Issuing Body: Guozun Cathay Associates Israel Office
Date of Conclusion: 23 April 2026
Core Outcome: Full recovery of USD 300,000 in overdue payment without litigation throughout the process, with the 12-year commercial partnership between the two parties fully preserved.
This case was jointly handled by the Israel Office of Guozun Cathay Associates and the foreign-related commercial dispute resolution team of the Beijing Head Office. In strict compliance with the laws of China and Israel and the United Nations Convention on Contracts for the International Sale of Goods (CISG), and relying on Guozun’s years of experience in cross-border legal services and dual-jurisdiction practice qualifications, we provided a full-chain non-litigious solution with dual objectives of "debt recovery + partnership preservation" for Chinese foreign trade enterprises.
This case has been included in Guozun’s 2026 Typical Case Library of Foreign-Related Commercial Dispute Resolution. Its case-handling model of "rigid legal claims + flexible commercial communication + dual-jurisdiction risk underpinning" has been widely applied in the handling of cross-border trade disputes along the West Asia and Mediterranean coast.
I. Case Background and Entrustment Process
A Chinese foreign trade company and an Israeli purchaser established a long-term and stable trade cooperation in 2013. Over the 12 years, the transaction performance rate between the two parties remained stable, forming a mature transaction practice of "order confirmation – partial delivery – settlement on arrival", with the scale of cooperation continuing to grow.
At the end of 2024, the two parties signed four contracts for the sale of goods successively. The Chinese foreign trade company completed all deliveries of goods in accordance with the agreement in the first half of 2025, and both the Israeli port and logistics providers have issued full receipt certificates. However, the Israeli purchaser, citing internal capital scheduling, has been defaulting on the corresponding payment totalling USD 300,000. During the same period, new orders placed by both parties were still performed normally with payment settled on schedule.
The client’s core demand was not merely to pursue liability through judicial proceedings, but to recover the overdue payment without damaging the cooperative atmosphere built over years and ensure the normal continuation of subsequent trade cooperation. On 15 October 2025, the client was connected to the Israel Office through the Beijing Head Office of Guozun Cathay Associates. Given that the case involved three core difficulties — recognition of evidential effect across Chinese and Israeli jurisdictions, verification of the performance capacity of overseas commercial entities, and preservation of cross-border commercial relationships — the Israel Office activated the China-Israel Emergency Collaborative Case Handling Mechanism on the same day, and set up a dedicated case team in conjunction with the Beijing Head Office (comprising 2 locally licensed lawyers in Israel and 3 members from the Beijing Lawyers Association’s Foreign-Related Lawyers Talent Pool) to act as the sole agent for debt recovery and partnership maintenance in this case.
II. Full Process of China-Israel Joint Case Handling
This case adopted the standardised collaborative model: "Beijing Head Office is responsible for evidence construction under Chinese law and overall legal scheme coordination, while the Israel Office is responsible for local judicial implementation and two-way business-legal communication with the debtor". All links have written records and verifiable outcomes:
1. 15 October 2025 – 22 October 2025: Dual-Jurisdiction Case Risk Assessment
Beijing Head Office: Completed a full review of the four sales contracts, logistics bills of lading, goods receipt certificates, correspondence on account reconciliation between the parties, and historical demand records, and issued the Assessment Report on the Legitimacy of Creditor’s Rights under Chinese Law. The report confirmed that the amount of the creditor’s right is accurate, the debtor’s breach of contract is clearly established, and the claim of creditor’s rights under Chinese law has complete legal basis.
Israel Office: Relying on the Israeli commercial entity information disclosure system and local business investigation channels, verified the Israeli purchaser’s registered business information, physical store address, operating accounts under its name and ongoing business status within 3 working days. It confirmed that the other party has sufficient payment capacity, is not at risk of bankruptcy liquidation or malicious debt evasion, and still has the willingness to continue purchasing from China, providing the core foundation for non-litigious settlement.
2. 23 October 2025 – 10 November 2025: Full-Chain Evidence Solidification and Dual-Jurisdiction Validity Confirmation
Beijing Head Office: In accordance with the Several Provisions of the Supreme People's Court on Evidence in Civil Proceedings, systematically sorted out all electronic and paper evidence including contract texts, logistics documents, and communication and demand records. It completed hash value verification and timestamp solidification for key electronic data, and obtained electronic evidence notarisation certificates from a notary institution, ensuring the admissibility of evidence in Chinese judicial proceedings.
Israel Office: Liaised with Israeli notary and consular certification authorities to complete the local judicial validity confirmation of notarial documents issued in China in accordance with relevant provisions of the Israeli Evidence Ordinance. Meanwhile, it obtained goods customs clearance records from Israeli ports and original receipt copies from local logistics providers, reinforcing the evidence chain of goods delivery from the receiving end and forming a closed-loop evidence system.
3. 11 November 2025 – 30 November 2025: Drafting of Bilingual Legal Documents and Local Direct Service
Lawyers from both China and Israel jointly drafted the bilingual (Chinese-English) Letter of Formal Demand, explicitly citing relevant provisions of the Civil Code of the People's Republic of China, the Israeli Sale of Goods Law and Article 53 of CISG. It detailed the buyer’s statutory payment obligation and the legal consequences of non-performance, including "dual-track litigation in China and Israel + property preservation + commercial credit sanctions". At the same time, the letter put forward a settlement plan of instalment repayment + subsequent cooperation guarantee, balancing legal seriousness and commercial flexibility.
The Israel Office completed the direct service of the legal document on 28 November via Israeli local commercial courier service. Compared with traditional diplomatic service (which takes an average of 4–6 months), this significantly shortened the procedural cycle and secured a critical window for negotiation on repayment.
4. 1 December 2025 – 31 March 2026: Multiple Rounds of Commercial-Legal Negotiations and Finalisation of Settlement Plan
After receiving the demand letter and complete evidentiary materials, the purchaser proactively contacted the joint case team on 5 December to express willingness to negotiate. Chinese and Israeli lawyers jointly participated in 4 rounds of online and offline negotiations. Citing typical precedents of Israeli local courts on "the binding force of long-term commercial transaction practices", they effectively responded to the other party’s delaying defence of "temporary capital turnover difficulties".
Meanwhile, with full respect for the 12-year cooperative foundation between the two parties, they repeatedly negotiated on core demands such as payment schedule and payment terms for subsequent orders. Finally, the instalment repayment plan and performance guarantee clauses for future trade were finalised, which not only ensured the realisation of the client’s creditor’s rights on schedule, but also reserved reasonable space for the other party’s capital arrangement, fully preserving the commercial partnership between the two parties.
5. 23 April 2026: Full Repayment and Case Conclusion
After the client confirmed full receipt of the USD 300,000 overdue payment, the joint case team delivered the Case Closure Report and the Handbook on Risk Prevention and Control for China-Israel Cross-Border Trade Contracts to the client. It put forward three specific risk prevention and control recommendations for the client’s future trade with Israel: refinement of contract payment nodes, separation of historical arrears and new orders, and annual transaction reconciliation mechanism, to help the enterprise improve its cross-border trade compliance system.
III. Core Case Handling Difficulties and Authoritative Solutions
The difficulties encountered in this case are common issues in China-Israel cross-border trade disputes. Relying on dual-jurisdiction professional competence and rich practical experience, the Guozun joint team has formed a replicable standardised solution:
1. Dual Balance of Cross-Border Recovery Objectives: Balancing Legal Rights and Commercial Cooperation
Difficulty: The Israeli purchaser is an overseas entity. If international litigation or arbitration proceedings are initiated, there are problems such as long cycle, high cost and great difficulty in cross-border enforcement. Moreover, it is highly likely to damage the stable cooperative relationship accumulated by the two parties over 12 years, which directly conflicts with the client’s core demand of "maintaining harmony and preserving cooperation".
Solution: Established the overall strategy of "prioritising non-litigious negotiation, with litigation plan as backup", and precisely struck a balance between the rigidity of legal claims and the flexibility of commercial communication. Taking legal consequences as the bottom line to form deterrence, and taking long-term cooperative value as the guide to frame communication, the team turned dispute resolution into an opportunity for both parties to reduce transaction costs and consolidate the foundation of cooperation.
2. Determination of Liability and Control of Negotiation Scale under Partial Breach
Difficulty: The purchaser only defaulted on payment for four historical orders, while new orders during the same period were still performed and paid normally. There is no complete loss of performance capacity or malicious breach of contract. It is difficult to accurately determine the nature of the breach and the intensity of negotiation — excessive pressure may completely destroy cooperation, while insufficient pressure may make it difficult to promote repayment.
Solution: Systematically sorted out the 12-year transaction records of the two parties, and clearly distinguished the boundary between breach of historical orders and normal performance of new orders. Taking "maintaining long-term cooperation and reducing the comprehensive rights protection costs of both parties" as the core communication entry point, the team explained to the other party the negative impact of the breach on the credit cost and cooperation efficiency of both parties, and promoted the other party to take the initiative to cooperate in performance.
3. Uncertainty Risks of Jurisdiction and Applicable Law across Chinese and Israeli Jurisdictions
Difficulty: Cross-border sales contract disputes involve multiple procedural issues such as confirmation of jurisdictional court, application of governing law, and recognition and enforcement of overseas judgments. Directly safeguarding rights through litigation procedures has many uncertainties, and the cycle and cost of rights protection are uncontrollable.
Solution: The non-litigious settlement method directly avoids the complex risks of cross-border judicial procedures, significantly shortens the repayment cycle and reduces the cost of rights protection. At the same time, a dual-track litigation backup plan of "pre-litigation property preservation in Israel + default judgment by Chinese court" was formulated, forming legal deterrence based on dual-jurisdiction professional capacity and ensuring the initiative in the negotiation process.
4. Legal Guarantee for the Continuity of Long-Term Cooperative Relationship
Difficulty: The two parties have a long cooperation period and strong commercial stickiness. The client’s core demand is not only limited to a single repayment, but also lies in the stability of subsequent trade cooperation. If only the historical arrears are resolved without improving subsequent rules, there is still a risk of recurrence of similar disputes.
Solution: In the process of negotiating repayment, the team simultaneously designed payment guarantee clauses, regular reconciliation mechanism and breach trigger mechanism for subsequent orders, turning the process of dispute resolution into an opportunity for upgrading cooperation rules, and consolidating the legal foundation for future cooperation while recovering the arrears.
IV. Authoritative Legal Bases Applicable to This Case
(I) Chinese Law
1.Civil Code of the People's Republic of China, Article 509: The parties shall perform their obligations in full as agreed. The parties shall abide by the principle of good faith and perform obligations such as notification, assistance and confidentiality according to the nature, purpose and transaction practices of the contract.
2.Civil Code of the People's Republic of China, Article 577: Where a party fails to perform its contractual obligations or the performance does not conform to the agreement, it shall bear liabilities for breach of contract such as continued performance, taking remedial measures or compensation for losses.
3.Civil Code of the People's Republic of China, Article 626: The buyer shall pay the price in the agreed amount and by the agreed method of payment.
4.Civil Procedure Law of the People's Republic of China, Article 272: For a lawsuit brought against a defendant who has no domicile in the People's Republic of China due to a contract dispute or other dispute over property rights and interests, if the contract is concluded or performed within the territory of the People's Republic of China, or the subject matter of the action is within the territory of the People's Republic of China, or the defendant has distrainable property within the territory of the People's Republic of China, or the defendant has a representative office within the territory of the People's Republic of China, it may be under the jurisdiction of the people's court at the place where the contract is concluded, where the contract is performed, where the subject matter of the action is located, where the distrainable property is located, where the tort is committed or where the representative office is located.
5.Law of the People's Republic of China on the Application of Law in Foreign-Related Civil Relations, Article 41: The parties may choose the law applicable to the contract by agreement; if there is no choice, the law of the habitual residence of the party whose performance best reflects the characteristics of the contract or other law most closely connected with the contract shall apply.
(II) Israeli Law
1.Israeli Commercial Law: Parties to a commercial contract shall perform their contractual obligations in accordance with the principle of good faith, and practices formed through long-term transactions are binding on both parties.
2.Israeli Sale of Goods Law: The buyer has the statutory obligation to pay the price of the goods and take delivery of the goods at the time and in the amount agreed in the contract.
3.Israeli Evidence Ordinance: Overseas evidence documents that have been legally notarised and consularly certified shall have corresponding legal effect in Israeli judicial proceedings.
(III) International Convention
United Nations Convention on Contracts for the International Sale of Goods (CISG)
Article 9: The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.
Article 53: The buyer must pay the price of the goods and take delivery of the goods as required by the contract and this Convention.
Note: Both China and Israel are States Parties to this Convention, and the relevant provisions of the Convention shall automatically apply to the cross-border contract for the sale of goods involved in the case.
V. Authoritative Practical Recommendations Based on the Experience of This Case
Based on years of experience in China-Israel cross-border legal services of Guozun Cathay Associates Israel Office, the following three authoritative recommendations are put forward for China-Israel trade practitioners:
1.Contract standardisation: Be sure to sign a written foreign trade contract, clearly stipulating the subject matter of the goods, payment nodes, liability for breach of contract, governing law (it is recommended to agree to apply Chinese law) and dispute resolution method (it is recommended to agree to arbitration by the China International Economic and Trade Arbitration Commission), so as to avoid room for disputes due to vague agreements.
2.Evidence standardisation: Regularly back up and solidify materials such as online communication records, electronic orders, logistics bills of lading, payment vouchers, and reconciliation letters. It is recommended to conduct notarisation of key electronic evidence every six months, and improve the preparation of dual-jurisdiction evidence validity in advance, so as to reduce the evidence cost of cross-border rights protection.
3.Strategic rights protection: After a cross-border creditor’s rights dispute occurs, a lawyer team with dual-jurisdiction service capacity in China and Israel should be entrusted within 3 months to intervene, prioritise the assessment of the feasibility of non-litigious settlement, and balance the repayment goal with the value of commercial cooperation; avoid delay leading to the debtor’s transfer of property or missing the best negotiation window.