Many foreign firms have big concern over filing a lawsuit or responding to a lawsuit filed by a Chinese firm with a China court, worrying being China court will favor for the Chinese party and being treated unfairly. Are there any grounds for such worry?
We cannot see the bias China courts hold to foreigners or foreign firms no matter from any accessible database, individual cases or our practice experience.
Take the most sensitive Intellectual Property related cases as example. In the “Ten Major IP Cases” for Year 2017 as published by China Court, one is Jaguar Land Rover Limited vs. Guangdong Fenli Food Co., Ltd and Wang Zhengming on dispute of trademark infringement, and Jaguar Land Rover Limited won the case both in the first instance and the second instance.
Among the 50 Typical IP Cases for 2017 as issued by China court, 8 involved foreigners or foreign firms, including American individual/firm, French firm, Netherland firm and Korean firm, etc. The foreigner or foreign firms were the winning party in 7 cases. Michael Jordan is a party one case against the Trademark Review & Adjudication Board of State Administration of Industry and Commerce. Michael lost the case in the first instance and second instance trial, but in the retrial heard by the Supreme Court of PRC, the first and second instance judgements were overturned, and Michael won it.
According to a report on Raconteur.net, China has become a place that foreign firms prefer to handle IP disputes. In 2015 there are overall 65 foreign firms filed cases with Beijing IP Court and obtained winning ruling. The Diplomat indicated in an article that 20016 throughout 2011 foreign firms filed over 10% patent infringement cases in China, and the winning rate was over 70%. Right now the averaged winning rate is 80% according to Beijing IP Court.
Our own practice experience tally with the story. As a law firm specialized in representing foreign firms or foreign invested companies, in majority cases, including IP cases and civil and commercial cases such as bank performance guarantee dispute and even criminal cases, we represented we obtained winning judgment or satisfactory result, and hardly had unfair ruling or treatment against foreigners or foreign firms. Based on our experience, provided we can prepare well on evidence collection and legal analysis and argument the courts were unlikely to rule against us in any obvious unfair way. Even though occasionally the ruling might not be so fair, it could still be corrected by appeal and retrial.
So, there is no need to fear to file or respond in China court when a dispute with Chinese party happens. It would be wise to make choice from the perspective of easier enforcement of judgment and focus on the preparation of the case and picking up an appropriate lawyer.