1. Background

The client was a Vietnamese multinational transport and logistics company which had established a long-term transport relationship with an international logistics company in Shenzhen and provided cross-border transport services for it. In the course of the cooperation the defendant ran up USD 50,000 in unpaid freight. It paid RMB 50,000 on 31 July 2025, but the balance was delayed for a prolonged period.

An overseas company pursuing a domestic debtor faces three obstacles: language, service of process and enforcement. The client therefore instructed Zhai Chenhong of Yingke Law Firm (Shenzhen) to bring proceedings in Shenzhen.

2. Key difficulties and issues in dispute

The difficulty in this case lay not in the substance but in procedure and in securing recovery.

• The plaintiff was a foreign legal person, and its corporate documents had to be notarised in the country of incorporation and legalised by a Chinese embassy or consulate; without this the case could not even be filed.

• The defendant was a domestic company with assets available for enforcement, but if it delayed its response or moved assets, even a successful judgment might prove unenforceable.

• The parties disagreed about the order in which the payments already made should be applied, which directly affected the amount of the outstanding principal.

3. Counsel’s approach

• Clear the filing threshold first: prepare and complete the notarisation and legalisation of the plaintiff’s corporate documents in advance, and deal with the power of attorney at the same time, so that the filing requirements of the foreign-related chapter of the Civil Procedure Law were satisfied.

• Apply for property preservation at the same time: apply to seal and freeze the defendant’s assets when filing, creating pressure to perform and securing any later enforcement.

• Fix the payment and set-off rules: review the reconciliation records and bank vouchers, clarify the order in which payments were to be applied, and narrow the dispute to verifiable figures.

• Trade efficiency for certainty: given the length of cross-border litigation and the cost of enforcement, the strategy was not to pursue a judgment but to obtain a certain and enforceable result through a settlement built on instalments plus acceleration on default.

4. The settlement and its confirmation by the court

Under the auspices of the court the parties reached a voluntary settlement. They confirmed jointly that the defendant owed USD 50,000 in freight, part of which had already been paid in RMB on 31 July 2025. The plaintiff agreed that the defendant might pay the remaining USD 43,048 in four instalments, each of USD 10,762, due by the 30th of each month from August to November 2025 and to be remitted to an account designated by the plaintiff.

It was further agreed that the plaintiff would apply to lift the preservation within three days of receiving payment in full; and that if the defendant failed to pay any instalment in full and on time, the plaintiff would be entitled to apply for compulsory enforcement of all outstanding amounts and liquidated damages together, the liquidated damages being calculated on the unpaid balance at 10% per annum from 31 July 2025.

5. Outcome

The court reviewed the agreement, found that it did not contravene the law, and confirmed it. A mediation agreement takes legal effect once the parties have signed the record and the court has confirmed it.

The case was concluded by mediation, which both fixed the amount of the debt and the payment schedule and preserved enforceability through the “acceleration on default plus liquidated damages” clause, avoiding the common cross-border trap of winning the case but not the money. The plaintiff bore the case acceptance fee and the property preservation application fee itself, in exchange for the certainty of voluntary performance and a substantial saving of time.

6. Practical advice for logistics and trading businesses

• Provide for jurisdiction and service addresses in the contract: agree expressly on the jurisdiction of a court in China, and include a contractual service-of-process address clause, so as to avoid service abroad taking months.

• Keep a complete reconciliation chain: the statement of account, bill of lading, invoice and payment voucher for each shipment should be filed together, forming a verifiable evidential chain as to the amounts.

• Apply for property preservation promptly: foreign-related litigation is slow, and preservation is often the decisive factor in whether payment is ultimately recovered.

• Prefer mediation with an acceleration clause: compared with obtaining a judgment, a mediation agreement containing a default acceleration clause is often faster and cheaper to enforce.