Since joining the WTO, international trade between China and various countries and regions around the world has become increasingly frequent, and disputes between various foreign trade entities due to quality issues of goods are not uncommon. In practice, it is common for foreign importers to find quality issues after receiving the goods, but fail to negotiate with domestic exporters and then resort to court. Exporters often use the defense that the inspected or returned goods are not actually the goods they sent. Courts at all levels in various regions are also accustomed to placing the burden of proof of the identity of the goods solely on foreign importers during the trial. In a foreign trade quality case, the author represented the plaintiff, a company from Israel, against a company from Shandong. The first instance court rejected all the plaintiff's applications, but recently, the author received a judgment from the second instance court revoking the original judgment and changing the judgment to support all the plaintiff's applications. The author will combine practical experience in handling similar cases and case precedents of other courts to conduct a shallow analysis of the problem of goods identity in disputes over international sales contracts.

1 Introduction to the case of the author's agency

1 Overview of the first instance

A. In this case, the plaintiff, an Israeli company, purchased stainless steel plates with the model ASTM-A240 from the defendant, a company in Shandong. After receiving the steel plates, the plaintiff tested them and found that they did not meet the standards stipulated in the contract. Therefore, the plaintiff appealed to the court. After preliminary trial, the court summarized the main focus of the dispute as "whether the goods delivered by the defendant comply with the contract agreement". The author proposed evidence such as goods pictures (with product model), steel plate furnace number (proving that the steel is produced in the same furnace), inspection reports, and communication records between the plaintiff and the defendant regarding quality disputes, which are sufficient to prove that the plaintiff took samples for inspection immediately after receiving the goods, and that the samples indeed came from bulk goods, At this point, the plaintiff's evidence has reached a highly probable standard for proving the identity of the goods. However, the first instance court fully attributed the burden of proof for the key fact to the plaintiff. The defendant only denied the above evidence and did not submit corresponding rebuttal evidence. The court also did not make it bear the consequences of being unable to provide evidence, resulting in a serious imbalance in the burden of proof.

B. Regarding the issue of sample testing, the first instance court made errors in evidence acceptance. According to Article 28 of the "Several Provisions of the Supreme People's Court on Civil Litigation Evidence", "If one party entrusts relevant departments to make an appraisal conclusion on their own, and the other party has evidence sufficient to refute and apply for re appraisal, the people's court should allow it." Therefore, the law does not prohibit the party from unilaterally entrusting appraisal. The defendant denied the qualification of the plaintiff's inspection agency and the inspection report, and did not provide evidence to refute or apply for re appraisal. At this time, the plaintiff's set of evidence should be accepted, but in fact, the first instance court did not accept it and rejected all the plaintiff's litigation requests accordingly.

2 Overview of the Second Trial

A. The court of second instance adjusted the law applicable to the case to the United Nations Convention on Contracts for the International Sale of Goods, According to Article 38 of the Convention, "(1) the buyer must inspect the goods or have them inspected by others within the shortest possible time according to the situation; (2) if the contract involves the transportation of the goods, the inspection may be postponed until the goods arrive at the destination." Therefore, the plaintiff has the right to exercise the buyer's right to inspect the goods after receiving them. The court of second instance held that the evidence such as the Chat log provided by the plaintiff, the pictures of the goods sampled and submitted for inspection, and the test report of unqualified samples clearly showed that the heat number, product specification, model, etc. of the goods submitted for inspection were consistent with the steel plate provided by the defendant company. The same heat number was based on the heat number, and the steel quality, process, and chemical composition inspection data of the heat could be queried. Combining the time of receipt and sampling for inspection, it can be proven that the inspected goods are under the contract. The plaintiff sampled the goods for inspection in the shortest time, which was in line with the provisions of paragraph 1 of Article 38 of the United Nations Convention on Contracts for the International Sale of Goods, so the court of second instance finally adopted the plaintiff's test report.

B. Regarding the allocation of burden of proof, the court of second instance held that although the defendant denied the plaintiff's evidence proving the identity of the goods, there was no rebuttal evidence, and they should bear the consequences of not being able to provide evidence, that is, determining the facts claimed by the plaintiff. The second instance court's move aims to jointly assume the burden of proof regarding the identity of goods between the plaintiff and defendant, which is more conducive to clarifying the facts of the case and highlights substantive justice.

2 Experience sharing in similar cases

1 In quality dispute cases where the subject matter is a type of product, it is more difficult to prove the identity of the goods. For example, in the (2009) Hu Er Zhong Min Wu (Shang) Chu Zi No. 64 case, the winning item was steel, in the (2021) Min 05 Min Zhong 4754 case, the winning item was hot air cotton, in the (2022) Zhe 02 Min Zhong 3454 case, the winning item was a batch produced shirt, and in the (2017) Zhe 06 Min Zhong 3750 case, the winning item was Oxford cloth, The aforementioned case involved the issue of identity of goods after a quality dispute arose, but each plaintiff lost the case due to their inability to provide sufficient evidence. In the (2017) Zhejiang 06 Min Zhong 1712 case, although the subject matter was jeans of the same type, both parties strictly grasped the details of the goods during the transaction. After the dispute arose, the court found that the goods had identity due to the completeness of details such as the goods seal number, box number, goods name, quantity, clothing style, and model in the plaintiff's evidence, and ultimately the plaintiff won the lawsuit. Similarly, in the case represented by the author, the target steel plate was also a type of product, but the trading parties clearly agreed that the steel plate model was GB/T24511-2017 ASTM240, and the model was printed on the steel plate. The product manual clearly recorded the specific furnace number of the steel production, which resulted in the goods having significant characteristics and the issue of goods identity being properly resolved. Therefore, in the sales contract for various types of goods, both parties to the transaction should make detailed agreements on the goods in relevant documents such as negotiation emails, contracts, invoices, instructions, etc., including but not limited to agreed standards, industry standards, testing standards, various numbers, codes, etc. If possible, special packaging should be used as much as possible, and box numbers, seal numbers, etc. should be used to distinguish, Thus, in the event of a dispute, objective evidence can be used to intuitively explain the issue of goods' identity.

2 Article 38 of the United Nations Convention on Contracts for the International Sale of Goods stipulates the buyer's obligation of timely inspection, and the first paragraph of Article 39 stipulates that "the buyer must notify the seller within a reasonable period of time after discovering or ought to have discovered the non conformity of the goods, and explain the nature of the non conformity, otherwise it will lose the right to claim the non conformity of the goods." Article 620 of the Civil code of China There are similar provisions in Article 621. Therefore, for buyers, timely inspection after receipt is both a right and an obligation. If defects are found in the goods, they should communicate with the seller in a timely manner, raise objections, and pay attention to communication techniques and skills, and keep communication records properly.

3 Regarding the sampling issue, in the case represented by the author, the plaintiff recorded the entire process of cutting and sampling steel plates with model standard spray codes. Although the inspection process was not recorded synchronously, the court, based on information such as sampling time, inspection time, and report results, can determine that the fact that the samples come from bulk goods has a high probability. In addition, during the second instance, the plaintiff submitted two employee testimonies (which were notarized and authenticated in Israel) for cutting the samples at that time. Although the defendant denied it, there was no rebuttal evidence, and the second instance court supported the original petition. Therefore, it is best for the buyer to record the entire process of unpacking, sampling, and inspection when receiving the goods. The video content should include the product number, trademark, and other distinctive markings. At the same time, the testimony of the personnel involved in receiving and sampling should be fixed in a timely manner (preferably with three or more witnesses). If conditions permit, a notary can be arranged to notarize the entire process. After sampling, the buyer should also seal the samples and goods for secondary testing after filing a lawsuit with the court.

4 With regard to the inspection agency, although Article 38 of the United Nations Convention on Contracts for the International Sale of Goods stipulates that the buyer has the right to conduct unilateral inspection, the buyer should pay attention to the authority of the inspection agency. If the buyer is overseas, it should entrust an internationally renowned inspection agency, or an inspection agency designated and recognized by the local authority. At the same time, the Buyer shall select global general standards, national standards, industrial standards, etc. as far as possible when submitting for inspection, so as to ensure the objectivity and universality of the test results, so as to avoid that the final test results do not have reference significance. However, both parties to the transaction should have a certain degree of foresight, such as agreeing in advance on the inspection agency and inspection standards after arrival in the contract, formal invoice, and other documents. In this way, the inspection results after quality disputes can be considered as a consensus between both parties.

5 In summary, the issue of goods' identity is common in quality dispute cases and is not unique to each province or country. Its existence is reasonable. The solution to this problem must be based on standardized business processes, supported by sufficient evidence under complete and detailed transaction documents, in order to simplify complex disputes.

 

 
     

 

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