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CISG CASE PRESENTATION

China 27 June 1997 CIETAC Arbitration proceeding (Kidney beans case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/970627c1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 19970627 (27 June 1997)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/1997/18

CASE NAME: Unavailable

CASE HISTORY: Unavailable

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

BUYER'S COUNTRY: Hong Kong (claimant)

GOODS INVOLVED: Kidney beans


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 49 ; 74 [Also cited: Article 64 ]

Classification of issues using UNCITRAL classification code numbers:

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

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

74A ; 74A1 ; 74B [General rules for measuring damages: loss suffered as consequence of breach; Includes loss of profit; Outer limits of damages: foreseeability of loss]

Descriptors: Avoidance ; Fundamental breach ; Damages ; Profits, loss of ; Foreseeability of 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): Zhong Guo Guo Ji Jing Ji Mao Yi Zhong Cai Wei Yuan Hui Cai Jue Shu Hui Bian [Compilation of CIETAC Arbitration Awards] (May 2004) 1997 vol., pp. 2118-2124

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Dong WU, CIETAC's Practice on the CISG, at nn.23, 24, 158, 172, 204, Nordic Journal of Commercial Law (2/2005); Fan Yang, The Application of the CISG in the Current PRC Law and CIETAC Arbitration Practice (December 2006) n. 87

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Case text (English translation)

Queen Mary Case Translation Programme

China International Economic & Trade Arbitration Commission
CIETAC (PRC) Arbitration Award

Kidney beans case (27 June 1997)

Translation [*] by Meihua Xu [**]

Edited by LIN Zhongming [***]

The China's International Trade and Economic Arbitration Commission, Shenzhen Sub-Commission (hereafter, " Shenzhen Commission") accepted the case on 20 March 1997 according to

   -    The arbitration clause in Sales Contract No. GG/LH9608 (D) signed by Claimant [Buyer], Hong Kong ___ Grain Company and Respondent [Seller], China Liaoning ___ Import & Export Company on 15 May 1996;
 
   -    The written arbitration application submitted by [Buyer].

According to Article 64 of the Arbitration Rules of China's International Trade and Economic Arbitration Commission (issued on 1 October 1995, hereafter the "Arbitration Rules"), this case is qualified to use summary procedure.

Together with the arbitration application, the [Buyer] also submitted a Property Preservation application. According to Article 28 of Arbitration Law of the People's Republic of China and Article 258 of Civil Procedure Law of the People's Republic of China, Shenzhen Commission forwarded the aforesaid Property Preservation application to the Intermediate People's Court of Dalian, Liaoning Province, where the property is located. The Intermediate People's Court of Dalian, Liaoning Province took action to preserve the property and issued (1997) Da Zhong Fa Bao Zi No. X Civil Decision on 25 March 1997.

Because the parties did not jointly appoint the Presiding Arbitrator within the time stipulated in the Arbitration Rules, the Chairman of the Arbitration Commission appointed Mr. P as the Presiding Arbitrator. The Arbitration Tribunal was formed on 5 May 1997 to hear the case.

After examining the arbitration application, the defense, and related evidence, the Arbitration Tribunal held a court session in Shenzhen on 27 May 1997. Both parties appeared at the court session. The Arbitration Tribunal heard the oral statements and arguments by the parties, and investigated related facts of this case.

With the agreement of the parties, the Arbitration Tribunal sought to mediate this case. However, because the disagreement between the parties was severe, the mediation did not succeed. The Arbitration Tribunal terminated the mediation procedure. After the court session, both parties submitted supplementary materials.

The Arbitral Tribunal concluded the case on 27 June 1997. The following are the facts, the Tribunal's opinion and award.

I. FACTS

On 15 May 1996, the [Buyer] and the [Seller] signed Contract GG/LH9608 (D) (hereafter the "Contract"). According to the Contract, the [Buyer] will purchase 500 tons of kidney beans from the [Seller]. The price is US $328/ton, and the shipment term is FOB Dalian. Dalian A (Group) Co. Ltd. shall issue a 100% irrevocable L/C before 5 June 1996;

The [Buyer] asked to have the goods loaded between 25 June and 15 July 1996. The Contract called for the [Buyer] to give notice to the [Seller] at least seven days before the ship arrives at Dalian port. The Contract also stipulates issues such as packaging, inspection, and force majeure.

There was a dispute between the parties during the performance of the Contract. Because of the failure of negotiation, the [Buyer] submitted an arbitration application to Shenzhen Commission based on the arbitration clause in the Contract, and stated its arbitration claim in detail. After making two changes, the [Buyer] framed its arbitration claim, which is that the [Seller] should compensate US $84,536 to the [Buyer].

POSITION OF THE PARTIES

A. [Buyer]'s claim

The elements of [Buyer]'s US $84,536 claim are:

(1) US $26,000. Loss of profit [(Price for reselling - Contract price) x Contract quantity, (US $430 - US $378) x 500 tons = US $26,000];

(2) US $26,250. Loss of shipping fee [Shipping rate x weight, US $52.5 x 500 tons = US $26, 250];

(3) US $21,500. Contract violation fee (compensation for the amount the [Buyer] should pay to its customers [which is US $430 x 500 tons x 10% = US $21,500];

(4) US $ 4,096. Arbitration fee and arbitrator's fee paid by the [Buyer] in advance, renminbi [RMB] 34,000 [which is US $4,096];

(5) US $ 6,690. [Buyer]'s Attorneys' fee, cost for case procedure, and the cost for court procedure [they are US $1,285, HK $30,000, and RMB 12,670 = US $6,690].

The [Seller] made counter arguments.

B. [Buyer]'s position

(1) After concluding the Contract, the [Buyer] issued an irrevocable L/C with the [Seller] as beneficiary on 30 May 1996. However, the [Seller] has not provided any goods. Because of the [Seller]'s breach of contract, the [Buyer] has suffered loss of shipping fee and loss of profit, etc.

(2) [Seller]'s excuse -- not receiving loading notice seven days in advance -- is an unacceptable basis for refusing delivery..

      1. In a fax sent by the [Buyer] to the [Seller] on 28 June 1996, the [Buyer] informed the [Seller] that the shipping date would be 12 July to 15 July.

      2. The [Buyer] sent another fax on 8 July notifying the [Seller] that the ship would arrive at the port between 12 July 1996 and 14 July 1996. The ship in fact arrived at the port on 15 July, therefore, the notice had been given seven days before the ship arrived.

      3. Even if the [Buyer] had not given notice seven days in advance, the [Seller] had no right to terminate the Contract by itself, and refuse to deliver the goods.

According to Article 64 of the United Nations Convention on Contracts for the International Sales of Goods (hereafter the "CISG"), "the [Seller] may declare the Contract avoided if the failure by the [Buyer] to perform any of his obligations under the Contract amounts to a fundamental breach". The [Buyer]'s notifying the [Seller] several days late would not constitute a fundamental breach, therefore, the [Seller] could not use this as an excuse to refuse to perform.

(3) [Seller]'s fraud caused the loss of shipping fee

On 24 June 1996, the [Buyer] sent a reservation form to the shipping company, and made a reservation for shipping space for 500 tons of goods by the Ship YI RONG, which would arrive at Dalian Port in the middle of July 1996. As a trade usage, the [Buyer] noted in the reservation form that "the reservation is effective after confirmed by the [Buyer]."

On 2-5 July 1996, when the [Buyer] was inspecting the goods in Dalian, it had enough evidence to doubt the [Seller]'s ability to provide the goods in time. In order to avoid the loss of shipping fee, the [Buyer] decided not to send shipping confirmation to the shipping company. However, on 5 July 1996, the [Seller] sent a fax to the [Buyer]'s Hong Kong office notwithstanding the fact that the [Buyer]'s representative was in Dalian. The [Seller] promised that it would provide the goods with the same quality, quantity, shipping time, and price stipulated in the Contract.

On 8 July 1996, after the [Buyer]'s representative returned to Hong Kong, he read the fax and believed that the [Seller] could perform the Contract. The [Buyer] sent shipping confirmation to the shipping company on the same day, and the shipment Contract was formed.

All of the above facts indicate that, even though there was an indication that the [Seller] might violate the Contract, the [Buyer] performed in good faith to mitigate the possible loss. However, the [Seller] knew that it could not deliver the goods on time, but deliberately sent a fraudulent fax to the [Buyer] on the afternoon of 5 July 1996 to avoid taking responsibility. The [Seller] knew that 6 July and 7 July was a weekend, and that the [Buyer] could not respond to the fax in time, which would look like the [Buyer] failed to give notice to the [Seller] and also would be an excuse for the [Seller] to violate the Contract. The [Seller]'s fraudulent behavior caused the [Buyer] to send a shipping confirmation to the shipping company, which caused the [Buyer]'s loss of the shipping fee.

(4) Forseeability

It was clearly stated in the fax sent by the [Buyer] to the [Seller] on 6 May 1996 that "our company needs to pay our customer a 10% down payment". Therefore, the [Seller] had known before signing the Contract that its breach of contract would cause the [Buyer] to pay a 10% down payment to its customers.

In fact, every merchant should have knowledge that its breach of contract will cause the other party to be sued or claimed for compensation by its customers. The [Seller] in this case was thinking about breaching the Contract. It should have known the [Buyer] would be asked for compensation by its customers. In addition, the [Seller] had already been informed of this fact. Therefore, the [Seller] should take the responsibility for the compensation to the [Buyer]'s customers, in other words, the [Seller] should pay US $21,500.

C. [Seller]'s position

The [Seller] responds that:

(1) [Buyer] is the one who should take the responsibility for failing to perform the Contract. Following the shipment clause in the Contract, the [Seller] was preparing for the shipment after the [Buyer] issued the L/C, and sent a fax to the [Buyer] to urge it to "arrange for shipment as determined in the Contract." However, the [Buyer] sent a fax to the [Seller] on 8 July 1996 notifying that the shipping date was between 12 July to 14 July. No matter whether the shipping date was 12 July or 14 July, the [Buyer] failed to give notice seven days in advance for the [Seller] to prepare for shipping. The [Buyer] did not perform its obligations of the Contract, with the result that the [Seller] did not have enough time to prepare for shipping, and could not deliver the goods as provided in the Contract.

(2) The [Buyer] did not made reservation for shipping space. The [Buyer]'s claim for loss of shipping fee has no legal basis.

      1. The shipment reservation form of 24 June was only an application form for shipping, which could be purchased for several cents at shipment agencies. Clients may fill such a form at will, just as filling forms at banks. The important issue was not how many shipment reservation forms there were, but whether the shipping company accepted the application and sent back the shipping confirmation. Only the shipping confirmation can prove that the [Buyer]'s application has been accepted by the shipping company.

      2. The shipping confirmation fax sent on 8 July.

The fax was written by the [Buyer]. If it was needed, as long as there was a typing machine and fax machine, the [Buyer] could type and send numerous faxes. The [Buyer] should have known that providing the evidence made by itself will not satisfy the basic requirement for evidence - objectivity. Therefore, the evidence should not be submitted. It cannot be trusted, nor can it be the legal basis to make judgment.

The [Buyer] has already submitted the fax to the Arbitration Tribunal. No matter how strong evidence it is, from the inconsistent contents, it can be found that the fax was written afterward.

First, upon sending shipping confirmation to the shipping company on 8 July, the [Buyer] had already known the ship was going to arrive at Dalian port on 15 July. Why did the [Buyer] write that the shipping date was between 12 July to 14 July in the fax sent to the [Seller] on the same day?

Second, if the shipping confirmation was sent after the [Buyer] notified the [Seller] of the shipping date, it indicates that the [Buyer] did not arrange for shipment and did not make reservation for shipping space.

Third, even though the [Buyer] did send a shipping confirmation fax to the shipping company, having no idea whether there was any space and without the shipping confirmation issued by the shipping company, how could the [Buyer] know that it had successfully made reservation for the shipping space? For long distance shipping, making phone calls and sending faxes to make reservation for shipping space is only a client's one-sided action. No shipping confirmation by the shipping company indicates that there is no agreement between the shipping company and the client. Since no shipping contract exists, how can the shipping company ask for a shipping fee?

      3. The shipping company's claim for compensation

The letter only indicates the mind of one side. There are no facts to prove the occurrence of compensation, no evidence of transferring money by bank, and no receipt of accepting money by the shipping company, the claim by only one side cannot prove that there was a loss suffered by the shipping company. The [Buyer] consistently uses "the fax from the third party" to claim for damages, which has no legal basis and lacks common sense.

Technically, if the [Buyer] had one piece of paper and paid several Yuan of fax fee, it could write anything it wanted. It could let anyone send the fax without taking responsibility. The [Buyer] could even send the fax by itself, such as using a third party's fax machine to send the fax to its own fax machine. Therefore, this kind of fax should never be used as a legal basis for a lawsuit or arbitration.

      4. The fax sent by the [Seller] on 5 July

[Buyer] argues that the fax sent by the [Seller] on 5 July caused the [Buyer] to send shipping confirmation to the shipping company.

The [Seller] argues that it is the [Buyer]'s right to send or not to send shipping confirmation. Sending a shipping confirmation within a stipulated time is the [Buyer]'s obligation. When to assert the right or when to perform the obligation is determined in the contract or L/C.

(3) Because the [Buyer] did not reserve the shipping space and failed to notify the [Seller] of the shipping date as required by the Contract, this made it impossible for [Seller] to perform the Contract. Therefore, the [Buyer] should bear the entire responsibility for failure to perform the Contract. As a violating party, the [Buyer] has no right to claim for loss of profit and demand compensation from the [Seller].

(4) The compensation claim from the [Buyer]'s customers was only presented by fax. There is neither bank payment evidence nor receipt by the customers. The [Buyer]'s loss cannot be proved, which means there is no legal basis for compensation. Therefore, the [Buyer] has no legal right to claim for compensation from the [Seller].

III. OPINION OF THE ARBITRATION TRIBUNAL

(1) Applicable law

The parties did not stipulate the applicable law in the Contract. However, the parties did mention Chinese law and the United Nations Convention on Contracts for the International Sales of Goods (hereafter the "CISG") to support their arguments. Therefore, it should be deemed that the two parties agree that Chinese law should be the applicable law. In addition, the CISG should be applied as a reference here.

(2) The binding effect of the Contract

Contract GG/LH9608 (D) signed by both parties on 15 May 1996 was formed after negotiation by both parties and satisfies the requirements for effectiveness of a contract as defined by Chinese law. The Contract is valid and has binding effect to both parties.

(3) The responsibility for breach of Contract

The [Buyer] argues that: On 30 May 1996, the [Buyer] issued a L/C with the [Seller] as beneficiary. However, the [Seller] did not deliver goods, which was a breach of the Contract, and caused the [Buyer]'s loss of shipping fee and loss of profit.

The [Seller] argues that: After the [Buyer] issued the L/C, it was preparing for shipping, and sent fax on 5 July 1996 to urge the [Buyer] to arrange for shipment within the time stipulated in the Contract. The [Buyer] sent a fax on 8 July 1996 saying that the date for shipping would be between 12 July to 14 July, therefore, the [Buyer] failed to give notice at least seven days in advance for the [Seller] to prepare shipping. The [Buyer] did not perform its notice obligation as required by the Contract, with the result that the [Seller] did not have enough time to prepare shipping, and could not perform its obligation to ship the goods on time.

It was found that on 30 May 1996, the [Buyer] issued a 100% irrevocable L/C through Dalian A (Group) Co. Ltd. As requested by the [Seller], the L/C issuing bank, The Bank of Tokyo Mitsubishi, Ltd., Hong Kong Branch, made changes to the L/C on 10 June 1996.

On 24 June 1996, the price for the goods in the Contract increased tremendously, and the [Seller] asked for a higher price. The [Buyer] responded on 24, 28 July 1996 saying that it could not agree to the [Seller]'s asking for higher price or reducing packaging contents. However, the [Buyer] agreed that the [Seller] may increase or decrease 10% of the quantity of the goods, and also postpone the shipping date, which was between 12-15 July to several days later to give the [Seller] enough time to prepare for shipping.

On 5 July 1996, Mr. Lin of [Buyer]'s company sent a fax to the [Seller] in Dalian stating

"I just received a phone call from Mr. Su of your company, who said that Ms. Li was in the hospital, therefore, the plan to check the goods in your warehouse at 2:30 p.m. had to be cancelled. Since Mr. Su said that Ms. Li did not tell anything about the goods for shipping, and there are also some signs to show that you are not ready for shipping yet. Therefore, in order to avoid the loss for shipping fee and late fee, we have to cancel the ship arriving in Dalian on 12 July, and reserve the contractual right ... We have emphasized again and again that the goods must be fully delivered. If there is anything needs our cooperation, please call our Hong Kong office next Monday."

On the same day the [Seller] also sent a fax to the [Buyer]'s Hong Kong office and said,

"After signing the Contract, the delay and changes of the L/C set back the performance of the Contract. In addition, the price of kidney beans has increased tremendously, and the demand for kidney beans also increased, which caused big difficulties for us to perform the Contract. In order to continue our business relationship (1) please send the ship on time. We promise to deliver the goods on time with the same quality and price. (2) If you cannot send the ship on time, we will then discuss."

Mr. Lin saw the fax after retuning to Hong Kong, and replied to the [Seller] on 8 July 1996 saying that:

"We received the fax Ms. Li sent us on 5 July (I saw it in the morning I returned to Hong Kong). I am very glad to know that you are able to ship the goods with the same quality, quantity, and price as in the Contract. We cannot doubt your ability any more. Therefore, we have already arranged ship "Yi Rong", which will arrive in Dalian port between 12 to 14 July. Please contact our representative in Dalian immediately to decide the loading date. Before loading the goods, please complete the process of commodity inspection, smoking and steaming, vegetable inspection, customs, and submitting the Bill of Lading."

The [Seller] replied on the same day asserting that:

"We received your fax on 8 July and knew that Yi Rong ship would arrive between 12 to 14 July. According to the Contract, you should give notice to us about the shipping date and the ship's name at least seven days in advance. However, you gave notice to us less than six days in advance, within which we cannot complete preparation for shipping, therefore, we cannot ship the goods."

After the [Buyer] receiving the fax from the [Seller], it replied that:

"We received your fax by Ms. Li at 2:30 this afternoon, and we agree to load the goods on 15 July after negotiating with the shipping company. The Bill of Lading should also be issued on 15 July."

The [Seller] did not respond to the aforesaid fax. On the next day, the [Buyer] sent another fax to the [Seller] asking why the [Seller] tried to avoid the [Buyer] and why it could not reach the [Seller]. It also asked how the shipping preparation was going. The [Buyer] also agreed that without changing the rights under the original Contract, it could consider to accept (1) the [Seller] can load as much as it has onto ship Yi Rong. (2) Postpone the shipping date to 20 - 25 July, which will be another ship "TOGO BEAUTY. (3) The [Seller] may deliver the remaining goods until August.

On 11 July 1996, the [Buyer] sent another fax to the [Seller] asking why the [Seller] did not reply any fax or phone call. The [Buyer] asked the [Seller] to load the goods on 15 July to perform its obligation under the Contract, and stated that the [Buyer] wanted the goods, if the [Seller] had difficulties, it should tell the [Buyer] and the [Buyer] would help.

The [Seller] sent its last fax in the afternoon of 8 July 1996, and did not contact the [Buyer] further, nor did it reply the faxes sent by the [Buyer] afterward. The goods in the Contract have never been delivered.

The Arbitration Tribunal considered that the [Buyer] has performed its obligation to issue a L/C. About the loading notice, on 28 June 1996 the [Buyer] notified the [Seller] that the ship would arrive around 12- 15 July 1996. However, the [Buyer] did not inform the [Seller] of the ship's name at that time, therefore, it should not be considered as a loading notice. The loading notice sent by the [Buyer] on 8 July 1996 had the shipping date and the ship's name on it; therefore, it was a valid loading notice. If the shipping date was the same as in the notice, which was between 12 to 14 July, then the [Buyer] failed to give notice seven days in advance. However, the [Buyer] sent another fax on the same day saying that the shipping date could be postponed to 15 July, therefore, with its effort, the [Buyer] successfully gave notice to the [Seller] seven days in advance.

After the price for the Contract goods increased, the [Seller] asked the [Buyer] to pay a higher price or reduce the contents of the goods, which was refused by the [Buyer]. Even though the [Seller] said it was preparing to deliver the goods and notified the [Buyer] that it would deliver the goods on time with the same quality, quantity, and price, there is no evidence to show that the [Seller] was performing the Contract.

The [Seller] used as an excuse -- "the [Buyer] did not give loading notice seven days in advance to let the [Buyer] to prepare for shipping" -- to give up shipping the goods, and ignored the [Buyer]'s suggestions afterward, which would allow the [Seller] to have enough time to prepare for shipping; that in fact caused the termination of the Contract.

The Arbitration Tribunal considered that the [Buyer] did its best to perform the Contract. The [Seller]'s excuse that the [Buyer] did not give notice properly is not acceptable. According to the Law of the People's Republic of China on Economic Contracts Involving Foreign Interest and the CISG, the [Seller]'s terminating the Contract by itself constituted a fundamental breach of the Contract, therefore, [Seller] should bear the responsibility for Contract violation.

(4) The arbitration claim

      1. The loss of shipping fee

The [Buyer] provided a shipping space reservation application form it sent to South Africa Phoenix Shipping (Pty) Ltd. (hereafter, the South Africa Shipping Company) and the fax of shipping space confirmation it sent to South Africa Shipping Company. The Arbitration Tribunal noticed that the aforesaid form has only the [Buyer]'s signature and seal, but no South Africa Shipping company's seal. The [Buyer] did not provide the reservation confirmation from the South Africa Shipping Company and related evidence. The Arbitration Tribunal deems that there is not enough evidence to prove the loss for space vacancy, therefore, [Buyer]'s claim for US $26,250 should not be accepted.

      2. The Contract violation fee paid to the customers

[Buyer] added a claim for the loss of Contract violation fee paid to its customers. The [Buyer] provided a fax which was sent to the [Seller] before the Contract was formed. The [Buyer] stated in this fax that:

"The Contract form will be the same we used before, but a new compensation clause will be added, which is 'after concluding the Contract, if the [Seller] cannot deliver the goods as determine in the Contract, it should compensate the [Buyer] 10% of the Contract price as a penalty. (Because we need to pay 10% Contract insurance fee to our customers too)."

The Arbitration Tribunal deems that the [Buyer]'s informing the [Seller] that it needed to pay a 10% contract insurance fee to its customers was only a possibility. The [Buyer] had not formed contracts with its customers then, and whether the compensation clause would be included in their contracts was still not clear at that time. Therefore, the [Seller] could not foresee the loss to the [Buyer], and the [Buyer] did not provide any evidence to show that the loss had actually occurred. Therefore, the [Buyer]'s claim for loss of contract violation fee should not be accepted.

      3. Loss of profit

The [Buyer] provided a contract it formed with its customer. The Arbitration Tribunal cannot determine its validity. However, since the [Seller] has fundamentally breached the Contract, which caused the Contract not to be performed, the [Seller] should therefore pay a reasonable compensation to the [Buyer]. 10% of the Contract price should be reasonable, which is the amount [Seller] should pay the [Buyer]: US $18,900 (US $378/ton x 500 tons x 10% = US $18,900)

      4. The attorneys' fee, cost for court procedure

Evidence shows that the [Buyer]'s attorneys' fee and cost for lawsuit is US $1,285, HK $30,000, and RMB 10,000. The cost for application for property reservation to the Intermediate People's Court of Dalian is RMB 2,670, which will not be considered by this Tribunal. The [Buyer] should file this claim to related court as defined by Chinese law. According to Article 59 of Arbitration Rules, the [Seller] should pay the [Buyer] the reasonable cost of claim of US $1,890.

      5. The arbitration fee and other fees incurred

The [Buyer] shall bear 40%, and the [Seller] shall bear 60% of the arbitration fee and other fees incurred.

III. THE AWARD

(1) [Seller] shall pay the loss of profit of US $18,900 and the reasonable cost of US $1,890 for filing claims, which is a total of US $20,790. [Seller] shall pay the aforesaid amount within 45 days of the date this award takes effect. Otherwise, 8% annual interest shall be added.

(2) The arbitration fee and the cost for filing claim is RMB ___ Yuan. [Buyer] shall bear RMB ___ Yuan, and [Seller] shall bear RMB ___ Yuan. [Buyer] has paid RMB ___ Yuan in advance, therefore, [Seller] shall pay back [Buyer] RMB ___ Yuan to [Buyer] within 45 days of the date this award takes effect. Otherwise, 12% annual interest shall be added.

(3) [Buyer]'s other claims shall be dismissed.

This is the final award.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of Hong Kong is referred to as [Buyer] and Respondent of the People's Republic of 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's Republic of China (renminbi) are indicated as [RMB].

** Meihua Xu, LL.M. University of Pittsburgh School of Law on an Alcoa Scholarship. She received her Bachelor of Law degree, with the receipt of Scholarship granted by the Ministry of Education, Japan, from Waseda University, Tokyo, Japan. Her focus is on International Business Law and International Business related case study.

*** LIN Zhongming, LL.M. China University of Political Science and Law. Major: International Economic Law.

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