China 12 April 2003 CIETAC Arbitration proceeding (Pig iron case)
[Cite as: http://cisgw3.law.pace.edu/cases/030412c1.html]
DATE OF DECISION:
DATABASE ASSIGNED DOCKET NUMBER: CISG/2003/08
CASE HISTORY: Unavailable
SELLER'S COUNTRY: People's Republic of China (claimant)
BUYER'S COUNTRY: Singapore (respondent)
GOODS INVOLVED: Pig iron
PEOPLE'S REPUBLIC OF CHINA: China International Economic & Trade Arbitration
Commission (CIETAC) (now South China Branch) 12 April 2003 (Pig iron case)
Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/114],
CLOUT abstract no. 1124
Reproduced with permission of UNCITRAL
A Chinese seller and a Singaporean buyer entered into a contract for the sale of pig iron. According to the contract, the buyer would send a ship at an agreed time so that the goods could be shipped in two shipments. The seller sent several faxes to notify the buyer to send the ship after preparing the first batch of goods, but there was no word from the buyer by the last day available for loading the ship. The seller notified the buyer that it would stop performing the relevant obligations relating to the first batch of goods, and would reserve the right to claim for compensation. Later, the two parties performed their respective obligations in relation to the second batch of the goods. The seller initiated arbitration proceedings, and requested the Arbitration Tribunal to order the buyer to compensate it for such damages as the storage cost for the first batch of goods, the direct loss from price differences and the loss of interest on the sum that should have been paid for the goods.
In view of the fact that the place of business of the parties were in State Parties to CISG, the Tribunal decided that the dispute in this case should be governed by the Convention.
The buyer argued that the seller had decided unilaterally to stop performing the obligations for the first batch of goods, and was therefore not entitled to demand compensation. The Tribunal held that the seller had stated clearly in its faxes that it reserved the right to claim compensation, and that the failure of the buyer to send a ship for loading the goods at the time agreed upon in the contract was a breach of contract.
Regarding the costs of storage, the Tribunal held that, in accordance with article 77 of the Convention, the evidence provided by the seller did not prove that the costs had any direct connection with the contract or with the buyer, nor that the seller had taken timely and reasonable measures to prevent any increase in the losses. The Tribunal, therefore, only partially supported this request from the seller.
Regarding the loss of interest and the loss from price differences, the Tribunal held that the seller had not proved that the goods resold at a discount price were those under this contract, and the interest for raising finance and the loss from the discounted resale were risks from its own operations. They should therefore be borne by the seller itself. However, the Tribunal, in consideration of the principles of equity and justice, supported part of the seller's request.Go to Case Table of Contents
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
CITATIONS TO OTHER ABSTRACTS OF DECISION
CITATIONS TO TEXT OF DECISION
Original language (Chinese): Unavailable
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents