Chinese factory holding your moulds? What to do, and how to prevent it

Why is my Chinese factory refusing to release my moulds?

Almost always because the factory has leverage and wants something: payment, more business, or time. Tooling disputes usually start when the buyer moves to a new supplier. As Harris Sliwoski puts it, "Possession gives the factory leverage even when your ownership claim is strong."

• Unpaid balances: Article 783 of China's Civil Code says that if the customer has not paid the price or material costs, the maker may keep the finished work or refuse to deliver it, unless the parties agreed otherwise.
• Unrelated invoices: Article 448 of the Civil Code normally requires a lien to relate to the same legal relationship as the debt, but makes an exception for liens between businesses. A factory may tie release of your moulds to a disputed invoice for a different order.
• "Release fees" and engineering charges: the factory issues a new invoice for CAD work, testing or revisions it says were not in the tooling price. Harris Sliwoski describes these as often a departure fee under another name.
• Design files: the factory accepts you own the steel but keeps the drawings and native files you need to repair or copy the mould.
• Subcontractors: many factories outsource mould making to a separate mould shop, which holds the files and may not be bound by your contract with the factory.
• Silence: the factory stops replying, says the moulds are lost, or moves them.

Who owns the moulds if I paid for them?

Paying for a mould helps, but it does not settle ownership or control on its own. Three separate things are at stake: the physical tool, the technical files needed to use or reproduce it, and the design and know-how behind it. What decides your position is what your documents say, in a form a Chinese court will accept.

Document	What to look for	Weak point
Supply contract or purchase order	A clause saying the buyer owns all tooling, the factory holds it as custodian, and must return it on request	Only a purchase order, or a contract in English with a foreign court clause
Tooling agreement	A list of each tool with ID number, photos and location; who owns files; no release or storage fees; no lien	No separate agreement, or no list of tools
Tooling invoices (模具费)	Tooling invoiced and paid separately, ideally stating the buyer owns the mould	Tooling "free" or built into the unit price, which is the hardest to prove
Payment records	Bank transfers matching each tooling invoice, paid to the contracting company	Payments to a personal account or a different company
NNN agreement	Protects your drawings and specifications from disclosure, use and circumvention	Harris Sliwoski notes an NNN does not establish mould ownership; that belongs in a tooling agreement

How do I get my moulds back from a Chinese factory?

Most cases are resolved by pressure and negotiation, with court action as the backstop that makes negotiation work.

1. Do not announce the move first: before telling the factory you are leaving, confirm where every tool is, who made it, who holds the files and what you still owe.
2. Collect evidence: contract, tooling invoices, bank records, dated photos of marked moulds, sample approvals and all chats and emails. Save copies of WeChat and platform messages now.
3. Check the factory: confirm its registered name and status on gsxt.gov.cn and check court and enforcement records. A factory already on the defaulter list is a weaker target for a claim but may settle faster.
4. Separate the money from the moulds: work out what, if anything, you genuinely owe. Paying a real balance is often cheaper than any legal route. Dispute only what is not owed.
5. Negotiate in Chinese, in writing: a clear letter in Chinese setting out ownership, what is paid and a deadline for release is taken more seriously than English emails. A letter from a Chinese law firm adds weight.
6. Ask a Chinese lawyer about property preservation: a court can seal, seize or freeze property, including bank accounts and the moulds themselves. Harris Sliwoski describes a case where a court froze a factory's bank accounts within about five days and the factory released the moulds the next day, while noting few disputes move that fast.

How does a Chinese court asset freeze work?

Property preservation (财产保全) lets a Chinese court freeze a party's assets before or during a lawsuit or arbitration, so the other side cannot move them.

Point	Rule
Before suing (诉前保全)	Only in urgent cases. The court must rule within 48 hours of accepting the application, and the order is lifted if you do not sue or start arbitration within 30 days.
Security before suing	Supreme People's Court rules require security equal to the amount to be frozen, though the court may adjust this in special circumstances.
Security during a lawsuit	If the court requires security, it may not exceed 30% of the amount to be frozen.
Form of security	Cash, a bank guarantee, or a guarantee letter from an insurer under a preservation liability policy.
Court fee for the application	RMB 30 up to RMB 1,000; 1% of the amount from RMB 1,000 to RMB 100,000; 0.5% above that; capped at RMB 5,000.
Your risk	If the freeze turns out to be wrongful, you can be liable for the factory's losses, which is what the security covers.

You will need a Chinese lawyer to apply. A contract that names a Chinese court or arbitration body, governed by Chinese law and written in Chinese, makes this route much easier. A contract with only an English court clause may do little to recover moulds sitting in a Chinese factory.

What does it cost, and what is realistic?

Costs depend on the claim value and the city, so get a quote from a Chinese lawyer before committing.

• Court filing fees: set by national scale. For a property claim: RMB 50 up to RMB 10,000, then 2.5% of the amount from RMB 10,000 to RMB 100,000, 2% up to RMB 200,000, falling in steps to 0.5% above RMB 20 million.
• Lawyers: one 2026 guide puts local counsel for a preservation application at roughly RMB 8,000 to 40,000 or more, plus translation and notarisation of foreign documents.
• Security: cash tied up, or an insurance premium, for the life of the order.
• Realistic outcomes: a negotiated release after paying an agreed sum; a release after a freeze or lawsuit; or writing the moulds off and remaking them elsewhere. Which is cheapest depends on the value of the tools, what you owe, and how strong your documents are.

How do I stop a factory holding my moulds in future?

Put ownership, location and release terms in a Chinese-language agreement before you pay any tooling deposit.

• Tooling agreement: buyer owns all tooling and files; factory is custodian only; no release, storage or engineering fees without written approval; release within a set number of days on request; Chinese law, Chinese text controlling, and a Chinese court or arbitration body.
• Exclude the lien: Articles 783 and 448 allow a factory to hold your goods unless agreed otherwise, so state that the factory waives any lien or right to withhold tooling.
• Marking: permanent plates on each tool with your company name and an asset number.
• Photos and records: a tooling schedule with photos, numbers, specifications and the address where each tool is kept. Re-photograph during audits.
• Location and subcontractors: no move or subcontracting without written approval; ask who is actually making the mould and get the mould shop to sign up too.
• Files: require delivery of editable source files (for example STEP or IGES) when the tool is approved.
• Payment structure: invoice tooling separately from parts; pay against milestones such as approved first samples; avoid "free" tooling hidden in the unit price.
• NNN agreement: sign one before sharing drawings, alongside the tooling agreement, not instead of it.

How can Thornfield help?

Thornfield Resources is a London company (Companies House 17162127) that works in English and Mandarin for UK and European businesses buying from China. For a mould dispute we offer a dispute assessment from £450, reviewing your documents and the factory's records, then negotiation with the factory in Mandarin for a fixed fee or a 10 to 15% success fee. We can check a new factory before you pay for tooling, from £175. Thornfield is not a law firm; where court action is needed we refer you to licensed Chinese lawyers. See dispute help, supplier checks or contact us.

Common questions

Can a Chinese factory legally keep my moulds?

It can if you owe it money for the work, because Article 783 of the Civil Code lets a maker withhold its work until paid, unless the contract says otherwise. Holding moulds you have fully paid for, with a contract confirming your ownership, is much harder for it to justify in court.

Should I just pay the release fee?

Sometimes it is the cheapest option, especially if the fee is small compared with remaking the tools. Get the release terms, the handover date and the files in writing before paying, and pay the contracting company, not a personal account.

Can I sue the factory in the UK?

You can, but a UK judgment still has to be recognised by a Chinese court before it can be enforced against the factory's assets in China. A Chinese court or arbitration clause is usually the faster route for moulds held in China.

What if the moulds are at a subcontractor?

Your contract with the factory may not bind the mould shop. Find out its name and address, check whether your agreement covered subcontractors, and include it in any negotiation or legal action.

How long does a Chinese asset freeze take?

Before a lawsuit, the court must rule within 48 hours of accepting an urgent application, but preparing documents, translations and security takes longer. You must then sue or start arbitration within 30 days.

Sources

• Harris Sliwoski: Who owns your molds? How overseas factories hold tooling hostage (updated 30 July 2026)
• Harris Sliwoski: Molds and tooling in international manufacturing, the 30 essential FAQs (6 June 2025)
• Harris Sliwoski: China NNN agreements, the ten most asked questions (updated 30 September 2026)
• Chongqing Daily: full text of the PRC Civil Code, Article 783 (2 June 2020)
• JunHe: liens over third-party property and Civil Code Article 448 (19 April 2022)
• Supreme People's Court: Provisions on property preservation cases (in force 1 December 2016)
• Supreme People's Court: Measures on payment of litigation fees (in force 1 April 2007)
• Global Law Experts: How to obtain a preservation order in China (2026 update) (26 July 2026)