5 Elements for Chinese Companies trading into the UK: Part (5)

• Published date: 23 October 2019
• Author: Valentine Kerboull,Dorothy Murray
• Citation: jd0077
• Date: 23 October 2019
• Subject Matter: International Economic Law

2020/11/2 5 Elements for Chinese Companies trading into the UK: Part (5) | China Law Insight

https://www.chinalawinsight.com/2019/10/articles/compliance/5-elements-for-chinese-companies-trading-into-the-uk-part-5/# 1/2

CHINA LAW INSIGHT

5 Elements for Chinese Companies trading into

the UK: Part (5)

By King & Wood Mallesons on October 23, 2019

by：Dorothy Murray、Valentine Kerboull

Five Elements for Chinese Companies trading with UK counterparts Part 5: Earth

In our work with international companies supplying goods to the UK, we see a number of

common issues arising regularly. In our previous articles, we explained what happens if a

UK customer hits financial difficulties and the powers of insolvency practitioners. In this

last of five articles based on the five elements of the Wu Xing, we take the theme

of Earth and explain the options to get paid by an insolvent customer, completing the

business as usual cycle of supply and payment and thereby restoring balance to your

business.

Earth: how to ensure your customer’s insolvency leaves a sweet not a sour taste in

the mouth and get paid in the event of insolvency

Absent a retention of title clause (or any other protective clause in a contract –

see Part 1 in this series, a creditor of an insolvent company has the following options:

1. A creditor should file a proof of debtin the insolvency process, supported by

evidence such as the sales contract, proof of delivery and unpaid invoices. Aside

from filing a proof of debt, in administration and liquidation, creditors are usually

barred from starting proceedings against the company.