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CISG CASE PRESENTATION

China 25 July 2006 CIETAC Arbitration proceeding (Bleached softwood Kraft pulp case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060725c1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20060725 (25 July 2006)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/2006/22

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Singapore (claimant)

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

GOODS INVOLVED: Bleached softwood Kraft pulp


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 75 ; 77

Classification of issues using UNCITRAL classification code numbers:

74A ; 74B [General rules for measuring damages: loss suffered as consequence of breach; Outer limits of damages: foreseeability of loss];

75A1 [Damages established by substitute transaction after avoidance: resale by aggrieved seller];

77A [Obligation to take reasonable measures to mitigate damages]

Descriptors: Damages ; Foreseeability of damages ; Cover transactions ; Mitigation of loss

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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 and Trade Arbitration Commission
CIETAC (PRC) Arbitration Award

Bleached softwood Kraft pulp case (25 July 2006)

Translation [*] by Jingyuan Sun [**]

Translation edited by Jing Li [***]

The China International Economic and Trade Arbitration Commission (hereinafter, "CIETAC", or the "Arbitration Commission") accepted the case (Case No. R2006____) according to:

  -   The arbitration clause in Sales Contract No. 05WB0056B (the "Contract") concluded on 12 October 2005, by the Claimant AAA International (Overseas) Pte Ltd [of Singapore] (hereinafter, the "[Seller]") and the Respondent BBB Industrial and Trading Company [of the People's Republic of China] (hereinafter, "[Buyer]");
 
  -   The Request for Arbitration submitted by the [Seller] on 5 February 2006.
 
The Arbitration Rules of CIETAC (hereinafter, the "Arbitration Rules") which took effect as of 1 May 2005 apply to this case. Since the amount in dispute does not exceed RMB 500,000, according to Article 50 of the Arbitration Rules, the Summary Procedure in Chapter IV applies to this case. For matters not covered by Chapter IV, other chapters of the Arbitration Rules shall apply.

On 13 February 2006, the Secretariat of CIETAC (hereinafter, the "Secretariat") forwarded by express mail the Notice of Arbitration, the Arbitration Rules and the List of Arbitrators to the parties, and the Request for Arbitration and its attachments to the [Buyer].

Since the parties failed to jointly appoint or to entrust the Chairman of CIETAC to appoint the sole arbitrator within the specified time period, the Chairman appointed Mr. Yan Gu as the sole arbitrator on 31 March 2006 to hear the present dispute pursuant to Article 25 of the Arbitration Rules. On the same day, the Secretariat sent the Notice of Formation of the Arbitration Tribunal to the parties.

On 10 April 2006, the Secretariat decided that the case would be heard in Beijing on 27 April 2006 and sent the Notice of Hearing to the parties on the same day.

On 25 April 2006, the [Buyer] requested a postponement of the oral hearing stating that it did not receive the Notice of Hearing and other documents from the Secretariat. The [Seller] commented on the request. After investigation, the Arbitration Tribunal held that the Request for Arbitration and its attachments, the Notice of Formation of the Arbitration Tribunal and the Notice of Hearing had been delivered to the [Buyer]'s place of domicile, and that the hearing would be held as scheduled.

On 27 April 2006, the oral hearing was held as scheduled. Representatives of both parties attended the hearing. They stated the facts of the case, argued and cross-examined, and answered inquiries raised by the Arbitration Tribunal. The [Seller] submitted supplementary evidence at the oral hearing.

On 15 May, 22 May and 12 June 2006, the [Seller] submitted to the Arbitration Tribunal an Attorney's Opinion and its attachments, a Reply and Objection to the [Buyer]'s Opinion and a Supplementary Attorney's Opinion, respectively. The [Buyer] submitted to the Arbitration Tribunal its Attorney's Opinion, an Objection to the Formation of the Arbitration Tribunal, and a Supplementary Opinion regarding this case on 16 May and 23 May 2006, respectively. The Secretariat then forwarded the documents to the parties.

The [Buyer] states in the Objection to the Formation of the Arbitration Tribunal that it had not received the Notice of Arbitration, Request for Arbitration and its attachments, the Notice of Formation of the Arbitration Tribunal and the Notice of Hearing before the hearing. The CIETAC confirmed that the above-mentioned documents were sent to the [Buyer] at address BBB, the registered place of business of the [Buyer]. However, the [Buyer]'s office location is at CCC, which is the last known place of business of the [Buyer] proved by the Contract and other evidence. A contract number and a fax number were also listed in these documents. Therefore, the [Buyer] alleged that the service of documents by the CIETAC was made without reasonable inquiries and did not conform to Article 68 of the Arbitration Rules. As a result, the [Buyer] could not appoint the arbitrator and prepare its Defense. The [Buyer] thereby challenged the formation of the Arbitration Tribunal.

The Arbitration Tribunal notes that the Notice of Arbitration and the Notice of Formation of the Arbitration Tribunal (the Notice of Hearing was signed for by the [Buyer]) were sent to the [Buyer] at address BBB provided by the [Seller] in the Request for Arbitration, and they were effectively signed for. According to the receipt provided by the express mail company, the [Buyer] signed for the Notice of Arbitration and the Notice of Formation of the Arbitration Tribunal, and thus was properly served under the Chinese Arbitration Law and the Arbitration Rules. The [Buyer], nevertheless, alleged that the Secretariat should have delivered the documents to the last known place of business of the [Buyer], i.e., CCC, which was indicated in the Sales contract. However, after investigation, the Arbitration Tribunal finds that the [Buyer]'s place of business indicated in the Sales Contract attached to the Request for Arbitration is at DDD, Rizhao, Shandong, China, instead of CCC as the [Buyer] alleged. Therefore, the Arbitration Tribunal rejected the [Buyer]'s challenge and ruled that the hearing should proceed as scheduled. The Secretariat then notified the [Buyer] about the rejection in writing.

Upon the request of the [Seller], the Arbitration Tribunal decided on 15 June 2006 to hold a second hearing on 21 June 2006. The Secretariat sent the Notice of the Second Hearing to the parties on the same day.

The second hearing was held in Beijing on 21 June 2006 as scheduled. At the hearing, the representatives of both parties made oral statements on the facts, examined the new evidence and answered questions raised by the Arbitration Tribunal.

After the hearing, both parties submitted supplementary written materials and the Secretariat forwarded these materials to the parties.

The [Buyer] restated at the hearing that it insisted on its opinions in the challenge upon the arbitral proceedings. However, with regard to this matter, the CIETAC had responded clearly. Moreover, in its Attorney's Opinion and at the hearing, the [Buyer] requested the Arbitration Tribunal to visit the police department of City B to investigate a related criminal case. The Arbitration Tribunal, however, found that after two oral hearings and reviewing the written documents submitted by the parties, it was not necessary for the Arbitration Tribunal to visit the police department of City B to investigate the criminal case. On 28 June 2006, the Secretariat so advised the parties.

On 29 June 2006, upon the request of the Arbitration Tribunal, the Chairman of CIETAC extended the time limit to render the arbitration award to 30 July 2006 upon necessity. The Secretariat notified the parties by mail on the same day.

All the documents in this case have been properly served on the parties.

The case is now closed. The Arbitration Tribunal hands down the arbitration award based on the verified facts and written documents submitted by the parties.

The facts and position of the parties, and the Arbitration Tribunal's opinion and award are as follows:

I. THE FACTS AND POSITION OF THE PARTIES

The [Seller] and the [Buyer] concluded Sales Contract No. 05WB0056B (the "Contract") by fax on 12 October 2005. The Contract stipulates that:

(1)    (Goods and price) The [Buyer] purchases from the [Seller] 1,970.511 metric tons of bleached softwood Kraft pulp by Pacifico at the unit price of US $505 per m.t. CPT Qingdao China. The total amount of the Contract is US $995,108.06.
 
(2)    (Shipment terms) The shipment should be made within seven days after the Customs clearance. The port of loading is Changshu, China and the port of discharge is Qingdao, China. The [Buyer] should clear Customs within seven days after receiving the shipping documents from the [Seller].
 
(3)    (Payment terms) The payment for the goods should be made by irrevocable 180-day usance L/C. The L/C must be received by the [Seller] by 27 October 2005.
 

After signing the Contract, the [Buyer] failed to issue the L/C as scheduled which resulted in the dispute between the parties. The [Seller] applied for arbitration to resolve this dispute.

The [Seller] alleges in its Request for Arbitration that:

The [Seller] stored the goods at a warehouse of Changshu EEE Storage Co. Ltd. (hereinafter, "EEE") according to the Contract. However, the [Buyer] failed to issue the L/C within the time limit under the Contract. The [Seller] contacted the [Buyer] several times, requiring the latter to perform its contractual obligation, but the [Buyer] refused to do so. In this period of time, the [Seller] tried to resolve the dispute via letters and other measures, but in vain due to the [Buyer]'s lack of good faith. The [Seller] then terminated the Contract on 1 December 2005. Since the market price of the goods kept falling after mid-October 2005, in order to prevent the loss from increasing, the [Seller] resold the stored goods (1,970.511 metric tons of bleached softwood Kraft pulp by Pacifico) to DDD (Hong Kong) Timber LTD (hereinafter, "DDD") for a reduce price of US $480 per ton.

Based on the above facts, the [Seller] requests for the following relief:

(1)    The [Buyer] should pay the [Seller] the difference between the contract price and the resale price of the goods, i.e., US $49,262.78.
 
(2)    The [Buyer] should compensate the [Seller] for the storage fee, i.e., RMB 53,950.68.
 
(3)    The [Buyer] should compensate the [Seller] for its travel and accommodation expense for this case.
 
(4)    The [Buyer] should pay the arbitration fee.
       

The [Buyer] did not submit any defense before the first hearing.

The [Buyer] submitted its Attorney's Opinion after the first hearing as follows:

The parties agreed at the oral hearing and in the Contract that the law of the People's Republic of China should be the governing law of this case. Therefore, application of laws of any foreign countries and international treaties are excluded.

1. The [Buyer] has never entered the Contract with the [Seller]. The Contract is forged.

      (1) With regard to the evidence, the alleged contract the [Seller] provided is a fax copy. As it is well known that it is easy to forge a facsimile copy. Without any other supporting evidence, a facsimile copy should not be verified as authentic. In the present case, the [Seller] can provide neither the original copy of the Contract nor any evidence to prove that the [Buyer] concluded the Contract by fax. Therefore, this evidence provided by the [Seller] cannot demonstrate that the [Buyer] has signed the alleged Contract.

      (2) In terms of trade usage, an international commercial contract with a large sum for a transaction such as the one in the present case does not come into play overnight. Companies do due diligence about their business partners and negotiate the terms of transactions before entering into this kind of contract. In other words, before the conclusion of such a contract, the parties should have had correspondence via letters, facsimiles, e-mails, or other measures in carrying out the necessary negotiations. However, the [Seller] provided no evidence at the hearing to prove the negotiation process and which employee of the [Buyer] it communicated with by fax during the process. It is unreasonable. Moreover, considering that the place of business of the [Buyer] is in Rizhao, China and that of the [Seller] is in Singapore and neither party has a branch office in Shanghai, China, but the Contract was faxed between two numbers in Shanghai, the authenticity of the Contract is doubtful.

According to international trade usage and the law of China, the conclusion of a contract should be based on an offer and acceptance of the parties, even several rounds of offer and counter-offer between the parties before an acceptance occurs. However, in the present case, the alleged Contract was not concluded based on such an offer and acceptance process, or other negotiation.

      (3) According to the law of China, the party who alleges the conclusion of a contract bears the burden of proof. Since the [Seller] cannot demonstrate the fact that the alleged Contract was effectively concluded, it should bear the negative consequence therefrom.

      (4) The [Buyer]'s core business is export of agricultural products and it had never dealt with kraft pulp trading. During the same period of the Contract, the [Buyer] imported the same goods as those under the Contract on behalf of another company and was cheated in the transaction by false pretense and suffered great losses. The police department has investigated the case. The [Buyer] did not know of this Contract until it obtained the fax copy of the Contract from the Arbitration Tribunal. Further, the alleged Contract is lacking a trade basis. Therefore, the [Buyer] believes that the Contract was concluded by this other company fraudulently on behalf of the [Buyer]. The [Buyer] even suspects that the [Seller] maliciously colluded with the other company to conclude this Contract.

2. Even if the Contract was effectively concluded, the [Seller]'s claim for damages could not be supported.

      (1) The [Seller]'s claim for the difference between the contract price and the resale price should be rejected.

            a) The [Seller] did not inform the [Buyer] of the termination of the Contract in writing, or request to terminate the Contract in the arbitration. The [Seller] submitted a Demand Letter. However, it could not prove that it had delivered the Demand Letter to the [Buyer]. Moreover, the [Seller] stated in the Demand Letter that it "may" terminate the Contract instead of "lawfully terminating" the Contract. Therefore, the Contract has not been lawfully terminated, and thus, the [Seller] cannot request damages.

            b) The [Buyer] objects to the authenticity of the resale contract, commercial invoices and L/C submitted by the [Seller]; also, they contradict each other.

First, the [Seller] cannot prove the authenticity of the resale contract, i.e., whether the [Seller] has concluded the resale contract with DDD, and whether DDD actually exists. The [Seller] is incorporated in Singapore. DDD is incorporated in Hong Kong while its contact number is in Zhongshan, China. The [Seller] and DDD concluded the resale contract in Shanghai while the goods were in Changshu. It was logically unreasonable.

Second, the contract number in the commercial invoices the [Seller] provided is different from the number of the resale contract.

Third, The L/C provided by the [Seller] is in fact a notice without the seal of the bank. The DDD in the notice is not the drawer but the first beneficiary, which is not logically reasonable. At page 3 of the notice, the due date is 20 January 2006 while the date of shipment declared by the [Seller] is 22 January 2006. These two dates contradict one another, because the goods under the resale contract could not be delivered before the due date of the L/C. Therefore, the L/C is of no effect.

Fourth, the [Seller] did not submit any evidence to prove the goods under the resale contract were delivered to DDD.

            c) According to the Chinese Contract Law, "where a party breached the contract, the other party shall take the appropriate measures to prevent further loss; where the other party sustained further loss due to its failure to take the appropriate measures, it may not claim damages for such further loss." The [Seller] alleges that "the market price of the goods has fallen since mid-October 2005." Being aware of the drop in price, the [Seller] did not resell the goods until 20 December 2005. Therefore, the [Seller] did not take appropriate measures to prevent further loss and cannot claim further loss such as the difference in prices and storage cost.

            d) The [Seller] claims damages for the difference between the contract price and the resale price. However, the units of weight used in the Contract and in the resale contract are different. Moreover, the [Seller] could not prove that the resale price is reasonable compared with the then market price. According to the Chinese Contract Law, the amount of damages shall not exceed the likely loss resulting from the breach which was foreseen or should have been foreseen by the breaching party at the time of conclusion of the contract. Therefore, assuming but not conceding that the alleged Contract did exist and the [Buyer] did breach the Contract, the difference between the contract price and the resale price and the drop in the price of the goods under the Contract could not have been foreseen by the [Buyer] at the time of conclusion of the Contract. The [Buyer] should not be held liable for such loss.

      (2) The [Seller]'s claim for compensation for the storage fee should be rejected

            a) The storage agreement, the statement of storage fee and the commercial invoice provided by the [Seller] contradict each other and are irrelevant. Moreover, the [Buyer] objects to the authenticity of these documents.

First, the storage agreement was concluded on 31 August 2005 but the storage fee started from 16 September as indicated in the statement. The [Seller] states in the Request for Arbitration that the [Seller] stored the goods in Changshu at EEE according to the Contract. These alleged facts apparently contradict each other.

Second, the storage agreement does not stipulate the name, quantity of the goods and cannot prove that the stored goods were the goods under the Contract.

Third, the contract number in the commercial invoice and that in the statement of storage fee are the same. However, the storage agreement does not indicate a contract number. It is apparent that these three documents are of no relevance.

Fourth, the statement of storage fee does not provide the name of the goods, and the quantity of goods indicated therein is substantially different from that indicated in the Contract. EEE, as an important witness who was the [Seller]'s business cooperation partner did not appear at the oral hearing, but only provided an Explanation that cannot be authenticated, and thus, should be invalid. Moreover, the calculation and basis for the gross weight and net weight of the goods should have been provided. A mere Explanation does not suffice.

            b) The price of the goods under the Contract is a CPT price, where the seller pays for carriage to the destination. Since storage fee is part of the cost, it should be reflected in the sales price. When the [Seller] resold the goods under the Contract, the resale price should have included the storage fee and this other buyer's payment should have covered it, and thus, the [Buyer] should not be responsible to pay for it again. To the contrary, assuming that the resale price did not include the storage fee, the storage fee must have been included in the difference between the contract price and the resale price, and thus, it would have been a double request. Therefore, the claim for storage fee should be rejected.

            c) The method the [Seller] used to calculate the storage fee is factually and legally groundless.

First, since the authenticity of the storage agreement cannot be proved, it is impossible to prove whether the storage fee is reasonable compared with the then market price.

Second, the storage agreement provides the [Seller] a 30-day free storage. However, since the [Seller] did not submit evidence proving the time when the goods under the Contract were put into storage, the [Seller]'s alleged starting date of storage cannot be proved.

Third, the storage agreement was stipulated to be valid till 31 December 2005, which meant that the last date for the calculation of the storage fee should have been 31 December 2005. However, the [Seller] claims for storage fee till 12 January 2006. Since the [Seller] failed to submit evidence demonstrating the delivery of goods, the calculation of the storage fee should not be based on the [Seller]'s alleged delivery date.

Fourth, the resale contract stipulates that the buyer is responsible for the storage fee after 15 January 2006. Therefore, the [Seller] cannot claim storage fee after such date.

3. Since the [Seller]'s application for arbitration is groundless, the [Seller] should be responsible for the travel and accommodation fee and attorneys' fee incurred by the [Buyer] in the course of the arbitration.

In its supplementary opinion submitted after the first hearing, the [Seller] states that:

1. The Contract is effective and legally binding on both of the parties.

      (1) The Contract was effectively concluded.

      The Contract was signed by legal persons from both parties and their company seals were affixed. According to the Chinese Contract Law, the Contract was effectively concluded.

            a) It is an international trade usage to enter into contracts by fax.

            The [Seller] first sent the Contract as an offer to the [Buyer] by fax. After the [Buyer] faxed the Contract on which it affixed its company seal, the [Seller] affixed its company seal on the Contract and sent it back to the [Buyer] by fax on 18 October 2005. In the course of concluding the Contract, the [Seller]'s employee Xiaqin Ma was in contact with the [Buyer]'s employee Li ___ via telephone at 0063-2216772/773.

The Statement of Calling History provided by China Telecom (Shanghai) shows that faxes were sent from 50476788/5166 ([Seller]'s two fax numbers dedicated only to send and receive faxes) to 0663-2216772/779/781 in Rizhao during October and November 2005 (12, 17, 18, 19, 25 October, 1 and 28 November, respectively). 0663-2216779 is the [Buyer]'s fax number. After the first hearing, the [Seller] called 0633-2216779, and confirmed that this number was connected to an automatic fax machine; 0633-2216781, the verified fax number of the [Buyer] under the Contract, was confirmed to be connected to an automatic fax machine as well when the [Seller] called the number after the first hearing. In addition, 0633-2216772 is the [Buyer]'s telephone number. The [Seller] called 0633-2216772 at 15:57 on 12 May 2006. The person who answered the phone confirmed that it was BBB's number and Li ___ was an employee there.

The above facts show that the parties exchanged faxes in concluding the Contract and provided relevant information to each other thereafter. The Contract in the present case was indeed concluded by fax. Concluding a contract by fax is permitted by the Chinese Contract Law, and is widely accepted by the international trade industry, which has become a usage. In the [Seller]'s course of business, most international sales contracts are concluded via fax.

It is worth noting that the [Seller] is a wholly-owned subsidiary of AAA-M International (Holding) Co. Ltd. (hereinafter, "AAA-M International"). These two companies have certain cross business. Therefore, although the Contract was signed by the [Seller], employees of AAA-M International were involved in most of the daily communications and the actual operations in the negotiation process of the Contract.

            b) The [Buyer] acknowledged that the seal in the Contract is its company seal. Its challenge to the existence of the Contract should be rejected.

First, on 27 April 2006, at the oral hearing, the [Buyer] confirmed that the company seal and the legal person's signature of the [Buyer] in the Contract were authentic. Such a confirmation can be reasonably concluded to be a confirmation of the Contract itself.

Second, the [Buyer] alleged at the first hearing that the seal was not affixed by the [Buyer], and that it might have been affixed by its business partner in Beijing who was under suspicion of having been involved in false pretense in the case mentioned above, and this Beijing company was prosecuted. However, in its Request to Postpone the Hearing, the [Buyer] states that "the softwood kraft pulp business between the [Buyer] and the [Seller] was done by an import agency company and the relative correspondence was completed by this agency company." This statement shows that the [Buyer] was aware of the transaction in the Contract, which demonstrates that the transaction in dispute does exist. The false pretence the [Buyer] mentioned was between the [Buyer] and its business partner in Beijing concerning another transaction, and thus, is irrelevant. Even if its business partner did affix the seal of the [Buyer] on the Contract, such dispute should be between the [Buyer] and its business partner, which is not relevant to the [Seller].

Third, the [Buyer] alleged that the faxes may be forged. However, it was based on mere speculation. The [Buyer] did not produce enough evidence to prove that the faxes between the two parties were forged by the [Seller]. All faxes may be forged. However, it is unreasonable to believe that all faxes are forged.

Fourth, the [Seller] sent a Demand Letter by EMS on 28 November 2005 regarding the [Buyer]'s breach of contract at the [Buyer]'s registered place of business for the attention of Li ___. The Demand Letter has not been returned, which means the [Buyer] has received it.

The above facts show that the Contract was effectively concluded and the transaction under the Contract is true.

      (2) The parties have undertaken preparations for performance of the Contract.

      The [Seller] prepared the goods under the Contract after signing the Contract. In order to perform the Contract, on 24 October 2005, the [Buyer]'s employee modified the application to issue the L/C supervised by the [Buyer]. After the modification, the [Buyer] sent the application to the [Seller] by fax on 25 October 2005. It is demonstrated that the [Buyer] voluntarily accepted to be bound by the Contract and prepared to perform the Contract.

2. The [Buyer] breached the Contract and should be liable for the resulting damages.

According to the Contract, the [Buyer] was to have issued the L/C by 27 October 2995. The [Buyer] failed to issue the L/C even after repeated demands by the [Seller], and thus, the Contract could not be performed. The [Buyer] should be liable for breach of contract according to the Chinese Contract Law.

      (1) The [Buyer] should be liable for the [Seller]'s loss resulting from the resale of the goods under the Contract.

            a) The [Buyer]'s breach of contract forced the [Seller] to resell the goods under the Contract.

            As stated above, the [Buyer] refused to issue the L/C after the [Seller] required the [Buyer] to do so on several occasions. Since the storage of the goods under the Contract was incurring extra cost and the market price of the goods was fluctuating, the [Seller] signed the resale contract with DDD to prevent further loss after knowing that the Contract could not be performed. The [Seller] then resold all the goods under the Contract to DDD.

            b) The [Buyer] should pay the [Seller] the difference between the contract price and the resale price.

            The contract price is US $505 per ton and the resale price is US $480 per ton. The difference is US $25 per ton, and thus, the difference in total is US $49,262.78.

According to Chinese Contract Law,

"Where a party failed to perform or rendered non-conforming performance, thereby causing loss to the other party, the amount of damages payable shall be equivalent to the other party's loss resulting from the breach, including any benefit that may be accrued from performance of the contract. …"

Therefore, the [Buyer] should be responsible for the loss in the resale resulting from its breach of contract.

            c) It was reasonable for the [Seller] to resell the goods under the Contract to prevent further loss.

            The resale contract between the [Seller] and DDD was legally effective, and was duly performed. The [Seller] incurred a loss in the resale. It is groundless for the [Buyer] to claim that the resale price was unreasonably low. Since the [Seller] was not sure whether the [Buyer] would be able to cover the damages and the damages were not actually recovered from the [Buyer], it was unreasonable for the [Seller] to intentionally resell the goods at an unreasonably low price. In addition, the [Buyer] did not produce any evidence to support its claim that the resale price was unreasonably low.

      (2) The [Buyer] should be liable for the storage fee resulting from its failure to perform the Contract.

            a) The goods under the Contract were kept in the warehouse for an extra seventy-three days from 11 November 2005 to 22 January 2006 because of the [Buyer]'s breach of contract. The [Seller] paid RMB 51,821.05 in total for the storage over this period.

According to the Contract, the [Seller] should deliver the goods within seven days after the Customs clearance and the [Buyer] is responsible to clear Customs within seven days after receiving the relevant documents from the [Seller]. Moreover, the issuance of L/C by the [Buyer] is a prerequisite for the [Seller] to provide to the ]Buyer] relevant documents for Customs clearance.

The Contract stipulates that the L/C should arrive at the [Seller]'s firm by 27 October 2005. Thus the deadline for delivery of goods should be fourteen days after 27 October, i.e., 10 November. Therefore, the [Buyer] is responsible for the storage fee for the period from 11 November when the goods should have been moved out of the warehouse to 22 January 2006 when the goods were actually moved out of the warehouse, which is seventy-three days.

According to the storage agreement between the [Seller] and EEE, the storage fee was calculated based on the gross weight of the goods. The gross weight of the goods under the Contract was 2,028.221 tons and the price of storage is RMB 0.35 per ton per day. Therefore, the total storage fee for the seventy-three days is RMB 51,821.05.

            b) The [Buyer]'s challenge to the authenticity of the storage fee is groundless.

First, the storage fee was actually incurred. The Notice of Storage shows that the [Seller] stored the goods in EEE's warehouse in Changshu from 11 November 2005 to 22 January 2006. The contract number on the Statement of Storage Fee and that on the commercial invoice are both "05GHS076YY", which is the contract number of the resale contract. This number is also in provision 46A and 47A of the L/C that DDD issued for this resale, and is in the commercial invoice that the [Seller] provided to DDD.

The above facts show that the goods stored were the goods under the Contract. From 11 November 2005 to 22 January 2005, the goods stored grossly weighed 2,028.221 tons and the storage fee was RMB 51,821.05.

Second, there is a difference between the gross weight and the net weight of the goods under the Contract.

As a raw material for producing paper, the goods under the Contract look like cardboards that are packed together as a small package, eight of which packed together as a big package with an overwrap as well. Therefore, there is a difference between the gross weight and the net weight of the goods. With regard to storage, the calculation should be based on the gross weight of the goods.

The Notice of Storage, Statement of Storage Fee from EEE and the Delivery Order from the [Seller] to the warehouse all state that the rate between gross weight and net weight is about 97.2%. Therefore, since the net weight of the goods is 1,970.511 tons, the gross weight of 2,028.211 tons is within the rate.

Third, the [Seller] actually paid for the storage fee until 22 January 2006. Although the resale contract stipulates that DDD should pay for the storage fee incurred after 15 January 2006, the [Seller] and DDD reached another agreement in which the [Seller] waived its right to collect the storage fee from DDD from 15 January to 22 January 2006 considering the actual needs of DDD and the [Seller].

3. The [Buyer] should pay the arbitration fee. The present dispute arose due to the [Buyer]'s breach of contract. According to the relevant law and Arbitration Rules, the [Buyer] should bear the arbitration fee.

In response to the [Buyer]'s Supplement Opinion, the [Seller] alleges in its Supplementary Opinion that:

1. It is groundless for the [Buyer] to allege that the Contract was not authentic. The [Buyer] has failed to produce any evidence to prove that the Contract is forged. The allegation was based merely on a speculation.

2. The criminal false pretense case was not relevant to this case. The [Buyer] has failed to prove the existence of such a criminal case. In addition, assuming but not conceding that this case exists, as the [Buyer] stated at the first hearing, the contract involved in the false pretense case was not the Contract in this case. Therefore, the false pretense case is irrelevant to this case and does not affect the arbitration proceedings of the present case.

3. The [Buyer]'s challenge of the L/C in the resale is groundless.

      (1) The notice. Pages 1 and 2 of Evidence Exhibit 10 are the notice of receiving the L/C and relevant fees issued by the advising bank. The terms of the L/C are from pages 3 to 6. The six pages constitute a complete original copy of the L/C. In addition, it is indicated from page 3 to page 6 of Evidence Exhibit 10 that "this credit is valid when used in conjunction with our notification of L/C Advice No. 957114163434-Z dated 29 December 2005." These two items (i.e., the notice and the L/C terms from page 3 to page 6) should be taken into account together.

      (2) The seal. It is stated at the bottom of pages 1 and 2 of Evidence Exhibit 10 that "this is a computer generated advice. No signature is required." Therefore, it was not necessary to sign these two pages. On the other hand, the relevant employee of the bank signed and affixed a seal from page 3 to page 6 of Evidence Exhibit 10.

      (3) The assignability of the L/C. The L/C is assignable according to 47A of the L/C on page 4. Moreover, it is expressly stated in the L/C that the L/C is subject to the Uniform Customs and Practice for Documentary Credits (UCP 500). According to Article 47 of UCP 500,

"A transferable Credit is a Credit under which the Beneficiary (first Beneficiary) may request the bank authorized to pay, incur a deferred payment undertaking, accept or negotiate (the 'Transferring Bank'), or in the case of a freely negotiable Credit, the bank specifically authorized in the Credit as a Transferring Bank, to make the Credit available in whole or in part to one or more other Beneficiary(ies) (Second Beneficiary(ies))". [Translator's note: It should be Article 48 of the UCP 500].

      (4) The expiry date of the L/C. According to sub-Article 42(b), "documents must be presented on or before such expiry date." Therefore, the [Seller] only needed to provide relevant documents before the expiry date of the L/C (20 January 2006) but not necessarily to ship the goods before that date. The [Seller] declared that 22 January 2006 should be the date of shipment, which is not the same date as the [Buyer] stated in its Attorney's Opinion.

Therefore, it is groundless for the [Buyer] to challenge the [Seller]'s resale L/C. The [Buyer] not only misunderstood the content of the L/C, but also misunderstood the [Seller]'s statement.

In its Supplementary Opinion, the [Buyer] states that:

1. The Statement of Calling History provided by China Telecom (Shanghai) does not show the owners of the numbers 50475166 and 50476788, and thus, cannot prove that the numbers belong to the [Seller]. In addition, the function of these two numbers are unclear, and thus, the [Seller] fails to prove that these numbers are for fax only by its mere statement.

2. Since the [Seller] is incorporated in Singapore without representative office in Shanghai, it is not reasonable for the [Seller] to have fix-line telephones in Shanghai. It is unreasonable and not in accordance with the trade practice as the [Seller] alleges that the Contract was signed by the [Seller], while employees of AAA-M International were involved in most of the daily communications and the actual operations in the negotiation process of the Contract.

3. The [Seller]'s company seal on the Delivery Order it submitted after the hearing is different from that in the Contract and that in the Request for Arbitration. The authenticity of these seals cannot be proved. Therefore, the [Buyer] doubts that the [Seller] actually signed the Contract.

4. The Statement of Calling History submitted by the [Seller] is not in accordance with its statement about the signing of the Contract, and thus, the [Seller] fails to prove that it signed the Contract via fax. The faxed Contract the [Seller] submitted shows "2005.OCT.18 18:02". However, there is no record of calling with any number in Rizhao on 18 October 2005 in the Statement of Calling History. Therefore, the [Seller]'s allegation that it sent the Contract with its company seal to the [Buyer] by fax on 18 October 2005 is not true.

5. It is obvious that the "Demand Letter" item in the List of EMS Domestic Express Mails was added after the list was made. The certificate made by Shanghai Pudong Postal Office needs to be authenticated by having an employee from the office appear in court as a witness. In any case, all mails via EMS are recorded and are accompanied with a receipt signed by the recipients. Therefore, whether the Demand Letter was actually received by the [Buyer] can be proven by a receipt signed by the [Buyer] A postal office certificate that the Demand Letter has been sent and not returned cannot be used to prove the [Buyer]'s receipt of it. According to the Chinese Contract Law, the [Seller] would have the right to terminate the Contract if it had properly notified the [Buyer] and demanded that the [Buyer] perform the Contract within a reasonable period of time. However, the [Seller] resold the goods under the Contract before it properly notified the [Buyer] and demanded performance and did not legally terminate the Contract. Therefore, the [Seller] does not have the right to claim for damages against the [Buyer], because the conditions precedent therefor were not satisfied.

After the second hearing, the [Seller] states in its Supplementary Opinion that:

No law of China requires that one company can only carry one official company seal. There is no such law for other seals of the company, either. It is groundless for the [Buyer] to allege that the company seal must be recorded at the police department and one company can only have one seal, which has been recorded.

Two different seals appeared in the two statements made by EEE because EEE has stopped using one of them. The company seal in the Delivery Order from the [Seller] to DDD is for relevant notes only. It is different from the main company seal that was used on the Contract at issue.

The [Buyer] states in the Supplementary Opinion it submitted after the second hearing that:

It disagrees with the [Seller]'s statement about the laws and regulations regarding company seals, and that the evidence submitted by the [Seller] is forged and invalid.

III. OPINION OF THE ARBITRATION TRIBUNAL

A. Whether the Contract is authentic

The [Buyer] denied the existence of the Contract (Sales Contract No. 05WB0056B) throughout the arbitration. The [Buyer] alleges that during the same period of the Contract, the [Buyer] imported the same goods as those under the Contract on behalf of another company and was cheated in the transaction by false pretense, which resulted in massive loss. The [Buyer] states that the police department has investigated the case. The [Buyer] alleges that this domestic company fraudulently concluded the Contract at issue on behalf of the [Buyer]. The [Buyer] even suspects that the [Seller] maliciously colluded with the other company to conclude this Contract.

After reviewing the written materials, the Arbitration Tribunal notes the following evidence:

1. The [Seller] and the [Buyer] signed Contract (No. 05WB0056B) by fax. It is indicated in the Contract that the place of contract is Shanghai, that the parties signed on 12 October 2005, that the [Buyer]'s telephone number is 86-633-221___, and that its fax number is 86-633-221___. The Contract has two pages with the parties' signatures and seals at the bottom of both pages. "2005.OCT.18 18:02" and "FAX 0215047___ AAA INTERNATIONAL" are printed on the top of both pages. On the first page, it is handwritten: "to Mr. Li ___, please affix your company seal and fax it to 021-5047___" and "to Ma ___ 021-5047___". The Contract stipulates that the [Seller] sells to the [Buyer] 1,970.511 metric tons of bleached softwood kraft pulp by Pacifico at the unit price of US $505 per m.t. CPT QINGDAO China, and that the total amount of the Contract is US $995,108.06. According to the Contract, the payment for goods shall be made by irrevocable 180-day usance L/C and the L/C should be received by the [Seller] by 27 October 2005.

According to the [Seller]'s statements, the [Seller] drafted the Contract and first sent the Contract as an offer to the [Buyer] by fax. After the [Buyer] faxed back the Contract with its company seal, the [Seller] affixed its company seal on the Contract and sent it to the [Buyer] by fax on 18 October, 2005. In the course of concluding the Contract, the [Seller]'s employee Xiaqin Ma was in contact with the [Buyer]'s employee Li ___.

2. The [Seller] entered the storage agreement with EEE on 31 August 2005. According to the storage agreement, EEE provides warehouse service to the [Seller] according to the contracted rate and terms, such as the first 30 days of storage for free and after that the storage fee is RMB 0.35 per ton per day. EEE and the [Seller] signed the storage agreement which is valid from the date of signature to 31 December 2005.

3. In the [Buyer]'s application for issuing an L/C, made on 24 October 2005, the beneficiary is the [Seller], the relevant contract number is 05WB0056B, the goods under the contract are bleached softwood kraft pulp by Pacifico, and the amount is US $995,108.06. The [Seller] altered the application and asked Li ___ to "issue the L/C as soon as possible".

4. According to the China Telecom (Shanghai)'s Statement of Calling History submitted by the [Seller], there were ten calls from 5047___1 and 5047___2 from Shanghai to 0633221___1, 0633221___2 and 0633221___9 from Rizhao from 12 October to 28 November 2005. The call on 18 October started from 16:23:46.

5. On the China Huasheng Website, the [Buyer]'s telephone number is 0633221___3 and its fax number is 0633221___9.

6. The [Seller] sent to the [Buyer] the Demand Letter on 28 November 2005. It is stated in the Demand Letter that "according to the Contract (05WB0056B) that we signed on 12 October 2005, please issue the L/C by 30 November 2005 as required in order to maintain our friendly cooperation relationship and our mutual interests. Otherwise we are going to terminate the Contract according to the Contract Law of People's Republic of China and you will be liable for the resulted loss incurred to us, including but not limited to our anticipated profits."

7. The [Seller] alleges that, according to the List of EMS Domestic Express Mail, the Demand Letter was sent to Li ___ at BBB (Arbitration Tribunal's note: The [Buyer]'s place of business) from AAA-M International at DDD in Shanghai.

The facts stated by the [Seller] are slightly different from those that are demonstrated by the above evidence, e.g., no record in the Statement of Calling History shows that a call between the parties was made at the time shown on the Contract, i.e., on 2005.OCT.18 18:02. However, errors of time setting often happen on fax machines. The fax would show up a wrong time if the time setting on the machine is wrong. In addition, it is proved by other evidence that fax number 50476788 (the [Seller]'s fax number) and fax number 0633221___9 (the [Buyer]'s number) were connected for 1 minute and 41 seconds starting from 16:23:46 on 18 October 2005. Therefore, taking into account other evidence submitted, the Arbitration Tribunal notes that the evidence submitted by the [Seller] is relevant and each piece of evidence links and corroborate with others. Therefore, it can be proved that the parties communicated by telephone and fax before the conclusion of the Contract, and eventually signed the Contract by fax, and that the parties prepared to perform the Contract, and even communicated about the dispute resolution. Hence, the Arbitration Tribunal finds that the parties did conclude the Contract.

The [Buyer] denied the existence of the Contract but has failed to produce enough evidence to prove its defense. The [Buyer] failed to prove that the criminal false pretense case it was involved in was related to this case. Therefore, the Arbitration Tribunal rejects its request to investigate the criminal case in Rizhao.

The [Buyer] alleges that the Contract was forged because it was concluded by fax from a number in Shanghai and neither of the parties had an office in Shanghai. According to the [Seller], although the Contract was signed by the [Buyer] and the [Seller], employees of AAA-M International were involved in the course of negotiation of the Contract. The Arbitration Tribunal finds that it is international trade usage that a third party can help in conclusion of a contract; it is also reasonable for parties to conclude a contract at or to transfer contractual documents via a third place different from the places of business of the parties. Therefore, the Arbitration Tribunal does not support the [Buyer]'s challenge to the existence of the Contract.

B. The applicable law

Article 9 of the Contract stipulates that "this contract shall be construed in accordance with and governed by the law of P.R. China." Therefore, the Arbitration Tribunal holds that the law of P.R China applies to this case. For matters that are not covered by such laws, international usages shall apply. If an international treaty concluded or acceded to by the People's Republic of China contains provisions differing from those of such laws, the provisions of the international treaty shall apply, unless the provisions are ones on which China has announced reservations. Since China and Singapore, where the parties are incorporated, respectively, are parties to the United Nations Convention on Contracts for the International Sale of Goods (1980) (hereinafter, the "CISG"), the CISG shall apply to the case. Although the parties held different opinion on the application of the CISG at the first hearing, the Arbitration Tribunal finds that unless otherwise prescribed, where provisions of the law of China differ from those of CISG, the CISG shall apply.

C. The validity of the Contract

The Arbitration Tribunal notes that the Contract was signed by both parties with their company seals and reflects the intent of the parties. The Contract does not violate a mandatory provision of any law or administrative regulation. According to Article 32 and Article 44(1) of the Chinese Contract Law, "where the parties enter into a contract by a memorandum of contract, the contract is formed when it is signed or sealed by the parties", and "a lawfully formed contract becomes effective upon its formation". Therefore, the Arbitration Tribunal finds that the Contract is effective and legally binding on both parties. The parties should perform the Contract and enjoy the rights they are entitled to under the Contract.

The [Buyer] has not produced enough evidence to support its allegation that since the seal used in the documents between the [Seller] and EEE is different from the one used in the Contract, these documents are not authentic. Therefore, taking into account the relevance of other evidence, the Arbitration Tribunal does not support this allegation.

D. The performance of the Contract

Article 4 of the Contract stipulates that the [Buyer] should pay for the goods by irrevocable 180-day usance L/C and that the L/C must be received by the [Seller] by 27 October 2005, i.e., the L/C should be issued by the [Buyer] no later than 27 October 2005. However, the [Buyer] failed to do so. According to Article 161 of the Chinese Contract Law, "the buyer shall pay the price at the prescribed time." The [Buyer]'s failure to issue the L/C before 27 October 2005 constitutes a breach of contract. The [Buyer] should be liable for the resulted damages.

E. The [Seller]'s claims and requests

1. The [Seller] request that the [Buyer] pay the difference between the contract price and the resale price of the goods, i.e., US $49,262.78.

The Arbitration Tribunal notes that the [Buyer] failed to issue the L/C at the prescribed time, and thus, fundamentally breached the Contract. The [Seller] sent to the [Buyer] the Demand Letter on 28 November 2005, stating that it would terminate the Contract unless the [Buyer] issue the L/C by 30 November 2005.

According to Article 94 of the Chinese Contract Law, a party may terminate the contract if "(2) before the time of performance, the other party expressly stated or indicated by its conduct that it will not perform its main obligations ". According to Article 96 of the Chinese Contract Law, "the party availing itself of termination of a contract in accordance with Paragraph 2 of Article 93 and Article 94 hereof shall notify the other party. The contract is terminated when the notice reaches the other party. If the other party objects to the termination, the terminating party may petition the People's Court or an arbitration institution to affirm the validity of the termination."

The [Buyer] alleges that it did not receive the Demand Letter and that the [Seller] could not provide the signed receipt. After investigation, the Arbitration Tribunal notes that the Demand Letter was sent to the [Buyer]'s place of business by EMS domestic express mail. The [Seller] submitted the List of EMS Domestic Express Mails (No. E0630052334CN). Although the [Seller] could not provide the signed receipt due to the expiration of the tracking period, the Shanghai Pudong Postal Office provided a certificate on 30 April 2006 proving that "EMS No. E0630052334CN (from AAA-M International to the [Buyer]) was sent out on 28 November 2005 at Jinmao Plaza Office of Shanghai Pudong Postal office. There is no record of return." Therefore, the Arbitration Tribunal finds that the Demand Letter was delivered to the [Buyer] at the [Buyer]'s place of business. Since the [Buyer] failed to issue the L/C by 30 November 2005 as required by the Demand Letter, the Arbitration Tribunal finds that the Contract was effectively terminated by the [Seller] even though the [Seller] did not thereafter notified the [Buyer] of the termination of the Contract in writing.

After termination of the Contract, the [Seller] resold the goods under the Contract to DDD for US $945,845.28 on 20 December 2005. The [Seller] has submitted relevant evidence such as the resale contract 05WB0056C, the commercial invoice offered by DDD, the assigned L/C from DDD to the [Seller], the Delivery Order from [Seller] to DDD, and market information about bleached softwood kraft pulp downloaded from the Internet by the [Seller]. The Arbitration Tribunal finds that the above evidence shows that the [Seller] did resell the goods under the Contract, that the resale was not excessively delayed, and that the resale price was reasonable compared to the then market price. According to Article 113 of the Chinese Contract Law and Articles 74 and 75 of CISG, the [Buyer] should pay the [Seller] for the difference between the contract price and the resale price. The difference is: US $995,108.06 - US $945,845.28 = US $49,262.78.

2. The [Seller] requests the [Buyer] to pay for the storage fee resulting from the latter's breach of contract, i.e., RMB 53,950.68.

After investigation, the storage agreement between the [Seller] and EEE stipulates that EEE provides storage service to the [Seller] for free for the first 30 days of storage and for RMB 0.35 per metric ton per day afterwards.

According to the statement of storage fee submitted by the [Seller], among the goods of Zhonghua Singapore imported into China on 18 July 2005, 3,589.951 tons (gross weight) of the goods numbered 05GHS076YY were stored and EEE started charging for the storage from 17 September 2006 for RMB 0.35 per ton per day. The quantity of goods was reduced to 2,028.221 tons (gross weight) on 31 October 2005 and the remaining goods were moved out of the warehouse on 22 January 2006. The Arbitration Tribunal notes that the number of goods stored, i.e., 05GHS076YY is the same as the number in the commercial invoice and assigned L/C provided by DDD.

In addition, EEE states in its certificate:

"I hereby certify that

1. AAA International stored bleached softwood kraft pulp by Pacifico (Purchase Order No. 05GHS076YY) from 11 November 2005 to 22 January 2006. The gross weight of the goods was 2,028.221 MT, the net weight was 1,970.511 MT and the total storage fee was RMB 51,821.05.

2. Here is the explanation for the documents submitted to the Arbitration Tribunal:

      (1) The name "Zhonghua Singapore" in the statement of storage fee is the Chinese abbreviation of AAA International.

      (2) The brand of the stored bleached softwood kraft pulp in the invoice (Invoice No. 2006-0142) we issued to AAA International was Pacifico.

      (3) The Notice of Storage (No. 10002726) was sent by us to AAA International by fax. The net weight of goods on the Notice of Storage is 4927.302 tons (gross weight 5129.46 tons). Those goods were moved out of the warehouse entirely on 22 January 2006."

In addition, the [Seller] also submitted the Notice of Storage regarding the 4,987.302 tons of bleached softwood kraft pulp by Pacifico issued by EEE on 5 August 2005, the commercial invoice and its correction regarding the storage fee issued by EEE, statement of storage fee by EEE and the e-statement regarding the payment of storage fee from the [Seller] to EEE through Standard Chartered.

Based on the evidence above, the Arbitration Tribunal finds that the [Seller] has paid US $18,156.53 to EEE as storage fee, including the fee for the storage of the goods under the Contract. According to the [Seller], the Contract stipulates that the proper L/C should arrive at the [Seller]'s by 27 October 2005, and thus, the deadline for delivery of goods should be fourteen days after 27 October (10 November). The [Seller] calculated the loss due to storage fees from 11 November 2005 to 22 January 2006 when the goods were actually moved out of the warehouse, a period of seventy-three days. According to the storage agreement, since the goods with gross weight of 2,028.221 tons were stored for seventy-three days at the price of RMB 0.35 per m.t. per day, the total amount of storage fee should be RMB 51.821.05.

After studying the relevant terms of the Contract, the Arbitration Tribunal notes that, according to the Contract, the port of loading is Changshu, China, the port of discharge is Qingdao, China, the date of shipment is within seven days after Custom clearances, and the [Buyer] should complete the Custom clearance within seven days after receiving the shipping documents from the [Seller] and should issue the L/C by 27 October 2005. Therefore, if the Contract was duly performed, the [Buyer] should have shipped the goods by 10 November 2005, i.e., the last date to be calculated for the storage fee that the [Seller] would have been responsible for and the storage fee incurred after 10 November 2005 was caused by the [Buyer]'s breach of contract that resulted in the [Seller]'s failure to ship the goods as scheduled. Therefore, the Arbitration Tribunal finds that the [Buyer] is liable for the storage fee incurred after such date.

The Arbitration Tribunal also notes that DDD should bear the storage fee after 15 January 2006 according to the resale contract, but the [Seller] in fact paid for the storage fee from 15 January to 22 January 2006. The [Seller] alleges that it paid for the storage fee because of the new agreement on the storage fee between the [Seller] and DDD. Since the [Seller] did not provide the new agreement or any other relevant evidence, the Arbitration Tribunal finds that the [Seller] should bear the storage fee from 15 January to 22 January 2006. Since the price term in the resale contract is a CPT price and thus the [Seller] should bear all the cost before delivering the goods, including the necessary storage fee, the Arbitration Tribunal finds that it is reasonable for the [Buyer] to bear the storage fee of RMB 30,000.

3. The [Seller] requests that the [Buyer] compensate the [Seller] for its travel and accommodation expense for this case. The Arbitration Support does not support this request since the [Seller] failed to produce any evidence regarding the expenses.

4. The [Seller] requests that the [Buyer] pay for the arbitration fee. The Arbitration Tribunal finds that the [Buyer] shall pay 95% of the arbitration fee and the [Seller] pay 5% of it.

IV. AWARD

Based on the above facts and analysis, the Tribunal renders the following award:

(1)    The [Buyer] shall pay US $49,262.78 to [Seller] for its loss resulted from reselling the goods under the Contract;
 
(2)    The [Buyer] shall pay RMB 30,000 to [Seller] as compensation for the storage fee resulted from the [Buyer]'s breach of contract;
 
(3)    The [Seller]'s request that the [Buyer] pay for the travel and accommodation fee is rejected;
 
(4)    The arbitration fee is US $3,192, 5% of which assumed by the [Seller] (i.e., US $159.60) and 95% by the [Buyer] (i.e., US $3,032.40). As the [Seller] has paid for the arbitration fee in advance, the [Buyer] shall pay US $3,032.40 to the [Seller] as compensation.
 
(5)    All of the above payment must be paid within 20 days by the [Buyer] to the [Seller], from the date of this award.

The award is final and takes effect when rendered.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Amounts in U.S. currency (dollars) are indicated as [US $]; amounts in the currency of the People's Republic of China are indicated as [RMB].

** Jinguan Sun is an Associate of the New York office of the law firm of Sheppard Mullin Richter & Hampton LLP. Sheppard Mullin produces the China Law update website.

*** Jing Li, Associate, Institute of International Commercial Law, Pace University School of Law; LL.M., University of Texas at Austin, School of Law; Master of Law and LL.B., Sun Yat-Sen University School of Law, China; Participant, Thirteenth Annual Willem C. Vis International Commercial Arbitration Moot (2006); Participant, Fifth Annual Willem C. Vis (East) International Commercial Arbitration Moot (2008).

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Pace Law School Institute of International Commercial Law - Last updated April 16, 2010
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