Data

Date:
17-11-2021
Country:
China
Number:
Case No. (2022) Su 02 Minchu No. 73
Court:
Wuxi Municipal Intermediate People’s Court, Jiangsu Province
Parties:
Wuxi Huamei Plates Processing Co. Ltd. v. AKK GmbH

Keywords

DAMAGES (Art. 74 CISG) - ONLY FORESEEABLE LOSSES RECOVERABLE

Abstract

[CLOUT case no. 2205. Abstract prepared by Zhang Bona, National Correspondent]

This case deals with the avoidance of a contract for the international sale of goods and the legal effects of the avoidance. On 25 October 2016, Wuxi [ Plates
Processing Co. Ltd. (the Buyer) signed a sales contract concerning the goods in question with AKK GmbH (the Seller), whereby the Buyer purchased machine A and
machine B, sold by the Seller. After the installation of the two machines was completed, the Buyer discovered serious quality issues during the testing period.
There were significant problems with ink blockage and ink breakage, making it impossible to produce complete printed products. After unsuccessful negotiations, the
Buyer filed a lawsuit requesting the termination of the contract, the return of the payment and compensation for losses incurred, including interest, import duties and
transportation fees.

Wuxi Municipal Intermediate People’s Court, in Jiangsu Province, held that the machines delivered by the Seller did not meet the quality standards stipulated in the
contract and agreed upon by both parties, rendering them unable to function properly for production and use. Furthermore, the Seller was unable to resolve the quality
issues in question, resulting in the Buyer’s inability to achieve the purpose of the contract. The Seller was responsible for the fact that the quality of the machines did
not meet the terms of the contract, in violation of CISG articles 35 and 36. After the Buyer declared the contract in question avoided on 21 June 2018, it was entitled to
request the Seller to return the contract payment of €486,000 and to pay the corresponding interest. The import duties and transportation fees claimed by the
Buyer were substantiated by relevant contracts, payment receipts, invoices and other evidence. They were the actual expenses incurred by the Buyer for the purchase and
transportation of the machines in question, and could not be recovered. Such expenses were costs that the Seller should have reasonably anticipated when the contract was
concluded, and they should therefore be compensated. The costs for supporting equipment and site renovation were beyond the foreseeable scope and should not be
compensated. The Buyer and Seller had no clear agreement in the contract or other documents as to which party should bear lawyers’ fees in the event of a breach.
Therefore, the Buyer’s claim that the Seller should cover incurred lawyers’ fees was unsubstantiated.

Fulltext

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Source

Case law on UNCITRAL texts (http://www.uncitral.org/uncitral/en/case_law.html) A/CN.9/SER.C/ABSTRACTS/2205}}