Data

Date:: 27-06-2023
Country:: China
Number:: Case No. (2022) Hu 0115 Minchu No. 65721
Court:: People's Republic of China: Pudong New District People’s Court, Shanghai
Parties:: Shanghai Haoyo Machinery Equipment Co., Ltd. v. Fırat Ulaştırma Lojistik ve Ticaret Limited Şirketi

Keywords

SELLER'S FUNDAMENTAL BREACH OF CONTRACT (ART. 25 CISG) - BUYER'S RIGHT TO TERMINATE THE CONTRACT (ART. 49(1)(b) CISG)

Abstract

[CLOUT Case no. 2206. Abstract prepared by Zhang Bona, National Correspondent]

This case involves the avoidance of an international sales contract for goods and the legal effects following that avoidance. On 6 May 2020, Shanghai Haoyo Machinery
Equipment Co., Ltd. (the Buyer) and Fırat Ulaştırma Lojistik ve Ticaret Limited Şirketi (the Seller) negotiated and concluded a sales contract, wherein the Buyer
agreed to purchase melt-blown fabric from the Seller. After the contract was signed, the Seller failed to deliver the white melt-blown fabric valued at $336,000, in
violation of the agreed delivery date of 22 May 2020. This failure prevented the end user from utilizing the material for normal production activities, thereby blocking the
Buyer from achieving its contractual objectives. Consequently, the Buyer initiated legal proceedings.

The Pudong New District People’s Court in Shanghai held that the case involved a dispute over an international sales contract for goods. The business locations of the
two parties were situated in China and Türkiye, both of which were CISG contracting States. Since neither party had agreed to exclude the application of CISG, it
automatically applied to the case. The sales contract was established when the Buyer accepted the price offer (i.e. on 6 May 2020), and it was legally binding on both
parties. The contract stipulated a delivery date of 22 May 2020, over three years before the case was heard. That notwithstanding, the defendant failed to deliver the
white, melt-blown fabric worth $336,000 to the plaintiff, and thus should bear the corresponding liability for breach of contract. When the Seller failed to deliver on
time and as stipulated, the Buyer could issue a declaration of contract avoidance.

Since the copy of the Buyer's complaint was delivered to the Seller on 8 February 2023, the contract in question was declared avoided on that date. In summary, the
court supported the Buyer’s request for confirmation of the termination of the contract and demand that the Seller return the payment for undelivered goods and shipping
costs and pay compensation for the loss of interest.

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/2206)}}