Understanding the Process of Suing a Supplier in China
As a foreign trader engaging with Chinese suppliers, you may occasionally face breaches of contract. These could manifest as no delivery or delayed delivery of goods, or receiving products that do not meet agreed-upon quality standards. When such issues arise and amicable solutions are unattainable, legal action often becomes necessary. But how exactly does one sue a supplier in China?
The Jurisdiction of Local Courts
Establishing the jurisdiction of local courts is the first crucial step in suing a supplier in China. Filing your case with the appropriate court ensures it will be accepted for consideration. Typically, the court where the defendant’s primary business location or domicile is situated holds jurisdiction over civil or commercial disputes.
Interestingly, jurisdiction may also lie with the local court where the contract was entered into or performed. This provides some flexibility depending on where interactions have taken place.
Exceptions to Jurisdiction Rules
- If a valid commercial arbitration clause exists in the contract, the case must go through arbitration, not the courts.
- In labor disputes, initial resolution through a labor dispute arbitration commission is mandated before any court involvement.
- If criminal elements are involved, these are typically handled by law enforcement and prosecution departments.
- Different provinces in China may have specific rules for cases involving foreign entities.
Case Preparation Essentials
Preparation is key to ensuring a smooth litigation process. It involves several steps:
- Notarization and Verification of Documents: Commission documents and certificates must be notarized locally and verified by the Chinese Embassy or Consulate in your country.
- Evidence Collection and Translation: All evidence must be translated into Chinese, with overseas documents requiring notarization and verification.
- Asset Information Collection: Gather information about the defendant’s assets to aid potential asset preservation orders during litigation.
These preparations can be time-consuming, particularly due to the notarization and verification processes required in your home country.
Commencement of Litigation
Once prepared, you move to file your case. Pre-hearing procedures can take up to a month and include:
- Filing: Your case officially begins when accepted by the court. If dismissed, you have 10 days to appeal.
- Asset Preservation: Apply to freeze the defendant’s assets if applicable; this can encourage settlement or ensure enforceability post-judgment.
- Court Fees: Payable within seven days of case acceptance.
The Trial of First Instance
If no settlement is reached, the trial process begins, generally concluding within six months from commencement. Key stages include:
- Notice to Defendant: The court informs the defendant of proceedings.
- Evidence Submission: Parties submit evidence within at least 15 days post-subpoena receipt.
- Hearing: Both parties present facts and arguments.
- Judgment Issuance: The court renders its decision; foreign-related cases may exceed typical time limits.
The Appeal Process
The Chinese legal system operates on a two-instance trial system. If dissatisfied with the first instance judgment, an appeal can be filed within a legally specified timeframe. Appeals typically extend over 6-9 months.
Enforcement Stage
If a favorable judgment is obtained but not honored, you may request court enforcement. Applications for enforcement must occur within two years post-judgment execution deadline. Recognition of foreign judgments is possible, details forthcoming in future articles.
Conclusion
Suing a supplier in China involves navigating a complex legal landscape. Consulting a Chinese lawyer, part of an experienced China law firm, is advisable to manage this intricacy effectively.
Commonly Asked Questions
What materials should we prepare to file a civil case in the Chinese court?
A company must prepare original copies of various documents including civil complaints, power of attorney (or participate personally), incorporation certificates, and relevant identity documentation. Notarization and translation into Chinese are required for foreign documents.
What charges might we encounter during a lawsuit in China?
- Notarization and authentication fees.
- Translation fees for converting documents into Chinese.
- Litigation costs encompassing court fees and associated expenses for witnesses and interpreters.
What substantive remedies are available?
Monetary interest is common, alongside damages, declarations, injunctions, and specific performance based on case specifics. Punitive damages are rare except in consumer rights violations and unauthorized food production cases.
Can we appoint our lawyers from our country?
No, only Chinese attorneys are authorized to represent foreign companies in Chinese courts.
Do I need to appear in court?
Your appointed Chinese attorney can represent you without requiring your presence in court.