Win & Win Law Firm                         24 Hour Emergency Response

How to distribute civil liability in international trade dispute by Chinese court

The focus of dispute in this case is: whether the products delivered by the defendant Hai company to the plaintiff Jie company through the third party have quality problems, and how to distribute its civil liability.

The plaintiff, Jie company, was registered and established in Turkey, and the sale and purchase of the subject matter was outside the territory of China. This case is a dispute over the contract for the international sale of goods. Article 145 (1) of the general principles of the civil law of the people’s Republic of China stipulates: “the parties to a foreign-related contract may choose the law applicable to the settlement of contract disputes, unless otherwise stipulated by law.” Both the plaintiff and the defendant choose to apply the law of the people’s Republic of China in the process of litigation. In line with the above legal provisions, Qingdao intermediate people’s Court of Shandong Province has determined that the law of the people’s Republic of China is the applicable law for the settlement of the dispute in this case.

The plaintiff and the defendant have no objection to the establishment of a contractual relationship for the international sale of goods between the two parties, and have no dispute over the name, subject matter and quantity of the parties to the contract (referring to the part actually performed). There are differences between the parties on whether the plaintiff and the defendant have ever concluded a contract in writing. The existence of such differences does not affect the final settlement of the case and can be shelved. The legal relationship of the sales contract between the plaintiff and the defendant is not invalid under the provisions of Chinese laws and administrative regulations, and is protected by law and legally binding on the parties.

Article 148 of the contract law of the people’s Republic of China stipulates: “if the purpose of the contract cannot be realized because the quality of the subject matter does not meet the quality requirements, the buyer may refuse to accept the subject matter or terminate the contract. If the buyer refuses to accept the subject matter or rescinds the contract, the risk of damage to or loss of the subject matter shall be borne by the seller. ” The “quality requirements” in the warranty liability for defects in the subject matter stipulated in this article include not only the technical standards and quality requirements stipulated by the exporting country, but also the technical standards and quality requirements stipulated by the importing country, The parties to the contract may agree on internationally accepted product standards and technical requirements or make other special agreements. The defendant claimed that he devoted a lot of manpower and material resources to design and manufacture products for the plaintiff. Whether it is to purchase according to the exhibits or to accept orders to start R & D and production, after all, it needs to reach an agreement on the sale of products before it can be fulfilled, especially in the international trade of goods across countries and regions. When different countries and regions may adopt different quality standards and requirements for products, especially for products of special industries including mobile phones, it is necessary and correct to make clear and specific agreements on the quality standards and requirements of products in advance. However, as far as the adducing evidence of both parties in this case is concerned, neither party has submitted the evidence specifically agreed on the quality standards and requirements in advance. Although the relevant evidence materials submitted involve this problem, they can not explain the problem. The plaintiff claimed that the products actually delivered by the defendant were lack of raw materials and parts, which constituted product quality problems. When the plaintiff accepts the authentication opinions submitted by the defendant, he can not take it for granted that the specifications / standards on which the authentication opinions are based are the quality requirements that can realize the purpose of the contract. The technical standards and quality requirements of transnational telecommunication products are relatively complex issues. The handling of this case is lack of technical specifications, which can only be confirmed and handled by applying the evidence rules and contract law on the basis of the evidence submitted by the plaintiff and the defendant.

The plaintiff, Jie company, put forward the quality claim mainly on the basis that the imported products were ordered to be recalled by the government functional departments in the importing country. In order to protect the interests of non-specific consumers and public safety, under the guidance and supervision of government departments, in accordance with the prescribed procedures and requirements, manufacturers and importers should take timely recall measures for products with systemic defects, so as to effectively prevent and eliminate the damage caused by defects, which is an important measure implemented in many countries and regions, including China. Because product recall is implemented under the guidance and supervision of government departments, the product recall system is not completely composed of civil acts between equal subjects, and its legal liability includes not only civil liability but also administrative liability. Therefore, it is inappropriate to treat the process and legal liability of the plaintiff’s product recall ordered by the government department for importing the defendant’s products in the country where the plaintiff is located according to the effectiveness and standard of proof of civil acts regardless of the circumstances. This is also the evidence that the plaintiff submitted a large number of government departments to participate in the risk assessment and notice recall process in the proof of product recall. It is not objective for the defendant to raise a query on the ground that it is a unilateral commissioned test or a non independent third party test.

The main factual basis of the defendant’s defense against product quality lies in the certification opinion before delivery. Although the certification opinion is issued by the certification authority of a third country, it is also applied by the defendant itself in essence and does not have stronger evidentiary force than the product inspection accepted by the plaintiff in its country. According to the two inspection reports generated before and after the delivery of the products, the quality problems found in the inspection of the imported products in Turkey focus on electromagnetic compatibility, radio spectrum and indication defects, The technical standards and quality requirements based on the relevant test reports are much the same or roughly the same as the technical standards and quality requirements based on which the defendant applied for product certification before delivery. It is precisely because of the comparability of the two inspections in terms of items and technical specifications, Only in this way can the inspection changes before and after the product delivery reflect the quality status of the product more pertinently. However, the product recall system prevents the occurrence and expansion of damage through the recall itself, which does not take the actual damage as the premise. Moreover, the content of recall measures is diverse, including modification or supplement of consumption instructions, repair, replacement, recovery and other forms. In this case, the inspection conducted in the recall procedure did not give the conclusion that what the plaintiff insisted in the litigation process was the manufacturing defects due to the lack of raw materials and parts in the product manufacturing process (theoretically, the product defects can be divided into design defects, manufacturing defects, instruction defects and development defects), Moreover, the risk degree of the defective product after risk assessment and the appropriate degree of recall measures corresponding to the risk degree are not reflected in the relevant recall evidence submitted by the plaintiff. In a word, the product imported by the plaintiff was ordered to be recalled by the government department in the importing country due to product defects. Although the defendant did not admit it, there was no evidence to overturn the fact claimed by the plaintiff. In this case, the recall measure itself was not reviewed, but the plaintiff claimed the contract liability to the defendant on the main reason that the product was recalled, It is necessary to examine the relationship between the relevant facts of recall and the case, as well as the conditions required for the establishment of the plaintiff’s claim for responsibility.

With the participation of regulators, implementers, consumers and helpers, the recall system contains a variety of legal relationships. In terms of the division and investigation of legal responsibilities between manufacturers and importers of implementers, in addition to the relevant economic control laws, it is still regulated by the contract law which regulates the legal relationship of international sales contracts. After the importer undertakes the responsibility of product recall, the civil liability of the manufacturer shall be investigated on the basis of the sales contract. As mobile phones, which are more sophisticated and need to be supported by telecommunication technology, especially in the business of transnational telecommunication products, even if there are no defects and defects in the products themselves, there is certain uncertainty about whether they can be used normally and effectively. However, the buyer and the seller do not sign a written contract on the technical standards and quality requirements of the products, the inspection of the products and the handling of quality problems No matter the plaintiff Jie company claims to order products by finding exhibits at the exhibition, or the defendant Hai company claims that both parties sign a general and simple supply contract, which can not replace the written sales contract with complete content and clear agreement, This has laid a hidden danger for the quality disputes caused by the defects found after the products were put into circulation in Turkey, and also created difficulties for the settlement of the disputes. Both the plaintiff and the defendant are responsible for this. In terms of risk prevention and control corresponding to product recall, in the case of product output, who is more convenient and effective to reasonably prevent and eliminate the risk, that is, who should timely and correctly take corresponding measures.

Before the products are put into circulation, the necessary inspection should be given to avoid the greater burden brought by the recall from the consumers, and the manufacturer should intervene in time to take necessary measures to prevent and eliminate the possible damage caused by the defects, or the defaulting party should bear civil liabilities such as repair, replacement and recovery, so as to reduce the losses of the manufacturer and the importer. As a matter of fact, according to the existing evidence in this case, the plaintiff did not give necessary and careful attention until consumer complaints occurred in the circulation field and led to the serious consequences of recall under the supervision of government departments, which made the defendant, as a manufacturer, unable to participate in recall procedures such as risk assessment, It is also the most severe form of recall without any response or remedy opportunity. As far as product manufacturers and importers are the co implementers of recall measures, the plaintiff can play a greater role in the prevention and control of risks, regardless of the reasons, and has a certain responsibility for the formation of the final situation. Even in the recall procedure, what kind of product defect is it (if it is a design defect, if the manufacturer submits certification opinions to the importer and the importer does not raise objection, the loss caused by the design defect can not be borne by the manufacturer entirely), how dangerous the product is, and whether it is necessary to take back the product, And the proportion of defective products in all products is related to the distribution of responsibilities between the plaintiff and the defendant, and the plaintiff’s proof is not sufficient. Therefore, the plaintiff should bear the corresponding civil liability for the performance of the contract for the international sale of goods.

Even though the defendant Hai company can take the certification opinion before delivery as the factual basis for its products to be qualified, the defendant also has no sufficient basis to overturn the fact that its exported products were ordered to be recalled in Turkey due to the failure of some inspection items. In the case of equal validity of evidence, the delivery of goods is the node, Generally speaking, the inspection conclusion after delivery can better reflect the development and change of things than the inspection conclusion before delivery, which is also in line with the normal logic law. Therefore, the fact that the defendant bears more than half of the responsibility for the recall of the product is appropriate to the facts reflected in the evidence. The product recall focuses on the prevention and elimination of risks, and does not take the actual damage as the premise. The plaintiff Jie company’s proof on the actual damage caused by product defects is not sufficient, and the plaintiff also has a certain responsibility for the final result. Therefore, it is in line with the reality of this case that the plaintiff bears less than half of the responsibility.

In view of the fact that there is only the result of product recall and the lack of a more sufficient and reliable final conclusion that the defendant is fully responsible, there is only the result of product recall and the lack of sufficient basis for the necessity of adopting this form, there is only the evaluation opinion of product defects and the lack of a clear conclusion on the harm degree and scope of systematic defects, In addition, in view of whether the defendant has the opportunity to participate, express and take corresponding measures in the recall procedure, as well as the measures that the plaintiff should take to prevent and control the risks, it is appropriate for the plaintiff and the defendant to bear 40% and 60% respectively of the responsibility for returning the payment claimed by the plaintiff.

PREV
NEXT

RELATED POSTS

Leave a Reply

*

*