Civil Ruling of Tianjin Second Intermediate People’s Court

(2014)Erzhong Minsanchuzi-No. 5, 17 July 2014

Petitioner: Shanghai Mori Seiki Ltd., Located at 425, 4th floor, No. 125 Futebeilu, Waigaoqiao Free Trade Zone, Shanghai, PRC

Legal Representative: Ya-Yan SEN, Chairman of the Board

Attorney: Xiao-Hong Yao, Shanghai AllBright Law Offices

Respondent: Tianjin Deshengmei Automobile Parts Ltd., Located at No. 110, Dishierdajie, Tianjin Economic-Technological Development Area, Tianjin, PRC

Legal Representative: Wei-Nan Ding Chairman of the Board 

Attorney: Li-Min Han, Female, In-house counsel of Tianjin Deshengmei Automobile Parts Ltd.

Attorney: Xiao-Lan Sun, Female, In-house counsel of Tianjin Deshengmei Automobile Parts Ltd.

Respondent: Xin Hua GmbH, Located at AmRitterskamp 23, D-40489, Dusseldorf, Germany

Legal Representative: Xi Wu, General Manager

Respondent: Eastcad International Limited, Located at Unit 1711, Grand Central Plaza Tower 2, 138 Sha Tin Rural Committee Road, Sha Tin, New Territories, HKSAR

Legal Representative: Jing-Chun Xing, Director 

Attorney: Xiao-Hong Yao, Shanghai AllBright Law Offices 

Attorney: Jian-Lin Min, Shanghai AllBright Law Offices

Respondent: DMG Mori Seiki Co Ltd., Located at 106 kitakoriyama-cho, Yamato-Koriyama City, Nara 639-1160, Japan

Legal Representative: Ya-Yan SEN, Proprieter 

Attorney: Xiao-Hong Yao, Shanghai AllBright Law Offices 

Attorney: Jian-Lin Min, Shanghai AllBright Law Offices

This application of Shanghai Mori Seiki Ltd. for recognition and enforcement of foreign arbitral award, in which the Respondents are Tianjin Deshengmei Automobile Parts Ltd., XinHua GmbH, Eastcad International Limited and DMG Mori Seiki Co Ltd. After the court accepted the application, the court formed a collegiate bench according to the laws. This case is now closed.

The Petitioner alleges that: the Swiss Chambers’ Court of Arbitration and Mediation have settled the disputes on sale contract between the Petitioner and Tianjin Deshengmei Automobile Parts Ltd. and issued Arbitral Award No. 600223- 2010 on 6 November 2012. According to this arbitral award, Tianjin Deshengmei Automobile Parts Ltd. should pay the Petitioner balance of payment (39,890,000 Japanese Yen), arbitration fee (192,505.25 Swiss Francs), attorney’s fee and any other fees (including 494,141 Swiss Francs, 92,055 Euro, 239 US dollars, 9,857 UK pounds, 402,1476 Japanese Yen and 323,137 RMB). Although the arbitral award has taken effect, the Respondent Tianjin Deshengmei Automobile Parts Ltd. has not performed its obligation under this award. For that reason, according to the Civil Procedure Law of the PRC and the Notice of the Supreme People’s Court on Implementing the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Acceded to by China, the Petitioner applies the court to: 1. recognize and enforce the Arbitral Award No. 600223-2010 of the Swiss Chambers’ Court of Arbitration and Mediation and to order Tianjin Deshengmei Automobile Parts Ltd. to pay 43,911,476 Japanese Yen, 686,646.25 Swiss Francs, 92,055 Euro, 239 US dollars, 9,857 UK pounds and 323,137 RMB. 2. order Tianjin Deshengmei Automobile Parts Ltd. to pay the cost of this lawsuit. Subsequently, the Petitioner withdrew its application of enforcement, and only applied to recognize the arbitral award and order Tianjin Deshengmei Automobile Parts Ltd. to pay the cost of this lawsuit.

The Respondent Tianjin Deshengmei Automobile Parts Ltd. contends that: it refuses to pay the money applied by the Petitioner based on the Arbitral Award No. 600223-2010 of the Swiss Chambers’ Court of Arbitration and Mediation. According to item (c) of this award, only after the Petitioner meets the requirements of (i) and (ii), shall the Respondent Tianjin Deshengmei Automobile Parts Ltd. pay the money said above. It is not the Tianjin Deshengmei Automobile Parts Ltd. delays in payment but the Petitioner has not meet the two requirements. So it disagrees to enforce the award on the application of the Petitioner, but we agree to recognize the legal force of this arbitral award.

The Respondent XinHua GmbH submitted its writing opinions and agreed to recognize the legal force of the Arbitral Award No. 600223-2010 of the Swiss Chambers’ Court of Arbitration and Mediation issued on 6 November, 2012.

The Respondent Eastcad International Limited submitted its writing opinion and agreed with the requests of the Petitioner.

The Respondent DMG Mori Seiki Co Ltd. submitted its writing opinion and agreed with the requests of the Petitioner.

The court identified facts that: on 31 December 2006, the Petitioner and the Respondents have signed Contract No. FT-070112DSM. According to this contract, the Respondent, XinHua GmbH (formerly Mersher Metnll Ltd.) shall buy eleven complete range of “NH5000DCG High-Accuracy Machine Center” from the Respondent, Eastcad International Limited. In this contract, the Respondent, DMG Mori Seiki Co Ltd., and the Petitioner’s Beijng office are the manufacturers of this goods and the Respondent, Tianjin Deshengmei Automobile Parts Ltd., is the end-user of the goods. The parties of this contract agreed to submit any disputes arising from this contract to the Swiss Chambers’ Court of Arbitration and Mediation.

Afterwards, the parties had disputes on the performance of this contract. Xin Hua GmbH (first Claimant) and Tianjin Deshengmei Automobile Parts Ltd. (second Claimant) submitted the dispute to the Swiss Chambers’ Court of Arbitration and Mediation, and listed Eastcad International Limited as the first Respondent, DMG Mori Seiki Co Ltd. as the second Respondent and Shanghai Mori Seiki Ltd. Beijing office as the third Respondent. On 6 November 2012，the Swiss Chambers’ Court of Arbitration and Mediation issued an Arbitral Award No. 600223-2010. The award decided that: a) the three Respondents shall jointly and severally pay the first Claimant and the second Claimant 435,1167 Japanese Yen and 8,689,648.11 RMB. They shall also pay an interest of 5% per year from the date of 16 July 2010,until they pay in full; b) the three Respondents shall jointly and severally disable the Mobile Alarm/ Password Protection System, which is installed on the Machine Center, and shall pay the fees by themselves; c) the first Claimant and the second Claimant shall pay the first Respondent 39,890,000 Japanese Yen if the two conditions below are satisfied: (i) the Respondent issued signed commercial invoice based on article 10.2.2(b) of the supply contract and; (ii) the Respondent disabled the Mobile Alarm/ Password Protection System installed on the Machine Center; d) the total amount of the arbitration fees is 769,979 Swiss Francs. It includes: (i) the fees paid to the presiding arbitrator Markus Vozbo (including to the Arbitration Tribunal Clerk) (358,155.40 Swiss Francs) and his expenses (7,117.50 Swiss Francs); (ii) the fees paid to co-arbitrator Dr. Martin Bonet (179,077.70 Swiss Francs); (iii) the fees paid for the co-arbitrator Dr. Martin Burkhard (179,077.70 Swiss Francs) and his expenses (289.70 Swiss Francs); (iv) administrative cost of the Swiss Chambers’ Arbitration Institution (46,261 Swiss Francs). The Claimants shall pay 75% of the arbitration fees and the Respondents 25%. All fees will be deducted from the advance payment of the parties. In consideration of the partial payment of the arbitration fees made in advance by the Claimants and the Respondents, the Claimants should pay 192,505.25 Swiss Francs to the Respondents; e) the Claimants shall jointly and severally pay the expenditure of the Respondents caused by this arbitration and any other related expenses (494,141 Swiss Francs, 92,055 Euro, 239 US dollars, 9,857 UK pounds, 4,021,476 Japanese Yen and 323,137 RMB); f) the tribunal reject any other requests.

The court finds that the Beijing Office of Shanghai Mori Seiki Ltd. is an office established by the Petitioner of this case, Shanghai Mori Seiki Ltd. in Beijing and the office’ registration has been cancelled on 2 September 2008. The court also finds Mori Seiki KK is a Japanese company and modified its registration as DMG Mori Seiki Co Ltd. in Japan on 18 September 2013.

The facts above are based on the Contract No. FT-070112DSM, the Certificate of Cancellation of Registration of Foreign-Invested Enterprises, Arbitral award No. 600223-2010 issued by the Swiss Chambers’ Court of Arbitration and Mediation, and any other evidences like  attestations and the party’s statements.

Our court holds that: since China and Switzerland are contracting parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“Convention”), according to this Convention, the Petitioner can apply Chinese courts to recognize and enforce a foreign arbitral award. The related issue in this arbitral award is contractual commercial legal relationship under Chinese law, so the court will use Article V of the Convention to review whether the arbitral award can be recognized and enforceable.

After our court reviewed that the Swiss Chambers’ Court of Arbitration and Mediation settled the dispute based on the parties’ valid arbitration agreement. The parties do not have any objection on the procedure of the arbitration and its arbitrability. The application was within the time limit under Article 239 of the Civil Procedure Law of the PRC. The arbitral award does not include any of the circumstances mentioned in Article V of the Convention to refuse to recognize, and it meets the requirement of the Decision of the Standing Committee of the National People's Congress on China's Accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards issued on 2 December 1986 and it does not violate the reservations made by China. Therefore, our court thinks we do not have any reasons for refusing to recognize the arbitral award. According to Article V of the Convention and Article 283 of the Civil Procedure Law of the PRC, we hereby decide as follows:

Recognize the legal force of the arbitral award rendered by the Swiss Chambers’ Court of Arbitration and Mediation numbered 600223-2010 on 6 November 2011.

The cost of this lawsuit is RMB 500 Yuan, which shall be paid by Respondent Tianjin Deshengmei Automobile Parts Ltd.

This ruling is final.

Presiding Judge Yu-Ming Bai

Judge Yue Pei

People's Assessors Hua-Qiang Cui

17 July 2014

Law Clerk Zhen Zhang

Typist Zhang-Qin Yin

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*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.