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In 2024, the Nanjing Maritime Court heard a case in which a marine engineering company had filed a lawsuit against a foreign equipment company. This case, later cited in the Supreme People's Court's Report during the Two Sessions, was the first to apply Article 12 of "the Anti-Foreign Sanctions Law of the People's Republic of China" ("AFSL").
In the middle of 2024, the foreign equipment company had refused to pay the outstanding US$11.86 million to the marine engineering company, and terminated negotiations after a third country imposed sanctions on the marine engineering company.
The marine engineering company applied to the Nanjing Maritime Court for pre-litigation attachment of the subject vessel, and claimed compensation under Article 12 of AFSL. To lift the attachment, the equipment company applied for a payment license from the jurisdiction which had imposed the relevant sanctions, and thereafter submitted a counter-guarantee of about RMB 99 million.
After the court elucidated the legal implications of foreign sanctions under Chinese law, the parties reached a mediation agreement within less than two months. Subsequently, the court issued a civil mediation document, and the settlement funds were transferred through enforcement procedures.
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