Table of Contents

1. Sino-Environment Technology Group Limited (Singapore) v. Thumb Environmental Technology Group (Fujian) Co., Ltd. (Disputes over Shareholder’s Contribution)

2. ThyssenKrupp Metallurgical Products GmbH v. Sinochem International (Overseas) Pte.,Ltd. (Disputes over a Contract on International Sales of Goods)

3. Hachiman Shipping S.A. v. Shanghai Shenfu Chemical Co., Ltd. and Dorval Kaiun K.K.(Disputes over Goods Damage Compensation in a Marine Freight Contract)

4. A series of Cases regarding Disputes Arising from Abandonment of the Sierra Leonean Vessel “LEDOR” by Its Albanian Owner, G&B Shipping SH.P.K.

5. Runipsys (Wuhan) Injection Systems Co., Ltd. v. Wuhan Branch of TNT International Forward Agency (China) Co., Ltd.( Disputes over a Contract on Goods Carriage by Air)

6. Zhejiang Yisheng Petrochemical Co., Ltd. v. INVISTA Technology Co., Ltd. (Luxembourg) (Disputes over Application for Confirming the Effect of an Arbitration Clause)

7. Jiangsu Taihu Boiler Co., Ltd. v. PT. KRAKATAU Engineering Co., Ltd. and Wuxi Branch of Bank of China Co., Ltd.( Disputes over Letter of Guarantee Fraud)

8. Case regarding Application of Fuligubohr Co., Ltd. (Poland) for Recognizing and Enforcing the Judgment Rendered by the Court of the Republic of Poland 

Case 1

Providing Impartial and Efficient Judicial Services and Safeguarding the Lawful Rights and Interests of both Domestic and Foreign Investors on an Equal Footing

——Sino-Environment Technology Group Limited (Singapore) v. Thumb Environmental Technology Group (Fujian) Co., Ltd. (Disputes over Shareholder’s Contribution)

I. Basic Facts

Thumb Environmental Technology Group (Fujian) Co., Ltd. (hereinafter referred to as “Thumb Company”) was a wholly foreign-owned enterprises established by Sino-Environment Technology Group Limited (Singapore) (hereinafter referred to as “Sino-Environment Group”) in China. On June 30, 2008, the registered capital of Thumb Company was increased to CNY 380 million upon approval. On April 27, 2012, Thumb Company filed a lawsuit on the ground that Sino-Environment Group failed to make contribution in full amount and requested the court to order that Sino-Environment Group should perform its shareholder’s obligation of contribution and pay the increased capital of CNY 45 million.

After a trial of first instance, the High People’s Court of Fujian Province held that Sino-Environment Group failed to perform its statutory obligation of making contribution in full amount as a shareholder, which has impaired the property right of legal person of Thumb Company, and Thumb Company had the right to require Sino-Environment Group to perform the obligation of contribution and make up the contribution. Therefore, the High People’s Court of Fujian Province ordered Sino-Environment Group to make the contribution of CNY 45 million to Thumb Company. Sino-Environment Group appealed to the Supreme People’s Court.

II. Judgment

On June 11, 2014, the Supreme People’s Court held an open hearing of this case and pronounced the judgment in court. After the second instance review, the Supreme People’s Court held that in accordance with the provisions of paragraph 1 of Article 14 of the Law of the Application of Law for Foreign-related Civil Relations of the People’s Republic of China, the Chinese laws should apply to such matters as contribution obligation between a foreign-funded enterprise in China and the foreign investor; and the laws at the locality of registration of the foreign investor should apply to such matters as the capacities for civil rights and the capacities for civil acts of judicial administrator and liquidator of the foreign investor. In accordance with the provisions of the Company Law of Singapore, during the period of judicial administration, the rights and duties obtained by a company’s director based on the Company Law and the company’s bylaws should all be exercised and performed by the judicial administrator. Therefore, the resolution on appointing and dismissing the directors and legal representative of Thumb Company made by the judicial administrator of Sino-Environment Group was valid and effective. The Board of Directors of Thumb Company did not implement the resolution made by its sole shareholder, Sino-Environment Group, causing inconsistency between the legal representative under the industrial and commercial registration and the one appointed by the shareholder, and disputes arose in turn. In accordance with the provisions of the Company Law of the People’s Republic of China, the legal representative of a company under the industrial and commercial registration had the force of disclosure outside the company. If the disputes over the right to represent the company involved a third party outside the company, the judgment should be made based on the industrial and commercial registration; as for the internal dispute between the company and its shareholders over the appointment or dismissal of the legal representative, the judgment should be made based on the effective resolution of the shareholder’s meeting on the appointment or dismissal of the legal representative and the legal effect of the alteration of the legal representative should take place within the company. The lawsuit in this case could not represent the true intention of Thumb Company. Therefore, the Supreme People’s Court rendered a ruling to reverse the original judgment and dismiss the appeal of Thumb Company.

III. Significance

This case is of great significance in safeguarding the lawful rights and interests of both domestic and foreign investors on an equal footing, guaranteeing the shareholder’s rights to choose the administrator, and optimizing the legal environment for foreign investment and it has been awarded one of the important cases for the 65th Anniversary of the Building of the Supreme People’s Court. This case has specified the rules for determining the capacities for civil rights and the capacities for civil acts of the judicial administrator of a foreign company within the territory of China, clearly defined the rules for differentiating disputes over the foreign company’s right of representation and enhanced foreign investors’ confidence in making investment in China. Meanwhile, it is the first case in which the Supreme People’s Court has invited foreign ambassadors and overseas media to attend the hearing and the judgment has been pronounced in court, which has highlighted China’s judicial image of impartiality and efficiency.

Case 2

Accurately Applying an International Convention and Legally Supporting the Parties in Selecting the Applicable Law

——ThyssenKrupp Metallurgical Products GmbH v. Sinochem International (Overseas) Pte.,Ltd. (Disputes over a Contract for International Sales of Goods)

I. Basic Facts

On April 11, 2008, Sinochem International (Overseas) Pte., Ltd. (hereinafter referred to as “Sinochem Pte., Ltd.”) and ThyssenKrupp Metallurgical Products GmbH (hereinafter referred to as “ThyssenKrupp GmbH”) concluded a Contract on the Purchase of Petroleum Coke. Sinochem Pte., Ltd. has made full payment for goods as agreed in the Contract, but the Hardgrove Grindability Index (HGI) of petroleum coke delivered by ThyssenKrupp GmbH was only 32. Sinochem Pte., Ltd. held that the acts of ThyssenKrupp GmbH constituted a fundamental breach and requested the court to order that the Contract should be terminated, and ThyssenKrupp GmbH should refund its payment for goods and compensate for its losses.

After a trial of first instance, the High People’s Court of Jiangsu Province held that: In accordance with the relevant provisions of the United Nations Convention on Contracts for the International Sale of Goods (CISG), the HGI of petroleum coke provided by ThyssenKrupp GmbH was far below the standard as agreed in the Contract, causing failure to sell such petroleum coke in the Chinese market and achieve the expected purposes when the Contract was concluded. Therefore, the acts of ThyssenKrupp GmbH constituted a fundamental breach. The High People’s Court of Jiangsu Province rendered a judgment to support the claims of Sinochem Pte., Ltd. ThyssenKrupp GmbH appealed to the Supreme People’s Court.

II. Judgment

After a review, the Supreme People’s Court held that: The business places of both parties to the case regarding disputes over a contract on international sales of goods were in Singapore and Germany, both of which were contracting states of the CISG, and both parties did not exclude the application of the CISG. Therefore, the CISG was applicable to the trial of the case in the first place. Where, in the CISG, there were no provisions on such issues involved in the trial of the case as validity of contract and transfer of ownership, the American law chosen by the parties should apply. In accordance with the provisions of the CISG, the goods delivered by ThyssenKrupp GmbH did not conform to the provisions of the Contract and the acts of ThyssenKrupp GmbH constituted a breach; however, since Sinochem Pte., Ltd. could resell such goods at a reasonable price, the acts of ThyssenKrupp GmbH did not constitute a fundamental breach as provided in the CISG. Therefore, on June 30, 2014, the Supreme People’s Court rendered a final judgment to reverse the original judgment and order ThyssenKrupp GmbH to assume losses to partial payment for goods and storage charges.

III.Significance

The case accurately applies international treaties, and for the matters not regulated by international treaties, the applicable law chosen by the parties shall be supported in accordance with the law. The case clarifies the criteria for the application of the UN Convention on Contracts for the International Sale of Goods to determine the fundamental breach of contract, and enhances the uniformity, stability, and predictability of the application of the Convention in China's judicial practice, effectively guaranteeing the orderly conduct of international trade.

Case 3

Improve the rule of compensation for damages at sea to effectively regulate the international shipping order

——Dispute case of damages compensation according to the sea freight contract for Hachiman Shipping Company, Shanghai Shenfu Chemical Co., Ltd. , and Japan Debao Shipping Co., Ltd.

I. Basic Facts

On August 23, 2008, 1001.53 tons of phenol loaded on board in Spain's Huerva Port. The carrier, Japan Debao Shipping Co., Ltd. issued a clean bill of lading. Shanghai Shenfu Chemical Co., Ltd. endorsed the bill of lading by endorsement and accordingly took the cargo on board in the port of discharge of Qingdao. As there is damage for cargo due to the increase of color chroma of phenol during shipment, Shanghai Shenfu Chemical Co., Ltd. filed a lawsuit requesting Japan Debao Shipping Co., Ltd. and the actual carrier Hachiman Shipping Company to jointly compensate for the loss of goods of CNY 8,347,849.57 and its interest losses.

The Qingdao Maritime Court calculated the amount of compensation for damages according to the expense of repairing goods, decided that Japan Debao Shipping Co., Ltd. and Hachiman Shipping Company jointly compensate Shanghai Shenfu Chemical Co., Ltd. for a loss of goods of CNY 3,715,676.30 and the interest, and refused other lawsuit requests from Shanghai Shenfu Chemical Co., Ltd. The Higher People's Court of Shandong Province adopted the actual value difference method and partially revise it. Hachiman Shipping Company applied to the Supreme People's Court for retrial.

II. Judgment

The Supreme People's Court issued a retrial judgment on December 6, 2013 and held that Article 55 of the "Maritime Law of the People's Republic of China" stipulates that "The amount of compensation for damage to the goods is calculated according to the difference of actual value before and after the damage of the goods or the repair expense of the goods. The actual value of the goods is calculated based on the value of the goods at the time of loading, plus insurance premium and freight expense." This case does not involve restoration costs. The damage amount of good should be calculated by the difference of the actual value of the goods, that is, the difference between the CIFs before and after the damage to the goods. Article 55 of the Maritime Code excludes market price losses, so the carrier has no liability for the loss of the market price of phenol. In this case, the calculation method for the derogatory rate of goods should be adopted. That is to say, the market value of intact goods in the destination port minus the sales value of the damaged goods, and the result should be divided by the intact market value of the goods, then the derogation rate should be calculated. The derogation rate should be used to calculate the loss of value due to damage that caused by goods transportation. According to this, the first and the second instance verdicts were withdrawn and decided Hachiman Shipping Company and Japan Debao Shipping Co., Ltd. jointly paid Shanghai Shenfu Chemical Co., Ltd. the loss of goods of CNY 2,055,837.30 and the interest, and rejected other lawsuit requests from Shanghai Shenfu Chemical Co., Ltd. 

III. Significance

This case is a dispute of compensation for damages to a contract for the carriage of goods on sea involving foreign factors. The parties have no objection to the application of China’s Maritime Law to deal with the dispute in this case. According to the provisions of Article 55 of the Maritime Code of the People's Republic of China, the carrier has two methods of calculating the amount of compensation for damage to the goods during the period of liability, which is calculated the difference between the actual value before and after the damage to the goods or the repair cost of the goods. The first instance judgment calculated the amount of compensation for goods damaged by the cost of repairing the goods, but according to the facts, the damaged goods in this case were not actually repaired. The actual value-difference method was adopted in the second instance, but the loss caused by the decline in the market price of the goods was not deducted. The judgment of retrial uses the method of calculating the derogatory rate of goods and determines the amount of compensation for the goods involved, excluding the impact of market price fluctuations on the amount of compensation for damages, conforming to the provisions of the Maritime Law, and is also adopted by maritime judicial practice. This case completes the calculation rules for the amount of damage compensation, effectively regulates the international shipping order, and has important guiding significance for future judicial practice.

Case 4

Distributing Ship Auctions in Time in Accordance with Laws and Safeguarding the Smoothness of the Maritime Silk Road——A series of disputes case caused by the abandonment of Sierra Leonean “LEDOR” by Albania shipowner Kean Bi Shipping Co., Ltd.

I. Basic Facts

The “LEDOR” of Sierra Leone ship carrying a 20,000-ton imported iron ore from a large state-owned enterprise in China was stranded in Putian, Fujian Province, from Chennai Port, India, to Nantong Port, Jiangsu Province, China in October 2011. The maritime department considered that there was a risk of fractures, sunk, endangering human lives, and polluting the marine environment. The shipowners were required to submit the ship's escape plan, and measures for barge cargo and oil barges on board ships. The consignee requested the shipowners to unload the goods locally. All failed. The ship held old hull, ballast tanks, some damaged cargo tanks, and expired certificate. Albania shipowner Kean Bi Shipping Co., Ltd. was unable to sustain the ship’s life, and abandoned the ship together with a dozen of foreign crew members and cargo in Putian, Fujian Province. In July 2012, the consignee applied to the court for a maritime injunction and preservation of maritime claims, requesting the seizure of ships and forced unloading. An Albanian captain and 17 Syrian crewmen on board sued to require the shipowner to pay wages; the consignee sued the shipowner for compensation for loss of cargo, etc.; the farmers who suffered damage due to the stranding and the companies that provided the anti-pollution services, supply of the material and oil for the ship, and agency services during the period of stranding have all filed lawsuits,  and requested payment of related fees. This has led to a series of major complex and difficult cases.

II.Judgment

After accepting the aforementioned cases, Xiamen Maritime Court timely ruled in accordance with law to auction the vessel and released an announcement regarding the ruling, notified relevant creditors to register their creditor's rights, and finally sold the vessel at a high price that exceeded the vessel owner’s estimate. Concomitantly, the court timely and openly heard, in accordance with statutory procedures, the series of disputes triggered by the abandonment of the vessel and finally rendered the judgment of first instance, which came into legal effect in May 2013. Subsequently, the court timely organized and convened a meeting of creditors and distributed the proceeds from the vessel’s auction in accordance with legal provisions.

III.Significance

This is a typical case in which a series of difficult and complex disputes were successfully heard under the circumstances of a foreign vessel owner’s abandoning vessel. Through the efficient organization of a vessel auction, the convening of a creditors’ meeting, and the distribution of the proceeds of the vessel’s auction in accordance with law, the people’s court realized, in a timely manner, the protection of the rights and interests of the creditors inside and outside China, ensuring that the Maritime Silk Road was unimpeded and orderly. During the process of enforcing the distraint order and the maritime mandatory order, the court designated a state-owned vessel to provide vessel agency services to the abandoned vessel. After the vessel was sold in accordance with law, the court provided the foreign seamen with ample humanitarian aid by contacting the public security departments, which, based on the special circumstances of these foreign seamen, handled the corresponding visas and procedures for exiting the territory.

Case 5

Accurately Comprehending the Provisions of the Montreal Convention and Clarifying the Rules for Adjudication of Disputes in International Carriage by Air

--Runipsys (Wuhan) Injection Systems Co., Ltd. v. Wuhan Branch of TNT Express Worldwide (China) Ltd. (A Dispute over a Contract on Goods Carriage by Air)

I.Basic Facts

On Nov. 22, 2010, Runipsys (Wuhan) Injection Systems Co., Ltd. (hereinafter referred to as “Runipsys Company”) entered into an Agreement on International Carriage of Express Mails by Air with Wuhan Branch of TNT Express Worldwide (China) Ltd. (hereinafter referred to as “TNT Branch”), in which Runipsys Company entrusted TNT Branch to handle matters concerning international carriage of express mails by air. The Agreement also included the Terms on TNT Carriage and Other Services and other two appendixes. From March 2011 to August 2011, Runipsys Company repeatedly entrusted TNT Branch to carry goods by express for a consignee in France. On Aug. 30, TNT Branch picked up 5 commodities entrusted by Runipsys Company, 4 of which arrived in Lyon, France on Sep. 13 and were received by the consignee in France upon signature. On Sep. 23, TNT Branch notified the consignee and Runipsys Company in email that the missing commodity had been found and would arrive in Lyon on the same day. The consignee replied in the email that he would refuse to accept it. Thereafter, this commodity was carried back to China from France by ocean shipping and was finally delivered to Runipsys Company. Runipsys Company filed a lawsuit and requested the court to confirm that the contract had been rescinded and TNT Branch should compensate for its losses arising from TNT Branch's breach. TNT Branch instituted a counterclaim against Runipsys Company and required Runipsys Company to pay the freight charges in arrears and the interest thereof.

II.Judgment

Wuhan Intermediate People’s Court opined upon trial: TNT Branch executed the act of carrying goods transnationally by air. The waybill issued by TNT Branch listed multiple goods and these goods could be regarded as independent items in the course of carriage. Therefore, each of these goods could be regarded as having an independent contractual relation for carriage. The commodity involved in this case was transported to France after a delay of more than ten days and the consignee in France refused to accept it. Before the dispute of this case occurred, the two parties had already had service transactions for the carriage of goods by air and the actual performance time limits thereof did not exceed 10 days. In light of the speedy nature of carriage by air and the parties’ expectations about the carriage time limit formed by prior transactions, TNT Branch’s act of delaying the carriage constituted a fundamental breach of contract. The carrier exclusion clause agreed in the Terms on TNT Carriage and Other Services violated the provisions of the Convention for the Unification of Certain Rules for International Carriage by Air (“Montreal Convention”), therefore, it was invalid. TNT Branch should, up to the amount prescribed by the Montreal Convention, bear the liability to pay compensation for losses caused by its delay in carriage. Accordingly, the court decided to confirm the rescission of the contract for the carriage of the delayed goods involved in this case, ordered TNT Branch to pay compensation to Runipsys Company for its losses, and ordered Runipsys Company to pay TNT Branch the freight charges and corresponding interest. Neither party appealed. The judgment came into legal effect on Jul. 22, 2014.

III.Significance

This case has significance in serving as a typical model for clarifying the rules for adjudicating disputes over contracts concerning international carriage by air and for regulating the rights and responsibilities in international air logistics. Firstly, the case makes it clear that in the transnational carriage of goods by air, a delay in carriage that causes the consignee to refuse to accept the delivery may constitute a fundamental breach of contract by the carrier. Therefore, the consignor may exercise the right of partial rescission to rescind the relevant carriage contract. Secondly, the case makes it clear that an agreement in a contract for the carriage of goods by air that aims at exempting the carrier’s liability as provided in the Montreal Convention or reducing the limits of liability violates the Montreal Convention and is therefore invalid. The carrier should, up to the amount prescribed by the Montreal Convention, bear the liability to pay the consignor compensation. 

Case 6

Promoting the Internationalization of Arbitration, Respecting Parties’ Wishes to Arbitrate

Zhejiang Yisheng Petrochemical Co., Ltd. v. INVISTA Technology Co., Ltd. (Luxembourg) (A Case of an Application to Affirm the Invalidity of an Arbitration Clause) (2014)

I.Basic Facts

On Apr. 28, 2003 and Jun. 15, 2003, Zhejiang Yisheng Petrochemical Co., Ltd. (hereinafter referred to as “Yisheng Company” and INVISTA Technology Co., Ltd. (Luxembourg) (hereinafter referred to as “INVISTA Company”) signed two technology licensing agreements, to agree on: “The arbitration shall take place at China International Economic Trade Arbitration Centre (CIETAC), Beijing, P. R. China and shall be settled according to the UNCITRAL Arbitration Rules as at present in force”. On Jul. 11, 2012, INVISTA Company applied for arbitration to China International Economic and Trade Arbitration Commission. On Oct. 29, 2012, on the grounds that the arbitration agreed upon by the two parties was in essence ad hoc arbitration which is not permitted by China’s Arbitration Law, Yisheng Company submitted to Ningbo Intermediate People's Court an application to affirm that the arbitration clause was invalid.

II Judgment

After appealing to the Supreme People's Court for a review of the case and having it approved, the Ningbo Intermediate People's Court announced a final ruling on March 17, 2014, where it noted that, although the parties used the expression "take place at" which is usually followed by a distinct location, the phrase after the expression in the arbitration clause could refer to either the location of the arbitration or the arbitration agency for purposes of achieving the goal in arbitration. The court stated that the arbitrator mentioned in the clause should be Beijing's China International Economic and Trade Arbitration Commission as indicated by its abbreviation, CIETAC, though the Chinese name of the agency in the clause is not accurate. Therefore, the arbitration clause in this case is not in violation of the Arbitration Law of China, and Yisheng's request for confirming the invalidity of the arbitration clause is denied.

III Significance

This case was the first to recognize the force of a clause that the parties agree to and handled by a permanent arbitration agency in China according to UNCITRAL Arbitration Rules. It also clarified the idea that the clause involves the organization of arbitration rather than temporary arbitration. The case used an explanation method that could help the parties achieve their desire for arbitration concerning ambiguous words in the contract. Since the clause did not define the arbitration agency's specific function, the court decided that the parties' agreement that an agency could apply another arbitration rule should be understood as follows: the agency can take charge of the whole arbitration process in accordance with relevant rules. This case is a typical example of the need to promote a method for resolving disputes and for encouraging international arbitration and greater credibility in the arbitration process.

Case 7

Strictly Grasping the Standards on Guarantee Fraud and Maintaining the International Financial Order, 

—— Case Regarding Disputes over Guarantee Fraud of Jiangsu Taihu Boiler Co., Ltd., PT. Krakatau Engineering Co., Ltd. and Wuxi Branch of Bank of China Co., Ltd.

I Basic Facts

Jiangsu Taihu Boiler Co., Ltd. (Taihu Company) and PT. Krakatau Engineering Co., Ltd. (Krakatau Company) agreed to complete a construction project concerning generators. The two parties' contract clearly stipulated that if the contract was to be revised, the revision had to be adopted in the form of amendments to the contract; meeting minutes and faxes could not produce the effect of altering the contract. If Taihu Company breached the contract, Krakatau Company could demand payment in accordance with a demand guarantee. Afterwards, Krakatau Company required the guarantee issuer, Wuxi Branch of Bank of China Co., Ltd., to pay the guarantee on the ground that Taihu Company breached the contract. Taihu Company filed a lawsuit, claiming that both parties have modified the contract through meeting minutes, and Krakatau Company's acts of demanding the demand guarantee did not conform to the contractual stipulations and constituted a fraud, and the court should order to stop the payment of the guarantee. After a trial of the first instance, the Intermediate People's Court of Wuxi City, Jiangsu Province dismissed the claim of Taihu Company. Taihu Company appealed.

II Judgment

The High People's Court of Jiangsu Province handled the case and held that a court's review of an underlying contract is limited to reviewing whether the beneficiary, knowing the debtor of the underlying transaction neither breached the contract nor had overdue payments, still abuses his/her right to demand payments by making malicious demands. Meeting minutes for revising the contract without following the forms and procedures stipulated in the contract do not produce the effect of altering the contract. In a situation where the nature of the terms and stipulations of a guarantee, its payment conditions, etc. as stated in the underlying contract are in dispute, a beneficiary's demand for payment in accordance with the conditions set out by the bank when it issued the guarantee does not constitute fraud. Payment in accordance with the guarantee should be made in compliance with the rule "make payment first, dispute later". Therefore, on May 27, 2014, the High People's Court of Jiangsu Province rendered the final judgment of this case, upholding the first-instance judgment.

III Significance

In the judgment of this case, the High People's Court of Jiangsu Province fully respected the international transaction practices that the parties had agreed to apply, adjudicated the case in accordance with the handling rule "make payment first, dispute later" specified in the International Chamber of Commerce's rules on demand guarantees, strictly grasped the standards on guarantee fraud, safeguarded the beneficiary's legal right to promptly receive payment in accordance with the guarantee, and maintained the international financial order. This case was featured in the September 2014 issue of Documentary Credit Magazine published in the United States. Meanwhile, this case also reflects that in the course of "going global", Chinese enterprises need to fully understand the characteristics of international financial settlement and guarantee instruments and that performance not strictly in accordance with a contract will produce huge legal risks.

Case 8

Earnestly Implementing the Judicial Assistance Treaties and Legally Recognizing and Enforcing the Foreign Civil and Commercial Judgments

—— Case regarding Application of Fuligubohr Co., Ltd. (Poland) for Recognizing and Enforcing the Judgment Rendered by the Court of the Republic of Poland

I Basic Facts

Due to a dispute over sale and purchase contract with Fuligubohr Co., Ltd. (Poland), Ningbo Yongchang Company filed lawsuits to District Court in Zielona Góra, Poland and the District Court in Opole respectively in 2004 and 2006, to claim against Fuligubohr Co., Ltd. (Poland) for USD 65,454 plus related interests. Both the above courts in Poland denied Ningbo Yongchang Company's litigation request, but then Court of Appeal in Wrocław in Poland amended these judgments and ruled that Ningbo Yongchang Company won the lawsuit. Thereafter, the Supreme Court of Poland ruled to revoke the judgement of the Court of Appeal in Wrocław and remanded the case for retrial. On April 8, 2009, the Court of Appeal in Wrocław rendered another judgment, rejecting Ningbo Yongchang Company's request and ordering it to return to Fuligubohr Co., Ltd. (Poland) USD 54,521 and related litigation costs that Fuligubohr Co., Ltd. (Poland) had already paid it in accordance with the first judgment of the Court of Appeal in Wrocław. The final judgment rendered by the Court of Appeal in Wrocław, Poland, became effective on May 12, 2009. On April 8, 2011, Fuligubohr Co., Ltd. (Poland) mailed to the Intermediate People's Court of Ningbo materials related to an application for the recognition and enforcement of the judgment of the Court of Appeal in Wrocław, Poland. On February 5, 2013, Fuligubohr Co., Ltd. (Poland) submitted related supplementary materials and the case was formally registered. Ningbo Yongchang Company raised objections, claiming that the time period for submitting an application for compulsory enforcement had already expired and that the lawyer who participated in the litigation in Poland on its behalf was not authorized to do so.

II Judgment

The Intermediate People's Court of Ningbo Municipality handled the case and held that China and the Republic of Poland have entered into the Agreement on Judicial Assistance in Civil and Criminal Matters and, therefore, the court should review, in accordance with relevant provisions of the Civil Procedure Law of China and this agreement, whether the judgment should be recognized. According to China's then applicable legal provisions concerning the time limit for applying for the enforcement and those concerning suspension and termination of the statute of limitations, the statutory period for Fuligubohr Co., Ltd. (Poland)'s application had not expired. Furthermore, during the period in which the litigation took place in Poland, Ningbo Yongchang Company entrusted the same lawyer to participate in the litigation by a power of attorney for general authorization. Also, Ningbo Yongchang Company received USD 54,521 and related litigation costs paid by Fuligubohr Co., Ltd. (Poland). Therefore, the lawyer's act of representing Ningbo Yongchang Company should be considered valid. On March 12, 2014, the Court rendered the final-instance ruling, recognizing the civil judgment numbered I ACa 231/9 rendered on April 8, 2009 by the Court of Appeal in Wrocław, Poland.

III Significance

To date, China and more than 30 countries have already entered into bilateral agreements that include content regarding judicial assistance in civil and commercial matters. Some of these agreements include content concerning the mutual recognition and enforcement of civil and commercial judgments. This case reflects the standpoints of China's courts of earnestly performing judicial assistance agreements, recognizing and enforcing foreign civil and commercial judgments in accordance with law, and equally protecting the legal rights and interests of Chinese and foreign parties.

*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.