Which language version of a bilingual China contract prevails?

Whichever version the contract nominates, so check that clause in both languages: Chinese-drafted contracts often name the Chinese text, sometimes only in the Chinese. Where the versions are agreed to be equally authentic, China’s Civil Code presumes they mean the same, and an inconsistency is interpreted from the related clauses, the contract’s nature and purpose, and good faith (Article 466).

A bilingual contract is not one document in two languages. It is two documents that are supposed to match, and in our experience they often do not. This is rarely deception. The Chinese text is usually the working draft; the English is produced afterwards; then a term is amended in one language and not the other, and nobody reconciles them because the negotiation has moved on. The result is a contract where the two columns impose different obligations.

What does Chinese law say when the versions differ?

One Civil Code provision addresses it, and it covers only one case. Where a contract is made in two or more languages and the parties agree the versions have equal effect, the Civil Code presumes the words in each version have the same meaning. Where they are inconsistent, they are interpreted from the contract’s related clauses, its nature and purpose, and the principle of good faith (Article 466).^⁠[1]

That is a rule for resolving an argument, not a way to avoid one. A clause that nominates one version as prevailing is a term of the contract like any other, and it is the first thing to find, in both versions.

What if the contract says nothing about language?

Then the general rule for a disputed term applies (Civil Code, Article 466, first paragraph).^⁠[1] The Supreme People’s Court’s interpretation of the Contract Book tells a court to start from the ordinary meaning of the words, read with the related clauses, the nature and purpose of the contract, custom and good faith, and with reference to the background, the negotiations and how the parties actually performed (Article 1).^⁠[2] Each of those is evidence, which is why a silent contract is a dispute waiting to be had rather than a protection.

Which language does a Chinese court or CIETAC work in?

A people’s court hearing a foreign-related civil case uses the spoken and written language in common use in the PRC, which in practice means Chinese (Civil Procedure Law, Article 273).^⁠[3] Foreign-language written material goes in with a Chinese translation; if the parties dispute that translation, they jointly appoint a translation agency, and if they cannot agree on one the court chooses it (Supreme People’s Court interpretation of the Civil Procedure Law, Article 525).^⁠[4] In a Chinese court, in other words, the English version arrives as a translated exhibit.

Arbitration is more flexible. Under the CIETAC Arbitration Rules, the parties’ agreement on the language of the arbitration prevails; without one, the language is Chinese, though CIETAC may decide on one or more languages after considering all the circumstances, including the language of the contract. Once formed, the tribunal may set the language again, and the tribunal or CIETAC’s Arbitration Court may ask for Chinese or other translations of documents (Article 84).^⁠[5] A language clause in the arbitration agreement is worth having for that reason.

What does your contract’s clause mean in practice?

What your contract says	What it means in practice
“The Chinese version shall prevail”(以中文文本为准)	The contract itself says the Chinese governs where the versions differ. Check everything you rely on against the Chinese.
“The English version shall prevail”	Favourable to you, but confirm the clause appears in the Chinese text too, and says the same thing there.
“Both versions are equally authentic”	Article 466 applies: the versions are presumed to mean the same, and any divergence is resolved by interpretation.⁠[1] The clause that looks fairest is the one that creates the most argument.
Silent on the point	The general interpretation rule applies, and the evidence includes the negotiations and how the parties performed.⁠[2]
Different answers in each version	The most serious finding available, and it is not rare. It usually means the versions were amended separately.

Where do the versions usually diverge?

• Payment days, and what event starts the clock.
• Performance deadlines, and whether they run from signature, from payment or from an approval.
• Liability caps and what sits outside them.
• Ownership of intellectual property and work product: in our experience often addressed in the Chinese text only.
• The dispute-resolution forum, and occasionally the governing law itself.

What should you do about it?

The differences are a question of fact: set the versions side by side clause by clause, in both directions, and list every place they do not correspond. What each difference means for your business, and what to ask to change, is a commercial judgement that turns on the deal. Whether a clause is valid or enforceable under the governing law is a separate, legal question for a qualified lawyer, and arriving at that conversation with the differences already identified makes it shorter and cheaper. The other commercial checks are in what to check in a China contract before signing.

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