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In international trade, after they conclude a deal through negotiations and sign the sales contract, the buyers and the sellers assume the obligation to perform the contract. However, breach of the contract by one party occurs quite often and causes losses to the other party with the result that various trade disputes are brought about, which subsequently leads to claims and arbitration.

Claims refers to a request for compensation for losses or damages. In the course of executing a contract, if one party breaks the contract and thus brings about economic losses to another party, the suffering party may ask the defaulting party for compensation according to the contract stipulations. Handling the suffering party’s claim is called settlement of claim. Therefore, claim and its settlement are two aspects of an issue.

Arbitration is an important way to settle disputes in foreign trade. Compared with litigation, arbitration is more flexible, less expensive and much quicker in handling the case; besides, the arbitral award is final and binding on both parties. Therefore, arbitration has become the most popular method to resolve disputes in international trade.

Arbitration is a means of settling a dispute between two parties through the medium of a third party who is not partial to either of the parties to the dispute and whose award on the dispute is final and binding. Once it is made, an arbitral award has the force of law and there is no need to register and keep it in a law court. If parties to a contract desire to settle disputes, an arbitration clause is usually made in the contract well before a dispute arises.

Mr. Brown, an importer from the US, talks with Mrs. Yu, an expoter of dried food in China, about the moldy mushrooms and compensation. Brown： I’m sorry I have to mention it again, Mrs. Yu.

Yu： You are talking about the quality problem of the dried mushroms you ordered two months ago. Is that right?

Brown： Yes. It’s too serious to be overlooked. So we have to raise a claim here amounting to $1 500 plus inspection charges.

Yu： Please be patient, Mr. Brown. Have a cup of coffee first, think about it, and then let us know the whole thing.

Brown： Thanks. You see, much to our regret, most of the goods forwarded to us were moldy and unfit for consumption any more.

Yu： Could you be more specific please?

Brown： Well, I’ve a survey report with me. According to the report, the packing was sound and intact. So the surveyor was sure that the mushrooms were not well-dried before packing.

Yu： But, the China Commodity Inspection Buresu gave the goods in question a very strict inspection just before loading. That lot of mushrooms were in first class condition when they left here, which was also evidenced by the Clean Bill of Loading.

Brown： I hold your Inspection Bureau in good esteem, but casual mishaps might be possible.

Yu： Mr. Brown, we are always ready to compensate for any losses caused by us, but in this case, we are apparently not liable for the loss. And, I’d like to remind you that the loss may have been caused by improper or long storage in your warehouse. Don’t you think so?

Brown： Well, we’ll make further investigation. If that’s really the case

you mentioned above, we’ll have to turn to the shipping company or the insurance company for compensation.

Yu： You may have a try, Mr. Brown, and I’m awfully sorry for the mess you have suffered, although it is quite out of our control.

Brown： Thank you for your appreciation. I think we really have a long way to go to sort out this mess.

Morgan： Yes. I’ve read your email. You complained that the last shipment of fertilizer arrived in a very bad condition and nearly 200 bags were seriously broken.

Feng： Yes. That’s true.

Morgan： I hope we can settle the problem in a pleasant way.

Feng： Obviously it was due to inadequate packing.

Morgan： Our company has always been careful in its packing, and never before has such a thing occurred. Perhaps this damage took place en route to the buyer?

Feng：　　I don’t think the shipping company is responsible for the claim. It is stipulated in the contract that new gunny bags are used in packing, but to our regret, you used 200 second-hand bags. It was reported that poor packing caused the breakage and no other reason.

Morgan： This is really unbelievable. If so, we’ll settle the problem in accordance with the contract and help you out of your trouble.

Feng： I’m glad to hear that. We expect a compensation of RMB 3 500 of repacking fees.

Morgan： Please send us a letter of confirmation and a copy of your survey report. It’ll be solved soon if your claim is well grounded.

Feng： OK. We’ll send you the report and the confirmation letter as soon as possible.

Mr. Ryan is the Purchase Manager of Global Trading Company of Australia. He raised a claim to Mr. Qi, Sales Manager of XY Trading Co., Ltd. in China, for the inferior quality of toys and expected a compensation.

Qi： Mr. Ryan, I’ve presented you with the copies of all the documents, which makes clear that the delivery of the goods was carried out exactly according to the contract. And the official inspection documented that the goods were acceptable, too.

Qi： I’m afraid we can do nothing about it, though we understand your difficult position.

Ryan： So, it seems that we have no other choice but to submit the case for arbitration.

Qi： We have no objection if you insist, Mr. Ryan. We are not at fault obviously. We’ve fully performed our obligations.

Ryan： Actually, I have a different idea. If I were you, I would reconsider the claim for the sake of reputation. Well then, for the arbitration, in which country?

Qi： Arbitration is usually carried out in the country of the defendant. And we name CCPIT, the China Council for Promotion of International Trade, as the arbitration organization.

consumption n.（食物、资源等的）消耗 sound a. 完好的，未受损的

1. Clean Bill of Loading 清洁提单，即运输公司对所承载的货物及其包装无缺陷时签发的提单。

2. Perhaps this damage took place en route to the buyer? 也许货损发生在运输途中。en route to...意为“在去……的途中”；“在运输途中”也可以说成“in/during transit.

3. It’ll be solved soon if your claim is well grounded. 如果你方索赔要求合理，问题很快会得到解决。

4. And the official inspection documented that the goods were acceptable, too. 官方的检验也证明这些货物合格。

5. That is to say, you are unable to entertain our claim? 也就是说，你不能考虑我们的索赔。

6. Also, the arbitration fee will be borne by the losing party. 还有，仲裁费将由败诉一方负担。to be borne by 意为“由……负担”，例如：All expenses and risks thereinafter shall be borne by your side. 此后一切所发生的风险和费用由你方承担。

3) We would suggest that you file a claim against the insurance agent of the PICC at your end.

1) We cannot accept your claim with us for compensation because the above order was shipped clean.

2) So the damage must have occurred in transit and we should not be held liable.

1) We must apologize for this error, which resulted from carelessness in our packing department.

2) We can only assume that an oversight has been made in making up the order, this carton apparently being intended for another buyer.

3) We are extremely sorry to learn that an error was made in shipping the above order.

3) Therefore, the damage must have occurred in transit and we should not be held liable.

5) We all know that bad quality will force the products to sell at a loss or to become unsalable.

3) Who do you think you should file a claim against if you find the losses or damages take place in transit, but the responsibility lies with the insurance company or shipping company?

Situation： Mr. Porter and Mr. Huang are talking about short weight of the goods.

Techniques of Employing Humor in Internatinal Business

Humor is a specialized form of communication. Which is a good joke and which is bad? Nobody can tell you except the listeners. So don’t give them stories they don’t want to hear. Should we tell off-color stories? Ethnic jokes? That’s your call, but the listeners should have a vote, too. If they don’t like them, don’t tell them. Remember, you are using humor to enhance your message. If your humor offends, it interferes with what you have to say. It’s not worth it. If in doubt, drop it. Using humorous anecdotes is a way of breaking the ice and establishing a relaxed atmosphere prior to getting down to business. Anyhow, we do not laugh at the same thing.

So it’s of great help to have an idea of Do’s and taboos of humor around the world.

Try to learn as much as you can, in advance, about the customs and practices of the culture of your business partners. And never or ever do or say anything that will bring unfavable attention or embarrassment to another person.

Avoid any and all ethnic jokes.

Watch to see what types of subjects, situations, or incidents amuse your hosts or your international clients.

If you commit some goof or gaffe, be certain to laugh it off.

Humorous devices such as English malapropisms, puns, or spoonerisms are not appropriate.

When toasting or in any public speaking circumstance, avoid the spur-of-the-moment decision to ad lib what seems to be at that particular moment a great punch line.

Any joke that needs explaining and virtually all of them do when told across cultures and in a language that needs to be interpreted—is not worth telling.