If there is a default on the bonds whose debtors or guarantors are based in mainland China, you can initiate an action before a court outside China and enforce the judgment in China.
This post was first published in CJO GLOBAL, which is committed to providing consulting services in China-related cross-border trade risk management and debt collection. We will explain how debt collection works in China below.
According to the news report, in July 2022, Zhang Kangyang (张康阳), the son of Zhang Jindong (张进东), president of the Italian football club Inter Milan and the de facto controller of Suning.com (one of China’s largest e-commerce retailers) has lost a court case in Hong Kong High Court, making him liable for US$255 million of debt as he had given his personal guarantee for his company in a financing deal.
We estimate that the court ruling is likely to be recognized and enforced in mainland China in the future, as most of the debtor’s property is located in the Mainland, i.e. assets related to Suning.com.
The case concerned the enforcement of the Hong Kong court ruling in the Mainland. There are already several arrangements in place between the Mainland and Hong Kong Special Administrative Region for this purpose, so there are no obstacles to such proceedings.
In addition, there are basically no obstacles to the enforcement of foreign judgments in China either. Judgments made in countries with international financial centers, such as the United States, the United Kingdom, South Korea, Singapore, the United Arab Emirates, and Germany, can all be enforced in China.
To learn more about how foreign judgments can be enforced in China, please read the ‘2022 Guide to Enforce Foreign Judgments in China’.
Photo by Cloris Chou on Unsplash
Contributors: Meng Yu 余萌
