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 (I have not been able to locate a free translation, unfortunately), analogous to the National People’s Congress (NPC) and its legislative plans. On 10 July, the SPC’s General Office issued the document above. It sets out a list of 48 judicial interpretation projects for 2018 (with several for 2019). 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 first time this type of document was publicly released (please contact me with corrections). If so, it is a concrete step in increasing the SPC’s transparency (addressed in part in one of my forthcoming academic articles). 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.
The document classifies the 48 projects into three categories:
- 2018 year-end deadline;
- 2019 half-year deadline;
- 2019 deadline.
From these we can see which projects are the highest priority and where the SPC sees gaping regulatory holes that need to be filled, reflecting its political-legal priorities. Often specific issues have already been on the agenda of the relevant division of the SPC for some time before they have been officially been approved by the SPC’s judicial committee.
Several of the listed interpretations have already been issued. The SPC has solicited public opinion at least one of these draft interpretations, and it is unclear which other drafts will be made public for comment, as the 2007 regulations do not require it to do so. Making this list known may put some pressure on the SPC to undertake more public consultation.
This post will discuss the projects in the first category only, with a follow-up post discussing the projects in the second and third categories.
30 projects with a 2018 year-end deadline
- Regulations on the jurisdiction of the Shanghai Financial Court. The NPC Standing Committee decision required the SPC to do so and included some broad brush principles on the new court’s jurisdiction. As the SPC has announced that the court will be inaugurated at the end of August, this is likely to be the highest priority project. The Case Filing Division is in charge.
- 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, as item 18 below addresses provisional measures in IP cases (in which a great deal of interest exists in the intellectual property rights community, as these order can affect a company’s business). The Case Filing Division is in charge. These regulations could benefit from some market input.
- Interpretation with the Supreme People’s Procuratorate on the Handling of Cases of Corruption and Bribery (II), likely updating 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 (the journal of the SPC’s five criminal divisions, mentioned here) . The #3 Criminal Division is in charge of drafting, but it is likely that the supervision commission will be/is one of the institutions providing input. As I have mentioned earlier, the SPC generally does not solicit public opinion when drafting criminal law judicial interpretations.
- Judicial interpretation on the handling of criminal cases of securities and futures market manipulation. This is linked to the government’s crackdown on abuses in the financial sector (see this report on the increase in regulatory actions) and is linked to last summer’s Financial Work Conference. The #3 Criminal Division is responsible. It is likely the China Securities Regulatory Commission will provide input during the drafting process.
- Judicial interpretation on the handling of cases involving the use of non-public information for trading (Article 180 of the Criminal Law). Guiding case #61 involved this crime. It is likely that the principle from the guiding case will be incorporated into this judicial interpretation, as frequently occurs. Again linked to the crackdown on the financial sector and again, it is a task for the #3 Criminal Division.
- Judicial interpretation on the handling of underground banking (地下钱庄) cases. Large amounts of money are being whisked out of China unofficially. Linked again to the crackdown on the financial sector as well efforts to slow the outflow of funds from China, and likely the People’s Bank of Chin. Again, a task for the #3 Criminal Division.
- Interpretation on challenges to enforcement procedures in civil cases, related to the campaign to basically resolve enforcement difficulties within two to three years. Drafting this is a task for the #1 Civil Division.
- Interpretation on evidence in civil procedure. Important for lawyers and litigants, domestic and foreign. Drafting this is a task for the #1 Civil Division.
- Interpretation on civil cases involving food safety. Food safety is an area in which public interest cases are contemplated. These cases have been politically sensitive. Drafting this is a task for the #1 Civil Division.
- Interpretation on construction contracts (II). The initial interpretation dates back to 2004. These type of disputes generally involve a chain of interlocking contracts and often regulatory and labor issues. Some of the larger cases have been heard by the SPC. Drafting this is a task for the #1 Civil Division.
- Interpretation on the designation of bankruptcy administrators. Issues surrounding bankruptcy administrators have been ongoing in the bankruptcy courts, as has been discussed in earlier blogposts. Drafting this is a task for the #2 Civil Division.
- Regulations on the consolidating the bankruptcy of company affiliates, again an area where regulation is insufficient, posing issues for bankruptcy judges (as has been discussed in earlier blogposts). Drafting this is a task for the #2 Civil Division.
- Regulations on the civil and commercial cases relating to bank cards. The drafting of this interpretation has been underway for several years, with a draft issued for public comment in June. There have been a large number of disputes in the courts involving bank cards. Drafting this is a task for the #2 Civil Division.
- Interpretation on legal provisions relating to financial asset management companies acquiring, managing, and disposing of non-performing assets. 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. Drafting this is a task for the #2 Civil Division.
- Interpretation on the trial of internet finance cases (civil aspects), as existing judicial interpretations inadequately address the issues facing the lower courts. Drafting this is a task for the #2 Civil Division.
- Judicial interpretation on the statute of limitations in the General Provisions of the Civil Code (just issued), which was the responsibility of the #1 and #2 Civil Divisions as well as the Research Office. The General Provisions changed the length of the statute of limitations.
- Judicial interpretation on administrative cases involving patent authorization and confirmation. It appears to be the counterpart in the patent area of a 2017 judicial interpretation relating to trademarks. I look forward to “brother blogger” Mark Cohen’s further comments on this. Drafting this is a task for the #3 Civil Division.
- As mentioned above, pre-filing injunctions in intellectual property cases (知识产权九分诉前行为保全案件适用法律若干问题的解释 ), a type of pre-filing injunction. There is great deal of interest in the intellectual property rights community concerning these injunctions, as these orders can affect a company’s business. I look forward to Mark Cohen’s further comments on this. Drafting this is a task for the #3 Civil Division.
- Regulations on issues relating to the International Commercial Court. Those were the responsibility of the #4 Civil Division and the interpretation was issued at the end of June. See the previous blogpost for further comments.
- Regulations on the scope of environmental and natural resources cases, with drafting responsibility placed on the Environmental and Natural Resources Division. These relate to current government efforts to improve the environment. I would anticipate that these would include provisions on cross-regional centralized jurisdiction, so that pressure from local government will be reduced. Several provinces have already introduced such guidelines.
- Interpretation on compensation for harm to the environment, also with drafting responsibility placed on the Environmental and Natural Resources Division. This is related to an end 2017 Central Committee/State Council General Office document on reforming compensation for harm to the environment. Again, Drafting responsibility with the Environmental and Natural Resources Division.
- Regulations on the trial of administrative agreements. There is a tension between the administrative and civil/commercial specialists, as reflected in the area of Public Private Partnerships (PPPs)(see this earlier blogpost). This has practical implications for both the domestic and foreign business community, as the government is seeking to expand the use of PPPs and avoid local government abuse of them. Drafting responsibility with the Administrative Division and the Ministry of Finance is likely to be providing input.
- Regulations on administrative compensation cases, drafting responsibility with the Administrative Division.
- 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.
- Interpretation on the enforcement of notarized debt instruments. Lenders often use this provision to seek more efficient enforcement. This is related to the campaign to improve enforcement as well as government policy relating to the financial sector. This research report by one of Beijing’s intermediate court shows that asset management companies are often the creditors and the large amounts of money are involved. Drafting responsibility with the Enforcement Bureau.
- 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 recent presentation by one of the circuit court judges on this issue. Drafting responsibility with the Enforcement Bureau.
- Regulations on reference pricing when disposing of property. This too is related to the enforcement campaign as well as efforts to clean up the enforcement divisions of the local courts by requiring more transparent procedures.
- Interpretation on the Handling of Cases of Crimes Disturbing the Administration of Credit Cards (II), updating the SPC’s 2009 interpretation, found here. Responsibility of the Research Office, which can coordinate with criminal divisions involved as well as interested authorities such as the China Banking Regulatory Commission.
- Interpretation on cases involving both civil and criminal issues. 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. Drafting responsibility with the research office, likely involving several civil and criminal divisions.
- Regulations on the implementation of the People’s Assessors Law. As the law and the follow up SPC notice are too general for courts to implement, more detailed rules are needed. The Political Department (it handles personnel related issues) and Research Office are involved in drafting.
See the next blogpost for a discussion of interpretation in the second and third categories.