Guangzhou Chinese Investment Company v. Jiang Su Jiang Kong Filming Company Limited for

Appeal Court’s findings are as follows :

 

·    The profit sharing agreement entered into between the two parties covenanting that Jiang Kong is responsible for the film’s distribution work in Gong Su Province and that the profit sharing corresponds to the income generated by the box office are in line with the PRC Copyright law and the contract entered into between the parties.

 

·    Regarding the deception issue, although the written contract is proposed by the Investment Company. Both parties agreed the terms of the agreement and there was no deception. Further the date of the contract was agreed by Jiang Kong which is not prejudicial to Cheung Kong’s interest, the national’s interest or third party. Therefore, dating back the contract cannot be regard as deception.

 

·    Clause 4(6) of the profit sharing agreement provides Jiang Kong is liable for the accuracy of the sales figures provided by the box offices and is also liable for the box offices’ non-accuracy and non-disclosures. Jiang Kong’s act of unilaterally amended this clause to read the filming company is liable does not exempt it from liability. Although Investment Company issued a letter to Jiang Kong, filming company and theatre demanding the actual figure, failing which a penalty of 10 times of the damages would be imposed. this letter cannot support that the Investment Company and Jiang Kong reached a new agreement. According to law of contract, Jiang Kong is liable for any non-disclosures and inaccuracy of the figures provided by the box offices.

 

·    Due to the fact that it is difficult for the Investment company to prove the inaccuracy and the penalty was agreed by both parties, the Court does not agree to Jiang Kong’s submissions that the damages is 5 times of the non-disclosures figures.

 

·    As for any non-disclosures of box offices’ figures, the request for an in-dept enquiry on the actual figures showing in Gong Su Province is not granted by the Court. Firstly, the Investment Company is required to comply with the burden of proof as stipulated in the agreement. Secondly, the Court only verifies the non-disclosures figures and the burden of proof on damage is on the Investment Company. Otherwise, it will act contrary to the agreement agreed by both parties and the neutral position of the Court is a problem. Further, it is not fair to the other party.

 

·    In addition, the penalty is able to compensate the damage caused by Jiang Kong. According to the PRC law and to the Agreement, the burden of proof of any non-disclosures is on the Investment Company. As the Original Court has verified the figures provided by Investment Company and use those figures as missing figures, the Court will not go beyond this point.   The objectiveness of the test adopted by the Original Court was one of the grounds of appeal raised by the parties, the Court has accepted this as part of the appeal reasons.

 

·    According to 1095 sets of investigation reports provided by the Investment Company, there are some discrepancies in the showing time in Hoi An Province. These investigation reports were treated as evidence on non-disclosures. Further there are discrepancies on the statement provided by witnesses. The Court did not accept this as evidence. The Court compared the daily report on the show and the reports on the film accounts and confirms that the regional filming company did not provide the box office figures accurately. Jiang Kong submitted same report to the Investment Company and therefore the fact of inaccuracy of the figures is correct.