Iron Throne Wine Case

A paper by Anastasia Raffalovich, Alice Trichet, Giulia Marchitelli,

Joshua Bach and Filippo Alberti (D1.3)

Introduction:
The following Arbitration will resolve the dispute raised by Riverland Wine Cooperation
(claimant) to Winterfell Super Markets (respondent).

Arbitration clauses:
➔ The Following Arbitration will be followed by the Court of Arbitration of Madrid, in
accordance with its Arbitration Rules in force at the time the request for arbitration is
filed.

➔ The arbitral tribunal shall confirm to the parties that the proposed candidate is
independent and impartial, available and free of any conflict of interest. The arbitral
tribunal shall inform the parties if any of these conditions change during the arbitral
proceedings. The administrative secretary shall be subject to the same standards of
impartiality and independence as the arbitrators.

➔ There will be only one arbitrator following the dispute.

➔ Judgement on the verdict will solely be of the Arbitrator.

➔ The place of Arbitration shall be located in Madrid, Spain and must be done in English.
Both parties will split in half all the expenses of the arbitration.

Recap of the problem:

Riverland Wine Cooperative (WC) participated in a trade show for the wine industry. At the
same time, Winterfell Super Markets (SM) sent a team of buyers to the show to look for new
wines. They were interested in a red wine presented by WC called "Iron Throne 2005" (IT2005).
Subsequently, Mr. Stark, Sales Manager for WC, and Mr. Lannister, Wine Buyer for SM, begin to
discuss how much could be ordered and at what price. At the beginning of June, Mr. Lannister
sends an order to WC. The order is to be delivered in 4 shipments. In the approval letter Mr.
Lannister stipulated that SM had to have an answer by June 21, in order to set up a promotion
plan for the wine. However, when the letter arrived at WC, Mr. Stark was away on business so
he could not sign it until June 19. The same day Mr. Stark sends back the signed document.
The delivery service shows that SM received it on June 21. However, right after sending the
contract, Mr. Stark receives an email from Mr. Lannister telling him that he is withdrawing the
contract. Due to a technical problem WC did not receive the email until the 19th although it was
sent a day earlier. SM decided to cancel the contract because of an article that reported that the
wine enhalts an antifreeze-agent. Following this email WC made a report that proves that the
article is false. However, SM did not change its mind. Thus, SM did not buy any bottles of WC.

Potential claim of each parties:

● Wine Cooperative wants to sue Super Markets in claim of the purchase price + Storage
costs US$ 30.000 + interest + arbitration costs.

Arguments of Wine Supermarkets:

Argument 1)
Since the offer of buying 20,000 cases of Iron Throne 2005 was not stated as irrevocable by
Wine Cooperative, Super Markets has all the right to withdraw from the offer. Following Article
16 of the CISG convention “an offer may be revoked if the ­revocation reaches the offeree before
he has dispatched an acceptance”. At the time SuperMarket revoked the offer, to be precise on
the 18th of June, the acceptance letter from Wine Cooperative still hadn’t been sent, as it was
sent on the 19th of June. Therefore Wine Cooperative is not obliged to accept the order of
20,000 cases of Iron Throne 2005 wine.

Argument 2)
The withdrawal email was sent on the 18th June by Mr. Lannister to the Wine cooperative.
Unfortunately, at the same time the email arrived, wine corporation had an internal network
failure, which was fixed the day afterwards. However, the server received the message on the
18th of June. As we can deduct from Article 15.1 of the UNCITRAL Model Law on Electronic
Commerce:

“Unless otherwise agreed between the originator and the addressee, the dispatch of a
data message occurs when it enters an information system outside the control of the
originator or of the person who sent the data message on behalf of the originator.”

The fact that the withdrawal email was made accessible only on the 19th afternoon is not valid
as an excuse to change the arrival date.

Argument 3)
Wine Supermarkets retains the offer as not irrevocable by putting forward Article 16.2b:

“However, an offer cannot be revoked: [...] if it was reasonable for the offeree to rely on
the offer as being irrevocable and the offeree has acted in reliance on the offer.”.

Wine Supermarkets did not rely solely on Wine Cooperatives offer, as, if the offer would have
not come to an end, Wine Supermarket would have found another supplier for their wine
promotion. It was never mentioned that Wine Supermkarts was relying only on Wine
Cooperatives to market their wine promotion, and therefore retains the offer as revocable.
Argument 4)
Wine Supermarkets has withdrawn the offer due to the “Antifreeze” Scandal presented by
Riverland Magazine. As Mr Lannister mentioned: “With the bad publicity that wine from the Iron
Throne region has received in the Winterfell newspapers, it no longer has the qualities
necessary to be an outstanding choice for a promotion of quality wines”. Wine Supermarkets
was not told, nor aware that antifreeze agents were present in the Iron Throne 2005. This is
fundamental for Wine Supermarkets, since they want to sell the highest quality and natural
wine. Wine Supermarket therefore believes that there was a lack of conformity from Wine
Cooperative. As Article 36.2 mentions:

“The seller is also liable for any lack of conformity [...] due to a breach of any of his
obligations, including a breach of any guarantee that for a period of time the goods will
remain fit for their ordinary purpose [...] [and] will retain specified qualities or
characteristics.”

Wine cooperative failed to mention the specified characteristics of the wine, mainly that it
included Antifreeze agents and sweeteners.

To strengthen our Position we will have to bring forward fact number 21:

“Neither country requires the label on a bottle of wine to show its ingredients. There are
regulations in both countries as to the minimum amount of a given grape variety that
must be present for a wine to be sold as a varietal wine. Since Iron Throne2005 was a
mixture of several grape types and was not sold as a varietal, those regulations do not
apply.”.

Being a mixture of grapes, Iron Throne 2005 must have an Ingredients label at the back of the
bottle. Wine Cooperative is not acting according to the regulations. This proves that Wine
Cooperative was actively retaining characteristics of the wine, thus committing lack of
conformity.

Argument 5)
As Mr. Lannister requested Mr. Stark to annul the shipment on 20 June 2020, following his
statement regarding the retreat from the incomplete contract between the two companies, Mr.
Stark informed Mr. Lannister almost a month later, precisely on 15 July, that the shipment had
been refrained and therefore is still ‘on hold’. In other words, Mr. Stark continued to preserve the
20,000 cases which Mr. Lannister no longer needed. This was an unnecessary measure taken
by Mr. Stark, curiously manipulating the situation since Mr. Lannister had never mentioned
wanting to keep ‘on hold’ the cases. This means that the storage costs should not be the Super
Market’s responsibility, considering the fact that there had been an interval of three weeks
between the email sent by Mr. Lannister and the corresponding reply of Mr. Stark. In fact, within
this period of time, the Wine Cooperative could have already begun looking for another buyer,
knowing that the Super Markets were no longer interested in their product.
Argument 6)
Furthermore, the fact that Mr. Stark replied to Mr. Lannister’s email (Exhibit No.11),
approximately three weeks later, during such a strict and narrow time frame before the Super
Market’s wine promotion of October, is suspicious. After all, Mr. Stark was not giving any
confirmation regarding the cancellation of the shipment until 15 July 2020, leaving Mr. Lannister
uncertain of whether the cases were going to be delivered to the Super Markets or not. Without
such information, Mr. Lannister could not know how to properly proceed to organize the wine
promotion and whether to make new agreements with other producers. This caused a major
disadvantage for the Super Markets. On the other hand, Mr. Stark had known since 18 June
2020 that the Super Markets no longer wanted to receive the cases and therefore were served
more time to operate with a different buyer.