Navigating Civil Litigation in Chinese Courts

Civil litigation in China is governed by the Civil Procedure Law, which was most recently amended in 2021 to streamline procedures, improve court efficiency through the introduction of online case filing and remote hearings, and enhance the enforceability of court judgments. For individuals and businesses in Qinghai involved in civil disputes that cannot be resolved through negotiation or mediation, understanding the court system and litigation procedures is essential for protecting their rights and achieving favorable outcomes in a timely and cost-effective manner.

China's court system for civil cases operates at four levels. Basic People's Courts at the district or county level handle the majority of first-instance civil cases and are the court where most civil litigation begins. Intermediate People's Courts at the prefectural level handle cases involving significant amounts in controversy typically exceeding 10 million yuan for most types of disputes, foreign-related matters requiring special expertise, and other specified categories of cases that are considered of sufficient importance to warrant handling by a higher court. High People's Courts at the provincial level handle cases of significant regional importance and serve as appellate courts for cases appealed from Intermediate Courts. The Supreme People's Court in Beijing handles cases of national significance and provides authoritative judicial interpretations that guide the application of laws by all lower courts. Most civil disputes in Qinghai are heard at the Basic or Intermediate Court level depending on the amount in controversy and the nature of the dispute.

Initiating a Civil Lawsuit

A civil lawsuit begins when the plaintiff files a written complaint with the competent court that has jurisdiction over the dispute. The complaint must identify the plaintiff and defendant with sufficient detail to permit service of process, state the facts giving rise to the dispute in a clear and organized manner, set out the legal basis for each claim being asserted with reference to the applicable laws and regulations, specify the relief sought including the amount of monetary damages and any injunctive or declaratory relief requested, and be signed by the plaintiff or their legal representative. The plaintiff must also pay court acceptance fees calculated as a percentage of the amount in controversy, ranging from approximately 2.5 percent for claims up to 10,000 yuan to 0.5 percent for larger claims, with the fees being reimbursed to the prevailing party as part of the cost award at the conclusion of the case.

The court reviews the complaint to determine whether it meets the acceptance requirements under Article 122 of the Civil Procedure Law, which requires that the plaintiff have a direct interest in the case, that there is a specific defendant, that there are specific factual allegations and legal claims, and that the case falls within the court's jurisdiction. If the complaint meets these requirements, the court accepts the case within seven days and notifies the defendant. The defendant must file a written defense within 15 days of receiving the complaint, stating their position on each of the plaintiff's claims and any counterclaims they wish to assert.

Evidence Rules and Trial Procedure

Chinese civil procedure follows the principle that the party making a claim bears the burden of proving the facts supporting that claim. Evidence may take various forms including documentary evidence such as contracts, invoices, official certificates, and correspondence which carries significant weight in Chinese courts, physical evidence such as damaged goods, products, or other tangible items, witness testimony from individuals with personal knowledge of relevant facts, expert opinions from qualified professionals on technical or specialized matters, electronic data including emails, text messages, WeChat records, and other digital communications which are increasingly accepted as evidence, and audio-visual materials including recordings and videos that document events or transactions. Courts evaluate evidence based on its relevance to the issues in dispute, its authenticity and reliability, and its legality meaning whether it was obtained through lawful means. The court makes factual findings based on the preponderance of evidence standard in most civil cases, meaning that the party whose version of facts is more likely than not to be true will prevail on factual issues.

Case Management and Court Procedures

After a civil case is accepted by the court, the court will manage the case through a structured process designed to lead to a just and efficient resolution. The court will first attempt mediation to encourage the parties to reach a voluntary settlement, as Chinese courts have a statutory duty to promote mediation in civil cases and many cases are resolved through court-annexed mediation before proceeding to trial. If mediation is unsuccessful or inappropriate for the case, the court proceeds to trial preparation including exchange of evidence between the parties, identification of disputed factual and legal issues, and scheduling of the trial date. The trial itself follows a structured format: the court first investigates the facts by hearing the parties' opening statements, examining documentary and physical evidence, and questioning witnesses and experts. After the factual investigation, the court conducts legal argument where each party presents their legal reasoning and responds to the other party's arguments. The presiding judge may ask questions throughout the proceedings to clarify factual or legal issues.

The court must issue its judgment within a statutory time limit, which is six months from the date of acceptance for cases heard by Basic Courts under ordinary procedure, extendable by six months with court president approval, and three months under summary procedure which applies to cases with clear facts and undisputed legal issues. The judgment must set out the court's findings of fact, legal analysis, and decision on each claim and counterclaim. The prevailing party may enforce the judgment through the court's enforcement division if the losing party does not voluntarily comply within the specified period. Enforcement measures include seizure and auction of assets, freezing of bank accounts, restriction of the judgment debtor's travel and high consumption activities, and in serious cases, detention for contempt of court or criminal liability for refusal to enforce a court judgment.

Costs and Practical Considerations

Civil litigation in China involves several categories of costs that parties should consider when deciding whether to pursue litigation. Court acceptance fees are calculated based on the amount in controversy and must be prepaid by the plaintiff at the time of filing, with the prevailing party entitled to reimbursement of these fees from the losing party. Attorney fees are negotiated between the lawyer and client and may be structured as hourly fees, flat fees, or success fees depending on the nature and complexity of the case. In some cases, the court may order the losing party to reimburse a portion of the prevailing party's reasonable attorney fees, although the amount awarded is typically limited and may not cover the full fees actually incurred. Other potential costs include notarization fees for evidence authentication, appraisal fees for court-ordered expert evaluations, translation fees for documents in foreign languages, and travel expenses for lawyers and witnesses appearing at court hearings. Parties should discuss these costs with their legal counsel before initiating litigation and should weigh the potential recovery against the costs and risks of litigation to make an informed decision about whether to pursue formal legal proceedings or seek alternative dispute resolution methods.

Enforcement of Judgments

Obtaining a favorable judgment in a civil case is only part of the litigation process, and enforcing the judgment against a reluctant defendant can sometimes be more challenging than obtaining it. When a judgment debtor fails to comply with a court judgment voluntarily within the specified period, typically 10 days from the effective date of the judgment, the prevailing party may apply to the court for compulsory enforcement through the court's enforcement division. The enforcement division has broad powers to locate and seize the judgment debtor's assets including bank accounts through nationwide bank account inquiry and freezing systems that can identify and freeze accounts at any bank in China within hours, real property through court orders recorded with the real estate registration authorities, vehicles through motor vehicle registration records, and other assets including equipment, inventory, and accounts receivable that can be identified and attached through various legal mechanisms.

If the enforcement division is unable to locate sufficient assets to satisfy the judgment, the court may impose measures to pressure the judgment debtor into payment including restricting the judgment debtor's ability to travel abroad through exit bans that prevent them from leaving China, restricting their ability to engage in high-consumption activities including business-class air travel, hotel accommodations at luxury hotels, and purchases of high-value goods, placing the judgment debtor on the dishonesty blacklist which publicly identifies them as an uncooperative judgment debtor and can affect their credit rating, business relationships, and professional licensing, and in cases of willful refusal to comply with a court judgment, detention for contempt of court for up to 15 days or criminal prosecution for the crime of refusing to enforce a court judgment under Article 313 of the Criminal Law. The combination of these enforcement measures has made Chinese courts increasingly effective at enforcing judgments and collecting amounts due to prevailing parties, and creditors should not assume that a judgment against an unwilling debtor is worthless but should instead work with their legal counsel to pursue enforcement through all available legal mechanisms.