ECOM Agroindustrial Corp. Ltd. Switzerland v. 青岛锦华东国际贸易有限公司

At a glance

Parties

ECOM Agroindustrial Corp. Ltd. Switzerland (applicant) v. Qingdao Jinhuadong International Trade Co., Ltd. (青岛锦华东国际贸易有限公司) (respondent)

Case no.

(2021)鲁02协外认3号

Court

Qingdao Intermediate People's Court, Shandong Province, China

Underlying award(s)

International Cotton Association (ICA) Award No. A012019050 of 6 May 2020 (arbitrators W. Ballenden, D. Adcroft and D. Wookey (chair)); seat Liverpool, England; English Arbitration Act 1996

Forum and rules

Recognition and enforcement under the New York Convention and the PRC Civil Procedure Law

Treaty

New York Convention 1958 (Articles IV and V)

Court

Presiding judge 孙琦; judges 谷林平 and 于梦

Sector

Cotton trading

Outcome

The ICA award was recognised and enforced in full (25 February 2022).

Amount

Award: USD 443,124.60 price difference; USD 22,307.99 interest from 4 September 2019 to 6 May 2020; further interest on USD 465,432.59 at New York prime rate plus 4.25% a year, compounded annually, from 27 May 2020 until payment; GBP 3,482.50 arbitration fees. Court application fee of RMB 100 charged to the respondent.

The dispute

On 28 June 2018 ECOM Agroindustrial Corp. Ltd. Switzerland and Qingdao Jinhuadong International Trade Co., Ltd. signed Contract No. 315590006. Under it the Qingdao company was to buy about 1,000 metric tonnes of Brazilian raw cotton. The contract incorporated the ICA Bylaws and Rules and provided for ICA arbitration under English law. During the China–US trade tensions, ECOM asked the buyer to confirm in writing by 23 August 2019 whether it would perform. The buyer did not reply, so ECOM closed out (invoiced back) the contract on 4 September 2019. ECOM then started ICA arbitration in October 2019 and obtained an award, made without the buyer's participation, on 6 May 2020. When ECOM sought recognition and enforcement in Qingdao, the buyer made three arguments: it had never received the request for arbitration or a notice of hearing; the trade war made performance harmful to it; and enforcement would harm Chinese public policy because the arbitration took place during the COVID-19 epidemic.

Key holdings

1. The award was made in the United Kingdom, which, like China, is a party to the New York Convention. The court has jurisdiction because the respondent is domiciled in Qingdao. The application of 1 April 2021 was within the time limit in Article 246 of the Civil Procedure Law. p. 8
2. The applicant supplied notarised and authenticated copies of the award and of the arbitration agreement, with Chinese translations. This satisfies Article IV of the New York Convention. p. 8
3. Notice was proper under Article V(1)(b). The ICA sent the notice of arbitration, the request for arbitration, the notices on appointment of arbitrators and the award to the respondent's 163.com email address, which the respondent admitted it used. The email of November 2019 attached the contract and the request for arbitration. Service to that address complied with the ICA Rules and counts as service. pp. 9–10
4. No notice of hearing was needed. Under the ICA Rules an oral hearing takes place only if a party asks for one in writing. Neither party asked, and the tribunal decided on documents exchanged according to a set timetable. p. 10
5. The respondent offered no evidence of defects in the arbitration agreement, the appointment of the arbitrators, the scope of the award, the composition of the tribunal or the procedure. The dispute is an international commercial contract dispute that can be arbitrated under Chinese law, and enforcement does not breach Chinese public policy. The award was recognised and enforced, and the respondent bears the RMB 100 application fee. pp. 10–11

Procedural history

1. 28 June 2018The parties sign Contract No. 315590006 for about 1,000 metric tonnes of Brazilian raw cotton, with an ICA arbitration clause.
2. 4 September 2019ECOM sends a notice closing out (invoicing back) the contract.
3. October 2019ECOM starts ICA arbitration. The ICA notifies the respondent by email on 28 October 2019.
4. 4 December 2019The respondent does not appoint an arbitrator, so Pierre Chehab is appointed on its behalf. David Wookey is appointed chair on 9 December 2019. On 3 March 2020 David Adcroft replaces Chehab, who resigned.
5. 6 May 2020ICA Award No. A012019050 is issued in the respondent's absence. It is sent by email and by DHL.
6. 1 April 2021ECOM applies to the Qingdao Intermediate People's Court for recognition and enforcement.
7. 25 February 2022The court recognises and enforces the award.

Tribunal, counsel and experts

For the claimant

上海市诚建成律师事务所

For the respondent

山东舜达律师事务所 · 山东舜达（青岛）律师事务所

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Keywords

• New York Convention
• recognition and enforcement
• International Cotton Association
• ICA Rules
• cotton
• Article V(1)(b)
• proper notice
• service by email
• default award
• documents-only arbitration
• public policy
• China–US trade war
• COVID-19
• Qingdao
• invoicing back
• Article IV
• Liverpool seat

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