An Italian chef bought a restaurant in Suzhou for 500,000 RMB from compatriots in 2022 but withheld payment, citing undisclosed unpaid capital. After a lawsuit and appeal, the Suzhou Intermediate People's Court mediated a settlement in December 2025, involving installment payments and an apology, ending the three-year dispute.
Source: OT-Team(G), 最高人民法院
On February 10, an Italian national identified as "Lao Yi" traveled to the Suzhou Intermediate People's Court to personally express his gratitude to judges in its foreign-related commercial tribunal, following the successful mediation of a long-running business dispute involving an Italian-owned restaurant in eastern China.
From Italian Cuisine to Corporate Conflict
The case traces back to 2017, when an Italian father and daughter, referred to as "Lao Su" and "Xiao Su," established a foreign-invested company in Suzhou, located in Jiangsu, China. With registered capital of €50,000, each held a 50% stake. Their business centered on operating an authentic Italian restaurant.
As operating pressures grew and long-term residence in China became impractical, the pair decided to transfer their shares to Lao Yi, a fellow Italian and experienced chef who had worked at the restaurant for years.
In June 2022, the three parties signed a bilingual Chinese-English equity transfer agreement. The contract stipulated that Lao Yi would acquire all shares for RMB 500,000. Notably, the agreement contained a jurisdiction clause stating that disputes should first be resolved through negotiation and, failing that, be brought before the people's court where the company was registered — a provision that later proved decisive.
According to presiding judge Han Xiaoan, deputy chief judge of the Suzhou International Commercial Court, the parties' choice reflected more than convenience. Having lived and conducted business in Suzhou for years, they had developed strong trust in the Chinese judicial system.
Payment Dispute Emerges
Following the agreement, share registration changes and operational handovers were completed smoothly. However, after the payment deadline passed, Lao Yi failed to pay the agreed transfer price.
"We repeatedly contacted him, and he always said the restaurant was struggling financially," Xiao Su later recalled. "We had no choice but to file a lawsuit."
In early 2024, the father and daughter sued, seeking payment of RMB 500,000 plus overdue interest. The first-instance court ruled in their favor.
Lao Yi immediately appealed, arguing that the sellers had failed to disclose a crucial fact: the registered capital had not actually been paid in by the original shareholders before the December 31, 2020 deadline. After acquiring the company, he said, he personally contributed the €50,000 capital — equivalent to roughly RMB 370,000 — and believed this amount should be deducted from the transfer price.
The sellers rejected the allegation, insisting the unpaid contribution had been disclosed during negotiations. During the second-instance proceedings, Lao Yi submitted more than 20 pieces of additional evidence, while mounting legal costs and unfamiliar procedures placed increasing pressure on both sides.
Mediation as the Practical Solution
Judge Han and the judicial team concluded that the dispute was not irreconcilable. Lao Yi's non-payment was not malicious; the restaurant faced genuine operational difficulties, and his understanding of Chinese company law — particularly rules governing shareholder capital contributions and equity transfers — was limited. Meanwhile, even with a favorable judgment, enforcement could prove difficult for the sellers.
Mediation, the court determined, offered the most practical path to a substantive resolution.
The judges conducted multiple rounds of communication. They explained relevant provisions of Chinese company law to Lao Yi and clarified the legal reasoning behind the first-instance judgment, while also encouraging the father and daughter to consider his financial circumstances. Given that the restaurant had already ceased operations and Lao Yi's income was limited, the court guided the parties toward a structured installment payment plan.
Settlement After Three Years
On December 30, 2025, the three Italians met again under the court's coordination. The tense atmosphere that had characterized earlier proceedings gave way to candid discussion.
Lao Yi offered a formal apology and proposed paying the remaining amount in three installments after deducting certain agreed expenses. He made the first payment on the same day. The sellers accepted the arrangement, and all parties signed the settlement agreement, bringing a dispute that had lasted nearly three years to an end.
The case highlights the growing role of Chinese courts in resolving foreign-related commercial disputes and illustrates how mediation, alongside adjudication, can provide practical solutions in cross-border business conflicts where legal, cultural, and operational challenges intersect.