A deal went wrong, and your money is with the other party.
An advance paid to a factory that has gone quiet, or a container that is not what was ordered. We are not a law firm, and many of these cases never need one. We have sourced from China for our own projects and for clients since 2016, with supplier disputes settled on the way. We negotiate with factories in Chinese – directly, or through the people a factory listens to. Where it has to go the legal way, the lawyers in our team take it there. The first call tells you whether there is a case worth looking at.
The situations we handle
Which one are you in?
Four situations bring people to this page. Open yours to see what can still be done, and what we do about it.
Paid, nothing came
- “I paid the advance and the factory has stopped answering.”
- “The delivery date passed a month ago and I get excuses or silence.”
The advance is with the factory, and what you hold is a contract. Whether anything comes back depends on two things you may not know yet. Does the company named on the contract still exist and operate? And does it have a reason to settle – other buyers where you sell, or your next order?
How we handle it: we find out who you are dealing with – the company’s registration status and the person registered to act for it, through the public registry and, for larger sums, through a licensed investigation firm on the mainland. Then we put a demand to the factory in Chinese that names a sum and a date, with the contract and the payment records behind it. Where a foreign buyer’s letter would go unanswered, we go in through the factory’s industry association or our local contacts.
The goods are wrong
- “The container arrived and half the units are defective.”
- “They shipped a lower grade than the sample we approved.”
Tell the factory in writing now that the goods are defective – the contract may set a deadline for that notice – and keep the goods as they arrived; the file starts there. The buyer’s strength is the unpaid balance: as long as part of the price is unpaid, the factory still wants it and has a reason to rework or replace; once the lot is paid and loaded, that reason is gone. What is left after shipment is a claim on paper – the file listed below, item by item in our guide to defective goods from a Chinese supplier.
How we handle it: we assemble the file and negotiate the outcomes that are realistic – replacement, rework before the next shipment, part of the money back, or a credit on the next order. Where it changes the result, we inspect a lot still in China or visit the factory.
A conflict with a partner
- “My co-owner has stopped signing anything.”
- “A partner wants out and we cannot agree on terms.”
An exit both sides will sign is on our ownership restructuring page; this tab is for the one they will not. Where it goes from there depends on the paper. A shareholders’ agreement with an arbitration clause may send the dispute to arbitration; without one, a deadlock can end up before the Hong Kong court, where the case is run by lawyers qualified in Hong Kong. Which of these is yours is a question for such a lawyer, and we put it to one early.
What we do: we map who controls the bank account and the operations today, and push toward terms you can accept. If it has to go to court, the lawyers in our team brief and coordinate the Hong Kong lawyers who run it, and we run the file.
The contract has a dispute clause
- “Our contract says disputes go to arbitration in Hong Kong. What does that mean for us?”
- “We want to take the factory to court.”
The clause decided, on the day of signing, where a case is heard and who may speak for you. Mainland arbitration law keeps a court out of a dispute the parties validly agreed to arbitrate, so the case lands in the arbitration the clause chose. Where the clause seats the arbitration in Hong Kong – the seat is the place whose courts stand behind the case – Hong Kong’s Arbitration Ordinance lets you be represented by anyone you choose. A contract with no clause leaves the ordinary courts open; which one, and whether the sum justifies it, is for a lawyer. What each line of a clause does is in our guide to the dispute clause.
How we handle it: where a case is worth bringing, the lawyers in our team take it to mediation or arbitration, and on to enforcing the result. We run the China side and the negotiation that can settle the matter before any award or judgment, and we stay your single contact for the whole job.
What we need
What to send before the first call
Send what exists, with the gaps.
The contract, and what the factory’s side of it shows – the registered Chinese name, licence number and company seal, or an English trading name – plus any notice period it sets.
The correspondence – the date you reported the problem and the factory’s reply.
The payment records – the invoice and the bank statement lines that settled it.
The evidence – an inspection report, or dated photographs and a count; for a short shipment, the packing list and bill of lading.
Whether a balance is still unpaid.
For a partner conflict – the shareholders’ agreement if there is one, the company’s articles, the register of directors, and who signs for the bank today.
How we work
How we approach a dispute
The same order applies to a supplier or contract dispute; a partner conflict starts from the control map in the tab above and joins at step 3.
Assess the position
Whether anything can still be claimed from the other party, and whether the sum justifies any formal step at all. This is also where you may hear that there is nothing left to claim.
Establish who you are dealing with
Registration status, the person registered to act for the company, whether it still operates, and what its annual reports show.
Negotiate in Chinese, with the file
A demand with a figure and a deadline, with the evidence behind it, and the outcome that is realistic for this factory: replacement, rework, refund, credit or a payment schedule. Directly, or through someone whose word carries weight with the factory – its industry association, or a customer it cannot afford to lose.
Escalate only where it pays
Mediation, arbitration or court, and enforcement of the result, through the lawyers in our team, with local lawyers engaged where a court requires them – we have been through court proceedings in China. If the dispute leaves you with a company to replace or an ownership to change, that goes through ownership restructuring and our formation services.
Common questions about disputes
Is this a job for lawyers, or for you?
For us first. Many of these disputes end in a negotiation, and that is our own work: the assessment, the check on who the other party is, the demand in Chinese, an inspection of a lot still in China, and the file. Lawyers come in where a case is worth bringing, and we stay your single contact.
The factory has our advance and has gone quiet. Is the money gone?
Not always. Everything turns on the company named in the contract: does it still exist, and does it have something to lose – buyers where you sell, or your next order. If so, a demand with the file behind it can be enough. If not and the sum is small, we may tell you there is nothing to collect, and that the money is better spent on a next order built so this cannot happen again.
Should we write to the factory ourselves first?
Yes. Tell it in writing that the goods are defective, inside any notice period the contract sets, and keep the goods as they arrived. Then send us the file. The demand with a figure and a deadline is better sent once we know whether the company still exists and what it has to lose.
What does it cost?
Case by case, and agreed with you before any work starts. The first 30-minute call is free.
Find out what can still be claimed
Come with the file as it is – gaps are fine. Whether there is a position, and what the first step would be: that is what the free 30-minute call is for.
Book a free call →