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CISG CASE PRESENTATION

China 18 September 1995 Changsha Intermediate People's Court of Hunan (Skandinaviska v. Hunan Co.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/950918c1.html]

Primary source(s) of information for case presentation: Wu Dong

Case Table of Contents


Case identification

DATE OF DECISION: 19950918 (18 September 1995)

JURISDICTION: PR China

TRIBUNAL: Changsha Intermediate People's Court, Hunan Province

JUDGE(S): Li, Haobo; Li, Qing; Qiu Zhongxian

CASE NUMBER/DOCKET NUMBER: Chang Zhongjingchuzi No. 89 (1995)

CASE NAME: Skandinaviska Meterno AB v. Hunan Co. for International Economy and Trade

CASE HISTORY: Unavailable

SELLER'S COUNTRY: China (defendant)

BUYER'S COUNTRY: Sweden (plaintiff)

GOODS INVOLVED: Molybdenum iron alloy


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 30 ; 53 ; 73 ; 74 ; 75 ; 77 ; 78 [Also cited: Articles 1 ; 4 ; 18 ]

Classification of issues using UNCITRAL classification code numbers:

30A [Seller obligation to deliver, etc.];

53A [Buyer obligation to pay price of goods];

73A [Avoidance in installment contracts: fundamental breach with respect to installment];

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

75A2 [Damages established by substitute transaction (substitute transaction after avoidane): repurchase by aggrieved buyer];

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

78A ; 78B [Interest on delay in receiving price or any other sum in arrears; Rate of interest]

Descriptors: Delivery ; Price ; Installment contracts ; Avoidance ; Damages ; Cover transactions ; Mitigation of loss ; Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=428&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (Chinese): Zhongguo shenpan anli yaolan, University, Peking, Renmin daxue chubanshe (1997) 380-382; CISG-China Case [IPC/11]: <http://aff.whu.edu.cn/cisgchina/en/news_view.asp?newsid=67>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Changsha Intermediate People Court [18 September 1995]

Translation [*] by Wu Dong [**]

[PROCEEDINGS]

PARTIES AND COUNSEL. Plaintiff: Sweden Skandinaviska Metemo AB [Buyer], Address: Stockholm No. 10041, Swede. Legal Agent: Girnng Crocker, Chief Manager. Attorney: Lu, Lixi, Lawyer of Legal Affairs Department of Hunan Trade Promotion Committee. Defendant. Hunan International Economy and Trade Company [Seller], Address: Ziyuan Road No. 51, Changsha. Legal Representative: Jiang, Ping, Chief Manager. Attorney: Tan, Xiaoao, Director of the Department of Legal Service of Hunan Legal System Weekly.

[POSITION OF THE PARTIES]

[Buyer]'s position. On 21 September and 23 November 1993, [Buyer] and [Seller] concluded two contracts of sale of molybdenum-iron. [Seller] only delivered 18 tons, or half of the amount under Contract No. 60103, the contract of 21 September; as to Contract No. 60117, the contract of 23 November, [Seller] did not perform any of it. To meet the needs of [Buyer] clients, [Buyer] had to buy these goods from other European and Chinese traders at a higher price: US $6.8 per kilogram. The loss caused by the margin of the price was US $57,060; with interest of US $6,847.20 added to that, the sum was US $63,907.20. [Buyer] requested the court to direct [Seller] to pay compensation to [Buyer] for incomplete performance under Contract Contract No. 60103 and non-performance under Contract No. 60117.

[Seller]'s position. In response, [Seller] argued that under Contract No. 60103, after [Seller] delivered the first installment of goods (18 tons of molybdenum-iron) in due time, [Buyer] refused to pay the remaining 10% of the price in due time. [Seller] was therefore entitled to refuse to deliver the second installment. [Buyer] was in breach of contract so that there was no factual and legal basis for [Seller] to compensate [Buyer] losses. As to Contract No. 60117, it was not concluded at all. [Seller] therefore requested the court to dismiss [Buyer] claims.

FINDINGS OF THE COURT

The court found the following:

On 21 September 1993, [Buyer] and [Seller] concluded Contract No. 60103 for the import of molybdenum-iron. The contract stipulated:

Seller] shall export 36 tons of molybdenum-iron to [Buyer] at the price of US $5.35 per kilogram. The delivery term is CIF (Rotterdam Harbor). The goods are to be delivered in two installments: 18 tons in October and the other 18 tons in November. [Buyer] shall pay 90% of the price by collection (D/P at sight), and the other 10% shall be paid 30 days after all of the goods arrive in Rotterdam and the inspection is completed.

[Seller] delivered the first installment under Contract No. 60103 and [Buyer] accepted it in due time and paid the 90% price in due time. On 23 November, [Buyer] sent an offer by telex to [Seller] to purchase molybdenum-iron under Contract No. 60117 and asked for another export of 60 tons of molybdenum-iron. After [Seller] received this offer, [Seller] modified the quantity, quality and delivery date in the offer and telexed back to [Buyer]. During the trial, [Buyer] asserted that when [Buyer] received the modified draft contract by telex, [Buyer] signed it to reflect [Buyer] consent and telexed back to [Seller]. However, [Seller] asserted that the second telex it received from [Buyer] was a counter-offer because [Buyer] modified it again and [Seller] did not accept this counter-offer. But, neither party could prove its assertion by evidence. [Seller] insisted that [Buyer] pay the remaining 10% of the price of the goods under Contract No. 60103 before it delivered the second installment of 18 tons of goods under that contract. [Buyer], in accordance with the contract, refused to pay the 10% price first. [Seller] thereupon refused to deliver the second installment. To meet the needs of clients, [Buyer] had to conclude another contract (No. 60127) with Swiss Newco Ac Company on 18 January 1994 to buy 18 tons of molybdenum-iron at the price of US $6.8 per kilogram. [Buyer] thus suffered a loss of US $15,660 due to the margin between the prices. After several efforts at negotiation, no solutions were reached. [Buyer] brought this suit before Changsha Intermediate People's Court, Hunan Province on 20 April 1995.

The aforesaid facts are proved by the following evidence:

  1. Contract No. 60103 concluded by [Buyer] and [Seller] on 21 September 1993;

  2. Fax of the offer for Contract No. 60117 from [Buyer] to [Seller] on 23 November 1993;

  3. Contract No. 60127 concluded by [Buyer] and Swiss Newco Ac Company on 18 January 1994;

  4. The bases for calculating compensation for the relevant losses;

  5. The investigation notes and hearing notes of the court.

[HOLDING OF THE COURT]

Based on the aforesaid facts, the court held that the trade conducted by [Buyer] and [Seller] belonged to the legal relation in international sale of goods. Contract No. 60103, concluded as the production of the meeting of true intents of the two parties, was legal and valid; the two parties should perform completely and actually. The request of [Seller] for the 10% price of the first installment was not based on the contract and was obviously unreasonable. [Seller] refusal to deliver the second installment was an act breaching the contract. All the civil responsibilities caused thus shall be borne by [Seller]. The assertion of [Buyer] that Contract No. 60117 had been concluded cannot be found by the court without sufficient evidence, so the relevant claim for compensation cannot be supported by the court.

Based on the aforesaid facts, evidence and reasons, Changsha Intermediate People's Court, Hunan Province on 18 September 1995 in accordance with articles 1, 4, 18, 73, 74, 77 of the CISG hereby decides as follows:

  1. Due to [Seller] non-performance of Contract No. 60103, [Seller] shall compensate the losses to [Buyer] due to the margin between the prices, which was US $15,660.

  2. [Buyer] shall pay the other 10% price of the first installment to [Seller], which was US $6,027.42.

  3. After set-off of item 1 and 2, [Seller] shall pay [Buyer] US $9,632.58 with interest until the completion day of payment at the rate of the lowest foreign exchange (US dollar) lending rate of circulating capital.

To fulfill the aforesaid liabilities, if [Seller] is unable to pay in US dollars, [Seller] shall pay in Renminbi according to the national foreign exchange price on the payment day.

Suit acceptance fee is 20,407 RMB. [Buyer] shall bear 2,407 RMB and [Seller] shall bear 18,000 RMB. As [Buyer] had paid in advance, [Seller] shall pay to [Buyer] directly.

After the decision, neither party appealed.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Sweden is referred to as [[Buyer]] and Defendant of the PR China is referred to as [[Seller]]. Amounts in the currency of the United States (dollars) are indicated as [US $]; amounts in the currency of the People Republic of China (Renminbi) are indicated as [RMB].

* Wu Dong, LL.M. candidate, Peking University School of Law, Beijing, P.R. China, 2001 to present; LL.B. Peking University School of Law, 2001.

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Pace Law School Institute of International Commercial Law - Last updated May 11, 2010
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