CNY 360,000 Processing Fee Dispute – Court Orders Payment
A court in Eastern China City has ruled in favor of a small factory owner in a processing contract dispute, ordering a local company to pay CNY 360,000 in outstanding processing fees. The plaintiff, Mr. Li, who operates a knitting factory, had provided processing services for the defendant, a company referred to as Chunlan Industrial, starting in March 2009. After a settlement in January 2012, the defendant acknowledged the debt but failed to pay, leading to litigation.
The case began when Mr. Li claimed that from March 2009 onward, his factory processed polyester yarn for Chunlan Industrial on a continuing basis. On January 20, 2012, both parties conducted a financial settlement, and the defendant confirmed that it still owed Mr. Li CNY 360,000 for the processing work. Mr. Li then filed a lawsuit seeking payment of that amount plus the court costs. The defendant did not appear in court or submit a written defense, despite being properly summoned.
During the hearing, Mr. Li presented two key pieces of evidence: a receipt and a payment slip, both showing the outstanding balance of CNY 360,000, and 13 incoming goods records that demonstrated an ongoing processing relationship between the parties. The court also independently obtained a debt list from the defendant from a related case file, which matched the amount claimed. Mr. Li confirmed the accuracy of this list. Because the defendant failed to attend the hearing without a valid reason, the court treated this as a waiver of the right to challenge the evidence.
The court found that the evidence was credible and consistent. The receipt and payment slip corroborated each other, and the amount matched the debt list obtained from the court’s own inquiry. The incoming goods records were deemed genuine and relevant to the dispute. Based on this, the court accepted Mr. Li’s version of the facts. The judge concluded that a valid processing contract existed between the parties, and that Mr. Li had fulfilled his obligation by delivering the processed goods.
Under the Contract Law of the People’s Republic of China, the court held that both parties must perform their contractual duties in full. Since the defendant did not pay for the completed processing work, it was in breach of contract and bore liability for the unpaid amount. The court specifically cited Articles 107, 251, and 263 of the Contract Law, which require a breaching party to continue performance, take remedial measures, or compensate for losses. The court also applied the Civil Procedure Law to allow a default judgment due to the defendant’s absence.
The court ordered Chunlan Industrial to pay Mr. Li CNY 360,000 within seven days of the judgment taking effect. If the payment is late, the defendant must pay double the interest on the overdue amount for the period of delay. The court also ordered the defendant to bear half of the case acceptance fee, which came to CNY 3,350. This judgment illustrates that processing contract disputes are resolved based on documented evidence and clear contractual obligations. Businesses should maintain accurate records of settlements and deliveries to protect their rights in similar situations.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.