Dispute between appellant Company A and respondent Company B over a sales contract

Abstract of judgment:

Regarding the applicable law, the parties to this case did not make a specific agreement in the contract. Since both China, where the parties have their places of business, and Country A are contracting states to the United Nations Convention on Contracts for the International Sale of Goods (CISG) signed in Vienna on April 11, 1980, inapplicable circumstances as stipulated in articles 2 and 3 of the CISG do not apply in this case.

Considering that the appellant, Company A, explicitly chose to apply the CISG as the basis for determining its rights and obligations throughout the first-instance and this second-instance adjudications, and the parties did not explicitly exclude the application of the CISG, the CISG shall apply automatically in this case (excluding the provisions for which China has declared a reservation).

As for matters related to the adjudication of the case that are not covered by the CISG, in accordance with Article 41 of the Law of the People's Republic of China on the Law Applicable to Foreign-Related Civil Relationships, the parties may agree to choose the law applicable to the contract. Where the parties have not made a choice, the law of the place of habitual residence of the party whose performance most embodies the characteristics of the contract, or other law most closely connected with the contract shall apply. Given that both parties have agreed to apply the law of the People's Republic of China when the CISG is silent, the law of the People's Republic of China shall govern.