It is very likely that you are not going to file a lawsuit with a court in Beijing or Shanghai, but in a small or medium-sized Chinese city unfamiliar to you.
Most foreigners only know Beijing and Shanghai and may know Guangzhou, Shenzhen and Hangzhou as well. For the rest, they know little or nothing.
Admittedly, in most circumstances, the China supplier you sue is not in a big city like Beijing or Shanghai, and you cannot initiate an action before a court of big cities.
Because you shall observe the jurisdiction rules of the PRC Civil Procedure Law (CPL), which determines the court your case is brought before.
Such rules may direct your case to a court in a city with many factories, an airport, or a seaport.
This city can be hundreds of kilometers or thousands of kilometers away from Beijing or Shanghai.
1. China’s jurisdictional rules
(1) Domicile of the defendant
In normal circumstances, if you want to sue a Chinese company, you should file a lawsuit with the court in its domicile. The domicile is usually its registered address or actual place of business.
Most Chinese factories engaged in international trade are domiciled in cities of the four provinces (Guangdong, Fujian, Zhejiang, and Jiangsu), such as Foshan, Dongguan, Shantou, Yiwu, and Wuxi.
(2) Place of contract performance
The disputes with a China supplier often arise from contracts, so you can also choose to bring a case before the court in the place of performance of a contract.
The place of performance can be the place of performance agreed upon in the contract, the place of delivery, and the place of accepting payment.
Thus, when you ask your China supplier to deliver the goods to your designated freight forwarder in China, the location of the freight forwarder or its receiving warehouse, which are usually in the vicinity of airports and seaports, can be the place of performance. The courts in these locations also have jurisdiction over your case.
The major Chinese airports and seaports are located in Shanghai, Guangzhou, Shenzhen, Ningbo, Xiamen, and Qingdao.
2. How about the courts in these cities?
Although not as well-known as Beijing and Shanghai, these cities are also the most developed areas in China. Due to international trade, these cities have become economic leaders of China.
The infrastructure of these cities does not differ markedly from that of Beijing and Shanghai, including the court system.
In particular, the courts in export-oriented cities and port cities have more experience in international trade disputes than those in Beijing and Shanghai.
After all, Beijing and Shanghai play a role as a financial center in China, rather than a manufacturing center.
The Cross-border Trade Dispute 101 Series (‘CTD 101 Series’) provides an introduction to China-related cross-border trade dispute, and covers the knowledge essential to cross-border trade dispute resolution and debt collection.
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Contributors: Meng Yu 余萌