Can a Chinese Court Still Exercise Jurisdiction Over a Project Located Overseas? — A Jurisdictional Reversal That a Construction Company "Never Saw Coming"

2026/10/14

I. A Seemingly "Sure-Win" Jurisdictional Objection

A certain construction company (hereinafter "Company A") became involved in a dispute with a natural person (hereinafter "Individual B") arising out of an overseas construction project contract. Individual B commenced an action before a Chinese court, but Company A, fully confident, raised a jurisdictional objection: the project is located overseas, and under the rule of exclusive jurisdiction over immovable property, the Chinese court has no authority to accept the case.

Company A's logic appeared unassailable — disputes over construction project contracts are governed by jurisdiction rules applicable to disputes over immovable property; wherever the immovable property is located, that is where the court of jurisdiction sits. If the project is overseas, then naturally a Chinese court should not have jurisdiction.

However, the rulings at two levels of court produced a result that Company A "never saw coming."

II. The Reversal: Exclusive Jurisdiction Applies Only to Immovable Property "Within China"

After hearing the case, the court held that all parties to the case were either Chinese nationals or Chinese legal persons, and that, based on the principle of personal jurisdiction (ratione personae), the Chinese court enjoyed judicial jurisdiction. More critically, the provisions of the Civil Procedure Law concerning exclusive jurisdiction over immovable property apply only to civil proceedings in which the immovable property is located within the territory of China. The project at issue was located overseas and therefore did not fall within the category of cases subject to exclusive jurisdiction over immovable property.

Since the matter did not constitute exclusive jurisdiction, it reverted to the general jurisdiction rules governing contract disputes — namely, jurisdiction lies with the court of the defendant's domicile or the place of performance of the contract. Company A's domicile was in a certain city within China, and the court of that locality therefore had jurisdiction over the case.

III. What Exactly Is the "Conflict" in This Case?

Conflict One: Where exactly is the "boundary" of exclusive jurisdiction? Many people assume as a matter of course that whenever immovable property is involved, exclusive jurisdiction applies without exception. But the phrase "location of the immovable property" in the statutory text by default refers to the territory of China. Immovable property located overseas falls outside that scope.

Conflict Two: Does a foreign-related element necessarily cause a Chinese court to "step back"? Quite the contrary. So long as the parties have a connecting point with China, a Chinese court may still exercise jurisdiction on the basis of personal jurisdiction. A foreign-related element does not mean the court "cannot exercise jurisdiction."

Conflict Three: Can difficulty in ascertaining facts serve as a reason to decline jurisdiction? The court's position was clear: the doctrine of forum non conveniens is subject to strict conditions, and the mere fact that the project is located overseas does not automatically exclude jurisdiction.

IV. Attorney's Observations and Recommendations

1. Do not treat "exclusive jurisdiction" as an all-purpose shield. Where a construction project is located overseas, a Chinese court does not automatically lose jurisdiction. Where a party seeks to exclude the jurisdiction of a Chinese court on the ground of exclusive jurisdiction, such an argument will often fail to hold up.

2. For foreign-related construction contracts, jurisdiction clauses must be designed in advance. It is advisable to expressly stipulate in the contract the method of dispute resolution and the court of jurisdiction. If the intention is for an overseas court or arbitral institution to have jurisdiction, a clear and effective provision to that effect should be made, so as to avoid subsequent disputes.

3. Evidence preparation must be "front-loaded." Where a project is located overseas, the difficulty of adducing evidence is indeed considerable. Construction companies should preserve key evidence in advance — contracts, site instructions, settlement documents, quality acceptance records, and the like — and, where necessary, have such evidence notarized and authenticated, so as to be prepared for possible litigation.

4. The involvement of specialist counsel often determines the trajectory of a case. A jurisdictional dispute may appear to be a procedural matter, but in reality it directly affects the convenience and outcome of the substantive hearing. Counsel can assist parties in accurately assessing jurisdictional rules, designing litigation strategy, organizing evidence, and seizing the initiative at the jurisdictional objection stage itself.

V. Conclusion

A project located overseas does not mean a Chinese court "cannot reach it." Exclusive jurisdiction has its boundaries, and a foreign-related element does not amount to jurisdictional immunity. For construction companies, rather than disputing after the fact whether a court "should have jurisdiction," it is better to solidify the contractual terms and evidentiary foundation in advance. After all, the real risk often lies not in the project itself, but in the passivity and unpreparedness that set in once a dispute arises.