HKTDC Sourcing Supplier Dispute: What Should You Do?

If you purchased goods from a Chinese supplier through HKTDC Sourcing and the supplier failed to deliver, delivered defective products, refused to provide a refund, or otherwise breached the transaction, you may have several options.

The appropriate response depends on how the transaction was structured, how you paid the supplier, what was agreed, and what evidence you have.

HKTDC Sourcing is a B2B sourcing platform operated by the Hong Kong Trade Development Council. It provides buyers with access to products, suppliers, quotation requests and communication tools. However, using HKTDC Sourcing does not necessarily mean that HKTDC is a party to the sales contract between the buyer and the supplier.

For this reason, when a serious supplier dispute arises, the key question is often not simply how to contact HKTDC, but what legal rights you have against the Chinese supplier and how your loss can be recovered.

What Is an HKTDC Sourcing Supplier Dispute?

HKTDC Sourcing helps international buyers identify manufacturers, suppliers and products.

A supplier dispute may arise when a Chinese supplier:

Fails to deliver the goods;

Delivers only part of the order;

Delivers defective products;

Delivers products that do not match the agreed specifications;

Fails to meet the agreed delivery date;

Refuses to refund a deposit or purchase price;

Fails to provide agreed documents;

Refuses to replace defective products; or

Otherwise breaches the sales or manufacturing agreement.

The first question is not simply:

“How do I complain to HKTDC?”

The more important question is:

What legal rights do I have against the Chinese supplier, and how can I recover my money or other losses?

Step 1: Determine How You Paid the Supplier

Before taking action, determine how the transaction was structured and how payment was made.

This can make a significant difference to your options.

For example, a buyer may:

Find a Chinese supplier through HKTDC Sourcing;

Send an enquiry or request for quotation;

Communicate with the supplier through the platform;

Receive a quotation or proforma invoice;

Negotiate the transaction directly with the supplier;

Sign a sales or manufacturing contract; and

Transfer payment directly to the supplier.

In such a transaction, the buyer’s legal rights will generally depend primarily on the underlying contractual relationship, payment records, evidence and applicable law.

Payment Through a Platform or Directly to the Supplier

The fact that a supplier was found through HKTDC Sourcing does not automatically make HKTDC responsible for the supplier’s contractual obligations.

The actual transaction should therefore be examined carefully.

In many international sourcing transactions, HKTDC Sourcing functions primarily as the place where the buyer and supplier are introduced and communicate.

The actual sales contract may subsequently be concluded directly between the buyer and the Chinese supplier.

This distinction becomes particularly important when the transaction involves a substantial deposit or a large amount of customized goods.

Direct T/T Payment to the Chinese Supplier

A common structure is direct bank transfer.

For example:

The buyer finds a Chinese manufacturer through HKTDC Sourcing;

The buyer contacts the supplier through the platform;

The parties negotiate price, specifications and delivery;

The supplier issues a quotation or proforma invoice;

The parties sign a contract or confirm a purchase order; and

The buyer transfers a deposit directly to the supplier’s bank account.

If the supplier subsequently fails to perform, the dispute may need to be addressed as a contractual claim against the Chinese company.

This is particularly important for:

Machinery and industrial equipment;

Building materials;

Furniture;

OEM products;

ODM manufacturing;

Customized products; and

Other high-value commercial transactions.

Step 2: Contact the Supplier and Attempt to Resolve the Problem

If a problem occurs, you should normally first communicate with the supplier.

However, for a significant dispute, informal discussions should not continue indefinitely.

Your communications should clearly establish:

What was ordered;

What was agreed;

What the supplier was required to do;

What the supplier actually did;

Why the performance was defective or incomplete;

What remedy you are requesting; and

The deadline for the supplier to respond.

If the supplier continues to delay or refuses to resolve the problem, a formal written demand may be more appropriate than continuing ordinary commercial discussions.

Step 3: Preserve Your Evidence

Evidence is often the most important part of a Chinese supplier dispute.

You should preserve the complete transaction record.

Contract Documents

Sales contract;

Purchase order;

Proforma invoice;

Quotation;

Technical specifications;

Product drawings;

Approved samples;

Inspection requirements;

Warranty terms.

Payment Evidence

Bank transfer records;

Payment receipts;

Deposit records;

Refund records;

Supplier bank-account information.

Communications

HKTDC Sourcing messages;

Emails;

WhatsApp;

WeChat;

Other correspondence with the supplier.

HKTDC Sourcing provides buyers and suppliers with communication and enquiry functions, making the preservation of platform communications particularly useful when reconstructing the transaction.

Product Evidence

Photographs;

Videos;

Inspection reports;

Testing reports;

Shipping documents;

Packing lists;

Customs documents;

Records showing the actual condition of the goods.

The more closely the evidence connects the supplier’s promises with the actual transaction, the easier it may be to assess the legal claim.

Step 4: Contact HKTDC Where Appropriate

If a problem arises with a supplier found through HKTDC Sourcing, it may be appropriate to contact HKTDC and report the problem or seek assistance concerning your use of the platform.

HKTDC Sourcing provides customer and sourcing-related support functions, and the platform includes communication and enquiry tools for buyers and suppliers.

However, contacting HKTDC should not be confused with bringing a legal claim against the Chinese supplier.

HKTDC is not the same as a court or arbitral tribunal deciding the buyer’s underlying commercial claim.

The buyer should therefore avoid assuming that a platform complaint will automatically result in recovery of the purchase price or compensation for losses.

Step 5: Do Not Treat Platform Assistance as the Same as a Legal Claim

This distinction is extremely important.

There are usually two different relationships:

The relationship between the buyer and HKTDC as a user of the platform; and

The commercial relationship between the buyer and the Chinese supplier.

A dispute concerning the first relationship is not necessarily the same as a claim arising from the second.

If the supplier has breached the sales contract, the buyer may need to pursue the supplier directly.

This means that even if you contact HKTDC, you should continue to preserve your rights against the Chinese supplier.

What If HKTDC Does Not Resolve the Problem?

If contacting HKTDC does not result in a satisfactory resolution, you should not necessarily assume that the dispute is over.

The next question is whether you have a valid contractual claim against the Chinese supplier.

Important questions include:

Who is the contracting supplier?

What company received the payment?

What exactly did the supplier agree to provide?

Was there a written contract?

Was there an arbitration clause?

Is there a jurisdiction clause?

What law governs the contract?

Where was the contract performed?

What losses can be proven?

Does the supplier have recoverable assets?

These questions are much more important for a potential lawsuit than the fact that the supplier was originally discovered through HKTDC Sourcing.

Can You Sue a Chinese Supplier Found on HKTDC Sourcing?

Potentially, yes.

Finding a supplier through HKTDC Sourcing does not by itself prevent a buyer from pursuing a legal claim against that supplier.

The actual transaction documents need to be reviewed.

For example, if a Chinese company signed the sales contract, received the purchase price and failed to perform its obligations, the buyer may have a contractual claim against that Chinese company.

The appropriate court or arbitration forum depends on the contract, applicable jurisdiction rules and other circumstances.

If the contract contains a valid arbitration agreement, arbitration may be required instead of litigation.

The supplier’s actual Chinese legal entity is also important.

A supplier’s HKTDC Sourcing profile, brand name or sales representative may not necessarily be the same entity that signed the contract or received the payment.

This is why the correct Chinese contracting entity should be identified before commencing legal proceedings.

HKTDC Sourcing Supplier Disputes vs. Direct T/T Disputes

The sourcing platform and the underlying commercial transaction should be treated as separate issues.

Transaction

Initial Approach

HKTDC Sourcing supplier transaction

Review the supplier relationship and underlying contract

Direct T/T payment to Chinese supplier

Review contract, payment and supplier identity

Supplier delivered defective goods

Review specifications, quality evidence and contract terms

Supplier did not ship

Review payment records, contract and delivery obligations

Supplier refuses to refund

Consider formal demand and contractual remedies

HKTDC assistance is insufficient

Consider direct legal action against the supplier

The platform may have helped you find the supplier.

However, for a serious commercial dispute, the underlying legal relationship with the Chinese supplier remains the central issue.

What If the Supplier Delivered Defective or Non-Conforming Goods?

Quality disputes are particularly common in international sourcing.

The key question is usually not simply whether the buyer considers the goods to be “bad.”

The more important question is:

Did the goods conform to what the supplier agreed to provide?

For example, a machinery dispute may concern:

Production capacity;

Technical specifications;

Materials;

Dimensions;

Performance;

Testing requirements;

Installation;

Commissioning;

Warranty.

A building-material dispute may concern:

Material grade;

Dimensions;

Color;

Finish;

Quantity;

Certifications;

Technical standards;

Approved samples.

A furniture dispute may concern:

Dimensions;

Materials;

Color;

Hardware;

Drawings;

Approved samples;

Manufacturing quality.

This makes technical documents and communications with the supplier particularly important evidence in a later dispute.

What If the Supplier Received My Money but Never Delivered?

This can be particularly serious where the buyer has paid a substantial deposit.

The buyer should preserve:

The contract or purchase order;

The proforma invoice;

Bank transfer records;

The supplier’s bank-account information;

Delivery deadlines;

Production records;

Communications concerning production;

Any promises concerning shipment or refund.

If the supplier has stopped responding or refuses to refund the money, the buyer may need to move from ordinary commercial communication to a formal legal demand.

If necessary, litigation or arbitration may then need to be considered.

What Can a China Lawyer Do?

A China lawyer’s role is not simply to contact HKTDC on your behalf.

For a significant supplier dispute, the more valuable role is to analyze the transaction as a potential legal recovery case.

A China lawyer can assist with:

1. Supplier Identification

Determine the actual Chinese legal entity involved in the transaction.

2. Contract Review

Identify the supplier’s contractual obligations and potential breaches.

3. Evidence Analysis

Determine which documents support the buyer’s claim.

4. Loss Calculation

Assess the amounts that may potentially be claimed.

5. Platform Assistance

Where appropriate, help organize the buyer’s position and communications concerning the HKTDC Sourcing transaction.

6. Demand Letter

Send a formal legal demand to the Chinese supplier.

7. Negotiation

Communicate directly with the supplier to seek payment, replacement, refund or settlement.

8. Litigation or Arbitration

Assess and, where appropriate, pursue formal legal proceedings against the supplier.

9. Enforcement

If a judgment or arbitral award is obtained and the supplier does not voluntarily comply, consider enforcement against available Chinese assets.

Common HKTDC Sourcing Supplier Disputes

We assist foreign buyers with disputes involving:

A Practical Approach to an HKTDC Sourcing Supplier Dispute

A high-value supplier dispute should generally be approached in stages:

1. Preserve the evidence

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2. Identify the actual Chinese supplier

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3. Review the contract and transaction documents

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4. Determine how the transaction was paid

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5. Contact the supplier and attempt to resolve the problem

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6. Contact HKTDC where appropriate

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7. Assess the underlying legal claim

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8. Send a formal demand or negotiate

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9. Consider arbitration or litigation

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10. Enforce the judgment or award if necessary

The appropriate path depends on the facts of the individual transaction.

When Should You Contact a China Lawyer?

You should consider obtaining legal advice particularly when:

The transaction value is substantial;

The supplier has received a large deposit;

The supplier refuses to refund your money;

The products are defective or substantially non-conforming;

The transaction involves customized machinery;

The supplier has stopped responding;

HKTDC assistance has not resolved the problem;

You are considering litigation or arbitration;

You need to determine whether the Chinese supplier has recoverable assets.

For a small-value transaction, continued commercial negotiation may sometimes be sufficient.

For a high-value commercial transaction, however, the cost of failing to preserve evidence or choosing the wrong legal strategy can be much greater.

What Should You Do Now?

If you have a dispute with a supplier found through HKTDC Sourcing, do not immediately delete messages, close communication channels, or continue informal negotiations without preserving the evidence.

Collect the available transaction records first.

These may include:

Contract or purchase order;

Proforma invoice;

Payment records;

HKTDC Sourcing supplier information;

Supplier communications;

Product specifications;

Drawings;

Inspection reports;

Photos and videos;

Shipping documents;

Evidence of your financial losses.

The documents do not need to be formally organized before an initial legal review.

The first step is to determine:

What did the Chinese supplier agree to do, what actually happened, what can be proved, and what legal remedies may be available?

Legal Assistance for HKTDC Sourcing Supplier Disputes

We provide China-focused legal support for foreign buyers involved in disputes with Chinese suppliers.

Our services may include initial case assessment, evidence review, HKTDC Sourcing-related dispute assistance, contract analysis, lawyer’s demand letters, supplier negotiations, arbitration, litigation and enforcement in China.

If contacting HKTDC does not resolve the problem, we can also assess the underlying legal claim against the Chinese supplier.

HKTDC Sourcing may be where you found the supplier.

But when a serious commercial dispute arises, the more important question is often what legal rights you have against the Chinese company behind the transaction and how those rights can be enforced.

Legal Contributors

Legal professionals contributing to this article and related legal analysis.

Qiang Lyu

Attorney-at-law (PRC) ｜ Cross-Border Dispute Resolution

Qiang Lyu focuses on cross-border commercial dispute resolution, China supply chain disputes, international trade litigation, and foreign-related debt recovery matters. He has represented and assisted clients from the United States, Japan, South Korea, and Europe in disputes involving Chinese manufacturers, suppliers, and international business transactions.

His practice also includes China company law, intellectual property matters, and commercial contract disputes involving foreign-invested businesses and cross-border commercial activities.

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Email: lvqiang_at_lyuandassociates.com Please replace "_at_" with "@" before sending your email.

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