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Meredith Chen

China’s top court has hailed a mediated resolution to an international shipbuilding dispute as a landmark example of the country’s anti-sanctions law working to protect domestic industry.
In a social media post on Friday, the Supreme People’s Court said the case was a milestone in China’s legal response to foreign “bullying” and “long-arm jurisdiction”.
“Its ruling’s principles demonstrate China’s firm commitment to safeguarding the multilateral trading system and offer judicial insight towards building a fair and equitable international economic order,” the court said.
The case centred on a 2023 subcontract between an unnamed Chinese company based in Shandong and a Swiss marine equipment firm.
The Swiss firm contracted the Chinese company to build modules for a floating production, storage and offloading vessel used to process, store and transfer oil at sea.
The contract was valued at US$19.45 million and the Swiss firm paid more than US$7 million in initial payments.
The Chinese company completed construction and main assembly of the modules on the vessel at a port in Jiangsu province in June 2024, according to a case briefing released by Chinese judicial authorities.
But just days later, the company was added to the US’ Specially Designated Nationals sanctions list for its alleged involvement in Russian projects, according to Chinese media reports.
The Swiss firm, which owned the vessel, then suspended payment of the remaining US$11.86 million, citing compliance with a third country’s sanctions order, and stopped communication, according to the court.
The Chinese company applied to the Nanjing Maritime Court for a pre-litigation arrest to “protect its rights” by preventing the vessel from leaving China.
The court granted its application in September that year, issuing a “live arrest” to ensure the vessel remained in China and work on the vessel could continue.
In October 2024, the Chinese company filed a lawsuit under Article 12 of the Anti-Foreign Sanctions Law, which allows Chinese entities to seek compensation if others implement or assist in enforcing what the law calls discriminatory foreign restrictive measures.
The law, passed in June 2021, is part of Beijing’s attempt to expand its legal toolbox to respond to US restrictions designed to extend its legal reach beyond its borders.
The Chinese company is one of many to have been added to US and European sanctions lists since Russia invaded Ukraine. Those sanctions have frozen Chinese assets, restricted transactions and disrupted operations across a range of sectors.


After the Nanjing court accepted the case, the Swiss company deposited around US$14 million with the court to lift the seizure of the vessel.
The parties then requested court-led mediation, which resulted in a settlement and full payment.
Li Jie, a judge with the court in Nanjing, said the loss of payment would affect the suppliers’ ability to pay salaries to its employees.
During the legal proceedings, the court informed the Swiss company of the potential consequences under Chinese law of “assisting in the enforcement of foreign unilateral sanctions”, according to court documents.
“The court’s appropriate handling of the case represents an effective step in putting China’s Anti-Foreign Sanctions Law into practice, from text to real-world application,” presiding judge Shen Yan said.
Shen said the court minimised the impact on ship construction and business operations, and the resolution avoided potential international legal conflicts, upheld supply chain stability and showed “a Chinese legal solution” to global disputes.


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China

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Sanctioned Chinese company takes on Swiss firm in ‘landmark’ action against foreign ‘bullying’ and ‘long-arm jurisdiction’


Sanctioned Chinese company takes on Swiss firm in ‘landmark’ action against foreign ‘bullying’ and ‘long-arm jurisdiction’.


China’s anti-sanctions law

US sanctions on China

Switzerland

United States

Is this maritime court case a model of China’s anti-sanctions law in action?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Sanctioned Chinese company takes on Swiss firm in ‘landmark’ action against foreign ‘bullying’ and ‘long-arm jurisdiction’

Sanctioned Chinese company takes on Swiss firm in ‘landmark’ action against foreign ‘bullying’ and ‘long-arm jurisdiction’