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.
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.