In 2010, a renowned Spanish motorbike distributor (the claimant) signed an agreement with an established Chinese motorbike manufacturer (the respondent) that the former be the exclusive distributor of the latter’s products in Spain. In October that year, a fire broke out in the distributor’s warehouse, causing huge loss. The fire, according to the claimant, resulted from a defect in the motorbikes.

The claimant thus engaged a Shanghai-based team led by Liu Xinyu to represent him in arbitration at the China International Economic and Trade Arbitration Commission and to seek €2,000,000 in compensation from the respondent.

Compared with other cross-border sales contract cases commonly seen, the case in question encountered greater difficulty in terms of language and evidence verification. Both Spanish and Catalan involved in the case are non-common languages that constituted a hindrance to communication, investigation and evidence collection. In terms of evidence, the fire had destroyed a large amount of it that supposedly pointed to the real cause of the disaster. And to verify evidence found and assess the loss, a great deal of expertise outside the legal profession was needed. Worse still, as the evidence was found in a foreign country, it had limited credibility and would hardly be taken as direct evidence.

To solve these problems, the attorneys maintained close contact and collaboration with the client, overseas law firms, translation agencies, notary organizations and foreign experts and explained complex issues to the arbitrator via remote video so that the scene of the accident could be restored as much as possible.

At the end of 2013, China International Economic and Trade Arbitration Committee ruled pursuant to law that the fire was caused by a defect in the respondent’s products and the claimant’s request for compensation should be supported.

Although a large percentage of international trade disputes result from product defects, cases involving fire accidents prove especially complex. The case in question will provide useful insights for attorneys faced with similar circumstances.