International Legal Perspective | Securing Victory in International Arbitration and Overcoming Cross-Border Enforcement Challenges: A 50-Million-Yuan Debt Case Won, with Full Insurance Compensation Obtained
Published:
2026-01-09
In the tide of globalized trade, cross-border commercial disputes often face the predicament of winning a lawsuit yet failing to collect payment—challenges such as differences in foreign judicial systems, concealment of assets by the judgment debtor, and exorbitant costs associated with cross-border enforcement have turned many companies’ legitimate claims into mere empty promises. Recently, the six international arbitration cases involving breaches of foreign trade sales contracts that I represented have secured final favorable awards. Through cross-border collaboration, we successfully prompted the Peruvian court to accept and enforce these judgments, enabling the company to receive full compensation from the China Export & Credit Insurance Corporation (hereinafter referred to as “SINOSURE”). Using this arbitration case as a case study, this article delves deeply into the credit risks faced by exporters under medium- and long-term open-account sales models, the difficulties in gathering evidence, arbitration procedural strategies, and key considerations for cross-border enforcement in international arbitration cases. The case focuses on core disputes such as recovery of payment under advance-payment plus long-term open-account sales models, proof of partial performance, and interest calculation, highlighting that international commercial dispute resolution should shift from merely securing favorable awards to effectively realizing creditors’ rights.
In the tide of globalized trade, cross-border commercial disputes often face the predicament of winning a lawsuit yet failing to collect payment—challenges such as differences in foreign judicial systems, concealment of assets by the judgment debtor, and exorbitant costs associated with cross-border enforcement have turned many companies’ legitimate claims into mere empty promises. Recently, the author’s firm secured final favorable arbitration awards in six international arbitration cases involving breaches of foreign trade sales contracts. Through cross-border collaboration, we facilitated the acceptance and enforcement of these awards by Peruvian courts, enabling the company to receive full compensation from the China Export & Credit Insurance Corporation (hereinafter referred to as “Sinosure”). Using this arbitration case as a case study, this article provides an in-depth analysis of the credit risks faced by exporters under medium- and long-term open-account sales models, the difficulties in gathering evidence, arbitration procedural strategies, and key considerations for cross-border enforcement in international arbitration cases. The case focuses on core disputes such as recovery of payment under advance-payment plus long-term open-account arrangements, proof of partial performance, and interest calculation, highlighting that international commercial dispute resolution should shift from merely securing favorable awards to effectively realizing creditors’ rights.
I. Case Background: Six foreign trade contracts are in arrears with payment, and cross-border rights protection faces multiple challenges.
Since 2017, China’s Company A and Peru’s Company S have established a cooperative relationship and have subsequently signed six “Sales Contracts,” under which Peru’s Company S agreed to purchase large-scale goods and components from China’s Company A. The total contract value exceeds US$9 million, with payment terms stipulating a prepayment followed by the final payment 720 days after the date of the bill of lading. The trade terms used are... FOB The dispute resolution method is the China International Economic and Trade Arbitration Commission ( CIETAC ) Arbitration shall be governed by Chinese law.
In the early stages of the cooperation, Chinese company A strictly fulfilled its delivery obligations as agreed upon, delivering to Peruvian company S a total of 97 large-sized goods, 31 large-sized goods, and multiple batches of spare parts. All these goods were exported after undergoing customs clearance and were received by Peruvian company S. Callao Port, Peru The goods have been cleared and received. However, after making a partial advance payment, Peru’s Company S has defaulted on the final payments under six contracts—totaling approximately 50 million RMB—citing reasons such as the COVID-19 pandemic and industry fluctuations. The longest delay in payment has exceeded two years. Faced with these outstanding debts, China’s Company A has repeatedly urged payment via emails and letters. Although Company S had initially promised to settle the arrears by August 2021, it has consistently delayed payment under various pretexts and even avoided further communication altogether. At this point, multiple challenges in cross-border rights protection have emerged: First, Company S is registered and holds assets solely in Peru, with no enforceable assets within China; second, there are significant differences between the judicial systems of China and Peru, making cross-border service of process and enforcement procedures unfamiliar and complex; third, the pandemic has severely restricted international travel, driving up the costs of on-site investigations and communications; fourth, if the company wins an arbitration case but fails to secure enforcement, its claims will remain difficult to realize—and there is even a risk of missing critical deadlines. China Export & Credit Insurance Corporation Claim processing time.
II. Attorney Strategy: Building on a Winning Arbitration Outcome, Achieving Breakthroughs Through Cross-Border Collaboration and Insurance Claims Simultaneously
After taking on the case, the team’s lawyers promptly established a dedicated task force. Leveraging the unique characteristics of cross-border trade disputes, they developed a three-pronged rights protection strategy: securing arbitration victories to establish entitlements, ensuring effective cross-border enforcement to realize those rights, and obtaining insurance claims to compensate for losses—thus guaranteeing all-round protection of the client’s interests.
(1) Precisely organize the chain of evidence and achieve a successful outcome efficiently during the arbitration phase.
Arbitration procedures form the foundation for cross-border rights protection, and evidence is central to securing a successful outcome. The author first conducted a comprehensive review of the implementation details of the six contracts, meticulously verifying the key evidence for each transaction one by one.
(2) Collaborate with local Peruvian lawyers to achieve cross-border enforcement and break down geographical barriers.
Winning an arbitration is only the first step; the core challenge in cross-border rights protection lies in how to turn a mere arbitral award into actual enforceable claims. To safeguard the interests of Chinese company A, and given that all of Peruvian company S’s assets and business activities are located in Peru, the working group has developed an enforcement strategy for cross-border proceedings that involves collaboration between Chinese lawyers and local Peruvian attorneys, coupled with precise asset investigations.
(3) Simultaneously advance China Export & Credit Insurance Corporation claims processing to compensate for customers’ substantial losses.
Cross-border enforcement processes are lengthy and fraught with uncertainty. To prevent customers from facing financial strain due to prolonged waiting periods, the working group initiated arbitration proceedings while simultaneously advancing China Export & Credit Insurance Corporation (SINOSURE) claims processing. The core requirement for SINOSURE’s claim settlement is legal documentation proving the buyer’s default and the amount of loss incurred. In this case, the final arbitration award and the acceptance document issued by the Peruvian court were successfully converted into insurance documents. SINOSURE determined that the incident fell within the scope of insurance coverage and fully compensated Chinese company A for the outstanding payment. This achievement demonstrates that the rights protection effort has not yet concluded and that the losses have been effectively remedied.
III. Highlight of the Case: Three-Dimensional Coordination Tackles Pain Points in Cross-Border Rights Protection, Helping Clients Recover Their Losses
The successful handling of this case not only helped China’s Company A avert substantial economic losses but also demonstrated the comprehensive capabilities of our professional legal team in the field of cross-border commercial dispute resolution. The core highlights of this achievement lie in breakthroughs across three key dimensions:
IV. Lawyer’s Advice: The Three Core Points for Protecting Your Rights in Cross-Border Trade Disputes
Drawing on the experience gained from handling this case, our legal team offers the following three key recommendations to address common contract breach disputes in cross-border trade, helping businesses prevent risks and efficiently protect their rights:
V. Summary
From the onset of the contractual dispute to winning the arbitration—obtaining 100% support for the principal amount of the goods payment and a reasonable determination of interest—and finally realizing the debt through cross-border collaboration, this case fully demonstrates the closed-loop process of international commercial dispute resolution. It profoundly illustrates that, in today’s world where economic globalization coexists with regional risks, the protection of Chinese enterprises’ rights can no longer be confined merely to a favorable arbitration award. The true value of international arbitration ultimately lies in the enforceability of its awards and the effectiveness of their execution. This not only requires enterprises to excel in legal argumentation and evidence management during arbitration proceedings but also demands that they possess strategic execution capabilities with a global perspective. This means, on the one hand, being adept at leveraging... New York Convention On the one hand, multilateral frameworks are being used to locate debtors’ assets and seek recognition and enforcement in nearly a hundred jurisdictions worldwide. On the other hand, it is also essential to flexibly employ a variety of commercial and legal tools—including credit insurance, debt restructuring, and asset tracing—to create a comprehensive strategy for realizing creditors’ rights.
In the international commercial arena of the future, the competition will not only hinge on business acumen and legal expertise but also on the ability to integrate global resources and enforce cross-border judgments effectively. Only by extending the lifecycle of dispute resolution—from merely responding to disputes to actively securing rights and from winning awards to ensuring their full enforcement—can Chinese enterprises truly build an impregnable defense of their interests in the turbulent and ever-changing global market. Moreover, by transforming international arbitration—a powerful legal tool—into a cornerstone for safeguarding overseas assets and underpinning their global strategies, Chinese businesses can confidently navigate the complexities of the international marketplace. If your company is facing cross-border trade disputes, breaches of foreign contracts, or difficulties in cross-border enforcement, we invite you to reach out to us. We’ll provide you with tailored legal solutions and work closely with you to overcome the challenges of protecting your rights across borders!
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