ICC Commercial Crime Service

Chinese-Related Disputes on the Rise

As relationships between the West and China continue to develop, it is apparent that there has been a noticeable increase in Chinese-related disputes.

Easier Enforcement

One cause can be linked to Chinese individuals and corporates rapidly acquiring overseas portfolios. With this, potential claimants are presented with a more readily available set of assets against which to seek to enforce their claims against such Chinese. Whereas previously potential claimants may have been put off by the prospect of enforcing in China, the prospect of looking elsewhere, as in the UK, may prove to be an important driver in the growth of litigation.

At the same time, Chinese investors are being drawn into overseas litigation in pursuing claims.

More Foreign Investments

For example, with greater numbers of Chinese purchasing real estate in the UK, the prospect of them being caught up in fraudulent schemes is increased. Real estate in London has, for a number of years, been considered a sound investment for overseas investors. However, not all such investments end happily.

Our clients include a group of investors, mainly based in the Far East, who purchased long leases for London properties that were supposed to be built. The building work barely started before the companies went into liquidation, with each of the investors losing the deposits that they paid. The person behind the scheme has apparently disappeared with many tens of millions of pounds unaccounted for.

Additional Litigants

In this case, we have targeted the lawyers who acted on the transactions. It is important to remember that in addition to the primary fraudster, whose assets may be difficult to find, those who were involved in the transactions and who may have the benefit of insurance or are otherwise wealthy may also have incurred a liability.

Recoveries can also be made against the primary fraudsters. This usually requires the victims to act quickly in tracing and freezing assets – possibly in multiple jurisdictions on a simultaneous basis – before they can be further dissipated.

Looking Ahead

As China’s reported economic growth continues, these trends will continue to drive litigation with Chinese individuals and corporates. Additionally, Brexit stands to impact this trend, as the UK looks to foreign markets and as trade between the UK and China grows.

Steven Philippsohn is a leading authority on complex international asset recovery. Over the last 30 years his firm has been retained by governmental, national and international organisations. A founding member of ICC FraudNet, he is listed by The Times of London as one of the 100 key influential legal professionals in the United Kingdom. Among his firm's highlighted work is representation of the primary defendant to a $1 billion claim (one of The Lawyer’s Top 20 cases for 2014 and 2015).





ICC FraudNet is an international network of independent lawyers who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit.