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S. K. MISRA MEMORIAL INTERNATIONAL

MEDIATION AND NEGOTIATION COMPETITION 2.0
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LLOYD LAW COLLEGE

MEDIATION
PRELIMINARYPROBLEM
ROUND I II

ladrc@lloydlawcollege.edu.in | www.lloydlawcollege.edu.in
 MEDIATION PROBLEM
THE GAMING CONSOLE DISPUTE
GENERAL INFORMATION
Edelweiss International Ltd. is a company based in Thoiland engaged in the business of digital hardware
distribution in neighboring countries including Minimar, Rambodia, Milisiya, Singadoor, Pindonesia etc.
The company was founded in 1990s and is now under the control of Mr. Cyril D'souza, grandson of the
founder.

Compu Calc Ltd. is a hardware manufacturing company based in Singadoor which manufactures
computer and gaming hardware devices. The company has won accolades for its new gaming console
'Ferrari' which became a bestseller. Compu Calc is controlled by its Chief Executive Officer Mr. Henry
Lee.

Edelweiss and Compu Calc entered into an annual distribution agreement in October 2018 for 12,000
gaming console units to be sold each year. According to the agreement, Edelweiss was granted exclusive
rights to establish a distribution network for Compu Calc's new gaming console 'Ferrari' in all its
neighboring countries. The trademark of 'Ferrari' belonged to Compu Calc.

Edelweiss ordered 10,000consoles immediately after the agreement was signed. However, Compu Calc
insisted that its legal department was still reviewing the agreement. Compu Calc insisted on continuingto
sell the gaming console directly in Singadoor and Pindonesia,along with Edelweiss. In November 2018,
Compu Calc shipped 10,000 gaming consoles to Edelweiss.

The consoles were in high demand and in June 2019, Edelweiss again placed an order for 5,000
consoles owing to the popularity of this new gaming device in the markets. However, it could only sell
4,000 units and therefore kept 1,000 consoles in stock for the next annual term beginning from October
2019.

Compu Calc came up with 'Ferrari 2.0', a better version of the gaming console in December 2019. This
version was priced slightly more than the original 'Ferrari'. Edelweiss ordered 7,000 units of the new
version of the gaming console in December. It had 500 console units left from its previous stock which it
wanted to return to Compu Calc as now there was demand only for the new version.

In March 2020, due to the spread of the Covid-19 pandemic, Edelweiss could not distribute orders to
customers due to ban on transportation facilities. It faced financial losses amounting to $65,000 due to
delay in payments and bad debts by customers. Edelweiss had 3,000 consoles left with it at that time.
The distribution operations resumed in June 2020 and Edelweiss decided not to order any more consoles
for the ongoing annual term.

Edelweiss wanted Compu Calc to give it exclusive distribution rights in Singadoor and Pindonesia too as
was stated in the distribution agreement and also compensate it for the losses suffered due to the
pandemic. Edelweiss further declared to order 3,700 more consoles if Compu Calc takes back the 500
old version 'Ferrari' consoles left with Edelweiss or 3,000 more consoles 'Ferrari 2.0' if Compu Calc does
not take back the 500 old consoles.
 Compu Calc, on the other hand wanted Edelweiss to sell 5,000 more units to fulfill the target of sale of
12,000 consoles by October 2020. It threatened to terminate the annual agreement and claim
damages by initiating arbitration against Edelweiss. It further said that the agreement does not contain
any provision for reimbursement of losses.

The deadlock status quo is maintained since June 2020.The agreement between both the companies
contained a compulsory mediation clause following the APCAM rules before either of the parties
initiates arbitration. Keeping this in mind, the parties agreed to attend a mediation session scheduled for
December 2020

Edelweiss has been able to sell the remaining 3,000 units it had since June 2020. The annual contract
between the parties was not renewed in October 2020. Mr. Cyril D'souza along with his lawyer Ms.
Monica will attend the mediation behalf of Edelweiss International Ltd. Mr. Henry Lee along with his
lawyer Mr. Ross will attend the mediation on behalf of Compu Calc Ltd.

TERMS OF AGREEMENT BETWEEN EDELWEISS INTERNATIONAL LTD.

AND COMPU CALC LTD.

• This distribution agreement between Edelweiss International Ltd. (Thoiland) and Compu Calc Ltd.
(Singadoor) shall begin from October 2018 for the distribution and sale of 12,000 units of gaming
consoles each year.

• The gaming console 'Ferrari' manufactured by Compu Calc Ltd. will remain the intellectual property of
the same and Edelweiss International Ltd. will get the exclusive rights to sell the consoles in Thailand and
neighboring countries including Minimar, Rambodia, Miliysia, Singadoor, Pindonesia etc.

• This agreement is renewable on an annual basis subject to consent of both the parties for the renewal.

• The gaming console 'Ferrari' also encompasses any upgraded versions of the product which maybe
manufactured by Compu Calc Ltd.

• The gaming console units once sold by Compu Calc Ltd. to Edelweiss International Ltd. cannot be returned
under any circumstances except if the units are found to bedefective or Compu Calc Ltd. agrees to
accept them back voluntarily.

• Neither party shall be liable to each other for any direct or consequent losses incurred by them in the
course of business or otherwise under any circumstances whatsoever.

• In case of any dispute, the matter shall first be referred to compulsory mediationfollowing the Singapore
International Mediation Centre rules before either of the parties initiates arbitration or litigation
proceeding against the other. The seat of arbitration shall be Singapore.

• The agreement can be terminated by either parties in case of a breach of the abovementioned
conditions by giving a notice of termination one week before the actual termination of agreement.
 • In the case of a force majeure event, the partial fulfillment of the total requirement of selling 12,000
gaming console units is admissible in that particular annual term. If the parties do not have a consensus on
whether an event falls within the meaning of force majeure, the same shall be determined by an arbitral
tribunal/ court if the dispute is not resolved through mediation.

Contact Details:
Daisy Pallawi | +91-9523981666, Prajjavi Srivastava | +91-7054515846
Email ID- ladrc@lloydlawcollege.edu.in