Civil & Commercial Litigation in China 101: You need to know（1）

1.Can foreign companies win in Chinese Courts.

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.

2.Legal System

China largely follows the civil law legal system. Statutory law is the most important source of law in the Chinese legal system. However, the Supreme Court has constantly posted “Guiding Cases”, which provide as the references to the lower courts when the making decisions on similar cases.

Chinese court system can be divided as follows:

• Supreme Court, the the highest level court in China

• Provincial High Court, in very province or municipality

• Intermediate Courts

• Primary Courts in each county, district, or county-level city.

China adopts a two-instance trial system. Most of the cases are tried by primary courts. The cases involved foreign elements, may be tried in the intermediate courts, special courts, such as intellectual property courts, maritime courts, and financial courts, or higher courts, which depends on the claim amount.

The judgment passed by the first instance court can be appealed to the second instance court, except when the first instance in Supreme Court. The judgement rendered by the second instance court is binding, but which may be revised via a retrial proceeding in some circumstances.

3.How long will the litigation take?

For first instance, the court shall conclude the case within six months from the date of acceptance. If it applies summary procedure, the court shall conclude the case within three months. For second instance, the court shall conclude the case within three months from the court accepting the appeal.

However, extension of time limits is allowed when approved internally or by higher court.

For the foreign-related cases, the time frame mentioned above is not applied. However, in law practice, provincial high courts in many places have put forward higher requirements for the trial period of foreign-related civil and commercial cases. Usually, it may take 6-24 moths for the courts conclude the case, if no settlement reached during the litigation.

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.