翱兰国际有限公司 (Olam International Limited) v. 青岛中商恒通国际贸易有限公司

At a glance

Parties

Olam International Limited (翱兰国际有限公司, Singapore) v. Qingdao Zhongshang Hengtong International Trade Co., Ltd. (青岛中商恒通国际贸易有限公司, China)

Case no.

(2020)鲁02协外认5号, Qingdao Intermediate People's Court

Court

Shandong Qingdao Intermediate People's Court (山东省青岛市中级人民法院)

Underlying award(s)

International Cotton Association (ICA) award No. A01201934, made in Liverpool, England, on 28 February 2020

Forum and rules

Application to recognise and enforce a foreign arbitral award under the PRC Civil Procedure Law (Art. 283) and the New York Convention

Treaty

New York Convention 1958 (Arts. III, IV, V)

Tribunal

Sun Qi (孙琦, presiding judge), Gu Linping (谷林平), Yu Meng (于梦)

Sector

Raw cotton trade

Outcome

ICA award No. A01201934 recognised and enforced (31 December 2020). Four earlier rulings by other Chinese courts, also published here, recognised and enforced other ICA awards in Olam's favour.

Amount

Olam sought enforcement of USD 901,826.06 in damages, USD 40,211.55 in interest at 7.5% (26 July 2019 to 28 February 2020), GBP 6,787.5 in arbitration costs, and interest at 2.75% a year compounded quarterly on USD 942,037.61 from 20 March 2020 (about RMB 6,751,650.65 in total as at 2 April 2020). The court fee of RMB 100 was charged to the respondent.

The dispute

Olam International Limited, a Singapore company, was the seller and Qingdao Zhongshang Hengtong International Trade Co., Ltd. the buyer under two cotton sales contracts, Nos. 18/S/00319 and 18/S/00368. Both contracts referred all disputes to arbitration by the International Cotton Association (ICA) under its Bylaws and Rules. A dispute arose, and Olam filed for arbitration with the ICA on 6 September 2019. The buyer did not appoint an arbitrator and did not file a defence, so the case proceeded in default. On 28 February 2020 the ICA issued award No. A01201934 ordering the buyer to pay losses and interest totalling USD 942,037.61, plus costs. Neither side appealed within the ICA time limit, and Olam applied to the Qingdao court on 1 December 2020 for recognition and enforcement. The respondent was duly summoned but did not appear or raise any defence. The published documents also include four earlier rulings in which other Chinese courts enforced ICA awards won by Olam against other Chinese cotton buyers.

Key holdings

1. The Qingdao court has jurisdiction because the respondent is domiciled in Qingdao (Civil Procedure Law Art. 283). The award was made in the United Kingdom, a New York Convention State, and the dispute is commercial, so the court reviewed the award under Article V of the Convention, in line with China's reciprocity and commercial reservations. p. 5
2. Under Article V(1), refusal requires the resisting party to raise and prove one of the listed grounds. The court examines arbitrability and public policy (Article V(2)) on its own motion. The respondent did not appear and raised no objection to the arbitration agreement, the appointment of arbitrators, notice, excess of mandate or the composition of the tribunal. pp. 5–6
3. The application was filed within the two-year time limit of Civil Procedure Law Art. 239. The notarised, legalised and translated award satisfied Article IV. No Article V ground applied, so ICA award No. A01201934 was recognised and enforced, with the RMB 100 court fee charged to the respondent. pp. 6–7
4. Jingmen court (2014), Olam v. Jingshan Weijia Textile: (1) Chinese translations certified by a Shanghai notary satisfied Article IV(2), and formal defects in the notarial certificate did not deprive it of evidentiary value. (2) An arbitration clause referring to the ICA rules validly designates the ICA. (3) Courier service of the key notices to the registered address was proper notice under Article V(1)(b). (4) The alleged breach of ICA Bylaw 301 was a merits issue outside the court's review. pp. 8–11
5. Zibo court (2016), Olam v. Zibo Yinhua Cotton: the buyer said it lacked a cotton import tariff quota. This did not make enforcement contrary to public policy, because the award ordered damages and interest, not performance of the contract. Taking part in the arbitration and the appeal showed that the buyer accepted the arbitration agreement. pp. 11–12
6. Wuxi court (2016): Olam had replaced QC (US) Marketing, Inc. as seller, and a 2012 contract-amendment agreement confirmed ICA arbitration, so a valid arbitration clause bound the buyer. Zhengzhou court (2018): service by email, letter and courier complied with the ICA Bylaws and Rules, and the buyer's later change of shareholders and management did not defeat enforcement. Wuxi pp. 3–4; Zhengzhou p. 6

Procedural history

1. 20 January 2014Jingmen Intermediate People's Court recognises the ICA award of 11 January 2013 against Jingshan Weijia Textile.
2. 19 January 2016Zibo Intermediate People's Court recognises and enforces the ICA appeal award of 27 February 2015 against Zibo Yinhua Cotton.
3. 15 March 2016Wuxi Intermediate People's Court recognises and enforces parts of ICA award A01/2013/47 (17 April 2014) against Wuxi Tianran Textile.
4. 27 December 2018Zhengzhou Intermediate People's Court recognises and enforces ICA award A01/2016/01 (5 September 2016) against Zhengzhou Zhaoge Spinning.
5. 6 September 2019Olam files for ICA arbitration against Qingdao Zhongshang Hengtong under contracts 18/S/00319 and 18/S/00368.
6. 28 February 2020ICA issues award No. A01201934 in Liverpool. No appeal is filed by the 27 March 2020 deadline.
7. 1 December 2020Qingdao Intermediate People's Court accepts Olam's application for recognition and enforcement.
8. 31 December 2020Qingdao court recognises and enforces ICA award No. A01201934.

Tribunal, counsel and experts

For the claimant

上海邦信阳中建中汇律师事务所 · 北京市中伦律师事务所上海分所

For the respondent

湖北正信律师事务所 · 山东子诚律师事务所

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Keywords

• New York Convention
• recognition and enforcement
• foreign arbitral award
• International Cotton Association
• ICA
• cotton
• Olam
• China
• Article V
• Article IV translation
• proper notice
• default award
• public policy
• import quota
• commercial reservation
• reciprocity reservation
• limitation period

Summary generated with AI from the published documents — refer to the award for the authoritative text.