Update on China’s international commercial court

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Judge Gao Xiaoli

Among the many developments flagged in Supreme People’s Court (SPC) President Zhou Qiang’s 2018 report to the National People’s Congress is that the SPC will establish an international commercial tribunal (court)(最 高人民法院国际商事审判庭), as approved by the Central Leading Group for Comprehensively Deepening Reforms. The timing is unknown. The international commercial tribunal (this post will use the term “court”) as is understood clearly, must fit political and technical requirements. This blogpost will look at those, particularly the technical ones, as those are the ones that have escaped the attention of most commentators outside of China.


Although many  articles have been published in the media, both in and out of China after the public announcement to the press about the international commercial court in January, 2018, most of them have little detail on the issues. Some contain uninformed statements, such as the one that quotes an insider at the China Council for the Promotion of International Trade mentioning the use for dispute resolution of “the common law of the United States and European countries” (send the insider back to law school please!).

In the past three months, Judge Gao Xiaoli, deputy head of the SPC’s #4 civil division (photo above), and at least one other person at the SPC has released some information about the court, all of which seems to have eluded international discussions. For those who are not aficionados of Chinese foreign-related dispute resolution, Judge Gao (who often appears at UNCITRAL or international arbitration related conferences or seminars) outside as well as inside mainland China, is a formidable presence in the courtroom. Thanks to the SPC’s streaming of court hearings, it is now possible to see that from any corner of the world.  She is also an impressive speaker. Judge Gao is representative of the judges engaged in technical legal work at the SPC, with a PhD in law from one of China’s leading law schools and experience studying abroad.

Political requirements

On the political requirements, there are at least two, both previously highlighted in this blog.  The more general one was highlighted one year ago–the establishment of the international commercial court relates to a sentence in the Fourth Plenum Decision:

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.

More specifically, it appears to be the civil and commercial counterpart to the efforts noted on this blog two years ago (concerning dispute resolution in maritime cases),  part of a push to move the locus of China-related dispute resolution from London and other centers in Europe (or elsewhere) to China, where Chinese parties will encounter a more familiar dispute resolution system.

The other political requirement relates to the need to serve major government strategies, the BRI/OBOR one in particular, discussed in this blogpost.  President Zhou Qiang’s 2018 NPC report, as his 2016 report (and presumably 2017 report) contain the phrase “provided service for the country’s major strategies.” As a central government institution, the SPC must do its part to support national major strategies. Since BRI/OBOR has been initiated, President Zhou Qiang’s report has mentioned  BRI/OBOR as one of those major strategies for which the SPC has provided service.

Technical requirements

Further background

The sources that previous commentators missed include the following:

In the press interview, Judge Gao reviews what the SPC has done so far in this area, including several developments previously highlighted on this blog:

  • SPC’s One Belt One Road (BRI/OBOR) policy document;
  • SPC’s OBOR/BRI model/typical cases (see above link and translations by the Stanford Guiding Cases project found here);
  • SPC’s judicial interpretation on demand guarantees, that blogpost explains that with so many Chinese companies focusing on infrastructure projects overseas, Chinese banks have issued billions of dollars in demand guarantees.

 Technical issues

The SPC is looking at three types of investment and trade disputes:

  • state-state disputes (for China, generally WTO);
  • investor-state disputes (ICSID and other institutions, generally using UNCITRAL rules (note that CIETAC and the Shenzhen Court of International Arbitration (SCIA) also have amended their rules to be able to take investor-state disputes, with SCIA using the UNCITRAL rules;
  • disputes between commercial parties.

Judge Gao mentioned that they at the SPC, too have noticed the worldwide trend of other jurisdictions establishing courts to hear investor-state disputes, citing Canada among them and that they are exploring whether the Chinese courts can do so as well.  However, she notes that when China acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), it made a commercial reservation, and the SPC judicial interpretation concerning the New York Convention excluded investor-state disputes, so that currently it is not possible to enforce investor-state awards through the New York Convention. Judge Gao says they are considering solutions to this issue.

Commercial disputes

Definition of OBOR/BRI disputes

Although none of the authors have mentioned this (nor have I, until now), one unrecognized issues in discussing OBOR/BRI disputes is a definitional one–what is a OBOR/BRI related dispute?  It seems that in court practice, the definition is broad, including cases between Chinese contractors and their demand guarantee issuing banks, as well as cross border cases involving Chinese and parties located in OBOR countries.  In my research (including a discrete inquiry with a knowledgeable person), a formal definition is lacking.

Judicial cooperation/enforcement issues

As this earlier blogpost mentioned, enforcement of foreign court judgments is on the SPC’s agenda.  As Judge Gao recognizes, there needs to be a structure for judgments of this international commercial court to be enforced outside of China.  She mentions (as has this blog), that China is actively participating in negotiations on the Hague Convention on the Recognition & Enforcement of Foreign Judgments, and is studying ratification of the Hague Convention on the Choice of Courts Agreements.  She flags also (as has this blog) that the SPC is drafting a judicial interpretation on the recognition and enforcement of foreign civil & commercial judgments.

Practice in other jurisdictions

Judge Gao mentions that the SPC is looking at the international commercial courts in several jurisdictions, including Dubai and Singapore (as mentioned in the earlier blogpost), but also Abu Dhabi, London’s Commercial Court (it appears that someone at the SPC has read this Financial Times article on foreign litigants there), and notes that the Netherlands, Germany, and Belgium are all establishing international commercial courts that use English.

Challenges for the Chinese courts

Judge Gao forthrightly flags a list of issues (my comments in italics) that the SPC faces in establishing an international commercial court. It is likely that she and her colleagues are aware of the additional issues raised as well.

  • judges; she notes that Dubai and Singapore have foreign judges on their international commercial courts, but currently China’s Judges’ Law and People’s Court Organizational Law (being amended) present obstacles to having foreign judges, and without them, the court will not be international and will not be internationally credible (literally, be internationally influential) (但是如果不引进外籍专业性人才参与国际商事法庭的建设,则缺乏国际性,缺乏影响力). My earlier blogpost mentioned the nationality issue. Would qualified foreign judges (or those from Hong Kong) be willing to join the international commercial court? Judge Gao does not mention that the group of Chinese judges qualified to hear these cases is not that large, and they are overloaded with cases, judicial interpretation/other guidance drafting, and other work. Could highly qualified Chinese lawyers be appointed to this court?  It is unclear, and relates to issues of how they would fit into the rigid structure of the judiciary, highlighted here.
  • choice of law; she mentions that parties have freedom concerning choice of law in China, so that would not be a problem.  However, relating to choice of court clauses, Professor Vivienne Bath’s research on parallel proceedings in China (previously mentioned on this blog) shows that Chinese courts do not recognize the validity of those clauses when the choice “lacks an actual connection with the dispute” because of provisions in the Civil Procedure Law.
  • procedure; she queries whether there can be some breakthroughs in civil procedure in this area.  Foreign lawyers are likely to query whether this could mean better discovery of documents. More importantly, what is not mentioned is that China’s failure to have acceded to the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents will also be a major obstacle for the international commercial court. Under current Civil Procedure legislation,  notarization and legalization of documents is often required. The first step is when a party files suit or when a foreign party responds. Additionally, in litigation, evidence from a foreign country often must be notarized and legalized. Notarization and legalization costs time and money and a great deal of effort. At an academic conference in 2017, experts from the institutions involved discussed how to proceed on this.
  • language; Judge Gao notes that the Civil Procedure Law puts obstacles in the way of the international commercial court hearing cases in English.  Note that the pool of Chinese judges able to hear cases in English is not large, and would even further require recruiting judges from outside China’s judicial system.
  • counsel; She mentions the issue of having foreign lawyers handle cases is also an obstacle for the international commercial court, because China’s Civil Procedure Law currently does not permit it.
  • transparency; Judge Gao notes that Chinese judicial transparency and informatization has made great strides, so should be useful to the international commercial court.  However, Judge Gao and her colleagues could usefully look at the type of information accessible to both the parties and general public (and the level of detail in judgments) in other international commercial courts.
  • enforcement; Judge Gao raises the issue of recognition and enforcement of judgments, discussed above.

Where does the SPC go from here?

The article by the post-doctoral student Liao Yuxi suggested that the SPC may want to request the NPC Standing Committee authorize it to suspend some of the problematic provisions of the Civil Procedure Law that Judge Gao flagged above, such as the use of language, and the qualification of judges.  However many of the other issues cannot be resolved so easily, such as international enforcement and the requirement of notarization and legalization of evidence.

As for when we can expect to see some rules relating to the international commercial court, and whether drafts will be circulated for public (or even soft consultation), those are all unclear.  What is clear is that many complicated legal issues face Judge Gao and her colleagues.







Why are Chinese judges so stressed?


“Dear litigants”

The photo above was viral in legal Wechat groups in early February–a notice in the lobby of a Guangxi district court advising litigants to use mediation or arbitration because the judges in the court are overworked, overstressed, and voting with their feet to leave the courts.  The notice gives the court’s 2017 caseload (36,476 cases) and prediction for 2018 (over 40,000) and says fifteen percent of the judges have quit, retired, or transferred out of the courts and judges’ assistants are leaving as well.

How many Chinese judges are there?

SPC President Zhou Qiang reported to the National People’s Congress Standing Committee in November 2017 that there were 120,128 quota judges/judicial post judges(员额制), a reduction from 211,990.   Some of those judges have become judicial assistants, while others have been transferred to administrative roles within the courts.

It appears that the authorities decided to reduce the headcount of Chinese judges by comparing the percentage of judges in China with those in major jurisdictions. The readers of this blog know (and Chinese judicial reformers know clearly), the structure of the Chinese courts is quite different from those in other jurisdictions, whether civil or common law systems. However, once the reduction had been approved by the highest political authorities,  those questioning the wisdom of this decision  run the risk of improperly discussing (or distorting (歪曲)) judicial reform (妄议司改), a variation of “improperly discussing Central policy (妄议中央).

Chinese courts are a cross between a court and a Party/government organ, with personnel in administrative offices such as the political department (政治部), general office (办公厅), supervision bureau (监察局). Senior personnel such as the court president, vice presidents, and division chiefs, have a significant portion of their time taken up by administrative matters.  The judicial reforms now require senior personnel to hear a small number of cases per year and according to President Zhou Qiang, that number is up 32% (the base number is unknown).  Of the 120,990 judges who have the status of judge, 85% of them hear some number of cases. Statistics on the number of judges actually hearing cases are hard to pin down.

We do not know how many judges have left the Chinese courts in 2017 or 2016 by quitting or transferring to a government department.  Presumably, the head of the Supreme People’s Court’s (SPC) Political Department (in charge of personnel) does, but those statistics seem to be confidential.  Based on partial information however, judges are continuing to leave the courts, from the SPC on down.

From a survey done by a post-doctoral student at the China Institute of Applied Jurisprudence of the SPC in 2015 (further detailed below), close monitoring of Wechat articles, and my own personal observations, those who remain in the judiciary have a high degree of stress.

Stresssed Chinese judges and their job dissatisfaction

In the spring of 2015, then Beijing Higher People’s Court Judge Hu Changming and a post doctoral student at the SPC’s China Institute of Applied Jurisprudence, but now a researcher at the Chinese Academy of Social Sciences Institute of Law, conducted a job satisfaction survey among Chinese judges, published in the prestigious China Law Review and summarized in SPC media. Hu previously won awards for his writings as a judge. He later published an article on Wechat (originally published in the defunct Wechat account “Home of Judges” that (according to this report) led to his punishment for distorting (歪曲) judicial reform.

Hu received 2660 responses from judges working in all four levels of the Chinese judiciary.  Although the ongoing trope about the Chinese judiciary outside of China is that most Chinese judges are former People’s Liberation Army officers, Judge Hu’s survey found that most judges had at least an LLB or master’s degree in law, with small numbers of judges with less than an LLB or a Ph.D.

The pie chart below (from Hu’s study) is of responses concerning job satisfaction (extremely satisfied 1.28%, relatively satisfied, 11.09%, neutral, 30.53%, not very satisfied 34.89, and very dissatisfied, 22.22%).Screen Shot 2018-02-21 at 3.58.34 PM

His survey further revealed that practically all (94.47%) of judges surveyed had considered quitting the judiciary, of whom 57.37% had considered it seriously, and only 5.53% had never considered it.  His survey had more male than female respondents, and more middle-aged than late career judges, likely affecting these results.

Why are Chinese judges dissatisfied?

According to Hu’s 2015 survey, Chinese judges are dissatisfied for both work-related and benefits-related reasons. This is consistent with my earlier research.   This post will look at some of the work-related reasons.

Work-related reasons

Both the survey and other observations show that Chinese judges, particularly those in basic level courts in China’s most developed areas, have too much work.  One major reason was the decision in 2015 to change the case filing system. Six weeks into the case filing reform I predicted “greater stress for fewer judges and other judicial staff” and at the end of 2015 noted the SPC was “putting a positive spin on what is a highly stressful situation for frontline judges.”

The caseload in the busiest courts is large and on the increase yearly(see the chart below for the caseload in first half of 2017 and percentage increases). The Wechatosphere frequently reports on the heavy caseload in the country’s major courts and the stress on frontline judges. In September, 2017, I reported on the situation for frontline judges pre-19th Party Congress.

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1. Pudong/Shanghai; 2.Chaoyang/Beijing;3. Yuexiu/Guangzhou; 4. Baoan/Shenzhen; 5. Futian/Shenzhen; 6. Haidian/Beijing; 7. #1/Dongguan; 8. Jingan/Shanghai; 9. Western District/Beijing; #1/Zhongshan

For domestic cases, judges are under tight deadlines and their work computers will flash a red signal when a case isn’t closed on time. Although unreasonable performance targets were to have been abolished, Wechat articles and judges who I was able to disturb at year’s end mentioned that they were under pressure to close cases by year end so that their court could achieve a high closing rate, documenting the closing rate pressure mentioned in September, 2017.

Another source of pressure for judges is the lifetime responsibility system, which two Chinese judges writing in an academic law journal called the “sword of Damocles hanging over judges” ( 法官办案责任追究是时刻悬挂在法官们头上的“达摩克利斯之剑”), analyzing the drawbacks with the standards and their implications for judges.  Hu’s survey found that almost half of them felt that the responsibility system for mistaken cases was unfair and this is also shown in Wechat and articles in court media as well as comments by individual judges.

According to Judge Hu’s survey, judges regularly work overtime, some for over six months a year, and most mention that they have inadequate administrative support. This may change over time as some law graduates are willing to take on positions as judge’s assistants, but as the sign above indicates, some of them are leaving too, but from the Wechatosphere, they feel stressed as well. As mentioned in this earlier blogpost, interns are a welcome source of additional brainpower, although in experience of my students, at least, interns need to depend on their parents or school scholarships to cover their expenses during their internships.

Then there is the matter of what work occupies their work day.  In addition to sitting in court, reading case files,  or drafting judgments, Chinese judges have to receive petitioners, deliver litigation documents, and enforce judgments, as well as publicize law to “the masses (including soldiers).”

Additionally, meetings of various types take up their time as well.  Since the Communist Party has been focusing on raising the ideological level of the judiciary, it seems likely that for frontline judges, meetings focused on the latest Party documents take time away from cases.

As this blog has mentioned previously, the judicial reforms for the most part have retained the pyramid structure of Chinese courts, where the court president, vice presidents, and division chiefs have administrative authority over judges.  And even for those reformed courts that have a flat administrative structure, the authority of the head of the court (or tribunal and the judicial committee still remains in place, although the judicial reforms call for new committees to be put in place relating to both appointments and judicial punishment.

Will the “deepened reform of the judicial system with comprehensive integrated reforms” (深化司法体制改革综合配套改革) (discussed in December’s blogpost) deal with the stress of China’s judges and retain (and attract) the elite corps that Chinese judicial reformers envision?  We will need to wait and see.






Rights of the Child

Hannah Lu[1]

As of this writing, there have been eight school shootings in the United States since 2018 started[2] and there have been 290 school shootings in the United States since 2013[3]. Between the years 2013-15, 85 of these shootings have occurred at K-12 schools.[4]

In November 1989, practically every member of the United Nations signed the Convention on the Rights of the Child (CRC), a human rights treaty that sets out the civil, political, economic, social, health, and cultural rights of children. I learned about this treaty when I was in primary school in Hong Kong.  196 members of the United Nations are party to the convention. The United States is not.

CRC Article 3 states

“in all action concerning children, whether undertaken by public or private social welfare institution courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration”.

Article 19:

“State’s parties shall take all appropriate legislative, administrative, social and educational measures to protect the child from all forms of physical or mental violence, injury or abuse, neglect or negligent treatment, maltreatment or exploitation, including sexual abuse, while in the care of parent(s), legal guardian(s), or any other person who has the care of the child.”

The United States (while it has not ratified the treaty, it remains a signatory) is in violation of these articles through its negligence to properly and adequately protect children from gun violence while they are at school. [Editor’s note: this assumes these articles are now part of customary international law, so that the United States is bound by these principles although it has not ratified the CRC.] The failure to pass any gun reform legislation on both a federal and state level is not just a failure on the part of the government to its children but a violation of their human rights. The negligence and inability to pass gun reform legislation mean that the United States has both failed to consider the best interests of its children but also that it has failed to protect them from physical and mental violence. The State Department’s website says that “the protection of fundamental human rights was a foundation stone in the establishment of the United States over 200 years ago”[5]. The question now is when will the United States address those foundational rights?


[1] Class of 2018, New York University, Tisch School of the Arts (and daughter of the Monitor).

[2] https://www.theguardian.com/world/2018/feb/14/school-shootings-in-america-2018-how-many-so-far

[3] https://everytownresearch.org/school-shootings/

[4] https://everytownresearch.org/reports/analysis-of-school-shootings/

[5] https://www.state.gov/j/drl/hr/

Supreme People’s Court & the new campaign to “sweep away black & eliminate evil”

Screen Shot 2018-01-31 at 11.21.40 AMLast week, China announced the latest campaign to “sweep away black and eliminate evil,” saohei chu’e (扫黑除恶),“Concerning the Carrying Out of a Special Action to Sweep Away Black and Eliminate Evil” (关于开展扫黑除恶专项行动的通知) (full text not yet released) with Xinhua news reporting that it reflects it reflects the leadership’s  outlook on security and people-centered governance thought.  The Supreme People’s Court (SPC) is an integral part of the campaign and was one of the institutions (along with the Supreme People’s Procuratorate, Ministry of Public Security, and Ministry of Justice) that issued a guiding opinion (办理黑恶势力犯罪案件的指导意见) on how the campaign is to be carried out (text found here). As previously discussed on this blog (and in a forthcoming article), there is no transparency requirement for guiding opinions and other “judicial normative documents” that are not judicial interpretations.  What has been made transparent (in a quick dive into the Wechatosphere) is that the SPC is both clarifying the criminal law issues to the legal community and signalling through releasing typical cases and other actions that lower authorities should not use the campaign to confiscate the property of private entrepreneurs. But will other imperatives trump that signal?

  1. Clarifying the legal issues

Although the commentators in this Voice of America program weren’t aware of it, there is a body of (confusing) legislation, partially described in this book chapter (somewhat outdated).  The authoritative (because it is published by the five criminal divisions of the SPC)  Reference to Criminal Trial (刑事审判参考), had published a special issue (issue #107) on organized crime law last summer. (For those of us who read more quickly in English, the editors have helpfully compiled an English translation of the table of contents. (see below)



In his 29 January Wechat posting on his 说刑品案 (“Speak About Criminal Law, Evaluate Cases”) Wechat account, its editor, Judge Yu Tongzhi (于同志), a judge in the #2 Criminal Division and one of the editors of Reference to Criminal Trial, set out 20 Q & A’s with guidance on the legal issues (derived from last summer’s issue).

Judge Yu described the posting as to “coordinate” (配合) with this campaign, but is the author’s way of saying that the law on these issues is confusing and all involved, whether they are judges, prosecutors, public security or defense lawyers need an authoritative steer through the forest of law, judicial interpretations, and other guidance.   As is apparent from the photo above, the guidance includes a 2015 conference summary on organized crime, guiding cases (指导案例)(not to confused with those guiding cases (指导性案例 issued by the SPC itself), authoritative commentary on the 2015 conference summary, major cases, and discussions by judges of difficult legal issues. The guidance posted often illustrates answers with examples from the guiding cases and cautions that standards should not be improperly expanded, such as the definition of a “gang member.”  He does not include a summary of the law on property seizure, the subject of one of the articles in issue #107.

Some of the organized crime legal issues are analogous to those in other jurisdictions and last year one of the SPC websites published a long article analyzing this area of law (and its problems), suggesting that China look to US RICO legislation.

The first of the 20 questions is:

  1. What’s the connection between the 2015 and 2009  conference summaries on organized crime?

Don’t be surprised if you haven’t heard of either conference summary, as neither one seems to have been incorporated in any of the major translation databases.  As to what conference summaries are, Conference summaries are what the SPC entitles “judicial normative documents”  (there are a number of titles for these) and often address new issues or areas of law in which the law is not settled.   “Conference summaries” are also a form of Communist Party/government document.

The relationship is addressed in the article on the application of the 2015 conference summary by several heads of SPC criminal divisions in issue #107.  Their view is that the two conference summaries should be read together, which the later one taken as an elaboration of the first, with newer provisions superseding the older ones.

The campaign & private entrepreneurs

The second signal that the SPC is sending is that the “sweep away black and eliminate evil” campaign should not be used to abuse private entrepreneurs.  On 30 January, the SPC issued seven typical cases on protecting private property rights and the rights of entrepreneurs, one of which involves a case that occurred during the 2008 “strike black” campaign.  As summarized in China Daily,  the Liaoning Public Security Department arrested Liu Hua and Liu Jie in a 2008 criminal investigation and seized 20 million yuan (about 3.16 million U.S. dollars) in funds from their company, Beipeng Real Estate Development Co. Ltd. in Shenyang. In 2014, a local court in Benxi convicted the two and the company of illegal occupation of farmland but exempted them from criminal punishment. Liaoning Public Security refused to return the seized funds and related financial documents were not returned.  SPC Vice President Tao Kaiyuan SPC Vice President Tao Kaiyuan acted as the chief judge, and the SPC’s State Compensation Committee ruled the Liaoning Public Security Department should return the funds with  interest. Judge Hu Yunteng and the  #2 Circuit Court  were involved in this as well. Company counsel’s detailed account of this case (highly recommended!) found here. Judge Zhu Heqing, Deputy head of the #3 Criminal Division, discussed in the article mentioned above in #107 the problems with the law and practice of property seizures, such as the lack of a definition of “organized crime related property” (涉黑财物) and related seizure procedures, as well as the lack of procedures to require the return of property improperly seized.

Some thoughts

As the document on implementing this campaign has not been released, we cannot know whether it includes performance targets that will lead local authorities to “round the usual suspects up.” What is apparent from the Wechat posting and much more from issue #107, is that the law is this area is unclear, lacks procedures for protecting the property of the entities involved (not to mention the entrepreneurs), and can be easily abused by local authorities.  As we know from the case above and other cases, entrepreneurs will then spend years seeking the return of their property.  The SPC must coordinate with this latest campaign while protecting the rights of entrepreneurs, and avoid a new set of mistaken cases.





Supreme People’s Court & Supreme Court Justice Roberts’ 2017 year-end report

download-2Chief Justice John Roberts of the United States Supreme Court may be surprised to learn that a translated version of his 2017 year-end report on the federal courts was recently published by the People’s Court Daily, as it has been for the past twelve years. It was republished by Wechat and Weibo sites affiliated with the Supreme People’s Court (SPC) and other prominent Wechat public accounts and legal websites. What significance does the report have?

The translators that bring the year-end reports to Chinese readers are Mr. Huang Bin (formerly of the SPC’s China Institute of Applied Jurisprudence and now of the National Judicial College, a former Yale Law School visiting scholar) and Ms. Yang Yi (China Institute of Applied Jurisprudence, a former Columbia Law School visiting scholar).

Two subjects in Justice Roberts’ 2017 report are likely to resonate with Chinese readers. The first is how the federal courts dealt with national disasters in 2017 (introductory comments in some of the Wechat versions mention that China has only scattered legislative provisions related to emergency measures for the courts). The second is sexual harassment and Justice Roberts’ request to the Director of the Administrative Office of the United States Courts to organize a working group to review the code of conduct for the federal judiciary, guidance to employees on issues of confidentiality and reporting of instances of misconduct, and rules for investigating and processing misconduct complaints.

The #Metoo movement has not yet explicitly affected the Chinese courts. However, it is likely that Chief Justice Roberts’ acknowledgment that existing rules and structures for dealing with sexual harassment complaints are inadequate that resonates with Chinese women judges and judicial support staff, who make an increasingly large percentage of the Chinese judiciary. It seems likely (confirmed by discrete inquiries) that sexual harassment occurs in Chinese courts as well.

More broadly, what relevance does Justice Robert’s report and others on the US federal and state judiciary have for the Chinese judiciary after the 19th Party Congress, when in October, 2017 Communist Party Central Committee policy on the training of judges and prosecutors lists first resolutely opposing erosion by the mistaken Western rule of law viewpoint” (坚决抵制西方错误法治观点侵蚀)? To the careful observer, the publication of these reports and other articles on specific issues in SPC publications means that the senior and lower levels of the Chinese courts have an ongoing interest in what the US federal and state courts are doing and look to commonalities and takeaways (despite the vast differences in the two systems).

Another example of the Chinese courts looking to commonalities with the US courts occurred earlier this month (January) when the China Institute of Applied Jurisprudence published a Chinese summary of the National Center for State Courts’ 2017 survey on public confidence in the state courts. The article appears to be a republication of an article previously published internally and reflects the concern of the Chinese judiciary with public trust.

The takeaways, that is referring to or borrowing foreign legal concepts or models to reform China’s judicial system remains politically sensitive. In Party General Secretary and President Xi Jinping’s 19th Party Congress speech, he called for the continuation of judicial reform:

We will carry out comprehensive and integrated reform of the judicial system and enforce judicial accountability in all respects, so that the people can see in every judicial case that justice is served.

 Earlier in 2017, when visiting the China University of Political Science and Law, Xi Jinping cautioned that Chinese legal reform does not mean wholesale adoption of foreign law and institutions:

China shall actively absorb and refer to successful legal practices worldwide, but they must be filtered, they must be selectively absorbed and transformed, they may not be swallowed whole and copied (对世界上的优秀法治文明成果,要积极吸收借鉴,也要加以甄别,有选择地吸收和转化,不能囫囵吞枣、照搬照抄).

What a careful observer notices from monitoring SPC media is that those involved with reform of discrete areas of Chinese legislation and judicial practice continue (in the pre/post 19th Party Congress era) to look at US federal/state law (and other foreign law) structures and practices, including: use of mediation in federal appeals cases; bankruptcy practicereform of Chinese nuclear safety legislation to broaden the scope of information released to the public, that is in specific areas that do not involve basic principles of the Chinese courts.




Supreme People’s Court Monitor’s 2017 year-end report



SPC court handbooks & monthly bulletins from the 1980s & 1990s

A change in this year-end report, with some stories as well as thank yous.

In 2017, the Supreme People’s Court Monitor published 41 posts and had over 33,000 page views, from 155 jurisdictions, primarily from:

  • United States;
  • Hong Kong;
  • (mainland) China; and
  • Australia.

with the United Kingdom, Germany, and Singapore trailing.

Since founding almost five years ago:

Views: 108,990
Jurisdictions: 183
Posts: 212

Most followers use Twitter to follow the Monitor.Although Twitter is not accessible in mainland China without a VPN, 26% of the Monitor’s Twitter followers are based there.

Thank yous

Thank you to:

  •  the booksellers (likely long retired) who sold me the SPC court handbooks & bulletins in the 1990s, opening for me a door into the world of the Chinese judiciary;
  • my colleagues and students at the School of Transnational Law, Peking University (Shenzhen);
  • my fellow bloggers Jeremy Daum (Chinalawtranslate.com), Wei Changhao (npcobserver.com, Mark Cohen (Chinaipr.com), and Eugene Fidell (globalmjreform.blogspot.com);
  • the law schools and other institutions around the world, that have listed my blog as a Chinese law resource;
  • law and political science professors who have recommended the Monitor to students and many others in other institutions who have provided support in various ways;
  • journalists and scholars writing about the Chinese judiciary who have cited the Monitor;
  • organizers of conferences and other events in Beijing, Shanghai, Leiden, Cologne, Hong Kong, and Sydney. One Shanghai event attracted several “mature students” from the local authorities, apparently interested to know more about the challenges Chinese students could face studying law in the US;
  • Certain members of the Chinese legal community:
    • judges and others currently or formerly affiliated with the SPC and local courts, who helped me understand the Chinese court and legal system in countless ways;
    • lawyers, arbitrators and other legal professionals who have done the same;
    • administrators of the Wechat public accounts who published my articles; and
    • those who had the fortitude to read early drafts of articles and give frank comments, particularly the person who asked the classic question “what are you trying to say?!”  (The much-improved article will be published this year.)

Finally, thank you very much to the East Asian Legal Studies program of Harvard Law School for supporting the Monitor.  I hope their example will lead to the greater recognition of the importance of understanding the Chinese legal system (with its many special characteristics).

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    School of Transnational Law, 29 December



Supreme People’s Court reports on its bankruptcy accomplishments

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The warm sun and shopping mall Christmas decorations were not what drew Supreme People’s Court (SPC) President Zhou Qiang and a large group of senior court and other government leaders to Shenzhen on Christmas Day–it was a rare national bankruptcy trial work conference. It sends signals about the importance of bankruptcy post 19th Party Congress.

This appears to have been one of the last official activities of Grand Justice Du Wanhua, who has taken the lead in promoting bankruptcy work in the courts (see earlier blogposts) and is a classmate of President Zhou Qiang. Du, who turns 64 in January, is retiring.  Takeaways from the conference include:

  • some statistics;
  • the latest political/professional policy on bankruptcy;
  • some informed comments on where the challenges are (with some of my further comments in italics).


The Chinese courts accepted 8984 bankruptcy & compulsory liquidation cases in 2017 (through 21 December), heard by 97 bankruptcy divisions (up from 6 in 2016, a consequence of a 2016 SPC notice, described here).  The courts concluded 4404 bankruptcy cases through November.

Reforms aimed at speeding up cases moving from enforcement to bankruptcy proceedings are showing some initial success, with the Guangdong courts handling over 43,000 in the second half of 2017, of which 10,000 were handled by the Shenzhen courts.

Latest bankruptcy policy statements

President Zhou Qiang conveyed the macro policy on bankruptcy.

  • adhere to problem orientation (必须坚持问题导向) (one of the current political slogans);
  • if at all possible, merge or reorganize, less bankruptcy liquidation 尽可能多兼并重组,少破产清算 (the current policy);
  • Explore establishing a simplified procedure and a pre-reorganization system (简易破产程序、预重整制度) (this idea, a borrowing of pre-packaged administration from US/English law has been discussed by academics and others for some years, but this prominence seems to be new.  Pre-packaged administration is a bankruptcy/insolvency procedure under in which a company arranges to sell all or some of its assets to a buyer before appointing an administrator to facilitate the sale. It involves a company’s institutional creditors agreeing to it, so it is understandable that would be an attractive idea in China);
  • intermediate courts in larger cities and economically developed areas should establish bankruptcy divisions or collegial panels (this follows from an announcement in 2016, discussed here);
  • use informatization to improve the hearing of bankruptcy cases (信息化建设提高破产审判质效).

Du Wanhua had more specific signals to the lower courts.

  • improve professionalism;
  • improve the bankruptcy administrator system, promote establishing a bankruptcy administrator society, bring in a competitive system;
  • improve the enforcement to bankruptcy system,  accelerate cases that can’t be enforced transferred to bankruptcy proceedings;
  • use reorganization as much as possible through the market and legal methods to save companies in trouble;
  • establish a normalized government/courts unified coordinated system (要建立常态化的“府院破产统一协调机制”), protect the rights of each party on an equal basis;
  • use informatization.
  • handle carefully bankruptcy cases involving debts that are mutual/joint guarantees, guide financial creditors to convert the debt into equity or other methods that simplify the debtor relationship and enable the company to survive;
  • handle carefully the consolidated bankruptcy of affiliated companies, balance the conflicts between the rights and interests of each party.
  • improve cross-border bankruptcy trial work.

 On problems facing bankruptcy courts

Professor Li Shuguang of the China University of Political Science & Law, one of the preeminent Chinese bankruptcy law scholars, who attended the conference, had informed comments, citing the following challenges for the bankruptcy courts:

  1. The relationship between the courts and government when hearing bankruptcy cases needs to be resolved. (Despite the official talk of a united approach by courts & government, discussed above, it remains a challenge. For some local color, see this excerpt from an article by a team of Zhejiang bankruptcy judges on real estate developer bankruptcy:

If a real estate developer is having a crisis, government will involve itself first, and only if administrative measures don’t work, will they think of judicial measures. This creates problems in transitioning from administrative to judicial procedures. For example, how should a court treat the legal authority of the creditor settlement arrangement of the special work team formed by government to deal the crisis? Once the company goes into bankruptcy procedures, government hasn’t withdrawn completely, and on the one hand, all sorts of bankruptcy matters require coordination and cooperation by many government departments, and on the other hand government will give instructions and suggestions about bankruptcy work, considering the needs of the local economy, stability, and other interests.

3.  Many local courts are afraid to accept bankruptcy cases and even establish unreasonable barriers to for local protection–new systems need to be put in place.

4.  On bankruptcy administrators, there need to be more detailed rules on selection, oversight, administration, operation. [I can testify to this, based on the questions raised on one of my Wechat chat groups about bankruptcy administrators and the many articles published on bankruptcy law-related Wechat public accounts.] 

5. Professor Li asks how Chinese bankruptcy law can be reformed to effectively rescue companies, to enable courts to identify salvageable companies, properly protect the rights of creditors and shareholders.  More detailed rules are needed on preferences in bankruptcy.  These are ongoing issues for Chinese bankruptcy courts, as the current system protects local government interests.

6.  There exist a group of specific issues related to bankruptcy liquidation, such as how to expand the pool of assets available to the creditors, balance the interests of various creditors, deal with the relationship between creditor committees (under the bankruptcy law) and financial institution creditors committee (these committees were put in place from 2016, see more details here).  This also relates to issues of transparency and procedure, particularly what information will be available to members of the creditor committee, and at what point. An important area where legal infrastructure is lacking, as discussed in this Wechat article.

Among those issues is how to protect the interests of consumers who have purchased property from a bankrupt real estate developer.  This is an important practical issue for all involved (including local governments) because an increasing number of real estate developers are going into bankruptcy.  A recent Wechat article analyzes a 2015 SPC ruling that requires the bankruptcy administrator to perform the purchase and sale contract where payment has been made in full.  In practice, courts take different approaches to variations on this scenario.

7.  He echoes Du Wanhua on issues related to consolidation of bankruptcy cases involving corporate affiliates and the transfer of cases from enforcement to bankruptcy, raising the problem of the courts performance indicators.

8. Professor Li opens up the issue of “informatization,” so that it becomes a platform collecting and analyzing bankruptcy data, and information sharing mechanism for all involved.  This comment echoes my own experience that the electronic platform is not helpful for a researcher seeking access to bankruptcy documents, as few are accessible, not even those that are otherwise publicly available. Some bankruptcy judges have responded to my discrete inquiries that little information is available because it is possible to set access restrictions on information.)

9.  He raises the increasingly prominent issue of cross-border bankruptcy, in which judges lack legislation and experience to deal with these issues, and suggests that at an appropriate time harmonization of Chinese cross-border bankruptcy standards with international ones.  By this, he is likely referring to the UNCITRAL model law on cross-border insolvency.  These issues are ongoing ones for the professional community in Hong Kong and increasingly in the rest of the world, see this law firm alert. This has been a frequent topic of academic analysis.

Finally, Professor Li states (what is clear from the comments above) that bankruptcy legislation is inadequate–the judicial interpretations the SPC has issued. deal with only a small portion of the outstanding issues and there isn’t time to draft a long judicial interpretation.  As judges are hearing bankruptcy cases, large numbers of technical issues have arisen [I can testify to this, based on the questions raised on one of my Wechat chat groups.]  SPC academic journals and academic studies address specific issues, see these articles. Professor Li suggests that a “conference summary” be issued based on this conference and input from bankruptcy court professionals. (A conference summary is explained in this blogpost.)

Quick comment

Finally, this area of law is a microcosm of issues facing the Chinese courts, whether it is the requirement for the SPC and lower courts  to reflect current Party/government policy in what they do, relationship between the courts and government, issues with judicial professionalism, large number of technical issues but a lack of legislation, related issues that affect the ordinary person, consideration of foreign law models, and the disconnect between international and Chinese practice.