Being Sued in China: A Foreign Defendant’s Guide
Being Sued in China: A Foreign Defendant’s Guide
A foreign company or individual often learns—through an unfamiliar courier or an online notice—that a lawsuit has been filed against it in a Chinese court. The instinct is either to ignore a proceeding on the other side of the world or to react without a plan. Both are costly. Chinese civil procedure gives a foreign defendant real tools, but those tools expire on fixed deadlines that begin running the moment service is complete. This article sets out how a defendant without domicile in China should read the timeline, preserve its defenses, and avoid the traps that turn a defensible case into an unenforceable default.
The Clock Starts at Service, Not at Awareness
Under the Civil Procedure Law of the People’s Republic of China (2023 Amendment, effective 1 January 2024), the procedural calendar for a defendant is triggered by valid service of process, not by the date the defendant happens to learn of the dispute. Article 283 sets out the methods by which Chinese courts may serve litigation documents on a party that has no domicile within China, including service on a litigation agent appointed in the case, service on a wholly foreign-owned enterprise, representative office, or branch the party has established in China, service through channels provided by international treaty, and—where other methods fail—service by public announcement. The 2023 Amendment shortened the public-announcement period for foreign-related service from three months to sixty days, so a defendant who treats a published notice as background noise can find itself validly served before it has engaged counsel.
The time periods are longer for foreign defendants than for domestic ones. A party without domicile in China has thirty days to file its statement of defense, rather than the fifteen days that apply to a domestic party, and the same thirty-day period applies to appeals. These extensions acknowledge the practical distance involved, but they are not invitations to delay: the defense window is also the window in which several rights must be exercised or lost.
Practical takeaway: Treat any document from a Chinese court, courier, or the party’s China entity as potentially effective service. Diarize a thirty-day deadline from the date of receipt and confirm the exact service date with local counsel before assuming there is time to spare.
The First Move: Challenging Jurisdiction
Where a defendant disputes that the Chinese court is the proper forum, the objection to jurisdiction must be raised within the period for submitting the statement of defense. An objection filed after that period is generally treated as waived, and the defendant will be deemed to have accepted the court’s jurisdiction by responding on the merits. For cross-border contracts, the most common ground is a valid arbitration agreement or an exclusive forum-selection clause designating courts outside China; raising the existence of an arbitration clause at the outset can require the court to decline the dispute in favour of arbitration.
The defendant should also assess whether the Chinese court has a proper connecting factor under the foreign-related jurisdiction rules of the Civil Procedure Law, which the 2023 Amendment expanded. Filing a jurisdiction objection does not waive the right to defend on the merits, but failing to file it on time forfeits the argument permanently.
Practical takeaway: Decide the jurisdiction question first. If a contract contains an arbitration or foreign-court clause, raise it within the answer period—an untimely objection cannot be revived after the merits are joined.
Default Is Not Safety
A defendant that ignores a properly served summons does not stop the case; it removes itself from it. Chinese courts may render a default judgment against a defendant that has been validly served but fails to appear. A foreign defendant sometimes assumes that a Chinese judgment is harmless because its assets sit abroad. That assumption is unsafe on two fronts. First, the defendant may hold, or later acquire, assets, receivables, or equity interests in China that are immediately exposed to enforcement. Second, the broadening practice of recognition and enforcement of Chinese judgments abroad—through bilateral treaties and an expanding reciprocity standard—means a default judgment can follow the defendant into other jurisdictions. The right place to contest liability is in the proceeding itself, where service defects, jurisdiction, and the merits can all be argued.
Practical takeaway: Non-appearance converts a contestable claim into a default judgment that is far harder to unwind. Appear and preserve the record, even when the immediate intention is to challenge the court’s authority.
Building the Defense: Evidence Rules for Foreign Parties
Evidence formed outside China is subject to formality requirements that catch many foreign defendants by surprise. Identity documents and authorization documents—such as a power of attorney appointing Chinese counsel—executed abroad ordinarily require notarization in the country of origin and authentication. Since the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (the Apostille Convention) entered into force for China on 7 November 2023, public documents from other contracting states may be certified by apostille rather than consular legalization, shortening what was once a months-long process. All documentary evidence in a foreign language must be accompanied by a Chinese translation. Under the Several Provisions of the Supreme People’s Court on Evidence in Civil Litigation, the party asserting a fact bears the burden of proving it, and the court evaluates the evidence as a whole.
Practical takeaway: Begin the notarization and apostille process for identity, authority, and key evidentiary documents immediately—these steps run in parallel with, and can outlast, the thirty-day answer period.
Counterclaims, Mediation, and Controlled Settlement
Responding to a claim is not purely defensive. Where the defendant has its own claims arising from the same legal relationship, a counterclaim filed within the proceeding can consolidate the dispute and create settlement leverage. Chinese courts also actively encourage judicial mediation, and a court-confirmed mediation agreement carries the same enforceability as a judgment. For a foreign party weighing reputational exposure against the cost of a contested trial, a negotiated mediation—entered from a position of preserved procedural rights rather than after a default—is frequently the most efficient exit.
Practical takeaway: Map the defendant’s own claims early. A counterclaim or a court-confirmed mediation reached while defenses remain intact yields a far better outcome than a settlement negotiated after liability is fixed.
After Judgment: Appeal and Enforcement Exposure
A defendant without domicile in China has thirty days from service of the first-instance judgment to appeal to the next higher court. The appeal continues the same case and can address both findings of fact and application of law. Once a judgment becomes effective, the prevailing party may apply for enforcement against the defendant’s property, including bank accounts, equity, and receivables located in China. Where enforcement is sought abroad, the outcome depends on the treaty relationship or reciprocity between China and the enforcing state. A foreign defendant should therefore evaluate enforcement risk not only by where it is incorporated, but by where its collectible assets actually sit.
Practical takeaway: Calendar the thirty-day appeal deadline the moment a judgment is served, and assess enforcement exposure by asset location rather than place of incorporation.
Conclusion
A foreign defendant’s position in a Chinese proceeding is governed less by the strength of its underlying case than by the discipline with which it manages a fixed sequence: confirm whether service was valid and when it took effect; decide and raise any jurisdiction or arbitration objection within the answer period; appear rather than default; perfect the formality of foreign evidence early; use counterclaims and mediation as deliberate tools rather than afterthoughts; and treat the appeal and enforcement stages as extensions of the same timeline. Each stage carries a deadline, and each deadline, once missed, narrows the options at every stage that follows. The defendant that reads the timeline correctly keeps the full range of defenses the law provides; the one that waits for certainty before acting usually finds that its most valuable defenses have already expired.
This article is based on the author’s experience advising foreign companies and individuals in cross-border disputes and litigation in China. It is for informational purposes only and does not constitute legal advice. Procedural rules and time periods may vary by case and change periodically; consult qualified PRC counsel for current requirements.
Author: Jianxing Pan
Partner, Beijing ChangAn Law Firm
Offices in Beijing and Shenzhen
