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CISG CASE PRESENTATION

China 2003 [assigned date] Shanghai No. 1 Intermediate People's Court [District Court] (Shanghai Weijie Electronic Devices Ltd v. Superpower Supply Inc) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030000c1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20030000 (2003) [assigned date]

JURISDICTION: People's Republic of China

TRIBUNAL: Shanghai No. 1 Intermediate People's Court [District Court]

JUDGE(S): Unavailable

DOCKET NUMBER: (2000) Hu Yi Zhong Jing Chu Zi Di No. 727 t

CASE NAME: Shanghai Weijie Electronic Devices Ltd. v. Superpower Supply Inc

CASE HISTORY: Unavailable

SELLER'S COUNTRY: People's Republic of China (plaintiff)

BUYER'S COUNTRY: United States (defendant)

GOODS INVOLVED: Computer cases


Classification of issues present

APPLICATION OF CISG: The court stated:

"Since the parties failed to choose the applicable law, the Closest Connection Doctrine should be applied. In this case, [Seller] is an entity established in China and the place of delivery was in Shanghai, China, according to the FOB item in the contract. Therefore, China has the proximate connection with this contract and Chinese law should be the applicable law. At the same time, since the places of business of the parties both are in Contracting States of the CISG, Article 142(2) of the General Rules of Civil Law of the PRC stipulates that the CISG will prevail if there is conflict between the CISG and Chinese law. According to the Contract Law of the PRC, the parties shall abide by the principle of good faith; after the seller has finished the delivery under the terms of the contract, the buyer should pay the purchase price and compensate for losses. The same requirement will be found in the CISG. Therefore the Contract Law of the PRC is the applicable law in this case." [The citation that follows is to the Contract Law of the PRC.]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 6

Classification of issues using UNCITRAL classification code numbers:

6A [Autonomy of parties: [implicit] agreement to apply Convention, to exclude Convention]

Descriptors: Autonomy of parties ; Choice of law

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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): Click here for Chinese text of case; see also CISG-China Case [IPC/16]: <http://aff.whu.edu.cn/cisgchina/en/news_view.asp?newsid=62>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Global jurisconsultorium case translation program

First Intermediate People's Court of Shanghai [Assigned date: 2003]

Shanghai Weijie Electronic Devices Ltd. v. Superpower Supply Inc.

Translation [*] by Zhou Xishu and Chen Lili [**]

-   Proceedings
-   Position of the parties
-   Issues present and Court's resolution of these issues
      -   Ruling on the applicable law
      -   Other rulings
-   Judgment

I. PROCEEDINGS

The Plaintiff, Shanghai Weijie Electronic Devices Ltd., [of the People's Republic of China] (hereafter "[Seller]"), filed suit before the First Intermediate People's Court of Shanghai over a dispute with the defendant, Superpower Supply Inc., [of the United States] (hereafter, [Buyer]), regarding their sales contract. On 28 November 2000, the Court formed a collegiate bench, and held public court sessions on 29 August 2002, 15 January 2003 and 24 April 2003. The [Seller]'s representatives attended all of the court session, and the [Buyer]'s representatives attended the first and third court session, but were absent in the second court session. This case has been concluded.

II. POSITION OF THE PARTIES

1. [Seller]'s claims

[Buyer] concluded a sales contract with the [Seller] pursuant to which purchase orders were processed from 4 January 2000 to 15 August 2000 for many kinds of computer cases. The Incoterm was FOB. Payment terms were by wire transfer 90 days from dispatch of goods. Before 10 July 1999, Wu Jiansheng and Wang Yanhui (hereafter "Wu &Wang") confirmed the OEM prices list of all kinds of computer cases and the price list of PU Panel Unit by signatures. [Seller] delivered the products in accordance with the purchase orders. The total price was specified as US $1,875,718.54. The [Buyer] paid the [Seller] US $516,460.55. However, the [Buyer] was in default on US $1,359,257.99 for the goods delivered by the [Seller]. This was a breach of the contract. The [Seller] requested the Court to rule that:

     1)    The [Buyer] shall pay the [Seller] the remaining amount due on the goods: US $1,359,257.99; and
     2)    The [Buyer] shall pay the [Seller] a charge in the amount of 0.021% of the total overdue value for the breach of contact.

2. The [Buyer]'s defense

[Buyer] alleged that Wu Jiansheng, Wang Yanhui were agents of Xinhong Electronic Devices Ltd. working at [Buyer], not the [Buyer]'s agents. There was no contractual relationship between [Seller] and [Buyer], and [Buyer] only took delivery of part of the goods. The price in the purchase orders provided by [Seller] was zero. The US $100,000 was the payment transferred by [Buyer] to Taiwan Huanxin company, [Buyer] had no contractual obligation to pay [Seller] for the goods.

According to both parties, there are three issues in this case:

     1)    The status of Wu Jiansheng, Wang Yanhui;
     2)    Whether a contract between [Seller] and [Buyer] existed or not;
     3)    The purchase price for specific performance of the contract.

III. ISSUES PRESENT AND THE COURT'S RESOLUTION OF THESE ISSUES

1. ISSUE ONE: The status of Wu Jiansheng and Wang Yanhul

Evidence submitted by [Seller]

     1) The business registration application form and materials (including power of attorney, application form for establishing a foreign-investment enterprise in China, name list of board, the identity documents of Lu Jinchang,Wu Jiansheng and Wang Yanhui, Foreign-Invested Enterprise Approval Notice and Approval Certificate for foreign-investment enterprises) of Ding Shun Li Computer Ltd. invested by [Buyer]. Submitted to prove the status of "OTTO LU", "Wu Jian Sheng" and "Wang Yan Hui";

     2) Four fax mails to Lu, president of [Seller], by OTTO LU, the legal agent of [Buyer]. Submitted to prove Wu Jiansheng was entitled to represent [Buyer];

     3) The business card of Wu Jiansheng and Wang Yanhui; And three mails in the name of "Shanghai SUPERPOWER" to contact business. Submitted to prove Wu Jiansheng was [Buyer]'s representative in Shanghai;

     4) Three application letters for loaning money to [Seller], sent by Wu Jiansheng and Wang Yanhui as [Buyer]'s employees; a letter to [Seller]'s president for the pay packets of Liu Feilong, Pan Jianjun and Ma Xin, sent by Wu Jiansheng; six final statements of [Seller]'s other charges; two recapitulation statements of staff not living in the dormitory; and five telecom fees bills. Submitted to prove that [Buyer]'s operations departments including Wu Jiansheng, Wang Yanhui, Cai Xue, Liu Fei, Pan Jianjun, Zou Meng, Wu Zhihua, Ma Xin, and the staff worked in [Seller].

     5) Seven liaisons; nine letters addressed to [Seller]' staff of goods producing, quality and transportation. Submitted to prove the fact that Wu Jiansheng and others have business contact with [Seller].

[Buyer]'s response

[Buyer] has no objection to the the authenticity of these items of evidence provided by [Seller], [Buyer] has no objection, except for the fax letter sent in the name of "OTTO LU" and the two business cards. For the content of the evidence, [Buyer] argued:

     1)   [Buyer] did not set up operation departments in Shanghai, Wu Jiansheng was the representative of Xinhong Electronic Devices Ltd.;
     2)   The authorization which [Buyer] gave to Wu Jiansheng while establishing Kunshanding Shunli Computer Ltd., was separate and specific;
     3)   The content reflected by the contract list was a connection within [Seller];
     4)   [Buyer]'s legal agent contacted with [Seller] by letter in the name of consignee.

At the same time, [Buyer] requested to refer the handover receipt of bill of lading (hereafter B/L) (of 4 November 1998) as evidence which was provided by [Seller] and not available. In addition to prove that the staff in the handover receipt of the B/L including Wu Jiansheng, Cai Xue, Liu Feilong, Pan Jianjun, Ma Xin were employees of [Seller].

[Seller]'s response

[Seller] confirmed the authenticity of the handover receipt of the B/L, and argued that the handover receipt of B/L was only able to prove the trade with [Buyer] which had already begun in November 1998, it could not prove the [Buyer]'s point of view.

Facts identified by the Court

     1) The facts associated with the two business cards were not clear, and [Buyer] had objection, so the Court does not treat them as reliable evidence;

     2) [Buyer] also objected to the reliability of the fax mail sent by "OTTO LU", however, [Seller] showed the original copy of fax mail sent by "OTTO LU", which could be proved mutually, so the authenticity of this exhibit was proved;

     3) [Buyer] had no objection to the reliability of the identity cards of Wu Jiansheng and Wang Yanhui, also the reliability of the Approval Certificate for foreign-investment enterprises, but there was no relationship between the dispute and these exhibits, so they were inadmissible;

     4) Neither party had objection to other materials, thus the Court sustains the authenticity of these exhibits.

According to the certificated evidence, the Court recognized the following facts:

     1) On 3 August and 2 November 1998, "OTTO LU" had sent letters to [Seller]'s president Lu, "... go to Shanghai to meet with you, à first to state the matters discussed briefly as follows: à # 6 Shanghai SUPERPOWER's business department, etc."; "The procurement of 'pre-processing equipment' matter briefly as follows, Wu Jiansheng with me chosen ' Co., Ltd.', detailed specifications ..., etc., Wu Jiansheng has very carefully ... surveyed, so he would report determinants, information and quotations to your face;"

     2) On 13 November 1998, Wu Jiansheng sent a letter to [Buyer]'s president Lu for the problem of wage determination of Liu Feilong, Ma Xin and Pan Jianjun, and for paying the price difference that may exist, and to settle accounts with [Buyer];

     3) The non-residential staff dining summary table showed the fee deduction of Wu Jiansheng, Wang Yanhui, Cai Xue, Liu Fei, Pan Jianjun from 26 November to 25 December 1998, which was signed by Wang Yanhui and noted by [Seller];

     4) The non-residential staff dining summary table shows the fee deduction of Wu Jiansheng, Wang Yanhui, Cai Xue, Liu Fei, Pan Jianjun, Xue Meng, Wu Zhihua, Ma Xin from 26 April to 25 May 1994, which was signed by Wu Jiansheng and noted by [Seller];

     5) Wu Jiansheng and Wang Yanhui applied to the [Seller] for loans at the end of 1998, respectively;

     6) On 17 August 1999, [Buyer]'s legal agent Lu Jinchang gave a power of attorney to Wu Jiansheng, authorizing him to handle the application procedure of setting up a foreign-investment enterprise, Kunshanding Shunli Computer Ltd. In the power of attorney, besides the name Lu Jinchang, was noted "OTTO LU" in English. The board list and Foreign-Investment Enterprise Approval Notice registered by the State's competent department in charge of industry and commerce administration, when establish Kunshanding Shunli Computer Ltd. by [Buyer] showed that Wu Jiansheng was Deputy Director CEO and Wang Yanhui was Director of Kunshanding Shunli Computer Ltd. which was an individual proprietorship held by [Buyer]. The application form for establishing a foreign-investment enterprise in China stated that [Buyer]'s contract person in China was Wu Jiansheng, and the phone number was 021-58577249. The Telecom fee bills stated that from May to June 1999, the consumer was [Seller], and the bill to [Seller] that was paid for by [Buyer], was confirmed by the signature of Wu Jiansheng in the name of [Buyer]'s responsible person. Moreover, Wu Jiansheng and Wang Yanhui were confirmed by signatures in the other bills to [Seller] which were paid for by [Buyer].

     7) The fax mail sent by Wu Jiansheng in the name of [Buyer] to business connection stated that the address of [Buyer] was No. 1 Weijie Road, Qiaonong Industrial Park, Sunqiao town, Pudong New District, Shanghai. The connection lists and connection mails from 1998 to 2000 of both parties show that Wu Jiansheng, Cai Xue, Liu Feilong, Pan Jianjun were connecting with [Seller] all the while.

     8) In the handover receipts of the B/L, from 4 November 1998 to 24 March 1999, the staff signing on the bill of lading was Li Wei, Li Feng, and after that time, it was Cai Xue, Liu Feilong, Pan Jianjun and Ma Xin.

     9) In the two undated mails, "OTTO LU" had connection with [Seller] for the business plan of 2000. One mail noted, "The purchase order forms made by Wu Jiansheng! Whether each container could be delivered or not is very important to us! So please!" And another mail attached to the two pages of the delivery plan in 14 March 2000 made by Wu Jiansheng noted, "Attached two pages of the detail of urgent need for delivery by our European company à How could you only stare at our increase of business and purchase orders, but cannot deliver, à please deliver as soon as possible!"

Facts analysed by the Court

The Court notes that the power of attorney for [Buyer]'s legal agent Lu Jinchang shows that "OTTO LU" is his English name. The letter "OTTO LU" sent to [Seller]'s general manager indicates that the business relationship between [Seller] and [Buyer] existed from 1998. From 1998 to 2000 û on behalf of [Buyer], Wang Jiansheng, Wang Yanhui, Cai Xue, Liu Feilong, Pan Jianjun and Ma Xin were giving [Seller] direction or coordinating with [Seller] in the name of [Buyer]'s staff in the Shanghai department. The letter sent by "OTTO LU" also confirms the plan of eatablishing the [Buyer]'s department in Shanghai and the validity of purchase order made by Wu Jiansheng.

The Court holds that, although the establishment of [Buyer]'s department in Shanghai did not follow the legitimate procedure, Wu Jiansheng and others worked for the commercial profit of [Buyer] in the name of [Buyer]'s department in Shanghai, and represented [Buyer] to order goods, coordinate production, arrange plan of shipments, receive the certificate of goods. [Buyer]'s legal agent also confirmed the purchase order made by Wu Jiansheng in 2000, which was made in the name of [Buyer]. Base on these facts, [Seller] had reason to believe Wu Jiansheng had the authority to issue purchase orders, and also to believe that Wang Yanhui, Cai Xue, Liu Feilong, Pan Jianjun, Ma Xin were entitled by [Buyer] to receive the goods.

2. ISSUE TWO: The contract relationship between [Seller] and [Buyer]

Evidence submitted by [Seller]

     1) Material downloaded from the [Buyer]'s website and the [Seller]'s product literature stating that [Buyer] had a department in Shanghai, and the list of [Buyer]'s products including the products produced by [Seller]. Submitted to prove that [Buyer] has purchased from [Seller] the same kind of goods involved in this case;

     2) The book of invoice handover (beginning in 3 November 1998) indicated that the [Buyer]'s staff had received the invoice of goods. Submitted to prove the contract relationship between [Seller] and [Buyer] existed from 3 November 1998;

     3) The list of payment of goods from [Buyer] and the payment voucher amounting to US $3,794,970.84 stated that [Buyer] had to pay the bill of the contract.

     4) The part of purchase order not paid by [Buyer] specified the clause of subject matter, quantity, time of performance, place of performance and payment terms. Submitted to prove the contract relationship between the parties.

     5) The OEM prices list of many kinds of computer cases and the price list of PU Panel Unit (here after "price confirmation"). Submitted to prove the way of price valuation;

     6) A letter to [Seller]'s President from "OTTO LU" undated. Submitted to prove that the contract relationship between parties existed from 2000.

[Buyer]'s response

[Buyer] had no objection to the authenticity of these items of evidence provided by [Seller], [Buyer] had no objection, except for the purchase order without Wu Jiansheng's signature and the fax letter sent in the name of "OTTO LU". However, [Buyer] argued:

     1)   The material in [Buyer]'s website and the mail from "OTTO LU" could only prove [Buyer] had received the goods from [Seller];
     2)   The [Buyer] having receiving goods and the payment for a customer could not prove the contract relationship claimed by [Seller];
     3)   The party shown in the purchase order was Xinhong Electronic Devices Ltd.;
     4)   Wu Jiansheng and Wang Yanhui had no authority to sign the contract on [Buyer]'s behalf.

[Buyer] provided no evidence to support its rebuttal.

Facts identified by the Court

     1)   The authenticity of purchase order without the signature of Wu Jiansheng could not be proved and it was objected to by [Buyer], so it is inadmissible;
     2)   [Seller] had shown the original copy of the fax mail sent by "OTTO LU", so its authenticity has been proved;
     3)   The Court recognized the fax mail sent by "OTTO LU" and other evidence recognized by both parties related to this issue as evidence to prove the facts on this issue;

According to the certificated evidence and the statement in Issue One, the Court recognized the following facts:

     1) [Buyer]'s legal agent "OTTO LU" said in mail dated 3 August 1998, " ... about the arrearage, from 1 February 1998 to 8 May 1998, you have delivered 23,300 boxes, and I have 14,000 boxes in stock to date à Our financial condition is stressed à the details of both parties were different, we should check face by face à hope discuss after meeting!"

     2) From 22 November 1998 to 15 March 2000, Wu Jiansheng, Cai Xue, Pan Jianjun had received by signature all of the invoices except for some. From 17 April to 16 June 2000, Cai Xue received the invoices numbered 000097 to 0000183. (Except for No. 0000166, 0000167, 0000169, 0000170, 0000173, 0000174, 0000176, and No. 0000178 was vacant, No. 0000140 was cancelled, and No. 0000160 was replaced by No. 0000171)

     3) From 22 March 1999 to 10 August 2000, [Buyer] had paid US $3,793,970.84 to [Seller] after receiving the goods delivered by [Seller];

     4) From 17 February 2000, Wu Jiansheng had submitted purchase orders to [Seller] for all kinds of computer boxes by signature in the name of [Buyer]. Both Xinhong Electronic Devices Ltd. and SUPERPOWER-SHANGHAI were shown in the purchase order in title, and the purchase orders specified that [Seller] was the supplier. The Incoterm was FOB Shanghai, the charge per unit was in US dollars, the manner of payment was Wire Transfer 90 days after receipt, the price in the purchase orders was zero or blank. Each purchase order had noted the receiving company, place, way of department and port of discharge separately;

     5) From 10 June to 10 July 1999, Wang Yanhui and Wu Jiansheng had confirmed the price of the goods related to the case by signing on the price confirmation list;

     6) In the three undated letters sent by [Buyer]'s legal agent, (including two letters as evidence in the first issue and one in this issue) "OTTO LU" has contracted with [Seller] for the business plan in 2000 of [Buyer]. In one of these letters, "OTTO LU" said, "The purchase orders made by Wu Jiansheng: Whether you could have each container delivered or not is very important to us! I hope you would deliver at least 7 containers per week from 25 February à and make 398, 300, 301, 302 as a container should by delivered every 2 weeks à Please do that from 18 February and lasting two months! Therefore the quantity of goods can meet our business plan in 2000!" And in this letter, "OTTO LU" also wished a Happy New Year to [Seller]'s president. In another letter attached with the pages of the delivery plan made by Wu Jiansheng on 14 March 2000, "OTTO LU" said, "Attached are two pages of the detail of urgent need for delivery by our European company à How could you only stare at our increase of business and purchase orders, but cannot deliver? à Please deliver as soon as possible!" At the end of this letter, "OTTO LU" said, "How many boxes can be delivered in the week from 20 to 24 March and in next week from 27 March to 1 April, which connected with the performance of SUPERPOWER in 2000. It will be a far and deep reaching influence, all of everything based on you, so please! à the promise for transferring US $200,000 to you will be kept, but the delivery should be based on you!" When [Buyer]'s legal agent required [Seller] to deliver, the types and quantity were definitely stated in the three letters above.

Facts analyzed by the Court

The Court notes that the letter sent by [Buyer]'s legal agent on 3 August 1998 stated that [Buyer] had received the goods delivered by [Seller] and paid for them. The information in the book of invoice handover and the payment to [Seller] could prove that the contractual business relationship between [Seller] and [Buyer] existed in 2000. In the three undated letters sent by [Buyer]'s legal agent, it can be inferred that all the letters were sent in the beginning of 2000 and it can prove that [Buyer] had required [Seller] to deliver in 2000. Although both Xinhong Electronic Devices Ltd. and SUPERPOWER-SHANGHAI were shown in the purchase order of 17 February 2000, it was a nominal description, which Wu Jiansheng had signed in the name of the [Buyer].

Combining these facts with other purchase orders, price confirming list and the invoices after No. 000097, this Court concludes that a contractual relationship between [Seller] and [Buyer] has existed from 17 February 2000.

3. ISSUE THREE: The purchase price for specific performance of the contract

Evidence submitted by [Seller]

     1) The Packing List, forty-nine copies of declarations for exportation, forty-six copies of B/L and the handover receipt in line with the purchase order. Submitted to prove the quantity of the goods delivered by [Seller].

     2) The receipt and disbursement list of the two computer cases and 6348PCS parts and components picked up by [Buyer]. Submitted to prove the quantity of the goods picked up by [Buyer].

     3) The one hundred and six invoice stubs or customs of the unpaid purchase price. Submitted to prove that the amount of unpaid purchase price by [Buyer] was US $1,259,257.99.

     4) The letter dated 3 September 1999 of Wu Jiansheng. Submitted to prove that the US $100,000 transferred to the third party should be deducted from the paid purchase price.

     5) A freight invoice, submitted to prove that the reimbursed expenses of freight amounting to US $185,538.38 had been deducted from the paid purchase price.

     6) The sales contract between Xinhong Electronic Devices Ltd. and Hesheng International Investment Ltd., the sales contract between [Seller] and Hesheng International Investment Ltd, two copies of payment notice, the payment and acceptance notice under L/C. Submitted to prove that Xinhong Electronic Devices Ltd. did not provide mould to [Seller], and [Buyer] was not entitled to obtain the goods for free.

[Buyer]'s response

[Buyer] argued that the Packing List, the one hundred and six invoice stubs, the receipt and disbursement list picked up by [Buyer], and the freight invoice were all made by [Seller] unilaterally. The fax signed by Wu Jiansheng which confirmed the transfer payment, the B/L whose receiver was not [Buyer] were all copies of doubtful authenticity. [Buyer] admitted the other evidence materials were true. Further, [Buyer] contended that the declaration for exportation without the examining of customs could not prove the goods had been declared. The signatures on the B/L and the handover receipt by Wu Jiansheng etc. were only internal signatures records of [Seller]. The B/L whose receiver was not [Buyer] could not certify that [Seller] had delivered the goods to [Buyer]. Besides, Xinhong Electronic Devices Ltd. had provided mould to [Seller] for free apart from the purchase by [Seller] itself.

To prove its defenses, [Buyer] provided the following evidence

     1) The pleadings and power of attorney of Xinhong Electronic Devices Ltd. in a suit against the [Seller]. Submitted to prove that Xinhong Electronic Devices Ltd. had transferred the mould to [Seller], thus [Buyer] was entitled to obtain the goods for free.

     2) The contract of transferring the mould, to prove that [Seller] had transferred the mould provided by Xinhong Electronic Devices Ltd. to Kunshanding Shunli Computer Ltd.

[Seller]'s response

[Seller] admitted the authenticity of the evidence materials provided by [Buyer], but denied their relevance.

Facts identified by the Court

After examining the evidence materials, this Court ascertained that:

For the [Seller]'s evidences,

As to the Packing List, since it was not translated to Chinese and did not comply with the formality requirement, the Court does not sustain the authenticity of this evidence. As to the freight invoice, since it was made by [Seller] unilaterally, and without confirmation by other evidence, this Court does not sustain the authenticity of this evidence either. However, since there was other evidence to confirm the receipt and disbursement list of the goods picked up by [Buyer], this court sustains the authenticity of that evidence. The declaration for exportation without the examining of customs could not be accepted by the Court as evidence because of its illegible writing. Since [Seller] has shown the original copy of fax signed by Wu Jiansheng which confirmed the transfer payment, this Court affirms its authenticity. The 31 copies among 37 copies of B/L whose receiver was not [Buyer] had been received by the officers of [Buyer], and [Buyer] did not present the original 31 copies of B/L to deny the authenticity of the B/L. Therefore, this Court affirms their authenticity. Although the receiver of the other 6 copies of B/L was not the [Buyer] (the two of which were the European company of [Buyer]), they could be confirmed by the purchase order signed by Wu Jiansheng, the declaration for exportation with complete seals etc. (the invoices of the 5 copies of B/L had been signed by [Buyer]). Furthermore, it was in conformity with the export trade situation for [Seller] to only hold the duplicate copies of B/L after delivery. Thus, this Court confirms the authenticity of such 6 copies of B/L. Besides, since the parties had not questioned the authenticity of other evidence materials, this Court affirms them.

As to the confirmed evidence materials:

     -    The declaration for exportation, the B/L, and the handover receipt had connection with the formation and performance of the contract;
     -    The receipt and disbursement list of the goods picked up by [Buyer] had connection with the performance of the contract;
     -    The one hundred and six invoices had connection with the amount of the debatable purchase price;
     -    The letter dated 3 September 1999 of Wu Jian-sheng had connection with the amount of the debatable purchase price.

Since the confirmed evidence materials had connection with the dispute and complied with the formality requirement, this Court affirms their authenticity. The contract of transferring the mould, evidence of payment and the pleadings and power of attorney of Xinhong Electronic Devices Ltd. in the suit against [Seller] had no direct connection with this dispute, therefore, this Court does not sustain the authenticity of this evidence.

Based on the confirmed evidence materials, the Court ascertains the following facts:

On 3 September 1999, Wu Jian-sheng, on behalf of [Buyer], sent the letter to confirm that the US $100,000 transferred by [Seller] to Taiwan Huanxin Company should be deducted from the purchase price paid by [Buyer] on 3 August 1999.

As to the paid purchase price, since [Buyer] did not dispute this part, this Court will calculate the specific unpaid purchase price based on the statements and evidence concerning the performance provided by [Seller].

Among the deals with the B/L to prove the delivery of the goods, the following two conditions should be distinguished:

     1) For the part that [Buyer] had signed, the purchase price will be determined according to the invoices;

     2) For the part that [Buyer] had not signed, the B/L in line with the five invoices numbered 000089, 000090, 000091, 000092, 000099 did not record the bulk cargo, and could not prove that [Seller] had delivered the bulk cargo to [Buyer]. Thus, when ascertaining the purchase price recorded by the five invoices, the price of the bulk cargo amounting to US $1,350 should be deducted. As to the other part that [Buyer] had not signed, the quantity of the goods recorded by the invoices was in conformity with the amount recorded by the B/L. However, the price of the KS-201 goods recorded by invoice numbered 0000219 was higher than the amount of price confirmation. Thus this Court sustains the amount of US $10,225.80 according to the price confirmation. Besides, the other price recorded by invoices was lower than or was the same as the amount of price confirmation, thus this Court affirms this part of purchase price based on the invoices. In sum, the purchase price of deals with the B/L amounts to US $1,186,197.38.

Among the deals without the B/L to prove the delivery of the goods, the order and order alternation notice in line with the invoice numbered 0000218 were signed by Wu Jian-sheng, and the consignee recorded by the order was [Buyer]. In addition, [Seller] had applied the goods to customs later; thus [Seller] had finished its delivery obligation. Since the price recorded by invoices was in conformity with the amount of price confirmation, this Court sustains the purchase price amounting to US $61,503 under these invoices. As to the deals with the air transport and consolidation transport, [Seller] did not provide the farther evidence of delivery. Therefore, this Court does not sustain the purchase price amounting to US $11,002 in line with the invoices numbered 000075, 000086, 000093, 0000106, 0000107, 0000142.

Concerning to the goods picked up by [Buyer], this Court affirms based on the receipt, disbursement list of [Buyer], the confirmed calculated basis, and distinguishes the following two conditions:

     1)   The case in which [Buyer] signed both the disbursement list and the invoices: This Court affirms the value of the goods picked up by [Buyer] according to the invoices signed by [Buyer]. The invoices numbered 0000144, 0000145, 0000165, 0000172 are located in this sphere, which amounted to $2, 451.46 in sum.
 
     2)   The case in which [Buyer] only signed the disbursement list: This Court affirms the value of the goods picked up by [Buyer] according to the goods received by [Buyer] in practice, and sustains the parts affirmed by the receipt list and price confirmation. The invoices numbered 000094, 000095, 0000199, 0000216 are located in this sphere, which amounted to $560.40 in sum.

Based on the above, after [Buyer] signed the order numbered PA-0002041 on 17 February 2000, [Seller] had delivered goods valued at US $1,250,712.24 in the way required by the order and [Buyer], including: the exported goods valued US $1,247,700.38, and the goods picked up by [Buyer] valued at US $3,011.86. Besides, [Seller] had transferred US $100,000 to Taiwan Huanxin Company from the purchase price paid by [Buyer] on 3 August 1999.

Ruling on jurisdiction

This Court holds that it has jurisdiction over this dispute because the legal relation between parties was the contractual legal relationship for the International Sale of Goods, and the loci of the contracts was in the Court's district.

Ruling on the applicable law

Since the parties failed to choose the applicable law, the Closest Connection Doctrine should be applied. In this case, [Seller] is an entity established in China and the place of delivery was in Shanghai according to the FOB item in the contract. Therefore, China has the proximate connection with this contract and Chinese law should be the applicable law. At the same time, since the places of business of the parties both are Contracting States of the CISG, Article 142 (2) of the General Rules of Civil Law of the PRC stipulates that the CISG will prevail if there is conflict between the CISG and Chinese law. According to the Contract Law of the PRC, the parties shall abide by the principle of good faith; after the seller has finished the delivery under the terms of the contract, the buyer should pay the purchase price and compensate for losses. The same requirement will be found in the CISG. Therefore, the Contract Law of the PRC is the applicable law in this case.

Other rulings

This Court holds that, based on the behavior of Wu Jiansheng, etc., the statements of the legal representative of [Buyer] and other facts, it was reasonable for [Seller] to believe that Wu Jiansheng had the authority to sign the contract on behalf of [Buyer], and the other officers of [Buyer] had the authority to perform the contract. Thus, the contractual formation and performance of Wu Jiansheng, etc. had legal binding force over [Buyer].

The price of the goods delivered by [Seller] had been affirmed according to the agreement of the parties and the invoices; however, [Buyer] did not pay in the contractual way and date. Thus, [Buyer] breached the contract and should bear the responsibility. The [Buyer]'s argument that there was no contractual relationship between the parties and that the purchase price was zero was denied by the confirmed evidences, thus the Court dismissed this argument.

Based on the evidence materials of the purchase price provided by [Seller] and the transferred US $100,000 to the third party, the total amount of unpaid purchase price by [Buyer] was US $1,369,529.49. The sued amount of unpaid purchase price was US $1,359,257.99. This Court sustains the unpaid purchase price amounting to US $1,350,712.24 based on the confirmed evidence.

Considering the submission of [Seller] that [Buyer] should bear the compensation of late payment from 90 days after the last batch of delivery at the rate of two point one out of ten thousand per day, the Court upholds such submission since it is reasonable. Simultaneously, the last delivery date for [Seller] was 23 August 2000, therefore, the date of overdue interest was 21 November 2000, not 18 November 2000 as alleged by [Seller].

IV. JUDGMENT

According to Article 243 of Civil Procedure Law of the PRC and Article 107 of Contract Law of the PRC, this Court hands down the following judgment:

     -    Defendant [Buyer] shall pay to Plaintiff [Seller] US $1,350,712.24 and the compensation of late payment within ten days of the effective date of the judgment (it shall be calculated from 21 November 2000 to the effective date of this judgment at the rate of two point one out of ten thousand per day).
     -    The litigation fee was 71,297 RMB in total and should be paid to this Court within seven days of the effective date of the judgment. [Seller] should bear 448 RMB and [Buyer] should bear 70,849 RMB.

Should there be an objection to this judgment, [Seller] may appeal by submitting a Petition of Appeal with copies for the other parties through this Court to the Shanghai High People's Court within fifteen days after the judgment is served; [Buyer] may appeal by submitting a Petition of Appeal with a copy for the other party through this Court to the Shanghai High People's Court within thirty days after the judgment is served.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff Shanghai Weijie Electronic Devices Ltd. is referred to as [Seller] and Defendant Super Power Supply, Inc. is referred to as [Buyer].

** Zhou Xishu is an undergraduate student at the School of Law, Xiamen University, Xiamen; Chen Lili is a graduate student studying International Economic Law at the School of Law, Xiamen University. They have both participated in the 17th annual Willem C. Vis International Commercial Arbitration Moot.

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Pace Law School Institute of International Commercial Law - Last updated May 11, 2010
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