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Schroeder KG GmbH (Germany) v China Dandong Junao Food Co.Ltd. (2012)

From: 清华大学法学院《中国商事仲裁法律汇编》         Updated: 2014-10-14

 The Intermediate People’s Court of Dandong, Liaoning (14 October 2014) ICC A China No. 2016-1

Civil Ruling of Dandong Intermediate People’s Court, Liaoning Province

(2012) Dandong Civil Special No. 00001, 14 October 2014


Petitioner: Schroeder KG (GmbH & Co.).

Legal representative: Martin Humbert, managing director of the company.

Attorney: Huang Chen, China Shanghai Ying Ming Law Firm.


Respondent: China Dandong Junao Food Co., Ltd.

Legal Representative: Yanjie Yi, the chairman of the company.

Attorney: Sun Baoren, China Liaoning Boyang Law Firm.


This court, after filing the case Schroeder KG (GmbH & co.) v. China Dandong Junao Food Co.,Ltd. for recognition and enforcement of foreign award,duly formed a collegiate panel and held an open trial on September 9, 2013. Appearing at the court for debate were the attorney of the Petitioner Schroeder KG, Chen Huang, the legal representative of the Respondent,China Dandong Junao Food Co.,Ltd (“China Dandong Junao”), Liangbin Zhao, and the attorney of the Respondent,Baoren Sun, The case is now closed.


Petitioner Schroeder KG alleged that: On September 17, 2010, the petitioner and the respondent signed the Purchase Contract No. 40051. In the contract, respondent should ship 48,000 kg cranberries between October 1, 2010 and October 10, 2010, but the respondent did not perform according to the contract. By then, on October 13, 2010 the petitioner demanded the respondent to ship the goods and issued a notification that the shipment should be no later than October 18, 2010, otherwise the respondent should compensate the differences between the purchase contract price and the market price in total about USD 45,600. However, the respondent did not give any reply. On October 20, 2010, the petitioner notified the respondent, to remit the compensation no later than October 27, 2010 (in accordance with the provisions of the applicable rules, the rules of the German Hamburg Exchange Commodity Association (“GHECA”), the respondent should pay the petitioner the price difference between the market price of October 19, 2010 and the contract price in total USD48,000) to the bank account provided by the petitioner. When the respondent failed once again to respond, the petitioner, in accordance with the contractual agreement, filed an application for arbitration to the German Hamburg Exchange Commodity Association.


On May 18, 2011, the arbitral tribunal of the GHECA ruled: 1. The respondent was sentenced to pay USD 48,000 to the petitioner since October 28, 2010, plus interest at a rate of 5 basis points per annum; 2) The respondent was sentenced to compensate the petitioner EUR 3,071.43 for arbitration costs. Said arbitral award has entered into force, by the certification document of the German Hamburg Exchange Commodity Association issued on September 21, 2011.


To safeguard its legitimate rights and interests, the petitioner, in accordance with the provisions of the New York Convention, to which the PRC and the Federal Republic of Germany are contracting parties, applied to the court: First, to recognize the award issued by the Court of Arbitration of the GHECA, registered as arbitral award No. 2/11; Second, to enforce the aforementioned "arbitral award": 1) the respondent was to pay the petitioner the principal RMB 321,532.8 (USD 48,000 × RMB exchange rate on October 28, 2010 USD 100 /669.86 RMB); 2) the respondent was to pay to the petitioner interest on the principal amount of RMB 19,663.59 (USD48,000 × 5% ÷365 days × 475 days [since October 28, 2010 provisional count to 15 January 2012] × RMB exchange rate on February 15, 2012 USD 100/ RMB 629.58); 3) the respondent is to pay the costs of arbitration 28,418.1 RMB to the petitioner (€ 3,071.43 × RMB exchange rate on October 28, 2010 € 100 /925.24 RMB). The total amount of the above is RMB 369,614.49 (provisional count, calculates interest till the actual date of payment).


Respondent, China Dandong Junao, contended: The respondent was not served with the relevant notification documents and arbitral award No. 2/11 from the GHECA Court of Arbitration, thus the "arbitral award" was not binding to the respondent. The respondent applied to dismiss the application of the petitioner.


To prove its claims the petitioner, Schroeder KG, submitted the following evidence:

Evidence 1. album A and album B of business registration of the petitioner and its certified documents, translated documents and notarized documents. To prove the qualification of the petitioner as the subject. Evidence 2. The "arbitral award" and its proof of entry into force, proof of service issued by the Court of Arbitration of the GHECA, and the purchase contract and its certified, translated and notarized documents. To prove that according to the arbitration clause in the contract signed by both parties, the disputes over the purchase contract between two parties had been ruled by the Court of Arbitration of the GHECA. Moreover, the award and related documents had already entered into force and was severed to the respondent. However, the respondent failed to fulfill its obligation. Evidence 3. Petitioner’s power of attorney and its certified, translated and notarized documents to prove the authority of the agency representatives.


The Cross-examination views of the respondent, China Dandong Junao, are as follows: No objection to Evidence 1 and 3. No objection to the authenticity of Evidence 2, but the respondent did not receive relevant documents of arbitral procedures and "arbitral award".


The court opinions on the above evidence are as follows: the respondent had no objection to the above evidence, and such evidence is relevant to and can prove facts of this case. Hence, the court admits the evidence.


The court identified facts by trial as follows: On September 13, 2010, the petitioner and the respondent signed a "purchase contract" provides: “LQF wild blueberry, picked in 2010, origin from China, the unit weight of 48,000 kg, the deposit (USD) 2.65 / kg. Payment Terms: According to documents at sight, net of cash. Delivery conditions: CFR- Hamburg to pay the costs and the freight. Delivery date: October 1, 2010 to October 10, 2010. This contract is subject to German law. This contract is signed in accordance with the terms and conditions of the rules of the German Hamburg Exchange Commodity Association. The ruling for all and any related disputes of the arbitrator or professionals of the association is final”. The petitioner filed arbitration with the GHECA on the ground that the respondent had failed to timely delivery and failed to remit the compensation to the bank account provided by the petitioner. The Court of Arbitration of the GHECA mailed the respondent, via the Deutsche Post AG by registered letters, the notice of appointment of arbitrator, the complaint, the summons, the arbitral award and other related instruments. According to the certification documents submitted by the petitioner and issued by the Deutsche Post AG, the relevant letters were posted to the legitimate recipient, but did not get receipts or other form of confirmation from the postal system of destination country. Mailing lists submitted by the petitioner were capped with the transceiver chapter of the respondent. The respondent did not attend to the arbitration. The award issued by the Court of Arbitration of the GHECA on May 185 2011, registered as arbitral award No. 2/11, concluded: “1. The respondent was sentenced to pay the petitioner $48,000, including the interest at five percent rate per annum,since October 28, 2010; 2. The respondent to bear the costs of arbitration established at EUR 3,071.43. The respondent was sentenced to compensate the petitioner arbitration costs for EUR 3071.43.” Due to the respondent's failure to comply with its obligation under the award, the petitioner filed an application on March 21, 2012 before this court to apply for recognition and enforcement of the award issued by the Court of Arbitration of the GHECA, on May 18, 2011, registered as arbitral award No. 2/11.


Our court holds that: this case is an application for the recognition and enforcement of a foreign arbitral award. Both the PRC and the Federal Republic of Germany are contracting state to the New York Convention, thus the relevant provisions of the Civil Procedure Law of the PRC and the New York Convention shall apply. Article 283 of the Civil Procedure Law of the PRC provides: "Where an arbitral award of a foreign arbitral institution requires recognition and enforcement by a People’s court of the People's Republic of China, a party shall apply directly to the intermediate people's court at the place of domicile of the party against whom enforcement is sought or at the place where the property thereof is located, and the people’s court shall process the application in accordance with an international treaty concluded or acceded to by the People's Republic of China or under the principle of reciprocity.” The respondent's domicile and the location of the main property are within the jurisdiction of the court, thus the court has jurisdiction on the case. The "arbitral award",the copy of the "purchase contract” and the Chinese translation certified by our embassies and consulates, submitted to the court by the petitioner, comply with Article IV of the New York Convention. Schroeder KG’s application to recognize and enforce the foreign arbitral award complies with the relevant provisions of law.


Article V(l) of the New York Convention states: “Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (b)The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case.” According to the law mentioned above, the Court of Arbitration of the GHECA mailed the appointment of the arbitrator, the complaint, the summons and other documents by registered letter via Deutsche Post AG to the respondent. Proof issued by the Deutsche Post AG states: the mails were posted to a legitimate recipient, but did not get receipts or other confirmation of receipt from the postal agency of the destination country. The respondent contended only that it has not received the documents mailed by the Court of Arbitration of the GHECA, but failed to submit evidence to prove that the notification procedure of the tribunal did not meet the requirement of “proper notice” in Article V(b) of the New York Convention, which means the tribunal did not notify the appointment of the arbitrators and arbitration proceedings to the respondent or the methods of notification violate the arbitration rules or the law of arbitration seat, and thus cause the respondent cannot being heard. Hence, the involved "arbitral award" does not satisfy Article V(l)(b) of the New York Convention. The "arbitral award" shall be recognized and enforced.


Pursuant to Article V (b) of the New York Convention and Article 283 of the Civil Procedure Law of the PRC, the Court hereby decides as follows:


To recognize the award registered as arbitral award No. 2/11, issued by the Court of Arbitration of the GHECA on 18 May 2011. The respondent, China Dandong Jun, shall fulfill the duty determined in the arbitral award within 30 days from the date of service of this ruling. In case the respondent failed to perform the duty within the time limit, the people's court will enforce it.


Respondent, China Dandong Junao Food Co., Ltd. bears the litigation fees of RMB 5,445.


This is the final verdict.


Presiding Judge Jun Lee

Acting Judge Xin Li

Acting Judge Xuesong Sun

October 14, 2014

Court Clerk Tingting Zhao



 

*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.