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.
When people talk about the need to find a Chinese lawyer, what he actually needs is a network of Chinese lawyers.
Still undecided whether to bring a lawsuit in China?
International business partners are getting increasingly accustomed to using WhatsApp or WeChat to reach an agreement, send orders, modify transaction conditions and confirm performance.
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?
You’d better not turn your back on your deals with Chinese suppliers. You shall terminate your contract in accordance with reasonable procedures.
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.
You have to prove the specific transaction agreed in the contract during the lawsuit in China.
You can publish a notice in a provincial or national newspaper in China, or in the People’s Court Daily(人民法院报) of the Supreme People’s Court of China.
What evidence should you prepare? Documentary evidence (physical documents), electronic documents, and recordings are all necessary in this regard.
In China, courts charge much less than arbitration institutions. But if there is an appeal, the cost of litigation is not much cheaper than the cost of arbitration.
You should prepare sufficient documentary evidence prior to filing a lawsuit, preferably provided or presented by the other party. In some cases, you can also rely on the court to collect evidence for you.
Roughly speaking, if you claim USD 10,000, the court cost is USD 200; if you claim USD 50,000, the court cost is USD 950; if you claim USD 100,000, the court cost is USD 1,600.
When your Chinese suppliers or distributors defraud or default, where will you file the lawsuit? China or somewhere else (eg. the place of your domicile), provided that both have jurisdiction over your case? To answer these questions, we need to compare the litigation in China with that in other countries.
Chinese judges lack commercial knowledge, flexibility and time to understand transactions beyond the contract text.
You are very likely not to file a lawsuit with a court in Beijing or Shanghai, but in a city with many factories, an airport, or a seaport hundreds of kilometers or thousands of kilometers away. It means that the elite lawyers gathered in Beijing and Shanghai may not be able to help you any better.
The costs you need to pay mainly include three items: Chinese court costs, Chinese attorney’s fees and the cost of notarization and authentication of some documents in your country.
You can sue a company in a Chinese court. Even if you are not in China, you can still do so with the help of Chinese lawyers. To get prepared, you need to know, to start with, whom you can sue and then identify its legal name in Chinese, as well as the address thereof.
Apart from pleadings and evidence, foreign companies in Chinese courts need to complete a series of formalities, which can sometimes be somewhat cumbersome. Therefore, it is necessary to spare sufficient time and costs to get ready.
As long as you are ‘directly affected’ pursuant to Chinese law, you may file a lawsuit with the court. First, you must be directly affected by the defendant. Second, you must be a natural person or a legal entity.
