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Case 2: Determination of fee disputes over local guide services provided by overseas travel agencies
—Dispute over entrusted contract signed by a German travel company and a Beijing travel agency company

Updated: December 23, 2022

As overseas tourism continues to grow, irregularities occur in the entrusted tourism services. Chinese courts will serve and protect the enterprises in foreign-related cases, and give judicial guidance to foreign companies to improve their management and standardize their business behaviors.

On August 26, 2016, a travel agency in Beijing (Party A) signed a contract on local guide with a German travel company (Party B), stipulating that Party A entrusts Party B to arrange transportation, accommodation, sightseeing, catering and other matters for Party A's tour group members travelling in Europe. The full payment of the service was to be made within 60 days from the day the tour group accepted Party B's reception.

From September 11, 2016 to December 20, 2017, the German travel company provided local guide services for 160 tour groups for the travel agency in Beijing. The German travel company has been in the Chinese market for more than six years, and has cooperated with more than 500 Chinese outbound travel agencies, online travel platforms, and overseas study tour agencies. It ranks among the top five in the private outbound travel market for Chinese citizens, with a market share of around 12 percent. As a travel company with long-term operating experience, it discovered problems in its management through litigation, such as a lack of risk awareness and negligence in account reconciliation. Unscheduled verbal reconciliations and reminders led to confused accounts and chaotic management. The personnel of the company are widely distributed and highly mobile. In addition, the company failed to preserve written records , which made it difficult to present evidence in litigation. The court entrusted an accounting firm to conduct a judicial forensic accounting appraisal, which confirmed the amount of money owed to the German travel company and supported its reasonable claims. To further standardize the business process of the local guide service industry and promote its healthy development, the court issued judicial advice to the company on the problems found in the process of litigation, and the German company responded positively, expressing that it would develop its online signature software and other software in a targeted and practical manner. It will also strengthen personnel training to effectively prevent disputes and standardize business activities.



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