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The burden of proof in litigation for international trade dispute

Author of article: Lawyer of Shandong Win & Win Co. Law Firm

Basic of dispute:

The supplier as plaintiff claimed that the supplier and buyer as defendant started trade in 2018. After purchasing products from the supplier, the buyer sold the purchased products to other customers in its country. Since 2018, the buyer has repeatedly purchased equipment and ancillary products from suppliers. The buyer still owes supplier $200000 for the goods. The supplier failed to receive to payment. Accordingly, requested court to order the buyer to pay the purchase price of USD 200000 and interest.

On behalf of the buyer, we argued that the supplier had the burden of proof for the fact that the two parties had a contractual relationship and had delivered the goods to the buyer accordingly. The commercial invoice, proforma invoice, payment record and other evidences submitted by the supplier were not original, which was also denied by the buyer. In this case, there was no sales contract signed by both parties, so the authenticity of the above evidences could not be confirmed. Therefore, the plaintiff’s claim shall not be uphold.

Court judgment:

The court held that the plaintiff’s evidence did not prove that the buyer received of the goods. The supplier claimed that it delivered the goods to the buyer, lacked sufficient evidence, and should bear the adverse consequences of failure to provide evidence. The supplier’s request for the buyer to pay the overdue payment and interest is not supported due to lack of factual basis.

Lawyer opinion:

Disputes over contracts for the international sale of goods are the main types of commercial disputes. If a party brings a lawsuit based on the contract for the international sale of goods, it shall first prove the existence and establishment of the contract. The parties prove the establishment, effectiveness and performance of the contract for the international sale of goods mainly through two ways: (1) proving the establishment of the contract; (2) Prove that the contract has been performed.

Paragraph 1 of Article 64 of the civil procedure law stipulates: “the parties have the responsibility to provide evidence for their claims.” Paragraph 3 of Article 2 of several provisions of the Supreme People’s Court on civil litigation evidence stipulates: “the parties shall be responsible for providing evidence to prove the facts on which their claims are based or the facts on which their claims are refuted.” Paragraph 4 stipulates: “if there is no evidence or the evidence is insufficient to prove the factual claims of the parties, the parties bearing the burden of proof shall bear the adverse consequences.” Article 7 of the regulation also stipulates that “in the absence of specific provisions in the law and when the burden of proof cannot be determined in accordance with these provisions and other judicial interpretations, the people’s court may determine the burden of proof in accordance with the principles of fairness and good faith, taking into account the parties’ ability to provide evidence and other factors.” The above laws and regulations clarify the distribution principle of the burden of proof in China’s Litigation – “who claims, who provides evidence” system.

An international contract for the sale of goods refers to an agreement concluded between parties whose places of business are in different countries. One party provides goods and transfers ownership, and the other party pays the price. International goods sales contract is the most important contract in international trade transactions. It is basic for enterprises engaged in import and export business in various countries to carry out goods transactions. The United Nations Convention on Contracts for the international sale of goods is currently the most important international convention in the international sale of goods. The convention was concluded in 1978 and adopted at the diplomatic conference held in Vienna in March 1980 with the participation of 62 countries.

International trade contracts clearly stipulate the rights and obligations of the parties, are the link between the two sides, and have the same legal binding force on both sides. In the process of performing the contract, both parties to the contract must strictly implement the terms of the contract, otherwise breach of contract. In case of loss or damage caused by breach of contract, the injured party may file a claim in accordance with relevant applicable laws, and the breaching party must bear the losses caused. If one party needs to modify some terms of the contract or terminate the contract due to objective reasons, it must submit it to the other party for confirmation. If the other party does not agree to modify or terminate the contract, unless the requesting party proves that there are special circumstances such as force majeure; Otherwise, the applicant still needs to perform the original contract.

If in the absence of a written contract for the international sale of goods, the evidence that the parties can put forward to prove that both parties have reached an agreement is relatively limited. Therefore, in international trade, it is particularly important for the parties to sign the international sales contract first. In the absence of an international contract for the sale of goods, it shall be remedied by preserving the evidence in the process of fixed performance, such as fax, e-mail, delivery paper signed by the other party and other evidence, so that it can be used as evidence in litigation after a dispute occurs.

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