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CISG CASE PRESENTATION

China 9 January 2008 CIETAC Arbitration proceeding (Metallic silicon case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/080109c1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20080109 (9 January 2008)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/2008/02

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: People's Republic of China [Mainland China] (respondent)

BUYER'S COUNTRY: Hong Kong (claimant)

GOODS INVOLVED: Metallic silicon


Classification of issues present

APPLICATION OF CISG: Yes, election of the parties

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 8 ; 9 ; 29 ; 51 ; 76 ; 80 [Also cited: Articles 13 ; 18 ; 23 ; 74 ; 75 ]

Classification of issues using UNCITRAL classification code numbers:

8C [Interpretation of party's statements or other conduct: interpretation in light of surrounding circumstances];

9C [Practices established by the parties];

29A [Parties by agreement may modify or terminate the contract];

51A [Buyer's rights: delivery or non-conformity of only part of goods];

76B [Avoidance: damages recoverable based on current price];

80A [Failure of performance caused by other party (party causing non-performance): loss of rights]

Descriptors: Intent ; Usages and practices ; Modification of contract ; Avoidance ; Fundamental breach ; Damages ; Failure of performance, other party

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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) South China Sub-Commission Arbitration Award

Metallic silicon case [9 January 2008]

Translation [*] by Jing Li [**]

Edited by Xiangyu Huang [***]

I. ARBITRATION PROCEEDINGS

A. Acceptance of case

The China International Economic and Trade Arbitration Commission South China Sub-Commission (originally named China International Economic and Trade Arbitration Commission Shenzhen Sub-Commission, renamed as "South China Sub-Commission" on 18 June 2004, hereinafter, "CIETAC") accepted the case (Case no. SHEN R2007029___) according to:

-    The arbitration clause in International Purchase Contract (hereinafter, the "Contract") signed on 23 May 2006 by Claimant Hong Kong T Trading Co. Ltd. [of Hong Kong SAR] (hereinafter, "[Buyer]"), and Respondent H Group Co. Ltd. [of People's Republic of China] (hereinafter, "[Seller]"); and
 
-    The written Request for Arbitration submitted to CIETAC by the [Buyer] on 19 March 2007.

On 27 March 2007, the Secretariat of CIETAC (hereinafter, the "Secretariat") sent the Notice of Arbitration and the relevant evidence, the Arbitration Rules, Arbitration Fee Schedule, and the Panel of Arbitrators to both parties via express mail (EMS). Meanwhile, the Secretariat of CIETAC sent the Request for Arbitration to the [Seller].

B. Arbitration rules

The "China International Economic and Trade Arbitration Commission Arbitration Rules" (hereinafter, "Arbitration Rules"), which took effect on 1 May 2005, apply to this case.

C. Arbitration clause

Article 20 of the Contract stipulates that:

"Arbitration. Any disputes in connection with this Contract and/or the execution thereof shall be settled by amicable negotiations and friendly discussions between both parties. In case no settlement can be reached, the matter shall then be referred to the China International Economic and Trade Arbitration Commission South China Sub-Commission for arbitration under Incoterms 2000 and United Nations Convention on Contracts for the International Sale of Goods. The decision made by the Commission is to be accepted as final and binding upon both parties. The arbitration fee shall be borne by the losing party."

According to Article 2(4) of the Arbitration Rules, the parties are deemed to have unanimously agreed that the arbitration shall be administered by CIETAC.

D. Service of documents

The Secretariat has sent all the required documents including the Notice of Arbitration, Notice of Formation of the Arbitral Tribunal, Notice of Oral Hearing, Request for Arbitration, and the relevant evidence to both parties. The parties have been properly served.

E. Formation of Arbitral Tribunal

Pursuant to the Arbitration Rules, the [Buyer] appointed Mr. ___ as arbitrator and the [Seller] appointed Mr. ___ as arbitrator. Since the parties did not appoint the presiding arbitrator jointly, nor entrust the Chairman of CIETAC to make this appointment within a specified time, the Chairman of CIETAC appointed Mr. ___ to be the presiding arbitrator. On 9 May 2007, the above three arbitrators formed an arbitral tribunal (hereinafter, the "Tribunal") to hear this case.

F. Oral hearing

On 3 December 2007 at 9:00 in the morning, the Tribunal held an oral hearing in Shenzhen. Both parties sent representatives to attend. At the oral hearing, the Tribunal heard the statements of the parties and investigated the facts. The parties cross-examined the evidence and negotiated with the guidance of the Tribunal. However, the parties failed to come to a settlement.

After the hearing, the parties submitted their Attorneys' Opinion and the [Buyer] submitted relevant evidence. In response to the other party's materials, the [Buyer] submitted a Proof, and the [Seller] submitted a Supplementary Opinion. The above documents were sent to the opposing party.

On 7 December 2007 at 9:30 in the morning, the Tribunal held a second oral hearing in Shenzhen. Both parties sent representatives to attend. At the oral hearing, the Tribunal investigated the relevant facts. The parties cross-examined the evidence they submitted after the first hearing and at the second hearing and made closing statements.

At the second hearing, the [Buyer] submitted a Supplementary Evidence List and the evidence listed; the [Seller] submitted Supplementary Opinion (2). The above documents were sent to the opposing party.

G. Extension of the time limit for rendering the award

Due to the complexity of the facts, it was difficult for the Tribunal to render an award within the time limit stipulated in the Arbitration Rules. Upon the request of the Tribunal, according to Article 42 of the Arbitration Rules, the Chairman of CIETAC extended the time limit for the award to 9 January 2008.

H. Closing of the case

This case is now closed. The Tribunal renders this arbitral award on 9 January 2008.

II. FACTS

A. The Contract

On 23 May 2006, the [Seller] and the [Buyer] concluded the Contract, which stipulated that the [Seller] sells to the [Buyer] 720 tons of metallic silicon (specification 553#) at the price of US $915 per ton. The Contract also includes the following provisions:

1)    Price: FOB Huangpu (Guangzhou), Shanghai, or Tianjin (at the [Buyer]'s option);
2)    Delivery: The [Seller] is to deliver the goods in three installments on 30 June 2006, 30 July 2006, and 20 August 2006, respectively to Huangpu (Guangzhou), Shanghai, or Tianjin at the [Buyer]'s option;
3)    Payment: The [Buyer] is to issue an irrevocable L/C within five working days after the [Seller] issues the performance guarantee.

On 5 July, 4 August, and 21 August 2006, the parties signed three more purchase contracts (No. 003A, No. 004A, and No. 002C) (hereinafter, "T/T Contracts"), stipulating that the [Seller] sells to the [Buyer] 240 tons, 120 tons, and 120 tons of metallic silicon (specification 553#), respectively, at the price of US $915 per ton. The price terms and port of shipment under the T/T Contracts were identical to those of the Contract at issue, while the payment terms under the T/T Contracts provided that:

-    The contract price was to be paid by telegraphic transfer (100% of the contract price was to transferred to the [Seller]'s account within seven working days after shipment); and
 
-    The dates of shipment were to be no later than 30 July, 8 August, and 25 August 2006, respectively.

B. [Buyer]'s arbitral requests and opinion

The [Buyer] alleged that the parties concluded the Contract on 23 May 2006. Thereafter, the [Seller] sent a letter to the [Buyer] on 7 June 2006, stating that because the bank delayed in issuing the performance guarantee, the [Seller] requested the [Buyer] to grant an extension for the delivery date to 20 August 2006, and for the expiration date of the L/C to 4 September 2006. The [Seller] also requested the [Buyer] to confirm with the issuing bank. Thereafter, the [Buyer] modified the Contract as required.

On 9 June 2006, Shanghai P___ Bank Chengdu Branch issued the performance guarantee under the Contract to the [Buyer] per the [Seller]'s request. On 12 June 2006, the [Seller] confirmed the [Buyer]'s application for the L/C. On 13 June 2006, O___ Bank issued the irrevocable L/C per the [Buyer]'s request. On 15 June 2006, Shanghai P___ Bank Chengdu Branch confirmed the receipt of the L/C issued by O___ Bank and notified the beneficiary, i.e., the [Seller]. Thereafter, the [Buyer] sent a letter to the [Seller] on 27 June 2006 requesting the latter to prepare shipment of 120 tons of goods and place them at the Port of Huangpu before 30 June 2006.

Up until the application of this arbitration, the [Seller] had not performed its obligation to deliver the goods under the Contract. On 19 September 2006, the [Buyer]'s lawyer sent an attorney's letter to the [Seller] requesting the [Seller] to deliver 720 tons of goods to the [Buyer] before 25 September 2006. However, the [Seller] failed to do so and asked for a higher unit price of the goods. After repeated communication of requirements and attempted negotiations, the [Buyer] eventually sent a letter on 6 November 2006 to the [Seller] terminating the Contract.

Under relevant provisions of United Nations Convention on Contracts for the International Sale of Goods (1980) (hereinafter, the "CISG"), the [Buyer] required the [Seller] to compensate for the [Buyer]'s loss from the [Seller]'s non-performance.

Article 76 of the CISG provides that:

"If the contract is avoided and there is a current price for the goods, the party claiming damages may, if he has not made a purchase or resale under article 75, recover the difference between the price fixed by the contract and the current price at the time of avoidance as well as any further damages recoverable under article 74."

Referring to the China Silicon Net, the Industrial Silicon Quotation from the Metal Bulletin at the time of the termination of the Contract, the [Buyer] requested the [Seller] to:

(1)    Compensate the [Buyer]'s loss of expected profits in the amount of US $136,800 due to the [Seller]'s non-performance; and
 
(2)    Compensate the [Buyer] for the cost of this arbitration in the amount of RMB 10,000 and US $13,680.

C. [Seller]'s defense

1. The Contract

After the conclusion of the Contract, since the bank delayed in issuing the performance guarantee, after negotiations the parties agreed in writing on 7 June 2006 to modify the date of delivery to 20 August 2006 and to modify the date of the L/C and the performance of guarantee of the [Buyer]'s bank to 4 September 2006.

2. The modification of the delivery date and performance of the Contract

After the conclusion of the Contract, the international market price of metallic silicon product increased rapidly while the domestic market was in short supply, and thus, the [Seller] was running out of stock. In order to prevent the situation where the [Seller] could not make full delivery on time, the [Seller] contacted the [Buyer] hoping that the [Buyer] would accept delivery in installments (while the specification, unit price, and quantity remain the same). The [Seller] also promised to deliver all of the goods before 15 September 2006. Other terms under the Contract would remain the same. After negotiation, the [Buyer] understood the [Seller]'s difficulty and agreed to modify the Contract as requested by the [Seller].

Considering that the new delivery time was later than the original expiration dates of the L/C and the performance guarantee (4 September 2006), in order to avoid the complicated process and delay in time for the parties to request their own banks to issue the L/C and the performance guarantee, the parties agreed that while the [Seller] was to deliver the goods under the Contract before 20 September 2006, the parties would sign "transactional contracts" according to the actual quantity delivered in each installment and would modify the original payment method from L/C to telegraphic transfer which would be faster and more favorable to the [Buyer]. Thereafter, the parties signed three T/T Contracts via facsimile on 5 July, 4 August, and 21 August 2006 according to the quantity of the goods actually delivered (480 tons in total). The [Buyer] also made full payment for the goods via telegraphic transfer in accordance with the specification and unit price under the Contract.

3. The [Buyer]'s allegation that the [Seller] failed to deliver the goods under the Contract was contradictory to the facts

      (1) Comparing the content of the Contract and the T/T Contracts, the subject matter, unit price, and the delivery terms (FOB) were identical; the only difference was the payment terms (i.e., L/C compared to payment upon receipt of the goods). Therefore, the T/T Contracts were in actuality supplementary contracts of the Contract at issue which amended the payment method thereof.

      (2) In accordance with Article 5 of the Contract, "Delivery: FOB Huangpu (Guangzhou), Shanghai, or Tianjian at the [Buyer]'s option," the [Buyer] was responsible for notifying the [Seller] of the appointed port of shipment, the carrier, and the detailed delivery time in order to assist the [Seller] to deliver the goods. However, the [Buyer] failed to perform this obligation of notification after the parties modified the payment method under the Contract. More importantly, the parties agreed in their correspondence on 22 August 2006 to the shipment, Customs clearance, and delivery of the third installment of 240 tons of goods (the residue of the 720 tons of goods under the original Contract which should be delivered by 20 September 2006). However, since the [Buyer] sent a lawyer's letter to the [Seller] denying the fact that the [Seller] had delivered 480 tons of goods, the parties did not continue the performance according to the T/T Contracts. Besides the delivery time and payment method that was modified by the T/T Contracts, the terms of the original Contract were not changed. The Contract was mostly performed except for 240 tons of goods that were rejected by the [Buyer].

      (3) The [Seller] had delivered 480 tons of goods by a series of international business activities by both parties. As shown in the evidence documents including commodity inspection, Customs clearance, Customs check, and transit for export, the Contract was the only legally valid international sale of goods contract, instead of the T/T Contracts that the [Buyer] claimed to have no relevance to the Contract. If the T/T Contracts were considered contracts separate from the Contract at issue, there would have been no filing and records on the import and export of the goods transferred internationally under the Contract. Hence, the main contract between the parties was the Contract at issue, and the T/T Contracts should merely be considered to be supplementary contracts or accessory contracts modifying the Contract.

      (4) From the beginning of July to the end of August of 2006, when the [Seller] was delivering the 480 tons of goods in installments, the [Buyer] did not raise objections to non-performance under the Contract by the [Seller] as the [Buyer] alleged. Assuming the [Buyer]'s allegation conformed to the facts, it was not logical, because it was unreasonable for the [Seller], after the [Buyer] claimed that the [Seller] was in fundamental breach of the Contract, to ignore the previous Contract that was secured by payment of L/C and to actively sign new contracts with the [Buyer] during the same period, with a subject matter that was of the same specification, same unit price, and same export port, but with less favorable payment method (payment after delivery), and actively perform the delivery obligation under the new contracts. It was also unreasonable for the [Buyer] to ignore the so-called "fundamental breach by the [Seller]" and waive its right to claim the earnest money of RMB 500,000 under the performance guarantee (the expiration date of the guarantee was 4 September 2006). Therefore, it could be concluded that the parties had agreed on substituting the L/C payment terms with telegraphic transfer to prevent delay in time in issuing another L/C and another guarantee, and that the [Seller] was allowed to delay delivery of goods according to the change of the market.

4. Discrepancy between the performance and the [Buyer]'s real purpose of arbitration

The [Seller] alleged that after the modification of the transaction, the parties were cooperating in good faith. Therefore, the negotiation in modification of the transaction and other correspondence between the parties were by normal means of international business, i.e., telephone and facsimile. In addition, the Customs clearance, transit, inspection and quarantine were accomplished in accordance with the Contract. Thus, the parties did not confirm the modification of transaction in writing. It was worth noting that the rapid change of the market rendered uncertain factors affecting the quantity of the goods in each installment delivered by the [Seller]. The quantity was the condition precedent to each T/T Contract, which was signed via facsimile by the parties promptly after the goods were delivered to the port of shipment and inspected by the appointed shipping agent. All of the T/T Contracts signed were prepared hastily.

When the [Seller] was actively preparing the delivery of the residue of 240 tons under the Contract and searching for supplies, the [Buyer] suddenly notified the [Seller] on 10 September 2006 by telephone requesting the latter to deliver 720 tons of goods. Thereafter, the [Buyer] entrusted the Xiamen Xufeng Law Firm to send a lawyer's letter to the [Seller] on 19 September 2006 requesting the [Seller] to perform delivery of 720 tons of goods under the Contract; otherwise, the [Buyer] would resort to legal proceedings. The [Seller] alleged that the [Buyer] maliciously claimed its rights under the modified Contract under circumstances in which the Contract was almost fully performed. The [Buyer]'s allegation contradicted the facts and was in bad faith. Its conduct directly put the [Seller] in a dilemma in delivering the remaining 240 tons of goods, because the [Buyer] completely denied the fact that the Contract was modified and refused to take delivery of the 240 tons of goods in the same T/T Contract means as it did with the first 480 tons of goods, and if the [Seller] delivered the residue, the [Buyer] was likely to refuse payment for this installment based on the same allegation. In order to respect the facts and to protect its own rights, the [Seller] promptly replied to the lawyer's letter stating that:

(1)    The Contract has been modified and the parties have performed transactions of 480 tons of goods in accordance with the modified terms;
 
(2)    If the [Buyer] insists on performance of the original Contract, the [Buyer] should pay for the 240 tons of goods by L/C in order to secure the payment, and the [Seller] would then agree to issue another performance guarantee for the residue;
 
(3)    The price of the residue of 240 tons of goods should be reasonably increased due to the change of the market price based on fair dealing; the [Seller] promises to grant the best price.

However, the [Buyer] expressly rejected the [Seller]'s reasonable requirements.

To sum up, the [Seller] alleged that the transactions under the Contract and the T/T Contracts are actually the same transaction.

D. Key points stated in the [Buyer]'s Attorneys' Opinion

1. Applicable law

Article 20 of the Contract stipulated that the applicable law of the present case should be Incoterms 2000 and the CISG.

2. Facts

The [Buyer] alleged that the Contract was the only contract that is involved in the present dispute. The three T/T Contracts were not in dispute as alleged by the [Seller]. With regard to the Contract, the parties agreed that the [Seller] sells to the [Buyer] 720 tons of metallic silicon (specification 553#). The expiration dates prescribed in the L/C issued by the [Buyer] and the performance guarantee issued by the [Buyer]'s bank were both 4 September 2006. After the [Buyer]'s repeated communication of requirements, the [Seller] still failed to perform the Contract. The [Seller] alleged that as shown in the evidence documents including commodity inspection, Customs clearance, Customs check, and transit for export, the Contract was the only legally valid international sale of goods contract, and the T/T Contracts modified the original Contract. However, the [Buyer] alleged that these procedural documents existed due to the [Seller]'s contractual obligations. Therefore, it was at the [Seller]'s option to select the type of contract as the basis in completing the import and export procedure. The [Seller] had total control over the procedure, while the [Buyer] did not.

As for the [Seller]'s allegation that the [Buyer] failed to perform the obligation to notify under the Contract in appointing the port of shipment, the carrier, and the detailed delivery time, the [Buyer] alleged that the Contract was not the first transaction between the parties, and the parties confirmed details of the transaction by telephone in their previous transactions. Even if in performing the T/T Contract, the parties completed the transactions over the phone, including the [Buyer] notifying the [Seller] of the port of shipment, the carrier, and the detailed delivery time. According to Article 9(1) of the CISG:

"The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves."

At the hearings, the parties confirmed that they mostly communicated the transactional details over the phone. The [Seller]'s rejection to perform the Contract with the argument that the product price increased should not be supported or excused.

3. Whether the T/T Contracts were substitutes for the Contract

The [Buyer] alleged that T/T Contracts were not supplementary to the Contract, nor were they substitutes for the Contract. The parties concluded the Contract via facsimile. The T Contracts were separate from the Contract, and the T/T Contracts did not mention that they were a substitute, modification, or supplement to the Contract. Besides providing a single facsimile, the [Seller] did not submit any other evidence in the attempt of proving that the [Buyer] agreed to the alleged substitution. In addition, the facsimile sent from W___ to Manager C___ submitted by the [Seller] merely demonstrated that the [Seller] sent a facsimile to Manager C___, but not the fact that the [Buyer] had agreed on a substitution. With regard to the alleged reply of Manager C___, the [Seller] failed to prove that it was Manager C___'s handwriting, and the fax paper did not have the [Buyer]'s fax number that was normally shown on the top of a facsimile. Based on the principle of "he who alleges must prove," the [Seller] had to first prove that the [Buyer] had agreed that the T/T Contracts were substitutes for the Contract, and then confirm that the Contract was substituted. The [Seller] alleged that it could be concluded that the Contract was substituted and that this was agreed to by the [Buyer] because the [Buyer] did not claim the earnest money under the Contract. The [Buyer] did not agree with this allegation. Due to the fact that the parties were still performing the new contracts (the T/T Contracts), the [Buyer] was still expecting that the [Seller] would perform the Contract in good faith and was hoping that the parties could handle the issue of performing the Contract based on a peaceful and friendly negotiation. Therefore, the [Buyer] had been waiting for the [Seller] to perform the Contract until the [Buyer] eventually terminated the Contract after repeatedly urged the [Seller] to perform.

4. The real reason why the Contract was not performed

Between August and September 2006, the price of metallic silicon was increasing rapidly. Wishing to achieve the utmost commercial interests, the [Seller] refused to perform the Contract with the [Buyer]. This conduct resulted in the [Buyer]'s actual economic loss.

E. Key points stated in the Supplementary Opinion by the [Seller]

Supplementary Opinion (1)

1. The issue of the Contract being modified by T/T Contracts

The [Buyer] alleged that the letter dated 22 August 2006 submitted by the [Seller] was the [Seller]'s unilateral conduct and that the [Buyer] had never recognized this letter. The [Buyer] also alleged that the handwriting of the letter was not proved by the [Seller] to be Manager C___'s of the [Buyer]'s firm. The [Seller], on the other hand, alleged that judging from the Contract, the T/T Contracts, and other correspondence between the parties, there had been a practice established between the parties to communicate via facsimile. The [Buyer]'s representative did not deny the receipt of this letter, either. With regard to the authenticity of Manager C___'s handwriting, the [Buyer] had the burden of proof according to the rule of evidence for civil and commercial arbitration.

At the hearing, the [Buyer] alleged that under the contractual FOB terms, the [Seller] was obligated to clear Customs, and thus, the [Buyer] was not involved in or aware of the fact that the Contract was the transactional contract for Customs clearance and commodity inspection. The [Seller], on the other hand, alleged that it was impossible for the [Buyer] to have no knowledge of the preparation of the above-mentioned statistics and materials concerning the international transaction of the goods and the rights and benefits and commercial risks of both parties regarding Customs clearance. Based on the contractual FOB terms, the [Buyer] was obligated to bear the costs and risk, and responsible for the procedure for the importation of the goods. Therefore, the [Buyer] was deemed to know of the relevant statistics and the above-mentioned certificates and invoices after confirming those with the [Seller].

2. The [Buyer] was responsible for the failure of the [Seller] to deliver the third installment of 240 tons of goods

      (1) According to Article 13 of the CISG, "For the purposes of this Convention 'writing' includes telegram and telex" and Article 18(2) of the CISG, "A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance," the correspondence between the parties via facsimile, invoice for Customs clearance, and the practice between the parties have constituted a complete chain of evidence.

      (2) Judging from the letters dated 22 August 2006, it was clear that the parties were negotiating on the shipping, Customs clearance, and delivery terms for the third installment of 240 tons of goods. Thereafter, the [Buyer] denied the fact that 480 tons of goods had been delivered and requested the [Seller] to deliver 720 tons of goods within the time limit; otherwise, the [Buyer] would resort to legal proceedings. The [Buyer] thereby fundamentally breached the Contract. This denial was also the direct cause of the non-delivery of the 240 tons of goods.

      (3) Due to the fact that the [Buyer] completely denied the modification of the Contract and refused to take delivery of the residue of 240 tons of goods under the T/T Contracts, the [Seller] had to requested the [Buyer] to issue new letter of guarantee and L/C for the 240 tons of goods. It was justifiable for the [Seller] to take self-protective action under the circumstance that the [Buyer] had fundamentally breached the Contract.

      (4) The [Seller] alleged that no matter the Contract or T/T Contracts, the delivery terms were FOB. However, the [Buyer] had never performed its obligations, i.e., the [Buyer] was obligated to book space or hire a ship, pay for the freight, and notify the [Seller] of the carrier, port of shipment, and time of shipment.

      (5) Under Article 76(2) of the CISG:

"For the purposes of the preceding paragraph, the current price is the price prevailing at the place where delivery of the goods should have been made or, if there is no current price at that place, the price at such other place as serves as a reasonable substitute, making due allowance for differences in the cost of transporting the goods."

The [Buyer] did not even perform its obligation of appointing the place where delivery of the goods should have been made, which resulted in the inability to determine the "current price" of that place. Therefore, the [Buyer] had to claim the price difference according to the market price in London. It could be proved that the [Buyer] did not perform its contractual obligations, and that the [Buyer] contradict itself in its claims.

      (6) The Contract was terminated by the [Buyer] with the allegation that the [Seller] did not perform the delivery obligations. Therefore, the key issue of the present case should be whether the [Buyer] effectively terminated the Contract, instead of whether the [Seller] had to deliver the goods under the Contract.

3. The [Buyer]'s obligation to notify under the FOB terms

The [Seller] requested the Tribunal to note that the [Seller] had never agreed that this obligation to notify could be performed orally. With regard to this obligation, the [Seller] alleged that:

      (1) The obligation to notify under FOB terms is a major and prerequisite obligation. In addition, the fact that the [Buyer] must perform this obligation was determined by the features of international trade and the importance and generality of the obligation, because under FOB terms, the buyer bears the risk of damage to and loss of goods from the time the good pass the ship's rail. Hence, the prerequisite of the [Seller] delivering the goods was receiving the notice from the [Buyer], so that the [Seller] could ship the goods at the specific port, deliver the goods to the specific carrier, and that the risk of the goods could be passed to the [Buyer].

      (2) Under the FOB terms, the buyer must give sufficient notice of the vessel name, loading point, and required delivery time. Under this provision, the buyer's obligation should be "sufficient", which is specially emphasized. A "sufficient" notice means that the notice should be timely and precise, which should provide the basis for the parties to perform the contract. Therefore, the obligation to notify includes three aspects of requirements: a) precise time, b) detailed content, and c) a recordable and fixed form.

      (3) With regard to the result of the obligation to notify, the FOB terms provide that this obligation is the major and prerequisite obligation, not an accompanying obligation. Therefore, the [Buyer]'s failure to perform the obligation to notify constituted a fundamental breach of the Contract. The [Buyer] should be liable for its breach.

4. The termination of the Contract

      (1) Article 51 of the CISG provides that:

"(1) If the seller delivers only a part of the goods or if only a part of the goods delivered is in conformity with the contract, articles 46 to 50 apply in respect of the part which is missing or which does not conform.

(2) 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."

The [Seller] alleged that disregarding the causes and liability of the non-delivery of the residue of 240 tons of goods, judging merely from the fact that the [Seller] had already delivered 480 tons of goods under the Contract, the [Buyer]'s termination of the Contract was itself a breach of the Contract because the prerequisites of the termination of a contract were not fulfilled, and thus, the termination was not valid.

      (2) The [Buyer] alleged that Article 76(1) of the CISG was the basis for its termination of the Contract and its claim. The [Seller] alleges that the [Buyer] had deliberately ignored the provision of the second paragraph under this same article. Article 76(2) of the CISG provides that:

"For the purposes of the preceding paragraph, the current price is the price prevailing at the place where delivery of the goods should have been made or, if there is no current price at that place, the price at such other place as serves as a reasonable substitute, making due allowance for differences in the cost of transporting the goods."

Taking into account the fact that the [Buyer] had to refer to the market price in London for the "current price", it could be concluded that the [Buyer] failed to perform its obligation to notify the [Seller] of the delivery time, place, and carrier.

Therefore, according to Article 80 of the CISG ("A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party's act or omission"), the [Buyer] was the party who fundamentally breached the Contract, instead of the [Seller].

5. The copies of relevant contracts and invoices

The [Seller] alleged that the party to these contracts and invoices was Xiamen ___ Co. Ltd., not the [Buyer]. The [Buyer] alleged at the hearings that Xiamen ___ Co. Ltd. and the [Buyer] were two different entities, and the former was not relevant. Therefore, the [Seller] did not cross-examine these copies.

Supplementary Opinion (2)

1. The issue of the Contract being substituted by T/T Contracts and whether the [Seller] was in breach

      (1) The [Seller] alleged that if the Contract was sufficiently substituted, the Contract would no longer be valid. It could not be denied that the L/C issued by the [Buyer] under the Contract had expired and was not paid for. Hence, the performance guarantee issued by the [Seller] expired at the same time; however, the [Seller] was not held responsible. The explanation was that the parties agreed on substituting the Contract with T/T Contracts and the parties could only choose either one to perform because they could not co-exist. Therefore, the [Seller] alleged that the validity of the Contract lapsed due to the substitution. It was unreasonable to still discuss the reason for the substitution and which party was liable under the Contract, because the parties agreed on the substitution. The issue that mattered was the performance of the parties after the substitution, not the performance or breach under the substituted contract.

      (2) With regard to the Tribunal's inquiry on the causes and liability considering the non-delivery of the residue of the 240 tons of goods and the benefits that the [Seller] obtained, the [Seller] alleged that this inquiry had exceeded the scope of the [Buyer]'s claims. In addition, the answer to this inquiry, whether positive or negative, would contradict the premises or the basis of the [Buyer]'s applying for this arbitration.

            a) With regard to the installments of delivery and the negotiation, the only difference between the Contract and the T/T Contracts was the payment method and the delivery time. The quantity of 720 tons of goods was the same. After the Contract was substituted, the [Seller] still had 240 tons of goods to be delivered. This was contrary to the parties' intention in substituting the Contract. However, it was not caused by the [Seller]. Taking into account different stages of the present arbitration, the [Buyer] had always been denying and refusing to discuss the matter of substitution. In all the arbitral documents submitted by the [Buyer], the [Buyer] always insisted that the Contract and T/T Contracts were separate and the arbitration was brought against the [Seller] due to the non-performance of the entire 720 tons of goods under the Contract. The [Buyer] had failed to directly discuss the residue of 240 tons of goods. The [Seller] had never denied the fact that it had not delivered this installment and had repeatedly shown its willingness to deliver.

            b) With regard to the letters of negotiation dated 22 August 2006, the [Seller] suggested that the residue should be cleared at the Customs on 20 September 2006 at the latest. However, the [Buyer] suggested that the residue should be cleared at the Customs on 15 September 2006. Although the parties did not agree on this date, it did not substantially affect the transaction, because the parties agreed that the transaction of the residue of 240 tons of goods should be accomplished in September 2006. Due to the fact that the Contract was substituted and lapsed, the performance and details of the transaction under the new contract were the rights and obligations of both parties. If the parties could not agree on a specific time of delivery, the gap could be filled by Article 33 of the CISG. Neither party could lawfully impose its own will upon the other party.

            c) With regard to the [Buyer]'s allegation that the [Seller] obtained benefits from the non-delivery of the residue and violated the principle of fairness, the [Seller] alleged that the [Buyer]'s arbitral requests and the basis of this arbitration were specific. This basis was different from that of the substitution of the Contract and that of the return of benefits from the 240 tons of goods. Logically, whether the [Buyer]'s arbitral requests should be supported was not relevant to whether the [Seller] had obtained benefits from the non-delivery of the goods. If the Tribunal supports the [Seller]'s allegation that the Contract was substituted, the [Buyer]'s arbitral requests were deemed to be blackmail. The [Buyer]'s rejection of the residue of 240 tons of goods was a violation of good faith; [Buyer]'s attempt to obtain a large amount of improper benefits was the real reason why the [Seller] did not deliver the 240 tons of goods.

            d) The parties had chosen the CISG to be the applicable law. Therefore, the CISG governs the present case. Article 80 of the CISG provides that

"A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party's act or omission."

In the present case, the [Seller] was exempted from liability for non-delivery because of the [Buyer]'s termination of the Contract and its conduct of blackmail.

2. The scope of the arbitral requests and the result of the arbitration

The [Seller] alleged that the arbitral requests of the [Buyer] were specific, and the establishment of these arbitral requests was merely based on the following allegation: the Contract and T/T Contracts were separate from each other, and the former was not substituted by the latter; the [Seller] failed to deliver the 720 tons of goods under the Contract, and thus, the [Seller] had fundamentally breached the Contract which was then terminated, and that such termination was in accordance with the CISG.

The specific arbitral requests and the return of the benefits from the non-delivery of the residue of 240 tons of goods are two contradicting issues. These two issues could not exist simultaneously. Therefore, the [Seller] alleged that if the Contract was not substituted by T/T Contracts, the allegations of the [Buyer] were established; otherwise, the allegations were not established, and thus, the issue of the [Seller] obtaining the benefits from the non-delivery of the 240 tons of goods would not have existed. Without modifying its arbitral requests, the [Buyer] would require the Tribunal to exceed its scope of arbitration and decide on other issues. Should the [Buyer]'s allegations be supported by the Tribunal, the parties' autonomy to decide on their substantive civil rights would be violated, as well as the provisions of the Arbitration Rules, which would have led to a defective resolution of the present dispute and would have resulted in disputes over the arbitral award of the present case.

III. OPINION OF THE ARBITRAL TRIBUNAL

A. Applicable law

The [Buyer] was legally incorporated in the Hong Kong Special Administrative Region and the [Seller] was legally incorporated in the People's Republic of China. Therefore, the Contract signed by the parties should be considered a contract with foreign elements. The Tribunal notes that the parties expressly agreed in the Contract that the CISG was applicable. According to the principle of autonomy, the Tribunal finds that the CISG applied to the present case. The Tribunal also notes that the place of business of the [Seller], the place of delivery, and the place of arbitration were in China. Hence, China was the place of closest connection to the present dispute. According to the principles of applicable law under international private law, the Chinese law should also be applicable to the present case.

The parties agreed in the Contract that Incoterms were applicable as international usages. The Tribunal notes that in accordance with the principle of autonomy, Incoterms applied to the present case.

B. Validity of the Contract

After investigation, the Tribunal finds that the parties concluded the Contract on 23 May 2006. The parties did not object to this fact. The parties' signing the Contract constituted an effective offer and acceptance. Article 23 of the CISG provides that

"A contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention."

Therefore, the Contract was effectively concluded. Since the CISG does not govern the matters of validity of a contract, the Tribunal applies the Chinese law to determine whether the Contract was valid. The Tribunal notes that the parties signed the Contract and the content of the Contract did not violate any of the mandatory provisions of the Chinese law. According to Article 44 of the Contract Law of the People's Republic of China (hereinafter, "Chinese Contract Law"),

"A lawfully formed contract becomes effective upon its formation."

Therefore, the Tribunal finds that the Contract was valid and binding on the parties. Both parties enjoy rights and bear obligations under the Contract.

C. Performance of the Contract and disputes over the Contract

1. Performance of the Contract

Based on the evidence available and the statements made by the parties, the Tribunal finds that the parties concluded the Contract on 23 May 2006 agreeing that the [Seller] sells to the [Buyer] 720 tons of metallic silicon (specification 553#) at US $915 per ton and that the [Seller] was to deliver the goods in three installments. The Contract also provided that the price terms were FOB Huangpu (Guangzhou), Shanghai, or Tianjin (at the [Buyer]'s option) and that the [Buyer] was to issue an irrevocable L/C within five working days after the [Seller] issued the performance guarantee.

On 7 June 2006, the [Seller] sent a letter to the [Buyer] requesting the latter to postpone the delivery date for ten days, with the delivery of the last installment postponed to 20 August 2006 and the expiration date of the L/C postponed to 4 September 2006. The [Seller] and the [Buyer] modified the Contract accordingly, i.e., the latest delivery date for each installment was changed to 30 June, 30 July, and 30 August 2006, respectively. Shanghai P___ Bank Chengdu Branch issued a performance guarantee under the Contract per the [Seller]'s request on 9 June 2006. O___ Bank then issue an irrevocable L/C under the Contract per the [Buyer]'s request on 13 June 2006. The expiration date indicated in both documents was 4 September 2006.

No damages under the performance guarantee were claimed by the [Buyer] within the expiration date and the irrevocable L/C was not utilized within the expiration date.

On 5 July, 4 August, 21 August 2006, the [Buyer] and the [Seller] signed T/T Contracts No. 003A, 004A, and 002C, respectively, agreeing that the [Seller] sells to the [Buyer] 240 tons, 120 tons, and 120 tons of metallic silicon (specification 553#) at US $915 per ton, with the latest date of shipment on 30 July, 8 August, 25 August 2006, respectively. These three T/T Contracts had the same price terms and ports of shipment as the Contract. The terms of the T/T Contracts provided that the [Buyer] was to pay 100% of the contract price via telegraphic transfer within seven working days after the shipment. The parties did not object to the fact that the above three T/T Contracts were sufficiently performed.

With regard to the performance of the Contract, the [Buyer] alleged that the T/T Contracts were separate from the Contract, and that the [Seller] failed to fulfill its delivery obligation under the Contract; the [Seller] alleged that the Contract was the main contract and the T/T Contracts were supplementary contracts or accessory contracts modifying the Contract in terms of payment.

2. Relationship between the Contract and the T/T Contracts

The Tribunal notes that when the parties were performing the T/T Contracts, the Contract was not performed. The [Seller] alleged that after the conclusion of the Contract, the international market price of metallic silicon increased substantially and the goods were in short supply domestically, which resulted in the [Seller]'s actual short supply. In order to prevent the situation where the [Seller] could not make full delivery on time and taking into account that the new delivery time was later than the original expiration dates of the L/C and the performance guarantee (4 September 2006), the parties agreed on a modification to the Contract to avoid the complicated process and delay in time for the parties to request their own banks to issue the L/C and the performance guarantee. This modification provided that the parties should sign individual "transactional contracts" based on the quantity of goods delivered in each installment and to amend the payment method of L/C under the original Contract to telegraphic transfer, which could be accomplished faster and would be more favorable to the [Buyer]. Other terms under the Contract were not modified. The [Buyer] alleged that the T/T Contracts were not supplementary contracts, nor were they substitutes for the Contract, but that they were separate from the Contract, because the content of the T/T Contracts did not indicate that they were substituting, modifying, or supplementing the Contract.

After investigation, the Tribunal finds that the corresponding terms under T/T Contracts were identical to the ones under the Contract, except for the quantity of goods, delivery date, and payment method. In accordance with the Contract, each installment should be delivered before 30 June, 30 July, and 20 August 2006, respectively. The [Buyer] sent notice of delivery and vessel information on 27 June 2006 to the [Seller] regarding the first installment under the Contract. However, the [Buyer] did not send similar notice to the [Seller] regarding the second and third installments. In addition, the L/C under the Contract was not used within the expiration date. The parties signed the three T/T Contracts on 5 July, 4 August, and 21 August, respectively, after the conclusion of the Contract, agreeing that the [Seller] was to deliver 240 tons of goods before 30 July, 120 tons of goods before 8 August, and 120 tons of goods before 25 August. These three T/T Contracts were sufficiently performed. The [Seller] sent a letter to the [Buyer] on 22 August 2006 notifying the latter of the delivery of the third installment of 240 tons of goods under the Contract. The above facts confirmed the [Seller]'s allegation that the "transactional contracts" signed according to the quantity of goods that were actually delivered substituted for the performance under the Contract.

Although the [Buyer] alleged that the T/T Contracts were individual contracts separated from the Contract, there exists no evidence demonstrating that the [Buyer] had required the [Seller] to perform the Contract and T/T Contracts at the same time after the parties signed the first T/T Contract on 5 July 2006 and before the L/C under the Contract expired. According to the FOB terms agreed by the parties under the Contract, the [Buyer] must notify the [Seller] of the vessel name, place of loading, and time of delivery. The [Buyer] alleged that it had notified the [Seller] via telephone of the detailed information regarding the port of shipment, carrier, and delivery time. However, the [Seller] denied this and the [Buyer] failed to provide relevant materials or documents supporting its allegation. There is no evidence supporting the [Buyer]'s allegation.

The Tribunal notes that the T/T Contracts between the parties were signed after the agreed delivery time limit of the first installment under the Contract. If the T/T Contracts were separate from the Contract, i.e., under the circumstances that the [Seller] delayed delivery, the parties signed a series of T/T Contracts with terms of subject matter, price, terms and conditions (except for payment method) that were identical to those under the Contract, and the [Seller] entirely ignored the fact that it was violating the delivery obligation under the Contract but signed T/T Contracts and delivered goods identical to the ones under the Contract; these transactions were carried on by the parties, even after the expiration of the performance guarantee and the L/C under the Contract, but the parties ignored the above facts, it was completely abnormal in regular course of business transactions. The [Buyer] failed to provide relevant materials explaining such situations.

Based on the above ascertained facts and the evidence made availed by the parties, the Tribunal supports the [Seller]'s opinion that the Contract was the main contract with the "transaction contracts" substituting for the Contract with the payment method of telegraphic transfer, i.e., after the conclusion of the Contract, due to the fact that the [Seller] was short in supply and in order to prevent the situation where the [Seller] could not make full delivery on time, the parties agreed to sign individual "transactional contracts" based on the quantity actually delivered in each installment, and to modify the L/C payment terms to telegraphic transfer; other terms under the Contracts remained the same.

To sum up, the Tribunal finds that the [Seller] and the [Buyer] modified the Contract with telegraphic transfer as the payment method by concluding individual T/T Contracts based on the quantity actually delivered in each installment because of the preparation of the goods by the [Seller] after the conclusion of the Contract. The parties signed three T/T Contracts in order to substitute the delivery obligation of 480 tons of goods that were already performed. However, the [Seller] was still obligated to deliver the third installment of 240 tons of goods under the Contract.

3. The liability for the non-delivery of the third installment under the Contract

The Tribunal has affirmed that the parties had performed the Contract via T/T Contracts in the above section 2. Therefore, the [Seller] was still obligated to perform the delivery obligation of the third installment under the Contract after delivering 480 tons of goods (i.e., performing the three T/T Contracts).

The Tribunal has ascertained the following facts:

      (1) On 22 August 2006, the [Seller] sent a letter to the [Buyer] notifying the latter of the delivery of the third installment of 240 tons of goods under the Contract, confirming delivery of the goods in installments before 20 September 2006.

      (2) The [Buyer] requested delivery before 15 September 2006 and required the [Seller] to confirm and reply in writing. However, the [Seller] failed to do so.

      (3) On 19 September 2006, the [Buyer] sent a lawyer's letter to the [Seller] requesting the latter to prepare delivery of the 720 tons of goods under the Contract by 25 September 2006.

      (4) The [Seller] replied to the [Buyer] on 21 September 2006 confirming that the [Seller] was to deliver 240 tons of goods under the Contract, and requesting the [Buyer] to issue a new L/C, hoping that the [Buyer] would purchase these goods at the current market price.

      (5) On 25 September 2006, the [Buyer] replied by letter rejecting the increase of the price.

      (6) Thereafter, the parties signed an Agreement on Cancellation of the Contract on 10 October 2006 after negotiation, which provided that the Contract would be cancelled after "both parties concluded the contract of 240 tons of goods, FOB US $915/MT."

      (7) The [Seller] faxed the Agreement on Cancellation of the Contract (Draft) to the [Buyer]. The [Buyer] changed the wording "Signed" to "Performed" and faxed it back to the [Seller]. In addition, the [Buyer] sent a letter urging the [Seller] to sign the above Agreement on Cancellation of the Contract. However, the [Seller] failed to respond.

      (8) The [Buyer] thereafter declared the Contract terminated on 6 November 2006.

The Tribunal notes that the [Buyer] terminated the Contract on 6 November 2006 based on the allegation that the [Seller] did not perform the Contract. The [Seller] did not express willingness to deliver the third installment of 240 tons of goods under the Contract after its receipt of this notice from the [Buyer]. Therefore, the Tribunal affirms that the performance of the third installment of 240 tons of goods under the Contract was terminated.

With regard to the reasons why the third installment under the Contract was not delivered, the [Buyer] alleged that from August to September 2006, the price of metallic silicon had been increasing, and the [Seller] refused to perform the valid Contract because the [Seller] wanted to pursue the utmost commercial benefits. On the other hand, the [Seller] alleged that due to the fact that the [Buyer] completely denied the modification of the Contract in bad faith, the [Seller] had to require the [Buyer] to issue an L/C for the third installment of goods under the Contract to protect itself.

Based on the available evidence and ascertained facts, the Tribunal finds that:

      (1) The [Seller] sent a letter to the [Buyer] notifying the latter that the third installment of 240 tons of goods under the Contract would be delivered before 20 September 2006. The [Buyer] required the [Seller] to deliver the goods before 15 September 2006, which was reasonable. However, the [Seller] did not reply to this request by the [Buyer].

      (2) The [Buyer] sent a lawyer's letter on 19 September 2006 to the [Seller] requiring the [Seller] to deliver the 720 tons of goods under the Contract. Such conduct violated the principle of good faith. Based on the ascertained fact that the [Seller] had already delivered 480 tons of goods under the Contract according to the T/T Contract terms by way of substitution, the [Buyer] was not entitled to require the [Seller] to deliver the 720 tons of goods under the original Contract.

      (3) Although the [Buyer] was not entitled to the 720 tons of goods under the Contract, the [Seller] was not allowed to require the [Buyer] to issue a new L/C as the condition precedent for its delivery of the third installment and was not allowed to require an increase of the contract price, because such requirements would have changed the agreed arrangement by the parties, i.e., to substitute the performance of the original Contract by the "transactional contracts" which required a payment method of telegraphic transfer.

      (4) Another reason why the third installment was not delivered was the [Seller]'s failure to respond to the [Buyer]'s requirement to sign the Agreement on Cancellation of the Contract. It was not unreasonable for the [Buyer] to amend the draft of this Agreement, which was in accordance with the parties agreeing on the substitution of the Contract by the T/T Contracts.

Furthermore, the Tribunal finds that according to the above analysis, the non-performance of the third installment of goods under the Contract resulted in the termination of the performance of this installment. Both parties should be held responsible for this non-performance. Therefore, the loss arising out of the termination of this installment should be borne jointly by the parties.

D. The [Buyer]'s arbitral requests

With regard to the [Buyer]'s arbitral requests, the Tribunal holds the following opinion.

1. To compensate the [Buyer]'s loss of expected profits in the amount of US $136,800 due to the [Seller]'s non-performance

The Tribunal notes that the [Buyer] based this request on the fact that the [Seller] did not perform the Contract thoroughly and calculated the damages of US $136,800 according to the difference between the then current market price and the contract price. Since the Tribunal has affirmed that the parties agreed on substituting the performance of the Contract by T/T Contracts, i.e., the [Seller] had delivered 480 tons of goods under the Contract, the [Buyer] was not entitled to claim damages based on the delivered 480 tons of goods.

Article 75 of the CISG provides that:

"If the contract is avoided and if, in a reasonable manner and within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the difference between the contract price and the price in the substitute transaction as well as any further damages recoverable under article 74."

Article 76(1) of the CISG provides that:

"If the contract is avoided and there is a current price for the goods, the party claiming damages may, if he has not made a purchase or resale under article 75, recover the difference between the price fixed by the contract and the current price at the time of avoidance as well as any further damages recoverable under article 74. If however, the party claiming damages has avoided the contract after taking over the goods, the current price at the time of such taking over shall be applied instead of the current price at the time of avoidance."

Therefore, according to the materials submitted by the [Buyer] and referring to the then relevant contract price, the "current price" of the third installment of 240 tons of goods under the Contract at the time of termination of the performance should be US $1,105 per ton, the average price of the FOB price of US$ 1,080-1,130 per ton at Chinese port. Hence, the difference between the current price of the third installment of the 240 tons of goods at the time of termination of performance and the contract price was US $45,600 (US $1,105 240 tons).

2. To compensate the [Buyer] for the cost of this arbitration

The [Buyer] requested the [Seller] to compensate the cost of this arbitration of RMB 10,000 and US $13,680. The [Buyer] also submitted a contract of agency. The Tribunal finds that taking into account the arbitral requests of the [Buyer] and the extent to which the Tribunal supports these requests, as well as the liability of both parties arising out of the dispute, the [Buyer] should be responsible for its attorneys' fee.

For the arbitration fee of the present case, the Tribunal finds that the [Buyer] is responsible for 70% thereof and the [Seller] is responsible for 30% thereof, based on the extent to which the Tribunal supports the [Buyer]'s arbitral requests.

IV. AWARD

The Tribunal renders the following award:

(1)    The [Seller] should compensate the [Buyer] for the latter's loss of expected profits of US $22,800;
 
(2)    The other arbitral requests of the [Buyer] are dismissed;
 
(3)    The arbitration fee for the present dispute is US $6,367 -- 70% of which should be borne by the [Buyer] (i.e., US $4,457) and 30% of which should be borne by the [Seller] (i.e., US $1,910). The [Buyer] has paid in advance the full amount, and thus, the [Seller] should compensate the [Buyer] for the arbitration fee of US $1,910.

The above payments under Items 1 and 3 should be made by the [Seller] to the [Buyer] within thirty days after the rendering of this arbitral award.

This 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, Claimant, Hong Kong T Trading Co. Ltd. of Hong Kong SAR, is referred to as [Buyer] and Respondent, H Group Co. Ltd. of People's Republic of China, 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 the United States (dollars) are indicated as [US $].

** 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).

*** Xiangyu Huang, Undergraduate, Wuhan University School of Law; Participant Seventeenth Annual Willem C. Vis International Commercial Arbitration Moot (2010).

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Pace Law School Institute of International Commercial Law - Last updated May 5, 2010
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