Expertise/Russia–China Practice

Service

Foreign Trade Contracts with Chinese Companies

A contract between Russian and Chinese companies for the supply of goods and equipment, or for works or services, is drawn up in two languages and sets out quality requirements, acceptance, payments and the dispute resolution procedure.

We are most often instructed by:

  • Russian companies buying from Chinese suppliers
  • Chinese manufacturers selling products to Russia
  • Russian partners of Chinese manufacturers

The information on this website is provided for information purposes only and does not constitute a public offer.

What the Service Includes

Timing and Fees
from 5business days
from ₽fee on request

Timing and fees are indicative and are confirmed when the engagement is agreed.

01 / Overview
Two types of project

A contract with a Chinese party is prepared differently depending on whose interests are represented: the buyer's or the supplier's.

When a Russian company buys from a Chinese supplier, the focus is on the products' conformity with the stated specifications, acceptance and handling of defects, manufacturing and shipment times, repayment of the advance, payments and the enforceability of the decision under the chosen dispute resolution procedure.

When a Chinese company sells to a Russian buyer, including through a Russian partner, the focus is on certainty as to the subject matter and the buyer's requirements, the limits on rejection, product formalities in Russia, security for payment and limitation of liability.

China-specific considerations

  • Two language versions and precedenceThe contract is prepared in Russian and Chinese, specifying which version prevails. Terms relating to quality, acceptance, deadlines and liability are reconciled: the translation of certain concepts changes their legal content.
  • Status and authority of the other partyConfirmation of the Chinese company's status, the signatory's authority and whether the name matches the registration details, and the significance of the seal at signing.
  • Payments and payment processingPayment processing is treated as a separate risk. The contract includes notification of difficulties, the periods after which performance is suspended, alternative payment terms and the allocation of costs.
  • Accompanying documentsThe composition and form of shipping, technical and accompanying documents, their language and execution: deficiencies in the documents delay customs clearance and payments.
  • Changes to termsThe procedure for recording changes in volume, timing and specifications: some arrangements are reached in correspondence and are not carried over into the contract.
  • Enforceability of a decision in a disputeThe dispute resolution procedure is chosen taking into account where the other party's assets are located and how the decision would be enforced. Where persons subject to restrictive measures are involved, the exclusive jurisdiction of the Russian commercial (arbitrazh) courts is checked separately.
02 / Outcome
Service Outcome
  • Contract in two languagesThe text with annexes, specifying the prevailing version.
  • Comments on the other party's draftA list of risks with alternative wording and priorities.
  • Post-negotiation draftsDocuments reflecting the agreed terms, with any outstanding points of disagreement marked.
  • Performance documentsOrders, specifications, amendments, notices, documents on acceptance and quality claims.
  • Settlement materialsClaims, replies and negotiation documents in the event of breaches.

The outcome of the service is the work performed within the scope agreed with the client.

03 / Projects
Selected Projects
01 / 04

Acting for the Chinese company

Establishing a China–Russia joint venture

Challenge

A Chinese and a Russian partner were setting up a joint venture, and they had different legal traditions, expectations regarding management and views on the allocation of control.

What was done

The Chinese company was advised on the ownership structure, the management and exit mechanics, and the alignment of the parties' interests under Chinese and Russian law. The venture was launched on the agreed terms.

Parent company due diligence

Due diligence of a Chinese parent company in the acquisition of a Russian company

Challenge

A Russian buyer was acquiring a Russian company whose parent was a Chinese company. Closing the transaction required due diligence of the Chinese parent company and its connection with the asset being sold.

What was done

Legal due diligence of the Chinese parent company was carried out, covering the group's corporate structure, the chain of ownership of the Russian subsidiary and the legal risks at the intersection of Chinese and Russian law. The acquisition of the Russian company went ahead with a legal picture that was clear to the parties.

Legal due diligence

Legal due diligence of a Chinese company

Challenge

Independent legal due diligence of a Chinese company was required, covering its corporate structure and legal status at the intersection of Chinese and international law.

What was done

An opinion was prepared on the corporate structure, the chain of ownership and the related legal risks. The client obtained a clear legal picture for its further decisions.

Contract review

Legal review of international sale of goods contracts for a Chinese company

Challenge

Contracts for the international sale of goods between China and Russia carry risks of divergence in the governing law, delivery terms and dispute resolution mechanisms. Such contracts were reviewed on behalf of the Chinese company.

What was done

The governing law, delivery terms (Incoterms), currency and tax aspects and the dispute resolution procedure were analysed. The risks were identified and eliminated before signing.

04 / Questions
Frequently Asked Questions

The choice depends on the subject matter of the contract, the negotiating positions and the place of performance. Russia and China are parties to the 1980 United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention), and it applies to supplies between companies of the two countries unless the parties have excluded it.

This question is settled when the contract is drafted. The options differ in timing, cost, language of the proceedings and how the decision is enforced. A decision is of value where the other party's assets are located, and the dispute resolution procedure is agreed together with security, which often works faster than proceedings.

Payment linked to manufacture and shipment, a letter of credit, security for repayment of the advance, retention of part of the price until acceptance. The choice depends on the contract amount and the parties' positions; at the same time, it is determined what constitutes evidence that each step has been completed.

The contract sets out the conformity criteria, the place and procedure of acceptance, the time limits for comments, how defects are recorded and the consequences of their discovery. The pre-shipment inspection procedure is agreed in advance: non-conformities found after import cost the parties more.

This is determined by the contract: obligations for conformity assessment, labelling and the documents for the import and circulation of products are allocated between the supplier, the buyer and third parties. The allocation is agreed before signing, as it affects the timing of import and liability to end buyers.

Not necessarily. For regular shipments, a framework contract is used, with general terms and orders or specifications for each consignment; it describes which terms are changed by an order and which remain unchanged.

An hourly rate, a fixed fee or a combined model is used; in some cases part of the fee depends on the outcome achieved. The fee is determined by the time actually spent, the complexity of the matter and the overall timeframe of the project, and is agreed before work begins.

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