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Case study: recovery of an unpaid invoice for a Chinese supplier against a UK distributor

By Leon Chua · Partner · 9 May 2026

An anonymised illustration of how UK debt recovery runs in practice for a Chinese supplier owed money by a UK distributor. The case settled before any winding-up petition was presented, with payment in full plus statutory interest and recoverable costs. Names, sums and identifying details have been changed; the underlying procedural shape is representative of work the firm regularly undertakes.

The facts

A Chinese manufacturer (the client) had supplied a UK distributor with three shipments of consumer goods over a six-month period. Two invoices totalling roughly £180,000 were outstanding, the older by 11 months. The distributor had stopped responding to emails. The client engaged Duan & Duan UK LLP after a Hong Kong–based introducer suggested the firm.

Threshold analysis

In the first 48 hours we:

  • Confirmed the UK distributor was a UK-incorporated company in good standing on Companies House (active, no charges, no insolvency events filed);
  • Verified the contract was governed by English law with English jurisdiction;
  • Confirmed the limitation position — both invoices were within the 6-year limitation period for ordinary contractual debts;
  • Confirmed the debt was not genuinely disputed: invoices had been issued, goods delivered, no written objection raised.

This was a clean undisputed-debt case. The fastest route was the statutory demand and winding-up petition route under sections 122 and 123 of the Insolvency Act 1986.

Letter Before Action

A pre-action letter was sent under the Pre-Action Protocol for Debt Claims, demanding payment within 30 days, setting out:

  • The contractual basis for the debt;
  • Statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 — 8 percentage points above the Bank of England base rate from each invoice's due date;
  • The fixed administrative charge of £100 per invoice (debts over £10,000);
  • Reasonable costs of recovery;
  • A clear notice that, in the absence of payment, a statutory demand and winding-up petition would follow.

A holding response was received on day 28 promising payment "shortly". No payment arrived.

Statutory demand

A statutory demand under section 123(1)(a) of the Insolvency Act 1986 was served at the company's registered office under section 1139 of the Companies Act 2006. The demand gave 21 days to pay, secure or compound the debt, failing which a winding-up petition would be presented.

Within 14 days the distributor's solicitors made contact and proposed settlement.

Settlement

The case settled before any winding-up petition was presented. Terms:

  • Payment of the principal in full;
  • Statutory interest under the 1998 Act — accumulated interest of approximately £21,000;
  • Fixed administrative charge of £200 (£100 per invoice);
  • The client's recoverable costs (claimed and largely allowed);
  • Settlement secured by a charge over the distributor's UK trading premises pending full payment within 4 months.

The total recovery exceeded the principal debt by approximately 13% once interest, fees and costs were aggregated.

What it took

  • 9 weeks from instruction to settlement.
  • One Letter Before Action; one statutory demand; no proceedings ever issued.
  • Documents in Chinese were not required to be translated for English use because the distributor did not raise a substantive defence.
  • The client ran the case from China; we acted as the UK address-for-service.

Why this works

UK companies — and particularly UK directors who have to consider personal exposure to wrongful trading claims — take a properly-served statutory demand seriously. Most undisputed-debt cases settle in the gap between Letter Before Action and the listing of the winding-up petition, because the alternative for the debtor is bank-account freezing, public advertisement of the petition, and reputational damage in the trade.

For more on the procedure see The UK company didn't pay our invoice: a debt recovery guide for Chinese suppliers and exporters and the cross-border practice hub at /uk-china-disputes/.

Contact

Leon Chua (Partner) and Jackson Ng MCIArb (Partner & Barrister) lead the firm's UK debt recovery practice for Chinese creditors.

This case study is anonymised. Names, sums and identifying details have been changed. Past results do not guarantee similar outcomes; each debt-recovery matter must be assessed on its specific facts including limitation, debtor solvency, and disputed-debt risk. Duan & Duan UK LLP is a limited liability partnership registered in England and Wales (OC427307), authorised and regulated by the Solicitors Regulation Authority (SRA number 659252).

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