Brief introduction of the case

1992, Zhejiang dongyang plastic company (hereinafter referred to as sudong company) was approved by the State Council economic and trade office, included in "1992 national technical transformation special balanced foreign exchange introduction project plan", and imported a set of "* * * PET sheet extrusion production line". After investigation in many countries, we finally decided to purchase from David Standard Company (hereinafter referred to as David Company). 1992 65438+On February 20th, China Machinery Import and Export Corporation (hereinafter referred to as China Machinery Company), the import agent of Sudong Company, signed a purchase contract with American Machinery Co., Ltd. (hereinafter referred to as American Machinery Company) for the above production line. 1993 16 in may, American machinery company signed a sales contract with David company for the above production line, and made it clear that the end user was Sudong company. At the same time of signing the contract, representatives of American Machinery Company, David Company and Su Dong Company signed their names on the accessories of PET sheet production line, such as supply scope, equipment performance, quality assurance, engineering design, installation, commissioning and reception, training and warranty period. After that, Sudong Company paid US$ 23 1 000 to China Machinery Corporation, and the production line equipment arrived in Sudong Company on 1 and was debugged by David Company in June 1994. During the debugging process, Su Dong Company and David Company had a great dispute about the quality of the production line. By 1996, David company refused to send someone to debug again. Su Dong Company entrusted my lawyer to file a lawsuit in August, 1997. In April, 2000, Zhejiang Higher People's Court ruled that David Company compensated Sudong Company for the equipment loss of PET sheet extrusion production line of 2 1.9955 1.70 USD. David Company compensated Su Dong Company for other economic losses 1300 1936.36 yuan. In 2004, the lawyer accepted the second-instance litigation again. On September 22, 2005, after mediation by the Supreme People's Court, the two parties reached a settlement agreement: the equipment of the * * * extruded PET sheet production line installed by Sudong Company belongs to Sudong Company, and David Company is no longer responsible for the equipment; David Company paid $654.38+$500,000 to Su Dong Company. At this point, the eight-year lawsuit finally settled.

Focus of controversy

In response to the claim of Su Dong Company, David Company put forward the reasons for rejecting the claim. The specific focus is:

(1) Is there a legal relationship between Su Dong Company and David Company?

David Company appealed that there was no direct contractual legal relationship between David Company and Su Dong Company. David Company signed a contract for the sale of goods and accessories in the United States on May 6, 1993, and sold * * * PET sheet extrusion production line equipment to American machinery companies. Since then, the American machinery company sold the goods to China Machinery Company, an import agent entrusted by the Soviet Union and East China Company. Therefore, David Company has no direct contractual relationship with Su Dong Company. Although the representative of Sudong Company marked (signed the surname) in the annex to the contract, it does not mean that Sudong Company is the party to the contract. The representatives of Su Dong Company came with the personnel of American machinery company, and the subject matter can only be regarded as the personnel of American machinery company. Moreover, according to the provisions of Articles 9 and 13 of the Foreign Trade Law of People's Republic of China (PRC), Sudong Company has no right to mark the contract for the sale of goods and its annexes, and the marks of its representatives have no legal effect. Therefore, Su Dong Company has no right to directly claim rights from David Company according to the contract for the sale of goods and its annexes.

The agent of Sudong Company believes that the agreements on the scope of supply, quality and training endorsed by Sudong Company, Meiji Company and David Company should be legally binding as civil legal acts. Although the agreement is an annex to the contract, it clearly stipulates that the end user is Sudong Company, so Sudong Company has a clear identity and is independent of American machinery companies. In addition, the disputes and negotiations on production line debugging in the past three or four years were also conducted directly between Su Dong Company and David Company. The written agreement on product performance and quality signed by Su Dong Company, David Company and American Machinery Company, that is, the commitment to the quality of mechanical equipment, is an express quality guarantee. The purpose of the second American company to make this commitment is to obtain the payment from the appellant through China Machinery Corporation. Conversely, Su Dong Company will only pay the payment through its agent after obtaining these commitments. And according to Article 106 of the General Principles of the Civil Law, those who violate the contract or fail to perform other obligations shall bear civil liability. Even if it is not a contractual relationship, it should also bear the corresponding civil liability as an obligation promised to the end user.

In the judgment of first instance, Zhejiang Higher People's Court held that 92MMG-400(62)2 1US, its attachments and letters signed by representatives of Sudong Company, Meiji Company and David Company constitute the proof that Sudong Company reached an agreement with Meiji Company and David Company on the quality, performance and debugging (trial operation) of the PET sheet extrusion production line. The contents of the above agreement do not violate the prohibitive provisions of People's Republic of China (PRC) laws and public interests, and are binding on all three parties in this case.

(2) Whether the laws of China are applicable is under the jurisdiction of the courts of China.

David Company appealed that the contract for the sale of goods in this case was signed by two American companies in the United States, and the performance of the contract, such as payment and delivery, was in the United States, not in People's Republic of China (PRC), and its laws on the sale of goods should apply to local laws in the United States. Therefore, the legal relationship between two foreign companies outside China should not be governed by the laws of People's Republic of China (PRC), but by the courts of China. In addition, the cause of this case is a "product quality dispute", and the legal basis for Sue East Company's prosecution is the People's Republic of China (PRC) Product Quality Law and other relevant laws. As mentioned above, the goods produced and sold by David Company are all outside China, and Article 2 of the Product Quality Law stipulates: "The production and sales activities in People's Republic of China (PRC) must abide by this law." The applicable area of this Law is in China, and its applicable subjects are companies, enterprises (including branches of foreign companies in China), institutions, state organs, social organizations and individual industrial and commercial households in China, while David Company does not have any institutions or offices in China, so it is not the applicable subject of the Product Quality Law. Besides, our company is not engaged in the production and sales of this commodity in China. Therefore, David Company does not have any production and sales behavior in the legal sense in China, and it is not the subject of the application of China's product quality law. According to the Product Quality Law, Su Dong Company cannot sue David Company in court for "product quality dispute". Finally, David Company also mentioned that Sudong Company should settle the dispute through its import agent, China Machinery Corporation, according to the arbitration clause of the goods import contract.

The agent of Sudong Company believes that the quality agreement was signed in Beijing and is governed by the laws of China. The agent also provided the conversation record of the original legal representative of Sudong Company at that time, and the air ticket from Dongyang to Beijing at the time of endorsement. Moreover, it has been indicated in the agreement that the end user is Sudong Company, and the installation, operation and receipt of the contract equipment of the mechanical equipment in this case are all agreed in the factory of Sudong Company. It can be seen that the signing of the agreement and the performance of the main sales obligations occurred in People's Republic of China (PRC). Furthermore, the subject matter of the current quality dispute is in China. According to Article 145 of the General Principles of Civil Law of People's Republic of China (PRC): "The parties to a foreign-related contract may choose the applicable law for handling contract disputes, unless otherwise stipulated by law. If the parties to a foreign-related contract have no choice, the laws of the country most closely related to the contract shall apply. " Obviously, the quality dispute in this case should be governed by the laws of China. Based on the above facts, according to Article 243rd of the Civil Procedure Law of People's Republic of China (PRC): "When a contract is signed and performed in People's Republic of China (PRC), or the object of litigation is in People's Republic of China (PRC), or the defendant is in People's Republic of China (PRC), a lawsuit is brought against the defendant who has no domicile in People's Republic of China (PRC)." Or the defendant has a representative office in People's Republic of China (PRC), which can be under the jurisdiction of the people's court where the contract is signed, the contract is performed, the object of litigation, the property that can be sealed up, the infringement or the representative office is located. "Under the jurisdiction of the Higher People's Court of Zhejiang Province, Su Dong Company has laws to follow in choosing the object of litigation.

In the judgment of the first instance, the Zhejiang Higher People's Court held: "The parties have not chosen the applicable law to solve the dispute. According to the principle of closest connection in private international law, the applicable law in this case should be the location of the end user of the equipment, the installation and commissioning place and the place where the dispute occurred, that is, the law of People's Republic of China (PRC)." With regard to jurisdiction, the Supreme People's Court finally ruled that the lawsuit filed by Su Dong Company based on its agreements with American Machinery Company and David Company on equipment quality and performance met the conditions for prosecution. According to Article 243rd of the Civil Procedure Law of People's Republic of China (PRC), the subject matter of the dispute in this case is within the territory of Zhejiang Province, and the Higher People's Court of Zhejiang Province has jurisdiction over the dispute in this case.

(3) Disputes over major facts

David Company's appeal: (1) The equipment involved is complex in technology, and the relevant contract terms also allow David Company to carry out multiple debugging. In particular, Su Dong Company admitted in the fax to David Company on February 1996 that the engineers of David Company "worked very hard and produced high-quality plates"; (2) David Company has completed the commissioning as agreed, but Su Dong Company has not issued the acceptance certificate as agreed; (3) Su Dong Company failed to operate and use the equipment involved in this case, which was caused by its own cooling water system, contaminated raw materials and workers' failure to operate correctly, and should not be blamed on David Company; (4) Even if the equipment has problems after trial operation, the warranty and after-sales service shall be provided according to the contract. However, Su Dong Company refused to sign the acceptance certificate, which proved that David Company could not provide warranty and after-sales service. (5) According to the contract, the maximum amount of compensation that David Company should bear should not exceed 5% of the total contract price, not the total payment; (6) Even if the equipment is defective, David Company will bear the repair, replacement and related expenses within the warranty period of 12 months as agreed, and should not order the return of goods and compensate for the purchase price.

Corresponding to the above, the agent of Sudong Company thinks that: (1) The faxes sent by Sudong Company to David Company are all unsuccessful in negotiating claims. As for the fax sent by Su Dong Company1February 3, 996, it also shows that the thickness difference between David's technicians when replacing parts and using automatic dies during debugging can not meet the contract requirements, and the thickness is uneven, and some specifications of plates have not been tested. Because it is the Spring Festival, at the end of the fax, we will say some polite words, such as "working hard", "making some good sheets" and "good luck in the new year". However, the Chinese translation of the fax provided by David Company deliberately omitted the word "a", and the fax text was unfinished debugging. (2) The terms related to debugging and the quality and capacity to be achieved during debugging have been specified in the contract between both parties. If the debugging is unsuccessful, the qualified products cannot be produced and the agreed production capacity cannot be reached, of course, it is a breach of contract. The contract stipulates that "the performance of the debugged products meets the requirements of the contract, and the contract equipment is deemed to be accepted by the buyer after being signed in writing". This is the formal requirement of whether the equipment meets the contract requirements. If there is no signature, it is obviously impossible to prove that debugging is complete. This is the formal condition agreed by both parties. (3) It is stipulated in the contract that "the products that can meet the standard are based on the use of American raw materials", so Sudong Company imported expensive raw materials from the United States for debugging. As for the workers' operation, according to the contract, David Company is obliged to be responsible for training, and the commissioning operation is carried out under the on-site control of David Company experts. Other objective reasons are even less based on facts. (4) The attitude of refusing to provide after-sales service without signing for it confirms the fact that the appellant refused to continue debugging unreasonably and forcibly after four unsuccessful debugging, and Sudong Company had to take the road of litigation rights protection. Sudong Company hopes to complete the debugging as soon as possible and start normal production. Every debugging requires a lot of manpower and raw materials, and also hosts experts from David Company. There is no reason not to sign for it without reason. (5) The agreed compensation of no more than 5% refers to the situation that the buyer can accept the equipment whose quality problem is lower than the guaranteed value 10% after three operation failures. If the debugging of the whole production line fails, it is unreasonable and unfair to pay only 5%. David's understanding of the contract is wrong. (6) As for the agreement that the guarantee period is twelve months, the guarantee period is not a legal period. And according to the agreement, no matter during the warranty period or outside the warranty period, it is not excluded to bear the liability for breach of contract such as repair, replacement, return and compensation for losses stipulated by law. Moreover, regarding the defense reason of the warranty period, David Company should be regarded as giving up automatically because it did not appear in court in the first instance.

The Higher People's Court of Zhejiang Province held in the judgment of first instance that the equipment quality of the * * * extruded PET sheet production line provided by American Machinery Company and produced by David Company did not meet the requirements stipulated in the agreement, and David Company did not complete the equipment debugging, which was a breach of contract, resulting in the economic losses of Su Dong Company, and both American Machinery Company and David Company should bear civil liability. David Company withdrew its debugging personnel after many failures in equipment debugging, which made the equipment still unable to operate normally, further causing great economic losses to Sudong Company, and its breach of contract seriously affected the expected economic interests of Sudong Company. Su Dong Company should support its lawsuit and ask David Company to reasonably choose to return the payment and compensate other economic losses according to the nature and degree of David's breach of contract.