Recovering RMB 1.5 million in sales commission: a China commercial dispute

How a sales commission dispute became a court case — and why the agreement mattered.

A sales intermediary can spend months finding buyers, presenting samples and negotiating terms, only to discover that the manufacturer intends to keep the customers and withhold the commission. Where the parties have relied heavily on personal trust, proving what was promised can become more difficult than doing the original sales work.

MYRON TRADE helped arrange legal representation in a Chinese commercial dispute involving approximately RMB 2 million in unpaid sales commission. The customer ultimately recovered RMB 1.5 million. This is one specific case, not a prediction of what a court will decide in another dispute.

How the disagreement developed

Our client was a company registered in China with wholly foreign ownership. Its team introduced distributors and customers to another China-registered trading company, which also had foreign shareholders. They arranged meetings, showed samples, discussed prices and helped develop sales.

The commercial relationship worked with end-customer contracts being signed directly by the company that owned the goods. That initially seemed practical. Later, when substantial commission had accumulated, the goods owner decided to continue selling to those customers without the intermediary and refused to pay the commission claimed.

A direct contract between supplier and buyer does not, by itself, resolve whether the intermediary is entitled to compensation. The dispute depends on the arrangement between the companies, the work actually performed and the available evidence.

From the initial claim to the money arriving

We connected the client with partner lawyers in China and helped organise the legal work. The commercial arrangement for that assignment involved a modest initial legal fee and a success-related component.

At first instance, the court supported RMB 1 million rather than the claimed two million. The defendant appealed. Our client's side also challenged the outcome and continued pursuing a higher amount.

The appeal resulted in an award of RMB 1.5 million. Enforcement then followed: the debtor's accounts were frozen and the awarded amount was transferred to the client's company bank account.

There is a crucial difference between receiving a favourable court judgment and actually collecting the debt. In this case, the funds were recovered. That outcome depended on the facts, legal process and enforcement measures available in the particular dispute.

Documents worth preserving before a conflict arises

This is a practical record-keeping checklist, not a statement that any particular court must accept each document. A licensed Chinese lawyer should assess the evidence and applicable law in an actual dispute.

What can be agreed before the first sale

Where remuneration depends on customer introductions, spell out which customers count, which orders generate commission, how sales are confirmed and when payment falls due. Address what happens if the supplier later sells directly to those same customers.

It is also useful to agree on access to relevant transaction information. Without a workable reporting mechanism, the intermediary may not know what the supplier sold or how to calculate the fee.

A dispute does not always start with a lawsuit

Before litigation, reconstruct the timeline, collect the documents and separate proven amounts from promises that exist only in conversation. That preparation may support a serious negotiation, or it may show that legal proceedings are necessary. Either way, an accurate claim calculation is more useful than a general assertion that the other party has behaved unfairly.

Consider enforcement prospects too. A favourable judgment is of different commercial value if the debtor has no accessible assets or payment will be difficult to recover. Ask counsel about this early, not only about the chances of winning at trial. In the case described here, enforcement ultimately led to payment into the client's account.

Our role in resolving business disputes

MYRON TRADE organises legal support in China through appropriately qualified partner lawyers and helps customers collect records and coordinate communication. For new business relationships, supplier and company verification may reduce some risks, although even a legitimate, established company can become involved in a commercial disagreement.

If you need an assessment, prepare the contracts, correspondence, timeline, customer list and a clear calculation of the claim. The first useful step is an informed review of the actual documents, not an immediate promise about the result.