UK property and construction law specialist Cardium Law has cooperated successfully on a case with Beijing-based Cyan Law which involved a fact-finding visit to the Chinese capital by Cardium Director Chris MacQueen.

The two practices met when they worked together on a case where a UK business owner was overcharged by a Chinese supplier which then threatened a counter-claim. Cyan Law helped London-based Cardium to understand and to reconcile necessary substantive and civil procedure issues of the claim under Chinese law, allowing it to successfully argue that the case should be heard by a UK court.

“We agreed that the firms’ case collaboration was successful,” says MacQueen. “Using this case as a model, we believe that further collaboration will be to the benefit of both practices and will allow us to help more British and Chinese companies to efficiently and effectively resolve disputes, so providing them both with more confidence to invest globally and in particular in China and the UK.”

Since 2019, Chinese and foreign businesses have been moving away from instructing large foreign law practices towards instructing domestic Chinese legal firms for China legal work, which has created more options and suitable choices for the client.

MacQueen explains: “There is real quality in the Chinese legal market. The level of professionalism, cross-cultural familiarity, procedural know-how and domestic law acumen available makes this an easy switch for clients.”

He also believes domestic firms can often provide equivalent, if not more culturally effective solutions than foreign firms. However, one area where Chinese firms typically don’t have the know-how or legal regulatory licences to advise their clients is in claims that are brought in overseas jurisdictions and which are subject to non-Chinese law.

As Cyan’s Partner for responsibility with International Affairs, Mr. Arthur Chiu notes, “It is advantageous for Chinese law firms to cooperate with qualified and licensed law firms in other countries, such as Cardium in the UK, to provide cost-effective and work-efficient global service to their clients.” 

MacQueen adds: “Cardium Law is delighted to work with an exceptional law firm like Cyan Law. They have an enviable reputation in the Chinese domestic market, skilled legal teams and phenomenal connections. We are looking forward to assisting them to advise their clients in the UK and related market, and also using their services to help us to be able to more effectively serve our own domestic clients by utilising their expertise in the growing Chinese market.”

As China starts to refocus on global trade following the end of the Covid pandemic it has continuously refined its legal system in consideration of global business and international affairs. This means that foreign companies can win judgment or obtain enforcement of foreign awards in Chinese courts or Chinese arbitration when the merits of the legal case are in their favour.

If you are doing business with a Chinese company, there are two strong choices that you have if you want to be able to be able to enforce your contractual rights against your Chinese counterpart …

Chiu elaborates: “China is a country that has a clear domestic rule of law and civil procedures. Many of China’s codified contract and commercial laws are even modelled after or similar to common law statutes/principles.

China is a party to many established international treaties such as the New York (Foreign Arbitral Awards) Convention and the Hague (Apostille) Convention.

“Further, China is a party to many established international treaties such as the New York (Foreign Arbitral Awards) Convention and the Hague (Apostille) Convention. Therefore, UK companies have the ability to protect their business interests with proper consideration and application of UK, China and/or international law in their international investment or transaction.” 

“If you are doing business with a Chinese company, there are two strong choices that you have if you want to be able to be able to enforce your contractual rights against your Chinese counterpart,” Mr MacQueen says.

“The first is to make the contract subject to Chinese Law and to submit to the jurisdiction of the Chinese courts. Not a bad option given recent developments in the Chinese legal system and one which our clients are increasingly interested in exploring.

“The second is to include an arbitration clause in your contract and have the seat in a neutral venue such as Singapore. With China being a signatory to the New York convention and in 2021 the Ministry of Justice of the People’s Republic of China having confirmed it will now enforce ad hoc arbitrations, these awards are more commonly and seamlessly enforced than the judgments of foreign courts.”

“The process of entering business contracts, and the contents of the contracts that you negotiate are very different from what you may see in the UK. There are far fewer boilerplate items, and it’s a lot more focused on the key operational clauses. But even with the lesser formality, you still have to make sure you understand the negotiation process and tick all the right boxes or you will find that the contract you have worked so hard to negotiate is worth no more than the paper it is written on.”