Complaint against Architect Ch'en Hui-hsiung for deliberately stalling the screening of ceiling materials to be used for the new project of the MOTC Telecommunications Service Complex, with the intent to benefit a certain material supplier
Chinese Taipei
Case:
Complaint against Architect Ch'en Hui-hsiung for deliberately stalling the screening of ceiling materials to be used for the new project of the MOTC Telecommunications Service Complex, with the intent to benefit a certain material supplier
Key words:
concealing important facts, abuse of superior position
Reference:
Fair Trade Commission Decision of 13 May 1998 (the 340th Commission Meeting); Disposition (87) Kung Ch'u Tzu No. 134
Industry:
Construction and Engineering Services Industry (7200)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
A supplier of construction materials filed a complaint alleging that Architect Ch'en Hui-hsiung (the respondent) had stalled for a year the screening of the ceiling engineering implementation plan and samples deliberately, in order to favor the AMF brand 300 mm wide x 1050 mm long ceiling panels and Ta Chung Co. 38 mm high x 24 mm wide light steel frames products referenced in the drawings, which products were supplied by a single distributor.
The Project bid was awarded to Teh Sheng. Teh Sheng selected, and signed an agreement with, the complainant from the four companies named by the respondent as qualified ceiling engineering companies, i.e. Ta Chung Co., Wei Li Co., Kuo Pin Co. and the complainant. The complainant accordingly planned to ship the materials into the site for constructions, but the respondent refused to give his approval. The respondent argued that the complainant submitted a 38mm high light steel frame sample for review, which did not comply with the 40mm and above requirement; and, as no sample mineral fiber panel was submitted, no approval was granted.
In practice, however, the ceiling panel screening requires only a small piece or section of the panel that is sufficient to meet the fireproof and density tests. The materials would be allowed in for constructions upon approval of the sample. In addition, according to the explanation given in the drawing, those materials whose specification was higher than the required standard were acceptable subject to the approval of the Project owner and the architect's approval of the related supplier-prepared drawing. Upon the architect's approval of the detailed implementation drawing, the materials could be applied to constructions.
The complainant then submitted a tooling certification for a 40mm or above light steel frame and an ASTM test report, but still was not approved. Clearly, the respondent deliberately made it difficult for the complainant.
Furthermore, the budget of the Project was based on the prices quoted by Ta Chung, Wei Li, and Kuo Pin. Wei Li and Kuo Pin did not have supply capabilities. In addition, Wei Li was not the agent for the products in the catalog it presented and was not able to supply proof of its business performance, original copies of the catalog and the address of the factory. On the other hand, Kuo Pin could only implement the ceiling panel work and was unable to present related samples and original copies of the catalog. Ta Chung was known in the industry for specializing in seared resin products, and its products fully complied with the standard. The respondent alleged Ta Chung's 990 series products were made by US-based CMC. However, CMC is a world famous company, and its Chinese Taipei distributor is Chiu Ju Co. CMC did not produce a 990 series of products, and its logo was different from Ta Chung's CMC990 logo. It was established that Ta Chung's products were not US products. The respondent should have known these facts when he based the drawing and the specification on Ta Chung's products. The respondent also alleged that he followed the owner's instruction in removing the AMF and CMC brands, and only Ta Chung, Wei Li, Ch'ung You, Tien Ch'iang, Hsien Chi were capable of supplying the products. The brand names of their products included ARMSTRONG, USG, CELOTEX, OWA, and AMF. The CELOTEX product producer did not want to produce the supply because the 1050 x 300 x 15 mm specification was rare (as per its comment: "Please note that we do not produce this unusual size.") Obviously, the respondent-named capable suppliers could only have been the mineral fiber panel companies, and not just any company that was willing to produce the unusual size. The respondent was found to have engaged in a deliberate deception.
Article 24 of the Law provides that, unless otherwise provided for in the Law, an enterprise shall not conduct other deceptive or obviously unfair acts that are sufficient to affect trading order. The respondent was dishonest in the course of budgeting for the Project. The complainant's own products were not the standard products in the design but the complainant was listed as a qualified business [for the Project]. Clearly, the respondent concealed important facts that misled the complainant into believing that it had a business opportunity. Such act was sufficient to affect the trading order and satisfied the "deceptive" requirement under Article 24 of the Law. The complainant re-submitted a tooling certificate [certifying the compliance of specification] and a test report, but still failed to be approved. The respondent acted against business ethics and abused his superior position to obstruct the complainant. These acts constituted "obviously unfair acts" in violation of Article 24 of the Law.
Summarized by Huang, Ch'ung-chieh
Supervised by Tzuo, T'ien-liang