When a Chinese company breaches a contract, fails to pay, or causes other harm to your business, you may need to take legal action. However, suing a Chinese company involves unique challenges that differ significantly from litigation in Western countries. This guide explains what you need to know.
The Critical First Question: Where Should You Sue?
The most important decision is jurisdiction — where you bring your case. This choice can determine whether you ever collect anything, even if you win.
Key Point: Chinese courts generally do not enforce judgments from U.S., UK, or most other foreign courts. If you sue in your home country and win, you may have a judgment you cannot enforce against a Chinese company with assets only in China.
Your main options are:
- Chinese courts: Best if the company's assets are in China and you want enforceable results
- Arbitration (CIETAC, HKIAC, etc.): Often preferred for international disputes; awards are enforceable in China under the New York Convention
- Your home country courts: Only practical if the Chinese company has assets in your jurisdiction
Litigation in Chinese Courts
If you decide to sue in China, here's what to expect:
1. You Need a Chinese Lawyer
Foreign lawyers cannot represent clients in Chinese courts. You must engage a licensed Chinese attorney. Having a bilingual lawyer who can communicate with you directly is invaluable.
2. Documents Must Be Prepared Properly
All foreign documents (contracts, evidence, corporate documents) must be:
- Notarized in your home country
- Authenticated/legalized (often through your country's embassy or consulate)
- Translated into Chinese by a certified translator
3. Evidence Rules Are Strict
Chinese courts focus heavily on documentary evidence. Witness testimony carries less weight than in common law systems. Preserve all contracts, emails, payment records, and correspondence.
4. Timeline
A typical commercial case in China takes 6-18 months for first instance, with possible appeals extending this further.
Arbitration: Often the Better Choice
For international commercial disputes, arbitration offers several advantages:
- Enforceability: Arbitration awards are enforceable in China under the New York Convention
- Neutrality: You can choose a neutral venue like Hong Kong or Singapore
- Language: Proceedings can be conducted in English
- Confidentiality: Unlike court cases, arbitration is private
Important: You can only use arbitration if your contract contains an arbitration clause. This is why having proper contracts drafted before problems arise is so important.
Before You Sue: Practical Considerations
Litigation is expensive and time-consuming. Before proceeding, consider:
- Does the company have assets? Winning a judgment against a company with no assets is pointless
- Is negotiation possible? Many disputes settle before trial
- What's your evidence like? Weak evidence means a weak case
- Statute of limitations: Most contract claims in China have a 3-year limitation period
Steps to Take Now
- Gather and preserve all evidence (contracts, communications, payment records)
- Review your contract for dispute resolution clauses
- Consult with a Chinese lawyer to assess your options
- Consider sending a formal demand letter before litigation
- Act promptly — don't let limitation periods expire
Need Help With a Dispute?
I help foreign businesses navigate litigation and arbitration in China. Get a free initial consultation to discuss your situation.
Contact MeConclusion
Suing a Chinese company is possible, but requires careful strategy. The key is choosing the right forum, preparing proper documentation, and working with experienced local counsel. If you're facing a dispute with a Chinese company, early legal advice can help you understand your options and avoid costly mistakes.