Ferrante assists in litigating and revoking an administrative punishment

Through an administrative litigation in which the Sichuan Higher People's Court recently handed down an appellate judgment, our firm has assisted the Italian company STAFF INTERNATIONAL S.P.A.(“STAFF”) in successfully revoking an administrative punishment decision issued by the local Market Supervision Administration (formerly, the Administration for Industry and Commerce, "AIC") against certain clothing supplied by STAFF.

STAFF, founded in 1976, is a Made in Italy leader in research and development, ready-to-wear and accessories production, logistics, omni-channel distribution and marketing.

In July 2018, on the grounds that the concerned clothing supplied by STAFF were indicating an incorrect place of production (namely Shanghai, while the actual place of production was Nanjing, China), the AIC of the Jinjiang District, Chengdu City, ordered a domestic distributor to stop selling the clothing and eliminate the negative impact, and imposed an administrative fine of RMB 98,000.

Dissatisfied with the AIC’s punishment decision, STAFF entrusted our firm to initiate an administrative litigation, seeking revocation of the punishment decision. In defense of its punishment decision, the defendant AIC argued that STAFF was not the counterparty or interested party of the punishment decision, and hence had no right to initiate the administrative litigation.

However, both the trial court and the appellate court upheld the arguments put forward by our firm on behalf of STAFF, finding that, as the upstream supplier of the concerned clothing, STAFF does have an interest in the punishment decision and therefore has a standing to litigate it; and that the mistake in place of production of the concerned clothing will unlikely mislead consumers and does not constitute unfair competition. The court therefore revoked the AIC’s punishment decision for misapplication of the Anti-unfair Competition Law.

The successful revocation of the AIC’s punishment decision means that the concerned clothing supplied by STAFF did not violate the Anti-Unfair Competition Law, as previously held by the AIC, and exonerates STAFF from being wrongly viewed as a supplier of illegal product.