In practice, as an agency specializing in China-related debt collection, we have noticed that small and medium-sized enterprises (SMEs) are often more likely to get into situations where they are owed money by their Chinese partners.
In international trades, many traders do not always use formal contracts when doing business in China. Instead, they use simple purchase orders (POs) and proforma invoices (PIs), which do not cover all the details of the transaction.
What do you do as a creditor if you have a winning judgment against your debtor in a country other than the one where the debtor has assets or is located?
Have you ever encountered with the situation where the lawyers appointed by China Export & Credit Insurance Corporation (hereinafter referred to as “SINOSURE”) to collect the payment for goods from you?
When people talk about the need to find a Chinese lawyer, what he actually needs is a network of Chinese lawyers.
If you fail to collect your debt at the amicable collection stage, the next step is to initiate legal proceedings.
When most people plan to sue in China, they think of court costs and attorney fees, but often ignore notarization and authentication costs.
Firstly, these are actions that you can take on your own in the event of a late delivery, in case you want to try to push the supplier to deliver or terminate the deal yourself before seeking professional advice.
Still undecided whether to bring a lawsuit in China?
Can I ask a Chinese court to order the other party to pay for my attorney’s fees?
Imagine if you buy goods from a Chinese supplier, but the deal fails and the Chinese supplier should return you the advance payment.
International business partners are getting increasingly accustomed to using WhatsApp or WeChat to reach an agreement, send orders, modify transaction conditions and confirm performance.
A Chinese company with larger registered capital, especially paid-in capital, usually has larger scale and stronger ability to perform contracts. However, its registered capital or paid-in capital isn’t necessarily equal to its actual assets at a certain point of time.
International debt collection can be a complex, drawn-out process, particularly when you don’t understand Chinese, can’t come to China, and know nothing about China’s legal and judicial system.
Before bringing a lawsuit, you could first consider negotiation, complaint, and debt collection.
Collecting debts from international clients is hard enough, but the process becomes even harder when trying to collect a debt from a Chinese business partner whose culture and language are completely different from yours.
When you decide to sue a Chinese company, where will you file the lawsuit? China or your own country, provided that both have jurisdiction over your case?
Of course, you can sue a manufacturer in China. It will not be any different, in terms of complexity and costs, from suing companies in other countries.
If you believe that the Chinese company does not comply with the NNN agreement, you may resolve the dispute via arbitration outside of China and enforce the arbitral award in China.
You need to determine where you are going to sue, and what law is applicable to your case. If you are planning to file a lawsuit in China, then we have prepared 8 tips for you in this article to help you evaluate your potential legal action.
