Introduction to the Chinese Civil Litigation Process

1.How long will it take until you are able to collect the money once you start to sue?

The short answer is anywhere from 3 months to 1 year.

Let me explain.

In tryingcivil cases, the people's courts shall, as provided for by law, apply the system whereby the second instance is final. This means that after the court of first instance makes a judgment, if either party files an appeal in 15 days, the case will go to the second instance. Otherwise the first instance judgment becomes final.

Fist instance

1)A people's court shall, in handling a case to which ordinary procedure is applied, close it within 6 months from the date of filing.

Second instance

2)In trying an appealed case against a judgment, the people's court shall make a final judgment within 3 months after the case was filed as one of second instance. Any extension of the term necessitated by special circumstances shall be subject to the approval of the president of said court.

Execution

3）Court execution usually takes 2 to 3 months.

2.How much will it cost to litigate in China?

1）Attorney fees

In China, attorney fees can be roughly divided into two categories, namely fixed fees and risk agency. If it is a fixed fee（generally no more than 8% of the subject amount）, because the case may have a first instance and a final instance, attorney fees will be incurred at each stage.

In the case of a risk agent, attorney fees are charged as a percentage (usually 30% or more) of the final execution amount.

2）Court cost

After the court has filed a case, you need to pay the court fees. Court fees are generally 2.5% or less of the subject matter of the case, which is very reasonable if you ask me.

3.Notarization fees (important)

As a foreign company, to file a lawsuit in China, you also need to bear the notarization fee for the power of attorney and the company license. In some cases, certain evidence also needs to be notarized.

To put it simply, The above documents need to be notarized by a lawyer or a notary public in your country, and then notarized by the Chinese embassy in your country. This is the so-called double notarization.

If the subject amount of the lawsuit is not large, the notary fees may exceed the attorney fee.

3.If you win, will you get your money back for sure?

Unfortunately, NO. It depends on the defendant's financial situation. All over the world, companies have limited liability. If the defendant is a company with no property, it will be very difficult for you to get your money back.However, according to Chinese law, shareholders are required to undertake company debts within the scope of unpaid registered capital(which is quite a common situation). That is to say, we have the opportunity to add the company shareholder as the person to be executed in the case.

Our team has specialized in maritime law, international logistics, and international trade cases for more than 15 years. We sincerely hope to serve you well and to reach long-term cooperation with you to safeguard your interests in China.

Zhai Dongwei International Trade & logistics Attorney team was founded in 2007. Its founder, Zhai Dongwei, is the founding partner of Guangdong Yingzun Law Firm. Focusing on International trade,maritime affairs, and supply chain cases for more than 16 years, the team currently has more than 30 professional logistics attorneys, of which more than 10 have overseas work and study experience, and can use Chinese, English and French to work and participate in business negotiations.