Financial services litigation—China—Q&A guide
Financial services litigation—China—Q&A guide

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Financial services litigation—China—Q&A guide
  • 1. What are the most common causes of action brought against banks and other financial services providers by their customers?
  • 2. In claims for the mis-selling of financial products, what types of non-contractual duties have been recognised by the court? In particular, is there scope to plead that duties owed by financial institutions to the relevant regulator in your jurisdiction are also owed directly by a financial institution to its customers?
  • 3. In claims for untrue or misleading statements or omissions in prospectuses, listing particulars and periodic financial disclosures, is there a statutory liability regime?
  • 4. Is there an implied duty of good faith in contracts concluded between financial institutions and their customers? What is the effect of this duty on financial services litigation?
  • 5. In what circumstances will a financial institution owe fiduciary duties to its customers? What is the effect of such duties on financial services litigation?
  • 6. How are standard form master agreements for particular financial transactions treated?
  • 7. Can a financial institution limit or exclude its liability? What statutory protections exist to protect the interests of consumers and private parties?
  • 8. What other restrictions apply to the freedom of financial institutions to contract?
  • 9. What remedies are available in financial services litigation?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to financial services litigation in China published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2020).

Authors: Tian Yuan Law Firm—Rachel Li; Xiaodong Zhu

1. What are the most common causes of action brought against banks and other financial services providers by their customers?

In China, for this chapter, excluding Hong Kong, Macau and Taiwan, the causes of action for civil and commercial cases can be found in the Provisions on Causes of Action for Civil Cases, which was promulgated by the Supreme People’s Court in 2008 and amended in 2011. The current system of causes of action comprises 10 primary categories, including personality rights, property rights, torts, disputes over contracts, disputes over intellectual property rights and competition.

Based on our case study, the most common causes of action brought against banks and other financial services providers by their retail and institutional customers in the Chinese jurisdiction include disputes over:

  1. financial loan contracts;

  2. contracts for wealth management;

  3. contracts for savings deposits;

  4. securities transaction contracts;

  5. securities frauds (such as securities insider trading and false representation);

  6. trusts; and

  7. negotiable instruments.

Also, there are no common law claims as China is not a common law country.

2. In claims for the mis-selling of financial products, what types of non-contractual duties have been recognised by the court? In

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