catalogue

1. Dispute over Shareholders' Contributions between Singapore Zhonghua Environmental Protection Technology Group Co., Ltd. and Thumb Environmental Protection Technology Group (Fujian) Co., Ltd

2. Dispute between ThyssenKrupp Metallurgical Products Co., Ltd. and Sinochem International (Singapore) Co., Ltd. on the International Sales Contract for Goods

3. Hachiman Shipping Company, Shanghai Shenfu Chemical Co., Ltd., and Japan Debao Shipping Co., Ltd. Disputes over Compensation for Cargo Damage in Maritime Cargo Transportation Contracts

4. Series of Disputes Caused by the Abandonment of the Sierra Leonean "LEDOR" Ship by Albanian Shipowner Keenby Shipping Co., Ltd

5. Langli (Wuhan) Injection Molding System Co., Ltd. and Tiandi International Transportation Agency (China) Co., Ltd. Wuhan Branch Air Cargo Transportation Contract Dispute Case

6. Case of Zhejiang Yisheng Petrochemical Co., Ltd. and Luxembourg Invida Technology Co., Ltd. Applying for Confirmation of the Validity of the Arbitration Clause

7. Letter of Guarantee Fraud Dispute between the Taihu Lake Boiler Co., Ltd., Karakato Engineering Co., Ltd. and Bank of China Wuxi Branch

8. Application for Recognition and Enforcement of Judgments of the Courts of the Republic of Poland by Frigupol Co., Ltd

Case 1

Fair, efficient, and equal judicial protection of the legitimate rights and interests of domestic and foreign investors

——Dispute over Shareholders' Contributions between Singapore Zhonghua Environmental Protection Technology Group Co., Ltd. and Thumb Environmental Protection Technology Group (Fujian) Co., Ltd

1、 Basic facts of the case

Thumb Company is a wholly foreign-owned enterprise established by Singapore Environmental Protection Company in China. On June 30, 2008, Thumb Company's registered capital was approved to increase to RMB 380 million. On April 27, 2012, Thumb Company filed a lawsuit alleging that Singapore Environmental Protection Company had not fully paid its capital contribution, requesting that Singapore Environmental Protection Company fulfill its shareholder contribution obligations and pay a capital increase of 45 million yuan.

The Fujian Provincial High People's Court held in first instance that the failure of Singapore Environmental Protection Company to fulfill the legal obligation of shareholders to fully pay their capital contribution has infringed on the legal property rights of Thumb Company. Thumb Company has the right to demand that Singapore Environmental Protection Company fulfill its capital contribution obligations and make up for the capital contribution. Based on this, it is ordered that Singapore Environmental Protection Company pay a capital contribution of 45 million yuan to Thumb Company. Singapore Environmental Protection Company has filed an appeal to the Supreme People's Court.

2、 Judgment results

On June 11, 2014, the Supreme People's Court held a public hearing to hear the case and made a judgment in court. The second instance trial of the Supreme People's Court held that, in accordance with the provisions of Article 14, Paragraph 1 of the Law of the People's Republic of China on the Application of Foreign Civil Relations, the investment obligations and other matters between foreign-invested enterprises in China and their foreign investors should be governed by the laws of China; The legal capacity for civil rights and civil conduct of the judicial administrator and liquidator of a foreign investor shall be governed by the law of the place where the foreign investor is registered. According to the provisions of the Singapore Company Law, during the judicial management period, the powers and responsibilities obtained by the directors of the company based on the Company Law and the articles of association are exercised and fulfilled by the judicial administrator. Therefore, the appointment and removal resolution made by the judicial manager of Singapore Environmental Protection Company to change the directors and legal representatives of Thumb Company is valid. Due to the failure of the board of directors of Thumb Company to implement the resolution of the sole shareholder Environmental Protection Company, there was a discrepancy between the legal representative registered for business registration and the legal representative appointed by the shareholder, which sparked controversy. According to the provisions of the Company Law of the People's Republic of China, the legal representative of the industrial and commercial registration has the effect of public disclosure to the public. If there are external disputes arising from the company's representation rights caused by a third party outside the company, the industrial and commercial registration shall prevail; For internal disputes between the company and shareholders arising from the appointment or removal of the legal representative, a valid resolution of the shareholders' meeting shall prevail and have the legal effect of changing the legal representative within the company. The lawsuit in this case cannot represent the true intention of Thumb Company. The original judgment is revoked and Thumb Company's lawsuit is dismissed.

3、 Typical significance

This case is of great significance for equal protection of the legitimate rights and interests of Chinese and foreign investors, safeguarding the right of shareholders to choose managers, and optimizing the legal environment for foreign investment. It has been rated as one of the major cases of the 65th anniversary of the establishment of the Supreme People's Court. This case clarifies the rules for determining the civil rights and behavioral capacity of the judicial administrator and liquidator of foreign companies within China, clearly defines the rules for distinguishing disputes over company representation, and enhances the confidence of foreign investors in China. At the same time, this case is the first time that the Supreme People's Court has invited foreign envoys to China and foreign media to attend the trial and make judgments in court, highlighting China's fair and efficient judicial image.

Case 2

Accurately applying international treaties in accordance with the law to support parties in choosing the applicable law

——Dispute between ThyssenKrupp Metallurgical Products Co., Ltd. and Sinochem International (Singapore) Co., Ltd. on the International Sales Contract for Goods

1、 Basic facts of the case

On April 11, 2008, Sinochem Singapore signed a "Purchase Contract" with Krupp Germany for the purchase of petroleum coke. Sinochem Singapore paid the full amount as agreed, but the HGI index of petroleum coke delivered by Krupp Germany was only 32. Sinochem Singapore believes that Krupp Germany constitutes a fundamental breach of contract and requests a decree to terminate the contract. Krupp Germany will refund the payment and compensate for the losses.

The Jiangsu Provincial High People's Court held in first instance that, according to the relevant provisions of the United Nations Convention on Contracts for the International Sale of Goods, the HGI index of petroleum coke provided by Krupp Germany is far below the contractual standard, making it difficult for petroleum coke to be sold in the domestic market and the expected purpose at the time of signing the sales contract cannot be achieved. Therefore, Krupp Germany's behavior constitutes a fundamental breach of contract. The judgment supports the lawsuit request of Sinochem Singapore Company. German Krupp Company has appealed to the Supreme People's Court.

2、 Judgment results

The Supreme People's Court held that the parties involved in the dispute over an international contract for the sale of goods have their respective places of business in Singapore and Germany, both of which are contracting states to the United Nations Convention on Contracts for the International Sale of Goods, and the parties have not ruled out its application. Therefore, this case first applies the Convention. For issues that are not covered by the convention in the trial of cases, such as contract validity and transfer of ownership, the United States law chosen by the parties should apply. According to the United Nations Convention on Contracts for the International Sale of Goods, the goods delivered by Krupp AG do not comply with the contract and constitute a breach of contract. However, Singapore Petrochemical Company's ability to resell the goods at a reasonable price does not constitute a fundamental breach of contract under the Convention. Based on this, a final judgment was made on June 30, 2014, revoking the original judgment and changing the judgment to German Krupp Company to bear partial losses of payment and storage fees.

3、 Typical significance

This case accurately applies international treaties and supports the applicable law chosen by the parties in accordance with the law for matters not adjusted by international treaties. This case clarifies the criteria for determining fundamental breach of contract under the United Nations Convention on Contracts for the International Sale of Goods, enhances the uniformity, stability, and predictability of the application of the Convention in China's judicial practice, and effectively guarantees the orderly progress of international trade.

Case 3

Improving the Rules for Compensation for Maritime Cargo Damage and Effectively Standardizing the International Shipping Order

——Hachiman Shipping Company, Shanghai Shenfu Chemical Co., Ltd., and Japan Debao Shipping Co., Ltd. Disputes over Compensation for Cargo Damage in Maritime Cargo Transportation Contracts

1、 Basic facts of the case

On August 23, 2008, 1001.53 tons of phenol were loaded onto the ship at the port of Vilva, Spain, and the carrier, Debao Company, issued a clean instruction bill of lading. Shenfu Company has endorsed and accepted the bill of lading, and accordingly picked up the goods on board at the unloading port Qingdao Port. Due to the increase in phenol color during the transportation period, causing damage to the goods, Shenfu Company filed a lawsuit and demanded that Debao Company and the actual carrier Hachiman Company jointly compensate for the loss of the goods by RMB 8347849.57 and its interest losses.

The Qingdao Maritime Court calculated the amount of compensation for cargo damage based on the cost of repairing the goods, and ordered Debao Company and Hachiman Company to jointly compensate Shenfu Company for the loss of goods of RMB 3715676.30 and interest; Reject other litigation requests from Shenfu Company. The Shandong Provincial Higher People's Court adopted the actual value difference method and partially revised the judgment. Hachiman Company applied for retrial to the Supreme People's Court.

2、 Judgment results

The Supreme People's Court made a retrial judgment on December 6, 2013, stating that Article 55 of the Maritime Law of the People's Republic of China stipulates: "The compensation for damage to goods shall be calculated based on the difference between the actual value of the goods before and after the damage or the repair cost of the goods. The actual value of the goods shall be calculated based on the value of the goods at the time of loading, plus insurance and freight." This case does not involve repair costs, The loss of goods should be calculated based on the difference between the actual value of the goods, which is the difference between the CIF price before and after the damage. Article 55 of the Maritime Code excludes market value losses, so the carrier is not liable for the market value losses of the phenol involved in the case. This case should adopt the method of calculating the depreciation rate of goods, which is to subtract the sales value of the damaged goods from the intact market value of the goods at the destination port, and then divide it by the intact market value of the goods to obtain the depreciation rate. Then, the depreciation rate is used to calculate the amount of value loss caused by transportation damage to the goods. Based on this, the first and second instance judgments are revoked, and Hachiman Company and Debao Company are adjudged to jointly compensate Shenfu Company for the loss of goods of RMB 2055837.30 and interest, and other litigation claims of Shenfu Company are rejected.

3、 Typical significance

This case is a dispute over compensation for damage to goods in a maritime cargo transportation contract with foreign factors. The parties have no objection to the application of China's Maritime Law to handle this dispute. According to Article 55 of the Maritime Code of China, there are two calculation methods for the carrier's compensation for damage to the goods during the period of responsibility, which are based on the difference between the actual value of the goods before and after the damage or the cost of repairing the goods. The first instance judgment calculated the amount of compensation for damage based on the cost of repairing the goods, but based on the facts found, the damaged goods in this case were not actually repaired. The second instance adopted the actual value difference method, but did not deduct losses caused by the decrease in the market price of goods. The retrial judgment adopts the calculation method of the rate of goods depreciation to determine the compensation amount for the involved goods, excluding the impact of market price fluctuations on the compensation amount for goods damage. It is in line with the provisions of Maritime Law and has also been adopted in maritime judicial practice. This case has improved the calculation rules for cargo damage compensation, effectively standardized the international shipping order, and has important guiding significance for future judicial practice.

Case 4

Timely distribution of ship auction funds in accordance with the law to ensure the smooth and orderly operation of the Maritime Silk Road

——Series of Disputes Caused by the Abandonment of the Sierra Leonean "LEDOR" Ship by Albanian Shipowner Keenby Shipping Co., Ltd

1、 Basic facts of the case

The Sierra Leonean ship "LEDOR", which carries 20000 tons of imported iron ore from a large state-owned enterprise in China, ran aground in Putian, Fujian during its journey from Chennai Port in India to Nantong Port in Jiangsu, China in October 2011. The maritime department believes that the ship poses risks of breakage, sinking, endangering human safety, and polluting the marine environment. They require the shipowner to submit a ship's escape plan, measures for transferring cargo and oil on board, while the consignee requires the shipowner to unload the cargo on site, all of which have failed. The hull of the ship was old, the ballast tanks and some cargo tanks were damaged, and the certificate expired. The Albanian shipowner, Keenby Company, was unable to continue the ship, so the ship, along with more than ten foreign crew members and cargo, was abandoned in Putian, Fujian. In July 2012, the consignee applied to the court for a maritime injunction and maritime preservation, requesting the arrest of the ship and compulsory unloading. One Albanian captain and 17 Syrian crew members on board sued the ship owner for payment of wages; The consignee sued the shipowner for compensation for the loss of the goods, etc; The farmers who were damaged due to the grounding of the ship, as well as various companies that provided anti pollution services, material and oil supply, and agency services for the ship during the grounding period, have filed lawsuits demanding payment of related fees, which has led to a series of major and complex cases of different types.

2、 Judgment results

After accepting the above-mentioned case, the Xiamen Maritime Court ruled in a timely manner to auction the ship and issued an announcement, notifying relevant creditors to register their claims, and ultimately sold the ship at a higher price than the estimated by the shipowner. On the other hand, a series of dispute cases arising from this round were promptly and publicly tried in accordance with legal procedures, and a first instance judgment was finally made, which took legal effect in May 2013. Subsequently, the court promptly organized a creditors' meeting to distribute the ship auction proceeds in accordance with legal provisions.

3、 Typical significance

This case is a typical case of successfully trying a series of difficult and complex disputes when a foreign shipowner abandoned the ship. The people's court ensures the timely realization of the rights and interests of domestic and foreign creditors by efficiently organizing ship auctions, convening creditor meetings, and distributing ship auction funds in accordance with the law, ensuring the smooth and orderly operation of the Maritime Silk Road. In the process of executing the arrest order and maritime injunction, the court designated a state-owned shipping agent to provide ship agency services for the abandonment of the ship. After the ship was sold off in accordance with the law, the court contacted the public security department to handle corresponding visas and exit procedures according to the special circumstances of this batch of foreign crew members, providing sufficient humanitarian assistance to the foreign crew members.

Case 5

Accurately understanding the provisions of the convention and clarifying the rules for international air transport disputes

——Langli (Wuhan) Injection Molding System Co., Ltd. and Tiandi International Transportation Agency (China) Co., Ltd. Wuhan Branch Air Cargo Transportation Contract Dispute Case

1、 Basic facts of the case

On November 22, 2010, Langli Company signed the "International Air Express Transport Agreement" with Tiandi International Branch regarding the entrusted handling of international air express transportation matters. The agreement also includes three appendix documents, including "TNT Transportation and Other Service Terms". From March to August 2011, Langli Company repeatedly entrusted Tiandi International Branch to deliver goods by express delivery to the consignee in France. On August 30th, Tiandi International Branch extracted 5 items shipped by Langli Company, and 4 items arrived in Lyon, France on September 13th and were signed for by the French consignee. On September 23rd, Tiandi International Branch notified the consignee and Langley Company via email that the missing item had been found and would arrive in Lyon, France on the same day. The recipient replied to the email and refused to receive it. Afterwards, the goods were transported back to China by sea from France and ultimately delivered to Langley Company. Langli Company filed a lawsuit requesting confirmation of contract termination and compensation for breach of contract losses from Tiandi International Branch; Tiandi International Branch counterclaims Langli Company for paying overdue freight and interest.

2、 Judgment results

The Intermediate People's Court of Wuhan City held that Tiandi International Branch carried out cross-border transportation of goods by air, and there were multiple pieces of goods corresponding to the waybill issued by Tiandi International Branch. These goods were considered independent during transportation, so each piece of goods can be considered as having an independent transportation contract relationship. One piece of goods involved in the case was delayed by more than ten days in arriving in France, and the French consignee refused. Before the dispute in this case occurred, the actual performance period of the ongoing air cargo transportation service transaction between the two parties did not exceed 10 days. Given the speed of air transportation and the expected transportation period formed by previous transactions, the transportation delay behavior of Tiandi International Branch constitutes a fundamental breach of contract. The carrier exemption clause stipulated in the TNT Transportation and Other Service Terms is invalid due to violation of the provisions of the Convention for the Unification of Certain Rules for International Air Transport (referred to as the Montreal Convention). Tiandi International Branch shall be liable for compensation within the legal limit of the Convention for losses caused by transportation delay. Based on this, the judgment confirms the termination of the transportation contract for the delayed goods involved, and Tiandi International Branch compensates Langli Company for the losses. Langli Company pays the freight and corresponding interest to Tiandi International Branch. Neither party appealed, and the judgment came into effect on July 22, 2014.

3、 Typical significance

This case has exemplary significance in clarifying the arbitration rules for international air transport contract disputes and regulating the rights and responsibilities of international air logistics. One is to clarify that in cross-border cargo transportation implemented by air, the delay in transportation leading to the consignee's refusal to accept delivery can constitute a fundamental breach of contract by the carrier, and the shipper can exercise partial termination rights and have the right to terminate the relevant transportation contract. The second is to clarify that the air cargo transportation contract aims to exempt the carrier from liability or reduce the limit of liability stipulated in the convention. Violation of the provisions of the Montreal Convention is invalid, and the carrier shall bear compensation liability to the shipper within the limit of the convention.

Case 6

Respect the willingness of the parties involved in arbitration and promote the internationalization of arbitration

——Case of Zhejiang Yisheng Petrochemical Co., Ltd. and Luxembourg Invida Technology Co., Ltd. Applying for Confirmation of the Validity of the Arbitration Clause (2014)

1、 Basic facts of the case

Yisheng Company and INVIDIA Company signed two technology license agreements on April 28 and June 15, 2003, respectively, stipulating that "relevant disputes, disputes or demands shall be submitted for arbitration and resolution; arbitration shall be conducted at the China International Economic and Trade Arbitration Center (" CIETAC ") in Beijing, China, The arbitration shall take place at China International Economic Trade Arbitration Centre (CIETAC), Beijing, P. R. China and shall be settled according to the United Nations Commission on International Trade Law Arbitration Rules as presented in force. On July 11, 2012, INVIDIA submitted an arbitration application to the China International Economic and Trade Arbitration Commission. On October 29, 2012, Yisheng Company applied to the Ningbo Intermediate People's Court to confirm the invalidity of the arbitration clause, citing that the arbitration agreed upon by both parties was essentially an interim arbitration not allowed by China's arbitration law.

2、 Judgment results

After being submitted to the Supreme People's Court for review step by step, the Ningbo Intermediate People's Court made a final ruling on March 17, 2014, stating that although the parties used the expression "take place at" in the arbitration clause, the subsequent phrase is generally understood as the place. However, according to the method of interpretation that is conducive to achieving the parties' arbitration intention, it can be understood that it also includes the agreement on the arbitration institution. Although the Chinese name of the arbitration institution agreed upon by the parties is inaccurate, it can be inferred from the English abbreviation CIETAC that the arbitration institution chosen by the parties is the China International Economic and Trade Arbitration Commission in Beijing. The arbitration clause involved in this case does not violate the provisions of China's arbitration law, and the ruling rejects the application of Yisheng Company to confirm the invalidity of the arbitration clause.

3、 Typical significance

The case recognizes for the first time the validity of the clause that the parties agree to have a permanent arbitration institution in China manage the arbitration proceedings in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law, and clarifies that the clause stipulates institutional arbitration rather than ad hoc arbitration. The case adopts a method of interpretation that is conducive to the realization of the parties' willingness to arbitrate in the contract terms where there are differences in understanding between the parties. In the case where the arbitration clause does not clearly limit the specific functions of the arbitration institution, it is determined that the agreement between the parties regarding the application of another arbitration rule by the permanent institution should be understood as that the institution manages the entire arbitration procedure in accordance with the arbitration rules. This case has typical exemplary significance in promoting the construction of diversified dispute resolution mechanisms, supporting the internationalization of arbitration, and enhancing the credibility of arbitration.

Case 7

Strictly grasp the standards of letter of guarantee fraud and maintain the international financial order

——Letter of Guarantee Fraud Dispute between the Taihu Lake Boiler Co., Ltd., Karakato Engineering Co., Ltd. and Bank of China Wuxi Branch

1、 Basic facts of the case

The Taihu Lake Company and Karakato Company have agreed to complete a generator unit construction project. The contract between the two parties clearly stipulates that if the contract is modified, the form of contract amendment must be used. Minutes of meeting, fax, etc. cannot produce the effect of contract change. If the Taihu Lake Company defaults, Karakato Company can claim the demand guarantee. Later, Karakato Company requested the issuer of the letter of guarantee, Bank of China Wuxi Branch, to honor the letter of guarantee in case of breach of contract by the Taihu Lake Company. The Taihu Lake Company filed a lawsuit, claiming that both parties had modified the contract through the minutes of the meeting. Karakato Company's claim for the letter of guarantee did not comply with the contract, which constituted fraud, and requested to stop the payment of the letter of guarantee. The First Instance Decision of Wuxi Intermediate People's Court in Jiangsu Province rejected the lawsuit request of the Taihu Lake Company, and the Taihu Lake Company filed an appeal.

2、 Judgment results

The Higher People's Court of Jiangsu Province held that the court's review of the basic contract was limited to whether the beneficiary had knowingly abused the right to claim maliciously even though the debtor of the basic transaction did not have a breach of contract or other payment due facts. The meeting minutes of modifying the contract not in accordance with the agreed form and procedures shall not have the effect of changing the contract. In the event of disputes over the nature and payment conditions stipulated in the guarantee terms in the basic contract, if the beneficiary requests payment according to the conditions when the bank issues the guarantee, it does not constitute fraud in the guarantee. Instead, the guarantee should be honored according to the "compensation first, dispute later" rule. The Jiangsu Provincial High People's Court made a final judgment on May 27, 2014, upholding the first instance judgment.

3、 Typical significance

In the judgment of this case, the People's Court fully respected the international transaction practices agreed upon by the parties, and made a judgment in accordance with the International Chamber of Commerce's rules on "first compensation, then dispute" handling of demand guarantee letters. It strictly grasped the standard of guarantee letter fraud, protected the legitimate rights of beneficiaries to receive prompt repayment based on the guarantee letter, and maintained the international financial order. This case was highlighted in the September 2014 Journal of Documentary Credits in the United States. At the same time, the case also reflects that Chinese enterprises must fully understand the characteristics of international financial settlement and guarantee tools in the process of "going global". Failure to strictly fulfill contracts will result in huge legal risks.

Case 8

Effectively fulfilling judicial assistance agreements, recognizing and enforcing foreign civil and commercial judgments in accordance with the law

——Application for Recognition and Enforcement of Judgments of the Courts of the Republic of Poland by Frigupol Co., Ltd

1、 Basic facts of the case

Ningbo Yongchang Company filed lawsuits in 2004 and 2006 in the Polish Green Mountain City District Court and the Oppole District Court due to a sales contract dispute with Frigupol Company, requesting Frigupol Company to pay $65454 and related interest. The above-mentioned courts in Poland have all ruled against the application of Ningbo Yongchang Company, but the Wroclaw Court of Appeal in Poland has ruled in favor of Ningbo Yongchang Company. Subsequently, the Polish Supreme Court ruled to revoke the judgment of the Polish Court of Appeal in Wroclaw and remand the case for retrial. On April 8, 2009, the Wroclaw Court of Appeal in Poland issued a judgment rejecting the request of Ningbo Yongchang Company and ordering it to refund the $54521 and related litigation costs already paid to Frigupol Company according to the Wroclaw Court of Appeal. The final judgment made by the Wroclaw Court of Appeal in Poland came into effect on May 12, 2009. On April 8, 2011, Frigupol Company sent relevant materials to the Ningbo Intermediate People's Court for recognition and enforcement of Polish court judgments. On February 5, 2013, Freguopol Company submitted additional relevant materials, and the case was officially filed. Ningbo Yongchang Company raised an objection, stating that the application for compulsory execution of the judgment has expired and that the lawyer representing it in the relevant Polish litigation has not been authorized.

2、 Judgment results

The Ningbo Intermediate People's Court held that China and the Republic of Poland have concluded the Agreement on Civil and Criminal Judicial Assistance, and therefore should review whether the judgment should be recognized in accordance with the relevant provisions of China's Civil Procedure Law and the Agreement. According to the relevant provisions of Chinese law at that time regarding the suspension or interruption of the application for execution and the statute of limitations, the application of Freguopol Company did not exceed the statutory deadline. Moreover, Ningbo Yongchang Company entrusted the same lawyer to participate in the litigation in Poland with a power of attorney during the litigation period. The power of attorney provided a general authorization to the lawyer, and Ningbo Yongchang Company also received the payment of 54521 US dollars and related litigation fees from Frigupol Company. Therefore, the lawyer's agency should be valid. The court made a final ruling on March 12, 2014, acknowledging the civil judgment I ACa 231/9 made by the Wroclaw Court of Appeal in Poland on April 8, 2009.

3、 Typical significance

China has currently concluded bilateral agreements with more than 30 countries that include judicial assistance in civil and commercial matters, some of which include mutual recognition and enforcement of civil and commercial judgments. This case reflects the position of Chinese courts in effectively fulfilling judicial assistance agreements, recognizing and executing foreign court civil and commercial judgments in accordance with the law, and equally protecting the legitimate rights and interests of both Chinese and foreign parties.