COMPARATIVE GUIDE
6 March 2025

Litigation Dispute Resolution Comparative Guide

Litigation Dispute Resolution Comparative Guide for the jurisdiction of China, check out our comparative guides section to compare across multiple countries
China Litigation, Mediation & Arbitration

1 Legal framework

1.1 What system of jurisprudence applies in your jurisdiction? What implications does this have for litigation?

China is a civil law jurisdiction that places significant emphasis on statutes and only legislative enactments are considered as sources of law. Courts often take account of previous judicial decisions, especially those of the higher courts, but the practice is to refrain from directly citing these precedents in judgments.

This highlights the unique blend of legal traditions in China and underscores the importance of understanding both the statutory framework and the evolving role of case precedent in the Chinese legal landscape.

1.2 What rules govern litigation in your jurisdiction?

The procedural rules applicable to civil and commercial lawsuits in the Chinese courts are set out in the Civil Procedure Law, which was last amended in 2023. These rules apply to the litigation of civil and commercial cases at all levels of the judiciary.

1.3 Do any special regimes apply to specific claims?

Certain specialist courts and tribunals deal with specific claims in China. These include:

  • the IP courts, which handle cases relating to patents, trademarks, copyright and unfair competition; and
  • local labour arbitration committees and mediation organisations, as the pre-litigation dispute resolution authorities for labour disputes.

1.4 Which bilateral and multilateral instruments have relevance to litigation in your jurisdiction?

These include the following, among others:

  • the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters;
  • the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters;
  • the United Nations Convention on Contracts for the International Sale of Goods; and
  • the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.

As of 23 November 2023, China had entered into bilateral and multilateral instruments (including both civil and criminal) with 86 countries, including the United States, Italy, Singapore, Korea and Thailand.

China has also entered into many mutual arrangements with the Hong Kong Special Administrative Region (SAR) and the Macao SAR that relate to litigation, such as the Arrangements for Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Cases between Courts of the Mainland and Hong Kong Special Administrative Region.

2 Judicial structure

2.1 What courts exist in your jurisdiction and how are they structured?

There are four levels of courts in the Chinese judicial system, as follows:

  • The district people's courts cover all Chinese counties and city districts. These basic courts deal with cases at first instance and may handle some simple foreign-related matters.
  • The intermediate people's courts at the city level handle appeals from the district court and first instance cases where the amount in dispute exceeds a certain threshold.
  • The higher people's courts, located in provincial capitals, deal with appeals from the intermediate people's courts and first instances where the amount in dispute exceeds a certain threshold.
  • At the top is the Supreme People's Court, which sits in Beijing.

2.2 What specialist courts or tribunals exist in your jurisdiction?

In China, certain claims are addressed through specialised courts or tribunals, including:

  • the military courts;
  • the maritime courts;
  • the courts of railway transport;
  • the financial courts;
  • the IP courts;
  • the internet courts; and
  • labour and employment tribunals.

Each of these bodies is designed to handle particular types of disputes, as indicated by their names.

3 Pre-litigation

3.1 What formalities apply before litigation can be commenced in your jurisdiction?

No strict statutory formalities are required before a party can commence litigation in China.

A threat to sue is not required but is usually good practice, in the sense that it can document the nature of the dispute and the amounts claimed. It can also be used to demonstrate to the court that the damaged party is actively exercising its rights.

Certain pre-litigation procedures are mandatory for specific types of disputes. For instance:

  • in labour disputes, conciliation with the settlement committee of the relevant labour union or arbitration before the relevant local labour tribunals is a prerequisite to initiate litigation before the court; and
  • in IP cases, the parties may need to engage in administrative procedures or consultations before pursuing remedies before the court.

3.2 Do any pre-action protocols or similar rules apply prior to the commencement of litigation? What are the consequences of non-compliance?

There are no mandatory pre-action protocols or similar rules that apply prior to the commencement of litigation in China. However, the normal practice is to issue a demand letter before bringing the claim to the court. The Chinese courts also encourage pre-litigation mediation to resolve disputes.

3.3 What other factors should a party consider before commencing litigation in your jurisdiction?

These factors include:

  • the fees and other associated costs (eg, the court case acceptance fees, attorneys' fees, translation fees, notarisation fees);
  • the counterparty's financial capacity to repay the debt;
  • which court is most competent from among the various courts that may have jurisdiction; and
  • the strength of the evidence.

4 Commencing litigation

4.1 What rules on limitations periods apply in your jurisdiction?

The general limitation period for civil and commercial claims is three years, starting from the date on which the claimant knew or should have known about the damage and the identity of the liable party. However, this does not apply to certain claims, such as claims for:

  • the cessation of infringement;
  • the removal of obstacles; or
  • the elimination of danger.

4.2 What rules on jurisdiction and how this is determined apply in your jurisdiction?

In China, jurisdictional rules are primarily governed by the Civil Procedure Law and related judicial interpretations.

Jurisdiction is determined mainly on the basis of:

  • the level of the court;
  • the territorial attributes of the dispute; and
  • the nature of the dispute.

The general principles are as follows:

  • The district people's courts, intermediate people's courts and higher people's courts handle first instance cases where the amounts in dispute meet various thresholds.
  • For contractual disputes, the parties can agree on the jurisdiction as long as the relevant court has a connection to the contract; in the absence of such agreement, the court at the place of the defendant's habitual residence (in the case of natural persons) or domicile (in the case of legal persons), or the court at the place where the contract is performed, will have jurisdiction.
  • For tortious disputes, the court at the place of the defendant's habitual residence (in the case of natural persons) or domicile (in the case of legal persons), or the court of the place of occurrence of the tortious act, will have jurisdiction.
  • Certain disputes are subject to the exclusive jurisdictions of specific courts as required by law – for example, disputes relating to real estate must be referred to the court at the place where the real estate is located.

4.3 Are class actions permitted in your jurisdiction?

There is no exact equivalent concept to a class action in China's legal framework. A similar concept is the 'representative action', in which the representative plaintiff sues on behalf of himself or herself and many other persons:

  • who have a claim based on the same or a similar alleged wrongful action; and
  • whose claims raise the same questions of law or fact.

However, unlike the Western-style class action:

  • a representative action in China does not involve a class certification process; and
  • all plaintiffs must register with the court to join the proceedings.

Another similar type of litigation involves cases that concern the public interest. These proceedings allow certain qualified organisations – such as investor protection groups, consumer protection groups or governmental bodies – to bring lawsuits on behalf of a group of individuals.

4.4 What are the formal requirements for commencing litigation?

To commence litigation in China, the Civil Procedure Law requires the following:

  • The plaintiff must be:
    • a citizen;
    • a legal person; or
    • an organisation that has a direct stake in the case.
  • One or more specific defendants must be identified.
  • There must be specific claims, facts and reasons.
  • The dispute must fall within the scope and jurisdiction of the relevant court.

4.5 What are the procedural and substantive requirements for commencing litigation?

The procedural requirements involve:

  • filing a written statement of claim to the competent court, which must specify:
    • the concerned parties;
    • the relief sought;
    • the facts and reasons; and
    • the evidence to be presented; and
  • paying a court filing fee subject to the court's notice after accepting the case.

The substantive requirements include:

  • having a valid legal basis for the claims with sufficient supporting evidence; and
  • adhering to the Civil Procedure Law and related regulations, to ensure that the lawsuit is properly substantiated and filed within the statutory limitation period.

4.6 Are interim remedies available in your jurisdiction? If so, how are they obtained?

The common interim remedies available in the Chinese courts include:

  • preservation of the defendant's assets;
  • preservation of the relevant evidence; and
  • injunctions ordering a party to perform or refrain from performing certain actions.

The remedies can be obtained by application and are subject to leave of the court. The Civil Procedure Law requires the applicant to submit:

  • a written application;
  • any supporting documents demonstrating the urgency and necessity for the interim measure sought; and
  • security to compensate the counterparty if the interim measure is later found to be unjustified.

The court may also, where it deems necessary, issue a ruling on its own initiative to take any interim measures.

4.7 Under what circumstances must security for costs be provided?

There is no specific statutory provision requiring security for costs in China, as court fees must be paid in advance by the plaintiff in order for the case to proceed.

5 Disclosure

5.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply to certain types of documents?

In China, the disclosure rules diverge from common law practices. The key aspects include the following:

  • Limited disclosure principle: The parties are not obliged to disclose all documents relating to the case. Instead, each party is responsible for proactively presenting evidence to support its own case.
  • Court-mandated disclosure: A Chinese court may order the disclosure of a specific document by a specific party if it deems this necessary for its fact finding. The courts enjoy wide discretion in determining the scope and extent to which such disclosure should be made.
  • Exceptions to disclosure: Certain documents may be exempt from disclosure, such as:
    • trade secrets;
    • confidential business information; and
    • state secrets.
  • In addition, illegally obtained evidence may not be admitted by the court.

5.2 What rules on third-party disclosure apply in your jurisdiction?

Third-party disclosure is not common in Chinese court proceedings, as the parties to the litigation are responsible for presenting their own evidence. Parties may apply to the court for the joinder of a third party to the litigation on the grounds that the third party has a stake in the outcome of the litigation, in which case the third party may produce evidence to support the court's fact-finding process.

During the litigation, the court may, upon the parties' application or on its own initiative, require certain third parties to disclose documents where it deems this necessary.

5.3 What rules on privilege apply in your jurisdiction? Does attorney-client privilege extend to in-house counsel?

In China, attorney-client privilege is enshrined in the Lawyer Law, which imposes a strict confidentiality obligation on lawyers, extending to both state secrets and business secrets encountered during their professional activities. Lawyers must also safeguard the privacy of their clients, refraining from disclosing any information or circumstances learned in the course of their practice that the client or others involved wish to remain undisclosed.

However, there are exceptions to this duty where the client or others are involved in activities that:

  • threaten national security or public safety; or
  • are causing severe harm to life, property or other significant interests.

Notably, the law acknowledges a lawyer's confidentiality obligation even concerning information about crimes that have already been committed. While the law addresses the confidentiality duty of lawyers, it does not explicitly exempt lawyers from the duty to testify before the courts.

Attorney-client privilege generally does not extend to in-house lawyers in China. In-house counsel may be subject to disclosure requirements to their employers and communications with them may not be protected under the same confidentiality standards as communications with external lawyers.

5.4 How have technological advances affected the disclosure process in your jurisdiction?

Technological advances have significantly affected the process for the production of evidence in China. Most Chinese courts have now adopted e-discovery tools and digital platforms to streamline the collection, review and presentation of evidence. This:

  • expedites the process;
  • enhances efficiency; and
  • reduces the costs associated with the traditional paper-based method.

5.5 What specific considerations should be borne in mind during the disclosure process, for both plaintiff and defendant?

Plaintiffs should:

  • ensure that the evidence supporting their claims is comprehensively documented;
  • identify and protect legally privileged information from disclosure; and
  • disclose only information that is directly relevant to the case to avoid unnecessary exposure.

Defendants should:

  • scrutinise the plaintiff's disclosures for inconsistencies or weaknesses;
  • assess the impact of disclosure on potential counterclaims and defences;
  • seek protective orders to safeguard sensitive business information; and
  • disclose information selectively to control limited exposure.

6 Evidence

6.1 What types of evidence are permissible in your jurisdiction?

Article 66 of the Civil Procedure Law sets out a list of admissible evidence, including:

  • party statements;
  • documentary evidence;
  • physical evidence;
  • audiovisual recordings;
  • electronic data;
  • witness testimony;
  • expert opinion; and
  • survey transcripts.

Evidence must be verified to be true before it can be used as a basis for the ascertainment of facts.

6.2 What rules apply to expert evidence in your jurisdiction? What specific considerations should be borne in mind when preparing and presenting expert evidence?

In Chinese court proceedings, expert opinions can be admitted as evidence only if they are produced by a qualified expert recognised and appointed by the court. Party-submitted expert opinions can serve only as a statement of that party or as documentary evidence.

6.3 What other factors should be borne in mind when preparing and presenting evidence in your jurisdiction?

While the evidence should be thorough enough to support a party's case, clarity and simplicity in organising and presenting the evidence also play a significant role in assisting the court's factfinding.

Adhering to the procedural requirements, such as the time limit for submission and proper authentication formalities, is also important when producing evidence to the court. Additionally, maintaining a respectful and professional demeanour during the presentation of evidence is advised.

7 Court proceedings

7.1 What case management powers do the courts have in your jurisdiction?

The Chinese courts play an active role in court proceedings and enjoy broad case management powers, including the authority to:

  • schedule the hearings;
  • set the time limit for the submission of evidence or pleadings; and
  • order the production of evidence.

The court can also encourage the parties to settle through mediation and lead the overall mediation process.

7.2 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Court proceedings in China are public, with the only statutory exception being where state secrets and/or personal privacy is involved. The relevant parties can apply to the court to keep the proceedings or related information confidential; however, this is subject to the court's sole discretion.

7.3 How is the applicable law determined? What happens in the event of a conflict of laws?

The rules to determine the applicable law and any conflict of laws are set out in the Law of on Choice of Law for Foreign-Related Civil Relations. The Chinese courts will respect the parties' choice of law unless specifically required otherwise by law. For instance, if the application of foreign laws would infringe the public interests of Chinese society, the Chinese law will apply.

7.4 What rules apply to the joinder of third parties?

The joinder of third parties can be achieved:

  • on application by a party to the litigation;
  • on application by the third party; or
  • on the court's own initiative.

The main considerations include:

  • the third party's relevance to the case; and
  • whether that third party has any stake in the outcome of the case.

7.5 How do the court proceedings unfold in your jurisdiction? What specific considerations should be borne in mind at each stage of the process, for both plaintiff and defendant?

Chinese court proceedings can be generally divided into four stages, as follows:

  • Case filing: The documents filed in this stage should meet the necessary standards as set out in the Civil Procedure Law. The process typically begins with the plaintiff filing a written complaint that includes:
    • a clear statement of facts;
    • the legal grounds; and
    • the relief sought.
  • The court will only check whether the case filing documents meet the formality requirements when determining whether to accept the case.
  • Pre-trial procedure: After accepting the case, the court may conduct pre-trial conferences to:
    • examine the evidence;
    • identify key issues in dispute; and
    • encourage settlement.
  • Settlement can occur at any stage of the case, including before and during the trial.
  • Trial stage: The court normally will only schedule one hearing for a case; hence, this may be the sole opportunity for a party to orally present its case to the judge.
  • Judgment and appeals: The court issues a judgment based on the evidence and arguments presented. Dissatisfied parties can appeal to a higher court within the prescribed timeframe.

7.6 What is the typical timeframe for the court proceedings?

The statutory time limit for the court to render a first instance judgement is:

  • six months from case acceptance for cases in which general procedures apply; and
  • three months for summary procedures.

However, these time limits may be (and often are) extended upon the approval of the president of the court. In practice, a first instance case could be completed in around one year after acceptance of the case by the court.

The statutory time limit for the court to rule on an appeal case is three months, subject to any extensions that may be approved by the president of the court.

8 Judgment and remedies

8.1 What types of judgments, orders and other remedies are available in your jurisdiction?

  • Judgments:
    • Declaratory judgments: The court declares the legal rights or status of the parties without granting any specific remedy.
    • Monetary judgments: A sum of money is awarded as compensation or damages to the prevailing party.
    • Injunctive judgments: A party is ordered to refrain from or perform a particular action.
  • Orders and remedies:
    • Injunctions: Prohibitory or mandatory court orders to prevent or compel specific actions.
    • Specific performance: Orders directing a party to fulfil contractual obligations as agreed.
    • Attachment and seizure: Orders for the freezing of assets or seizure of property to secure a judgment.
    • Repossession: Returning the possession of property to the rightful owner.
    • Compulsory execution: Enforcing judgments through compulsory measures, such as wage garnishment or property auctions.
  • Other remedies:
    • Settlement order: The courts may issue a settlement order recording the parties' settlement terms. This order can be enforced as if it were a court judgment.
    • Arbitration awards: In cases that are subject to arbitration, the court may recognise and enforce an arbitral award.

9 Appeals

9.1 On what grounds may a judgment be appealed in your jurisdiction?

Parties are generally entitled to appeal as a matter of legal recourse and the right to appeal is not strictly limited to specific grounds. For an appeal to succeed, parties should have grounds to establish that there were legal errors, factual inaccuracies or procedural irregularities in the previous judgment or proceedings. Unlike in certain legal systems, where the court's review of appeals is limited to specific circumstances, China's legal framework allows parties to appeal for a comprehensive review of the entire case, including both legal and factual aspects.

9.2 What is the appeals process? Is the judgment stayed while the appeal is pending?

The appeals process typically involves a review by a higher court. The procedure unfolds as follows:

  • Filing an appeal: The dissatisfied party submits a written appeal to the higher court within the specified timeframe. The court will accept the appeal if it is filed within the relevant timeframe.
  • Court's review: Once accepted, the relevant court will conduct a substantive review of the facts and the application of the law. The court's review can be conducted in writing or by way of hearing(s) with the parties.
  • Decision: The higher court will then issue its ruling on the appeal.

During the court's review, the first instance judgment is stayed pending the decision of the appellate court.

9.3 What specific considerations should be borne in mind during the appeals process, for both plaintiff and defendant?

  • Timeliness: The parties must adhere to strict deadlines for filing appeals, emphasising the importance of prompt action.
  • Clear grounds for appeal: The appellant should clearly articulate the grounds for appeal, whether based on:
    • legal errors;
    • factual discrepancies; or
    • procedural issues.
  • Legal representation: Both the plaintiff and defendant should have competent legal representation to navigate complex procedural requirements and present a compelling case.
  • Mediation and settlement: The parties should explore opportunities for mediation or settlement during the appeals process, as courts may encourage amicable resolution.
  • Appellate court dynamics: The appellant should recognise the appellate court's dynamics and tailor its arguments to align with the court's priorities and precedents.

10 Enforcement

10.1 How are domestic judgments enforced in your jurisdiction?

Domestic judgments in China are enforced by the court's enforcement division. The process involves the following steps:

  • Application for enforcement: The party submits a written application to the court (usually the first instance court, or alternatively the same level court where the assets that are the subject of the judgment are located).
  • Asset investigation: The court's enforcement division may conduct an investigation to identify the debtor's assets.
  • Seizure and auction: If the debtor fails to comply voluntarily, the enforcement division may take measures to seize and auction assets to enforce the judgment.

10.2 How are foreign judgments enforced in your jurisdiction?

For foreign judgments, the party should first seek recognition and enforcement of the judgment pursuant to the relevant bilateral and multilateral instruments entered into between China and the jurisdiction in which the judgment was issued. The court may also recognise and enforce foreign judgments based on the principle of reciprocity.

10.3 What specific considerations should be borne in mind during the enforcement process, for both plaintiff and defendant?

Plaintiffs should:

  • pay attention to the time limits for filing an application for enforcement;
  • consider and investigate the debtor's financial position; and
  • advise the court to facilitate the enforcement.

Parties may also settle during the enforcement proceedings.

Defendants should:

  • be aware of their rights to challenge an enforcement action; and
  • seek proper legal representation to deal with the matter.

11 Costs, fees and funding

11.1 What costs and fees are incurred when litigating in your jurisdiction?

The litigation and associated costs include:

  • case filing fees, which are proportionate to the amount in dispute if the case concerns a monetary claim;
  • application fees, such as for an application for interim measures;
  • expert fees, which should be settled by the party that engages the expert in advance and subsequently be attributed between the parties according to the outcome of the case;
  • security fees – a party applying for asset preservation may be required by the court to provide relevant security for such an application. The forms in which this security may be provided include the purchase of litigation liability insurance from an insurer; and
  • travel expenses, accommodation expenses, living expenses and subsidies for missed work incurred by witnesses, interpreters and experts who appear in court.

11.2 Are contingency fees and similar arrangements permitted in your jurisdiction?

Contingency fees are generally allowed for civil and commercial cases, except for cases relating to:

  • marriage;
  • inheritance;
  • social insurance;
  • minimum living allowance requests;
  • alimony;
  • child support;
  • maintenance;
  • relief funds; and
  • requests for payment of labour remuneration.

Contingency fees are prohibited in:

  • criminal cases;
  • administrative litigation;
  • state compensation cases; and
  • representative litigation.

11.3 Is third-party funding permitted in your jurisdiction?

Third-party funding is neither expressly regulated nor prohibited in China.

11.4 What other strategies should parties consider to mitigate the costs of litigation?

Parties can strategically incorporate mediation into the dispute resolution process. Parties that successfully settle through mediation can apply for a refund of the relevant court fees from the court.

12 Trends and predictions

12.1 How would you describe the current litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

  • Increasing emphasis on alternative dispute resolution (ADR): The Chinese authorities have been promoting ADR methods such as mediation and arbitration to:
    • reduce the burden on the courts; and
    • facilitate quicker dispute resolution.
  • Stare decisis: The Supreme People's Court is implementing a revised version of the courts' case database, which is intended for use by the lower courts.

13 Tips and traps

13.1 What would be your recommendations to parties facing litigation in your jurisdiction and what potential pitfalls would you highlight?

  • Recommendations:
    • Seek early legal advice.
    • Preserve documents.
    • Consider mediation and the enforceability of judgments if obtained.
    • Develop a comprehensive strategy with the support of local legal representatives, emphasising cultural sensitivity and adherence to deadlines.
  • Potential pitfalls: These include:
    • paying insufficient attention to the preservation of evidence;
    • disregarding strict procedural timelines; and
    • failing to ensure effective communication and understanding of local legal dynamics, which are crucial for a successful resolution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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