DeHeng Achieved Successful Resolution of Major Construction Dispute, Saving Client Nearly RMB 100 Million

2024-04-24

DeHeng recently secured favorable outcomes for a well-known publicly listed company and its controlling shareholder (collectively referred to as the “Client”) in a series of disputes involving a construction contract with a Chinese construction and development company (referred to as the “Counterparty”). The disputes, centered on a major urban complex construction project, were successfully concluded with court-issued execution notices.

The urban complex project, located in an international eco-business district, spans over 130,000 square meters with a total construction contract value exceeding RMB 230 million. Acting as the project owner and employer, the Client alleged that the Counterparty, as the general contractor, engaged in several breaches of contract and unlawful conduct during the project, and refused to rectify issues and resume work. This resulted in significant delays and a prolonged project suspension. Consequently, the Client initiated legal action seeking contract termination and holding the Counterparty accountable for the associated damages. The Counterparty denied these claims and countersued, demanding over RMB 130 million in compensation.

Lawyer Zhang Lu and his team at DeHeng’s Shanghai Office served as the Client’s dedicated legal advisor and litigation counsel. The team provided diligent and efficient professional legal services throughout the proceedings. Following comprehensive litigation efforts in both the first and second trials, the court fully endorsed DeHeng’s arguments, ruling in favor of the Client. The verdict upheld the Client’s primary claims, including contract termination, payment of liquidated damages for construction delays, compensation for overdue site clearance, and the return of project documentation. Additionally, the court determined that the payable project fees were substantially lower than the Counterparty’s claimed amount, ultimately saving the Client over RMB 90 million in potential losses. During the enforcement phase, DeHeng facilitated the smooth execution of settlement, site clearance, and project handover, ensuring a successful resolution for all parties involved.