The Chinese factory is holding your moulds or using them for others

The case, in five lines

What is brought

A formal demand requiring the factory to hand over the tooling and stop using it, backed by an inventory made in China. If it does not comply, a request for arbitration or a claim: for delivery under the contract (arts. 30 and 46(1) of the Vienna Convention (CISG), if the mould was sold to you as goods) or, if you are already the owner, for restitution (art. 235 of the Civil Code of the People's Republic of China), with foreseeable damages (art. 74 of the Convention) and, in urgent cases, preservation of the mould and an order prohibiting its use, sought from the Chinese people's courts (art. 39 of China's Arbitration Law where there is an arbitration agreement; without one, under China's Civil Procedure Law).

Before which court

Whichever the contract designates. With an arbitration agreement, the arbitral tribunal of the designated institution (CIETAC, the China International Economic and Trade Arbitration Commission, or another), and the Chinese people's courts to preserve the mould and the evidence. Without one, the Chinese people's courts, before which a lawyer qualified in China appears, coordinated by us. The sección civil del Tribunal de Instancia (the civil section of the court of first instance) in Spain only if there is a submission to the Spanish courts or the return was to take place in Spain, and its decision must then be recognised in China before the Intermediate People's Court.

Deadline

The pressing one is the retention period: unless another was agreed, the factory must give you 60 days or more to pay before enforcing its lien over the mould (art. 453 of the Chinese Civil Code). If you seek interim measures in Spain before suing, the claim must follow within twenty days, except in institutional arbitration (art. 730 of the LEC, Spain's Civil Procedure Act). Limitation is set by the law of the contract: four years under Chinese law for an international sale (art. 594 of its Civil Code) and five under Spanish law (art. 1964(2) of the Spanish Civil Code), which an out-of-court claim interrupts (art. 1973). Setting aside an award made in China must be sought there within three months.

Who can bring it

The company that commissioned and paid for the mould and appears in the contract or on the tooling invoice, against the factory that holds it. If you bought from a trading company, that company is your seller and delivery is claimed from it; against the factory, the direct route is the owner's claim. Before the Chinese courts a lawyer qualified in China appears, coordinated from Spain by the firm.

Financial risk

If you owe anything that is due, even from another order, the retention may be lawful (arts. 447, 448 and 783 of the Chinese Civil Code), and an unjustified application for a measure gives rise to a duty to compensate (art. 39 of China's Arbitration Law; in Spain, the security required by art. 728 of the LEC). Without an ownership agreement, you may have only a contractual claim, not the mould. And nobody can guarantee that the mould will come back in good condition or in time for your production.

Paying for the mould does not make it yours: Chinese law decides ownership

The Vienna Convention on Contracts for the International Sale of Goods (CISG), which governs a sale between a company in Spain and one in China unless the contract excludes it, does not deal with who owns the goods (art. 4(b)). Nor does the contract settle it on its own: possession and ownership of movable property are governed by the law of the place where it is located (art. 10(1) of the Código Civil, the Spanish Civil Code), and your mould is in China. So the question ‘whose mould is it?’ is answered by the Civil Code of the People's Republic of China, not by the invoice.

Under that Code, ownership of movable property passes on delivery (art. 224), and the mould was never delivered to you: it stayed at the factory. What saves you is a specific agreement: if the parties agree that the transferor remains in possession of the asset, the buyer becomes the owner when that agreement takes effect (art. 228). Without it, paying the ‘tooling fee’ gives you a claim against the factory, but not ownership. What nobody tells you is that most orders contain no such agreement, still less when the cost of the mould was spread across the price of each part.

That does not leave you empty-handed. If the mould was sold to you as goods, with its own price and invoice, the Convention obliges the seller to deliver it and transfer ownership of it to you (art. 30), and you may require it to perform (art. 46(1)). Even if it was commissioned, the Convention treats it as a sale unless you supplied a substantial part of the materials or the main part of the obligations was labour or services (art. 3); if it falls outside the Convention, Chinese law treats manufacturing to order as a work contract (art. 770), under which the contractor delivers the work product to the client and may retain it only if it is not paid (art. 783). And if the agreement exists and you are the owner, you may seek restitution from whoever possesses it without right (art. 235), through negotiation, mediation, arbitration or litigation (art. 233).

When the factory may retain the mould and when it may not

The factory will tell you it is holding the mould until you pay. Chinese law allows it to do so in two situations. In a work contract, if the client does not pay the remuneration or the materials, the contractor may retain the work product or refuse to deliver it, unless otherwise agreed (art. 783). And as a general rule, a creditor may retain the debtor's movable property that it lawfully possesses if the debt is due (art. 447); between enterprises, even if the debt arises from another relationship (art. 448). That is why a mould can be blocked over the invoice for a different order.

But the retention has limits that can be put to use. The debt must be due; if you dispute it because the order arrived defective, that is a dispute on the merits and it is documented from day one with the notice of non-conformity (we explain this in "Your Chinese supplier delivers magnets or parts that are not as agreed"). Nothing may be retained that the law or the parties' agreement excludes (art. 449). And retaining is not appropriating: to enforce the lien, absent an agreement, the factory must give you 60 days or more to pay (art. 453). Meanwhile, under a work contract, it must keep the mould safely and is liable if it is damaged or lost through improper safekeeping (art. 784).

What nobody tells you is that withholding payment as a means of pressure usually makes things worse: every overdue invoice is a fresh ground for retention. When the amount is smaller than the value of the mould and of your stopped line, it often makes sense to pay the undisputed part, and the disputed part under an express reservation of the right to claim it back, and to collect the mould at the same time, with a handover record. If the factory claims that the mould was lost in a relocation or a closure, its safekeeping was the factory's responsibility and, in a sale, it is relieved of damages only if it proves an impediment beyond its control, unforeseeable when contracting and insurmountable (art. 79 of the Convention).

If it is making parts for another customer with your mould

Seeing parts identical to yours on the market does not by itself prove that they come from your mould: they may be a copy. Here the technical evidence decides. An injection-moulded or stamped part carries the imprint of the mould that made it: the cavity number, the ejector pin marks, the parting line, the engravings and the steel's own flaws. Our expert engineers compare a purchased sample with your parts and with the mould inventoried at the factory, and that comparison is the basis of the expert report.

Under a work contract, Chinese law requires the contractor to keep confidential whatever the client asks and forbids it to keep copies or technical data without the client's permission (art. 785). If the mould is yours, you may demand its return (art. 235) and, in urgent cases, seek an order forbidding the factory to use it while the arbitration runs (art. 39 of China's Arbitration Law). If you also hold in China a trade mark or a patent registered and recorded with Chinese customs, those customs can stop the parts from leaving for other buyers, because they protect those rights on export too (Regulations on Customs Protection of Intellectual Property Rights, State Council Decree 395, arts. 2 and 3); where it is the supplier that registered the trade mark, see "Your supplier registered your trade mark in China and is blocking your shipment".

What nobody tells you: if those parts reach the European Union and you hold a trade mark or a patent here, EU customs action does not always help. Regulation 608/2013 does not apply to goods made with the right holder's consent or to what an authorised manufacturer produces beyond the agreed quantities (art. 1(5)), which is exactly what a factory does when it extends the run with your mould. That excess is pursued in the courts on the basis of the industrial property right itself, and the loss claimed from the factory is measured under the Convention: the loss suffered and the profit lost that it could foresee when contracting (art. 74).

The evidence is obtained in China, and before giving notice

The order of steps matters. If you announce the change of supplier before knowing where the mould is, what condition it is in and what the factory says about your account, you give it time to move it, retain it or keep using it. That is why, before any formal demand, the file is put together: the order or the tooling agreement, the separate invoice for the mould and proof of payment, the drawings or specifications you supplied, the emails in which you approved the first samples and the photos showing the nameplate or the engraved number.

Then the factory is visited. The firm works with partners with offices in China and with expert engineers in Spain and in China, who check the goods and their specifications before shipment, on arrival and, if a claim has to be made, as expert evidence. In a mould dispute they locate the tooling, inventory it with dated photos, check the number of cavities, the wear and the cycle count, and whether it is mounted on a machine producing for someone else. We cannot guarantee what they will find; we can make sure that what is seen is documented and usable.

That material is the foundation, not the end. In proceedings in Spain the expert report is signed by an expert holding an official qualification, under an oath of objectivity, and is filed with the claim (arts. 335, 336 and 340 of the LEC): the photos, the inventory and the comparisons made in China support it, but a report produced there does not by itself count as expert evidence here. In an arbitration seated in China, the arbitral tribunal may order an expert examination at a party's request (art. 56 of China's Arbitration Law), and evidence at risk of being lost is preserved, also before the arbitration in urgent cases (art. 58); in an arbitration with a foreign party, the institution forwards the application to the Intermediate People's Court of the place where the evidence is located (art. 79).

Where to claim: arbitration, the Chinese courts or Spain

The contract decides. If the standard terms provide for arbitration, check that they designate an institution: under China's revised Arbitration Law, in force since 1 March 2026, an agreement that does not designate one is void unless a supplementary agreement is reached (arts. 27 and 29), and arbitration without an institution seated in China is only possible in maritime matters and free trade zones (art. 82). With a valid agreement, for example before CIETAC, the people's court may order the mould to be preserved and the factory to refrain from using it, also before the arbitration in urgent cases (art. 39), and the arbitral tribunal itself may grant interim measures (art. 23.3 of the 2024 CIETAC Rules). A party that seeks a measure without grounds must pay compensation.

If the arbitration is seated in Hong Kong and administered by an institution on the list in the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong SAR of 2 April 2019, measures may also be sought in mainland China before the award. If the seat is elsewhere, such as Madrid, China's arbitration law provides no express route for those measures: a clause drafted for the convenience of litigating in Spain can leave you without interim relief where the mould is. Whatever is won is enforced where the factory has assets, usually in China; if it has assets or receivables in Spain, the foreign award is recognised here under the New York Convention by the Sala de lo Civil y Penal del Tribunal Superior de Justicia (the Civil and Criminal Chamber of the regional High Court of Justice) and enforced by the civil section of the Tribunal de Instancia (arts. 8(6) and 46 of Law 60/2003). It is not set aside in Spain: setting aside an award made in China is sought there, within three months (art. 72). How to choose the forum is covered in "You want to sue your Chinese supplier: arbitration or the courts?".

Without an arbitration agreement, the claim is brought before the Chinese people's courts, where a lawyer qualified in China appears, coordinated by us with our partners. Spain is possible, but rarely the shortest route for a mould. The Spanish courts have jurisdiction if there is a submission to them (art. 25 of the Brussels I bis Regulation) or if the obligation to deliver was to be performed in Spain (art. 22 quinquies(a) of the LOPJ, Spain's Organic Law on the Judiciary), and before suing the negotiation required by Ley Orgánica 1/2025 (Organic Law 1/2025) must be attempted, also against a Chinese company, though not to seek interim measures before the claim (art. 5(3)). A Spanish interim measure reaches whatever the supplier has in Spain and may be sought in support of an arbitration abroad (art. 722 of the LEC; arts. 8(3) and 11(3) of Law 60/2003), but the mould is in China, it is governed by Chinese law and the judgment would have to be recognised there before the Intermediate People's Court (1992 Spain-China Treaty, arts. 17 and 18), after serving the claim under the Hague Service Convention, which takes around six months.

The tooling agreement clauses that would have prevented it

The document missing in almost all of these cases is a tooling agreement separate from the order, signed by the factory that holds the mould. Its first clause concerns ownership: every mould, die or tool belongs to the buyer from payment, even while it remains with the manufacturer, which holds it on the buyer's behalf (this is the agreement in art. 228 of the Chinese Civil Code). It should include a list with number, cavities, material and photos, and an obligation to fix to each mould a plate bearing the owner's name. And a separate invoice for the mould, not its cost spread across the price of the parts.

The second concerns retention: the manufacturer waives any right to retain the tooling for any debt, from that order or any other (art. 449 and the proviso in art. 783). The third concerns use: only for the buyer's orders, no manufacturing for third parties, no copying the mould and no keeping drawings or technical data (art. 785), with a right of inspection by whomever the buyer appoints. The fourth concerns return: on first request, within a fixed number of days, packed for transport and delivered to a specific place; if that place is in Spain, it helps to ground Spanish jurisdiction and later recognition in China (art. 22 quinquies(a) of the LOPJ; art. 21 of the 1992 Treaty). With a penalty for each day of delay, and safekeeping, maintenance and insurance borne by the factory.

The last concerns the forum. If you are going to arbitrate, an institution designated by name, the seat in writing and the language, because without an institution the agreement is void in China (arts. 27, 29 and 81 of China's Arbitration Law), and a seat that allows measures over the mould to be sought in mainland China; if you choose the Spanish courts, an express written submission, which is the safest route to having the judgment recognised there. We draft it and negotiate it with the factory; with the new one, it is best signed before the first payment, which is when you have the leverage to obtain it.

How we run the case, step by step

1. 1

   Assemble the mould file and the state of account

   Contract or order, invoice and payment for the mould, drawings you supplied, sample approvals, photos and nameplates; and every invoice with the factory, paid, outstanding or disputed, to establish whether there is a debt that is due which could justify the retention (arts. 447 and 448 of the Chinese Civil Code).

2. 2

   Locate and inventory the mould in China

   Our partners with offices in China and our expert engineers attend the factory with whatever access the contract or the factory itself allows: where each mould is, its condition, how many cavities and cycles it has, and whether it is producing for someone else. With dated photos and, if there are third-party parts, a technical comparison with yours.

3. 3

   Formal demand with a request to negotiate

   A translated letter to the factory identifying each mould, demanding its delivery and an end to its use, setting a date and place for collection and offering a way out on the disputed debt. If the claim is to be brought in Spain, with its subject matter clearly defined it serves as the prior attempt to negotiate required by Organic Law 1/2025 and interrupts the limitation period from the date on which its dispatch is recorded (art. 7(1)); that law does not apply to arbitration, and if the contract is governed by Chinese law, limitation and its interruption are governed by that law.

4. 4

   Urgent measures where the mould is

   If there is a risk that it will sell it, move it or keep using it, preservation of the mould and an order prohibiting its use, sought from the Chinese people's courts, even before the arbitration (art. 39 of China's Arbitration Law), filed by a lawyer qualified in China and coordinated by the firm; in Spain, over whatever the supplier has here (art. 727 of the LEC).

5. 5

   Arbitration or claim with an expert report

   A request for arbitration before the agreed institution, or a claim: delivery or restitution of the mould, an end to its use and foreseeable damages (art. 74 of the Convention), including the cost of a new mould if making one was the reasonable way to reduce the loss (art. 77). The expert report is signed by an expert holding an official qualification, based on what was documented in China (arts. 335 and 340 of the LEC).

6. 6

   Collect the mould against a handover record and protect yourself with the new factory

   Collection takes place with a handover record and an inspection by our engineers, who check that the mould is the one inventoried and that it works. If it is brought to Spain, the import declaration is lodged by your company or your customs representative, with the documentation we prepare. And with the new factory, a tooling agreement signed before paying.

The law that applies

• Arts. 3, 4, 30 y 46 de la Convención de Viena de 1980. The Convention governs the rights and obligations of seller and buyer, including the supply of goods to be manufactured, unless the buyer supplies a substantial part of the materials or the main part of the obligations consists of labour or services (art. 3), but not the validity of the contract or its effects on ownership of the goods. The seller must deliver the goods, transfer ownership of them and hand over the documents; the buyer may require performance unless it has resorted to an inconsistent remedy. BOE-A-1991-2552
• Arts. 74, 77 y 79 de la Convención de Viena de 1980. Damages cover the loss suffered and the profit lost, up to what the party in breach foresaw or ought to have foreseen when contracting. The claimant must take reasonable measures to mitigate the loss. A party is exempt from damages only if it proves an impediment beyond its control, unforeseeable when contracting and insurmountable. BOE-A-1991-2552
• Art. 10.1 del Código Civil. Possession, ownership and other rights over property, movables included, are governed by the law of the place where it is located; goods in transit are deemed to be located at the place of dispatch, unless sender and consignee agree on the place of destination. BOE-A-1889-4763
• Arts. 1, 8, 11, 23 y 46 de la Ley 60/2003, de Arbitraje. It applies to arbitrations seated in Spain, and some provisions, such as those on interim measures and recognition, also to those seated abroad. An arbitration agreement does not prevent a party from seeking interim measures from a court, which will be the court of the place where the award is to be enforced or where they are to take effect; the arbitrators may also grant them. An award made outside Spain is recognised under the New York Convention by the Civil and Criminal Chamber of the regional High Court of Justice. BOE-A-2003-23646
• Arts. 722, 727, 728 y 730 de la Ley de Enjuiciamiento Civil. They allow interim measures to be sought, also in support of an arbitration or foreign proceedings, such as a preventive attachment, deposit of a movable item, an inventory or an order to refrain from certain conduct. They require a prima facie case, a risk from delay and security. If sought before the claim on grounds of urgency, they lapse unless the claim is filed within twenty days, except in institutional arbitration. BOE-A-2000-323
• Arts. 22 ter y 22 quinquies de la Ley Orgánica del Poder Judicial. Absent a submission, the Spanish courts hear a contractual obligation if it was performed or was to be performed in Spain, even if the defendant is not domiciled here; if the contract chooses a foreign court, the Spanish court stays the proceedings and hears the case only if that court declines. BOE-A-1985-12666
• Arts. 17 a 23 del Tratado entre España y China sobre asistencia judicial en materia civil y mercantil (1992). Civil and commercial judgments of each country are recognised and enforced in the other. In China the interested party applies directly to the Intermediate People's Court, with no review of the merits, providing an authentic copy, proof of finality, proof of service and a translation. The court of origin must have had jurisdiction under art. 21, for example by written submission or because the contract was to be performed in Spain. BOE-A-1994-2077
• Arts. 5 y 7 de la Ley Orgánica 1/2025. Before suing in civil matters, an appropriate dispute resolution method must first be attempted, which may be negotiation between lawyers; it is not required for interim measures before the claim or for preliminary inquiries. The request interrupts limitation or suspends time bars, and if within thirty calendar days the first meeting is not held or there is no written reply, the limitation period starts afresh and the time bar resumes running. BOE-A-2025-76

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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