Business disputes between a Chinese company and a foreign firm are quite common. Knowing the process of how to sue a Chinese company should be your first priority. If you don’t have the knowledge, it is a good idea to hire a China business lawyer with an extensive knowledge of dealing with China litigation cases.
When it comes to suing a Chinese company in Mainland China, the US and the European firms face no jurisdictional restriction. Articles 3 and 237 of the PRC’s Civil Procedure Law grant Chinese court’s jurisdiction over international cases involving foreign plaintiffs against Chinese companies.
There 3 things you must know about suing a Chinese company–
1- Where to sue?
Jurisdiction will usually be the first issue you will need to resolve in figuring out your litigation strategy against a Chinese company. Before attempting to sue a Chinese company, make sure that you qualify to use the Chinese court system. Review your case and compare it to the guidelines that a local Chinese court offers. If you are unsure, consult with an attorney.
2- Sue in what language?
Your English document must be translated into Chinese first by the authorized party. Some Chinese courts don’t enforce English language contracts at all. It is extremely important that you preserve all records that have any relationship to the case.
3- Determine the claims
Determine what claims you have and what type of damages you are interested in. Damages can take many forms, such as monetary compensation or a replacement product. This may seem obvious, but you need to have a genuine legal claim or “cause of action” in order to have a court support your position.
Drafting a solid contract with a Chinese company is the first step to successfully suing it. It is essential to set what will happen under which conditions. The US and the European firms will often have a standard contract, which is unlikely to be optimal when engaging in business with Chinese companies. Make sure your China attorneys really understand the case. And they need to work closely with you to ensure you understand the Chinese legal system and its nuances and processes.
You need to draft your suit papers in the right way. If the information in suit papers is incorrect in any way, China company may move to dismiss the action in its entirety. When suing a Chinese company, the first thing you should do is to carefully draft the suit papers with an experienced China business lawyer.