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Business Articles Awards > Asian Antitrust

Foreign Sovereign Compulsion: A Widening Split on Chinese Exports

Christopher B. Hockett et al., Davis Polk, 2016

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A team of attorneys from Davis Polk & Wardwell LLP presented the January Monthly Update for In-House Counsel. The followingarticle summarizes one of the recent developments discussed during the program.Three recent price fixing cases have analyzed the question of whether and to what extent price and output restrictions imposed by the Chinese government can serve as a defense to antitrust claims under U.S. law. In thefirst case (involving the export of vitamin C from China to the United States), a New York district court rejectedthe defense on summary judgment and forced a trial, which the defendants lost. In the second case (bauxite), aPennsylvania district court upheld the defense and granted summary judgment in the defendants’ favor. And in thethird case (magnesite), a district court in New Jersey has indicated that it will likely give deference to the Chinesegovernment’s position on its control of Chinese export prices, but it has not yet ruled on the question.Below, we explore some implications of these different outcomes, including the possibility of further suits againstChinese exporters subject to export controls, the prospect of forum shopping by plaintiffs in such lawsuits, andthe apparent split between the judiciary and executive branches of government in their interpretation of China’sactions on matters of international trade.

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