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CISG CASE PRESENTATION

China 25 March 1999 CIETAC Arbitration proceeding (Women's pants case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/990325c1.html]

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

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Case identification

DATE OF DECISION: 19990325 (25 March 1999)

JURISDICTION: Arbitration ; China

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

JUDGE(S): Unavailable

DATABASE ASSIGNED DOCKET NUMBER: CISG/1999/13

CASE NAME: Unavailable

CASE HISTORY: Unavailable

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

BUYER'S COUNTRY: France (respondent)

GOODS INVOLVED: Women's pants


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 78

Classification of issues using UNCITRAL classification code numbers:

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

78B [Rate of interest]

Descriptors: Damages ; 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

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Chinese): Zhong Guo Guo Ji Jing Mao Yi Zhong Cai Wei Yuan Hui Cai Jue Shu Hui Bian [Compilation of CIETAC Arbitration Awards] (May 2004) 1999 vol., pp. 1624-1626

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Dong WU, CIETAC's Practice on the CISG, at n.123, Nordic Journal of Commercial Law (2/2005)

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

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

Women's pants case (25 March 1999)

Translation [*] by Zheng Xie [**]

China's International Trade and Economic Arbitration Commission Shanghai Commission, [hereafter, Shanghai Commission] accepted this case according to:

   -    The arbitration clause in Contract No. 94YCZB/9-008 for sales of Women's pants En 60% Dam, 40% Polyamide, signed by Claimant [Seller], Zhejiang ___ Company, and Respondent [Buyer], France ___ Corporation; and
 
   -    The written arbitration application submitted by [Seller] to the Arbitration Commission on 8 July 1998.

Because the disputed amount in this case is less than renminbi [RMB] 500,000, according to Article 64 of Arbitration Rules of China Economic and Trade Arbitration Commission (hereafter, the Arbitration Rules), summary procedure is applied. [Seller] and [Buyer] did not appoint or authorize the Chairman of Shanghai Commission to appoint an independent arbitrator within the stipulated time according to Article 65 of the Arbitration Rules, so the Chairman appointed Mr. P as the arbitrator. On 27 January 1999, the Arbitration Tribunal was formed.

The Arbitration Tribunal reviewed the application and related materials. [Buyer] did not submit a defense. On 25 February 1999, the Arbitration Tribunal held the court session in Shanghai. [Seller]'s representative and agent attended the court session, but [Buyer] did not attend. According to Article 42 of the Arbitration Rules, the Arbitration Tribunal heard the case by default. [Seller] presented a statement and answered the Arbitration Tribunal's questions. After the court session, [Seller] submitted supplementary materials. The Arbitration Tribunal authorized the Secretariat of Shanghai Commission to send the supplementary materials to the [Buyer], and gave the [Buyer] a second opportunity to submit a defense and the opportunity to request a second court session. [Buyer] did not reply within the stipulated time. The Arbitration Tribunal handed down its award on the basis of facts and law.

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

FACTS

On 3 July 1994, [Seller] and [Buyer] signed the contract for sales of 4,320 pairs of women's pants 60% Dam / 40% Polyamide, for the price of US $9.55/per pair of pants CIF Anvers, and a total price of US $41,256.00; shipping period: before 10 September 1994; loading port: Shanghai; terms of payment: D/P 60 days. On 18 September 1994, [Seller] loaded the goods; [Buyer] did not make the payment on 25 November 1994, the last day for payment. [Seller] urged [Buyer] to make the payment, but did not receive payment. [Seller] applied to the Shanghai Commission for arbitration and requests the Arbitration Tribunal to make the following award:

1.    [Buyer] shall pay [Seller] the price of the contract, US $29,056.92;
2. [Buyer] shall pay [Seller] for the loss, US $15,469.53;
3. [Buyer] shall bear the entire arbitration fee.

[Seller]'s position

After signing the contract, at [Buyer]'s request, [Seller] adjusted the type, quantity and price of the goods, and postponed the shipping period. On 18 September 1994, [Seller] delivered by air 2,968 pairs of women's pants en tricot 50% and polyamide 50%, for the price of US $ 9.79/per pair of pants and a total price of US $29,056.72. [Buyer] did not make payment within the payment period. [Seller] urged [Buyer] many times, and on 28 August 1995, [Buyer] promised in writing to pay by installments. [Seller] alleges that the contract signed by [Seller] and [Buyer] is valid. [Seller] delivered the goods as [Buyer] requested, and [Buyer] should make the payment on time. [Buyer] did not make the payment on time, so he should be liable for the breach.

[Seller]'s supplementary statements after the court session are:

     (1) [Seller] did not deliver the goods of the type, quantity, price and shipping period provided in the contract, because [Seller] adjusted the type and quantity as [Buyer] requested, and postponed the shipping period also as [Buyer] requested;

     (2) [Seller]'s second claim is US $14,393.64, i.e., actual loss = amount owed X months the amount owed X interest rate (US $29,056.92 X 43 X 11.52/1000 = US $14,393.64);

     (3) The total amount which [Buyer] owed to [Seller] is US $311,982.28, and on 28 August 1995, [Buyer] promised to pay by installments, among which the amount under the Contract No. 94YCZB/9008 is US $29,056.72.

[Buyer] did not submit any defense.

OPINION OF THE ARBITRATION TRIBUNAL

First, the countries in which the parties have their places of business are parties to the United Nations Convention on Contracts for the International Sale of Goods (1980) (CISG). The CISG is therefore applied to this case.

Second, Contract No. 94YCZB/9008 signed by [Seller] and [Buyer] is valid. After reviewing [Seller]'s application and materials, the Arbitration Tribunal notes that [Seller] alleges that he adjusted the type, quantity, price and shipping period as [Buyer] requested, but did not provide evidence of this. [Seller] submitted the airway bill, packing list and invoice, but did not submit the airway carrier's dispatch list. However, on 28 August 1995, [Buyer] promised to pay [Seller] in writing stating:

"We, ____, suffered severe damages in the transaction with you in 1994, due to the problem of the company. We still owe you US $ 311,984.98 ... In October 1995, we will pay US $20,000, and at the end of December, we will pay US $150,000, and at the end of June 1996, we will pay off the above amount."

The Arbitration Tribunal finds that [Buyer] still owes [Seller] US $29,056.72. The parties signed six contracts during their course of dealing in 1994, including Contract No. 94YCZB/9008 in this case, and the actual transaction amount is US $ 311,982.28. The amount [Buyer] promised is US $311,984.98. Although the promised amount is US $2.70 more than the actual transaction amount, that can be regarded as a mistake. [Buyer]'s promise shows that he received the goods delivered by [Seller], and admitted [Seller]'s delivery. Accordingly, the Arbitration Tribunal holds that [Seller] fulfilled his duty to deliver the goods. [Buyer] did not submit any defense to [Seller]'s claim for payment, and relinquished its right to defense. [Buyer] is therefore liable for non-payment.

Third, Article 74 of CISG provides: "Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach ..." and Article 78 states that "If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it."

[Buyer] shall pay [Seller] the contract price and interest. As to the interest and the interest rate in [Seller]'s claim, the Arbitration Tribunal holds that it is unreasonable to use the bank's lending interest rate; the bank's interest rate for deposit is more reasonable. The interest shall be calculated as US $29,056.92 (the contract price) X 4.93% (average annual interest rate) 12 (months) X 43 (amount of months) = US $5,133.15.

Fourth, [Buyer] shall bear the entire arbitration fee.

AWARD

1.    [Buyer] shall pay [Seller] the contract price, US $29,056.92;
2. [Buyer] shall pay interest on the contract price, US $5133.15;
3. The arbitration fee of his case is RMB ___, which shall be paid by [Buyer]. [Seller] has paid the arbitration fee, RMB ___ in advance, so [Buyer] shall pay [Seller] RMB ___.

The above amount shall be paid within 45 days of the date of this award.

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]; Respondent of France is referred to as [Buyer]. 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].

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

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Pace Law School Institute of International Commercial Law - Last updated January 6, 2006
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