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Embarrassing stumble for China's good-guys

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A DECISION in Hongkong's Supreme Court which effectively overturned an arbitration ruling made in China, has caused a stir in some China trade and legal circles.

To hear some Hongkong-based lawyers tell it, China's ''good guys'' have stumbled embarrassingly and many observers wonder what lies ahead.

A dispute between Paklito Investment and Klockner East Asia that found its way into Mr Justice Kaplan's court this month was complicated but all too familiar to those familiar with legal wrangles in China.

The case involved a dispute over the landed condition of a 2,500-tonne, US$1.9 million shipment of galvanised steel coil sent from Istanbul to Huangpu in Guangdong in January 1989.

Hongkong-based Klockner held that the steel coil was delivered on a C-and-F basis (cost plus freight but not including insurance) in good order.

However, on April 19, 1989 claims were made by a series of sub-purchasers and Paklito Investment, a Hongkong arm of a state-owned metals buyer in China, against Klockner for defective goods.

The original contract, a relatively standard document in China trade terms, contained a clause providing for arbitration in China should a dispute arise.

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