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49 court cases on arbitration agreement invalidness- defective seal (4)

June 21, 2023

Full title: 49 existing court cases on invalidness of arbitration agreement - If one party to the contract is a legal person and the official seal or seal affixed has defects, which cannot prove that the arbitration clause was reached by both parties through mutual agreement, it shall be deemed invalid (4)

Case 17. If the contract is not stamped with the official seal of one party of the legal entity or signed by its legal representative, and there is no evidence to prove that the natural person authorized by one party of the legal entity to sign on the contract has agreed on the arbitration clause on its behalf, the arbitration clause shall be invalid.

Case Name: Wang Moufang's Application for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2021) Liao 01 Min Te No. 183

Reason for Judgment: According to the "Template Engineering Labor Contract", the parties to the contract are Shenyang Guangjucheng Construction Labor Co., Ltd. and Wang Moufang, respectively. However, the contract was not stamped with the official seal of Shenyang Guangjucheng Construction Labor Co., Ltd. or signed by the legal representative, and only signed by "Wang Mouhua". After being summoned by this court in accordance with the law, if Shenyang Guangjucheng Construction Labor Service Co., Ltd. refuses to appear in court without justifiable reasons, it shall be deemed as a waiver of its litigation right to provide evidence and express opinions. There is currently no evidence to prove that Shenyang Guangjucheng Construction Labor Service Co., Ltd. authorized "Wang Mouhua" to agree on the arbitration clause on its behalf, so the arbitration agreement involved in the case should be invalid.

Regarding the validity of the arbitration clause in the case. According to the "Template Engineering Labor Contract", the parties to the contract are Shenyang Guangjucheng Construction Labor Co., Ltd. (hereinafter referred to as Guangjucheng Company) and Wang Moufang, but the contract is not stamped with the official seal of Guangjucheng Company or signed by the legal representative, only signed by "Wang Mouhua". After being summoned by this court in accordance with the law, if Guangjucheng Company refuses to appear in court without justifiable reasons, it shall be deemed that it has waived its litigation right to provide evidence and express its opinions. There is currently no evidence to prove that Guangjucheng Company authorized "Wang Mouhua" to agree on the arbitration clause on its behalf, so the arbitration agreement involved in the case should be invalid.

Case 18. (1) If the affixing of the official seal by one party to the arbitration agreement is inconsistent with the filing official seal, and it cannot be proven that one party has used multiple official seals, it can be determined that the arbitration clause is not its true expression of intention, and the arbitration clause in question is invalid. (2) If one party is unaware of the agreement containing the arbitration clause from the beginning and has never conducted any negotiations on the formation of the contract, it does not constitute a situation where the parties reached an arbitration agreement on the dispute at the time of the contract formation, and the validity of the arbitration agreement is not affected if the contract is not established.

Case Name: Poten Environment Group Co., Ltd. and Qingyu (Shanghai) Equity Investment Fund Management Co., Ltd. Applying for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2020) Hu 74 Min Te No. 111

Reason for arbitration: The validity of the arbitration clause mainly refers to whether both parties have a consensus to submit the dispute to arbitration. According to the judicial appraisal results and the explanation issued by the Beijing Guoxin Notary Public Office, the official seal of "Poten Environment Group Co., Ltd. (hereinafter referred to as Poten Group Company)" stamped on the "Difference Compensation Agreement" and "Power of Attorney" is the same seal and both are forged. Qingyu (Shanghai) Equity Investment Fund Management Co., Ltd. (hereinafter referred to as Qingyu Company) has not provided evidence to prove that Poten Group Company has used multiple seals, Therefore, Poten Group Company claims that the arbitration clause in the "Difference Compensation Agreement" in this case is not a true expression of its intention and has factual basis. Based on existing evidence, Poten Group Company was unaware of the so-called "Difference Compensation Agreement" and had never conducted any negotiations on the contract. Upon discovering that a website had published its guarantee for the Huayi Lanxin Fund investment project, it immediately issued a notice to clarify the matter. Therefore, this case does not belong to the case where the parties reached an arbitration agreement on the dispute at the time of concluding the contract, but the contract was not formed, and the validity of the arbitration agreement is not affected. Therefore, Article 19 of the Arbitration Law of the China and Article 10 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Arbitration Law of the China do not apply to this case.

Case 19. If one party to the contract entrusts an agent to sign a forged contract, which cannot prove that the contract is the true expression of one party's intention, the arbitration clause in the contract shall be deemed invalid.

Case name: Liu Mouying and Weifang Tianzi Hairdressing Industry Development Co., Ltd. applied to confirm the validity of the arbitration agreement

Case number: (2021) Lu 07 Min Te No. 55

Reason for judgment: Weifang Tianzi Hairdressing and Beauty Industry Development Co., Ltd. (hereinafter referred to as Tianzi Company) took Liu Mouying as the respondent, and the parties to the Construction Contract on which the arbitration was based were Tianzi Company and Weifang Sanyuan Decoration Engineering Co., Ltd. (hereinafter referred to as Sanyuan Company). In the signing part of the contract, although there was Liu Mouying's signature at the "entrusted agent" of Sanyuan Company, it was confirmed in the criminal judgment that the signature was forged, and the bank account recorded in the contract was not provided by Liu Mouying. Although the relevant funds were remitted to Liu Mouying's account, the account was actually controlled and used by others. Therefore, Liu Mouying is not a party to the "Engineering Construction Contract" involved in the case, and the arbitration clause stipulated in the contract was not reached between Liu Mouying and Tianzi Company, and has no legal effect on Liu Mouying. Liu Mouying's request to confirm the invalidity of the above arbitration clause should be supported.

Case 20. The contract shall come into effect after being signed and stamped by representatives of both parties. If only the legal representative signs and does not affix the official seal, and there is no other evidence to support it, the contract shall not be binding on either party. The arbitration clause in the contract shall be invalid in the event that the party has not ratified it and the parties have not reached an arbitration agreement afterwards.

Case name: Dongguan Fulin Smart City Wood Industry Home Furnishing Industrial Park Construction Co., Ltd. and Guangdong Qiyuan Law Firm applied to confirm the validity of the arbitration agreement

Case No.: (2020) Yue 01 Min Te No. 492

Reason for judgment: First of all, on the first page of the Special Legal Counsel Contract, it is listed that Party A is Fulin Technology Co., Ltd. and Dongguan Fulin Smart City Wood Industry Home Furnishing Industrial Park Construction Co., Ltd. (hereinafter referred to as Fulin Smart City), but only Fulin Technology Co., Ltd.'s seal and Mr. Zhang's strong signature are available at Party A's signature. According to Article 9 of the contract, the contract shall be signed and stamped by representatives of both parties, and shall come into effect from the date of signing the contract. Although Guangdong Qiyuan Law Firm (hereinafter referred to as Qiyuan Law Firm) provides evidence to prove that Zhang Mouqiang is the sole shareholder and actual controller of Fulin Smart City and Fulin Technology Company, and believes that Zhang Mouqiang can sign contracts on behalf of Fulin Smart City or represent Fulin Smart City's expression of intention. However, the company has a legal status as the main body, and its intention is clearly independent of the shareholders and actual controllers. The two cannot be equated, and the absence of a seal on the contract by Fulin Smart City does not prove that Zhang Mouqiang also signed on behalf of Fulin Smart City at that time. Secondly, even though Qiyuan Law Firm and Zhang Mouqiang proposed that the company's official seal was in the possession of other creditors at the time, which objectively made it difficult to seal, there was no evidence to prove that the signing of the contract was the true intention of Fulin Smart City. Therefore, without the official seal of Fulin Smart City Company, the above claims of Qiyuan Law Firm are clearly inconsistent with the effective conditions stipulated in the contract. To take a step back, Qiyuan Law Firm

Case 21. The official seal affixed by one party to the contract is a special seal for materials with specific purposes. The affixing of the official seal on the contract in question exceeds the scope of application of the official seal, and it cannot be deemed that all terms of the contract are true expressions of one party's intentions, which is insufficient to prove that both parties have reached a valid written arbitration agreement.

Case Name: Hangzhou Xingyao Construction Group Co., Ltd. Application for Confirmation of the Validity of the Arbitration Agreement

Case No.: (2018) Su 05 Min Te No. 68

Reason for Judgment: Suzhou Zhongshi Decoration Engineering Co., Ltd. (hereinafter referred to as Zhongshi Company) submitted an arbitration application to the Suzhou Arbitration Commission under the "Original Stone Coating Construction Contract", and the seal of the contract was stamped with the "Technical Seal for the Qianjiang Sanqiao Supporting Maintenance and Testing Business Housing Project of Hangzhou Xingyao Construction Group Co., Ltd. (hereinafter referred to as Xingyao Company)", and the printed text of the seal contained the label "Invalid for Economic Activities". Due to the specific purpose of the project department's data seal, which is only used for construction project materials such as commencement reports and design drawings, affixing the project department's data seal on the "Original Stone Coating Construction Contract" clearly goes beyond the scope of use of this seal. Although there is a factual construction contract relationship between the two parties, without the recognition of the validity of this contract by Xingyao Company, It cannot be determined that all the terms of the "Original Stone Coating Construction Contract" are the true intentions of Xingyao Company. In addition, the seal and text involved in the case clearly indicate "invalid for economic activities". When signing the contract, China Decoration Company should carefully review whether the actor has the right to sign on behalf of Xingyao Company. In the absence of proof of the relevant information of the signatory, simply using the "Original Stone Coating Construction Contract" with the special seal for this information is not enough to prove that Xingyao Company and China Decoration Company have reached a valid written arbitration agreement.