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It is profitable doing business with China – until things go wrong and they tie you up in Mandarin.
That was the lesson Karl-Heinz Göbel learnt after an exclusive contract to import and distribute Chana cars from China in South Africa became complicated.
He brought an urgent application in the North Gauteng High Court in Pretoria to stop arbitration proceedings because he cannot understand the documents – which are all in Mandarin.
According to Göbel’s affidavit, his company signed the exclusive agreement in May 2006. It stipulated that any dispute would be referred to arbitration, with English as the language of communication, and Chinese laws would apply.
Things went wrong, and in a second agreement, Göbel’s company, Abrina 708, signed a debt acknowledgment for $895 435 (R14.3 million).
Abrina and the Chana International Corporation would then develop a further business plan for southern Africa.
In a third agreement, Göbel signed sponsorship in his personal capacity.
“Without my knowledge, Chana changed the terms and conditions on arbitration in the first agreement,” said Göbel.
According to this agreement, the arbitration would be conducted in Mandarin and held in Chongqing, China.
At the end of last year, he received a notice of arbitration in English, informing him all further correspondence would be in Mandarin. Chana’s documents were handed over to him, but he has “absolutely no idea what they say”.
Göbel said he did not want to drag things out, but he would at least have liked to understand what was going on.
He said he had between five and 10 witnesses who would all have to travel to China to testify, and that was not possible.
The South African court granted an urgent order prohibiting Chana from proceeding until the dispute about how the arbitration should be conducted was heard.
