SUMMARY
- Suing Chinese companies for product liability is possible
- Strategic lawsuits for product liability
I. Suing Chinese companies for product liability is possible
Many enterprises try to bring an action against Chinese enterprises for products that have been manufactured in China and caused physical injury to customers. Often foreign importers or retailers had been successfully sued by customers. These firms want to take recourse against the Chinese manufacturer. Filing a successful suit against Chinese companies for product liability is possible, but burdensome even in China in practice. We will see enough of this concerning the new Chinese Export Control Law.
A Chinese manufacturer will probably deny personal jurisdiction of a court if dragged into court in another country. Also, an intermediary company in Hong Kong is likely to have shipped the goods overseas. Here, it is regularly challenging to prove that this intermediary firm belongs to the Chinese debtor enterprise. Even if you achieve to get a verdict of a court in another land, it is not certain whether Chinese courts will enforce it eventually. Trying to seize another shipment of this Chinese manufacturer will usually be in vain as it probably has already set up a new corporate shell. Besides, filing a claim with a Chinese court directly, is arduous, too.
So how could this problem be solved in practice?
II. Strategic lawsuits for product liability
Chinese courts enforce judgements of courts of certain states. You have to strive for a verdict of such a court. In addition to that, you should find out whether the Chinese debtor firm has assets in this very same land. Hence, as soon as you have a money judgement of this jurisdiction, you can legally seize assets of the manufacturer at its foreign location. Additionally, you should be able to quickly convert this verdict into a local Chinese judgement having the chance to straightly confiscate assets of the debtor company in China. The underlying core strategy of this method is to go after the firm that owes you until it is worn down and willing to pay or settle. It goes without saying, this approach takes time and stamina.
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