Translator：Wang Qiyu

Recently, Senior Partner Lawyer Li Xinli successfully coordinated the resolution of three international trade legal disputes involving mask-making machines and protective clothing for both Chinese and American clients within a short period of time. The clients expressed great satisfaction with the outcomes.

1. Recovering Prepayment for a US Company through a Legal Letter

A US company specializing in medical equipment approached Lawyer Li, explaining that they had identified a supplier of fully automatic mask production machines on Alibaba's platform. Despite having paid a 50% prepayment according to the order terms, the Chinese supplier failed to deliver the goods as agreed and repeatedly postponed the delivery date. The US company was concerned about the supplier's production capacity and found it increasingly burdensome to bear the substantial costs of US-based manpower and logistics.

After analyzing the situation, Lawyer Li Xinli actively communicated and coordinated with the manufacturing company. He explained to the US buyer the local policies regarding resumption of work and production. The Chinese manufacturing company was partially affected by the epidemic and couldn't resume full-scale operations. Moreover, they faced shortages of components for the mask-making machines. They had taken proactive steps to procure these components from relevant suppliers, but due to the intricate nature of the machinery and the complexity of assembling thousands of parts, including mechanical, electrical, and programming aspects, the process was time-consuming. However, due to limitations in labor and resources, production capacity could not be restored to normal levels.

Ultimately, with Lawyer Li's mediation, the Chinese company agreed to return the entire prepayment to the US company the following day.

2. Recovering Prepayment for a Chinese Company through a Legal Letter

In early February 2020, a medical equipment company based in Ningbo, China, purchased protective clothing from a Turkish company. The order was supposed to be delivered in three shipments, with the final delivery completed on March 23. However, the Turkish company repeatedly delayed shipments due to quality issues. Moreover, recent export restrictions on protective clothing were imposed by Turkey in response to their domestic epidemic situation. Exporting such products now required special government approval, which the Turkish company had not obtained. Consequently, they were unable to fulfill the order as agreed. After over a month of unsuccessful urging by the Ningbo company, its leadership sought assistance from Lawyer Li Xinli to address the matter.

Upon reviewing the relevant documents, Lawyer Li Xinli first drafted an English legal letter based on the United Nations Convention on Contracts for the International Sale of Goods (CISG), urging the Turkish company to fulfill its contractual obligations. Within a day, the Turkish company, through its lawyer, responded with a letter explaining that the export restrictions constituted force majeure under Article 79 of the CISG, thus relieving them from breach of contract. They expressed willingness to provide a full refund.

Subsequently, Lawyer Li Xinli advised the Ningbo company to accept the refund, emphasizing the importance of mutual understanding during these exceptional times. Within a week of the legal letter's issuance, the client received the refund, expressing high satisfaction with Lawyer Li's services.

3. Successfully Urging Shipment for a US Company through a Legal Letter

A US company had purchased a significant quantity of mask-making machines from China. They had selected a freight agent that promised air transportation on March 25th and had fully paid over several hundred thousand RMB, including air freight, magnetic testing fees, delivery fees, insurance fees, and bank charges. However, as of March 26th, the goods had not yet been shipped. The US company sought Lawyer Li's assistance to expedite the shipping process.

Upon receiving the mandate, Lawyer Li Xinli promptly sent a legal letter to the freight agent, demanding the earliest available shipment date. He also contacted the freight agent responsible for the transportation to inquire about the situation. The agent explained that the aviation freight capacity was still low due to the ongoing impact of the epidemic, resulting in higher overall international air freight rates. The outbreak of COVID-19 at the beginning of 2020 had led to flight suspensions, business closures, entry restrictions, and changes in import policies in various countries, resulting in a significant reduction in air cargo routes and weakened cargo hold capacity, leading to frequent overbooking. Furthermore, the government was prioritizing the transport of Category I medical supplies, while the mask-making machines purchased by the US client were classified as Category II, making them subject to temporary substitution.

While urging the freight company to expedite the shipment, Lawyer Li patiently explained to the US company the unique circumstances and advised them to be patient and not rush into canceling the order during this exceptional period. Eventually, the goods successfully arrived in Chicago, USA, on March 28, 2020.

Regarding the swift resolution of these three cases, Lawyer Li Xinli mentioned that apart from some luck, goodwill during negotiations is crucial. When representing clients in communication with the other party, it's important to avoid an aggressive stance and instead understand the challenges the other party is facing during these special times. Necessary compromises should be made, and clients should be patiently explained to, preventing unreasonable expectations. For instance, in the first case, the US client initially demanded compensation for the potential loss of profits due to delayed delivery. However, Lawyer Li explained the provision in Chinese law that indirect losses are not compensable, leading the client to abandon the claim.