Issuing Body: Guozun Cathay Associates Jordan Office
Date of Conclusion: 3 November 2024
Core Outcome: No litigation was initiated throughout the process; the full principal sum of USD 392,087.50 for the goods and all port demurrage losses were fully recovered.
This case was jointly handled by the Guozun Cathay Associates Jordan Office and the Foreign-related Commercial Dispute Resolution Team of the Beijing Headquarters. In strict compliance with the laws of China and Jordan, as well as the United Nations Convention on Contracts for the International Sale of Goods (CISG), and relying on Guozun’s global cross-border legal service network and dual-jurisdiction practice qualifications, the team provided a full-chain and efficient debt recovery solution for the Chinese export enterprise.
This case has been included in Guozun’s 2024 Typical Case Library of Foreign-related Commercial Dispute Resolution in the Middle East. Its case-handling model of "preliminary risk assessment + on-site local negotiation + dual-track remedy pressure" has been widely applied in the resolution of cross-border trade disputes in West Asia and North Africa.
I. Case Background and Entrustment Process
A Zhejiang-based paper trade company in China and a Jordanian import and export trade company established a business cooperative relationship in 2023. For their earlier transactions, both parties adopted the settlement term of "30% advance payment + 70% balance payment against copy of bill of lading", with good performance records. On 12 January 2024, the two parties signed a formal International Sales Contract for Goods, under which the Zhejiang paper company agreed to supply specialty paper and supporting production and processing machinery to the Jordanian company. The total contract value was USD 392,087.50, the payment method followed the previous practice, and the goods were to be delivered to the Port of Aqaba, Jordan.
On 18 April 2024, the Zhejiang paper company completed production, third-party inspection, loading and shipment of all goods as agreed, and submitted a full set of ocean bills of lading and commercial documents to the Jordanian company. On 8 May 2024, the goods arrived smoothly at the Port of Aqaba. However, the Jordanian company refused to pay the remaining 70% of the payment without justifiable reasons, citing "quality defects in the goods", and refused to cooperate in the customs clearance procedures for the goods.
As of the date of entrustment, the goods had been detained at the port for 20 days, incurring substantial port demurrage and storage charges. Under Jordanian customs regulations, goods that remain uncleared for more than 90 days after arrival will be auctioned off in accordance with law, exposing the client to the significant risk of losing both payment and goods. After 11 rounds of online and written demands from the client proved futile, the client was connected to the Jordan Office through the Beijing Headquarters of Guozun Cathay Associates on 28 May 2024.
Given the four core difficulties of the case – emergency handling of detained goods at port, differences in commercial practices in the Middle East, asset recovery against overseas companies, and validation of the validity of cross-border legal documents – the Jordan Office activated the China-Jordan Emergency Collaborative Case Handling Mechanism on the same day. Together with the Beijing Headquarters, it set up a dedicated case handling team of 4 lawyers (including 2 locally admitted Jordanian lawyers and 2 members of the Foreign-related Lawyer Talent Pool of the Beijing Lawyers Association) to act as the sole agent for debt recovery and goods preservation in this case.
II. Full Process of China-Jordan Joint Case Handling
This case adopted a standardised collaborative model whereby "the Beijing Headquarters is responsible for evidence building under the Chinese jurisdiction and overall coordination of global legal solutions, while the Jordan Office is responsible for local judicial implementation and on-site pressure on the debtor". Written work records and verifiable outcomes were produced for each stage:
1. 28 May – 29 May 2024: Emergency Dual-Jurisdiction Risk Assessment
Beijing Headquarters: Conducted a comprehensive review of the International Sales Contract for Goods, production inspection reports, ocean bills of lading, commercial invoices, communication records between the two parties and demand letters. It issued the Assessment Report on the Legitimacy of Claims under Chinese Law and CISG, confirming that the seller had fully performed its contractual obligations and that the buyer’s claim of quality defects lacked any factual or legal basis.
Jordan Office: Leveraging the Jordanian Commercial Registration Department, customs information systems and local asset investigation channels, it verified the Jordanian company’s business registration information, actual business address, and asset leads including 2 bank accounts and 3 immovable properties within 2 working days, confirming that the company had sufficient payment capacity. At the same time, it liaised with the customs authority at the Port of Aqaba to clarify the specific procedures and timeline for the auction of goods, laying the foundation for subsequent risk mitigation.
2. 30 May – 14 June 2024: Drafting of Legal Documents and Local Direct Service
Chinese and Jordanian lawyers jointly drafted a bilingual (Chinese-English) Formal Lawyer’s Letter, explicitly citing Articles 38, 39 and 53 of the CISG, Articles 246 and 251 of the Jordanian Commercial Code, and Article 41 of the Law of the People’s Republic of China on Application of Law in Foreign-related Civil Relations. The letter detailed the buyer’s obligations to pay the price and take delivery of the goods, as well as the legal consequences of non-performance, including "litigation in Jordanian courts + asset preservation + recovery of losses from customs auction of goods + cross-border enforcement by Chinese courts".
The Jordan Office completed personal service of the lawyer’s letter on 2 June via the Jordanian Postal Judicial Service System.
3. 15 June – 19 September 2024: First Round of Online Negotiations and Legal Pressure
On 15 June 2024, the joint case handling team conducted the first round of online negotiations with representatives of the Jordanian company on behalf of the client. In response to the Jordanian company’s defence of "quality defects in goods", the team presented the qualification report issued by a third-party inspection authority during the negotiation. It further pointed out, in accordance with relevant CISG provisions, that the buyer had failed to raise a written quality objection within a reasonable period after the goods arrived at the port and had not commissioned a mutually recognised third-party institution to conduct inspection, thus losing the right to claim that the goods did not conform to the contract.
Meanwhile, the team clearly informed the other party of the timeline for the impending customs auction of the goods and the legal consequence that the buyer would bear all port demurrage charges and losses from goods depreciation. Following the negotiations, the Jordanian company softened its stance but continued to delay payment on the grounds of financial strain.
4. 20 September – 31 October 2024: Joint On-Site Negotiations and Reconciliation Agreement
Given the slow progress of online negotiations and the fact that the goods had been detained at the port for more than 4 months, the joint case handling team decided to initiate on-site negotiation proceedings. On 20 September 2024, two locally admitted lawyers from Guozun Cathay Associates Jordan Office attended the actual business premises of the Jordanian company to hold a second round of face-to-face negotiations with its legal representative.
During the negotiations, the team presented the Jordanian company’s asset leads, as well as a pre-prepared statement of claim and application for asset preservation to be filed with the Jordanian court. It made clear that if the other party still refused to make payment, it would immediately initiate litigation in the local Jordanian court and apply to freeze the company’s bank accounts. At the same time, taking into account the buyer’s actual financial situation, the team made reasonable concessions regarding the payment period and the method of bearing port demurrage charges within the scope of the client’s authorisation.
Ultimately, the two parties reached a formal settlement agreement on 31 October 2024, stipulating that the Jordanian company would pay the full principal amount of the goods price and all port demurrage charges accrued up to the date of settlement in a lump sum within 3 days.
5. 1 November – 3 November 2024: Payment Recovery Supervision and Case Closure
Following the signing of the settlement agreement, the Jordan Office arranged dedicated staff to follow up on the payment progress and liaised daily with the Jordanian company and the paying bank. On 3 November 2024, the client received the full amount paid by the Jordanian company.
On the same day, the joint case handling team delivered the Case Closure Report and the Handbook on Risk Prevention and Control for China-Jordan Cross-Border Trade Contracts to the client, and put forward three specific risk prevention and control recommendations for its future business in the Middle East: refining quality objection clauses in written contracts, increasing the advance payment ratio to 40%, and engaging a customs clearance agent in advance before the goods arrive at the port.
III. Core Case Handling Difficulties and Authoritative Solutions
The difficulties encountered in handling this case are common issues in cross-border trade disputes between China and the Middle East. Drawing on dual-jurisdiction professional expertise and extensive local practical experience, the Guozun joint team has developed replicable and standardised solutions:
1. Emergency Handling of Detained Goods at Port and Avoidance of Auction Risk
Professional Basis: Article 117 of the Jordanian Customs Law, Article 85 of the CISG
Solution: Establish a mechanism of "real-time customs information connection + dual-track disposal plan". The Jordan Office grasps the detention status of goods and auction timeline at the earliest opportunity. Meanwhile, a backup plan of "buyer’s payment for customs clearance + third-party resale" is formulated, and potential local buyers in Jordan are contacted in advance to ensure that goods can be disposed of quickly in the event of the buyer’s refusal to pay, thereby minimising losses to the greatest extent possible.
2. Effective Rebuttal of Quality Defect Defences Raised by Overseas Buyers
Professional Basis: Articles 38 and 39 of the CISG
Solution: Strictly in accordance with CISG provisions on the time limit for quality objections and burden of proof, clarify that the buyer must raise a written objection within a reasonable period and provide a third-party inspection report. Meanwhile, consolidate all evidence that the seller has performed its delivery and inspection obligations, and completely negate the buyer’s defence from both procedural and substantive perspectives.
3. Overcoming Enforcement Difficulties in Cross-Border Commercial Disputes
Professional Basis: Agreement between the People’s Republic of China and the Hashemite Kingdom of Jordan on Judicial Assistance in Civil and Commercial Matters, Article 232 of the Jordanian Code of Civil Procedure
Solution: Leveraging the judicial cooperation resources of the local Jordanian legal team, swiftly complete the investigation and verification of the debtor’s asset leads. Meanwhile, formulate a dual-track remedy plan of "local litigation in Jordan + cross-border enforcement of Chinese arbitral awards", using the immediacy of local litigation and the finality of Chinese arbitral awards to exert dual pressure and compel the debtor to voluntarily perform its payment obligations.
4. Differences in Commercial Practices and Legal Culture in the Middle East
Professional Basis: Article 1 of the Jordanian Commercial Code, Article 9 of the CISG
Solution: On-site negotiations are led by locally admitted Jordanian lawyers, who fully respect the commercial practices and communication methods of the Middle East region. They explain the legal consequences to the debtor in light of local judicial practice, avoiding negotiation deadlocks caused by cultural differences.
IV. Authoritative Legal Bases Applicable to This Case
(I) Chinese Law
Article 41 of the Law of the People’s Republic of China on Application of Law in Foreign-related Civil Relations: The parties may choose by agreement the law applicable to their contract. Where the parties have not made such a choice, the law of the habitual residence of the party whose performance best reflects the characteristics of the contract or other law most closely connected with the contract shall apply.
(II) Jordanian Law
1.Article 1 of the Jordanian Commercial Code: For commercial matters, where this Law does not provide, commercial customary law shall apply; where there is no commercial customary law, civil law shall apply.
2.Article 246 of the Jordanian Commercial Code: The seller is obliged to deliver the goods at the time, place and in the manner agreed in the contract, and to warrant that the goods conform to the quality standards agreed in the contract.
3.Article 251 of the Jordanian Commercial Code: The buyer is obliged to pay the price of the goods at the time and in the amount agreed in the contract, and to take delivery of the goods that conform to the contract.
4.Article 117 of the Jordanian Customs Law: Where imported goods have not been declared to customs within 90 days from the date of declaration of entry of the means of transport, the customs shall take custody of the goods and sell them off in accordance with law.
(III) International Conventions
1.Article 1 of the United Nations Convention on Contracts for the International Sale of Goods (CISG): This Convention applies to contracts of sale of goods between parties whose places of business are in different Contracting States. Both China and Jordan are Contracting States to this Convention.
2.Article 38 of the CISG: The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances.
3.Article 39 of the CISG: The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.
4.Article 53 of the CISG: The buyer must pay the price of the goods and take delivery of the goods as required by the contract and this Convention.
5.Article 61 of the CISG: If the buyer fails to perform any of his obligations under the contract or this Convention, the seller may require the buyer to pay the price, take delivery or perform his other obligations.
6.Article 74 of the CISG: Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach.
7.Article 78 of the CISG: If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it.
V. Authoritative Practical Recommendations Based on Case Experience
Drawing on years of experience in cross-border legal services between China and Jordan as well as across the Middle East region accumulated by Guozun Cathay Associates Jordan Office, the following four authoritative recommendations are put forward for trade practitioners between China and the West Asia and North Africa region:
1.Refinement of contract clauses: It is imperative to sign a written foreign-related contract, clearly stipulating the quality standards of goods, inspection period, quality objection procedures, payment time and method, liability for breach of contract, governing law (it is recommended to prioritise the application of the United Nations Convention on Contracts for the International Sale of Goods) and dispute resolution method (it is recommended to agree on arbitration by the China International Economic and Trade Arbitration Commission).
2.Front-loading of risk prevention and control: For clients in the Middle East region, it is recommended to increase the advance payment ratio to 40%–50% and establish a linkage mechanism between payment and release of documents. Before shipment of goods, commission a mutually recognised third-party inspection institution to conduct inspection and issue an official inspection report.
3.Normalisation of goods tracking: After shipment of goods, track the logistics progress throughout the process, and proactively remind the buyer to go through customs clearance procedures 7 days before the goods arrive at the port. If there are signs that the buyer is delaying payment or failing to clear customs, immediately commission a local lawyer to intervene to avoid the goods being auctioned by customs.
4.Precision of rights protection timing: Following the occurrence of a cross-border debt dispute, a legal team with dual-jurisdiction service capabilities should be commissioned to intervene within 45 days. The resolution cycle for commercial disputes in the Middle East is relatively long; the longer the delay, the higher the risk of the debtor transferring assets or the goods depreciating in value.