ID#107: Supply of fake product. Case 2

Claim amount: 84,312.24 USD

Status: Case closed


According to the terms and conditions of the Contract the Seller (ХХХ, CHINA) has accepted the obligation to supply Dioctylphtalate in the quantity of 40.00 tons on CIF, ХХХ, Russia for the total amount of USD 67,520.00.

According to the terms and conditions of the Contract the Seller accepted the obligation to guarantee the compliance of the goods´ quality with the quality specifications as stated in the Additional Agreement No. 1 (Addendum) to the Contract and by a confirmed certificate of analysis issued by the manufacturer.

Based on the Seller´s Pro-forma invoice the Buyer paid, as stipulated by the Contract, full amount of USD 67,520.00 which corresponds to 100% (One hundred percent) of the contract value.

During the quantity inspection made upon the arrival of the goods it was discovered that only 32.024 tons were delivered instead of 40.00 tons as it was stated in the invoice.

Acceptance of the goods by quality was performed in the presence of the Expert of the Chamber of Commerce and Industry of the Russian Federation. According to the CCI Expert’s Opinion: "Chemical product supplied by ХХХ, CHINA under the Contract is not Dioctylphtalate."

On 31.12.2010 the Buyer made a Claim to the Seller for the recovery of the total sum of USD 84,312.24 including:

  1. Return of the money for the undelivered goods in the amount of USD 67,520.00.
  2. Compensation of the costs connected to the customs fees and duties paid by the Buyer in the amount of USD 16,312.13.
  3. Compensation of the costs connected to the independent expert’s opinion in the amount of USD 480.11.

The Seller’s action in respond to the Claim:

  1. 06.01.11 the Seller informed the Buyer of its intention to visit the factory to check quality of the supplied goods.
  2. 18.02.11 the Seller claimed that he had occured losses due to the cooperation with our company. In reply to this statement we proposed him to make an official Claim supported by the documents confirming the specified amount of the losses. The Claim was not sent by the Seller by this date.
  3. 21.02.11 the Seller continued to insist that the goods were of good quality and requested us to send the samples of the supplied goods to China in order to re-check the results of our expert analysis. We refused to send the unidentified product to China and suggested to have an independent inspection of the samples in Russia. The inspection should be done by the organisation nominated by the Seller and in presence of the Seller´s representatives.
  4. 03.03.11 the Seller continued to require that the samples of the supplied goods should be sent to China.

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