Dispute Resolution in China

How disputes in China are resolved: the short answer

Disputes in China are resolved through three main channels: the people's courts, arbitration (administered by Chinese or foreign institutions) and mediation, which is often built into both. Each channel has its own procedure, timetable and enforcement route, and the choice usually has to be made when a contract is signed rather than when a problem appears. For most cross-border commercial relationships, the decision that matters most is not who is right on the merits but whether a decision can be enforced against the assets of the losing party.

Foreign parties face disputes in China in several settings. A multinational may be in conflict with a Chinese supplier, distributor or joint venture partner. A private equity investor may need to enforce redemption or drag rights against a founder. A lender may need to recover from a Chinese guarantor through offshore and onshore proceedings. And increasingly, a Chinese company going abroad may find itself defending claims in Europe, the US or Southeast Asia, while its assets and evidence remain on the mainland.

In each scenario the same questions recur. Which law governs? Which forum has jurisdiction, and is the clause valid under Chinese law? Can the other side's assets be frozen quickly? Will the decision be recognised where the assets are? And how do data, state secrets and sanctions rules affect the evidence and the remedy? This page sets out the framework and introduces each area of our dispute resolution practice.

The legal framework for disputes in China in 2026

The framework has changed substantially since 2023. The Civil Procedure Law was amended with effect from 1 January 2024, expanding the bases on which Chinese courts can take jurisdiction over foreign-related cases, recognising exclusive choice of court agreements, introducing rules on parallel proceedings and forum non conveniens, and modernising service and evidence taking abroad. The same date saw the Foreign State Immunity Law take effect, moving China to a restrictive approach under which foreign states can be sued over commercial activities.

The most significant change for commercial parties is the revised Arbitration Law, adopted by the National People's Congress Standing Committee on 12 September 2025 and in force from 1 March 2026. It introduces a statutory concept of the seat of arbitration, permits ad hoc arbitration for certain foreign-related disputes (foreign-related maritime disputes and foreign-related disputes between enterprises registered in pilot free trade zones, the Hainan Free Trade Port and other designated areas), confirms that online arbitration has the same effect as hearings in person and opens the way for foreign arbitration institutions to operate in designated areas.

Alongside national legislation, cross-boundary arrangements with Hong Kong are now a central part of the toolkit. Since October 2019, parties to arbitrations administered by qualifying Hong Kong institutions can apply to mainland courts for interim measures such as asset preservation. Since 29 January 2024, a broad arrangement allows mainland and Hong Kong court judgments in civil and commercial matters to be recognised and enforced in each other's courts. China's accession to the Apostille Convention, effective 7 November 2023, also simplified the use of foreign public documents in Chinese proceedings.

Courts are organised in four levels: basic, intermediate and high people's courts, with the Supreme People's Court at the apex. A judgment generally becomes final after one appeal, with retrial applications available on limited grounds. Specialist courts handle intellectual property, maritime, financial and internet cases, and the Supreme People's Court's China International Commercial Court hears selected high-value international cases. The official texts are published in the National Database of Laws and Regulations and court guidance on the Supreme People's Court website.

Choosing a forum: courts, arbitration or mediation

There is no single best forum for disputes in China. The answer depends on where the counterparty's assets are, whether urgent interim relief will be needed, how sensitive the subject matter is, and whether the contract is foreign-related. Under Chinese law, two Chinese-incorporated entities, including a foreign-invested enterprise and a Chinese supplier, generally cannot submit a purely domestic dispute to arbitration seated outside mainland China, so that choice is often unavailable to wholly foreign-owned subsidiaries.

For foreign-related contracts, arbitration seated in Hong Kong or Singapore, or administered by a leading mainland institution, remains the most common choice for international parties. Chinese courts are increasingly a realistic option, however, particularly in specialist courts and where the defendant's assets are entirely onshore and the claimant values a fast preservation order. Mediation now runs through almost every forum: courts routinely refer cases to mediation, and arbitration institutions offer combined mediation and arbitration procedures.

Our disputes in China practice areas

Our dispute resolution work is organised around the types of conflict clients face and the forums that decide them. Each page below explains the legal framework, the practical issues and how we support clients alongside licensed PRC law firms where Chinese representation is required.

Commercial, corporate and financial disputes

• Commercial and contract disputes: supply, distribution, licensing and services disputes, including breach, termination, damages and the interaction of the Civil Code with foreign governing law.
• Shareholder and corporate disputes: joint venture deadlock, minority oppression, control of company chops and legal representatives, and the new remedies in the 2024 Company Law.
• Financial disputes: loan, guarantee, bond, derivatives and asset management disputes, including proceedings before China's specialist financial courts.
• Securities misrepresentation class actions: investor claims for false statements, including representative actions under the 2020 Securities Law.
• Insurance and professional negligence disputes: coverage disputes, reinsurance and claims against auditors, valuers and other advisers.

Arbitration, mediation and cross-border enforcement

• International arbitration: seat and institution selection, CIETAC, SCIA, HKIAC, SIAC and ICC proceedings, and enforcement of awards in and outside China.
• Domestic arbitration in China: arbitration between Chinese entities, including foreign-invested enterprises, under the revised Arbitration Law.
• Mediation: court-annexed, institutional and commercial mediation, and how settlement agreements are made enforceable.
• Cross-border litigation and enforcement of judgments: parallel proceedings, service, evidence and recognition of foreign judgments in China and of Chinese judgments abroad.
• Hong Kong courts and HKIAC: using Hong Kong as a neutral forum and the mainland arrangements on interim measures, awards and judgments.

State, public law and apex court matters

• Foreign state immunity: claims by and against foreign states and state entities under the Foreign State Immunity Law.
• Supreme People's Court practice and retrials: retrial applications, judicial interpretations and guiding cases.
• Administrative litigation and reconsideration: challenging licensing, enforcement and penalty decisions by Chinese authorities.
• Climate change litigation: environmental public interest claims, greenwashing risk and climate-related claims against Chinese companies abroad.

Sector and asset disputes

• Product liability and tort claims: defective products, recalls and multi-jurisdictional claims involving Chinese manufacturers.
• Construction and infrastructure disputes: EPC, FIDIC-based and Belt and Road project disputes, payment claims and delay.
• Real estate disputes: development, leasing, distressed property and land use rights disputes.

Related disputes are covered in other practices, including international trade disputes, IP litigation, labour arbitration and litigation and tax disputes.

Enforcement and assets: planning backwards

The most useful discipline in disputes in China is to plan from the end. Start by mapping where the counterparty holds assets: bank accounts, receivables, equity in subsidiaries, real estate, intellectual property and offshore holding structures. Then work out which decision can reach those assets fastest. A Hong Kong award against a company whose only assets are onshore will need recognition by a Chinese intermediate court; an onshore judgment may be quicker but cannot easily reach assets held through a Cayman holding company.

Arbitral awards made outside mainland China are recognised and enforced in China under the New York Convention, to which China has been party since 1987 with reciprocity and commercial reservations, or, for Hong Kong and Macau awards, under bilateral arrangements. Chinese courts operate an internal reporting system under which a lower court that intends to refuse enforcement of a foreign-related or foreign award must refer the decision upwards, ultimately to the Supreme People's Court in many cases. The New York Convention text and contracting states list is the starting point for any enforcement plan.

Recognition of foreign court judgments has historically been harder. Chinese courts recognise judgments on the basis of a treaty or reciprocity, and since the late 2010s they have taken a more open view of reciprocity, including presumed reciprocity where the foreign country would in principle recognise Chinese judgments. Results remain case-specific, which is why arbitration is still preferred where the counterparty's main assets are on the mainland.

1. Map the assets onshore, in Hong Kong and in third countries, including shareholdings and receivables.
2. Choose the forum whose decision will be recognised where those assets are.
3. Secure interim relief early, as preservation orders in China often require security from the applicant.
4. Preserve evidence in a form usable in the chosen forum, respecting data export rules.
5. Prepare for enforcement in parallel with the merits, not after the award or judgment.

Evidence, data and sanctions in cross-border cases

Evidence is a recurring problem in cross-border disputes in China. Chinese procedure relies heavily on documentary evidence, with limited disclosure, so parties should collect and preserve documents proactively. At the same time, Chinese law restricts sending evidence and data abroad for foreign proceedings: the Data Security Law and Personal Information Protection Law require approval before data is provided to foreign judicial or law enforcement authorities, and rules on state secrets apply to certain records. Planning document production for a US or English proceeding therefore requires a PRC-compliant transfer route.

Sanctions and countermeasures add another layer. Performance may be prohibited under US or EU sanctions while China's Anti-Foreign Sanctions Law gives Chinese parties a right to sue those who implement discriminatory foreign measures against them. Our Anti-Foreign Sanctions Law and blocking rules page explains the regime. These conflicts increasingly shape force majeure, termination and payment disputes, and they must be considered before any notice is sent.

Chinese companies in disputes abroad

The flow of disputes is no longer one-way. Chinese manufacturers, contractors, platforms and investors now face claims in Europe, the US, the Middle East, Africa and Southeast Asia, and they bring their own claims against foreign buyers, host states and partners. Typical matters include warranty and payment claims from overseas distributors, construction claims on Belt and Road projects, investor-state claims against host governments and post-acquisition disputes after outbound M&A.

These cases raise a mirror image of the issues foreign parties face in China. A Chinese parent may be sued abroad over a subsidiary's conduct, foreign courts may order disclosure of documents held on the mainland, and a foreign judgment may later be presented for recognition in China. Each step engages Chinese rules on data export, state secrets and judicial assistance, so a defence strategy needs to be coordinated across jurisdictions from the outset.

Three practical steps help Chinese groups going abroad. First, standardise dispute resolution clauses across overseas contracts, typically favouring arbitration in Hong Kong, Singapore or another New York Convention seat. Second, keep group structures and intra-group guarantees under review so that liabilities do not travel further up the group than intended. Third, set a protocol in advance for responding to foreign disclosure orders, regulatory requests and dawn raids, so that local teams do not transfer documents in breach of Chinese law under time pressure.

Common mistakes in disputes in China

The same avoidable errors appear in many disputes involving Chinese counterparties. Recognising them early saves time and cost.

• Pathological clauses: naming a non-existent institution, providing for both courts and arbitration, or choosing a foreign seat for a purely domestic dispute.
• Wrong counterparty: contracting with an offshore entity that holds no assets while the operating company in China gives no guarantee.
• Ignoring the company chop: failing to confirm that the contract bears the official company seal or the signature of the registered legal representative.
• Late preservation: notifying the counterparty of a claim before applying to freeze its bank accounts.
• Translation risk: letting a Chinese-language version prevail without reviewing it, or failing to state which version controls.
• Limitation: overlooking the general three-year limitation period under the Civil Code while negotiations drag on.
• Evidence formalities: assuming foreign documents can be used without notarisation and authentication, now simplified for Apostille states but not eliminated.

A related mistake is treating a dispute as purely legal. Many disputes with Chinese partners are settled through structured commercial negotiation backed by a credible legal threat, and a well-timed preservation order or arbitration notice often brings a counterparty to the table.

How TRW & Co helps

As a foreign law firm representative office in Shenzhen, TRW & Co advises on dispute strategy from an international perspective and on the laws of the jurisdictions where our lawyers are qualified. We help clients choose and draft dispute resolution clauses, assess forum and enforcement options across China, Hong Kong and other jurisdictions, coordinate international arbitration and foreign proceedings, manage evidence and data transfer planning, and run settlement negotiations. Where PRC legal advice, filings, preservation applications or representation before Chinese courts and arbitral tribunals are needed, we work with licensed PRC law firms and manage the overall case. Contact us to discuss a dispute or a clause under review.