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A Discuss About Business Litigation in China

Business litigation is a traditional area of practice for most of China litigation lawyers. Business litigation is different from employment dispute litigation and divorce litigation. When considering litigation, a business owner should be aware of his or her options. In addition to the courtroom, there are other forums that might be appropriate, depending on the specific needs of the business. Alternative dispute resolution (ADR), described below, may be a desirable alternative to litigation or, if the cause of action is of an eligible size, small-claims court may be another venue for an owner to consider. Class actions may also be utilized by a business in certain circumstances. Additionally, business owners must understand the basic features of class actions, in the event that they are named as defendants.

A business contemplating bringing or defending a lawsuit would be well served by consulting with a seasoned trial attorney like one from our Beijing litigation attorney, Shanghai litigation attorney,Guangzhou litigation lawyer, to better understand all of the legal options.

Litigation Procedure

There are many steps that a litigant must follow when pursuing a judicial resolution to an issue. The civil litigation process is relatively uniform and is controlled by federal or state court rules. The process itself involves a considerable volume of work, whether or not the case actually goes to trial. Required tasks include everything from filing an initial pleading such as a complaint, subsequent pleadings such as an answer or possibly counterclaims or third-party actions, to pursuing an appeal if the judgment is found to be unsatisfactory. The steps that are usually involved in litigation are:


Difference between deposition and affidavit rules in China litigation

Depositions and Affidavits in China litigation is similar with those in common law countries. Although China's deposition and affidavit procedure and requirement are somewhat named differently, they are similar in nature. Before a case goes to trial, both sides want to know what the witnesses will say. If a witness is friendly, the parties or their attorneys may talk to him and ask what he knows about the events that are relevant to the case. However, if the witness changes his mind before trial, the party questioning the witness at trial can do only one of two things. If the witness in court admits making the contradictory out-of-court statement, the trier of fact (judge or jury) might disregard all of the witness's testimony. However, if the witness does not admit making the contradictory statement, then the party questioning him might have to call another witness who heard the earlier statement. This creates a "swearing match" in which the trier of fact has to decide which witness is more credible.

A more effective way of avoiding such surprises and making sure that a witness does not change his story at trial is to get the first statement in writing and under oath.


An affidavit is merely a written record of a witness's out-of-court statement that is signed and sworn to by the witness in front of a notary public or other official authorized to administer oaths. A written statement that is not signed under oath (or "notarized") may be used in court under certain circumstances. It is a crime in most jurisdictions to lie under oath. Thus, witness affidavits may be used to impress upon a witness the importance of telling the truth in his out-of-court statement. The witness can then be asked whether he was lying when he made the first sworn statement out of court or when he gave the contradictory sworn testimony in court.


How to enforce or challenge CIETAC awards in China

China International Economic and Trade Arbitration Commission(CIETAC) is a regional international arbitration institution. As an China international arbitration lawyer, I have entensive experience in handling cases with CIETAC, especially its South China branch which is located in Shenzhen. This article is to briefly introduct how to enforce and challenge CIETAC awards in China court.

The circumstances in which a CIETAC award may be set aside or enforcement refused are set out in paragraph 1 of article 260 of the CPL. They are that:
• the parties neither included an arbitration clause in their contractnor subsequently concluded a written arbitration agreement;
• the party against whom enforcement is sought was not asked to appoint an arbitrator or to participate in the arbitration proceedings or failed to state its case for reasons for which it cannot be held responsible;
• the composition of the arbitral tribunal or the arbitral proceedings did not conform with the relevant arbitration rules; and
• certain items of the award exceeded the scope of the arbitration agreement or were outside the jurisdiction of the arbitration institution.

Article 260 also provides that if a People’s Court decides that enforcement of the award would be against the social and public interest, it shall refuse the enforcement application. Although the relevant provisions of the Arbitration Law do not refer to refusing to enforce an award on the grounds of social and public interest, this probably remains a valid ground for refusing enforcement.


How to becoma a China litigation lawyer - advice to law students

I have always want to write something about how to become a China  litigator for those law students. A litigation attorney works as an expert in cases that don’t settle outside the courtroom and go to trial. Litigation attorneys, also known as “litigators” or “trial lawyers,” represent plaintiffs and defendants in civil cases and manage all phases of the litigation process from investigation, pleadings and discovery to pre-trial, trial, settlement and appeal.

Law firms will typically hire a litigation attorney to help with cases and adapt to the specific needs of different clients. Litigation lawyers deal with various types of cases, including criminal cases, civil case, capital offenses or property disputes. A litigation attorney does not specialize in a specific branch of the law but yet can deal with any kind of trial. Litigation attorneys have to focus on what happens in the courtroom to convince the judge and the jury by sometimes putting on something of a show. A litigation lawyer has to have excellent public speaking skills and a versatile mind.

1. Develop excellent verbal skills from an early age. Join your school’s debate team to learn argumentation techniques and get accustomed to public speaking. Understand that becoming a lawyer will take a lot of work and studying, so get ready by developing good learning habits.

2. Go to college or university and follow a four-year undergraduate program. Most schools will not favor a specific major or minor, but they will ask for a wide-ranging liberal arts education. A philosophy major, for example, will help with your argumentation skills. Whatever you choose, make sure you have a high final GPA, which will factor heavily in your admission file.

3. Register for and take the China Judicial Qualification Test. Some students take the CJQT during their senior year of college, but in some situation this path is not allowed anymore. You want to get a high score, so you might have to retake it. You can sit for the test four times a year for a registration fee each time.

4. Register with the Law School Admission Office at the law school you want to attend. You’ll have to submit your school transcripts, letters of motivation, recommendation letters from teachers and any other documents the law school to which you want to apply requests. The LSAO will send your documents and test results to the law schools you choose.

5. It will take several months before you get an answer from the law schools and another several months before you can enroll in law school. Use the time to get some work experience. Accept any type of job in a law firm or legal office to start building your resume.


Free China Employment Agreement Drafted By China Lawyer

The article is about a free employment contract drafted by our China lawyer. Please note that this is only for you reference. You should consult our China attorney for related China employment law and employ our service to draft an employment agreement according to y our specific circumstance.


EMPLOYMENT AGREEMENT (this “Agreement”) dated as of [__] (the “Effective Date”), by and between HITECH COMPANY, Inc., a Delaware corporation (“HITECH”), and [__] (the “Employee”).

1.    Employment. HITECH hereby employs the Employee to serve as President and Chief Executive Officer of HITECH in accordance with the terms and provisions of this Agreement, and the Employee hereby accepts such employment with HITECH. Employee also shall serve as a member of the Board of Directors of HITECH.

2.    Term. The term of this Agreement shall commence on the Effective Date and shall continue until this Agreement is terminated as hereinafter provided.

3.    Compensation. As compensation for all services rendered by the Employee to HITECH pursuant to this Agreement, HITECH shall pay to the Employee the following amounts during the term of this Agreement:

(a)    Base Compensation. HITECH shall pay to the Employee base compensation at no less than the rate set forth on Schedule A attached hereto and herein incorporated by reference (the “Base Compensation”). The Base Compensation shall be payable pursuant to HITECH’s standard payroll practices, except as otherwise noted on Schedule A.

(b)    Incentive Bonus. In addition to the Base Compensation, the Employee shall be eligible to receive incentive bonuses from time to time at the discretion of the Board of Directors of HITECH.


China Lawyer's Role in Domestic Arbitration and International Arbitration

China lawyer’s role in the China arbitration is similar to China lawyer’s role in litigation; that is to say the lawyer is an identifier, selector, and marshaller of the evidence.  In fact, one text describes the role of the litigators as that of historians and litigation largely a process of recreating historical facts.  One needs only to look at the division of time spent on a case.  The majority of time is spent gathering and presenting the evidence as opposed to gathering and arguing the law.

During the process of dispute resolution, the client and their counsel deal with the evaluation of risk taking.  By risk taking I mean assessing a risk – namely, the cost if things go wrong and the probability of that occurring.  If the cost is high, the probability must be minimized.  If the cost is low, the probability may be allowed to increase according to the party’s personal assessment of “acceptable risk.”

Risks are controlled by:
1.  The elimination of the risk.
2.  Eliminating activities that produce undue risk.
3.  Insuring for uncontrolled risk.
4.  The informed consent of the client.
5.  The establishment of standards, controls and regulations.

These factors come into play in any dispute either as a proactive or reactive procedure.


Choice of Arbitration Venue in International Arbitration Agreement

Parties to an international commercial arbitration are generally free to choose for themselves where that arbitration should take place. The failure to make a clear choice of the place of arbitration in the arbitration clause of a contract may lead to unexpected results. A court in the United States ordered an arbitration to proceed in California under the AAA Rules where the arbitration clause did not specify a place of arbitration even though a separate clause in the contract specified that if an arbitration was necessary and was to be held in Peking it was to be subject to the Rules of Procedure of the Foreign Trade Arbitration Commission in Peking. The parties may make the choice of a plaee at any time before the arbitration begins; or they may leave it to be made on their behalf by an arbitral institution (if the arbitration is to be conducted under institutional rules) or by the arbitral tribunal itself.

At some stage, however, a choice will have to be made. The question which then arises is where should an international commercial arbitration be held? Should it, for example, be held in London or Washington, Paris or Geneva, Cairo or Kuala Lumpur? There is no simple or universal answer to this question. The nationalityof the parties to the arbitration will have to be taken into account, since the general practice is to hold an arbitration in a country which is neutral, in the sense that it is not the country of any of the parties to the dispute. The usual residence or place of business of the parties must be taken into account too, because of the need to cut down as far as possible on the expense and inconvenience of travelling. There are political factors, such as the general acceptability of the particular location to the parties and, in particular, the question of whether any restriction is likely to be imposed on the entry of the arbitral tribunal, the Parties, their advisers and witnesses.


A Brief Introduction to China International Arbitration

A business contract, lease or other written contract may contain an arbitration clause. By using such a clause, the parties to the contract agree to arbitrate any future disputes. As with any clause, all parties must agree to it's use in the contract before the contract is signed. Arbitration is an out-of-court proceeding in which a neutral third party called an arbitrator hears evidence and then makes a binding decision. Arbitration is the most commonly used method of alternative dispute resolution (ADR), and you'll find an arbitration clause in the fine print of all kinds of contracts these days. Read on to find out whether you should include an arbitration clause in your agreement.

Binding or Nonbinding Arbitration

Arbitration can be binding (which means the participants must follow the arbitrator's decision and courts will enforce it) or nonbinding (meaning either party is free to reject the arbitrator's decision and take the dispute to court, as if the arbitration had never taken place). Binding arbitration is more common.

Who Can Arbitrate Disputes?

Arbitration can be voluntary (the parties agree to do it) or mandatory (required by law). Most contract arbitration occurs because the parties included an arbitration clause requiring them to arbitrate any disputes "arising under or related to" the contract. If a provision like this isn't included in the contract, the parties can still arbitrate if they both agree to it (although it's tough to reach an agreement to arbitrate once a dispute has arisen).

Advantages and Disadvantages of Arbitration

For simple contract disputes in which the matter can be heard in one day, arbitration is usually a good choice. However, if in doubt, consider the advantages and disadvantages, below.

Advantages. Arbitration is usually faster, simpler, more efficient, and more flexible for scheduling than litigation. Also, it avoids some of the hostility of courtroom disputes, perhaps because it's a private proceeding versus the public drama of the courtroom. And if the subject of the dispute is technical--for example, about a patent--the parties can select an arbitrator who has technical knowledge in that field, rather than a judge who may not be familiar with the issues.

Disadvantages. Unlike a court ruling, a binding arbitration ruling can't be appealed. It can be set aside only if a party can prove that the arbitrator was biased or that the arbitrator's decision violated public policy. Unlike a court case, there is no automatic right to discovery (the process by which the parties have to disclose information about their cases to the other party). (However, you can include a requirement for discovery in your arbitration clause or agree to it under arbitration rules.) The costs of arbitration can be significant; in some cases, they may even exceed the costs of litigation (see below).

Still weighing the good and the bad when it comes to arbitration?

What Does Arbitration Cost?

According to a survey by Public Citizen, a consumer watchdog group, the cost of initiating an arbitration is significantly higher than the cost of filing a lawsuit. On average, it costs about $9,000 to initiate a claim to arbitrate a contract claim worth $80,000 (versus about $250 to file that action in state court). Keep in mind that the people in the dispute pay the arbitrators, and arbitration fees can run to $10,000 or

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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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This China Lawyer Blog is aiming at providing better knowledge and understanding of Chinese law for foreigners. Should you have any legal issue in China, do not hesitate to contact China Lawyer Blog for consultation. Preliminary consultation is free. Further legal service, however, will be charged in due rate and in due course.

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.