On 7 July the Supreme People’s Court (the Court) issued an opinion (意见) policy document on how the courts should provide services and protection to “One Belt One Road” (OBOR Opinion) (关于人民法院为“一带一路”建设提供司法服务和保障的若干意见). This blogpost explains why the Supreme People’s Court issued it, what the policy document provides and what it means for legal professionals. The typical (model) cases issued at the same time include the Sino-Environment case, subject of an earlier blogpost  (and deserve closer analysis).

Why was the One Belt One Road document issued?

One Belt One Road (OBOR) is a major government strategic initiative.  As a central government institution, the Court must do its part to support OBOR.  Major SOEs contemplating investing in OBOR projects or trading with companies on OBOR recognize that their interests are best protected through legal infrastructure and the Court has an important role in this. MOFCOM and other related regulatory agencies realize this as well. Local courts linked to the Belt or the Road, are dealing with new demands because of OBOR and are looking to the Court for guidance.

The OBOR Opinion was drafted with input from these regulatory agencies and certain legal experts, but was not issued for public comment.

What the OBOR Opinion covers

The OBOR Opinion covers cross-border criminal, civil and commercial, and maritime as well as free trade zone-related judicial issues.  It also deals with the judicial review of arbitration.

Criminal law issues: the lower courts are requested to improve their work in cross-border criminal cases, and the courts are to do their part in increased mutual judicial assistance in criminal matters.  The focus is on criminal punishment of  those characterized as violent terrorists, ethnic separatists, religious extremists, and secondarily on pirates, drug traffickers, smugglers money launderers, telecommunication fraudsters, internet criminals, and human traffickers. It also calls on courts to deal with criminal cases arising in trade, investment, and other cross-border business, and deal with criminal policy and distinguishing whether an act is in fact a crime, so that each case will meet the test of law and history.  The political concerns behind criminal law enforcement issues are evident in this.

Much of the focus in the OBOR Opinion is on civil and commercial issues, including the exercise of jurisdiction, mutual legal assistance, and parallel proceedings in different jurisdictions and in particular, improving the quality of the Chinese courts in dealing with cross-border legal issues. These issues are explained in more detail below

One of the underlying goals set out in the OBOR Opinion, is to improve the international standing and influence of the Chinese courts and other legal institutions.

What does it mean for legal professionals

The OBOR Opinion signals that the Court is working on a broad range of practically important cross-border legal issues.  Some of these issues involve working out arrangements with other Chinese government agencies and are likely to require several years to implement.  The OBOR Opinion mentions that the Court:

• seeks to expand bilateral and multilateral mutual judicial assistance arrangements, for better delivery of judicial documents, obtaining evidence, recognition and enforcement of foreign court judgments.
• supports and promotes the use of international commercial and maritime arbitration to resolve disputes arising along One Belt One Road.  China will promote the use of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) between countries on One Belt One Road and encourage countries that have not yet acceded to the Convention to do so.
• supports and promotes the use of various types of mediation to resolve OBOR related cross-border disputes.
• it signals that the Court will become more involved in Chinese government initiatives such as the Asian Infrastructure Investment Bank, the conference of supreme courts under the Shanghai Cooperation Organization, and other international or regional multilateral judicial cooperation organizations.
• is signalling the lower courts that they should limit the range of cross-border contracts being declared invalid or void.
•  sets out the new thinking on the issue of reciprocity in the enforcement of foreign judgments, in particular that Chinese courts can take the initiative in extending the reciprocity principle to parties from other jurisdictions.  This is practically significant for foreign parties and their counsel, and has been discussed repeatedly by both practitioners and academics (such as these);
• will improve Chinese legal infrastructure on overseas evidence, overseas witnesses giving evidence, documenting the identity of overseas parties, “to better convenience Chinese and foreign parties. ”  This would involve evolving from the current system embedded in Chinese legislation of requiring notarization and legalization of many documents (because mainland China is not yet a party to the Hague Convention on the Abolishing the Requirement of Legalization of Foreign Public Documents. This is a positive sign;
• The Court has on its agenda further legal infrastructure on the judicial review of arbitration (as signalled at the end of last year), involving foreign/Hong Kong/Macau/Taiwan parties, aimed at supporting arbitration and having a unified standard of judicial review on the following issues:
  • refusing enforcement of arbitral awards; and
  • setting aside arbitral awards.
• has on its agenda judicial legal infrastructure for supporting the resolution of bilateral trade, investment, free trade zone and related disputes.
• Reflecting language in the 4th Plenum, it calls for China to be more greatly involved tin the drafting of relevant international rules, to strengthen China’s voice concerning issues of international trade, investment, and financial law.
•  mentions that an improved version of the Court’s English language website and website on foreign-related commercial and maritime issues is forthcoming.  Specific suggestions can be emailed to supremepeoplescourtmonitor@gmail.com.