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August 18, 2015
China Law Blog: Make contracts with Chinese companies enforceable.
We do prize blogs by experienced practicing lawyers who know what they're doing. Today Dan Harris' peripatetic law partner Steve Dickinson of Seattle-based Harris Moure tells you how to make Chinese deals work in "China Contracts: Make Them Enforceable Or Don’t Bother" at the enduring and always useful China Law Blog. Excerpt on jurisdiction provisions for disputes.
The contract should be enforceable in a Chinese court with jurisdiction over the defendant. This normally means jurisdiction in a court in the district where the defendant has its principal place of business. China has excellent domestic arbitration panels with extensive experience in resolving sino-foreign disputes. But litigation is usually a better alternative for several reasons.
First, in disputes with smaller Chinese companies, there is a concern that the company will dissipate assets before a judgment can be obtained. Chinese courts can order a prejudgment writ of attachment that prevents this. In addition, a prejudgment writ will often convince a smaller Chinese company to resolve the matter quickly.
Second, the plaintiff in a dispute with a Chinese company will often want an order instructing the defendant to take some action such as ceasing to infringe IP rights, return molds or tooling, or appointing a manager or officer of a company. In other words, what would be called injunctive relief in a common law system. Simply stated, a court has the authority to issue such orders while an arbitration panel does not.
Steve Dickinson
Posted by JD Hull at August 18, 2015 02:54 PM
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