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