International Law

US china flagsThis 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…

double red triangle arrows Continue reading “How To Sue A China Company (Part 3)”

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…

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What should you do if you are owed money by or have been wronged by a Mainland Chinese company? Bring a lawsuit against the Chinese company, of course. But how?

Mainland Chinese courts do not enforce U.S. judgments. Therefore, it will probably be a waste of time for you to bring a lawsuit in a U.S. court against a Chinese company that does not have assets in either the United States or in a country that enforces U.S. judgments. However, it is important that you research where the “Chinese” company is actually based because Mainland China, Hong Kong, Taiwan, and Macao are different jurisdictions entirely.

This series of posts will discuss the challenges of litigating against Mainland Chinese companies and will offer guidance in overcoming these challenges, both in the United States and in China.

double red triangle arrows Continue reading “How To Sue A China Company (Part 1)”


American companies often come to us with a “great business idea” that turns out to be prohibited for foreign companies in China. When we give them the bad news, their first response is usually: “But that makes no sense.” Some then suggest that all we need to do is meet with the “right people” in the Chinese government to explain how their business will create jobs and boost China’s economy. We tell them that will never work.

China has deliberately limited foreign involvement in certain industries (e.g., publishing and the Internet) to be able to control those industries. The Chinese government is more concerned with social harmony and the contentment of its citizens than with economic numbers, and you should always factor this into your China business decisions. China’s slowing economy only heightens the government’s focus on contentment.

If you are doing business in China, or even just considering it, you should be mindful of the following…

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Dinesh D’Souza

* The United States is launching air strikes against ISIS in Syria and Iraq, but some have been compelled to wonder whether it’s legal under international law. Of course it’s legal, under the Rule of ‘MERICA, F*CK YEAH! [BBC]

* Dewey know whether this failed firm’s former COO can get out of paying $9.3M to its bankruptcy trustee? Dewey know whether we’ll ever be able to stop using this pun? Sadly, the answer to both questions is no. [WSJ Law Blog]

* Marc Dreier of the defunct Dreier LLP has been ordered to testify in person in his firm’s bankruptcy case in Manhattan, but he’d rather stay in the comforts of his prison home in Minnesota. Aww. [Bloomberg]

* Dinesh D’Souza won’t have to do hard prison time for his campaign-finance violations. Instead, he’ll be spending eight months in a “community confinement center,” which sounds just peachy. [New York Times]

* Northwestern Law is launching a campaign to fundraise $150M to be spent on an endless supply of Chick-fil-A sandwiches financial aid for students and curriculum improvements. [National Law Journal]

I am often asked what foreign companies doing business in China need to know to stay out of legal trouble. I usually respond as follows:

  • Are You Operating Legally?  Generally speaking, if you are doing business in China for more than a few weeks, you need to form a legal entity there (i.e., a Wholly Foreign Owned Entity (WFOE), a joint venture, or a representative office. Assuming, of course, that your business scope is permissible; some businesses that are perfectly legal in the United States or in Europe are proscribed in China.

There are five more things you need to know in order to stay out of legal trouble in China…

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My firm’s clients often ask how their contracts with Chinese companies should be signed and/or chopped (affixed with the company seal). We typically respond with something like the following:

Each Chinese company has only one “legal representative” (a term of art under Chinese law), who is identified as such on the company’s business license. Any agreement signed by a Chinese company’s legal representative is binding on the company, whether or not a chop is affixed. However, to enforce a contract that is not chopped, you must prove that the signature on the contract really belongs to the Chinese company’s legal representative. Therefore, if you can get the contract chopped, you should.

Larger Chinese companies often do not have their legal representative sign their contracts. In this situation, you need to be particularly vigilant about securing a proper chop.

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A great many of our most polarizing political discussions involve deciding what we should be able to sell. Pot legalization, for instance, is oftentimes framed as a debate over whether we should be able to smoke marijuana cigarettes at our leisure. But that debate’s over. It’s been won by the High Times crowd a thousand times over, no matter how many times a kid gets popped on a possession rap. No, the schism involves the sale of weed. The business of it. News articles about Colorado are less interested in doofuses smoking pot and more interested in the brave, new world of pot dispensaries. The business of America is business and all that.

This weekend brought news of a burgeoning overseas market in human organs. And gay eyeballs. If you can’t see the connection, allow me…

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With the media recently paying so much attention to foreign (read American and British) businesspeople getting in trouble in China, my firm’s China lawyers have been getting a large number of calls lately from worried Americans based in China. These callers are asking the following kinds of questions, and we are giving the following kinds of short answers (needless to say, our long answers are much more nuanced):

1.  Should I leave China? Not unless you or your company have violated Chinese law in such a way that you are at risk for going to jail. Let’s talk about whether or not that is the case…

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China joint ventures are notorious for their high failure rate. An old Chinese saying that is often applied to joint ventures is “same bed, different dreams.”[1] Far too often, American companies and Chinese companies rush into joint ventures without ever discussing their respective dreams.

Many years ago, a client about to fly to China to meet with a potential Chinese joint venture partner asked for my help. I compiled a list of issues to raise at that meeting, and have provided a similar list (honed a bit more each time) to subsequent clients facing the same situation. The goal of raising these issues is to determine whether the two companies share the same dreams, and whether the Chinese company is JV worthy. Currently, this list includes the following questions:

double red triangle arrows Continue reading “China Joint Ventures: You’ve Got To Love The One You’re With”

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