China arbitration lawyersChinese companies (especially SOEs) increasingly require their contracts with foreign companies provide for disputes to be resolved by arbitration in China. In these situations, we are seeing mostly CIETAC and BAC arbitration clauses. Many of our American and European clients are uncomfortable with arbitrating against a Chinese company in China as they are convinced they cannot “get a fair trial” there. Our China lawyers explain how in our experience, the nationality of the parties to a Chinese arbitration is far less important to the ruling than the overall way in which Chinese arbiters (both judges and arbitrators) view cases. We then explain how Chinese courts focus much more on the equities of a case (as opposed to the law) than American courts and that is even more true of Chinese arbitrators.

With equity so central to China disputes, potential litigants should stop reviewing their cases strictly on the law and start looking at them from an equitable perspective as well. In determining the strength or weakness of your case, you should ask yourself who in all fairness should win this case and whose winning it would be best for the people of China?

Many years ago, an American company asked my law firm’s China international arbitration lawyers to compete for a China arbitration matter. We told this company that our strategy would be to try to settle the case as quickly as possible because we saw little likelihood of winning because the equities were so against it. The American company chose another law firm because that firm was “confident about winning based on the law.” The American company ended losing at arbitration.

My law firm’s international arbitrators not so long ago secured a seven figure arbitration award in a CIETAC arbitration conducted in Chinese on behalf of an American company against a Chinese company. Without a doubt, one of the keys to this victory was our lawyers (not me) accounting for the equities in making the decision to bring the case and then emphasizing the equities at the arbitration itself.

A couple years ago I testified before a Congressional Committee on how China treats foreign companies and on how American companies sometimes confuse “the Chinese way of doing things” with bias and I used China arbitration and litigation matters as  examples of this. I am not going to say that foreign companies are always treated fairly in China because they are not. But I am going to say that it is important to distinguish between China actions that stem from bias and those that stem from American misunderstandings of how China operates.

Litigation and arbitration in China are very different from litigation and arbitration in the United States and in Europe, of that there is no doubt. But if you understand and account for those differences, you will find bias to be far less of a problem than you would expect.

What have you seen out there?

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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.  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.