- (2004) XiaMinRenZi No. 81
- Xiamen Intermediate People’s Court
- Xiamen Xiangyu Group Corp. v. Mechel Trading AG
SALES CONTRACT - BETWEEN A SWISS COMPANY AND A CHINESE COMPANY - CHOICE OF LAWS CLAUSE REFERRING TO CISG AND, FOR ISSUES NOT COVERED BY CISG, TO THE UNIDROIT PRINCIPLES
A Chinese company and a Swiss company entered into a contract for the trade of steel. The contract, concluded on 26 March 2004, contained the following clauses providing respectively: “The application and interpretation of this contract shall be governed by the United Nations Convention on Contracts for the International Sale of Goods. On Issues not covered by this Convention, the UNIDROIT Principles (1994) shall apply. In case both instruments cannot cover the issue under dispute, international customs and the law of Seller’s place of business (Swiss law) shall apply”, and “All disputes arising from or related to this contract shall be decided in accordance with the ICC Arbitration Rules [...] The place of arbitration is Beijing, China, and the language of arbitration is Chinese and English”.
Some months later when a dispute arose the Swiss company commenced arbitration. The Chinese company applied to the Xiamen Intermediate People's Court challenging the validity of the arbitration agreement. However the Court rejected the application and confirmed the validity of the arbitration agreement.