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CISG CASE PRESENTATION

China December 2006 CIETAC Arbitration proceeding (Automobile case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/061200c1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20061200 (December 2005)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/2006/03

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Australia (respondent)

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

GOODS INVOLVED: Automobile


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 35 ; 48 ; 49 ; 74 [Also cited: Articles 38 ; 39 ; 40 ; 51 ]

Classification of issues using UNCITRAL classification code numbers:

25B [Definition of fundamental breach: substantial deprivation of expectation, etc.];

35A [Conformity of goods to contract: quality, quantity and description required by contract];

48A [Cure by seller after date for delivery: seller's right to remedy any failure to perform];

49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract];

74A [General rules for measuring damages: loss suffered as consequence of breach]

Descriptors: Avoidance ; Fundamental breach ; Conformity of goods ; Cure ; Damages

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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

Automobile case (December 2006)

Translation [*] by Zheng Xie [**]

Edited by Farah Poon [***]

PARTICULARS OF THE PROCEEDING

The China International Economic and Trade Arbitration Commission (hereafter, the "Arbitration Commission") accepted the case (Case number: M2006____) according to:

   -    The arbitration clause in Contract No. 05ETC-0712AU signed by Claimant AAA ___ Tourism Company [Buyer] [of the People's Republic of China] and Respondent BBB Ltd. [Seller] of Australia on 12 July 2005; and
 
   -    The written arbitration application submitted by the [Buyer] on 15 March 2006.

The Arbitration Rules of the Arbitration Commission [hereafter, the "Arbitration Rules"], which took effect on 1 October 2000, apply to this case.

On 30 March 2006, the Secretariat of the Arbitration Commission by express mail served the [Seller] at the address, i.e., "ex-bbb", provided by the [Buyer] in writing, the Arbitration Notice, the [Buyer]'s arbitration petition and evidentiary material, the Arbitration Rules and the Arbitrators List, and also served the [Buyer] the arbitration documents.

Thereafter, the documents sent to the [Seller] were returned with the returned slip showing that the receiver's address was not clear, and that the telephone did not work. The Arbitration Commission notified the [Buyer] of this information. The [Buyer] provided the [Seller]'s new address "___" to the Arbitration Commission. On 27 April 2006, the Secretariat re-sent the documents to the new address provided by the [Buyer], and the documents were delivered on 2 May 2005.

The [Seller] submitted to the Arbitration Commission several letters as brief responses via facsimile on 24 May, 30 June, 12 July, 11 and 17 August 2007, respectively, advising the Arbitration Commission that it was negotiating with the [Buyer] to resolve the disputed matters, and that it was willing to accept and entrust the Arbitration Commission to appoint an arbitrator for the [Seller], but it did not submit any other response or evidentiary material. On 24 July 2006, the [Buyer] submitted a status report to the Arbitration Commission. The Secretariat served all of the aforementioned documents to the parties.

The [Buyer] appointed Mr. ___ as its arbitrator. As per the [Seller]'s entrustment, the Chairman of the Arbitration Commission appointed Mr. ___ as the [Seller]'s arbitrator. Because the [Buyer] and the [Seller] did not jointly appoint or entrust a Presiding Arbitrator within the time limit, pursuant to the Arbitration Rules, the Chairman of the Arbitration Commission appointed Mr. ___ as the Presiding Arbitrator. On 27 June 2006, these three arbitrators formed an Arbitration Tribunal to hear this case.

After discussing with the Secretariat, the Arbitration Tribunal decided to open a court session in Beijing on 31 August 2006.

The Secretariat, by express mail, served the [Buyer] and the [Seller] the aforementioned Notice of Formation of the Arbitration Tribunal and Notice of Court Session on 27 June and 28 July 2006, respectively.

On 31 August 2006, the Arbitration Tribunal opened the court session in Beijing as scheduled. The [Buyer]'s representative attended the court session, but the [Seller] did not send any representative and did not present any reason for the absence. Upon investigation, the Notice of Arbitration and Appendix, Notice of Formation of Arbitration Tribunal, Notice of Court Session and the [Buyer]'s Arbitration Petition, etc. were duly served to the [Seller] at the new address provided by the [Buyer], and the service conformed to Article 68 of the Arbitration Rules. Pursuant to Article 34(2) of the Arbitration Rules. The Arbitration Tribunal heard the case by default. In the court session, the [Buyer] stated its opinion and arbitration requests, presented evidentiary material, submitted pertinent evidence, and answered the Arbitration Tribunal's questions.

After the court session, the Secretariat sent a letter to the [Seller] on 8 September 2006 informing the [Seller] of the process of service and the court session, and also served the supplemental evidence submitted by the [Buyer], and requested the [Seller] to submit a request for another court session if desired, or relevant opinion or evidence within ten days after the [Seller] was served with this letter. The [Seller] did not submit any written response within the time limit.

On 14 September 2006, the [Buyer] submitted its Attorneys' Opinion to the Arbitration Tribunal, and the Secretariat served the aforementioned document to the [Seller].

Based on the facts verified in the court session and the written material, the Arbitration Tribunal entered this award by consent.

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

FACTS AND POSITION OF THE PARTIES

The [Buyer] and its agent, China CCC Co., entered into Contract No. 05ETC-0712AU with the [Seller], which stipulated that:

The [Seller] shall sell a 1X4400m2005 automobile (which could be used on land and in water) to the [Buyer].

-    Price: AUD 65,000 [AUD = Australian dollars];
-    Payment: 40% of the contract price should be paid after the Contract is executed, 50% should be paid by letter of credit, and the remaining 10% should be paid by T/T when the [Buyer] received the goods.

During the performance of the Contract, a dispute arose between the [Buyer] and the [Seller]. The [Buyer] filed the petition for arbitration according to the Arbitration clause stipulated in the contract.

The [Buyer]'s position

After signing the Contract, the [Buyer] paid the contract price to the [Seller]. The [Buyer] summarized the start of the disputes as follows:

1. On 21 September 2005, the automobile arrived at [Buyer]'s location in China;

2. On 8 October 2005, the [Seller]'s engineer arrived at the [Buyer]'s place to adjust the automobile. However, because part of the automobile was broken, the engineer had to stop the adjustment.

3. On 20 November 2005, the [Seller] sent its engineer to the [Buyer]'s place again to adjust the automobile.

4. On 27 November 2005, when adjusting the automobile, the [Seller]'s engineer found that the automobile could not work because of its own defect. When the automobile went into the water, the motor would overheat. On the same day, the engineer took a letter of confirmation concerning the defect back to Australia.

5. On 5 December 2005, the [Seller] sent a letter to the [Buyer] acknowledging the defect of the automobile and recommended that the [Buyer] ship the automobile back to Australia to the [Seller] for repair.

6. On 12 December 2005, the [Buyer], in response to the [Seller]'s letter, stated that it would take the [Seller]'s recommendation only if the [Seller] provided a suitable guaranty.

7. On 4 January 2006, the [Seller] sent another letter to the [Buyer] requesting the [Buyer] to ship the automobile back to Australia. On the next day, the [Buyer] responded to the [Seller] and insisted the [Seller] to provide a suitable guaranty. The [Buyer] also claimed for damages;

8. On 6 March 2006, because the [Seller] did not respond to the [Buyer], and the automobile could not be used, the [Buyer] sent a letter to [Seller] announcing termination of the contract and requesting the [Seller] to exchange the goods and it requested the [Seller] to bear the damages.

[Buyer]'s allegations

The [Buyer] alleged that the automobile had severe defects and could not be used. Therefore, the purpose of the contract was frustrated, which constituted a fundamental breach. The [Buyer] petitioned for arbitration.

The [Buyer]'s request was as follows:

      (1) Contract No. 05ETC-0712AU should be revoked;
 
      (2) The [Buyer] would return the automobile 1X4400mt2005;
 
      (3) The [Seller] should return the contact price of AUD 58,500, and pay the adjustment fee of RMB 6,199.50;
 
      (4) The [Seller] should compensate the [Buyer] for direct damages caused by returning the automobile, including transportation expenses of RMB 157,700, commodity inspection fee of RMB 2,641, warehouse charges and other necessary costs incurred.
 
      (5) The [Seller] should reimburse the [Buyer] its attorneys' fees of RMB 50,000, traveling expenses, translation expenses, etc.
 
      (6) The [Seller] should bear the arbitration fee.

Documents submitted by [Buyer]

In order to sustain its position, the [Buyer] submitted the following documents:

      (1) The [Buyer]'s business license;

      (2) The [Buyer]'s legal representative's identification certificate;

      (3) Power of attorney;

      (4) The Contract No. 05ETC-0712AU that was executed by the parties;

      (5) Import agency agreement;

      (6) Payment confirmation of the accessories;

      (7) Correspondence between the [Seller] and the [Buyer];

      (8) Proof of damages expenses incurred due to return of the automobile.

In the court session the [Buyer] submitted the following additional documents:

      (1) Receipt of translation fee;

      (2) Receipt of traveling expenses;

      (3) Correspondence between the [Seller] and the [Buyer] after the arbitration proceeding was commenced;

      (4) Receipt of transportation fee of 5 July 2006.

The [Seller]'s position

The [Seller] had submitted to the Arbitration Commission several letters as brief replies via facsimile on 24 May, 30 June, 12 July, 11 and 17 August 2006, respectively, advising the Arbitration Commission that:

   -    The [Seller] had been actively cooperating with the [Buyer], and did not ignore the defect of the automobile;
 
   -    The [Seller] recommended that the [Buyer] ship the automobile back to Australia for final assembly and repair at the [Seller]'s expenses; and
 
   -    The [Seller] would ship the automobile back to China after fixing the automobile at its own expenses (the shipping expenses could be deducted from the outstanding balance of the contract price, i.e., 10% of the contract price).

The Attorneys' Opinion submitted by the [Buyer]

The [Buyer], in its Attorneys' Opinion submitted on 14 September 2006, summarized the performance of the contract and the history of the dispute and alleged that:

   -    The [Seller] and the [Buyer] executed the Contract:
 
   -    The purpose for which the [Buyer] purchased such an expensive automobile was to attend an international cruise exhibition and to exhibit the automobile in order to develop new tourism business; and
 
   -    The [Seller] knew this purpose clearly.
 
   -    The dispute between the [Seller] and the [Buyer] arose because the automobile had severe defects and did not comply with the purposes and quality requirements stipulated in the Contract;
 
   -    The [Seller] failed to resolve the problems or correct its breaching conduct within the grace period granted by the [Buyer];
 
   -    The [Seller]'s breach caused the frustration of the [Buyer]'s purpose to execute the Contract.

The [Buyer]'s position and Summary of Facts and Legal Basis

1. Facts

The automobile delivered by the [Seller] had not been inspected or tested sufficiently in the factory. The [Seller] did not provide any quality certificate. The automobile could not be used in water. The [Seller]'s engineers went to repair the automobile twice, but failed to fix the defect. The [Seller]'s engineers and the [Seller] confirmed the defect of the automobile in writing.

As to the method to resolve a quality defect, the Contract stipulated that if the automobile has any defect, the ways to resolve the defect are limited to reducing the price, returning the automobile, and/or exchanging the automobile. The purpose for the [Buyer] to sign the Contract was not to purchase the automobile itself only, but to show it in an exhibition in order to expand tourism business. Because the [Seller] failed to deliver an automobile complying with the requirements of the Contract, the purpose of the Contract was frustrated. Meanwhile, because the [Seller] and the [Buyer] were located in different countries, and import/export procedures were complicated, if the automobile had defects and could not be fixed in the [Buyer]'s country, it was not practical to ship the automobile back to Australia for repair. It was not feasible to reduce the price or exchange the automobile as well. Therefore, the [Buyer] announced the termination of the Contract.

2. Legal basis

The [Seller]'s and the [Buyer]'s places of business were located in two different countries. Both countries are Contracting States of United Nations Convention on Contract for International Sales of Goods (CISG). The Contract did not stipulate the applicable law. Therefore, the CISG should apply to this case.

      (1) The goods delivered by the [Seller] did not comply with the Contract

      Pursuant to Article 35 of CISG, "Except where the parties have agreed otherwise, the goods do not conform with the contract unless they: (a) are fit for the purposes for which goods of the same description would ordinarily be used," the automobile would have to be used on land and in water as stipulated in the Contract. However, the automobile delivered by the [Seller] could not be used in this manner; therefore, the automobile did not comply with the Contract.

      (2) The [Buyer]'s notice of non-compliance

      The [Buyer] immediately notified the [Seller] that the automobile did not comply with the Contract after the [Buyer] had discovered the defect.

      (3) Inspection

      Pursuant to Article 38 of CISG, the [Buyer] inspected the automobile on time. Because the reason to import the automobile was for Exhibition, the commercial inspection procedure was not required. However, pursuant to Article 40 of CISG, "The seller is not entitled to rely on the provisions of articles 38 and 39 if the lack of conformity relates to facts of which he knew or could not have been unaware and which he did not disclose to the buyer," the [Seller] knew that the production of the automobile was not completed and could not be used when delivering it to the [Buyer], but it did not inform the [Buyer] of this. Therefore, the [Buyer]'s right was not affected even though the automobile did not go through the commercial inspection procedure.

      (4) The [Seller] fundamentally breached the Contract.

      Article 25 of CISG provides, "A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result." The automobile had severe defects because of design and quality, and could not be used, and it could not be displayed in the Exhibition. Therefore, the [Buyer]'s right was fundamentally deprived because of the [Seller]'s breach.

      (5) [Buyer]'s notice of avoidance of the Contract complied with the law

      Article 49 of CISG provides, "(1) The buyer may declare the contract avoided: (a) if the failure by the seller to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract;" As said, the [Seller]'s breach deprived the [Buyer]'s right which is stipulated in the Contract and caused the [Buyer]'s purpose to execute the Contract to be frustrated. Therefore, the [Seller] fundamentally breached the Contract.

Meanwhile, the [Seller] requested the [Buyer] to ship the automobile back to Australia for repair, and the [Buyer] responded to the [Seller]'s request promptly advising that it did not agree to ship the automobile back to Australia unless the [Seller] could provide a guaranty. The [Buyer] advised the [Seller] of the above suggestion twice, but the [Seller] did not respond. Thereafter, the [Buyer] announced the avoidance of the Contract, which complied with Article 49 of the CISG.

With respect to the [Seller]'s response after the arbitration proceeding was commenced, the [Buyer] alleged that since the [Buyer] had already announced the avoidance of the Contract, it could not accept the [Seller]'s request to repair the automobile.

THE ARBITRATION TRIBUNAL'S OPINION

1. Relationship of the parties under the Contract

The Contract (Contract No. 05ETC- 0712AU) was executed by the [Seller], the [Buyer] and the [Buyer]'s agent. The Import Agency Agreement submitted by the [Buyer] showed that the [Buyer] entrusted its agent to sign the Contract and its appendix. In legal terms, the [Buyer] was the actual purchaser and end-user of the goods sold under the Contract.

2. Applicable law

The Arbitration Tribunal noted that the Contract did not stipulate the applicable law. Since the Contract was for the sale of goods, and both the [Seller] and the [Buyer] were located in Contracting States of the CISG, the CISG should apply to this case.

3. Performance of the Contract and disputes

      (1) Performance of the Contract

      After executing the Contract, according to the Contract the [Buyer] paid to the [Seller] AUD 65,000, i.e., 40% of the contract price, and also opened a letter of credit for AUD 65,000, i.e., 50% of the contract price. The [Buyer] fulfilled its duty of payment.

   -    The automobile arrived at the [Buyer]'s place on 21 September 2005.
 
   -    On 8 October 2005, the [Seller]'s engineers arrived at the [Buyer]'s place to adjust and test the automobile, but stopped the test because some parts of the automobile had quality defects.
 
   -    On 20 November 2005, the [Seller] sent its engineer to the [Buyer]'s place to adjust and test the automobile for the second time. The engineers tested and adjusted the automobile until 27 November 2005, but the engineers did not succeed.
 
   -    On 5 December 2005, the [Seller] sent a letter to the [Buyer] confirming the defect of the automobile and requesting the [Buyer] to ship the automobile back to Australia for repair.
 
   -    On 12 December 2005, in response to the [Seller]'s letter, the [Buyer] agreed to ship the automobile back to Australia for reparation on the condition that the [Seller] provide a third party guaranty for the amount of AUD 58,000 which the [Buyer] had already paid, or deposit the same amount in an escrow account.
 
   -    On 4 January 2006, the [Seller] rejected the [Buyer]'s requested stated in the letter of 12 December 2005.

2. Dispute between the [Seller] and the [Buyer]

      (1) The parties' dispute on the quality of the automobile

      The [Buyer] alleged that the automobile contained severe design and quality defects, and could not be used, which caused the purpose of the Contract to be frustrated. The [Seller] fundamentally breached the Contract.

In a response letter, the [Seller] alleged that because it needed to deliver the automobile before the Exhibition, and had pressure to manufacture the automobile within a short period; the [Seller] regretted that it could not meet the [Buyer]'s purpose for exhibition. The [Seller] requested the [Buyer] to ship the automobile back to Australia for reparation, advising that it would repair the defect immediately and deliver a complying automobile.

      (2) The automobile did not comply with the Contract, and the parties disputed on remedial measures

The [Buyer] would accept the [Seller]'s recommendation to ship the automobile back to Australia for reparation on the condition that the [Seller] wire the amount of AUD 58,000, i.e., the 90% of the contract price, which the [Buyer] had already paid, to a third party's account in China or deposit the same amount in an escrow account, and the [Buyer] would wire the money back to the [Seller] once the automobile was shipped to the [Buyer]'s place and the quality conformed to the Contract.

As to this condition the [Buyer] imposed, the [Seller] responded on 4 January 2006 stating that it had spent AUD 67,000 manufacturing the automobile, and had to do more work, and the deposit money which the [Buyer] requested was needed by the [Seller] to repair the automobile and ship it back to the [Buyer]'s place. Therefore, the [Seller] did not accept the [Buyer]'s condition.

The Arbitration Tribunal found that:

   -    On 12 January 2006 the [Buyer] sent a letter to the [Seller] stating that if the [Seller] did not accept the [Buyer]'s condition, since the automobile had lots of defects and did not comply with the Contract, and could not be used by the [Buyer], the [Buyer] had to claim damage in the amount of RMB 550,000 including the contract price paid and transportation fee, etc.
 
   -    On 6 March 2006, the [Buyer] sent a letter to the [Seller] alleging that the [Seller] did not respond to the [Buyer]'s letter dated 12 January 2006, and the automobile could not be used, and therefore, the [Buyer] revoked the Contract and returned the automobile; the [Buyer] requested the [Seller] to refund the contract price paid and compensate for damages the [Buyer] incurred.

      (4) Disputes and liabilities

The Arbitration Tribunal reviewed the parties' correspondence and evidentiary material, considered the [Buyer]'s statement and cross-examination in the court session, and held the following:

1. The automobile delivered by the [Seller] did not comply with the Contract.

The automobile which the [Seller] delivered had design and quality defects. The [Seller]'s engineers adjusted and tested the automobile twice, but could not fix it. These facts were proved by the [Seller]'s engineers' letter to the [Buyer] dated 5 December 2005. The automobile could not be used. Especially, the [Buyer] is a company which provides tourist services, and it purchased this automobile for its anticipated purpose of exhibition. The purpose of the Contract was frustrated when the automobile could not be shown in the exhibition. The [Seller] knew the [Buyer]'s purpose to purchase the automobile when executing the Contract, and the date of delivery was set for this purpose. Since the automobile delivered did not meet the requirements stipulated in the Contract and could not be used, the purpose of the Contract for the [Buyer] could not be fulfilled. Therefore, the Arbitration Tribunal held that the [Seller] fundamentally breached the Contract and should bear all the liabilities.

2. Whether the automobile should be shipped back for reparation, or the [Buyer] should return the automobile and the [Seller] should refund the contract price paid

The Arbitration Tribunal found that the [Seller] requested the [Buyer] to ship the automobile back for reparation and fixing; the [Buyer] responded in a letter dated 12 December 2005 requesting certain conditions and clarifying who should bear expenses. In the letter, the [Buyer] listed five sugestions and specified the relevant cost. The [Buyer] intended to coordinate with the [Seller], but in order to avoid business risk, the [Buyer] stated in point 3 and requested that the [Seller] should wire the amount of AUD 58,000, i.e., 90% of the contract price, which the [Buyer] had already paid, to a third party's account in China or deposited the same amount in an escrow account, with the understanding that the [Buyer] would wire the money back to the [Seller] once the automobile was shipped to the [Buyer]'s place and the quality conformed to the Contract. This request was common in international trade. The [Seller] rejected the [Buyer]'s request because it had already spent lots of money manufacturing the automobile. This is also a common practice in international trade. The parties did not reach an agreement regarding reparation of the automobile.

The Arbitration Tribunal noted that although the [Seller] had stated several times that it could fix the automobile, the [Buyer] in its Attorneys' Opinion dated 13 September 2006 alleged, "the [Seller]'s correspondence could prove that the automobile was manufactured by other companies entrusted by the [Seller], and that the [Seller] did not manufacture automobiles; the [Seller]'s engineers tried to repair the automobile twice, but failed to fix it; therefore, the [Buyer] had reason to doubt the [Seller]'s capacity to perform the Contract. In addition, if the safety could not be guaranteed, the automobile could not be used for the purpose of tourism. Furthermore, the Attorneys' Opinion averred:

"It is not practical that if the automobile has any problem, the only remedy is to ship it back to Australia for reparation.

"The automobile could not be used or be fixed on site; it was meaningless for the [Buyer] if the automobile was shipped to Australia for reparation. The damages would be enlarged if the automobile was shipped to Australia; even if the automobile was fixed, when the automobile had defects, should the [Buyer] ship the automobile back to Australia again?

"Therefore, the [Buyer] did not agree to the [Seller]'s request to continue performing the Contract."

The Arbitration Tribunal held that the [Buyer]'s rejection of the [Seller]'s request to continue performing the Contract had factual basis. Because of the frustration of the Contract, the [Buyer]'s request to return the goods and get a refund complied with Article 14(a) of the Contract and Article 25 of CISG, which provides:

"A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result"

and Article 51(2) of CISG, which provides:

"The buyer may declare the contract avoided in its entirety only if the failure to make delivery completely or in conformity with the contract amounts to a fundamental breach of the contract."

Accordingly, the Arbitration Tribunal sustained the [Buyer]'s request to avoid the Contract, return the automobile and get a refund from the [Seller].

      (5) Tribunal's ruling on the [Buyer]'s arbitration requests

The Arbitration Tribunal held as follows:

1. Considering the nature of dispute and verification of liabilities, the Arbitration Tribunal sustained the [Buyer]'s requests 1, 2 and 3.

2. Considering that the [Buyer]'s requests to avoid the Contract, return the automobile and get a refund from the [Seller] was sustained, the Arbitration Tribunal supported the [Buyer]'s claim for direct damages and expenses, holding that the [Seller] should pay the [Buyer] transportation expenses of RMB 157,700 and inspection fee of RMB 2,641. Because the [Buyer] did not claim a specific figure for warehouse charges or submit any evidence on this account, the Arbitration Tribunal did not sustain the [Buyer]'s claim for warehouse charges.

3. Since the dispute was caused by the [Seller]'s fundamental breach, and the [Buyer] submitted evidence to prove its attorneys' fees and traveling expenses incurred for this case, the Arbitration Tribunal held that the [Seller] should bear the arbitration fee and reimburse the [Buyer] for the attorneys' fees of RMB 50,000 and traveling expenses of RMB 5,700. As to the translation fee, the Contract stipulates, "the Contract is drafted in English and Chinese, and the Chinese version should prevail." Neither the Arbitration Tribunal nor the [Seller] requested translation of evidentiary material, therefore the Arbitration Tribunal did not sustain the [Buyer]'s claim for the translation fee.

AWARD

(1)   The Contract between the [Seller] and the [Buyer] was avoided;
 
(2)   The [Buyer] should return the automobile 1X4400mt2005;
 
(3)   The [Seller] should refund AUD 58,500, the contract price which the [Buyer] had already paid, and the adjusting and testing fee of RMB 6,199.50;
 
(4)   The [Seller] should reimburse the [Buyer] for the transportation expenses of RMB 157,700 and inspection fee of RMB 2,641;
 
(5)   The [Seller] should reimburse the [Buyer] for its attorneys' fees of RMB 50,000 and traveling expenses of RMB 5,700;
 
(6)   The [Buyer]'s other claims were dismissed;
 
(7)   The [Seller] should bear the arbitration fee of RMB 49,352. The [Buyer] had prepaid the arbitration fee, which was set off, and therefore, the [Seller] should reimburse the [Buyer] RMB 49,352.

The [Buyer] should pay the above amount to the [Seller] within 45 days after the awards are entered.

The awards are final and take effect when entered.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of the People's Republic of China is referred to as [Buyer]; Respondent of Australia is referred to as [Seller]. Amounts in the currency of the People's Republic of China (renminbi) are indicated as [RMB ]; amounts in the currency of Australia (Australian dollars) are indicated as [AUD]..

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

*** Farah Poon grew up and studied in Hong Kong. She is a freelance translator and interpreter who has just finished her studies in the Juris Doctor program.

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Pace Law School Institute of International Commercial Law - Last updated September 8, 2009
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