On December 19, 1984, Guangdong Hong Kong Agricultural Resources Development Company (the buyer) signed a contract for the purchase and sale of feed machinery and equipment with Japan Science and Technology Trading Co., Ltd. (the seller) in Doumen County, Guangdong Province through the introduction of Hong Kong Donghe science and technology trading company. The contract stipulates that the Seller shall provide the buyer with a new set of feed production machinery and equipment with a price of 239.28 million yen, and the production capacity of the whole set of equipment is more than 2 tons per hour; the Seller shall provide the design drawings of plant, civil engineering and machine installation, and send engineers to guide and supervise the installation and trial operation of the equipment; The buyer shall open an irrevocable letter of credit in favor of the seller within 21 days after receiving the letter of guarantee for the exclusive sale of products from Japan, with the amount of JPY 216 million, and the remaining JPY 23.28 million shall be paid by Hong Kong Donghe science and technology trading company directly to the seller as a deposit; the buyer shall be responsible for the expenses for the installation of the equipment sent by the seller's technical personnel; the Seller shall complete the shipment of the goods within 6 months after receiving the letter of credit; The whole set of equipment shall be installed within 3 months after arrival. After normal trial operation, the product shall reach the quality and output indicators, and no defect is found, it shall be formally handed over for use. In case of any dispute, both parties shall settle it through friendly consultation. If it cannot be solved, it shall be arbitrated by international arbitration organization. If either party breaches the contract, the other party shall have the right to claim for compensation for the loss.
After the contract is signed, the seller provides the buyer with the construction drawings of the plant and other engineering buildings in accordance with the contract. On January 30, 1985, the buyer opened the letter of credit No. 85 / 455129 with the amount of 216 million yen in favor of the seller through Zhuhai branch of Bank of China, and requisitioned 6590 square meters of land for the preparation of the factory building, leveled the land and built the factory building according to the requirements of the seller, and signed the acorn purchase contract with the farmers. Hong Kong Donghe technology trading company (the buyer's joint venture) pays the seller a deposit and a lump sum fee of US $132,00.
On November 23, 1985, the seller delivered the feed processing equipment to Huangpu port, Guangzhou, China. The buyer will return the equipment to Doumen County and wait for the seller to send technical personnel to guide and install according to the contract. On February 23, 1986, the seller sent 6 persons to Yuegang agricultural resources development company in Doumen County to install the equipment. After unpacking, it was found that there were straw residue and serious wear marks on the pressing parts of the equipment, and there were obvious signs of residue on the main components of the chopper and two molding machines. The buyer applied for two inspection certificates issued by Guangdong Import and Export Commodity Inspection Bureau on March 26 and April 28, 1986, which proved that the shell shapes of two molding machines provided by the seller were inconsistent, The corners of some hex screws of one of them have been worn and seriously rusted; the steel plate of the machine has been rusted into concave and convex shape; the inclined device of the roller in the machine has obviously increased the filling material, and the silver material coated by the machine is covered with plant feed and rust flakes after welding; the chain feet of the five groups of conveyor chains of the cutter have friction grooves, some of the chain cores have large gaps, and the wheel seat of the cutter is rusted, Fixed cutter is not sharp. At the same time, the rotating gear of the press is worn, the running chain part of the finished conveyor belt is rusted, and the small shaft of the sand guide wheel has been damaged and run empty. The inspection conclusion is that the above equipment has been used and there are signs of old renovation. During the inspection by the Commodity Inspection Bureau, the technical personnel dispatched by the seller installed the complete set of equipment, and the main parts of the equipment were marked with English "engineer in gtraders Corp" and Chinese "Japan Science and technology trading company". During the installation and test run, the technical personnel dispatched by the seller put together the non matching equipment parts and made a large cutting change to the equipment parts. After 50 days of operation and trial production, the average hourly output is only 0.535 tons, which is far from 2 tons per hour specified in the contract. The moisture content of feed product is as high as 13.6%. The technical personnel dispatched by the Seller shall use 75% water content of raw materials for trial production, and the water content of finished products specified in the contract shall not be less than 12%. Due to the serious problems of equipment quality and production capacity, it is impossible to support production at all. The buyer has repeatedly raised objections to the seller. On May 15, 1986, the buyer sent a letter to the seller, together with the commodity inspection certificate, requesting the seller to come to negotiate solutions. However, the seller's reply denied that the supplied equipment was used and refused to negotiate.
On August 18 and September 3, 1986, the buyer applied to China Foreign Economic and Trade Arbitration Commission and Shenzhen 1 Office of the Arbitration Commission for arbitration. Because the arbitration clauses agreed in the contract signed by both parties are not clear, China Foreign Economic and Trade Arbitration Commission and its Shenzhen office shall not accept it. After that, the two parties failed to reach a new agreement on the selection of the arbitration organization, so the buyer filed a lawsuit with Zhuhai intermediate people's Court on September 27, 1986, requesting the court to order the machine and equipment to be returned to the seller, and the Seller shall compensate for the economic losses incurred and pay the litigation fee and commodity inspection fee in this case. At the same time, the buyer also applies to freeze the payment under the L / C it has issued and suspend the payment. After receiving the buyer's statement of complaint, Zhuhai intermediate people's court, through examination, holds that the buyer has the right of action and shall file a case for trial. At the same time, the buyer's application for litigation preservation is allowed, and the payment under the letter of credit issued by the buyer is ordered to be suspended, which shall be handled after the case is concluded. The seller also submitted the reply on time. The seller argues that we have fulfilled all the obligations of delivery and equipment installation and commissioning stipulated in the contract, and the buyer shall pay all the payment for goods. At the same time, it is proposed that the arbitration clause has been stipulated in the contract, and the Chinese court has no jurisdiction; the buyer's application for the court to freeze the payment under the L / C issued by it and the application for litigation preservation granted by Zhuhai intermediate people's court to the buyer violate international practice. Foreign lawyer
The seller refused to appear in the court without proper reasons after being legally summoned twice by the court of our country. The collegial panel, in accordance with Article 113 of the Civil Procedure Law of our country (for Trial Implementation), in 1988