1、Chapter 9 Force Majeure Arbitration CasesChapter 9 Force Majeure and Arbitration in International Trade DefinitionSignificance of Force Majeure ClauseStipulation of Force Majeure ClauseNotes to Quoting Force Majeure Clause9.1 Force MajeureDefinition Force Majeure,also called Act of God,refers to an
2、event that can neither be anticipated nor be preventable,avoidable and controllable after the conclusion of the contract,not resulted from the fault or neglect of the parties involved,leading to the failure or the delay of the fulfillment of contract;the party who fails or delays to fulfill the cont
3、ract due to such event can be free from the liabilities,or to be given an option of terminating the contract or postponing the performance of the contract.9.1 Force MajeureSignificance of Force Majeure Clause With a view to avoiding the unnecessary disputes due to a Force Majeure event,and preventin
4、g the arbitrary explanation of the Force Majeure event,unreasonable requirement proposed,or unreasonable refusal of the reasonable requirement proposed by the other party,it is very necessary to make a Force Majeure clause in a sales contract,specifying the nature,scope,principle,and settlement of t
5、he Force Majeure clearly so as to the execution of the contract.9.1 Force MajeureBrief Stipulation Concrete Stipulation Synthesized Stipulation Essential ways of stipulationThere are two kinds of legal consequences arising from a force majeure event:(1)termination of the contract(2)postponement of t
6、he contract fulfillment The adoption of the settlement ways is dependent on the effect of the force majeure event.Settlement of Force Majeure EventsNotes to Quoting Force Majeure ClauseThe party who suffers from force majeure event shall notify the other party immediately.The party who receives the
7、notification and supporting document about the force majeure event from the other party shall reply the other party promptly as required.After the confirmation of a force majeure event,the settlement of the event shall be made according to the requirements of the contract.9.1 Force MajeureDefinition
8、Function and Forms of Arbitration AgreementArbitration Clause in ContractArbitration ProcedureEnforcing an Award9.2 ArbitrationDefinition The Arbitration refers to that the two parties,before or after the disputes arise,reach a written agreement that they will submit the disputes which cannot be set
9、tled through amicable negotiations to a third party for arbitration.Both parties shall settle the disputes complying with the result of arbitration as the arbitration result has legally binding force.9.2 ArbitrationCharacteristicsTo settle trade disputes,neither a governmental power nor with a coerc
10、ive jurisdiction.The settlement of the case is based on the will of both parties involved.The parties involved shall sign an arbitral agreement before resorting to arbitration.The parties involved are granted with the right to choose the arbitrators.The procedures of arbitration are simple,settling
11、the disputes more quickly,with a low cost.9.2 ArbitrationCharacteristicsThe settlement of a case is in accordance with the arbitration agreement concluded by both parties,excluding the possibility of resorting to the litigation and the jurisdiction of the court for the disputes.At the same time,the
12、arbitral body and the concerned arbitrators are granted the jurisdiction relating to the case.An arbitral verdict has a legally binding force,and is usually final,and binding upon both parties.9.2 ArbitrationFunctions of Arbitration AgreementThe both parties involved are bound to the arbitration agr
13、eement.If one party breaches the arbitration agreement and has resorts to the court at its own will,the other party may require the court to refuse the case according to the arbitration agreement,and brings the case to the arbitral tribunal for judgment.The arbitration tribunal or arbitrator is gran
14、ted the jurisdiction of the case concerning the dispute.9.2 ArbitrationForms of Arbitration Agreementthe arbitration agreement concluded before the disputethe agreement for arbitration9.2 ArbitrationArbitration Procedure Arbitration ApplicationArbitration Tribunal Formation and Arbitrators Appointme
15、ntProceedings of CaseAward Issuance9.2 ArbitrationArbitration Clause in Contract Arbitration in our CountryArbitration in the Country of the DefendantArbitration in a Third Country Agreed by Both Parties9.2 ArbitrationEnforcing an AwardThe award shall be enforced by the losing party voluntarily and
16、the arbitration body is not with coercive force and obligation to enforce it.In case that the losing party is not willing to enforce the award,the wining party may resort to the courts of local country or the losing partys country for the help to force the losing party to enforce the award.9.2 Arbit
17、rationEnforcing an Award UN signed Convention on the Recognition and Enforcement of Foreign Arbitral Award,New York Convention for short,which is the most important international convention about the execution of foreign arbitration award.9.2 ArbitrationCase Study Case 1Case 2Case 3Case 4Case 5Case
18、6Case 7Case 8Case 9Case 1:A Chinese importer had concluded a contract with a foreign company to import chemical products,however the foreign seller found he would be at a lose as the price of the products in the international market was rising.So he required to cancel the contract due to Force Majeu
19、re.Then as the Chinese importer,how to deal with the situation?Case 2:An institute in China signed an import contract with a Japanese seller to buy a set of precision appliance.It was stipulated to make delivery on Sep.in contract,but the Japanese government declared the kind of appliance was high-t
20、ech product whichs prohibited for export on 7th Sep and the regulation come into effect 7 days after the declaration.Then the Japanese buyer required removing the contract due to force majeure.Question:Is the requirement of Japanese seller reasonable?How to settle the matter as the Chinese buyer?Cas
21、e 3:A Chinese importer has signed a contract with Iran company on 2nd November,1990 in term of FOB.Due to the Gulf War breaking out,the ship of Chinese side cannot reach Iran port until the end of the Gulf War on April of 1991.The seller claimed for the compensation against us for the storage expens
22、e,is it reasonable?Case 4:A Chinese exporter made an offer of farm products in 1500 M/T to a British company at 348 Pounds per M/T CFR London with the total amount of GBP522000 and the delivery time of May-SEP.of the year.After the conclusion of the contract,there was a natural disaster in China(flo
23、od).Thus,the Chinese seller required to be free from the commitment of supply due to Force Majeure,but the buyer refused it saying that they got into a loss of GBP150000 due to the exporters failure of delivery as the market price of the product has risen for 8%,and claimed for the concerning compen
24、sation.The Chinese exporter didnt agree with him.Finally,the both sides agreed to settle the dispute through arbitration.Question:What kind of arbitration result is supposed to be?Case 5:A British exporter made an offer of raw materials in 20000 tons in term of CIF Shanghai to a Chinese importer.The
25、 applicable law for the contract is the law of UK.Before the delivery,the Gulf War broke out,the UK seller had to ship the goods to China port via Cape of Good Hope of South Africa due to failing to go through Suez Canal,thus the exporter asked for the Chinese buyer to raise the price or remove the
26、contract.Question:what shall the Chinese buyer do?Case 6:An Austrian exporter offered chemical materials to China in term of CIF Tianjin,with Force Majeure clause.In 1991,due to the Gulf War,the price of oil rose drastically,leading to the Austrian sellers cost increase of 28%,so the seller asked fo
27、r raising the price,otherwise refusing to make delivery.Question:how to settle the problem?Case 7:A Chinese importer signed a contract with an Australia seller to import 2 million tons of wheat to be delivered in May.Unfortunately,there was a natural drought in Australia that year,leading to wheat h
28、arvest short by 20%in many regions.At the same time,Russia purchased wheat from USA in a large quantity because of the severe food shortage in Russia.It resulted in the price rise of wheat.Then,the Australia seller offered to extend the contract to the next year,shall the Chinese importer agree with
29、 him?Case 8:20000 tons of bean-made cake were going to be imported from Argentina to China,with the scheduled delivery time by the end of Aug.and resold in Europe.However,the scheduled purchase place was attacked by flood leading to the purchase plans failure.The Argentina seller required for the ex
30、emption from the contract fulfillment according to Force Majeure.Question:As the Chinese buyer,how to settle the matter?Case 9:An Chinese supplier concluded 3 contracts with a Japanese buyer for coal export before the big earthquake in Tangshan in June of 1976,the names of the commodity specified in
31、 the contracts were respectively“Kailuan coal”(out of stock),“the Kailuan coal stored in stack yard”,and“Chinese coal”.Upon the above-mentioned 3 kinds of situation,please take respective proposals for claiming for the exemption from the contract fulfillment.Questions:What is Force Majeure?What are
32、the 3 Characteristics of it?And the application scope?What are the legal result of Force Majeure and the principles of settling it?How to make a regulation of Force Majeure in a sales contract?What are the forms of arbitration agreement?And the roles of them?Under what kind of situation,an arbitrament may be cancelled?What are the varieties of arbitrament and the contents included?
