The strange case of Shyamsunder Agrawal and Deepak Raheja, the two Indian businessman who have caused a rumpus between Beijing and New Delhi, has taken another odd turn. We wrote about the confused details in January, and have become none the clearer about the truth since, but in short, the two were facing some rough local justice in Yiwu, the electronics components trading town, in connection with some unpaid bills before Indian consulate staff intervened to have them removed to Shanghai, where the case could be sorted out in the courts.
The two have since had their passports returned but are barred from leaving the country until the outstanding debt of $1.6 million is cleared. (They claim it is their employer, who has reportedly absconded to his native Yemen, who is responsible.) The Indian diplomatic service has said it can no longer afford to pay for the hotel. Indian press reports say the pair have been thrown out on the street and have gone on hunger strike, demanding to be repatriated. One report says they have threatened suicide if their demand is not met within a week. Chinese officials are insisting they can’t leave the country until the debt is cleared one way or another, as the Shanghai court has ordered though it has yet to make its final ruling.
There may be no greater import to this case than it shows how the civil legal system, for all its recent improvement, remains ill-equipped to handle a case as messy as this. It also throws a light on the realities of conducting commerce in China, especially away from the bright lights of the big international cities and sharp suits of the lawyers and their contracts. This Bystander would wager, with low knowledge but high confidence, that there wasn’t much paperwork around the original transactions. What has been produced in court, the pair say, they signed later and under duress.
China Bystander 
The crux of the matter here is that China will not let them leave until the bill is settled. That’s not quite how we’re used to things in the West, where you can be prosecuted and persued overseas as long as your country of origin has the relevant diplomatic ties. I’m not familar with the various treaties China has signed in this regard, but clearly it appears there is something lacking in China’s diplomatic protocols when incidents such as this arise.
It’s not entirely satisfactory to prevent foreigners leaving when a civil legal dispute occurs, and clearly the link between a civil dispute and the ability for police to retain your passport can be open to abuse. It also prevents the gentlemen concerned making further efforts, back home, to recover the money and put other matters related to this case into action. The way this issue is progressing may end in tragedy, and although the Chinese side might be pragmatic enough to say its a lesson not to rip off Chinese buisnesses, it’s hardly a satisfactory outcome either. This suggests that the way such disputes (which are hardly uncommon) between foreign and Chinese businesses are handled can spin out of control very nastily indeed, and that the current way of dealing with it has serious faults.
Please keep us posted on the developments in this story.
Thanks
A comment on the earlier post on this story indicated that this wasn’t the first such case involving Indian traders and Yiwu merchants. So perhaps making this an exemplary case out of this may have value in itself. Mostly, we think this case shows that a legal remedy that works in the domestic context just can’t be applied as effectively in international cases, and the civil legal system isn’t yet seasoned enough to deal with the differences. We’ll continue to follow this to its conclusion, and hope it doesn’t end as messily as you fear. — CB
The Yiwu incident you highlight is disturbing for two reasons:
1) The Indian being held are employees of the company and are not the owners. Yet they are being held because of a dispute with the owner.
2) India sent a diplomat to Yiwu to provide assistance. He was also incarcerated. That sparked a huge diplomatic spat. He’s now free, but it demonstrates how much the police are siding with the local company.
3) The logical conclusion in this case is that you are guilty by association, not because you yourself have broken the law. Thats a very dangerous precendence.
Interesting analysis of what as of yet are unknown facts. Perhaps Chris can look in his crystal ball and explain just why he believes the two individuals destitute in Shanghai and prohibited from leaving the country.
What evidence does Chris possess showing that the two supposed employees were not, in fact, more than that and directly involved in whatever scam is supposed to have happened? Did you get that information from yet another “exclusive meeting” with a government minister, Chris? 😉
That the Indian diplomat was — supposedly — mistreated is regretable, but it indicates a severe lack of understanding when one states that it is unsatisfactory to prevent a party under civil judgment from departing the jurisdiction. While it may not happen in many European or Western countries, it is pretty much the norm in many other countries.
@John – who sounds rather like a troll, but I’ll pay you the courtesy of a reply – to clarify these are not “unknown facts”. The case has been widely reported in the media and especially in India. The holding of Indian employees against a corporate debt (the owner of the company is Qatari) is not a development any reasonable legal platform would wish to see develop. Besides, shouldn’t the Chinese company have conducted their due diligence and credit checks?
CDE
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