Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography
Search the entire CISG Database (case data + other data)

CISG CASE PRESENTATION

China 2002 Hangzhou Intermediate People’s Court [District Court] (Gulf Resources Development Co. Ltd. v. Hangzhou Hanggang Foreign Economic Co. Ltd.) [abstract available]
[Cite as: http://cisgw3.law.pace.edu/cases/020002c1.html]

Primary source(s) of information for case presentation: Abstract

Case Table of Contents


Case identification

DATE OF DECISION: 20020000 (2002)

JURISDICTION: People's Republic of China

TRIBUNAL: Hangzhou Immediate People’s Court [District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: Unavailable

CASE NAME: Gulf Resources Development Co. Ltd. v. Hangzhou Hanggang Foreign Economic Co. Ltd.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: United Arab Emirates (plaintiff)

BUYER'S COUNTRY: People’s Republic of China (defendant)

GOODS INVOLVED: Plastic raw materials


Case abstract (English translation) [second draft]

Queen Mary Case Translation Programme

Hangzhou Intermediate People's Court

Gulf Resources Development Co. Ltd.
v.
Hangzhou Hanggang Foreign Economic Co. Ltd.

Assigned date of decision: 2002

Translation [*] by Jing Li [**]

CASE SUMMARY

Plaintiff, Gulf Resources Development Co. Ltd. [of the United Arab Emirates] (hereinafter, "[Seller]"), filed a lawsuit with the Hangzhou Intermediate People's Court [hereinafter, the "Court"] against Defendant, Hangzhou Hanggang Foreign Economic Co. Ltd. [of the People's Republic of China] (hereinafter, "[Buyer]").

In accordance with the principle of party autonomy, the Court applied the United Nations Convention on Contracts for the International Sale of Goods (1980) (hereinafter, the "CISG") to the case and dismissed the action.

The [Seller] and the [Buyer] had a telephone conversation regarding the purchase of plastic raw materials PVCS6558. On 7 June 2001, the [Seller]'s Shanghai Representative Office sent a facsimile to the [Buyer] notifying of the latter the name, price, package and quantity, delivery, and terms of payment of the goods. Additionally, this facsimile stated:

"Please confirm in writing; we will send you the written contract later."

After receiving this facsimile, the [Buyer] wrote on the facsimile that

"We herein confirm the above provisions; details will be discussed on 11 June."

Thereafter, the [Buyer] returned this document via facsimile to the [Seller]'s Shanghai Representative Office. On 13 June 2001, the [Seller]'s Shanghai Representative Office sent another facsimile to the [Buyer], requesting the latter to confirm its willingness to purchase the goods by noon of 14 June. The [Buyer] rejected the goods. Therefore, the [Seller] filed this lawsuit with the Court, requesting the Court to find that a sales contract was concluded between the parties, and that the [Buyer] was responsible for the [Seller]'s loss of more than RMB 940,000.

The [Seller] and the [Buyer] agreed to apply the CISG to the dispute. The Court finds that pursuant to the General Principles of the Civil Law of the People's Republic of China [hereinafter, "General Principles"],

"The parties to a contract involving foreign interests may choose the law applicable to settlement of their contractual disputes."

and thus, the CISG was the law applicable to the present dispute. According to the CISG,

"A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer." [Article 19(1) CISG]

In the present case, the [Buyer]'s reply to the [Seller]'s offer was that

"We herein confirm the above provisions; details will be discussed on 11 June."

The Court finds that the [Buyer] did not accept the offer without additional conditions. On the other hand, the [Buyer] expressed its intention to continue negotiation. Hence, this was a reply with limitations, which shall be considered a rejection to the offer, i.e., a counter-offer. Under Article 19(1) of the CISG, the alleged contract was not concluded. Moreover, the [Seller]'s Shanghai Representative Office sent the offer on its own behalf without declaring or presenting the authorization of the [Seller]. A representative office of a foreign company is merely capable of communicating and consulting in China. It does not have the civil capacity to engage in commercial transactions. The CISG does not concern itself with the validity of the contract or the competency of the parties. The present transaction was negotiated in China. According to the doctrine of closest and most real connection, the law applicable to issues of validity of the contract and the competency of the parties shall be Chinese law. Under Article 58 of the General Principles,

"Civil acts in the following categories shall be null and void: (1) those performed by a person without capacity for civil conduct."

Therefore, even if the contract was validly concluded, it was null and void from the beginning. Consequently, the [Seller]'s claim based on a valid contract was not established, and thus, the Court dismissed the [Seller]'s action.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff, Gulf Resources Development Co. Ltd. of the United Arab Emirates, is referred to as [Seller] and Defendant, Hangzhou Hanggang Foreign Economic Co. Ltd. of the People's Republic of China, is referred to as the [Buyer]. Amounts in the currency of the People's Republic of China (renminbi) are indicated as [RMB].

** Jing Li, LL.M., University of Texas at Austin, School of Law; Master of Law, Sun Yat-Sen University School of Law, China; LL.B., Sun Yat-Sen University School of Law, China; Associate, Institute of International Commercial Law, Pace University School of Law.

Go to Case Table of Contents

Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 6 ; 14 ; 19

Classification of issues using UNCITRAL classification code numbers:

4B [Scope of Convention (issues excluded): capacity of parties];

6B [Agreements to apply Convention];

19A1 [Reply purporting to accept offer but containing additions or modifications: in general, constitutes rejection and counter-offer]

Descriptors: Scope of Convention; Capacity of parties ; Autonomy of parties ; Choice of law ; Counter-offer

Go to Case Table of Contents

Editorial remarks

Go to Case Table of Contents

Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Chinese: Click here for Chinese abstract of case; see also CISG-China No. [BPC/31] <http://aff.whu.edu.cn/cisgchina/en/news_view.asp?newsid=114>

CITATIONS TO TEXT OF DECISION

Original language (Chinese): Unavailable

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

Go to Case Table of Contents
Pace Law School Institute of International Commercial Law - Last updated March 1, 2010
Comments/Contributions
Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography