A northern German businessman has stayed in China for three months. A manufacturer from Shenzhen reportedly supplied firecrackers which wouldn’t detonate to his former company. This had led to a loss of some 450,000 dollars in 2006, the Sueddeutsche Zeitung quotes the businessman. Also according to the report, the German company owed its former Chinese business partners 900,000 dollars. Before a solution for the dispute or disputes were found, the German company went into insolvency, in 2008, and has since ceased to exist.
The German founded another company, and contacted the Shenzhen company again. “That was my greatest mistake, because this informed them when I’d be in China”, the Sueddeutsche quotes him. He has been barred from leaving China since March 15 this year.
His Chinese counterparts wield a lot of political influence, he believes. A court in Changsha, Hunan province, which deals with the civil action against him, reportedly received documents in early May which proved that the former German company doesn’t exist any more, and that claims – of some 900,000 dollars - against it were therefore void.
A German counselor-at-law is quoted as saying that the case is unusual in that the prohibition to leave the country had been issued unusally early after the civil action had been made known to the German, and in that the court in Changsha had no authority to deal with the case anyway. The defunct German company and its counterpart in Shenzhen had agreed in written that disputes should be settled by an international arbitration court.
The Chinese claimant refers to the German as a cheater. The supplies of 2006 had been faultless, despite an expert opinion to the contrary.
The German embassy in Beijing regularly gets complaints from German business people who were cheated and who doubt the dependability of Chinese justice, writes the Sueddeutsche.
The German embassy apparently doesn’t provide information about these cases on its website, but the American embassy warns that
Americans doing business in China should be aware that if they become involved in a business and/or civil dispute, the Chinese government may prohibit them from leaving China until the matter is resolved. Civil cases may sometimes be regarded as criminal cases and the defendant may be placed in custody. Civil law disputes may take years to resolve. There are many cases of American citizens being prevented from leaving China for months and even years while their civil cases are resolved.
EUCCC: Growing Interest and Growing Caution, Sept 7, 2009