Decoding the puzzle: Chinese culture, familial transfers, and disputes in Western courts

Abstract

More and more Chinese live in Western countries nowadays and many disputes over transfers between Chinese family members are brought to Western courts. Generally, little documentary evidence on such transactions is available and the oral evidence is commonly divergent as to what was agreed and what happened. Western judges are faced with the puzzle whether the transfer was a gift, a loan, or an equity investment. This article elaborates on the relevant Chinese cultural dimensions and the recent developments. It discusses the cultural relevance in determining the nature of such transfers and investigates whether clearly established Chinese cultural norms could be admissible evidence aiding the interpretation, or even implied terms, of the transaction. It argues that Chinese culture should be seriously considered in assessing the credibility of Chinese witnesses. This article critiques the prevailing common law presumptions, and proposes an analytical model aiming to assist Western judges and lawyers to assess the cultural influence properly for better answers to the puzzles.