China 2 December 2004 High People's Court [Appellate Court] of Jiangsu Province (China Changzhou Kairui Weaving and Printing Company v. Taiwan Junlong Machinery Company) [Abstract available]
[Cite as: http://cisgw3.law.pace.edu/cases/041202c1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: Unavailable
CASE HISTORY: 1st instance Changzhou Intermediate People's Court of Jiangsu Province
SELLER'S COUNTRY: Taiwan (plaintiff)
BUYER'S COUNTRY: People's Republic of China (defendant)
GOODS INVOLVED: Knitting machine
Jiangsu High People's Court (Knitting machine case) of 2 December 2004
Abstract prepared by Meihua Xu
Changzhou Kairui Knitting and Printing Company (Appellant, Defendant in the first trail, hereafter "K Company") took objection to the decision made by Jiangsu Province Changzhou City Intermediate People's Court on the contract dispute between K Company, Changzhou Renshun Knitting and Printing Company (Defendant in the first trail, hereafter "R Company") and Junlong Machinery Company (Plaintiff in the first trail, hereafter, "Seller") and appealed to Jiangsu High People's Court.
From 1997, R Company purchased knitting machines and parts from the Seller, and Zhang, Yi purchased knitting machines and parts from the Seller in a Hong Kong company (hereafter, "H Company")'s name and delivered them to R Company (Zhang, Yi was a shareholder of H Company, but had sold his shares to others prior to the purchase of the goods in this case. During the performance of this contract, Zhang, Yi was contacting the Seller in R Company's name). However, R Company failed to make payment in accordance with the contract.
R Company was established in 1994 in Jiangsu, China with the legal representative of Zhang, Yi, who was also the legal representative of K Company. In 1998, shareholders of R Company decided to move R Company to the address of K Company, and Zhangyi used the machines R Company purchased from the Seller as his investment in K Company. The Seller asked the Court of First Instance to direct R Company and K Company to bear joint liability to make payment on the goods and the interest on the delayed payment.
The Court of First Instance ruled that based on ..., article 8(3) and 9(1) of the CISG [there is only this one sentence reference to the CISG], and ..., R Company shall pay the price for the goods and the interest on the delayed payment to the Seller, and that K Company shall bear joint liability for the aforesaid debt within the amount of acceptance of R Company's assets.
K Company appealed that it should not be the defendant; that it was an independent company from R Company.
The Appellate Court rules that R Company is the investor of K Company since R Company invested its major assets in K Company and moved to K Company's address, and the employees, assets, and administration of the two companies were mixed together, therefore, the aforesaid two companies were not independent entities. The Appellate Court, therefore, holds that the Court of First Instance erred in holding that R Company shall bear joint liability within the amount of the acceptance of R Company's assets. However, since the Seller failed to appeal on this issue, the Appellate Court affirms the decision made by the lower court and dismisses the Seller's appeal.Go to Case Table of Contents
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Chinese): CISG-China Case [HPC/15]: <http://aff.whu.edu.cn/cisgchina/en/news_view.asp?newsid=86>
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents