"To strengthen socialist legality", the article says, "we must first of all proceed with legislative work on a large scale." To do this, "necessary legal organs and legal institutions must be revived and established", and legislation on "criminal law, criminal procedure, civil law and civil procedure" should be enacted, as well as "important laws on economic construction". Much revision of existing law is necessary, as well as strengthening of existing legal organs. In addition, "leading organizations and leading cadres must become models in carrying out and following the constitution and the law." The article called also for developing popular education about legality on a large scale throughout the media. The article signifies an end to the long hiatus in Chinese law-making, and suggests that China's leaders are beginning to stress the importance of regularized rules for China's current modernization efforts. The link between law-making, law observance and the education of cadres and masses is also significant because officials and population alike have in the past often been encouraged to be impatient with rules and regulations. Recent signs that the new policy is being implemented were apparent when this author visited Canton in April, 1978: A statute originally promulgated in 1957, providing for police punishment of minor violations of public order, had been promulgated and posted in downtown Canton; outside the offices of a neighborhood residents' committee a poster urged all to support Chairman Hua's call to strengthen the socialist legal system. Even more recently, Red Flag, the Chinese Communist Party's theoretical monthly, featured an article by Chiang Hua, President of the Supreme People's Court, calling for enforcement of the new constitution and for improvement of the legal system.48 Emphasis is laid on the need for cadres to obey the law and party discipline, and on protection of persons who "expose bad persons and deeds in state institutions." The need for orderly and regularized judicial procedure is explicitly recognized. Elsewhere, authoritative statements by local leaders 49 and in the media have echoed the themes articulated in Han Yu-t'ung's article summarized above.5 50 Although the emphasis on legality has been expressed only very generally and very recently, its reappearance in China is noteworthy and invites speculation on its significance. It certainly suggests that the Chinese leadership is committed to orderly, structured leadership and administration of economic development. To some extent socialist legality will probably be used to reinforce discipline, as it was during the mid nineteen-fifties, the last time heavy industrialization, constitutionalism and the rule of law were simultaneously stressed in China. But the language of the most recent Chinese articles also suggests that the making and application of rules and regulations may be used soon to systematize China's apparatus of government. Conversations with legal specialists in Peking in March 1978 suggested that codification projects would be resumed and that many laws would be revised and harmonized. Han Yu-t'ung's article specifically mentioned the need for "important laws on socialist construction". Since 1949 great quantities of internal bureaucratic regulations have been promulgated 48 Red Flag on New Constitution, Socialist Legal System, FBIS Daily Report, China, 11 May 78, p. E7. 49 See, e.g., "Kiangsu Meeting on Public Security, Judicial Work in Nanking", FBIS Daily Report, China, 10 May 78, p. G4. 50 "Call for Rule of Law" [Report on Liberation Army Daily 7 May Editorial: "Be Models in Abiding by the Constitution and Obeying the Rule of Law", FBIS Daily Report, China, 10 May 78, p. E 10. to direct the activities of economic units and their relations with each other. China's current modernization drive could well produce legislation expressing general principles of economic administration that until now have not been articulated. Legal and economic planning officials stated in July 1978 that drafts of such principles were being circulated internally. Much more difficult to predict is the significance, if any, of the domestic emphasis on legality for China's international economic relations. Can the new attention to legality at home in any way be a harbinger of increased Chinese interest in international trade law and practice? Perhaps it is not coincidental that Chinese invocation of the principle of reciprocity in trademark registration, noted above, should come at this time. It is too early to tell. At the moment, no direct relationship can be ascertained between China's domestic legality and international trade practice-but the strengthening of legality may reflect a cast of mind and a relative doctrinal openness that could lead to receptivity to new ideas and to flexibility in foreign trade. Of interest in this regard is an apparent increase in the number of lawyers' delegations being invited to China. A Canadian bar delegation visited China in early 1978, and two groups from the American Bar Association were scheduled to visit China in 1978. The first, led by Association President William A. Spann, Jr. in July, which apparently was allowed to learn more about Chinese legal institutions than previous visitors, traveled as official guests of the China People's Friendship Association. This delegation was told by high-ranking officials that law codes were being prepared, and throughout the visit the regular operation of the formal legal system was emphasized. Whether increased contacts with foreign lawyers will eventually influence Chinese negotiating practice and contracts is of course impossible to predict. Negotiations of the type described at the beginning of this essay have usually been conducted without significant reference to practice and precedents other than those of the Chinese trade. corporation involved. It is not impossible these days to invoke and discuss conventional international practice in some matters, although obtaining the assent of Chinese negotiators to change contract language that has long been in use is, as anywhere else in the world in similar situations, difficult. Yet if the emphasis on legality and the new attention to law are continued, it may be that Chinese practice in international trade will also reflect the influence of the new policy. As China imports more technology and licensors insist on a more evident willingness to protect patents and know-how, China may show greater interest in the international patent system. In this manner changes in domestic development policy may cause China to move closer to formal adherence to prevailing norms of international trade law. In the meantime, current policies suggest that Chinese legal institutions may be reemerging as significant components of the Chinese State. China National Machinery Import and Export Corporation, Erh-Li-Kou, Hsi Chiao, Peking, China. (Cable Address: "Machimpex" Peking) The Sellers: This Contract is made by and between the Buyers and the Sellers; whereby the Buyers agree to buy and the Sellers agree to sell the undermentioned commodity according to the terms and conditions stipulated below: 1. Commodity, Specifications, Quantity and Unit Price: 2. Total Value: 3. Country of origin and Manufacturers: 4. Packing: To be packed in strong wooden case(s) or in carton (s), suitable for long distance ocean parcel post air freight transportation and to change of climate, well protected against moisture and shocks. The Sellers shall be liable for any damage of the commodity and expenses incurred on account of improper packing and for any rust attributable to inadequate or improper protective measures taken by the Sellers in regard to the packing. One full set of service instructions for each instrument shall be enclosed in the case(s). 5. Shipping Mark: The Sellers shall mark on each package with fadeless paint the package number, gross weight, net weight measurement and the wordings: "Keep Away From Moisture", "Handle With Care", "This Side Up" etc., and the shipping mark: 6. Time of Shipment: 7. Port of Shipment: 8. Port of Destination: 9. Insurance: To be covered by the Buyers after shipment. 10. Payment: for/by (1) In case by L/C: The Buyers, upon receipt from the Sellers of the delivery advice specified in Clause 12 (1)(a) hereof, shall 15-20 days prior to the date of delivery, open an irrevocable Letter of Credit with the Bank of China, Peking, in favour of the Sellers, for an amount equivalent to the total value of the shipment. The Credit shall be payable against the presentation of the draft drawn on the opening bank and the shipping documents specified in Clause 11 hereof. The Letter of Credit shall be valid until the 15th day after the shipment is effected. (2) In case by Collection: After delivery is made, the Sellers shall send the shipping documents specified in Clause 11 hereof, from the Sellers' Bank through Bank of China, to the Buyers for collection. (3) In case by M/T or T/T: Payment to be effected by the Buyers within seven days after receipt of the shipping documents specified in Clause 11 of this contract. 11. Documents: The Sellers shall present to the paying bank the following documents for negotiation: (1) In case by freight: 3 Negotiable copies of clean on broad ocean Bill of Lading marked "Freight To Collect"/"Freight Prepaid", made out to order, blank endorsed, and notifying the China National Foreign Trade Transportation Corporation at the port of destination. In case by air freight: One copy of Airway Bill marked "Freight Prepaid" and consigned to the Buyers. In case by post: One copy of Parcel Receipt addressed to the Buyers. (2) 5 copies of Invoice with the insertion of Contract No. and the Shipping Mark. (in case of more than one shipping mark, the invoice shall be issued separately). (3) 2 copies of Packing List issued by the Manufacturers. (4) 1 copy of Certificate of Quantity and Quality issued by the Manufacturers. (5) Certified copy of cable/letter to the Buyers, advising shipment immediately after shipment is made. (6) The Sellers shall, within 10 days after the shipment is effected, send by air-mail two sets of the abovementioned documents (except Item 5)-One set to the Buyers and the other set to the China National Foreign Trade Transportation Corporation at the port of destination. 12. Shipment: (1) In case of FOB Terms: a. The Sellers shall, 30 days before the date of shipment stipulated in the Contract, advise the Buyers by cable/letter of the Contract No., commodity, quantity, value, number of package, gross weight and date of readiness at the port of shipment for the Buyers to book shipping space. b. Booking of shipping space shall be attended to by the Buyers' Shipping Agents Messrs. China National Chartering Corporation, Peking, China. (Cable address: Zhongzu Peking) c. China National Chartering Corporation, Peking, China, or its Port Agents, (or Liners' Agents) shall send to the Sellers 10 days before the estimated date of arrival of the vessel at the port of shipment, a preliminary notice indicating the name of vessel, estimated date of loading, Contract No. for the Sellers to arrange shipment. The Sellers are requested to get in close contact with the shipping agents. When it becomes necessary to change the carrying vessel or in the event of her arrival having to be advanced or delayed the Buyers or the Shipping Agent shall advise the Sellers in time. Should the vessel fail to arrive at the port of loading within 30 days after the arrival date advised by the Buyers, the Buyers shall bear the storage and insurance expenses incurred from the 31st day. d. The Sellers shall be liable for any dead freight or demurrage, should it happen that they have failed to have the commodity ready for loading after the carrying vessel has arrived at the port of shipment on time. e. The Sellers shall bear all expenses, risks of the commodity before it passes over the vessel's rail and is released from the tackle. After it has passed over the vessel's rail and been released from the tackle, all expenses of the commodity shall be for the Buyers' account. (2) In case of C&F Terms: a. The Sellers shall ship the goods within the shipment time from the port of shipment to the port of destination. Transshipment is not allowed. The contracted goods shall not be carried by a vessel flying the flag of the country which the Buyers can not accept. The carrying vessel shall not call or stop over at the port/ports of Taiwan and/or the port/ports in the vicinities of Taiwan prior to her arrival at the port of destination as stipulated in Clause 8 of this Contract. b. In case the goods are to be dispatched by parcel post/air-freight, the Sellers shall, 30 days before the time of delivery as stipulated in Clause 6, inform the Buyers by cable/letter of the estimated date of delivery, Contract No., commodity, invoiced value, etc. The sellers shall, immediately after dispatch of the goods, advise the Buyers by cable/letter of the Contract No., commodity, invoiced value and date of dispatch for the Buyers to arrange insurance in time. 13. Shipping Advice: The Sellers shall, immediately upon the completion of the loading of the goods, advise by cable/letter the Buyers of the Contract No., commodity, quantity, invoiced value, gross weight, name of vessel and date of sailing etc. In case the Buyers fail to arrange insurance in time due to the Sellers not having cabled in time, all losses shall be borne by the Sellers. 14. Guarantee of Quality: The Sellers guarantee that the commodity hereof is made of the best materials with first class workmanship, brand new and unused, and complies in all respects with the quality and specification stipulated in this Contract. The guarantee period shall be 12 months counting from the date on which the commodity arrives at the port of destination. 15. Claims: Within 90 days after the arrival of the goods at destination, should the quality, specification, or quantity be found not in conformity with the stipulations of the Contract except those claims for which the insurance company or the owners of the vessel are liable, the Buyers shall, on the strength of the Inspection Certificate issued by the China Commodity Inspection Bureau, have the right to claim for replacement with new goods, or for compensation, and all the expenses (such as inspection charges, freight for returning the goods and for sending the replacement, insurance premium, storage and loading and unloading charges etc.) shall be borne by the Sellers. A regards quality, the Sellers shall guarantee that if, within 12 months from the date of arrival of the goods at destination, damages occur in the course of operation by reason of inferior quality, bad workmanship or the use of inferior materials, the Buyers shall immediately notify the Sellers in writing and put forward a claim supported by Inspection Certificate issued by the China Commodity Inspection Bureau. The Certificate so issued shall be accepted as the base of a claim. The Sellers, in accordance with the Buyers' claim shall be responsible for the immediate elimination of the defect(s), complete or partial replacement of the commodity or shall devaluate the commodity according to the State of defect(s). Where necessary, the Buyers shall be at liberty to eliminate the defect (s) themselves at the Sellers' expenses. If the Sellers fail to answer the Buyers within one month after receipt of the aforesaid claim the claim shall be reckoned as having been accepted by the Sellers. 16. Force Majeure: The Sellers shall not be held responsible for the delay in shipment or nondelivery of the goods due to the Force Majeure, which might occur during the process of manufacturing or in the course of loading or transit. The Sellers shall advise the Buyers immediately of the occurrence mentioned above and within fourteen days thereafter, the Sellers shall send by airmail to the Buyers for their acceptance a certificate of the accident issued by the Competent Government Authorities where the accident occurs as evidence thereof. Under such circumstances the Sellers, however, are still under the obligation to take all necessary measures to hasten the delivery of the goods. In case the accident lasts for more than 10 weeks, the Buyers shall have the right to cancel the Contract. 17. Late Delivery and Penalty: Should the Sellers fail to make delivery on time as stipulated in the Contract, with exception of Force Majeure causes specified in Clause 16 of this Contract, the Buyers shall agree to postpone the delivery on condition that the Sellers agree to pay a penalty which shall be deducted by the paying bank from the payment under negotiation. The penalty, however, shall not exceed 5% of the total value of the goods involved in the late delivery. The rate of penalty is charged at 0.5% for every seven days, odd days less than seven days should be counted as seven days. In case the Sellers fail to make delivery ten weeks later than the time of shipment stipulated in the Contract, the Buyers shall have the right to cancel the contract and the Sellers, in spite of the cancellation, shall still pay the aforesaid penalty to the Buyers without delay. 18. Arbitration: All disputes in connection with this Contract or the execution thereof shall be settled through friendly negotiations. In case no settlement can be reached, the case may then be submitted for arbitration to the Arbitration Committee of the China Council for the Promotion of International Trade in accordance with the Provisional Rules of Procedures promulgated by the said Arbitration Committee. The Arbitration shall take place in Peking and the decision of the Arbitration Committee shall be final and binding upon both parties; neither party shall seek recourse to a law court or other authorities to appeal for revision of the decision. Abritration fee shall be borne by the losing party. Or the Arbitration may be settled in the third country mutually agreed upon by both parties. 19. Special Provisions: In Witness Thereof, this Contract is signed by both parties in two original copies; each party holds one copy. The Buyers: China National Machinery Import and Export Corporation The Sellers: |