China, Depositions, International Law

How To Sue A China Company (Part 2)

What are some of the challenges of conducting discovery against Mainland Chinese companies?

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This series of posts is on seeking redress against a Chinese company that owes you money or has wronged you. Part I was on Hague Convention service of process on a Chinese company and jurisdiction. This post is on how to conduct discovery against a Chinese company.

Once you have served a Chinese company in a U.S. lawsuit, it will be bound by the court’s normal discovery rules. China, however, prohibits depositions on its soil, even if the deponent consents. In its declaration on accession to the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters, China stated it would not be bound by those provisions granting consular officers the right to oversee depositions. In 1989, China allowed a deposition in U.S. v. Leung Tak Lun, et al., 944 F.2d 642 (9th Cir. 1991), but advised that its grant of authority for that particular deposition should not be considered precedent, and it has not permitted a deposition since. Conducting a deposition in China may lead to arrest or expulsion. Even a telephonic deposition of a witness in China likely violates Chinese law, and would not be a good idea for anyone planning to go to China.

The easiest way to depose a China‐based witness will usually be to have that witness go to the United States or to Hong Kong for deposition…

China has agreed to allow limited discovery of documents under the Hague Convention on Evidence. Articles 1 and 2 of that Convention provide for document discovery via a Letter of Request issued by the court where the action is pending and transmitted to the “Central Authority” of the jurisdiction where the documents are located. The Central Authority is then responsible for transmitting the request to the appropriate judicial body for a response. Article 23 of that Convention permits a signatory country to “declare that it will not execute Letters of Request issued for the purpose of obtaining pre‐trial discovery of documents as known in Common Law countries.” China has executed such a declaration, making document discovery permissible for trial purposes, but not merely to gather up information.

Though China has agreed to document discovery for trial, you should not expect the Chinese Central Authority will instruct a Chinese court to compel production in your case. The U.S. State Department made the following accurate summary of how China tends to respond to U.S. court document discovery requests:

While it is possible to request compulsion of evidence in China pursuant to a letter rogatory or letter of request (Hague Evidence Convention), such requests have not been particularly successful in the past. Requests may take more than a year to execute. It is not unusual for no reply to be received or after considerable time has elapsed, for Chinese authorities to request clarification from the American court with no indication that the request will eventually be executed.

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Chinese companies are not accustomed to U.S.-style discovery, and they often consider compliance with the discovery rules optional.

Part 3 of this series will discuss litigation and judgment enforcement strategies against Chinese companies. Part 4 will discuss arbitrating against Chinese companies and suing them in China.

Dan Harris is a founding member of Harris Moure, an international law firm with lawyers in Seattle, Chicago, Beijing, and Qingdao. He is also a co-editor of the China Law Blog. You can reach him by email at firm@harrismoure.com.

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