Lawyers Larry and Jeremy Resolve Trade Dispute for Shandong Company with Austrian Company, Prompting Case Withdrawal

An Austrian company purchased steel from a Shandong trading company, and both parties signed a bilingual sales contract. The Chinese version of the contract stipulated that disputes would be arbitrated by the China International Economic and Trade Arbitration Commission, while the English version specified arbitration by the Hong Kong International Arbitration Centre. However, the contract did not clarify which version would prevail.

After the Shandong supplier shipped the steel, the Austrian company, citing quality issues with the goods and failing to reach an agreement on compensation, initiated arbitration proceedings with the Hong Kong International Arbitration Centre based on the English version of the contract.

Upon receiving the arbitration notice, the Shandong company engaged the legal team of Lawyer Larry Zhou at Landing (Shenzhen) Law Office to handle the dispute, with Lawyer Larry and Lawyer Jeremy specifically taking charge. 

After reviewing the case materials, our lawyers identified two key points: first, procedurally, the ambiguous arbitration clause would likely not be recognized in China. Second, substantively, the Austrian company had not commissioned the professional inspection agency jointly designated by both parties to conduct a comprehensive quality inspection of the goods.

Based on these findings, our lawyers took two main actions: 

First, we submitted observations to the Hong Kong International Arbitration Centre (not a formal response, as we did not acknowledge the validity of the arbitration). 

Second, we proactively and swiftly filed a lawsuit with the Intermediate People’s Court in the location of the Shandong company to confirm the invalidity of the arbitration agreement.

Meanwhile, to reduce the burden and costs of litigation (arbitration) for all parties involved, our lawyers believed that mediation was possible and initiated negotiations with the opposing party. 

By devising a reasonable settlement strategy and considering the doubtful validity of the arbitration clause and the quality dispute, after several rounds of discussions, both parties reached a settlement agreement: The Shandong company made a reasonable compensation to the Austrian company, which then voluntarily withdrew its arbitration application in Hong Kong. The Shandong company also simultaneously withdrew its domestic litigation proceedings, resolving the dispute amicably. All parties highly praised the irreplaceable role and professional services of our lawyers in this case.

In this case, Lawyers Larry and Jeremy, leveraging their profound understanding of international commercial arbitration rules and extensive experience in cross-border dispute resolution, swiftly identified the key breakthrough points at the onset of the dispute. By combining technical defenses with business negotiations, they successfully avoided significant economic losses for the client, fully demonstrating their comprehensive professional capabilities in handling complex foreign-related disputes.

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