Litigating against a Chinese company is litigation against a party established in China. At Musch Legal, we regularly handle commercial disputes involving Chinese suppliers and customers. Judgments by Dutch courts are virtually unenforceable in China — arbitration via HKIAC, SIAC, or CIETAC is therefore essential. Anyone contracting without an arbitration clause lacks effective enforcement.
What is the legal problem? (Why is China so difficult in terms of procedural law?)
China has its own legal system with different principles. Foreign court judgments are recognized to a limited extent — only under reciprocity or treaty. Litigating in China requires the Chinese language, local lawyers, and Chinese procedural law. Judgments by Dutch courts are virtually unenforceable in China. Arbitration is by far the safest route, but must be agreed upon before the contract is concluded.
What does the law say? (Which frameworks apply?)
The Chinese Civil Code, as of January 1, 2021, includes contract law. Civil Procedure Law (PRC) governs civil proceedings. China is a signatory state to the New York Convention of 1958 — arbitral awards are enforceable through the Supreme People's Court. Since Supreme People's Court Memo 2017, China increasingly recognizes foreign rulings under presumed reciprocity. For Hong Kong specifically: Arrangement Concerning Mutual Enforcement of Arbitral Awards (1999).
For IP enforcement in China: specialized IP courts in Beijing, Shanghai, Guangzhou.
Route
Processing time
Enforceability in China
Dutch court
18-36 months
Limited under reciprocity
HKIAC arbitration
12-18 months
High (Arrangement 1999)
SIAC arbitration
12-18 months
High (New York Convention)
CIETAC arbitration
12-24 months
Direct (China domestic)
Chinese court
2-4 years
Direct (Chinese judgment)
Route
Processing time
Enforceability in China
Dutch court
18-36 months
Limited under reciprocity
HKIAC arbitration
12-18 months
High (Arrangement 1999)
SIAC arbitration
12-18 months
High (New York Convention)
CIETAC arbitration
12-24 months
Direct (domestic China)
Chinese court
2-4 years
Direct (Chinese judgment)
What risks do companies face? (What damages threaten in a Chinese dispute?)
Loss of claim due to lack of an enforceable route. Trademark squatting via first-to-file without Madrid Protocol registration. Problems with evidence in Chinese proceedings without Chinese counsel. Reputational damage and commercial loss due to opaque handling. In IP disputes: parallel Chinese proceedings before the Beijing IP Court sometimes parallel to international arbitration. Accumulation of risks in large imports without legal preparation.
Practical example from our practice (How did we win an HKIAC case?)
Musch Legal represented a Dutch importer with an English-language contract with a Chinese manufacturer. During the initial renegotiation of the contract, we incorporated HKIAC arbitration (Hong Kong as seat, Dutch law). In a subsequent quality dispute, this resulted in successful enforcement within eleven months: the HKIAC ruling became enforceable in China via the Supreme People's Court (Arrangement 1999). The client received $380,000 in damages plus costs. Without the arbitration clause, the Dutch judgment would have been virtually unenforceable.
What can you do? (Which route do you choose against the Chinese counterparty?)
For new contracts: choose arbitration at HKIAC, SIAC, or CIETAC. Make the contract bilingual (English-Chinese, Chinese version prevailing in disputes before Chinese courts). Conclude an NNN agreement under Chinese IP law. Register trademarks via the Madrid Protocol prior to production. For existing disputes: assess the arbitration or Chinese court route on a case-by-case basis. Engage Musch Legal with Chinese counsel for litigation.