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CISG CASE PRESENTATION

China 3 February 1999 CIETAC Arbitration proceeding (Men's rayon shirts case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/990203c1.html]

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

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Case identification

DATE OF DECISION: 19990203 (3 February 1999)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/1999/07

CASE NAME: Unavailable

CASE HISTORY: Unavailable

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

BUYER'S COUNTRY: Hungary (respondent)

GOODS INVOLVED: Men's rayon shirts


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 53

Classification of issues using UNCITRAL classification code numbers:

53A [Obligation of buyer to pay price of goods]

Descriptors: Price

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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) 1999 vol., pp. 1514-1517

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

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

Men's rayon shirts case (3 February 1999)

Translation [*] by Meihua Xu [**]

Edited by LIN Zhongming [***]

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

   -    The arbitration clause in Sales Contracts No. 95BX001-1, 95BX002-1, and 95BX003 signed by Claimant [Seller], China __ Engineering Company, and Respondent [Buyer], Hungary __ Company on 17 January 1995, 10 March 1995, and 19 June 1995, respectively; and
 
   -    The written arbitration application submitted by [Seller] on 23 June 1998.

On 28 July 1998, the Secretariat of the Arbitration Commission sent the arbitration notice and the attachment to the [Buyer] and the [Seller], which were received by the [Buyer] on 4 August 1998.

The [Seller] appointed Mr. A as its arbitrator. Pursuant to the Arbitration Rules, the Chairman of the Arbitration Commission appointed Mr. D as the [Buyer]'s arbitrator because the [Buyer] failed to appoint one as required in the arbitration notice, and the Chairman appointed Mr. P as the Presiding Arbitrator. The three arbitrators formed the Arbitration Tribunal to hear this case on 6 October 1998. The Secretariat of the Arbitration Commission sent the Arbitration Tribunal formation notice to the [Buyer] and the [Seller], which was later returned by the [Buyer]. The [Seller] neither provided a new address of the [Buyer], nor did it ask the Arbitration Commission to send the material to the original address; therefore, according to Article 77 of the Arbitration Rules, the Secretariat of the Arbitration Commission entrusted Global Law Office to send the entire arbitration materials to the [Buyer].

On 8 December 1998, a court session was held in Beijing. The [Seller] sent its arbitration agent to the court session, but the [Buyer] did not appear at the court session, nor did it explain the reason for its absence. In accordance with Article 42 of the Arbitration Rules, the Arbitration Tribunal processed this case by default. The [Seller]'s agent made a statement on the facts of this case, answered the Arbitration Tribunal's questions, and submitted supplementary material to the Arbitration Tribunal.

On 29 December 1998, the Arbitration Tribunal informed the aforesaid situation to the [Buyer] through the Secretariat of the Arbitration Commission, and asked the [Buyer] to submit evidence and opinions on this case before 24 January 1999; however, the [Buyer] did not submit any written material within the aforesaid time limit.

The Global Law Office sent the aforesaid materials to the address provided by the [Seller] and confirmed by written document that the materials had been received by the [Buyer].

This case has been concluded. Based on the existing written materials and the court session, the Arbitration Tribunal handed down this award by consent within the time stipulated in the Arbitration Rules

The following are the facts, the Tribunal's opinion and award.

I. FACTS

On 17 January 1995, the [Buyer] and the [Seller] signed Sales Contract No. 95BX001-1, by which the [Buyer] undertook to purchase 37,800 pieces of men's staple rayon shirts, totaling US $83,038.56 CIF BUDAPEST. The shipping period was to be before the end of April 1995, and the [Buyer] was to make payment by T/T within 30 days after receiving the goods.

On 10 March 1995, the two parties signed the second contract, No. 95BX002-1, by which the [Buyer] was to purchase 22,320 pieces of men's staple rayon shirts, totaling US $44,193.6. The shipping period was to be before 20 April 1995, and the other terms were the same as in the first contract.

On 19 June 1995, , the two parties signed the third contract, No. 95BX003, by which the [Buyer] was to purchase 108,000 pieces of men's staple rayon shirts, totaling US $258,120. The goods were to be delivered in five shipments, with the first shipment to be made at the end of June A 10% deposit was to be paid before every shipment, with the remaining payment to be made within 30 days after the arrival of the goods. The other terms were the same as in the aforesaid two contracts.

The [Seller] delivered the goods to the carrier under the first and the second contracts, and issued invoices. The goods under the first contract arrived at Budapest on 23 June 1995, and the goods under the second contract arrived at Budapest on 17 June 1995; however, the [Buyer] only paid US $32,921.60 to the [Seller] on 22 September 1995 without paying the remaining part.

As to the third contract, the [Buyer] paid the deposit of US $5,000 on 5 September 1995. The [Seller] delivered 21,600 pieces of shirts to the [Buyer] on 7 September 1995, totaling US $51,624, and issued its invoice. This shipment of goods arrived at Hamburg, Germany on 19 October 1995, and the [Buyer] took delivery of the goods on 10 November. Later, after being urged by the [Seller], the [Buyer] refused to make payment. Thus, the [Seller] filed the arbitration application and asked the Arbitration Tribunal to rule that:

  1. [Buyer] shall pay the price for the goods of US $140,934.56;

  2. [Buyer] shall bear the entire arbitration fee.

The [Buyer] made no defense to the [Seller]'s arbitration claims.

II. OPINION OF THE ARBITRATION TRIBUNAL

(1) The applicable law

The parties did not stipulate the applicable law in the three contracts. Since the countries of the [Buyer] and the [Seller], Hungary and China, are Contracting States of the United Nations Convention on Contracts for the International Sales of Goods (hereafter, the "CISG"), therefore, the Arbitration Tribunal deems that the CISG should be applied;

(2) The performance of the contract

Based on the existing written materials, the Arbitration Tribunal found the following facts:

On 17 January 1995, the [Buyer] and the [Seller] signed Contract 95BX001-1 in Beijing, by which the [Buyer] was to purchase 37,800 pieces of men's staple rayon shirts, totaling 83,038.56, CIF BUDAPEST; the shipping period was to be at the end of April 1995, with the [Buyer] obligated to make payment by T/T within 30 days after receiving the goods.

On 10 March 1995, the two parties signed the second contract, No. 95BX002-1, via fax, by which the [Buyer] was to purchase 22,320 pieces of men's staple rayon shirts, totaling US $44,193.6; the shipping period was to be before 20 April 1995, and the other terms were the same as in the first contract.

On 29 April 1995, the carrier, D Company, signed on the B/L for the first contract. It also signed the B/L for the second contract, but the date was unknown.

On 17 June 1995, the goods under the second contract arrived at Hungary.

On 23 June 1995, the goods under the first contract arrived at Hungary.

On 17 January 1995, the [Seller] issued an invoice to the [Buyer] for US $44,193.60.

On 22 September 1995, the [Buyer] paid to the [Seller] a portion of the price for the goods: US $32,921.60.

On 19 June 1995, the [Seller] and the [Buyer] signed the third contract, No.95BX003, by which the [Buyer] was to purchase 108,000 pieces of men's staple rayon shirts, totaling US $258,120. The goods were to be delivered in five shipments, with the first shipment to be made at the end of June A 10% of deposit was to be made prior to each shipment, and the remainder paid within 30 days after the arrival of the goods. The other terms in this contract were the same as in the aforesaid two contracts.

After signing the contract, the [Buyer] paid the deposit of US $5,000 to the [Seller] on 5 September 1995.

On 7 September 1995, the [Seller] delivered 21,600 pieces of goods under the third contract, totaling US $51,624.

On 19 October 1995, the goods under the third contract arrived at Hamburg, Germany, and the [Buyer] took delivery of the goods on 10 November 1995.

The aforesaid facts are evidenced by the three sales contracts signed by the two parties, three B/Ls signed by carrier C and carrier D, the invoices issued by the [Seller], the fax sent by the [Buyer] to the [Seller] on 9 June 1995, Loan notice issued by Bank of China on 22 September 1995, and the fax sent by the [Buyer] to the [Seller] on 24 November 1995.

(3) [Buyer]'s contract violation

Based on the above facts, the Arbitration Tribunal holds that the [Seller] has performed its obligations to deliver the entire goods under the first and the second contracts and made the first delivery of the third contract; however, the [Buyer] failed to make payment accordingly, which has constituted a contract violation, and the [Buyer] is liable for this.

(4) [Seller]'s arbitration claim

The Arbitration Tribunal finds that the [Seller] has delivered the entire goods under the first and the second contracts and part of the goods under the third contract, totaling US $178,856.16. The [Buyer] has paid US $37,921.60 with US $140,934.56 in arrears, which the [Buyer] shall pay to the [Seller].

Since the dispute in this case was caused by the [Buyer]'s failure to make payment in accordance with the contract, therefore, the [Buyer] shall bear the entire arbitration fee.

Based on above all, the Arbitration Tribunal accepts the [Seller]'s entire arbitration claims.

III. THE AWARD

The Arbitration Tribunal rules that:

      (1) [Buyer] shall pay to the [Seller] the price of the goods of US $140,934.56;

      (2) [Buyer] shall bear the entire arbitration fee.

[Buyer] shall make the aforesaid payment within 30 days of this award; otherwise 8% annual interest shall be added.

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 the People's Republic of China is referred to as [Seller] and Respondent of Hungary is referred to as [Buyer]. Amounts in the currency of the United States (dollars) are indicated as [US $].

** 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 a 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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Pace Law School Institute of International Commercial Law - Last updated October 18, 2006
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