Apart from judgments dealing with divorce and custodial issues, only a small number of published cases have been identified involving attempts to enforce monetary judgments entered in China in U.S. courts. A recent decision from the Central District of California is a landmark in the recognition of Chinese decisions.
By Ge Yan, Partner, Cross Border Dispute Resolution
A Chinese company’s top executive is usually the company’s legal representative, and he or she is legally entrusted with the company seal, which is the company’s official symbol. The company seal provides the legal capacity to make and execute agreements, provide guarantees, transfer assets, and legally bind the company. When a legal representative is replaced, the displaced legal representative must return the company seal to the company so that the new legal representative can represent the company. However, if the displaced legal representative refuses to return the seal, the company could be liable for all the agreements that the former legal representative binds the company to. In other words, even if the articles of association can be used to remove an executive it does not necessarily mean that the foreign investors have been able to regain control of the company in practice. Therefore, retrieving the terminated legal representative’s unlawfully held company seal is an important step toward the foreign investors recapturing control of the company.
By Zhang Shouzhi, Xu Xiaodan and Li Xiang, King & Wood’s Cross-Border Dispute Resolution Practice, BeijingContinue Reading Battle for the Company Seal
China’s rapid economic development and its emerging middle class allow franchises to operate in China under the following model:
The franchisor
• owns a well-known brand with a global reputation;
• has a strong desire to expand its brand in China;
• currently lacks sufficient capital and the traditional franchising model is no longer suitable to support such expansion.
The franchisee:
• has a well-developed distribution network;
• already owns second-line brands for the same or similar products which have already established certain market share in China;
• has ready capital and other operational resources.
By Cecilia Lou, Partner at King & Wood’s Intellectual Property Group