Data
- Date:
- 00-00-2018
- Country:
- China
- Number:
- Court:
- Shaoxing Intermediate People’s Court
- Parties:
- Zhejiang Xinlong Construction Co Ltd v Shaoxing Zhengxin Metal Trading Co Ltd
Keywords
DISPUTE BETWEEN TWO CHINESE COMPANIES - REFERENCE TO THE UNIDROIT PRINCIPLES AS A MEANS TO SUPPLEMENT APPLICABLE DOMESTIC LAW
"COMMENTS" BY CHINESE JUDGES ON THEIR DECISIONS - NOT LEGALLY BINDING - FORSEEABILITY OF HARM - REFERENCE TO ART. 74 CISG AND ART. 7.4.4 UNIDROIT PRINCIPLES IN ORDER TO ESTABLISH WHAT TYPE OR EXTENT OF LOSS IS COVERED BY THE FORESEEABILITY TEST - IN THE OPINION OF THE JUDGE FORESEEABILITY RELATES ONLY TO THE NATURE OR TYPE OF THE HARM, NOT TO ITS EXTENT
Abstract
A seller failed to supply steel as contracted and sought to resist the buyer’s claim of damages by contending that the buyer’s loss, which ensued a 40 per cent rise of the market price of steel, was not ‘foreseeable’ by the seller at the time of concluding the contract.
It was held by the appellate court that the seller, as a steel trader, ought to have foreseen the buyer’s loss.
In a comment to the decision, the judge who presided over the panel of the court of appeal acknowledged that Chinese law endorses a foreseeability rule, hence mirroring a universal consensus reached in international instruments like Article 74 of the CISG and Article 7.4.4 of the PICC. He further stated that Chinese law has not as yet resolved the issue of whether it is the type or extent of a loss that is to be subjected to the foreseeability test; in his view, only the type (as opposed to extent) of a loss is so subjected.
Summary of the decision extracted from Qiao Liu, The PICC in Chinese Courts, Uniform Law Review, Volume 27, Issue 3, pp. 472–491
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