Inspection of Goods and Settlement of Trade Disputes

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Chapter7

• Inspection of Goods and Settlement of Trade
  Disputes

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Inspection of Goods

• The importer usually ask a commodity inspection
  to certify that whether the quality , quantity or
  packing of the goods received is in conformity
  with that of the contract. He can take the
  certificate of inspection as a proof of the
  conditions if there is a trade dispute for
  compensation.
• Received / Accepted

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Three modes of inspection time and place of
inspection

• 1. Shipping Quality, Shipping Weight or Quantity
  ????
• To make inspection before shipping, at the
  place of shipment, the resulting certificate as
  a final proof
• 2. Landing Quality, Landing Weight or Quantity
  ????
• To make inspection when the goods arrive at
  the place of destination, the resulting
  certificate as a final proof

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• The buyer should inspect the goods received in
  the shortest time according to the circumstances
  (the agreed period).
• The quality and the quantity can be taken as no
  problem If the buyer is too late to notice the
  seller after inspection. That means that the
  buyer will lose the right to reject the
  unqualified goods.

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• 3. Shipping Quality or Quantity For Negotiation,
  Re-inspection at Destination ?????,?????
• To make inspection of quantity and quality in the
  export country and the certificate could be as a
  document for negotiation for payment to make
  re-inspection in the import country and the
  result may taken as a claim for compensation.
• This mode is relative fair to both sides and
  much popular in international trade.
• Usually to make weight inspection at the port
  / place of shipment,
  quality inspection at the port / place of
  destination
  ???????,???????

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Inspection Certificate

• Inspection Certificate of QualityInspection
  Certificate of QuantityInspection Certificate of
  WeightInspection Certificate of
  HealthInspection Certificate of
  OriginInspection Certificate of ValueInspection
  Certificate of Damaged CargoDisinfection
  Inspection CertificateVeterinary Inspection
  Certificate ??????

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Inspection Clause in Contract

• The inspection clause in contract usually
  contains stipulations on the inspection right,
  the time and place of inspection or reinspection,
  the inspection organization, the inspection items
  and the inspection certificate.

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• It is mutually agreed that the Certificate of
  Quality and Weight (Quantity) issued by the China
  Quality Supervision and Inspection and Quarantine
  Bureau at the port/place of shipment shall be
  part of the documents to be presented for
  negotiation under the relevant L/C. The Buyer
  shall have the right to reinspect the quality and
  weight (quantity) of the cargo. The reinspection
  fee shall be borne by the Buyers. Should the
  quality and/or weight (quantity) be found not in
  conformity with that of the contract, the Buyers
  are entitled to lodge with the Sellers a claim
  which should be supported by survey reports
  issued by a recognized surveyor approved by the
  Sellers. The claim, if any, shall be lodged
  within days after arrival of the cargo at the
  port/place of destination.

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Disputes

• Reasons for disputes
• Breach of Contract
• Consequences of the breach
• Britain Breach of Condition Breach of Warranty
• US Material Breach Minor Breach
• Conventions Fundamental Breach Non-Fundamental
  Breach

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Claim and Satisfaction

• Claim means that in international trade, one
  party breaks the contract and cause losses to the
  other party directly or indirectly, the party
  suffering the losses may ask for compensation for
  those losses.
• Satisfaction / Settlement of Claims means that
  the party breaking the contract declares that he
  will accept and handle the claim.

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• Valid Term for Claim
• A period within which the injured party entitled
  to ask for compensation.
• According to United nations Convention on
  Contracts for the International Sales of Goods,
  the valid term for claim is
• 2 years after received the goods
• Claim Clause in the contract
• 1. The discrepancy and claim clause ???????
• 2. Penalty clause ????
  

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Force Majeure

• What is Force Majeure?
• An event outside the control of either party to
  a contract (such as strike, riot, war, act of
  God) which may cause either party from fulfilling
  his contractual obligations in certain
  circumstances, provided that the contract
  contains a force majeure clause.
• According to international trade practice, a
  contract may be suspended or terminated as a
  consequence of the force majeure.
• ?????????,???????????????,????????????????????????
  ??????????,???????????????,???????????????????????
  ?????

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Arbitration

• It means that the two parties, before or after
  the disputes arise, reach a written agreement
  that they will submit the disputes which cant be
  settled through amicable negotiations to the
  third party for settlement.
• There are four ways to solve the dispute
• Negotiation, Conciliation (??),
• Arbitration, Litigation (??)

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• The functions of arbitration agreement
• ???????
• 1.Arbitration agreement is the basis for
  settlement of disputes, and is binding upon both
  parties. ???????
• 2. It is the warranty for arbitration
  authorities and arbitrators to obtain the
  jurisdiction. ?????????
• 3.The arbitration agreement eliminates the
  jurisdiction of the court over the relative case.
  In case an arbitration agreement is reached, the
  interested parties cant appeal to the court
  anymore.
  ???????

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• Characters of arbitration
• Voluntary, special, secrecy, convenient,
  economical, independent, fair
• Arbitration procedure
• 1.Application
• Submitting name and address of claimant and
  respondent arbitration agreement facts and
  evidence

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• 2. forming arbitration tribunal
• 3. examining the case
• Oral hearings (not in open session) based on the
  documents only
• 4. award (final and binding)
• 5. acceptance and execution

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Famous arbitration agencies

• 1. The International Court of Arbitration of
  International Chamber of Commerce???????
• 2. American Arbitration Association
  (??AAA)??????
• 3. the Arbitration Institute of the Stockholm
  Chamber of Commerce(??SCC)??????????
• 4. the London Court of International
  Arbitration,??LCIA ???????

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• 5. the International Center for the Settlement
  of Investment Disputes,??ICSID ??????????
• 6.China International Economic and Trade
  Arbitration Commission ???????????