大宝产业株式会社 v. 山东浩瀚能源有限公司

At a glance

Parties

大宝产业株式会社 (a Japanese company based in Tokyo) v. 山东浩瀚能源有限公司 (a Chinese company based in Ju County, Shandong)

Case no.

(2018)鲁11协外认3号

Court

Rizhao Intermediate People's Court, Shandong Province (山东省日照市中级人民法院)

Underlying award(s)

JCAA Tokyo Case No. 17-04, award of 31 January 2018

Forum and rules

Recognition proceedings under the New York Convention and the PRC Civil Procedure Law; the underlying arbitration was held under the JCAA Commercial Arbitration Rules

Treaty

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

Court

Presiding judge 尚华; judges 韩文卓 and 王蓉

Sector

Industrial equipment sale (methane-rich gas liquefaction plant)

Outcome

The JCAA award was recognised in full on 25 December 2019. All of the respondent's objections under Article V(1)(b), (c) and (d) were rejected.

Amount

The award ordered payment of JPY 522,500,000, JPY 190,000,000 and JPY 95,000,000, plus late-payment penalties at 0.1% per week. It also awarded storage and related costs (JPY 5,704,143 and USD 2,850 proven up to 31 December 2016), legal fees of JPY 10,600,000 and arbitration costs of JPY 7,141,915. The respondent must pay the court application fee of RMB 400.

The dispute

On 21 May 2014 a Japanese company, 大宝产业株式会社, and a Chinese company, 山东浩瀚能源有限公司, signed a contract in Dalian for the sale of a methane-rich gas liquefaction plant (Contract No. 2014-LNG-IM-01). The contract provided for JCAA arbitration under the JCAA rules before three arbitrators of Chinese nationality, in Chinese, with Chinese law governing. The seller brought arbitration over the buyer's late performance. It named the buyer and 浩宇集团有限公司 as respondents, but the proceedings against 浩宇集团 were later terminated. The JCAA award of 31 January 2018 ordered the buyer to pay the unpaid contract price, penalties and costs, and the seller then applied to the Rizhao court for recognition. The buyer raised four objections: (1) the JCAA appointed the arbitrators in breach of its rules; (2) the claim was amended orally without the procedure the rules require; (3) the award did not list one of the seller's counsel; and (4) by allowing payment "by letter of credit or other means", the tribunal decided beyond the claim and denied the buyer a chance to present its case. The buyer also challenged the power of attorney filed with the application.

Key holdings

1. The power of attorney was valid. The Japanese notary, the Osaka Legal Affairs Bureau, the Japanese Ministry of Foreign Affairs and the PRC Consulate in Osaka had all notarised and legalised the documents. The notarial certificate showed that the agent confirmed the representative's signature and seal. The respondent offered no contrary evidence. p. 11
2. The JCAA rules apply. The parties filed competing translations of the rules from qualified translation agencies, so the court decided on the basis of the text that was not in dispute and did not order a third translation. p. 11
3. Tribunal composition complied with the parties' agreement (Art. V(1)(d)). Fixing the number of arbitrators at three followed the contract. Neither the parties nor the rules addressed a three-party case where only two parties had agreed on three arbitrators, so the JCAA was entitled to apply the time limit in Rule 29.2. Rule 29.7 sets a time limit, not a precondition. The respondent's period to appoint was the same under Rule 29.2 or 29.3, so its right to appoint was not affected. When it failed to appoint, the JCAA could appoint all three arbitrators. pp. 12–13
4. There was no amendment of the claim, no decision beyond the claim and no denial of the right to be heard (Art. V(1)(b), (c), (d)). The award records no amendment. The words "by letter of credit or other means" only specify how payment may be made. They do not exceed the JPY 807,500,000 claimed or add to the respondent's burden. pp. 13–14
5. The award's failure to list the claimant's counsel 孙大昆（坤） is not a procedure contrary to the parties' agreement under Art. V(1)(d). pp. 14–15
6. The award is recognised. The application met Article IV and the two-year time limit under Article 239 of the Civil Procedure Law. China and Japan are both Contracting States, and none of the Article V grounds applies. The respondent bears the RMB 400 fee. p. 15

Procedural history

1. 21 May 2014The parties sign the sales contract for the gas liquefaction plant in Dalian.
2. 4 April 2017The seller files for JCAA arbitration against the buyer and 浩宇集团有限公司. The JCAA serves notice on 13 April 2017.
3. 26 September 2017First hearing in Shanghai, on 浩宇集团's jurisdictional objection. On 10 October 2017 the tribunal terminates the proceedings against 浩宇集团.
4. 18 December 2017Second hearing in Shanghai.
5. 31 January 2018The JCAA renders the award in Tokyo Case No. 17-04.
6. 14 August 2018The Rizhao Intermediate People's Court registers the application for recognition. It later rejects the respondent's objection to its jurisdiction, and the Shandong High People's Court dismisses the respondent's appeal.
7. 25 December 2019The court recognises the award.

Tribunal, counsel and experts

For the claimant

上海市协力律师事务所 · 孙大昆（坤）

For the respondent

山东旷世律师事务所

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Keywords

• recognition of foreign arbitral award
• New York Convention
• Article V(1)(d)
• composition of the tribunal
• multi-party arbitration
• appointment of arbitrators
• JCAA
• Japan Commercial Arbitration Association
• ultra petita
• amendment of claim
• right to be heard
• letter of credit
• notarisation and legalisation
• power of attorney
• LNG equipment
• China
• Japan

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