A Chinese OEM agent for a U.S. company unilaterally terminated its partnership and representation of the US partner and demanded a retroactive ten year rental payment, unsupported by any contract. The OEM agent also held the raw materials and semi-finished products hostage.
The “first call” resulted in the development of a comprehensive action plan which included the placement of a surveillance team to monitor the safety of the high-value raw materials and semi-finished products; coordination with local police and government officials regarding the extortion; gathering evidence and preparation for potential litigation; delivery of demand letters to document and educate the parties regarding the legal options and consequences and lay the foundation for possible settlement; and coordination with customs officials over possible damages to the bonded goods and raw materials in violation of PRC customs rules. In addition, communication channels were established to influence the internal discussions within the former local partner.
The parties reached a settlement agreement through our combined efforts and the official and unofficial mediation of various PRC government stakeholders. The seized goods were released within a week.