Disputes In China: Choice Between Arbitration And Court Can Be Crucial

Disputes cannot always be prevented. Contracts must therefore provide for an effective means of dispute resolution. An important consideration in that respect is the choice for arbitration or court proceedings. This is especially true in China, where a tailored approach is a must because standard clauses rarely lead to practicable solutions. In choosing a forum, foreign investors will therefore have to consider a number of important issues.

Dispute resolution is rarely a walk in the park, with many foreign investors feeling most comfortable choosing one of the various paths available in their home countries. China also offers a wide range of paths, but since these are still very much under construction, it is easy to get lost without detailed guidance. This article aims to offer some initial guidance, distinguishing between arbitration and court proceedings, both outside and within China.