CHINA Law and Practice Contributed by: Qingyou Wang, Yichen Lu, Chao Tang and Yuhe Gu, Anli Partners
18 months from the submission of filing materials to conclusion, even longer.
fidentiality clauses and, during the proceedings, pro- actively request redaction or technical processing of sensitive data, in order to balance confidentiality with legal disclosure requirements. 8.3 Enforcement of Settlement Agreements Under Chinese law, the enforceability of a settlement agreement depends on its legal form. A privately negotiated settlement that has not been judicially confirmed has only the binding effect of a contract; if one party defaults, the other must bring a separate claim for breach of contract. By contrast, where set- tlement terms are incorporated into a court mediation statement, a judicial confirmation ruling or an arbitral award, they acquire direct enforceability, and the suc- cessful party may apply straight to the court’s enforce- ment division for compulsory enforcement. In practice, to balance commercial flexibility with enforcement efficiency, parties often adopt a dual- track structure: a concise court mediation statement paired with a more detailed private settlement agree- ment, or a “mediation plus arbitration” arrangement under which the settlement is converted into an arbi- tral award. Importantly, if a settlement reached at the enforcement stage is not carried out, the court will normally resume enforcement of the original judg- ment, and all enforcement steps remain subject to the statutory time limits for applying for enforcement. 8.4 Setting Aside Settlement Agreements A settlement agreement can be set aside on the same grounds as any other contract. These grounds include fraud, duress, serious misunderstanding, and appar- ently unfair contract. To challenge a settlement agree- ment, a party must file a lawsuit with the court. The party must set out the grounds for challenging the set- tlement and provide evidence to support their claim. If the court finds the settlement agreement invalid, it will issue an order setting it aside. 9. Damages and Judgment 9.1 Awards Available to the Successful Litigant Under Chinese law, the main forms of relief include:
8. Settlement 8.1 Court Approval
In China, a settlement agreement reached autono- mously between the parties during the litigation pro- cess is treated as a civil contract and generally takes effect without the need for court approval, but it does not, by itself, carry compulsory enforceability. If one party fails to perform, the other will usually need to bring a separate action to enforce its rights. If the parties wish the settlement to have the same enforceable effect as a judgment, they may ask the court to issue a civil mediation statement based on the settlement terms or apply for judicial confirmation of a mediation agreement reached outside litigation. The court will conduct both a formal and a substantive review of the settlement, including whether its content is lawful, whether it breaches mandatory provisions, whether it harms State interests, public interests or the lawful rights of third parties, and whether it reflects the parties’ true intentions. Once this review is passed, the mediation statement or confirmation ruling, upon taking effect, may serve as a basis for compulsory enforcement. 8.2 Settlement of Lawsuits and Confidentiality In China, the confidentiality of litigation settlements is typically achieved in two main ways. First, parties include confidentiality provisions in their settlement agreements. Secondly, cases may be concluded by withdrawal of the claim or through a court-issued civil mediation statement, which keeps detailed terms out of publicly available judgments. As a matter of law, court mediation is not public, and parties can ask the court to record only essential terms to protect com- mercially sensitive information. Confidentiality is not absolute. Exceptions apply for regulatory filings, audit requirements and other manda- tory disclosure obligations. Courts may also disclose limited information where necessary to safeguard public interests or the fundamental rights of others. Parties should therefore draft clear and targeted con-
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