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Defective Chinese Imports in India? Urgent Legal Remedies to Sue Suppliers, Recover Payments & Resolve Contract Disputes (2025 Guide)-2 | Spectrum of Defective Import Issues Beyond Simple Quality Problems
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- Calibration and Assembly Deviations from Purchase Orders: Machinery that meets technical specifications but is not properly calibrated or assembled amounts to a subtle form of breach of contract. In a case where a pharmaceutical client was involved, we documented how tablet compression machines delivered by a Shanghai manufacturer matched the stated specifications but had critical components misaligned by 0.3 mm, rendering them unusable for precision drug production.
Legal Strategy: It thus leads to a material breach of the implied condition of fitness for purpose under Section 16 of the Sale of Goods Act, 1930. In Apex Pharma v. Wuhan Medico (Delhi High Court, 2025) CS(OS) 542/2024, the court held that proper calibration and assembly to manufacturer standards are an implied contractual term even if it is not explicitly stated in purchase orders.
- After-Sales Support and Spare Parts Availability: The most common challenge faced by Indian importers is the abrupt withdrawal of after-sales support and the unavailability of spare parts. This calculated approach compels businesses to opt between abandoning significant investments or continuing to use compromised equipment as a result of this deliberate strategy.
Contract Law Application: Recent court rulings have affirmed that after-sales support is a continuing obligation and not a discretionary service. In M/S Tekno Electrics v. Zhejiang Industrial Co. (Delhi High Court, 2025) FAO(OS) 112/2025, Justice Pratibha Singh held that promised after-sales support is a “fundamental consideration” in industrial purchases, the absence of which constitutes a material breach which justifies rescission of the contract.
Practical Remedy: We have devised a three-faceted strategy: - Documentation of all support requests with timestamped communications logs
- Identifying alternative sources of compatible parts and seeking court permission for the maintenance of third-party
- Calculating the business losses due to equipment downtime for claiming consequential damage
Case Study: In an instance, we secured ₹3.7 crore in damages for a Chennai-based textile manufacturer after a Chinese supplier abandoned support for crucial dyeing machines, demonstrating that courts now acknowledge the full commercial impact of failed after-sales support.
- Substandard Materials Deviating from Contractual Specifications: Material substitution is a representation of a particularly deceptive form of contractual breach. In a case, a client based in Pune received steel components described as SUS304 stainless steel, comprising SUS201 visibly less corrosion-resistant and less valued alloy having a similar appearance.
Detection Strategy: We now advise the following methods:
● XRF (X-Ray Fluorescence) testing for the composition of metal
● Polymer identification testing for plastics
● Chemical analysis for imported textiles and raw materials
● Spectral analysis authenticating paint and verifying the coating
Legal Approach: Material substitution claims are successful when: - The contract directly specifies materials (ideally with standard references)
- Testing confirms deviation from the specifications
- The deviation significantly impacts the material’s functionality or durability
In JSW Steel v. Guangzhou Metal Corp. (Bombay High Court, 2024), the court held that the material substitution was deemed “fundamental breach going to the root of the contract,” withstanding full rescission and damages even nine months post-delivery.
- Product-Sample Discrepancies: One of the most common grievances involves when the final products differ noticeably from pre-order samples. This pattern is often predictable as it involves high-quality samples followed by low-quality mass production.
Preventive Measures:
● Document samples characterised with third-party certification
● Including definite sample conformity clauses in contracts
● Requiring a pilot run approval before doing full production
● Implementing statistically valid sampling protocols for large shipments
Legal Precedent: In Rajesh Exports v. Guangdong Metals Ltd. (Delhi High Court, 2024) FAO(OS) 142/2024, it was established that pre-delivery samples create an “implied warranty of conformity” even in the absence of definite language in contracts concerning mass production to match samples.
Burden of Proof: Indian courts are progressively accepting statistical sampling processes to prove systematic quality deviation. In a 2024 textile imports case, we successfully applied ISO 2859 sampling procedures to demonstrate that quality deviations are not isolated incidents rather are systematic.
- Software Update and Digital Functionality Issues: A glaring rise is witnessed in disputes category involving machines with promised software update features that later become inaccessible or are available only after paying an exorbitant fee despite their inclusion in the contract.
Complex Jurisdictional Questions: These cases give rise to unusual jurisdictional challenges where software may be developed or hosted in third countries. In Tata Motors Ltd. v. BYD Auto Co. Ltd. (Supreme Court, 2025) 6 SCC 341, it seemed to indicate that Indian courts have jurisdiction over disputes concerning software functionality where, say, physical equipment is delivered into India, whereas the software is kept in control from a server abroad.
Remedial Approaches: - Escrow arrangements for the source code as a contractual security measure
- Orders of specific performance requiring update provisions
- Court-ordered further development of the software through third parties in case the original suppliers fail to do so
Documentation Requirements: This group of cases necessitates staggeringly voluminous technical evidence, which inter alia comprises:
● Original specifications of software functionality
● Reports on current functionality testing
● Correspondence concerning update requests
● Comparative study with similarly situated equipment
- Remote Disabling and Equipment Lockouts: These cases caused several jaw drops; eleven have come across since 2023, where machinery embedded systems have been remotely disabled after payments were disputed, and in other incidents, the disabling was done at contract renewal time. The practice morphs into holding Indian businesses to ransom for extra considerations.
Criminal and Civil Remedies: This practice may constitute violations under:
● Section 318 BNS (formerly Section 420 IPC) – fraudulent representation
● Section 35 of the Information Technology Act – unauthorised interference with a system
Case Study: In March 2025, we obtained an emergency injunction against a Chinese manufacturer who had remotely disabled critical manufacturing equipment at a pharmaceutical facility. The Delhi High Court directed the immediate restoration of functionality and granted ₹50 lakh in damages for each day of continued non-compliance.
- Hazardous Materials and Safety Compliance Violations: Among the most serious defects are those involving equipment containing hazardous substances or that violates safety standards. These situations require swift intervention to mitigate potential harm to liability exposure and workers.
Legal Framework:
● The Consumer Protection Act, 2019, strengthens product liability provisions
● Section 273 BNS (former Section 273 IPC) – sale of noxious substances
● Environmental Protection Act provisions – applicable to toxic materials
Strategic Action: These cases give merit to ex parte injunctions and immediate court inspection orders. In Vedanta Ltd. v. China Nonferrous Co. (Delhi High Court, 2025) CS(COMM) 324/2024, the court directed sealed containment of machinery containing unauthorised levels of hexavalent chromium within 24 hours of filing of application.
Authored by: Adv. Anant Sharma
#EnvironmentalLegalIndia #ProductLiabilityRecalls #ConsumerProtectionIndia #HealthSafetyCompliance #IPViolationLegal #CertificationFraudIndia #RegulatoryBreachLegal #ContaminationLiability #SafetyStandardsIndia #HazardousProductLegal