Demand Letters to Chinese Companies: Facts are Optional

My legislation firm’s global dispute resolution lawyers usually generate need letters to Chinese providers that owe cash or have unsuccessful to abide by a deal. These letters are different from what we produce to American and European firms.

Our need letters to American and European providers are usually fairly prolonged. They extensively explain the specifics and the relevant legislation. Then they explicitly describe what we will get from a courtroom or arbitration panel if the receiver fails to comply with our requests. They then set out what the recipient have to do to take care of the case and point out how it is in “everyone’s very best interest” to obtain resolution.

The receiver of these letters normally responds by pointing out holes in our client’s situation. The reaction letter normally presents its individual intensive factual and authorized recitation, then describes why they will prevail. It is generally lengthier than the desire letter that precipitated it.

China tends to be distinctive.

In When Your Provider is not Arguing to Acquire, David Dayton (who actually has a Ph.D in Chinese Business Anthropology), explains some of this big difference, and posits that Chinese organizations just do not care about arguing towards reasonable conclusions:

Us residents tend to argue to take care of particular factors (phrases, dates, stats, and many others.). Preferably those people specific factors will be acknowledged and eventually the argument will attain a “logical” conclusion—each side’s specific factors have been settled to some mutual agreeable degree. I guess you can say that you “win” an argument by obtaining as a lot of of your specific worries solved to your fulfillment as probable (without the need of giving up also a lot of to the other aspect).

But in 12 decades in China, I can say that I have only experienced this progressing-to-a-sensible-summary form of argument a few of instances. It looks to me that both equally the issue of and the system of arguing is fully different in China.

Our lawyers have continuously identified that 1 to two web page letters that incorporate incredibly minimal by way of points or regulation are best for all but the most significant Chinese companies. Our demand from customers letters (constantly in Chinese) typically just point out that the Chinese corporation owes our client X dollars from its failure to do Y. They then convey to the Chinese company what we will do if it does not shell out our shopper instantly.

The Chinese corporation normally responds by declaring it will by no means shell out our customer anything. It usually also delivers some vague cause for this, these types of as “your customer is a liar” or “your customer claimed it would make a different order from us” or “your customer does not comprehend China.” We then reiterate what will take place to the Chinese company if it does not pay back fast and then the Chinese business possibly responds to point out that it would desire to settle. Or not.

For extra on how to cope with a dispute from a Chinese firm test out How to Sue a Chinese Firm: The Prolonged Edition.