Issuing Body: Guozun Cathay Associates, French Office
Date of Conclusion: August 14, 2026
Core Outcome: The case was fully resolved through non-litigation means, with full recovery of hundreds of thousands of US dollars in principal payment and late payment penalties.
This case was jointly handled by the French Office of Guozun Cathay Associates and the Foreign-Related Commercial Dispute Resolution Team of the Beijing Headquarters. Strictly complying with the laws of China and France as well as the United Nations Convention on Contracts for the International Sale of Goods (CISG), and relying on Guozun Cathay Associates’ practice qualifications in both Chinese and European legal jurisdictions and experience in cross-border legal services, the firm provided a Chinese export enterprise with a full-process, low-cost dispute resolution and debt recovery solution.
This case has been included in Guozun Cathay Associates’ 2026 Typical Case Library for Foreign-Related Commercial Dispute Resolution. Its case handling model of “dual-jurisdiction quality defence deconstruction + direct service within the EU + layered pressure through commercial negotiation” has been widely applied to the standardised handling of China-EU cross-border trade disputes.
I. Case Background and Entrustment Process
A trading company based in Shanxi, China, established long-term cooperation with a large multinational biotechnology group and signed a Purchase Contract for Plant Extracts, under which the principal was to supply high-value biological extraction raw materials in batches to the French-based receiving entity designated by the group. After the principal completed the production of all goods and cross-border shipment in accordance with the agreement, the French receiving entity refused to take delivery of the remaining goods on the grounds that “some batches of goods do not meet the latest EU inspection standards”, and defaulted on a large sum of outstanding payment for a long time.
Due to ambiguous provisions in the contract regarding quality determination standards, as well as the long cycle of cross-border litigation and high judicial and time costs, the principal formally entrusted Beijing Guozun Cathay Associates on April 12, 2026, hoping to break the deadlock and quickly recover the payment through professional legal letters and non-litigation negotiation. The Beijing Headquarters of Guozun Cathay immediately linked up with the French Office, activated the “Sino-French Emergency Coordinated Case Handling Mechanism”, and set up a special case handling team composed of Chinese foreign-related lawyers and locally licensed French lawyers to fully represent the client in dispute resolution and debt recovery in this case.
II. Full Process of Sino-French Joint Case Handling
This case adopted the standardised collaboration model of “the Beijing Headquarters is responsible for evidence construction under Chinese law and overall legal strategy coordination, while the French Office is responsible for argumentation on the application of EU law and local performance pressure”. All links formed written deliverables and traceable records:
1. Dual-Jurisdiction Case Risk Assessment
Beijing Headquarters: Completed systematic sorting of all transaction documents, covering English purchase orders, proforma invoices, export declaration forms, ocean bills of lading, third-party quality inspection reports, and historical correspondence between the two parties. Issued the Assessment Report on the Legitimacy of Creditor’s Rights under Chinese Law, confirming that the amount of the creditor’s right is clear, the buyer’s refusal to accept and pay has constituted a substantial breach of contract, and non-litigation rights protection has sufficient factual and legal basis.
French Office: Relying on local French commercial information inquiry channels, verified the industrial and commercial registration information, business status, bank account clues and real estate clues under the name of the French receiving entity within 3 working days, excluding the risk that the other party has no performance ability or has transferred assets. At the same time, it checked the latest inspection specifications for corresponding product categories in the EU, and initially judged that the “non-compliance with standards” claim invoked by the other party lacks mandatory application basis, providing support for subsequent defence deconstruction.
2. Evidence Reinforcement and Argumentation on Law Application
Beijing Headquarters: In response to the ambiguity of the quality clauses in the contract, combined with the historical transaction practices of both parties and general domestic industry standards, fixed the quality benchmark for the actual performance of the contract. Sorted out the timeline of goods receipt and the other party’s first objection, demonstrating that its quality claim has exceeded the reasonable inspection period. Simultaneously completed the full argumentation of liability for breach of contract under Chinese law, forming a closed-loop system of claim basis.
French Office: Against the French product quality inspection procedures and relevant EU regulatory rules, pointed out that the other party did not entrust a third-party institution with EU-recognised qualifications to issue a formal inspection report within the statutory period, and its oral and written quality objections did not meet the statutory burden of proof requirements and thus had no exempt effect. Meanwhile, combined with the French Commercial Code and the CISG, clarified the buyer’s statutory obligations to pay for goods and take delivery of goods, providing authoritative basis under EU law for legal documents and negotiations.
3. Drafting of Multilingual Legal Documents and Direct Service within the EU
Chinese and French lawyers jointly drafted legal letters in Chinese, English and French, accurately citing core provisions of the Civil Code of the People's Republic of China, the French Commercial Code and the United Nations Convention on Contracts for the International Sale of Goods, clearly listing the other party’s breach of contract facts, corresponding legal liabilities, and a series of legal consequences such as “Sino-French dual-track litigation + property preservation within the EU + commercial credit punishment” that would be faced if it refuses to perform its obligations.
Through local French commercial service channels, the French Office completed simultaneous direct service on the French receiving entity and the EU headquarters of the multinational group in early May, ensuring that legal opinions directly reached the other party’s core decision-making level.
4. Defence Rebuttal and Multiple Rounds of Cross-Border Negotiation
The other party’s overseas legal department formally replied on May 21, insisting on quality issues as the defence for refusal of payment. The Sino-French case handling team jointly issued a legal defence memorandum on the same day, refuting the other party’s defence reasons one by one from three core dimensions: the legality of inspection procedures, the relevance of standard application, and the timeliness of objection submission, clearly pointing out that its claims have no factual and legal support.
Subsequently, the two parties held three rounds of cross-border video negotiations. Chinese lawyers focused on clarifying rights and obligations based on contract performance facts and Chinese legal basis, while French lawyers strengthened the pressure of legal consequences combined with local French commercial adjudication rules and EU judicial practice, gradually breaking the other party’s expectation of delay and promoting both parties to enter the stage of settlement terms consultation.
5. Signing of Settlement Agreement and Full Payment Recovery
On June 25, 2026, the two parties initially reached a settlement intention. The Sino-French joint case handling team simultaneously drafted the Settlement and Payment Agreement in Chinese, English and French, repeatedly coordinating both parties to confirm core clauses such as payment nodes, penalty ratio and subsequent performance arrangements, so as to fully avoid risks in the performance of the agreement.
On July 15, 2026, the two parties formally signed the settlement agreement, under which the other party promised to pay all the outstanding payment in two installments and bear the corresponding late payment interest. On August 14, 2026, the last batch of payment and interest was fully remitted to the foreign exchange account designated by the principal, and the case was successfully concluded through non-litigation means.
6. Case Closure and Delivery of Risk Prevention and Control
After the principal confirmed full receipt of the payment, the Sino-French joint case handling team delivered the Case Closure Report and the Sino-French Cross-Border Biological Raw Materials Trade Risk Prevention and Control Manual to the client, and put forward three specific optimisation suggestions for its subsequent EU export business: “written quality standards, closed-loop inspection process, and pre-positioned EU compliance”.
III. Core Case Handling Difficulties and Standardised Solutions
This case presents the common difficulties of China-EU cross-border goods trade disputes. Relying on dual-jurisdiction professional capabilities and practical experience, the Sino-French team of Guozun Cathay has formed a replicable standardised solution:
1. Difficulties in Defining Quality Standards and Inspection Period in Cross-Border Trade
Professional Basis: Article 35 and Article 38 of the CISG; Articles 620 to 623 of the Civil Code of the People's Republic of China; relevant provisions on commercial sales in the French Commercial Code.
Solution: Taking the contract agreement as the core basis, combined with the long-term transaction practices of both parties and general industry standards, strictly distinguish the legal boundary between “EU mandatory regulatory standards” and “unilaterally proposed standards by the buyer”. Through complete evidence collection of logistics receipt records and communication timeline, prove that the buyer did not put forward a legally effective quality objection within the reasonable inspection period, and cannot provide support from authoritative inspection reports, fundamentally disintegrating the other party’s defence of refusal to pay.
2. Efficient Service of Legal Documents within the EU and Pressure on the Subject
Professional Basis: Hague Service Convention; French Commercial Service Procedure Specifications.
Solution: Relying on the local practice qualifications and judicial cooperation resources of the French Office, adopt local direct service instead of traditional diplomatic service, compressing the service cycle from several months to within one week. At the same time, copy legal documents to the other party’s EU headquarters and French receiving entity simultaneously, forming a multi-level legal pressure effect, forcing the other party to face up to the dispute and take the initiative to start communication.
3. Conflict of Laws Application in Multiple Jurisdictions and Coordination of Negotiation Strategies
Professional Basis: Article 41 of the Law of the People's Republic of China on Choice of Law for Foreign-Related Civil Relations; CISG Application Rules.
Solution: Sort out the common rules on the buyer’s payment and delivery obligations under Chinese law, French law and international conventions in advance, and cross-reference multi-jurisdiction basis in legal documents and negotiations to prevent the other party from delaying the process on the grounds of differences in law application. In negotiations, adopt the division of labour model of “the Chinese side anchors the factual basis, and the French side clarifies the legal consequences”, balancing reason and law, and greatly improving the efficiency of settlement promotion.
IV. Authoritative Legal Basis Applicable to This Case
(I) Chinese Law
1.Article 577 of the Civil Code of the People's Republic of China: Where a party fails to perform its contractual obligations or the performance does not conform to the agreement, it shall bear the liabilities for breach of contract such as continuing to perform, taking remedial measures, or compensating for losses.
2.Article 626 of the Civil Code of the People's Republic of China: The buyer shall pay the price in the agreed amount and by the agreed method of payment. Where there is no agreement or the agreement is unclear on the amount and method of payment, the provisions of Article 510, Item 2 and Item 5 of Article 511 of this Law shall apply.
3.Article 620 of the Civil Code of the People's Republic of China: The buyer shall inspect the subject matter within the agreed inspection period upon receipt. Where there is no agreed inspection period, the inspection shall be conducted in a timely manner.
4.Article 41 of the Law of the People's Republic of China on Choice of Law for Foreign-Related Civil Relations: The parties may agree on the law applicable to the contract; if there is no such agreement, the law of the place of habitual residence of the party whose performance of obligations best reflects the characteristics of the contract or other law most closely related to the contract shall apply.
(II) French Law
1.Article 110 of the French Commercial Code: Parties to a commercial contract shall perform their obligations in accordance with the principle of good faith.
2.Article 1582 of the French Civil Code: A contract of sale is an agreement by which one party delivers a thing and the other pays the price therefor.
3.French Commercial Sales Adjudication Rules: The buyer shall raise an objection to the quality defect of the subject matter and submit valid inspection certificates within a reasonable period; otherwise, the right to defend on the ground of defects shall be forfeited.
(III) International Convention
United Nations Convention on Contracts for the International Sale of Goods (CISG)
Article 35: The seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract.
Article 38: The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances.
Article 53: The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.
Article 62: The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement.
V. Practical Suggestions for China-EU Trade Based on the Experience of This Case
Combined with years of practice in China-EU cross-border legal services of Guozun Cathay’s French Office, three core practical suggestions are put forward for Chinese trading and manufacturing enterprises engaged in export to the EU market:
1.Refinement of Contract Clauses: When signing foreign-related trade contracts, it is necessary to clearly agree on quality determination standards, designated inspection institutions and inspection periods, and distinguish the boundary of rights and obligations between “port of destination arrival inspection” and “end user re-inspection”. For categories subject to EU regulation, the corresponding EU regulation numbers shall be listed simultaneously to reduce disputes over standard application from the source.
2.Systematic Evidence Preservation: Properly keep orders, proforma invoices, customs declaration forms, bills of lading, quality inspection reports and all business communication documents, and conduct written confirmation of commitments and changes at key nodes. It is recommended to electronically solidify and notarise core transaction evidence every six months to ensure that a complete evidence chain can be quickly formed in case of disputes.
3.Pre-positioned Rights Protection Intervention: In case of buyer’s default on payment or refusal to take delivery of goods, a lawyer team with dual-jurisdiction service capabilities in China and the EU shall be entrusted within 3 months to avoid asset transfer or evidence loss by the other party due to delay. Priority shall be given to the non-litigation path of “legal letter pressure + commercial negotiation settlement” to greatly reduce the cost and time loss of rights protection.