Demand Letters to Chinese Companies: Facts are Optional

My regulation firm’s intercontinental dispute resolution lawyers normally generate demand letters to Chinese organizations that owe income or have unsuccessful to abide by a agreement. These letters are unique from what we create to American and European firms.

Our desire letters to American and European organizations are usually relatively very long. They extensively describe the details and the applicable legislation. Then they explicitly describe what we will get from a court docket or arbitration panel if the receiver fails to comply with our requests. They then established out what the receiver have to do to solve the scenario and point out how it is in “everyone’s greatest interest” to obtain resolution.

The receiver of these letters normally responds by pointing out holes in our client’s circumstance. The reaction letter commonly delivers its possess substantial factual and legal recitation, then clarifies why they will prevail. It is typically longer than the demand from customers letter that precipitated it.

China tends to be diverse.

In When Your Supplier is not Arguing to Get, David Dayton (who really has a Ph.D in Chinese Business enterprise Anthropology), points out some of this variance, and posits that Chinese firms simply do not care about arguing toward rational conclusions:

People tend to argue to resolve precise points (terms, dates, figures, etc.). Preferably those people person points will be acknowledged and sooner or later the argument will attain a “logical” conclusion—each side’s precise points have been fixed to some mutual agreeable level. I guess you can say that you “win” an argument by acquiring as numerous of your particular worries settled to your gratification as possible (with out giving up much too a lot of to the other facet).

But in 12 years in China, I can say that I’ve only experienced this progressing-to-a-logical-conclusion style of argument a pair of times. It appears to be to me that the two the issue of and the process of arguing is completely various in China.

Our lawyers have continually located that 1 to two web page letters that incorporate pretty tiny by way of specifics or regulation are ideal for all but the most significant Chinese companies. Our demand letters (normally in Chinese) generally just state that the Chinese corporation owes our client X bucks from its failure to do Y. They then explain to the Chinese firm what we will do if it does not pay our shopper right away.

The Chinese corporation ordinarily responds by expressing it will by no means pay our consumer anything. It commonly also offers some imprecise rationale for this, these types of as “your client is a liar” or “your customer reported it would make a further buy from us” or “your consumer does not realize China.” We then reiterate what will come about to the Chinese organization if it does not pay back rapidly and then the Chinese corporation possibly responds to reveal that it would favor to settle. Or not.

For a lot more on how to take care of a dispute in opposition to a Chinese firm verify out How to Sue a Chinese Firm: The Lengthy Variation.