Exit restrictions in Chinese civil litigation

Exit restrictions can be imposed by courts to prevent a debtor from escaping

A foreign national, e. g., who owes money to a Chinese creditor can be prevented from leaving the country until the debt is (at least partially) paid

Who is affected?

Exit restrictions can be applied to natural persons, in case of a company, to the ‘legal representative’
For organisations, the ‘principal head’ is responsible
Certain provisions extend to the scope of application to ‘persons in charge’
Due to unclear legal definition, this could even be a higher manager

Exit restrictions can be imposed as enforcement measure, which aims to enforce existing court decision
Exit restrictions can also be imposed as preservative measure, which is an injunction imposed during litigation
Courts restrict exit of the defendant upon application by the plaintiff
Applications are only checked formally

Apart from China, only few countries apply exit restrictions in civil litigation
Exit restrictions are often decided upon without substantive examination, although they infringe on personal freedom and should be used as last resort
Preservative measures were originally intended to only preserve the asset in dispute, but courts developed the application to also include exit restrictions
Scope of application of exit restrictions is not conclusively clarified
Unpredictable restrictions may deter foreign companies from investing

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