Chinese Commerical Arbitration – Alternative Approach for Resolving International Disputes

March 18, 2009

The New York Times characterizes China’s court system as a “Chinese legal netherworld.”[1] Many foreign business memoirs are packed with horror stories about corrupt judges and unenforceable court decisions.[2] For foreign investors, arbitration offers a way to bypass much of the corruption and local protectionism existing in court systems.[3] In 2005 China’s arbitration commissions handled more than 1,000 disputes involving foreign partners.[4] With some improvements, Chinese arbitration will be the first choice for resolving international business disputes in China. This article intends to address the history and structure of the arbitration system in China and how it has developed in recent years to meet the needs of constant economic development.

China has a long history of mediation and conciliation. [5] However, before the mid-1950s, there was no independent international commercial arbitration in China. As a result, when a dispute arose between a Chinese party and a foreign party, the parties typically referred the arbitration to a tribunal outside China, notwithstanding that Chinese parties were concerned about arbitrating in a foreign tribunal.[6] The former Government Administration Council of the Central People’s Government established the Foreign & Trade Arbitration Commission which is the former name of today’s Chinese International Economic & Trade Arbitration Commission  (“CIETAC”).[7]

However, the organization developed very slowly. By the end of the next 20 years, the CIETAC only accepted about 100 arbitral cases.[8] The development of international commercial arbitration in China grew dramatically after China began to implement its open-door policy in the late 1970s.[9] By the middle of 1990s, CIETAC filings were averaging more than 700 cases per year. CIETAC has thus become the world’s busiest international arbitration tribunal.[10] The evaluation on CIETAC competency was overwhelmingly positive. The American Chamber of Commerce in Beijing conducted a survey among American companies and found that companies having experience with the organization had positive feedback on the competency of CIETAC. [11]

The primary law regulating arbitration today is the Chinese Arbitration Law (“CAL”). In addition, the Civil Procedure Law and other laws contain some provisions concerning arbitration or enforcement of arbitral agreements and awards.[12] The CAL was adopted and promulgated in 1994, as China began to implement a market economy.[13]

The CAL has the characteristics which are essential to modern international commercial arbitration law. [14] First, the CAL considers promoting party autonomy as one of its primary goals. Parties must agree to arbitrate of their own will before an arbitration institution can exert jurisdiction unless parties agree to arbitrate “of their own record”; Chinese courts cannot assert jurisdiction over the dispute. And an arbitration provider cannot accept a dispute if there is no valid agreement to arbitrate.[15] Second, the CAL provides that arbitration institutions shall be independent from the government. For example, Article 8 provides that arbitration shall be conducted independently according to the law and shall not be subject to interference from government entities. Article 14 further provides that “all arbitration committees are independent from the administrative organs.”

Enacted in 1991, the Civil Procedure Law is another law containing provisions related to arbitration.[16] It separates arbitral awards into domestic, foreign-related and foreign awards with each receiving a different standard of judicial review. For domestic awards, courts may conduct a substantive review. Foreign awards that are arising from arbitrations made by an international arbitration tribunal enjoy deferential treatment from the courts – courts only conduct a procedural review. The Civil Procedural Law categorizes awards resulting from arbitrations, involving foreign parties and arbitrated by a Chinese arbitration tribunal, as foreign-related awards. [17]

In December 2003, the Chinese Supreme People’s Court promulgated a draft judicial interpretation, clarifying that the more deferential standard of review should apply to all awards with foreign parties or elements, regardless of whether the awards were issued from a domestic or international arbitration institution. The more deferential standard of judicial review afforded to foreign awards and foreign-related awards is based on Article V(1) of the New York Convention.[18]

With regard to the enforcement of awards, the Supreme People’s Court took steps to avoid the local protectionism by setting up a reporting system to monitor the lower courts’ refusals to enforce foreign arbitral awards.[19]

In general, the Chinese commercial arbitration system is in conformity with the international standard. In addition, with deferential treatment from the courts, enforcement of foreign and foreign-related awards in China becomes predictable. With its development over the past decades, Chinese commercial arbitration deserves to be the first choice in resolving international commercial disputes in China.

[1] Fiona D’Souza, The Recognition and Enforcement of Commercial Arbitral Awards in the People’s Republic of China, 30 Fordham Int’l L.J. 1318, 1318 (April, 2007); see Joseph Kahn, Dispute Leaves U.S. Executive in the Chinese Legal Netherworld, N.Y. Times, Nov. 1, 2005 at A1 (reporting U.S. Business executive deprived of liberty in P.R.C. and coerced into signing documents transferring property).

[2] No Dispute About It, Econ. Intelligence Unit (Bus. China), Apr. 24, 2006.

[3] Id.

[4] Id.

[5] Xiuwen Zhao, Reforming Chinese Arbitration Law and Practices in the Global Economy, 31 U. Dayton L. Rev. 421, 421 (Spring, 2006).

[6] Id. at 423.

[7] Id.

[8] Id. at 424.

[9] Id.

[10] Id. at 425.

[11] Benjamin O. Kostrzewa, China International Economic Trade Arbitration Commission in 2006: New Rules, Same Results, 15 Pac. Rim L. & Pol’y J. 519, 531 (June 2006).

[12] Zhao, supra note 5, at 427-28.

[13] Id. at 428.

[14] Id.

[15] Id.; see also CAL Article 1.

[16] Jian Zhou, Judicial Intervention in International Arbitration: A Comparative Study of The Scope of the New York Convention in U.S. and Chinese Courts, 15 Pac. Rim L. & Pol’y J. 403, 410 (June 2006).

[17] According to a 1992 SPC interpretation implementing the 1991 Civil Procedure Law, a case is a foreign-related case” if (1) one or both parties are foreign nationals, stateless persons, or foreign companies or organizations; (2) the legal actions leading to formation, change, or termination of the legal relationship occurred in a foreign country; or (3) the subject matter of the dispute is located in a foreign country.

[18] Zhao, supra note 5, at 443.

[19] Zhou, supra note 16, at 415.

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China overtakes US as world’s top car market

February 11, 2009

CHINA overtook the United States as the world’s largest auto market for the first time when it sold more cars, 735,500 units, in January, the China Association of Automobile Manufacturers said yesterday.

But the January figure was a drop of 14.35 percent year-on-year and this indicated that sentiment in China’s auto industry is still in a downtrend because of a global financial crisis. Analysts, however, agreed that the market showed signs of an early recovery with government support and lower fuel prices.

Vehicle sales in China rose 6.7 percent to 9.38 million units last year. Sales may grow 5 percent this year, the slowest pace since 1998, CAAM said earlier.

January vehicle sales in the US plummeted 37 percent to 656,693 as more auto makers closed down plants and laid off thousands of workers.

The association reports said China’s passenger cars dropped 7.77 percent to 610,000 units last month, following a 12-percent slump in December

But the slower drop in sales was helped by the central government’s measures such as cutting fuel prices and halving a vehicle sales tax on small cars to counter a slump in the automotive industry since August last year.

“The fuel tax reform and tax cuts work effectively as sales of vehicles powered by 1.6-liter engine or less enjoyed rapid growth from a month earlier,” Zhu Yiping, a director at CAAM, said. “This helped passenger car makers to cut inventory by 80,000 units.” He added that the overall stockpile of Chinese car makers also hit its 13-month low.

Selling commercial vehicles remained tough due to the economic situation as their sales plunged 36.46 percent to 125,100 units in January, CAAM said.

China announced a 4-trillion-yuan (US$586 billion) economic stimulus package and favorable policies including tax cuts and road-toll abolishment in January to spur demand.

However, most analyst cautioned that the sales pickup won’t last long and they remain skeptical that China would remain the world’s biggest car market for the year.

“We should not be too optimistic as the impact of favorable policies may be weaker as time goes on,” said Rao Da, secretary general of China Passenger Car Association. “Sales of vehicles with engines larger than 1.6 liters are not expected to boom and overall sales will still be hampered by a weak economic outlook and lower exports.”

Source: Shanghai Daily

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Concerns about LPG Powered Cars in Enclosed Car Parks

January 23, 2009

car-parking1LPG (under a variety of names “GPL” and “Auto gas” also) is widely used as a vehicle fuel in Far East, USA, Europe.  USA, UK, Holland, Italy and France have particularly well developed infrastructures.

There are serious restrictions on LPG fuelled vehicles using ferries, tunnels, enclosed car parks.  They do check and they turn back vehicles simply when found. All underground car parks in Europe and in the USA have signs banning for LPG powered vehicles.

Since 2001, LPG tanks and fuel systems are fitted with active safety mechanisms that better  minimize the risk of explosion or leakage, making it safe to park vehicles also in multi-story and underground car parks. The Italy Interior Ministry  allows all LPG vehicles with a safety system that complies to the ECE/ONU no. 67/01 Regulation to park on the first underground floor of multi-story car parks, even when connected to other underground floors.

LPG is pressurized and LPG tanks are sealed. Sealed tanks eliminate evaporative emissions or spillage. Using outage valves incorrectly during refueling, however, could cause excess vapor discharge.

The weight of LPG vapors at ambient temperatures is approximately 150 % the weight of air. If there is a leak, LPG vapors tend to sink to the ground and pool, creating a potentially hazardous situation. In some areas in North America, LPG vehicles are not allowed in enclosed car parks, tunnels.  LPG is extremely volatile and burns twice as hot as a gasoline fire. Vehicle fuel tanks in LPG vehicles are of relatively thick-wall steel construction. In the event of a vehicle crash, they are much less prone to rupture or to cause fires than gasoline tanks.

LPG can explode when mixed with air in the range 1.8 % to 8.6 %. It requires a small ignition source, which could be a match, cigarette, electrical spark (think overhead catenary) or even a simple sharp strike against certain materials, particularly metals containing aluminum, magnesium, titanium etc.

You can smell a leak of LPG, but you have nowhere to go to escape in such place.  LPG gas sinks so its difficult for the ventilation system to extract it. Spilt petrol falls to the ground, but then it evaporates. Auto gas is more explosive than petrol.

LPG is stored in a closed high pressure system so any breach will leak gas or liquid that rapidly gasifies leading to an air/gas mixture of potentially the correct proportions. Once ignited the explosion is highly likely to lead to fire and subsequent possible death by carbon monoxide poisoning as well as fire and shrapnel injuries.

Federal Council of Switzerland has officially banned LPG powered vehicles from multi-storey car parks! An appropriate sign was developed, but it cannot be used in German-speaking Switzerland because nobody understands the meaning of the French abbreviation GPL.  Authorities has written to the Council to launch a debate on both a Switzerland-wide ban and an appropriate sign that can be understood throughout Switzerland, or even throughout Europe. The rules in force do not prohibit the imposition of individual bans. The owner or the management of a multi-storey car parks have the right to ban access to vehicles of this type by putting up an appropriate sign, and naturally such an arrangement would apply to foreign vehicles too.

In case of basement fires offer a degree of complexity and hazard beyond the normal building fire due to heat build up and the need for firefighting access being made from above.  Enclosed car fires can develop  to create an extreme heat and smoke environment, possibly compromising the structure.  This may have a direct impact on not only occupants but also firefighter safety, especially in relation to search and rescue.

Insurance Companies in Europe and USA have continued the risk analysis and made recommendations on the construction, equipment and other safety measures of multi-storey enclosed car parks.

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Need a parking place? Good luck

September 6, 2008

LOS ANGELES — After circling in anguish for 15 minutes, holiday shopper Derek Bracey abandoned his search for free primo parking along this city’s trendy Melrose Avenue.

“You always hope it will be better,” said Bracey, who ended up parking a half-mile from the shop where he was buying a gift for his brother.

This month, millions of Americans could find themselves in a similar predicament, fruitlessly orbiting packed parking lots in shopping centers, malls and downtowns as the holiday shopping season builds toward a peak.

They are the victims of a growing national parking crunch, the product of ever-increasing numbers of cars and scarcer places to put them in many cities.

In the past four decades, the number of registered vehicles has risen nearly 170% and the ranks of licensed drivers have doubled, Federal Highway Administration figures show.

parking_garages

The infrastructure is struggling to accommodate the crush. Many cities are experiencing downtown rebirths with new condos, hotels and office buildings, but the amount of parking on streets remains largely a fixed asset.

The value of parking in a tony urban neighborhood can be seen dramatically in Boston, where spots can be sold. An anonymous buyer bought a space in a Back Bay alley for a record $250,000. Prices for downtown spaces are up 14% this year over last year and have almost doubled since 2001, according to Listing Information Network, which tracks Boston real estate trends.

Parking structures aren’t always the solution. Although 2.8 million parking spaces were built in structures from 1996 through last year, the number of construction starts fell from a peak of 465 in 2001 to about 405 this year, says Dale Denda, research director for Parking Market Research in McLean, Va.

Part of the reason for the reluctance to build new parking structures is cost. Construction costs alone are up more than 35% in the past six years to an average of about $13,900 a space. That doesn’t include the soaring price of urban land.

“The world has changed,” says Donald Shoup, an urban planning professor at the University of California at Los Angeles and author of The High Cost of Free Parking, which advocates letting market forces set on-street parking rates as a way of revitalizing cities. “We’re realizing that the new parking is wildly expensive and hard to pay for.”

Some planners are starting to look to technology for help. Borrowing ideas from Europe, they’re coming up with solutions such as robotic garages that whisk cars around on metal pallets, and parking spots reserved by cellphones or found through in-car navigation screens.

‘Find alternatives’ to parking

Some cities are trying to wean themselves and their residents away from the driving that requires more parking. Instead, they’re plotting to lure shoppers, diners and workers onto public transit, bikes or their own feet.

“There are cities all across the country that are actively saying, ‘We want to limit the amount of parking we provide,’ and, ‘We want people to find alternatives,’ ” says David Fields, senior planner for Nelson/Nygaard Consulting Associates in New York.

Even shopping centers and malls, traditional homes to expanses of free parking big enough to be their own small countries, are trying new ideas to ease parking hassles for their customers. Westfield, a big shopping center operator, has close-in spots for expectant moms at all its 59 properties. The lines are painted pink.

It’s also experimenting with call-ahead reserved parking, preferential paid parking in a gated lot and a parking shuttle at various California centers.

General Motors is sponsoring valet services at two malls, Phipps Plaza in Atlanta and Town Center at Boca Raton in Florida. Cadillac drivers get free valet parking at both. At Town Center, so do Saab and Hummer owners.

But even when valet parking is available, some people are reluctant. Hector Rodriguez, 40, a Los Angeles hair salon owner, says he hesitates to hand the keys to his customized Chrysler 300C to an attendant. “I don’t want people driving my car.”

In car-dependent Los Angeles, the time it takes to find a parking spot on the street has doubled in the past five years, estimates Shanette Madden, 40, a Los Angeles property manager. She pulled her Nissan Versa into a no-parking zone and sent her daughter Malika, 16, off on an errand along Melrose Avenue one Sunday afternoon. She says she had hunted for 15 minutes to find a metered space, then gave up. Parking is not only hard to find, she says, but becoming more expensive. “It’s just like gas (prices). What can you do?”

Bracey, 40, pausing as he hoofed back from the shop, says he won’t even venture into Santa Monica, the affluent, liberal enclave to the west where the popular outdoor mall is rimmed by often-crowded parking structures.

Santa Monica is one of those communities that knows it has a problem and is trying to find a solution. Last month, it started a website, www.parkingspacenow.smgov.net, that gives the availability of spaces in 14 downtown lots and garages. It’s updated every five seconds.

“The city doesn’t really like parking,” says Lucy Dyke, Santa Monica’s transportation planning manager. It “doesn’t want to waste money on parking spaces we really don’t need.”

Instead, the Web page is aimed at making better use of spaces, encouraging people to find other means to get downtown when lots are full.

New solutions

The rebirth of downtowns and resulting crunch, combined with new electronic devices, are leading to a “parking technology revolution,” says Dennis Burns, vice president of consultants Carl Walker.

Some of the ideas include:

•Automated parking. Think of a vending machine in reverse. In automated parking, motorists drive their cars onto a steel plate in a garage and get out of the car. The plate is then whisked away like a pallet in a warehouse, all robotically, to a parking space.

“Your car can never be stolen or dented,” says Lee Lazarus, president of A.P.T. Parking Technologies in New York.

Eliminating ramps, walkways — even lowering the ceiling — allows a developer to dramatically reduce the size of the structure. It can pack almost double the number of spaces of a conventional garage, Lazarus says.

While they’re popular in Europe, the USA so far has only a few automated garages, including a 312-space garage in Hoboken, N.J., and a 74-space structure in Washington, D.C.

While they free vital space in a building that can be used for people instead of cars, automated parking is expensive, at more than $20,000 a spot, Lazarus says.

•Finding parking through in-car navigation. XM Satellite Radio is one of three companies working to develop a system that would allow the navigation screens in vehicles to be used to hunt down available parking spots. XM is working with one of the nation’s largest parking providers, Standard Parking, and a technology company, Quixote Transportation Technologies. The system would use color-keyed icons to show how many spots are available in a garage or lot.

•Reserving by cellphone. A company called MobileParking is developing a system in which drivers can call ahead on their cellphones to reserve parking spots. Early next year, MobileParking hopes to create a network of 3,100 parking structures in the 30 biggest U.S. cities where drivers can call or message ahead. In some cases, parking attendants will rope off a special area for MobileParking customers, says President Jason Boseck.

In addition to the parking charge, customers will pay a $1.75 service fee.

•Paying by cellphone. Rather than having to run out to feed the meter, motorists who park at one of about 90 spaces along the famed Sunset Strip in West Hollywood, Calif., can arrange to get a call on their cellphone asking them if they want to extend their time on the parking meter.

“You pay for parking and if you want to add time, you can do that with a cellphone,” says Chris Chettle, vice president of Digital Payment Technologies, which co-developed the system.

It works because instead of standard parking meters, the spaces are connected to kiosks — one for every nine spaces — that accept payment by credit card or currency.

So far, though, not many parkers have registered to use the cellphone feature, says Oscar Delgado, the city’s parking operations manager.

A San Francisco company, Spark Parking, is creating a cellphone payment system for garages. Instead of barriers and ticket machines, a parking structure would be open. Motorists would drive directly to an open space. A sensor in the stall would keep track of how long they parked and bill them, says CEO Cooper Marcus.

The system will help give planners a better picture of how lots and structures are used, helpful in setting parking rates.

For every car, three spaces

Higher rates might actually help consumers, he says, by creating more turnover of spaces.

“If pizza was free, everyone would eat lots of pizza. If parking is free, everyone is going to use lots of parking,” Marcus says.

Parking consumes enormous amounts of space.

“Every car needs three spaces: one at home; one at work; and one at play,” says Steve Shannon, president of ParkingMan, a consultancy in Pitman, N.J. “It’s difficult to accommodate all these cars.”

The key appears to be striking a balance of need. In Ann Arbor, Mich., University of Michigan students compete with other residents for coveted parking spaces downtown. At its worst, motorists sometimes can take 10 minutes finding a spot, says Susan Pollay, executive director of the city’s Downtown Development Authority.

The city is studying the parking issue but hopes that parking is only one solution, along with buses, bikes and walking.

“We have become smarter in realizing that parking is not the silver bullet,” Pollay says. Rather, it’s just “a tool in the toolbox” to a total transportation solution.

Source:    http://www.usatoday.com

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Dallas’ compact-car parking spaces a growing problem

September 6, 2008

Dallas to consider changes as fitness of compact-car spaces shrinks

Like a heavy man wedged into a pair of bicycle shorts, it’s a tight fit and nobody’s too happy with the result.

JIM MAHONEY/DMN

JIM MAHONEY/DMN

While more drivers in Dallas are finding it difficult to fit their vehicles in compact-car parking spaces, Joanne Pratt worries that if the city eliminates the spaces, there will be fewer places to park.

Yet compact-car parking spaces seem to be everywhere in Dallas, especially on the day after Christmas when lots are full and the last thing you want to do is decide whether a decent parking spot is worth a door ding or a trip through an open window.

Now, after years of complaints from drivers and developers, the Dallas City Council appears poised to do something next year about the narrow spaces that so often crop up between behemoth SUVs.

“I have a small car, and it doesn’t even fit in these spaces. It’s virtually impossible to get in and out of the car,” said council member Angela Hunt, whose four-door Audi tests the 7 ½ -foot width of a compact space.

A standard parking space is a foot wider. But sometime in the late 1980s, no one seems to recall exactly when, the city adopted a policy that it hoped would help solve growing parking woes and nudge people toward buying smaller, more fuel-efficient cars.

Like so many programs that start out with good intentions, however, it didn’t quite work out that way.

“People don’t go into a car dealership and purchase a compact car based on the fact there is compact-car parking,” District 11 council member Linda Koop said.

And as more fuel-efficient cars, including hybrids, become more common, even they are proving to be a tight fit.

“The reality of the marketplace is that even the hybrids are big,” said Theresa O’Donnell, director of the city’s Development Services department.

At a recent council meeting, Ms. Koop broached the subject of compact-car parking with an offhanded comment that she would like to see it go away.

Her aside prompted a resounding chorus from fellow council members who, almost to a person, said that changes must be made.

“It hasn’t been as effective as a lot of people thought it would be,” council member Jerry Allen said.

During a recent busy lunch rush at Eatzi’s on Oak Lawn Avenue, the problem was as clear as yellow stripes on black asphalt.

“I’d be curious to see how many people have door dings in spaces like this,” said Russ Plum of Frisco.

Mr. Plum and three friends were grabbing a quick takeaway lunch, but his friend Patrick Garcia had a tough time squeezing his Dodge Durango into one of the compact-car spots.

Mr. Garcia said that when he goes out in central Dallas “you’re forced pretty much to valet.”

The problem might be clear, but a solution could be complicated.

If the council gets rid of compact-car parking but requires developers to provide the same number of spaces per lot, more land will have to be devoted to parking. If it lowers the required number of spaces per lot, there will be less parking to go around. Less parking in lots means more parking in streets, with cars spilling into neighborhoods, such as those along Greenville Avenue.

“In some areas, it’s not as problematic. But again, where you have the restaurant adjacent to neighborhoods, it really does create friction,” said David Cossum, assistant director of Development Services.

Mr. Cossum likely will be in charge of bringing recommendations to the council next year on how to fix the compact-car parking problem.

The issue will have to be reviewed carefully, and easy solutions aren’t likely to be found, he said.

And for those drivers who are hoping to see the narrow spaces disappear at a favorite restaurant or shop, don’t hold your breath.

It’s unlikely that existing spaces will disappear in the short term, Ms. Koop said. Restriping and retrofitting lots would be costly and confusing, city planners agreed.

Neil Emmons, a veteran city plan commissioner who has studied the parking issue, said the most logical solution would be to permit new parking lots to be smaller, with the understanding that in the future, more people in Dallas will be walking or using public transportation.

“If I were going to make a recommendation, I would say reduce the number of spaces required, so that all of the spaces might have a wider stripe but require no more land usage,” he said.

As it stands, the general requirements for developers in the city are: Restaurants must have one parking space for every 100 square feet of interior space. Retail stores must have one space for every 200 square feet, and offices must have one space for every 300 square feet.

For a developer, that can quickly add up to a lot of pricey concrete.

Frequently, a builder will turn to compact spaces to fulfill the parking requirements with less concrete and less land, said Willie Cothrum, a former council member who now lobbies City Hall on behalf of businesses.

Under city ordinances, a builder can have as much as 35 percent of a lot devoted to compact-car spaces in most parts of Dallas, Mr. Cothrum said.

If council members decided to simply do away with compact-car parking without addressing parking requirements overall, developers would have to devote more land to parking, Mr. Cothrum said.

That’s something that neither developers nor council members seem to want.

“It doesn’t make any sense to do that because it’s not a good use of land,” Ms. Hunt said.

So with the new year, new kinds of parking lots are likely to be conceived in Dallas. Expect them to hold fewer vehicles but more comfortably.

“What I really think is going to happen in a lot of our new developments, we’re asking that it be sustainable, more walkable, so you’ll have less need [for] cars,” Ms. O’Donnell said.

TIGHT FITS

THE PROBLEM: Narrow compact-car parking spaces that pose a tight fit even for the fuel-efficient cars for which they were intended.

CURRENT REGULATIONS: Up to 35 percent of a parking lot can be designated for compact-car spaces, which at 7 ½ -feet wide are a foot narrower than regular slots.

POSSIBLE SOLUTIONS: Do away with compact spaces, at least in new developments. New parking lots either would have to use more land to meet current requirements, or the city would reduce the required number of spaces, meaning lots overall could be smaller.

Source: http://www.dallasnews.com

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