What steps are required to file a civil lawsuit for a breached contract against a business partner in China, and how long does the process typically take?
Lawyer Answers
mohammad mehdi ghanbari
Hello and regards,
Based on the details you provided regarding the breach of contract by your Guangzhou supplier, this is a manageable situation, but it requires strict adherence to Chinese procedural law. Below is a breakdown of the process, evidence, and costs involved in filing a civil lawsuit in China.
1. Required Evidence & Preparation
To sue a Chinese entity, your evidence must be legally valid in a Chinese court.
Documentation: You need the signed contract, purchase orders, commercial invoices, proof of payment, and all communications (WeChat, emails) proving the breach.
Legalization (Crucial Step): Evidence generated outside China (like your payment records or the contract if signed abroad) is not automatically admissible. It must be notarized in your country and then legalized (authenticated) by the Chinese Embassy or Consulate in your country.
Translation: All documents must be translated into Chinese by a court-approved translation agency.
2. Asset Preservation (Freezing Assets)
You mentioned wanting to freeze assets. This is called 财产保全 (Property Preservation).
Timing: You can apply for this before or during the lawsuit to prevent the supplier from hiding money.
Security Deposit: The court will require you to provide a "security" (guarantee) to cover potential wrongful damages to the defendant. This is typically equivalent to 30% to 100% of the value of the assets you want to freeze. You can often purchase "litigation property preservation liability insurance" to cover this bond at a lower cash cost.
3. Litigation Timeline
First Instance: Typically takes 6 months, but for foreign-related cases, it often extends to 12 months or more due to the complexity of serving documents and notarization.
Service of Process: If the supplier avoids receiving court papers, the court may need to serve by public announcement, which adds ~60 days to the timeline.
4. Costs Involved
Court Fees: These are charged on a sliding scale based on the claim amount. For example, if you are claiming 1 million RMB, the fee is roughly 1.4%; for higher amounts, the percentage decreases (e.g., ~0.5% for claims over 20 million RMB).
Legal Fees: Hiring a Chinese lawyer is mandatory for court representation. Fees are usually negotiable (hourly or a percentage of the recovered amount).
Recommendation
You absolutely need professional assistance. Navigating the "Intermediate People's Court" system in Guangzhou requires fluency in legal Mandarin and knowledge of local procedures.
I can assist you further with this.
I offer professional consultation to guide you through these steps, help prepare your strategy, and explain the nuances of the Chinese legal system.
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