Identifier
Created
Classification
Origin
06GUANGZHOU30986
2006-10-05 05:24:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Guangzhou
Cable title:
Chinese Authorities Ban AMCIT from Leaving China Pending
how-toVZCZCXRO0303 RR RUEHCN RUEHGH RUEHVC DE RUEHGZ #0986 2780524 ZNR UUUUU ZZH R 050524Z OCT 06 FM AMCONSUL GUANGZHOU TO RUEHC/SECSTATE WASHDC 4230 INFO RUEHOO/CHINA POSTS COLLECTIVE RUCPDOC/USDOC WASHDC RUEAIIA/CIA WASHDC RUEKJCS/DIA WASHDC RHHMUNA/HQ USPACOM HONOLULU HI
UNCLAS GUANGZHOU 030986
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: CASC CJAN ECON EINV KJUS CH
SUBJECT: Chinese Authorities Ban AMCIT from Leaving China Pending
Civil Contract/IPR Dispute
UNCLAS GUANGZHOU 030986
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: CASC CJAN ECON EINV KJUS CH
SUBJECT: Chinese Authorities Ban AMCIT from Leaving China Pending
Civil Contract/IPR Dispute
1. (SBU) Summary: PRC immigration authorities detained AMCIT Robert
Jonathan Carr for 12 hours at the Zhongshan port of entry on October
3 and ordered him to remain in China until the resolution of a civil
case brought against him by a manufacturing company in Changsha,
Hunan. The Hunan company claims that Carr's company, which designs
remote-controlled airplanes and unmanned aerial vehicles, is in
breach of contract. Moreover, the Hunan firm is acting to block
Carr from further utilizing his US patents in China. Carr's Chinese
attorney plans to send letters of protest to the PRC Supreme
People's Court and Hunan Supreme People's Court. Consulate General
Guangzhou and Embassy Beijing, in whose consular district this court
matter will unfold, have coordinated on Mr. Carr's situation. End
summary
Background on AMCIT's Company
--------------
2. (SBU) On October 4, Admin Officer, ACS Chief, and Econoff met
with AMCIT Robert Jonathan Carr (DPOB: 5/29/1954, Oklahoma),Carr's
attorney Luka Lu, and Carr's assistant, Suzie Li. Carr is president
of IWA Toy Co., a 10-employee enterprise based in Oklahoma City, OK,
that designs model UAVs (unmanned aerial vehicles). Several large
retail chains have signed purchasing agreements with IWA, and the
U.S. Navy and DHS have expressed interest in one of Carr's designs.
IWA has manufacturing contracts with three firms in Guangdong
province (two others are planned) as well as with Xicheng Co., a
manufacturer in Changsha, Hunan.
The Business Dispute
--------------
3. (SBU) IWA and Xicheng began discussions in 2004 and signed a
manufacturing contract in July 2005. Carr said Xicheng was late in
delivering the UAV and then produced a substandard and dangerous
product. Carr also alleges that Xicheng managers lied to him about
the company's prior experience and manufacturing capabilities. In
July 2006, the two sides agreed by correspondence to terminate their
contract. However, in June 2006, unbeknownst to IWA, Xicheng filed
a civil suit with the Changsha Intermediate Court, claiming that IWA
did not own the UAV patent and was in breach of contract. (Note:
Carr has not registered the UAV patent in China, although he has
done so in other countries, including the US.) Xicheng is currently
selling the UAV under its own brand (model: Swift, website
http://www.hnxcmodel.com/eng/paomoeng.htm).
Detained at Port of Entry; Passport Confiscated
-------------- --
4. (SBU) On October 3, as Carr was clearing passport control prior
to departing for Hong Kong where he planned to catch a flight to
return to the United States, immigration authorities at the
Zhongshan, Guangdong port of entry confiscated Carr's U.S. passport
and detained him for 12 hours. The presiding judge in the case took
the unusual step of flying from Changsha to Zhongshan that day
(i.e., during the Chinese national holiday week) and formally served
Carr with a court order. The judge requested that Carr pay RMB 4.7
million (USD 590,000) - the amount of damages alleged in the
lawsuit. Carr did not sign the order or pay the fine. Immigration
authorities told Carr that he could not leave China until the case
was resolved. Carr's lawyer said such an action is highly unusual,
particularly in a civil case, and believes Xicheng has used its
political connections to influence the court.
Next Steps
--------------
5. (SBU) Carr is currently residing at a hotel in Zhongshan, a city
adjacent via ferry to both Shenzhen and Hong Kong. Chinese
authorities continue to hold Carr's U.S. passport. Carr's attorney
said they plan to send a letter of protest to the PRC Supreme
People's Court and the Changsha Supreme People's Court. The
attorney said PRC authorities did not follow standard procedures for
serving court orders and have overstepped their legal bounds by
barring Carr from leaving China.
6. (SBU) Consulate Guangzhou has coordinated with Embassy Beijing on
this case and will continue to monitor developments insofar as Carr
remains within our Consular district. Embassy Beijing normally
follows court proceedings in Hunan province.
GOLDBERG
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: CASC CJAN ECON EINV KJUS CH
SUBJECT: Chinese Authorities Ban AMCIT from Leaving China Pending
Civil Contract/IPR Dispute
1. (SBU) Summary: PRC immigration authorities detained AMCIT Robert
Jonathan Carr for 12 hours at the Zhongshan port of entry on October
3 and ordered him to remain in China until the resolution of a civil
case brought against him by a manufacturing company in Changsha,
Hunan. The Hunan company claims that Carr's company, which designs
remote-controlled airplanes and unmanned aerial vehicles, is in
breach of contract. Moreover, the Hunan firm is acting to block
Carr from further utilizing his US patents in China. Carr's Chinese
attorney plans to send letters of protest to the PRC Supreme
People's Court and Hunan Supreme People's Court. Consulate General
Guangzhou and Embassy Beijing, in whose consular district this court
matter will unfold, have coordinated on Mr. Carr's situation. End
summary
Background on AMCIT's Company
--------------
2. (SBU) On October 4, Admin Officer, ACS Chief, and Econoff met
with AMCIT Robert Jonathan Carr (DPOB: 5/29/1954, Oklahoma),Carr's
attorney Luka Lu, and Carr's assistant, Suzie Li. Carr is president
of IWA Toy Co., a 10-employee enterprise based in Oklahoma City, OK,
that designs model UAVs (unmanned aerial vehicles). Several large
retail chains have signed purchasing agreements with IWA, and the
U.S. Navy and DHS have expressed interest in one of Carr's designs.
IWA has manufacturing contracts with three firms in Guangdong
province (two others are planned) as well as with Xicheng Co., a
manufacturer in Changsha, Hunan.
The Business Dispute
--------------
3. (SBU) IWA and Xicheng began discussions in 2004 and signed a
manufacturing contract in July 2005. Carr said Xicheng was late in
delivering the UAV and then produced a substandard and dangerous
product. Carr also alleges that Xicheng managers lied to him about
the company's prior experience and manufacturing capabilities. In
July 2006, the two sides agreed by correspondence to terminate their
contract. However, in June 2006, unbeknownst to IWA, Xicheng filed
a civil suit with the Changsha Intermediate Court, claiming that IWA
did not own the UAV patent and was in breach of contract. (Note:
Carr has not registered the UAV patent in China, although he has
done so in other countries, including the US.) Xicheng is currently
selling the UAV under its own brand (model: Swift, website
http://www.hnxcmodel.com/eng/paomoeng.htm).
Detained at Port of Entry; Passport Confiscated
-------------- --
4. (SBU) On October 3, as Carr was clearing passport control prior
to departing for Hong Kong where he planned to catch a flight to
return to the United States, immigration authorities at the
Zhongshan, Guangdong port of entry confiscated Carr's U.S. passport
and detained him for 12 hours. The presiding judge in the case took
the unusual step of flying from Changsha to Zhongshan that day
(i.e., during the Chinese national holiday week) and formally served
Carr with a court order. The judge requested that Carr pay RMB 4.7
million (USD 590,000) - the amount of damages alleged in the
lawsuit. Carr did not sign the order or pay the fine. Immigration
authorities told Carr that he could not leave China until the case
was resolved. Carr's lawyer said such an action is highly unusual,
particularly in a civil case, and believes Xicheng has used its
political connections to influence the court.
Next Steps
--------------
5. (SBU) Carr is currently residing at a hotel in Zhongshan, a city
adjacent via ferry to both Shenzhen and Hong Kong. Chinese
authorities continue to hold Carr's U.S. passport. Carr's attorney
said they plan to send a letter of protest to the PRC Supreme
People's Court and the Changsha Supreme People's Court. The
attorney said PRC authorities did not follow standard procedures for
serving court orders and have overstepped their legal bounds by
barring Carr from leaving China.
6. (SBU) Consulate Guangzhou has coordinated with Embassy Beijing on
this case and will continue to monitor developments insofar as Carr
remains within our Consular district. Embassy Beijing normally
follows court proceedings in Hunan province.
GOLDBERG