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Yanying Li

How to sue a Chinese company

Foreign companies can and do win cases against Chinese companies in Chinese courts. 

Normally, most evidences filed to the court are written submissions. The judges render the judgement will mainly base on written documents/evidences and oral arguments. To a large extent, Chinese Courts are quite open to foreign companies.


When you decide to sue a Chinese company in Chinese court, how should you do?


Firstly, the lawsuit filed by a foreign company in China is a foreign-related civil litigation.


A foreign-related civil litigation means a civil litigation in which one or both of the parties are foreign citizens, foreign legal persons or other foreign organizations, or stateless persons, or the habitual residences of one or both of the parties are outside the territory of the People's Republic of China, or the subject matter is outside the territory of the People's Republic of China, or the legal facts that produce, change, or terminate legal relationship occurred outside the territory of the People's Republic of China. A Hong Kong, Macau or Taiwan-related civil litigation shall be heard by referring to the procedures for foreign-related civil litigation.


Secondly, a foreign company shall notarize and certify its identity information and other identity certificates.


Notarization refers to notarization by the local notary organization in the country where the foreign company is located, or by a local lawyer if there is no notary organization.

Authentication refers to the authentication of a notarized document by the embassy or consulate of the People's Republic of China in the country where the foreign company is located.


To file a lawsuit, the foreign company shall submit : (1) proof of its identity of information, such as Certificate of Incorporation,(2)the resolution of the shareholders meeting, the resolution of the board of directors, the partnership agreement, or the opinions of the person in charge agreeing, which will depends on the type of the company. Also, The foreign company shall have the aforementioned documents to be notarized and authenticated.


For example, according to the list of documents submitted by the Qianhai court (the court designated in Shenzhen to have jurisdiction over foreign-related cases), the specific documents are as follows:


A.For a Hongkong Company. The proof documents of the entity status of the enterprise or other organization in Hong Kong (business registration certificate, registration certificate, and annual declaration form), which shall be notarized by a Hong Kong lawyer entrusted by the Ministry of Justice of the PRC, and a special forwarding seal shall be stamped by the China Legal Service (Hong Kong) Co., Ltd.;


They may contact a Hong Kong lawyer directly, and generally the notarization of one set document costs a few thousand HK dollars.


B.For a Macau Company. The supporting documents on the legal entity status of a Macau enterprise or other organization shall be notarised by a Chinese notary dispatched to Macau by the Ministry of Justice of China, and a special forwarding seal shall be affixed by the China Legal Services (Macau) Company Limited;


C.For a Taiwan Company. The supporting documents on the legal entity status of a Taiwanese enterprise or other organization shall be notarised by a notary organisation in Taiwan, with the Straits Exchange Foundation sending the duplicate of the notarial certificate, and a verification certificate of consistency between the original and the duplicate issued by the China Notary Association or a notary association of the province, autonomous region or centrally-administered municipality;


D.For a Foreign Company. The supporting documents on the legal entity status of a foreign enterprise or other organization shall be notarised by a notary organisation in the country where it is located, and authenticated by the embassy or consulate of the People's Republic of China in that country, or shall undergo the relevant certification formalities stipulated in the relevant treaty between the People's Republic of China and the country; where notarisation and authentication formalities are required, and the country where the foreign party is located does not have diplomatic relations with the People's Republic of China, the supporting documents may be notarised by a notary organisation in that country, authenticated by the embassy or consulate of a third country which has diplomatic relations with the People's Republic of China in that country, and then authenticated by the embassy or consulate of the People's Republic of China in that third country;


E.Where a foreign-related, Hong Kong, Macao or Taiwan-related enterprise or other organisation acts as the plaintiff, the following documents shall be submitted separately, also need to be notarized and authenticated:

i. the shareholders' resolution and board resolution in respect of the consent of the enterprise or other organisation to file a lawsuit and elect a representative, the certificate of a shareholder or a director, the partnership agreement or the opinions of the person-in-charge (depends on the type of the company);

ii.the identity certificate of the representative;

iii.a photocopy of the identity certificate of the representative.


Thirdly, for a foreign company, the power of attorney shall be notarized and legalized.


(1)For the power of attorney issued outside the territory of China. Where the party concerned is a foreign-related, Hong Kong, Macao or Taiwan enterprise or organization, the power of attorney issued by the legal representative or authorized person on behalf of the enterprise or organization outside the territory of China shall be subject to the relevant notarization, authentication or other certification procedures;


(2)For the power of attorney issued within the territory of China. The power of attorney executed by the legal representative or authorized person on behalf of the enterprise or organization within the territory of China shall be certified by a notary organ in China, whose identity shall be certified and that the power of attorney is executed within the territory of China, and the certification documents issued by the enterprise or organization which can prove that it is entitled to execute the power of attorney after going through the notarization, authentication or other certification procedures shall be submitted to the court;


(3)For the power of attorney issued in the witness of the judge of the Court. The power of attorney executed by the legal representative or authorized person on behalf of the enterprise or organization in the witness of the judge of the Court is not required to go through the notarization, authentication or other certification procedures; however, when executing the power of attorney, in addition to producing the proof of identity and the proof of entry, the legal representative or authorized person must also produce the proof documents issued by the enterprise or organization which can prove that it is entitled to execute the power of attorney after going through the notarization, authentication or other certification procedures.


(4)The power of attorney can grant one-time authorization for multiple stages or multiple cases such as first instance, second instance, enforcement, court fee refund and fee collection, etc., and can be used repeatedly within its term of validity.


The subject and authorization are preferably written in Chinese with corresponding foreign language. If the subject and authorization are not available in Chinese, they must be translated into Chinese when used in China. A foreign translation company may be used directly for translation, rather than being required.


Finally, a statement of claim and an appeal petition are not required to notarized and authenticated.


The statement of claim or the petition of appeal may be signed by its Chinese attorney on behalf of the foreign company, or may be signed by the foreign company itself and sent to the attorney, who shall then submit the same to the court directly.


Currently, the courts in Zhejiang Province adopt the elements-based online filing system. After providing the power of attorney, the court only needs to fill in the elements such as the subject matter and the claim, and then a statement of claim or the application for enforcement will be generated, and there is no need to upload the signed and sealed documents of the parties involved.


However, requirements may vary from one court to another, and it is advisable to check with the court in advance to avoid unnecessary repetitive of work.


In a short word, usually you have to prepare the following documents and get them legalized before suing a Chinese company:

1.Identity information of the company, such as certificate of incorporation, trade license, etc.

2.the resolution of the shareholders meeting, the resolution of the board of directors, the partnership agreement (depends on the type of the company and articles of association), approving to sue the Chinese company, and appointing someone to handle this lawsuit.

3.A certificate of the position of the authorized person in the company.

4.A photocopy of the authorized person.

5.The Power of Attorney.




Disclaimer:

  • The article is an important work product and copyright of CHAN & LEE PARTNERS. If you intend to reprint it, please specify the source.

  • This article has been prepared for general reference purposes only and should not be relied on as legal advice or regarded as a substitute for detailed advice in individual cases.

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