FSOJ国际有限责任公司 (FSOJ International LLC) v. 天津北方电影集团有限公司

At a glance

Parties

FSOJ International LLC (USA) v. Tianjin North Film Group Co., Ltd. (天津北方电影集团有限公司)

Case no.

(2018) 津01协外认3号

Court

Tianjin No. 1 Intermediate People's Court

Underlying award(s)

IFTA International Arbitration Tribunal Award No. 17-02 of 27 April 2017 (seat: Los Angeles)

Forum and rules

Application for recognition and enforcement under the New York Convention and Article 283 of the PRC Civil Procedure Law

Treaty

New York Convention 1958 (Articles II and V(1)(a), (b), (d))

Court

Presiding Judge Shi Huiming; Judges Miao Jia and Lu Lei

Sector

Film distribution licensing

Outcome

Recognition and enforcement refused (18 May 2020) under Article V(1)(a) and (b). The Article V(1)(d) objection was rejected.

Amount

Award: USD 2.5 million plus interest, and USD 18,925.58 in attorney fees and costs. Court application fee of RMB 500 borne by FSOJ.

The dispute

FSOJ International LLC, a Los Angeles company, signed a Deal Memo on 15 May 2016 at the Cannes Film Festival. The counterparty was named as "Tianjin North Film Corporation", and the person who signed was "Sun Ran" (real name Sun Liqing). The Deal Memo licensed the film "The Free State of Jones" for China against a USD 2.5 million deposit. No payment was made. FSOJ then started IFTA arbitration in Los Angeles, and on 27 April 2017 the IFTA tribunal issued Award No. 17-02 against "Tianjin North Film Corporation". FSOJ applied in Tianjin to have the award recognised and enforced against Tianjin North Film Group. The group's defences were these: Sun Ran had no authority to bind it, so there was no arbitration agreement (Article V(1)(a)); it never received proper notice of the arbitration (Article V(1)(b)); and FSOJ skipped the 120-day negotiation step required before arbitration (Article V(1)(d)).

Key holdings

1. The incapacity ground in Article V(1)(a) means lack of power to contract. That includes a person who has no authority to represent a company, or to act as its agent, when concluding an arbitration agreement. p. 11
2. Who may represent the company is governed by the law of the place of registration (Article 14 of the PRC Law on the Application of Laws to Foreign-Related Civil Relations), which here is Chinese law. Sun Ran was not the group's registered legal representative. Agency is governed by French law, as the law of the place of agency under Article 16 of that law. FSOJ proved no mandate, and Sun Ran was not an employee of the group. pp. 11–13
3. Apparent authority under French law failed. FSOJ relied on a business card and an unproven search of the Cinando database. Neither was conduct or a representation by the group, and relying on a business card in a major transaction is not reasonable reliance. There was therefore no valid arbitration agreement, and Article V(1)(a) applied. p. 13
4. No proper notice under Article V(1)(b). The award said the notice was received on 16 January 2017, but the tribunal secretary later said the package could not be tracked. The group proved it had left that address before March 2016. The two-page fax did not include the notice of arbitration or the rules. As a result, the group was unable to present its case. pp. 14–15
5. Objection under Article V(1)(d) rejected. The pre-arbitration negotiation period comes before the arbitration starts, so it concerns neither the composition of the arbitral authority nor the arbitral procedure. Its standard of performance is also unclear, and the filing of arbitration showed the dispute could not be settled by negotiation. p. 15
6. The court refused recognition and enforcement of IFTA Award No. 17-02, and FSOJ bears the RMB 500 application fee. p. 16

Procedural history

1. 15 May 2016Deal Memo signed in Cannes by Sun Ran in the name of Tianjin North Film Corporation.
2. 22 December 2016FSOJ files for arbitration with the IFTA International Arbitration Tribunal.
3. 24 February 2017FSOJ and Tianying Hengxing (Tianjin) Investment Co. sign an amendment: Tianying Hengxing takes on all obligations and agrees to pay USD 1 million by 30 March 2017.
4. 27 April 2017IFTA Award No. 17-02 orders payment of USD 2.5 million plus interest and USD 18,925.58 in fees and costs.
5. 19 March 2018Tianjin No. 1 Intermediate People's Court accepts FSOJ's application for recognition and enforcement.
6. 18 May 2020The court refuses recognition and enforcement under New York Convention Article V(1)(a) and (b).

Tribunal, counsel and experts

Decided by

• Shi Huiming (史会明) Judge, Tianjin No. 1 Intermediate People's Court (presiding judge)
• Miao Jia (苗佳) Judge, Tianjin No. 1 Intermediate People's Court
• Lu Lei (卢磊) Judge, Tianjin No. 1 Intermediate People's Court

For the claimant

JunHe LLP Shanghai Office (君合律师事务所上海分所)

For the respondent

Tianjin Jiuhe Law Firm (天津九河律师事务所)

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Keywords

• New York Convention
• recognition and enforcement
• Article V(1)(a)
• incapacity
• lack of authority
• apparent authority
• French Civil Code
• proper notice
• Article V(1)(b)
• Article V(1)(d)
• pre-arbitration negotiation
• IFTA
• film licensing
• The Free State of Jones
• Cannes
• China
• Tianjin

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