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CISG CASE PRESENTATION

China 28 November 2005 Shanghai No. 1 Intermediate People’s Court [District Court] (Vishaybe Components Beyschlag GmbH v. Shanghai Yong Xu Electronic Ltd.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/051128c1.html]

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

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Case identification

DATE OF DECISION: 20051128 (28 November 2005)

JURISDICTION: People's Republic of China

TRIBUNAL: Shanghai No. I Intermediate People’s Court [District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: Hu Yi Zhong Min Wu (Shang) Chu Zi Di No. 139

CASE NAME: Vishaybe Components Beyschlag GmbH v. Shanghai Yong Xu Electronic Ltd.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany (plaintiff)

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

GOODS INVOLVED: Electronic products


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 53

Classification of issues using UNCITRAL classification code numbers:

53A [Buyer's obligation to pay the price]

Descriptors: Price

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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/23]: <http://aff.whu.edu.cn/cisgchina/en/news_view.asp?newsid=55>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Shanghai No. 1 Intermediate People's Court

Vishaybe Components Beyschlag GmbH
v.
Shanghai Yong Xu Electronic Ltd.

28 November 2005

Translation [*] by Zheng Xie [**]

The Plaintiff [Seller], Vishaybe Components Beyschlag GmbH, filed the lawsuit against the Defendant [Buyer], Shanghai Yong Xu Electronic Ltd., on a dispute arising out of a sales contract between the parties. Because the [Buyer]'s domicile is in the jurisdiction of this Court, the Court has jurisdiction over this case. After accepting the case on 20 July 2005 according to the relevant law, the Court formed a collegial bench and held a public court session on 25 October 2005. The [Seller]'s attorney was present; the Court had served a summons on the [Buyer], but the [Buyer] was not present at the court session. The Court heard this case by default according to the relevant law. The case was closed.

The [Seller] alleged that based on their long term cooperation, the [Seller] and the [Buyer] had an established long term sales relationship. However, since March 2003 the [Seller] has urged the [Buyer] many times to pay the contract price, but the [Buyer] has not responded. The [Buyer] owed the [Seller] the amount of renminbi [RMB] 1,888,941.15 for the period from March 2003 to 31 December 2004, and interest of RMB 193,178.07 on the above amount as of 30 June 2005. Therefore, the [Seller] filed the lawsuit with this Court requesting it to rule that the [Buyer] should pay the contract price of RMB 1,888,941.15 plus interest calculated to the day when the payment is actually made.

The [Buyer] did not submit a response.

The [Seller] submitted the following evidence to support its claims:

   (1)   The correspondence between the parties to prove the existence of a sales contractual relation between the parties;
 
   (2)   The account statements, packaging lists, bills of lading, and orders to prove that the [Seller] had delivered the goods to the [Buyer], and that the [Buyer] owes twenty-two payments to the [Seller].

All of the [Seller]'s above evidence was formed abroad, and had been notarized; the evidence was true, valid, and related to this case, so this Court held that the evidence was admissible in deciding the case.

Based on the above evidence, this court identified the following facts:

On 1 April 2003, the [Seller] sent a letter to the [Buyer]'s legal representative, Xu Yong, advising that the [Seller] had acquired Zhong Shi Electronic Inc. including all of its domestic and abroad affiliates, and purchase, sales, and distribution branches, as of 13 December 2002. Meanwhile, after reviewing the business operation of the [Buyer] in March 2003, the [Seller] expressed its satisfaction with the [Buyer]'s sales of the [Seller]'s products.

   -    Therefore, the [Seller] sent an unconditional letter of intent to the [Buyer] agreeing that the [Buyer] continue to sell the products listed in the Chinese market.
 
   -    The letter intent would take effect after the sales department of the [Seller] officially confirmed the shipping term/credit line, and the sales department of the [Seller] where the [Buyer]'s sales region was accepted the arrangement.
 
   -    Unless the [Buyer] immediately notified the [Seller], the [Seller] presumed that the [Buyer] accepted the letter of intent.

The transactions between the [Seller] and the [Buyer] were conducted by the [Buyer]'s orders and the [Seller]'s air deliveries by installments according to the orders.

1. The [Buyer] sent six orders to the [Seller] on 14 May, 23 July, 4 and 25 August, 5 and 25 September, 2003 respectively, specifying the specification, quantity, price, price term of FOB Haide, and payment term of within 60 days T/T.

   -    On 3 September 2003, the [Seller] issued packing list No. 136285 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 63,000 units, and the total value was US $4,295.91.
 
   -    On 10 September, the [Seller] issued packing list No. 137058 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 79,000 units, and the total value was US $5,952.91.
 
   -    On 17 September, the [Seller] issued packing list No. 137834 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 66,000 units, and the total value was US $3,898.14.
 
   -    On 8 October, the [Seller] issued packing list No. 137747 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 33,000 units, and the total value was US $3,019.77.
 
   -    On 19 November, the [Seller] issued packing list No. 144177 and the bill of lading with the [Buyer] as the Consignee. The total quantity of above goods was 49,000 units, and the total value was US $5,455.34.
 
   -    On 19 November, the [Seller] issued packing list No. 144200 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 97,000 units, and the total value was US $9,758.45.

On 31 December 2004, the [Seller] sent an account statement to the [Buyer] stating that the total contract price under the above six bills of lading was US $32,380.52; after the price of unqualified products, US $10,103.73, was deducted with the [Seller]'s approval, the [Buyer] still owed the [Seller] US $22,276.79.

2. The [Buyer] placed nine orders with the [Seller] on 12 March, 15 April, 25 and 26 June, 6 and 24 August, and 29 September 2003, respectively, specifying the specification, quantity, price, price term of FOB Haide, and payment term of within 60 days T/T.

   -    On 30 April 2003, the [Seller] issued packing list No. 122951 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 5,760,000 units, and the total value was 35,763 Euro.
 
   -    On 7 May, the [Seller] issued packing list No. 123441 and the bill of lading with the [Buyer] as the Consignee. The total quantity of above goods was 3,170,000 units, and the total value was 19, 716.50 Euro.
 
   -    On 7 May, the [Seller] issued packing list No. 123739 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 970,000 units, and the total value was 6,004.30 Euro.
 
   -    On 4 June, the [Seller] issued packing list No. 126567 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 1,730,000 units, and the total value was 10,740.70 Euro.
 
   -    On 4 June, the [Seller] issued packing list No. 126871 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 140,000 units, and the total value was 877.10.
 
   -    On 18 June, the [Seller] issued packing list No. 127938 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 3,890,000 units, and the total value was 24,159.50 Euro.
 
   -    On 19 November, the [Seller] issued packing list No. 144200 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 97,000 units, and the total value was US $9,758.45.
 
   -    On 30 July, the [Seller] issued packing list No. 132356 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 2,020,000 units, and the total value was 12,520.10 Euro.
 
   -    On 20 August, the [Seller] issued packing list No. 134442 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 3,210,000 units, and the total value was 19,936.30 Euro.
 
   -    On 20 August, the [Seller] issued packing list No. 134973 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 100,000 units, and the total value was 619 Euro.
 
   -    On 10 September, the [Seller] issued packing list No. 137057 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 1,040,000 units, and the total value was 6,481.60 Euro.
 
   -    On 8 October, the [Seller] issued packing list No. 139745 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 4,020,000 units, and the total value was 24,945.80 Euro.
 
   -    On 19 November, the [Seller] issued packing list No. 144175 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 1,620,000 units, and the total value was 10,063.80 Euro.

On 31 December 2004, the [Seller] sent an account statement to the [Buyer] stating that the total contract price under the above twelve bills of lading was 171,827.70 Euro. After the price of unqualified products, 2,796.87 Euro, was deducted, as the [Seller] approved, the [Buyer] still owed the [Seller] 169,030.83 Euro.

3. The [Buyer] placed three orders with the [Seller] on 5 and 26 August 2003, respectively, specifying the specification, quantity, price, price term of CIF Shanghai, and payment term of within 60 days T/T.

   -    On 8 October, the [Seller] issued the packing list No. 139746 and bill of lading with the [Buyer] as the Consignee. The total quantity of above goods was 21,000 units, and the total value was 102.90 Euro.
 
   -    On 22 October, the [Seller] issued packing list No. 141092 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 66,000 units, and the total value was 323.40 Euro.
 
   -    On 29 October, the [Seller] issued packing list No. 142131 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 9,000 units, and the total value was 44.10 Euro.
 
   -    On 19 November, the [Seller] issued packing list No. 144176 and the bill of lading with the [Buyer] as the Consignee. The total quantity of these goods was 195,000 units, and the total value was 955.50 Euro.

On 31 December 2004, the [Seller] sent an account statement to the [Buyer] advising that the total contract price under the above bills of ladings was 1,425.90 Euro. The [Buyer] did not make any payment.

Under the above three account statements, the [Buyer] owed the [Seller] US $22,276.79 and 170,456.73 Euro.

This Court held that the disputes in this case arose out of a contract involving foreign interest, and the parties did not stipulate the applicable law. Because China and Germany are Contracting States of the United Nations Convention on Contracts for the International Sale of Goods (CISG), and the [Buyer] received the goods in China, the CISG and the laws of the PRC should apply to this case.

This Court held that the [Seller] and the [Buyer] established a long term sales relationship by placing and fulfilling orders. The [Seller] delivered the goods according to the [Buyer]'s orders, and the [Buyer] should have made the payment after accepting the goods. However, the [Buyer] did not pay the contract price on time, so it should pay the contract price plus interest.

The [Seller] claimed the contract price in RMB, which the [Buyer] owed in US dollars and Euro. According to the foreign exchange rate; this claim was not inconsistent with the relevant law, so this Court sustained it. In addition, the [Seller] counted the payment time and calculated interest according to each bill of lading; this claim was consistent with the law, so this Court sustained it too.

According to Article 130 of the Law of Civil Procedure of the PRC, Articles 109, 112 and 159 of the Contract Law of the PRC, and Article 53 of CISG, this Court handed down the following judgment:

   (1)   The [Buyer] should pay the [Seller] the contract price of RMB 1,888,941.15 plus interest (RMB 193,178.07 as of 30 June 2005; calculated at the annual rate of 5.76% from 1 July 2005 to the day when the payment was actually made) within 10 days after this judgment takes effect.
 
   (2)   The litigation fee for this case is RMB 20,421, which the [Buyer] should pay within seven days after this judgment takes effect.

If an appeal of this judgment is desired, after the judgment is served the [Seller] within 30 days, and the [Buyer] within 15 days, should submit an appellate pleading to this Court and appeal to the Shanghai High People's Court, and also submit the copies of appellate pleading according to the number of counter-parties.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Seller]; Defendant 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 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.

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Pace Law School Institute of International Commercial Law - Last updated May 12, 2010
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