For all the exuberant talk about China being among the world’s greatest economic powers, with western marketers clamoring to get their products in front of China’s skyrocketing middle-class, the reputation of its legal systems has lagged behind considerably.
Whether China’s legal system is adequate or not, the arguments are all over the place. For example, contrast the recent Epoch Times post, Five Unspoken Rules of China’s Legal System with the South China Morning Post article, Legal System Less Arbitrary but Still a Work in Progress.
I mention this because I just read an excellent post on the Drug and Device Blog about a U.S. 4th Circuit decision issued just days ago finding that China is an adequate legal forum.
The post, Chinese Litigation Returned to Sender, breaks down the decision reached in Tang v. Syntura International, Inc., No. 10-1487, slip op. (4th Cir. Sept. 6, 2011). The case is notable because it involves a well-publicized scandal concerning tainted infant formula manufactured by Chinese companies
As with the China drywall litigation, a group of enterprising lawyers tried to make the infant formula litigation the latest Chinese export to the United States. The case was filed in the United States based on the fact that one of the 22 companies whose products had been contaminated was a sub- subsidiary of an American holding company located in Maryland.
The defendant filed a forum non conveniens motion to send the case back to China. The question raised was whether the Chinese legal system had modernized sufficiently that it can now be considered an “adequate forum.”
The court held that China is an adequate forum because its courts are available to hear contaminated formula cases. The court was swayed by the sufficiency of evidence presented by the Chinese defendant to back up this finding.
First, the defendant presented evidence showing that at least two provincial courts accepted contaminated formula cases prior to the district court’s decision.
Also supporting defendant’s forum non conveniens argument, was the affidavit of an officer from China’s highest court exalting the court’s readiness “to accept and hear these cases according to law at any time.”
Finally, the Chinese defendant presented evidence explaining that any inaction or delay by Chinese courts might be attributable to formal defects in the complaints and not the courts’ resistance to the subject matter of the cases.
One of the interesting points of the Tang decision is its holding that more than just litigation opportunities factor into whether an overseas forum is adequate. The existence of the Chinese government’s fund for contamination victims (similar to our own BP Oil Spill fund) must also be considered as a possible remedy– litigation is not the only mechanism available.
Adequate court system (although different). Check
Adequate remedy (although not similar). Check
China. It’s an adequate forum.
Or is it?