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CISG CASE PRESENTATION

China 18 September 2002 CIETAC Arbitration proceeding (Elevator parts case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/020918c1.html]

Primary source(s) of information for case presentation: Case text

Case Table of Contents


Case identification

DATE OF DECISION: 20020918 (18 September 2002)

JURISDICTION: Arbitration ; China

TRIBUNAL: China International Economic and Trade Arbitration Commission [CIETAC] (PRC)

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/2002/23

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy [?] (claimant)

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

GOODS INVOLVED: Elevator parts


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 8

Classification of issues using UNCITRAL classification code numbers:

8C [Interpretation of party's statement or other conduct: interpretation in light of surrounding circumstances]

Descriptors: Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Chinese): Unavailable

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Joint translation project:
New York University School of Law
and Pace University School of Law


 

China International Economic and Trade Arbitration Commission CIETAC (PRC)

Elevator parts case (18 September 2002)

Translation [*] by Cheng Shu [**]

Edited by Zheng Xie [***]

-   Particulars of the case
-   Facts
-   Position of the parties
-   Opinion of the Arbitration Tribunal
-   Award

PARTICULARS OF THE CASE

The China International Economic and Trade Arbitration Commission (formerly known as "China International Trade and Economic Arbitration Commission, renamed as "China International Economic and Trade Arbitration Commission, hereafter, the "Arbitration Commission") accepted the case (Case number M___) according to:

   -    The arbitration clauses in Contracts No. 109/100 and 111/00 signed by the Claimant [Seller], ___ S.p.A. and Respondent [Buyer], Beijing __ Imports and Exports Company; and
 
   -    The written application for arbitration submitted by [Seller] to the Arbitration Commission on 3 July 2001.

On 4 September 2001, the Secretariat of the Arbitration Commission sent the Notice of Arbitration to both parties and sent to the [Buyer] a copy of [Seller]'s application for arbitration, the Arbitration Rules and the Arbitrators List.

According to the Article 24 of Arbitration Rules of the Arbitration Commission (the rules took effect on 1 October 2000), the [Seller] appointed Lu ___ as arbitrator, and the [Buyer] appointed Shi ___ as arbitrator. Because the two parties failed to appoint or to jointly authorize the Chairman of the Arbitration Commission to appoint a presiding arbitrator within the specific period, the Chairman of the Arbitration Commission appointed Chen ___ as the presiding arbitrator; On 8 October 2001, the above three arbitrators formed the Arbitration Tribunal to hear this case.

On 30 October 2001, the [Buyer] submitted its defense to the Arbitration Commission.

After carefully reviewing the application for arbitration, the defense and the evidence, the Arbitration Tribunal scheduled a court session in Beijing on 12 November 2001. Both parties' arbitration agents participated in the court session, made oral statements and discussion, and answered the questions of the Arbitral Tribunal.

After the court session, both parties submitted supplemental evidence. In the court session and the supplemental documents after the court session, both parties requested technical expertise and handwriting authentication of the relevant evidence. On 13 May 2002, The Arbitral Tribunal through the Secretariat of the Arbitration Commission, delivered notice to both parties, deciding to retain a technical expertise requested by the [Seller] and conduct the handwriting authentication requested by the [Buyer].

On 15 and 16 May 2002, the [Buyer] submitted new evidence to the Arbitral Tribunal. The Arbitral Tribunal decided to suspend the authentication process and held a second court session.

On 5 July 2002, the Secretariat of the Arbitration Commission notified both parties that, with the approval of the General Secretary of the Arbitration Commission, the date for handing down a ruling on this case would be postponed to 8 October 2002.

On 18 July 2002, the Arbitral Tribunal held the second hearing on the case. Both parties' arbitration agents appeared at the court session, made further oral statement on the facts of the case and answered questions of the Arbitral Tribunal.

The Arbitral Tribunal handed down this award on the basis of the facts and the law. The following are the facts, the Arbitration Tribunal's opinion and the award.

FACTS

The [Seller] alleged:

On 24 July 2000, the [Seller] and the [Buyer] signed two contracts, No. 109/00 and No. 111/00, which stipulate:

   -    Product. The [Seller] shall provide the [Buyer] elevator components for the price of Italian lire [ItL] 585,411,870.00;
 
   -    Method of payment and term. 50% of the total amount shall be paid by Letter of Credit at sight; the other half shall be paid by telegraphic transfer within 90 days after issuance of Bill of Lading.

In addition, the packing clause, the term of shipping and documents requirement are all stipulated in the contracts.

The payment particulars were:

   -    On 4 August 2000, the [Buyer] issued an irrevocable L/C with the [Seller] as the beneficiary. The amount of the Letter of Credit was ItL 292,705,935.00. The shipping date was 10 August 2000. The expiration date was 25 August 2000.
 
   -    On 8 August 2000, the [Buyer] modified the Letter of Credit, stipulating that the last day for shipment would be 25 August 2000, and the expiration date was changed to 9 September 2000.
 
   -    The [Seller] shipped the contract goods on 10 August 2000; thereafter, the [Seller] delivered to the negotiating bank the original Bill of Lading and other documents requested in the Letter of Credit. On 24 August 2000, the negotiating bank noticed the [Seller] confirming that all the documents complied with the requirements of the letter of credit. On 18 September 2000, the negotiating bank notified the [Seller] that the amount stipulated in the Letter of Credit had been transferred to the [Seller]'s account.

POSITION OF THE PARTIES

[Seller]'s position

The last day for the telegraphic payment of the remaining 50 % due was 30 October 2000. However, the [Buyer] did not make this payment according to the contract. After a notice by a telephone call from the [Seller], the [Buyer] refused to make this payment without reasonable grounds. The [Seller] stated that:

   -    The [Seller] had performed all of the duties stipulated in the contract including delivering the goods and, providing all related documents and that the [Buyer] should pay the remaining amount in accordance with the contract;
 
   -    The [Buyer]'s rejection to make the payment was not only a breach of the contract but also in violation of the Chinese law;
 
   -  The [Buyer]s should bear the liability for breach of contract.

The [Seller] asked the Arbitration Tribunal to rule that:

1. The [Buyer] should promptly pay the arrearage in amount of ItL 292,705,935;

2. The [Buyer] should immediately pay the [Seller] the damages for breach of contract in the amount of ItL 11,801,903 (from 30 October 2000 to 10 May 2001 at 0.21 per day);

3. The [Buyer] should bear the arbitration fee.

[Buyer]'s position

The [Buyer] argued that:

1. The only contract signed by both parties was performed successfully and, the [Buyer] made the payment. On 10 July 2000, the [Buyer] signed a "Contract for Importing by Mandate" with Beijing ___ Trade Transportation Service Limited Liability Company (hereafter, the consignee). The [Buyer] was authorized to import 100 units of Italian elevator components in the amount of 100 units and at the price of ItL 292,705,935.00. After execution of the "Contract for Importing by Mandate", the Consignee sent the draft of "Confirmation of Purchase" to the [Buyer]. The seller in the Confirmation of Purchase is the [Seller] in this case, and the context is consistent with the "Contract for Importing by Mandate". The contract became effective after the sale's representative of the [Buyer] signed the contract on behalf of the company. The number of that contract is 109/00 AND 111/00 [Note: This contract identification number. is different from the contract 109/00 and 111/00,identification number in [Seller]'s claim. It 1s highlighted in italics in this presentation of the case text.] [Buyer alleged that contract 109 AND 111/00 is the only contract for purchase signed by both parties up till now.

In August 2000, the [Buyer], according to the "Confirmation of Purchase", issued an L/C at sight (No. LC1101130/00) through Bank of China Beijing Branch with the [Seller] as the beneficiary in the instance case for importing 100 units of elevator components for the price of ItL 292,705,935.00.

According to the L/C, on 10 August 2000, the [Seller] delivered the goods under contract 109/00 AND 111/00 and presented the L/C the credit to the bank for negotiation on time. The [Buyer], after payment, received the related Bill of Lading and commercial invoice in the amount of ItL 292,705,935.00. The 100 units of goods were delivered. On 10 October 2000, the goods arrived at the port. The [Buyer] authorized ___ Customs Clearing Agent to complete customs clearance . In early October 2000, ___ Custom Clearing Agent processed the goods through the customs formalities and delivered the goods to Consignee, Beijing ___ Transportation Service Limited Liability Company. At that time contract 109/00 AND 111/00, signed by both parties, was completely performed, and the procuratorial service for import was completed.

According to the aforesaid facts and evidence, it can be proved that:

      (1) The contract signed by the [Seller] and [Buyer] was the "Confirmation for Purchase" numbered 109/00 and 111/00 [Note: This contract number has not been highlighted in this presentation of the text.]. The method of payment in the contract was L/C at sight.

      (2) According to the contract, the [Seller] received a Letter of Credit, the amount of the credit equal to the amount of the contract price and negotiable with any bank by presenting documents for 100.00 pct of invoice value. Meanwhile, the L/C also included a partial shipments prohibited clause. The [Seller] accepted all the clauses of the L/C.

      (3) The [Seller], according to the L/C, negotiated with the bank. The [Buyer] required the document against payment.

      (4) The [Buyer], according to the relevant regulations, completed the customs clearance and delivery of goods formalities. The consignor received goods without any objection.

According to UCP 500, if the beneficiary of the L/C (the [Seller] in this case) presented the documents for negotiation on time; it is impossible for the issuer, the [Buyer] in this case, to reject making payment or to make partial payment for the goods. In this case, the [Buyer] paid the whole invoice price and, the [Seller] received the money. Regarding this, the [Seller] admitted that "on 18 September 2000, the bank notified [Seller] that the amount of money in the L/C had been transferred to the [Seller]'s account."

In sum, the [Buyer] made full payment for the goods.

It should be clarified that the [Buyer] mistakenly wrote the wrong contract number: 111/00 AND 109/00, which was a clerical error. The invoice was issued by the [Seller] on the basis of the wrong number of the L/C. This is the [Buyer]'s understanding of the way in which the [Seller] handled this. In the process of applying for the customs delcaration, customs clearance and tax payment, the [Buyer] operated on the basis of the correct number. This practice is also known by the other party and the authorities.

2. The statements by the [Seller] are without factual basis

      (1) Contracts No. 109/00 and 111/00

      These two contracts were irrelevant to the contract No. 109/00 AND 111/00 executed by the [Buyer].

In terms of the context of this contracts submitted by the [Seller], the signer for the Chinese party was Mr. Li ___. It is necessary to clarify that Mr. Li ___ is not an employee of the [Buyer], and that his signature has not been authorized or ratified by the [Buyer].

The contract for issuance of the L/C, customs clearance and picking up goods is the contract numbered 109/00 AND 111/00. The [Buyer] has never signed or conducted business on the basis of the two contracts numbered 109/00 and 111/00 that were submitted by the [Seller].

      (2) The invoice submitted to the Arbitral Tribunal by the [Seller]

      The invoice for contracts numbered 109/00 and 111/00 that was submitted to the Arbitral Tribunal by the [Seller] was never known by the [Buyer]. It was not the one required by the [Buyer] against payment from the issuing bank

OPINION OF THE ARBITRAL TRIBUNAL

1. Applicable law

In the instance case, the parties did not stipulate the applicable law in contracts 109/00 and 111/00. The Arbitral Tribunal, on the basis of the theory of proximate connection, laws of the place of signature of execution, the place of performance and the place of arbitration are all in China; the applicable law should be the law of China. Since the places of business of both parties are in Contracting States of the United Nations Convention on Contracts for the International Sale of Goods (CISG), the CISG should apply to this case.

2. The contractual relationship of the parties

It is necessary to clarify the relation between the contract No. 109/00 AND No.111/00, signed on 10 July 2000 and contracts No. 109/00 and No. 111/00 signed on 24 July 2000.

The [Seller] applied for the arbitration on the basis of the arbitral clause in contracts 109/00 and contract 111/00. However, in the [Buyer]'s defense, it says that it had never signed these two contracts with [Seller]. The [Buyer] also alleged that it only signed a contract (No. 109/00 AND 111/00) with [Seller] on 10 July 2000. That contract had already been performed. The [Buyer] requested the Arbitral Tribunal to dismiss all the claims of the [Seller].

After reviewing that all the materials and evidence delivered by the parties, the Arbitral Tribunal notes that.

      (1) Contract 109/00 AND 111/00

      The defense of [Buyer] and its attached material shows that the [Buyer], as the foreign trade agent, signed "Contract for Importing by Mandate" with the Consignor, Beijing ___ Trade Transportation Limited Liability Company on 10 July 2000. The contract stipulates that the Consignor should authorize the [Buyer] to perform the import contract numbered 109/00 AND 111/00 to import 100 units of brake gears in the amount of ItL 292,705,935.00 and with the delivery date of 10 August 2000. Moreover, the contract also stipulates that the [Buyer], according to the "Import Contract" in this agreement and upon receipt of all the payment of goods or deposit, should make the payments or clearance of formalities, send proper notice of date of arrival to the Consignee, make good cooperation with the Consignee in taking the delivery of the goods and handling the examination of importing goods and, collect commission as 1% of total amount of importing invoice.

The [Buyer] alleged that after signing the agency agreement with [Buyer], Beijing ___ Trade Transportation Limited Liability Company drafted and forwarded the "Confirmation of Purchase" (No. 109/00 AND 111/00) to the [Buyer] for signature. The seller in the contract is the [Seller] in this case. The context and articles are consistent with an agency agreement. This is the only contract for purchase of goods signed by [Buyer] and [Seller], and had been completely performed. The [Buyer] has made full payment for the goods.

In response to the request by the [Seller] for the handwriting authentication of the seller's handwriting in the "Confirmation of Purchase" (No. 109/00 AND 111/00, signed on 10 July 2000), the [Buyer] further argued that "on 3 August 2000, the [Buyer], according to the contract, issued a L/C (No. LC1101130/00) through Bank of China Beijing Branch with the [Seller] as the beneficiary in the instance case for importing 100 units of elevator components with the price of ItL 292,705,935.00. On 10 August 2000, according to the L/C, the [Seller] delivered the goods under the contract and handled the payment against documents promptly. Upon the payment, the [Buyer] obtained ocean bill of lading and invoice. The price in the invoice is ItL 292,705,935.00 and the quantity of goods for delivery is 100 units of elevator components. On 10 October 2000, the goods were delivered to the port. The [Buyer] authorized ___ Customs Clearance Agent to handle the customs clearance. After passing through customs, the goods were delivered to the Consigner, Beijing ___ Trade Transportation Service Limited Liability Company. Up till now, the contract 109/00 AND 111/00 signed by the [Seller] and the [Buyer] was fully performed and the service of import by mandate was completed"; "according to all related documents and the L/C, it is found that the contracts are all numbered 109/00 AND 111/00. It could also be found from the Agreement for Import by Mandate signed by [Buyer] and Consignee, Beijing ___ Trade Transportation Limited Liability Company that ___ granted the power to the [Buyer] to sign and perform the import contract (No. 109/00 AND 111/00). It could also be proved from another perspective that the Contract performed by the [Buyer] is the Confirmation for Purchase (No. 109/00 AND 111/00). Moreover, this contract was fully performed: the [Buyer] received the goods, and the [Seller] got the payment". "If it is reasonable that both parties, in the course of performing the contract, raised their suspicions on the validity of contract and requested handwriting authentication, the contract should be declared void by the authorities if the result of handwriting authentication turned out that the signature is signed not by the parties ." The [Buyer] argued that:

   -    One party to the contract requested handwriting authentication just after performing all of the duties under the contract for 20 months (the contract was fully performed in August 2000 and the handwriting authentication is requested on 6 February 2002);
 
   -    Even if the signature was forged, why did the [Seller] continue to deliver the goods? Why did the [Seller] still receive the right to the payment for the goods?

In addition, according to the theory of unauthorized agency, agency beyond the authority and agency period, if the principal ratifies the act, then the agency is effective and could bind the principal. In this case, the [Seller] ratified the validity of the signature in the contract through its conduct.

After the Arbitral Tribunal reviewed and verified the facts stated above: the [Buyer]'s authorization, the import by [Buyer]'s mandate, the signature and performance of contract No. 109/00 AND 111/00, the Confirmation for Purchase and the claim and argument against handwriting authentication from [Seller] and [Buyer], the Arbitral Tribunal concluded:

            (a) The No. 109/00 AND 111/00 Confirmation for Purchase signed by [Seller] and [Buyer] on 10 July 2000 was sufficient evidence submitted by the [Buyer] to prove that the [Seller] and [Buyer] signed a contract for sales of goods numbered 109/00 AND 111/00. This contract was performed fully and completely by both parties.

            (b) It is meaningless to conduct the handwriting authentication of the signature of one party in the Confirmation for Purchase (No. 109/00 AND 111/00) as the contract has been performed completely.

            (c) The Confirmation for Purchase (No. 109/00 AND 111/00) is a separate contract from the disputed contracts No. 109/00 and No. 111/00 in this arbitration and could only be considered as evidence submitted by the [Buyer]. The dispute for the contract 109/00 AND 111/00 is not within the scope of this arbitration.

      (2) Contracts 109/00 and Contract 111/00

      The [Seller] alleged that according to contracts No. 109/00 and No. 111/00 signed by both parties on 24 July 2000, after the [Buyer] issued an irrevocable L/C at sight in the amount of ItL 292,705,935 to the [Seller] as beneficiary, the goods under contract were shipped in the meantime the original letter of lading, together with all the documents were presented to the bank for negotiation. On 24 August, the negotiating bank notified the [Seller] that all the documents were consistent with the L/C. On 18 September 2000, the bank sent a notice to the [Seller] that the amount of the L/C was transferred to the [Seller]'s account. The [Seller] stated, "on 30 October 2000, the date of expiration stipulated in the contract for the telegraphic transfer of the other 50% of the payments, the [Buyer] did not make payment in accordance with the contract. Upon the notice by telephone call from the [Seller], the [Buyer] without reasonable excuse refused to make this payment. The [Seller] then applied for the arbitration according to the contract."

In response to the application for arbitration by the [Seller] based on contracts No. 109/00 and No. 111/00, the [Buyer] stated,:

"These are different contracts; they are different from the contract executed by the [Buyer]. The [Buyer] did not sign any of these two contracts. Li ___ signed these two contracts as a representative of the purchaser. However, it needs to be mentioned that Li ___ is no longer an employee of the [Buyer] and his signature was neither authorized nor ratified by the [Buyer]."

The Arbitral Tribunal noted that, the [Seller] made a statement about the process of negotiation of contract 109/00 and contract 111/00. The [Seller] alleged:

"Prior to 20 July 2000, the [Seller] via Su Zhou ___ Elevator Component Limited Liability Company reached an agreement with Li ___, the representative of the [Buyer] intending to cooperate with respect to the import of elevator components. Li ___ proposed articles of the import contract. On 20 July 2000, the [Seller] drafted a preliminary contract according to the relevant clauses and faxed it to the ___ Company (which was renamed as ___ Company) for review. On 21 July 2000, ___ Company sent back the second page of the draft to the [Seller] and asked [Seller] to modify Article 9(A) the time of delivery of shipping documents to the negotiating bank from 30 days prior to the shipment to 21 days prior to the shipment; On the same day, the [Seller] faxed the unsigned modified official contract to ___ Company (which used to be ___ Company) and sent to the [Buyer] one of two official contracts both with Mr. ___'s electronic signature through DHL (until now the original copy of this official contract has not been returned or sent back). Thereafter, ___ Company transferred to the [Seller] the faxed copy of the original official contract received and asked [Seller] to send it back after execution; the [Seller] received the contract and signed with electronic signature of Mr.___ and faxed it back to ___ Company. Then ___ Company faxed the contract to Li ___. Up till now, the entire procedure of executing the contract has been completed."

The [Seller] alleged:

"Li ___ acted as the representative of the [Buyer] for the negotiation with the contact person of the [Seller], Su Zhou Xi Er Kang Elevator Component Limited Liability Company on the issue of importing 100 units of traction machine; Moreover, Li ___, as a representative of [Buyer], had signed in the name of guarantor in Purchase Contract (No. 20BFTC-84021SICOR) and had stamped the seal of [Buyer] on that Contract. The [Seller] has reason to believe that Li ___ is the agent of the [Buyer]; therefore, the contracts (109/00 and 111/00) signed by Li ___ are effective."

The [Seller] alleged:

"Even though the date on the Confirmation for Purchase submitted by the [Buyer] was printed as 10 July 2000, the number 20BFTC-84021SICOR is the same number on the foresaid Purchase Contract signed on 20 July 2000 between Beijing ___ Trade Transportation Service Limited Liability Company and ___ Company. Moreover, the subject matters of the two contracts are the traction machine of the same type and quantity, which shows the close connection between the Confirmation for Purchase and Purchase Contract. The [Buyer] should have known of the existence of the Purchase Contract."

The Arbitral Tribunal comprehensively and carefully reviewed the [Seller]'s statement about the formation and execution of contracts 109/00 and 111/00, the argument on the issue of the effectiveness of contracts 109/00 and 111/00, and all of the materials and evidence submitted by both parties. The Arbitral Tribunal's opinion is that the issue in this case is whether the contracts 109/00 and 111/00 are effective, and whether Li ___ had the complete capacity of civil right and civil disposition to sign contracts 109/00 and 111/00 on behalf of [Buyer], Beijing ___ Import and Export Company. Through the court session , the Arbitral Tribunal found that the [Buyer] has evidence to prove that Li ___ is no longer its employee. Furthermore, Li ___ was not authorized to sign the contract in this case and the contract was not ratified by the [Buyer]. In the second court session on 18 July 2002, the Arbitral Tribunal found that both parties have never contacted with each other with respect to these two contracts (No. 109/00 and No. 111/00) through letters or telegrams. The [Seller] and Li __, purporting to act as the representative of the [Buyer], through the [Seller]'s contact person, ___ company reached the intent to cooperate and Li provided the [Seller] the terms of Imports Contract."

In summary, the Arbitral Tribunal holds that contracts 109/00 and 111/00 were established by [Seller] and Li ___, and that the [Buyer] was not a party to these two contracts.

      (3) Contract 20BFTC-84021SICOR

      The Arbitral Tribunal notes that, to prove that Li ___ signed contracts 109/00 and 111/00 on behalf of [Buyer], the [Seller] submitted Purchase and Sale Contract 20BFTC-84021SICOR between Beijing ___ Trade Transportation Service Limited Liability Company (seller) and Su Zhou ___ Elevator Component Limited Liability Company (buyer) providing for purchase of 100 elevator traction machines from [Seller]. As guarantor for the seller, Li ___ signed and stamped the [Buyer]'s company's seal on 20 July 2000.

Regarding Contract 20BFTC-84021SICOR submitted by the [Seller], the [Buyer] stated in the several documents submitted in and after the court session that the [Buyer] did not know of the existence of this contract and had never been the guarantor for the [Seller]'s performance of the contract. Meanwhile, the [Buyer] asked the [Seller] to provide the original copy of the contract and requested the Arbitral Tribunal to authorize the relevant institution for technical verification. Regarding the statement of the [Buyer], the [Seller] argued "the contract was signed and sealed by the [Seller] and the guarantor and faxed to the [Buyer], Su Zhou ___ Elevator Component Limited Liability Company, and that, after receipt of the facsimile copy, Su Zhou ___ Elevator Component Limited Liability Company confirmed and stamped its corporate seal and faxed it back to the [Seller]. There is no possibility that the original contract was sealed by three parties at the same time, the [Seller] could only provide the faxed copy kept by the Su Zhou ___ Company which was stamped with the seal of Su Zhou ___ Company." In response to the argument of the [Seller], the [Buyer] stated, "Even though the contract was sent through facsimile, there still could be an original copy " On the same day, the [Buyer] provided the model of its corporate seal for purpose of "the identification of the seal stamped on Contract 20BFTC-84021SICOR requested by the [Seller]," but the [Seller] has never provided any evidence related to Contract 20BFTC-84021SICOR. Since the [Seller] failed to provide any effective evidence, the Arbitral Tribunal does not support its allegation.

      (4) The arbitration claim by the [Seller] asking the [Buyer] to make the payments for goods under contracts No. 109/00 and No. 111.00

      The Arbitration Tribunal finds that the [Seller] applied for the arbitration on the basis of two contracts, No. 109/00 and No. 111/00 which were allegedly signed by the [Seller] and the [Buyer] (the representative of [Buyer] is alleged to be Li ___); However, the [Buyer] alleged that the [Buyer] did not sign these two contracts, because Li ___ is not its employee, and was not authorized to sign the contract, and Li ___'s signature was not ratified by the [Buyer].

The [Buyer] argued "Li ___ was no longer an employee of our company on 24 July 2000 when Li ___ signed contracts No.109/00 and No.111/00." And the [Buyer] provided material and a certificate from the Human Resource Department of the [Buyer] which was issued on 26 March 2002 stating:

"Mr. Li ___ moved from school to our company in August 1989. We terminated the employment relationship with him in January 1993, and in May 1993 his archives were transferred to the Municipal Human Resource Center."

On 15 and 16 May 2002, the [Buyer] provided related Industrial and Commercial Information for Inquiry and the Business License for Enterprises as Legal Persons of Beijing ___ Trade Transportation Service Limited Liability Company issued by Beijing Industrial and Commercial Administrative Bureau. After certifying these documents and material. The Arbitration Tribunal found that Li __ was the legal representative of Beijing __ Trade Transportation Service Company which was registered on 1 January 1996; the registered capital is RMB 500,000 and the period of business is permanent. The Curriculum Vitae of the Legal Representative in the Industrial and Commercial Information for Inquiry shows that Li __ worked in the Import and Export Department of Beijing ___ Import and Export Company from August 1989 to October 1992 and worked in the Human Resource Department of Beijing ___ Business Service Company from October 1992 to February 1995.

Through the verification of the certification from the Human Resource Department of Beijing ___ Import and Export Company and the Information for Inquiry provided by the Archives Center of Beijing Industrial and Commercial Administrative Bureau, the Arbitral Tribunal concludes that from October 1992 to January 1993, Li ___ was no longer an employee of the [Buyer]'s company, and from January 1993 to February 1995, Li ___ was working for Beijing ___ Business Service Company and was the legal representative of Beijing ___ Trade Transportation Service Limited Liability which was set up in December 1995.

At the court session, the Arbitral Tribunal also notes that it was determined that Beijing ___ Trade Transportation Service Limited Liability Company is the seller of Contract 20BFTC-84021SICOR which was submitted by the [Seller] and is also the consignee of the Contract for Importing by Mandate which was provided by the [Buyer]. The Arbitral Tribunal concludes that from January 1996 to the early of 2001, Li ___ was the legal representative of Beijing ___ Trade Transportation Service Limited Liability Company and was also the General Manager of that company, but not an employee of the [Buyer]'s company. Therefore, during the aforesaid period, Li ___ had no authority to sign the contracts No. 109/00 and No. 111/00 on behalf of the [Buyer].

As stated above, the Arbitral Tribunal dismisses the [Seller]'s claim based on the arbitration clauses of the contracts No. 109/00 and No. 111/00 to request the [Buyer] to pay the arrearage in amount of ItL 292,705,935.00.

3. The Arbitral Tribunal holds that the [Seller] should bear the entire arbitration fee.

AWARD

As stated above, the Arbitral Tribunal:

1. Dismisses all of the claims of the [Seller]; and

2. Rules that the [Seller] should bear entire arbitration fee in amount of US $5,616.50; This payment has been offset by US $5,616.50 pre-paid by the [Seller] to the Arbitration Commission.

This is the final award.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant is referred to as [Seller] and Respondent of the People's Republic of China is referred to as [Buyer]. Amounts in the currency of the United States (dollars) are indicated as [US $]; amounts in the former currency of Italy (Italian lire) are indicated as [ItL].

** Cheng Shu is an LL.M. candidate, New York University School of Law.

*** Zheng Xie, LL.M. Washington University in St. Louis, LL.M., BA in Economics, University of International Business and Economics, Beijing.

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