First, either use the Grade Shop to pass techs to a new game, or level up Genis until he learns a mid-level spell BEFORE you face Vidarr. Next, in the battle with Vidarr, cast a mid to advanced-level spell immediately, and delay the spell by holding the tech button. 10 seconds into the battle, release the tech button to cast the spell. The scene where Kratos comes into help will not show, and you must finish the battle without him. Kratos will not be part of your party after the battle. He will not enter your party until the first battle with Botta at the Sylvarant Base. Video here.
Submitted by: Matt