As global trade becomes increasingly intertwined, foreign traders often find themselves navigating complex scenarios with Chinese suppliers. Breaches of contract, such as non-delivery or delayed delivery of goods, or goods failing to meet quality standards, are not uncommon. When negotiations falter, legal recourse might be the only viable option. This comprehensive guide will walk you through the process of suing a supplier in China, offering insights into the intricate Chinese legal system.
Understanding Jurisdiction in Local Courts
The first critical step in pursuing litigation against a supplier in China is determining the appropriate court jurisdiction. In essence, this means identifying the correct local court with the authority to decide on your case. Failing to do so can lead to your case being dismissed outright.
Common Jurisdiction Scenarios
- The court located at the defendant’s place of domicile or main business location typically holds jurisdiction over civil or commercial disputes.
- The local court where the contract was either entered into or performed may also have jurisdiction.
Exceptions to Standard Jurisdiction Rules
- If your contract includes a valid commercial arbitration clause, disputes must be resolved through arbitration rather than the courts.
- In labor disputes, parties must first seek resolution through a labor dispute arbitration commission before approaching the courts.
- If criminal activity is involved, the matter is generally handled by police and prosecution departments.
- Each Chinese province may have specific rules for cases involving foreign entities.
Did you know? Chinese law can vary significantly from one province to another, much like state laws in the United States.
Preparing Your Case
Once jurisdiction is established, meticulous preparation is key. Here’s what you need to do:
Document Notarization and Verification
All relevant documents must be notarized locally and verified by the Chinese Embassy or Consulate in your country. This ensures their legitimacy in Chinese courts.
Evidence Collection and Translation
Any evidence originating overseas must be translated into Chinese, notarized, and verified. This applies even if the evidence comes from regions like Hong Kong, Macau, or Taiwan.
Asset Information Gathering
Collecting information about the defendant’s assets is crucial for asset preservation orders during litigation. The time required largely depends on how quickly you can complete document notarization and verification.
Commencing Litigation
Pre-Hearing Procedures
This phase involves filing your case with the court, which may take up to a month. If your application is rejected, you have 10 days to appeal to a higher court.
Asset Preservation Application
If you possess asset information about the other party, you can request that these assets be frozen. This can encourage settlement or ensure enforcement post-judgment.
Court Fees Payment
Court fees must be paid within seven days once your case is accepted.
The Trial Process
Trial of First Instance
If settlement fails, a trial ensues, typically concluding within six months. Key stages include:
- Notice to Defendant: The court issues a subpoena to the defendant.
- Evidence Submission: A minimum 15-day period is given for evidence submission after subpoena receipt.
- Court Hearing: Both parties present facts and arguments during the hearing.
- Judgment Issuance: The court issues its judgment post-hearing.
A noteworthy exception exists for foreign-related civil cases where no strict six-month limit applies.
The Appeal Process
The Chinese judicial system follows a two-instance trial system. Dissatisfied parties can appeal to a higher court within a legally specified period, with second trials typically spanning six to nine months.
The Enforcement Stage
If a winning judgment is obtained but not honored by the opposing party, you can apply for court enforcement. Applications for enforcement must be made within two years from the judgment’s execution deadline.
Interesting Fact: Foreign judgments can sometimes be recognized and enforced in China, depending on reciprocal agreements between countries.
Conclusion
Pursuing legal action against a supplier in China is complex and requires thorough understanding and preparation. Consulting with a seasoned Chinese lawyer, such as those at our firm with offices across China, can significantly ease this process. Our experienced team provides invaluable support to navigate these intricate waters effectively.
Frequently Asked Questions
- What materials are needed to file a civil case?
- A civil complaint, power of attorney (if applicable), certificate of incorporation, legal representative documentation, identity proof, and all related evidence are required.
- What costs are involved in a lawsuit?
- Costs include notarization and authentication fees, translation expenses, litigation costs (case acceptance fee, travel expenses for witnesses), and potentially others like asset preservation application fees.
- What remedies are available?
- The most common remedy is interest on monetary judgments. Other remedies include damages, declarations, injunctions, and specific performance.
- Can foreign lawyers represent us in China?
- No, only a licensed Chinese attorney can represent foreign companies in Chinese courts.
- Do I need to appear in court?
- Your appointed attorney can represent you without requiring your presence in court.