China question: How can I win the PR battle in litigation?

1. Choose arbitration. Arbitration hearings are always private and often the very fact of the arbitration will usually also be confidential (depending on the applicable arbitration laws and institutional rules). This will help keep information about the dispute outside the press.

2. Choose to arbitrate (or if necessary litigate) in a neutral and preferably large and sophisticated Chinese city. Judges of neutral cities will not be so influenced by local politics. If your hearing is in one of the larger cities, the judges are usually also more experienced and sophisticated and less likely to be affected by the media.

3. Consider including strict confidentiality provisions in your contractual arrangements. This would preclude your counterparty being able to air your “dirty laundry” before the media.

The above options may not be available to you either because your dispute is not contractual or you have an existing contract that does not include the elements listed above. In these circumstances, it is important to anticipate and assess the damage that might be created to your business and undertake damage control. Damage control can be achieved by using a combination of both experienced international disputes counsel and experienced local counsel. It is important to have both types of lawyers on board as local counsel can identify the local risks but may not be able to see past the local problems, whereas international disputes counsel will have various strategies that they are able to deploy, but may not fully understand the local risks involved.

One of the ways in which negative publicity may be generated is through the media and members of public attending the court hearing. Therefore, you may be able to restrict the amount of publicity by restricting media and public access to the court hearing. According to Article 120 of the PRC Civil Procedure Law (中华人民共和国民事诉讼法), if your claim involves matters of state secrets or personal privacy, the court hearing the case will be closed to the public. If the dispute involves trade secrets, you may request a private hearing.

The investment and employment opportunities brought by foreign investors are valued throughout China. The merits of foreign investment, however, may not always be at the forefront of people's minds in contentious circumstances. The right team of legal and other advisors can help you structure your contractual relationships so that you can avoid, or at least mitigate, any negative publicity by participating in a private arbitration in a neutral venue. They can also assist with framing your claim and delivering your message to the public, which will help to remind the judge and the public of all of the good that you have done in the community.

May Tai, Herbert Smith, Beijing

The specialist perspective

While you cannot prevent the other side from launching a negative campaign against your company, the following tips will help you elevate the tone of public discourse throughout the litigation process.

First, work with your legal team to identify the most appropriate court in which to file your complaint, one that will at least be impartial, if not sympathetic, to your case. Most cases are initially filed at the basic or intermediate people's court level, while appeals can be escalated to higher courts. Track records vary not only province by province, but even district by district.

Second, know which key stakeholders (supporters and detractors) may influence the court's ruling. These include government agencies, industry associations, media, academics and other opinion leaders. Chinese social media, such as Weibo, can also fuel and propagate negative public opinion, placing pressure on the court's decision.

Third, inform key government contacts before filing suit. Officials often cannot speak with you once the legal process begins. Contacting these people in advance allows you to tell your story and explain not only your position, but also the steps that you took to avoid litigation. There is a common misperception that foreign companies are overly litigious, which builds additional sympathy for Chinese defendants. This is also a gesture of professional courtesy. Your legal team will need to carefully plan the timing and setting of this engagement and anticipate the risks of a potential leak to the opposing side. In addition, never request or accept offers to facilitate a favourable ruling.

Fourth, identify opportunities to level the playing field. This includes involving your home government and senior executives as appropriate and engaging credible third parties to move the dialogue beyond attacks against your company. In addition to emphasising the positive commitments your company continues to make in China, discuss steps that are being taken by both industry and government to ensure sustainability, consumer and end user welfare, international cooperation, or other issues of mutual interest.

Fifth, remember to rise above the fray. Many companies are attacked in the court of public opinion not on the merits of their cases, but on the perceived tone of their response, which can be portrayed as arrogant and anti-China. This means having a clear, consistent and compelling point of view around your legal position while taking steps to avoid becoming the story. Imagine the headlines that could be generated by your response and pause before communicating.

Sixth, know your audiences and ensure that those who matter most to your business are hearing your messages. Many companies focus so much on media and overall public opinion that they forget to engage their most important audiences. Communicate regularly with employees, customers and business partners. Focus on the positive messages you can share, rather than defending your company against the negative and thank them for their support.

Finally, be prepared for any contingency. Conduct planning and prepare detailed responses in advance. Also, consider how you would handle common issues such as leaks, counter suits, unequally enforced gag orders, pressure to settle out of court, smear campaigns and delayed verdicts. Monitor developments and ensure that you have representatives in the courtroom to exchange name cards and begin building relationships with court reporters and other media.

Jennifer Hart, APCO Worldwide, Beijing, Chicago and Washington DC