Susan Finder has been observing the PRC Supreme People's Court for over 20 years, and was the first person to engage in a close analysis of its operations. She taught Chinese law and other subjects in the Law Department of the City University of Hong Kong, before putting her knowledge to work in the China practice group of Freshfields Bruckhaus Deringer, one of the first international law firms to recognize the importance of the China market.
She had the good fortune to study with three of the early pioneers of Chinese legal studies: Jerome Cohen, R. Randle Edwards, and Stanley Lubman and to have many leading practitioners and legal academics among her classmates at Harvard Law School (J.D.) and Columbia Law School (LL.M).
Susan Finder speaks and reads (Mandarin) Chinese and Russian and some German.
By Susan Finder with initial research assistance by Zhu Xinyue
The Supreme People’s Court’s (SPC) October 2022 specialized report on foreign-related adjudication work (最高人民法院关于人民法院涉外审判工作情况的报告) provides an overview of the SPC’s and the lower courts’ work related to foreign-related matters over the past 10 years. This blogpost uses the term “adjudication work” to encompass the multiple functions of the SPC (see my U.S.-Asia Law Institute article for a refresher) as well as the lower courts. The report is intended to showcase the SPC’s work in supporting Xi Jinping era fundamental changes in foreign policy, or as the concluding section words it, “vigorously serving the greater situation of the Party and State’s external policy work” (积极服务党和国家对外工作大局). An analysis of the content of this specialized report provides insights into the role of the SPC and its relationships with other Central institutions as well as the current and evolving concept of “foreign-related rule of law” (涉外法治). Concerning the link between “foreign-related rule of law” and the foreign-related adjudication work of the people’s courts, as President Zhou Qiang said: “the foreign-related adjudication work of the people’s courts is an important part of foreign-related rule of law work (人民法院涉外审判工作是涉外法治工作的重要组成部分).”
I surmise that the NPC Standing Committee requested the SPC submit a specialized report on the SPC’s foreign-related work because the political leadership is prioritizing developing China’s foreign-related body of law and takes the view that SPC expertise is needed to that end. As in any legal system, issues that come before the Chinese courts highlight the gaps in current legislation (broadly defined).
1. Overview of the Report
The report covers all areas of SPC work–criminal, civil and commercial, maritime, intellectual property, administrative, and other areas, as well as the recognition and enforcement of foreign judgments, recognition and enforcement of foreign arbitral awards, and other forms of international judicial assistance. Because cases involving Hong Kong, Macau, and Taiwan are considered by reference to the principles for foreign-related cases, the report provides highlights of those developments as well.
Following some background material, this blogpost follows the structure of the report and therefore the blogpost is much longer than usual. A more comprehensive analysis of many aspects is found in my “never-ending article,” currently on its meandering way to publication.
2. Drafting of the Specialized Report
Because most of the cases involving foreign-related matters tend to be in the commercial area generally (incorporating maritime, recognition and enforcement of foreign judgments and arbitral awards), it is likely that the #4 Civil Division took the lead in drafting the report, worked closely with the International Cooperation Bureau, and involved other divisions and offices of the SPC as needed, including those working on criminal law issues. Although this report appears to be just another anodyne official report, what underlies it is likely to be hundreds of hours of drafting, soliciting data and comments from related offices, including the Research Office (with a department in charge of Hong Kong and Macau issues), comments from the vice president in charge of the #4 Division (it now appears to be Justice Tao Kaiyuan), President Zhou Qiang’s office, and the NPC Standing Committee itself. It is unclear whether the Ministry of Foreign Affairs and the Ministry of Comments also provided input. It incorporated the SPC’s response to a research report on foreign-related adjudication work prepared by the NPC Standing Committee’s Supervisory and Judicial Affairs Committee (mentioned in the previous blogpost).
3. Summary of the Report
The report highlights the SPC’s work in foreign-related cases in support of related policies. The structure of the report is the usual one for such reports–a long list of accomplishments, followed by a summary of outstanding challenges and suggestions to the NPC Standing Committee for future work. It reveals some previously unknown developments and clearly sets out the official conceptual structure underpinning the SPC’s foreign-related adjudication work and therefore China’s “foreign-related rule of law.” The report takes an inclusive view of accomplishments: judicial interpretations, policy documents, typical and guiding cases, as well as correctly deciding important cases. This blogpost decodes the details in the report, with brief comments and links to some of my earlier blogposts.
a. Selected Statistics
The report provides selected statistics. As I have said when I have spoken on the Belt & Road and the SPC, the number of foreign-related cases heard in the Chinese courts has increased substantially over the past ten years, but even now they constitute a tiny percentage of cases heard in the Chinese courts. The report reveals some of the challenges, as seen officially.
From 2013 to June 2022, Chinese courts heard a total of 384,000 foreign-related (including Hong Kong, Macau, and Taiwan-related) cases. These numbers are tiny compared to the large number of cases accepted by the Chinese courts annually. For example, in 2021, that number reached over 33 million cases. The number of first-instance foreign-related civil and commercial cases nationwide increased from 14,800 in 2013 to 27,300 in 2021. The SPC has not released more detailed statistics about the types of civil and commercial cases or foreign-related cases in other areas of law, such as criminal cases.
b. Protecting China’s National Security and Sovereignty
As is usual with SPC official reports and documents, matters relating to national security and sovereignty take a prominent place. The SPC reiterates that its foreign-related adjudication work serves the domestic and external greater situations. This section highlights two areas of service in protection of national security and sovereignty:
protecting China’s investments abroad. Cases so classified include infrastructure-related cases, trade cases, and shipping cases. The principal accomplishment is issuing a judicial interpretation on the hearing of independent letter of guarantee (demand guarantee) disputes and unifying the rules governing such disputes. These developments, which have come through several SPC cases (discussed here) and the end 2021 Conference Summary, have been flaggedonthisblog. A long-pending China International Commercial Court (CICC) case may provide additional guidance.
c. Creating a Legalized International Business Environment
This section is relatively long and highlights much of the SPC’s foreign-related adjudication work in the past 10 years. The focus is on international commercial dispute resolution rather than intellectual property disputes. i. Foreign investment: The courts have supported the revised Foreign Investment Law and Implementing Regulations with two interpretations (including one on the application of the Foreign Investment Law, mentioned here), as well as a policy of centralizing the hearing of such cases, seeking to ensure greater competency. ii. Pilot free trade zones and ports: The courts have supported these policies through several services and safeguards opinions (one general one, discussed in my book chapter, as well as ones on Lingang, Hainan, and new zones in Beijing). The SPC also issued related typical cases and encouraged local courts to establish additional measures to support national free trade zone policy. iii. The courts have supported national policies supporting a competitive market order, and to that end have issued regulations on bankruptcy, normative documents on improving the business environment (including services and safeguards opinions and a conference summary), and established financial courts (see Mark Jia’s related article). iv. Supported national policy concerning economic development and COVID-19 pandemic control (I have a related article that will be published in Italian). The SPC promulgated four guiding opinions (policy documents) on the trial of civil cases related to the Covid-19 pandemic, one of which focused on foreign-related commercial and maritime cases. This document was included in UNCITRAL’s CLOUT database.
v. Respecting international conventions and international practices (customs or usage, by which is meant trade/commercial practices or usages). As mentioned here, the SPC is drafting a judicial interpretation on the application of international conventions and treaties and international practices and has issued related typical cases. vi. Application of (foreign (non-mainland) governing law. Since 2013, the courts have applied foreign law in 542 cases. My draft article discusses related issues briefly. vii. Cross-border recognition and enforcement of judgments: Since 2013, the courts nationwide have considered 7,313 cases of applications for recognition and enforcement of civil and commercial judgments from foreign courts. My draft article discusses the evolution of this policy. The report mentions the enforcement of Chinese judgments abroad.
d. Serving national maritime policy
The report underlines that the SPC’s maritime adjudication work directly serves foreign trade shipping and marine development to maintain national [judicial] sovereignty and related national interests. The report mentions that the SPC issued judicial interpretations on maritime litigation jurisdiction, and issued judicial interpretations for hearing cases of compensation for damage to marine natural resources and ecological environment. The SPC and the Supreme People’s Procuratorate issued regulations on handling public interest litigation cases on marine natural resources and ecological environment, and released related typical cases. The report mentions China’s work on becoming an international maritime justice center (See my article in the Diplomat). Related accomplishments include the SPC expanding the network of maritime courts and their dispatched tribunals and the report highlights that more parties without a jurisdictional link with China have chosen the jurisdiction of the Chinese maritime courts (for a different view from the official one, see Professor Vivienne Bath’s research on parallel litigation involving the Chinese maritime courts).
e. Improving international commercial dispute resolution mechanisms to serve high-quality development of the BRI
According to the report, the SPC is implementing the deployment of the political leadership in this area. Those include:
the CICC and related developments, including: the CICC’s bilingual website, the CICC’s expert committee; two BRI Services and Safeguards Opinions, and typical BRI cases, as well as establishing local international commercial courts. (This blog has discussed these developments in some detail, with more contained in my draft article).
f. Establishing diversified dispute resolution of international commercial disputes
i. The SPC reports that it established a “one-stop” diversified international commercial dispute resolution mechanism, which integrates litigation, arbitration, and mediation. The report mentions the accomplishments of several local courts and the incorporation of arbitration and mediation institutions into the SPC’s (CICC’s (Chinese version)) one-stop platform. ii. Arbitration: The SPC issued judicial interpretations on judicial review of arbitration cases and enforcement of arbitral awards, and introduced a mechanism and reporting system for judicial review of arbitration cases; since 2013, Chinese courts have heard over 110,000 judicial review cases (presumably the vast majority domestic). iii. Mediation: The report describes local developments and accomplishments related to the mediation platform of the people’s courts (see the related white paper).
g. Serving national Hong Kong, Macao and Taiwan policy
On the details of SPC and Greater Bay Area policy, please see my earlier blogpost and presentation at a November, 2022 conference held at the Law Faculty of the University of Hong Kong.
This blogpost summarized earlier developments related to Taiwan. The SPC issued judicial interpretations on the recognition and enforcement of Taiwan civil judgments and arbitration awards. The SPC mentioned that the courts have supported national policy on integrating Hong Kong and Macao into Greater Bay Area policy by supporting [Ministry of Justice led policy] to permit lawyers from Hong Kong and Macao to practice in the Greater Bay Area (note, such lawyers must be Chinese citizens). The courts are also supporting the initiatives related to integrating Hong Kong, Macau, and Taiwan legal professionals (again, foreign professionals registered in these jurisdictions are not included).
f. Improving the quality and credibility of China’s foreign-related adjudication
i. Jurisdiction: the report mentions a notice on jurisdiction on foreign-related cases (flagged in this blogpost) and centralized jurisdiction. ii. Service of process: The SPC amended the judicial interpretation of the Civil Procedure Law to enable more flexible service of process abroad and established a platform with the Ministry of Justice (discussed in this blogpost) to enable more efficient handling of service of process requests from abroad. (There is no mention of greater flexibility in foreign service of process into mainland China.) iii. Determination of foreign law: the SPC established a unified platform for the determination of foreign law (accessible through the CICC website, see the links above), which links to SPC-authorized institutions providing such services. My draft article provides additional details.
iv. Improving cross-border litigation services. This integrates with the SPC’s smart courts policy. One of the major accomplishments mentioned in the SPC’s judicial interpretation on cross-border online litigation. iv. Training foreign-related adjudication talents (涉外审判人才. See my earlier blogpost.
g. Promoting the development of the domestic and foreign-related legal systems
Matters so classified include: vigorously supporting the development of foreign-related legislation (mentioned in this blogpost); application of foreign-related law; and undertaking related research. The foreign-related legislation that the report mentions (Civil Procedure Law and several maritime-related laws), is actually only one small part of what the SPC has done. The application of foreign-related legislation gives the SPC an opportunity to reiterate its accomplishments in issuing judicial interpretations; policy documents; conference summaries; and typical cases. The SPC also mentions its BRI research center and establishing research centers at 15 universities and research institutions.
h. International judicial exchanges to promote the establishment of a community with a shared future of mankind
The SPC includes in this category the following: judicial exchanges in the form of memoranda of understanding and large-scale conferences; international judicial assistance in both civil and criminal matters; participation in the formulation of international rules (negotiating international conventions and bilateral treaties, as mentioned here, as well as providing support to China’s initiatives in various matters, including railway bills of lading (see my student Zhang Huiyu’s article); and “telling China’s rule of law story well.” The latter category includes certain conferences and meetings with foreign judiciaries. I have either been a participant or an observer in some of those “telling China’s rule of law story well” events, such as the CICC international conferences and the 2019 third meeting of the UK-China Joint Judicial Expert Working Group on Commercial Dispute Resolution.
4. Challenges in foreign-related work
The report listed the following challenges: a. Limited ability of some courts to engage in foreign-related adjudication work, as evidenced by the lack of experience of some courts in foreign-related work. When I spoke at a Hong Kong International Arbitration Centre event in October, 2022, my co-panelist Arthur Dong illustrated that with his accounts of how several local courts handled applications for interim measures. b. Ongoing difficult issues: difficulties in service of process, extraterritorial investigation and evidence collection; determining foreign (non-mainland Chinese) law; shortening the trial period for hearing foreign-related cases (also note that at least one CICC case has been outstanding for over two years). c. The “one-stop” diversified international commercial dispute resolution mechanism needs improving and China needs to accelerate the drafting of a commercial mediation law. The need for a commercial mediation law has been discussed within central institutions since at least 2019 (as I have observed). So it seems that the SPC is in line with the view of the Ministry of Commerce that such a law is needed to promote more professional mediation. d. A significant shortage in the number of judicial personnel with foreign-related expertise (discussed here).
5. Future developments
The report emphasized adhering to the leadership of the Party to ensure foreign-related adjudication is politically correct and in line with the deployment of the political leadership. The practical measures (directed towards the NPC Standing Committee) included:
Accelerating the process of amending the foreign-related part of the Civil Procedure Law (this has been accomplished). Incorporating the amendment of the Special Maritime Procedure Law into the [NPC’s] legislative plan; amend the NPC Standing Committee decision establishing the maritime courts, to give maritime courts in coastal cities jurisdiction over certain criminal cases (an issue under discussion since at least 2014);
improving certain matters related to the CICC to resolve certain “bottleneck” issues (unspecified).
At an appropriate time, drafting a commercial mediation law to provide a sufficient legal basis for China’s competitive position in international commercial dispute resolution;
Delegating authority to Guangdong and other courts that hear a large number of cases involving Hong Kong and Macau cases to simplify civil litigation procedures, such as proof concerning the identity of the party and authorization of its representative. (These issues are linked to the fact that China has not yet signed the Hague “Apostille Convention” (see my earlier blogpost) and has not yet created an analogous procedure for Hong Kong and Macau);
Improving training of foreign-related legal personnel through implementing an exchange policy with international institutions. As I have observed, much of the discussion of training foreign-related legal personnel has involved training in China, with minimal foreign involvement.
As this report has illustrated, the SPC (and the court system) are taking an active part in the evolving project of creating a foreign-related legal system that better reflects both the demands of the political leadership and the practical needs of the users of the Chinese legal system. It should be clear from this analysis that China’s foreign-related rule of law is a work in progress involving a multitude of issues, and that the SPC has a multifaceted and crucial role in its creation.
By Susan Finder, drawing on research by Sun Dongyu (Christopher)
In October 2022, Supreme People’s Court (SPC) President Zhou Qiang delivered a report to the National People’s Congress (NPC) Standing Committee on foreign-related adjudication work since the 18th Party Congress (党的十八大以来人民法院涉外审判工作情况) (Foreign-Related Adjudication Work Report). Under NPC legislation, this type of report is classified as a specialized report (专项报告). In the New Era, the SPC delivers such reports to the NPC Standing Committee annually. Han Xiaowu, the deputy head of the Supervisory and Judicial Affairs Committee of the NPC, in an article reviewing the supervisory powers of the NPC Standing Committee, described listening to and reviewing specialized reports as a significant means by which the NPC Standing Committee exercises its supervision authority over other institutions. The SPC has published a collection of these reports issued since the 18th Party Congress, pictured above.
This blogpost provides a dive into the law and practice of these specialized reports, focusing on reports prepared by the SPC. A subsequent post will focus on the content of the Foreign-Related Adjudication Work Report.
Specialized Reports & the Relationship between the NPC and SPC
Most people with basic knowledge about the operation of the Chinese legal system know that the SPC president delivers a report to the NPC annually, every spring. Less known is that the SPC president also gives specialized reports to the NPC Standing Committee, under the Law on Oversight by Standing Committees of People’s Congresses at Various Levels (People’s Congresses Oversight Law). According to the NPC Observer, that law is scheduled to be updated. The details of NPC Standing Committee supervision of the SPC through specialized reports provide one discrete example of how Party leadership of legal institutions is implemented in practice and the interrelationship among state legal institutions.
The People’s Congresses Oversight Law authorizes the NPC Standing Committee to supervise the SPC, Supreme People’s Procuratorate (SPP), and the government in several ways, one of which is requiring these institutions to provide specialized reports, as set out in the NPC Standing Committee’s annual plan. Han Xiaowu described them as drawn up according to the work deployment of the Party Center ( 中央的工作部署). Articles 8 and 9 of the People’s Congresses’ Oversight Law provide some basic principles concerning the topics of those specialized reports. It is understood that early in the year, the NPC’s Supervisory and Judicial Affairs Committee communicates with the SPC (and analogously with the other institutions that the NPC Standing Committee supervises), to set the topic and timing of the specialized report. It is likely that the SPC’s General Office, which is responsible for inter-institutional liaison, is the entity within the SPC that works out the details with the NPC Standing Committee.
A quick search on Wechat reveals that foreign-related adjudication work was part of the overall supervision plan of the NPC Standing Committee in 2022. It meant that the NPC Standing Committee allocated significant time to investigating how Chinese courts hear foreign-related cases. Official reports on Wechat flag that senior NPC Standing leaders went to certain provinces to investigate how local courts heard foreign-related cases as well as understand local developments relating to juvenile procuratorial work. In the summer of 2022. Cao Jianming, vice chair of the NPC Standing Committee (and former senior SPC leader and procurator-general) visited Jiangsu and Guangdong in the summer of 2022, while Hao Mingjin visited Fujian. In each case, according to bureaucratic protocol, senior leaders of the SPC and SPP accompanied the NPC Standing Committee leaders, who in turn had senior NPC Standing Committee staff in attendance.
These visits (described as research/调研) were consolidated into a report provided to the SPC (non-public), as revealed by the Foreign-Related Adjudication Work Report. It also enabled the NPC Standing Committee leaders to monitor how well the SPC and SPP respectively supervise and guide the lower courts and procuratorates in their work, politically and substantively, monitor local developments and the interaction among local institutions. Cao Jianming told senior leaders in Jiangsu that they must adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely implement the decision-making and deployment of the Party Central Committee, the work deployment of the SPC and the requirements of the provincial party committee. Cao reiterated principles for which local court leaders need no reminders–that they must thoroughly study and implement Xi Jinping’s thoughts on the rule of law, deeply understand the significance of foreign-related rule of law work, focus on researching new situations and new problems, improve systems and mechanisms, and continuously improve the level of foreign-related adjudication work.
The People’s Congresses Oversight Law provides further details concerning specialized reports. It requires the NPC Standing Committee to gather some questions to send to the SPC (or other institution providing a report), presumably intended to highlight issues that the NPC Standing Committee requires to be incorporated in the report. The procedure requires the SPC to send its draft report to the relevant specialized NPC committee 20 days before the formal report is delivered. Presumably, Han Xiaowu was involved in the review of the Foreign-Related Adjudication Work Report. If the SPC amends the draft report, it must be submitted to the NPC Standing Committee at least 10 days before that date, so the revised report can be distributed to the members. The head of the institution must deliver the report, which is discussed by members. The results of the discussions of the reports are forwarded to the SPC (or other reporting institutions), which must respond to them. The issues that the NPC Standing Committee raises with the institution providing the specialized report are made public in summary form. What is occasionally made public is the SPC (or other institution’s) response to the comments of NPC Standing Committee members. As I have not seen the SPC’s response to comments on last October’s report, I presume that the SPC has not yet finalized a response to the comments. Presumably, the #4 Civil Division would take the lead in drafting the response, which would be reviewed by the vice president in charge of that division, and likely by the SPC president. The NPC Observer discusses responses to reports in this blogpost.
Those who have been involved with the specialized report process explain that both institutions see benefits in the NPC Standing Committee requiring specialized reports of the SPC. The NPC Standing Committee sees it as an effective way of exercising its supervision (oversight) authority over the SPC, while the SPC sees it as an effective way to display its competence while providing a forum to raise issues that require the involvement of the NPC Standing Committee. It can also be said to be another way in which Party leadership of the courts (and other institutions) is indirectly implemented.
The specialized report procedure is a less understood way in which the NPC and its Standing Committee supervise (监督 oversees) the SPC and implement Party leadership, and provides an example of how the SPC is institutionally both more and less powerful than other apex courts.
Happy Year of the Rabbit to all followers and readers of this blog! As a few followers know, I moved recently. The disruption is the reason I haven’t posted in such a long time. Because of the move, some of my archives from my many years of researching the Supreme People’s Court (SPC), like Rip Van Winkle, have emerged from hibernation. They include:
the address and work number of a now-retired senior SPC judge. He will remain anonymous, as I am concerned there is no statute of limitations for minor violations of 外事纪律 (foreign affairs discipline) by receiving a foreigner in what he considered shabby premises, and being eminently hospitable. I have never had the chance to tell him that he is partly responsible for my interest in the SPC. I recall visiting him in his danwei-supplied housing (宿舍). He lived in a compound of one-story buildings (平房) next to the main SPC building. Thankfully, security was not as difficult as it would be now, and those buildings were demolished long ago. I recall riding my bicycle from Peking University into the one-story building compound to visit him. He must have recommended that I visit the shop of the People’s Court Press （人民法院出版社门市部) (now around the corner from the SPC main building on 正义路) and that simple recommendation was crucial. Among the books that I purchased during that initial visit were the first few volumes of 司法手册. These volumes, edited by the SPC’s Research Office, pre-dated court or other computer databases of legislation and documents. The assortment of SPC and related documents in those volumes led me down the rabbit hole of researching the SPC.
I fell down that rabbit hole in 1992 or 1993, when I pulled those volumes off my bookshelf and tried to make sense of them. At the time, I was focused on understanding how the SPC operated at the time（and did not read legal Chinese as quickly as I do now) and failed to read some of the historical documents included in those volumes. I can see now that these volumes contain documents issued by the SPC and Party institutions unavailable elsewhere, some relating to the Strike Hard Campaign (严打) of the early 1980’s, others relating to post-Cultural Revolution issues, others relating to divorce policy in the 1960’s, with still others linked to special regulations for foreign-related criminal cases.
Another book I came across was a 1993 volume edited by the editors of the SPC’s Gazette, containing typical cases (典型案例), judicial interpretations （司法解释),, and an assortment of SPC documents that the editors considered useful but were not published in the Gazette. The book was published before the SPC issued its rules on judicial interpretation work so some of the documents included in that volume would not be incorporated in an analogous volume today. When I wrote my first article on the SPC, this book was a crucial source for me. SPC typical cases themselves fill several volumes (I have multiple volumes of a 2009-2021 collection of typical cases published by the People’s Court Press).
I have a large collection of name cards given to me by people in the courts and other institutions, including a friend (now deceased) who was enormously helpful when researching my first SPC article. For some reason, I have a half dozen or more name cards from members of the staff of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress. At the time (early 1990’s), I took easy access to people in Party and state institutions for granted and never expected that 30 years later, it would be more rather than less challenging to meet them.
Among the items in my archives are notebooks, with questions that I prepared 30 years ago, to ask a small circle of friends linked to the courts, most as relevant now as then:
What does a 庭长 （division head) do?
What does the Research Office (研究室）do?
Interpretations, litigation, legislation [drafting of judicial interpretations and court rules], administration–which constitutes the bulk of the work of the SPC?
What are opinions (意见)?
Are conference summaries (会议纪要) considered to be interpretations by the courts?
The Supreme People’s Court Monitor published 21 posts in 2022 (including this one), with close to 40,000 page views. The most number of views came from the United States, with three jurisdictions having almost the same number of views:
Hong Kong (Hong Kong SAR).
The United Kingdom, Germany, and Canada trailed the others by a significant margin. I wish I knew the distribution of my readers in mainland China–from my discussions with Chinese judges this year, it seems I have a significant number of readers in the System (体制), seemingly more than among Chinese academics, with several important exceptions.
Why did I do less blogging in 2022? It can be attributed to focusing on longer academic articles and writing several short ones (one still to be published), as well as preparing for several challenging presentations. The presentation at the China International Commercial Court meeting in August was among those. It was a great pleasure to participate in an in-person event at the University of Hong Kong Faculty of Law this fall. I look forward to doing the same starting in January. I am very pleased that New York University School of Law’s U.S.-Asia Law Institute published my article on decoding the Supreme People’s Court’s Services and Safeguards Opinions and appreciate Katherine Wilhelm’s skillful editing.
Comments and discussions with several good friends, including in and out of the System, have helped me to gain additional insights, restructure and finish writing what I have called the “neverending article.” It will certainly need revising, as I will need to incorporate references to the latest batch of guiding cases and several items of legislation that the National People’s Congress (NPC) Standing Committee is considering. A second draft article will need to be restructured when the NPC Standing Committee promulgates some of that legislation.
Since the blog was founded almost ten years ago:
Page views: approximately 280,000
A special thank you to my anonymous “peer reviewers”, who have always given forthright, insightful, and helpful comments on draft blogposts.
Among the many issues that I am discussing in my “neverending article” is the role of the Supreme People’s Court (SPC) in the complicated process of drafting new legislation and amending existing legislation, as is sometimes revealed in the “Services and Safeguards Opinions” about which I write often. The role of the SPC is for the most part unseen and unnoticed. Because the Arbitration Law is so critically important to dispute resolution between Chinese and non-Chinese parties, this blogpost highlights the SPC’s role in the unfinished process of revising the Arbitration Law and includes some of my own comments on the positions taken by the SPC. I flag one particular issue that in my view would benefit from discussion and analysis by those with international arbitration law expertise.
Justice Tao Kaiyuan participated in a meeting of the Chinese People’s Political Consultative Conference (CPPCC)’s Committee on Social and Legal Affairs on 30 May on the Arbitration Law draft revision (link is to the Chinese original) and provided a summary of some of the work of the SPC and lower courts in “pushing forward the progress of amending the Arbitration Law. ” (Mao Xiaofei of the Chinese Academy of Social Sciences, International Law Institute has kindly shared her translation into English of the Arbitration Law revision, which includes a comparison with the current text.)
The 2020 document Guiding Opinions of the Supreme People’s Court on the People’s Courts Serving and Guaranteeing the Further Opening Up to the Outside World (最高人民法院关于人民法院服务保障进一步扩大对外开放的指导意见) about which I previously wrote, contains the phrase “push forward the progress of amending the Arbitration Law (and several other laws) (推动仲裁法、海商法、海事诉讼特别程序法等国内商事海事法律的修法进程). Additionally, the Annual Report on Judicial Review of Commercial Arbitration (2019), edited by the SPC’s #4 Civil Division (I had a cameo role in improving the English version) also mentions the SPC will support the amendment of the Arbitration Law. Persons whose eyes glaze over when reading official documents would miss this curious phrase. Few persons outside of China have access to the Annual Report.
Xu Liquan, one of the deputy heads of the CPPCC, also spoke at the 30 May meeting discussing the Arbitration Law draft and revealed arbitration statistics I had not previously seen–that Chinese foreign-related enterprises have a dispute rate of up to 10% ( 涉外企业纠纷发生率高达10%) in cross-border transactions, over 90% select arbitration as the dispute resolution method, but a large majority select arbitration outside of China. Mr. Xu did not mention the source of these statistics, but I understand them to be derived from a report by the China Arbitration Institute of the China University of Political Science and Law (CUPL). The report summarizes the China Arbitration Institute’s survey of more than 100 foreign-related enterprises recommended by the State-Owned Assets Supervision and Administration Commission (SASAC). The full report has not yet been made public.
From these statistics, it can be seen that if China wants to be considered a more attractive destination for commercial dispute resolution, improving the Arbitration Law is crucial.
A translation (amended machine translation) of Justice Tao’s remarks (I surmise they are a summary) follows below, along with some of my own comments in italics.
Some background on her remarks, for those who need it: The Ministry of Justice, as the regulator of arbitration institutions, is the institution charged with providing draft amendments to the Arbitration Law to be forwarded to the National People’s Congress Standing Committee. (I myself had the good fortune to be involved in a cameo role in this process as a consultant to the Great Britain China Centre (GBCC) before and during the pandemic. )
The Supreme People’s Court has been actively participating in this work, and supports the revision of an arbitration law that is based on China’s national conditions, draws on international practices, and takes into account the development stage of our country’s arbitration industry.
Justice Tao signals the SPC’s very active involvement in providing input to the Ministry of Justice. It appears from her summary that views from several different divisions and offices of the SPC are reflected in what she said, including the #4 civil division (responsible for international arbitration matters), #3 civil division (intellectual property and anti-monopoly), and the enforcement bureau. I surmise that it will actively involve itself in commenting on the draft of the Arbitration Law when it is considered by the National People’s Congress Standing Committee.
“Drawing on international practices” is a broad term, including the UNCITRAL Model Law and “international practices” of leading courts on arbitration-related issues. On China’s national conditions, although most foreign practitioners are aware of the top 3-5 Chinese arbitration institutions, the vast majority are funded by local governments. The local arbitration institutions have appointed arbitrators sometimes more for their official position than their knowledge of arbitration, and have management and staff with varying levels of competency. Local lawyers prefer the courts, where an appeal is possible if the initial decision is unfavorable.
Regarding further opening up of the domestic arbitration market and allowing overseas arbitration institutions to conduct business in the Mainland. In recent years, the Supreme People’s Court has successively issued a number of judicial documents to support the introduction of foreign arbitration institutions to set up branches to carry out arbitration business in the construction of Lingang New Area of China (Shanghai) Pilot Free Trade Zone, Hainan Free Trade Port and Beijing “two zones” [pilot free trade zone and service trade zone]. In the next step, we will support the opening of the arbitration market in other pilot free trade zones.
I wrote a report on this almost two years ago. There are many practical issues to be ironed out, and Zero Covid plus the unamended Arbitration Law makes it even less likely that a major foreign arbitration institution will agree to commit to opening an office in China that handles cases.
Regarding the reasonable expansion of the scope of arbitration cases. We agree with the suggestion that intellectual property, sports, and anti-monopoly disputes be included in the scope of arbitration, but it depends on the type [of dispute], and only civil and commercial disputes should be submitted to arbitration.
There has been a great deal of discussion in China about the arbitrability of intellectual property, sports, and anti-monopoly disputes, with cases having been heard in the courts. See this detailed discussion of the sports law issues here in an earlier volume of the Beijing Arbitration Commission’s annual volume Commercial Dispute Resolution In China: An Annual Review And Preview by Guo Cai and Jeffrey Benz. On intellectual property issues, a search in Chinese or English will turn up many articles–this one by Baker & McKenzie and this one by the intellectual property firm SIPS are two of many. The arbitrability of antimonopoly disputes in China has been discussed by both practitioners and academics. Another highly disputed issue is the scope of the disputes that are arbitrable, linked to the definition of “civil and commercial” disputes in the areas of intellectual property and anti-monopoly law.
However, we suggest further research on whether the international investment arbitration between the host country and the investor should be regulated by the Arbitration Law. First, international investment arbitration is different from commercial arbitration, and it is suggested to retain the provision that commercial arbitration applies to civil and commercial disputes between equal parties. Second, the investment protection agreement signed by my country provides different solutions to international investment disputes. According to the commercial reservation statement made when our country joined the “Convention on the Recognition and Enforcement of Foreign Arbitral Awards”, the recognition and enforcement of arbitration awards disputed between the host country and investors, the Convention does not apply.
Some of the Belt & Road “Services and Safeguards Opinions” have flagged investment arbitration as an issue of concern. Enabling investment arbitration in China involves a number of interlinked issues. I recommend Professor Chi Manjiao’s recent article on the many complicated issues related to improving Chinese law on investment arbitration.
Regarding the boundary between confidentiality and disclosure of information in the process of judicial review of arbitration. We agree with the suggestion that the advantage of arbitration confidentiality should be maintained in arbitration judicial review cases. It is difficult to make specific provisions in the Arbitration Law drawing the line between confidentiality and transparency, and it is suggested that it can be resolved through judicial interpretation. In judicial practice, judges do not involve facts irrelevant to arbitration judicial review when writing documents. The parties may also request the people’s court not to disclose the judgment documents on the grounds that the case involves personal privacy and commercial secrets. In the future, it may be considered to establish clearer rules to further balance the relationship between arbitration confidentiality and judicial openness.
Drawing the line between confidentiality and transparency is an issue worldwide, so it makes sense to leave this matter to the SPC to provide more detailed rules through a judicial interpretation.
On the protection of the rights and interests of third parties (案外人). The Arbitration Law should protect the legitimate rights and interests of third parties, but the current draft amendment to the Arbitration Law [Article 84] stipulates that the prerequisite for a third party to challenge the subject matter of enforcement is that the enforcement has not yet been completed, and even if the grounds are valid and the People’s Court decides to terminate the enforcement, it still cannot negate the validity of the arbitral award that has harmed his or her legitimate rights and interests, and this situation is particularly prominent when the parties to an arbitration case apply for arbitration in bad faith or sham arbitration. Therefore, it is necessary to introduce a system of application for setting aside an arbitral award by a third party, so as to fundamentally solve the problem that the current system of remedies for third parties in the draft amendment is insufficient to adequately protect their lawful rights and interests.
This is the section that I hope will attract discussion by those highly knowledgeable about arbitration law. Article 84 of the consultation draft of the Arbitration Law gives third parties in [domestic] arbitration enforcement proceedings the right to challenge the subject matter of the enforcement. Justice Tao is taking the view that the remedies for third parties in the draft are insufficient, and third parties should have the right to apply to a court to set aside the arbitral award at the enforcement stage. It appears that Justice Tao was persuaded by the views of the SPC’s Enforcement Bureau, as set forth in an article published a year ago by Judge Shao Changmao, head of one of its offices. Silence by other divisions does not necessarily signal agreement.
In my view, incorporating such a provision in the Arbitration Law could lead to even more challenges to arbitral awards and appears to signal a return to earlier law, in which courts could set aside domestic arbitral awards. It likely reflects the SPC’s concern with stopping sham dispute resolution, whether it is sham litigation (subject to criminal penalties) sham mediation (about which I have written earlier), or sham arbitration. However, it could lead to the “cure being worse than the disease.” The Chinese arbitration community is likely to take the view that this will not be helpful in making China become a more attractive destination for cross-border arbitration.
I surmise that incorporating this provision would make major international arbitration institutions more reluctant to establish case management offices in China. It would mean that Chinese courts could set aside their awards, which they could not do if the award was considered to have been made outside the mainland. I look forward to further discussion by the international arbitration community on the appropriateness of incorporating such a provision in the Arbitration Law.
Finally, amending the Arbitration Law, from my own brief involvement in the process and discussions with persons involved, is more complex that it appears but is a crucially important matter for the future of Chinese and China-related dispute resolution. Once the law is finalized, the process deserves a study of its own. The final version of the amended Arbitration Law will be an indication of the balance between internationalization (harmonization with international practice) and Chinese characteristics.
Many thanks to three anonymous peer reviewers for their comments on earlier drafts of this blogpost.
My apologies to the patient followers of this blog for the long gap between blogposts.
I recently published a short article on the Perspectives blog of the New York University School of Law U.S. -Asia Law Institute, with the same name as this post, linked here. The Perspectives blog has posted a PDF version, and I am reposting it here for the convenience of some blog readers. I have finished a long version of the article which I am now amending. The research on which this article is based draws on discussions with many persons who cannot be thanked by name and others who will be whenever the longer version is published. I particularly appreciate those knowledgeable persons who have shared their insights with me over the many years it has taken to write the longer version.
On August 24 and 25, 2022, the Supreme People’s Court (SPC) held a China International Commercial Court International Commercial Expert Committee (Expert Committee) reappointment ceremony and seminar on cross-border dispute resolution. The SPC reappointed my former colleague, Emeritus Professor Peter Malanczuk and me to the International Commercial Expert Committee (Expert Committee) of the China International Commercial Court (CICC). For those who read Chinese, the CICC website has posted the speeches or articles of those who presented. I’ll summarize the proceedings in slightly more detail than the official English reports. Then I’ll follow separately with a few comments on the ceremony and seminar and my experience as a CICC expert thus far.
Professor Malanczuk and I joined 21 other CICC experts in the hybrid reappointment ceremony, with many residing in Beijing attending in person. All others, including Professor Malanczuk and I, attended online.
President Zhou Qiang and Vice President Tao Kaiyuan of the Supreme People’s Court spoke at the reappointment ceremony, over which Executive Vice President He Rong presided. Senior officials of the Ministry of Foreign Affairs, Ministry of Commerce, National Reform and Development Commission, and China Council for the Advancement of Foreign Trade spoke thereafter. Excerpts from their official speeches are available here.
Representatives of the National People’s Congress and Chinese People’s Political Consultative Conference then spoke, followed by Expert Committee members Professor Zhang Yuejiao, Rimsky Yuen SC (former Secretary for Justice of the Hong Kong Special Administrative Region and Co-Chair of the Hong Kong International Arbitration Centre (HKIAC)), and Sir William Blair, retired head of the London Commercial Court.
Professor Zhang provided an overview of the first four years of CICC, including some of her thoughts and suggestions, She pointed out that due to inadequacies in the mechanism (organizational establishment) [inadequate] budget, and the impact of pandemic controls, the role of the members of the Expert Committee is limited, few opportunities have been created to enable members to interact and the members to interact with CICC judges, and finally, foreign experts have rarely participated. She had a number of suggestions, including that the expertise of members should be better used and that training sessions be organized at which members would speak.
Rimsky Yuen spokeabout the CICC facilitating greater interactions between the Chinese judiciary and judiciaries of other jurisdictions, such as participating in the activities of the Standing Forum of International Commercial Courts. As the Co-Chair of HKIAC, he thanked the SPC for including HKIAC in the One-Stop Diversified Dispute Resolution Mechanism.
Following the reappointment ceremony, the first panel addressed “the Latest Developments and Frontier Issues of International Commercial Courts,” with a mix of Chinese and foreign speakers, including Justice Tao Kaiyuan.
The last group of speakers on the first day, for the most part, Chinese expert committee members, discussed resolving complex commercial disputes. Judge Wang Shumeiprovided a very useful summary of Chinese judicial practice in complex cases.
On the second day, the first session, “Functioning within the “One-stop” Diversified International Commercial Dispute Resolution Mechanism” had presentations from all the members of the CICC’s One-Stop Mechanism.
I spoke as part of the last panel, on civil legal assistance, which was chaired by Professor Lu Song. Judge Shen Hongyu, deputy head of the #4 Civil Division and CICC judge, gave closing observations. I gave an update on trends in civil international judicial assistance and their challenges. Among the many speakers on my panel was Judge Gao Xiaoli, who gave an update on what the SPC is doing in judicial assistance in civil and commercial matters. She included statistics and an explanation of the platform that enables the SPC and Ministry of Justice (the designated Central Authority in most judicial assistance treaties and conventions) to communicate more quickly.
Judge Wang Shumei (head of the #4 Civil Division and CICC judge) and Justice Tao Kaiyuan gave concluding remarks.
Reappointment ceremony and seminar
I was disappointed that Beijing and central institution Covid-19 restrictions did not permit those of us living outside of mainland China to participate in person. In my view, the in-person event in 2018 was important for all, as well as for me personally. I surmise that for the SPC organizers, it was important that at least some portion of the people from outside China appointed as experts appear in person because it demonstrated to other institutions and the SPC leadership that the foreign/offshore experts valued the appointment. It was also an opportunity for people to connect, albeit briefly. So the experts could meet other experts, the CICC judges, and others attending the ceremony on that hot August morning in Beijing. For me personally, it was an opportunity to experience a high-level official event on-site, observe the dynamics, and connect with others. A Zoom event cannot substitute for an in-person meeting but in the current circumstances, it was the only alternative.
The reappointment ceremony and seminar had takeaways for the careful observer. The speeches of the officials of the “relevant central institutions” (有关中央部门) as actually delivered appeared to reflect the official discourse of the institution involved. I surmise some of the discourse may have been less sharp if the person anticipated he would see the foreign experts in person. Justice Tao Kaiyuan’s presentation sent needed signals about the ongoing importance of openness, the role of the CICC in integrating China with international practice, and the role of CICC expert committee members as bridges to the international commercial world.
Of course, I found the presentations and comments by SPC judges particularly significant. As for the other seminar presentations, the ones I found most interesting were the ones in which I learned something new and did not require me to use my homemade “useful content detector” to find the nuggets of insights inside layers of slogans. There were quite a few, but not all, that fit that bill.
The Chinese versions of my and other speakers’ papers were published on the Chinese version of the CICC website under “最新资讯 and are accessible from the landing page. It is unclear to me why the English versions are hidden under “Research Articles.”
On the topic of my own presentation, my suggestion that China (mainland) accede to the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents (Apostille Convention) was reported in the official press.
Some thoughts on my own experience on the CICC Expert Committee thus far
I will not repeat the comments I made over a year ago on my blog about the CICC. I would echo the sentiments that several Expert Committee members expressed at the seminar, that four years is not long in the development of a judicial institution, particularly when it coincides with a global pandemic. I would add that it has also coincided with important reforms to the institution of which it is a part.
When I spoke at the SPC in 2019, I made a number of modest suggestions concerning the Expert Committee (some previously mentioned on this blog), such as using the Expert Committee as a bridge between the SPC and the international legal world, to assist persons engaged in judicial interpretation drafting or judicial reform to understand better a foreign legal provision or mechanism that they were considering, or for the experts to be invited to speak at a judicial training session. These suggestions require those doing the actual work of administering the Expert Committee to make this resource known within the large bureaucratic institution of the SPC. It is possible that this proposal was lost or forgotten. Another possibility is that those responsible are more accustomed to dealing with routine bureaucratic matters rather than anything out of the ordinary.
Following up on my proposal (some of which were echoed by Professor Zhang in her remarks) means dealing with the concept and reality of “内外有别” (there are differences between the insiders and outsiders, often used to distinguish the foreign from the domestic) and the bureaucratic foreign affairs system if the Expert Committee member is foreign. I had also suggested inviting Expert Committee members visiting Beijing to present at the SPC, as this would have helped demonstrate the varied types of expertise among Expert Committee members, but the pandemic has mooted this suggestion, at least for the foreseeable future. This seminar should have compensated, in part.
As for my personal involvement with Expert Committee matters, I have been involved in some translation reviews for the SPC, as my social media followers would know, and have commented on some draft judicial interpretations and other draft rules.
My view is that with any institutional change in China, taking the long view and continuing communications with thoughtful people in the System are crucial. I echo my friend Jeremy Daum’s comments of a year ago, published on his blog:
regardless of how actively we [the United States] pursue opportunities to engage with China on legal reform, China will continue to learn from the US. Active collaboration and exchanges merely gives us an opportunity to better ensure that our own system is correctly understood, and an opportunity to learn from what is happening in China. As mentioned above, it also helps us better understand China itself, both the problems it is addressing and the goals it is working towards.
Legal exchanges of course also inform China and help them understand us. Mutual understanding is a valuable goal in its own right, but we further learn about ourselves (and about others) from hearing their perceptions of our own legal system fed back to us.
I hope I can be considered to have done something positive for better understanding and engagement through this blog and my involvement with the CICC.
Finally, I want to take some time to focus on my longer writing projects, particularly consolidating almost ten years of blogposts and almost that many years of interviews into something more accessible. For that reason, I will post to my blog going forward about once a month going forward. If any readers have written articles (in either Chinese or English) related to the SPC, especially its operations, please feel free to email them to: firstname.lastname@example.org or send them via social media.
On 30 August 2022, Supreme People’s Court (SPC) President Zhou Qiang (President Zhou) delivered the SPC’s interim report to the National People’s Congress Standing Committee (NPCSC), on the pilot to reorient the four levels of the Chinese courts ( 四级法院审级职能定位改革试点情况的中期报告). The interim report is required by last year’s authorization by the NPCSC. That authorization was reported here (by the NPC Observer). My November 2021 analysis of the background of the reform, including political leadership approval, and the impact of this reform on the SPC can be found here. At the time, I did not address the impact of the reform on the lower courts.
The NPCSC published comments by some of the members, including some former SPC judges (and justices). A summary of the interim report along with related materials that the SPC released, which I surmise were attachments to President Zhou’s report, selected comments by NPCSC members, and my analysis follow below. I welcome any corrections or criticisms of the analysis.
Progress of the Pilot
Although the NPCSC delegated authority to the SPC for this two-year pilot program, the delegation was not a hands-off one. President Zhou mentioned that the NPC NPC Supervisory and Judicial Affairs Committee and the NPCSC’s Legislative Affairs Commission heard numerous reports and engaged in supervision (perhaps better translated as oversight or monitoring). What that means in practice is not specified, but it is understood to be the usual practice. So perhaps the NPCSC delegation to the SPC or other entities to engage in pilot projects plus supervision can be better understood to be a “delegation plus a continuous monitoring process,” with the interim report stage a chance for the SPC to put its best face on the results so far, and a larger number of NPCSC members to provide comments. I look forward to the NPC Observer or others looking into this aspect of the work of the NPCSC.
Pilot Measures Issued By the SPC
The SPC issued the above graphic to illustrate the number of documents released to implement the pilot reform.
Several of the more specific ones have not been made public. As I wrote in my 2018 book chapter, there is no legal requirement for certain types of court guidance to be made public:
February 2022 SPC requirements concerning cases that should be transferred to a higher level court for hearing and reporting of work in case transfer and retrial;
November 2021 SPC work processes for civil and administrative retrial cases;
28 July 2022 SPC work procedures for reviewing applications for civil and administrative retrial;
December 2021 requirements on statistical reporting for the pilot reforms;
November 2021 work allocation for the reform.
Local courts also issued measures to implement the reforms, with the Shanghai Higher People’s Court announcing a kick-off meeting last fall. However, the measures mentioned in the kick-off meeting are not publicly available.
Impact on the SPC Itself
The impact of the reform on the SPC is more dramatic than I predicted in my November 2021 article. A related question, not mentioned in President Zhou’s report, is the implications for the circuit courts.
The statistics released by the SPC do not reveal the relative proportion of administrative vs. civil retrial applications that the SPC received before and after the pilot reform. According to my earlier research, the larger proportion of the retrial applications had been administrative cases, heard primarily in the circuit courts, with many cases focusing on the amount of compensation given by local governments in real estate requisition cases. These tend to be cases in which parties are not represented by counsel, although some circuit courts have determined that it is best to work with local justice bureaus to enable unrepresented parties (usually petitioners who go to the litigation service center) to have counsel. Most of my students who have interned in SPC circuit courts have spent time in the litigation service centers and accompanied judges who meet with petitioners. That does not seem to be the case for students who have interned at SPC headquarters.
Among the materials released by the SPC is this flow chart illustrating the progress of an application for retrial to the SPC. I surmise that it outlines the process in one of the internal documents mentioned above.
President Zhou introduced the work that the SPC had done because it was hearing far fewer retrial cases:
Heard 625 retrial cases (civil and administrative);
Concluded 2712 civil and administrative second instance cases;
Issued 25 judicial interpretations and three batches of guiding cases;
Held seven cross-disciplinary professional judges meetings, in which differences in views among different divisions in the SPC were resolved (as set out in these regulations); and
Reviewed 162 local court guidance and 219 guidance cases, under the filing system mentioned here.
He did not mention the larger number of judicial policy documents that the SPC has issued, except in very general language, although it is in fact an important part of the reform.
President Zhou also did not mention the implications so far on the work of the circuit courts. As I wrote earlier, most of the cases heard in the circuit courts have been administrative cases, with a much smaller number of appeals from the higher people’s courts. I also mentioned then that circuit courts seek to guide and supervise the lower courts in their circuit through circuit guidance, typical cases (several volumes have been published by different circuits), and conferences. Although the primary purpose of the circuit courts was to have been hearing cases involving cross-provincial interests, the circuit court reform has not thus far been so implemented. Judges assigned to the circuit xourts have found themselves busy with administrative retrial application case processing, feeling themselves to be “judicial migrant workers” (司法民工).
Impact on the lower courts
A relatively small number of cases had been pushed downwards to the lower courts and more cases had been raised to higher-level courts. Among the cases that had been transferred to a higher level, “23.70% of the cases involve major national interests and social and public interests,” 33.96% of the cases are relatively new and complex within their jurisdictions, and 34.91% of the cases have guiding significance. These cases involve issues such as the confirmation of data rights, unfair competition on the Internet, and the validity of education and training contracts under the “double reduction” policy. The SPC has transferred some retrial cases to the higher people’s courts.
Higher people’s courts had actively sought the support of the organizational (Party organization组织) and establishment ( headcount control 编制) departments.
In the pilot areas, higher and intermediate people’s courts have strengthened the guidance of lower-level courts through special training, typical cases, trial guidelines, etc. Basic-level people’s courts have sought to separate complex and simple cases and likely sought to promote the use of mediation to resolve cases.
President Zhou admitted that there are issues with related policies, including:
unclear standards for determining “major cases;”
poor information sharing, coordination, harmonization of procedures between upper and lower level courts;
work assessment systems have not been adjusted to deal with the new caseload because of the reform;
filing fees have not been reformed.
Comments by NPCSC Delegates
Several of the NPCSC delegates are former SPC Justices, including Jiang Bixin and Jing Hanchao (also deputy secretary general of the Central Political Legal Committee). Some of their comments included the following:
there are many judicial reforms, with some conflicts between them so research is needed to coordinate them better. (This is a point I made when I spoke at the SPC in 2018);
the Civil Procedure Law and Administrative Litigation Law will need to be amended;
court fees need to be increased;
better coordination is needed to ensure sufficient headcount at the local level.
There was no transcript of the comments so we cannot know whether sharper comments were not reported.
Some thoughts about this judicial reform
This report and this reform encapsulate at least some of the complexities of reforming the courts. Judicial reform is an enormously complicated project because the implementation of one reform and especially the partial implementation of a reform, particularly the crucial ones, have the ability to have a profound impact on linked and later reforms. The reforms relate to the state of the law as it is and to detailed measures intended to be piloted. It is unclear whether the relatively small team of persons working at the SPC on judicial reform matters has the capacity to draft guidance in sufficient detail to ensure that the reforms implemented are those intended. It is unclear whether the team uses some of the project management and data collection tools that are often used to this end elsewhere in the world.
So one aspect of the reform is the evolution of the SPC into a “supreme court with Chinese characteristics,” the intent being for a significant part of the SPC’s work to focus on “unifying the application of law” through issuing judicial interpretations, quasi-binding guidance such as conference summaries (meeting minutes), judicial policy documents, seeking to resolve differences of opinions on issues that cross divisional boundaries, etc., reviewing certain judicial review of arbitration cases, and hearing fewer, but more important cases, and fewer retrial cases. That means that the lower courts, from the higher courts will need to be the ones to hear large numbers of cases.
2. The second important aspect of the reform is reshaping the work of the lower courts, to distinguish the work of different levels of the courts from one another, particularly to make appeals more important. Many supporting measures are needed to make this a success. It appears that some supporting measures are weaker than they should be, and other infrastructure is only partially in place. This blogpost can only mention a few. Moreover, It is unclear how much “market input” the drafters solicited in the drafting process. As in anything, the devil is in the details.
a. Regarding “supporting measures,” among the most crucial ones are the lower courts having sufficient personnel and financing (and preferably flexibility in adjusting both to deal with change). One of the reforms in the 2015-19 Fourth Five-Year Judicial Reform Plan Outline was to reform the control of funding and personnel so that they would be controlled on the provincial level rather than locally. This reform was approved by the political leadership. Local court headcount is not controlled centrally, nor does the Ministry of Finance control court funding. It seems for a number of complex bureaucratic reasons, discussed variously earlier on this blog, in a 2017 article by Tsinghua University Political Science Professor Yu Xiaohong, and in a 2021 article in the SPC journal People’s Justice (人民司法) on court funding by a senior SPC official, that these reforms were only partially successful. That is why pilot higher people’s courts actively sought out those in charge of headcount, to see to ensure that they could have enough judicial personnel to implement the reform properly.
Although President Zhou did not mention court financing directly, the court funding situation that was described in the 2021 article as grim (严峻) cannot have improved, with the financial crisis that local governments are facing with the drop in local government revenues and the cost of Covid-19 testing.
b. The report also shed light on the state of the legal infrastructure supporting the basic level courts. For example, judicial reforms have created the role of judges assistant, but their specific authority remains unclear and the career path to becoming a judge is unclear. As a consequence, there is a serious brain drain among experienced judicial assistants, as I wrote earlier, and as discussed in this recent article in People’s Justice. Another issue frequently mentioned by local judges is the “one size fits all” judicial evaluation system, including performance indicators that penalize a judge whose judgments are appealed.
c. For retrial cases, highly flexible standards in the law and judicial interpretations make it easy for a party to initiate a retrial application, but amending the Civil Procedure Law and Administrative Litigation Law are major projects, with little change expected in the very short term.
c. An additional issue mentioned by some of the judges involved in piloting this reform is problems with judicial training and legal education, although it seems unlikely that this ranks as highly as adequate funding, headcount, and evaluation. Judge Huang Xiangqing of the Shanghai Higher People’s Court commented that new joiners to the court system are unfamiliar with evidence rules, and on-the-job training is needed to get young court staff familiar with the handling of evidence. I have heard analogous comments from others in the court system. Judicial training in the New Era further emphasizes ideological training (as I wrote earlier), but junior judges and the parties that appear before them may better benefit from consolidated instruction in evidence law and other basic judicial knowledge and skills. More practical subjects and skills training are not favored as much at many Chinese law schools, because hiring and promotion tend to be based on publications.
I welcome further comments and corrections, especially from those in the pilot courts.
Many thanks to an anonymous peer reviewer for providing detailed comments on several earlier drafts of this blogpost.
The SPC Unified Market Opinion reveals a great deal about what is on the agenda of the SPC as well as deeper trends in the development of the Chinese courts in the New Era. A summary of what the SPC’s Unified Market Opinion covers and reveals follows, with some comments on what it says about larger trends.
I. What Does the SPC’s Unified Market Opinion Cover?
The SPC Unified Market Opinion covers many aspects of the work of the courts. only some of which are discussed in this overly long blogpost. Therefore the SPC’s Research Office took the lead in drafting it, along with the #2 Civil Division, focusing on domestic commercial matters and the #3 Civil Division, focusing on intellectual property matters. For that reason, representatives from those offices spoke at the press conference, along with Justice Yang Wanming, who must have been the SPC leader responsible. However, it is clear from the document that many other entities within the SPC contributed to the drafting, particularly the #4 Civil Division, which focuses on cross-border commercial matters, including arbitration, maritime, trade and investment issues. The International Cooperation Bureau, which has substantive responsibilities in addition to its duties under China’s foreign affairs system clearly contributed to it as well.
It is consistent with other judicial services and safeguards opinions for the document to serve as a “package” for judicial measures, broadly understood. Many of the measures are not new to the regular reader of SPC documents, indicating that the problem is important and the related issue has not gone away.
In the SPC’s bureaucratic language contained in the SPC’s press release, the document “coordinates the precise efforts in all areas of the judiciary” (统筹司法各领域精准发力” ). In plain language, it means that measures across all relevant areas of law for which the SPC is involved are incorporated. It also means that different types of measures are included in the package, including relevant administrative matters.
The function of coordinating with Party and state institutions, about which I wrote last year is described in the press release as “coordinating all forces to implement comprehensive policies 统筹各方力量综合施策.” Oddly enough, at least one well-known Chinese scholar who has written about the Chinese courts doubted that this is a judicial function. From these points, it can be seen that this document is a multifunctional tool.
II. What is On the SPC’s Agenda?
For those of us seeking to monitor what is on the SPC’s judicial interpretation agenda since the SPC stopped publishing its annual agenda, the SPC Unified Market Opinion has a great deal of useful information. The document also flags forthcoming judicial policies and related administrative matters that the SPC leadership has approved and a great deal of guidance for the lower courts. For cross-border matters, because I am more familiar with the SPC’s judicial policies, I will go into greater detail. In several other areas, I will flag forthcoming judicial interpretations and other important matters.
A. Cross-border commercial matters
As relates to cross-border commercial matters, Articles 5 and 16 of the SPC Unified Market Opinions signal many matters to the careful reader.
Judicial interpretations on the ascertainment of laws and application of international treaties and international practice and possibly others are on the agenda. I surmise that they are at an early stage because it says “research shall be conducted.” It would not be surprising if one or more of the SPC’s Belt & Road Research Bases would be tasked with providing research. If that is so, given the usual gap between academic research and the requirements of the Chinese courts, it will be some time before drafts of these judicial interpretations are circulating within the court system and among selected experts.
Another topic on the judicial interpretation agenda, seemingly again at an early stage, is one on jurisdiction over foreign-related civil and commercial cases tried by the courts of first instance. I surmise that this is linked to last year’s reforms to the four levels of the Chinese courts and is likely to involve centralized jurisdiction over cross-border cases (foreign and Hong Kong, Macau and Taiwan), as has been the trend thus far.
One sentence flags developments related to service of process and possibly collection of evidence, although the latter is not specifically mentioned. It calls for judicial assistance to be strengthened [improved], foreign-related service mechanisms to be improved, and work to commence on a unified electronic platform for the service of process abroad. As mentioned earlier, Greater Bay Area policy documents have included this. Chinese Civil Procedure Law permits electronic service of process from China, although no mention is made of being more flexible in the service of process from abroad to China. The latter matter would involve the Ministry of Justice, which is designated as the Central Authority under the relevant Hague Conventions.
Another early stage project is “promoting the construction of a system for the extraterritorial application of Chinese laws to legally protect the lawful rights and interests of enterprises and citizens that go global.” So I believe that we will eventually see more Chinese legislation providing for extraterritorial jurisdiction (or what is called in Chinese discourse, “longarm jurisdiction”), and likely eventually judicial interpretations. This language suggests that the SPC takes the view that its expertise is needed in the drafting of such legislation because its judges would be able to thoroughly consider what type of system will not cause further decoupling of interactions between China and the outside world.
There is language about improving the operation of the China International Commercial Court, the expert committee, and the affiliated one-stop platform. It appears from the language that some procedural rules are needed.
Article 5 has a long reminder to lower court judges on “correctly applying” foreign investment law, foreign (non-mainland Chinese) law, international treaties and practice, as well as equally treating domestic and foreign-funded companies. So it appears that additional training is needed for lower court judges if the Chinese courts are to become a preferred jurisdiction for international commercial dispute resolution, as the political leadership would like the Chinese courts to be.
Article 16 focuses on improving the connection between domestic laws and international rules., highlighting improving domestic rules as well as foreign-related ones (as addressed in at least one blogpost last year). Much of Chinese legislation is domestically focused and is inconsistent with international practice. The Construction Law’s prohibition on subcontracting is one example, that often arises in dispute resolution in BRI projects. As this article explains, Chinese general contractors often subcontract part of their projects to other Chinese companies in Chinese law-governed contracts (regardless of the requirements of local law), in violation of Chinese law. It also mentions modernizing China’s foreign-related adjudication system and capacity, which I understand to be a signal that the SPC would like to see changes to the foreign-related section of the Civil Procedure Law as well as resources allocated to the training of judges hearing foreign-related cases (see last year’s blogpost for further details).
Two of the model cases concern foreign-related matters–one on foreign investment law, the other on maritime law, the latter signaling the accomplishments of the Chinese courts in resolving disputes at source and mediating to conclusion a dispute with a foreign arbitration clause.
B. Other Areas of Law
When read together, the other provisions of the SPC Unified Market Opinion can be seen as an assessment of the state of legality and the economy after ten years of documents issued by the political leadership as well as SPC (and other institutions). The impact of multiple campaigns, regulatory and otherwise, and the grip of government on the economy is visible. Many new and forthcoming developments are visible as well, such as the implementation of Chinese government undertakings concerning climate change and the challenge of new forms of employment.
Abuse of Administrative and Prosecutorial Power
Articles 3 and 4, entitled “helping the implementation of unified market entry” and “enhancing equal protection of property rights” provide guidance to lower courts on trying cases related to abuses of administrative power that harm business, the misuse of administrative power to exclude or restrict competition. property, and the abuse of prosecutorial power that transforms a business dispute into a criminal case. The language “it is imperative to improve the mechanism for petition and retrial, etc. of enterprise-related property right cases and refine the mechanism for effective prevention and correction of wrongful convictions” signals that the many documents issued to protect the interests of private entrepreneurs have not been effective and that the campaign (now normalized) to sweep out organized crime and get rid of evil (saohei 扫黑除恶） has likely resulted in another group of persons wrongfully convicted. That section and one of the model cases also signal that the protection of private property rights in criminal cases continues to be a problem.
Article 6 focuses on bankruptcy (insolvency) law. In addition to a long list of guidance, it mentions the SPC facilitating (推动) amendments to the Bankruptcy Law and legislation on individual bankruptcy. SPC President Zhou Qiang has received delegations from the NPC working on the drafting of the Bankruptcy Law several times, and it is likely that staff-level interactions occur much more often.
Another matter to note in that article is the establishment of the normalized “government-court interaction” coordination mechanism (常态化“府院联动”协调机制). SPC judges who have spoken about this mention that the coordination mechanism faces many barriers, but it is a fact that in the Chinese context, bankruptcy cannot proceed without the assistance of local governments.
Article 7 is on enforcement, and mentions that the SPC will cooperate (presumably with the NPC Standing Committee and its Legislative Affairs Commission) on efforts relating to the Civil Compulsory Enforcement Law and amend or otherwise issue a judicial interpretation to enforce it.
Article 8 is on unifying the urban and rural land markets. In addition to a great deal of guidance, it mentions that to adapt to the adjustments of land supply policies, the standards for the hearing cases involving disputes over the assignment and transfer of the right to use state-owned land shall be unified. It does not specify the form that the unification will take.
Article 9 relates to the securities and financial markets. In addition to a great deal of guidance, it mentions that the SPC will improve rules (审 理规则) for hearing new types of cases: private equity investment, entrusted wealth management, asset securitization, and cross-border financial asset transactions, among others. It flags that the SPC will research legal issues concerning digital currency and mobile payment (I surmise possibly looking to the academic sector for initial research),
Article 10 focuses on the unification of the data and technical market, flagging that judicial safeguards will be provided for the data element market driven by data and the SPC will focus on improving judicial protection of data property rights.
Article 11 relates to energy and the environment. Those focusing on these issues would be able to write an entire article on this article–I would only mention that the SPC plans to research judicial policy support for achieving the target of carbon peaking and carbon neutrality.
Article 12 focuses on the judiciary and business environment, mentioning work on establishing an indicator system consistent with China’s national conditions and international standards; issuing judicial interpretations and judicial policies providing services and safeguards for the business environment, and cooperating with relevant functional departments (unspecified有关职能部门), in promulgating an implementation plan for building a business environment under the rule of law.
Article 13 is devoted to creating a good faith transaction environment. At least three points to be noted: the issuance of the judicial interpretation of the Contract Part of the Civil Code, work on deep integration of socialist core values with the work of the courts; and exploring paths for better integrating the social credit system with the work of the courts.
Article 14 focuses on regional market integration and Article 15 on improving the linkage of rules between the mainland, Hong Kong, Macau, (and mentioned less, Taiwan). The last blogpost explored Greater Bay Area judicial policy in depth.
Article 18 focuses on labor issues, reminding judges that employment discrimination cases should be tried properly but not mentioning the drafting of a judicial interpretation. It flags that the SPC will do research related to a judicial interpretation concerning labor disputes of employees in new business forms.
Article 20 focuses on providing better protection for the consumer. It mentions improving e rules for hearing cases involving online consumption, mechanisms for trying consumer disputes, work on establishing a collective litigation system for consumer cases plus a related public interest litigation system and cooperation mechanism with consumer protection authorities.
Article 21 is a long paragraph on anti-monopoly law, so much in this area can be anticipated. It mentions “strengthening” judicial regulation over monopoly by platform enterprises, improving rules for making judgments in competition cases and eventually issuing a judicial interpretation on anti-monopoly civil litigation. The article on intellectual property law, Article 19, appears to be a summary of current policies.
Article 22, on supervising and supporting market regulators also deserves standalone analysis. It mentions amending and improving the judicial interpretations relating to public disclosure of government information and cooperating with the procuratorate to push market regulatory departments to improve their regulatory system through administrative public interest litigation cases and judicial recommendations. The courts will communicate and cooperate more with the market regulators to unify administrative and judicial rules.
Article 23 focuses on criminal and other violations of market order. On the agenda in this area is a future judicial interpretation on hearing tax-related criminal cases. It also mentions intensifying the punishment of tax evasion by making use of dual contracts and by high-net-worth individuals in culture and entertainment fields. As could be anticipated the judiciary will collaborate with the taxation and public security authorities on tax matters.
Article 24 summarizes SPC policy in support of epidemic prevention and the economy. I have a forthcoming short article on this topic.
Implications for the Courts
The concluding section (Articles 25-29) of the SPC Unified Market Opinion focuses on the courts themselves. The message from the SPC is that this document is important and that lower court leaders should regard it as an important political task. This section summarizes recent litigation-related reforms, SPC efforts to unify the application of law, smart courts, and diversified dispute resolution.
III. What Does It Signify About Larger Trends?
I surmise that the SPC issued this document in July so that it could be included in its forthcoming mid-term report to the NPC Standing Committee about the piloting of the reforms to the four levels of the courts. That reform means a shift in focus of the work of the SPC, especially SPC headquarters, to judicial policy, judicial interpretations, and guidance of the lower courts as well as reducing the number of cases the SPC considers. It is meant to illustrate to the members of the NPC Standing Committee the many contributions the SPC makes when focused on judicial policy, interpretations, and guidance of the lower courts. For that reason, it also appears designed “to welcome” the upcoming 20th Party Congress by showing the relevance of the SPC and the court system to promoting the development of the economy and socialist rule of law (with Chinese characteristics).
Assuming that the mid-term report is approved and the reform of the four levels of the Chinese courts continues to be implemented, we will see more of such relatively comprehensive judicial services and safeguards opinions promoting the multiple functions of the Chinese courts. These will strengthen the centralizing role of the SPC, or as I have mentioned often in this blog, strengthen the firm guiding hand of the SPC.
This report contains useful information for legal professionals in Hong Kong, Macao, and those beyond as it reveals issues and concerns in the area of civil and commercial law as relations between the mainland and the two SARs become closer through the GBA Strategy. For reasons of time, I am focusing my comments on the first two sections but the rest of the report merits analysis as well. My comments are in italics.
I. Political background
The opening sentence of the report states that the development of the Greater Bay Area is a national strategy personally devised, personally planned, and personally driven by President Xi Jinping. The report sets out how the judicial functions of the courts serve and safeguard the construction of the GBA. The opening paragraph sets out some of the basic principles that the SPC is implementing, including “promoting the convergence (linkage) of judicial legal rules, deepening judicial exchanges and cooperation among Guangdong, Hong Kong and Macao (在推进粤港澳司法法律规则衔接，深化粤港澳司法交流合作).
The first sentence frames the political importance of the report and the work of the SPC supporting the GBA Strategy.
The SPC has issued many “judicial services and safeguards” documents setting out the role of the courts in supporting and promoting national strategies. Understanding these documents is important for understanding current issues in the Chinese courts as related to that strategy, as well as the future direction of judicial policy and related measures. This blog has analyzed quite a few of those“judicial services and safeguards” documents. Of those many posts, GBA-related “judicial services and safeguards” documents are mentioned here and there. The report sets out a list in the following section.
Section III will briefly address the judicial legal rules linkage and judicial exchanges and cooperation policies.
II. Mechanisms for implementing the GBA national strategy through the courts
The mechanism is “horizontal coordination and vertical implementation.” The SPC established a GBA special working small group (专项工作小组) jointly composed of relevant SPC departments and the Guangdong Higher People’s Court (Guangdong High Court) The Guangdong High Court is the institution that has principal responsibility. It has involved all levels of the (mainland) Chinese courts.
It is the normal working practice of the SPC and other central institutions to establish working small groups to achieve important tasks that link across institutions. It appears that a significant part of the GBA strategy involves implementing reforms within the mainland. It is not clear whether there are discussions among the Guangdong High Court and HKSAR and Macao SAR authorities on specific matters affecting the two SARs. One assumes that to be the case.
The SPC has focused on promoting judicial cooperation mechanisms between the Mainland and Hong Kong and Macau, signed Discussion Minutes” (会谈纪要) with Hong Kong and Macau on strengthening judicial and legal exchanges and cooperation (full text here), and instructed the Guangdong High Court and the Hong Kong Department of Justice (HK DOJ) to sign a “Guangdong-Hong Kong-Macao Greater Bay Area Legal Exchange and Mutual Cooperation Arrangement” (粤港澳大湾区法律交流与互鉴框架安排).
It appears that the SPC is taking the lead on more major matters involving interactions with Hong Kong and Macao. I have not been able to find all of the documents mentioned, however. It appears that this legal exchange and mutual cooperation agreement (dated 2019) should be added to the list of arrangements about which I wrote last year. I have not been able to identify the full text of this arrangement and would welcome a citation. Judge Si Yanli mentioned the Meeting Minutes and Mutual Cooperation Arrangement in her article published earlier this year.
To implement “wherever the Party Center’s policy decisions are deployed, the judicial services of the people’s courts will be there” (党中央的决策部署到哪里，司法服务就跟进到哪里), the SPC issued the following documents:
Opinion Concerning the Provision of Judicial Services and Safeguards for the Construction of the Guangdong, Hong Kong, and Macao Greater Bay Area 关于为粤港澳大湾区建设提供司法服务和保障的意见》I have not been able to locate this document.
The Guangdong High Court, taking the lead in implementing GBA judicial policy, has issued a number of operational plans and assembled a list of reform measures. The operational plan includes: 1. three-year operational plan for promoting the construction of the GBA (推进粤港澳大湾区建设三年行动方案);
2. Three-Year Action Plan to Support Shenzhen in Building an Experimental Demonstration Zone for Socialism with Chinese Characteristics(支持深圳建设中国特色社会主义先行示范区三年行动方案)
3. A list plus ledger of 46 reform measures “清单+台账”方式推动46项改革举措
Other measures that GBA-area local people’s courts have taken:
centralized trial of foreign-related, Hong Kong, Macao and Taiwan civil and commercial cases (this is a theme in professionalizing the hearing of foreign-related cases);
Trying out a trial model of “professional judges + Hong Kong and Macao jurors + industry experts”; (it is not clear how much this is actually happening in the Covid era, with strict border controls still ongoing);
Accumulate practical experience that can be promoted and replicated elsewhere such as the centralized jurisdiction of Hong Kong and Macao-related cases, separation of complicated and simple cases, and expanded application of laws.
The Higher People’s Court of Guangdong Province has released 60 typical cases of cross-border disputes in the Guangdong-Hong Kong-Macao Greater Bay Area for three consecutive years, providing professional and clear legal guidance for parties in the three places. See my earlier blogpost on SPC typical cases.
The Shenzhen Intermediate People’s Court established the first administrative trial center in the Mainland to implement centralized jurisdiction of administrative cases and took the lead in exploring the transfer of some administrative cases involving Hong Kong and Macao to the jurisdiction of grassroots courts. The People’s Court of the Guangdong-Macao Deep Cooperation Zone in Hengqin was inaugurated,
This last list of matters is highlighting the accomplishments of the GBA courts in implementing judicial reform, especially in mechanisms that can be replicated elsewhere in the Chinese court system.
III. Judicial Legal Rules Convergence and Judicial Exchanges and Cooperation Policies
Section 3 of the report addresses this topic, focusing primarily on what is termed judicial exchanges and cooperation policies (司法交流合作), mentioning that the SPC concluded three arrangements and one judicial assistance document (司法协助文件) with the HKSAR and two arrangements with the Macao SAR. Because I have previously written about this topic in severalearlier blogposts, I will instead focus on the topic of judicial legal rules convergence (linkage, 司法法律规则衔接). The report mentions very little about this.
As mentioned above, Judge Si Yanli published an article earlier this year (2022) in China Law Review（Research into Difficult Issues of Legal Rules Convergence in the Greater Bay Area, Focusing on the Diversified Dispute Resolution Mechanism as an Entry Point中国法律评论, 粤港澳大湾区法律规则衔接疑难问题研究——以多元化纠纷解决机制为切入点 ) with very useful insights for understanding what is meant by judicial legal rules convergence (linkage) and the areas of law that are under consideration. What she discusses in her article are not official statements of policy.
Among the many suggestions for rule convergence in her article are the following: concluding civil and commercial judicial assistance agreements between (or among) Guangdong, Hong Kong and Macao. Among the areas she suggests a GBA judicial assistance agreement would be useful is the service of process and creating a mechanism bringing the entire process online. She also suggests that the three jurisdictions cooperate in areas of law outside of the arrangements that have been reached, such as inheritance and intellectual property. She also suggests that Hong Kong and Macao invested entities in the GBA be able to choose Hong Kong or Macao law for contracts and Hong Kong or Macao arbitral institutions for arbitration. Note that an article on the website of the Hong Kong Department of Justice mentions that this is being piloted.
Judge Si very usefully proposes a GBA agreement on the enforcement of mediation agreements that would draw on the Singapore MediationConvention, discussing the many obstacles in the way of that occurring, including gaps in Chinese (mainland) mediation legislation. Hong Kong official media has reported on work on GBA mediation platform, with ongoing work on mutual recognition of qualifications, accreditation, and mediator code of conduct.
As I have previously commented, the judicial (and more broadly, the legal) aspects of the GBA merit more attention than they have received thus far. But understanding the documents of the GBA has its challenges. As mentioned previously, some documents have not yet been made public. The larger challenge in understanding them for local Hong Kong (and I assume Macao students) is that it requires the reader to be familiar with the language of (mainland) Chinese official documents.
The GBA is likely to have an impact on the careers of at least some students in the GBA area law schools, including my own students at the Peking University School of Transnational Law (in Shenzhen), as well as in Hong Kong’s and Macao’s three law schools, so I look forward to some group of students taking up the challenge.
This post is a lengthy summary/incomplete translation of an article entitled 省级统管后法院经费保障机制再造 (Reconstruction of the Court’s Funding Guarantee Mechanism after Provincial Administration)by Fan Lisi (范丽思), a judge of the Wuhou People’s Court, Chengdu, Sichuan Province. Judge Fan was one of the first prize winners in the 2020 “Ram City Cup” competition for articles on judicial reform, administered by the Supreme People’s Court (SPC)’s judicial reform office. People’s Justice (人民司法) published her article in 2021. Many thanks to Guo Ran, a current Tufts student, and Tina Chen ( 陈雨茗), an Oxford undergraduate for assisting with the translation/summary. I have included some explanations in square brackets . I have omitted most of the charts/graphics. I welcome corrections to the summary/abridged translation and comments.
Based on her review of data from multiple provinces/directly administered cities, the author shows that the reform of funding the courts at the provincial level (cited as one of the successes of the judicial reforms in several English language academic articles) has been a failure. The reforms make the local courts even more dependent on local financing. She explains why that happened.
I surmise that 2022 will be an even more challenging year for court budgets in many areas, as provincial/local budgets are under greater stress because of testing for Covid-19, decreased income from land sales, and less tax revenue because of lockdown-related downturns in business activity.
She looks at other court financing models abroad and discusses a topic I have rarely seen mentioned in the academic literature about the Chinese courts (certainly in English–I don’t claim to be as familiar with the Chinese academic literature)–separating the judicial and administrative functions. I have had discussions with several persons previously affiliated with the SPC on this issue. She proposes that the SPC establish a finance committee and that local courts establish counterpart institutions. Drawing on her research on Chinese court funding and that of other jurisdictions, she proposes a new model. I cannot claim any expertise on this and will not comment on the practicability of her proposal.
The role of the people’s courts in national governance has changed. Judicial authority has transformed into a central power from a local power [司法事权属性已由地方事权转变为中央事权]. The transformation of the courts’ functions requires a mechanism for guaranteeing funding that matches the operation of judicial power. The provincial unified administration reform in 2014 saw the beginning of the current funding guarantee mechanism reform. [This reform was part of the 4th Five-Year Judicial Reform Plan]. But after five years of pilot practice, the provincial unified administration has not achieved its established goals of “de-localization,” “de-administratization” [去行政化] and “balanced judicial supply power (均衡司法供给力).” It is necessary to reflect on the reasons for the failure of the provincial unified management reform, clarify the theoretical components [应然内涵] of the court funding guarantee mechanism, identify the situational variables affecting the choice of reform tools, and “reload “the reform toolbox. Based on provincial unified management, China should build a court funding guarantee mechanism that follows judicial principles [规律] and financial management principles, so as to effectively solve the problem of financial resources for the operation of the judiciary and assist in constructing modern social governance in China based on the rule of law.
Problems that the Reform aimed to resolve
Solution provided by the Reform
Underlying judicial value
Who is paying (the money)?
The source of funding is raised to the provincial level of administration, altering from local finance departments to provincial finance departments.
To allow the courts to gain independence economically from local governments, removing localized variants and guarantee judicial independence.
Who is responsible for the distribution and management of the money?
The main body of funding is raised to the provincial level. Funding used to be distributed and managed by local financial departments is now subject to provincial financial departments.
To eliminate regional differences within the same province, and to realize the standardization of judicial services through standardizing financing capacity of the courts.
How is the total amount of funding determined?
Fixed-base budget: The reform uses the total amount of funds before as the “base;” the base will only be raised but not reduced.
Institutionally secure the “guaranteed amount” of legal funding, overcome the problem of arbitrariness in determining the total amount of funding in the previous years, and establish a benign dynamic growth mechanism of funding
To whom is the power of reviewing budgets vested in:
Governmental budgeting department with limited power to review: provincial finance departments delegate the power to conduct initial review of budgets to provincial courts. They will then sum up the subordinate courts’ budgets and conduct initial review of their reasonableness and compliance. Then the provincial finance department will submit them among other departmental budgets to the provincial People’s Congress.
Develop the court’s function of funding management, make use of the higher court’s knowledge of the lower courts, and enable the higher courts to fully participate in the lower courts’ budget filing, review, and coordination processes
I. Benchmarking review: Evaluating the practical effectiveness of provincial unified management
The provincial unified management of court funding attempts to centralize the administration of court funding at the provincial level. Cout funding was previously an obligation of local government on the same administrative level as the local court. The reform aims to break the previous local court fund management pattern, reshaping the relationship between courts, administrative agencies, and Party and government agencies, which has had an impact on the autonomy and fairness of the local courts.
To analyze the success of this reform, the author selected the 2019 and 2020 budget and final accounts data of 1,535 basic-level courts (data from 14 provincial-level jurisdictions: Tianjin, Jiangsu, Guangxi, Hunan, Jiangxi, Inner Mongolia, Guizhou, Hebei, Shaanxi, Shanghai, Guangdong, Beijing, Shanxi, Yunnan. She reviewed the following data:
basic-level court department’s budget,
final accounts public statement, and
people’s courts’ financial statistics analysis system
and analyzed key indicators such as :
source of funding,
average cost of each case
average public expenditure per case, and t
growth rate of case-handling operational funds, etc.
A. The reform has not eliminated local court dependence on government at the same level
The study presented the following findings:
(1) Shifting the source of court funding has not completely freed the local courts from depending on local governments.
The current judicial reform centered on withdrawing court funding from the government-led horizontal model of bureaucracy and removing the function of allocating or transferring funds from governments on the same administrative level through institutional reforms, which in turn removes the possibility of the judiciaries colluding with governments on the same administrative level to solicit funding. After the transformation into provincial unified management, the judiciaries’ funding will mainly be composed of provincial finance; governments on the same administrative level will cease to allocate funds to the judiciary.
By examining the funding income structure of the sample courts in 2020, the study found that, out of 741 courts that have been reformed, 249 still relied on funding from governments on the same administrative level, which comprised 43.22% of the courts’ total funding.
In the case of some local courts in Shanxi and Hebei province, the percentage could even reach 87%. Funding from government on the same administrative level compensates for the lack of funding for:
facilities procurement; and
Labor costs are the largest proportion, at 63.05%.
From the above data, it is clear that nearly 33.6% of local courts have not yet completely detached from local governments financially, even after the reform.
B. Raising the funding guarantee to the provincial level has not significantly improved unequal financial supply capacity
Balanced judicial finance is the necessary condition for standardized judicial services. One of the objectives of the provincial unified management reform was to ensure that the public has equal access to judicial services of equivalent quality and quantity within a province, by arranging courts’ funds on a provincial level.
The equalization of financing provision capacity is a sensitive indicator. In order to obtain a concrete observation of this indicator, the author has selected “public expenditure per case” and “cost per case” to reflect, respectively, the ability to finance “administrative affairs” and “enforcement of courts’ decision”….
Suppose we reflect on the tools adopted by the provincial unified management plan. In that case, we could explore the problems in tool selection and application with the existing reform and establish useful precedents for a new funding guarantee mechanism.
C. The policy requirement of a guaranteed minimum funding does not necessarily produce a sustainable dynamic increase in the courts’ funds.
In “Framework Opinions on Several Issues of Judicial System Reform Pilot” (referred to as “Framework Opinions”) issued by the Central Leadership in 2014, it was stated that after the implementation of the provincial unified management reform the total amount of funding must not decrease, however, this minimum requirement does not suggest a sustainable increase in funding. Among the sample courts, 711 courts experienced growth in the number of cases heard in 2018.
Through comparing and analyzing the growth rate of cases heard and the growth of overall funding in handling cases, it was found that in 66.67% of the courts the growth rate of overall case funding was lower than the growth rate of cases heard; among them, 55.13% of the courts even had a decrease in case funding when the number of cases heard had increased; the courts that been reformed had a comparative advantage in terms of the increase of funding in cases. Among the 237 courts that saw equivalent or higher growth in case funding than cases heard, there was almost a fifty-fifty division between reformed and unreformed courts. (See the figure below)
D. The power of provincial courts to manage funds continues to be marginalized.
Under the institutional framework of “One Government, One Committee and Two Courts”, [government, the supervision commission, the courts and procuratorate] judicial independence manifests in the division of labor rather than independent authority from the government.
However, a mode of leading and being led, managing and being managed is formed between the local courts and government on the same administrative level, through the mediation of the fiscal relationship. The provincial unified management reform hopes to rebalance the power constraints between the provincial court and governmental departments, through the practice of restoring an interactive relationship between the courts and government, by developing the courts’ own financial management capacity and transferring the power to manage funds from government to the courts.
But the four management models developed in the process of promoting the reform have been found to be problematic in their own respects: the direct management model (adopted by 57.15% of the reformed courts) tends to marginalize the managing power of provincial courts, and local courts will communicate directly with provincial fiscal departments; in the assisted-management model (adopted by 38.1% of the reformed courts), although the provincial courts are involved in the management process, their role is reduced to that of a megaphone, with no substantial power of their own; the model of entrusting municipal management of court funds does not achieve the reform objective of transferring the fund management power to the provincial courts; the trusteeship model, in which the provincial treasury delegates the daily management of funds to the provincial courts, is only an expedient measure to fill up the absence of the provincial government’s financial management capacity. It is also worth noting that only one province has adopted this model.
Therefore, it can be concluded that the provincial courts have not taken up the power of allocating funds as the reform expected, and have again ended up being marginalized in fund management.
II. real-world problems: dissecting the failure of provincial management reforms
Reason 1: lack of capacity to financially supply at the provincial level inhibits the local courts from becoming financially independent from local governments
The ideal plan, according to the provincial unified management reform is that the local courts should be funded only by the provincial treasury. This is a completely novel expenditure for the provincial budget and can only be financed through increased provincial revenue. However, a comparative analysis of the increase in the courts’ budget against the incremental revenue increase at the provincial level suggests that almost all provincial-level finances are unable to satisfy such a large increase in funding demand: Tianjin, Guizhou, Beijing, and 10 other regions have experienced a reduction in provincial-level revenues compared to the previous year, and it is simply impossible to spare funding for local courts when existing provincial needs remain difficult to satisfy.
Jiangxi, Yunnan, and Guangdong Province have less than 1.8 billion Yuan of increase in revenue to finance their own budgets, which is far less than the funding needs of local and provincial courts. Even in economically developed regions such as Shanghai and Beijing, budgets were further contracted compared to the previous year, with arranged courts’ budget revenue accounting for less than 2% of the provincial budget. The same lack of financial supply capacity can be observed. (See Table 2)
The lack of financial supply capacity on the provincial level has forced the courts to continue fundraising with the local governments. In the process of fundraising, the local courts will now have to communicate on the one hand with the provincial finance department for more funding, and on the other hand with the local government to compensate for the lack. Having to communicate simultaneously on two administrative levels increases the costs of fundraising for the courts. A further difficulty since the reform lies in the fact that, facing the funding applications from the local courts, the local government can decline their requests using the reform as a legitimate excuse, by saying that the courts have now “completed the provincial unified management reform”, increasing difficulties in fundraising, and potentially deepening local courts’ dependence on local governments.
The reform asked for formal unified management on the provincial level, while failing to bring about substantial unity in expenses, resulting in the continued imbalance of financial supply capacity within provinces. Firstly, provincial unified management suggests standardization, however, in reality, local standard in labor and public funds still persists, while the funding for case-handling remains insufficiently supplemented. Secondly, the reform also demands unity in expenses, i.e. the amount of funding from provincial expenditure to the local courts should be standardized. But the reality is that the provincial finance department simply required local governments to report the total funding allocated to local courts before the reform, and use this figure as a criterion to budget for local courts for the year. Some provinces with limited capacity to guarantee funding even require the local finance departments to transfer this amount upward, before the provincial finance department then transfers the funding to the courts, so as to achieve formal unified management. Provincial finances in this process did not take effective means to coordinate and adjust the funding budgets to balance the substantial expenditure, and the status quo of having huge gaps in financial capacity among the courts within provinces has not been significantly improved.
There is a tension between the self-expansionary nature of court funding and the principle of necessity, which prevented court funding from increasing alongside the expansion in courts’ capacity to handle cases. The idea of public finance in principal-agent theory conceptualizes the government as a “trust fund” established to serve the public interest of society, whilst recognizing that the government’s natural tendency of self-expansion may create excessive demand for financial power. Therefore, in order to curb the government’s urge to abuse public finance, budgeting should follow the principle of necessity.
The courts, however, while budgeting for their own expenditures, tend to be self-expansionary: justice is the highest normative value of judicial activities; when justice and economic efficiency are in tension, cost-effectiveness has to come second. Fair and just judicial activities must be backed up by adequate and stable financial resources. However, when reviewing court budgets, finance departments usually follow the principle of necessity and reject the demands to increase budgets alongside the expansion of judicial activities, while the courts themselves have no effective means to reject this practice.
Reason 4: The absence of legislation and policies leads to the lack of legitimacy in the expansion of courts’ power to manage funds
It was clearly stated in “Framework Opinions” that it aims at “the establishment of a provincial unified management mechanism”, i.e. the department responsible for managing courts’ funding is the provincial finance department. The revised budget law in 2018 defines the budget as “public actions involving revenue and expenditure”. The statute did not specify for the normative standard of judicial actions involving revenue and expenditure, which suggests that the state has recognized, on a legislative and policy level, the subordinate status of the court budget in relation to the total public budget. The relationship between the finance department and the courts constitutes a de facto managing-and-managed relationship. Although having provincial courts participating in the management of funds allows for the decision-makers to make informed decisions, the whole process is made difficult due to the lack of legitimacy in the expansion of power.
III. Theoretical reflection on the reform’s “toolbox”
A. The normative components and theoretical toolbox of the court funding guarantee mechanism
Before introducing a theory to transform the court funding guarantee mechanism, it is necessary to clarify its normative outlook. The author examined changes in the PRC’s court funding guarantee system since 1949 and its counterparts in Japan, the U.K., and the United States. She concluded that the court funding guarantee mechanism must determine four core issues in varying political and economic environments: the source of funding, the court funding administrator, the method of ascertaining court budgets, and the authority to review court budgets.
1. The source of funding, or who pays the money
Judicial services maintain social order and justice through the resolution of specific disputes. It is both a private product that protects the legal interests of individuals and a public product that provides legal services to the state. Therefore, when ascertaining the source of funding, there are two available sources, namely, the state and the litigating parties. In cases where the state provides court funding, two sources are available–central government finance and local government finance–depending on the financial condition of each government.
Due to the centralized nature of unitary states, central government finance tends to be the funding provider in unitary states such as Japan and the United Kingdom. On the other hand, the federal countries tend to fund the court through local government finance. For example, the U.S. state courts are financed by state funds. Some other courts are also funded by the litigating parties. The British civil courts, for example, are funded by the case acceptance fee. Although China is a unitary state, Chinese local courts have historically been funded by local government finance because of the country’s vast territory, significant regional differences, and limited central financial resources.
2. The court funding administrator, or who manages and distributes funding
Generally speaking, whoever pays for the funds naturally controls the allocation and management of the funds, so the funding provider is usually the guarantor of court funding. The central government finance is guaranteed by the central government, and the local government finance is guaranteed by local governments. This one-to-one correspondence is particularly prominent during the historical variations of China’s court funding mechanism.
To prevent undue government interference in judicial fairness, many countries have enacted laws or other institutional arrangements that grant the court funding administrator a high degree of independence from the government that provides court funding. For example, in Japan, the Supreme Court is mainly responsible for funding management; the United Kingdom and the United States have set up an independent judicial administrative department for this purpose. Depending on the funding provider and its dynamic interaction with the court, the author identified four main administrators of court funding–the central government, the local government, the Department of Judicial Administration, and the courts.
3. The method of ascertaining court budgets, or how to determine the total amount of funding
Figuring out the quantity of budgetary funds helps the judiciary to secure the resources necessary for it. To ascertain court budgets, there are three methods to choose from: “fixed amount method”, “fixed percentage method”, and “incremental budget increase method”. The four periods of China’s funding guarantee model all rely on the fixed amount method or its modifications, as it is operationally the easiest; the fixed percentage method is more often used in Latin American countries. However, it is not accepted by the mainstream because one cannot quantitatively test and justify the set percentage; the incremental budget increase method, which is the most responsive to the needs of the courts, is used in the United States and the United Kingdom.
4. The authority to review court budgets, or who has the power to review and revise the court budget during budget declaration and approval
Depending on the level of detail that the executive branch reviews court budgets, there are three types of budget review authority: “government departmental review”, “independent review”, and “government departmental review with limited power”. In the government departmental review model, the court budget is a sub-system of the government budget. The government finance department has the strongest scrutiny and involvement in the courts’ budget. In the independent review model, the courts are relatively independent, and the finance department has the weakest scrutiny of the court budgets. The court budget is filed, reviewed, and revised within the court system or by an independent judicial funding management authority. The government has no substantive right to review or revise the court budgets. In the “government departmental review with limited power” model, the court has a say and could participate in the budget review process, but the ultimate review power still lies within the finance department. The model is a compromise between the first two models, but is essentially more inclined to the government departmental review model.
Summary: By comparing the application of the four major types of guarantee tools during various reform periods and in different political entities, the author concluded that the choice of reform tools in the “toolbox” is closely related to the national financial situation, political institutions and the role and function of judicial power in society. The reform plan of court funding guarantee should fully consider the influence of situational variables including political, economic and judicial power. It should also accurately identify the role and function of courts in the national governance structure. To fill the reform “toolbox,” it should choose the appropriate combination of the above 13 tools.
B. Reflections on the problems with the existing reform
Having clarified the reform’s normative outlook and theoretical toolbox, it is necessary to reflect on the tools adopted by the provincial unified management plan. In this way, we could explore the problems in tool selection and application with the existing reform and set up useful precedents for a new funding guarantee mechanism.
1. Confusions in tool selection: the unclear boundary between judicial authority and administrative authority in the judiciary
The unclear boundary between judicial authority and administrative authority in the judiciary has led to the inappropriate mixing of reform tools for judicial funding and judicial administrative funding. Judicial authority refers to the court’s authority to try and legal supervision on behalf of the state, while the administrative authority in the judiciary refers to the power to manage personnel, property, technical equipment and other administrative affairs of the judiciary for the purpose of supporting judicial authority.
The two kinds of authority are essentially different in forms, functions, and substantive contents. The operation of judicial authority should follow the judicial principles and stress judicial independence; the administrative authority in the judiciary should follow administrative principles and stress subordination within the administrative hierarchy. However, in the provincial unified management reform, the two authorities have been confused as the same court functions. The funds for case handling and court facilities, which represent the operating costs of judicial power, and the personnel and public expenditure funds, which represent the operating costs of administrative affairs, are placed in the same guarantee model. The choice of various reform tools has failed to differentiate between the operation of the two powers.
2. Reflection on the choice of tools: the court’s role and function remain unclear, resulting in the deviation of tool choices from the reform’s values
Historical changes in the court’s funding mechanism have shown a continued evolution of the court’s functions. The court’s role in society and the state determines the Party’s policy arrangement of court funding: if the court serves to resolve specific cases and disputes within its jurisdiction, then the court exercises local affairs; as the judicial responsibility should match with the court’s power of finance, the court should be financed by local government. If the court serves to promote the rule of law in social governance at the national level, then the court should be financed by the central government.
Since the founding of the PRC, the court’s role has shifted from a means to an end to an end in itself; from “a political means to realize revolutionary goals” to “a manifestation of value in improving the political system.” The court’s function has been elevated to the level of “providing the foundation of the rule of law for national development.
Accordingly, the court should be funded by the central government. The provincial unified management plan has been aware of the public service provision function of judicial products. It has also established values such as“de-localization” and “ameliorating the regional divergence in financial supply capability.” Nevertheless, since it still viewed the court’s main role as the settler of specific disputes, the source, and management of court funding remained on a provincial level after the reform, which partially contradicted the reform’s goal of de-localization.
3. Reflection on the application of tools: the insufficiency of financial resources hindered the intended application of tools
The foremost issue of funding reform is to figure out “where the money comes from.” As the leading reformer, the court did not control economic resources. Therefore, when faced with significant financial supply shortages on a provincial level, the reformers sought to avoid the risk of failed reforms. They came up with a compromised but effective method: the courts on each administrative level cooperated with local finances to determine a base amount of funding, which must be no less than the pre-reform amount. The local governments on the same administrative level would then transfer the funding to the provincial treasury, which would then distribute funding to local courts through transfer payments.
This process formally satisfies the requirements of provincial unified management and that the court funding remains no less that the current level. It also seems to push forward the reform. However, the local governments on the same administrative level remained deftly as the actual source of funding. The provincial courts were deprived of the possibility to coordinate the arrangement of provincial funds. The end result of the reform completely deviated from its original intention of shifting the main body of funding guarantee up to the provincial level.
4. Reflection on the implementation of tools: insufficient political resources leads to the lack of internal motivation to enact and push forward the reform tools
The court funding guarantee mechanism reform seems to be a reform within the judiciary. However, because China’s court funding system is decentralized and deeply intertwined with politics, the reform would not only involve a reconfiguration of legal institutions and their respective functions. It would also require adjustments to China’s contemporary legal principles. In practice, both the local financial departments and the provincial financial departments held a passively cooperative attitude toward the reform initiatives, resulting in the initiatives’ weak implementation nationwide compared with other reforms of the judicial system.
The court funding guarantee mechanism reform seems to be a reform within the judiciary. However, because China’s court funding system is decentralized and deeply intertwined with politics, the reform would not only involve a reconfiguration of legal institutions and their respective functions. It would also require adjustments to China’s contemporary legal principles. In practice, both the local financial departments and the provincial financial departments held a passively cooperative attitude toward the reform initiatives, resulting in the initiatives’ weak implementation nationwide compared with other reforms of the judicial system.
IV. Tool Re-selection: the remaking of the court guarantee mechanism around “separation of the judicial and administrative authorities”
Having reflected on the reform toolbox, the author concluded that the new funding guarantee mechanism should abide by the principle of “separation of the judicial and administrative authorities.” Accordingly, it should apply different funding guarantee mechanisms for judicial and administrative fundings in the judiciary. It should also re-select the source of funding, the funding guarantee administrator, and the reviewer of judicial funding budgets. The reform should also establish a dynamic growth mechanism for court funding centered on the average cost per case.
A. A general change of plan: from single-center provincial unified management to a unified management model based on the judicial-administrative separation
Xi Jinping pointed out that “the judicial power is fundamentally a central governmental affair.” According to the principle that the administrative power should match with the financial expediture responsibility [根据事权与财政支出责任匹配的原则], the main body in charge of judicial expenditure should be the central government. The judicial funding should thus be included in the central government budget and managed by the central government management mechanism yet to be established.
On the other hand, as the judicial administration includes judicial personnel, property, legal infrastructure construction and maintenance, and party and political-administrative affairs, it manifests interactions between the local courts and governments. Compared with judicial power, judicial administrative power demonstrates a clear local feature. Therefore, it should continue with the provincial unified management model, with its funding mainly provided by provincial finance and supplemented by the transfer payment from a national and provincial level.
B. Changing the source of judicial funding: establishing a special fund for judicial activities to guarantee stable funding
The central government finance should collect the litigation fee revenue from all courts nationwide and set up a special fund for judicial expense for case-handling. It should also establish five basic rules to fully implement the “separation of revenue and expenditure” requirement – unified revenue collection and expenditure, earmarking, limitation on carryover and balance surplus, managing surplus/shortage, and auditing and supervision – which would, in principle, prohibit mixing judicial funds with administrative funds. In this way, it provides a stable source of revenue for the central finance to guarantee court case-handling expenditure:
Firstly, litigation fees are capital costs charged by the courts in providing judicial products and services to the litigating parties. Its main purpose is to compensate for the material costs of service provision. Therefore, the use of litigation fee revenue to compensate for the cost of case-handling is justified and reasonable. Secondly, the analysis of the sample courts’ financial data shows that the total litigation fee revenue in 2019 was 27,830 billion Yuan, and the total expenditure on case handling and equipment was 22.266 billion yuan. The litigation fees exceed the court’s case-handling expenditure by 0.25 times, so it is realistic to compensate the case-handling cost with the litigation fee revenue.
In addition, it is necessary to clarify that the use of litigation fee income as a source of financial guarantee for central finance does not violate the principle of “separation of revenue and expediture.” Nor does it mean a rollback to the “revenue generation era” at the cost of litigating parties.
Although the litigation fee is collected by the court, it goes directly into the central treasury. The central treasury is responsible for both the management and expediture of litigation fees after collection, not the courts themselves. This solution is thus in line with the principle of “separation of revenue and expenditure.”
Additionally, through reasonable institutional arrangements, the funding distribution is not linked to the local courts’ amounts of litigation fee revenue. The courts at all levels thus lose the original motive to increase allocated funds by generating more litigation fee revenues.
C. Reforming the court funding administrator: setting up an independent professional institution responsible for the management and allocation of funds.
The Supreme People’s Court should set up a judicial fund management committee. The committee should consist of professionals in charge of managing the judicial funds, which should include financial budget management experts, personnel assigned by the Ministry of Finance, and audit experts.
Specifically, the committee should: communicate on behalf of the Supreme People’s Court with the central finance department and the National People’s Congress and its Standing Committee; collaborate with the Ministry of Finance to design a set of regulations on judicial fund management and budget filing; be responsible for the budget collection and review of lower courts; be responsible for the budget declaration and responding the questioning of higher administrative institutions; assume internal supervision responsibilities; establish a special inspection system that regularly monitors the exercise of judicial funding.
The provincial courts should set up funding management committees that consist of budgeting, auditing, accounting and other professionals as well as the personnel appointed from the provincial finance departments. The committee should be specifically responsible for communicating with the funding management committee of the Supreme People’s Court, managing and allocating the judicial funds below the provincial level, communicating with the provincial finances, and managing and allocating the judicial administrative funds below the provincial level.
D. Changing the method of determining judicial funding budget: establishing a dynamic budget adjustment mechanism around the average cost per case.
The early stage of the reform: the average cost per case varies from place to place; some courts’ case-handling expenses are intertwined with public expediture of varying amounts; the court financial personnel varies in their professionality; and some financial data lack credibility. To solve the problems, the total amount of funding can be temporarily determined as the sum of the previous year’s case-handling and equipment expenses. The funding can float with the growth or decline in the number of cases handled in the next years.
Trial run phase: Strictly enforce the absolute one-way barrier [单向绝对壁垒] between judicial and administrative funding; constructing IT infrastructure [信息化建设] under the supervision of the Supreme People’s Court, so that the quality control of data information could improve.
Formal operation phase: After 3 to 5 years trial run, the judicial funding should have basically eliminated administrative funding, and the quality of data should have been effectively guaranteed. Then, the government would collect historical funding statistics and local development indicators and determine key elements such as “the average cost per case,” “the proportion of case categories,” “case growth expectation,” and “local economic development indicators.” In this way, the government could construct a system of indicators and a dynamic funding adjustment mechanism around the average cost per case.
E. Inheriting and improving the budgetary framework [预算权归属工作]: establishing a judicial budget system led by the judicial fund management committee.
As a legal basis to modify the court budget status in the existing budgetary model is lacking, the court funding reform must be restrained by the governmental sector budget model. Both judicial and administrative funding should also follow the basic principles in the current budget law. However, the Supreme People’s Court judicial funding management committee and provincial court judicial funding management committees could participate in the design, review, and auditing of budget rules. The committees could set up institutional arrangements such as restricting the finance departments’ right to delete or edit court budgets during the review process. In this way, it could effectively exclude undue interference from the administrative branch.
The funding guarantee proposal based on “the separation of judicial and administrative funding” is a problem-oriented one. It also reflects the strategies adopted by the provincial unified management reform. By transferring the litigation fee to the newly established judicial funds in the central government, the proposal could provide sufficient and stable financial resources for the centralized provision of judicial funding; by decoupling judicial funding from provincial finance, the proposal could reduce the provincial financial burden and effectively alleviate funding shortages; by establishing a dynamic adjustment mechanism for judicial funding, which centers around the average cost per case, the proposal could effectively balance the judicial financial supply capacity nationwide; by establishing judicial funding management committees and other professional organizations to participate in the funding management, the proposal could provide an institutional basis for empowering the courts. The funding guarantee model attempts to solve various problems faced by the current reform from the real-world application perspective and thus has a strong practical value.
That observation is that the way Yuan describes cases being used looks very much like a bureaucratic machine striving for error reduction. The imperative driving it is different from that which drives the idea of respect for precedent in a common-law system.
For example, cases more than three years old are not considered very important when searching for the “like cases” that should be treated alike. To me that suggests that the main concern is that the machine at any given time produce consistent judgments. The system is seen as a unified whole, and if it’s doing X at the same time that it’s doing not-X, that’s a malfunction that calls the integrity of the whole machine into question. Inconsistent judgments from a long time ago are less of a concern.
The concerns of respect for precedent are different. In a system that values precedent, the fact that you judged a case a certain way before is precisely a good reason for judging a like case the same way now; by contrast, what other judges in other courts are doing at the same moment you are judging is much less important.
Another thing that stands out in this report is the tremendous amount of work done by court personnel in finding and analyzing (what they consider to be) like cases, in contrast to what is reported to be the virtual absence of input on this issue from the parties’ lawyers. We see this a lot in China. Here is work that could theoretically be outsourced to the parties at their own expense; a conscientious court worried about misuse of cases could still spend time reading the cases cited by the parties, and would still save the time spent having to find them. It’s hard to believe that judges and their interns and assistants have the skills to analyze judicial reasoning in cases, but Chinese lawyers do not. The conclusion would seem to be that this kind of input from lawyers is not welcomed. And again, that makes sense if the primary concern is the efficient and consistent functioning of the judicial machine in the eyes of its personnel. Why would they let outsiders tell them how to do their job?
Response by Yuan Ye
Thank you to Prof. Donald C. Clarke for your kind comments and observations on my note: first, researching similar case is a method the SPC, as “a bureaucratic machine”, uses to reduce error and thus keep itself as a whole; second, there is an imbalance between the work on (re)search similar case done by judges (and their assistants) and lawyers.
Both the comments are very insightful. My response is as follows:
I. The purpose of similar case (re)search: maintain the judicial system as whole
Indeed, retaining or asserting internal administrative consistency, rather than following precedent, is arguably the dominating motivation for the SPC to require searches for similar cases.
According to the first sentence of the Guiding Opinions on Unifying the Application of Laws to Strengthen the Retrieval of Similar Cases (for Trial Implementation) (“《关于统一法律适用加强类案检索的指导意见（试行）》”), the purpose and goal of similar case search is to “unify the application of laws and enhance judicial credibility”. 3 months after the publication of this Guiding Opinion, the SPC issued Implementing Measures for the Work of Unifying the Application of Law (最高人民法院统一法律适用工作实施办法), first article of which the SPC explained the meaning and significance of “unifying the application of law” :
Unifying the application of law in judicial work is not only an inherent requirement for building a sound socialist legal system with Chinese characteristics, but also one of the basic responsibilities of the people’s courts in independently and fairly exercising judicial power according to the law. It provides an important means to ensure the unity, dignity and authority of the national legal system, and is indispensable for improving the quality, efficiency and credibility of the judicial system……
From reading these statements, it is clear that the purpose of promoting a unified application of law is principally to enhance the quality and position of the SPC’s (and all lower courts’) judicial work in the context of the “socialist legal system with Chinese characteristics.” Therefore, promoting similar case (re)search helps to unify the application of law and “enhance the credibility of the judicial system” and the legal system as a whole.
From a more practical perspective, due to the varying level of development of courts in different cities, there is a widespread phenomenon called “Different Judgment in the Same Case” (“同案不同判”), which is a concern of the central government and SPC. Such divergence has “ seriously affected the public trust of the judiciary”, and many believe that the absence of “case law” is one of the main reasons. Pushing different Chinese courts to apply the same standards helps the judicial system to operate as a “bureaucratic machine” both internally and externally: first internally, different lower courts maintain consistency with the SPC [note that the editor has previously commented that certain reforms are intended to “strengthen the firm guiding hand of the SPC”); and then second externally, to ensure the judicial system (“法院系统”)’s role in the entire Chinese political-legal system and image before ordinary people.
II. The imbalance between the judge (assistant) and lawyer
Generally speaking, Chinese dispute resolution lawyers are far from professional enough to apply “case law” in their work. Some leading law firms and lawyers have promoted case research in their practice and in the whole legal market. The Tian Tong (“天同”) law firm, was likely the earliest to do so. The firm, which I will join on graduation, has “collected, sorted out and refined the adjudication rules of judicial precedents, forming a 42-million-word “Tiantong Code” series(“天同码”), creating a unique case coding system in China”  But many lawyers are still not accustomed to searching for prior cases, leaving it out of their routine work.
The uneven level of (case) law education in different law schools has contributed to that imbalance in legal practice. Under China’s civil law system, cases, even Guiding Cases, are not “law” or binding authorities that can be cited as a “basis” for judgments.
Therefore, traditional Chinese law school education is dominated by teachers’ lectures on legal theory, with rare class participation from students, with rare mentions of case law. In my undergraduate law school, the typical class scene was that the teacher read PowerPoint slides at the front of the class, with the students taking notes on what the teacher said. The main questions on the exams were also discussions of specific legal theories rather than issue spotting.
Things started to change later when some leading law schools had introduced Appraisal Case Analysis (鉴定式案例分析法), a concept borrowed from German law schools, or using other case law teaching methods to enhance the quality of legal education. For example, Peking University Law School [in Beijing] has introduced a series of case law seminars ranging from civil law to criminal law and related procedural law into its teaching. STL is of course also an excellent example of implementing US-style case law education in its daily teaching of Chinese law. However, such new efforts are still limited to a few leading law schools and more time is needed for law school graduates to become experienced lawyers who are capable of using case law in their work.
Courts in developing cities are much less attractive for graduates from leading law schools, and therefore judges in those courts are less familiar with the appropriate way to apply case law than those in developed cities. Therefore, the imbalance is not only between judges and lawyers but also between legal practitioners in different cities.
Another reason behind the imbalance is the “inquisitorial system” adopted by Chinese courts. In contrast to the adversarial system under common law, Chinese courts, when facing parties and their lawyers, have greater authority, having the power to decide the process and results of the judicial process. The lawyers involved are only “necessary” or “useful” when the court believes so. Therefore, lawyers generally lack incentives and confidence to pay more attention to the legal and case (re)search, because there have been many times under which the courts simply ignore the lawyers’ efforts.
 Detailed Rules for the Implementation of the Provisions of the Supreme People’s Court on Case Guidance (《〈最高人民法院关于案例指导工作的规定〉实施细则》) article10: “Where a people’s court at any level refers to a guiding case in the trial of a similar case, it shall quote the guiding case as the judgment’s reasoning, instead of citing it as the basis for the judgment.
By (袁野) Yuan Ye, 4L student, Peking University School of Transnational Law, edited by Susan Finder
As a JD/JM student at the School of Transnational Law (STL) of Peking University, and an LLB student at Xiamen University School of Law, I have had the opportunity to intern in courts at three of the four levels of the Chinese courts in three different cities. One of the tasks that I have often undertaken for the judge to whom I was assigned is searching for similar cases. Most often, my work was first submitted to the judge’s assistant, who thoroughly reviewed my work before he (or more often she) forwarded it to the judge. Similar case search is required by applicable legislation and SPC policy. The search and application of similar cases(“类案”) are now required to ensure the “uniform and proper implementation of laws” during the case hearing (adjudication) process (审判过程) in Chinese courts. ”) Under that cited guidance, the SPC defines the “unified application of the law” to include “various work for promoting the unified and correct application of the law, such as drafting and enacting judicial interpretations and other normative documents, releasing [typical and guiding] cases, implementing a retrieval system for similar cases, and holding professional judges meetings to discuss cases.”
My description of a typical search, research, discussion, and application of similar cases is based on my own experience and that of some of my STL classmates.
I. The (re)search of similar cases
A. Why (re)search similar cases?
During my internship at the Third (#3) Circuit Court of the SPC in 2018, the search of similar cases, at least in my observation, had not yet become required by SPC regulations. [Note that the editor had mentioned that SPC judges (and their assistants) were searching for similar cases in her 2017 article in the Tsinghua China Law Review.] However, some judges and judge assistants, whom I discovered were much more professional than I thought, had already (re)searched and applied analogous “similar” cases to cases under consideration.
For example, in a review report (“审查报告”) [explained in the linked article] of a complicated retrial case handled by my trial team, the judge’s assistant cited several cases that raised the same issues as authority to support her proposed holding. One case that she cited was decided by the 1st Circuit Court, which is opposite to the assistant’s position; and others were from High Courts, supporting her position. The assistant also analyzed in detail the reasoning behind the 1st Circuit case and refuted it, point by point. The whole process of applying “similar cases” was very thorough and professional.
Another good example was that in dealing with a cutting-edge case, a judge in charge (承办法官) asked all interns in the court to search for similar cases from the United States, because he knew, as an SPC judge, that there was no precedent for reference in China. The SPC regulation requiring a search of similar cases was not published until 2020, so why, in 2018, had the judge and his assistant started the search and application of similar cases—even US cases? In my mind, the motivations were quite simple and straightforward: they knew case law is practically useful and even indispensable in adjudication. (The fiduciary duty of asset managers provides a good example.)
Also, an SPC judge and judge’s assistant enjoy a great deal of freedom and discretionary power in deciding cases, so they felt comfortable applying case law in their work. At that time, the ordinary legal community (law schools and students, lawyers, scholars, etc.) was still unfamiliar with case law, not to mention (re)search and use of cases in legal education and research. [Note that in 2016, the editor wrote that lawyers and some judges used case law.] So, when I read that review report, I felt it a great pity, thinking how wonderful it would be if such an excellent application of case law could appear in the final judgment. Because it was the SPC, its judgment applying similar cases would be a good example and strong signal for the legal community: it is time to use case law.
In 2019, during a talk with an SPC judge in the 3rd Circuit, I heard that a leader in SPC, who was a vice president of the 3rd Circuit, required that all judges and their assistants attach a list of similar cases at the end of their retrial review report, to show the results of their case search. I think it is a good illustration of how certain SPC regulations come into being: first some judges engaged in a practice, then more judges joined and created a consensus, and finally leaders approved and made it a formal rule. I believe this is how (re)search of similar cases become a legally required obligation.
As of now, searching for similar cases has become a legal obligation and the scope of cases requiring the search is nearly unlimited. In practice. Few will question the necessity and legality of case research. In other words, as long as making a judgment of the case requires something more than a direct application of statutes, the research of similar cases is then a necessity of legal research rather than a simple internal procedural requirement. Such awareness has become a consensus of many judges and judge’s assistants in Chinese courts, especially those working in developed cities.
B. What is a similar case?
According to Article 4 of Guiding Opinions on Unifying the Application of Laws to Strengthen the Retrieval of Similar Cases published by the SPC in 2020, 7 sets of cases can be searched and used: guiding cases, typical/model cases issued by the SPC, other SPC cases, reference cases issued by High Courts, other High Courts cases, any cases from higher courts and previous cases decided by the court in question These cases form a pyramid of guiding effect, with the Guiding Cases that all courts must follow at the top, and previous cases of a local court at the bottom. It can be derived from this article that, two types of logic apply to the pyramid: one is the logic of administrative levels, from the SPC to district courts; the second is time: cases from more than three years ago are less worth reviewing.
The practice I experienced was similar to the rules encapsulated in Article 4. When searching cases, it is rare to find a similar Guiding Case because there are only 173 Guiding Cases, as of the end of 2021. Then other SPC cases are always first searched. If none are found, people would turn to higher people’s court cases. The search for cases from Intermediate Court or even District Courts is only persuasive when the court is of the same level or lower level. For example, during my internship in the Shenzhen Futian District Court, I felt comfortable looking at cases decided by Shenzhen Nanshan District Court. I would be much less confident to do so if I were in the 3rd Circuit.
Under Article 4, almost all cases judged by Chinese courts may be regarded as “similar” cases, as long as they are “similar” to the one at hand. How should similarity be determined? The legal definition is far from clear. Based on my experience, the similarities can be reflected by a wide variety of factors, including:
The same or similar factual factors. E.g., parties involved, type of transaction, markets, and regulations under which the transactions occurred
The same or similar legal issues. The analogy may be based not only on specific legal reasoning but more often on the applicable legal theory under the Chinese civil law system. For example, a commissioning contract (“委托合同”) is a type of typical statutory contract under the Chinese Civil Code. The search of similar cases to determine the duties of the commissioned party when managing the commissioning party’s assets is conducted under the category of commissioning contract, although the legal reasoning behind is probably fiduciary duty under trust law.
The same or similar procedural factors, such as the same courts, higher courts of this court, courts in the same position, or similar cities (such as the comparison of cases between Beijing Financial Court and Shanghai Financial Court).
I believe that leaving the definition of similarity vague is actually a good choice for Chinese courts to apply similar cases. Not all judges, especially those from lower courts, are familiar with the process of case analogy or distinguishing one case from another. Given this situation, leaving the discretionary power to determine whether a case is similar to the one under consideration would lower the barriers to applying case law.
C. How to (re)search similar cases
The judge in charge of handling the case is called the “承办人”, who bears the legal obligation to search similar cases. But in practice, the search is conducted by the judge’s assistant. If the judge’s assistant has a law student intern, typically, the intern will first do the search for similar cases to consider how best to decide the legal issues that are disputed in the case.
The China Judgments Online (www.wenshu.court.gov.cn) is the recommended database for similar case search, but no one would really care or question which database a similar case comes from. Different people may use different databases. For me, I used China Judgments Online in the 3rd Circuit Court of the SPC most. But later, the connection to this website has gradually become unstable, so I turned to the commercial databases Wolters Kluwer and Beida Fabao (“北大法宝”). To check the original version of a case, I searched China Judgments Online because it is the only official database published by the SPC, from which all other databases crawl data.
The SPC also required that “courts at all levels” increase the efficiency of case search by using AI technology and “all high people’s courts shall…establish a trial case database” Under the ideal scenario, the AI system will “push” similar cases to the judge (assistant) handling the case. For example, Shanghai courts have adopted a “Shanghai court data system for trial assistance” and which has become “a necessary assistant for the judge.” During my internship, I only tried that system a few times and did not rely on it much, because the similar case pushed on the screen is often insufficient or not as accurate as it is supposed to be. And the push of similar cases can only be done on specific computers connected to court’s intranet, which is not always easy and convenient. However, my experience is limited to the courts in which I have interned and the use of AI in similar case searches may become more widespread and convenient.
Several factors are often used as filters when searching cases in a database. In my experience, the one used most often is “案由”， [cause of action] which signals the basic legal relationship between the parties involved. Keywords expressing legal issues under Chinese civil law theory are also very useful, for example, the fiduciary duty is generally expressed as “勤勉尽责” in Chinese civil law, so this word should be used as a keyword.
It is important to note that the structure of Chinese court judgments (and rulings) is basically the same, with each part starting with the same fixed words, making the search of cases easy. For example, the holding’s reasoning always starts with “本院认为”(“this court holds that”), so it is very convenient to check whether a case is useful by locating this keyword first.
II. The use and application of similar cases
The first step after finding similar cases is for the person handling the case to analyze and apply the reasoning of similar cases (if any) to the issues of the case under consideration, or distinguish them. If any party involved has cited a Guiding Case or another similar case previously decided by the SPC in their arguments, the review report or trial report (both the review report and trial report (审理报告) are types of bench memorandum used in the Chinese courts) must then include a response to the cases cited and an explanation of whether to follow the cited case or not. The collegial panel also discusses whether the cases cited by the parties are applicable during their meeting. 
If the collegial panel finds that the case under consideration is analogous to a guiding case, the collegial panel is under a legal obligation to apply the guiding case reasoning to the current one. If the judges take the view that the current case should be distinguished from the guiding case, the draft judgment must be submitted to the Professional Judges Meeting (“专业法官会议”) or on some occasions, directly to the judicial (adjudication) committee(“审委会”) to determine (or decide) whether the collegial panel has properly distinguished the guiding case or SPC case.
In my experience, it is rare to see parties citing useful cases as authority to support their position. In my view, lawyers who are capable of using case law account for a small portion of the entire legal market. There’s still a great deal of work to be done to promote the application of case law, both for lawyers and judges.
III. The report, discussion and archiving of similar cases
For almost all cases, it is required that similar cases be listed and explained in the trial report (审理报告 or review report) compiled as a separate report and attached to the case file. In most cases, similar cases are demonstrated by a copy of its full text or by a brief summary or an excerpt of its facts. Usually, the reasoning of similar cases will be fully copied there, but without further analysis of its applicability. In other words, the list or report of similar cases is usually very simple and straightforward. Readers will find it hard to grasp the link to the current case without any explanation from the person handling it.
Later, the list or report is submitted to all meetings at which the case is discussed, such as meetings of the: collegial panel (“合议庭”), professional judges committee (“专业法官会议”), state compensation committee, or the judicial (adjudication) committee (“审委会”). During the oral report of the case, the person handling the case will introduce the similar cases found, either briefly or thoroughly (depending on the case). The introduction is not just to determine the merits of the case, but also for the judges to be aware of the possible political or social implications of the draft holding. For example, if the judge in charge of the case or the collegial panel proposes distinguishing similar SPC cases found or guiding cases, the professional judges committee or other court committees will generally be very cautious in supporting such proposal.
Once similar cases are attached to the case file in the form of an independent report, the report is incorporated into the case auxiliary (secondary) file (附卷, discussed here). As a constituent part of the case file, the similar cases and related report are forwarded wherever the case file goes (appeal or retrial), and ultimately archived. Part of SPC policy is to move to electronic files and electronic archiving of files (now being piloted). Because the similar cases and trial or review report are part of the auxiliary or supplementary file, it means the parties involved have no access to them.
Yuan Ye worked as intern judge’s assistant at the Third Circuit Court of the SPC from February to August 2018; at Shenzhen Futian District Court from May to June 2021, and at Shanghai Financial Court from March to May 2022.
 “The retrieval scope of similar cases generally includes: 1. guiding cases issued by the SPC; 2. model cases issued by the SPC and cases in which the judgments made by the SPC have taken effect; 3. reference cases issued by the higher people’s courts of the provinces (autonomous regions or municipalities directly under the Central Government) and cases in which the judgments made by such courts have taken effect; and 4. cases in which the judgments made by the people’s court at the next higher level or this people’s court have taken effect. In addition to guiding cases, priority shall be given to cases in the past three years; and where similar cases have been retrieved already in the previous order of precedence, the people’s courts are not required to retrieve more cases.”
 Ibid, Article 6: “A judge handing a case shall identify and compare the similarity between the pending case and the retrieval result to determine whether it belongs to a similar case.” No other legal definition of similar cases is provided by laws.
 Article 919 of China Civil Code: “A commission contract of mandate is a contract whereby the commissioning party and the commissioned party agree that the commissioned party handles the affairs of the commissioning part.”
 Notice by the Supreme People’s Court on the Guiding Opinions on Unifying the Application of Laws to Strengthen the Retrieval of Similar Cases (for Trial Implementation) (“最高人民法院印发《关于统一法律适用加强类案检索的指导意见（试行）》的通知)” Article 3: “A judge handling the case shall retrieve similar cases based on the China Judgments Online (www.wenshu.court.gov.cn), the trial case database, etc., and be responsible for the veracity and accuracy of the retrieval.”
 The use of AI has been regarded as a key step to create Smart Courts (“智慧法院”), see Opinions of the Supreme People’s Court on Accelerating the Construction of Smart Courts（最高人民法院关于加快建设智慧法院的意见）art.14 to art.18.
 Circular of the Supreme People’s Court on Issuing the Guiding Opinions on Unifying the Application of Law and Strengthening the Retrieval of Similar Cases (for Trial Implementation) (“最高人民法院印发《关于统一法律适用加强类案检索的指导意见(试行)》的通知”) article 12: “People’s courts at all levels shall actively promote the retrieval of similar cases, strengthen technology research and development and application training, and enhance the intelligence and precision of similar case push. All high people’s courts shall make full use of modern information technology to establish a trial case database and pave the way for the development of a unified and authoritative trial case database nationwide.”
 See Artificial Intelligence Makes Judicature More Just, Efficient and Authoritative–the Theoretical Analysis and Practical Exploration of Artificial Intelligence in Judicial Field (“人工智能让司法更加公正高效——人工智能在司法领域应用的理论分析与实践探索”), Cui Yadong(崔亚东), ChinaTrial(中国审判), 2017, available with translation at https://law.stanford.edu/china-law-and-policy-association-clpa/articles/. The author is the President and Chief Justice of Shanghai High People`s Court.
 Implementing Measures of the Supreme People’s Court on Harmonization of the Application of Laws (Fa  No.289) (“《最高人民法院统一法律适用工作实施办法》”,(法〔2021〕289号))”, Article 8: “For the cases for which similar cases shall be retrieved as provided in Article 6 hereof, the collegial panel shall include the harmonized standards for the application of law for the cases in the content of deliberation. During the trial, where the public prosecution organ, the parties concerned and their defenders or agents ad litem submit the guiding cases or the effective judgments of the Supreme People’s Court of similar cases in support of their claims, the collegial panel shall include whether the submitted cases or the effective judgments and pending cases belong to the similar cases in the content of deliberation.”
 Implementing Measures of the Supreme People’s Court on Harmonization of the Application of Laws (Fa  No.289) (“《最高人民法院统一法律适用工作实施办法》”,(法〔2021〕289号))”, Article 9: “If a pending case is similar to the guiding case retrieved in terms of basic merits and legal application, the collegial panel shall make a judgment with reference to the main points (裁判要点) of the guiding case. In the judgment with reference to a guiding case, the guiding case shall be cited as the reason for judgment, but shall not be cited as the basis for judgment. If a guiding case is cited in the reason for judgment, the number of the guiding case shall be indicated.”
 Implementing Measures of the Supreme People’s Court on Harmonization of the Application of Laws (Fa  No.289) (“《最高人民法院统一法律适用工作实施办法》”,(法〔2021〕289号)), Article 10: “ Where the proposed judgment results of a pending case are inconsistent with the application of law standards for guiding cases and the judgments of the Supreme People’s Court for similar cases, or the proposed judgment results will form new standards for the application of law, the collegial panel shall suggest submitting the case to the departmental professional judges session for discussion; if the president or chief judge finds that a pending case has any of the aforesaid circumstances, the departmental specialized judges session shall be convened as required to discuss the case. Where it is inappropriate to submit the cases specified in the preceding paragraph to the professional judges session for discussion due to confidentiality and other reasons, they shall be reported to the leader in charge of the People’s Court level by level for approval, and may be directly submitted to the Judicial (Adjudication) Committee for discussion.”
 Implementing Measures of the Supreme People’s Court on Harmonization of the Application of Laws (Fa  No.289) (“《最高人民法院统一法律适用工作实施办法》（法〔2021〕289号）”) Article 6: “If a case in handling has any of the following circumstances, the responsible judge shall retrieve similar cases: (1) The case is proposed to be submitted to the judicial committee or the specialized judges session for discussion; (2) The case lacks specific judgment rules, or has not yet reached unified judgment rules; (3) The case is major, difficult, complex and sensitive; (4) The case involves group disputes or raises widespread social attention, which may affect social stability; (5) The case may conflict with judgments of the Supreme People’s Court on similar cases; (6) Relevant entities or individuals allege that the judge has conducted the trial in violation of the law; (7) The Supreme People’s Procuratorate has protested; (8) During the trial, the public prosecution, the parties and their defenders, or agents ad litem submit guiding cases or the effective judgments of the Supreme People’s Court on similar cases to support their claims; and (9) The president or chief judge retrieves similar cases in accordance with the authority for trial supervision and administration. For the retrieval of similar cases, it is allowed to retrieve only the guiding cases released by the Supreme People’s Court and the effective judgments of the Supreme People’s Court.
 Implementing Measures of the Supreme People’s Court on Harmonization of the Application of Laws (Fa  No.289) (“《最高人民法院统一法律适用工作实施办法》（法〔2021〕289号）”) Article 7: “For cases for which similar cases shall be retrieved pursuant to the provisions of Article 6 hereof, the responsible judge shall provide an explanation on the retrieval of such cases in the trial report, or prepare a special retrieval report for such cases. The retrieval explanation or report for similar cases shall reflect the retrieval results of such cases objectively, comprehensively, and accurately, and shall be submitted together with the collegiate bench for deliberation or the specialized judges session, the compensation committee, the judicial relief committee, and the adjudication committee for discussion. The retrieval report for similar cases shall be incorporated into the auxiliary file together with the case.”
A brief summary of the Population Aging Opinion follows, along with a bit of background information and some very brief comments.
It is one of the latest in a large number of “judicial services and safeguards” (also translated as guarantees) documents, usually issued in the form of opinions, that the SPC has issued in the Xi Jinping New Era.
Although this steadily growing group of SPC documents has not attracted much attention by either academics or practitioners, I take the view that they are worthy of further attention, as they illustrate a number of New Era themes. This blog has published a number of analyses of earlier judicial services and safeguards opinions and I have written two book chapters related to services and safeguards opinions as well. These opinions package related measures, some relating to substantive and procedural law and some related to administrative matters, as broadly understood. The SPC flags legal issues (relevant to the courts) in these opinions. What it flags imbeds the SPC’s analysis of the possible impact of the national strategy or policy on the courts and relevant measures needed to fulfill the obligations of the courts under the strategy or policy. The SPC tweaks judicial policy to respond to the implications of the national strategy or policy. Follow-up measures implementing specific provisions are usual, as the Population Aging Opinion illustrates.
From having read the Shanghai Jingan District People’s Court 2020 White Paper on protecting the rights of the elderly, knew that the SPC was aware that the aging of the Chinese population is having an impact on the court system, That court has had a specialized division focusing on the elderly for thirty years, although the title of the division has evolved along with related court policy I. I recommend the White Paper to any readers who are interested in elderly-related issues in China.
Specialized focus on legal issues related to the elderly does not seem to be widespread either among practitioners or academics. From my inquiries with those teaching in Chinese law schools and in legal practice in China, elderly law is new. The Ministry of Justice issued a notice on legal services for the elderly, but I surmise that the notice caught few persons’ attention with the nationwide concern about the spread of Omicron in China and lockdowns across many Chinese cities.
The SPC’s #1 Civil Division led the drafting of the Population Aging Opinion. That division that is in charge of “traditional” civil law matters, such as family law disputes (including inheritance, marriage, divorce, and support), as the explanatory press release was entitled as “a responsible person of the #1 Civil Division ” answers questions about the Population Aging Opinion. It is clear that the drafters also consulted with colleagues in other SPC divisions, as many provisions relate to matters outside the competence of the #1 Civil Division. This type of package document effectively coordinates different divisions and offices of the SPC to work together toward fulfilling the SPC’s responsibilities in making the national strategy successful.
The Population Aging Opinion is relatively short, especially when compared to the Belt & Road-related Opinions. It has three sections: the introductory one, framing the political background; the second, on maximizing adjudication functions; and the third, one on reform-related matters.
The Population Aging Opinion is linked to last November’s National Strategy. This section is typical of the introductory section of services and safeguards opinions. It calls for courts to raise their political positions, adhere to the guidance of Xi Jinping thought, and now that Xi Jinping legal thought has been canonized, implement those principles as relevant to the protection of the rights of the elderly. Harmonizing with greater themes in Xi Jinping thought, the part relating to guiding ideology reiterates the importance of traditional Chinese values. Those values are the “traditional Chinese virtues of filial piety and respecting the elderly.” The range of disputes mentioned in the second part and the typical cases signal that traditional virtues of filial piety seem to be respected in the breach among some part of the Chinese population.
2. Maximizing adjudication functions
This section is the longest (as is typical with such documents) and a careful reader can easily see typical legal problems that appear in the Chinese courts that involve the elderly. Typical of services and safeguards opinions, each article packages a number of sub-issues. This section includes articles on elder care, including services contracts and occupancy rights (Article 8); rights of rural elderly to land (Article 9); disputes over medical service contracts (Article 10); employment rights of the elderly (Article 11); cracking down on crimes against the elderly, including elder abuse and elder fraud (Article 12).
This analysis focuses on the following four groups of issues: 1) marriage and family cases; 2) inheritance; 3) domestic violence; and 4) guardianship issues. Most of these issues are common to other societies around the world.
Article 4 relates to marriage and family cases. The first sentence, “cases regarding disputes over the support for the elderly shall be tried in accordance with the law to guarantee the basic living needs of the elderly” signals that many disputes relating to the elderly involve the failure of grown children to provide financial support for the elderly. This is also flagged in accompanying typical case #3 and other SPC typical cases. The Population Aging Opinion calls for using mediation to encourage sons and daughters to provide “spiritual support” (such as visitation) for the elderly, an obligation now incorporated into the Civil Code. Because it reiterates that older people enjoy freedom of marriage, it signals what the SPC states explicitly in the typical cases, grown children are too often interfering in the divorce of their parents or the second marriage of a parent. The Jingan Court White Paper noted a steady increase in the number of divorces among the elderly:
The steady rise in the number of divorce disputes reflects, to some extent, the changing understanding of marriage among older people, whose expectations of “old age” are not only limited to making do with what they have, but are becoming more aware of the need to truly follow their heart and actively strive for their own happiness in their old age.
The last provision in Article 4 responds to the increasing number of property disputes involving elderly people who cohabit, reminding lower court judges to consider the period of time the couple lived together, the contributions made by both parties, the interests of both parties shall also be considered, and other factors so that these disputes can be fairly decided.
Article 5 relates to inheritance and wills and signals that the wishes of the elderly should be respected. It flags the system of estate administrators, now incorporated into the Civil Code, apparently a concept adapted from Taiwan’s legal system. This recent article published by the Shanghai Bar Association has a useful update.
Article 6 relates to elder abuse, calling for the better protection of the personal safety and the property of the elderly, calling for better coordination among related departments. The first typical case involves elderly abuse. Article 6 calls for improving guidance on the burden of proof for elderly victims, better linkage with psychological counseling, and priority status for victims of elder abuse. A quick search of the public health literature finds studies on elder abuse in China, particularly in rural areas and among the less educated, and that Covid-19 has had a negative impact. One study found that much of the abuse was either neglect or financial abuse. This article, summarizing and analyzing a survey by the national and local aging authorities, found that at least 60% of respondents reported some type of abuse, either physical, mental, intimidation, or violation of their legal rights.
Article 7 concerns guardianship. It encourages the elderly to issue an advance guardianship directive. It reflects special concerns about abuses committed by guardians when the elderly person is in some way capacitated and those who abuse the guardianship system for their own benefit, also reflected in typical case #2.
3. Reform measures
The third section of the Population Aging Opinion concerns judicial reforms to be applied to aging issues. Among those are:
the Fengqiao experience (here referring to diversified dispute resolution), and integrating the resolution of elderly-related disputes in cross-institutional arrangements involving the courts at the basic level.
integration of socialist core values into the trial of cases involving the elderly: and family trial reforms.
The last article concerns improving case registration and other services related to elderly persons filing a case. This article likely involved input from the SPC’s case registration division and some type of guidance, either publicly available or internal can be expected. Although the Chinese courts are promoting smart courts, this last article recognizes that many elderly either need in-person, phone, or other non-smartphone procedures, or an assistant to help them access court facilities.
Many of the issues addressed in the Population Aging Opinion are not limited to China, whether it is elder abuse, abuse of guardianship, re-marriage of the elderly, employment rights of the elderly, or medical care contracts. Elder law issues could possibly be a useful area in which the Chinese courts (perhaps in cooperation with one of the Chinese law schools), could engage with international specialists in a workshop setting and share experiences. It is likely to be seen as an area of “foreign beneficial experience.”
Because the Supreme People’s Court (SPC) is now issuing more and more typical cases, likely because General Secretary Xi Jinping has said “one case is better than a dozen documents (习近平总书记强调， “一个案例胜过一打文件”), this blogpost will provide more background on the Supreme People’s Court’s (SPC) typical (典型案例) and major cases (十大案件). It includes a general description of how typical cases are “tempered.” For those who miss the reference, it’s to the old Russian book “How Steel is Tempered, pictured above. My understanding is that “major cases” are considered a type of “typical case” for the purposes of the SPC’s required search of cases under its 2020 guidance and so I’ll use the term “typical case” to cover both major and typical cases. I have not seen official definitions of either term.
I’ll first summarize how the SPC views the role of “typical cases” and the legal basis for issuing them, drawing on what I have previously written and a draft article on the long road to publication, and then explore a topic little explored in English–how the SPC compiles or edits (the Chinese term is 编写) typical cases. I have not seen a Chinese article that sorts out the various types of typical cases systematically. As readers of this blog know, I have long had an interest in Supreme People’s Court (SPC) typical /model/exemplary cases( 典型案例) and related types of cases such as major cases (大案件).
The Role of Typical Cases
The SPC issues typical cases as part of its function to supervise and guide the lower courts, deriving from Article 10 of the Organic Law of the People’s Courts. The SPC has done so for many years. However typical cases have taken on a greater role in the Xi Jinping New Era, symbolized by the quote above.
Guiding the lower courts
Typical cases are a type of SPC soft law. They are a tool by which the SPC seeks to unify the judgment (adjudication) standards of the Chinese courts. As mentioned before, they are a means by which the SPC seeks to harmonize the decisions of the Chinese courts to be consistent with SPC policy (or said another way, strengthen the firm guiding hand of the SPC).
That guidance can relate to substantive or procedural issues, because the issues that come before the Chinese courts far outpace the infrastructure of existing law, including judicial interpretations. Additionally, given the role of the SPC in social governance, typical cases also enable the SPC to do its part to further the latest Party policy. This is more complex than appears. One aspect relates to issues at the intersection between law and morality, such as the second batch of cases in which the people’s courts promote socialist core values.
Guiding the General Public
The SPC issues typical cases to guide the general public to fulfill its obligations under the popularization of law responsibility system established through a 2017 Central Committee State Council document and implemented through an inter-ministerial joint conference on the popularization of law, Section 6 of that 2017 documents calls for judge, procurators, administrative enforcement personnel, and lawyers to establish a “using cases to explain the law” system. The document calls on judges, etc. to collect, sort, research, and issue cases and establish a database, using typical cases for the purposes of guidance, standardization, prevention, and education. At the end of 2017, the SPC issued its own document to implement the Party-State Council document, 人民法院贯彻落实〈中共中央办公厅 国务院办公厅关于实行国家机关“谁执法谁普法”普法责任制的意见〉的实施意见》(SPC Explaining the Law Opinions), with several articles promoting the use of typical cases to educate the public. In January of this year, President Zhou Qiang publicized ten cases illustrating the rule of law in the New Era, praising each case as illustrating the vivid practice of Xi Jinping’s rule of law thought in the people’s courts, and the concentrated embodiment of socialist core values and the spirit of the rule of law.
The cases selected and the extent of detail in typical cases intended to guide the general public are different from those intended to guide the lower courts.
How SPC typical cases are “tempered”
I draw on some writings on how to write (the Chinese term is 编写, closer to compile) a model case, instructions to the lower courts on how to submit a case, and the “revolutionary experience” (革命经验) of several friends who have been on the editorial side of typical case publishing to explain how SPC typical cases are “tempered.” Several have been on the drafting side as well as the editorial side. Judge Guo Feng’sdescription of compiling guiding cases also provides insights.
Which SPC institutions issue major and typical cases?
The SPC and its constituent divisions and institutions (this is meant to include the China Institute of Applied Jurisprudence and the National Judges College) issue typical cases and major cases. I am not aware of a document that distinguishes major cases from typical cases. I’ve noticed “10 major cases” in the areas of intellectual property, commercial, and drugs crime law ), but those announcements do not distinguish major from typical. I surmise the notice that the SPC sent to the lower courts soliciting submissions for major and typical cases sheds some light on the difference, but I have not come across such notices.
Annual major intellectual property cases (and annual typical intellectual property cases are issued by the SPC General Office. It is my understanding that judges from the SPC Intellectual Property Court (SPCIPC) and #3 Civil Division (in charge of intellectual property) recommended the selected cases.
The #2 Civil Division selects the 10 major commercial cases announced annually. The 10 major typical drugs cases have been selected by relevant departments of the SPC, perhaps meaning the Research Office together with one of the Criminal Divisions.
I surmise that the vice president in charge of the relevant division or matter has approved their release.
Which SPC institutions issue typical cases?
This expanded, but likely incomplete list supplements an earlier blogpost in which I listed SPC institutions that issue typical cases. I am not aware of rules governing the approval of SPC typical cases and so the process is understood to be flexible. It is my understanding from discussions with knowledgeable persons (and as I have written before), that customary practice governs the approval process. It appears to often be the vice president responsible for the division or institution, possibly involving the SPC President himself.
The SPC General Office (办公厅), edits the Supreme People’s Court Gazette (最高人民法院公报). Readers of this blog should note that the web version does not include all content of the Gazette, unlike the Gazette of the State Council. As an aside, it is unclear how publicity to the reading public is promoted if the full version is not available online. It appears to be generally inconsistent with the practice of other supreme courts. The cases in the Gazette include selected court documents (裁判文书选登) and cases (案例), generally totaling 20-30. The first type is cases decided by various trial divisions of the SPC and reflects their views on certain issues, while the second type is model cases submitted by the local courts (through the provincial high courts), which have been reviewed by the editor of the Gazette, conferring with the various trial divisions of the SPC if needed. These cases are considered to be more technical within the court system and are widely considered when judges undertake the required similar case search.
The SPC General Office issues monthly SPC typical cases (available here). These are selected by the division or office in charge of the topic involved, so that typical cases involving family law matters would be selected by the #1 Civil Division, while the Belt & Road typical cases would be selected by the #4 Civil Division. Sometimes typical cases are issued jointly with a relevant ministry, such as those issued in 2021 concerning 996 labor cases, and would reflect the substantive and political concerns of that ministry. Some of the cases selected may not have legal significance but are selected to harmonize with the leadership’s current policies.
The Judicial Reform Office issues typical judicial reform “cases” after approval by the SPC’s judicial reform leading small group. These typical cases are not “cases” in the sense of the substantive divisions of the SPC, but rather are focused on various types of judicial reform projects that the Judicial Reform Office considers are useful experiences replicable by lower courts around the country.
Selection of People’s Court Cases(人民法院案例选), a quarterly publication of the China Institute of Applied Jurisprudence (discussed previously on this blog). These cases are published in paper version only, but lower courts subscribe to them widely. These cases are considered more technical.
The National Judges College and the SPC’s Judicial Case Academy (located at the National Judges College) edit and issue 中国法院【】年度案例， divided into subject matter, edited by the Judicial Case Academy. These cases are considered more technical.
Additionally, as mentioned earlier, typical cases can be found in the People’s Court Daily and People’s Justice (人民司法). Presumably, the editors of those publications make the final selection, but likely work with the substantive divisions of the SPC when doing so.
Several of the circuit courts issue a “case a week” and the SPCIPC does so as well.
The SPCIPC issues case gists, also considered analogously to “typical cases” to intellectual property judges. Some SPC circuit courts do as well.
Although, as will be further discussed below, “political correctness” is considered when selecting typical cases, some of the typical or major cases listed above are selected more for policy reasons, while others are considered by those in the inside as more technical.
How does a case in the local courts become an SPC typical case?
The roadmap from a case in the local courts to an SPC typical case can be gleaned from a detailed notice that the China Institute of Applied Jurisprudence (CIAJ) issued in the spring of 2021. The CIAJ issued the notice to courts at the provincial level (including the Xinjiang Construction & Production Corps Higher People’s Court and the People’s Liberation Army Military Court), seeking contributions to its Selection of People’s Court Cases (人民法院案例选). These principles apply similarly to SPC Gazette, typical or major cases that the SPC itself issues, although the format of the published case varies.
The higher people’s courts are in charge of reporting them to the SPC–principle three in the notice (the organization reports them 组织报送)—-although authors theoretically can submit directly. That means that local court judges must obtain internal approval to submit their cases level by level.
I surmise that the gatekeepers at the provincial level vary, depending on the area of law. It is likely that the Research Offices of the Higher People’s Courts are responsible for reviewing draft submissions and recommending ones to be submitted to the CIAJ, while the divisions in charge of cross-border commercial matters would compile cross-border commercial cases for submission to the #4 Civil Division. It is likely to be a collective exercise at the provincial level, with a final sign-off from a person in a leadership position.
The notice also provides details on what the lower courts should report–the case, which should be published on the SPC case database. However, this does not appear always to be the case, as noted by Professor He Haibo of Tsinghua University (and coauthors) in their article on the transparency of court decisions. The case that the lower court submits is to be reported in a specific edited format (the website of the CIAJ has detailed guidance), with the original judgment or rulings attached. Most SPC typical cases I have seen do not provide the case numbers for the related cases and in certain cases, the cases themselves are not public. The recent third batch of Belt & Road typical cases is among the exceptions to the general practice.
As for the type of case analysis that is required:
The case analysis provides guidance to judges and others in the legal profession because it supplements legislation, judicial interpretations or judicial policy documents. To do so the case must be typical, novel, difficult, and correct. As to what that means:
Typical refers to the legal relationship, law applied, and the usefulness of the case as a reference for others.
Novel relates to legal issues arising after the promulgation of new laws and regulations, judicial interpretations or new policies, or although the issues or although the legal relationships are not new, new circumstances or technology etc. have emerged, which means the case is novel.
Difficult often refers to the law being unclear or the case being controversial.
Correct means both legal and politically–the case and the analysis adhere to the concept of socialist rule of law with Chinese characteristics, embody socialist core values, and are consistent with Xi Jinping’s legal thought. The political correctness requirement is not new–it is consistent with what I wrote about SPC Gazette cases in 1993. Therefore the typical cases involving the Belt and Road will need to be consistent if not further intended to further China’s Belt and Road policies and other policies relating to cross-border dispute resolution.
Case evaluation consists of the comment and analysis of the opinions, reasons, and results in the judgment document by the editor. It is not only a simple repetition of the reasons for the judgment, but more whys…. The evaluation and analysis should be discussed in depth in combination with relevant laws and regulations, and even the legal theory and legal spirit behind the law. A case analysis with a profound commentary is often a small paper with a clear and a strong argument.
A small group of judges or other staff at the SPC reviews the typical case submitted from the provincial high courts. In smaller divisions, a judge and judge’s assistant are responsible for an initial review, while in larger divisions, a small group of judges and judge’s assistants do so. But the persons who will be involved in the selection will depend on the SPC institution responsible for the selection. According to the notice, the CIAJ involves prominent academics in the process, but the initial filtering is likely done by a team involving CIAJ post-docs (I surmise). Those doing the initial review will select more cases than the targeted number. Generally, the professional judges meeting of the division involved will review the selection, with the deputy and head of the division reviewing the selected cases and determining the final selection to be made to SPC leadership. It is likely that a report accompanies the selection of the typical cases so that those in leadership understand the significance of each case. Having a case selected by the SPC as a typical case is considered prestigious to the individual and the court involved. (For one of many examples, see this notice about a series published by the Shanghai Financial Court, noting that many of their cases had been selected as Gazette or other types of typical cases).
Typical cases are one of many tools in the SPC guidance toolbox. Its major use is to guide the lower courts, given dynamic Party policy and statutory law (and possibly judicial interpretations) that leave courts a great deal of discretion. The SPC uses typical cases to guide the lower courts timely to apply the law and judicial interpretations correctly in specific cases, harmonized with current policy, to better unify judgment (adjudication) standards.
Second, the SPC does so to fulfill its obligations under the popularization of law responsibility system to guide and educate the general public. This, too, is not new, just repurposed for the New Era.
Third, the fact that some typical cases are selected to harmonize more closely with current policy rather than for their legal significance reflects the fact that the Chinese judiciary operates within a system in which political quality (政治素质) takes the leading role in the assessment of judges, as exemplified in November 2021 SPC guidance.
Many thanks to several knowledgeable persons for their comments related to typical cases, which will be further incorporated into a later blogpost. Special thanks to an anonymous peer reviewer for insightful and helpful comments on an earlier draft of this blogpost.
Readers of this blog who either know me personally or have looked at About Me will know that I spent almost 12 years at the law firm Freshfields Bruckhaus Deringer, thanks to Tom Jones (Thomas Edwin Jones), then a partner in the Hong Kong office of what was then Freshfields, now Freshfields Bruckhaus Deringer (Freshfields). He was most recently a senior consultant with Fangda Partners, where he worked with several of our former colleagues, including Michael Han (韩亮) and Colin Law. He passed away last week (on 17 March) at the age of 72. He had suffered from Amyotrophic lateral sclerosis (ALS). Among the most frequent comments from former colleagues in our Freshfields “old cadre (老干部)” Wechat group that “he was a good man” and “the best mentor.” Our many former colleagues are partners in other law firms or in-house counsel with major companies, while some who have left the law altogether and several of us are (or were) in academia.
I was privileged to be part of his multinational team of “China lawyers,” spread out among the Freshfields offices in Hong Kong, Beijing, Shanghai, sometimes London, and often one or more cities in Germany. Those of us from “the West” often had had a previous career before joining the team, and our mainland Chinese colleagues in the Beijing and Shanghai offices were always graduates from top law schools, with at least one 高考学霸 (top scorer in the gaokao). Because Freshfields is a Magic Circle firm, we regularly hosted guest lawyers from the Lord Chancellor’s Scheme for Chinese Lawyers, several of whom later joined the firm.
When I decided to leave City University of Hong Kong in 1994, he was one of the very few law firm partners with whom I interviewed who recognized that my academic background could be an asset to the firm. He fostered a sense of collegiality and team spirit that I subsequently discovered was a rare phenomenon. He brought people together even after he left this world.
In the period between 1 January and today (2 March 2022), the Supreme People’s Court (SPC) issued quite a few judicial interpretations, judicial documents, and typical cases. This blogpost focuses on one judicial interpretation; several Greater Bay-related interpretations and documents; and several sets of typical cases issued since the beginning of the year. Apologies to readers that I do not have time to analyze any of this properly-I am doing the first of many major revisions of an academic article, for submission.
Judicial interpretations: General Part of the Civil Code
In late February, the SPC issued the Interpretation of the General Part of the Civil Code (最高人民法院关于适用《中华人民共和国民法典》总则编若干问题的解释). I had previously surmised that it would be finalized before the National People’s Congress (NPC) meeting in March. It went into effect on 1 March 2022. An SPC press release is found here, with background information on drafting, mentioning that the drafters had completely accepted the views of the Legislative Work Commission (LAC) in the drafting process, for reasons previously discussed. I surmise in the meeting rooms in which the draft interpretation was discussed, there was a robust exchange of views. A more recent article, published after this blogpost was originally written), that I recommend to those with an interest (Understanding and Application of the General Part), has more detailed information about the drafting.
As discussed earlier, the drafters solicited views within the court system and among some of the leading Beijing law schools. The press release highlighted the importance of integrating socialist core values into the interpretation. Commentary by a responsible person of the Research Office of the SPC here. That office led the drafting of the General Part, as flagged in this blogpost. The authoritative person (perhaps Judge Guo Feng, but unknown), mentions the integration of socialist core values into the General Part of the Civil Code, as is required by the ongoing SPC plan and a multi-institutional Party document that has not been made public. The “Understanding and Application of the General Part) was written by Judge Guo Feng, Chen Longye (mentioned here), and Liu Ting, a judge’s assistant, whom I surmise was seconded to the Research Office from the Nantong (Jiangsu) Intermediate People’s Court. Therefore I assume that the authoritative person quoted in the earlier press release was in fact Judge Guo.
The article by Judge Guo and colleagues details the many entities that saw the draft of the interpretation: relevant entities within the SPC; all the higher people’s court; as well as the Central Publicity Department (中宣部), Central Political-Legal Commission (中政委),the office of the Central Governing the Country According to Law Commission (中央依法治国办), the Supreme People’s Procuratorate (最高人民检察院), Ministry of Public Security (公安部)、Ministry of Justice (民政部)、State Administration of Market Regulation (市场监管总局), China Law Society (中国法学会), China Academy of Social Sciences (presumably the Law Institute), the All-China Federation of Industry and Commerce, and others. They twice sought comments from the LAC in writing(两次书面征求全国人大常委会法工委的意见)–this means through formal institution to institution communications.
As I wrote in an earlier blogpost, it appears that the SPC is both “serving the greater situation” by implementing in the courts the Party’s plan to integrate socialist core values in plans to legislate and amend legislation（社会主义核心价值观融入法治建设立法修法规划） [the new plan, entitled 关于建立社会主义核心价值观入法入规协调机制的意见（试行）] while at the same time seeking to deal with many of the difficult legal issues that face it.
The General Part covers the following issues: capacity for civil rights and capacity for civil conduct, guardianship, declaration of disappearance and declaration of death, civil legal acts, agency, civil liability, statute of limitations, and supplementary provisions. Professor Wang Liming’s highly authoritative commentary, posted on an SPC Wechat account, is found here. Professor Yang Lixin has also published an authoritative article. I recommend this version, with red highlighting by now-former SPC judge Xiao Feng of the important points of Professor Wang, Yang, and Shen Weixing, dean of Tsinghua University Law School and Professor Yu Fei of China University of Political Science and Law.
Greater Bay Area Judicial Assistance and Judicial Policy
The SPC issued several Greater Bay related documents since 1 January, listed below, which relate to SPC policy on developing civil judicial assistance with the Hong Kong and Macau Special Administrative Regions:
Important background found in the press conference, in which Judge Si Yanli and others involved in negotiating the Arrangement spoke. My earlier blogpost explains why Arrangements are approved as judicial interpretations, although they do not fit the formal jurisdiction of one: “Judge Si mentioned that for the Supplementary Arrangement to be effectively implemented on the mainland, it must be transformed into a judicial interpretation.” Those following legal developments in the two SARs should note the following language in the press conference: “the Outline of the Greater Bay Area and the Hengqin Plan both propose to promote the convergence of rules and coordination of mechanisms in the Greater Bay Area of Guangdong, Hong Kong, and Macao. Inter-regional judicial assistance is an important way to reflect Chinese characteristics, highlight the advantages of “two systems” and achieve convergence of legal rules and mechanisms. 《大湾区纲要》《横琴方案》均提出要推进粤港澳大湾区规则衔接、机制对接。区际司法协助是体现中国特色、彰显“两制”优势，实现法律规则衔接、机制对接的重要途径”。This theme is further developed in two January, 2022 policy documents linked below.
3. Opinions on Supporting and Guaranteeing the Comprehensive Deepening of the Reform and Opening-up of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone 关于支持和保障全面深化前海深港现代服务业合作区改革开放的意见， linked to the Central Committee and State Council’s September, 2021 document on Qianhai/Hong Kong and Opinions on Supporting and Guaranteeing the Construction of Hengqin Guangdong-Macao Deep Cooperation Zone 关于支持和保障横琴粤澳深度合作区建设的意见, linked to the Central Committee & State Council’s September document on Hengqin/Macau. It is unclear to me whether the SPC solicited the views of the two SARs on these documents. As mentioned above, it mentions national policy to achieve convergence of legal rules and mechanisms in the Greater Bay Area and mentions several aspects of that policy that is relevant to dispute resolution. Among those are (numbers are from the points in the relevant Opinion):
4. Expanding the jurisdiction of the Qianhai court, including permitting it to take cases when the parties have agreed on the jurisdiction of the Qianhai, but there is no connection to the dispute. This appears to be another piloting (the SPC’s Lingang Opinion has a similar provision) of a possible future amendment of the Civil Procedure Law to abolish the closest connection rule for cross-border jurisdiction (see Professor Vivienne Bath’s research on this issue);
5. Work on (加强) establish an inter-regional judicial assistance system with Chinese characteristics, consider an electronic platform for civil and commercial judicial assistance in the Guangdong-Hong Kong-Macao Greater Bay Area;
8. Explore the establishment of a unified qualification recognition system for Hong Kong and Macao mediators to practice in the Guangdong-Hong Kong-Macao Greater Bay Area. The lawyer qualification system requires that the lawyer be a Chinese citizen, consistent with Chinese legislation. Query whether the same requirement will be imposed on mediators. This would be disadvantageous for Hong Kong mediators who are not Chinese citizens.
I highly recommend Judge Si Yanli’s recent academic article on Greater Bay judicial assistance issues for those with an interest in this topic.
It is my hope that someone can undertake further analysis of these documents.
SPC Typical Cases
Perhaps because General Secretary Xi Jinping has said “one case is better than a dozen documents (习近平总书记强调， “一个案例胜过一打文件”), in the run-up to the “Two Meetings,” the SPC has issued quite a few typical cases. Typical cases are intended to guide the courts and the general public.
Nine typical cases on protecting the rights of juveniles 未成年人权益司法保护典型案例, well worth further analysis, with several involving family education orders to parents and one involving failure of a hotel to verify the identity and contact information of a juvenile couple that checked into a hotel room (where they had sex);
Ten typical cases on solid waste pollution人民法院依法审理固体废物污染环境典型案例, seven criminal cases, two civil cases, and one administrative case. Three involve public interest litigation, two by the procuratorate and one by a civil society organization;
The third set of Belt & Road-related cases 最高法发布第三批涉“一带一路”建设典型案例. The cases are not necessarily specifically connected with the Belt & Road but involve Chinese cross-border commercial, maritime, and arbitration issues. One China International Commercial Court (CICC) case is included, a case on an infrastructure payment guarantee, as is the Brentwood case. The SPC’s comments on the CICC case are consistent with my comments published earlier on this blog about the role of CICC in providing soft precedents for the Chinese courts: “the principle of attribution has an exemplary guiding role for the resolution of similar disputes in the future (该归责原则对今后类似纠纷案件的解决具有示范指导作用).”
Accompanying the release of the General Part judicial interpretation was the first set of Civil Code typical cases The typical cases are not limited to illustrating the General Part but relate to different parts of the Civil Code, also stressing socialist core values.
A first set of typical cases of the courts providing services and safeguards to the free trade zones 人民法院服务保障自由贸易试验区建设典型案例. The cases are intended to guide the lower courts and general public, and as the introduction states illustrate the “achievements of the people’s courts in actively creating a business environment that is ruled by law, internationalized, and convenient.” For those interested, see my earlier article on the SPC and free trade zones, available on
The second batch of cases in which the people’s courts promote socialist core values 第二批人民法院大力弘扬社会主义核心价值观典型民事案例. These cases are worth further analysis for what they show about the treatment of the elderly, among other social issues.
In early November 2021, the Supreme People’s Court (SPC) issued a new Guiding Opinion regarding Further Improving the Trial Supervision and Management Mechanism for the Four Types of Cases (关于进一步完善“四类案件”监督管理工作机制的指导意见translationhere) (“Four Types of Cases Guiding Opinion” or “Guiding Opinion”). Official commentary by the drafters is found here. The “Four Types of Cases” refer to certain types of cases, all politically or socially sensitive, that require special handling within the court system and involvement by the relevant court leadership. The term “Four Types of Cases” originates with the 2015 SPC document “Several Opinions on Improving the Judicial Responsibility System of the People’s Courts,” (2015 Opinion) although special treatment within the Chinese court system for special types of cases is not new, as I described in my (the Monitor’s) 1993 article. This Guiding Opinion illustrates themes newly stressed in General Secretary Xi Jinping’s 15 February 2022 article on the socialist rule of law.
While the “Four Types of Cases” are a little-known concept outside of China, they are well known within the Chinese court system and are embedded in other court guidance. The Four Types of Cases Guiding Opinion draws together threads of related policy to provide standardized principles on:
Redefined “Four Types of Cases;”
Mechanisms for flagging cases as one of the “Four Types of Cases” at each stage of the court process;
Mechanisms for special treatment of these cases; and
A range of mechanisms for involving more senior judges in the handling of these cases while monitoring their involvement.
The Four Types of Cases Guiding Opinion provides insights into the operation of the Chinese judicial system, particularly after the 19th Party Congress and the ongoing transformation of the judicial system and legal system.
This blogpost gives a summary of the background to this Guiding Opinions before examing its details and providing some comments linking to larger themes.
1. Origin of the “Four Types” of Cases
a. The 2015 Opinion
The 2015 Opinion implements the broad principles in the 4th Plenum of the 18th Party Congress decision and 4th Judicial Reform Plan Outline by setting out guidelines for greater autonomy and greater responsibility for judges, known as the “judicial responsibility system.” It contrasts to the pre 4th five-year judicial reform plan period when all court decisions needed to be approved by a person (or committee) in a leadership role in a court. It also requires the preferential use of a random allocation of cases system, while pre-reform, court leaders at various levels designated judges hearing cases.
At the same time, the 2015 Opinion also imposed more responsibility or accountability on frontline judges, while reducing (or eliminating) the involvement of court leaders not involved in the hearing. It gives court leaders (a court president, vice president, and division head) supervisory and management authority. Other guidance prohibits court leaders from involving themselves in cases handled by other judges, with certain exceptions. An exception was made for “major, difficult, and complicated cases” when court leaders could designate collegiate panels to conduct hearings (Article 7). These cases are called the “Four Types of Cases” (四类案件). They refer to the following cases:
Group disputes that may affect social stability;
Ones that are difficult, complex, and have a significant impact on society;
They might conflict with the judgment of the court or a higher-level court; and
Relevant units or individuals report that the judge has violated the law (Article 24).
The 2015 Opinion did not provide any further details about these Four Types. Lower courts issued guidance detailing the meaning and scope of these cases, while the SPC incorporated measures relating to “Four Types of Cases” in documents relating to the judicial responsibility system listed below.
b. Subsequent documents
Pre and particularly post 19th Party Congress, the SPC issued a number of documents related to the judicial responsibility system and the special responsibility of court leaders. At the same time, Party authorities issued documents imposing greater responsibility on Party members in leadership positions. Many of these are collected in a 2021 book edited by the office of the SPC leading small group on the judicial responsibility system and the SPC Political Department. These documents include:
February, 2019 Fifth Five-Year Judicial Reform Plan (5th Judicial Reform Plan): it emphasizes the full implementation of the judicial responsibility system. That system in turn is linked to broader Party initiatives to expand the responsibility of leading Party and government cadres as well as court leaders to cooperate better with Party inspections of various types.
March, 2020 Opinions on Deepening the Comprehensive Reform Supporting the Judicial Accountability System issued by the General Office of the CPC Central Committee (关于深化司法责任制综合配套改革的意见 full text not available)；
Four Types of Cases cases are deemed too complex, sensitive, or important to be handled by a frontline judge or panel of judges alone. The new Four Types of Cases Guiding Opinion embeds multiple levels and a range of guidance and supervision as well as penalty provisions for court personnel. The guidance and supervision are aimed at personnel at various levels and roles within a court. It is intended as a practical set of basic principles that consolidates and develops measures that appeared in the guidance listed above. It anticipates local courts issuing more detailed rules to implement it. A 2022 media report by the Shanghai Higher People’s Court on its judicial reform program for 2022 highlights the issuing of detailed rules on the Four Types of Cases as a priority matter. A summary of the definition and scope; identification mechanism, handling and supervision; and liability provisions follows.
Definition and scope
The 2021 Guiding Opinion redefines the Four Types of Cases and their scope, sets out the responsibilities of various persons within a court at different stages of a case, both front line and in a leadership role (court president and division chiefs) According to Article 14, those in a leadership role include the court president, vice presidents, full-time members of the judicial committee, division heads and deputy heads, and others in a supervision and management role. The guidance promotes using a multi-stage mechanism for identifying these cases and flagging them for special handling. Article 2 to 6 go into detail concerning the meaning and scope of “Four Types of Cases”, with changes from the 2015 Opinion. The new “Four Types of Cases” encompass the following types of cases:
They are major, difficult, complex, or sensitive;
They involve mass disputes or cause widespread societal concern, which might affect social stability;
They might conflict with the judgments and rulings of the court or a higher level people’s court in similar cases;
Relevant units or individuals reported that a judge has violated the law in the trial.
The comments below address points 1-3. The first type significantly expands the scope from the original “group disputes that may affect social stability”. The drafters explain this change: “the difficulty and complexity of cases are not necessarily proportional to their social impact”. For example, a divorce case can be complicated and sensitive, yet their impact on regional or national society might be minimal. “Major, difficult, complex, or sensitive” could cover a case in any area of law, in theory.
The second type also changes the definition in the 2015 Opinion significantly, now referring to cases that involve large groups, or cases that cause widespread social concern. Most importantly is that these cases may affect social stability. For example, some types of cases may involve a large number of litigants, such as traffic accidents, but carry little risk of causing further mass incidents or intensifying social conflicts. These cases should not be considered one of the Four Types of Cases.
However, cases that may trigger mass incidents (e.g., labor protests after failure of litigation), risk intensifying social conflicts, or the case may have a “demonstration”, i.e., precedent-setting, effect (e.g., land-taking compensation cases), and may trigger more litigation. This may impact the development of specific industries, or the interest of specific groups, and are all cases that do need careful supervision and management.
Additionally, the SPC is of the view that cases that cause widespread concern and may affect social stability are not limited to group disputes. For example, murder cases are known to stir up public outcries. Additionally, cases involving rape claims have recently also garnered a lot of public attention.
For the third type, the Opinion broadened the scope. First, it changed the wording from “judgment” (判决) to “decision” (裁判). This can be translated as “judgment and rulings.” Second, in addition to a final judgment by a court, it includes other rulings or decisions regarding inadmissibility, objections, suspension or termination of litigation. This suits the more comprehensive process-based type of supervision that is intended and is further discussed below. The conflict with current or prior judgments and rulings is specified to be with decisions of that court or higher courts within the past three years, or are currently being heard, and where it is necessary to unify the application of law.
While the Opinion further details the meaning and scope of the Four Types, the drafters explain that they insist on maintaining a healthy balance between broadness and specificity, so as to allow local courts leeway in determining how to identify a case as one of the Four Types. This recognizes that courts in different regions have different considerations, and that, based on local conditions, different kinds of specific cases require supervision and management.
Article 7 contains additional measures to widen the scope of “Four Types of Cases.” It provides that the oversight and management measures for Four Types of Cases can be applied to other types of cases: effective decisions that are in error and require retrial; cases in which the procuratorate has filed a protest; whether a death sentence (including suspended ones) is intended to be imposed; the amount in dispute is very large; or where a court plans to pronounce a defendant not guilty. This Article is consistent with recent policy to expand the scope of supervision of the exercise of judicial power, most recently emphasized in Xi’s February, 2022 article.
Identification Mechanism, Handling. and Supervision
Article 8 requires local courts to establish mechanisms to cover the entire court process to identify, label, and give a warning concerning Four Types of Cases. This article additionally requires local courts to set rules on the responsibility of internal entities to flag cases and report them, as well as responsibility for the failure to do so. The rest of the article sketches the SPC’s concept of how the Four Types of Cases are to be flagged through the entire court process and who decides any dispute over classification.
Article 9 and 10 address the adjustments and measures that senior court members may make regarding the case, depending upon when the case is flagged as one of “Four Types of Cases.” Regardless of whether a case is designated at the filing stage or not until it has been transferred to a case hearing division, the Opinion requires the case must be heard by a collegial panel rather than a single judge, and a member of the court leadership could serve the presiding judge. The recent Civil Procedure Law reforms mentioned in this earlier blogpost expand the scope of cases that a single judge can hear, but this Guiding Opinion makes clear that a collegial panel must take on responsibility for hearing one of “Four Types of Cases.” These provisions links to previous SPC guidance to senior court leaders on the role they need to fulfill since the judicial reforms. The court leadership can also change the presiding judge and the size and composition of the panel.
Article 10 lists the oversight and management measures that court leaders may take within their authority, such as: requesting reports on the progress of the case, reviewing the case files and trial report, attending trial hearings, submitting the case to a professional judges meeting, to the judicial committee, or even reporting to the court at one level above for guidance. The measures taken are likely to depend on how sensitive, difficult, or otherwise troublesome the case is. I surmise that this system will lead to more such cases discussed by a professional judges meeting or judicial (adjudication) committee meeting so that the decision is made on a collective basis.
Article 10 importantly clarifies the exact measures that constitute permissible supervision and management under the new responsibility system. These measures need to be incorporated into the list of powers and responsibilities based on the court member’s position. All actions and measures need to be in accordance with local procedures and within the scope of authority of the judge exercising supervisory authority. The Opinion specifies that any action that falls within this scope does not constitute undue interference in cases and does not violate provisions about internal interference with judicial processes.
In contrast to previous practice, in which court leader guidance in these types of cases was not generally recorded, Article 11 requires that court leader oversight and management of “Four Types of Cases ” must be recorded in the case file and on the case-handling platform. Note that the recording would not be accessible to lawyers reviewing a court file. The views of court leadership about the case must be announced at a professional judges meeting or judicial committee meeting, Court leaders can request that a collegial panel reconsider their proposed decision, but cannot directly change the panel’s decision without going through permitted procedures. These measures seem to be aimed at preventing improper practices that enable corruption. Those improper practices must have regularly occurred in the handling of “Four Types of Cases.” Article 14 specifies that supervision and administration of “Four Types of Cases” are considered part of the scope of a court leader’s work and therefore will be incorporated into the person’s performance evaluation.
Article 12 contains penalty provisions for both the frontline judges handling the case and the court leadership. Acts that can trigger liability for frontline judges include concealing that a case is a “Four Types of Case” case, failure to obey supervision and management, or causing a serious error in a decision through that conduct with serious consequences.
Court leaders who neglect or improperly perform their oversight and management of a “Four Type of Case” case intentionally or through gross negligence causing errors in decisions and serious consequences bear liability with reference to the provisions and procedures for the management of cadres.
Article 13 addresses using the smart courts mechanism to identify “Four Types of Cases,” remind front-line judges to report the case, and prompt court leaders to supervise and manage the cases.
In one short document, the Guiding Opinion on the Four Types of Cases captures many themes in internal court administration regulation and in the operation of the Chinese judicial system after the 19th Party Congress as well as the ongoing transformation of the judicial system and legal system.
The Guiding Opinion seeks to protect front-line judges from deciding “Four Types of Cases” autonomously in a way that is considered wrong or inconsistent with policy and legal provisions (non-unified). Consistency of judicial decision-making is a high priority of the SPC recently, consistent with Xi’s article mentioned above: “maintaining the unity of the country’s rule of law is a serious political issue 维护国家法治统一是严肃的政治问题. ” This links to the role of court leaders as well.
The Guiding Opinion consolidates guidance for court leaders, who under the Chinese bureaucratic court system, have special responsibilities under the SPC guidance listed above, as well as more general Party regulations applicable to “#1” leaders, and Party group members in the Zhengfa 政法 (political-legal) system. It imposes greater pressure on court leaders to hear cases, as required by earlier guidance. As discussed earlier, judges in a leadership position spend substantial time on administrative, coordination, and Party matters rather than hearing cases. Guiding the proper handling of one of the Four Types of Cases is also a way for a court leader to display leadership qualities while mishandling it will trigger criticism in an internal judicial or Party inspection (see my chapter on judicial discipline for a discussion of the principal types of inspections.) On incorporating work on “Four Types of Cases” into leaders’ performance evaluation, although the Chinese court slogan (of several years ago) is that judges should be treated more like judges, the Guiding Opinion appears to treat lower court judges analogously to secondary or university students, to be given grades for their class participation.
The Opinion embeds supervision of the activity of court leaders, particularly by the use of the digital（smart courts) case-handling platform. By now, the majority of Chinese courts have a fully online and digital case-handling platform, many of which automatically record these types of supervisory and managerial measures. However, it is unclear how this has changed judicial practice regarding sensitive cases, and whether new informal practices to circumvent this digital system have emerged.
This Guiding Opinion is an important document in understanding the Party leadership’s and the SPC’s vision of the Chinese courts in the New Era. It illustrates themes in what Xi calls in the February, 2022 article “comprehensively deepening reforms in the area of rule of law 全面深化法治领域改革,” therefore a vision of reshaping Chinese law and legal institutions generally. It links to the Party leadership’s vision of whole process supervision (全过程监督), mentioned in Xi’s most recent article, which to this observer has its roots in traditional Chinese concepts of supervision of the bureaucracy. It uses its cutting-edge smart court system towards this end. That would be consistent with themes mentioned recently in an earlier blogpost, that Chinese characteristics have a great deal of weight in the reshaping of the Chinese legal system. It is also consistent with an important statement in Xi Jinping’s February, 2022 article: “the socialist rule of law system with Chinese characteristics that we want to build must be a rule of law system that is rooted in Chinese culture, based on Chinese conditions and solving Chinese problems, and cannot be misled by Western misconceptions (我们要建设的中国特色社会主义法治体系，必须是扎根中国文化、立足中国国情、解决中国问题的法治体系，不能被西方错误思潮所误导).”
The definition and scope of the “Four Types of Cases” are flexible, so as to accommodate a system in which judges bear lifetime responsibility for their decisions and court leadership bears responsibility for the decisions of their judges, and multiple types of inspections, both Party and court, monitor implementation of campaigns (such as those for the Sao Hei campaign), as well as more general policies. The accountability (responsibility or liability) provisions are broad and linked with the Party’s system for cadres, rather than professional rules. That too is consistent with traditional Chinese law.
The vision of the approach to handling”Four Types of Cases” in the Opinion is holistic, in line with the principles mentioned in the 2021 Opinion on integrating socialist core values into judgment instruments— the organic unity of political, legal, and social effectiveness (政治效果、法律效果和社会效果有机统一 ), because through this process, a judicial decision that best meets that target is likely to be achieved. And this has implications for litigants.
Many thanks to Straton Papagianneas for translating the “Four Types of Cases Guiding Opinion” and drafting an initial version of this blogpost (and responding to several rounds of comments). Many thanks also to an anonymous peer reviewer for perceptive comments on a later draft of this blogpost.
In January 2022, the Supreme People’s Court (SPC) issued a Conference Summary [also translated as “Meeting Minutes”] of the National Symposium on Foreign-Related Commercial and Maritime Trial Work (Foreign-Related Commercial & Maritime Law Conference Summary (bilingual version here) (全国涉外商事海事审判工作座谈会会议纪要). From unauthorized versions released, it can be seen that it was another SPC year-end accomplishment. Although this document is not a judicial interpretation and cannot be cited in Chinese court judgments, it is crucially important for legal professionals outside of China dealing with cross-border commercial issues involving China and for Chinese legal professionals focusing on cross-border commercial issues involving the rest of the world.
The conference summary has 111 provisions. The focus is on legal issues because the target audience of domestic judges understands the political framing. The conference summary applies to foreign-related cases and to Hong Kong, Macau, and Taiwan-related cases by reference (see Article 111, set out at the end of this post). They are in the following categories:
foreign-related commercial (涉外商事部分), the longest:
Judicial review of arbitration (仲裁司法审查部分).
This blogpost will explain why the conference summary was issued, its legal and policy basis, and why it addressed those particular issues and will leave the majority of the content of the conference summary for the experts in practice and academia.
Why this conference summary?
The conference summary (meeting minutes) is based on a national conference on foreign-related commercial and maritime trial work held in Nanjing in June of last year and the issues that the SPC would have heard raised by lower court judges.
When asked the question of why this conference summary was issued, an SPC judge is likely to say “to resolve difficult issues in practice and unify judgment standards.” But a fuller answer to this question for a larger audience requires further details.
As to why a conference summary and not rely on “case law” with Chinese characteristics, including China International Commercial Court cases, SPC cases, and various types of typical or SPC selected cases as “soft precedents,” the answer is that the SPC is issuing this conference summary to guide lower court judges (and possibly judges in other divisions of the SPC) practically and efficiently and for some additional reasons. The simple answer is that “case law” is not effective enough to practically guide lower court judges. If it were, the SPC would not have issued this document. I have seen a number of academic articles (in English) that illustrate a misunderstanding of what the SPC is doing.
Additionally, I surmise that at the Nanjing conference, behind closed doors, SPC judges heard about inconsistent approaches or requirements from lower court judges. I surmise they also heard from lower court judges uncertainty in the approach that they should take concerning issues where the law is unclear. The judicial evaluation system values deciding cases correctly. Moreover, the most recent SPC policy focuses on unifying the application of law. Its leadership has established a leading small group to that end. So for all these reasons, lower court judges would look to the SPC for clarification. What is contained in the conference summary is the SPC’s current consensus on major cross-border commercial, maritime, and arbitration review-related issues, based on their further research and consideration.
In the busiest courts where many of these cases arise, judges are under enormous pressure to decide cases timely and accurately, especially after the recent changes to the jurisdiction of lower courts under the reorientation of the four levels of the people’s courts and the issuance of other documents changing the jurisdiction of the lower courts in commercial cases. “Codifying” the principles from cases and issues considered by the SPC in the form of a conference summary is the most useful and efficient form of guidance for lower court judges. As mentioned here, although conference summaries are not judicial interpretations and cannot be cited in a court judgment document as the basis of a judgment, they provide important guidance to the work of the courts concerning issues about which existing law and judicial interpretations are unclear. Judges will rely on its provisions to decide cases.
As for an answer to the question of why not issue a judicial interpretation–time, fluidity, and attenuated basis for some of the conference summary’s provisions do not permit a judicial interpretation to be issued. One example of the attenuated basis and fluidity is Article 100, which”codifies” the Guangzhou Intermediate People’s Court decision in the Brentwood case (discussed here). It establishes welcome certainty to the enforceability of arbitral awards made by overseas arbitration institutions arbitrations seated in Mainland China. It provides that such awards are regarded as foreign-related arbitral awards (rather than foreign awards) in Mainland China. It is likely to be helpful to the overseas arbitration institutions that are considering establishing case management offices in China, as is now possible under Shanghai and Beijing regulations. As mentioned before, the Arbitration Law being revised, the current draft addresses the issue, and the SPC is likely to issue a comprehensive judicial interpretation thereafter.
Moreover, for some of the procedural provisions, such as those relating to the recognition and enforcement of foreign judgments, it gives the SPC a chance to pilot its guidance, before formalizing it in the form of a judicial interpretation. A recent Wechat article (with further details) flags that in 2021, three foreign judgments and nine Hong Kong, Macau, and Taiwan judgments were recognized and enforced. Likely more applications were made but not decided.
Other provisions consolidate existing guidance in a form that is easier for the lower courts to grasp quickly. Article 22, on obtaining an opinion on foreign or international law from a China International Commercial Court (CICC) expert committee expert, for example, repeats what is to be found in CICC guidance. The same can be said about Article 11, on the topic of electronic service of process, promoted in several Belt & Road-related SPC Opinions. It should be noted that China maintains its traditional approach to service of process from foreign jurisdictions.
Articles 18-20 address a few of the ongoing issues related to the application of international conventions and treaties in the Chinese courts. Article 18 answers the question of what a court should do if the relevant treaty or convention is silent or China has made a reservation on that issue. The answer is to use the Law on the Laws Applicable to Foreign-Related Civil Relations to determine the applicable law. Article 20 focuses on what a Chinese court should do if it is applying Chinese law if Chinese law has conflicting positions and China has acceded to a relevant treaty or convention. A report on a recent workshop involving the SPC, the Beijing #4 Intermediate People’s Court, and academics from the China Academy of Social Sciences and other institutions flags some of the many other unresolved issues.
Article 30 addresses an important question for Chinese and foreign banks, suppliers to Chinese EPC contractors, and project owners, particularly in Belt & Road jurisdictions–how easily can a Chinese court stop payment on a demand (independent) guarantee? The answer is, strictly according to the provisions of the relevant judicial interpretation. Article 30 provides that when a court hears an application to stop payment on the basis of fraud (which can be filed as a preliminary matter or during the course of litigation or arbitration), it must examine the independent letter of guarantee stop payment application submitted by the parties in according to Article 14 of the (updated) Provisions on Several Issues Concerning the Hearing of Independent Letter of Guarantee Dispute Cases, and conduct a preliminary substantive examination on whether there are fraudulent grounds for stop payment in accordance with the provisions of Article 12 and set out its finding of facts and reasoning as required by Article 16.
The Bigger Picture
This conference summary is another form of SPC soft law. It harmonizes the decisions of the Chinese courts to be consistent with SPC policy (or said another way, strengthens the firm guiding hand of the SPC).
This document reflects the awareness of its drafters, the judges of the #4 Civil Division of the SPC, that the issues that come before the Chinese courts far outpace the infrastructure of Chinese foreign-related commercial law. Given the larger trends I described in my brief article last fall, we can expect the SPC to continue to play an important role in developing China’s body of law related to cross-border commercial matters.
111.【涉港澳台案件参照适用本纪要】涉及香港特别行政区、澳门特别行政区和台湾地区的商事海事纠纷案件，相关司法解释未作规定的，参照本纪要关于涉外商事海事纠纷案件的规定处理)。111. [The application by reference of this conference summary to cases involving Hong Kong, Macao and Taiwan]. As for commercial and maritime cases involving the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan, which are not otherwise stipulated in relevant judicial interpretations, shall be handled with reference to the provisions of this conference summary on foreign-related commercial and maritime cases.
On 7 January 2022, Dean of Tongji University’s School of Law and Professor Jiang Huiling gave a guest lecture in my School of Transnational Law class. We were honored to hear Dean Jiang provide his unique perspective and insights on over 20 years of Chinese judicial reform and his insights on future developments. He has been involved with Chinese judicial reform starting from the first plan in 1999 (see also more about his background here). This blogpost summarizes his presentation. I have inserted my occasional comments in italics. If a point is not more fully elaborated, it means he did not do so.
He spoke on the following six topics:
1. Brief History of Chinese Judicial Reform
2. How Judicial Reform Actions Are Taken
3. From the 4th to the 5th Judicial Reform Plan
4. Strategic Move: From Judicial Reform to “Zhengfa” (政法) Reform
5. Technical Measures: Rule of Law
6. Future Direction
1. Brief History
Dean Jiang went briskly through the history of judicial reform, commenting that in the first judicial reform plan, the focus was on raising public and professional awareness about the judiciary。 The second one, in which the Central Government greatly supported the SPC to undertake work mechanism (工作机制) reforms, not touching on structural reforms such as the status of judicial personnel. He noted that there was great progress during the second judicial reform plan. He called the third judicial reform plan a test before the New Era, and said that a decision had been taken to de-localize the judiciary and change the status of the judges and prosecutors, but at the end, there wasn’t internal confidence that the legal profession and society would accept such changes. He called the fourth judicial reform plan a structural, systematic, and radical change to the judicial system, especially the decision that judges would not be treated as ordinary civil servants. Dean Jiang characterized the fifth judicial reform plan as comprehensive and supplementary, and part of the Zhengfa reforms (as he further explained in the latter part of his presentation).
What were the lessons learned?
Right (科学) concept of the judicial system (universal and with Chinese characteristics)–that the legal profession and the leading party accepted the value of the rule of law and the importance of the judiciary;
Theoretical preparation–although he thought scholars had not done enough;
Consensus for change–the judiciary is regarded as and is a bureaucracy–there is that consensus among both court leaders, who are legal professionals and with a Party role, and ordinary judges, who are legal professionals;
Common achievements of human civilization–that means learning from other countries–China had done so not only in science and technology but also in law and democracy. Chinese judicial reformers had benefited from the open policy–he himself was an example; and
Critical role of strong leadership–legal professionals could not initiate fundamental changes themselves–it needed court and political leadership to do so–he quoted General Secretary Xi Jinping on the ability to do what could not have been done before.
2. How Judicial Reform Actions are Taken
Dean Jiang rapidly made the following six points:
Judicial awareness and enlightenment;
Negative case matters;
Reform for branches and reform for all (parochialism);
Top-down design and comprehensive reform–the court system is part of the political system and reform has to be done by the Central Government;
Coordination with other departments–in China, unlike in other countries, some matters require coordination with other departments, such as the Ministry of Finance;
A group of devoted experts–both within the judiciary and among academics.
3. From the 4th to the 5th Judicial Reform Plan
Dean Jiang mentioned that the two plans are connected, but that significant differences exist in the value or orientation of the two plans. The fourth one made radical (revolutionary) changes to the judicial system. The fifth one is a new phase, and comes after the completion of the fourth one, which made the following fundamental changes:
Structural changes–delocalizing the judicial system
Status of the judges and prosecutors
Changes to the internal operation of the judiciary
Improvements to the guarantees for judges and prosecutors.
Although these reforms are not completed, these were the focus of their work in the judicial reform office of the SPC and of the Central Government.
The 4th judicial reform plan focused on the following:
1. Separation of administrative region and judicial jurisdiction area–delocalization, as Xi Jinping said, the judicial power is a central power, uniform application of law, so that the law is not applied in favor of one locality;
2. Judiciary-centered litigation system–“in the real world in China, the judiciary does not always have the final say”–and in the past the public security and prosecutors had the final say rather than the judges. The reform to have personnel and financing of courts at the provincial level is part of this reform;
3. Optimization of internal power allocation–as a court is a bureaucracy with different entities with different functions, and the leaders have different functions from ordinary judges;
4. Operation of hearing and adjudicatory power
5. Judicial transparency;
6. Judicial personnel–this is basic but very important; and
7. Independence of the court–this is basic but very important.
The 5th judicial reform plan:
Work for the country’s overall task and situation—subject of one of my forthcoming articles
Litigation service–treat litigants properly and give them judicial services– the courts have public funds to pay for legal representation if people do not meet the standard for legal aid
Judicial transparency–“always on the way”
Responsibility-based judicial operation
Court’s organization and function–reforms in that area (he referred to the recent repositioning of the four levels of the court system, among others)
Court personnel system reform–better training of judges
Smart court–using technology
The bolding above reflects his stress on those points in his presentation.
Dean Jiang mentioned that the Central Government put the court system into a bigger picture, but that the prior reforms were needed to make the judicial system more professional. It is for this reason that the Central Government mentions the phrase “judicial reform” much less than before.
The bigger picture is involving the court system more in the development of the whole country. This reflects a change in China’s overall policy, and we Chinese legal professionals need to understand this.
Comparing the 4th and 5th Reform Plans:
Similar, but different;
Duplicated, but deepening and supplementary;
To those unfinished tasks, less emphasis
He said these should be seen in the context of the national plan for achieving the rule of law, and from 2035, China will have achieved rule of law and be a modernized, democratic country–the second 15-year plan will be about rule of law. He thinks that the timing is insufficient.
4. Strategic Move: From Judicial Reform to “Zhengfa” (政法) Reform
1. Before 2012, judicial work mechanism reform
2. From 2013，Judicial system reform
3. From 2017，Comprehensive supplementary reform of the judicial system
4. From 2019, Promoting Comprehensive
Reform in Zhengfa Area
5. From 2020，Xi Jinping rule of law thoughts
On point 4 above, that relates to a comprehensive document adopted in 2019 [Implementing Opinion On the Comprehensive Deepening Reforms of the Political-Legal Sector 关于政法领域全面深化改革的实施意见, not publicly available but mentioned previously on this blog], of which judicial reform plays only a small part. From 2020, Xi Jinping rule of law thoughts plays an important guiding role in the role of law. He said all law students and legal professionals should read it because it will have an important impact on the building of rule of law in China.
Structure of the new arrangement:
Breadth: From the judiciary to other related areas
Depth: From judicial system reform to broader systematic innovation–the latter means is moving from judicial system reform to areas previously little discussed, such as Party leadership and the role of the Political-Legal Commission, and the relationship between the Party and the law.
Goal: From fair, efficient, and authoritative judicial system to modernization of Zhengfa work system and capability—that is, that the judicial system is to be part of a modernized governance system and governance capability [国家治理体系和治理能力现代化–from the Decision of the 4th Plenum of the 19th Party Congress]. That is the goal for the next 30 years. It means the rule of law in the future will have a major part to play as part of modernized governance, and the courts will have an even more important role to play in supporting this modernized state governance (this is in my draft article). It may not be apparent from the English words, but it is a change.
Method: From branch-driven to Central Committee-driven–how to get there? He says this wording is not quite accurate as the 4th Judicial Reform Plan was also Central Committee driven, but because the Central Government put the project of the rule of law into the modernization of state governance, it has a different method for treating reform in the legal area, but he thinks that change of method is only an improvement.
Nature: Chinese style and self-owned brand–when you read English language literature on building a fair and independent judicial system from abroad you will see many common points. In the current arrangement–in the Zhengfa reforms, Chinese characteristics have a great deal of weight and also in the reconstruction of the legal system. Although China has learned a great deal from other countries, China has to go on its own way, since it has its own history, political situation and historical stage and there is a change in the international situation. China has changed its position in the world. He is getting accustomed to this new way of judicial reform and it will be more difficult for foreigners to understand it.
The change of emphasis can be seen from the VIP (very important research projects of 2021), which are all more general than before:
No. 67. Practice and Experiences of the Party Comprehensively Promote Law-based governance
No. 68. Socialist Legal Theory with Chinese Characteristics
No. 69. Spirit of Socialist Rule of Law
No. 70. Constitution-centered Socialist Legal System with Chinese Characteristics
No. 71. Promoting Comprehensive
Reform in Zhengfa Area
Dean Jiang described the 2019 document mentioned above as containing the following areas of reform.
Seven Areas of Zhengfa Reform:
Party’s leadership of the Zhengfa work–that is the Chinese situation
Deepening reforms of Zhengfa institutions–not only the courts and the prosecutors, but changing the overall structure of Zhengfa institutions
Deepening reform of systems of law implementation–we combined Legislative Affairs Office (of the State Council 法制办) into the Ministry of Justice [MOJ]–that’s an important change
Deepening reform of social governance system–the Zhengfa Wei important for social governance–one of the most popular words is “governance“–how to support social stability, social development; innovative spirit, people’s lives;
Public Zhengfa service system–public legal service is part of Zhengfa service–all the political-legal organs will work together to provide efficient high-quality services for the people-人民为中心–Xi Jinping says all our work needs to be people-centered;
Zhengfa profession management reform–no major change here
Application of IT technology–no major change here–continued application of IT in the Zhengfa area
These are seven areas of Zhengfa reform, based on the prior judicial reforms, but now going to a new stage. Governance is a crucial word.
5. Technical Measures
This is what he has devoted his life to before.
Law is a profession, and the judicial system is the carrier of law and justice.
Law is also science of law.
Rule of law is one of the most technical way of state governance.
Rule of law will have no efficacy without the joint efforts of other institutions.
He listed 10 legal issues for consideration for reference and research, as these are the most important topics:
Structural reform: local judicial power, or central judicial power–at the present time, the Central Government cannot manage all those 200,000+ judges and prosecutors, and at first stage, the provincial level is taking that over, but he is not sure of the final judicial model
Organizational reform: bureaucratic or judicial, especially the internal organs–this is a more technical reform, including internal and external organs, different tiers of the court and branches of the judiciary, including the procuracy;
Functions of the four tiers of court: their role and function–cylinder, or cone (his metaphor of 20 years ago)–should the SPC concentrate on judicial interpretations and a small number of cases, and does not need 400 judges–this relates to the pilot program of late last year on the repositioning of the four levels of the Chinese court; the local courts will focus on factual issues;
Personnel reform: Profession, or ordinary public servant–this is still an ongoing issue, and in his view, some continental European countries have not resolved this issue either. Although there are improvements, judges and prosecutors feel that it is not sufficient, given their new role in society, and the importance of their work. He agrees, having been a former judge.
Procedural reform: Court-centered litigation system, fair trial, simplification of procedure–how to make things fairer, and given the more than 10% annual increase in cases, a big burden on judges in particular, how to simplify procedure. This links to the recent amendments to the Civil Procedure Law, which focuses on simplification of procedures and giving online procedures the same status as offline.
Adjudication committee: advisory, or adjudication–there is a great deal of discussion about it–it is the highest decision-making body in a court (see this blogpost).
Judicial responsibility system: The hearing officer makes the decision, and decision-maker takes the responsibility–司法责任制–this is another tricky one–this is required by the Central Government, a step forward towards the rule of law, instead of having a judge’s boss approve his decision (because the court is bureaucracy)–for China, this is a step towards the rule of law, but there is still a long way to go.
Supervision over “four types of cases”–that means for most cases, judges take responsibility for their cases, but for difficult, controversial, and possibly having an impact on social stability–because junior judges have different capacities from the more senior–for those four types of cases, the court president and senior court leaders are involved to oversee or supervise (see translation of guidance here, commentary to come)–he has not found useful academic papers on this point;
ADR (Diversified dispute resolution): this is a traditional topic–optimizing the allocation of resources of dispute resolution
Judicial administration: local government loses its administrative power, but what internal administration;
Judicial democracy: lay judge system–different from common law jury (but China can learn from the common law jury–having them focus on factual rather legal issues)–the law has changed, but academic work is insufficient.
Judicial transparency–this is an old issue, to make the judiciary more transparent to the parties and the public.
These are the major issues in the next five years. These technical legal issues are very interesting and need legal scholars to look at them to support the Zhengfa reforms.
6. Future Direction
Xi Jinping rule of law thoughts–inevitable guideline–some of political and strategic, but it provides some guidelines for basic principles;
Rule of law-driven first;
Politics driven and guarantee–politics should be a consideration but it should not be unbalanced. Political role of the rule of law-leading the legislative institutions. Guarantee means guaranteeing the executive implementation of law, supporting the judiciary, and being a model of a law-abiding citizen; This will be very important in putting judicial reform forward;
To complete those halfway reforms–judicial personnel reforms;
More rethought and theoretical guide–scholars criticize the judiciary for having an insufficient theoretical basis;
Dealing with the other judicial civilizations–we never stopped, especially in technical areas, and for our legal professionals, that has never stopped. We need to work together for all of humanity.
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