Case No.: 108/2017/KDTM-ST:

Plaintiff: Distribution and Trading Limited Liability Company T

Defendant: Export-Import Limited Liability Company C

Regarding: Dispute regarding Logistics service contract

Facts of the case:

Plaintiff: Distribution and Trading Limited Liability Company T

Distribution and Trading Limited Liability Company T (Company T) engaged Export-Import Limited Liability Company C (Company C) to handle the importation of a batch of soybeans valued at 2,700 USD purchased from Company S in Thailand to be sent to Vietnam. Company T had previously negotiated the goods, quantity, and price with Company S in Thailand. On July 12, 2016, Company T and Company C signed Logistics Service Contract No. 127/2016-UTNK to facilitate the shipment. On July 9, 2016, Company C entered into a purchase contract with Company S. Company T, and transferred money to Company C twice for Company C to pay Company S, first: 35% of the contract value, which is 22,288,000 VND, second: 65% of the contract value, which is 39,312,000 VND. However, Company T did not receive the goods from Company S in Thailand. According to Company C, the failure to verify the validity of the documents provided by Company S in Thailand and the failure to verify the vessel information before transferring money to Company S resulted in Company S not delivering the goods to Company C for shipment back to Vietnam for Company T. Company T filed a lawsuit requesting Company C to compensate Company T for the amount of 60,485,000 VND. Subsequently, during the conciliation meeting on March 27, 2017, Company T amended its compensation request. Company T demanded compensation of 39,312,000 VND for the second payment made by Company C without verifying vessel information. The request did not include a refund of the first payment of 22,288,000 VND.

At the conciliation meeting on June 1, 2017. The contract dated July 19, 2016, between Company C and Company S was signed by Company T under the direction of Company T regarding the selling company, quantity, quality, price etc. Between Company T and Company C, there was no contract signed for the delegation of buying and selling goods, but a Logistics contract was signed to handle the import procedures of the batch of goods under the purchase contract between Company C and Company S. Company C is responsible for importing the goods and delivering them to Company T intact. Company C’s fault lies in not checking the bill of lading and not verifying the vessel’s operation before transferring the second payment to Company S. This led to a breach of the Logistics contract entered into with Company T. In order to reach a quick settlement, during the first conciliation meeting, Company T reduced the amount of the compensation claim, only demanding Company C to compensate the second payment of 65% of the contract value, equivalent to 39,312,000 VND. However, due to the lack of goodwill on the part of Company C, Company T maintained its original claim, demanding Company C to compensate the amount of 60,485,000 VND.

Defendant: Export-Import Limited Liability Company C

On July 12, 2016, Company C signed Logistics Service Contract No. 127/2016-UTNK with Company T, accepting the task of importing a batch of soybeans to Vietnam. Company C is only responsible for being named on the import documents, customs procedures, and delivering the goods to Company T’s warehouse. Company T independently contacted and negotiated with Company S in Thailand, provided Company C’s information, made contracts with foreign parties, negotiated quality, price etc. Company T requested Company C to receive money from Company T to transfer to Company S. In order to complete the transfer procedure, Company C had to sign a purchase contract with Company S. Company C was unaware of the delivery time and vessel operation until receiving information from Company T. Company C only transferred money as instructed by Company T. The bill of lading was also provided by Company T to Company C. Company C confirmed the signing of the purchase contract with Company S in Thailand as instructed by Company T for a legitimate money transfer. Company C is only responsible for being named on the import documents, customs procedures, and transporting the goods to the warehouse for Company T without the responsibility to inspect imported documents, or verify foreign partners. Company C transferred the first payment to Company S upon signing the contract, which is 22,288,000 VND, and the second payment after Company T received the bill from Company S, which is 39,312,000 VND. Company C has no fault and has fulfilled its obligations under the contract. Company C asserts that it only signed a Logistics service contract with Company T and did not sign any other delegation contracts for buying and selling. The signing of the purchase contract with Company S was to fulfill the Logistics contract with Company T, therefore, Company C does not agree to compensate any amount as requested by Company T.

At the working session on April 4, 2017, Company C once again confirmed that it did not sign any delegation contracts with Company T, confirming its role as “named company for monitoring and reporting.” Company C confirmed that it only signed the scanned contract with Company S, without the responsibility to deal with Company S. All documents such as bills of lading, contracts etc. were provided by Company T to Company C, and Company T requested Company C to transfer money to Company S. Company C’s responsibility is only to complete customs procedures when the goods arrive at Port C, receive the goods, and transport them to the warehouse for Company T. Company C has complied with the signed Logistics contract.

Court’s Opinion:

Company T filed a dispute over the Logistics service contract against Company C. In the Logistics service contract signed by both parties on July 12, 2016, Clause 7.3 of Article VII of the general

commitment section states: “If any dispute or disagreement arises or relates to this contract.. the parties have the right to submit the dispute to the Ho Chi Minh City Economic Court for resolution…” The agreement on the jurisdiction to resolve disputes between the parties is unclear and not in accordance with the legal provisions stipulated in Articles 35, 37, 39 of the Civil Procedure Code, so the agreement on the dispute resolution authority is void. Therefore, Company T disputed the Logistics service contract and filed a lawsuit at the Tan Binh District People’s Court, as Company C’s main office is registered in Tan Binh District, falling under the jurisdiction of the Tan Binh District People’s Court.

Company T demanded that Company C compensate the amount of 39,312,000 VND. Based on Logistics service contract No. 127/2016-UTNK dated July 12, 2016, Company T and Company C signed a Logistics service contract for the transportation and delivery of imported and exported goods, including soybeans. Both Company T and Company C confirmed that they only signed Logistics service contract No. 127/2016-UTNK dated July 12, 2016, without any contract regarding Company T entrusting Company C to purchase or import soybeans from Company S in Thailand. Company C is responsible for importing the goods and delivering them intact as negotiated. Foreign partners deliver goods to Company C as directed by Company T. Company C is not responsible for the quality of goods and foreign documents, late cargo reports, and declared prices in the import contract. This demonstrates that the delivery of goods to Company C by Company S is negotiated by Company T with Company S.

According to the Logistics contract, Company C is only responsible for being named on the import documents, completing customs procedures, and transporting the goods to Company T’s warehouse. Company T acknowledges that the amount of 60,485,000 VND is the amount that Company T provided to Company C for transfer to Company S as per the purchase contract signed by Company C with Company S on July 19, 2016. Company C has also transferred this amount to Company S, with confirmation from K Bank – Tan Binh branch. Company C has complied with the Logistics contract, so there is no fault in not receiving goods from Company T. The bill of lading BLA dated July 25, 2016, was provided by Company T to Company C, so the failure to verify the accuracy of the bill of lading is entirely Company T’s fault, and the demand for Company C to compensate the amount of 39,312,000 VND has no basis.

Court’s Decision:

Reject all of Company T’s lawsuit demands for Company C to compensate the amount of 39,312,000 VND. Company T bears the first-instance court fees.

Legal Basis:

Articles 302, 303 of the Commercial Law 2005, paragraph 3 of Article 27 of the Decree on court fees and court fees, paragraph 1 of Article 30, point b of paragraph 1 of Article 35, point a of paragraph 1 of Article 39; paragraph 1 of Article 273, paragraph 1 of Article 280 of the Civil Procedure Code 2015; Articles 302, 303, 233 of the Commercial Law 2005; paragraph 3 of Article 27 of the Decree on court fees and court fees.