Do PRC Blocking Statutes Excuse Chinese Entities from US Discovery Obligations?

May 12, 2023 | BY

Hugo Yeung

Chinese entities faced with a foreign discovery request may be prevented from complying due to PRC data transfer restrictions. How do U.S. courts address this conflict between new Chinese regulations and the need for document discovery in U.S. litigation?

Credit: GoodIdeas/Adobe Stock

Summary

  • U.S. courts will not excuse discovery obligations just because a foreign blocking statute puports to prohibit the disclosure of information.
  • U.S. courts have consistently denied Chinese defendants' requests to be excused from discovery obligations.
  • Chinese parties have struggled to prove that U.S. discovery obligations are "unduly burdensome" as there is little evidence of PRC blocking statutes being enforced. 
  • U.S. litigation counsel should be vigilant about developments in Chinese authorities' interpretation and application of legislation governing the extra-territorial transfer of information. 

 

Rising tensions between the U.S. and China over economic, technological, and defense issues have made the exchange of information between Chinese and U.S. companies, judicial bodies, and enforcement agencies a hotly-contested issue. 

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