Court Orders Payment of CNY 78,000 in Cytidine Contract Dispute
In this case, a technology company based in Eastern China City initiated legal proceedings against a pharmaceutical chemical company located in another Eastern China City for unpaid payment of CNY 78,000 arising from a sale of goods contract. The court ruled in favor of the plaintiff, ordering the defendant to pay the outstanding amount along with interest and costs.
On May 3, 2011, the plaintiff, an Eastern China City technology company, entered into a written product purchase and sale contract with the defendant, an Eastern China City pharmaceutical chemical company. The defendant agreed to buy 200 kilograms of cytidine at a unit price of CNY 390 per kilogram, packed in 25-kilogram drums. On May 4, 2011, the plaintiff delivered the goods by express courier as agreed. The total value of the shipment was CNY 78,000. The defendant received the goods but failed to pay the sum when due. Despite repeated demands, the defendant refused to make payment. The plaintiff then filed suit seeking an order for the defendant to pay the principal amount of CNY 78,000 together with interest calculated from the date of filing until full payment at the benchmark rate published by the People’s Bank of China for the corresponding period.
The court held a public hearing on March 21, 2012, at which the plaintiff appeared through its authorized agent, Mr. Li. The defendant, represented by its legal representative Mr. Wu, failed to attend despite having been properly served with a court summons and without providing any justification. The plaintiff submitted several pieces of evidence: (1) business licenses and organization code certificates for both parties to establish their legal standing; (2) the original product purchase and sale contract and a fax copy to prove the contractual relationship and delivery to the defendant’s designated location; (3) an accounts receivable confirmation letter and a Zhejiang value-added tax invoice to show the outstanding debt of CNY 78,000. Because the defendant did not appear, it was deemed to have waived its rights to challenge and cross-examine this evidence. The court reviewed the submissions and confirmed that all evidence met the requirements of authenticity, legality, and relevance.
The court found that the contract between the parties was lawful and valid because it did not violate any mandatory provisions of law or regulation. Both sides were obligated to perform their duties according to the agreement. The plaintiff had delivered the goods as required, and the defendant was therefore obliged to pay the purchase price without delay. The defendant’s failure to pay despite demands constituted a clear breach of contract. The court held that the defendant must bear liability for breach and compensate the plaintiff for interest losses. The plaintiff’s claim for payment of the principal plus interest was well-founded and supported.
According to relevant law, the court cited Article 112 and Article 161 of the Contract Law of the People’s Republic of China, as well as Article 130 of the Civil Procedure Law. Article 112 provides that a party that fails to perform its contractual obligations shall be liable for damages including interest. Article 161 requires the buyer to pay the purchase price at the time agreed. The court reasoned that the interest should run from the date the plaintiff filed the lawsuit, January 13, 2012, because that is when the plaintiff formally demanded payment through judicial process. The interest rate applied was the benchmark lending rate of the People’s Bank of China for the same period, calculated up to the date specified in the judgment. The court also noted that if the defendant failed to pay within the prescribed ten-day period after the judgment became effective, it would be subject to double the interest for the period of delayed performance, as stipulated in Article 229 of the Civil Procedure Law.
The court issued a default judgment because the defendant did not appear or contest the case. The defendant was ordered to pay the plaintiff CNY 78,000 in principal plus interest calculated from January 13, 2012, at the People’s Bank of China benchmark rate until the date of the judgment’s designated payment date. The defendant was also ordered to bear the court costs of CNY 875, half of the original filing fee. The judgment allows the defendant to appeal within fifteen days of service. If the defendant fails to comply voluntarily, the plaintiff may apply for enforcement within two years from the last day of the performance period. This case illustrates the importance of adhering to contract terms and the consequences of defaulting on a commercial payment obligation.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.