This is part III of our series on how to sue a Chinese company. This series of posts addresses what to do to secure redress against a Chinese company that owes you money or has wronged you. It is based on an article I recently wrote for Bloomberg Law Reports [one week trial subscription required] and on an article I wrote for the Wall Street Journal, entitled,” Chinese Companies Court Disaster.” Please note that instead of using footnotes, this post use brackets, [], instead.

Part I focused on how to effect service of process on a Chinese company pursuant to the Hague Convention and on the jurisdictional issues involved in suing a Chinese company. Part II focused on how to conduct discovery against a Chinese company. This post focuses on overall litigation strategies against Chinese companies and on enforcing judgments against them.

Litigation Strategies

U.S. companies hold many advantages over Chinese companies in U.S. litigation. In today’s political climate, American jurors generally view Chinese companies unfavorably. Moreover, Chinese companies’ tendency to skirt American discovery rules, if brought to the court’s attention, have the potential to cost the Chinese company valuable credibility. See also Chinese Companies Court Disaster, Wall Street Journal, August 18, 2010. Finally, Chinese companies tend to underestimate the importance of U.S. trial court decisions in fact‐finding, often holding back until appeal:

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.

Enforcing U.S. Judgments In China

U.S. judgments have virtually no value in China. Neither a treaty nor a reciprocal arrangement exists between China and the United States regarding the recognition or enforcement of judgments in civil matters. Chinese courts simply disregard U.S. judgments.

If the Chinese company 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 best way to proceed. Otherwise, the judgment of a U.S. court is of little to no use.

Tomorrow’s post will be the fourth and final post in this series and it will focus on suing Chinese companies in China and in arbitration.

 

The above excerpt comes from an article originally published by Bloomberg Finance L.P. and has been reprinted with permission. The opinions expressed are those of the author.  © 2010 Bloomberg Finance L.P.

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.