China, International Law

How To Sue A China Company (Part 3)

This post discusses litigation strategies against Chinese companies and enforcing judgments against them.

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This series of posts addresses how to seek redress against a Chinese company that owes you money or has wronged you. Part 1 was on how to effect service of process on a Chinese company under the Hague Convention and on the jurisdictional issues involved in suing a Chinese company. Part 2 dealt with conducting discovery (or not) against a Chinese company. This post discusses litigation strategies against Chinese companies and enforcing judgments against them.

Litigation Strategies. U.S. companies hold many advantages over Chinese companies in U.S. litigation. American jurors generally view Chinese companies unfavorably. Chinese companies frequently try to skirt our discovery rules and bringing this to the court’s attention can cost the Chinese company credibility or force it to incur sanctions. Perhaps most importantly, Chinese companies generally underestimate the importance of U.S. trial court decisions, often holding back on vigorously defending a lawsuit until appeal. From Chinese Companies Court Disaster:

Appeals in China are usually de novo, meaning that if a trial court judge disagrees with your version of the facts, you can make another attempt to tell your side of the story at the appellate level. But in the U.S., appeals courts take as a given the trial court’s findings of fact and will hear only disputes about the trial judge’s interpretation of legal questions. This means that in America you rarely get more than one chance to put forth your version of the facts, so you had better do it right the first time. In China the fight often begins only once a case hits the appeals court.

U.S. Judgments In China. U.S. judgments have virtually no value in China. There is no treaty nor any reciprocal arrangement between China and the United States regarding recognition or enforcement of civil judgments. For these reasons, Chinese courts disregard U.S. judgments.

If the Chinese company you are suing has assets in the United States or in another country that generally enforces U.S. judgments (such as the United Kingdom, Canada, or South Korea), suing in a U.S. court may be the best way to proceed. Otherwise, the judgment of a U.S. court may end up being of little to no use.

My fourth and final post in this series will address suing Chinese companies in China and in arbitration.

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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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