What Is The Blocking Effect Of Chinese Cross-border Data Transfer Laws On Foreign Discovery Systems?

Recently, the United States District Court of the Northern District of California rejected a Chinese company's argument of China's restriction of cross-border data transfer as a legal justification, and has required the defendant in China to fulfil their duty of discovery of evidence. This acts as a yellow light warning to Chinese companies involved in foreign litigations.

We take a look at this case below.

Case background

Defendant Syntronic (Beijing) Technology R&D Center Co., Ltd. (a wholly-owned subsidiary, located in China, of a Swedish company) has filed a motion for reconsideration addressing the Court's prior support of the discovery request proposed by Plaintiff Cadence Design Systems, Inc. Ultimately, the Court upheld the original discovery order, and held that there was no conflict between Chinese law and the Court's previous order. This thereby required the defendant to provide the 24 computers in their control to the plaintiff for inspection in