance in which promised payments by Xynomic had not been made. As a result, we must stop all enrollment activities until we receive payment of all open invoices.”).

44 JX

- 334 (Letter from Martin F. Mahoney II ( “ M a h o n e y ” ) , Corp. Vice President, Assoc. Gen. Couns. & Chief Compliance Officer, Parexel Int’l (IRL) Ltd., to C hasey Zhang (“Zhang”) , Vice President of Global Strategic Sourcing & Operations , Xynomic Pharms

. , Inc., Re: N otice of Material Breach of Master Services Agreement (May 24, 2019)).

45 JX

- 252 (MSA § 5.2).

46 JX

- 167 (E

- mail from Xu, to Scott, Re: Discount (June 1, 2019)) (Xu proposing to pay of all invoices by June 28, 2019); JX

- 180 (E

- mail from Xu, to Scott, Re: Status (June 12, 2019)) ( Xu stating that Xynomic remained “committed to pay the outstanding invoices by the end of June”).- 11

-

In July 2019, Parexel brought this action seeking payment owed under the
MSA and Work Order 1. 47 In September 2019, Parexel ceased all Work Order 1’s

non
- patient

- safety work. 48 Xynomic tried to get P arexel to resume its work under Work Order 1 by continuing to promise full payment of its outstanding invoices

. 49
T h es e attempts were unsuccessful and on Oct ober 31, 2019 , Parexel amended its complaint in this action to include addi tional incurred invoice s Parexel had

su bmitted to Xynomic. 50 Parexel is now seeking the total unpaid remainder o n those
invoices

— $5,530,579.30

— and corresponding interest. 51
C. T RIAL T ESTIMONY . Parexel ’s first witness in this three

- day trial was Francesco Pa ronelli , a Senior Project Leader with Parexel, who explained the MSA and Parexel’s role in Xynomic’s clinical trials

. 52 Mr. Paronelli testified that the parties signed a change

47 Compl. (D.I. 1).

48 Trial Tr., J an. 25, 2021 (Prasad), at 214

- 15 (D.I. 74).

49 JX

- 241 (E

- mail from Xu, to Kraus, R e: Notification

– Action Needed {[Parexel] } (Oct. 8, 2019) ) (“We will do our ABSOLUTE best to pay the invoices as soon as we complete our next financing. In the meantime, p lease provide the minimum support we need for this XYN

- 602 study.”); JX

- 245 (E

- mail from Jason Wu ( “ W u ” ) , Chief Operating Officer, Xynomic Pharms., Inc., to Scott, Re: Fw: XYN

- 602 Trial Discussion (Nov. 7, 2019)).

50 Am. Compl. (D.I. 15).

51 Am. Compl

. ¶¶ 69, 103; Parexel’s Post

- Trial Br. at 35. This figure excludes (i) the $2 million advance payment of the pass

- through and investigator fees that was to be paid by Xynomic at the execution of Work Order 1; and (ii) the $1 million Xynomic p aid Parexel in May 2019. Id . at 8 n.17.- 12

-

order to Work Order 1 in or around April 201 9 that reflect ed the additional

res ponsib ilities Parexel took on

. 53
Mr. Paronelli laid out the responsibilities of Parexel under Work Order 1 and how the contract provided for both regular monthly payments and milestone

- based payments ; the latter of these required Parexel to achieve certain performance
mile s tones to receive compensation

. 54 In addition to describing the milestone structure of the contract, Mr. Paronelli explained that the contract allowed Parexel to invoice Xynomic in advance for the invest igator and p ass
- t hrough fees. 55
Mr. Pa ronelli told the Court that Parexel had performed services in China before Xynomic suspended Parexel’s services there. 56 A ccording to Mr. Paronelli,

a fter Xynomic suspended Parexel’s work in China , Parexel “met at the global level

52 Trial Tr., Jan. 25, 2021 (Paronelli), at 21

- 24.

53 Id. at 26

- 29 (citing JX

- 128 (E

- mail from Zhang, to Francesco Paronelli (“Paronelli”) , Senior Project Leader, Parexel Int’l (IRL) Ltd., Re: PXL240681_Xynomic_CO 1_02Apr_2019.docx (Apr. 16, 2019))).

54 Id. at 32

- 34.

55 Id. at 35.

56 Id. at 39, 42

- 44 (“Q: And how much work did Parexel perform in China? A: Mainly we created the basis or the ground to have the study run in China. We did enough for the main, the m ost important, the main site in China. We also obtained the authorizations, so we went through all the ground activities for these site [s] .” (citing JX

- 305 (slide deck prepared for a meeting with Xynomic listing services Parexel perfor med))).- 13

-

a couple of times and

. . . organized several meeting [s] on the kind of one

- to

- one to transfer and to train our counterpart

. . . on how to run the global study.” 57 In response to Xynomi c’s allegations that Parexel underperformed, or failed to perform in China , Mr. Paronelli admit ted that “[t]here were some miscommunication or communication problem[s ,]” but Parexel addressed t hose issues through staffing changes. 58 To Mr. Paronelli, any issue that remained was
attributable to Xynomic. 59 Additionally, Mr. Paronelli testified that Pa rexel and Xynomic mutually agreed to stop performing activities in certain countries due to
either : (1) a joint agreement to do so or , (2) Xynomic’s failure to pay Parexel. 60 Specifically addressing services in the United Kingdom, Mr. Paronelli s aid that Xynomic and Parexel jointly agreed to “hold on activities . . . waiting for a new protocol to be c reated.” 61
Mr. Paronelli explained that , other than certain communications issues in China, Xynomic had not raised , either when they allegedly occurred or shor tly

57 Id. at 46 (citing JX

- 333 ( E

- mail from Hui Liu , Project Director, PPC, to numerous recipients , Re: Communication on XYN

- 602 (May 21, 2019)) ).

58 Id. at 48.

59 Id.

60 Id. at 68.

61 Id. at 76.- 14

-

thereafter, any of the issues it now alleges against Parexel. 62 He also c larified that only after th is litigation commenced did he learn of any complaints, besides the China study, that Xynomic had with Parexel’s service or performance. 63 Next, Par e xel’ s D irector of P roject L eadership , Vineeta Prasad, described her interactions with Xynomic and what dat a Xynomic had access to

. 64 M s
. Prasad testified that Parexel only bill ed Xynomic for the work Parexel actually performed
in China. 65 Additionally , she sai d that , through the course of the clinical trial, Xynomic had access to the electronic trial master file for each study , and moreover was provided all necessary information, data, and vendor contracts. 66 Around September 2019 , after Xynomic ended Parexel’s work in China, Ms. Prasad said
Par e xel shut down access to the imaging database, but did not shut down access to

62 Id. at 111

- 65; see, e.g., id. at 97 (testifying that Xynomic had not raised any issues with Pazopanib being classified as a Non

- Investigational Medicinal Project); id. at 102 (testifying that Xynomic had not raised any issues with the Informed Consent Form given to trial participants before litigation).

63 Id. at 165

.
64 Trial Tr., Jan. 25, 2021 (Prasad), at 201

- 05.

65 Id. at 208

- 09.

66 Id. at 210

- 14.- 15

-

any safety

- related data or information. 67 M s
. Prasad confirmed that Xynomic never complained about the work performed by Pare xel or a b out any of the invoices. 68
On the second trial day, Erin Williams, Parexel ’s Senior Director and G lobal
H ead of S ite C ontracts , testified. 69 Ms. Williams countered Xy n o m ic’s assertions
about Par e xel’s billing practices. Specifically, Ms. Williams testified that the U ni ted
States clinic al site agreement did not provide that Pazopanib, a drug used in the
clinic al trial, was within the standard of care

. 70 So, Pazopanib would not be covered by insurance and Xynomic was , therefore, contractually obligated to reimburse
Parexe l for this drug as a p ass
- t hrough fee

. 71 Bradley McClellan, Parexel ’s Senior Finance Business Partner , then clarified
the billing procedures under Work Order 1 and the MSA

. 72 Mr. McClellan explained
th at , as the contract was partially milestone

- based, Parexel could not invoice Xynomic certain sum s until certain milestones were achieved. 73 Mr. McClellan described the investigator fees as the “expenses that confirm individual sites that are

67 Id. at 216.

68 Id. at 219.

69 Trial Tr., Jan. 26, 2021 (Williams), at 6

- 8.

70 Id. at 15

- 17.

71 Id.

72 Id. at 23

- 24 (McClellan).

73 Id. at 25, 32.- 16

-

treating patie nts.” 74 And he described the p ass
- t hrough fees as those expenses incurred by t hird

- parties, including Parexel employees

. 75 Parexel makes no profit on either the investigator or p ass
- t hrough fees. 76 And the invoices Par e xel sent Xynomic include d individual s ite s and individual expenses broken down to the “granular level

. ” 77 According to Mr. McClellan , under the MSA ’s dispute provision , Xynomic
had ten days to dispute an y invoice d charge, and if Xynomic d idn’t dispute an invoice, Par e xel would, pe r the MSA’s language, deem that invoice approved. 78
Mr. McClellan w ent through a number of invoices that Xynomic never objected to. 79
As to the investigator and p ass
- t hrough fees, Mr. McClellan recounted t hat the contract provides that Parexel invoice each of these $1 m illion fees in advance, yet Xynomic pa id n either of those advance fees. 80

74 Id. Examples of these fees include lab visits, lab fees, and any site visits or expenses.

75 Id. at 26

- 27.

76 Id. at 26

- 28.

77 Id. at 26.

78 Id. at 29 (citing JX

- 252 (MSA § 4.2)).

79 Id. at 45.

80 Id. at 33.- 17

-

Next , Ronald Kraus, former Corporate Vice President and H ead of G lobal
P roject L eadership for Parexel , outlined Xynomic’s outstanding payments due. 81
And Mr. Kraus confirmed that Xynomic never raised any Parexel perform a nce issues during the many pre

- suit d isc ussions trying to resolve its delinquencies

. 82
Mr. Kraus told of the April 16, 2019 phone call wit h Xynomic’s Yinglin Mark
Xu concerning Xynomic’s next steps to pay Parexel for outstanding invoices . He
recalled that Xynomic failed to make the payment tha t Mr. Xu promised for the following week of April 22, 2019. 83 Mr. Xu had then said Xynomic w ould start mak ing all outstanding late

- invoice payments during the week of May 15, 2019 ; it didn’t

. 84 Mr. Kraus acknowledged that Xynomic did pay some outstanding b alances

to Parexel, but that Xynomic was still well behind on its total outstanding invoices. 85 As observed, Parexel sen t Xynomic a N otice of M aterial B reach, which gave Xynomic thirty days to cure the alleged breach. 86 After this n otice, Xynomic asked

81 Id. at 87

- 97 (Kraus).

82 Id

. at 97.

83 Id. at 101

- 02; see also JX

- 140 (E

- mail from Kraus, to Xu, Re: Follow up (Apr. 16, 2019)) ( memorializing conversation).

84 Trial Tr., Jan. 26, 2021 (Kraus), at 113; see JX

- 155 (E

- mail from Xu, to Kraus, Re: Quick update (May 20, 2019)).

85 T rial Tr., Jan. 26, 2021 (Kraus), at 116.

86 Id. at 119, 121 (citing JX

- 334 (Letter from Mahoney, to Zhang, Re: Notice of Material Breach of Master Services Agreement (May 24, 2019))).- 18

-

Parexel to continue working on the clinical trials and promised it was raising the money to pay Parexel. 87 Again, Mr. Kraus affirmed that Xynomic simply never raised concerns or issues with Parexel’s performance

— neither b efore nor after
Parexel sent the N otice of M aterial B reach. 88 The core of Mr. Kraus ’s testimony: Xynomic continued to promise to pay Parexel the full amount due, but that just never happened. 89
Dr. Wentao Jason Wu, Xynomic ’s co
- founder and its current Chief Operatin g Officer , took the stand to detail the clinic al trials. 90 According to Dr. Wu , Xynomic was dependent on Parexel’s knowledge and connections in the countries where its trials were being conduct ed

. 91 Xynomic was obligated to pay monthly invoices that were se parate from the milestone payments and were due each month regardless of the work performed. 92
Dr. Wu offered that “if [he] ha[d] [the] chance to redo the contract, [he] wouldn’t

87 Id. at 139

- 40.

88 Id. at 127.

89 Id. at 143.

90 Id. at 183, 19 2

- 93 (Wu).

91 Id. at 197.

92 Id. at 214

- 15.- 19

-

construct the contract th is way [,] ” i.e . with monthly payments due regardless of work performed. 93 According to Dr. Wu , Parexel didn ’ t complete all the services required under
Work Order 1

. 94 He said he had difficulty communicating with Parexel’s local team
in China and he had brought those issues to Parexel. 95 He claimed to have me t with Parexel’s team and t o have communicated some of the issues Xynomic had with Parexel’s performance. 96 Last, Dr. Wu t estified that after Xynomic ended Parexel’s work in China, Xynomic had asked Parexel to transfer some of the non

- safety

- related data t o Xynomic

. Dr. Wu told the Court that Parexel did that

. 97 On the last day of trial, Sophia Paspal, Xynomic’s Chief Development Officer, gave her view of Parexel’s performance of its contractual obligations. 98

93 Id. at 215

- 16.

94 Id. at 217

- 18.

95 Id. at 219

- 21 (citing JX 361 (E

- mail from Leigh Abbott (“Abbott”), Dir. of Clinical Operations, Xynomic Pharms., Inc., to Sara Leone, Parexel Int’l (IRL) Ltd., Acti on Required: Xynomic XYN

602 China PL Change Request (July 19, 2018))); i d. at 224 (citing JX

- 3 60 (E

- mail from Magdalena Wianecka

- Skoczen, Clinical Operation Leader, Parexel Int’l (IRL) Ltd., to Abbott, Re: Xynomic XYN

- 602 Recruitment Requirements (July 26 , 2018))); i d. at 225

- 26 (citing JX

- 285 (E

- mail from Paronelli, to Abbott, Xynomic China Discu ssion & Expectations (Aug. 3, 2018))).

96 Id. at 226, 229 (citing JX

- 255).

97 Id. at 235

- 37.

98 Trial Tr., Jan. 27, 2021 AM (Paspal), at 9

- 12

.- 20

-

Ms. Paspal pointed to the proposed timeline attached to Work Order 1 as evidencing what Xynomic had expected Parexel to perform and whe n those things were expected

. 99 Specifically, Ms. Paspal testified to a March 2019 invoice from Parexel that showed 25% of sites had been initiated . According to M s. Paspal , Xynomic expected all sites to have be en initiate d by then

. 100 In addition, Ms. Paspal used the
March 2019 invoices as exemplars of Par e xel’s invoices that, in her view , failed to provide sufficient detail to justify the charges within. 101
Concerni ng services in China, Ms. Paspal said there were no initiated sites or patients enrolled there. 102 Concerning services in the United Kingdom,
Ms. Paspal belie ved that five sites were supposed to have been initiated, but that

none were. 103 Ms. Paspal told th e Court that the United Kingdom’s regulatory authority denied Parexel’s submission for Xynomic’s study because Parexel misclassified the investigational medicinal product. 104 And n o s ites were initiated in

99 Id. at 2 5 (citing JX

- 15).

100 Id. at 28

- 29.

101 Id. at 30

- 31.

102 Id. at 31

- 32.

103 Id. at 33

- 34.

104 Id. at 34 (citing JX

- 77 (Notice of Grounds for Non

- Acceptance and Right to Amend Request)).- 21

-

France, Italy, or the Czech Republic , Ms. Paspal de clared , because Parexel alleged ly
fail ed to properly submit Xynomic’s clinical trial package. 105 Last, Ms. Paspal complained that , after Parexel left the China study, Parexel
gave Xynomic no access to the data collected during the parties’ relationship exc ept for certain safety

- related data

. 106
Another Xynomic co
- founder who is now its Chairman and Chief Executive
Officer , Yinglin Mar

k Xu , then recounted how Parexel was selected t o conduct the
clinical trials and explained Xynomic’s expec tation of Parexel ’s performance

. 107
Mr. Xu said Parexel promised “ that a lot of work would be done front ended.” 108 According to Mr. Xu, Par e xel was to have started on all seventy

- five sites by the end of July 201 8 , but , come seven months later , had delivered only 25% of
th e sites . So, he purported , Parexel was “nine months late and 75 percent underperformed.” 109 Mr. Xu depo ned t hat Xynomic selected another clinical
research organization for China and it was able to open sites there

. 110

105 Id. at 36.

106 Id. at 74

- 75.

107 Id . at 116

- 17, 120

- 22 (Xu).

108 Id. at 133.

109 Id. at 134.

110 Trial Tr., Jan. 27, 2021 PM (Xu), at 5 (D.I. 74).- 22

-

Mr. Xu told the Court that Xynomic pai d Parexel $1 m illion in May 2019 , and that as of May 27, 2019 , it had paid Parexel $4.56 m illion. 111 He claimed that , in an
email he sent to Mr. Kraus , he asked for a 25% discount , which

— while not stated in
the email

— was to a ccount for Parexel’s poor perfor mance. 112 Joseph Scott, former Senior Vice President of Finance at Parexel , was the final
trial witness. He recounted his communications with Xynomic about the payments due. 113 During the many phone and email conversations Mr. Scott ha d with Mr. Xu,
the latt er never mentioned Parexel ’s performance issues. 114 Instead, Mr. Xu gave his approval for Parexel to use the $1 m illion Xynomic had paid Parexel to offset outstanding invoices

. 115 And Mr. Scott confirmed that Mr. Xu’s reason for Xynomic’s non
- payment was “[c ]ontinuing operating cash flow challenges and working capital issues.” 116 Neither Mr. Xu nor anyone else at Xynomic ever told

111 Id. at 12.

112 Id. at 13

- 14 (citing JX

- 160).

113 Id . at 56

- 58 (Scott).

114 Id. at 61

- 63 (citing JX

- 153 (E

- mail from Xu, to Scott, Re: Follow

- up (May 8, 2019))); i d. at 6 7 (citing JX

- 175 (E

- mail from Xu, to Kraus, Re: Discount (June 4, 2019))); i d. at 68 (citing JX

200 (E

- mail from James Tong (“Tong”) , Bison Holding, to Kraus, Re: Xynomic[/]Parexel Call (July 18, 2019))); i d. at 73.

115 Id. at 65

- 66 (citing JX

- 179).

116 I d. at 73.- 23

-

him that Xynomic “was withholding payment of unpaid invoices becau se of the performance issues[.]” 117

IV. GENERAL LEGAL PRINCIPLES
Th ough the Court sits without a jury, it has applied the same principles of law
in its deliberations and consideration of each individual claim and counterclaim that it would have more formally instructed a jury to follow. The Court may highlight
here som e of those that are most applicable to this particular case. But the fact that some particular point or concept may be mentioned here should not be regarded as any indication that the Court did not

— during its deliberations

— consider all legal principles ap pl icable to this case and to the parties ’ claims and counterclaims. In reaching its verdict , the Court has examined the joint exhibits submitted and considered the testimony of all witnesses, both direct and cross. T he Court has also considered the applic able Delaware case law that has defined the legal precepts applicable to the c laims and defense s the parties have forw arded . The Court has

a pplied the Delaware Rules of Evidence to the testimony and exhibits and only used
for its deliberation that which would be allowed under those rules

— consistent with the Court’s knowledge of those rules and the specific rulings that may have been
made and a rticulated both pre

- trial, during the trial proceedings, and post

- trial. And,

117 Id. at 74.- 24

-

of course, the Court has considered each party’s respective arguments on the weight

t o be accorded the testimony and evidence. The Court then reviewed and applied the very ins tructions that it would give a jury in these circumstances. 118 In this particular case, Parexel carries the burden of proof by a preponderance 119 of the evidence on the only remaining claim, Count I (Breach of Work Order 1) , in its Complaint.
V. FINDINGS AND VERDICT “To recover on a breach [

- ] of [

- ] contract claim, a party must prove the existence of an enforceable contract; the party performed or was ready to perform;
that the other contracting party failed to perform; and that the failure to perfor m caused damages.” 120 The parties agree they had a valid contract. So, the three
contentions to be resolved here are : (1) whether Parexel performed under the MSA

118 See, e.g., Del

. Super. Ct. Civ. Pattern Jury Instr. 4.1 ( Burden of Proof by a Preponderance of the Evidence) ; id. at 4.2 ( Evidence Equally Balanced ); id. at 23.1 ( Evidence

— Direct or Circumstantial ); id. at 23.9 ( Credibility of W itnesses

— Weighing Conflicting Testimony); id. at 23.10 ( Expert Testimony )

.
119 See e.g. , Reynolds v. Reynolds , 237 A.2d 708, 711 (Del. 1967) (defining preponderance of the evidence); accord Oberly v. Howard Hughes Med

. Inst. , 472 A.2d 366, 390 (Del. Ch. 19 84).

120 Gerstley v. Mayer , 2015 WL 756981, at *5 (Del. Super. Ct. Feb. 11, 2015) (citing VLIW Tech., LLC v. Hewlett

- Packard Co ., 840 A.2d 606, 612 (Del. 2003)).- 25

-

and Work Order 1 ; (2) whether Xynomic breached the MSA and Work Order 1 ; and (3) whether Parexel supported its alleged damages.
A. P AREXEL PERFORMED UNDER THE MSA AND W ORK O RDER 1 . Parexel contends that it performed under the MSA and Work Order 1 and that Xynomic never rai sed any issues with Parexel’s performance or its invoices before this litigation proceeded. 121 As such, it asks the Court to enter judgment in its favor and award it damages in the amount of the total outstanding invoices, $5,530,609.30,
and also pre
- and p ost

-

judgment interest. 122 Xynomic says that Parexel failed to perform under the contract s and deserves

no recovery. 123 Xynomic’s complaints about Parexel’s supposed deficient performance ( or non
- performance ) come down to: ( 1) minor incidents stitched togethe r to try to fabricate a material breach ; and ( 2) a suggestion that Parexel didn’t
adhere to Xynomic’s expected performance timeline. To determin e whether Parexel performed under the contract and deserves payment , the Cou rt has examine d Xynomic’s allegati ons and see whether Xynomic coul d be excused from performance because of Parexel’s alleged material breach

. 124

121 Parexel’s Post

- Trial Br. at 1

- 3.

122 Id. at 5.

123 Xynomic’s Post

- Trial Br. at 1

.
124 E. g ., BioLife Sols., Inc. v. Endocare, Inc. , 838 A.2d 268, 278 (Del. Ch. 2003) (“A party is excused from performance under a contract if the other party is in material breach thereof.”)

.- 26

-

1. Xynomic did not exercise its contract ed
- for avenues of contesting Parexel’s alleged deficient performance and deficient invoice s . Section 4.2 of the MSA provided Xynomic a mechanism for challeng ing Parexel’s invoices, and Section 18 gave Xynomic the ability to elevate such a challenge through a dispute resolution procedure

. 125 Specifically, Section 4.2 provides: All invoiced amounts for Services per formed in accordance with the terms and conditions of this Agreement and any Work Order are due net thirty (30) days from the receipt of PAREXEL's electronic invoice. If [Xynomic] id entifies items in an invoice which are disputed, [Xynomic] will notify PA REXEL in writing, noting its objection to the disputed item(s) with specificity, within ten (10) working days of the date of the invoice. All items that are not disputed by [Xynomic] in writing within such period shall be deemed to have been approved by [ Xynomic]. A ll disputes of which [Xynomic] notifies PAREXEL in accordance with this Section shall be addressed as set forth in Section 18 below

. [Xynomic] will pay any undisputed por tions of any invoice per the agreed upon payment terms. [Xynomic] will p ay interest on any unpaid invoice (including any undisputed portion of a disputed invoice) at the rate of one percent (1%) per month until such invoice(s) is paid in full. Payments w ill be made to PAREXEL in accordance with the instructions set forth in t he applicable Work Order or such other written instructions as may be provided by PAREXEL from time to time. 126
And Section 18 .1 provides: If a dispute arises between the parties re lating to this Agreement or any Work Order, the parties to this Agreement or such Work

125 JX

- 252 (MSA §§ 4.2, 18).

126 JX

- 252 (MSA § 4.2).- 27

-

Order will meet and attempt to resolve the dispute in good faith. In the event the dispute is not resolved through negotiation within ten (10) business days after said m eeting, the parties will submit to confidential, nonbinding mediation befo re a mutually acceptable mediator. Each party will designate at least one corporate officer with full authority to resolve the dispute who will attend and participate in the mediati on. If the dispute remains unresolved after mediation, then each party wi ll be free to pursue any available remedy at law or in equity. 127 In short, after Xynomic received an invoice, it had a ten

- day window to raise any object ions

. If Xynomic didn ’ t obj ect within this ten

- day window , the invoice was deemed approved, and twenty days later (thirty days after the invoice was sent) the undisputed portions of the invoice became due. According to Xynomic , it could not exercise its contractual rights to challenge
the invoices it received because Parexel “did not provide any detail o r back up

. ” 128
A s Xynomic tells it, it just didn ’ t know what it was paying for. 129 Xynomic s ays that it only agreed to the se contractual terms because of its “lack of experience at the time the MSA and [ W ork O rder 1 ] were signed

. ” 130 That might account for Xyn omic’s initial acceptance of the terms. But it does nothing to explain why Xynomic didn ’ t challenge Parexel’s billing u nder Section 4.2 or elevate

127 JX

- 252 (MSA § 18.1).

128 Xynomic’s Post

- Trial Br. at 41.

129 Id.

130 Id. at 21 (citing Trial Tr., Jan. 26, 2021 (Wu), at 215

- 16).- 28

-

any issue to dispute resolution as provided in Section 18. Instead, Xynomic blithely
maintains that it was just “impossible to ascertain what work Parexel had actually completed within ten days of receipt of an invoice [.]” 131 So Xynomic had the contractual right to challenge the invoices, but it failed
to do so . Xynomic a lso had the ability to contemporaneousl y vo ice its performance
issues with Parexel , but it failed to do so. When asked why, Xynomic answers: it “need[ed] to keep Parexel involved in the project.” 132 Xynomic’s previous silence
would indicate consent to Parexel’s performance

— i.e. , there really w as nothing wrong on Parexel’s side

. And , having considered all the evidence and testimony , that previous silence is a strong indicator of Xynomic’s concoction of post

- hoc
rationales for non

- payment as defense s to t his action. Th at is, Xynomic’s now
minte d allegations of Parexel’s deficient performance and deficient invoices seem conveniently contrived and give Xynomic no cover here.
2. Parexel did not material ly breach the MS A or Work Order 1 . Once litigation commenced , Xynomic started complaining about Parexel’s perfor mance. Now, according to Xynomic , Parexel’s performance under Work
Order 1 was inexcusably deficient

. It calls out certain discrete “ failures ” under Work

131 Id.

132 Id. at 24 (“Xynomic may not have raised specific issues with Parexel’s performance during these financial communications, a s described above, due to Xynomic’s need to keep Parexel involved in the project.”).- 29

-

Order 1 , including Parexel’s alleged failure: to provide S ite I nitiation V isit s and corresponding r eports to Xynomic; to deliver an adequate and workable model
Informed Consent Form ; and , to review safety data listings, including failure to
deliver documents to demonstrate whether monitoring was being completed

. 133 Xynomic argues that these , “in addition to the failures in China, resulted in the non

delivery of approximately 40 of the 75 anticipated sites, 5 out of the 9 anticipated countries involved, and most of the 413 p atients to be enrolled.” 134 Simil ar to Xynomic’s reason for not asserting its right to challenge the invoices, Xynomic s ays that it didn ’ t raise performance concerns with Parexel because of its “ need to keep Parexel involved in the project.” 135 Xynomic goes further , saying it was “held captive by Parexel.” 136 And that “Parexel took advanta ge of Xynomic’s dependence
on its services

– knowing that Xynomic could not complete the study without Parexel, Parexel continued to bill for services not performed.” 137

133 Id. at 34.

134 Id. at 34

- 35. It’s important to keep in mind that , by the time Parexel completely halted all work on Work Order 1 (due to persistent non

- payment), th e parties were less than two years into a five

year contract.

135 Id. at 24.

136 Id. at 22 ( internal quotation marks omitted).

137 Id.- 30

-

Xynomic asserts, and Parexel acknowledges, that some performance issues
were raised conc erning China ; the credible evidence demonstrates that, when noticed, Parexel s ought to remedied those issues. 138 But as to any other alleged performance issues, Xynomic a dmits i t never raised those with Parexel explicitly

. And it now ask s the Court to read between t he lines in email conversations between the parties. 139
The C ourt finds Xynomic’s tardy claims of deficient performance un availing. Xynomic has

—

th r ough both trial and post

- trial briefing

— failed to present any credible evidence supporting its protestation o f material breach by Par e xel or its own powerlessness to call Par e xel on such material breach as it was supposedly occurring. Indeed, aside from o perations in China, the record is devoid of any contemporaneous complaints regarding performance, any use of the performance dispute procedures outlined in the MSA, or anything to show that these alleged
failures existe d at the time Xynomic now says they w ere so obvious

. 140 But w hat

138 Trial Tr., Jan. 25, 2021 (Paronelli), at 48.

139 Xu testified that , while not explicitly stated, he had sought a 25% discount on outstanding payments because of Parexel’s performance. Trial Tr., Jan. 27, 2021 PM (Xu), at 13

- 14 (citing JX

- 160).

140 See Trial Tr ., Jan. 25, 2021 (Prasad), at 219 (“Q: Prior to this litigation, did anyone at Xynomic ever tell you that th ey weren’t paying Parexel’s invoices because they were dissatisfied with performance? A: No. This never came up with my discussions with Sophia or e ven Melanie. Q: Ever even a suggestion that this was the case? A: No.”); Trial Tr., Jan. 26, 2021 (Kraus), at 151 (“Q: Did anyone at Xynomic ever tell you Xynomic was withholding payment of the unpaid invoices because of performance issues? A: No one fr om Xynomic.”); Trial Tr., Jan. 27, 2021 PM (Xu), at 37 (“Q: Is it your testimony, sir, that you at any poin t communicated to Parexel in any- 31

-

the record does bear is Xynomic’s repeated failure to engage the MSA’s dispute

met hods, its promises to pay, its statements regarding lack of adequate funding, and
its pleas to keep Parexel on its projects. 141

of these e

- mails that you sent that you wanted a discount based on performance issues? A: I didn’t mention performa nce issues in the e

- mails.”); Id . at 74 (Scott) (“Q: Did anyone at Xynomic ever tell you Xynomic was withho lding payment of the unpaid invoices because of performance issues? A.: No , they did not.”). Now, Xynomic did produce evidence of the rejected Un ited Kingdom regulatory application. See JX

- 77 (Notice of Grounds for Non

- Acceptance and Right to Amend Requ est). But this one discrepancy

—

which Parexel would have had time to correct but for the MSA’s early termination due to Xynomic’s persistent non

- paym ent

— is no material breach. See Parexel’s Post

- Trial Ans. Br. at 26, Apr. 16, 2021 (D.I. 72) (“Parexel could have, and would have, revised the package consistent with the regulatory authority’s comments, but it was forced to terminate the MSA before it had the chance.”); see also BioLife , 838 A.2d at 278 (“The question [of] whether the breach is of sufficient im portance to justify non

- performance by the non

- breaching party is one of degree and is determined by weighing the consequences. . . .” (internal quo tation marks omitted)); see generally R ESTATEMENT (S ECOND ) OF C ONTRACTS § 241 ( A M
. L. I NST
. 1981) (enumerati ng factors).

141 PSO ¶¶ 34

- 84, 109; JX

- 106 (Xu’s proposal of a new payment schedule); JX

- 117 (Xu’s proposal of a another payment schedule); JX

- 119 ( Xu’s proposal of a another payment schedule); JX

- 140 (email from Xu to Kraus memorializing conversation); JX

- 155 (Xu: “I will start making payments this week. ” ); JX

- 167 (Xu proposing to pay of all invoices by June 28, 2019); JX

- 180 (Xu stating that Xynomic remained “committed to pay the outstanding invoices by the end of June”); JX

- 213 (E

- mail from Tong, to Krau s, Re: Call regarding the most recent updates (Aug. 6, 2019)) (“Mark and I have been gathering the funding source to suffice the payment. Our plan is to pay as much as what is available on the company’s account and pay the remainder as soon as additional cash is raised or loaned to the company.”); JX

- 241 (Xu: “We will do our ABSOLUTE best to pay the invoices as soon as we complete our next finan cing. In the meantime, please provide the minimum support we need for this XYN

- 602 study.”) ; JX

- 241 (Xu: “ Thank y ou for the continuous support. We will provide more frequent and substantive update [s] regarding our ongoing financing

. ”); JX

- 245 (Wu: “Second, on behalf of Xynomic [’s] operation team, I also want to express our sincere gratitude for Parexel’s support of o ur RCC study . . ., particularly during our financial [ly] difficult period starting from early this year. I am now working closely with our CE O and the finance team on the company’s fund raising activity. I am confident we will get this round done soon. . . . Right now all I would like to ask Parexel is to keep minimum work on this project

. . . .”); Trial Tr., Jan. 26, 2021 (Kraus), at 97, 101

- 0 2, 113, 139

- 40.- 32

-

One last point here : Xynomic’s cries of being beholden to Parexel and needing to keep Parexel on the project ring hollow. W hen X ynomic terminated Parexel ’s
services in China, it almost seamlessly replaced Parexel with a new clinical research organization that was able to open clinical sites there

. 142
3. Parties’ failure to meet certain timelines does not constitute material breach . Xy nomic says Parexel failed to perform because it did not meet Work Order 1’s proposed timeline. 143 Specifically, X ynomic asserts that , because it is a start

- up biopharmaceutical company, any delay could cause Xynomic to incur more expenses, which , in turn, c ould impact its existence as a business. 144 In effect, Xynomic wants the Court to enforce an otherwise unwritten and unbargained

- for
time

- of

- the

- essence requirement here. 145 But this, the Court cannot do. Xynomic can ’t point to a single MSA or Work Order 1 provision that explicitly states time is of the essence. Instead, Xynomic reli es on Exhibit C of Work
Order 1

— the estimated timeline between the parties. 146 But, a s Exhibit C ’s name

142 Trial Tr., Jan. 27, 2021 PM (Xu), at 5.

143 Xynomic’s Post

- Trial Br. at 19; see JX

- 15 (Work Order 1 Ex. C).

144 Xynomic’s Post

- Trial Br. at 33

- 35.

145 Id. at 33.

146 Id. at 35; see JX

- 15.- 33

-

itself suggests, this timeline was “ estimated

. ” It set no deadline s. An d it certainly
cannot be read as engrafting an enforceable time

- of

- the

- essence clause into the MSA
or Work Order 1

. Delaware “ law presumes contracting parties are familiar with time of the essence clauses and that they know how to make time of the essence if they so desire, especially in contract s between sophisticated business [es]. ” 147 While Xynomic
contends that it was naïve to the MSA’s contractual terms and obligations, and that Parexel took advantage of Xynomic’s ignorance, this is not Xynomic’s (and i ts principals’) first time ar ound the drug trial block. 148 Xynomic’s two co

- founders,
Wentao Jason Wu and Yinglin Mark Xu , ha ve significant experience working in the pharmaceutical industry and had each previously worked for or with industry

leading drug co mpanies. 149 As such, the parties are experienced and sophisticated enough in the industry that if they intended to make time of the essence, they could
and would have done so. 150

147 HIFN, Inc. v. Intel Corp. , 2007 WL 1309376, at *10 (Del. Ch. May 2, 2007).

148 Xynomic’s Post

- Trial Br. at 22.

149 Trial Tr., Jan. 26, 2021 (Wu), at 183

- 8 5; Trial Tr., Jan. 27, 2021 AM (Xu), at 116

- 17.

150 See W. Willow

- Bay Ct., LLC v. Robino

- Bay Ct. Plaza, LLC , 2007 WL 3317551, at *9 (Del. Ch. Nov. 2, 2007) (“The presumption that the parties are bound by the language of the agreement they negotiated appl ies with even greater force when the parties are sophisticated entities that have engaged in arms

- length nego tiations.”), aff’d , 2009 WL 4154356 (Del. Nov. 24, 2009).- 34

-

The facts here are similar to those in HIFN, Inc. v. Intel Corp. , where Intel

as serted th at the Court of Chancery should read a time of the essence clause into the parties’ contract governing certain technolog y development. 151 The HIFN c ourt rightly observed that “judicially insert[ing] a time is of the essence clause automatically int o every contract . . . would be inconsistent with fundamental rules of contract interpretation

. ” 152 Even more so here. These parties directly spoke to
the element of time in their scrivening. And they decided to set forth estimated
timel ines, not hard dea dlines backed with time

- of

- the

- essence verbiage. Not to be deterred, Xynomic continues its time

- of

- the

- essence contention with the suggestion th at Parexel’s complained

- of delay was unreasonable. 153 Here , Xynomic again turns to HIFN, Inc. I t argues t hat a court can

— even absent an express time

- of

- the

- essence provision in the contracting papers

— find that a party failed to perform when it did not complete its obligations in a reasonable time. 154 Perhaps so, und er the right circumstances. But HIFN, Inc. provides a good example of what those circumstances might be. There , the Court of Chancery concluded that
HFIN hadn’t perform ed in a reasonable time only after finding that HIFN spent three

151 HIFN, Inc ., 2007 WL 1309376, at *11.

152 Id.

153 Xynomic Post

- Trial Br. at 20.

154 Id

. at 37 (citing HIFN, Inc. , 2007 WL 1309376, at *17).- 35

-

times as long to fulfill its contractual obligations than was ex pected and after finding
further that “failure to perform was not caused in any way by Intel ’s alleged repudiation.” 155 Not so here. Here, the parties’ expected timeline was delayed b y Xynomic’s failure to pa y and with the parties’ mutual assent

. 156 What’s more, Xynomic has
failed to demonstrate what would have been a reasonable time period for performance; it’s said only that Parexel should have known time wa s of the essence

. As such, Xynomic has not proven that any delay was outside of “reasonable time”

a nd , therefore , has not shown Parexel materially breached the MSA or Work Order
1

. 157

155 HIFN, Inc. , 2007 WL 1309376, at *17.

156 Parexel’s Post

- Trial Br. at 28

- 29.

157 Further sinking Xynomic’s claim here is the fact that even Exhibit C’s timeline was by its own terms in its infancy. When litigation arose in July 2019, the parties were less than 18 months into a five

- year contract

. By then, Parexel only had the opportunity to meet three out of the eleven tasks outlined in Exhibit C. And th e only then

- expect e d task that the Court can see wasn’t m et was the Site Initiation goal that was to be completed on July 29, 2018 . T hat reached 25% completion i n March 2019. Trial Tr., Jan. 27, 2021 AM (Paspal), at 28; JX

- 116. But Xynomic had no issue with this delay. In March 2019, when Parexel did complete 25% of the Site Initiation, it billed Xynomic for that milestone. JX

- 116. Xynomic neither objected to t he billing of this milestone nor claimed its competition was untimely. No, Xynomic just continued to say it would pay this bill (as it did all others) when it had its finances straightened out.- 36

-

B. X YNOMIC M ATERIAL LY B REACHED THE C ONTRACT . Xynomic a dmits it didn’t pay Parexel

. Xynomic has tried to defend that failure by decrying what it says was Parexel’s alleged def icient performance. 158 Of

course , for Xynomic to have any success, it would need to demonstrate that Parexel materially breached the contract s
. 159 And, of course, the Court just found that
Parexel didn ’t. So non e of Xynomic ’ s contracted

- for performance obligations ( i.e. , payment) can b e excused on that basis

. Accordingly , the question remaining for the
Court to now resolve is whether Xynomic’s failure to pay was a material breach of
the subject contract s
. This Court has adopted the Re statement (Second) of Contracts for determining wh ether a breach is material. 160 Restatement (Second) of Contracts, § 241 provides : In determining whether a failure to render or to offer performance is material, the following circumstances are significant: (a) the extent to which the injured party will be de prived of the benefit which he reasonably expected;

158 Xynomic’s Post

- Tr. Br

. at 37.

159 Commonwealth Constr. Co. v. Cornerstone Fellowship Baptist Church, Inc. , 2006 WL 2567916, at *19 (Del. Super. Ct. Aug. 31, 2006) (“[A] party in material breach of the contract cannot then complain if the other party fails to perform.”).

160 E.g. , i d.- 37

-

(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform wil l suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform wil l cure his failure, taking account of all the circumstances including any reasonable assurances; (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. 161 Xynomi c materially breached the MSA and Work Order 1

. Simply put, Xynomic continually promised to pay Parexel for its outstanding invoices but never
did

. 162 Xynomic’s repeated excuse for not paying those invoices : internal funding
issues . Yet , when Parexel ’s forbearance finally ended and it sued for Xynomic’s persistent non
- payment, Xynomic dropped its funding

- issues excuse and went on
offense , complaining for the fi rst time of Parexel’s alleged performance
deficiencies

. 163

161 R ESTATEMENT (S ECOND ) OF C ONTRACTS § 241.

162 See, e.g. , JX

- 106, JX

- 117; JXs

- 119

- 23 (series of emails between Xu and Scott on proposed payment schedule); JX

- 155; JX

- 167; JX

- 180; JX

- 213 ; see also R ESTATEMENT (S ECOND ) OF C ONTRACTS § 241 cmt . a (The materiality standard “is to be applied . . . in such a way as to further the purpose of securing for each party his expectation of an exchange of performances.”); R ESTATEMENT (S ECOND ) OF C ONTRACTS § 241 cmt. b (“[A]n important circumstance in dete rmining whether a failure [to perform] is material is the extent to which the injured party will be deprived of the benefit [that] he reasonably expected from the exchange.”).

163 Trial Tr., Jan. 26, 2021 (Kraus), at 147; JX

- 241; Xynomic’s Post

- Trial Br. a t 23.- 38

-

No doubt, Xynomic’s c hronic failure to pay the invoices owed to Parexel , after many assurances of payment, constitute s a material breach.
C. P AREXEL SUPPORTED ITS ALLEGED DAMAGES . T o succeed on its b reach

- of

- contract claim, Parexel must prove damages stemming from the breach. 164 Here , Parexel presents a number of invoices sent to Xynomic, which were deemed accepted under the terms of the MSA but still went unpaid. 165 Parexel presents a breakdown of the figures and types of payments due
under each invoice. 166 Parexel is seeking: (1) Nine monthly payments for August 2018, September 2018, and December 2018 through June 2019, totaling 1,687.482.00 ; 167 (2) Three milestone payments for the following: ( a ) $1,200,000 fo r the Start of the Work Order; (b) $300,000 for reaching 25% of Sites Initiated; and (c) $1,476,548 for the First Patient Enrolled , totaling $2,976,548.00; 168 an d

164 E.g. , Connelly v. State Farm Mut. Auto. Ins. Co. , 135 A.3d 1271, 1279 (Del. 2016) (“[A] cause of action for breach of contract includes damages as an element.” )

.
165 Parexel’s Post

- Tria l Br. at 9

- 12.

166 Id. at 7

- 13.

167 Id. at 12

- 13; JX

- 46 (Month Service Fees for Aug. and Sept. 2018); JX

- 79 (Monthly Service Fee for Dec. 2018); JX

- 89 (Monthly Service Fee for Jan. 2019); JX

- 105 (Monthly Service Fee for Feb. 2019); JX

- 116 (Monthly Service Fee for Mar. 2019); JX

- 143 (Monthly Ser vice Fee for Apr. 2019); JX

- 163 (Monthly Service Fee for May 2019); JX

- 187 (Monthly Service Fee for June 2019) ; s ee also Parexel’s Post

- Trial Br. at 12 n.48 (“Xynomic paid the monthly service fees for October 2018 an d November 2018”).

168 JX

- 45, JX

- 116 ; s e e also JX

- 15 (Work Order 1, Ex. G).- 39

-

(3) P ass
- t hrough fees totaling 1,866,579.30. 169
The total amount due under these i nvoices is $6,530 ,609.30. This amount is reduced by two $500,000 payments made by Xynomic in May 2019, adjusting Parexel’s sought damages to $5 ,5 30,609.30. 170
1. Monthly Invoices . As Xynomic sees it, Parexel’s invoices

— which are the basis for its damages
claim

— are “based entirely on a ssumptions contained in Exhibit A to Work Order 1 that were not met[,] ” so Parexel isn ’ t entitled to damages. 171 Too, according to Xynomic, the parties never executed a c hange o rder to reflect Xynomic ’s
terminat ion of Parexel’s work in China, so the monthl y invoiced totals are not
accurate. 172

169 Parexel’s Post

- Trial Br. at 13; JX

- 62; JX 68; JX

- 90; JX

- 91, JX

- 114; JX

- 115; JX

- 145; JX

- 146; JX

- 170; JX

- 171; JX

- 185; JX

- 186; JX

- 220; JX

- 226; JX

- 227; JX

- 228; JX

- 230. Parexel al so states that , separate to the invoice , it provided back

- up information identifying each specific expense for which it was seeking reimbursement. Parexel’s Post

- Trial Br. at 13; see JX

- 62; JX

- 87; JX

- 88; JX

- 112; JX

- 113; JX

- 141; JX

- 142; JX

- 168; JX

- 169; JX

- 1 82; JX

- 183; JX

- 218; JX

- 223; JX

- 224; JX

- 225; JX

- 229.

170 Parexel’s Post

- Trial Br. at 8, 14

- 15.

171 Xynomic’s Post

- Trial Br. at 41.

172 Id. at 38

- 39.- 40

-

Parexel says that it was forced to halt opening sites and enrolling patients because of Xynomic’s repeated failures to pay its bills

. 173 And so it was Xynomic’s
own failure tha t caused the delayed timeline. 174
The Court must determine whether Parexel properly invoice d Xynomic for assumptions that were made, but not met, under Work Order 1 and whether Parexel’s
invoices sent to Xynomic after it terminated Parexel’s work in China w ere accurate. Xynomic and Parexel execute d a contract, and subsequent work orders, under
which Xynomic took on three types of payment obligations : “milestone payments, monthly payments, and reimbursement for pass [

- ] through expenses[.]” 175 Both sides
agree, the monthly invoices weren ’t contingent o n any event or milestone but were due every month regardless of the actual work completed

. 176 Xynomic says that , when it terminated Parexel’s work in China , “no sites had been initiated in China, n o patients had been enrolled in China, and no regulatory

173 Parexel’s Post

- Trial Ans. Br. at 10

- 11 (citing JX

- 137).

174 Id.

175 Parexel’s Post

- Trial Br. at 6.

176 Id. ; Trial Tr., Jan. 26, 2021 (Wu), at 215. Xynomic’s co

- founder, Wentao Wu, testified to this understanding and added that “if [he] ha[d] [the] chance to redo the contract, [he] wouldn’t construct the contract this way.” Id.- 41

-

app rovals had been submitted by Parexel in China.” 177 This alleged inaction by Parexel, according to Xynomic, precludes Parexel from being awarded damages. 178 Along with this, Xynomic argues that the fact that the monthly billing was not changed after Xynomic e nded Parexel’s work in China shows that the monthly
invoices were in accurate. 179 Moreover, Xynomic contends that Parexel has not provided “any detailed basis for the services actually provided in connection with those invoices[.]” 180 Parexel first disputes Xynomic’s suggestion that , because no sites were opened or patients enrolled in China , Parexel didn ’ t do any work. 181 To the contrary,
Parexel says that it laid the groundwork for its eventual opening of sites and
enrol lment of patients in China. 182 And w hil e it had not yet open ed sites or enroll ed patients , Parexel notes that it did perform services in China

. 183 And even after the April 2019 termination from China, Parexel maintains that it continued “working on

177 Xynomic’s Post

- Trial A ns. Br. at 5 (D.I. 73).

178 Id.

179 Xynomic’s Post

- Trial Br. at 42.

180 Id.

181 Parexel’s Post

- Trial Ans. Br. at 20

- 21.

182 Id. (citing Trial Tr., Jan. 25, 2021 (Prasad), at 229

- 30).

183 Id.- 42

-

China sites/activities until the handover with the selected new CRO [was] completed.” 184 Next, Parexel disputes Xynomic’s assertion that the parties never executed a change order that reflected Xynomic’ s termination of Parexel’s work in China. 185
The parties did indeed execute a change order on April 15, 2019, contemporaneous with Xynomic ’s terminat ion of Parexel’s work in China. 186 As Parexel points out, Xynomic had already determined it would remove P arexel from China , so when it signed the change order it could have requested a lower monthly fee . Xynom ic
did n’t

. 187 No doubt, the monthly fees were in consideration of the parties’ overall ongoing commitment and relationship that was meant to last five years

— not the specific work completed in any given month or period

. The latter was to be compensated upon the meeti ng of milestones. Even if the parties’ inclusion of monthly fees, regardless of work performed, was not as beneficial to Xynomic as it might have see med, the Court cannot save Xynomic from its decision to agree to those terms. 188 Delaware c ourts “do not

184 Id. at 29 (citing JX

- 274).

185 Id. at 18.

186 JX

- 111 (Form of Change Order); JX

- 274 (Xynomic terminating Parexel’s services in China).

187 Parexel’s Post

- Trial Ans. Br. at 18.

188 See, e.g. , NAMA Holdings, LLC v. World Mkt. Ctr. Venture, LLC , 948 A.2d 411, 419 (Del. Ch. 2007) (“Contractual interpretation operate s un der the assumption that the parties never include- 43

-

re lieve [ sophisticated parties] of the burden of [ their contracts ] simply because of
their after

- the

- fact regrets. To do so would greatly undermine the utility of

contracts

. ” 189
The Court finds that Parexel accurately invoiced Xynomic under Work Order
1 and that the invoices Parexel sent to Xynomic even after it terminated Parexel’s work in China were, likewise, accurate. 2. Milestone P ayments . C oncerning milestone payments, it’s clear that Parexel only invoiced those
upon Par e xel ’s accomplish ment of th e milestone s. 190 And Xynomic has conceded
that those specific milestones billed

- for were met. 191 Though Xynomic expected

superfluous verbiage in their agreement, and that each word should be given meaning and effect by the court.”), aff’d , 2008 WL 571543 (Del. Mar. 4, 2008) ; see also Nemec v. Shrader , 991 A.2d 1120, 1126 (Del . 2010) (“Parties have a right to enter into good and bad contracts, the law enforces both.”) ; W. Willow

- Bay , 2007 WL 3317551, at *9 ( “[A] court will not disturb a bargain because, in retrospect, it appears to have been a poor one .”), aff’d , 2009 WL 41 54356 ; Aspen Advisors LLC v. United Artists Theatre Co. , 843 A.2d 697, 707 (Del. Ch. 2004) ( Contracting parties cannot use litigation to extra ct “contractual protections that they failed to secure for themselves at the bargaining table.” ).

189 Milford Powe r Co., LLC v. PDC Milford Power, LLC , 866 A.2d 738, 748 (Del. Ch. 2004). Furthermore, the record indicates that Parexel stopped billing Xynomic its monthly fee in June 2019

. S ee , e.g. , Parexel’s Post

- Trial Br. at 10

- 11 (collecting invoices and billing sta tements).

190 Parexel only billed for the three milestones it achieved: (1) $1,200,000 for the Start of the Work Order; (2) reaching 25% of Sites Initiated; and (3) the First Patient Enrolled milestone. JX

- 45, JX

- 116.

191 Trial Tr., Jan. 26, 2021 (Wu) at 2 13

- 14 (“Q: C an you please tell us your understanding of what the milestone payments are supposed to be for? A: Well, milestone means once they reached the particular points that define [d] as
. . . a milestone, they

– the other party need[s] to pay accordin g to the num ber that [ is ] listed here. So, for instance, . . . [t]here is a line called a first site initiated. That means [,] among all the global [] sites outlined in [the proposal] . . . , if the very first one site- 44

-

Parexel to have initiated all sites by March 2019, Parexel didn’t. And Par e xel didn’t
invoice for any milestone not yet met

. 192 Had it do ne so, Parexel would indeed be invoicing for work not completed. And that the written agreements wou ld not allow. But, h aving only billed for the milestones it accomplished, and having confirmed the achievement of those milestones, Parexel has proven its damages thereon

. 3. Pass
- Through and I nvestigator F ees . Xynomic argues that Parexel is double billing for the p ass
- t hrough and investigator fees. 193 Under Exhibit G of Work Order 1, Xynomic was to make two advance payments of $1 million for the investigato r and p ass
- t hrough fees. 194 Xynomic never made those advance payments. 195 Up until trial, Parexel was seeking payment on those advance payments and on the p ass
- t hrough and investigator fees

get [s] initiated, then we need to pay th e $1.2 milli on, according to the schedule.”); i d . at 217 (“And I remember Parexel enrolled the first patient. That was in October

. . . 2018.”); Trial Tr., Jan. 27, 2021 PM (Xu), at 50 (“Parexel did deliver 19 sites.”).

192 Trial Tr., Jan. 27, 2021 AM (Pas pal), at 28

- 29.

193 Xynomic’s Post

- Trial Br. at 30.

194 JX

- 116 (Work Order 1, Exhibit G).

195 PSO ¶¶ 32

- 35.- 45

-

it actually incurred. 196 At trial, Parexel s tipulated that it was no longer seeking payment of the two invoices for the advance payment of the fees. 197 Xynomic doesn ’ t dispute Parexel ’s right to collect the pass

- through and investigator fees it a ctually incurred . But Xynomic does maintain that Parexel

cannot recover for the invoiced $2 million advance payments. 198 Par e xel agrees. At trial, Parexel produced a re e valuated figure of $5.53 million, excluding the invoices for the $2 million advance payments , and has reaffirmed that lower sum throughout its post

- tr ial briefing. 199 G iven that the amount of actual ly incurred
pass
- through and investigator fees is uncontested , and that Parexel has provided a breakdown of such fees, Parexel has proven its damages on those as well

. D. A TTORNEY ’ S F EES Parexel contends that it is entitled to attorney ’ s fees under the bad faith exception to the American Rule. 200 And Parexel cites to two instances of Xynomic’s

196 PSO ¶¶ 31

- 84 (original figure of unpaid invoices for Wor k Order 1 was $7, 408,256.24).

197 Trial Tr., Jan. 26, 2021, at 83; id . at 177 (“Well, t he position is that as of the time we filed

. . . the litigation and the amended complaint [] that those invoices were unpaid. And, as we have heard testimony through e ven the amended complaint, Xynomic was still asking Parexel to continue working on this project. Therefore, those invoices were still outstanding, due, and payable. Now that we are through the litigation and the study has concluded, Parexel is no longer doing any work, no one is doing any work on this, those invoices are now not due and pa yable.”).

198 Xynomic’s Post

- Trial Br. at 32

- 33 & n.4.

199 Trial Tr., Jan. 26, 2021, at 177

- 78; Parexel’s Post

- Trial Br. at 8; Parexel’s Post

- Trial Ans. Br. at 28

- 29.

200 Parexel’s Post

- Trial Br. at 32

- 33.- 46

-

conduct that it says qualifies under that exception

. First , Parexel claims that , by acknowledging that i t owed Parexel money , but failing to identify the invoice d

amounts in dispute, Xynomic wasted Parexel’s time and money and needlessly prolong ed this litigation. 201 Second , Parexel alleges that Xynomic’s Chief Executive
Officer , Yinglin Mark Xu , submitted a false , unsworn foreign declaratio n. 202 Under the American Rule, it is generally presumed that each party will pay its own attorney ’ s fees 203 unless the bad faith exception applies

. 204 The bad faith exception applies only under “extraordinary circumstances.” 205 It should not be
invoked merely because some party’s “allegations were disproven at trial.” 206 Instead, the party seeking attorney ’ s fees must show by “ clear evidence ” that the opposing party “acted in subjective bad faith.” 207 This subjective bad faith must
relate to those actions taken either i n the “ commencement of ” or “ during ” litigation. 208

201 Id. at 33.

202 Id. at 34.

203 E.g., Mahani v. Edix Media Grp., Inc. , 935 A.3d 242, 245 (Del. 2007).

204 E.g. , RBC Cap. Mkts., LLC v. Jervis , 129 A.3d 816, 877 (Del. 2015)

205 Montgomery Cellular Holding Co., Inc. v. Dobler , 880 A.2d 206, 227 (Del. 2005) (internal quotation marks omitted).

206 Gen. Video Corp. v. Kertesz , 2009 WL 106509, at *1 (Del. Ch. Jan. 13, 2009).

207 RBC Cap. , 129 A.3d at 877 (internal quotation marks omi tted).- 47

-

According to Xynomic , this trial exposed the fact that Parexel hadn ’ t engaged
and provided the required reconciliation that would have avoided double billing had Xynomic not resisted and pressed its defense

. 209 And as to Mr. Xu’s declaration , Xynomic claims it was made to the “best of his knowledge at the time[,]” and not in
bad faith. 210
Under t he American Rule , the bad faith inquiry is fact

- intensive and reserved for the most serious and extraordinary circumstan ces that , if not sanctioned , would
harm the judicial process. 211 The Court has examined the entire record in this matter
and cannot find that Parexel’s allegations, even if true, rise to a level justify ing the
award of such a serious sanction. 212 And so, no fee shifting is appropriate. Each party must pay its own attorney ’ s fees.

208 Id. (internal quotation marks omitted) ; cf. Versata Enters., Inc. v. Selectica, Inc. , 5 A.3d 586, 607 (Del. 2010) (“Generally, the bad faith exception to the American Rule . . . does not apply to the conduct that gives rise to the substantive cl aim itself.” (internal quotation marks omitted)).

209 Xynomic’s Post

- Trial Ans. Br. at 12

- 13.

210 Id. at 14

- 15.

211 Montgo mery , 880 A.2d at 22 7.

212 See Lawson v. State , 91 A.3d 544, 552 (Del. 2014) (“The bad faith exception applies only in extraordinary cases , and the party seeking to invoke that exception must demonstrate [its applicability] by clear evidence . . . .” (emph asis added) (internal quotation marks and citat ion omitted)); see also RBC Cap. , 129 A.3d at 879 ( observing that whether to shift fees using the bad faith exception “is a matter that is within the discretion of the trial judge” and explaining that a trial court does not “abuse [its] discretion” in shifting or not shifting fees just because a nother court “may have come to a different conclusion”) ; see generally Gatz Props., LLC v. Auriga Cap. Corp. , 59 A.3d 1206, 1222 (Del. 2012) (“[T]here is n o single defin ition of bad faith conduct.” (internal quotation marks omitted)); cf. Johnston v. Arbitrium (Cayman Is.) Handels AG , 720 A.2d 542, 546 & n.27 (Del. 1998) ( giving “falsified records” as an example of bad faith, but also noting that- 48

-

E. P RE - AND P OST - J UDGMENT I NTEREST A non

- b r eaching party is entitled to pre

- and post

- judgment interest as a matter of right, and Delaware c ourts will not dist urb that right. 213 When the parties have contractually expressed an interest rate, the Court will abide by that expressed
interest rate. 214
MSA Section 4.2 does provide that “[Xynomic] will pay interest on any unpaid invoice (including any undisputed portion of a disputed invoice) at the rate of one percent (1%) per month until such invoice(s) is paid in full.” 215 And Par e xel asks that interest rate be applied here. 216 Xynomic never responds to Parexel’s

“insufficie nt proof that [the] documents in question were falsified” counsels against fee

- shifting (citation omitted) ).

213 Brandywine Smyrna, Inc. v. Millennium Builders, LLC , 34 A.3d 482, 486 (Del. 2011) (“[I]n addition to the principle that prejudgment interest in Delaware case s is awarded as a matter of right, the general rule is that interest accumulates from the date payment was due the plaintiff, because full compensation requires an allowance for the detention of the compensation awarded and interes t is used as a basis for measuring that allowance.” (internal quotation marks omitted)); see also Chaplake Holdings Ltd. v. Chrysler Corp. , 2003 WL 22853462, at *4 (Del. Super. Ct. Oct. 30, 2003) (“Under Delaware law, pre

- judgment and post

-

judgment interes t on a debt is awarded as a matter of right and not of judicial discretion. Courts award pre

- judgment and post

- judgment interest to the prevailing injured party for the detention of damages.” (internal quotation marks and citation omitted)).

214 Cf. Bea rd Rsch., Inc. v. Kates , 8 A.3d 573, 620 (Del. Ch. 2010) ( computing the statutory ( “default” ) interest rate because there was no “express contract rate” (citing D EL
. C ODE A NN
. tit. 6, § 2301(a) (2020))) , aff’d sub nom. , ASDI, Inc. v. Beard Rsch., Inc. , 11 A.3d 749 , 750 (Del. 2010)

.
215 JX

- 252 (MSA § 4.2).

216 Parexel’s Post

- Trial Br. at 31

- 32.- 49

-

invocation of Section 4.2

— which the Court deems as Xynomic ’s concession to the

r ate’s application

. Accordingly, Parexel is entitled to pre

- and post

- judgment interest at the rate
of one percent ( 1% ) per month of the unpaid invoices.
VI. CONCLUSION When it wasn’t paying its accumulating bills, Xy n o m ic engaged a check’s

- in

the

- mail a pproach with Parexel. Once sued, Xynomic took a different tack. It now

sa ys , Par e xel didn’t earn those phantom checks. In more formal legal terms, Xynomic’s defense here has been that it was
excused from any obligation to pay its outstanding invoices bec ause Parexel either
deficien tly perform ed or failed to perform under the MSA and Work Order 1 to an extent that Par e xel was in material breach o f those agreements. Not so. Xynomic had the contractual right to challenge any in voice it wanted, and moreover was free to express issues with work performed or withheld

. When asked why it didn ’ t raise objections to Parexel’s performance before now , the best Xynomic could offer was that it “need[ed] to keep Parexel involved in the project.” 217 But that begs the q uestion of when, if ever, Xynomic was going to raise its

s upposed o bjections with Parexel. At best , Xynomic sat on its rights and , by not

217 Xynomic’s Post

- Trial Br. at 24 (“Xynomic may not have raised specific issues with Parexel’s performance during these financial communications, as described above, due to Xynomic’s need to keep Parexel involved in the project.”).- 50

-

asserting its objections , agreed to the volume, substance , and quality of the work performed . A t worst , Xynomic hel d valid performance complaints in its back pocket just waiting for litigation over non

- payment. And at very worst, these dire performance issues were nothing more than the bumps expected along road to approval of a promisin g drug that are now being miscast to try to excuse Xynomic’s failure to pay its toll. No matter which it is, Xynomic’s free ride must now end. In determining whether the elements of breach of contract were met, the Court
credits the many witnesses who testified that Parexel consist ently provided the consideration required and was performing in the manner agreed to. Though Xynomic claims that in certain instances Parexel was underperforming or not performing at all, the Court is unconvinced. Parexel did perform as required under
th e contract s , and Xynomic material ly breach ed th os e same agreements by failing to pay its properly invoiced obligations thereunder. As a result, Xynomic is ordered to pay Parexel $5,530, 60 9.30 and the corresponding one percent ( 1% ) pre
- and post

- judgment interest as derived from the

contracts.- 51

- V II . VERDICT AND JUDGMENT
O N P AREXEL ’ S C OMPLAINT :

- Count I

– Breach of Contract (Work Order 1) : For Parexel

. Parexel is entitled to pre

- and post

- judgment interest on Count I

. But Parexel is not
entitled to its Attorney’s Fees. The parties sha ll confer and, within 15 days, submit to the Court a proposed
form of Order of Fi nal Judgment consistent with these findings and verdicts.
IT IS SO ORDERED.

_ Paul R. Wallace, Judge Original to Prothonotary cc: All couns el via File & Serve