what we think

By Maarten Roos

Our firm was open for little over a year when a European gentleman called for an appointment. He was referred to us by a European embassy. He had just discovered that his Chinese business partner of many years and joint venture partner, had been defrauding him.

Almost 14 years later, the dispute has finally been put to rest. This was easily the longest-running case of our firm, and it was particularly complex. Over the years we spent time on numerous lawsuits and criminal filings, administrative lawsuits, in negotiations and reaching near-settlements, and in pursuing all kinds of other ways to solve the dispute. Finally, we managed to liquidate the joint venture, sell the land, and get our client paid.

Was it worth it? If you had told the client in 2011 that it would take so long to get to a resolution, they may have just given up from the start. But in the end, the client did receive substantially more than it paid in (legal) costs. Moreover, giving up was never a realistic option as long as there were substantial sums to fight for. A better result may have been an early settlement. In fact, we tried, but the parties never could shake on a deal.

Valuable lessons
We can draw some valuable lessons from this case:

• Dispute resolution in China (as in the rest of the world) can be costly and time-consuming – even more so if the dispute is complex, and one or both the parties are willing to fight hard, dirty, and till the end.
• Disappointments should be expected – in this case for example, the opponent's rejection of a win-win settlement on several occasions; the procuratorate's refusal to prosecute despite clear evidence of a crime; and a governmental department that sticks to administration rather than offering a solution. Expect challenges; and be ready to adjust your strategy as necessary to keep the case moving forward.
• The Chinese legal system offers ample opportunities. We sometimes hear of foreign companies complaining that Chinese courts are not fair, and how difficult it is to get funds out of China. This case (and many other cases that we have handled) shows that with hard work, perseverance, creativity, and a lot of trust between the client and his lawyers, results can be obtained.
• In case of difficulties, the involvement of a foreign embassy or consulate can be invaluable. In two instances we nearly got stuck – when the court delayed a decision, and when a government department set unreasonable requirements to get funds out of China. In both cases, the relevant embassy stepped in with great success (Thank you!).

We have just started a new year, and so we are still in the wishing mood. Our wish for all of you is that you never get into such a dispute. But if you do, rest assured that we will do what it takes to fight for your business – however long it takes!

At R&P, we resolve complex, long-running China disputes—including a 14-year joint venture fraud case where we liquidated the JV and secured payment for our European client. With perseverance and deep expertise, we fight for your interests no matter how long it takes. Contact Maarten Roos (roos@rplawyers.com) or your trusted R&P contact.

This was originally published on LinkedIn as an edition of Maarten's China Law Focus Newsletter. Subscribe here to get regular updates.