发布日期:2017-3-20   浏览次数:453

The People’s Court: A Litigation Primer

for Managers and Entrepreneurs


本文由牟晋军律师团队涉外高级法律顾问Samuel Speed和涉外法律顾问梁欣然撰写,是对涉外贸易领域纠纷中一般诉讼策略和程序进行的分析,对在中国从事贸易又不熟悉中国法律规定的境外公司,或许有初步了解的帮助。


Suppose China Co., a Chinese business, sold you some high performance wooden blocks that turned out to defective. China Co. then refused to fix them and now you are stuck with a pile of blocks you can’t use or sell. On top of that, China Co. wont refund your money either and has stopped taking your calls.




At this point, you have a choice. You can take the loss or you can take China Co. to the People’s Court. While it might make sense to continue to contact China Co. and try to resolve the situation yourself, you might also be giving China Co. time to get rid of evidence or to shift assets out of the way.  




If you decide to go to court, there are a few things you need to do.




First, it helps to know who China Co. is. If it is a registered business in China and has plenty of assets to pay you but just won’t, then you have some options. Believe it or not, finding out this information isn’t necessarily that hard. (And it’s something you should probably do before making major purchases for your business.)



流程图: 可选过程: Front loaded








The next thing you should do is gather evidence. In the People’s Court, evidence is almost always provided to the court in documents. For that reason, preparing the case – collecting evidence, researching the law, writing the petition – are the most important parts of the case. That’s what the court is going to base its decision on. For that reason, you should be talking to a lawyer at this point. Evidence collection in China is very technical and there are many ways to do it wrong and only one way to do it right.




Once your case is ready, you can then send out a lawyer’s letter to the other side. This gives China Co. another chance to talk about settlement. If China Co. has substantial assets and you have a good case, they are going to want to settle. Why?


Two reasons.






1)      China Co.’s assets can be frozen until the dispute is resolved in certain cases. This includes bank accounts. It’s very difficult to make payroll, pay suppliers, etc., if you can’t access your cash.




2)      We’ll say it again, People’s Court cases are front loaded. Unless China Co. has some incredible evidence that’s going to completely win the case, then they know they are going to lose and in doing so probably have to pay your attorney’s fees and court costs. On top of refunding your money if they lose the case, of course.


      二. 我们再次说明,中国法院的案件是预付性的。除非该中国公司掌握一些可以完全赢得案件的证据,他们知道他们会输掉官司,要作为败诉方支付你的律师费和诉讼费。不仅如此,他们当然还需要向你退还货款。


Although not every defendant responds to a lawyer’s letter with an offer to settle, a carefully prepared case and a correctly worded lawyer’s letter is oftentimes enough.




But suppose China Co. doesn’t care and it still wants to litigate despite the litigation risk and frozen assets. This happens and will always happen here in China, and in the US and in Europe. Some people are just like that.




The next stage is filing the case along with the litigation fee. By court rule, this fee is a percentage of the amount demanded of China Co. If you win, China Co. has to reimburse you for that fee.




After the case is filed, the court has seven days to decide if it’s going to accept the case or not.




In the past, the People’s Court was notorious for not accepting or rejecting cases. If the case was controversial or involved a locally prominent business as a defendant, the court would sometimes just sit on the case and never make a decision. That’s not allowed anymore. The rules were changed when the Civil Procedure Law was revised in 2012. While the court doesn’t have to accept every case, it does have to reject any case they aren’t going to take and explain their reasons for doing so in writing. And the new rules make it very hard to reject a case.




流程图: 可选过程: The process of litigation in PRC








Once the case is accepted, the court will ask the parties to try to settle. This is standard for any court anywhere but it does give you another chance to get to settlement. Things change once the case is filed and the defendant is now very publicly being accused of wrong doing. For most Chinese businesses, they will seek a quick exit if they can. By filing the case, you may have called their bluff and now they want out.




But suppose China Co. isn’t ready to give up yet.




In that case, the next stage is argument. The Court has your evidence in a neat stack of papers along with China Co.’s evidence and responses. That’s all the evidence that’s going to be presented.




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