Jenny Zhang, Attorney at Law, Lawyer, Law firm in Dalian, China

 TRIAL in China.

There is just an oral contract between the parties. How does the local court have the jurisdiction over such an oral contract without choice of forum? In this situation,  we must adpot the rules of choice of law.

In accordance with basic principlies of choice of law with respect of contract dispute, the closest relationship is the standard to decide the forum. In contract dispute, the place of performance has  the closest relationship with choice of forum. The parties have not expressly agreed upon the place of  performance, therefore, under Chinese Contract Law Article 61, paragraph (c), the place of performance shall be at  where the obligator is located. The parties agreed to deliver the goods with the term of CIF,  according to “International Incoterms 2000″, the Seller shall complete delivery obligations in the port of shipment, DAlIAN.  THUS, Dalian is the actual place of performance.

Without express agreement of place of performance, where CIF is adpoted, the Seller can lodge a suit in Dalian. BUT where both parties choose D-terms, it is hard for local Chinese court to accept the case. 

 Because international enforcement is very difficult and time comsuming, for such a small order, the Seller wouldnot choose to enforce it overseas. Then WHY DO WE LODGE A SUIT? The answer is , under Law of the People’s Republic of China on Control of the Entry and Exit of Aliens, we could apply the Chinese court to issue an injunction restricting the default party to leave China since it involves in unsolved civil cases. I guess that is most of the  foreign businessmen are reluctant to accept.

Recently, I got a case, a payment dispute in  international sales of goods.

China is an typical exporting country, foreign importers and distributors just got enough proceeds from importing Chinese goods. As most foreigners are trustworthy, Chinese exporters get used to sell goods overseas just on open account. In the good time, there is no problem. But depression finally came,  a lot of credit also become “credit”. Many Chinese exporters can’t get the payment any longer.

When the importer established  an agency in China,  it is easy to lodge a lawsuit in China. But if the defaulting party has  no office and property in China, how would we do? Solution?

Step One  Arbitration  Here I don’t want to talk about the advantages of arbitration. Since almost all the countries around the world participated in New York Convention, it’s just SO easy to enforce the arbitual award. In oral contracts, generally the parties haven’t even mentioned the possible disputes let alone resolution. There is, therefore, no arbitration clause in the contracts. If any party intends to choose arbitration, it can only resort to the agreement from the other party. However, when both parties really begin their “fight”, I guess the defaulting party just don’t care what the aggrieving party will do as it has no porperty to be enforced in China. Moreover, the attorney fee is that dear in western countries, they just gamble that Chinses party would not sue in their countries.

Yeah, they were right. Espacially in such recession, it seems that Chinese exporters are more torlerant.

BUT to those who deliberately refuse to pay money even if they have the ability to pay, we must protect us from such loss.

And the solution is TRAIL in China. (continued)

China‘s Ministry of Commerce (MOC) Thursday denied its refusal to approve Coca-Cola’s acquisition of Huiyuan Juice Group was protectionist.  

MOC spokesman Yao Jian said the decision would have no effect on China’s policy in accepting foreign investment.

Yao said the ministry made the decision based “on sufficient investigation and research, on the basis of facts, and strictly inline with the country’s anti-monopoly law.”

He said countries worldwide commonly reviewed acquisitions under anti-monopoly laws, and China was no exception. 

 “The purpose of the examination is to maintain market competition, protect consumers and safeguard the public interest,” he said.Foreign Ministry spokesman Qin Gang echoed Yao’s comments, saying the rejection of the bid was in no way protectionism.

 The government would continue to accept foreign investment, enhance opening up and provide foreign investors with a good investment environment.

“Products of the Coca-Cola company are available anywhere in China’s market. The country’s market is fully open to foreign companies,” said Qin.

Mei Xinyu, a trade expert with the MOC, said the rejection didn’t indicate that the country had closed the door to foreign investment, neither did it equal protectionism.

Coca-Cola offered to buy Huiyuan, the nation’s largest juice maker, for 17.92 billion Kong Kong dollars (2.3 billion U.S. dollars) in cash on Sept. 3. The MOC announced on Wednesday that the bid failed to meet requirements set out in the anti-monopoly law.

Hours after the decision was announced, Coca-Cola Company and Huiyuan said that they respected the decision.

Galaxy Securities analyst Zuo Xiaolei said the failed acquisition would not have any “substantial effect” on Huiyuan, because the company’s domestic market had not changed. 

Wang Zhile, a researcher with the MOC, said the failed bid might have a short-term negative effect on Huiyuan but the company would still play an important role in the country’s pure juice market.

“However, the company should reconsider its development in the domestic market, so that it will grow better in the long run,” he said.

Source:Xinhua

Hide and Seek originally is a kind of game. In America’s dictionary, it is called cops-and-robbers. Everybody played the game in our childhood. But the name of the game turns out to be the hottest network language nowadays. It results from a case. 

 According to the report in China Daily, the mysterious death of Li, 24, who allegedly died of a head injury while playing “hide-and-seek” game with fellow detainees, sparked wide discussion and doubts over internet.

Some warm-hearted netizens even formed a “hide-and-seek incident investigation committee” to investigate the sudden death of the detainee. This case continued to draw fire from the online community.

I am not stupid, so I just cannot believe the reason provided by the local police office as everybody else. We can imagine the size of space in a local detention house. How would a detainee could have enough time and space to play such a game. Based on my knowledge as a lawyer, a detainee could not have such freedom to go around somewhere besides their small cabinet, let alone play any game there. Even if they have enough freedom, how do they have such a mood! Yeah, based on the logic of such reasoning, Li and his fellow detainees are probably be nuts.

Not being a member of this committee, I think I just know the truth. One of our unspoken rules to examine the suspects is to “give him some color see see”. Maybe this time, one of the officers just neglected enough to harm his life.

Who can play hide-and-seek any more?

More articles online about this tipic:

Prosecutor: Man beaten to death in Chinese prison “hide-and-seek” game

County gov’t website hacked after “hide-and-seek” prison death

Netizens join probe into “hide-and-seek” prison death in China’s Yunnan

Sanlu Group Declared Bankrupt by Court

A Chinese local court declared Thursday the Sanlu Group at the heart of the country’s milk contamination scandal goes bankrupt.

The Intermediate People’s Court of Shijiazhuang, capital of the northern Hebei Province, accepted the bankruptcy petition for Sanlu, who faced a 1.1 billion yuan ($161 million) debt, last December.

Sanlu stopped production on September 12, after its melamine-tainted baby milk powder was found to cause deaths and kidney stone for children.

It was fined last month 49.37 million yuan by the Shijiazhuang court, which also handed down life sentence to Sanlu’s board chairwoman Tian Wenhua.

On December 19, the group borrowed 902 million yuan to pay the medical fees of children sickened by its melamine-tainted baby formula and to compensate the victims.

(Xinhua News Agency February 12, 2009)

Peanut Corp. Admits It’s Creamed

Tainted with salmonella accusations, company files for bankruptcy

The peanut processing company at the heart of a national salmonella outbreak is going out of business.

The Lynchburg, Va.-based Peanut Corp. of America filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Virginia Friday, the latest bad news for the company that has been accused of producing tainted peanut products that may have reached everyone from poor school children to disaster victims.

The salmonella outbreak was traced to the company’s plant in Blakely, Ga., where inspectors found roaches, mold and a leaking roof. A second plant in Plainview, Texas was shuttered this week after preliminary tests came back positive for possible salmonella contamination. So far, the outbreak has been suspected of sickening more than 630 people and may have caused nine deaths. It also has led to more than 2,000 product recalls, one of the largest recalls in U.S. history.

Companies file Chapter 7 to liquidate their assets and distribute the proceeds to creditors. A trustee is automatically appointed to oversee the wind down, as opposed to a Chapter 11 filing that gives a company breathing room while it tries to reduce its debts and continue in business. The company said in the filing that its debt and assets both ranged between $1 million and $10 million.

The board had considered a Chapter 11 bankruptcy but decided on an outright liquidation. It said in a court filing that the recalls had been “extremely devastating” to the company’s financial condition.

The company faced more scrutiny once it was revealed that its Texas plant, which opened in March 2005 and was run by a Peanut Corp. subsidiary, Plainview Peanut Co., was not inspected by state health officials until after problems arose at the company’s Georgia plant. Texas health officials asked the company to close the plant Monday after samples sent to a private lab for testing showed possible salmonella contamination.

(Washington News Feb 13, 2009)

Sanlu Group in China V.S. Peanut Corp. in America