2025.11.07
JunHe recently represented Korea Co., Ltd. ID Health Industry Group (Korea ID Health) in an almost decade-long series of joint venture disputes with a health investment company under a well-known domestic private enterprise (hereinafter referred to as 'the health company'). Under the auspices of the Supreme People's Court, a comprehensive global mediation agreement was reached. This agreement successfully dissolved the complex cross-border cross-shareholding relationship between the two parties. The client not only recovered its original overseas transferred equities but also smoothly exited the Sino-foreign joint venture in China, achieving a complete termination of the joint venture relationship and a successful exit from cross-border investment for both parties.
In 2016, the client established a strategic partnership with the health company to jointly explore the Chinese medical aesthetics market. According to the joint venture structure, the health company invested RMB 290 million overseas to acquire 30.52% of the client's equity. The two parties established a Sino-foreign joint venture in China, with the client investing RMB 240 million for a 40% stake and the health company investing RMB 360 million for a 60% stake. During the operation of the joint venture, differences in business philosophies led to the loss of the cooperative foundation, and the health company transferred the registered capital of the joint venture through transactions without board approval, resulting in the disputes.
Faced with a governance deadlock, JunHe intervened before initiating litigation procedures, systematically designing and implementing a response plan for the deadlock and laying a solid foundation for subsequent litigation strategies. JunHe developed a meticulous multi-line dispute resolution strategy. Over nearly a decade, JunHe successively represented the client in a series of litigation and arbitration procedures, including entrusted management disputes, shareholder information rights litigation and shareholder capital return litigation. The shareholder capital return litigation was critical due to legal issues such as the governance of Sino-foreign joint ventures and the determination of shareholder responsibilities, with a significant disputed amount (RMB 310 million). This coincided with major amendments to the Company Law and the case was reviewed by the Supreme People's Court during its trial at the Shanghai No.2 Intermediate People's Court in 2024. It was publicly heard at the Shanghai International Commercial Court in 2025, with over 80 attendees, including representatives from the National People's Congress, foreign experts, foreign investment associations, arbitration institutions, mediation institutions, and university faculty members and students.
The trial attracted significant attention and had two main characteristics: first, the direct review by the Supreme People's Court demonstrated the highest judicial authority's emphasis on complex foreign-related commercial cases and judicial guidance for unified legal application; second, the trial served as a public demonstration of the Chinese International Commercial Court and its highly standardized and professional trial procedures. It demonstrated JunHe's ability to examine complex cross-border facts, received high praise from domestic and foreign guests and peers, and showcased the credibility of the Chinese judiciary in international commercial dispute resolution. It was reported that, "[the] trial was presided over by Shen Hongyu, the Chief Judge of the Fourth Civil Division of the Supreme People's Court and Judge of the International Commercial Court. The half-day trial process was efficient yet rigorous, fully demonstrating the outstanding trial management ability of the judges of the Chinese International Commercial Court. The attending lawyers also exhibited a high level of professional competence. It can be said that today's trial represents the highest level of Chinese judicial adjudication, greatly benefiting the attendees". (Excerpt from the official WeChat report of the Shanghai First Intermediate People's Court)
After the trial, under the leadership of the Supreme People's Court, the parties underwent multiple rounds of negotiations. JunHe's team, with its strong grasp of the legal issues in the case, deep understanding of the client's commercial demands, and excellent negotiation skills, ultimately facilitated a final settlement between the parties.
This case was a typical example of how to successfully resolve cross-border joint venture disputes through a composite strategy of transaction planning + litigation-driven + judicial mediation. After the Supreme Court trial, multiple legal media companies reported on the case with headlines such as 'The Supreme Court's International Commercial Court Resolves Cross-Border Cross-Shareholding Disputes Between Chinese and Foreign Companies, Using Mediation to Help Chinese and Foreign Enterprises Move Forward ' (Legal Daily, July 26, 2025, Page 3) and 'International Commercial Dispute Resolved After Nearly Ten Years of Grievances, Supreme Court's 'Comprehensive Plan' Sets a New Benchmark for Dispute Resolution—"This is a Win-Win Result!"' (Front page of the People's Court Daily, July 26, 2025). The entire case covered the full lifecycle of the joint venture enterprise, including establishment, operation, deadlock resolution, dissolution and exit, and cross-border capital return, integrating transaction structure design and litigation arbitration strategies. JunHe collaborated closely with the overseas lawyers, effectively addressing issues of legal application across multiple jurisdictions, demonstrating outstanding cross-border dispute resolution capabilities. Through a decade of professional companionship and effort, JunHe helped the client achieve its core commercial goals, and earned high praise for its forward-looking strategies, cross-jurisdictional coordination abilities, and professional resilience in difficult negotiations.
The lead partner for this case was JIN, Xinghui, and the main partner was QI, Da (David). The main project members included CHEN, Yuwei, SHEN, Cheng and HAN, Wenji.
