Suing A Chinese Real Estate Developer
Or trying to collect on an American promissory note, mortgage, or real estate deed of trust.
If the contract was signed in the United States you will file suit in the State or County Court where the contract was conformed. Getting paid after you win is going to be an uphill road. Enforcing a judgement might make it difficult for the Chinese company to open further credit in the EIN tax number number that the individual person opened with the IRS. However if this is a LLC or S Corp the Chinese investor can get around paying you until the cows come home.
Suing a Chinese company in a U.S. court typically differs from suing a domestic company on:- Service of process
- Discovery
- Litigation strategy
- Enforcement of judgment
If the contract was signed in China this is a much more arduous process.
- Submit relevant documents to the Chinese court, such as your identity certificate (Passport becomes public and subject to unknown persons having your identity), power of attorney (with attorney licensed in the , and pleadings. These documents need to be notarized in your country, and then authenticated by the Chinese embassy or consulate in your country.
- Submit a completed United States Marshal Form USM‐94 to China's Ministry of Justice.
- Submit the original English version of the documents to be served and translated to Mandarin and Cantonese.
- Pay court fees via the attorney
- Submit a summons with the issuing court's seal.
- Submit other documents that may be required by the Chinese courts, such as:
- Subject qualification document
- Representative figure's identity document
- Extraterritorial evidence
- Application for preservation of property
The filing process varies. You should file the suit in the district in which the contract was signed or the one specified by the contract. You should petition the court clerk by paying the filing fees with the help of an international lawyer.
In China there is no such thing as the rule of law. Regulations that can be largely apolitical on the surface can be political when the Communist Party of China (CCP) decides to use them for political purposes.
China has a social credit system different from US FICO scoring. A number is not assigned to a person.
China's social credit system that rates the trustworthiness of individuals, businesses, and government entities. The People's Bank of China (PBOC) provides national financial credit reporting for businesses and individuals.
The Central Government operates national and regional blacklists based on various types of violations. An individual American citizen does not have easy access to this system, you pay a vendor and enter the person's credit number. The report is not in English. Local governments have various social record systems that work differently, while unofficial private versions are operated at companies such Ant Financial's Zhima Credit, better known as Sesame Credit. Ant Financial is the payment firm from Alibaba. There is no single Chinese coordinated system like Experian or FICO.
China's social credit system has penalties for bad credit scores, such as reduced access to credit, not able to purchase real estate, and block on travel.
China's corporate social credit system (CSCS) is a data-driven scoring system that rates the trustworthiness of all business entities registered in China.
There are local government credit scoring and two other larger sources as this system is developing. Your judgement will be entered into the system long after you win but might not help with collecting in the United States
- Sesame Credit: A social credit-scoring service developed by Ant Financial
- China Credit Information Service (CCIS): A credit rating services company based in Taiwan
