Supreme People’s Court’s New Policy on Cross-border Commercial Issues and Covid-19

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From left, Li Guangyu, SPC spokesperson; SPC Vice President Justice Luo Dongchuan; Judge Wang Shumei, head of #4 Civil Division

On 16 June, the Supreme People’s Court (SPC) held a news conference (pictured above), to announce that it had issued “Guiding Opinion on the Proper Handling of Civil Cases Involving the Novel Coronavirus Outbreak in Accordance with the Law (III)” (SPC Guiding Opinion III).” SPC Guiding Opinion focuses on the most important cross-border commercial issues that have arisen in the Chinese courts this spring as a result of the Covid-19 pandemic.  This brief blogpost provides some comments and an overview of the document, leaving the detailed analysis to the law firms that are sure to analyze it.

What is this document?

SPC Guiding Opinion III is a judicial policy document (司法政策性文件). As this blog has often commented, the Supreme People’s Court (SPC) must serve the greater situation and deal with practical legal issues, so that the SPC itself and its senior leadership are correct, politically, and professionally. One of those ways is by providing properly calibrated guidance to the lower courts and other related authorities with the appropriate political signals.  For this document, Justice Luo Dongchuan provided the political background and signals in his introductory remarks at the SPC news conference. The document itself is practically oriented (as those in the system say “problem-oriented”–“问题导向”)(and the practitioners say “干活”).

From the photo above it is clear that the #4 Civil Division, headed by Judge Wang Shumei, which focuses on cross-border commercial and maritime issues, took the lead in drafting. That division is one of the smaller divisions of the SPC and “punches above its weight.”

A judicial policy document is not a judicial interpretation but as the SPC editors of a collection of these documents noted, “it is generally recognized that they have an important guiding impact on the trial and enforcement work of the courts at every level.”  SPC Guiding Opinion III is one example of the many types of SPC “stealth” guidance to the lower courts.  I describe it as “stealth guidance” because it affects how cases are handled, heard, and decided, but cannot be cited in a court judgment or ruling. For that reason, only the highly observant will note the impact of judicial policy documents.

I anticipated that the SPC would issue further Covid-19 pandemic guidance when I spoke [links to video] in April at a virtual event sponsored by Berkeley Law School’s Center for Law & Technology. Some of the guidance reveals frequently used litigation tactics of Chinese parties.

Selected comments on the content

The document is divided into four sections:

  1. Civil procedure mechanics–parties, evidence,  deadlines, and statutes of limitations (Articles 1-5): This section draws on the recently amended and effective civil evidence rules

Article 1 directs Chinese courts to approve applications for extensions for foreign (cross-border) parties who are delayed in being able to provide notarized and authenticated documents to evidence the identity.  Delays in obtaining notarized and authenticated powers of attorney are to be treated similarly. If China had acceded to the 1961  Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, for all of China, this requirement would no longer be necessary. The Convention is applicable to Hong Kong because of UK-PRC handover arrangements, which enabled conventions originally applicable to Hong Kong pre-1997 to continue in effect.

Article 3 reveals one of the frequently used litigation tactics of Chinese parties in cross-border litigation in China–that is disputing the authenticity of a document because it has not been properly notarized and legalized. The SPC Guiding Opinion III advises lower courts to notify parties that they may reserve their arguments concerning these formalities, and focus their arguments on relevance and persuasiveness of the evidence.

      2. Ascertainment (determination) and application of law

These articles remind Chinese courts to use the Law of the People’s Republic of China on the Law Applicable to Foreign-Related Civil Relationships to determine governing law (assuming a contract does not designate a governing law), and to look to the SPC Guiding Opinion I for guidance on force majeure under Chinese law.  The SPC also reminds lower court judges not to substitute Chinese law if foreign law governs.  This is not the first time that this type of reminder has appeared in SPC policy documents, indicating this is an ongoing problem.  This section also includes guidance on the application on the UN Convention on the Sale of Goods.

Articles 8 and 9 relate to letters of credit, standby letters of credit, and demand (independent) guarantees. It reminds lower courts to correctly apply the International Chamber of Commerce (ICC)’s UCP 600 (Uniform Customs and Practice for Documentary Credits), the ICC’s URDG 758(demand guarantee rules), and the related SPC judicial interpretation concerning demand guarantees.

This likely means that Chinese contractors who have provided independent guarantees or standby letters of credit for construction projects overseas are seeking to prevent the owner of the projects from drawing on these guarantees through litigation in the Chinese courts. This case decided by the SPC in April, 2020, reverses the judgment of the Shandong Higher People’s Court in favor of the Chinese contractor.  The dispute relates to a Shandong Electric Power Company (SEPCO) project in India. Previous reporting in the Indian press seen here.

3. Transport contracts

Articles 11-17 relate to various types of transportation contracts as well as shipbuilding contracts.

4. Green channel.

This last section reminds courts to use online procedures and cross-administrative region arrangements if convenient and that Hong Kong, Macau, and Taiwan related commercial cases should be handled with reference to this guidance.

How was the document drafted?

As to how the SPC determined the FAQs of the lower courts, it did what all corporates and institutions around the world do these days–convened a video conference. The participants presumably came from the maritime courts and the foreign-related civil divisions of the provincial courts.

Why did the SPC issue it?

The number of cases directly affected by this guidance is relatively small. According to statistics released with President Zhou Qiang’s report to the NPC in May, there were 17,000 first instance foreign-related commercial cases and 16,000 foreign-related maritime cases in the Chinese courts in 2019, compared with 31.5 million cases in the Chinese courts overall.

However, foreign-related cases tend to be more sensitive because, as Zhou Enlai said “外事无小事” (foreign matters are never small matters” –foreign-related matters, because they involve relations with other countries and the prestige of the Chinese state, are sensitive. That means that judges hearing cross-border cases have a particular pressure to handle these disputes in a way that is consistent with the law (of course), acceptable to the leadership of their court & to the outside world.  One important aspect of SPC Guiding Opinion III  is the impact on Belt & Road projects, In many of these projects Chinese companies are often contractors, or also contractors and equipment suppliers (and Chinese banks provide financing). On the civil/commercial side cross-border cases possibly involve treaty/convention obligations (or treaty-like arrangements, in the case of Hong Kong).

As issues dealt with in SPC Guiding Opinion III relate to the most important Chinese cross-border commercial issues that have arisen during the pandemic, it has an impact on the Chinese (and foreign) business community, far beyond the number of foreign-related cases in the Chinese courts, and is likely to have an impact on related arbitrations governed by Chinese law.

What Is the Impact of the SPC’s Circuit Courts?

President Zhou Qiang’s May, 2020  report to the National People’s Congress (which I will analyze when time permits) revealed that the number of cases that the Supreme People’s Court (SPC) has increased about 10% over last year to 38,498 cases accepted. This year’s report usefully set out a bar graph with the number of cases that the SPC accepted and concluded.

 

These (also from the report) show that in 2019, almost 60% of the SPC’s cases were heard in the six circuit courts.

This is not accidental, but the result of intentional SPC policy. Judge He Xiaorong, current head of the #2 Circuit Court (and former head of the SPC’s judicial reform office) stated five years ago–” after the circuit courts (literally tribunals) are established, the center of the work of SPC headquarters will shift to supervision and guidance, primarily trying cases that have a major guiding function in unifying the application of law, that can become guiding cases  (巡回法庭普遍设立后,最高人民法院本部应当将工作重心转移到监督指导上,主要审理一些对统一法律适用有重大指导意义、具有重大示范价值、能够作为指导性案例的案件).

There has been one academic article in English (that I am aware of) (by Professors Chen and Wang) that focuses on the circuit courts, but looking at large scale policy rather than more granular analysis of circuit court decisions, whether in the form of judgments or rulings, or how circuit courts guide the lower courts, the impact on law practice in circuit court cities, and what it means for law students.  I’ll set out some quick thoughts on each topic.

Circuit Court Judgments & Rulings

According to the research of Tsinghua Professor He Haibo and colleagues, most of the SPC documents are rulings rather than judgments.  According to their data relating to 2017, 91% of the documents were rulings (relating to applications for retrial or trial supervision), with judgments accounting for about 4%, which in the authors’ view, makes it difficult for the SPC to fully fulfill its function of supervising and guiding the lower courts. This statement has made me think more about what the circuit courts are doing, particularly behind the scenes, as “supervising and guiding” the lower courts has multiple meanings.

What appears not to be generally known is that a substantial proportion of the cases heard in the circuit courts are administrative cases, although Chinese law firms have done many big data reports of commercial cases heard in the circuit courts. I am not aware of a comprehensive study on the number and type of administrative cases in the circuit courts.  This report on the #3 Circuit notes that approximately 70% of the cases were administrative, without breaking out annual statistics. I understand that similar statistics are true for the #1, #2, and #6 Circuit Courts. This report from a Shaanxi law firm on #6 Circuit cases (based on 2017-first half of 2019) found that practically all administrative rulings (96%) rejected the applicant’s request to retry or remand the cases (see the pie chart below).
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The law firm commented that of the administrative cases that were accepted, most of them involved the taking of collective land and the condemnation of housing on state-owned land, indicating government enforcement issues (among others). The comments of the lawyers on the judgments indicated that “administration according to law” is still a long term goal, particularly in western China, as the cases revealed instances of local governments:

  1. condemning or taking land and housing without obtaining approval;
  2. taking land or housing in excess of administrative authority;
  3. taking land or housing first, then obtaining approval;
  4. failing to compensate real estate owners or land use rights holders;
  5. failing to follow required procedures;
  6. demonstrating poor awareness of law, including procedural and evidentiary requirements;
  7. failing to protect the rights of related persons;
  8. failing to comply with open government regulations.

This data is consistent with what I had understood from other sources. One informed commentator mentioned that circuit courts are reluctant to order the retrial of administrative cases. He attributed it to “holistic” thinking on the part of judges (my term–considering factors other than those relating to the case), particularly social stability, the need to uphold the prestige of government, etc.

However, in addition to judgments and rulings, circuit courts use other ways of guiding local courts, and indirectly, local governments.

 How the circuit courts guide the lower courts

Doing some further digging, I found that circuit courts use their judgments and rulings in other more traditional ways to guide the lower courts.  Among those are:

Circuit Courts and Elite Law Firms

Another impact of the circuit courts is to attract some of the elite Beijing or Shanghai law firms to establish branches in circuit court cities.  Tian Tong Law Firm appears to be one of the first, but I’ve also noticed that some of the other big Chinese law firms have followed Tian Tong’s lead. The impact on lawyer career paths remains to be seen, but it is likely to improve the level of litigation practice in some locations.

Circuit Courts and Chinese law students

Finally, having a circuit court nearby has an unrecognized benefit for Chinese law students, many of whom are educated in a very traditional way, with little experience in thinking through legal problems in a comprehensive way or are unused to using their research skills analytically.  It also enables the circuit courts to have greater intellectual support, without expanding their headcount.  From my conversations with law students who have interned in circuit courts, the experience has given them the opportunity to undertake thorough analysis on new issues and to have their work reviewed carefully by highly qualified and experienced mentor judges or judge’s assistants.  It has also given some law students an appreciation of the demands of working “in the system” rather than the more relaxed environment of a university, as several of my students found when they didn’t realize that they needed to inform their supervisors ahead of time about taking leave from their internships to return to school!

 

Supreme People’s Court’s New Vision for the Chinese courts

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Publicity related to the document analyzed below

The month of April saw the Supreme People’s Court (SPC) issue many judicial policy documents, consistent with the commitment made in January 2020 to Party leadership to better serve the Party and state.

To the outside observer, a document issued on 1 April appears to signal the way that the Chinese judicial system will develop in the post-19th Chinese Communist Party (Party) Congress Fourth Plenum New Era.  The document is entitled Opinions of the Supreme People’s Court on Thoroughly Implementing the Spirit of the Fourth Plenum of the 19th Party Congress to Advance the Modernization of the Judicial System and Judicial Capacity (最高人民法院关于人民法院贯彻落实党的十九届四中全会精神推进审判体系和审判能力现代化的意见) (Implementing the 4th Plenum of 19th Party Congress Opinions). It implements “Implementing Opinions on Comprehensively Deepening Reform in the Political-Legal Field” (the text of this January 2019 document 关于政法领域全面深化改革的实施意见 has not been issued publicly) and “The Fifth Five-Year Reform Outline of the People’s Court (2019-2023) and obviously, the Decision of the 4th Plenum of the 19th Party Congress (4th Plenum Decision). The fact that the first document has not been issued publicly means that outside observers can identify its implications only through summaries in the press and implementing documents. The Party’s regulations on transparency (explained here) do not cover documents of this sort.

The Implementing the 4th Plenum of the 19th Party Congress Opinion is a framework document in which the Supreme People’s Court (SPC) identifies principles and goals for the Chinese judicial system and judicial capacity after the 4th Plenum of the 19th Party Congress. This blogpost will identify some of them and their link to the 4th Plenum, with related comments in italics. I expect that the SPC will issue specific judicial policy documents and judicial interpretations, as appropriate, to implement specific measures.

New Era Governance

The document needs to be seen as part of the larger picture for China’s governance set out in the 4th Plenum Decision.  Section 1 states that  “modernization of the judicial system and judicial capacity is an important part of the modernization of the national governance system and governance capability” and is needed, among other matters, to provide judicial services and guarantees for societal and economic development. One aspect of the importance of its judicial services is the fact that there were 28 million cases in the Chinese courts in 2018, most of them civil and commercial.

Political correctness

Several sections relate to political correctness.  This is linked to the clear requirement in the 4th Plenum Decision,  under the topic “perfecting the comprehensive leadership of the Party  (健全党的全面领导制度.)”  The 4th Plenum Decision also requires implementing the ideological responsibility system integrating socialist core values into law and social governance. This document, therefore, contains corresponding provisions.

Party leadership

Consistent with last year’s National People’s Congress report and other documents, this document states that the most important goal is to uphold and implement the Party’s absolute leadership of the courts and persist in putting the Party’s political construction first. It restates tasks for the courts, some of which were earlier flagged on this blog:

  • effectively implementing the Party’s leadership in all areas and aspects of the work of the people’s courts and ensuring the independent and fair exercise of judicial power under the leadership of the Party.  Related language is found in the 4th Plenum Decision. This requirement is found in the latest judicial reform plan and elsewhere, including judicial training (as discussed here);
  • Improve the system for implementing major decisions of the Party Center (完善党中央重大决策落实机制) (found in the 4th Plenum Decision and documents thereafter);
  • strictly implementing the [Party] system of reporting and seeking approval for major matters [also known as requests for instructions](严格落实重大事项请示报告制度)(the Party regulations on reporting and seeking approval for major matters) (mentioned here);
  • strengthening improvements from political inspection (see my blogpost on the inspection of the SPC) and judicial inspection (强化政治巡视和司法巡查整改) (discussed in my forthcoming article) (related content found in the 4th Plenum Decision. Judicial inspection is an old institution repurposed in the new era);
  • implementing the Party’s reporting and inspection system (督察落实情况报告制度, mentioned in the 4th Plenum report and thereafter).

As mentioned in a recent blogpost, this means implementing Party principles concerning the appointment of personnel, particularly those in a leadership position. These trends are linked to broader policies related to civil servants (this recent academic paper by Holly Snape has good insights).

Socialist Core Values and the Ideological Responsibility System

Section 5 focuses on socialist core values and the ideological responsibility system, both of which the 4th Plenum Decision stressed.

  • On the ideological responsibility system, this (authoritative) article (the author was then at the Party’s Central Compilation and Translation Bureau), unfortunately behind the publisher’s high paywall, sets forth an authoritative explanation of this concept in Xi Jinping New Era Governance that some of us need. The author defines the ideological responsibility system as follows:  it “is part of the political reforms and aimed at maintaining and improving the loyalty of the Bureaucracy, as well as maintaining their ideological unification…Under the current Xi administration, the CCP wants its cadres to be politically reliable, professional and competent, morally self-regulated, and preferably trusted by the people…
  • Resolutely prevent and oppose the eroding influence of Western mistaken thinking (坚决防范抵制西方错误思潮侵蚀影响).  This phrase has evolved from the one used several years ago and mentioned on this blog: “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).  Related language appears in the 4th Plenum Decision: have a clear-cut stand opposing various types of erroneous views (旗帜鲜明反对和抵制各种错误观点 ). This observer surmises that this phrase appeared in the 2019 Party document mentioned above. This does not create obstacles to Chinese judges continuing to consider useful “Western” legal concepts and mechanisms and the SPC continuing to have exchanges and cooperation projects with major “Western” jurisdictions.
  • Implement socialist core values in the work of the courts. This has multiple aspects and continues an ongoing theme, including in judicial interpretations–see my 2018 blogpost). Some high-level conferences organized by the Case Research Institute of the National Judicial College have been on the subject of promoting socialist core values through cases.

Practically oriented

The more practically oriented sections (4, 6-8) reveal priority areas of SPC leadership concern. Those particularly relate to economic development, social stability, judicial reform, and technological upgrading, all topics found in the 4th Plenum Decision., while the section on public health emergency management relates to Party decisions and Xi Jinping speeches during the Covid pandemic.

These sections mention short, medium, and long-term areas of concern and development.

Section 4 of the document lists some of the priority matters relating to economic development facing the SPC and the lower courts, many of them mentioned in this year’s judicial interpretation list or recently announced judicial reforms. A curated version (translation is modified Google translate):

  •  Improve risk monitoring and the early warning mechanism in financial trials,  properly hearing financial disputes, and actively preventing and resolving financial risks (therefore we have seen the establishment of the Shanghai Financial Court and specialized financial tribunals in certain major cities. More detailed observations on this will come in the future);
  • fully implement the environmental public interest litigation system, improve the environmental remediation system, improve the environmental protection injunction system, improve the jurisdiction provisions in environmental cases. (The 4th Plenum Decision had a section on environmental protection and a July 2019 press conference linked to the fifth anniversary of SPC’s Environmental and Natural Resources Division mentioned these measures.)
  • Use evaluation indicators such as “enforcing contracts” and “handling bankruptcy”,  to improve trial management, mechanism, quality, and efficiency to create a stable, fair, transparent, and predictable legal business environment. (This is linked again to the 4th Plenum Decision and China’s ranking on the World Bank’s Ease of Doing Business scorecard).
  • Intensify the review of the legality of administrative actions, strengthen the substantive resolution of administrative disputes (also linked to the strengthening of administration by law in the 4th Plenum Decision, therefore also on the 2020 judicial interpretation agenda).
  • Strengthen the judicial protection of property rights. See earlier blogposts on this.
  • Formulate judicial interpretations for cases of infringement of trade secrets, and continuously improve the level of judicial protection of intellectual property rights (IPR). (Improving trade secrets protection is mentioned in the 4th Plenum Decision. Also see Mark Cohen’s recent blogpost on this).
  • Formulate judicial interpretations of punitive damages for intellectual property rights, promote the establishment of a tort damages compensation system that reflects the market value of IPR (IPR is stressed in the 4th Plenum Decision and punitive damages in IPR cases is mentioned. Also see Mark Cohen’s blog on this.  This also relates to evidentiary issues in IPR cases).
  • Mediation and diversified dispute resolution (including giving non-litigation methods of dispute resolution priority, improving the separation of disputes and the creation of one-stop dispute resolution and litigation service that is efficient and low cost) is mentioned in this document as well.  It is unclear what this means for the development of a commercial mediation system in China.  Local courts have been working on better cooperation with institutions that can mediate specialized disputes, such as the Shanghai Financial Court’s arrangements with the Shanghai Stock Exchange and other institutions. The provisions here derive from language in the 4th Plenum Decision on improving an effective system in the new situation for the correct handling of internal contradictions among the people (完善正确处理新形势下人民内部矛盾有效机制) as well as the Fengqiao Experience. Xi Jinping has mentioned the Fengqiao Experience since 2013, if not earlier. The phrase about internal contradictions appears to derive from the 1959 Mao essay, On the Correct Handling of Contradictions Among the People.
  • Promote capacity building for foreign-related commercial and maritime trials, equally protect the legitimate rights and interests of Chinese and foreign parties in accordance with law, improve the diversified dispute resolution mechanism for international commercial disputes, serve the joint construction of the “Belt and Road” and the construction of free trade pilot zones and free trade ports ( The 4th Plenum Decision promotes a high-quality Belt & Road Initiative, so these measures implement the 4th Plenum Decision. Also, see my earlier blogpost on this.  To better improve diversified dispute resolution in cross-border cases, China needs to work on institutional arrangements enabling it to ratify the Singapore Mediation Convention. Those are many and complex, as I had a chance to learn in December, 2019. One matter that would assist foreign parties litigating in the Chinese courts (and Chinese parties litigating outside of China) would be for China to accede to the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents.  The SPC’s new evidence rules reduce the scope of documents that a foreign litigant (or domestic litigant providing foreign evidence) must notarize and legalize, but it is a troublesome and expensive process.
  • Improve the adjudication mechanism involving Hong Kong, Macao and Taiwan, build a centralized and professional trial system, explore and improve the diversified settlement mechanism for [civil/commercial] disputes involving Hong Kong, Macao and Taiwan. (The centralized system seems to be analogous to foreign-related cases. The intent is to have more competent judges consider these. Another issue is parallel proceedings in these cross-border cases. These issues deserve further analysis.)
  • Deepen the international judicial exchange and cooperation mechanism, participate in the reform of the global governance system and formulate rules of international law, and contribute more Chinese wisdom to the maintenance of the multilateral trading system and the international rule of law. (See my earlier blogpost on this).

Public health emergency management

Section 6 relates to the role of the courts in the public health emergency management system, in the short and long terms.  It mentions the courts providing judicial services to the joint prevention and control system, preventing mass events, and group prevention and control (群防群治工作机制, an old system to which Xi Jinping has given new meaning during the pandemic. That section mentions shorter-term issues, such as punishing the manufacturing and sale of fakes during the pandemic and longer-term issues, such as the courts being involved in improving the legal system in the area of public health.

Judicial Reform

Section 7 highlights some of the tasks in the current judicial reform plan. Those include:

  • Deepening the judicial responsibility system, for judges hearing cases solely or in a collegial panel, the members of a judicial committee, and the supervision of judicial power.  As mentioned on this blog several times, judges are concerned about the scope of the judicial responsibility system, and recent cases that have appeared in the Chinese press would only amplify those concerns. I have more on this in a forthcoming book chapter.
  • Improving the disciplinary mechanism for judges. The forthcoming book chapter is on this. The SPC is working on related regulations.
  • Promoting the improvement of the policies relating to the selection of judges level by level. The controls on the number of “quota judges,” judges with the title of “judge,” in many courts, means that some number of qualified personnel have become judges assistants. It has created a fair amount of frustration.  Another issue is that the new policies mean it takes longer for judges to be promoted, but at the moment, most judges need to retire at 60, so that the pool of judges eligible to be promoted eventually to the SPC will shrink. We can expect related policies issued in the medium term.
  • Improving the working mechanism of the circuit courts and promote the Supreme People’s Court’s Intellectual Property Court (SPCIPC) and the China International Commercial Court (CICC). Promote the strengthening of the organization system of intellectual property courts, and improve the specialized trial system so that it complies with the principles for the judicial protection of IPR. (It is understood that the circuit courts are hearing most SPC cases.  But it still leaves unanswered what the role of the SPC in hearing cases is.  Should it best focus on considering a smaller number of cases more thoroughly, as other supreme courts do? The SPCIPC and CICC both have captured SPC leadership attention (and the attention of the outside world). It is clear that the SPC has provided much more support to the SPCIPC than the CICC (most obviously the SPCIPC operates full time, while the CICC does not). China’s IPR enforcement system is a topic of worldwide concern (the Phase 1 Trade Agreement and the United States Trade Representative Office’s recent 301 Report both evidence this), so it is likely that this means the SPC leadership will focus more on intellectual property issues.
  • Deeply promote the reform of the trial-centered criminal justice system (this is a continuation of reforms initiated in the previous round of judicial reforms).  This topic requires a separate analysis, to consider the impact of the National Supervision Commission, among other issues.
  • Improve and deepen the judicial transparency mechanism including promoting the transparency of judgment documents, court hearings, trial process information, and execution information. See my earlier blogpost and Mark Cohen’s more recent one on his concerns in the area of intellectual property law.  Professor He Haibo has done important empirical work on judicial transparency.

Technology

Section 8 relates to technology and implementing the courts’ five-year plan on informatization (人民法院信息化建设五年发展规划).  It mentions promoting AI, big data, cloud computing, blockchain, and 5G. Litigants should know that the SPC is promoting online case filing, litigation, mediation, judicial blockchain, and the mobile micro-court.  A reality check is needed for China’s online litigation publicity.  One is provided by a popular Wechat article published last month “A month of online court hearings, judges and lawyers have all gone crazy” 云庭审上线一个月,法官律师都疯了Technology is an important area of SPC leadership concern, as it sees it as an area in which China can take the lead.

Take-aways?

What is the impact of this vision and program for the Chinese courts, for litigants (in China or elsewhere), and for others, including judiciaries in other countries and jurisdictions. Is this a “China model” for courts, as raised by some? It does not appear to be so, but rather an outline for the courts to be conveyed within China, rooted in the Chinese political, cultural, and social environment of 2020, which will change along with Party priorities and events.  Some aspects described above are common to judiciaries around the world, such as the trend towards greater online justice.  Will it deliver the results it promises?

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Many thanks to certain anonymous readers for their insightful comments on earlier versions of this blogpost. They are not responsible for any errors or “erroneous views.”

 

Supreme People’s Court’s 2020 judicial interpretation agenda

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On 17 March 2020, the Supreme People’s Court (SPC)’s General Office issued a document (English translation here) setting out a list of 49 judicial interpretation projects for which the SPC judicial  committee gave project approval.  This document sets out the responsibilities of various divisions and offices of the Supreme People’s Court (SPC) in undertaking an important part of the SPC’s work, promulgating judicial interpretations for 2020. As discussed in two blogposts in 2018 and two blogposts in 2019, the SPC has a yearly plan for drafting judicial interpretations, as set out in its 2007 regulations on judicial interpretation work. The plan is analogous to the legislative plans of the National People’s Congress (NPC) and its Standing Committee.

Judicial interpretations are binding on the SPC itself and the lower courts, and fill in some of the interstices of Chinese law (further explained here).  One of my articles in the production pipeline provides more details about the drafting process in one area of law.  It is one of the more controversial powers of the SPC, where the gap between the views of the academics, lawyers and those inside the system is particularly large.  I have my views on it as well, but that is a topic for another day and perhaps another article.

“Project approval” is an initial procedure used by regulatory authorities of all types, Party and state, to approve projects. For the SPC, it reflects one of the “planned economy” aspects of the way it operates. This is the third year that the SPC has made this list public, and it is a concrete step forward in increasing the SPC’s transparency. I’m grateful to Chinalawtranslate.com for translating the list so quickly. Of those projects, 38  with an end of 2020 deadline and 11 have a deadline set for the first half of 2021.   Some brief comments (some longer than others) follow below. Please see my previous blogposts commenting on the 2018 and 2019 agendas. Mark Cohen of Berkeley Law School (and Chinaipr.com) has already commented on the projects in the area of intellectual property law, so for those I will link to his comments.

As I commented previously, close observation reveals that some interpretations were listed previously, indicating that drafts were not ready for approval last year. Some of the reasons for slippage are likely to be:

  • the issues turn out to be more complicated than anticipated (substantively, procedurally or institutionally);
  • judges have less time to work on judicial interpretation drafting, with an increased caseload and document study;
  • many experienced SPC judges have been dispatched to circuit courts, leaving fewer at headquarters to work on judicial interpretations; and
  • timing may also be a factor. The SPC wants judicial interpretations to be in place for some time, and if the greater environment is not conducive for issuing the interpretation, or additional issues are seen, it will be postponed.

If an SPC division or office is listed as responsible, it means it is on its work agenda for that year.  (I surmise) the head (or heads) of the related responsible divisions or offices need to provide an explanation for slippage.

The 2007 SPC regulations on judicial interpretation work do not require drafts to be made public, but comments may be solicited from society if related to the interests of the general public (masses) or if it is a major difficult issue,  as decided by the executive vice president or president of the SPC, after an initial review by the SPC vice president in charge of that particular area of law (涉及人民群众切身利益或者重大疑难问题的司法解释,经分管院领导审批后报常务副院长或者院长决定,可以向社会公开征求意见). This procedure provides yet another glimpse into the bureaucratic nature (官本位) of the SPC.

Type 1 (to be completed before the end of 2020)

1. Interpretation of Several Issues on the Application of Law in Cases of Pre-trial Preservation of Assets. Responsibility: Case Filing Division. The deadline for this has been postponed for several years in a row. It was included in the 2019 and 2018 lists. This interpretation will provide more detailed rules for pre-filing injunctions, for non-intellectual property (IP) cases.

2. Provisions on Several Issues Relating to Preventing and Punishing Fake, Malicious, and Frivolous Litigation (关于防范和惩治虚假诉讼、恶意诉讼及无理缠诉若干问题的规定).  Responsibility of the Case Filing Division, Research Office. Again, it previously had a deadline of 2019. The Research Office has been added as a responsible party.  The Research Office is a unique institution at the SPC–further comments on that at some later date.

3. Decision on Revising the “SPC and SPP Interpretation on the Application of Law in Handling Cases of Criminal Endangerment of Food Safety,” Responsibility of the 1st Criminal Division, and similarly previously had a 2018 and 2019 deadline.

4. SPC, SPP Interpretation on Several Issues on the Application of Law in Handling Cases of Criminal Corruption (2). Responsibility of the #2 Criminal Division

5. SPC and SPP Interpretation on Several Issues on the Application of Law in Handling Cases of Criminal Dereliction of Duty (2) Responsibility of the #2 Criminal Division.  Previously with an end of 2019 deadline.  For those wishing to understand some of the issues delaying this interpretation, see this recent article (in Chinese) by Professor He Jiahong of Renmin University Law School.

6. Decision on Revising the “SPC Interpretation on the Specific Application of Law in Criminal Cases of Money Laundering” (New Item) Responsibility of the #3 Criminal Division. I surmise that this is directly linked to the Financial Action Task Force (FATF) mutual evaluation report of China, issued in 2019.

7. Interpretation on Specific Issues on the Application of Law in Handling Criminal Cases of Loan Fraud (New Item). Responsibility: #3 Criminal Division.  This means that lower court judges frequently encounter issues with this.

8. Interpretation on Several Issues Regarding the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Management: Responsibility: #4 Criminal Division

9. Interpretation of Several Issues on the Application of Law in Cases of Administrative Crimes (New Item)

To be handled by: 4th Criminal Division

10. Interpretation of Several Issues on the Application of Law for Restricting Commutation during the Reprieve Period for a Suspended Death Sentence. Responsibility: #5 Criminal Division

11. Interpretation of Several Issues on the Application of Law in Hearing Cases of Objections to Enforcement: Responsibility: #1 Civil Division.

12. Decision to Revise the “SPC Provisions on Several Issues on the Application of Law in Hearing Civil Cases of Private Lending (New Item) Responsibility: 1st Civil Division. Likely this needs to be amended to incorporate new policies regarding “professional” lenders(see the related SPC policy document Opinions on Several Issues Regarding the Handling of Criminal Cases of Illegal Lending translated here on Chinalawtranslate.com).

13. Interpretation on Several Issues on the Application of Law in Handling Cases of the Acquisition, Management and Disposition of Non-performing Assets by Financial Asset Management Companies

To be handled by: 2nd Civil Division

14. Provisions on Transformation of Preservation Measures for Debtors’ Assets after Acceptance of Bankruptcy Applications (New Item) Responsibility: 2nd Civil Division. Likely linked to the policy of encouraging certain enforcement cases to be transferred to the bankruptcy division before all assets are dissipated, mentioned in this blogpost.

15. Interpretation on Several Issues of Applicable Law in Hearing Cases of Disputes Over Security (New Item) Responsibility: 2nd Civil Division. This refers to disputes over guarantees, pledges, mortgages, and other types of security over assets, likely incorporating new principles (this article discusses the draft) set out in the SPC’s 2019 Conference Summary on Civil and Commercial Work.

16. Provisions on Evidence in Intellectual Property Rights Proceedings Responsibility: #3rd Civil Division, #1 Civil Division, Research Office, Intellectual Property Court.  Mark Cohen’s comments seen here.

17. Interpretation of Several Issues on the Application of Law in Patent Authorization Confirmation Cases Responsibility: 3rd Civil Division, Intellectual Property Court. Mark Cohen’s comments seen here.

18. Interpretation of Several Questions on the Application of Law in Hearing Cases of Disputes regarding Infringement of Trade Secrets: #3 Civil Division, #1 Criminal Division, Intellectual Property Court. Mark Cohen’s comments seen here.

19. Provisions on Several Issues on the Application of Law in Cases of Disputes over Pharmaceutical Patent Linkage(New Item) be handled by: 3rd Civil Division, Case Filing Division, Intellectual Property Court. Mark Cohen’s comments seen here.

20. Interpretation on Several Issues Regarding the Application of Law in Hearing Disputes over Ship Crews’ Labor Service Contracts Responsibility: #4 Civil Division

21. Interpretation on Several Issues Regarding the Application of Law in Hearing Cases of Disputes over Forestry Rights. Responsibility: Environmental Division

22. Interpretation on Several Issues Regarding the Application of Law in Hearing Environmental Tort Disputes (2)(New Item)  Responsibility: Environmental Division

23. Provisions on Several Issues Regarding the Application of Law in Hearing Administrative Cases of Compensation for Rural Collective Land Expropriation (New Item) Responsibility: Administrative Division.  There are many cases on this.

24. Provisions on Several Issues Regarding the Application of Law in Hearing Cases of Administrative Compensation. Responsibility: Administrative Division

25. Provisions on Several Issues on the Application of Law in Cases of Hearing Civil Controversies during Administrative Litigation.Responsibility: Administrative Division

26. Interpretation on Several Issues Regarding the Application of Law in Hearing Retrials of Cases Involving Disputes over Apparent Agency. Responsibility: Trial Supervision Division

27. Interpretation on Several Issues Concerning the Application of Law in Handling Cases of Share Equity Enforcement. Responsibility: Enforcement Bureau

28. Decision on Amending the “Supreme People’s Court’s Several Provisions on Publishing the List of Information on Judgment Defaulters”(New Item) Responsibility: Enforcement Bureau.  I surmise that some of the issues published in responses to Zhou Qiang’s mailbox will be incorporated.  Jeremy Daum is likely to have further comments on this draft interpretation.

29. Decision on Amending the “SPC’s Several Provisions on Restricting High Consumption and Related Consumption of Persons Subject to Enforcement”(New Item) Responsibility: Enforcement Bureau. Jeremy Daum is likely to have further comments on this draft interpretation.

30. Interpretation of Several Issues on the Application of Law in Handling Cases Connecting Civil and Criminal Matters

To be handled by: Research Office

31. Interpretation of Several Issues Related to the Application of the “P.R.C. Civil Code” (1) (New Item) Responsibility: Research Office. I surmise this will be a major project of the SPC.

32. Interpretation on the Application of the “P.R.C. Criminal Procedure Law”. Responsibility of the Research Office. Subject of my forthcoming article.

33. Decision Regarding Several Issues on Judicial Technology Work. Responsibility: Research Office, Trial Management Office, Judicial Equipment Administration Bureau

34. Provisions on Several Issues Regarding the People’s Courts’ Forensic Evaluations. Responsibility: Research Office, Trial Management Office, Judicial Equipment Administration Bureau

35. Interpretation on Several Issues Regarding the Application of Law in Labor Dispute Cases Involving Hong Kong, Macao and Taiwan Compatriots (New Item) Responsibility: Research Office. The Research Office has departments focusing on Hong Kong and Macao and Taiwan related issues. I surmise the #1 Civil Division will also be involved, as one of their responsibilities is labor issues.

36. Provisions on Several Issues Concerning the People’s Court’s Disclosure of Trial Processes Online。 Responsibility: Trial Management Office

37. Provisions on the Application of Law in Hearing Cases of Civil Disputes Arising from Monopolistic Conduct (2)(New Item)

To be handled by: Intellectual Property Court, #3 Civil Division

38. Work on Cleaning up Judicial Interpretations Related to Civil Code Responsibility: Research Office and Relevant Divisions. Likely to be a big task, determining which existing judicial interpretations having provisions inconsistent with the Civil Code (and the principles in the forthcoming judicial interpretation).

Type 2 (To be completed in the first half of 2021)

1. Provisions on Several Issues Regarding the Specific Application of Law in Hearing Cases of National Defense Patent Disputes (New Item) Responsibility: #3 Civil Division, Intellectual Property Court.  Likely to be because of the policies related to Civil and Military Integration (Chinese article here), English analysis of related issues, seen here. I surmise the Legal Department of the Central Military Commission

2. Interpretation of Several Issues Regarding the Application of Law on Punitive Damages for Intellectual Property Infringements: Responsibility: 3# Civil Division, Intellectual Property Court.

3. Interpretation of Several Issues Regarding the Application of Law in Hearing Civil Cases of Unfair Competition(New Item)

To be handled by: 3rd Civil Division, Intellectual Property Court. Mark Cohen’s comments seen here.

4. Provisions Regarding Several Issues in the Trial Procedures for Administrative Cases. Responsibility: Administrative Division

5. Provisions on Several Issues Regarding the Review of Normative Documents below the Rules Level as Part of Administrative Litigation. Responsibility: Administrative Division.

6. Provisions on Several Issues Regarding the Application of Law in Hearing Administrative Cases Involving Higher Education(New Item) Responsibility: Administrative Division.  There are many cases in this area.

7. Provisions on Standards for Changing Judgments in Retrial of Criminal Cases(New Item) Responsibility: Trial Supervision Division. Related research has been undertaken for some time, as described in my forthcoming article.

8. Interpretation on How to Determine “Heinous Circumstances” as Used in the First Paragraph of Article 50 of the Criminal Law [Involving limits on commutation of suspended death sentences](New Item).Responsibility: Trial Supervision Division

9. Provisions on Several Issues Regarding the Application of Law in Hearing Cases of Third Party Opposition. Responsibility: Research Office

10. Interpretation on Several Issues Regarding the Application of Law in Hearing Disputes over Personal Information Rights. Responsibility: Research Office

11. Provisions on Issues of the Specific Application of Law in Hearing Cases of Disputes over the Rights in New Varieties of Plants(New Item) To be handled by: Intellectual Property Court, 3rd Civil Division. Mark Cohen’s comments seen here.

 

 

 

 

 

Lawsuits against foreign countries in the Chinese courts

In March 2020, three Chinese lawyers filed civil lawsuits against (variously) the United States (US) government, President Trump, and other US government departments, attracting a great deal of attention on Chinese social media. The case that has attracted the most attention is the one in Wuhan, but according to Wechat articles, two different Beijing lawyers have also filed cases. Reports of these lawsuits are now making their way into English language media.

These lawsuits involve the issue of sovereign or state immunity of foreign governments, foreign embassies/consulates in China and their diplomatic staff, international institutions, and certain other persons and entities.  China’s position is absolute sovereign or state immunity– which means that states, diplomatic institutions and staff, as well as international institutions) are immune from suit and enforcement (unless they waive immunity). These issues have been discussed by practitioners and academics for quite a few years. (There have been academic discussions about China changing its position on state immunity and China has signed, but not ratified the United Nations Convention on Jurisdictional Immunities of States and Their Property, which adopts qualified immunity (not yet in force). I will not further discuss this issue as the law is quite clear.

What this blogpost will discuss is what others have not: the procedure (and the document in which the procedure is set out) by which a Chinese court decides whether to accept these cases.   This bureaucratic procedure gives greater insights into how the Chinese courts operate.

The procedure is set out in the 2007 Notice of the Supreme People’s Court on the Relevant Issues concerning the People’s Courts Acceptance of Civil Cases Involving Privileges and Immunities (the Notice) (最高人民法院关于人民法院受理涉及特权与豁免的民事案件有关问题的通知). The SPC issued the notice to the lower courts, including the military courts.

The Notice is intended to provide a clear standard to the lower courts when they encounter a case involving issues of state immunity. The system described below is one of the exceptions to the registration case filing system.

The notice itself (as I have written before about other types of judicial guidance documents) has an uncertain formal status under Chinese law, although as a practical matter it is binding on the lower courts. The core part of the notice follows:

To strictly enforce the provisions of the Civil Procedure Law of the People’s Republic of China and the relevant international conventions that China has acceded to and ensure the correct acceptance of civil cases involving privileges and immunities, this court has decided to establish a reporting system for cases involving privilege and immunity accepted by the people’s courts, and a notice is hereby issued as follows:

For a civil case filed with the people’s court where the defendant or third party is any of the following subjects that enjoys privilege or immunity in China, before deciding to accept it, the people’s court shall submit it to the higher people’s court with jurisdiction for examination; the higher people’s court agreeing on the acceptance shall submit its examination opinions to the Supreme People’s Court. Before the Supreme People’s Court makes a reply, no acceptance shall be made.) 保障正确受理涉及特权与豁免的民事案件,我院决定对人民法院受理的涉及特权与豁免的案件建立报告制度,特做如下通知:人民法院应在决定受理之前,报请本辖区高级人民法院审查;高级人民法院同意受理的,应当将其审查意见报最高人民法院。在最高人民法院答复前,一律暂不受理。

The entities listed include:

  • foreign countries;
  • foreign embassies and consulates in China and their staffs;
  • offices of the United Nations (constituent organizations) in China and their staff;
  • analogous organizations.

Judging by the number of page views (12,500) of the Notice in a recent Wechat article, many legal professionals (likely including judges) were unaware that the Notice existed.

The number of cases filed in China against foreign countries, diplomatic entities or persons is unknown.  One database I checked contained a case (with an English translation, that will be discussed below), and a case database has a case involving the International Red Cross, but a more litigious Chinese public means that cases likely have been filed, but I am unable to determine how many.

Explanation:

  1.  Under the Notice, the Supreme People’s Court (SPC) (most certainly with the concurrence of the Ministry of Foreign Affairs (MFA), although it is not so stated), has established an approval system for accepting civil cases involving the privileges and immunities of foreign governments, international organizations, etc.  This is one of several types of cases (of which I am aware) for which the SPC has an approval system.  Other types include cases involving the refusal to enforce foreign (foreign-related, and Hong Kong, Taiwan, Macau) arbitration awards (and related issues) and death penalty cases (the 死刑复核 system, although the nature of the review and approval are different in those cases).
  2. The court having jurisdiction over the case (generally an intermediate court), reports the case under consideration to its superior higher people’s court for review (request for instructions 请示).  If the higher people’s court concurs with the lower court’s decision to accept the case, it must report the matter to the SPC for review, and the lower court must not accept the case before the SPC has replied. According to other SPC guidance, the judicial committee of the higher court must discuss the issue before it is reported to the SPC.  This is illustrated in a reply by the SPC’s reply in a 2009 case, the Reply of the Supreme People’s Court to the Request for Instructions on Issues concerning Immunities in the Case of Disputes over a House Lease Contract between Li Xiaobo and the Regional Delegation for East Asia of the International Committee of the Red Cross.
  3.  The matter would be processed by the SPC’s Case Filing Division and then forwarded to the #4 Civil Division (the one considering cross-border civil and commercial cases). From the 2009 case, it is clear that the #4 Civil Division is the SPC division that replies to these requests for instructions. I would further surmise that in certain difficult cases, the SPC would consult with the MFA.
  4. I would surmise that in practice, the courts that may see these cases (Beijing’s Chaoyang District and one or more of the Shanghai courts) are familiar with these issues and reject them without seeking instructions.

What does this show about the Chinese courts?

First, the Chinese courts understand there to be a single correct view on certain issues.  This is seen more widely, with references in many documents to unifying judicial approaches to issues.

More importantly, it is one small illustration of the bureaucratic, hierarchical nature and operation (官本位) of the Chinese court system.  For important issues, such as those involving the death penalty, compliance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), and issues involving state immunity and the immunity of international organizations, the SPC’s view is that a high degree of control is needed. It is clear that the SPC’s understanding is that lower court judges are unlikely to be familiar with this technical but important issue.

Why is this issue important? As I wrote last year (about the China International Commercial Court), there are no small matters in foreign affairs (外事无小事)( Zhou Enlai’s saying). Both domestically and internationally, foreign-related matters, because they involve relations with other countries and the prestige of the Chinese state, are sensitive and important.

 

Controlling Judicial Headcount in the New Era

Screenshot 2020-03-19 at 4.32.02 PMIn the middle of March 2020, the Supreme People’s Court (SPC) Party Group convened a meeting (pictured above) to discuss the topic of “strengthen the awareness of the system, maintain the authority of the system, make stricter the management of the system, build a tougher court team, and work hard to build a model organization on which the Party Center can rely and that satisfies the masses (强化制度意识,维护制度权威,严格制度管理,打造过硬法院队伍,努力建设让党中央放心、让人民群众满意的模范机关).  Part of this phrase appeared in several of my blogposts in the past year (not surprisingly), and also can be seen across used by other Party and state institutions in 2019 (not surprisingly).  Although the discussion at the meeting centered around two topics–judicial headcount (bianzhi 编制) and selecting leaders (领导干部选拔任用, nomenklatura)–this short blogpost will focus on judicial headcount (bianzhi).

Chinese law, unlike legislation in many countries (see German legislation, for example), does not state clearly how many judges are on its highest court. It is also unclear how many persons work in the operational divisions of the SPC (the ones that decide cases) vs. the administrative (general, 综合部门) of the SPC.  As I wrote in an earlier blogpost, it is unclear how many judges in the SPC have been “borrowed” from the lower courts.  And as I wrote earlier about the SPC judicial committee, it appears that likely that the Central Staffing Commission regulates the number of persons who can be SPC vice presidents. I surmised that Justices Hu Yunteng, Liu Guixiang, Pei Xianding, and He Xiaorong were given the title of  “专委“ (full-time members of the judicial committee) to give them a bureaucratic rank equivalent to being an SPC vice president, with attendant privileges. The bianzhi system supplies the reason.

The bianzhi system provides insights into the thinking of the Chinese political leadership about how it views legal institutions, including the courts. It appears to treat the SPC as just another Party/state institution whose functions, internal institutions, and personnel the Party must set (the jargon in Chinese is the “three sets”(“三定”)(职能配置、内设机构和人员编制). It also shows the bureaucratic nature (官本位) of the SPC.  The bianzhi system illustrates that the SPC has a different role in the Chinese political system from the supreme courts of other major jurisdictions. This discussion and other ongoing discussions within the SPC on its “three sets” plan illustrates how the Party is reshaping legal institutions in the New Era. The Supreme People’s Procuratorate (SPP) has already been reshaped. This is part of the post-18th Party Congress (and 19th Party Congress) reshaping of Party and state institutions, to ensure the correct implementation of Party leadership.

The bianzhi system

The bianzhi system is a system for creating and eliminating Party/government/state-owned enterprise/institutional posts by identifying the necessary functions the system needs to fulfill. Those in the SPC are part of the government (政务) civil service/Party/government) system.  The bianzhi system is administered by the Central Staffing Commission. The Central Staffing Commission has an office (常设办事机构) that administers staffing matters, and it, in turn, is administered by the Party’s Organization Department.  Those whose posts are within the bianzhi system have civil service benefits and are said to “eat imperial grain.” (More scholarship on the bianzhi system can be found here and here). I should mention, however, that since 1982 the bianzhi system has given those in the political-legal institutions special status and special (专项) bianzhi. In 2015, the Central Staffing Commission issued a document on reforming the treatment of political-legal staff, including judges, which I mentioned in my 2019 article on transparency.

As to why the SPC Party Group discussed bianzhi in March, 2020, it is linked to new regulations on bianzhi work issued by the political leadership in August, 2019 (中国共产党机构编制工作条例) and apparently ongoing work on reshaping the internal institutions of the SPC, linked to those new regulations. (For those interested in cross-straits comparisons, please see analogous legislation from Taiwan.

In 2018, the SPC and the Central Staffing Commission issued regulations on the bianzhi of the lower courts, and some of the same principles in those regulations can be expected to applied when the SPC draws up its own “three-set” plan.  Those regulations were intended to control the number of internal institutions within a court, allocate more personnel to operational divisions, and standardize the functions and titles of internal institutions across provinces and nationally.  From my informal discussions with leaders in some busy local courts, they say that relying on bianzhi staff does not give them enough personnel to run their court, and contract staff are needed.

The principles for bianzhi work, as highlighted in the 2019 regulations are: 1) Upholding Party leadership over bianzhi work, the Party shall exercise centralized and unified leadership over bianzhi work, upholding and protecting General Secretary Xi Jinping as the core…( 坚持党管机构编制。坚持党对机构编制工作的集中统一领导,坚决维护习近平总书记党中央的核心); high quality in coordination with efficiency; the binding nature (like steel) of bianzhi (坚持机构编制刚性约束); and bianzhi must be slim and healthy.

The press report only vaguely hints on what the reshaping of the SPC will look like. President Zhou Qiang mentions a “trial centered” internal institutional model and personnel model, strengthening internal responsibility and operational matters, to ensure that the people’s courts can fulfill the demands of their responsibilities according to law.  Whether this means that more headcount will be allocated to the operational divisions of the SPC rather than the General Office and other administrative offices is unclear.  Whether it means that some of the smaller divisions of the SPC will shrink further is unclear. And whether it means that fewer people will be “borrowed,” I have my grave doubts.

Another unknown is whether the SPC’s “three sets” plan will be made available to the general public.  My guess is no (some approved plans are posted on the Central Staffing Commission’s website), but we are likely to see President Zhou Qiang issue a press release or discuss it at a news conference, as Chief Procurator Zhang Jun did last year, but not for some time.

A fundamental question not raised by the reports, but perhaps was in the minds of the participants in the meeting, is whether the bianzhi system, implementing the above principles, is consistent with some of the  SPC’s policy goals. One that comes to mind is being able to accommodate changes in where personnel is needed–a policy of rigidly enforcing bianzhi restrictions would be unhelpful.  After all, SPC leaders need to be “problem-oriented” (坚持问题导向), that is address relevant practical issues facing the court system as well as being politically correct, so that may mean that headcount needs to shift among divisions from time to time.

 

Educating Chinese Judges for New Challenges in the New Era

National Judges' College

National Judges’ College

One of the many documents issued late last year in the rush for year-end accomplishments (成就)is the Supreme People’s Court’s (SPC’s) latest Five Year Court Training Plan Outline for 2019-2023 (New Training Plan Outline) (2019—2023年全国法院教育培训规划).  The question this blogpost will explore is what is new and what has changed in the post-19th Party Congress New Era. As shown below, it is one small example of the impact of the 19th Party Congress on China’s legal and governance system. Competing obligations mean that this blogpost can only provide a few highlights and will focus on training for judges rather than support personnel, although the New Training Plan Outline covers all types of court personnel.

Other objective factors that have changed in the New Era are the number of cases in the courts (the majority of which are civil and commercial cases) and the average number of cases assigned to judges.  The numbers released to the public can only provide a general indication, as senior judges in a court (court presidents, vice presidents, and heads of divisions) are required to handle a small number of cases, which means in actual fact a greater burden on front-line judges, who constitute the majority of judges. The provinces and areas with the most developed economies tend to have the most number of cases.

This blog discussed the earlier plan almost five years ago.  The outside observer is handicapped by limited transparency about what the National Judicial College (NJC) actually does, although insights into the forthcoming curriculum can be found.  Previous versions of the NJC website had some course outlines, but those vanished in one of the website upgrades. In comparison, for example, the Australian National Judicial College publishes the National Judicial Curriculum and the German Judges Academy also has quite detailed information (to the extent this observer can understand it using a combination of high school German + Google translate).

The NJC, for those who aren’t familiar with it, is a separate institutional entity (事业法人) under the SPC, in charge of court training, primarily of judges, but also for other supporting staff. It is closely linked with the SPC’s Political Department (in charge of cadres). It has also hosted some training courses jointly (this was on administrative litigation) with the National Prosecutors College. Fortunately, the NJC website has posted screenshots of lectures (many by outstanding SPC judges) in its cloud classroom, although unfortunately, the lectures themselves are inaccessible.  I surmise that any teaching this spring will be at least initially online, as in other Chinese higher educational institutions. As of 30 March, this has provided to be correct, as the NJC website now features reports on training judicial trainers and provincial branches of the NJC providing training online.

What is new?

Consistent with what I wrote in this blog about Zhou Qiang’s report to the NPC in March of last year (2019) (and other 2019 blogposts), what is different about the New Court Training Plan Outline is the greater emphasis on political issues and Party leadership, although these were evident in the previous plan. The first sentence mentions Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era (习近平新时代中国特色社会主义思想) and “forging a high-quality court team (队伍) that the Party Center can rely upon and the masses are satisfied with.”  It mentions creating a revolutionalized,  regularized, specialized and professionalized team (革命化、正规化、专业化、职业化). As explained in an earlier blogpost, “revolutionized” signals absolute Party leadership. The top two goals for training are deepening education in Xi Jinping thought (习近平新时代中国特色社会主义思想学习教育更加深入) and further solidifying education with a Party nature (党性教育更加扎实).

What do Chinese judges need in the New Era?

The economic and social changes in China raise the competency bar for judges.  A more litigious and rights conscious public, the increasingly complex economy and a greater number of cross-border transactions and interactions, (not to mention coronavirus related issues) as well as a smaller number of judges to hear more cases means that judicial training is an important part of preparing Chinese judges for the New Era. Post 19th Party Congress changes in Party policy mean that competency in Party matters is increasingly significant.

The training plan

The training plan is linked to the 5th Five Year Judicial Reform Plan Outline, the Communist Party Central Committee’s five year training plan for national cadres, a special document for outstanding young cadres (关于适应新时代要求大力发现培养选拔优秀年轻干部的意见), the Court’s regulations on judicial training (to be amended),  as well the Court’s 2013 policy document on creating a new judicial team (队伍) in the new situation. Team (队伍 (or work team) derives from “classical” Party terminology (as Stanley Lubman highlighted in a 2014 article)).

The plan does not incorporate training for foreign judges, which the NJC delivers to judges from Belt & Road Initiative jurisdictions and other countries.

Content

The Training Plan stresses ideological, ethical, and professional training, for judges and other judicial personnel. Ideological training is listed first. Judicial training is to focus on active and practical methods, including the case method (no less than 30%), moot courts, and other interactive methods.  Even in the New Era, the intellectual influence of exchange and training programs with offshore counterparts (many of those in the NJC leadership had studied abroad) is apparent from the more interactive methods required.

Who’s being trained

The training requirements depend on the seniority of the judicial personnel

  • Court leadership: the focus is on their political education, as well as administration. The SPC will run a special training session on the Xi Jinping New Era thought for a large group of court leaders, with newly appointed ones required to participate in training within a year of appointment. In the next five years, they must participate in a certain minimum number of hours of Party school, cadre education, or judicial training.
  • The plan also calls for providing different types of training depending on court needs–off-site vs. on-site training, web-based training, circuit teaching (some of the younger SPC judges are sent to courts in western provinces to deliver training).
  • Special training program for new judges: the judicial training program (apparently drawing from the practice in Taiwan and Japan) for new judges highlighted almost five years ago still has not been put in place. The new plan calls for research into implementing measures for training for newly appointed judges and organizing training for a group that qualifies to take part in unified pre-service training) (研究制定法官职前培训实施办法, 组织符合条件的人员参加统一职前培训).

How will the Plan be implemented?

As I wrote in December, one of the little-discussed aspects of being in a leadership role in the SPC in the New Era ensuring that policies, actions, initiatives, and other decisions hit the target of being politically correct (post 19th Party Congress and post 19th Party Congress 4th Plenum) while being “problem-oriented” (坚持问题导向) that is, addressing relevant practical issues facing the court system.  As mentioned then, it is true for the leadership of the NJC as well as other SPC divisions and institutions, as can be seen from one document.

The NJC very usefully (for the outside observer, at least) posted a notice soliciting proposals (from qualified individuals and institutions) for judicial training in 2020 under the new plan. The guide to the proposals sets out the desired content, which must not only be politically correct (a given), but also creative (new training methods or viewpoints), and relevant–focusing on the new and difficult issues facing the courts. The solicitation lists 66 topics in seven categories:

  1. Ideological related training is listed first, of course, with six subtopics which include: Xi Jinping new ideology and strategy for ruling the country by law (listed first); enhancing socialist core values in judgments (see my earlier blogpost on a related topic);  political discipline rules as derived from the Party charter, regulations, and discipline.
  2. Professionalism: (four subtopics)–professional ethics and judicial values; judicial work-style and the standardization of judicial acts; anti-corruption issues and countermeasures; outstanding Chinese traditional legal culture and socialist justice (unclear whether this is meant to solicit critical views of Chinese traditional legal culture);
  3. Judicial capacity: this one has twenty-three subtopics, with a good portion also to be found in other jurisdictions: civil, commercial, administrative and criminal justice values and judgment formation; judgment writing and courtroom control; difficult financial cases; while other reflect Chinese characteristics: what to consider when hearing difficult and complicated cases involving the public (涉众型) (these are either criminal or civil cases); protecting property rights and preventing mistaken cases; intellectual property trials and serving the innovative strategy; dealing with zombie enterprises.
  4.  General courses: (eight subtopics)again, a mixture of courses seen elsewhere, and ones with Chinese characteristics: guiding the media; mediation techniques; blockchain, AI and the courts.
  5.  Case study courses: (13 subtopics)-most of the topics are ones found elsewhere in judicial academies, such as financial crimes, juvenile justice, and corporate disputes, but others reflect the New Era, such Xi Jinping New Era thought cases and case pedagogy,  cases promoting and applying the “Fengqiao Experience“; and sweeping black and eliminating evil cases.
  6. Discussion courses: Criminal, civil, and administrative law courses.
  7. Judicial reform: only six topics here, including implementing the judicial responsibility system; establishing intelligent courts; separating simple from complicated cases; administrative litigation reform, and promoting a trial based criminal justice system.

 

 

Supreme People’s Court wields the Criminal Law “Big Stick” in the Anti-Coronavirus Battle

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Press conference at the Central-Political Legal Commission announcing the Opinions

As this blog has often commented, the Supreme People’s Court (SPC) must serve the greater situation and deal with practical legal issues, so that the SPC itself and its senior leadership are correct, politically and professionally. One of those ways is by providing properly calibrated guidance to subordinates at the SPC, the lower courts and other related authorities that provide appropriate political signals.  Some guidance is politically more important than others. In recent days (early February 2020), the SPC has done so through the following documents:

This blogpost will give a quick introduction to the first document.  Its importance can be seen from the photo above, of the press conference at the Central Political-Legal Commission on 10 February, at which the Punishing Crimes and Violations of Obstruction Opinions was released and explained to select members of the press. That document was issued with the participation of the Commission on Comprehensive Governance of the Country by Law (Comprehensive Governance Commission, further explained here), Party Central Political-Legal Committee, SPC, Supreme People’s Procuratorate (SPP), Ministry of Public Security (MPS), and Ministry of Justice (MOJ). Fu Zhenghua, Minister of Justice and deputy head of the Comprehensive Governance Commission spoke first. Representatives from the other institutions also spoke.

The National Health Commission, SPC, SPP, and MPS issued the second document.

Both of them guide those in the criminal justice system to properly wield the “Big Stick” of the criminal law (and related administrative offenses) in the anti-coronavirus battle. The first document sends signals to the political leadership that the political-legal institutions are doing their part to fulfill the objectives that General Secretary Xi Jinping set in his 3 February speech

It is necessary to maintain a high-pressure situation, severely crackdown on illegal and criminal activities that disrupt social order, such as using the epidemic to drive up prices, hoarding, and looting, and severely crack down on the production and sale of counterfeit drugs, medical equipment, and medical and health materials. It is necessary to pay close attention to and resolve promptly all kinds of emerging problems, and to prevent all kinds of contradictions from overlapping and forming a chain reaction. (要保持严打高压态势,依法严厉打击利用疫情哄抬物价、囤积居奇、趁火打劫等扰乱社会秩序的违法犯罪行为,严厉打击制售假劣药品、医疗器械、医用卫生材料等违法犯罪行为。对各种苗头性问题,要密切关注、及时化解,严防各类矛盾交织叠加、形成连锁反应。)

What these documents are

The Punishing Crimes and Violations of Obstruction Opinions and the Ensuring Positive Medical Order are intended to provide guidance on certain violations of the criminal law and other related administrative offenses.  They do not create new legal rules but signal to the lower criminal justice institutions how the relevant criminal (and public security administration penalty) laws should be applied in the politically sensitive anti-coronavirus battle.  As a technical matter, both documents are classified as judicial document/judicial regulatory documents /judicial normative documents/judicial policy documents (司法文件, 司法规范性文件, 司法指导性文件, 司法正常性文件)(which I have written about previously).

As I have mentioned before, the SPC editors of a collection of those documents commented that “although judicial guidance documents are not judicial interpretations and cannot be cited in a court judgment document as the basis of a judgment, it is generally recognized that they have an important guiding impact on the trial and enforcement work of the courts at every level.” Titles included in the collection include “Opinions” (意见), “Decisions” (决定), Summaries” (纪要), “Notifications” (通知) Speeches (讲话), etc..

Some local high courts are starting to issue complimentary local guidance, with more detailed provisions, with the Jiangsu Higher People’s Court one of the early movers.

Section 1

The document is divided into several sections.  The first one, analogous to the opinion I analyzed recently, gives the political background, calling for the raising of the readers’ political stance, the strengthening of their “four consciousnesses,” the upholding of “four self-confidences,” and the implementation of the spirit of General Secretary Xi Jinping’s important instructions and Party central policies and arrangements.

Section 2

The second section of the Punishing Crimes and Violations of Obstruction Opinions (which appears to have been primarily drafted by the SPC, judging by the document reference 法发〔2020〕7号, indicating it is from the SPC), is the substantive part of the document. It is further divided into 10 subsections, nine of which describes a particular type of crime that is to be strictly punished according to law. They include:

  • crimes of resisting epidemic prevention and control measures; violence against medical personnel,
  • making or selling fake protective goods, supplies, or medicines;
  • fabricating or spreading rumors etc.

The first nine subsections describe one or more illegal acts that may occur. One example is subsection three, on the production or sale of shoddy prevention and protection goods or supplies or the production or sale of fake or shoddy medicines used in preventing the coronavirus. The Opinions state that where the requirements of the Criminal Law are met, the act should be punished as the crimes of production and sale of shoddy goods or medicines.  So it is giving prosecutors and judges a steer on how the Criminal Law should be applied but does not in itself create new law.

Subsection 10 gives guidance on how the law is to be applied. If the acts listed in subsections 1-9 do not constitute a crime (based on existing criteria), the public security authorities are to impose public security administrative punishments under the Public Security Administration Penalties Law.  The Opinions point to the following provisions:

false information disrupting public order; disrupting order at a unit or public venue; provocation; refusing to implement decisions and orders in an emergency; obstructing the performance of public affairs; breaking through police lines or instruments; striking others; intentional harm, insulting others, fraud, illegally digging or gathering gravel near railways, stealing or destroying public facilities near roads, destroying railway facilities and equipment, intentionally destroying property, looting public or property, and so forth; or the relevant departments are to give administrative punishments.

Importantly, when crimes or violations of the Public Security Administration Penalties Law occur during the period of epidemic prevention and control, it should be considered as an aggravating factor )(for punishment purposes). The stated purpose is to deter bad conduct  “to lawfully embody the requirements of the crackdown policy, to forcefully punish and deter violations and crimes, to preserve the authority of the law, to preserve social order, and to preserve the security of the people’s lives and their physical health.”

For those in the criminal justice charged with enforcing these provisions, they need to refer to relevant judicial interpretations and other guidance (or in the case of public security officials, their regulations and other relevant documents)–the Opinions do not set out the elements of the relevant crimes.

Since this document was issued, some of the professional Wechat accounts on criminal law issues have published authoritative commentary pointing out practical problems with the legislation (law and judicial interpretations). The deputy head of the SPP’s research office published this (on the crime of obstructing contagious disease efforts), while a local procurator (nationally recognized) wrote this on several of the crimes (including refusal to comply with quarantine or leaving quarantine without permission). Judges and prosecutors (procurators) are concerned about making “mistakes,” as the responsibility system imposes expansive responsibility (described by two judges as “the sword of Damocles” over judges’ heads).

Section 3

The third section relates to the relationship among the institutions involved, principles to be followed and gives apparently mixed signals which need to be understood together.

  • Promptly investigate cases;
  • Strengthen communication and coordination;
  • Safeguard procedural rights;
  • Strengthen publicity and education;
  • Emphasize safety in handling cases.

The first is directed to the public security authorities, directing them to promptly investigate cases but also be civil, while the last subsection concerns the personal safety of those in the criminal justice system. The second subsection encourages the criminal justice authorities to communicate and coordinate better but cautions the public security organs to pay attention to the comments and recommendations by the procuratorate. It requires the authorities to focus on public opinion guidance in cases that have caught the attention of the public.  Subsection three is one that contains apparently mixed signals, on the one hand emphasizing that defendants have the right to legal counsel, but at the same time,  all levels of judicial administrative organs should strengthen guidance and oversight of lawyers’ defense representation. The fourth subsection illustrates some ongoing techniques of the Chinese justice system, in using typical/model cases to educate the public and deter them from criminal or illegal behavior, and voluntarily comply with the law and the authorities. The document says explicitly: “the broader public should be guided to obey discipline and law, to not believe and spread rumors, and to lawfully support and cooperate with epidemic control work.”

Supreme People’s Court updates its Belt & Road policies

Screen Shot 2019-12-29 at 9.15.50 PMAt a press conference on 27 December (2019) the Supreme People’s Court’s (SPC) #4 Civil Division (the division focusing on cross-border commercial issues) announced it had issued three documents: a judicial interpretation and two judicial policy documents. The documents are connected directly or indirectly to the Belt & Road Initiative (BRI) and improving China’s foreign investment environment.

  1. Interpretation on Several Issues Regarding the Application of the “People’s Republic of China Foreign Investment Law” (FIL Interpretation) (最高人民法院关于适用〈中华人民共和国外商投资法〉若干问题的解释);
  2. Opinion on providing services and guarantees for the Belt & Road (BRI Opinion #2) (关于人民法院进一步为“一带一路”建设提供司法服务和保障的意见); and
  3. Opinion on providing services and guarantees for Construction of the Lingang area of the Shanghai Pilot Free Trade Zone (Lingang FTZ Opinion) (关于人民法院为中国(上海)自由贸易试验区临港新片区建设提供司法服务和保障的意见).

The two Opinions update two of the SPC’s two major policy documents on cross-border issues: the 2015 Opinion on Providing Services and Guarantees for the Belt & Road (BRI Opinion, and Opinion on Providing Guarantees for the Building of Pilot Free Trade Zones (FTZ Opinion). Policy documents do not have the force of law. They are examples of how the SPC supports the Party and government by issuing documents to support important strategies or initiatives (serving the greater situation (服务大局). In the New Era, the SPC has issued over dozen policy documents that provide “judicial services and guarantees” for major government strategies or initiatives, many more than before.  These Opinions are intended to harmonize the two earlier policy documents with post 19th Party Congress developments and priorities, including those mentioned in the Fourth Plenum Decision. I had previously reviewed the two earlier documents in detail.  My analysis of the Pilot FTZ Opinion can be found here and I have previously written and spoken about the BRI Opinion.  This blogpost draws on correspondence I had recently with Professor Vivienne Bathof the University of Sydney, but I am solely responsible for the views expressed here.  This blogpost discusses BRI Opinion #2.

2.  Belt & Road Opinion #2

This document is longer than the other two put together and has much more substantive and political content. Comments on the first section will focus on the political issues, while comments on the rest of the document will discuss the other content in the document:

  • political signaling on discrete issues;
  • judicial policy changes;
  • signaling to various audiences;
  • instructions and guidance to the lower courts;
  • highlighting future possible changes to SPC positions on legal issues;
  • promoting or supporting certain government initiatives within the courts;
  • reiterating basic policies.

New requirements and tasks (Section 1)

In keeping with post 19th Party Congress trends and the spirit of the 2019 Political-Legal  Work conference, BRI Opinion #2 has more politically oriented content and references than the 2015 BRI Opinion. As it must be harmonized with the latest Party and government policy, it includes the latest judicial policy jargon, such as “improving the business environment” and “creating an international, law-based and convenient business environment with stability, fairness, transparency, and predictability.”

The first section includes a long paragraph on working principles. For the casual reader, the principles are an odd hotpot of political, substantive, procedural, and administrative matters but in keeping with its role in the document. It is all about political signaling. To the person unfamiliar with these documents, it gives the reader the impression that if she put her chopsticks in one place in the hotpot, she would pull up support for international arbitration and if in another, support for constructing litigation service centers.

Policy changes and signaling (section 2)

This section contains seven apparently unconnected provisions. They are linked by their political and practical importance: judicial cooperation in criminal law; protecting the right of domestic and cross-border parties; supporting multilateralism; supporting the development of international logistics; supporting opening up in the financial sector; supporting the development of information technology, intellectual property, and green development. This section is a combination of signaling to the political authorities and the lower courts.

One notable provision is on judicial cooperation in the area of criminal law. Article 4 mentions the Beijing Initiative for the Clean Silk Road, and zero tolerance for corruption.  Doing something about cross-border corruption offenses is not a matter primarily of the SPC, as this analysis notes and has greater implications for state-owned enterprises (SOEs). This provision calls for the people’s courts to work with the judicial organs of other countries and regions along the “Belt and Road” to build jointly a judicial anti-terrorism mechanism, and curb the spreading of terrorism.  The link to the SPC is that we can anticipate that some staff from the SPC would be involved in negotiating regional or bilateral arrangements relevant to anti-terrorism (along with the Ministry of Foreign Affairs and Public Security Ministry). In an indirect way, it illustrates how the SPC works with other Party and government departments on legal issues, one of the distinctive functions of the SPC that rarely receives much attention.

On signaling to the lower courts, in addition to the section on financial cases, discussed in the previous blogpost, Article 6 is a reminder to the lower courts to apply the relevant rules of determining contract validity and liabilities in civil and commercial cases involving free trade agreements or cooperation documents signed between China and other countries. In any case, it is their obligation in applying relevant law.  Perhaps the SPC has issued the reminder because lower courts have failed to do too often.

Although Article 11 (on environmental protection) has received attention from a prominent environmental lawyer who saw the inclusion of cross-border environmental public interest litigation in the Opinion as ground-breaking, knowledgeable persons suggested it is a merely a reminder to local courts that they can take such cases provided current legal requirements are met, such as jurisdiction over the defendant, location of the pollution, and the social organization meeting specified requirements.

Specific policy (Section 3)

Section 3 contains signals on changes to specific judicial policies, reminders to the lower courts and also political signals, including highlighting SPC accomplishments. Article 13 signals to the lower courts some new policy on contract interpretation. It addresses situations that commonly arise when one party alleges fraud or collusion to avoid contract liability. The SPC reminds lower courts that evidence should be reviewed carefully, and the evidentiary standard should be beyond a reasonable doubt(根据排除合理怀疑的证据规则严格认定欺诈、恶意串通).  Article 13 directs courts to apply foreign law if the choice of foreign law would uphold contract validity.

This section has quite a few reminders to the lower courts to do what they should already be doing, such as: actively applying international conventions applicable to China; respecting international practices and international commercial rules; fully respecting parties’ governing law choice and explaining how they determined it; taking a restrictive approach towards declaring contracts invalid. Governing law is a sore spot in certain maritime matters, where the Chinese courts in a number of cases have set aside parties’ choice of law for a failure to have an actual connection.

Extending the influence of Chinese law abroad is a policy that received new impetus in the November, 2019 Decision of the 4th Plenum of the 19th Party Central Committee, and therefore it is found in Article 20 and again in Article 21 (in the following section).  Linked to this is language on increasing the prestige of the Chinese courts and the China International Commercial Court in particular. The language echoes and extends the 4th Plenum of the 18th Party Central Committee and BRI #1 Opinion, by calling on the people’s courts to extend the influence of Chinese law, publish typical cases tried by Chinese courts in multiple languages, lay a solid foundation for courts and arbitration institutions to correctly understand and apply Chinese laws, and strengthen the understanding and trust of international businesses of Chinese law. From the fact that the SPC envisions Chinese courts as having a role in assisting foreign courts and arbitration institutions to “correctly understand and apply Chinese law” shows that the SPC has a distinctive understanding of the role of a court.

On related accomplishments, one relates to typical cases in foreign languages and the other to the creation of the foreign law ascertainment platform. In 2019, the SPC published typical cases on cross-border issues in English, by publishing a pair of books on China Foreign-Related Commercial Cases and Maritime Cases (in China). It has also published a book of Chinese cases translated into English through Springer. On foreign law ascertainment, the accomplishment is the SPC having established a bilingual foreign law ascertainment platform, that assembles in one platform the available resources for ascertaining foreign law and a number of cases that involve ascertaining foreign law. There has been discussion in China as to whether courts should take such an active role in ascertaining foreign law, but the SPC has made a policy decision that it should.

International Commercial Court and One-Stop Dispute Resolution (Sections 4 and 5)

The BRI Opinion #2 contains several provisions related to the China International Commercial Court (CICC), with some mention of its expert committee.  Article 23 mentions working with international commercial courts outside of China to establish various types of exchanges and cooperation, including training judges. It is unclear whether this a reference to increasing cooperation under the Standing International Forum of Commercial Courts or other future initiatives.

These two sections also signals to the lower courts policy changes and policies to be stressed. One policy to be noted is implementing the policy of mediating first (贯彻调解优先原则), which is already incorporated into the CICC rules.  Some of the difficulties in mediating cross-border disputes involving state-owned enterprises were discussed in this earlier blogpost and at the workshop on implementing the Singapore Mediation Convention that I attended in December (2019).

Some new developments underway are mentioned in this section, linking to the central government’s policy of supporting Hong Kong’s role as an international dispute resolution center. Article 34 calls for support for increased cooperation with the Hong Kong International Arbitration Centre and other Hong Kong-based arbitration institutions, and appropriately involving Hong Kong-based institutions in CICC’s one-stop model. Article 35 mentions supporting offshore arbitration institutions being able to hear cases in China. (a development underway in recent months).

An important practical issue is raised in Article 31, which mentions improving the mechanism of coordinating cross-border bankruptcy (insolvency), and exploring (探索) applying the systems of the principal bankruptcy procedures and the center of the debtor’s main interests. This is likely linked to domestic development of bankruptcy law and the recognition that with BRI and thousands of Chinese companies investing abroad, some number will (or have) gone into bankruptcy (insolvency) proceedings. “Improving” and “exploring” mean that they are on the agenda of the SPC. It appears that the first related development occurred in Hong Kong in January 2020, when Judge Jonathan Harris granted recognition and assistance to mainland liquidators of CEFC (description of the case and link to judgment found here).  He concluded his judgment by stating” the extent to which greater assistance should be provided to Mainland administrators in the future will have to be decided on a case by case basis and the development of recognition is likely to be influenced by the extent to which the court is satisfied that the Mainland, like Hong Kong, promotes a unitary approach to transnational insolvencies.”

As I discussed in a recent blogpost and earlier, the SPC is seeking to use the CICC and its decisions (judgments/rulings) to guide the lower courts and to pilot reforms that are replicable (a Chinese judicial reform concept), as stated in Article 22 and 25: “the role of cases in determining rules and guiding behavior…and the role of the CICC in providing models and guidance shall be developed.  (发挥国际商事法庭示范引领作用…发挥好案例的规则确定 和行为指引作用).

Article 24 concerns presumptive reciprocity and mentions gradually promote reciprocity between commercial courts. This may signal that the judicial interpretation on enforcement of foreign court judgments is further delayed and that the SPC is taking a gradual approach by working towards mutual recognition and enforcement of international commercial court judgments, which would involve a smaller group of foreign judgments.

Themes that are not new in this section include supporting parties’ right to choose an appropriate dispute resolution forum.  It can be imagined that the #4 Civil Division judges considered that this basic principle needed repeating. Another ongoing theme, with more political coloration, is encouraging BRI dispute resolution, including investor-state dispute resolution to be heard in China. This is mentioned explicitly in Article 28, which lists measures “so that more international commercial disputes can be efficiently resolved in China.”  This is not new, but is part of a push that this blog noted as early as 2016, 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.

Article 32 mentions investment dispute resolution, and supporting “relevant departments in improving international investment dispute resolution mechanisms and organizations, respecting the dispute resolution clauses in bilateral and multilateral investment agreements, and resolving international investment disputes in a fair and efficient manner.”  This appears to be an acknowledgment that the SPC is in discussions with the Ministry of Foreign Affairs and other institutions on dealing with difficult issues related to enforcing international investment dispute arbitration awards in China (discussed here).

Personnel & Institutional Matters

The concluding section includes a notice in Article 37 to the lower courts that they shall “strengthen and improve the mechanism of coordination and guidance, and step up communication and cooperation with the relevant entities and departments.” This is a theme seen in many of the opinions issued by the SPC and reflects one of the many functions of the Chinese courts.

As discussed in the preceding blogpost, references in Article 38 and 39 to exchanges and training send signals within the SPC and its institutions, as well as lower courts about the types of programs that may be promoted, permitted or explored. It is likely that the National Judges College, its provincial branches, and its partners will continue to train foreign judges, as has expanded greatly in recent years. It appears that there could be greater possibilities for Chinese judges to go on exchange with other countries than has been possible in recent years. From my own contacts and experience with It may also provide the basis for a local court or division of the SPC to apply for funding to hold a legal roundtable or host an international exchange.

Concluding remarks

This Opinion is typical of New Era SPC policy documents providing guarantees and support for specific Party and government strategies and initiatives.  For a reader from outside the Chinese government system (体制), it takes knowledge of a constellation of related policies and practices to decode. This blogpost has been able to identify some of them.

BRI Opinion #2 has a great deal of content, not all discussed in this blogpost. Some have practical importance for practitioners in China and elsewhere.  But a larger question to consider, that likely was not in minds of the drafters, is whether this type of policy-oriented document is useful in reassuring foreign governments, foreign state-owned companies, and commercial entities that their dispute is best heard in China?  From my discussions with practitioners in various parts of the world, they may not be aware that BRI Opinion #2 even exists.

 

 

 

 

How are Supreme People’s Court Opinions structured?

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27 December SPC Press conference:from left, Li Guangyu (spokesperson); Justice Luo Dongchuan (vice president); Judge Wang Shumei (head of #4 Civil Division); Gao Xiaoli (deputy head, #4 Civil Division)

When the Supreme People’s Court (SPC) issues an “opinion” (意见), it is not issuing a judgment or ruling.  It is issuing a policy document, without the force of law.  In the New Era, the SPC has issued over dozen policy documents that provide “judicial services and guarantees” for major government strategies or initiatives, many more than before. They are examples of how the SPC supports the Party and government by issuing policy documents to support important strategies or initiatives (serving the greater situation (服务大局). What few, if any have written about is the structure of these opinions that support important strategies or initiatives as they relate to civil and commercial law issues. Understanding the structure is key to understanding the documents. Understanding opinions is important for understanding current issues in the courts and the future direction of judicial policy.

This blogpost uses the two opinions announced at the 27 December 2019 press conference pictured above, at which Justice Luo Dongchuan and Judges Wang Shumei and Gao Xiaoli (head and deputy head of the #4 Civil Division) introduced the two opinions (and a judicial interpretation). A subsequent blogpost will highlight what is new in these three documents. All three are connected directly or indirectly to the Belt & Road Initiative (BRI) and improving China’s foreign investment environment. The two opinions are:

  1. Opinion on providing services and guarantees for the Belt & Road (2) (BRI Opinion #2) (关于人民法院进一步为“一带一路”建设提供司法服务和保障的意见); and
  2. Opinion on Providing Services and Guarantees for Construction of the Lingang area of the Shanghai Pilot Free Trade Zone (Lingang FTZ Opinion) (关于人民法院为中国(上海)自由贸易试验区临港新片区建设提供司法服务和保障的意见).

The Opinions update two of the SPC’s two major recent policy documents on cross-border issues: the 2015 Opinion on Providing Services and Guarantees for the Belt & Road (BRI Opinion, and Opinion on Providing Guarantees for the Building of Pilot Free Trade Zones (FTZ Opinion).

The BRI Opinion #2 and Lingang FTZ Opinion are intended to harmonize the two earlier policy documents with post 19th Party Congress developments and priorities, including those mentioned in the  2019 19th Party Central Committee Fourth Plenum Decision. I had previously reviewed the BRI Opinion and FTZ Opinions in detail.  My analysis of the Pilot FTZ Opinion can be found here and I have previously written and spoken about the BRI Opinion.

Lower courts may issue documents that supplement the SPC’s policy documents, as is true with these Opinions.  This is a subject that I have written about on this blog and elsewhere before. The Shanghai Higher People’s Court has already issued a guidance document that provides related services and guarantees, with important content.

The two Opinions also link to three different events or matters–the promulgation of the Foreign Investment Law; the Second Belt & Road Forum for International Cooperation; and Xi Jinping’s visit to Shanghai and establishment of the Lingang Special Area of the Shanghai FTZ.

Structure of these Opinions

The structure of the two opinions is typical for SPC civil and commercial opinions “providing judicial services and guarantees” for major government strategies and initiatives.  Opinions often (but not always) start out with a first section with titles analogous to the section titles of these two Opinions:

I. Comprehensively grasping the new requirements and new tasks in serving the “Belt and Road” Initiative

I. Enhance understanding and get aligned with the mission of offering judicial services and guarantees to the New Area

A sample of the language of the first section is quoted below, from the second paragraph of the BRI Opinion #2:

Keeping committed to the concept of further providing judicial services and
guarantees by the people’s courts for the “Belt and Road” Initiative: The people’s courts shall firmly take the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline; study and fulfill the spirit of the19th CPC National Congress and the Second, Third, and Fourth Plenary Sessions of the 19th CPC Central Committee, as well as the essence of the key speech of General Secretary Xi Jinping on the Second Belt and Road Forum for International Cooperation; strengthen consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment…

The purpose of this initial section is two-fold. The first is to notify the lower courts of the political goals, background, and principles of the Opinion. The second to signal to the political-legal hierarchy that the policies that the SPC sets out in the body of the opinion are harmonized with the latest Party/government policies.

There are no hard and fast rules concerning the body of opinions, as analogous sections may occur in different order.  It may depend on the drafters and the topic involved.

The second section of the BRI Opinion has its counterpart in the third section of the Lingang FTZ Opinion:

II. Further performing the role of judicial trials, and serving and guaranteeing the joint construction of the “Belt and Road” with high quality in all aspects

III. Strengthen judicial trial function and maintain an institutional regime in the New Area focusing on investments/trade liberalization

These sections are meant to notify the lower courts about current relevant judicial policy, and implicitly inform them of any changes from previous policy and what the lower courts must do in support of that policy goal. The policies are likely to be linked to current Party/government policy.  From the BRI Opinion #2:

The people’s courts shall support the opening-up policy in the financial sector; the exemplary role (示范作用) of financial courts shall be maximized; eligible courts shall be encouraged to build special trial teams for financial cases; the application of law in foreign-related financial cases shall be further regulated and standardized;…valuable experiences of foreign countries in efficiently hearing financial cases shall be drawn upon…

Article 10, in Section III of the Lingang FTZ Opinion calls for

closer ties and communication mechanisms with the financial regulatory authorities shall be built to facilitate the construction of an integrated and efficient financial management system, in a bid for a better environment for doing business, for prevention of financial risks and for better national financial security.

In support of the opening-up policy in the financial sector, the SPC is promoting the role of financial courts (currently Shanghai, others to follow) in providing new mechanisms or methods in hearing cases or in their operations.  That is visible from the Shanghai Financial Court’s innovations in class actions in the sphere of securities law claims (claims against issuers, underwriters, directors and management, control parties, etc. for false and misleading disclosure upon initial issuance or in periodic reporting).  The Shenzhen intermediate court has established a special trial team for financial cases but not a separate court. From Article 10 of the Lingang FTZ Opinion, it can be anticipated that the Shanghai Financial Court has or will establish special communication channels with the financial regulators.

The titles of the third section of the BRI Opinion #2 is:

III . Further improving the application of law in cases involving the Belt and Road Initiative, and building a stronger rule-based business environment that is governed by law

From BRI Opinion #2:

13. The people’s courts shall vigorously carry forward the contract spirit and the good faith principle, and determine the acts of fraud and malicious collusion based on the rules of evidence beyond a reasonable doubt. If, in a civil or commercial case involving the construction, operation, purchasing, or bidding process of a project, there is a discrepancy on contract validity between the laws of the relevant countries, the people’s courts shall apply the law that holds the contract valid without damaging the honest party or benefiting the dishonest one, and promote mutual trust and benefits between the participants in the Belt and Road Initiative.

Each article in the third section of the BRI Opinion #2 focuses on a specific policy that the SPC wants the lower courts to promote.  In article 13, the SPC is seeking to control the tendency of lower courts to find a contract invalid because of allegations of fraud or malicious collusion, likely made by a Chinese litigant seeking to avoid contractual liability.  The Lingang FTZ Opinion does not have an exact counterpart to section III of the BRI Opinion #2, but has articles that focus on specific policies to be promoted, such as “properly handling cross-border bankruptcy cases….”

The title of the final section of BRI Opinion # 2 is:

VI. Further strengthening the organizational structure and team building to coordinate efforts to serve and guarantee the Belt and Road Initiative.

The last section relates to institutional and personnel matters. Take the following paragraph in the BRI Opinion #2 as an example:

39. The role of international exchange and research platforms such as international forums, legal roundtables..shall be further strengthened, and the exchanges and cooperation with the judicial systems of other countries shall be conducted. Training and studying programs for foreign judges shall be supported, and foreign legal service providers and think-tanks for the Initiative shall be invited to China to exchange views with Chinese counterparts so as to promote the formation of a diverse and interactive platform for legal exchanges….

Content in the last paragraph of the Lingang FTZ Opinion has some analogous provisions:

Establish a study training program and talent cultivation mechanism in line with international standards…Efforts shall be made to…(2) further expand international judicial communication channels, organize international judicial forums….

These provisions send signals within the SPC and its institutions, as well as lower courts about the types of programs that may be promoted, permitted or explored.  It is likely that the National Judges College, its provincial branches, and its partners will continue to train foreign judges, as has expanded greatly in recent years.  It appears that there could be greater possibilities for Chinese judges to go on exchange with other countries than has been possible in recent years.   It may also provide the basis for a local court or division of the SPC to apply for funding to hold a legal roundtable or host an international exchange. For the Lingang FTZ Opinion, it gives the Shanghai courts priority in organizing international programs and establishing programs to send outstanding young judges focusing on cross-border commercial issues on educational programs either in China or abroad.

The official report states that the SPC Party Group approved the two Opinions.  It appears from my previous research that pre-19th Party Congress, SPC policy documents did not necessarily require SPC Party Group approval. I surmise since the Party Political-Legal Work Regulations were promulgated in January 2019, it has now become a requirement, because Article 15 requires Party Groups/Committees to be responsible for setting major policies and directions.

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My thanks to a knowledgeable person for triggering my thinking about this and for insightful comments on an earlier draft.

Central Inspection Group gives feedback to the Supreme People’s Court (2020 edition)

Photo of CIG feedback meeting

In September, 2019, this blog reported that Central Inspection Group (CIG) #4 would inspect the work of the Supreme People’s Court (SPC) Party Group for approximately two months.  On 10 January 2020, Chinese media reported on CIG #4’s feedback to the SPC’s Party group. The summary and brief analysis below is based on the press release published in state media, rather than the full report given to the SPC.  Palpably better judicial transparency does not include Party documents of this nature. This process signals to the world outside of China that the SPC has a different role in the Chinese political system from the supreme courts of other major jurisdictions.

Chen Xi, Politburo Member, head of the Organization Department, and deputy head of the Leading Small Group on Central Inspections chaired the meeting. In the audience was: the head of the CIG #4 Group and its leader; members of the supervision office ( 监督检查室) of the CCDI/National Supervision Commission, leaders from relevant bureaus of the Party Organizational Department, leaders from the CCDI/Supervision Commission office stationed at the SPC, leaders of the SPC, and other responsible persons from the SPC. The results and the recommendations of what needs to be improved, as in 2017, were conveyed to the Standing Committee of the Politburo. The inspection group found that:

the study and implementation of Xi Jinping’s new era of socialist thinking with Chinese characteristics are not deep enough, the implementation of the Party’s line, direction, and policies and the Party’s central decision-making and deployment were not satisfactory.  There is insufficient focus on Party political construction;  the strengthening of political ideology and professional ethics of the cadre team (加强干部队伍思想政治和职业道德建设还不够到位) is not satisfactory; it insufficiently fulfills the duties and mission of the state’s highest judicial organ (履行国家最高审判机关职责使命还不够). The requirements of “justice for the people and fair justice” have not fully penetrated the entire court work process.   In every aspect, the trial management system and the supervision mechanism for the operation of judicial power are incomplete (各方面,审判管理体制和审判权力运行监督机制还不够健全完善). The strict implementation of the Party’s main responsibilities has not been put in place in a comprehensive manner, and minor problems are ignored; there are still problems with violations of the spirit of the Central Eight Point Regulations. There are still gaps in implementing the Party’s organizational policies for the New Era; leadership building and cadre construction are not in place. Party-building work of the institution and at the basic level is weak. Issues identified in the last inspection have not been corrected and corrective mechanisms are not in place.

In 2017, the CIG found: “four consciousnesses” need to be further strengthened; political discipline and political rules are not implemented strictly enough; the leadership role of the Party group is insufficiently developed;  there are some gaps in the coordination of the advancement of the system of judicial system reform; the implementation of responsibility system for ideological attitude (意识形态责任制落实不够有力); there are weak links in Party construction; organizational construction is not systematic enough; internal Party political life is not strict enough; relevance of ideological-political work is not strong; some Party leading cadres’ Party thinking is diluted (有的党员领导干部党的观念淡漠); the role of the basic level Party organization as a fighting fortress is insufficient; comprehensive strict governance of the Party is not strong, the implementation of the central eight-point regulations is not strict enough; formalism and bureaucratic issues still exist; tourism using public funds, abuse of allowances and subsidies still occurs; personnel selection is not standardized; cadre management is not strict enough; there are some areas of clean government risk.

This report revealed that some information involving leaders had been referred to the CCDI/National Supervision Commission, Party’s Organization Department, and other departments for further handling. The 2017 report contained similar language as well.

Chen Xi made demands of Zhou Qiang and other members of the SPC Party leadership. Among those is to implement the Party’s absolute leadership over the work of the courts, strengthen its “service and guarantees” to the work of the Party and state (see my 2019 article on one aspect), and implement judicial reforms. One of the demands he made with significant practical significance (flagged by a Wechat account popular among judges) is for measures for SPC judges (and likely lower court judges as well) that further restrict the employment of judges who have resigned and stricter conflict of interest rules for relatives of judges who are lawyers. [It is unclear whether these future measures will slow the resignation of SPC (or lower court) judges.]

He called upon the Party Group to raise their political position (提高政治站位) and arm their brains with Xi Jinping New Era Socialism with Chinese Characteristics thinking (用习近平新时代中国特色社会主义思想武装头脑–a current slogan, for those not aware of recent developments).

Comments

For the outside observer, handicapped by a limited ability to decode Party jargon, the summary of the feedback raises many questions but also provides insights.

Although the feedback appears to be devastating criticism of the SPC, a quick comparison to CIG feedback to the Supreme People’s Procuratorate and the Ministry of Justice indicates that the language (at least in the press reports) is standard for CIG feedback to Party and state institutions. It thus provides insights into the thinking of the political leadership about how it views the law and legal institutions, including the courts.  It appears to treat the SPC as just another Party/state institution to be inspected.

Part of current Party policy seeks to bolster domestic and international confidence in the SPC and the lower courts.  At the same time, this press release describes the SPC as insufficiently fulfilling the duties and mission of the state’s highest judicial organ, and that some of its operations are inadequate.  No specific examples are provided. What are the qualifications of the CIG members to make this decision and what type of evaluation mechanism have they used?  What will be the impact of this feedback within the institution, within the Chinese legal community, and on the views of people in and outside of China towards the SPC?

The feedback also reveals continuing concern about Party building, political ideology, the Party thinking of senior SPC personnel, and implementation of Party policy.  It can be seen from my recent blogpost that SPC leaders seek to craft their policies, actions, initiatives, and other decisions to hit the target of being politically correct (post 19th Party Congress and post 4th Plenum) while being “problem-oriented” (坚持问题导向) that is, addressing relevant practical issues facing the court system.  The practical issues facing the court system are primarily civil disputes. We do not have overall statistics for the number of cases in the Chinese courts in 2019, but if the Shenzhen courts are any indication, the number of cases they accepted increased by 24%, with most of the cases being civil or commercial disputes. That means a substantial part of the work of the SPC must be directed towards creating a framework for dispute resolution in which domestic (and international) civil and commercial litigants can have greater trust.

 

The China International Commercial Court & the development of case law with Chinese characteristics

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Article in 30 December edition of People’s Court Daily

On 30 December 2019, I was quoted in an article that appeared in Supreme People’s Court (SPC) media (see the screenshot above).

“中国国际商事法庭的运作时间不长,但从迄今为止的运作中可以清楚看到,其受理案件非常慎重,会选择对中国相关法律发展产生影响的案件。”最高人民法院国际商事专家委员、北京大学国际法学院常驻知名学者Susan Finder表示,从首批案件的裁判文书可以明显看出,中国国际商事法庭的判决和裁定对于下级法院的法官和法律界人士来说,可能是重要的“软先例”,即权威性的裁判。

The CICC has been in operation a short time…What is clear from its operations so far is that it is carefully choosing its cases, only selecting cases that will have an impact on the development of relevant Chinese law. What seems evident from the initial rulings, at least, is that the judgments and rulings of the CICC are likely to be significant for lower court judges and members of the legal community as “soft precedents,” authoritative decisions….

It is an excerpt from a brief article that I am setting out below as I wrote it in English (I have added (Chinalawtranslate.com’s) translation of excerpts from certain documents) and Chinese translation (many thanks to a knowledgeable person who took a break from year-end case closing to do this elegant translation).

I am honored to have this opportunity to comment on some of the first rulings and judgments of the China International Commercial Court (CICC). This brief commentary will address the significance of CICC judgments and rulings and the CICC arbitration-related rulings.

The CICC has been in operation a short time and it is early days to provide a more detailed analysis of its operations. What is clear from its operations so far is that it is carefully choosing its cases, only selecting cases that will have an impact on the development of relevant Chinese law. What seems evident from the initial rulings, at least, is that the judgments and rulings of the CICC are likely to be significant for lower court judges and members of the legal community as “soft precedents,”  authoritative decisions that are highly persuasive although not binding on the lower courts. Authoritative commentators in China and abroad have noted that the arbitration rulings fill a gap in Chinese arbitration law. The rulings are also consistent with the position taken by courts in some major jurisdictions that also find that the parties expressed their intent to arbitrate any dispute although their contract was never finalized. In the view of this commentator, they are part of China developing its own case guidance system, highlighted in item #26 of the 5th Judicial Reform Outline, in particular the phrase “Improve working mechanisms for mandatory searches and reporting of analogous cases and new types of cases” “完善类案和新类型案件强制检索报告工作机制” . It was previously mentioned in Opinions on Putting a Judicial Responsibility System in Place and Improving Mechanisms for Trial Oversight and Management (Provisional) –“on the foundation of improving working mechanisms such as consulting similar cases and judgment guidance a mechanism is to be established requiring the search of similar cases and relevant cases, to ensure a uniform judgment standard for similar cases, and the uniform application of law “最高人民法院关于落实司法责任制完善审判监督管理机制的意见(试行), (六) 在完善类案参考、裁判指引等工作机制基础上,建立类案及关联案件强制检索机制,确保类案裁判标准统一、法律适用统一 .

Moreover, thus far, five judges formed the members of the collegial panel, all of whom are the Chinese court’s most outstanding specialists on cross-border issues, including the judicial review of arbitration. This indicates the importance to which the Supreme People’s Court attaches to CICC cases.

In this commentator’s view, addition to CICC cases, other cases decided by or selected by the Supreme People’s Court would be classified as such. For example, cases decided by the Supreme People’s Court Intellectual Property Rights Court 最高人民法院知识产权法庭 would also be allocated to the category that I call “Supreme People’s Court soft precedents.” Other Supreme People’s Court soft precedents would include cases in the Supreme People’s Court Gazette 最高人民法院公报案件,  cases in the trial guides published by the various operational divisions 各个业务庭发表的审判业务指导丛书选的案件,and cases of the specialized judges committees of the SPC operational divisions 和各个业务庭专业法官会议案件。

In my view, cases decided by the collegial panels of the Supreme People’s Court are also persuasive, but not as persuasive as Supreme People’s Court cases in the categories described above. Supreme People’s Court circuit court cases are very persuasive to the courts within their jurisdiction. This case law is needed to supplement law and judicial interpretations and guide the lower courts correctly, as many new issues come before the courts before the legislative organs have time to amend legislation. I see China evolving its own case law, looking to traditional law and foreign jurisdictions for reference, but settling upon rules that fit China’s special situation, that may include some of the points I mention above. CICC decisions, whether rulings or judgments, will send important signals to the market, and are likely to be significant worldwide, as there is a documented increase in international arbitration cases where either the contract in dispute is governed by Chinese law or Chinese law is relevant in various ways.

The Chinese version:

中国国际商事法庭与有中国特色判例法的发展

我很荣幸有这个机会就中国国际商事法院(CICC)的首批裁定和判决发表意见。本短评将侧重中国国际商事法庭的判决和裁定以及仲裁司法审查裁定的重要性。

中国国际商事法庭的运作时间不长,对其运作进行更详细的分析还为时过早。 但从其迄今为止的运作中可以清楚看到的是,中国国际商事法庭选择其受理的案件非常慎重,只选择会对中国相关法律发展产生影响的案件。 至少从首批裁定可以明显看出,中国国际商事法庭的判决和裁定对于下级法院的法官和法律界人士来说,可能是重要的“软先例”,即权威性的裁判,虽然对下级法院没有约束力,但具有很强的说服力。 国内外权威专家均指出,这批裁定填补了中国仲裁法的一项空白。 这些裁定也与一些主要法域法院的立场保持了一致,也即尽管双方当事人的合同并未最后敲定,但双方都表示有意将争议提交仲裁。 在本文作者看来,这些裁判构成中国发展自己的案例指导制度的一部分,正如第五个司法改革纲要第26项所强调的,特别是“完善类案和新类型案件强制检索报告工作机制” 。 此前,最高人民法院关于落实司法责任制完善审判监督管理机制的意见(试行)曾提及“(六) 在完善类案参考、裁判指引等工作机制基础上,建立类案及关联案件强制检索机制,确保类案裁判标准统一、法律适用统一 。”

此外,到目前为止,合议庭均由五名法官组成,全部都是中国法院在跨境问题(包括仲裁司法审查)方面最杰出的专家。 由此可见最高人民法院对国际商事法庭案件的重视程度。

本文作者认为,除国际商事法庭案件外,最高人民法院审理或选取的其他案件也将被归入此类案例。例如,最高人民法院知识产权法庭判决的案件,也可归为所说的“最高人民法院软判例”,最高人民法院其他软判例还包括最高人民法院公报案例、各个业务庭发表的审判业务指导丛书选的案例和各个业务庭专业法官会议案例。我认为,最高人民法院合议庭判决的案件也具有说服力,但是没有上述几类案例的说服力强。 最高人民法院巡回法庭案例对其辖区内的法院具有很强的说服力。 由于立法机关往往来不及修改立法,许多新问题就摆在了法院面前,因此需要以判例来补充法律和司法解释以正确指导下级法院。 我看到中国正在发展自己的判例法,参考传统法律和外国司法管辖区的做法,但最终确定适合中国特殊国情的规则,这可能包括上文提到的一些要点。 国际商事法庭的裁判,无论是裁定还是判决,都将向市场发出重要信号,而且很可能在全球范围内产生重大影响,因为已有相关文件显示,争议合同适用中国法,或者中国法在不同方面予以适用的国际仲裁案件不断在增加。

Happy New Year!

Challenges for Supreme People’s Court leaders in the new era

Screenshot 2019-12-21 at 2.07.48 PMOne of the little-discussed aspects of being in a leadership role in the Supreme People’s Court (SPC) in the New Era is ensuring that policies, actions, initiatives, and other decisions hit the target of being politically correct (post 19th Party Congress and post 4th Plenum) while being “problem-oriented” (坚持问题导向) that is, addressing relevant practical issues facing the court system.  This is true for President Zhou Qiang as well as the vice presidents (each of whom is responsible for several divisions (主管), according to bureaucratic principles), the division heads, deputy heads, and equivalents in the affiliated institutions of the SPC, whether they be the circuit courts, National Judges College, or the China Institute of Applied Jurisprudence (CIAJ).

After the recent Central Economic Work Conference, Party Secretary and President Zhou Qiang convened a meeting of the SPC’s Party Committee, to discuss the implications for the courts, all of which appear to be the major initiatives of the SPC.  I have added numbers and deleted some provisions (translation thanks to Google translate). He said:

We must:

  1. deepen the comprehensive supporting reforms of the judicial system;
  2. vigorously promote the construction of smart courts;
  3. continuously improve the quality and efficiency of court work, and create a stable, fair, transparent, and predictable business environment for the rule of law.
  4. continue to strengthen judicial protection of intellectual property rights and intellectual property rights;
  5. improve the rule of law environment that supports the development of private economy, implement comprehensive, legal, and equal protection of property rights, protect the legitimate rights and interests of private enterprises and entrepreneurs in accordance with the law, and allow entrepreneurs to concentrate on starting a business..and operating with peace of mind.
  6. It is necessary to increase the judicial protection of intellectual property rights and provide strong judicial services and guarantees for the implementation of the innovation-driven development strategy. It is necessary to serve to ensure the healthy and rapid development of the digital economy, handle the relationship between the protection of digital rights and the development of the digital economy, protect personal information in accordance with the law, properly handle legal issues related to the digital economy platform, and better serve and guarantee the development of the digital economy.
  7. …Strengthen research on new situations and issues in the economic and financial field; do a good job in financial and bankruptcy trials; and effectively improve capacity of the people’s courts in risk prevention and resolution.
  8.  …It is necessary to serve a high level of opening up to the outside world, strengthen foreign-related commercial and maritime trials, protect the legitimate rights and interests of Chinese and foreign parties on an equal basis in accordance with the law, and provide powerful judicial services and guarantees for a wider, wider, and deeper opening.
  9. It is necessary to severely punish crimes in accordance with the law, actively participate in the special struggle to combat crime and eliminate evil, resolutely safeguard national security and social stability….

So what more specific measures hit the target? They include the following:

  • In November, Vice President Luo Dongchuan, when he made comments at the SPC Intellectual Property Court (Tribunal) on establishing a diversified technical fact investigation mechanism–see the language  in the Chinese version of the article (“raise political stance, fully recognize the importance of establishing and perfecting a technical fact investigation mechanism 罗东川强调,要提高政治站位,充分认识建立健全多元化技术事实查明机制的重要意义);
  • In December, Vice President Jiang Bixin, said such measures included improving environmental protection of the Yellow River Basin and high-quality development;
  • In December, head of the administrative division, Judge Huang Yongwei (mentioned on this blog when he was president of the National Judges College), said it included the judicial interpretation on administrative agreements, which he characterized as “having a positive effect on effectively protecting the legitimate rights and interests of the people in administrative agreements, advancing the government of the rule of law, building a credible government, optimizing the rule of law to do business, improving the ability of government administration, and advancing administrative trials in the people’s courts.”
  • For Yang Yongqing, deputy head of the #2 Civil Division, and one of the drafters of the recently promulgated 9th Civil and Commercial Trial Work Conference Summary (draft discussed here, the Conference Summary to be discussed in a future blogpost) (and Cao Shibin, head of the CIAJ, it meant going to one of the provincial courts to give lectures on civil and commercial issues.  Judge Yang explained what the conference summary means for trying cases involving a company that has provided security to a third party, as well as cases involving applications for relief by third parties.  Cao spoke on “Ethics and Judgment -Application of Judicial Reasoning in Civil and Commercial Trial Work”, starting from the challenges and difficulties facing the profession of judges.
  • Jiang Huiling, vice president of the National Judges College (NJC), in charge since Judge Hu Yunteng has retired: in November he addressed what implementing the 4th Plenum decision means for the NJC: “continuously promoting the modernization of education and training systems and education and training capabilities. The NJC should effectively translate its efforts into practical actions to promote development, gather the wisdom of all faculty and staff, study and judge the situation, … study in-depth the implications of constructing an “international first-class judicial institution (建设‘国际一流司法学府’)” [the goal that President Zhou Qiang has set for the National Judges College in its new five-year plan).”

This critic will “stay out of the region of immediate practice” (quote of Matthew Arnold, see a screenshot of a caricature that was one of my (late) father’s favorites).

 

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Singapore Mediation Convention & China (2)

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photo of the workshop in session

I was very honored to be able to participate in a workshop held on 4 December by the International Law Institute of the Chinese Academy of Social Sciences (CASS)  to discuss some of the complex issues involved in implementing the United Nations (UN) Convention on International Settlement Agreements Resulting from Mediation (Singapore Mediation Convention or Convention) in China.  It was linked to the previous workshop held in March, described in this earlier blogpost.  This time the workshop included participants from the Supreme People’s Court (SPC),  National People’s Congress (NPC), China Council for the Promotion of Foreign Trade (CCPIT), as well as some other academics and professionals.  The workshop could not have taken place if not for the efficient work of Professor Liu Jingdong and assistant research fellow Sun Nanxiang. As I mentioned in the previous blogpost, I had gotten to know Mr. Wen Xiantao, of the Department of Treaties and Law of the Ministry of Commerce (MOFCOM) and official Chinese negotiator of the Convention. Several others who had participated in the earlier workshop, such as Sun Wei, Zhong Lun partner and participant in the Convention negotiations as part of Beijing Arbitration Commission’s delegation to the negotiations as with observer status, had previous engagements and were unable to attend. The closed-door and invitation-only format of the workshop enabled a positive and interactive discussion among all participants.

Part of the purpose of the workshop was to discuss a research report  (not publicly available) that Professor Liu and his team had prepared for MOFCOM, discussing a number of issues related to implementing the Convention in China. Additionally, from the brief remarks each participant made, it was possible to obtain a greater understanding of the more specific implications and issues involved that otherwise would be impossible for a person outside that system to recognize. For example, Judge Guo Zaiyu of the SPC #4 Civil Division (and CICC) spoke about certain court-related issues.  I drew on my August blogpost and my discussions earlier that day with a prominent lawyer to discuss state-owned enterprise-related issues.

Among the many issues discussed were the implications for the courts, preventing the enforcement of fraudulent mediation settlements, promoting the growth of commercial mediation and legislative issues.

It was also an opportunity to gain a bit more understanding, as a participant and observer, about the complex process of implementing an international convention in China.

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Group photo of the workshop participants

 

 

How the Supreme People’s Court guides the lower courts through cases in its publications (1)

IMG_6372The Supreme People’s Court (SPC) guides the lower courts in many ways.  One way is by publishing “trial guides”(审判指导丛书) and other related specialized publications.  I have recently spoken about the cases in some of these publications.  The cases published in these trial guides are for the most part not “guiding cases” (指导性案例) and therefore may not be cited in a court judgment.  However, because they have been specially selected by the SPC, they are quite persuasive to the lower courts and therefore important to legal professionals.  The SPC sees them as a supplement to legislation, judicial interpretations, various types of judicial normative documents/judicial documents/(司法规范性文件/司法文件) and useful in providing a source for judicial interpretation drafting. I have called these cases ”stealth” guidance or “soft precedents”, as they are used without citation in judgments. This blogpost introduces cases found in several of these trial guides.

The series Reference to Criminal Trial (刑事审判参考), edited by a team from the five SPC criminal divisions is invaluable to anyone wanting a detailed understanding of the issues in the criminal justice system, as seen by insiders (and approved for general distribution).

As can be seen from the photo from a recent issue, the first section is a collection of guidance cases (指导案例). These are not guiding cases as approved by the SPC judicial committee and translated by the Stanford Project. These are cases selected by the editors. Issue #115 has a number of cases related to the crime of organizing, providing premises, and introducing prostitution. Several others discuss whether the death penalty should be applied in the circumstances described.  As the editors describe them: “these are typical cases selected for their research value in the determination of facts, adoption & application of evidence, law, and criminal punishment, to provide guidance & reference for those in criminal justice” “选择在认定事实,采行证据,法律适用和裁量刑罚…为了刑事司法工作人员处理类似案件提供具体指导和参考.”

Screenshot 2019-12-09 at 9.54.08 PMAnother specialized publication is the Guide to Foreign-Related Commercial and Maritime Trial, edited by the #4 Civil Division. As can be seen from the photos (and discussed in an earlier blogpost, some of the cases in the issue are entitled replies (some  called 答复 and others entitled 复函), while others are called cases (案例).  As mentioned in that earlier blogpost, the replies are from the SPC to a request from instructions (请示) from provincial-level courts (including the higher courts of Beijing, Shanghai, Tianjin, and Chongqing), as required by the SPC’s Prior Reporting system for cross-border arbitration matters (for example, as when a lower court intends to refuse the enforcement of a foreign arbitral award).  The #4 Civil Division publishes both the request for instructions as well as their response, while the SPC Administrative Division (in their publication Administrative Law Enforcement and Administrative Adjudication (行政执法与行政审判) (pictured below) only publishes their responses to the lower courts.

admin litigation publication

The cases published in these publications are ones that the editors consider significant. The editors of the Guide to Foreign-related Commercial and Maritime Trial describe the cases as providing powerful guidance”– “cases provide methods of thought for resolving similar issues” (具有较强的指导意义”“为了…遇到类似问题提供了解决思路”).  The editors of Administrative Law Enforcement and Administrative Adjudication describe their selected cases as being typical and guiding significance (具有典型和指导意义的审判案例. Lower court judges take the cases in these publications as providing very useful reference materials when they are presented with similar issues.  It is part of a larger effort by the SPC to use prior cases to guide the lower courts in applying their discretion.

 

 

Supreme People’s Court’s 2019 judicial interpretation agenda (II)

photo from an unrelated press conference at the SPC

As discussed in two blogposts in 2018, the Supreme People’s Court (SPC) has a yearly plan for drafting judicial interpretations, as set out in its 2007 regulations on judicial interpretation work. The plan is analogous to the legislative plans of the National People’s Congress (NPC) and its Standing Committee. Judicial interpretations, for those new to this blog, are binding on the SPC itself and the lower courts, and fill in some of the interstices of Chinese law (further explained here).  On 29 April 2019, the SPC’s General Office issued a document setting out a list of 47 judicial interpretation projects, 36  with an end of 2019 deadline (see the previous blogpost), and 11 with a deadline set for the first half of 2020 (set out below).  The list details the projects for which the SPC judicial committee had given project initiation/approval (立项), designating one or more SPC divisions/offices with primary drafting responsibility (this process to be detailed in a forthcoming article).  It appears to be the second time this type of document was publicly released.  If so, it is a concrete step in increasing the SPC’s transparency. The projects, deadlines, and some brief comments (some longer than others) follow below

(“Project initiation”/”project approval” is a procedure well-known to those of us who have been involved in foreign investment projects in China, where it involves approval from the planning authorities, primarily for infrastructure projects, but is an initial procedure used by regulatory authorities of all types, Party and state. For the SPC, it reflects one of the “planned economy” aspects of the way it operates.

Deadline of the first half of 2020:

  1. Provisions on Issues Concerning the Electronic Service of Legal Instruments (关于电子送达法律文书若干问题的规定). Responsibility of the Case Filing Division. This has been flagged for some years.
  2. Amending the 2013 joint SPC and Supreme People’s Procuratorate Interpretation on Several Issues Concerning the Handling of Criminal Cases Involving  Food Safety (关于修改《关于办理危害食品安全刑事案件适用法律若干问题的解释》的决定). Responsibility of the #1 Criminal Division.
  3. Interpretation on Several Issues Concerning the Application of Laws in Handling Criminal Cases Involving the Administration of Tax Collection (关于办理危害税收征管刑事案件适用法律若干问题的解释). Responsibility of the #4 Criminal Division.
  4. Interpretation Concerning the Application of Law in Cases of Disputes over the Infringement of Trade Secrets (关于审理侵犯商业秘密纠纷案件应用法律若干问题的解释). Responsibility of the #3 Civil Division. This judicial interpretation is flagged in the recently issued (November, 2019) Party/State Council document on improving intellectual property rights protection (Explore and strengthen effective protection of trade secrets, confidential business information and its source code etc. Strengthen criminal justice protection and promote the revision and the amendment and improvement of criminal law and judicial interpretations 探索加强对商业秘密、保密商务信息及其源代码等的有效保护。加强刑事司法保护,推进刑事法律和司法解释的修订完善). (“Brother” blogger Mark Cohen’s comments on the document found here.)Given the worldwide attention to this issue, I would expect that a draft will be issued for public comment.
  5. Interpretation on Several Issues Concerning Punitive Damages for Intellectual Property Infringement (关于知识产权侵权惩罚性赔偿适用法律若干问题的解释). Responsibility of the #3 Civil Division. Although recent publicity by the Chinese government has linked implementing punitive damages to the recent Party/State Council document on protecting intellectual property rights and the draft implementing regulations for the Foreign Investment Law, the 2018 Party/State Council document on improving intellectual property litigation had already mentioned this.  Given the worldwide attention to this issue, I would expect that a draft will be issued for public comment.
  6. Provisions on Issues Concerning the Application of the Foreign Investment Law of the People’s Republic of China (I) (关于适用《中华人民共和国外商投资法》若干问题的规定(一)). Responsibility of the #4 Civil Division. Given the worldwide attention to this issue, I hope that a draft will be issued for public comment.
  7.  Provisions on Several Issues Relating to Open Court Sessions of the People’s Courts on the Internet (关于人民法院互联网公开庭审过程若干问题的规定).  Responsibility of the Trial Administration Office.  I have an unpublished article on issues involved with the streaming of court hearings, prepared for an academic conference at which I gave a presentation three years ago. The paper (drawing on research within the court system) raises problems I have not seen mentioned by anyone writing in English.
  8. Interpretation Regarding the Application of the Criminal Procedure Law of the People’s Republic of China (关于适用《中华人民共和国刑事诉讼法》的解释). Responsibility of the Research Office.  I have a forthcoming academic article on the procedure underlying the drafting of this judicial interpretation, derived from a conference presentation I made almost two years ago.  The article was finalized early this year. I’m hoping it will be published next year.  I trust it won’t be out of date…
  9. Interpretation on Several Issues Concerning the Realization of Security Interests (.关于担保物权实现程序若干问题的解释). Responsibility of the Research Office. A practical issue for financial institutions, lawyers, and others.
  10. Issues in the Handling of Judicial Technology Cases (关于办理司法技术案件若干问题的规定). Joint Responsibility of the Research Office, Trial Administration Office, and Judicial Equipment Administration Bureau.
  11. Issues Concerning the Forensic Identification and Evaluation of the People’s Courts (关于人民法院司法鉴定若干问题的规定). Joint Responsibility of the Research Office, Trial Administration Office, and Judicial Equipment Administration Bureau.

I’d welcome comments by persons with further information about any of the above draft judicial interpretations.

Supreme People’s Court’s 2019 judicial interpretation agenda (I)

photo from an unrelated press conference at the SPC

As discussed in two blogposts in 2018, the Supreme People’s Court (SPC) has a yearly plan for drafting judicial interpretations, as set out in its 2007 regulations on judicial interpretation work. The plan is analogous to the legislative plans of the National People’s Congress (NPC) and its Standing Committee. Judicial interpretations, for those new to this blog, are binding on the SPC itself and the lower courts, and fill in some of the interstices of Chinese law (further explained here).  On 29 April 2019, the SPC’s General Office issued a document with a list of 47 judicial interpretation projects, 36  with an end 2019 deadline (set out below), and 11 with a deadline set for the first half of 2020 (set out in this blogpost).  The document details the projects for which the SPC judicial committee had given project initiation/approval (立项), designating one or more SPC divisions/offices with primary drafting responsibility (this process to be detailed in a forthcoming article).  It appears to be the second time this type of document was publicly released.  If so, it is a concrete step in increasing the SPC’s transparency. The projects, deadlines, and some brief comments (some longer than others) follow below. Some of the interpretations listed below are ones that Jiang Qibo, head of the Research Office, mentioned in 2018, as being linked to socialist core values (see my 2018 blogpost), although as I commented then, many are linked to the SPC’s need to “serve the greater situation” while at the same time seeking to deal with many of the difficult legal issues that face the courts.

(“Project initiation”/”project approval” is a procedure well-known to those of us who have been involved in foreign investment projects in China, where it involves approval from the planning authorities, primarily for infrastructure projects, but is an initial procedure used by regulatory authorities of all types, Party and state. For the SPC, it reflects one of the “planned economy” aspects of the way it operates.

Close observation reveals that some interpretations were listed last year, indicating that drafts were not ready for approval last year.  Some of the reasons for slippage are likely to be:

  • the issues turn out to be more complicated (substantively or otherwise);
  • judges have less time to work on judicial interpretation drafting with an increased caseload and document study;
  • many experienced SPC judges have been dispatched to circuit courts, leaving fewer at headquarters to work on judicial interpretations; and
  • timing may also be a factor.

Deadline of end 2019

  1. Regulations on pre-filing property protection provisional measures (关于办理诉前财产保全案件适用法律若干问题的解释 ), a type of pre-filing injunction.  These regulations are for non-intellectual property (IP) cases. Responsibility of the Case Filing Division.
  2. Provisions on Several Issues Concerning Preventing and Punishing False Lawsuits, Malicious Lawsuits, and Vexatious Litigation (关于防范和惩治虚假诉讼、恶意诉讼及无理缠诉若干问题的规定). Responsibility of the Case Filing Division.
  3.  Provisions on Regulating the Execution of Death Penalties and Related Issues (关于规范死刑执行及相关问题的规定) (Responsibility of the #1 Criminal Division).  The original deadline was the first half of this year. Apparently, this will focus on more setting out more detailed guidelines concerning how the death penalty is implemented, linked to the Criminal Procedure Law and the SPC’s interpretations of the Criminal Procedure Law;
  4. Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Corruption and Bribery (II) (最高人民法院、最高人民检察院关于办理贪污贿赂等刑事案件适用法律若干问题的解释(二). Responsibility of the #2 Criminal Division. It likely updates the 2016 interpretation to reflect the establishment and operation of the National Supervisory Commission and addressing issues that have arisen in practice.  Issues to be covered likely include ones discussed in issued #106 of Reference to Criminal Trial (刑事审判参考,the journal of the SPC’s five criminal divisions, mentioned here).  Responsibility of the #2 Criminal Division, but it is likely that the supervision commission will be/is one of the institutions providing input.
  5. Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Dereliction of Duty (II) (最高人民法院、最高人民检察院关于办理渎职刑事案件适用法律若干问题的解释(二)).  Was on last year’s list with an end 2019 deadline. I noted last year that it was likely updating interpretation (I) in light of the anti-corruption campaign and the establishment of the National Supervision Commission. Issues likely flagged in Reference to Criminal Trial.
  6. . Interpretation on Several Issues Concerning the Application of Law in the Trial of Criminal Cases Involving Concealing and Harboring Criminals (关于审理窝藏、包庇刑事案件适用法律若干问题的解释). These provisions occur in various parts of the Criminal Law and are also mentioned in the organized crime opinion discussed in this earlier blogpost. Drafting responsibility of the #4 Criminal Division;
  7. Interpretation on Several Issues Concerning the Application of Law in the Trial of Cases Involving Restrictions on Commutation of Suspended Death Penalties (关于审理死刑缓期执行限制减刑案件适用法律若干问题的解释), Interpretation on limiting commutation during the period of the suspension of death sentences. See related research in English and Chinese. The #5 Criminal Division is responsible for this.
  8. Interpretation on Several Issues Concerning the Application of Law in the Trial of Cases Involving Enforcement Objection Actions (关于审理执行异议之诉案件适用法律若干问题的解释). It previously had a deadline of the end of 2018, related to the campaign to basically resolve enforcement difficulties within two to three years. Drafting this is a task for the #1 Civil Division. A draft of this interpretation was issued for public comment on 30 November (the draft and details of how to submit comments found here.)
  9. Interpretation on Evidence in Civil Procedure, Responsibility of the #1 Civil Division (关于民事诉讼证据的解释).  Another interpretation deadline has slipped by one year. A draft was distributed in 2016. Many new issues have arisen because of the prevalence of electronic evidence.
  10. Interpretation on Several Issues Concerning the Application of Law in the Trial of Cases of Civil Disputes over Food Safety (关于审理食品安全民事纠纷案件适用法律若干问题的解释). Responsibility of the #1 Civil Division. The deadline has slipped by one year.  A draft was recently issued for public comment.
  11. Interpretation on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (V) (关于审理劳动争议案件适用法律若干问题的解释(五)).   It likely dealing with some of the most pressing labor law issues facing the courts that are not covered by the preceding four interpretations or relevant legislation. The #1 Civil Division is in charge of drafting. Judge Xiao Feng of that division posted his slides from his lecture at the National Judges College earlier this year flagging the three principal issues in that draft. His slides provide an overview of those three issues: linking of labor arbitration with litigation; substantive law issues; procedural law issues. Substantive law issues include determining whether the parties are in a labor relationship; procedural issues include the burden of proof concerning overtime.
  12. Issues Concerning Civil and Commercial Disputes over Bank Cards (关于审理银行卡民商事纠纷案件适用法律若干问题的解释), Responsibility of the #2 Civil Division. Another interpretation that previously had a 2018 year-end deadline.
  13. Interpretation on Financial Asset Management Companies’ Acquisition, Management and Disposal of Non-performing Assets (关于审理金融资产管理公司收购、管理、处置不良资产案件适用法律若干问题的解释).  The legal infrastructure related to non-performing assets is inadequate, as has been pointed out by all participants, including judges. The Shenzhen Intermediate Court has run several symposia bringing together leading experts from the market. Responsibility of the #2 Civil Division. Another interpretation that previously had a 2018 year-end deadline.
  14. Interpretation on Issues Relating to Internet Financial Disputes (civil aspects) (关于审理互联网金融纠纷案件适用法律问题的解释), as existing judicial interpretations inadequately address the issues facing the lower courts. Drafting this is a task for the #2 Civil Division. Another interpretation that previously had a 2018 year-end deadline.
  15. Company Law Interpretation (V) (关于适用《中华人民共和国公司法》若干问题的规定(五)) (Issued in late April, text found here, official commentary here).
  16. Extending the Time Limit for Trial & Postponing Hearing of Civil and Commercial Cases (关于严格规范民商事案件延长审限和延期开庭问题的规定), issued at the end of March, 2019.
  17. Interpretation of the Enterprise Bankruptcy Law (III), issued at the end of March, 2019, commentary by a leading global firm here and Chinese firm here.
  18. Intellectual Property Rights Evidence Rules (关于知识产权民事诉讼证据的若干规定).  These rules are linked to a 2018 Party/State Council policy decision on the reform of intellectual property litigation, (II (1), mentioning disclosure of evidence, burden of proof, and destruction of evidence. have been on the SPC agenda for some time. From several conferences involving leading judges (in Shanghai and Chongqing), it is possible to understand judicial thinking on these issues. Responsibility of the #3 Civil Division.
  19. Judicial interpretation on administrative cases involving patent authorization and confirmation (关于审理专利授权确权行政案件若干问题的解释). It appears to be the counterpart in the patent area of a 2017 judicial interpretation relating to trademarks. Responsibility of the #3 Civil Division. Another interpretation that previously had a 2018 year-end deadline.  A draft was issued for public comment in the summer of 2018.  Comments by US trade organizations were submitted, among others.
  20. Interpretation on the Recognition and Enforcement of Civil and Commercial Judgments by Foreign Courts (关于受理申请承认和执行外国法院民商事判决案件若干问题的解释). Original deadline of first half of 2019.  This issue has been flagged since at least 2014.
  21. Regulations on maritime labor service contracts (关于审理船员劳务合同纠纷案件适用法律若干问题的解释), likely connected with China’s accession to the 2006 Maritime Labor Convention and a large number of disputes in the maritime courts involving maritime labor service contracts. The linked report from the Ningbo Maritime Court mentions evidentiary problems and disputes involving foreign crew, among others. Responsibility of the #4 Civil Division.
  22. Scope of Acceptance of Environmental Resource Lawsuits (关于受理环境资源诉讼案件范围的规定). As is usual practice, local courts have issued guidance (link is to guidelines issued by the Chongqing Higher People’s Court) that is likely to provide information to the SPC. Responsibility of the Environmental and Natural Resources Division.
  23. Application of Law in the Trial of Cases of Compensation for Ecological Environmental Damage, issued in June, 2019. SPC press conference and model/typical cases released.
  24.  Disputes over forestry rights, apparently an area with many disputes.  Responsibility of the Environmental and Natural Resources Division. Original deadline was the first half of 2019.
  25. Provisions on Several Issues Concerning Administrative Compensation Cases (关于行政赔偿案件若干问题的规定).  I have not seen reports on a draft, but see a recent case on issues concerning the calculation of direct losses has been posted. Responsibility of the Administrative Division.
  26. Regulations on responsible persons of administrative authorities responding to lawsuits, (关于行政机关负责人出庭应诉若干问题的规定), relating to new requirements in the amended Administrative Litigation Law. and the 2018 judicial interpretation of the Administrative Litigation Law. Responsibility of the Administrative Division. Original deadline of the first half of 2019.
  27. Regulations on the consolidated review of normative documents in administrative cases (关于审理规范性文件一并审理案件若干问题的规定).  Responsibility of the Administrative Division. Original deadline of the first half of 2019.
  28. Regulations on the consolidated hearing of administrative and civil disputes (关于一并审理行政争议和民事争议若干问题的规定), apparently related to this item in a previous blogpost. Responsibility of the Administrative Division. Original deadline of the first half of 2019.
  29. Interpretation on procedures for the hearing of administrative cases (关于行政案件庭审程序若干问题的规定). Responsibility of the Administrative Division. Was mentioned in last year’s document.
  30. Interpretation related to agency issues in retrial (再审) cases.  With the many governance problems of Chinese companies, these issues frequently arise.  Drafting responsibility with the Judicial Supervision Division. Original deadline of end 2018.
  31. Interpretation relating to the enforcement of cases involving company shareholding.  Given the complexities of shareholding in China, including the frequent use of nominee arrangements, these are difficult issues for judges to deal with.  See a presentation by one of the circuit court judges on this issue.  Responsibility of the Enforcement Bureau.
  32. Interpretation on Several Issues Concerning the Application of Law in the Trial of Criminal Cases Involving Organizing Cheating in Examinations, issued in early September, jointly with the Supreme People’s Procuratorate (SPP), to ensure the two institutions have harmonized approaches.  The Research Office (which coordinates interactions with the SPP), was responsible.
  33. Interpretation on Issues Concerning the Trial of Criminal Cases Involving Crimes of Illegally Using an Information Network or Providing Aid for Criminal Activities in Relation to Information Network (link to the Chinalawtranslate.com translation), also a joint interpretation with the SPP, for which the Research Office was responsible;
  34. Personal information rights disputes judicial interpretation (审理个人信息权纠纷案件适用法律若干问题的解释), linked to the Civil Code being drafted.  Implications for individuals and entities, domestic and foreign. Responsibility of the Research Office.
  35. Amending (i.e. updating) ()the 2001 Provisions of the Supreme People’s Court on Certain Issues Concerning Application of Urging and Supervision Procedure, relating to the enforcement of payment orders by creditors.  Responsibility of the Research Office.
  36. Interpretation on cases involving both civil and criminal issues (关于办理民刑交叉案件适用法律若干问题的解释). This is a longstanding issue, and with the crackdown on the private lending sector, this has come to the fore.  Among the many issues include: if the defendant is criminally prosecuted first and assets are confiscated, how can affected borrowers or other parties be compensated.  Responsibility of the Research Office, likely involving several civil and criminal divisions. Originally with a 2018 year-end deadline.

I’d welcome comments by persons with further information about any of the above draft judicial interpretations.

Update from #1 China International Commercial Court

The Monitor at the #CICC/#1 Circuit Court, December 2018

In recent days, I had the opportunity to meet with  Zhang Yongjian, chief of the #1 China International Commercial Court (CICC) who provided some updates about the cases accepted by that court.  In addition to the three rulings (posted on the CICC website) that the #1 CICC had issued, he mentioned that a ruling in one of the cases was forthcoming, as was a judgment in another. He mentioned that in considering some of the cases, certain members of the expert committee have provided expert opinions, as is authorized by the CICC rules.  Additionally, the #1 CICC has accepted a sixth case, filed directly with the court. Zhang Yongjian mentioned the issues in that case relate to entrusted/nominee shareholding. The other cases accepted thus far are ones that had been referred by lower courts.

Supreme People’s Court Establishes a Mechanism for Resolving Inconsistent Decisions

 

Screenshot 2020-01-17 at 12.11.48 PM

On 11 October, the Supreme People’s Court (SPC)  issued brief guidance establishing a mechanism for resolving its inconsistent decisions, entitled “Implementing Measures on Establishing a Mechanism for Resolving Differences in the Application of Law (Implementing Measures) (关于建立法律适用分歧解决机制的实施办法).  The guidance did not appear in Chinese legal media until the end of October. The intent of the guidance is to create a mechanism to resolve the old problem of inconsistent court decisions concerning the same issue (same cases decided differently 同案不同判) made by Chinese courts and even within the SPC. Widespread use of the SPC’s judgments database has brought this phenomenon to greater public attention.  With the explosion in the number of cases in the Chinese courts and in the SPC in particular in recent years, the issue of divergent views within the SPC on the same issue is likely to be occurring even more frequently.  The concern about uniformity or consistency of judicial decisions has its roots in the traditional Chinese legal system and is an ongoing topic of discussion among Chinese judges, legal practitioners, legal academics, and law students.

For those with an interest in the details of how the SPC operates, this document does not have the status of a judicial interpretation but the SPC’s judicial committee has approved it, as is evident from the title of the document (measures/办法 and the document number 法发〔2019〕23号 (Fa Fa (2019) #23.  Judicial interpretations must have one of four titles and have a document number with  Fa Shi 法释.  The reason that the SPC judicial committee approved it is linked to Article 7 of the recently released guidance on judicial committees: “the adjudication [judicial] committee of the Supreme People’s Court is to unify law through means such as adopting and drafting judicial interpretations and normative documents (规范性文件), and publishing guiding cases.”

This mechanism has its antecedents in several previous judicial reform documents, and is one that is contained reform measure #23 of the last round of judicial reforms and reform measure #26 of the current round::

#23….Complete and improve working mechanisms for the uniform application of law.

#26 Improve mechanisms for the uniform application of law. Strengthen and regulate work on judicial interpretations, complete mechanisms for researching, initiating, drafting, debating, reviewing, publishing, cleaning up, and canceling judicial interpretations, to improve centralized management and report review mechanisms. Improve the guiding cases system, complete mechanisms for reporting, selecting, publishing, assessing, and applying cases. Establish mechanisms for high people’s courts filing for the record trial guidance documents and reference cases. Complete mechanisms for connecting the work of case discussion by presiding judges and collegial panel deliberations, the compensation commission, and the judicial committee. Improve working mechanisms for mandatory searches and reporting of analogous cases and new types of case. (完善统一法律适用机制。 加强和规范司法解释工作,健全司法解释的调研、立项、起草、论证、审核、发布、清理和废止机制,完善归口管理和报备审查机制。完善指导性案例制度,健全案例报送、筛选、发布、评估和应用机制。建立高级人民法院审判指导文件和参考性案例的备案机制。健全主审法官会议与合议庭评议、赔偿委员会、审判委员会讨论案件的工作衔接机制。完善类案和新类型案件强制检索报告工作机制)

A brief summary of the mechanism is set out, followed by my preliminary thoughts on the mechanism and related issues.

The mechanism

The Implementing Measures, which went into effect on 28 October,  provide that if certain SPC entities or lower courts discover that the SPC has issued valid judgments (判决) or rulings (裁定) (the Chinese term is “生效裁判”) which apply the law differently (存在法律适用分歧), or an ongoing case may result in the later decision applying the law differently from that in a previous SPC case, the matter should be brought to the attention of the SPC judicial committee through an application process managed by the Trial Management Office.

Article 1 of the Implementing Measures designates the SPC judicial committee (also translated as adjudication committee 审判委员会) as the institution to resolve and guide differences in the application of law.

Article 2 authorize  operational divisions of the SPC (业务部门), the higher people’s courts and specialized people’s courts to submit an application to the SPC’s Trial Management Office which may be eventually considered by the SPC’s judicial committee if either:

  1. there is a discrepancy in the application of law of judicial decisions of the SPC that are already effective (最高人民法院生效裁判之间存在法律适用分歧的);
  2. or there is a difference in the application of law between the conclusions in a case being tried and principles or standards on the application of law already determined in effective decisions of the SPC  (在审案件作出的裁判结果可能与最高人民法院生效裁判确定的法律适用原则或者标准存在分歧的).

Article 3 authorizes the China Institute of Applied Jurisprudence  (CIAJ) to submit an application to the Trial Management Office if it encounters differences in the application of law in effective judgments of the SPC that it encounters during its focused research work on like cases decided consistently (类案同判专项研究).

If the Trial Management Office determines the matter should be accepted (project initiation) (立项), that office is required to refer the matter to the CIAJ, which is required to provide an initial view to the Trial Management Office within five working days.  Presumably, they will do little additional research and will focus on reviewing the materials submitted by the entity involved.  In some situations, it appears to put CIAJ in the odd position of reviewing its own work.  The Trial Management Office forwards the initial view of the CIAJ to the SPC operational division involved for further review and response.  The operational division involved may involve experts in needed. The operational division should draft a response (复审意见) in a timely manner to the Trial Management Office, which should submit a request to an SPC leader (presumably the relevant SPC vice president) to place the matter on the judicial committee agenda.  Once the judicial committee makes a decision, the entity that applied for a determination is to be informed.  The Trial Management Office is required to provide a proposal containing the form and scope of the decision by the judicial committee for approval (提出发布形式与发布范围意见).  It can be anticipated that determinations on non-sensitive topics may be made public, while those on more sensitive topics will be distributed either solely within the court system or to a relevant category of judges. Article 11 of the Implementing Measures requires SPC operational divisions, local courts, and specialized courts to make reference and implement (参照执行) the SPC judicial committee’s decision in the course of their work. Presumably that will depend on how widely distributed the determination is.

Some preliminary thoughts

In my view, the mechanism is a microcosm of themes reflecting how the SPC operates.  As mentioned above, the SPC decides (either through judgments or rulings) large numbers of cases yearly, and the SPC responds to an unknown number of requests for instructions (请示), mostly on legal issues, which means that in practice that issues on the same body of law may be determined by different divisions of the SPC or different teams of SPC judges. So differences in legal issues may arise either through litigation or court administrative-type procedures. While SPC judges in practice (as I understand it) search for similar cases, it is inevitable that different people have different views on legal issues.  Unlike some other legal systems, the SPC has not evolved an en banc or enlarged panel of judges (this description of how France’s highest court operates provides a good example) as the final institution for resolving these issues.  Designating the SPC’s judicial committee reflects the traditional administrative way (官本位) that SPC makes major decisions concerning legal issues.  As I described in a recent blogpost, the members of the SPC’s judicial committee are its senior leaders.

I surmise that many of the differences in views will be resolved before the matters reach the judicial committee.  In comments made on the Implementing Measures, Justice He Xiaorong (head of the #2 Circuit Court) mentions that he has inaugurated a system of enlarged panels of judges that include those with a public law and private law background, and familiar with civil, criminal, and administrative law, to consider cases involving difficult issues. That system will reduce somewhat the pipeline of issues possibly entering this mechanism.  For those issues that enter the mechanism, it is possible that opposing views may be harmonized when the operational division of the SPC needs to respond to the points summarized by the CIAJ.  I predict that relatively few questions will go to the SPC judicial committee itself.  The mechanism may have been designed with that goal in mind or may have that impact.

Additionally, from my reading of the Implementing Measures, the drafting could have benefited from more input from greater input either within the SPC or without, which could have avoided some of the problems I point out below. I surmise that the drafters were so used to the terminology used within the SPC, they did not realize that lack of clarity will confuse the lower courts and the greater legal community, for whom this system may have practical implications. In particular, the Implementing Measures:

  1.  do not define what is meant by differences in the application of law (法律适用分歧).  Presumably, a major difference in the application of law is intended and the SPC judicial committee (and its gatekeeper, which appears to be the Trial Management Office) will consider carefully which inconsistencies merit a determination by the judicial committee. My understanding is that the judicial committee is reluctant to reverse its determinations on particular legal issues within a short time, as it seeks to provide legal certainty on particular issues through judicial interpretations and other documents.  As I described in my 2019 article on the SPC and FTZs, rules or policies included in SPC judicial policy documents may eventually be crystallized in SPC judicial interpretations and eventually codified in national law, but that process is slow and cannot meet the needs of the lower courts, which need to deal properly (politically and legally) with outstanding legal issues pending a more permanent stabilization.
  2. do not define the term “裁判,” which generally refers to judgments (判决) and rulings (裁定). To a casual reader, at least, it is not clear whether it is intended to include responses to requests for instructions (requests for advisory opinions, 请示).  As I wrote in a blogpost earlier this year, some responses to requests for instructions are entitled fuhan 复函 and others dafu 答复. The editors (from the SPC) of a two-volume collection of responses described them as ‘usually called quasi-judicial interpretation documents’ (往往被称为准司法解释性文件) and ‘a necessary supplement to judicial interpretations’ (它是对司法解释一种必须的补充).  It is not unusual for these responses to conflict with one another, as reasonable people can disagree and multiple institutions within the SPC issue responses on the same or related bodies of law.  I have not noticed a document (at least one that was made public–I’d be grateful to be informed otherwise) describing an existing mechanism requiring the drafters of these responses to review related responses issued by other divisions. Differences in the application of law could also arise between an existing response and later judgment, or draft judgment.
  3. do not define what is meant by “业务部门” (operational departments/divisions).  Does it include the SPC’s Research Office (which one knowledgeable person described as a comprehensive operational department (综合业务部门)), which often issues responses to requests for instructions?
  4. are very weak on specific procedures for when a question of law should be referred to this mechanism.  Consider, for example, a case that is being considered by one of the divisions of the SPC.  2017 SPC regulations on the SPC’s responsibility system mention professional  (presiding) judges meetings (as discussed in a 2017 blogpost and again several times this year.  The Implementing Measures do not specify whether the issue should be reviewed by the division’s professional judges meeting before it is submitted to the Trial Management Office. Presumably that will be the case, as the judicial committee guidance requires it. In Justice He Xiaorong, clarifies that the professional judges meeting is an important institution for resolving differences in the application of law.   As a practical matter, will this procedure suspend civil litigation procedures?  It is unclear.
  5. do not clarify what will be included in the package of documents that goes to the Trial Management Office. Will it be similar to the documents that go to the judicial committee under its new guidance on judicial committees? It appears that the Implementing Measures are not well integrated with the new guidance on judicial committees.   I surmise (please message me if I am mistaken) that the drafting of the Implementing Measures and the guidance on judicial committees was siloed, a frequent problem in the Chinese and other bureaucracies, so that the drafters of the Implementing Measures were unaware of the details of the new judicial committee guidance. As I wrote last month, those contain more specific requirements concerning the content of the report that the judges are required to prepare for the judicial committee, including arguments by both/all parties, prosecution/defense counsel and a clear listing of the issues on the application of law that require discussion and decision by the adjudication committee, the opinions of the professional (presiding) judges meeting.  The guidance also requires judges preparing these reports to search for similar or related cases. I surmise that these requirements will be consolidated in practice.
  6. give special authority to the CIAJ in the course of its research work on like cases. It is also possible that CIAJ could encounter major inconsistencies in its other work, such as compiling its Selection of People’s Court Cases (mentioned in my 2017 Tsinghua China Law Review article). Moreover, it is curious that the CIAJ is given this special authority but not an analogous institution in the National Judges College. Article 3 authorizes the CIAJ to submit an application relating to differences in the application discovered in the course of its work, while the Judicial Case Academy of the SPC (under the National Judges College) (see a list of its 2018-2019 research projects) has no such authority, giving the careful reader the impression that the CIAJ led the drafting of the Implementing Measures.  It appears to be a version of a phenomenon I described in a draft article, that because the SPC is a large organization, with many entities competing for top leadership attention, policy documents are sometimes drafted with  consideration of institutional interests, as a policy document approved by the SPC judicial committee can be seen as representing an undertaking by SPC leadership to the institutional goals of division or entity involved.

Supreme People’s Court President’s Zhou Qiang’s virtual mailbox

One of the more unusual features of the Supreme People’s Court (SPC)’s website is the “Court President’s mailbox,”  by which individuals can send an email to SPC President Zhou Qiang (to yzxx@court.gov.cn), and where selected responses are published. President Zhou Qiang established it in 2013, almost exactly six years ago. As to why the SPC has a letter to the court president function, the answer is on the SPC website and the article announcing the launching of the mailbox:

it is to “further develop the mass education and practice campaign [mentioned in this blogpost six years ago] and to listen to the opinions and suggestions of all parts of society (the masses).

Listening to the opinions and suggestions of society is also required of Zhou Qiang as a senior Party leader.  It was part of the mass education and practice campaign and continues to be a fundamental principle in the current “Don’t forget the Party’s original aspirations and firmly remember your mission” campaign.

President Zhou Qiang listed establishing the Court President mailbox as an accomplishment in his 2018 report to the National People’s Congress.

Local courts have followed the SPC’s model by establishing their ownCourt President’s mailboxes.” From my own experience, not all [non-spam] emails either to President Zhou Qiang’s or a local court president’s email box are considered to merit a response.

The language of the responses is surprising for the reader used to the very formal language of SPC documents.  (One follower of this blog was so surprised that he ask.ed me about this). Many of them start with

Hello! We received your proposal (or query), and after consideration, we respond as follows:您好!《关于…..》收悉。……经研究,答复如下:

And end with this language:

Thank you for your support of the work of the Supreme People’s Court! 感谢您对人民法院执行工作的关心和支持!

A  quick but unscientific survey of recently published responses follows. As to why people write, judging from my own experience and the content of published responses, it appears that it is one of the few ways to bring a problem (unrelated to a dispute) to the attention of the court authorities.  I have no way of determining whether the responses are representative of the letters submitted, but I surmise that the letters are typical (典型).

Proposals

Some responses relate to specific proposals. Among recent proposals include anonymizing references to HIV infected persons, stipulating the ceiling interest rate in private lending disputes, and uniforms for judges and judges assistants (specific recommendation not described).

Queries

Some responses relate to queries on specific practical issues for litigants, such as whether a plaintiff must provide the defendant’s identity card number when filing a lawsuit, and the deadline for an administrative agency to enforce an administrative penalty or fine.

 Issues with the social credit system

Responses to persons seeking to lift restrictions against them imposed by the judgment debtors part of the social credit system seem to constitute a substantial number of responses. In 2019, those included letters published on 8 October. 28 June, 12 June, 17 April, 31 January, among others. If affected persons need to write to Zhou Qiang to resolve their problem, it means that the mechanism in the social credit system for lifting restrictions on judgment debtors once they have complied does not work as well in practice as advertised, to the disadvantage of affected persons.

Issues with the operation of the SPC’s case database (裁判文书网)

Letters raising problems with the operation of the SPC’s case database (China Judgments Online) include letters published on 20 August, 16 July, 28 February. Users complain about problems with the search function, slow loading of pages, and other technical problems.  In one response the SPC complains about the database being used by companies using webcrawler or web scraping software, and their efforts to combat this by installing software to prevent it.  The SPC does not explain why this should be an issue.

(Complaints about the operation of the SPC’s case database are heard worldwide, judging by comments made at a recent international academic conference on Chinese law at 40 years and other academic conferences.)  As a consequence many researchers use alternative providers that offer better search functions and loading times.  I understand that the SPC has met with some of these alternative providers, but frustrations with the official database continue.

Who writes the responses?

Most responses lack a specific author. Occasionally a response is published in the name of the SPC’s Research Office or Data Center.  The careful reader detects inconsistencies in the way that letters are answered, with some persons addressed as Comrade, others by name, while others by Mr./Ms.

A natural question for legal professionals to ask is about the legal authority of these responses, as some of these responses are republished on Wechat public accounts focusing on law or legal information websites.  The answer seems to be “it depends”.  One recent response to a question concerned the time limit for an administrative agency to apply to a court to enforce an administrative penalty or fine was given by the SPC’s Research Office.  The Research Office is the SPC’s “gatekeeper” for judicial interpretations and is involved in drafting or coordinating the drafting (depending on the topic) of judicial interpretations (an academic article stuck in the production pipeline will provide more details).  Although the response is not legally binding (unlike a judicial interpretation), a Research Office response is likely to be highly persuasive guidance.  It is one of many tools in the the SPC’s guidance toolbox.