Fighting "foreign lawsuits" well is the essential skill for Chinese companies going global.

On July 1, 2026, the Second Constitutional Court of the Superior Court of Lima, Peru announced its second-instance judgment, overturning the first-instance winning verdict and dismissing the constitutional protection lawsuit filed by COSCO Shipping Ports Chancay Peru (referred to as COSCO Shipping Chancay) under the grounds of "failure to exhaust prior administrative remedies," thus returning the case to the initial state of supervision by the Supervisory Board for Investment in Transportation Infrastructure for Public Use of Peru (OSITRAN). On September 8, the Civil Chamber of the Huaura Superior Court dismissed the constitutional protection lawsuit filed by COSCO Shipping Chancay against the Peruvian National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI) over an allegedly flawed competition assessment report. This incident drew widespread attention domestically and internationally.

Under the spotlight, we need to calmly see three aspects: the essence of this lawsuit, the legal flaws in the claims made by Peru's relevant administrative departments, and what Chinese companies should learn from this. The Chancay Port dispute is by no means an isolated case but rather a litmus test for the legal challenges Chinese companies are bound to face after expanding globally on a large scale.

Resorting to law for disputes is a necessary lesson for going global.

From the foothills of the Andes in South America to the South Asian subcontinent, from the plains of Eastern Europe to the rainforests of Africa, the footprints of Chinese companies now span the globe. As the scale of investments and depth of business operations expand, legal friction with host countries in areas such as environmental protection, taxation, labor, market access, and regulatory boundaries has become almost inevitable.

Chancay Port, a landmark project under the “Belt and Road” initiative between China and Peru, was jointly developed, operated, and invested by COSCO Shipping Chancay and local enterprises. It is a private investment that neither involves national fiscal expenditures nor has a government-concessioned operation contract. Its operation was authorized administratively by Peru’s National Port Authority (APN). This “100% private investment, publicly used” legal structure has created a regulatory gray zone under Peru's legal framework. As a major transportation infrastructure, it is neither purely private commercial infrastructure nor a public port operated under government concession contracts.

Based on Peru's National Port System Law and the Law for the Regulation on Private Investments in Transportation Infrastructure for Public Use and Promotion of Aviation Transportation Services, OSITRAN argued that Chancay Port operates under “non-free market competition conditions” and thus must be regulated by OSITRAN and pay an annual regulatory fee equivalent to 1% of its operating revenue. This was an attempt to include Chancay Port within the "comprehensive regulatory" system for public or concession infrastructure. COSCO Shipping Chancay contended that OSITRAN's expansive interpretation infringed on its constitutionally protected private property rights, freedom of enterprise, legal certainty, and principle of non-confiscatory taxation. The company filed a constitutional protection lawsuit against OSITRAN in the Peruvian courts in September 2024.

This approach is justified. In a country like Peru, which has a relatively independent judicial system and mature constitutional litigation mechanisms, using local legal tools to protect legitimate rights and interests is a fundamental skill for Chinese companies operating abroad. A first-instance victory, a second-instance ruling to annul the first-instance judgment, and identification of an obligation for COSCO Shipping Chancay to pay OSITRAN's regulatory fees, followed by a constitutional special appeal to the Constitutional Court—this is the true rhythm of "foreign lawsuits": it is neither accomplished overnight nor entirely hopeless. The key lies in being able to pinpoint core issues within a foreign legal framework and proceed step by step. In contrast, companies that are afraid to go to court or cannot navigate legal rules will never grow into true multinational corporations.

Domestic public opinion must foster an environment of confidence in litigation.

When Chinese companies wield legal tools abroad, they should be backed not only by professional legal teams but also by mature and rational domestic public opinion.

If every time a company goes to or defends itself in court abroad, it is burdened with the expectation of "must win and cannot lose," the company will become hesitant and fall into a situation of "not daring to fight or being unwilling to fight." This will eventually lead to companies "swallowing the bitter pills" of injustice and missing the best opportunity to resolve issues within the rule-based framework, resulting in even greater losses.

The threefold legal misstep in Peru’s claims

A careful review of the arguments of OSITRAN and INDECOPI reveals three points where they violate legal principles:

First, transferring the "cost of public management services" to enterprises constitutes double charging. The provision of public management services—maintaining market order, protecting user rights, and combating monopoly and unfair competition—is a basic responsibility of the host country’s government and should be funded by fiscal taxes. As privately invested infrastructure, Chancay Port already fulfills its obligations through its tax burden and costs incurred to meet regulatory requirements by APN, customs, environmental authorities, and maritime authorities for various specialized facilities and measures. Imposing an additional “regulatory contribution fee” of 1% of annual operating revenue amounts to duplicative regulation and unreasonable charges. It alters the regulatory framework initially considered during investment decisions, which is legally unsound. The Peruvian Congress’s 2024 legal amendment explicitly authorized private port enterprises to obtain exclusive operating rights for basic port services. This legislative fact demonstrates that Peru recognizes the private investment nature of Chancay Port and grants it exclusive operational benefits. OSITRAN’s regulatory actions and fee collections represent a unilateral change in the reasonable expectations of private investments.

Second, using the “public use” attribute to justify “comprehensive regulation” blurs the legal boundaries of ownership. The core logic of the second-instance judgment in OSITRAN’s lawsuit is that Chancay Port, though privately funded, serves the public by providing port services and therefore has public infrastructure attributes, granting OSITRAN broad regulatory authority. While this logic appears coherent, it in fact uses the attribute of service to override ownership rights. Article 70 of Peru’s Constitution protects property rights from infringement, stating that property rights must be exercised within the public interest—but “public interest” does not equate to the government’s unlimited intervention in the business decisions of private property. The first-instance court’s judgment was more precise: intervention in private assets by the state must be an exception and must have explicit legal authorization. The legislative intent of OSITRAN's regulations was to target public infrastructure operated through concession contracts, and extending it to “privately owned public-use” ports is akin to using old laws to govern new models.

Third, INDECOPI’s competition assessment contained significant procedural and evidentiary flaws. In its technical report of April 2025, INDECOPI concluded that there was “no effective competition” in four services such as container loading and vessel mooring at Chancay Port, thus setting the stage for OSITRAN’s rate regulation. However, COSCO Shipping Chancay pointed out that INDECOPI did not adopt APN’s official investigation findings, which clearly determined that Chancay Port’s operation enhanced market competition, reduced market concentration, and stimulated market vitality. For an assessment conclusion that could significantly affect a privately invested infrastructure project by subjecting it to rate regulation, higher and more rigorous evidentiary standards should have been employed, which INDECOPI evidently failed to achieve.

More crucially, the OSITRAN litigation focused only on whether COSCO Shipping Chancay "had exhausted prior administrative remedies" and determined that the company failed to provide sufficient evidence proving that its basic rights were under "definite and imminent threat," thereby overturning the first-instance ruling on procedural grounds. It explicitly stated that Chancay Port, as public-use infrastructure, must bear OSITRAN’s regulatory fee obligation but did not substantively rule on whether OSITRAN has regulatory authority over Chancay Port. This leaves the substantive issue unresolved, allowing COSCO Shipping Chancay to continue asserting its rights through administrative appeals, administrative litigation, or even constitutional special appeals once specific administrative measures are enacted.

Overseas investment must be contract-based.

The Chancay Port dispute serves as a lesson to all outbound businesses: overseas investments are commercial actions based on contracts, and national interests must be separated from commercial rules.

The friendship between China and Peru, the strategic value of Chancay Port to Peru’s economic development, and the recognition of Chancay Port by Keiko Fujimori’s new government in its campaign manifesto—while such political and diplomatic assets are important, they cannot replace contractual protections under the law. In such an environment, relying on "friendship" and "connections" for investment security is unreliable; the only reliable factors are the rigidity of contract clauses and the procedural and substantive battles within the local legal framework.

In the specific case of Chancay Port, the response pathway for Chinese companies should be clear: procedurally, they should continue advancing the special appeal to Peru’s Constitutional Court, focusing on constitutional rights such as “private property rights,” “legal certainty,” and “the principle of non-confiscatory taxation” to secure a constitutional-level confirmation of regulatory boundaries for “private public-use” ports. Substantively, after OSITRAN formulates future specific rate decisions or penalties, these should be challenged item by item through administrative reviews and lawsuits, dismantling "comprehensive regulation" into contestable case-specific regulations.

Daring to “stand up” matters more than always winning.

Back then, Chancay Port faced unreasonable demands from certain government regulatory agencies and proactively chose legal avenues to protect its rights. Now, the second-instance reversal in the regulatory dispute over Chancay Port is not the end but a necessary stage in the journey of Chinese enterprises using local legal tools to protect their interests abroad. Daring to take on foreign lawsuits and excelling at them is a core competency for Chinese companies going global.

The true value of this lawsuit does not lie in short-term wins or losses but in the clear rules it establishes for future entrants: overseas investments must be contract-based and interest-oriented. Friendship and commercial rules must be separate; the host country’s government fulfilling its public management responsibilities is its duty and cannot externalize the costs to private investors. When the "public use" attribute is used as a pretext to expand regulatory jurisdiction, companies have both the right and responsibility to defend their constitutional rights through legal procedures.

The ultimate outcome of the Chancay Port case will not only determine the regulatory environment for this port but also have a profound precedent-setting effect on the regulatory model for “private public-use” infrastructure in Peru. Taking on foreign lawsuits has never been just about winning or losing a case—it is about establishing the discourse of rule-making for Chinese enterprises in global commercial civilization. A few wins or losses do not matter much; this confidence and ability to use the law and excel at it are the real core competencies of Chinese companies. The decision by COSCO Shipping to appeal is a legitimate action to protect its rights and an essential lesson for Chinese companies to learn how to "fight magic with magic" overseas.

The author is a researcher at the Central Party School (National Academy of Governance), a member of the National Law Society, and a director of the Public Economy Research Association.