Background of the Issue

Bank A is a domestic bank in China, while Company B is a foreign company with no domicile in China. The country where Company B is located is a member of the "Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters" (hereinafter referred to as the "Hague Service Convention"). The two parties signed a loan contract, which stipulated that disputes related to the contract would be under the jurisdiction of Chinese courts. Later, Company B defaulted on the loan, and Bank A filed a lawsuit against Company B in a Chinese court.

1. If both parties have agreed on a service of process clause in the contract, will China Court accept it in litigation? What should be considered when agreeing on such a clause?

In foreign-related financial and civil commercial disputes, the service of process clause in the contract reflects the mutual agreement of both parties, who can foresee the legal consequences of litigation. Therefore, such clauses are generally accepted by China Court. However, they must not violate mandatory provisions of Chinese laws and administrative regulations, infringe on national sovereignty, security, or public interest, and must be permitted by the laws of the recipient's country.

When agreeing on a service of process clause, the following should be considered:
Clear service information: The clause should specify the names, addresses, phone numbers, etc., of the parties, ensuring accuracy and reliability.
Scope of applicability: The clause should clearly state whether it applies to first instance, second instance, retrial, and enforcement proceedings.
Legal consequences: The clause should clearly outline the legal consequences to ensure both parties are aware of the implications.
Verification with foreign laws: The validity of the clause should be checked against the laws of the recipient’s country to prevent invalidation due to local legal restrictions.

2. If the contract stipulates a mailing address for Company B, what additional conditions must be met for the China Court to serve documents by mail? Can other methods of service be agreed upon in addition to mailing?

The China Court may serve Company B by mail only if the laws of its country permit this method. To confirm this, international treaties or bilateral judicial assistance agreements can be consulted. If Company B’s country is a member of the Hague Service Convention and has not objected to service by mail under the convention, then mailing is considered legally valid. However, if the country has made a reservation against service by mail, then mailing would not be legally effective.
Parties may agree on other methods of service besides mailing. Except for public notice service, China Court may use multiple service methods simultaneously, with the date of service determined by the first successful method.

3. If the contract allows electronic service to Company B, will a China Court directly adopt electronic service? What should be considered when agreeing on electronic service?

Even if Company B has agreed to electronic service in the contract, a China Court can only use this method if the laws of Company B’s country do not prohibit it. Since both China and Company B’s country are members of the Hague Service Convention, if Company B’s country has objected to service by mail, it is presumed that electronic service is also not allowed. Conversely, if there is no objection to mail service, electronic service is presumed to be allowed.
When agreeing to electronic service, the following should be considered: 
Verify legality: Confirm in advance that the laws of Company B’s country permit electronic service.
Specify service details: Clearly outline the method of electronic service in the contract, ensuring that the provided email or instant messaging account is accurate, authentic, and valid. 

4. Under what circumstances can a China Court directly serve documents on a foreign party within China?

A China Court can directly serve Company B in China under the following circumstances: 
Company B has a wholly-owned enterprise, representative office, or an authorized business agent in China.
Company B has a legal representative or key personnel present in China, including but not limited to the chairman, executive director, or general manager. 
If Company B has appointed a litigation agent during the proceedings, the China Court may serve documents directly to the agent.
When directly serving documents, the court must verify the recipient’s identity through a passport or other identification documents and retain copies as evidence.

5. If none of the above methods are effective, can a China Court serve Company B abroad? If so, how will this be done?

Yes, the China Court can serve Company B abroad through an international service request. If Company B has no domicile in China and does not meet the conditions for direct service, the court may use:
Bilateral judicial assistance treaties or multilateral conventions
Diplomatic channels
Chinese embassies/consulates for Chinese nationals
Since both China and Company B’s country are members of the Hague Service Convention, the China Court will follow the procedures stipulated in the convention.

6. If a foreign central authority requests payment for service, must Bank A bear the cost? If so, how should it be paid?

In foreign-related financial and civil commercial cases, if the foreign central authority charges a fee for service, the applicant (Bank A) must bear the cost. If prepayment is required, a remittance draft should be sent along with the documents. If no prepayment is required, payment should be made after service is completed via a remittance draft.

7. If all service methods fail, under what conditions can the China Court use public notice service? What is the time period for public notice service?

Public notice service can only be used if all other methods fail. In foreign-related financial and civil commercial cases, the period for public notice service is 60 days, after which service is deemed effective.

8. After receiving the complaint and related materials, what are the deadlines for Company B to submit a defense and evidence? Can Company B request an extension?

As a party without domicile in China, Company B has 30 days from receiving the complaint to submit a defense. The evidence submission deadline can be agreed upon by both parties with court approval or set by the court, with a minimum period of 15 days.
Company B may request an extension of the defense period and evidence submission deadline, subject to court approval.

9. If Company B wishes to appeal after the first-instance judgment, what is the appeal period? Can Company B request an extension?

If Company B has no domicile in China, the appeal period is 30 days from the date of receiving the first-instance judgment. Company B may apply for an extension, but approval is at the discretion of the court.