Civil Ruling of Wuxi Intermediate People's Court Jiangsu Province PRC

[2015] Wu Shangwaizhong shenzi No. 4, 15 March 2016

Petitioner: Olam International Limited. Domicile: # 11-02, Temasek Boulevard, Suntec Tower Two 038989, Republic of Singapore.

Legal Representative: Ashok Hegde, managing director and global director of the company.

Attorney: Luo Yun and Xia Yan, lawyers, Beijing Zhonglun Law Firm (Shanghai Branch).

Respondent: Wuxi Natural Textile Industry Co., Ltd. Domicile: No. 51, Xinmei Road, Hi-Tech Industrial Development Zone, Wuxi, Jiangsu, China.

Legal Representative: Zhu Guomin.

On 26 November 2015, this court accepted the application for the recognition and enforcement of foreign arbitral award of the case between the petitioner, Olam International Limited (“Olam”)，and the respondent Wuxi City Natural Textile Industry Co.，Ltd. (“Natural”)，and then formed a collegial panel to hear the case. At the hearing on 23 December 2015, Luo Yun and Xia Yan, counsel for Olam, attended the hearing. Natural, although summoned by the court, did not attend the hearing. The case is now closed.

Olam claimed as follows: QC (US) Marketing, Inc (“QC”), who was foreign to this dispute, signed with Natural three cotton sales contracts: Nos. QC / S / 01088, QC / S / 01089 and QC / SOI 110, respectively on 9 December 2010, 17 December, 2010. On 1 November 2011, with the consent of the three parties, Olam became the seller, substituting QC, in the above contracts. The contract numbers were updated as 11 / S / 11184, 11/S/11194 and 11 / S / 10982. Since then, that company and Natural have revised the contract respectively on 22 May, 26 July, 10 August 10, and 22 October 2012. According to the contracts, the Olam Company sold 700, 300 and 400 metric tons of US raw cotton to Natural, respectively. Natural opened an irrevocable sight letter of credit with Olam as the beneficiaries until 15 days before shipment date. The contract also stipulated that if there was any dispute, it should be submitted to the International Cotton Association to be solved through arbitration. After the signing of the contract, although urged by Olam, Natural did not issue a letter of credit under the contract and ignored the request for performance of the contract rendered by Olam. On 3 June 2013, Olam applied to the International Cotton Association for arbitration, and Natural participated to the arbitration proceedings. On 17 April 2014, the International Cotton Association issued an arbitral award, and both sides did not submit complaint within the complaint duration, and the arbitral award was therefore binding. The arbitral award was made in the United Kingdom and both the United Kingdom and China are parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. In view of such fact, the petitioner made such request to this court: I. to recognize the parts of the decision provided in subsection 1 to 13 of section 7 and section 8 of the awards rendered by the International Cotton Association on 17 April, 2014, and make the natural company to bear the difference between the contract price and the market price at the time of the confirmation of the contractual price, custody fee, interest and cost for the arbitral award in accordance with the aforesaid parts of the decision. II. to compel the natural company to fulfill the payment obligation stipulated in the arbitral award according to law, which is paying to the Olam company with USD 2,173,948.82 and GBP 8,992.50, equivalent to RMB 13971555.61; III.to legally compel the natural company to fulfill the payment obligation in the arbitral award and to pay the interest calculated from 8 May, 2014, to the date of the actual payment, while it is temporarily calculated as USD 273102.32, equivalent to RMB 1744222.59 until 31 December, 2015; IV. to have the natural company bear all the costs of the suite and enforcement.

Natural did not make any argument of non-recognition and non-enforcement against the above claimant.

This court, after reviewing, holds as follows:

I. Pursuant to Article 283 of the Civil Procedure Law of the PRC, when an award of a foreign arbitration institution is to be recognized and enforced by a people's court of the PRC, the parties shall directly apply to the intermediate court at the place of domicile of the person subject to execution or at the place where the property is located. The people's court shall deal with it, in accordance with the international treaties concluded or acceded to by the People's Republic of China, or in accordance with the principle of reciprocity. The award involved was rendered by the International Cotton Association, which made it a foreign award. Both China and the United Kingdom are parties to the Convention on the Recognition and Enforcement of Foreign Arbitral awards. Therefore, it shall be reviewed, in accordance with the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral awards, whether the arbitral award referred to in this case is recognized and enforced.

II. Olam submitted the notarized cotton sales contract, the revision notice of the contract, the revision agreement on the contract and the corresponding translation. According to the cotton sales contract, the confirmation letter of the revision and the revision agreement on the contract, QC and the natural company signed 3 cotton sales contracts respectively on 9 December 2010 and 17 December. The above three cotton sales contracts provided that any dispute involving the contract should according to the regulations and Articles of the Association of the International Cotton Association be submitted to arbitration with finality. Since then，the Olam company as a holding company of the QC company, substituting QC as a seller, issued a notice of revision and the revised contract to the natural company. Although the natural company did not sign on the notice of revision and the revised contract，however, the natural company and the Olam company modified some provisions of the above contract. In addition, the Olam Company, QC Company Natural Company and Wuxi Natural Green Fiber Technology Co.，Ltd. also signed an agreement on revision of the contract on July 26, 2012. The parties confirmed the conclusion of the above contract and the status of performance of the contract and revised the parts of letter of credit, shipment duration, price and other issues. They also agreed that if the natural company did not fulfill the agreement, the Olam company would be entitled to apply to the International Cotton Association for arbitration. Accordingly, it can be concluded that the parties have entered into a valid arbitration clause，and the involved contractual dispute should be settled by the International Cotton Association in accordance with its rules.

III.Olam submitted to the Court the notarized notices of service, the arbitral award and the corresponding translation issued by the International Cotton

Association. The contents of the above documents show that the International Cotton Association has already served the notices in the proceedings, including the notice of starting the arbitration proceedings, the notice of designation of the arbitrators, the arbitral award, notice of complaint, etc., to the natural company by e-mail. Natural also stated some relevant comment to the International Cotton Association. Accordingly, it may be determined that the International Cotton Association has given Natural proper notices of the designation of the arbitrators and arbitration proceedings in the course of the Arbitration. Natural company has not filed a complaint within the prescribed complaint duration.

In summary, Natural did not comply with the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral awards nor filed argument of non-recognition and non-enforcement. Evidences handed in by Olam also support the fact that the parties have entered into a valid arbitration clause. So, there exists no ground of refusing the recognition and enforcement provided in the Convention on the Recognition and Enforcement of Foreign Arbitral awards, and the arbitral award referred to in this case is allowed to be recognized and enforced. Accordingly, in accordance with Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral awards, paragraphs 1 and 10 of Article 154 of the Civil Procedure Law of the PRC, this court decides as follows:

This court recognizes and enforces section 7, subsections 1 to 13, and section 8 of the arbitral award A01/2013/47 rendered by the International Cotton Association on the dispute related to the contract of sales of cotton between Olam International and Wuxi City Natural Textile Industry on 17 April 2014.

The case fee, 500 yuan, is borne by Wuxi City Natural Textile Industry Co., Ltd.

This decision is final.

Presiding Judge Lu Chao

Judge Su Qiang

Judge Feng Fang

15 March 2016

Clerk Song Wanling

Related Links:
翱兰国际有限公司与无锡市天然纺织实业有限公司申请承认和执行外国仲裁裁决民事裁定书

*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.