How to Sue a Company in China: Tackling Litigation Properly

Due to the corona pandemic, demand for Chinese products, especially in the medical sector, has increased rapidly. Unfortunately, cooperation with Chinese companies does not always work smoothly and can sometimes turn out to be very asymmetric. Ecovis Heidelberg has dealt with many cases in which German companies have successfully sued Chinese factories for failure to deliver goods on time.

If you are facing problems like this with your Chinese partner there is no need to accept the situation. Although solving a dispute with a Chinese company can be very time consuming for a foreign company, with the right strategy, litigation can end successfully.

How do you go about suing a Chinese company?

To analyse whether suing the contractual partner is a good option and to find the right strategy, the following points should be considered:

• Do you have written contractual arrangements?
• Who is your contracting partner, i.e., private company or state-owned enterprise?
• Where is the contracting partner based in China? Different locations lead to different strategies.
• What is the disputed volume of euro/renminbi?
• Is there any agreement about the jurisdiction?
• Do you want to block the other party’s bank account?

It should be noted that litigation in certain areas is under the exclusive jurisdiction of the Chinese courts. For example:

• Real estate disputes
• Disputes arising from harbour operations
• Inheritance disputes
• Disputes arising from the fulfilment of contracts between Chinese-foreign joint ventures

Which documents are needed?

If you decide to sue a company in China, the Chinese courts may, for example, demand the following documents:

• Power of attorney
• Subject qualification document
• Representative figure’s identity document
• Extraterritorial evidence
• Application for preservation of property

How to legalise the documents?

Documents produced abroad should generally be notarised and authenticated abroad and then translated and notarised by a Chinese notary office before they can be used as effective evidence for court prosecution, explain the Ecovis experts.

For further information please contact:

Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany

Email: Richard.Hoffmann@ecovis.com