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CISG CASE PRESENTATION

China 12 August 2005 CIETAC Arbitration proceeding (Salted ___ case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050812c1.html]

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

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Case identification

DATE OF DECISION: 20050812 (12 August 2005)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/2004/11

CASE NAME: Unavailable

CASE HISTORY: Unavailable

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

BUYER'S COUNTRY: Italy (respondent)

GOODS INVOLVED: Salted ___


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 53 ; 78

Classification of issues using UNCITRAL classification code numbers:

53A [Obligation of buyer to pay price of goods];

78B [Rate of interest]

Descriptors: Price ; 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)

Queen Mary Case Translation Programme

China International Economic & Trade Arbitration Commission
CIETAC (PRC) Arbitration Award

Salted ___ case [12 August 2005]

Translation [*] by Zheng Xie [**]

Edited by Jing Li [***]

The China International Economic and Trade Arbitration Commission (hereinafter, "CIETAC"), accepted the case (Case number: G____) according to:

   -    The arbitration clauses in Contract No. CGOG04001 (13 January 2004), Contracts No. CGOG04010 and No. CGOG04011 (26 March 2004), and Contract No. CGOG04013 (11 May 2004) signed by Claimant [Seller], ___ Co., Ltd. [of People's Republic of China] and Respondent [Buyer], ___ Enterprise S.r.L. [of Italy]; and
 
  -    The written Application for Arbitration submitted by the [Seller] on 4 April 2005.

The Arbitration Rules of CIETAC (hereinafter, the Arbitration Rules), which took effect on 1 October 2000, apply to this case.

ARBITRATION PROCEEDINGS

The Secretariat of CIETAC sent the Notice of Arbitration, the Arbitration Rules, and the Panel of Arbitrators to both parties, respectively, by express mail on 12 April 2005. Meanwhile, the Secretariat sent the [Seller]'s Application for Arbitration and its attachment to the [Buyer].

On 26 May 2005, the [Seller] appointed Mr. ___ as Arbitrator. Since the [Buyer] did not appoint or authorize the Chairman of CIETAC to appoint an Arbitrator, according to Article 26 of Arbitration Rules, the Chairman appointed Ms. ___ as Arbitrator. The parties also did not jointly appoint or authorize the Chairman of CIETAC to appoint the Presiding Arbitrator, according to Article 24 of the Arbitration Rules, the Chairman appointed Mr. ___ as the Presiding Arbitrator. These three Arbitrators formed the Arbitral Tribunal (hereinafter the "Tribunal") to hear this dispute. On the same day, the Secretariat of CIETAC sent out Notice of Formation of the Tribunal to both parties, respectively, by express mail.

After reading the materials of the present case, the Tribunal, via the Secretariat of CIETAC, decided to hold the arbitration hearings on 8 July 2005. On 27 May 2005, the Secretariat sent out a Notice of Commencement of Arbitration to both parties, respectively, by express mail.

On 27 June 2005, the [Buyer] submitted a written Statement of Defense and its attachment in both Italian and English. On the same day, the Secretariat of CIETAC sent this material to the [Seller], and notified both parties by Letter No. ___ of Beijing, CIETAC (2005) that the language of this arbitration is Chinese and that the [Buyer] should submit a Chinese version of its Statement of Defense and its attachment before the commencement of the arbitration hearings.

However, the [Buyer] did not submit any written materials thereafter.

On 8 July 2005, the Tribunal commenced the arbitration hearing in Beijing as scheduled. The [Seller] appointed attorneys to attend. Although the [Buyer] was notified of the hearing, it did not appoint any representatives to attend, nor did it explain the reasons thereof. According to Article 42 of Arbitration Rules, the Tribunal proceeded to hear the case by default. At the hearing, attorneys for the [Seller] made oral statements of facts, presented original copies of the relevant evidence, and answered questions raised by the Tribunal. The [Seller] also submitted an "evidence list" and its attachment at the hearing.

After the hearing, the [Seller] submitted a Supplementary Opinion on the Application for Arbitration, Attorneys' Opinion, and supplementary evidence on 18 July 2005. The [Seller] specified its final arbitration claims in its Supplementary Opinion, and dealt with relevant procedures. On 19 July 2005, the Secretariat of CIETAC forwarded to the [Buyer] by express mail the above materials submitted by the [Seller] at and after the hearing. The Tribunal, via the Secretariat of CIETAC, also notified the [Buyer] by letter No. ___ of Beijing, CIETAC (2005) that any opinion or objection to the aforementioned supplementary materials and the present case, or requests for a second hearing by the Tribunal should be submitted in writing to CIETAC before 19 August 2005.

However, the [Buyer] did not submit any written materials thereafter.

This dispute is now settled. The Tribunal unanimously issues the award after discussion by the members of the Tribunal in accordance with the available written materials and facts and evidence investigated.

The followings are the facts, the opinion of the Tribunal, and the award.

FACTS

The [Seller] claimed that both parties concluded Contract No. CGOG04001 (13 January 2004), Contracts No. CGOG04010 and No. CGOG04011 (26 March 2004), and Contract No. CGOG04013 (11 May 2004), agreeing that the [Seller] sold salted ___ at CFR price, with the [Seller] being responsible for loading for delivery within a certain time period, and that the terms of payment were documents against acceptance (D/A) 60 days, i.e., payment within 60 days after issuance of Bill of Lading.

In accordance with the abovementioned contracts, the [Seller] arranged delivery of the goods in nine installments on 25 February 2004 and 20 May 2004, respectively. Immediately after it took delivery at the port of destination GENOVA, the [Buyer] resold the goods to its clients in its home country. However, up until now, the [Buyer] has merely made payment of two installments out of nine under the four contracts of the present case. The total arrearage of the remaining seven installments is US $144,000. The [Seller] had been sending letters requesting payments from the [Buyer] since 8 June 2004. The [Buyer], however, had been refusing to make payments alleging complaints from its clients about the quality of the goods. In fact, the [Seller] had already fully performed its obligations under the contracts, and [Buyer]'s conduct of refusing to pay the contract price constituted a breach to the contracts, causing severe losses to the [Seller].

Therefore, the [Seller] filed the Application for Arbitration based on the above agreements in the contracts.

CLAIMS AND REQUESTS BY THE PARTIES

[Seller]'s claims

The [Seller]'s arbitration claims are to have the [Buyer]:

(1) Compensate the [Seller] for the unpaid contract price of US $144,000.

(2) Compensate the [Seller] for interest on the unpaid contract price.

(3) Bear the [Seller]'s expenses including its attorneys' fee.

[Buyer]'s defense

Although the [Buyer] merely submitted its Statement of Defense in Italian and English without presenting its Chinese version as requested by the Tribunal, the Tribunal still notes that the [Buyer] has the following opinion:

      Both parties concluded the relevant contracts in the present case in 2004, agreeing that the [Seller] sold Grade A2 salted ___ to the [Buyer]. After receiving the draught salted ___ from the [Seller] from China, the [Buyer] forwarded the goods to its clients in its home country for processing. After the processing, the clients returned the goods to the [Buyer], objecting to the quality of the goods. Upon analysis, the goods were defective, with 3% of the goods having dry stems, and containing large amount of impurities, such as hair, straws, rocks, etc. On 23 July 2004, the [Buyer] sent a letter to the [Seller] requesting reduction of the price based on its objection to the quality of the goods. Thereafter, since part of the goods were already sold in supermarkets, the direct seller claimed that the [Buyer] was severely in breach, and that the [Buyer] should be responsible for damages therefrom. On 2 September 2004, the [Buyer] sent a letter to the [Seller] objecting to the defects of the goods, claiming the goods were not suitable for sales. The [Buyer], therefore, would terminate payments for the goods. The [Buyer] also requested the [Seller] to bear the responsibility that arose from the [Seller]'s breach of the contracts.

[Seller]'s supplementary opinion

After the oral hearing, the [Seller] submitted the following supplementary opinion:

1. Performance of the contracts of the present case

      (1) Contract No. CGOG04001

      The subject matter of Contract No. CGOG04001 was 60 tons of Grade A salted ___ at the price of US $69,000.

The goods under this contract were to be delivered in four installments with four invoices. The [Buyer] had already paid for the two installments corresponding with Invoice No. CGOGJS___ and Invoice No. CGOGJS___, totaling US $34,500. The unpaid two installments of goods were those corresponding with Invoice No. CGOGJS___ (loaded on 25 February 2004) in the amount of US $17,250 and Invoice No. CGOGJS___ (loaded on 20 April 2004) in the amount of US $17,250. The total unpaid amount was US $34,500.

According to Article 9 of this contract on terms of payment, the price of US $17,250 corresponding with Invoice No. CGOGJS___ shall be paid by 25 April 2004, and the price of US $17,250 corresponding with Invoice No. CGOGJS04019 shall be paid by 20 June 2004.

      (2) Contract No. CGOG04010

      The subject matter of Contract No. CGOG04010 was 30 tons of Grade A1 salted ___ at the price of US $37,500.

The goods under this contract were to be delivered in two installments with two invoices. The [Buyer] had not paid for these two installments of goods, which were those corresponding with Invoice No. CGOGJS___ (loaded on 7 April 2004) in the amount of US $18,750 and Invoice No. CGOGJS___ (loaded on 20 April 2004) in the amount of US $18,750. The total unpaid amount was US $37,500.

According to Article 9 of this contract on terms of payment, the price of US $18,750 corresponding with Invoice No. CGOGJS___ shall be paid by 7 June 2004, and the price of US $18,750 corresponding with Invoice No. CGOGJS___ shall be paid by 20 June 2004.

      (3) Contract No. CGOG04011

      The subject matter of Contract No. CGOG04011 was 30 tons of Grade A2 salted ___ at the price of US $34,500.

The goods under this contract were to be delivered in one installment with one invoice, which numbered CGOGJS___. The date of loading for delivery was 7 April 2004. The [Buyer] had not paid for this installment.

According to Article 9 of this contract on terms of payment, the price of US $34,500 shall be paid by 7 June 2004.

      (4) Contract No. CGOG04013

The subject matter of Contract No. CGOG04013 was 30 tons of Grade A salted ___ at the price of US $37,500.

The goods under this contract were to be delivered in two installments with two invoices. The [Buyer] had not paid for these two installments of goods, which were those corresponding with Invoice No. CGOGJS___ (loaded on 20 May 2004) in the amount of US $18,750 and Invoice No. CGOGJS___ (loaded on 20 May 2004) in the amount of US $18,750. The total unpaid amount was US $37,500.

According to Article 9 of this contract on terms of payment, the above two payments shall both be paid by 20 July 2004.

In the course of the performance of the abovementioned contracts, the [Seller] had already fulfilled its obligations accordingly, and the quality of the goods conformed to the [Seller]'s quality standards for exported goods. Further, the [Buyer] obtained relevant documents from its remitting bank, ___ Bank ___ Branch, on 4 May, 28 May, and 15 July of 2004, respectively and promised to make payment. In the correspondence between the [Seller] and the [Buyer], the [Buyer] had not denied its receipt of all of the goods, either.

The [Buyer] took delivery of each installment of the goods at the port of destination GENOVA and put the goods into new transactions. However, it did not make payment of the abovementioned contract price for seven of the installments in the amount of US $144,000 timely. As the [Seller] had not received those payments, it had been sending letters to the [Buyer] since 8 June 2004 requesting the [Buyer] to make payments. The [Buyer], however, had been refusing to make payments alleging complaints from its clients about the quality of the goods. The [Buyer]'s conduct constituted a severe breach of the contracts.

The [Buyer] submitted with the Statement of Defense the facsimile, dated 28 July 2004, notifying the [Seller] of the defects of the goods. This date had exceeded the contractual payment time for the last installment. Moreover, the [Buyer]'s notice was raised only after numerous requests by the [Seller] for payments. When the notice was sent, the goods had already been forwarded to several clients and were not under the control of the [Buyer]. The [Buyer] did not provide any evidence supporting its claim of "defective goods" except for its own facsimile. It did not even provide a fundamental report of quality inspection. Furthermore, based on the facsimile, the [Buyer] raised the quality matter only after five transfers of the goods (i.e., the [Buyer] - wholesaler for processing - canned plant for processing - supermarkets - a certain client). It was impossible to prove that the "defective" goods were goods provided by the [Seller]. Nor was it possible to prove that the "defects" were caused by the [Seller]. Most importantly, the "defective" goods were not able to be proven to have actual defects.

The [Buyer] had been alleging in its facsimile (dated 8 November 2004) attached to the Statement of Defense that the goods that were defective were the Grade A2 salted ___, and therefore, it refused to make payments. In actuality, there was only one installment of goods of the present case that was of Grade A2, i.e., goods corresponding with Invoice No. CGOGJS___ in the amount of US $34,500. Therefore, even if the goods were defective as alleged by the [Buyer], it was only one installment of goods. It was unreasonable for the [Buyer] to refuse payment of seven installments. Moreover, the Grade A2 salted ___ provided by the [Seller] completely conformed to the standards and it had obtained a confirmation certificate of quality inspection.

The [Seller]'s attorneys requested in the attorneys' letter that was sent to the [Buyer] that the [Buyer] should make payments within seven days or propose solutions thereof. However, the [Buyer] did not make any payments, nor did it show any intention to solve the problem. In the facsimile dated 23 November 2004, the [Seller] again required the [Buyer] to provide with evidence of losses if the goods were defective. The [Buyer] failed to provide any evidence up until now.

2. Interest on the arrearage

According to the Official Reply of the Supreme People's Court on How to Calculate Late Payment Breach Damages (16 February 1999), the interest on the belated payments shall be calculated as follows:

      (1) Invoice No. CGOGJS___ under Contract No. CGOG04001

      The unpaid amount under Contract No. CGOG04001 associated with Invoice No. CGOGJS___ was US $17,250. The period of overdue payment thereof totaled 439 days (from 25 April 2004 to 8 July 2005). Therefore, the interest thereon should be renminbi [RMB] 25,051 (US $17,250 8.27 439 days 0.4);

      (2) Invoice No. CGOGJS___ under Contract No. CGOG04001

      The unpaid amount under Contract No. CGOG04001 associated with Invoice No. CGOGJS___ was US $17,250. The period of overdue payment thereof totaled 383 days (from 20 June 2004 to 8 July 2005). Therefore, the interest thereon should be RMB 21,855 (US $17,250 8.27 383 days 0.4);

      (3) Invoice No. CGOGJS___ under Contract No. CGOG04010

      The unpaid amount under Contract No. CGOG04010 associated with Invoice No. CGOGJS___ was US $18,750. The period of overdue payment thereof totaled 383 days (from 20 June 2004 to 8 July 2005). Therefore, the interest thereon should be RMB 23,756 (US $18,750 8.27 383 days 0.4);

      (4) Invoice No. CGOGJS___ under Contract No. CGOG04010

      The unpaid amount under Contract No. CGOG04010 associated with Invoice No. CGOGJS___ was US $18,750. The period of overdue payment thereof totaled 396 days (from 7 June 2004 to 8 July 2005). Therefore, the interest thereon should be RMB 24,562 (US $18,750 8.27 396 days 0.4);

      (5) Invoice No. CGOGJS___ under Contract No. CGOG04011

      The unpaid amount under Contract No. CGOG04011 associated with Invoice No. CGOGJS___ was US $34,500. The period of overdue payment thereof totaled 396 days (from 7 June 2004 to 8 July 2005). Therefore, the interest thereon should be RMB 45,194 (US $34,500 8.27 396 days 0.4);

      (6) Invoice No. CGOGJS___ under Contract No. CGOG04013

      The unpaid amount under Contract No. CGOG04013 associated with Invoice No. CGOGJS___ was US $18,750. The period of overdue payment thereof totaled 353 days (from 20 July 2004 to 8 July 2005). Therefore, the interest thereon should be RMB 21,895 (US $18,750 8.27 353 days 0.4);

      (7) Invoice No. CGOGJS___ under Contract No. CGOG04013

      The unpaid amount under Contract No. CGOG04013 associated with Invoice No. CGOGJS___ was US $18,750. The period of overdue payment thereof totaled 353 days (from 20 July 2004 to 8 July 2005). Therefore, the interest thereon should be RMB 21,895 (US $18,750 8.27 353 days 0.4).

In sum, the [Buyer] should compensate the [Seller] for interest on overdue payments in the amount of RMB 184,208.

[Seller]'s final claims

The [Seller]'s final arbitration claims are to have the [Buyer]:

   (1)    Compensate the [Seller] for unpaid contract price of US $144,000;
 
   (2)    Compensate the [Seller] for interest on the overdue payments in the amount of RMB 184,208;
 
   (3)    Bear the arbitration fee of the present case in the amount of RMB 49,880; and
 
   (4)    Bear the [Seller]'s attorneys' fee, translation fee, and travel expenses totaling RMB 41,152.60.

THE OPINION OF THE TRIBUNAL

1. Applicable law

This dispute falls into the category of international sale of goods. 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 (1980) (hereinafter, the "CISG"), the CISG is applicable to the present dispute.

2. The [Buyer]'s claims

The [Buyer] in its Statement of Defense requested the Tribunal to rescind the contracts of the present case and find that the [Seller] should compensate it for the loss incurred from the defects of the goods. However, the [Buyer] did not submit any Chinese materials as demanded by the Tribunal. Moreover, the materials in Italian and English submitted by the [Buyer] exceeded the time period for a counterclaim provided in Arbitration Rules. Therefore, the Tribunal does not take into account the claims by the [Buyer] listed in the Statement of Defense.

3. Overdue payments by the [Buyer]

The Tribunal notes that both parties agreed, respectively, in the contracts of the present case, i.e., Contract No. CGOG04001, Contract No. CGOG04010, Contract No. CGOG04011, and Contract No.CGOG04013 that the [Seller] sold to the [Buyer] 60 tons of Grade A salted ___ (total contract price US $69,000), 30 tons of Grade A1 salted ___ (total contract price US $37,500), 30 tons of Grade A2 salted ___ (total contract price US $34,500), and 30 tons of Grade A salted ___ (total contract price US $37,500). The terms of payment were payments by acceptance within 60 days after issuance of Bill of Lading (Articles 9 of the contracts). The [Seller] alleged that after its conclusion of the contracts, it had delivered all the goods under the contracts in nine installments and that the [Buyer] had made payments for two installments associated with Invoice No. CGOGJS___ and Invoice No. CGOGJS___ under Contract No. CGOG04001. The [Seller] claimed and submitted evidence proving that the other seven installments were delivered to the [Buyer]. The delivery status was:

   -    Invoice No. CGOGJS___, US $17,250, B/L No. ___, weight 18,000kg, B/L date 25 February 2004;
 
   -    Invoice No. CGOGJS___, US $17,250, B/L No. ___, weight 18,000kg, B/L date 20 April 2004;
 
   -    Invoice No. CGOGJS___, US $18,750, B/L No. ___, weight 18,000kg, B/L date 20 April 2004, B/L No. ___, weight 18,000kg, B/L date 18 May 2004 (the [Seller] in its Statement mistakenly addressed the goods under this Invoice as one installment, instead of two installments, and mistakenly listed the B/L date as 7 April 2004 - by the Tribunal);
 
   -    Invoice No. CGOGJS___, US $18,750, B/L No. ___, weight 36,000kg, B/L date 7 April 2004 (the [Seller] in its Statement mistakenly listed the B/L date as 20 April 2004 - by the Tribunal);
 
   -    Invoice No. CGOGJS___, US $34,500, B/L No. ___, weight 18,000kg, B/L date 7 April 2004;
 
   -    Invoice No. CGOGJS___, US $18,750, B/L No. ___, weight 18,000kg, B/L date 20 May 2004;
 
   -    Invoice No. CGOGJS___, US $18,750, B/L No. ___-___, weight 18,000kg, B/L date 20 May 2004.

The Tribunal notes that the [Buyer] did not object to the [Seller]'s statements on delivery of the goods and the payments by the [Buyer]. The [Buyer] merely alleged that the goods delivered by the [Seller] were defective. However, the [Buyer] only submitted its facsimile sent unilaterally to the [Seller] claiming that the goods were defective, but did not submit any other evidence proving the defects it claimed.

Therefore, the Tribunal finds that the [Seller] had delivered all the goods under the contracts in the present case, but the [Buyer] had only made payment of part of the contract price of US $34,500, with an unpaid amount of US $144,000.

4. Interest on the overdue payments claimed by the [Seller]

According to Article 78 of the CISG:

"If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it."

The Tribunal finds that the [Seller] is entitled to the interest on the unpaid payments of US $144,000 from the [Buyer].

Since both parties agreed on terms of payment of payments by acceptance within 60 days after issuance of B/L, the Tribunal finds that the starting date of the calculation of the interest claimed by the [Seller], i.e., the 61st day after issuance of the B/L is reasonable; the closing date (of the calculation of the interest) claimed by the [Seller] was 8 July 2005, i.e., the date of commencement of the arbitration hearing, is reasonable; the exchange rate for U.S. dollars against RMB claimed by the [Seller], i.e., 1:8.27 is reasonable. However, the Tribunal finds that the interest rate (0.4 daily) claimed by the [Seller] is not reasonable. With reference to the lending rate of the People's Bank of China for the same period, the Tribunal finds that the interest rate on the overdue payments shall be 0.21 daily. Therefore, the Tribunal calculates the interest on the overdue payments as follows:

      (1) Interest on the overdue payment of 17,250 under Invoice No. CGOGJS___

      The date of B/L of this installment was 25 February 2004. The period of overdue thereof is 439 days (from 26 April 2004 to 8 July 2005). The interest thereon shall be RMB 13,152 (US $17,250 8.27 439 days 0.21);

      (2) Interest on the overdue payment of 17,250 under Invoice No. CGOGJS___

      The date of B/L of this installment was 20 April 2004. The period of overdue thereof is 383 days (from 20 June 2004 to 8 July 2005). The interest thereon shall be RMB 11,474 (US $17,250 8.27 383 days 0.21);

      (3) Interest on the overdue payment of 18,750 under Invoice No. CGOGJS___

      The date of B/L of this installment was 7 April 2004. The period of overdue thereof is 396 days (from 7 June 2004 to 8 July 2005). The interest thereon shall be RMB 12,895 (US $18,750 8.27 396 days 0.21);

      (4) Interest on the overdue payment of 18,750 under Invoice No. CGOGJS___

      The goods under this Invoice were delivered with B/L No. ___ and B/L No. ___. The dates of B/L of these installments were 20 April 2004 and 18 May 2004, respectively. The weight of these installments was both 18,000kg. Therefore, the Tribunal finds that the period of overdue payment of US $9,375 associating with B/L No. ___ is 383 days (from 20 June 2004 to 8 July 2005), and the interest thereon shall be RMB 6,236 (US $9,375 8.27 383 days 0.21); the period of overdue payment of US $9,375 associating with B/L No. ___ is 355 days (from 18 July 2004 to 8 July 2005), and the interest thereon shall be RMB 5,780 (US $9,375 8.27 355 days 0.21). The above amount totals RMB 12,016.

      (5) Interest on the overdue payment of 34,500 under Invoice No. CGOGJS___

      The date of B/L of this installment was 7 April 2004. The period of overdue thereof is 396 days (from 7 June 2004 to 8 July 2005). The interest thereon shall be RMB 23,727 (US $34,500 8.27 396 days 0.21);

      (6) Interest on the overdue payment of 18,750 under Invoice No. CGOGJS___

      The date of B/L of this installment was 20 May 2004. The period of overdue thereof is 353 days (from 20 July 2004 to 8 July 2005). The interest thereon shall be RMB 11,495 (US $18,750 8.27 353 days 0.21);

      (7) Interest on the overdue payment of 18,750 under Invoice No. CGOGJS___

      The date of B/L of this installment was 20 May 2004. The period of overdue thereof is 353 days (from 20 July 2004 to 8 July 2005). The interest thereon shall be RMB 11,495 (US $18,750 8.27 353 days 0.21);

In sum, the [Buyer] shall compensate the [Seller] for interest on overdue payments in the amount of RMB 96,254.

5. Attorneys' fee, translation fee, and travel expenses claimed by the [Seller]

The [Seller] requested the Tribunal to find that the [Buyer] shall compensate the [Seller] for its attorneys' fee of RMB 38,000, translation fee of RMB 140, and travel expenses RMB 3,012.60, totaling RMB 41,152.60.

Article 59 of Arbitration Rules provides,

"The arbitration tribunal has the power to decide in the arbitral award that the losing party shall pay the winning party as compensation a proportion of the expenses reasonably incurred by the winning party in dealing with the case. The amount of such compensation shall not in any case exceed 10% of the toal amount awarded to the winning party."

Since the above fees claimed by the [Seller] were supported by relevant evidence and reasonably incurred by the [Seller] in dealing with this case, the Tribunal fins that the [Buyer] shall pay the [Seller] expenses of RMB 41,152.60 as compensation.

6. Arbitration fee

Based on the circumstances of this case, the Tribunal finds that the arbitration fee arose therefrom shall be borne by the [Buyer].

AWARD

Consequently, the Tribunal hands down the following award:

   (1)    The [Buyer] shall make payment of the arrearage of US $144,000.
 
   (2)    The [Buyer] shall compensate the [Seller] for interest on the overdue payments totaling RMB 96,254.
 
   (3)    The [Buyer] shall compensate the [Seller] for reasonable expenses incurred from this case totaling RMB 41,152.60.
 
   (4)    The arbitration fee of this dispute is RMB 55,514. The [Seller] has prepaid this arbitration fee, and therefore, the [Buyer] shall pay the [Seller] RMB 55,514.
   (5)    Other claims by the [Seller] are rejected.

According to the above Items (1), (2), (3), and (4), the [Buyer] shall make payment to the [Seller] of US $144,000 and RMB 192,920.60. The [Buyer] is required to pay the above amount within 45 days after this award is handed down.

This is a final award. It comes into effect on the date this award is handed down.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant ___ Co., Ltd. of People's Republic of China, is referred to as [Seller] and Respondent___ Enterprise S.R.L., is referred to as [Buyer]. Amounts in the currency of the United States (dollars) are indicated as [USD]; amounts in the currency of the People's Republic of China (renminbi) are indicated as [RMB].

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

*** 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.

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