NLUJ DEAL

MEDIATION
COMPETITION 3.0

March 4 - 6, 2022

Quarter Finals
CONFIDENTIAL INFORMATION
 THE EV DREAM

ASMC
The prime minister of Sonder has, in his weekly address to the citizens - ‘Dil Ki Dastaan’, spoken
about his intention to make Sonder a hub for the manufacture of electric vehicles. His vision
however does not want the industry to depend upon foreign technology and so he has also urged
the citizens to make efforts to develop the ancillary industries that would be relevant for the same.
This would include the development of the li-ion batteries, the charging infrastructure and other
related technology.

The study undertaken in the R&D for the viability of the of electrical vehicles has shown that the
average expenditure on semiconductor chips used in the electric vehicles is approximately 5 times
more than what was used in the traditional vehicles. Therefore, this is also one of the ancillary
industries that the government of Sonder seeks to develop. However, they are cautious in this
regard since Sonder has failed twice in the past and they have not been able to float a sound
manufacturing company in this field. This time around, the government, looking at the surge in
global demand and the non-cyclical nature of this surge, has declared a 10 billion Sonder dollar
package to incentivize private businesses to venture in this business.

ASMC has already partially executed a deal with a manufacturer of electric vehicles in Sonder.
This has given them some amount of confidence in their ability to match the standard that would
be required to survive in the market in Sonder. They have come to know of this address by the
Prime Minister of Sonder and they want to cash in on the opportunity that Sonder has presented.
However, the market in Sonder is extremely complicated due to the commercial and the political
environment in the country. The country is a quasi-federal state and the provincial governments
are many a time run by parties that are opposing the central government. Therefore, it is a very
complex thing to navigate through and they do not think they can pull off their mission alone
without strong local backing.

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Mr. Donia of Truffle Corp is a very shrewd man and he has great ties with the local politicians and
they have a good relationship. ASMC believes that for the success of the venture in Sonder, they
need to partner with someone like Mr Donia. However, this needs to be done in a very structured
and precise manner for which they need to come and sit together and discuss the terms.

It seems highly unlikely that a new deal can be struck before they manage to come to terms about
how the previous, partially executed deal will work. The main issues that they faced in the case
were that they needed more money for the execution of the contract due to the additional costs
that they incurred because of the unilateral postponement of orders by Truffle Corp and it would
be difficult to furnish the demands within six months. The escalation clause in the contract
allowed for an escalation by 4% of the contracted amount, but in this current case, due to the
impact of the pandemic and the surge in demand, the additional costs that they are incurring is to
the tune of 7% of the contracted value.

Also, they can deliver the third phase of the consignment within the stipulated time of 6 months,
which they are keen on doing in order to gain the trust and confidence of Mr. Donia, but that
would mean that they would have to push their production capacity and that would entail an
additional 2.6 million Saiwanese dollar cost.

This issue is however the tip of the iceberg and Mr. Chang is largely interested in discussing the
issue of the manufacturing venture in Sonder for a period of 5 years. He is known to have an
acumen for the long-term gains and may bear additional costs in the present for a lucrative return
in the future. He wants to propose a plan for the same. He is willing to invest capital to the tune
of 300 million Sonder Dollars, in the ratio 3:5 (ASMC : TC) but he wants that the production
freedom to be retained by their company. This is because a lot of people have failed in the
business due unsuccessful experiments. Therefore, he does not want to risk this in the current
scenario. The revenue of the venture would be divided in the ratio of 1:4 but in return Mr. Chang
wants that the technology which would be created by the venture would not be used by Truffle
Corp separately or in any future arrangement with a third-party. The intention of the first session
is to develop a framework with which they could work and decide upon the more minute details
in the later sessions.

Note: $1 Saiwanese = $1 Sonder