The situation
A Brazilian food-packaging company purchased four automated filling lines from a Guangdong machinery manufacturer for US$2.3 million, paid 80% against shipment. On commissioning in Brazil, the lines failed every acceptance benchmark in the contract: throughput ran below half the warranted speed, seal-failure rates made the output commercially unusable, and two control units overheated repeatedly. The manufacturer sent one technician, blamed local power supply, and then stopped engaging. Fortunately, the bilingual purchase agreement — governed by Chinese law — contained a CIETAC arbitration clause and clearly defined acceptance criteria.
What we did
- Evidence first. Before any demand letter, we had the defects documented by an independent inspection body against the contract's specific acceptance metrics, preserved the commissioning logs and correspondence, and issued a formal notice of defects within the contractual claim period.
- CIETAC filing. We filed arbitration with CIETAC claiming repair-cost damages, lost production and partial price restitution, and applied for the tribunal to appoint a technical appraisal institution to examine the machines.
- Neutralizing the defenses. The respondent argued improper installation and voltage fluctuation. The appraisal report traced the failures to undersized servo components and a substituted PLC model that did not match the technical annex — a specification breach, not an operating problem.
- Hearing and quantum. We presented quantum through the client's production records and replacement-part invoices, keeping the claim conservative and documented rather than inflated.
The result
The tribunal issued a final award of US$1.9 million covering price restitution for two lines, rectification costs for the other two, appraisal fees and the bulk of the arbitration costs — approximately fourteen months from filing to award. When the manufacturer did not pay voluntarily, we filed for enforcement at the intermediate court where it is registered; facing account freezes, it paid the award in full within seven weeks. The client kept two rectified lines running and redeployed the recovered funds to a replacement supplier we contracted for them with far stricter acceptance terms.
The case turned on the contract: defined acceptance criteria and a workable arbitration clause converted a quality complaint into an enforceable money award.
Results depend on the specific facts of each matter; past outcomes do not guarantee similar results.