Civil Judgment — China Mobile v. Panke Technology — Dedicated Digital Transmission Line

Civil Judgment

Plaintiff: China Mobile Communications Group Beijing Co., Ltd., with its registered address at No. 7 Dongzhimen South Street, Dongcheng District, Beijing; organization code: 72261170-0.

Legal representative: Zhou*, chairman and general manager.

Authorized representative: Cao Huanhuan, lawyer at Beijing Zhongyin Law Firm.

Defendant: Panke (Beijing) Technology Co., Ltd., with its registered address at Room 806, Floor 8, Building 1, No. 16 Chaowai Street, Chaoyang District, Beijing; registration number: 110105014037164.

Legal representative: Zhang**.

This Court accepted the telecommunications service contract dispute between the plaintiff, China Mobile Communications Group Beijing Co., Ltd. (hereinafter “China Mobile”), and the defendant, Panke (Beijing) Technology Co., Ltd. (hereinafter “Panke”), on 13 May 2015. A collegial panel was constituted in accordance with law and held a public hearing. Cao Huanhuan, the plaintiff China Mobile’s authorized representative, appeared at the hearing. The defendant Panke did not appear despite having been lawfully summoned. The hearing of this case has now concluded.

The plaintiff China Mobile alleged as follows: On 18 February 2013, the plaintiff and defendant entered into the China Mobile Communications Group Beijing Co., Ltd. Dedicated Digital Transmission Line Service Agreement, under which the plaintiff agreed to provide dedicated digital transmission line services to the defendant. The agreement provided that the defendant should settle the bandwidth rental charges for the preceding month’s dedicated digital transmission line services with the plaintiff between the fifth day of each month and the fourth day of the following month. If the defendant failed to pay on time, the plaintiff was entitled to suspend services and to impose additional contractual penalties at 0.3% per day (three per thousand per day) on the unpaid amount until the defendant settled the arrears. If charges for any month remained unpaid three months after the end of that month, the plaintiff was entitled to terminate performance of the agreement, cancel the dedicated digital transmission line services, and continue pursuing all unpaid charges and contractual penalties. The defendant failed to pay the dedicated digital transmission line charges and contractual penalties due for January through March 2014 and still did not pay after repeated demands by the plaintiff. The plaintiff therefore brought this action seeking: (1) termination of the China Mobile Communications Group Beijing Co., Ltd. Dedicated Digital Transmission Line Service Agreement entered into by the parties; (2) payment by the defendant of CNY 10,163.48 in outstanding dedicated digital transmission line charges; and (3) payment by the defendant of CNY 11,916.16 in contractual penalties for the period before 4 May 2015, together with contractual penalties from 5 May 2015 until the date of actual payment, calculated on the outstanding service charges at 0.3% per day (three per thousand per day). The plaintiff also sought to have the defendant bear the litigation fees and public-notice fee.

The defendant Panke submitted no response.

Upon hearing the case, the Court found as follows: On 18 February 2013, the plaintiff and defendant entered into the China Mobile Communications Group Beijing Co., Ltd. Dedicated Digital Transmission Line Service Agreement, under which the plaintiff would use its transmission network to provide fixed-bandwidth data transmission channels to the defendant. Dedicated digital transmission lines included point-to-point, point-to-multipoint, and point-to-network dedicated lines. The parties agreed that the agreement would take effect on the date both parties affixed their seals and would remain valid for one year. If neither party objected when the term expired, the term would be extended for one year, and so on. A party wishing not to renew the lease after its term expired, or having an objection, was required to notify the other party in writing of cancellation and related matters thirty days in advance. Dedicated digital transmission line charges were CNY 3,480 per month. The monthly billing period ran from the first to the last day of each month, that is, one calendar month. Bandwidth rental charges were collected monthly. If services covered less than a full month in the month in which the lease began or ended, that month’s bandwidth rental charge was calculated as the number of days actually used × the basic monthly rental fee × 12 months ÷ 365 days, to two decimal places, rounding based on the third decimal place. The defendant should settle the bandwidth rental charges for the preceding month’s dedicated digital transmission line services with the plaintiff between the fifth day of each month and the fourth day of the following month. If the defendant failed to pay on time, the plaintiff was entitled to suspend circuit rental services and to impose additional contractual penalties on the unpaid amount at 0.3% per day (three per thousand per day), from the date the charges became overdue until the date all arrears were paid. If any month’s dedicated digital transmission line charges remained unpaid three months after the end of that month, the plaintiff was entitled to terminate performance of the agreement, cancel the dedicated digital transmission line services activated for the defendant, and continue pursuing all unpaid charges and contractual penalties. The defendant failed to pay dedicated digital transmission line charges for January through March 2014, totaling CNY 10,163.48. The plaintiff ceased providing services to the defendant starting in April 2005.

The foregoing facts are corroborated by evidence in the case file, including the parties’ statements, the China Mobile Communications Group Beijing Co., Ltd. Dedicated Digital Transmission Line Service Agreement, the dedicated digital transmission line service charge schedule, and the service registration form.

This Court considers as follows: Under China’s Civil Procedure Law, parties have the right to respond and to challenge the evidence submitted by the opposing party. In this case, the defendant Panke, having been lawfully summoned by this Court, refused without a legitimate reason to appear and defend the action; it is deemed to have waived its rights to respond and to challenge the evidence. Parties shall fully perform their obligations as agreed. In this case, the defendant failed to pay the relevant charges to the plaintiff on time as required by the contract, and the plaintiff has ceased providing services in accordance with the contract. This Court therefore grants the plaintiff’s claim to terminate the contract. The plaintiff now seeks payment by the defendant, in accordance with the contract, of outstanding dedicated digital transmission line service charges of CNY 10,163.48, contractual penalties of CNY 11,916.16, and further contractual penalties. The amounts are reasonable and the grounds are sufficient, and this Court grants those claims. In summary, pursuant to Articles 60, 93 and 113 of the Contract Law of the People’s Republic of China and Article 144 of the Civil Procedure Law of the People’s Republic of China, this Court enters judgment as follows:

I. It is confirmed that the China Mobile Communications Group Beijing Co., Ltd. Dedicated Digital Transmission Line Service Agreement entered into by the plaintiff, China Mobile Communications Group Beijing Co., Ltd., and the defendant, Panke (Beijing) Technology Co., Ltd., is terminated.

II. Within seven days after this judgment takes legal effect, the defendant, Panke (Beijing) Technology Co., Ltd., shall pay the plaintiff, China Mobile Communications Group Beijing Co., Ltd., dedicated digital transmission line service charges of CNY 10,163.48.

III. Within seven days after this judgment takes legal effect, the defendant, Panke (Beijing) Technology Co., Ltd., shall pay the plaintiff, China Mobile Communications Group Beijing Co., Ltd., contractual penalties for the period before 4 May 2015 of CNY 11,916.16, and shall pay contractual penalties for the period from 5 May 2015 until the date of actual payment, calculated on the outstanding dedicated digital transmission line service charges at 0.3% per day (three per thousand per day).

If the monetary payment obligations are not performed within the period specified in this judgment, double interest on the debt for the period of delayed performance shall be paid in accordance with Article 253 of the Civil Procedure Law of the People’s Republic of China.

The case acceptance fee of CNY 352 and the public-notice fee of CNY 560 shall be borne by the defendant, Panke (Beijing) Technology Co., Ltd., and shall be paid within seven days after this judgment takes legal effect.

A party dissatisfied with this judgment may submit a notice of appeal to this Court within fifteen days of service of the judgment, provide copies according to the number of opposing parties, and pay the case acceptance fee for the appeal, to appeal to Beijing No. 2 Intermediate People’s Court. If the case acceptance fee for the appeal is not paid within seven days after the appeal period expires, the appeal shall be treated as automatically withdrawn.

18 September 2015