The South China Sea continues to be in the news. But one of the many unnoticed developments related to the Supreme People’s Court (SPC) and the Chinese seas is the recent “bulking up” of the Chinese maritime courts.

The Chinese maritime courts, established 30 years ago, are said to be the busiest in the Asia Pacific region, and hear cases arising in Chinese waters, coastal and inland. In 2015, the maritime courts heard about 31,000 cases, a 43% increase year on year, with cases involving foreign parties accounting for about 15%.

The “bulking up”  of the maritime courts has occurred through the following recent events:

• establishment of a maritime court training campus and research base;
• two conferences convened by the SPC in December, 2015  on reforms to the maritime courts; and
• two February, 2016 judicial interpretations revamping the jurisdiction of the maritime courts.

These developments are responding to both international and domestic factors and link to earlier government/Party initiatives

This blogpost will highlight some of the international developments.

Party initiatives guiding the reform of the maritime courts

Reforming the maritime courts was foreshadowed in the 4th Plenum Decision, Supreme People’s Court 4th Five Year Plan for reforming the courts and more specifically in One Belt One Road Opinion:

From the 4th Plenum:

Adapt to the incessant deepening of opening up to the outside world, perfect foreign-oriented legal and regulatory systems, stimulate the construction of new structures for an open economy. Vigorously participate in the formulation of international norms, promote the handling of foreign-related economic and social affairs according to the law, strengthen our country’s discourse power and influence in international legal affairs, use legal methods to safeguard our country’s sovereignty, security and development interests.

From the court reform plan:

Reform the maritime case jurisdiction system. Further clean up the system for trial of maritime matters. Scientifically determine the scope of jurisdiction for maritime courts, establish working mechanisms better suited for maritime courts hearing of cases.

The One Belt One Road SPC Opinion highlighted some of the current reforms to the maritime courts, in some detail.

SPC new training center

December’s national maritime courts conference was held in Qingdao, where the maritime court training campus was established.  SPC President Zhou Qiang, who presided over the conference, described its purpose as:

to implement the decisions and arrangements of the CPC Central Committee, to accelerate the trial of maritime personnel training, promote maritime judicial theory and innovative practice.  It is an important measure for promoting the development of maritime trial work and advances international maritime justice.

A senior staff member of the Central Political Legal Committee and officials of Ministry of Foreign Affairs, State Ocean Administration, and other government agencies also attended the conference.

New regulations on jurisdiction of maritime courts

As mentioned above, in February, 2016, two regulations on the jurisdiction of the maritime courts were issued by the SPC.  Those regulations had been previously highlighted in several conferences and SPC documents, including the November, 2014 4th National Work Conference on Foreign-Related Commercial and Maritime Adjudication, OBOR Opinion, and December, 2015 Maritime Courts conference.  These regulations had been issued for less than two weeks in November for public comment, making it difficult if not impossible for interested foreign parties to comment.

One of the new regulations relates to the geographical jurisdiction of several maritime courts, principles for determining jurisdiction in administrative cases and objections to jurisdiction.  The other expands the scope of cases that can be heard by the maritime courts, setting out over 112 categories of cases that can be brought. In the section on ocean and sea navigable waters exploitation and environmental protection related disputes, ocean and sea navigable waters construction disputes are included, such as underwater dredging construction, land reclamation and ..artificial islands.

International maritime justice

Zhou Qiang had the following to say about the goals of reforming the maritime courts to improve their international  prestige.

• Make the maritime courts  internationally influential.  We have already established ourselves as the Asia Pacific area maritime judicial center (确立了亚太地区海事司法中心的地位).  (A corollary to this (derived from conference presentations) appears to be a push to move the locus of maritime dispute resolution from London and other centers in Europe to China, where Chinese parties will encounter a more familiar dispute resolution system);
• Increase China’s influence over the development of international maritime rules.  Improve China’s contribution to international maritime law, effectively safeguarding national sovereignty, security and development interests. (This is directly related to the 4th Plenum Decision.)
• Strengthen the sense of national sovereignty (要强化国家主权意识), exercise jurisdiction over all types of maritime development and utilization of marine waters within the jurisdiction of the country.  This refers to all the marine waters China claims in the South China Sea and elsewhere, according to a Chinese maritime law expert.

Commercial issues

From comments by (foreign) maritime law practitioners, it appears that major European and American shipping companies have concerns about the Chinese maritime courts.  Concerns include:

• Chinese courts, particularly the maritime courts, have repeatedly refused to enforce choice of court clauses when the chosen forum has no actual connection with the dispute.    Chinese maritime courts rely on the principle in Article 34 of the Civil Procedure Law that the choice of court selected by the parties must have a connection to the matter (although China’s choice of law legislation does not require a choice of law to have a connection) to disregard choice of courts clauses in bills of lading or other documentation, even if  proceedings have begun in other jurisdictions. This often occurs in cases involving bills of lading.
• Related to this is that the Chinese maritime courts are sometimes the site of parallel proceedings, when there may be proceedings elsewhere in the world relating to the same dispute.  Some of these cases were described in a talk at the University of Hong Kong by Professor Vivienne Bath of the University of Sydney and will be incorporated into a forthcoming article.

The larger issue, of course, is that while the Chinese maritime courts now include some very highly trained and experienced judges, the emphasis on Chinese national interests and national sovereignty leads non-Chinese and private enterprise litigants to question whether their dispute will be considered fairly.