1. Danone management might be too conceited to consult final legal opinions from the Mainland Chinese lawyers, or overwhelmingly relied upon its French lawyers or other common law lawyers right before official establishments of the Chinese joint venture, and that could seemingly have become the prime or one of the main reasons for its current bewilderment of mass global lawsuits

Danone decision makers may have already learned the bitter lessons now that in Mainland China, no matter what the overseas partners have talked with their Chinese partners or what documents they have mutually executed, the joint venture agreement, contract, articles of association and their amendments and other documents concerned in writing that have duly been approved by the competent Chinese examination and approval authorities and also duly registered with the competent industrial and commercial administrations(i.e the Company Registry) shall be deemed legally valid and may get the Chinese legal protections. Without governmental approvals in China of the joint venture agreement, contract, articles of association, their amendments and the likes, those agreed-upon and duly executed documents shall not be deemed legally valid and can not get the Chinese legal protections.

With respect to the Danone /Wahaha joint venture, both parties may have no faults to discuss or sign two joint venture contracts at the outsets, if they were willing to do that for whatever reasons, but Danone should not have agreed to deliver the simplified contract to the Chinese authorities for approvals, even though the delivery was probably made by the Chinese partner of Wahaha. Without the prior consents of Danone, however, we do not believe in general that the Chinese partner of Wahaha dared to submit just the simplified contract for governmental approvals, even thoughWahaha might indeed like to do that. The detailed contract, which may stipulate that Wahaha brand should become part of the joint venture assets for their sincere cooperation, can not get legal recognitions and lawful protections in lights of the Chinese foreign joint venture law and its implementations as well as the other foreign investment state policies in writing, which have all clearly indicated that governmental approvals of agreement, contract and articles of association as well as corporate registrations are preconditions for official establishment of a sino-foreign joint venture and for its valid operations.

Therefore, Danone has to swallow its hand-planted bitter fruits to date, because they should have known or should have well been informed of those primary Chinese law, regulations and state policies in writing at the outsets.

2. Danone's then management or then French lawyers or other common law lawyers concerned might probably be liable for its current tough situation or its huge losses

Overseas companies normally like to bring along their home lawyers to expand their business abroad, which is quite understandable and practical, but it does not necessarily mean that their home lawyers and home in-house lawyers can independently act as the overseas lawyers. In this particular case, should Danone fully use Mainland Chinese lawyers all along, apart from using their French lawyers or other common law lawyers who are normally good at drafting and arrangement of commercial documents, etc, they should have avoided the "common-sense" Chinese legal mistakes, or at least, Danone may have one more alternatives to possibly sue its Chinese lawyers for their negligence of work. Or probably, Danone may still sue somebody now and then for their huge loss: then decision-making management or then French or common law lawyers, who could not just make fatty professional fees from the joint venture establishment, but also shall be liable for their possibly negligent mistakes.

3. Danone and Wahaha shall take golden opportunities to make rapid settlements for their various lawsuits in the best interests of Danone

Given that the French and Chinese presidents have recently shown concerns over the Danone / Wahaha series of lawsuits; Danone might have negligent mistakes at the initial stages for agreeing to presenting the simplified contracts for Chinese governmental approvals; Wahaha is a privately-owned enterprise, etc., Wahaha may (1)offer to send a competent negotiating envoy quietly to talk with Mr. Zeng of Wahaha, (2)Danone may also have to prepare to pay more than 4 billions yuan(note: Danone has initially agreed to offer the prices in exchange for the rest firms of Wahaha) to buy back the Wahaha's rest firms, and (3)Denone may take first steps to withdraw all its lawsuits, on the pre-conditions that his single(not too many persons) chief-negotiator envoy has had successful secret contacts with Mr. Zeng of Wahaha and has had preliminary verbal or written agreements regarding mutually major concerns, under such circumstances, both parties may soon announce their close-all-disputes news, which shall be good for Danone in the long terms.

4. Further delay of settlements for all lawsuits could no doubt arouse more attentions of the medias and their readers at home and abroad, and benefit lawyers as well, even though I am also a lawyer, but certainly will damage more of Danone's permanent interests



(Analysis by AI GUO in Beijing with publications by South China Morning Post on 24th December 2007. This article with clear descriptions is cited here for reference and case studies)
Despite months of heated finger-pointing, estranged joint-venture partners Groupe Danone of France and Hangzhou-based Wahaha Group have cleverly left a back door open for an out-of-court settlement amid a barrage of public allegations that would suggest an inevitable allout confrontation.

Now, that leeway is being seized as both sides last week said they would return to peaceful talks and end all lawsuits and arbitration procedures, in an effort to meet the expectations of the mainland and French governments.

In fact, both companies have scheduled preconditions talks to resolve their disputes on brand and non-competition issues.

Economics professor Ning Xiang-dong, of Tsinghua University, likened the Danone-Wahaha dispute to a marital spat between a young couple, in which each side only thinks of how the marriage will benefit their own parents' families, at the expense of the new family from their union.

“You can blame it on either their rush into marriage, or a failure to tolerate one another in the relationship,”professor said.

Danone established a joint venture with Wahaha in 1996 and took a controlling 51%stake in the company.

Under the agreement, Danone allowed Wahaha to have several independent companies engage in beverage production and distribution outside the joint venture, and Wahaha agreed to transfer the Wahaha brand to the joint venture.

At the initial state of the merger, Danone and Wahaha signed two different contracts in order to pass state scrutiny in 1996. A simplified version was submitted to relevant ministries for authorization, while a detailed contract, with the issue of the brand transfer clearly identified, was kept between the two companies as a guideline for daily operation.

After realizing that Wahaha's non joint venture companies had been generating strong profits by selling products under the Wahaha brand, Danone offered Wahaha four billion yuan earlier this year to inject those firms into their joint venture. The offer was rejected as too low by Wahaha founder and chairman Zong, Qinghou.

Mr. Zong brought the dispute to the media's attention in April and said his company still owned the Wahaha brand because an earlier application to transfer the brand was denied by the State Trademark Office.

Danone, meanwhile, accused Wahaha and Mr. Zong of cheating in the brand transfer issue, and sued Mr. Zong in courts around the world. Danone argued that Mr. Zong and his family members had used the Wahaha brand for their benefit.

Mr. Zong and Wahaha, for their part, sued Danone in mainland court for hurting the joint vesture's interests by investing in rival firms.

Signs of a softening in the dispute emerged late last month after French President Nicolas Sarkoz visited the mainland and reached a consensus with President Hu Jintao on the need for a speedy and amicable resolution.
Emmaneul Faber, Danone's president for the Asia-Pacific region, this month offered to suspend all legal proceedings in exchange for Wahaha returning to the negotiation table with “concrete measures” for a reunification of the joint venture.

Wahaha, which gained an edge after winning a ruling from a Hang-zhou arbitration court over the ownership of a Wahaha brand this month, said it was willing to restart talks on condition Danone dropped all lawsuits first to show its “regret”.

Yang Du, a professor with the business school of Beijing-based Renmin University said both sides had allowed their lawsuits to continue in order to gain bargaining power at the negotiation table.

“This could have been settled if Danone had agreed to pay more to purchase Wahaha's independent companies,” Professor Yang said.

Mr. Zong, 63, who built Wahaha from a backyard production outfit into one of the country's most famous beverage brands, seems to have won the media war by playing the nationalism card. He claimed his fight was an effort to protect the brand from foreign destruction.

A survey at website Combinator showed that about 70% per cent of 347 respondents supported Mr. Zong.

Zhou Dunren, an economics professor with Shanghai-based Fudan University, said the dispute highlighted the need for tight contracts between joint-venture partners.

“You can not take anything for granted. You have to pay to let professionals work every detail out. It's the kind of cost no company should try to save on,”Professor Zhou said.



(Posted by Dan Harris of China Law Blog on December 21, 2007, this article is cited here for reference only)

Earlier this year, I wrote an article for the Alaska Bar Rag (I am an Alaska Bar member!) on China's trademark laws, mostly extolling how necassary it is to secure such a trademark and how relatively simple it is. Nothing much in the article that we have not been saying here for years, but since it provides a nice summary in one place, I am running the whole thing below:

Members of the media love to write about China's failure to protect foreign company intellectual property (IP), but those articles can be misleading. These articles often fail to state whether the foreign company actually registered its IP in China at all and they nearly always fail to distinguish between the various types of IP eligible for protection. Both of these shortcomings are meaningful.

China generally does not protect any IP unless it is registered in China. Though there are a few exceptions to this rule, the bottom line is that it will always be cheaper for a company to register its IP than to litigate, whether it comes within any exception or not.

The failure to distinguish among the various types of intellectual property leads companies to believe that enforcement of intellectual property in China is poor across the board, and that simply is not true. China's patent law system is difficult and spotty, at best. Copyright protection in China--particularly of DVDs, CDs, and software--is downright terrible. But, its protection of trademarks is actually quite good and getting better all the time. China's better courts (usually found in China's more commercialized cities) are actually quite good in enforcing trademark rights. There is a widely believed theory that countries start enforcing IP rights when their more powerful domestic companies demand enforcement because they themselves have IP worthy of protection.
With respect to trademarks in China, that time has already arrived. As proof of this, I often talk about an incident in China involving watermelon and rumors of their having been tainted by AIDS. A group of watermelon farmers in Linquan county, (a county in Shandong Province known for the high quality of its watermelons) had registered a trademark for their watermelons and established an association to promote them. The Linquan watermelons had, according to the Shanghai Daily, became "the top sellers, even though their price was much higher than watermelons from other regions."

Sales of Linquan watermelons then plunged amid rumors they had been injected with HIV tainted blood. The rumors had a devastating impact on sales. The newspaper interviewed one of the farmers who said he planted more than 6.7 hectares of watermelon this year. Before the rumors, he had sold out all of the watermelons harvested. After the rumors, much of the inventory rotted.

It should be clear from this incident that securing a trademark in China can be an effective tool for distinguishing your product from the competition and for allowing you to charge a premium price for it. That is exactly what happened here. The efficacy of trademarks in China allowed the Linquan farmers to charge significantly more than others and yet sell out of their watermelon crop, and it also caused its rivals to feel they needed to spread the vicious AIDS rumor.

So now that I have (I hope) convinced you that it makes sense to protect a trademark in China, the next step is to explain how to do so. Easy. Register it. Plain and simple.

China is a first-to-register country, which means that unless your trademark is a well known mark (and let me assure you it almost certainly is not and you definitely do not want to be litigating this issue in any event), whoever registers it in China first gets it. Put another way, to expect trademark protection in China, foreign companies must register their trademarks in China and the prudent company does this before going in.

There are actually a number of people in China who make a living by usurping foreign trademarks and then selling a license to that trademark to the original license holder. Once one comes to grip with the fact that China, like most of the rest of the world, is a "first to file" country, one can understand how easy this usurpation is, and also, how easy it is to prevent it.

The fact that you are manufacturing your product in China just for export does not in any way minimize the need for you to protect your trademark. Once someone registers "your" trademark in China, they have the power to stop your goods at the border and prevent them from leaving China.

China's trademark requirements are actually quite similar to those in most other countries. The trademark must not conflict with an existing Chinese trademark and it must be distinctive. China allows for registration of all marks for goods, services, collective marks and certification marks.

In deciding what to trademark, foreign companies must consider all sorts of things. Take Starbucks, for instance. Starbucks registered more than 200 trademarks in China. It has registered Starbucks in English and the translation of "star" and "bucks" together in Chinese. Any foreign company strategizing about what to trademark in China must have a fluent Mandarin speaker to assist. Indeed, some of the very largest foreign companies register trademarks in other dialects used in China as well.

China's Trademark Office maintains a centralized database of all registered and applied-for trademarks. Trademark applications that pass a preliminary screening are published by the Trademark Office and subject to a three-month period for objection. If there are no objections within this three-month period, or if the Chinese Trademark Office rejects the objections as frivolous, the trademark is registered. If the Chinese Trademark Office supports an objection, it will deny the application. Denied applications may be appealed to the State Administration of Industry and Commerce Trademark Review & Approval Board and then to the People's Court. Based on our experience, objections to trademarks are rare.

A Chinese trademark gives foreign companies a surprising amount of protection in China. If a foreign company learns that its trademark is being infringed in China, it has a number of actions available to it.

We usually advise our clients to pursue a multi-pronged approach to protect an infringed-upon trademark and to pursue the infringer. The foreign trademark owner should usually file a lawsuit against the infringer, seeking damages and an injunction stopping the infringer from continuing to sell the infringing goods. The Chinese courts in the more commercialized regions are actually quite willing to enforce China's trademark laws, even for foreign companies.

Trademark infringement is a crime in China. For serious cases of infringement, a complaint to the office of the public prosecutor can often result in a criminal prosecution against the infringer. The Chinese police will close the offending operation and seize the counterfeit goods. The courts are authorized to impose both fines and imprisonment. Finally, if the counterfeit goods are destined for export, a notice to the Chinese customs authorities will prevent export of the counterfeit goods.



A Beijing court has recently upheld a ruling that Yahoo China violates the Mainland Chinese law by facilitating mass copyright infringement though music downloads, the International Federation of the Phonographic Industry(IFPI) said.

“The ruling against Yahoo China is extremely significant in clarifying copyright rules for Internet music services in China,” said the IFPI, which aims to combat piracy and promote copyright laws. Yahoo China officials could not be immediately reached for comment.

Early this year, music industry leaders including Warner Music Group Corp sued Yahoo China for alleged copyright infringement involving more than 200 unlicensed songs, seeking damages of 5.5 million yuan.

Beijing No 2 Intermediate People's Court said in April this year that Yahoo China, partly-owned by Yahoo Inc, one of the world's biggest Internet companies, should bear some responsibilities for the copyright infringement, although the music was downloaded from servers of third-party websites.
The court ordered Yahoo China to delete links to free websites offering music downloads and to pay about 200,000 yuan for facilitating distribution of unlicensed songs by other sites. Yahoo China then said it would appeal against the verdict.

The Beijing Higher People's Court upheld the April ruling on this Thursday(i.e. 20th December 2007), under new copyright laws that were enforced last year, the IFPI said.

Music sales on the Mainland China totaled US$76 million last year, less than 1 per cent of the global recorded music market, the IFPI said.

(Notes: The report is for reference only, taken with minor adjustments from the South China Morning Post of 22th December 2007)



1. Mainland China Police Mistaken Story of an Innocent Chinese Peasant

According to an recent report by the Beijing Youth Daily dated 20th December 2007, a Chinese peasant named HAO, Jinan(“HAO”) from Henan province has freshly been found innocent after having mistakenly served 8-year-long jails in Fenyang city of Shanxi province for the so-called killing count. Poor HAO, who is seemingly over 50 or 60 something in the newspaper photo, seems to have no feelings of happiness and bitterness but numbness in front of his relative sad hugs, he is currently released on probation, for he has to wait for the official retrial by the Shanxi High People's Court to legally declare him innocent, roughly scheduled on 10th January 2008, even though the true killers have been found.

It is reported that in the late evening of 19th January 1998, a mine worker named LIU, Yinhe from Henan province then working at the Quan Wan Zi coal mine of Xiangning county of Shanxi province where HAO also worked was stab-killed to death. HAO was taken away by the police 5 days later on 24th January 1998, meanwhile, the police found in HAO's room a pair of shoes matching the footprints at the criminal scene and also found a shirt with dotted blood. HAO excused to the police that he had purchased the shoes and shirt for RMB20 from his hometown fellows of NIU(“NIU”) and YANG(“YANG”), and the two things belonged to the two persons. The police, however, did not corroborate on the important clues, but criminally detained him without hesitations. HAO was later prosecuted and given by the Linfeng Intermediate People's Court 2-year-long-suspended death sentence, his appeal was accepted but was not considered being established by the Shangxi High People's Court in late 1998. HAO stated that while in jails, he wrote countless petition letters reiterating that he is innocent but no one have ever taken notices of them or made any replies. HAO has never given up, for he believes he is truly innocent. In additions, HAO stated while he was taken away by the police 8 years ago, he was then beaten black and blue and one kidney even had to be immediately cut away, right after the police put him in custody house, where the house staff had to arrange for him to see doctors. HAO repeated that he had told the policemen in charge over and over again he is innocent, but they never made further investigations into his statement and clues, “I was strongly built then, without wife, no one to worry about in terms of finance, why should I go to rob things or kill anyone ?”

The sad story truth was accidentally disclosed for another criminal case. In 2006, the Yiyang county of Henan province police were out on their beat and caught a criminal suspect of the aforesaid NIU. According to NIU, he once robbed things and killed somebody in Linfeng city of Shanxi province, which has luckily resulted in revealing of the miserable story of HAO. The other killer of the aforesaid YANG has recently be caught as well.

The Shanxi High People's Court is scheduled to declare HAO's innocence by law earlier next year, for the time being he is temporarily on probation for medical examinations and treatment. In additions, his case files have completely been frozen, for once he is to be declared innocent by the court, no one may doubt about that, the authorities concerned will immediately be commencing the responsibility system and will make investigations into the responsible men. What is more tough or may arouse public attentions in the near futures is how much money the 8-year-long jailed truly innocent Chinese peasant will be compensated by the Chinese law.

2. The United State Police Mistaken Story of an innocent Laid-off Machine Operator Family with 6 Kids
Almost at the same time, another innocent laid-off worker house with wife and 6 kids in the United Stated was also reported to be wrongly raided by the Minneapolis police. According to the Hong Kong based Weekend Standard of 21th December 2007, with husband of Vang Khang and six kids tucked into bed, wife of Yee Moua watching TV in her living room just after midnight, Moua heard voices-faint at first, then louder, then came the sound of a window shattering.

Moua bolted upstairs, where her husband grabbed his shotgun(note: no license is required to own a shotgun in Minnesota) from a closet, knelt and fired a warning shot through his doorway as he heard footsteps coming up the stairs. He let loose with two more blasts. Twenty-two bullets were fired back at him, by the family's count. Then things suddenly became clear. “It is the police ! Police !” his sons yelled. Khang, a Hmong immigrant with shaky command of English, set down his gun, raised his hands and was soon on the ground, an officer's boot on his neck.

The gunmen, it turned out, were members of a police commando unit that had raided the wrong address because of bad information from an informant-a mistake that some critics say happens all too frequently around the United States and gets innocent people killed.

“I have six kids, and only one mistake almost took my kids,” said Moua, 29. “We will never forget this.” Luckily, no one was hurt in the raid, conducted by a task force that fight drugs and gangs, though two police officers were hit by the shotgun blasts and narrowly escaped injury because they were wearing bulletproof vests.
No charges were brought against Khang. Police apologized and sent the seven officers on leave while it investigates. Such mistakes are a fact of police work, some experts said. “Does going to the wrong address happen from time to time ? Yes” said John Gnagey, executive director of the National Tactical Officers Association. “ Do you corroborate as best as you can the information the informant gives you ? Absolutely. But still from time to time mistakes are made.”

3. How are the different cultures of innocent countrymen to be actually compensated in the two big nations ?

Given that the United States applies common law and precedents, punitive damages are also occasionally imposed for fairness and justice, there will be no big surprises if the laid-off American machine operator families might hugely be compensated.

Given that Mainland China applies the statutory law and no punitive damages may have ever been applied in any of the Chinese civil or criminal or administrative cases, what is more, the known Chinese state compensation cases in recent years have proved that only humble compensation fees, subject to the local workers' averaged salaries per day to be normally multiplied by the innocent guy's imprisonment days, are paid to the innocent persons, poor HAO or his relatives should not have high expectations over his state compensation fees, needless to say satisfactory or not, for the humble state compensation fees will have to “meet provisions of law or judicial interpretations or state policies”.

Should HAO's sad story impossibly be avoided in Mainland China or in the United States in the near futures, the responsible policemen for HAO's case 8 years ago, however, should not only be investigated into, but also be sentenced for years of imprisonments, together with their personal compensations, which have seemingly never be applied in China so far. Under such circumstances, the sad stories of HAO's kind may happen less and less in the most populous developing country of Mainland China or in the developed country of the United States.



For sakes of good corporate governance, the foreign company selecting partners in China may bear in mind choosing your partner carefully. Find yourself a friend, not a foe. To do that, you may have to abide by TEN COMMANDMENTS for doing business in China as compiled by CHINASOLVED:

Commandment #1

Know what you don’t know – (for many westerners, this is by far the most difficult challenge.). Any similarities between China and “back home” are purely accidental. This is a completely different culture. Do not be fooled by surface similarities or by local people who “seem to get it”. Sources of reliable information are your #1 asset.

Commandment #2

China is still a communist country - and there is absolutely zero chance of that changing any time soon.

Commandment #3

You have to show up to win. You must be physically present and put in the “face time”. There is no “autopilot” in Chinese business. If you feel that you are too busy to learn about China, then you are certainly too busy to be successful here.

Commandment #4

If things worked well here in China, then there would be significantly fewer opportunities for competent westerners. Try not to get too frustrated by the challenges you face.

Commandment #5

Time does not mean money here. Chinese business people do not believe in “opportunity cost”. Even simple negotiations can drag on for a long time. Avoid getting sucked into an endless cycle of meetings that don’t accomplish anything.

Commandment #6

Truth, honesty, good-will and long-term benefit are all culturally-specific concepts. Don’t expect your western standards to carry over here. Win-Win is not standard operating procedure here. Do not fool yourself that your long-term relationship with a local partner means anything.

Commandment #7

Don’t check your brains in at the border. You wouldn’t hand over your company’s money, intellectual property or trademarks to a virtual stranger in Sydney, London or San Francisco and expect to make a windfall. Don’t do it in China. The people that are offering to open doors for you are the same ones that can lock you out. Beware of people who peddle their “powerful friends and great connections”. They can use them to hurt you as well as help you.

Commandment #8

Due Diligence becomes more important when the language and systems are unclear, not less important. Don’t settle for the “least worst” deal or partner. Partners don’t get more honest and relationships don’t improve as the amount of money involved increases.

Commandment #9

China will still be here next year, and in 5 years. Don’t be pressured into signing a contract or making a deal because you are afraid of “missing the boat”. The boat has been here for 4,000+ years.

Commandment #10

Having a sense of humor helps. Having a Plan B helps even more.

(Notes: The 10 commandments expert adivce appeared on China Business Law Blog dated 19th July 2007 are cited here as reference only ! It does not necessarily mean I may fully agree with them)



The Chinese civil procedural law prescribes in general that starting from the time when a plaintiff finds or should find that his lawful right may be damaged, he should resort to the court for protections within 2 years thereafter; should there be whatever reasons that may result in the plaintiff not to resort to the court within the 2 years, he should at least demand such right within the 2 years by writing demanding letters and the likes to the party that has damaged his right, without doing so, the plaintiff shall lose his right to ultimately win the case, even though he still has his right to file the case with the court.

In additions, should the plaintiff be able to maintain valid the 2-year-long winning-case right(i.e. Statue of limitation) by continuing to issue demanding letters to the damaging party within or every two years since the plaintiff know or should know that his lawful right may be damaged, the right to win the case statue of limitation could validly last up to 20 years long at maximum, as prescribed by the Chinese civil procedural law. At expirations of the 20-year-long-at-maximum statute of limitation, the plaintiff shall lose his right to win his case.

The general 20-year-long-at-maximum statute of limitation, however, is not necessarily applied to all the Chinese civil litigation cases, as a concerning case was freshly reported by the Chinese People's Court Daily on 13th of December 2007.

According to the authoritative Chinese courts newspaper, about 21 years ago, two pregnant Chinese mothers who had not known each other delivered new-born boys almost the same time in the same hospital in Tong Zhou district of Beijing City; 21 years later, however, the two boys who have grown up in the two different families occasionally found they are natural twins, and the mistake apparently resulted from the said hospital. Therefore, all members of the two families have recently filed torts case with the Tong Zhou district court where the hospital has been existing. After hearing and trying the case, the court issued judgment on 12th of December 2007, indicating that the hospital has apparently made mistakes in the incident, and has surely brought spiritual damages to the two families to certain extents, under such circumstances, the court orders the hospital make apologies in writing to all the plaintiffs and also give compensations as spiritual relieves to all the plaintiffs of RMB410,000, RMB450,000, RMB100,000 and RMB50,000 respectively, totaling RMB1,010,000.

Regarding the legal issue of why the court can still issue favorable judgment to the plaintiffs in this case, as the 20-year-long-at-maximum statue of limitation has apparently expired, which has also been repeatedly asked and questioned by the hospital defendant during the trial, the court points out that (1)the 20-year-long-at-maximum statute of limitation may be extended, and also (2)the purpose of making the law provision in the regard is to encourage and to supervise the parties concerned to timely demand and to perform their rights in order to maintain social relationship stabilities. In this particular case, the plaintiffs have just found after 21 years that their rights are damaged, and also the personal identification right originating from the families connections is apparently and undoubtedly important to every citizen, therefore, the court objects to the hospital defendant's argument in the regard, besides, the defendant has no legal grounds not to bear obligations and liabilities simply by citations of the 20-year-long-at-maximum statute of limitation.

(Note: Personally speaking, I may not agree with the court in terms of law and for its correct applications, especially for the fact the court has not pointed out in details what law and judicial interpretations they have applied to this exceptional case to legally support their opinions on the statute of limitation, even though I may have to agree that it seems the judgment may widely be acceptable by and popular with the ordinary Chinese people)



1. According to the Chinese civil procedural law, the following conditions must be met when a lawsuit is to be brought with a Mainland Chinese court

1.1 the plaintiff is a citizen, legal person or other organization that has relationship of direct interest in the case;

1.2 the defendant is affirmative;

1.3 there are concrete litigation requests, facts and reasons;

1.4 the lawsuit shall be within the scope of acceptance for civil litigations by the court and also under the jurisdiction of the court where the lawsuit is to be brought with.

2. When a lawsuit is brought to a Chinese court, a statement for pleadings shall be submitted to the court, and copies of the statement shall also be provided to the court according to the number of defendants.

3. While filing a case with the Chinese court, the overseas plaintiff shall also present to the court the duly notarized power of attorney if a Chinese lawyer or any other person may be appointed on your behalf to appear at the court, together with some, not all, primarily supportive evidences. As for how to duly notarize the overseas power of attorney and overseas-made evidences, please see my blog dated 6th December 2007 for reference.

4. When a court receives the statement for pleadings and finds after examination that it meets the requirements for acceptance, the court shall place the case on the docket within 7 days and notify the parties concerned; if it does not meet the requirements for acceptance, the court shall made an order within 7 days to reject it. The plaintiff may file an appeal to a higher court if not satisfied with the court rejection order.

5. When a court accepts a case by law, they normally issue you a written notice in time which requests you to pay court charges within 7 days or at a designated time(note: to compared with the common law courts abroad, the Chinese court charges are quite expensive, for they are subject to the money to be claimed for, i.e. the more you claim your money, the more you have to pay to the Chinese court; additionally, you have to pay the court charges for trials of 1st instance and also of 2nd instance while filing a case or appealing to a higher court; the court charges, however, may generally be compensated from the rival party once you win a case). Suppose the court charges are not timely paid without reasonable grounds, the court will not accept the case any more. Meanwhile, the notice will also inform deadline for you to submit to the court all of your supportive evidences. At the expiration of the deadline, the court may not accept your delayed supportive evidences, for they may not be questioned and argued at the court, as rigidly prescribed by corresponding judiciary interpretations.



A Beijing court yesterday(i.e. 7th of December 2007) heard a lawsuit by a man demanding 1 million yuan in damages from mainland search engine giant Baidu.com and an e-mail service provider for leaking contents of his personal e-mails, Xinhua reported yesterday.
The case was supposed to be the first on the mainland in which a company had been sued for leaking personal information. Beijing Haidian District Court was told yesterday that Guo Li, a lawyer in Hangzhou of Zhejiang province found in August last year that Baidu had provided a link to his personal e-mail box and viewers could freely read the full content of an attached file in the e-mail by using a function provided by the search engine. Mr. Guo complained to Baidu and the e-mail host, but it took a month for the link to be removed, the report said.
The lawyer argued that e-mail correspondence should be protected by law and his rights had been violated. He claimed 1 million yuan in psychological damages. (By Zhuang Pinghui)
Published on South China Morning Post dated 8th of December 2007
With minor adjustments by Jason Zhang



1. How can an overseas corporate/individual client have the power of attorney to be duly notarized abroad in order to qualify for its proper use and legal acceptance by the Chinese court ?

1.1 When an overseas corporate/individual client decides to make a lawsuit or make defenses with the Chinese court, it/he may authorize a Chinese lawyer or any other person inside or outside China to represent it/him to appear at the Chinese court, under such circumstance, a power of attorney has to be issued by it/him. According to the Chinese civil procedural law and judicial interpretations, the power of attorney has to be duly notarized for its proper use at the Chinese court, and in practice it normally requires the following steps to be taken:
1.1.1 the power of attorney (1)has to be notarized by the notary public in your home country, to be followed by (2) the notarized power of attorney to be submitted to your home ministry of foreign affairs for endorsement, and additionally (3) the notarized power of attorney with endorsement has to be further submitted to the Chinese embassy or consulates in your home county for reconfirmation. When the three steps are completed, the said power of attorney is qualified for its valid use with the Chinese court. Please note that the power of attorney is preferably be attached with its Chinese translations, even though not absolutely necessary. This is true of or applicable to all the other overseas-made written evidences or proofs to be submitted to the Chinese court, or else, they may not validly be questioned and argued at the Chinese court, no speaking of being accepted by the court as valid evidences in your favor.
1.1.2 In some countries, however, (1)the local public notary admitted by the Chinese embassy or consulates in your home country may simply notarize the power of attorney; and then (2)the notarized power of attorney will directly be submitted to and be examined and accepted by the Chinese embassy or consulates for reconfirmations, therefore, you may not need submitting the notarized power of attorney to your home ministry of foreign affairs for endorsement

1.2 Normally, it may require 2 to 4 weeks to complete the 3-step or 2-step process before the qualified power of attorney and other documents are available.

1.3 Fees could be varied from country to country.

1.4 The overseas client is well suggested consulting or should consult in advance the Chinese embassy or consulates in your home country for double-check enquires before you seriously start the 3-step or 2-step "long march", for you have to keep in mind that the Chinese court only examines for qualifications in form the chops or seals made by the Chinese embassy or consulates on your power of attorney, evidences and other documents before they are validly questioned and argued at the courts, but how could the Chinese embassy or consulates in your home country make the chops or seals thereupon, they have to examine the power of attorney and other documents to be duly notarized by their admitted local public notary or to be duly endorsed via ministry of foreign affairs of your home country which may also require the local notary public to notarize the power of attorney and other documents at first. Therefore, the overseas notary work is subject to the Chinese embassy or consulates in your home country to great extents.

2. How can a Hong Kong corporate/individual client have the power of attorney to be duly notarized in Hong Kong in order to qualify for its proper use and legal acceptance by the Chinese court ?

2.1 Step one: to find any one of the 300-strong China Appointed Attesting Officers who are all Hong Kong senior solicitors and a few barristers but have passed relevant examinations by the PRC Ministry of Justice, to notarize the power of attorney for the Chinese litigation.

This is true of or applicable to all the other Hongkong-made written evidences or proofs to be submitted to the Chinese court, or else they may not validly be questioned and argued at the Chinese court, no speaking of being accepted by the court as valid evidences in your favor.

2.2 Step two: the notarized power of attorney shall further be submitted to the China Legal Service (Hong Kong) Limited(RM B, 32/F, United Centre, 95 Queensway, Hong Kong) for reconfirmation. The client, however, does not need going personally to the legal company, for China Legal Service (Hong Kong) Limited receives the notarized documents directly from the China Appointed Attesting Officers or their staff.

2.3 Normally, it requires 3-5 working days to complete the 2-step process before the qualified power of attorney and other documents are available.

2.4 Fees could be varied from case by case, in general, the corporate documents are charged by the China Appointed Attesting Officer for approximately HK$6,000 around, while the documents issued by individual persons are charged for HK$4,000 around, subject to the document volumes and the China Appointed Attesting Officer.

2.5 The 300-strong China Appointed Attesting Officers are located on Hong Kong Island, Kowloon and New Territory. For enquiries, please call China Legal Service (Hong Kong) Limited at (852)2827 9700.

3. Can Jason Zhang do coordination work for the Hong Kong corporate/individual documents to be notarized for the Chinese litigation ?

3.1 Being just a Hong Kong based Chinese lawyer instead of the China Appointed Attesting Officer, I am not qualified to do any of such notarization work.

3.2 I can, however, help coordinate the notarization work, by helping find a China Appointed Attesting Officer, picking up and delivering the said documents from/to the client, and additionally arranging for competitively-priced translations of the to-be-notarized documents like power of attorney and other English/foreign language legal evidences.

3.3 Fees are reasonable on good faith, subject to the individual project.

3.4 My email address: jason.zhang@chinalegal.com.hk
Note: the article is for reference only, not applicable to any particular case.



The Chinese Commercial Dispute Resolution Lawyers

20 Years of PRC Legal Practice in Mainland China & Hong Kong

1. In Brief

China Law Office is a foreign law firm registered in Hong Kong for more than 10 years. Its Chinese law practice, however, dates back to 1987 when we lawyers practice the Chinese law with the China Legal Service (HK) Ltd. China Law Office solely specializes in practicing the law of the People’s Republic of China(the “PRC”), and is registered annually both with the PRC Ministry of Justice in Beijing and with The Law Society of Hong Kong in Hong Kong. China Law Office currently has 5 partners, all of whom are China-born/educated Hong Kong Permanent Identity card holders, around 10 lawyers and paralegals (For official verifications, please see The Law Society of Hong Kong – The Law List 2006, on Page 436 for China Law Office & on Page 479 for Mr. ZHANG, Guohua/Jason, Partner; or see The Law Society of Hong Kong website of http://www.hklawsoc.org.hk/).

2. Unique China Background & Commercial Law Practice

Under the umbrella of the PRC Ministry of Justice, the firm has established good working relationships with quite a number of Mainland Chinese intermediate and high courts as well as the Supreme People’s Court / procuratorates / public security bureaus as well as governments at provincial/municipal levels, which are greatly helpful to our efficient communications and justice. As a commercial foreign law firm headquartered in Hong Kong with 3 liaison offices in Shenzhen, Shanghai and Beijing, the firm, in accordance with the Foreign Lawyers Practice Rules and the Foreign Lawyers Registration Rules as issued by the Law Society of Hong Kong, carries professional insurance to cover claims of malpractice. Having studied and worked for years in western countries and in Hong Kong, we lawyers understand how to work well with Hong Kong/international clients.

3. Professional Fees, Disbursements and Free Assessments of Cases

We charge our professional fees either (1) by the working hour $3,500 (equivalent to US$450), applicable to issues of legal opinions and general enquiries/meetings as well as the time-predictable legal matters; or (2) by a mutually agreed-upon percentage of the money to be recovered for our clients on successful basis, applicable to those time-consuming & time-unpredictable ADR(i.e. negotiation, conciliation & arbitration) and litigation cases, under such circumstances of (2) we may also charge minor initial professional fees with consents by clients. All legal matters or cases, regardless of their difficulties, are treated equally with complimentarily/freely preliminary assessments or reviews so that we may evaluate likelihood of success and make the best strategies. Regarding the out-of-pocket disbursements to be reasonably paid for the traffic(of y-class flights, trains, boats, taxis, and other transportations), accommodation(of 4-star hotels), corporate searches(to be paid to the corporate management authorities), courts(of 1st instance, 2nd instance and for enforcement of judgments / arbitration awards), translations(to be paid to the outside translation agencies), notarization/endorsement(applicable to the Hong Kong or overseas documents) and the likes, we invoice separately to and seek reimbursements from clients.

4. Harmonious Co-operation with All Solicitors

In association with China Legal Service (HK) Limited, which is the “window” company of the PRC Ministry of Justice, we have access to 300-strong China Appointed-Attesting Officers(note: super-majorities of whom are Hong Kong solicitors) who specialize in notarizing/endorsing Hong Kong issued corporate/individual documents to be legally used/admitted in Mainland China. China Law Office is familiar to most Hong Kong law firms and their senior solicitors who do not practice PRC jurisdiction law and therefore are always enjoying non-competitive cooperation with us (the solicitors’ firms include but not limited to: Baker McKinney, Clifford Chance, Linklaters, Herbert Smith, Richard Butlers, Johnson Stokes & Masters, Simmons & Simmons, Deacons). Our 20 years of providing PRC legal services to the Hong Kong holding companies, either directly or via our friendly co-operation with Hong Kong solicitors, have provided us with long-term relationships and excellent references.

5. Legal Presentations and Clients Representation

We are at intervals invited to make presentations to the Hong Kong solicitors and companies on Mainland China law as sponsored by The Hong Kong General Chamber of Commerce, Singapore Chamber of Commerce, Chinese Enterprises Association, Key Media, Hong Kong Directors Association and local universities. Our long-term co-operation with Ernst & Young, Deloitte, Bank of China (Hong Kong) and representation of international background companies from Japan(incl. a leading lease finance company), UK, Singapore, India and the USA(incl. a leading fast food company and a well-known petroleum company) has supported us to maintain/expand our practice. Our connection with the PRC Ministry of Justice has provided us with access to their branch bureaus throughout the country, plus our decades of successful cooperation with quite a number of local firms/lawyers in many provinces and cities(note: the cooperative lawyers’ professional fees are normally included in our lump work fees), resulting in a nationwide cooperative network of lawyers. Those allow us to provide clients with Mainland China legal assistance in almost every Chinese province and city.

6. Focusing Practice Areas – the Commercial Dispute Resolution

In recent years, we have been handling tough cases focusing on (1) commercial dispute resolutions via alternative dispute resolution(i.e. the ADR) and litigation regarding loan recoveries, money claims, guarantees / mortgages / legal charges, properties, land use rights, construction, lease finance, contracts, intellectual property infringement, torts, employment, international trade, foreign investment enterprises, enforcement of judgments and arbitration awards; (2) mergers and acquisitions, transfer of shares, foreign direct investment(i.e. the FDI), representative office; and (3) due diligence. As commercial dispute resolution PRC lawyers , we lawyers travel to Mainland China almost every week for diversified clients and cases in different Chinese provinces and cities.

7. Team Work

China Law Office has traditions of team work, and in general two lawyers are jointly responsible for a client/each case. Mr. ZHANG, Guohua(“Jason”), as main contactor of the firm, has handled hundreds of Hong Kong/international clients’ commercial dispute cases in the past ten years. Jason’s secretary of Miss Ivy WONG is available between 9am to 6:00pm at +852 2594 0756 (office). In the alternative, please contact Jason Zhang at: Jason.zhang@chinalegal.com.hk or +852 2594 0766(office) or +852 9150 7677 (mobile). China Law Office is located at: RM B2, 32/F, United Centre, 95 Queensway, Hong Kong.