ARTICLE
11 June 2025

The First Anti-Foreign Sanctions Case By China Company Pursuant To Article 12 Of AFSL

JT
Beijing Jincheng Tongda & Neal Law Firm

Contributor

Beijing Jincheng Tongda & Neal Law Firm (JT&N) is a large full-service law firm founded in 1992 and headquartered in Beijing. It was one of the first partnership-model law firms in China. To date, JT&N has strategically expanded its footprint across key regions of China's economic development and established overseas offices in Hong Kong, Tokyo, and Singapore.
In 2024, the Nanjing Maritime Court heard a case in which a marine engineering company had filed a lawsuit against a foreign equipment company.
China Corporate/Commercial Law

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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