An Analysis On Dispute Between Qiu Xukui And LUZHENG Company Over Futures Brokerage Contract

In recent years, system failure of securities and futures Company occurred many times, which drew the market's attention and a typical case is futures brokerage contract dispute between Qiu Xukui and LUZHENG Futures Company. In this case, LUZENG company provided its customer Qiu Xukui with a variety of transactions, such as telephone transactions, written transactions and online transactions, including an online futures trading software designed and maintained by HENGSHENG Company. HENGSHENG trading system appeared to log on slowly when the futures price fluctuated sharply, which led to the failure of Qiu Xukui's trade in time, and resulted in a loss. Accordingly, Qiu Xukui filed a lawsuit, and required LUZHENG Company to compensate him for the loss of 1220 thousand yuan. This case has been tried for two times. Ultimately, Shanghai High Court commuted that LUZHENG Company should shoulder a part of the responsibility for the loss of Qiu Xukui. There are three controversial issues in this case. Firstly, whether the company should bear the liability for breach of contract; secondly, how the amount of compensation should be determined; thirdly, whether the prescription limit has been broken or not. According to these three points, Shanghai High Court found although HENGSHENG system is not designed by LUZHENG company, but it was provided to customers as order tools by LUZHENG company. LUZHENG company had an collateral obligation to ensure that the system would not damage the rights and interests of clients due to system failure. As a professional company engaged in the futures, LUZHENG company shall have a higher duty of care. But the company didn't fulfill its care duty because of the action of use without testing fully, which broke a contract; hence, it shall pay compensation to the clients who had undergone some damage accordingly. LUZHENG company shall not be exempted from exceptions in the futures brokerage contract because of its fault and the statutory exemptions were not applicable to the case. The failure of HENGSHENG system directly led to the loss of trading opportunities. As for the amount of compensation, in that the actual transaction didn't work due to the failure of that system and hence Shanghai High Court comprehensively estimated that LUZHENG Company shall compensate Qiu Xukui 340 thousand yuan according to many factors, such as probability and derogation measures. Qiu Xukui's behavior of petition led to the interruption of limitation of lawsuit. Qiu Xukui filed a lawsuit which didn't exceed the limitation.